Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; New Categories for Hospital Outpatient Department Prior Authorization Process; Clinical Laboratory Fee Schedule: Laboratory Date of Service Policy; Overall Hospital Quality Star Rating Methodology; Physician-Owned Hospitals; Notice of Closure of Two Teaching Hospitals and Opportunity To Apply for Available Slots, Radiation Oncology Model; and Reporting Requirements for Hospitals and Critical Access Hospitals (CAHs) To Report COVID-19 Therapeutic Inventory and Usage and To Report Acute Respiratory Illness During the Public Health Emergency (PHE) for Coronavirus Disease 2019 (COVID-19)

CourtCenters For Medicare & Medicaid Services
Citation85 FR 85866
Publication Date29 Dec 2020
Record Number2020-26819
Federal Register, Volume 85 Issue 249 (Tuesday, December 29, 2020)
[Federal Register Volume 85, Number 249 (Tuesday, December 29, 2020)]
                [Rules and Regulations]
                [Pages 85866-86305]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2020-26819]
                [[Page 85865]]
                Vol. 85
                Tuesday,
                No. 249
                December 29, 2020
                Part II
                Book 2 of 2 Books
                Pages 85865-86455Department of Health and Human Services-----------------------------------------------------------------------
                Centers for Medicare & Medicaid Services
                -----------------------------------------------------------------------
                42 CFR Parts 410, 411, 412, et al.
                Medicare Program: Hospital Outpatient Prospective Payment and
                Ambulatory Surgical Center Payment Systems and Quality Reporting
                Programs; New Categories for Hospital Outpatient Department Prior
                Authorization Process; Clinical Laboratory Fee Schedule: Laboratory
                Date of Service Policy; Overall Hospital Quality Star Rating
                Methodology; Physician-Owned Hospitals; Notice of Closure of Two
                Teaching Hospitals and Opportunity To Apply for Available Slots,
                Radiation Oncology Model; and Reporting Requirements for Hospitals and
                Critical Access Hospitals (CAHs) To Report COVID-19 Therapeutic
                Inventory and Usage and To Report Acute Respiratory Illness During the
                Public Health Emergency (PHE) for Coronavirus Disease 2019 (COVID-19);
                Final Rule
                Federal Register / Vol. 85 , No. 249 / Tuesday, December 29, 2020 /
                Rules and Regulations
                [[Page 85866]]
                -----------------------------------------------------------------------
                DEPARTMENT OF HEALTH AND HUMAN SERVICES
                Centers for Medicare & Medicaid Services
                42 CFR Parts 410, 411, 412, 414, 416, 419, 482, 485, 512
                [CMS-1736-FC, 1736-IFC]
                RIN 0938-AU12
                Medicare Program: Hospital Outpatient Prospective Payment and
                Ambulatory Surgical Center Payment Systems and Quality Reporting
                Programs; New Categories for Hospital Outpatient Department Prior
                Authorization Process; Clinical Laboratory Fee Schedule: Laboratory
                Date of Service Policy; Overall Hospital Quality Star Rating
                Methodology; Physician-Owned Hospitals; Notice of Closure of Two
                Teaching Hospitals and Opportunity To Apply for Available Slots,
                Radiation Oncology Model; and Reporting Requirements for Hospitals and
                Critical Access Hospitals (CAHs) To Report COVID-19 Therapeutic
                Inventory and Usage and To Report Acute Respiratory Illness During the
                Public Health Emergency (PHE) for Coronavirus Disease 2019 (COVID-19)
                AGENCY: Centers for Medicare & Medicaid Services (CMS), Health and
                Human Services (HHS).
                ACTION: Final rule with comment period and interim final rule with
                comment period.
                -----------------------------------------------------------------------
                SUMMARY: This final rule with comment period revises the Medicare
                hospital outpatient prospective payment system (OPPS) and the Medicare
                ambulatory surgical center (ASC) payment system for Calendar Year (CY)
                2021 based on our continuing experience with these systems. In this
                final rule with comment period, we describe the changes to the amounts
                and factors used to determine the payment rates for Medicare services
                paid under the OPPS and those paid under the ASC payment system. Also,
                this final rule with comment period updates and refines the
                requirements for the Hospital Outpatient Quality Reporting (OQR)
                Program and the ASC Quality Reporting (ASCQR) Program. In addition,
                this final rule with comment period establishes and updates the Overall
                Hospital Quality Star Rating beginning with the CY 2021; removes
                certain restrictions on the expansion of physician-owned hospitals that
                qualify as ``high Medicaid facilities,'' and clarifies that certain
                beds are counted toward a hospital's baseline number of operating
                rooms, procedure rooms, and beds; adds two new service categories to
                the Hospital Outpatient Department (OPD) Prior Authorization Process;
                provides notice of the closure of two teaching hospitals and the
                opportunity to apply for available slots for purposes of indirect
                medical education (IME) and direct graduate medical education (DGME)
                payments; and revises the Clinical Laboratory Date of Service (DOS)
                policy. This interim final rule with comment period modifies the
                Radiation Oncology Model (RO Model) Model performance period for CY
                2021, and establishes new requirements in the hospital and critical
                access hospital (CAH) Conditions of Participation (CoPs) for tracking
                of COVID-19 therapeutic inventory and usage and for tracking of the
                incidence and impact of Acute Respiratory Illness (including, but not
                limited to, Seasonal Influenza Virus, Influenza-like Illness, and
                Severe Acute Respiratory Infection) during the ongoing COVID-19 public
                health emergency (PHE).
                DATES:
                 Effective date: This rule is effective January 1, 2021, with the
                exceptions of amendatory instructions 21 and 23 (amending 42 CFR 482.42
                and 485.640) and 25 through 31 (amending 42 CFR 512.205, 512.210,
                512.217, 512.220, 512.245, 512.255, and 512.285), which are effective
                on December 4, 2021.
                 Comment period: To be assured consideration, comments on the
                payment classifications assigned to the interim APC assignments and/or
                status indicators of new or replacement Level II HCPCS codes in this
                final rule with comment period (CMS-1736-FC) must be received at one of
                the addresses provided in the ADDRESSES section no later than 5 p.m.
                EST on January 4, 2021.
                 To be assured consideration, comments on the Reporting Requirements
                for Hospitals and CAHs to Report Acute Respiratory Illness During the
                PHE for COVID-19, instructions 21 and 23 amending Sec. Sec. 482.42 and
                485.640, and the Radiation Oncology (RO) Model, instructions 25 through
                31 amending 42 CFR 512.205, 512.210, 512.217, 512.220, 512.245,
                512.255, and 512.285 in this interim final rule with comment period
                (CMS-1736-IFC) must be received at one of the addresses provided below,
                no later than 5 p.m. on February 2, 2021.
                 Applicability dates: The provisions related to the Radiation
                Oncology (RO) Model contained in section XXI of this interim final rule
                with comment period are applicable beginning July 1, 2021.
                ADDRESSES: In commenting, please refer to file code CMS-1736-FC or CMS-
                1736-IFC as appropriate, when commenting on the issues in this final
                rule with comment period and interim final rule with comment period.
                Because of staff and resource limitations, we cannot accept comments by
                facsimile (FAX) transmission.
                 Comments, including mass comment submissions, must be submitted in
                one of the following three ways (please choose only one of the ways
                listed):
                 1. 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-1736-FC or CMS-1736-IFC, P.O.
                Box 8010, 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-1736-FC or CMS-1736-IFC, Mail Stop C4-26-05, 7500
                Security Boulevard, Baltimore, MD 21244-1850.
                 b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid
                Services, Department of Health and Human Services, 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: Advisory Panel on Hospital Outpatient
                Payment (HOP Panel), contact the HOP Panel mailbox at
                [email protected].
                 Ambulatory Surgical Center (ASC) Payment System, contact Scott
                Talaga via email [email protected] or Mitali Dayal via email
                [email protected].
                 Ambulatory Surgical Center Quality Reporting (ASCQR) Program
                Administration, Validation, and Reconsideration Issues, contact Anita
                Bhatia via email at [email protected].
                 Ambulatory Surgical Center Quality Reporting (ASCQR) Program
                Measures, contact Cyra Duncan via email [email protected].
                 Blood and Blood Products, contact Josh McFeeters via email
                [email protected]. Cancer
                [[Page 85867]]
                Hospital Payments, contact Scott Talaga via email
                [email protected].
                 CMS Web Posting of the OPPS and ASC Payment Files, contact Chuck
                Braver via email [email protected].
                 Composite APCs (Low Dose Brachytherapy and Multiple Imaging),
                contact Au'Sha Washington via email [email protected].
                 Comprehensive APCs (C-APCs), contact Lela Strong-Holloway via email
                [email protected], or Mitali Dayal via email
                [email protected].
                 Hospital Outpatient Quality Reporting (OQR) Program Administration,
                Validation, and Reconsideration Issues, contact Shaili Patel via email
                [email protected].
                 Hospital Outpatient Quality Reporting (OQR) Program Measures,
                contact Nicole P. Crenshaw via email [email protected].
                 Hospital Outpatient Visits (Emergency Department Visits and
                Critical Care Visits), contact Elise Barringer via email
                [email protected].
                 Hospital Quality Star Rating Methodology, contact Annese Abdullah-
                Mclaughlin via email [email protected].
                 Inpatient Only (IPO) Procedures List, contact Au'Sha Washington via
                email [email protected], or Allison Bramlett via email
                [email protected], or Lela Strong-Holloway via email
                [email protected].
                 Medical Review of Certain Inpatient Hospital Admissions under
                Medicare Part A for CY 2021 and Subsequent Years (2-Midnight Rule),
                contact Elise Barringer via email [email protected].
                 New Technology Intraocular Lenses (NTIOLs), contact Scott Talaga
                via email [email protected].
                 No Cost/Full Credit and Partial Credit Devices, contact Scott
                Talaga via email [email protected].
                 OPPS Brachytherapy, contact Scott Talaga via email
                [email protected].
                 OPPS Data (APC Weights, Conversion Factor, Copayments, Cost-to-
                Charge Ratios (CCRs), Data Claims, Geometric Mean Calculation, Outlier
                Payments, and Wage Index), contact Erick Chuang via email
                [email protected], or Scott Talaga via email
                [email protected], or Josh McFeeters via email at
                [email protected].
                 OPPS Drugs, Radiopharmaceuticals, Biologicals, and Biosimilar
                Products, contact Josh McFeeters via email at
                [email protected], or Gil Ngan via email at
                [email protected] or, or Cory Duke via email at
                [email protected].
                 OPPS New Technology Procedures/Services, contact the New Technology
                APC mailbox at [email protected].gov.
                 OPPS Packaged Items/Services, contact Lela Strong-Holloway via
                email [email protected], or Mitali Dayal via email at
                [email protected].
                 OPPS Pass-Through Devices, contact the Device Pass-Through mailbox
                at [email protected].
                 OPPS Status Indicators (SI) and Comment Indicators (CI), contact
                Marina Kushnirova via email [email protected].
                 Partial Hospitalization Program (PHP) and Community Mental Health
                Center (CMHC) Issues, contact the PHP Payment Policy Mailbox at
                [email protected].
                 Prior Authorization Process and Requirements for Certain Covered
                Outpatient Department Services, contact Thomas Kessler via email at
                [email protected].
                 Rural Hospital Payments, contact Josh McFeeters via email at
                [email protected].
                 Skin Substitutes, contact Josh McFeeters via email
                [email protected].
                 Supervision of Outpatient Therapeutic Services in Hospitals and
                CAHs, contact Josh McFeeters via email [email protected].
                 All Other Issues Related to Hospital Outpatient and Ambulatory
                Surgical Center Payments Not Previously Identified, contact Elise
                Barringer via email [email protected] or at 410-786-9222.
                 RO Model, contact [email protected] or at 844-711-2664,
                Option 5.
                 CAPT Scott Cooper, USPHS, (410) 786-9465, for the hospital and CAH
                COVID-19 Therapeutic Inventory and Usage reporting requirements and for
                the Acute Respiratory Illness (including, but not limited to, Seasonal
                Influenza Virus, Influenza-like Illness, and Severe Acute Respiratory
                Infection) reporting requirements.
                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. CMS will not post on Regulations.gov public
                comments that make threats to individuals or institutions or suggest
                that the individual will take actions to harm the individual. CMS
                continues to encourage individuals not to submit duplicative comments.
                We will post acceptable comments from multiple unique commenters even
                if the content is identical or nearly identical to other comments.
                Addenda Available Only Through the Internet on the CMS Website
                 In the past, a majority of the Addenda referred to in our OPPS/ASC
                proposed and final rules were published in the Federal Register as part
                of the annual rulemakings. However, beginning with the CY 2012 OPPS/ASC
                proposed rule, all of the Addenda no longer appear in the Federal
                Register as part of the annual OPPS/ASC proposed and final rules to
                decrease administrative burden and reduce costs associated with
                publishing lengthy tables. Instead, these Addenda are published and
                available only on the CMS website. The Addenda relating to the OPPS are
                available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.
                 The Addenda relating to the ASC payment system are available at:
                https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/ASC-Regulations-and-Notices.
                Current Procedural Terminology (CPT) Copyright Notice
                 Throughout this final rule with comment period, we use CPT codes
                and descriptions to refer to a variety of services. We note that CPT
                codes and descriptions are copyright 2019 American Medical Association.
                All Rights Reserved. CPT is a registered trademark of the American
                Medical Association (AMA). Applicable Federal Acquisition Regulations
                (FAR and Defense Federal Acquisition Regulations (DFAR) apply.
                Table of Contents
                I. Summary and Background
                 A. Executive Summary of This Document
                 B. Legislative and Regulatory Authority for the Hospital OPPS
                 C. Excluded OPPS Services and Hospitals
                 D. Prior Rulemaking
                 E. Advisory Panel on Hospital Outpatient Payment (the HOP Panel
                or the Panel)
                 F. Public Comments Received in Response to the CY 2021 OPPS/ASC
                Proposed Rule
                [[Page 85868]]
                 G. Public Comments Received on the CY 2020 OPPS/ASC Final Rule
                With Comment Period
                II. Updates Affecting OPPS Payments
                 A. Recalibration of APC Relative Payment Weights
                 B. Conversion Factor Update
                 C. Wage Index Changes
                 D. Statewide Average Default Cost-to-Charge Ratios (CCRs)
                 E. Adjustment for Rural Sole Community Hospitals (SCHs) and
                Essential Access Community Hospitals (EACHs) Under Section
                1833(t)(13)(B) of the Act for CY 2021
                 F. Payment Adjustment for Certain Cancer Hospitals for CY 2021
                 G. Hospital Outpatient Outlier Payments
                 H. Calculation of an Adjusted Medicare Payment From the National
                Unadjusted Medicare Payment
                 I. Beneficiary Copayments
                III. OPPS Ambulatory Payment Classification (APC) Group Policies
                 A. OPPS Treatment of New and Revised HCPCS Codes
                 B. OPPS Changes--Variations Within APCs
                 C. New Technology APCs
                 D. OPPS APC-Specific Policies
                IV. OPPS Payment for Devices
                 A. Pass-Through Payments for Devices
                 B. Device-Intensive Procedures
                V. OPPS Payment Changes for Drugs, Biologicals, and
                Radiopharmaceuticals
                 A. OPPS Transitional Pass-Through Payment for Additional Costs
                of Drugs, Biologicals, and Radiopharmaceuticals
                 B. OPPS Payment for Drugs, Biologicals, and Radiopharmaceuticals
                Without Pass-Through Payment Status
                VI. Estimate of OPPS Transitional Pass-Through Spending for Drugs,
                Biologicals, Radiopharmaceuticals, and Devices
                 A. Background
                 B. Estimate of Pass-Through Spending
                VII. OPPS Payment for Hospital Outpatient Visits and Critical Care
                Services
                VIII. Payment for Partial Hospitalization Services
                 A. Background
                 B. PHP APC Update for CY 2021
                 C. Outlier Policy for CMHCs
                IX. Services That Will Be Paid Only as Inpatient Services
                 A. Background
                 B. Changes to the Inpatient Only (IPO) List
                X. Nonrecurring Policy Changes
                 A. Changes in the Level of Supervision of Outpatient Therapeutic
                Services in Hospitals and Critical Access Hospitals (CAHs)
                 B. Medical Review of Certain Inpatient Hospital Admissions Under
                Medicare Part A for CY 2021 and Subsequent Years
                XI. CY 2021 OPPS Payment Status and Comment Indicators
                 A. CY 2021 OPPS Payment Status Indicator Definitions
                 B. CY 2021 Comment Indicator Definitions
                XII. MedPAC Recommendations
                 A. OPPS Payment Rates Update
                 B. ASC Conversion Factor Update
                 C. ASC Cost Data
                XIII. Updates to the Ambulatory Surgical Center (ASC) Payment System
                 A. Background
                 B. ASC Treatment of New and Revised Codes
                 C. Update to the List of ASC Covered Surgical Procedures and
                Covered Ancillary Services
                 D. Update and Payment for ASC Covered Surgical Procedures and
                Covered Ancillary Services
                 E. New Technology Intraocular Lenses (NTIOLs)
                 F. ASC Payment and Comment Indicators
                 G. Calculation of the ASC Payment Rates and the ASC Conversion
                Factor
                XIV. Requirements for the Hospital Outpatient Quality Reporting
                (OQR) Program
                 A. Background
                 B. Hospital OQR Program Quality Measures
                 C. Administrative Requirements
                 D. Form, Manner, and Timing of Data Submitted for the Hospital
                OQR Program
                 E. Payment Reduction for Hospitals That Fail To Meet the
                Hospital OQR Program Requirements for the CY 2021 Payment
                Determination
                XV. Requirements for the Ambulatory Surgical Center Quality
                Reporting (ASCQR) Program
                 A. Background
                 B. ASCQR Program Quality Measures
                 C. Administrative Requirements
                 D. Form, Manner, and Timing of Data Submitted for the ASCQR
                Program
                 E. Payment Reduction for ASCs That Fail To Meet the ASCQR
                Program Requirements
                XVI. Overall Hospital Quality Star Rating Methodology for Public
                Release in CY 2021 and Subsequent Years
                 A. Background
                 B. Critical Access Hospitals in the Overall Star Rating
                 C. Veterans Health Administration Hospitals in the Overall Star
                Rating
                 D. History of the Overall Hospital Quality Star Rating
                 E. Current and Proposed Overall Star Rating Methodology
                 F. Preview Period
                 G. Overall Star Rating Suppressions
                XVII. Addition of New Service Categories for Hospital Outpatient
                Department (OPD) Prior Authorization Process
                 A. Background
                 B. Controlling Unnecessary Increases in the Volume of Covered
                OPD Services
                XVIII. Clinical Laboratory Fee Schedule: Revisions to the Laboratory
                Date of Service Policy
                 A. Background on the Medicare Part B Laboratory Date of Service
                Policy
                 B. Medicare DOS Policy and the ``14-Day Rule''
                 C. Billing and Payment for Laboratory Services Under the OPPS
                 D. ADLTs Under the New Private Payor Rate-Based CLFS
                 E. Additional Laboratory DOS Policy Exception for the Hospital
                Outpatient Setting
                 F. Revision to the Laboratory DOS Policy for Cancer-Related
                Protein-Based MAAAs
                XIX. Physician-Owned Hospitals
                 A. Background
                 B. Prohibition on Facility Expansion
                 C. Deference to State Law for Purposes of Determining the Number
                of Beds for Which a Hospital Is Licensed
                XX. Notice of Closure of Two Teaching Hospitals and Opportunity To
                Apply for Available Slots
                 A. Background Section
                 B. Notice of Closure of Westlake Community Hospital, Located in
                Melrose Park, IL, and the Application Process--Round 18
                 C. Notice of Closure of Astria Regional Medical Center, Located
                in Yakima, WA, and the Application Process--Round 19
                 D. Application Process for Available Resident Slots
                XXI. Radiation Oncology (RO) Model
                 A. Model Performance Period for the Radiation Oncology Model
                 B. Waiver of Proposed Rulemaking
                XXII. Reporting Requirements for Hospitals and Critical Access
                Hospitals (CAHs) to Report COVID-19 Therapeutic Inventory and Usage
                and To Report Acute Respiratory Illness During the Public Health
                Emergency (PHE) for Coronavirus Disease 2019 (COVID-19)
                XXIII. Files Available to the Public via the Internet
                XXIV. Collection of Information Requirements
                 A. Statutory Requirement for Solicitation of Comments
                 B. ICRs for the Hospital OQR Program
                 C. ICRs for the ASCQR Program
                 D. ICRs for Addition of New Service Categories for Hospital
                Outpatient Department (OPD) Prior Authorization Process
                 E. ICRs for the Overall Hospital Quality Star Ratings
                 F. ICRs for Physician-Owned Hospitals
                XXV. Waiver of the 30-Day and 60-Day Delayed Effective Dates for the
                Final Rule With Comment Period and Waiver of Proposed Rulemaking for
                Reporting Requirements for Hospitals and Critical Access Hospitals
                (CAHs) To Report COVID-19 Therapeutic Inventory and Usage and to
                Report Acute Respiratory Illness During the PHE for COVID-19 Interim
                Final Rule With Comment Period (IFC)
                 A. Waiver of the 30-Day and 60-Day Delayed Effective Dates for
                the Final Rule With Comment Period
                 B. Waiver of Proposed Rulemaking for Reporting Requirements for
                Hospitals and Critical Access Hospitals (CAHs) To Report Acute
                Respiratory Illness During the PHE for COVID-19 Interim Final Rule
                With Comment Period (IFC)
                XXVI. Response to Comments
                XXVII. Economic Analyses
                 A. Statement of Need
                 B. Overall Impact for the Provisions of This Final Rule With
                Comment Period
                 C. Detailed Economic Analyses
                 D. Regulatory Review Costs
                 E. Regulatory Flexibility Act (RFA) Analysis
                 F. Unfunded Mandates Reform Act Analysis
                 G. Reducing Regulation and Controlling Regulatory Costs
                [[Page 85869]]
                 H. Conclusion
                XXVIII. Federalism Analysis
                I. Summary and Background
                A. Executive Summary of This Document
                1. Purpose
                 In this final rule with comment period and interim final rule with
                comment period, we are updating the payment policies and payment rates
                for services furnished to Medicare beneficiaries in hospital outpatient
                departments (HOPDs) and ambulatory surgical centers (ASCs), beginning
                January 1, 2021. Section 1833(t) of the Social Security Act (the Act)
                requires us to annually review and update the payment rates for
                services payable under the Hospital Outpatient Prospective Payment
                System (OPPS). Specifically, section 1833(t)(9)(A) of the Act requires
                the Secretary to review certain components of the OPPS not less often
                than annually, and to revise the groups, the relative payment weights,
                and the wage and other adjustments that take into account changes in
                medical practices, changes in technology, and the addition of new
                services, new cost data, and other relevant information and factors. In
                addition, under section 1833(i)(D)(v) of the Act, we annually review
                and update the ASC payment rates. This final rule with comment period
                also includes additional policy changes made in accordance with our
                experience with the OPPS and the ASC payment system and recent changes
                in our statutory authority. We describe these and various other
                statutory authorities in the relevant sections of this final rule with
                comment period. In addition, this final rule with comment period
                updates and refines the requirements for the Hospital Outpatient
                Quality Reporting (OQR) Program and the ASC Quality Reporting (ASCQR)
                Program.
                2. Summary of the Major Provisions
                 OPPS Update: For CY 2021, we are increasing the payment
                rates under the OPPS by an Outpatient Department (OPD) fee schedule
                increase factor of 2.4 percent. This increase factor is based on the
                final hospital inpatient market basket percentage increase of 2.4
                percent for inpatient services paid under the hospital inpatient
                prospective payment system (IPPS). Based on this update, we estimate
                that total payments to OPPS providers (including beneficiary cost-
                sharing and estimated changes in enrollment, utilization, and case-mix)
                for calendar year (CY) 2021 would be approximately $83.888 billion, an
                increase of approximately $7.541 billion compared to estimated CY 2020
                OPPS payments.
                 We are continuing to implement the statutory 2.0 percentage point
                reduction in payments for hospitals that fail to meet the hospital
                outpatient quality reporting requirements by applying a reporting
                factor of 0.9805 to the OPPS payments and copayments for all applicable
                services.
                 Partial Hospitalization Update: For CY 2021 OPPS/ASC final
                rule with comment period, CMS is maintaining the unified rate structure
                established in CY 2017, with a single PHP APC for each provider type
                for days with 3 or more services per day. We are using the CMHC and
                hospital-based PHP (HB PHP) geometric mean per diem costs, consistent
                with existing policy, using updated data for each provider type.
                Accordingly, we are calculating the CY 2021 PHP APC per diem rates for
                HB PHPs and CMHC PHPs based on updated cost and claims data. Given that
                the final calculated geometric mean per diem costs are much higher than
                the proposed cost floors, we are not extending the cost floors to CY
                2021 and subsequent years.
                 Changes to the Inpatient Only (IPO) List: For CY 2021, we
                are eliminating the IPO list over the course of 3 calendar years
                beginning with the removal of 266 musculoskeletal-related services. We
                are also removing 32 additional HCPCS codes from the IPO list for CY
                2021 based on public comments.
                 Medical Review of Certain Inpatient Hospital Admissions
                under Medicare Part A for CY 2021 and Subsequent Years (2-Midnight
                Rule): For CY 2021, we are finalizing a policy to exempt procedures
                that are removed from the inpatient only (IPO) list under the OPPS
                beginning on January 1, 2021 from site-of-service claim denials,
                Beneficiary and Family-Centered Care Quality Improvement Organization
                (BFCC-QIO) referrals to Recovery Audit Contractor (RAC) for persistent
                noncompliance with the 2-midnight rule, and RAC reviews for ``patient
                status'' (that is, site-of-service) until such procedures are more
                commonly billed in the outpatient setting.
                 340B--Acquired Drugs: We are continuing our current policy
                of paying an adjusted amount of ASP minus 22.5 percent for drugs and
                biologicals acquired under the 340B program. We are continuing to
                exempt Rural SCHs, PPS-exempt cancer hospitals and children's hospitals
                from our 340B payment policy.
                 Comprehensive APCs: For CY 2021, we are creating two new
                comprehensive APCs (C-APCs): C-APC 5378 (Level 8 Urology and Related
                Services) and C-APC 5465 (Level 5 Neurostimulator and Related
                Procedures). Adding these C-APCs increases the total number of C-APCs
                to 69.
                 Device Pass-Through Payment Applications: For CY 2021, we
                evaluated five applications for device pass-through payments. Two of
                these applications (CUSTOMFLEX[supreg] ARTIFICIALIRIS and EXALT\TM\
                Model D Single-Use Duodenoscope) received preliminary approval for
                pass-through payment status through our quarterly review process. Based
                on our review and public comments received, we are continuing the pass-
                through payment status for CUSTOMFLEX[supreg] ARTIFICIALIRIS and
                EXALT\TM\ Model D Single-Use Duodenoscope and approving the remaining
                three applications for device pass-through payment status.
                 Changes to the Level of Supervision of Outpatient
                Therapeutic Services in Hospitals and Critical Access Hospitals: For CY
                2021 and subsequent years, we are changing the minimum default level of
                supervision for non-surgical extended duration therapeutic services
                (NSEDTS) to general supervision for the entire service, including the
                initiation portion of the service, for which we had previously required
                direct supervision. This is consistent with the minimum required level
                of general supervision that currently applies for most outpatient
                hospital therapeutic services. We are finalizing our proposed policy to
                permit direct supervision of pulmonary rehabilitation, cardiac
                rehabilitation, and intensive cardiac rehabilitation services using
                virtual presence of the physician through audio/video real-time
                communications technology subject to the clinical judgment of the
                supervising physician until the later of the end of the calendar year
                in which the PHE ends or December 31, 2021.
                 Cancer Hospital Payment Adjustment: For CY 2021, we are
                continuing to provide additional payments to cancer hospitals so that a
                cancer hospital's payment-to-cost ratio (PCR) after the additional
                payments is equal to the weighted average PCR for the other OPPS
                hospitals using the most recently submitted or settled cost report
                data. However, section 16002(b) of the 21st Century Cures Act requires
                that this weighted average PCR be reduced by 1.0 percentage point.
                Based on the data and the required 1.0 percentage point reduction, a
                target PCR of 0.89 will be used to determine the CY 2021 cancer
                hospital payment adjustment to be paid at cost report settlement. That
                is, the payment adjustments will be the additional payments needed to
                result in
                [[Page 85870]]
                a PCR equal to 0.89 for each cancer hospital.
                 ASC Payment Update: For CYs 2019 through 2023, we adopted
                a policy to update the ASC payment system using the hospital market
                basket update. Using the hospital market basket methodology, for CY
                2021, we are increasing payment rates under the ASC payment system by
                2.4 percent for ASCs that meet the quality reporting requirements under
                the ASCQR Program. This increase is based on a hospital market basket
                percentage increase of 2.4 percent minus a multifactor productivity
                adjustment of 0.0 percentage point. Based on this update, we estimate
                that total payments to ASCs (including beneficiary cost-sharing and
                estimated changes in enrollment, utilization, and case-mix) for CY 2021
                would be approximately 5.42 billion, an increase of approximately 120
                million compared to estimated CY 2020 Medicare payments.
                 Changes to the List of ASC Covered Surgical Procedures:
                For CY 2021, we are adding eleven procedures to the ASC covered
                procedures list (CPL), including total hip arthroplasty (CPT 27130).
                Additionally, we are revising the criteria we use to add covered
                surgical procedures to the ASC CPL, providing that certain criteria we
                used to add covered surgical procedures to the ASC CPL in the past will
                now be factors for physicians to consider in deciding whether a
                specific beneficiary should receive a covered surgical procedure in an
                ASC, and adopting a notification process for surgical procedures the
                public believes can be added to the ASC CPL under the criteria we are
                retaining. Using our revised criteria, we are adding an additional 267
                surgical procedures to the ASC CPL beginning in CY 2021.
                 Hospital Outpatient Quality Reporting (OQR) and Ambulatory
                Surgical Center Quality Reporting (ASCQR) Programs: For the Hospital
                OQR and ASCQR Programs, we are updating and refining requirements to
                further meaningful measurement and reporting for quality of care
                provided in these outpatient settings while limiting compliance burden.
                We are revising and codifying previously finalized administrative
                procedures and are codifying an expanded review and corrections process
                to further the programs' alignment while clarifying program
                requirements. We are not making any measure additions or removals for
                either program.
                 Overall Hospital Quality Star Ratings: We are establishing
                and updating the methodology that will be used to calculate the Overall
                Hospital Quality Star Ratings beginning with 2021 and for subsequent
                years. We are updating and simplifying how the ratings are calculated,
                with policies such as adopting a simple average of measure scores
                instead of the latent variable model and reducing the total number of
                measure groups from seven to five measure groups due to the removal of
                measures through the Meaningful Measure Initiative. Additionally, we
                are increasing the comparability of star ratings by peer grouping
                hospitals by the number of measure groups. These changes will simplify
                the methodology, and therefore, reduce provider burden, improve the
                predictability of the star ratings, and increase the comparability
                between hospital star ratings. We did not finalize our proposals
                related to stratification of the Readmissions group by dual-eligible
                patients.
                 Addition of New Service Categories for Hospital Outpatient
                Department Prior Authorization Process: We are adding the following two
                categories of services to the prior authorization process for hospital
                outpatient departments beginning for dates of service on or after July
                1, 2021: (1) Cervical fusion with disc removal and (2) implanted spinal
                neurostimulators.
                 Clinical Laboratory Date of Service (DOS) Policy: We are
                excluding certain protein-based Multianalyte Assays with Algorithmic
                Analyses (MAAAs), which are not generally performed in the HOPD
                setting, from the OPPS packaging policy and adding them to the
                laboratory DOS exception at 42 CFR 414.510(b)(5).
                 Physician-Owned Hospitals: We are removing unnecessary
                regulatory restrictions on high Medicaid facilities and including beds
                in a physician-owned hospital's baseline consistent with state law.
                 Radiation Oncology Model (RO Model): On September 29,
                2020, we published a final rule in the Federal Register (85 FR 61114)
                entitled ``Specialty Care Models to Improve Quality of Care and Reduce
                Expenditures'' that finalized the Radiation Oncology Model (RO Model).
                To ensure that participation in the RO Model during the public health
                emergency (PHE) for the Coronavirus disease 2019 (COVID-19) pandemic
                does not further strain RO participants' capacity, we are revising the
                RO Model's Model performance period to begin on July 1, 2021 and end
                December 31, 2025 in this interim final rule with comment period. We
                are requesting comments on this change.
                 Reporting Requirements for Hospitals and Critical Access
                Hospitals (CAHs) to Report COVID-19 Therapeutic Inventory and Usage and
                to Report Acute Respiratory Illness During the Public Health Emergency
                (PHE) for Coronavirus Disease 2019 (COVID-19): This interim final rule
                with comment period establishes new requirements in the hospital and
                critical access hospital (CAH) Conditions of Participation (CoPs) for
                tracking COVID-19 therapeutic inventory and usage and for tracking the
                incidence and impact of Acute Respiratory Illness (including, but not
                limited to, Seasonal Influenza Virus, Influenza-like Illness, and
                Severe Acute Respiratory Infection) during the ongoing COVID-19 PHE;
                and for providing this information and data to the Secretary of Health
                and Human Services (Secretary) in such form and manner, and at such
                timing and frequency, as the Secretary may prescribe during the Public
                Health Emergency (PHE).
                3. Summary of Costs and Benefit
                 In section XXVII and XXVIII of this final rule with comment period
                and interim final rule with comment period, we set forth a detailed
                analysis of the regulatory and federalism impacts that the changes will
                have on affected entities and beneficiaries. Key estimated impacts are
                described below.
                a. Impacts of All OPPS Changes
                 Table 79 in section XXVII.C of the CY 2021 OPPS/ASC final rule with
                comment period displays the distributional impact of all the OPPS
                changes on various groups of hospitals and CMHCs for CY 2021 compared
                to all estimated OPPS payments in CY 2020. We estimate that the
                policies in the CY 2021 OPPS/ASC final rule with comment period will
                result in a 2.4 percent overall increase in OPPS payments to providers.
                We estimate that total OPPS payments for CY 2021, including beneficiary
                cost-sharing, to the approximately 3,665 facilities paid under the OPPS
                (including general acute care hospitals, children's hospitals, cancer
                hospitals, and CMHCs) will increase by approximately $1.61 billion
                compared to CY 2020 payments, excluding our estimated changes in
                enrollment, utilization, and case-mix.
                 We estimated the isolated impact of our OPPS policies on CMHCs
                because CMHCs are only paid for partial hospitalization services under
                the OPPS. Continuing the provider-specific structure we adopted
                beginning in CY 2011, and basing payment fully on the type of provider
                furnishing the service, we estimate an 11.9 percent increase in CY 2021
                payments to CMHCs relative to their CY 2020 payments.
                [[Page 85871]]
                b. Impacts of the Updated Wage Indexes
                 We estimate that our update of the wage indexes based on the FY
                2021 IPPS final rule wage indexes will result in an estimated increase
                in payments of 0.2 percent for urban hospitals under the OPPS and an
                estimated increase in payments of 0.4 percent for rural hospitals.
                These wage indexes include the continued implementation of the OMB
                labor market area delineations based on 2010 Decennial Census data,
                with updates, as discussed in section II.C. of this final rule with
                comment period.
                c. Impacts of the Rural Adjustment and the Cancer Hospital Payment
                Adjustment
                 There are no significant impacts of our CY 2021 payment policies
                for hospitals that are eligible for the rural adjustment or for the
                cancer hospital payment adjustment. We are not making any change in
                policies for determining the rural hospital payment adjustments. While
                we are implementing the reduction to the cancer hospital payment
                adjustment for CY 2021 required by section 1833(t)(18)(C) of the Act,
                as added by section 16002(b) of the 21st Century Cures Act, the target
                payment-to-cost ratio (PCR) for CY 2021 is 0.89, equivalent to the 0.89
                target PCR for CY 2020, and therefore has no budget neutrality
                adjustment.
                d. Impacts of the OPD Fee Schedule Increase Factor
                 For the CY 2021 OPPS/ASC, we are establishing an OPD fee schedule
                increase factor of 2.4 percent and applying that increase factor to the
                conversion factor for CY 2021. As a result of the OPD fee schedule
                increase factor and other budget neutrality adjustments, we estimate
                that urban hospitals will experience an increase in payments of
                approximately 2.6 percent and that rural hospitals would experience an
                increase in payments of 2.9 percent. Classifying hospitals by teaching
                status, we estimate nonteaching hospitals will experience an increase
                in payments of 2.9 percent, minor teaching hospitals will experience an
                increase in payments of 3.0 percent, and major teaching hospitals will
                experience an increase in payments of 2.0 percent. We also classified
                hospitals by the type of ownership. We estimate that hospitals with
                voluntary ownership will experience an increase of 2.6 percent in
                payments, while hospitals with government ownership will experience an
                increase of 2.2 percent in payments. We estimate that hospitals with
                proprietary ownership will experience an increase of 3.5 percent in
                payments.
                e. Impacts of the ASC Payment Update
                 For impact purposes, the surgical procedures on the ASC covered
                surgical procedure list are aggregated into surgical specialty groups
                using CPT and HCPCS code range definitions. The percentage change in
                estimated total payments by specialty groups under the CY 2021 payment
                rates, compared to estimated CY 2020 payment rates, generally ranges
                between an increase of 2 and 5 percent, depending on the service, with
                some exceptions. We estimate the impact of applying the hospital market
                basket update to ASC payment rates will be an increase in payments of
                $120 million under the ASC payment system in CY 2021.
                B. Legislative and Regulatory Authority for the Hospital OPPS
                 When Title XVIII of the Act was enacted, Medicare payment for
                hospital outpatient services was based on hospital-specific costs. In
                an effort to ensure that Medicare and its beneficiaries pay
                appropriately for services and to encourage more efficient delivery of
                care, the Congress mandated replacement of the reasonable cost-based
                payment methodology with a prospective payment system (PPS). The
                Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33) added section
                1833(t) to the Act, authorizing implementation of a PPS for hospital
                outpatient services. The OPPS was first implemented for services
                furnished on or after August 1, 2000. Implementing regulations for the
                OPPS are located at 42 CFR parts 410 and 419.
                 The Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of
                1999 (BBRA) (Pub. L. 106-113) made major changes in the hospital OPPS.
                The following Acts made additional changes to the OPPS: The Medicare,
                Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000
                (BIPA) (Pub. L. 106-554); The Medicare Prescription Drug, Improvement,
                and Modernization Act of 2003 (MMA) (Pub. L. 108-173); the Deficit
                Reduction Act of 2005 (DRA) (Pub. L. 109-171), enacted on February 8,
                2006; the Medicare Improvements and Extension Act under Division B of
                Title I of the Tax Relief and Health Care Act of 2006 (MIEA-TRHCA)
                (Pub. L. 109-432), enacted on December 20, 2006; the Medicare,
                Medicaid, and SCHIP Extension Act of 2007 (MMSEA) (Pub. L. 110-173),
                enacted on December 29, 2007; the Medicare Improvements for Patients
                and Providers Act of 2008 (MIPPA) (Pub. L. 110-275), enacted on July
                15, 2008; the Patient Protection and Affordable Care Act (Pub. L. 111-
                148), enacted on March 23, 2010, as amended by the Health Care and
                Education Reconciliation Act of 2010 (Pub. L. 111-152), enacted on
                March 30, 2010 (these two public laws are collectively known as the
                Affordable Care Act); the Medicare and Medicaid Extenders Act of 2010
                (MMEA, Pub. L. 111-309); the Temporary Payroll Tax Cut Continuation Act
                of 2011 (TPTCCA, Pub. L. 112-78), enacted on December 23, 2011; the
                Middle Class Tax Relief and Job Creation Act of 2012 (MCTRJCA, Pub. L.
                112-96), enacted on February 22, 2012; the American Taxpayer Relief Act
                of 2012 (Pub. L. 112-240), enacted January 2, 2013; the Pathway for SGR
                Reform Act of 2013 (Pub. L. 113-67) enacted on December 26, 2013; the
                Protecting Access to Medicare Act of 2014 (PAMA, Pub. L. 113-93),
                enacted on March 27, 2014; the Medicare Access and CHIP Reauthorization
                Act (MACRA) of 2015 (Pub. L. 114-10), enacted April 16, 2015; the
                Bipartisan Budget Act of 2015 (Pub. L. 114-74), enacted November 2,
                2015; the Consolidated Appropriations Act, 2016 (Pub. L. 114-113),
                enacted on December 18, 2015, the 21st Century Cures Act (Pub. L. 114-
                255), enacted on December 13, 2016; the Consolidated Appropriations
                Act, 2018 (Pub. L. 115-141), enacted on March 23, 2018; and the
                Substance Use-Disorder Prevention that Promotes Opioid Recovery and
                Treatment for Patients and Communities Act (Pub. L. 115-271), enacted
                on October 24, 2018.
                 Under the OPPS, we generally pay for hospital Part B services on a
                rate-per-service basis that varies according to the APC group to which
                the service is assigned. We use the Healthcare Common Procedure Coding
                System (HCPCS) (which includes certain Current Procedural Terminology
                (CPT) codes) to identify and group the services within each APC. The
                OPPS includes payment for most hospital outpatient services, except
                those identified in section I.C. of the CY 2021 OPPS/ASC final rule.
                Section 1833(t)(1)(B) of the Act provides for payment under the OPPS
                for hospital outpatient services designated by the Secretary (which
                includes partial hospitalization services furnished by CMHCs), and
                certain inpatient hospital services that are paid under Medicare Part
                B.
                 The OPPS rate is an unadjusted national payment amount that
                includes the Medicare payment and the beneficiary copayment. This rate
                is divided into a labor-related amount and a nonlabor-related amount.
                The labor-related amount is adjusted for area wage
                [[Page 85872]]
                differences using the hospital inpatient wage index value for the
                locality in which the hospital or CMHC is located.
                 All services and items within an APC group are comparable
                clinically and with respect to resource use, as required by section
                1833(t)(2)(B) of the Act. In accordance with section 1833(t)(2)(B) of
                the Act, subject to certain exceptions, items and services within an
                APC group cannot be considered comparable with respect to the use of
                resources if the highest median cost (or mean cost, if elected by the
                Secretary) for an item or service in the APC group is more than 2 times
                greater than the lowest median cost (or mean cost, if elected by the
                Secretary) for an item or service within the same APC group (referred
                to as the ``2 times rule''). In implementing this provision, we
                generally use the cost of the item or service assigned to an APC group.
                 For new technology items and services, special payments under the
                OPPS may be made in one of two ways. Section 1833(t)(6) of the Act
                provides for temporary additional payments, which we refer to as
                ``transitional pass-through payments,'' for at least 2 but not more
                than 3 years for certain drugs, biological agents, brachytherapy
                devices used for the treatment of cancer, and categories of other
                medical devices. For new technology services that are not eligible for
                transitional pass-through payments, and for which we lack sufficient
                clinical information and cost data to appropriately assign them to a
                clinical APC group, we have established special APC groups based on
                costs, which we refer to as New Technology APCs. These New Technology
                APCs are designated by cost bands which allow us to provide appropriate
                and consistent payment for designated new procedures that are not yet
                reflected in our claims data. Similar to pass-through payments, an
                assignment to a New Technology APC is temporary; that is, we retain a
                service within a New Technology APC until we acquire sufficient data to
                assign it to a clinically appropriate APC group.
                C. Excluded OPPS Services and Hospitals
                 Section 1833(t)(1)(B)(i) of the Act authorizes the Secretary to
                designate the hospital outpatient services that are paid under the
                OPPS. While most hospital outpatient services are payable under the
                OPPS, section 1833(t)(1)(B)(iv) of the Act excludes payment for
                ambulance, physical and occupational therapy, and speech-language
                pathology services, for which payment is made under a fee schedule. It
                also excludes screening mammography, diagnostic mammography, and
                effective January 1, 2011, an annual wellness visit providing
                personalized prevention plan services. The Secretary exercises the
                authority granted under the statute to also exclude from the OPPS
                certain services that are paid under fee schedules or other payment
                systems. Such excluded services include, for example, the professional
                services of physicians and nonphysician practitioners paid under the
                Medicare Physician Fee Schedule (MPFS); certain laboratory services
                paid under the Clinical Laboratory Fee Schedule (CLFS); services for
                beneficiaries with end-stage renal disease (ESRD) that are paid under
                the ESRD prospective payment system; and services and procedures that
                require an inpatient stay that are paid under the hospital IPPS. In
                addition, section 1833(t)(1)(B)(v) of the Act does not include
                applicable items and services (as defined in subparagraph (A) of
                paragraph (21)) that are furnished on or after January 1, 2017 by an
                off-campus outpatient department of a provider (as defined in
                subparagraph (B) of paragraph (21)). We set forth the services that are
                excluded from payment under the OPPS in regulations at 42 CFR 419.22.
                 Under Sec. 419.20(b) of the regulations, we specify the types of
                hospitals that are excluded from payment under the OPPS. These excluded
                hospitals are:
                 Critical access hospitals (CAHs);
                 Hospitals located in Maryland and paid under Maryland's
                All-Payer or Total Cost of Care Model;
                 Hospitals located outside of the 50 States, the District
                of Columbia, and Puerto Rico; and
                 Indian Health Service (IHS) hospitals.
                D. Prior Rulemaking
                 On April 7, 2000, we published in the Federal Register a final rule
                with comment period (65 FR 18434) to implement a prospective payment
                system for hospital outpatient services. The hospital OPPS was first
                implemented for services furnished on or after August 1, 2000. Section
                1833(t)(9)(A) of the Act requires the Secretary to review certain
                components of the OPPS, not less often than annually, and to revise the
                groups, the relative payment weights, and the wage and other
                adjustments to take into account changes in medical practices, changes
                in technology, the addition of new services, new cost data, and other
                relevant information and factors.
                 Since initially implementing the OPPS, we have published final
                rules in the Federal Register annually to implement statutory
                requirements and changes arising from our continuing experience with
                this system. These rules can be viewed on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html.
                E. Advisory Panel on Hospital Outpatient Payment (the HOP Panel or the
                Panel)
                1. Authority of the Panel
                 Section 1833(t)(9)(A) of the Act, as amended by section 201(h) of
                Public Law 106-113, and redesignated by section 202(a)(2) of Public Law
                106-113, requires that we consult with an expert outside advisory panel
                composed of an appropriate selection of representatives of providers to
                annually review (and advise the Secretary concerning) the clinical
                integrity of the payment groups and their weights under the OPPS. In CY
                2000, based on section 1833(t)(9)(A) of the Act, the Secretary
                established the Advisory Panel on Ambulatory Payment Classification
                Groups (APC Panel) to fulfill this requirement. In CY 2011, based on
                section 222 of the Public Health Service Act, which gives discretionary
                authority to the Secretary to convene advisory councils and committees,
                the Secretary expanded the panel's scope to include the supervision of
                hospital outpatient therapeutic services in addition to the APC groups
                and weights. To reflect this new role of the panel, the Secretary
                changed the panel's name to the Advisory Panel on Hospital Outpatient
                Payment (the HOP Panel or the Panel). The HOP Panel is not restricted
                to using data compiled by CMS, and in conducting its review, it may use
                data collected or developed by organizations outside the Department.
                2. Establishment of the Panel
                 On November 21, 2000, the Secretary signed the initial charter
                establishing the Panel, and, at that time, named the APC Panel. This
                expert panel is composed of appropriate representatives of providers
                (currently employed full-time, not as consultants, in their respective
                areas of expertise) who review clinical data and advise CMS about the
                clinical integrity of the APC groups and their payment weights. Since
                CY 2012, the Panel also is charged with advising the Secretary on the
                appropriate level of supervision for individual hospital outpatient
                therapeutic services. The Panel is technical in nature, and it is
                governed by the provisions of the Federal Advisory Committee Act
                (FACA). The
                [[Page 85873]]
                current charter specifies, among other requirements, that the Panel--
                 May advise on the clinical integrity of Ambulatory Payment
                Classification (APC) groups and their associated weights;
                 May advise on the appropriate supervision level for
                hospital outpatient services;
                 May advise on OPPS APC rates for ASC covered surgical
                procedures;
                 Continues to be technical in nature;
                 Is governed by the provisions of the FACA;
                 Has a Designated Federal Official (DFO); and
                 Is chaired by a Federal Official designated by the
                Secretary.
                 The Panel's charter was amended on November 15, 2011, renaming the
                Panel and expanding the Panel's authority to include supervision of
                hospital outpatient therapeutic services and to add critical access
                hospital (CAH) representation to its membership. The Panel's charter
                was also amended on November 6, 2014 (80 FR 23009), and the number of
                members was revised from up to 19 to up to 15 members. The Panel's
                current charter was approved on November 20, 2020, for a 2-year period.
                 The current Panel membership and other information pertaining to
                the Panel, including its charter, Federal Register notices, membership,
                meeting dates, agenda topics, and meeting reports, can be viewed on the
                CMS website at: https://www.cms.gov/Regulations-and-Guidance/Guidance/FACA/AdvisoryPanelonAmbulatoryPaymentClassificationGroups.html.
                3. Panel Meetings and Organizational Structure
                 The Panel has held many meetings, with the last meeting taking
                place on August 31, 2020. Prior to each meeting, we publish a notice in
                the Federal Register to announce the meeting, new members, and any
                other changes of which the public should be aware. Beginning in CY
                2017, we have transitioned to one meeting per year (81 FR 31941). In CY
                2018, we published a Federal Register notice requesting nominations to
                fill vacancies on the Panel (83 FR 3715). As published in this notice,
                CMS is accepting nominations on a continuous basis.
                 In addition, the Panel has established an administrative structure
                that, in part, currently includes the use of three subcommittee
                workgroups to provide preparatory meeting and subject support to the
                larger panel. The three current subcommittees include the following:
                 APC Groups and Status Indicator Assignments Subcommittee,
                which advises and provides recommendations to the Panel on the
                appropriate status indicators to be assigned to HCPCS codes, including
                but not limited to whether a HCPCS code or a category of codes should
                be packaged or separately paid, as well as the appropriate APC
                assignment of HCPCS codes regarding services for which separate payment
                is made;
                 Data Subcommittee, which is responsible for studying the
                data issues confronting the Panel and for recommending options for
                resolving them; and
                 Visits and Observation Subcommittee, which reviews and
                makes recommendations to the Panel on all technical issues pertaining
                to observation services and hospital outpatient visits paid under the
                OPPS.
                 Each of these workgroup subcommittees was established by a majority
                vote from the full Panel during a scheduled Panel meeting, and the
                Panel recommended at the August 31, 2020, meeting that the
                subcommittees continue. We accepted this recommendation.
                 For discussions of earlier Panel meetings and recommendations, we
                refer readers to previously published OPPS/ASC proposed and final
                rules, the CMS website mentioned earlier in this section, and the FACA
                database at http://facadatabase.gov.
                F. Public Comments Received in Response to the CY 2021 OPPS/ASC
                Proposed Rule
                 We received approximately 1,350 timely pieces of correspondence on
                the CY 2021 OPPS/ASC proposed rule that appeared in the Federal
                Register on August 12, 2020 (85 FR 48772). We note that we received
                some public comments that were outside the scope of the CY 2021 OPPS/
                ASC proposed rule. Out-of-scope-public comments are not addressed in
                this CY 2021 OPPS/ASC final rule with comment period. Summaries of
                those public comments that are within the scope of the proposed rule
                and our responses are set forth in the various sections of this final
                rule with comment period under the appropriate headings.
                G. Public Comments Received on the CY 2020 OPPS/ASC Final Rule With
                Comment Period
                 We received approximately 22 timely pieces of correspondence on the
                CY 2020 OPPS/ASC final rule with comment period that appeared in the
                Federal Register on November 12, 2019 (84 FR 61142), most of which were
                outside of the scope of the final rule. In-scope comments related to
                the interim APC assignments and/or status indicators of new or
                replacement Level II HCPCS codes (identified with comment indicator
                ``NI'' in OPPS Addendum B, ASC Addendum AA, and ASC Addendum BB to that
                final rule). Summaries of the public comments on topics that were open
                to comment and our responses to them are set forth in various sections
                of this final rule with comment period under the appropriate subject-
                matter headings. Summaries of the public comments on new or replacement
                Level II HCPCS codes are set forth in the CY 2021 OPPS/ASC proposed
                rule and this final rule with comment period under the appropriate
                subject matter headings.
                II. Updates Affecting OPPS Payments
                A. Recalibration of APC Relative Payment Weights
                1. Database Construction
                a. Database Source and Methodology
                 Section 1833(t)(9)(A) of the Act requires that the Secretary review
                not less often than annually and revise the relative payment weights
                for APCs. In the April 7, 2000 OPPS final rule with comment period (65
                FR 18482), we explained in detail how we calculated the relative
                payment weights that were implemented on August 1, 2000 for each APC
                group.
                 For the CY 2021 OPPS/ASC proposed rule (85 FR 48779), we proposed
                to recalibrate the APC relative payment weights for services furnished
                on or after January 1, 2021, and before January 1, 2022 (CY 2021),
                using the same basic methodology that we described in the CY 2020 OPPS/
                ASC final rule with comment period (84 FR 61149), using updated CY 2019
                claims data. That is, as we proposed, we recalibrate the relative
                payment weights for each APC based on claims and cost report data for
                hospital outpatient department (HOPD) services, using the most recent
                available data to construct a database for calculating APC group
                weights.
                 For the purpose of recalibrating the proposed APC relative payment
                weights for CY 2021, we began with approximately 167 million final
                action claims (claims for which all disputes and adjustments have been
                resolved and payment has been made) for HOPD services furnished on or
                after January 1, 2019, and before January 1, 2020, before applying our
                exclusionary criteria and other methodological adjustments. After the
                application of those data processing changes, we used approximately 87
                million final action claims to develop the proposed CY 2021 OPPS
                payment weights. For exact numbers of claims used and additional
                details on the
                [[Page 85874]]
                claims accounting process, we refer readers to the claims accounting
                narrative under supporting documentation for the CY 2021 OPPS/ASC
                proposed rule on the CMS website at: http://www.cms.gov/Medicare/
                Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
                 Addendum N to the CY 2021 OPPS/ASC proposed rule (which is
                available via the internet on the CMS website) included the proposed
                list of bypass codes for CY 2021. The proposed list of bypass codes
                contained codes that were reported on claims for services in CY 2019
                and, therefore, included codes that were in effect in CY 2019 and used
                for billing, but were deleted for CY 2020. We retained these deleted
                bypass codes on the proposed CY 2021 bypass list because these codes
                existed in CY 2019 and were covered OPD services in that period, and CY
                2019 claims data were used to calculate proposed CY 2021 payment rates.
                Keeping these deleted bypass codes on the bypass list potentially
                allows us to create more ``pseudo'' single procedure claims for
                ratesetting purposes. ``Overlap bypass codes'' that are members of the
                proposed multiple imaging composite APCs were identified by asterisks
                (*) in the third column of Addendum N to the proposed rule. HCPCS codes
                that we proposed to add for CY 2021 were identified by asterisks (*) in
                the fourth column of Addendum N.
                b. Calculation and Use of Cost-to-Charge Ratios (CCRs)
                 For CY 2021, in the CY 2020 OPPS/ASC proposed rule (85 FR 48779),
                we proposed to continue to use the hospital-specific overall ancillary
                and departmental cost-to-charge ratios (CCRs) to convert charges to
                estimated costs through application of a revenue code-to-cost center
                crosswalk. To calculate the APC costs on which the CY 2021 APC payment
                rates are based, we calculated hospital-specific overall ancillary CCRs
                and hospital-specific departmental CCRs for each hospital for which we
                had CY 2019 claims data by comparing these claims data to the most
                recently available hospital cost reports, which, in most cases, are
                from CY 2018. For the proposed CY 2021 OPPS payment rates, we used the
                set of claims processed during CY 2019. We applied the hospital-
                specific CCR to the hospital's charges at the most detailed level
                possible, based on a revenue code-to-cost center crosswalk that
                contains a hierarchy of CCRs used to estimate costs from charges for
                each revenue code. To ensure the completeness of the revenue code-to-
                cost center crosswalk, we reviewed changes to the list of revenue codes
                for CY 2019 (the year of claims data we used to calculate the proposed
                CY 2021 OPPS payment rates) and updates to the NUBC 2019 Data
                Specifications Manual. That crosswalk is available for review and
                continuous comment on the CMS website at: http://www.cms.gov/Medicare/
                Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
                 In accordance with our longstanding policy, we calculate CCRs for
                the standard and nonstandard cost centers accepted by the electronic
                cost report database. In general, the most detailed level at which we
                calculate CCRs is the hospital-specific departmental level. For a
                discussion of the hospital-specific overall ancillary CCR calculation,
                we refer readers to the CY 2007 OPPS/ASC final rule with comment period
                (71 FR 67983 through 67985). The calculation of blood costs is a
                longstanding exception (since the CY 2005 OPPS) to this general
                methodology for calculation of CCRs used for converting charges to
                costs on each claim. This exception is discussed in detail in the CY
                2007 OPPS/ASC final rule with comment period and discussed further in
                section II.A.2.a.(1) of the proposed rule and this final rule with
                comment period.
                 In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74840
                through 74847), we finalized our policy of creating new cost centers
                and distinct CCRs for implantable devices, magnetic resonance imaging
                (MRIs), computed tomography (CT) scans, and cardiac catheterization.
                However, in response to the CY 2014 OPPS/ASC proposed rule, commenters
                reported that some hospitals used a less precise ``square feet''
                allocation methodology for the costs of large moveable equipment like
                CT scan and MRI machines. They indicated that while we recommended
                using two alternative allocation methods, ``direct assignment'' or
                ``dollar value,'' as a more accurate methodology for directly assigning
                equipment costs, industry analysis suggested that approximately only
                half of the reported cost centers for CT scans and MRIs rely on these
                preferred methodologies. In response to concerns from commenters, we
                finalized a policy for the CY 2014 OPPS/ASC final rule with comment
                period (78 FR 74847) to remove claims from providers that use a cost
                allocation method of ``square feet'' to calculate CCRs used to estimate
                costs associated with the APCs for CT and MRI. Further, we finalized a
                transitional policy to estimate the imaging APC relative payment
                weights using only CT and MRI cost data from providers that do not use
                ``square feet'' as the cost allocation statistic. We provided that this
                finalized policy would sunset in 4 years to provide sufficient time for
                hospitals to transition to a more accurate cost allocation method and
                for the related data to be available for ratesetting purposes (78 FR
                74847). Therefore, beginning in CY 2018 with the sunset of the
                transition policy, we would estimate the imaging APC relative payment
                weights using cost data from all providers, regardless of the cost
                allocation statistic employed. However, in the CY 2018 OPPS/ASC final
                rule with comment period (82 FR 59228 and 59229) and in the CY 2019
                OPPS/ASC final rule with comment period (83 FR 58831), we finalized a
                policy to extend the transition policy for 1 additional year and we
                continued to remove claims from providers that use a cost allocation
                method of ``square feet'' to calculate CT and MRI CCRs for the CY 2018
                OPPS and the CY 2019 OPPS.
                 As we discussed in the CY 2018 OPPS/ASC final rule with comment
                period (82 FR 59228), some stakeholders have raised concerns regarding
                using claims from all providers to calculate CT and MRI CCRs,
                regardless of the cost allocations statistic employed (78 FR 74840
                through 74847). Stakeholders noted that providers continue to use the
                ``square feet'' cost allocation method and that including claims from
                such providers would cause significant reductions in the imaging APC
                payment rates.
                 Table 1 demonstrates the relative effect on imaging APC payments
                after removing cost data for providers that report CT and MRI standard
                cost centers using ``square feet'' as the cost allocation method by
                extracting HCRIS data on Worksheet B-1. Table 2 provides statistical
                values based on the CT and MRI standard cost center CCRs using the
                different cost allocation methods.
                [[Page 85875]]
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                 Our analysis shows that since the CY 2014 OPPS in which we
                established the transition policy, the number of valid MRI CCRs has
                increased by 18.7 percent to 2,199 providers and the number of valid CT
                CCRs has increased by 16.5 percent to 2,280 providers. Table 1 displays
                the impact on OPPS payment rates for CY 2021 if claims from providers
                that report using the ``square feet'' cost allocation method were
                removed. This can be attributed to the generally lower CCR values from
                providers that use a ``square feet'' cost allocation method as shown in
                Table 1.
                 We note that the CT and MRI cost center CCRs have been available
                for ratesetting since the CY 2014 OPPS in which we established the
                transition policy. Since the initial 4-year transition, we had extended
                the transition an additional 2 years to offer providers flexibility in
                applying cost allocation methodologies for CT and MRI cost centers
                other than ``square feet.'' In the CY 2020 OPPS/ASC final rule with
                comment period (84 FR 61152), we finalized a 2-year phased-in approach,
                as suggested by some commenters, that applied 50 percent of the payment
                impact from ending the transition in CY 2020 and 100 percent of the
                payment impact from ending the transition in CY 2021.
                 We believe we have provided sufficient time for providers to adopt
                an alternative cost allocation methodology for CT and MRI cost centers
                if they intended to do so and many providers continue to use the
                ``square feet'' cost allocation methodology, which we believe indicates
                that these providers believe this methodology is a sufficient method
                for attributing costs to this cost center. Additionally, we generally
                believe that increasing the amount of claims data available for use in
                ratesetting improves our ratesetting process. Therefore, as finalized
                in the CY 2020 OPPS/ASC final rule with comment period (84 FR 61152),
                in the CY 2021 OPPS we are using all claims with valid CT and MRI cost
                center CCRs, including those that use a ``square feet'' cost allocation
                method, to estimate costs for the APCs for CT and MRI identified in
                Table 1.
                 The Deficit Reduction Act (DRA) of 2005 requires Medicare to limit
                Medicare payment for certain imaging services covered by the Physician
                Fee Schedule (PFS) to not exceed what Medicare pays for these services
                under the OPPS. As required by law, for certain imaging services paid
                for under the PFS, we cap the technical component of the PFS payment
                amount for the applicable year at the OPPS payment amount (71 FR 69659
                through
                [[Page 85876]]
                69661). As we stated in the CY 2014 OPPS/ASC final rule with comment
                period (78 FR 74845), we have noted the potential impact the CT and MRI
                CCRs may have on other payment systems. We understand that payment
                reductions for imaging services under the OPPS could have significant
                payment impacts under the PFS where the technical component payment for
                many imaging services is capped at the OPPS amount. We will continue to
                monitor OPPS imaging payments in the future and consider potential
                impacts of payment changes on the PFS and the ASC payment system.
                 Comment: Several commenters requested that CMS not use the CT and
                MRI-specific cost centers and instead estimate cost using the single
                diagnostic radiology cost center, believing that this will solve the
                inaccurate reporting of costs for CT and MR services. Commenters stated
                that many hospitals have ``near zero'' CT and MRI CCRs and the existing
                cost centers are inaccurate, too low, and depressing the valuation of
                APCs that include CT and MRI services. One commenter recommended that
                CMS establish detailed instructions for nonstandard cost centers to
                improve the accuracy of the cost center data used to calculate CT and
                MRI CCRs. Commenters also noted that the impact of our proposal may
                diminish beneficiary access to medical imaging services for
                beneficiaries, specifically noting low OPPS payments for cardiac
                computed tomography angiography (CCTA). Several commenters noted that
                the use of separate CT and MRI CCRs creates unintended consequences on
                the technical component of CT and MRI codes in the Medicare Physician
                Fee Schedule and on the payment rate under the ASC payment system for
                these codes.
                 Response: We appreciate the thoughtful comments and analysis
                regarding the use of the CT and MRI cost center CCRs. However, as
                discussed in the CY 2020 OPPS/ASC final rule (84 FR 61152), we
                finalized a policy to end the transition policy and use all data
                submitted (including all providers, regardless of cost allocation
                method) in the CY 2021 OPPS. We did not propose to make any changes in
                the CY 2021 OPPS and are not modifying the policy at this time.
                2. Final Data Development and Calculation of Costs Used for Ratesetting
                 In this section of this final rule with comment period, we discuss
                the use of claims to calculate the OPPS payment rates for CY 2021. The
                Hospital OPPS page on the CMS website on which this final rule with
                comment period is posted (http://www.cms.gov/Medicare/Medicare-Fee-for-
                Service-Payment/HospitalOutpatientPPS/index.html) provides an
                accounting of claims used in the development of the final payment
                rates. That accounting provides additional detail regarding the number
                of claims derived at each stage of the process. In addition, later in
                this section we discuss the file of claims that comprises the data set
                that is available upon payment of an administrative fee under a CMS
                data use agreement. The CMS website, http://www.cms.gov/Medicare/
                Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html,
                includes information about obtaining the ``OPPS Limited Data Set,''
                which now includes the additional variables previously available only
                in the OPPS Identifiable Data Set, including ICD-10-CM diagnosis codes
                and revenue code payment amounts. This file is derived from the CY 2019
                claims that were used to calculate the final payment rates for this CY
                2021 OPPS/ASC final rule with comment period.
                 Previously, the OPPS established the scaled relative weights, on
                which payments are based using APC median costs, a process described in
                the CY 2012 OPPS/ASC final rule with comment period (76 FR 74188).
                However, as discussed in more detail in section II.A.2.f. of the CY
                2013 OPPS/ASC final rule with comment period (77 FR 68259 through
                68271), we finalized the use of geometric mean costs to calculate the
                relative weights on which the CY 2013 OPPS payment rates were based.
                While this policy changed the cost metric on which the relative
                payments are based, the data process in general remained the same,
                under the methodologies that we used to obtain appropriate claims data
                and accurate cost information in determining estimated service cost.
                For CY 2021, we are finalizing our proposal to continue to use
                geometric mean costs to calculate the relative weights on which the
                final CY 2021 OPPS payment rates are based.
                 We used the methodology described in sections II.A.2.a. through
                II.A.2.c. of the CY 2021 OPPS/ASC final rule with comment period to
                calculate the costs we used to establish the relative payment weights
                used in calculating the OPPS payment rates for CY 2021 shown in Addenda
                A and B to the CY 2021 OPPS/ASC final rule with comment period (which
                are available via the internet on the CMS website). We referred readers
                to section II.A.4. of the CY 2021 OPPS/ASC final rule with comment
                period for a discussion of the conversion of APC costs to scaled
                payment weights.
                 We note that under the OPPS, CY 2019 was the first year in which
                the claims data used for setting payment rates (CY 2017 data) contained
                lines with the modifier ``PN'', which indicates nonexcepted items and
                services furnished and billed by off-campus provider-based departments
                (PBDs) of hospitals. Because nonexcepted services are not paid under
                the OPPS, in the CY 2019 OPPS/ASC final rule with comment period (83 FR
                58832), we finalized a policy to remove those claim lines reported with
                modifier ``PN'' from the claims data used in ratesetting for the CY
                2019 OPPS and subsequent years. For the CY 2021 OPPS, we will continue
                to remove these claim lines with modifier ``PN'' from the ratesetting
                process.
                 For details of the claims accounting process used in the CY 2021
                OPPS/ASC final rule with comment period, we refer readers to the claims
                accounting narrative under supporting documentation for this CY 2021
                OPPS/ASC final rule with comment period on the CMS website at: http://www.cms .gov/Medicare/Medicare-Fee-for-Service-Payment/
                HospitalOutpatientPPS/index.html.
                a. Calculation of Single Procedure APC Criteria-Based Costs
                (1) Blood and Blood Products
                (a) Methodology
                 Since the implementation of the OPPS in August 2000, we have made
                separate payments for blood and blood products through APCs rather than
                packaging payment for them into payments for the procedures with which
                they are administered. Hospital payments for the costs of blood and
                blood products, as well as for the costs of collecting, processing, and
                storing blood and blood products, are made through the OPPS payments
                for specific blood product APCs.
                 We proposed to continue to establish payment rates for blood and
                blood products using our blood-specific CCR methodology, which utilizes
                actual or simulated CCRs from the most recently available hospital cost
                reports to convert hospital charges for blood and blood products to
                costs. This methodology has been our standard ratesetting methodology
                for blood and blood products since CY 2005. It was developed in
                response to data analysis indicating that there was a significant
                difference in CCRs for those hospitals with and without blood-specific
                cost centers, and past public comments indicating that the former OPPS
                policy of defaulting to the overall hospital CCR for hospitals not
                reporting a blood-
                [[Page 85877]]
                specific cost center often resulted in an underestimation of the true
                hospital costs for blood and blood products. Specifically, to address
                the differences in CCRs and to better reflect hospitals' costs, we
                proposed to continue to simulate blood CCRs for each hospital that does
                not report a blood cost center by calculating the ratio of the blood-
                specific CCRs to hospitals' overall CCRs for those hospitals that do
                report costs and charges for blood cost centers. We also proposed to
                apply this mean ratio to the overall CCRs of hospitals not reporting
                costs and charges for blood cost centers on their cost reports to
                simulate blood-specific CCRs for those hospitals. We proposed to
                calculate the costs upon which the proposed CY 2021 payment rates for
                blood and blood products are based using the actual blood-specific CCR
                for hospitals that reported costs and charges for a blood cost center
                and a hospital-specific, simulated blood-specific CCR for hospitals
                that did not report costs and charges for a blood cost center.
                 We continue to believe that the hospital-specific, simulated blood-
                specific, CCR methodology better responds to the absence of a blood-
                specific CCR for a hospital than alternative methodologies, such as
                defaulting to the overall hospital CCR or applying an average blood-
                specific CCR across hospitals. Because this methodology takes into
                account the unique charging and cost accounting structure of each
                hospital, we believe that it yields more accurate estimated costs for
                these products. We continue to believe that this methodology in CY 2021
                will result in costs for blood and blood products that appropriately
                reflect the relative estimated costs of these products for hospitals
                without blood cost centers and, therefore, for these blood products in
                general.
                 We note that we defined a comprehensive APC (C-APC) as a
                classification for the provision of a primary service and all
                adjunctive services provided to support the delivery of the primary
                service. Under this policy, we include the costs of blood and blood
                products when calculating the overall costs of these C-APCs. We
                proposed to continue to apply the blood-specific CCR methodology
                described in this section when calculating the costs of the blood and
                blood products that appear on claims with services assigned to the C-
                APCs. Because the costs of blood and blood products will be reflected
                in the overall costs of the C-APCs (and, as a result, in the proposed
                payment rates of the C-APCs), we proposed not to make separate payments
                for blood and blood products when they appear on the same claims as
                services assigned to the C-APCs (we refer readers to the CY 2015 OPPS/
                ASC final rule with comment period (79 FR 66796)). We refer readers to
                Addendum B the CY 2021 OPPS/ASC proposed rule (which is available via
                the internet on the CMS website) for the proposed CY 2021 payment rates
                for blood and blood products (which are generally identified with
                status indicator ``R''). For a more detailed discussion of the blood-
                specific CCR methodology, we refer readers to the CY 2005 OPPS proposed
                rule (69 FR 50524 through 50525). For a full history of OPPS payment
                for blood and blood products, we refer readers to the CY 2008 OPPS/ASC
                final rule with comment period (72 FR 66807 through 66810).
                 For CY 2021, we proposed to continue to establish payment rates for
                blood and blood products using our blood-specific CCR methodology. We
                did not receive any comments on our proposal to establish payment rates
                for blood and blood products using our blood-specific CCR methodology
                and we are finalizing this policy as proposed.
                (b) Payment for Blood Not Otherwise Classified (NOC) Code
                 Recently, providers and stakeholders in the blood products field
                have reported that product development for new blood products has
                accelerated. There may be several additional new blood products
                entering the market by the end of CY 2021, compared to only one or two
                new products entering the market over the previous 15 to 20 years. To
                encourage providers to use these new products, providers and
                stakeholders requested that we establish a new HCPCS code to allow for
                payment for unclassified blood products prior to these products
                receiving their own HCPCS code. Under the OPPS, unclassified procedures
                are generally assigned to the lowest APC payment level of an APC
                family. However, since blood products are each assigned to their own
                unique APC, the concept of a lowest APC payment level does not apply in
                this context.
                 Starting January 1, 2020, we established a new HCPCS code, P9099
                (Blood component or product not otherwise classified) which allows
                providers to report unclassified blood products. We assigned HCPCS code
                P9099 to status indicator ``E2'' (Not payable by Medicare when
                submitted on an outpatient claim) for CY 2020. We took this action
                because HCPCS code P9099 potentially could be reported for multiple
                products with different costs during the same period of time.
                Therefore, we could not identify an individual blood product HCPCS code
                that would have a similar cost to HCPCS code P9099, and were not able
                to crosswalk a payment rate from an established blood product HCPCS
                code to HCPCS code P9099. Some stakeholders expressed concerns that
                assigning HCPCS code P9099 to a non-payable status in the OPPS meant
                that hospitals would receive no payment when they used unclassified
                blood products. Also, claim lines billed with P9099 are rejected by
                Medicare, which prevents providers from tracking the utilization of
                unclassified blood products.
                 Because of the challenges of determining an appropriate payment
                rate for unclassified blood products, we stated in the CY 2021 OPPS/ASC
                proposed rule that we were considering packaging the cost of
                unclassified blood products into their affiliated primary medical
                procedure. Although we typically do not package blood products under
                the OPPS, for unclassified blood products, we stated that we do not
                believe it is possible to accurately determine an appropriate rate that
                would apply for all of the products (potentially several, with varying
                costs) that may be reported using HCPCS code P9099. Packaging the cost
                of unclassified blood products into the payment for the primary medical
                service by assigning HCPCS code P9099 a status indicator of ``N'' would
                allow providers to report the cost of unclassified blood products to
                Medicare. Over time, the costs of unspecified blood products would be
                reflected in the payment rate for the primary medical service if the
                blood product remains unclassified. However, we stated that we expect
                that most blood products would seek and be granted more specific coding
                such that the unclassified HCPCS code P9099 would no longer be
                applicable. We also explained that we believe that packaging the costs
                of unclassified blood products would be an improvement over the current
                non-payable status for HCPCS code P9099 as it would allow for tracking
                of the costs and utilization of unclassified blood products.
                 Another option we considered for the CY 2021 OPPS/ASC proposed
                rule, but ultimately rejected was similar to our policy under the OPPS
                to assign NOC codes to the lowest APC within the appropriate clinical
                family. We stated that we could have cross-walked and assigned the same
                payment rate for HCPCS code P9099 as HCPCS code P9043 (Infusion, plasma
                protein fraction (human), 5 percent, 50 ml), which is the lowest cost
                blood product with a
                [[Page 85878]]
                proposed CY 2021 payment rate of $8.02 per unit. This option would have
                provided a small, separate payment for each unclassified blood product
                service, and, similar to our proposal to package the costs of HCPCS
                code P9099 into their primary procedure, would have allowed for
                tracking of the cost and utilization for unclassified blood products.
                However, given that the cross-walked payment rate is potentially
                significantly lower than the cost of the product, we concluded that
                providers may find that packaging the cost of unclassified blood
                products into another medical service may generate more payment for the
                products over time.
                 Thus, for CY 2021, we proposed to package the cost of unclassified
                blood products reported by HCPCS code P9099 into the cost of the
                associated primary procedure. We proposed to change the status
                indicator for HCPCS code P9099 from ``E2'' (not payable by Medicare in
                the OPPS) to ``N'' (payment is packaged into other services in the
                OPPS). In addition, we also sought comment on the alternative proposal
                to make HCPCS code P9099 separately payable with a payment rate
                equivalent to the payment rate for the lowest cost blood product, HCPCS
                code P9043 (Infusion, plasma protein fraction (human), 5 percent, 50
                ml), with a proposed CY 2021 payment rate of $8.02 per unit. We stated
                that if we were to adopt this option as our final policy, we would also
                change the status indicator for HCPCS code P9099 from ``E2'' (not
                payable by Medicare in the OPPS) to ``R'' (blood and blood products,
                paid under OPPS).
                 Comment: Multiple commenters opposed our proposal to reassign HCPCS
                code P9099 to status indicator ``N'' and package the payment for
                unclassified blood products into the associated primary procedure.
                Commenters were concerned that because blood products are usually
                separately paid in the OPPS, APC payment rates for the associated
                procedures would not reflect the cost of the unclassified blood
                products, and that it would take a long time before providers would see
                any changes in payments that would include the cost of unclassified
                blood products. One commenter was also concerned that packaging the
                cost of unclassified blood products would make providers less likely to
                report HCPCS code P9099, making it harder to track the utilization of
                unclassified blood products, and reluctant to use blood products that
                would not receive separate payment.
                 Response: We agree with the concerns expressed by the commenters,
                and we have considered these concerns in determining the payment policy
                for the blood NOC code.
                 Comment: One commenter supported our proposal to reassign HCPCS
                code P9099 to status indicator ``N'' and package the payment for
                unclassified blood products into the associated primary procedure. The
                commenter also encouraged us to work with manufacturers and blood
                product stakeholders to move quickly to establish individual HCPCS
                codes for these new blood products.
                 Response: We appreciate the commenter's support for our proposal
                and we also support the request that codes be established in a timely
                manner for unclassified blood products.
                 Comment: Multiple commenters opposed our alternative proposal to
                pay services billed with HCPCS code P9099 at the lowest payment rate
                for a blood product in the OPPS, which is $7.79 per unit. The
                commenters believe the payment rate will be too low for new,
                unclassified blood products and may discourage manufacturers from
                pursuing new innovations in the blood products field.
                 Response: We understand the concerns of the commenters who believe
                paying for unclassified blood products at the lowest payment rate for a
                separately payable blood product in the OPPS does not provide adequate
                payment for new, unclassified blood products. However, our goal is to
                limit the time it is necessary for providers to report HCPCS code P9099
                until a new blood product has an individual HCPCS code established for
                the product. Once a new blood product has an individual HCPCS code, it
                will allow for a payment for the new service that is better aligned
                with its costs and make it easier to track utilization for the service.
                Establishing a payment rate for the blood NOC code that is equal to the
                payment rate for the lowest payment rate for a separately payable blood
                product is consistent with OPPS policy for other major categories of
                medical care where the payment rate for the unclassified service is
                equal to the lowest-paying APC in an APC series for that category of
                service.
                 Comment: The CMS HOP Panel and multiple commenters requested that
                unclassified blood products be separately paid using a weighted average
                of the payment rates of all separately payable blood products in the
                OPPS. The average payment rate would be weighted by the number of units
                billed for each service in the OPPS. Commenters believe a weighted
                average would be consistent with OPPS policy to provide separate
                payment for all blood products and would encourage the use of HCPCS
                code P9099 to track the utilization of unclassified blood products
                until the new products could receive individual HCPCS codes. The
                weighted average also would provide a higher payment for services
                billed with HCPCS code P9099 than the alternative proposal of assigning
                the lowest payment rate for a separately payable blood product as
                payment for unclassified blood products. Other commenters suggested
                that unclassified blood products be paid either at charges reduced to
                cost or at reasonable cost to appropriately compensate providers
                billing unclassified blood products.
                 Response: Providing payment for HCPCS code P9099 through a weighted
                average payment, charges reduced to cost, or reasonable cost could
                provide incentives to discourage manufacturers of new blood products
                from seeking individual HCPCS codes for their products. A weighted
                average payment would encourage manufacturers of relatively inexpensive
                unclassified blood products not to seek a HCPCS code for their products
                because the payment using P9099 for the products would be substantially
                higher than payment the products would receive once an individual code
                is established for the blood products. In addition, the level of
                payment from a weighted average payment may reduce the urgency of
                manufacturers to seek an individual HCPCS cost even for higher-cost
                products, which would delay our ability to track payment for individual
                blood products. We have similar concerns about paying unclassified
                blood products using either charges reduced to cost or reasonable cost.
                Although these payment methods would accurately reflect the cost of
                unclassified blood products to providers, there would be no incentive
                for providers to manage their costs when using unclassified blood
                products, and no incentives for the manufacturers to seek individual
                HCPCS codes for the unclassified blood products. The OPPS is a
                prospective payment system, and we want to limit rather than expand the
                types of services within the OPPS that do not receive prospective
                payment.
                 After reviewing the public comments, we are not finalizing our
                original proposal to package HCPCS code P9099 into the associated
                primary procedure. Instead, we are finalizing our alternative proposal
                to make HCPCS code P9099 separately payable, assign it a status
                indicator of ``R'', and pay the code at a rate equal to the lowest paid
                separately payable blood product in the OPPS, which is P9043 (Infusion,
                plasma protein fraction (human), 5 percent, 50 ml) with a payment rate
                of $7.79 per unit. Our alternative proposal aligns
                [[Page 85879]]
                with our general policy in the OPPS to pay NOC codes at the lowest
                available APC rate for a service category, while providing a payment
                for unclassified blood products when a service is reported on the
                claim. We believe our alternative proposal is superior to our original
                proposal, which would not have provided any separate payment for blood
                products reported using HCPCS code P9099. Our alternative proposal also
                provides incentives for manufacturers to seek individual HCPCS codes
                for new blood products, which helps us to track the utilization of
                these new blood products and establish a payment rate for these new
                products that better reflects their cost.
                 We decided to finalize our alternative proposal, as it gives
                providers some payment for unclassified blood products, is consistent
                with OPPS policy for other major categories of medical care where the
                payment rate for the unclassified service is based on the lowest-paying
                APC in an APC series for that category of service, while maintaining
                incentives for manufacturers to establish individual HCPCS codes for
                their new blood products in a timely manner.
                (2) Brachytherapy Sources
                 Section 1833(t)(2)(H) of the Act mandates the creation of
                additional groups of covered OPD services that classify devices of
                brachytherapy consisting of a seed or seeds (or radioactive source)
                (``brachytherapy sources'') separately from other services or groups of
                services. The statute provides certain criteria for the additional
                groups. For the history of OPPS payment for brachytherapy sources, we
                refer readers to prior OPPS final rules, such as the CY 2012 OPPS/ASC
                final rule with comment period (77 FR 68240 through 68241). As we have
                stated in prior OPPS updates, we believe that adopting the general OPPS
                prospective payment methodology for brachytherapy sources is
                appropriate for a number of reasons (77 FR 68240). The general OPPS
                methodology uses costs based on claims data to set the relative payment
                weights for hospital outpatient services. This payment methodology
                results in more consistent, predictable, and equitable payment amounts
                per source across hospitals by averaging the extremely high and low
                values, in contrast to payment based on hospitals' charges adjusted to
                costs. We believe that the OPPS methodology, as opposed to payment
                based on hospitals' charges adjusted to cost, also would provide
                hospitals with incentives for efficiency in the provision of
                brachytherapy services to Medicare beneficiaries. Moreover, this
                approach is consistent with our payment methodology for the vast
                majority of items and services paid under the OPPS. We refer readers to
                the CY 2016 OPPS/ASC final rule with comment period (80 FR 70323
                through 70325) for further discussion of the history of OPPS payment
                for brachytherapy sources.
                 For CY 2021, except where otherwise indicated, we proposed to use
                the costs derived from CY 2019 claims data to set the proposed CY 2021
                payment rates for brachytherapy sources because CY 2019 is the year of
                data we proposed to use to set the proposed payment rates for most
                other items and services that would be paid under the CY 2021 OPPS.
                With the exception of the proposed payment rate for brachytherapy
                source C2645 (Brachytherapy planar source, palladium-103, per square
                millimeter), we proposed to base the payment rates for brachytherapy
                sources on the geometric mean unit costs for each source, consistent
                with the methodology that we proposed for other items and services paid
                under the OPPS, as discussed in section II.A.2. of the CY 2021 OPPS/ASC
                proposed rule. We also proposed to continue the other payment policies
                for brachytherapy sources that we finalized and first implemented in
                the CY 2010 OPPS/ASC final rule with comment period (74 FR 60537). We
                proposed to pay for the stranded and nonstranded not otherwise
                specified (NOS) codes, HCPCS codes C2698 (Brachytherapy source,
                stranded, not otherwise specified, per source) and C2699 (Brachytherapy
                source, non-stranded, not otherwise specified, per source), at a rate
                equal to the lowest stranded or nonstranded prospective payment rate
                for such sources, respectively, on a per source basis (as opposed to,
                for example, a per mCi), which is based on the policy we established in
                the CY 2008 OPPS/ASC final rule with comment period (72 FR 66785). We
                also proposed to continue the policy we first implemented in the CY
                2010 OPPS/ASC final rule with comment period (74 FR 60537) regarding
                payment for new brachytherapy sources for which we have no claims data,
                based on the same reasons we discussed in the CY 2008 OPPS/ASC final
                rule with comment period (72 FR 66786; which was delayed until January
                1, 2010 by section 142 of Pub. L. 110-275). Specifically, this policy
                is intended to enable us to assign new HCPCS codes for new
                brachytherapy sources to their own APCs, with prospective payment rates
                set based on our consideration of external data and other relevant
                information regarding the expected costs of the sources to hospitals.
                The proposed CY 2021 payment rates for brachytherapy sources are
                included in Addendum B to the CY 2021 OPPS/ASC proposed rule (which is
                available via the internet on the CMS website) and identified with
                status indicator ``U''.
                 For CY 2018, we assigned status indicator ``U'' (Brachytherapy
                Sources, Paid under OPPS; separate APC payment) to HCPCS code C2645
                (Brachytherapy planar source, palladium-103, per square millimeter) in
                the absence of claims data and established a payment rate using
                external data (invoice price) at $4.69 per mm\2\. For CY 2019, in the
                absence of sufficient claims data, we continued to establish a payment
                rate for C2645 at $4.69 per mm\2\. Our CY 2018 claims data available
                for the final CY 2020 OPPS/ASC final rule with comment period, included
                two claims with a geometric mean cost for HCPCS code C2645 of $1.02 per
                mm\2\. In response to comments from stakeholders, we agreed with
                commenters that given the limited claims data available and a new
                outpatient indication for C2645, a payment rate for HCPCS code C2645
                based on the geometric mean cost of 1.02 per mm\2\ may not adequately
                reflect the cost of HCPCS code C2645. In the CY 2020 OPPS/ASC final
                rule with comment period, we finalized our policy to use our equitable
                adjustment authority under section 1833(t)(2)(E) of the Act, which
                states that the Secretary shall establish, in a budget neutral manner,
                other adjustments as determined to be necessary to ensure equitable
                payments, to maintain the CY 2019 payment rate of $4.69 per mm\2\ for
                HCPCS code C2645 for CY 2020.
                 For CY 2021, we proposed to continue to assign status indicator
                ``U'' to HCPCS code C2645 (Brachytherapy planar source, palladium-103,
                per square millimeter). For CY 2020, in the absence of sufficient
                claims data, we continued to establish a payment rate for C2645 at
                $4.69 per mm\2\. Our CY 2019 claims data available for the proposed CY
                2021 rule included one claim with over 4,000 units of HCPCS code C2645.
                The geometric mean cost of HCPCS code C2645 from this one claim is
                $1.07 per mm\2\ for CY 2019. We do not believe that this one claim is
                adequate to establish an APC payment rate for HCPCS code C2645 and to
                discontinue our use of external data for this brachytherapy source.
                Therefore, for CY 2021, we proposed to continue assigning the
                brachytherapy source described by HCPCS code C2645 a payment rate of
                $4.69 mm\2\ for CY 2021
                [[Page 85880]]
                through use of our equitable adjustment authority.
                 Comment: One commenter recommended that we should review outpatient
                claims data for low-volume brachytherapy sources and consider removing
                outliers to ensure appropriate and stable brachytherapy source
                reimbursement in future years. The commenter contends that
                brachytherapy source payments have fluctuated significantly since 2013
                and may create barriers to access for individual cancer patients.
                 Response: We thank the commenter for their recommendation. As we
                have stated in past rulemaking, the OPPS relies on the concept of
                averaging, where the payment may be more or less than the estimated
                cost of providing a service for a particular patient; however, with the
                exception of outlier cases, we believe that such a prospective payment
                is adequate to ensure access to appropriate care. We acknowledge that
                payment for brachytherapy sources based on geometric mean costs from a
                small set of claims may be more variable on a year-to-year basis when
                compared to the geometric mean costs for brachytherapy sources from a
                larger claims set. We will take the commenter's recommendation into
                consideration in future rulemaking.
                 Comment: One commenter recommended that we exclude erroneous claims
                data for C2642 (Brachytherapy source, stranded, cesium-131, per source)
                from a particular hospital. The commenter stated the hospital reported
                costs per source of $42.59 for C2642. Further, the commenter argued the
                proposed payment rate for C2642 as a result of including the hospital's
                claims information would threaten access to cancer therapy and would be
                less than the actual amount paid by any hospital for this source over
                the past decade.
                 Response: In our review of CY 2019 brachytherapy claims used for CY
                2021 OPPS ratesetting, we did not find any erroneous billing of C2642
                with respect to the particular hospital mentioned by the commenter.
                OPPS relative payment weights based on geometric mean costs capture the
                range of costs associated with services that are introduced slowly into
                the system on a case-by-case or hospital-by-hospital basis. For these
                reasons we believe it would be inappropriate to remove any outliers
                when determining brachytherapy geometric mean costs and payment rates
                for C2642.
                 After consideration of the public comments we received, we are
                finalizing our proposal to assign the brachytherapy source described by
                HCPCS code C2645 a payment rate of $4.69 per mm\2\ for CY 2021 through
                use of our equitable adjustment authority.
                 We continue to invite hospitals and other parties to submit
                recommendations to us for new codes to describe new brachytherapy
                sources. Such recommendations should be direction via email to
                [email protected] or by mail to the Division of Outpatient
                Care, Mail Stop C4-01-26, Centers for Medicare and Medicaid Services,
                7500 Security Boulevard, Baltimore, MD 21244. We will continue to add
                new brachytherapy source codes and descriptors to our systems for
                payment on a quarterly basis.
                b. Comprehensive APCs (C-APCs) for CY 2021
                (1) Background
                 In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74861
                through 74910), we finalized a comprehensive payment policy that
                packages payment for adjunctive and secondary items, services, and
                procedures into the most costly primary procedure under the OPPS at the
                claim level. The policy was finalized in CY 2014, but the effective
                date was delayed until January 1, 2015, to allow additional time for
                further analysis, opportunity for public comment, and systems
                preparation. The comprehensive APC (C-APC) policy was implemented
                effective January 1, 2015, with modifications and clarifications in
                response to public comments received regarding specific provisions of
                the C-APC policy (79 FR 66798 through 66810).
                 A C-APC is defined as a classification for the provision of a
                primary service and all adjunctive services provided to support the
                delivery of the primary service. We established C-APCs as a category
                broadly for OPPS payment and implemented 25 C-APCs beginning in CY 2015
                (79 FR 66809 through 66810). In the CY 2016 OPPS/ASC final rule with
                comment period (80 FR 70332), we finalized 10 additional C-APCs to be
                paid under the existing C-APC payment policy and added 1 additional
                level to both the Orthopedic Surgery and Vascular Procedures clinical
                families, which increased the total number of C-APCs to 37 for CY 2016.
                In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79584
                through 79585), we finalized another 25 C-APCs for a total of 62 C-
                APCs. In the CY 2018 OPPS/ASC final rule with comment period, we did
                not change the total number of C-APCs from 62. In the CY 2019 OPPS/ASC
                final rule with comment period, we created 3 new C-APCs, increasing the
                total number to 65 (83 FR 58844 through 58846). Most recently in the CY
                2020 OPPS/ASC final rule with comment period, we created two new C-
                APCs, increasing the total number to 67 C-APCs (84 FR 61158 through
                61166).
                 Under our C-APC policy, we designate a service described by a HCPCS
                code assigned to a C-APC as the primary service when the service is
                identified by OPPS status indicator ``J1''. When such a primary service
                is reported on a hospital outpatient claim, taking into consideration
                the few exceptions that are discussed below, we make payment for all
                other items and services reported on the hospital outpatient claim as
                being integral, ancillary, supportive, dependent, and adjunctive to the
                primary service (hereinafter collectively referred to as ``adjunctive
                services'') and representing components of a complete comprehensive
                service (78 FR 74865 and 79 FR 66799). Payments for adjunctive services
                are packaged into the payments for the primary services. This results
                in a single prospective payment for each of the primary, comprehensive
                services based on the costs of all reported services at the claim
                level.
                 Services excluded from the C-APC policy under the OPPS include
                services that are not covered OPD services, services that cannot by
                statute be paid for under the OPPS, and services that are required by
                statute to be separately paid. This includes certain mammography and
                ambulance services that are not covered OPD services in accordance with
                section 1833(t)(1)(B)(iv) of the Act; brachytherapy seeds, which also
                are required by statute to receive separate payment under section
                1833(t)(2)(H) of the Act; pass-through payment drugs and devices, which
                also require separate payment under section 1833(t)(6) of the Act;
                self-administered drugs (SADs) that are not otherwise packaged as
                supplies because they are not covered under Medicare Part B under
                section 1861(s)(2)(B) of the Act; and certain preventive services (78
                FR 74865 and 79 FR 66800 through 66801). A list of services excluded
                from the C-APC policy is included in Addendum J to the CY 2021 OPPS/ASC
                proposed rule (which is available via the internet on the CMS website).
                 In the interim final with request for comments (IFC) entitled,
                ``Additional Policy and Regulatory Revisions in Response to the COVID-
                19 Public Health Emergency'', published on November 6, 2020, we stated
                that effective for services furnished on or
                [[Page 85881]]
                after the effective date of the IFC and until the end of the PHE for
                COVID-19, there is an exception to the OPPS C-APC policy to ensure
                separate payment for new COVID-19 treatments that meet certain criteria
                (85 FR 71158 through 71160). Under this exception, any new COVID-19
                treatment that meets the two following criteria will, for the remainder
                of the PHE for COVID-19, always be separately paid and will not be
                packaged into a C-APC when it is provided on the same claim as the
                primary C-APC service. First, the treatment must be a drug or
                biological product (which could include a blood product) authorized to
                treat COVID-19, as indicated in section ``I. Criteria for Issuance of
                Authorization'' of the letter of authorization for the drug or
                biological product, or the drug or biological product must be approved
                by the FDA for treating COVID-19. Second, the emergency use
                authorization (EUA) for the drug or biological product (which could
                include a blood product) must authorize the use of the product in the
                outpatient setting or not limit its use to the inpatient setting, or
                the product must be approved by the FDA to treat COVID-19 disease and
                not limit its use to the inpatient setting. For further information
                regarding the exception to the C-APC policy for COVID-19 treatments,
                please refer to the IFC (85 FR 71158 through 71160).
                 The C-APC policy payment methodology set forth in the CY 2014 OPPS/
                ASC final rule with comment period for the C-APCs and modified and
                implemented beginning in CY 2015 is summarized as follows (78 FR 74887
                and 79 FR 66800):
                 Basic Methodology. As stated in the CY 2015 OPPS/ASC final rule
                with comment period, we define the C-APC payment policy as including
                all covered OPD services on a hospital outpatient claim reporting a
                primary service that is assigned to status indicator ``J1'', excluding
                services that are not covered OPD services or that cannot by statute be
                paid for under the OPPS. Services and procedures described by HCPCS
                codes assigned to status indicator ``J1'' are assigned to C-APCs based
                on our usual APC assignment methodology by evaluating the geometric
                mean costs of the primary service claims to establish resource
                similarity and the clinical characteristics of each procedure to
                establish clinical similarity within each APC.
                 In the CY 2016 OPPS/ASC final rule with comment period, we expanded
                the C-APC payment methodology to qualifying extended assessment and
                management encounters through the ``Comprehensive Observation
                Services'' C-APC (C-APC 8011). Services within this APC are assigned
                status indicator ``J2''. Specifically, we make a payment through C-APC
                8011 for a claim that:
                 Does not contain a procedure described by a HCPCS code to
                which we have assigned status indicator ``T;''
                 Contains 8 or more units of services described by HCPCS
                code G0378 (Hospital observation services, per hour);
                 Contains services provided on the same date of service or
                1 day before the date of service for HCPCS code G0378 that are
                described by one of the following codes: HCPCS code G0379 (Direct
                admission of patient for hospital observation care) on the same date of
                service as HCPCS code G0378; CPT code 99281 (Emergency department visit
                for the evaluation and management of a patient (Level 1)); CPT code
                99282 (Emergency department visit for the evaluation and management of
                a patient (Level 2)); CPT code 99283 (Emergency department visit for
                the evaluation and management of a patient (Level 3)); CPT code 99284
                (Emergency department visit for the evaluation and management of a
                patient (Level 4)); CPT code 99285 (Emergency department visit for the
                evaluation and management of a patient (Level 5)) or HCPCS code G0380
                (Type B emergency department visit (Level 1)); HCPCS code G0381 (Type B
                emergency department visit (Level 2)); HCPCS code G0382 (Type B
                emergency department visit (Level 3)); HCPCS code G0383 (Type B
                emergency department visit (Level 4)); HCPCS code G0384 (Type B
                emergency department visit (Level 5)); CPT code 99291 (Critical care,
                evaluation and management of the critically ill or critically injured
                patient; first 30-74 minutes); or HCPCS code G0463 (Hospital outpatient
                clinic visit for assessment and management of a patient); and
                 Does not contain services described by a HCPCS code to
                which we have assigned status indicator ``J1''.
                 The assignment of status indicator ``J2'' to a specific combination
                of services performed in combination with each other allows for all
                other OPPS payable services and items reported on the claim (excluding
                services that are not covered OPD services or that cannot by statute be
                paid for under the OPPS) to be deemed adjunctive services representing
                components of a comprehensive service and resulting in a single
                prospective payment for the comprehensive service based on the costs of
                all reported services on the claim (80 FR 70333 through 70336).
                 Services included under the C-APC payment packaging policy, that
                is, services that are typically adjunctive to the primary service and
                provided during the delivery of the comprehensive service, include
                diagnostic procedures, laboratory tests, and other diagnostic tests and
                treatments that assist in the delivery of the primary procedure; visits
                and evaluations performed in association with the procedure; uncoded
                services and supplies used during the service; durable medical
                equipment as well as prosthetic and orthotic items and supplies when
                provided as part of the outpatient service; and any other components
                reported by HCPCS codes that represent services that are provided
                during the complete comprehensive service (78 FR 74865 and 79 FR
                66800).
                 In addition, payment for hospital outpatient department services
                that are similar to therapy services and delivered either by therapists
                or nontherapists is included as part of the payment for the packaged
                complete comprehensive service. These services that are provided during
                the perioperative period are adjunctive services and are deemed not to
                be therapy services as described in section 1834(k) of the Act,
                regardless of whether the services are delivered by therapists or other
                nontherapist health care workers. We have previously noted that therapy
                services are those provided by therapists under a plan of care in
                accordance with section 1835(a)(2)(C) and section 1835(a)(2)(D) of the
                Act and are paid for under section 1834(k) of the Act, subject to
                annual therapy caps as applicable (78 FR 74867 and 79 FR 66800).
                However, certain other services similar to therapy services are
                considered and paid for as hospital outpatient department services.
                Payment for these nontherapy outpatient department services that are
                reported with therapy codes and provided with a comprehensive service
                is included in the payment for the packaged complete comprehensive
                service. We note that these services, even though they are reported
                with therapy codes, are hospital outpatient department services and not
                therapy services. We refer readers to the July 2016 OPPS Change Request
                9658 (Transmittal 3523) for further instructions on reporting these
                services in the context of a C-APC service.
                 Items included in the packaged payment provided in conjunction with
                the primary service also include all drugs, biologicals, and
                radiopharmaceuticals, regardless of cost, except those drugs with pass-
                through payment status and SADs, unless they function as packaged
                supplies (78 FR 74868 through 74869 and 74909 and 79 FR 66800). We
                refer readers to Section
                [[Page 85882]]
                50.2M, Chapter 15, of the Medicare Benefit Policy Manual for a
                description of our policy on SADs treated as hospital outpatient
                supplies, including lists of SADs that function as supplies and those
                that do not function as supplies.
                 We define each hospital outpatient claim reporting a single unit of
                a single primary service assigned to status indicator ``J1'' as a
                single ``J1'' unit procedure claim (78 FR 74871 and 79 FR 66801). Line
                item charges for services included on the C-APC claim are converted to
                line item costs, which are then summed to develop the estimated APC
                costs. These claims are then assigned one unit of the service with
                status indicator ``J1'' and later used to develop the geometric mean
                costs for the C-APC relative payment weights. (We note that we use the
                term ``comprehensive'' to describe the geometric mean cost of a claim
                reporting ``J1'' service(s) or the geometric mean cost of a C-APC,
                inclusive of all of the items and services included in the C-APC
                service payment bundle.) Charges for services that would otherwise be
                separately payable are added to the charges for the primary service.
                This process differs from our traditional cost accounting methodology
                only in that all such services on the claim are packaged (except
                certain services as described above). We apply our standard data trims,
                which exclude claims with extremely high primary units or extreme
                costs.
                 The comprehensive geometric mean costs are used to establish
                resource similarity and, along with clinical similarity, dictate the
                assignment of the primary services to the C-APCs. We establish a
                ranking of each primary service (single unit only) to be assigned to
                status indicator ``J1'' according to its comprehensive geometric mean
                costs. For the minority of claims reporting more than one primary
                service assigned to status indicator ``J1'' or units thereof, we
                identify one ``J1'' service as the primary service for the claim based
                on our cost-based ranking of primary services. We then assign these
                multiple ``J1'' procedure claims to the C-APC to which the service
                designated as the primary service is assigned. If the reported ``J1''
                services on a claim map to different C-APCs, we designate the ``J1''
                service assigned to the C-APC with the highest comprehensive geometric
                mean cost as the primary service for that claim. If the reported
                multiple ``J1'' services on a claim map to the same C-APC, we designate
                the most costly service (at the HCPCS code level) as the primary
                service for that claim. This process results in initial assignments of
                claims for the primary services assigned to status indicator ``J1'' to
                the most appropriate C-APCs based on both single and multiple procedure
                claims reporting these services and clinical and resource homogeneity.
                 Complexity Adjustments. We use complexity adjustments to provide
                increased payment for certain comprehensive services. We apply a
                complexity adjustment by promoting qualifying paired ``J1'' service
                code combinations or paired code combinations of ``J1'' services and
                certain add-on codes (as described further below) from the originating
                C-APC (the C-APC to which the designated primary service is first
                assigned) to the next higher paying C-APC in the same clinical family
                of C-APCs. We apply this type of complexity adjustment when the paired
                code combination represents a complex, costly form or version of the
                primary service according to the following criteria:
                 Frequency of 25 or more claims reporting the code
                combination (frequency threshold); and
                 Violation of the 2 times rule, as stated in section
                1833(t)(2) of the Act and section III.B.2. of the CY 2021 OPPS/ASC
                proposed rule, in the originating C-APC (cost threshold).
                 These criteria identify paired code combinations that occur
                commonly and exhibit materially greater resource requirements than the
                primary service. The CY 2017 OPPS/ASC final rule with comment period
                (81 FR 79582) included a revision to the complexity adjustment
                eligibility criteria. Specifically, we finalized a policy to
                discontinue the requirement that a code combination (that qualifies for
                a complexity adjustment by satisfying the frequency and cost criteria
                thresholds described above) also not create a 2 times rule violation in
                the higher level or receiving APC.
                 After designating a single primary service for a claim, we evaluate
                that service in combination with each of the other procedure codes
                reported on the claim assigned to status indicator ``J1'' (or certain
                add-on codes) to determine if there are paired code combinations that
                meet the complexity adjustment criteria. For a new HCPCS code, we
                determine initial C-APC assignment and qualification for a complexity
                adjustment using the best available information, crosswalking the new
                HCPCS code to a predecessor code(s) when appropriate.
                 Once we have determined that a particular code combination of
                ``J1'' services (or combinations of ``J1'' services reported in
                conjunction with certain add-on codes) represents a complex version of
                the primary service because it is sufficiently costly, frequent, and a
                subset of the primary comprehensive service overall according to the
                criteria described above, we promote the claim including the complex
                version of the primary service as described by the code combination to
                the next higher cost C-APC within the clinical family, unless the
                primary service is already assigned to the highest cost APC within the
                C-APC clinical family or assigned to the only C-APC in a clinical
                family. We do not create new APCs with a comprehensive geometric mean
                cost that is higher than the highest geometric mean cost (or only) C-
                APC in a clinical family just to accommodate potential complexity
                adjustments. Therefore, the highest payment for any claim including a
                code combination for services assigned to a C-APC would be the highest
                paying C-APC in the clinical family (79 FR 66802).
                 We package payment for all add-on codes into the payment for the C-
                APC. However, certain primary service add-on combinations may qualify
                for a complexity adjustment. As noted in the CY 2016 OPPS/ASC final
                rule with comment period (80 FR 70331), all add-on codes that can be
                appropriately reported in combination with a base code that describes a
                primary ``J1'' service are evaluated for a complexity adjustment.
                 To determine which combinations of primary service codes reported
                in conjunction with an add-on code may qualify for a complexity
                adjustment for CY 2021, we proposed to apply the frequency and cost
                criteria thresholds discussed above, testing claims reporting one unit
                of a single primary service assigned to status indicator ``J1'' and any
                number of units of a single add-on code for the primary ``J1'' service.
                If the frequency and cost criteria thresholds for a complexity
                adjustment are met and reassignment to the next higher cost APC in the
                clinical family is appropriate (based on meeting the criteria outlined
                above), we make a complexity adjustment for the code combination; that
                is, we reassign the primary service code reported in conjunction with
                the add-on code to the next higher cost C-APC within the same clinical
                family of C-APCs. As previously stated, we package payment for add-on
                codes into the C-APC payment rate. If any add-on code reported in
                conjunction with the ``J1'' primary service code does not qualify for a
                complexity adjustment, payment for the add-on service continues to be
                packaged into the payment for the
                [[Page 85883]]
                primary service and is not reassigned to the next higher cost C-APC. We
                listed the complexity adjustments for ``J1'' and add-on code
                combinations for CY 2021, along with all of the other proposed
                complexity adjustments, in Addendum J to the CY 2021 OPPS/ASC proposed
                rule (which is available via the internet on the CMS website).
                 Addendum J to the CY 2021 OPPS/ASC proposed rule includes the cost
                statistics for each code combination that would qualify for a
                complexity adjustment (including primary code and add-on code
                combinations). Addendum J to the CY 2021 OPPS/ASC proposed rule also
                contains summary cost statistics for each of the paired code
                combinations that describe a complex code combination that would
                qualify for a complexity adjustment and are proposed to be reassigned
                to the next higher cost C-APC within the clinical family. The combined
                statistics for all proposed reassigned complex code combinations are
                represented by an alphanumeric code with the first 4 digits of the
                designated primary service followed by a letter. For example, the
                proposed geometric mean cost listed in Addendum J for the code
                combination described by complexity adjustment assignment 3320R, which
                is assigned to C-APC 5224 (Level 4 Pacemaker and Similar Procedures),
                includes all paired code combinations that are proposed to be
                reassigned to C-APC 5224 when CPT code 33208 is the primary code.
                Providing the information contained in Addendum J to the CY 2021 OPPS/
                ASC proposed rule allows stakeholders the opportunity to better assess
                the impact associated with the proposed reassignment of claims with
                each of the paired code combinations eligible for a complexity
                adjustment.
                 Comment: A commenter stated that CMS should not use claims data
                from complexity adjustment code pairs in calculating the geometric mean
                cost for the next higher paying APC to which the complexity adjusted
                code pair is assigned and that doing so can decrease the geometric mean
                cost of APCs with a low number of claims, specifically C-APC 5493--
                Level 3 Intraocular Procedures. The commenter stated that CMS did not
                intend to include the costs of complexity-adjusted code pairs in
                calculating the geometric mean cost for the higher-paying APCs to which
                the complexity-adjustment code pair is assigned when the C-APC
                complexity adjustment policy was initially established and that
                complexity adjustments were intended as payment adjustments for complex
                versions of the comprehensive service only. To further support their
                claim that CMS intended for complexity adjustments to only provide
                higher payment for claims including complex comprehensive services, the
                commenter noted that, unlike other HCPCS codes with a significant
                number of claims assigned to an APC, complexity adjusted code pairs are
                not evaluated for a 2 times rule violation in the higher-paying APC to
                which they are promoted.
                 Response: We disagree with the commenter's assertion regarding the
                policy of including the costs of a complexity adjusted code pair in the
                calculation of the geometric mean costs of the next higher paying C-APC
                to which the code pair is assigned. The current C-APC complexity
                adjustment policy, including the calculation of the geometric mean cost
                of APCs that include complexity-adjusted code pairs, was initially
                described in the CY 2014 OPPS/ASC final rule with comment period (78 FR
                74887). In that rule, we stated the following: ``We then considered
                reassigning complex subsets of claims for each primary service HCPCS
                code. All claims reporting more than one procedure described by HCPCS
                codes assigned to status indicator ``J1'' are evaluated for the
                existence of commonly occurring combinations of procedure codes
                reported on claims that exhibit a materially greater comprehensive
                geometric mean cost relative to the geometric mean cost of the claims
                reporting that primary HCPCS code. This indicates that the subset of
                procedures identified by the secondary HCPCS code has increased
                resource requirements relative to less complex subsets of that
                procedure. If a combination of procedure codes reported on claims is
                identified that meets these requirements, that is, commonly occurring
                and exhibiting materially greater resource requirements, it is further
                evaluated to confirm clinical validity as a complex subset of the
                primary procedure and the combination of procedure codes is then
                identified as complex, and primary service claims with that combination
                of procedure codes are subsequently reassigned as appropriate. If a
                combination of procedure codes does not meet the requirement for a
                materially different cost or does not occur commonly, it is not
                considered to be a complex, and primary service claims with that
                combination of procedure codes are not reassigned. All combinations of
                procedures described by HCPCS codes assigned to status indicator ``J1''
                for each primary HCPCS code are similarly evaluated.
                 Once all combinations of procedures described by HCPCS codes
                assigned to status indicator ``J1'' have been evaluated, all claims
                identified for reassignment for each primary service are combined and
                the group is assigned to a higher level comprehensive APC within a
                clinical family of comprehensive APCs, that is, an APC with greater
                estimated resource requirements than the initially assigned
                comprehensive APC and with appropriate clinical homogeneity. We
                assessed resource variation for reassigned claims within the receiving
                APC using the geometric mean cost for all reassigned claims for the
                primary service relative to other services assigned to that APC using
                the 2 times rule criteria. For new HCPCS codes and codes without data,
                we will use the best data available to us to identify combinations of
                procedures that represent a more complex form of the primary procedure
                and warrant reassignment to a higher level APC. We will reevaluate our
                APC assignments, and identification and APC placement of complex claims
                once claims data become available. We then recalculate all APC
                comprehensive geometric mean costs and ensure clinical and resource
                homogeneity.''
                 We believe that the final statement clearly communicates our policy
                of including the costs of the complexity-adjusted codes pairs in
                calculating the geometric mean cost for the higher-paying APCs to which
                the complexity-adjustment code pairs are assigned. While the commenter
                is correct that we no longer require that a code combination (that
                qualifies for a complexity adjustment by satisfying the frequency and
                cost criteria thresholds described above) not create a 2 times rule
                violation in the higher level or receiving APC, this change was based
                on our belief that the requirement was not useful because most code
                combinations fall below our established frequency threshold for
                considering 2 times rule violations (81 FR 79582). In summary, we do
                not believe it is necessary to change the current policy that includes
                the costs of the paired code combinations in the next higher-paying APC
                at this time.
                 Comment: Several commenters requested that CMS alter the
                established C-APC complexity adjustment eligibility criteria to allow
                additional code combinations to qualify for complexity adjustments. We
                also received several comments requesting that CMS modify its
                complexity adjustment criteria by eliminating the claims frequency
                requirement to determine eligibility for the complexity adjustment and
                expanding the eligibility for a complexity adjustment to other APCs
                besides C-APCs to apply the
                [[Page 85884]]
                complexity adjustment to all blue light cystoscopy with Cysview
                procedures in the HOPD, even those assigned to clinical APCs.
                 Response: We appreciate these comments. However, at this time, we
                do not believe changes to the C-APC complexity adjustment criteria are
                necessary or that we should make exceptions to the criteria to allow
                claims with the code combinations suggested by the commenters to
                receive complexity adjustments. As stated previously (81 FR 79582), we
                continue to believe that the complexity adjustment criteria, which
                require a frequency of 25 or more claims reporting a code combination
                and a violation of the 2 times rule in the originating C-APC in order
                to receive payment in the next higher cost C-APC within the clinical
                family, are adequate to determine if a combination of procedures
                represents a complex, costly subset of the primary service. If a code
                combination meets these criteria, the combination receives payment at
                the next higher cost C-APC. Code combinations that do not meet these
                criteria receive the C-APC payment rate associated with the primary
                ``J1'' service. A minimum of 25 claims is already a very low threshold
                for a national payment system. Lowering the minimum of 25 claims
                further could lead to unnecessary complexity adjustments for service
                combinations that are rarely performed.
                 With regard to the requests for complexity adjustments for blue
                light cystoscopy procedures involving the use of Cysview, in CY 2018 we
                created a HCPCS C-code (C9738--Adjunctive blue light cystoscopy with
                fluorescent imaging agent (list separately in addition to code for
                primary procedure)) to describe blue light cystoscopy with fluorescent
                imaging agent and allowed this code to be eligible for complexity
                adjustments when billed with procedure codes used to describe white
                light cystoscopy of the bladder, although this code is not a ``J1''
                service or an add-on code for the primary ``J1'' service. For CY 2021,
                there is one code combination, of the six total available combinations
                involving C9738 and procedure codes used to describe white light
                cystoscopy, that qualifies for a complexity adjustment (HCPCS code
                52204 Cystourethroscopy, with biopsy(s) + C9738 Adjunctive blue light
                cystoscopy with fluorescent imaging agent (list separately in addition
                to code for primary procedure)). The remaining five code combinations
                do not meet the cost and frequency criteria to qualify for a complexity
                adjustment. At this time, we do not believe that further modifications
                to the C-APC complexity adjustment policy, including allowing services
                assigned to clinical APCs to qualify for complexity adjustments, are
                necessary to allow for complexity adjustments for these procedures.
                 After consideration of the public comments we received on the
                proposed complexity adjustment policy, we are finalizing the C-APC
                complexity adjustment policy for CY 2021, as proposed, without
                modification.
                (2) Exclusion of Procedures Assigned to New Technology APCs From the C-
                APC Policy
                 Services that are assigned to New Technology APCs are typically new
                procedures that do not have sufficient claims history to establish an
                accurate payment for the procedures. Beginning in CY 2002, we retain
                services within New Technology APC groups until we gather sufficient
                claims data to enable us to assign the service to an appropriate
                clinical APC. This policy allows us to move a service from a New
                Technology APC in less than 2 years if sufficient data are available.
                It also allows us to retain a service in a New Technology APC for more
                than 2 years if sufficient data upon which to base a decision for
                reassignment have not been collected (82 FR 59277).
                 The C-APC payment policy packages payment for adjunctive and
                secondary items, services, and procedures into the most costly primary
                procedure under the OPPS at the claim level. Prior to CY 2019, when a
                procedure assigned to a New Technology APC was included on the claim
                with a primary procedure, identified by OPPS status indicator ``J1'',
                payment for the new technology service was typically packaged into the
                payment for the primary procedure. Because the new technology service
                was not separately paid in this scenario, the overall number of single
                claims available to determine an appropriate clinical APC for the new
                service was reduced. This was contrary to the objective of the New
                Technology APC payment policy, which is to gather sufficient claims
                data to enable us to assign the service to an appropriate clinical APC.
                 To address this issue and ensure that there is sufficient claims
                data for services assigned to New Technology APCs, in the CY 2019 OPPS/
                ASC final rule with comment period (83 FR 58847), we finalized
                excluding payment for any procedure that is assigned to a New
                Technology APC (APCs 1491 through 1599 and APCs 1901 through 1908) from
                being packaged when included on a claim with a ``J1'' service assigned
                to a C-APC. In the CY 2020 OPPS/ASC final rule with comment period, we
                finalized that payment for services assigned to a New Technology APC
                would be excluded from being packaged into the payment for
                comprehensive observation services assigned status indicator ``J2''
                when they are included on a claim with a ``J2'' service starting in CY
                2020 (84 FR 61167).
                (3) Additional C-APCs for CY 2021
                 For CY 2021 and subsequent years, we proposed to continue to apply
                the C-APC payment policy methodology. We refer readers to the CY 2017
                OPPS/ASC final rule with comment period (81 FR 79583) for a discussion
                of the C-APC payment policy methodology and revisions.
                 Each year, in accordance with section 1833(t)(9)(A) of the Act, we
                review and revise the services within each APC group and the APC
                assignments under the OPPS. As a result of our annual review of the
                services and the APC assignments under the OPPS, we did not propose to
                convert any conventional APCs to C-APCs in CY 2021. However, as
                discussed in section III.D.7, we proposed to create an additional level
                in the ``Urology and Related Services'' APC series and, as discussed in
                section III.D.1, we proposed to create an additional level in the
                ``Neurostimulator and Related Procedures'' APC series. Table 3 lists
                the proposed C-APCs for CY 2021, all of which were established in past
                rules.
                 Comment: Commenters supported the creation of the two new proposed
                C-APCs, based on resource cost and clinical characteristics.
                 Response: We appreciate the commenters' support.
                 Comment: Several commenters expressed concern that the C-APC
                payment rates may not adequately reflect the costs associated with
                services. These comments stated that the C-APC methodology does not
                account for the complexity of certain care processes, fails to capture
                the necessary claims, and the resulting data may lead to inaccurate
                payment rates that will negatively impact access to services.
                 Commenters also had concerns around the claims data used for
                ratesetting, due to variations in clinical practice and billing
                patterns across the hospitals that submit these claims, and urged CMS
                to consider alternatives to the current methodology. Some commenters
                were concerned that hospitals are not correctly charging for procedures
                assigned to C-APCs and urged CMS to invest in policies and education
                for hospitals regarding correct
                [[Page 85885]]
                billing patterns. These commenters also requested that CMS provide an
                analysis of the impact of the C-APC policy on affected procedures and
                patient access to services. One commenter requested that CMS review and
                use Part B claims data in order to estimate costs for the appropriate
                C-APCs for CY 2021 ratesetting.
                 Response: We appreciate the comments. We continue to believe that
                the current C-APC methodology is appropriate. We also note that, in the
                CY 2018 OPPS/ASC final rule with comment period (82 FR 59246), we
                conducted an analysis of the effects of the C-APC policy. The analysis
                used claims data for the CY 2016 OPPS/ASC final rule with comment
                period, the CY 2017 OPPS/ASC final rule with comment period, and the CY
                2018 OPPS/ASC proposed rule, which were for the period from CY 2014
                (before C-APCs became effective) to CY 2016. We looked at separately
                payable codes that were then assigned to C-APCs and, overall, we
                observed an increase in claim line frequency, units billed, and
                Medicare payment for those procedures, which suggest that the C-APC
                payment policy did not adversely affect access to care or reduce
                payments to hospitals and is working as intended.
                 Comment: Several commenters requested that CMS discontinue the C-
                APC payment policy for all surgical insertion codes required for
                brachytherapy treatment. The commenters stated concerns about how the
                C-APC methodology impacts radiation oncology, particularly the delivery
                of brachytherapy for the treatment of cervical cancer. They also stated
                that they oppose C-APC payment for cancer care given the complexity of
                coding, serial billing for cancer care, and potentially different sites
                of service for the initial surgical device insertion and subsequent
                treatment delivery or other supportive services. These commenters
                suggested that CMS allow brachytherapy to be reported through the
                traditional APC methodology, move procedures to a higher C-APC, or
                separately pay for preparation and planning services to fully account
                for accurate reflection of the costs associated with these procedures.
                 Response: While we continue to believe that the C-APC policy is
                appropriately applied to these surgical procedures, we will continue to
                examine these concerns and will determine if any modifications to this
                policy are warranted in future rulemaking.
                 Comment: One commenter urged CMS to eliminate the C-APC policy for
                single-session stereotactic radiosurgery codes (77371 and 77372). The
                commenter requested that CMS continue to make separate payments for the
                10 planning and preparation codes related to SRS and include the HCPCS
                code for IMRT planning (77301) on the list of planning and preparation
                codes, stating that the service has become more common in single
                fraction radiosurgery treatment planning.
                 Response: At this time, we do not believe that it is necessary to
                discontinue the C-APCs that include single session SRS procedures. We
                continue to believe that the C-APC policy is appropriately applied to
                these surgical procedures for the reasons cited when this policy was
                first adopted and note that the commenters did not provide any
                empirical evidence to support their claims that the existing C-APC
                policy does not adequately pay for these procedures. Also, we will
                continue in CY 2021 to pay separately for the 10 planning and
                preparation services (HCPCS codes 70551, 70552, 70553, 77011, 77014,
                77280, 77285, 77290, 77295, and 77336) adjunctive to the delivery of
                the SRS treatment using either the Cobalt-60-based or LINAC-based
                technology when furnished to a beneficiary within 1 month of the SRS
                treatment for CY 2021.
                 Comment: We received one comment requesting that CMS carefully
                consider the proper location of care before establishing a C-APC for
                autologous hematopoietic stem cell transplant.
                 Response: We thank the commenter for this comment. This comment
                relates to a recommendation from last year's Advisory Panel on Hospital
                Outpatient Payment (HOP Panel), which recommended that CMS consider
                creating a C-APC for autologous stem cell transplantation and that CMS
                provide a rationale if it decides not to create such an APC. In the CY
                2020 OPPS/ASC final rule with comment period, we evaluated the
                possibility of creating this C-APC and found that it was not
                appropriate to create a C-APC for autologous hematopoietic stem cell
                transplant at that time for the reasons discussed in that rule (84 FR
                61162).
                 After consideration of the public comments we received, we are
                finalizing the proposed C-APCs for CY 2021. Table 3 below lists the
                final C-APCs for CY 2021. All C-APCs are displayed in Addendum J to
                this final rule with comment period (which is available via the
                internet on the CMS website). Addendum J to this final rule with
                comment period also contains all of the data related to the C-APC
                payment policy methodology, including the list of complexity
                adjustments and other information for CY 2021.
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                c. Calculation of Composite APC Criteria-Based Costs
                 As discussed in the CY 2008 OPPS/ASC final rule with comment period
                (72 FR 66613), we believe it is important that the OPPS enhance
                incentives for hospitals to provide necessary, high quality care as
                efficiently as possible. For CY 2008, we developed composite APCs to
                provide a single payment for groups of services that are typically
                performed together during a single clinical encounter and that result
                in the provision of a complete service.
                [[Page 85888]]
                Combining payment for multiple, independent services into a single OPPS
                payment in this way enables hospitals to manage their resources with
                maximum flexibility by monitoring and adjusting the volume and
                efficiency of services themselves. An additional advantage to the
                composite APC model is that we can use data from correctly coded
                multiple procedure claims to calculate payment rates for the specified
                combinations of services, rather than relying upon single procedure
                claims which may be low in volume and/or incorrectly coded. Under the
                OPPS, we currently have composite policies for mental health services
                and multiple imaging services. (We note that, in the CY 2018 OPPS/ASC
                final rule with comment period, we finalized a policy to delete the
                composite APC 8001 (LDR Prostate Brachytherapy Composite) for CY 2018
                and subsequent years.) We refer readers to the CY 2008 OPPS/ASC final
                rule with comment period (72 FR 66611 through 66614 and 66650 through
                66652) for a full discussion of the development of the composite APC
                methodology, and the CY 2012 OPPS/ASC final rule with comment period
                (76 FR 74163) and the CY 2018 OPPS/ASC final rule with comment period
                (82 FR 59241 through 59242 and 59246 through 52950) for more recent
                background.
                (1) Mental Health Services Composite APC
                 We proposed to continue our longstanding policy of limiting the
                aggregate payment for specified less resource-intensive mental health
                services furnished on the same date to the payment for a day of partial
                hospitalization services provided by a hospital, which we consider to
                be the most resource-intensive of all outpatient mental health
                services. We refer readers to the April 7, 2000 OPPS final rule with
                comment period (65 FR 18452 through 18455) for the initial discussion
                of this longstanding policy and the CY 2012 OPPS/ASC final rule with
                comment period (76 FR 74168) for more recent background.
                 In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79588
                through 79589), we finalized a policy to combine the existing Level 1
                and Level 2 hospital-based PHP APCs into a single hospital-based PHP
                APC, and thereby discontinue APCs 5861 (Level 1--Partial
                Hospitalization (3 services) for Hospital-Based PHPs) and 5862 (Level--
                2 Partial Hospitalization (4 or more services) for Hospital-Based PHPs)
                and replace them with APC 5863 (Partial Hospitalization (3 or more
                services per day)).
                 In the CY 2018 OPPS/ASC proposed rule and final rule with comment
                period (82 FR 33580 through 33581 and 59246 through 59247,
                respectively), we proposed and finalized the policy for CY 2018 and
                subsequent years that, when the aggregate payment for specified mental
                health services provided by one hospital to a single beneficiary on a
                single date of service, based on the payment rates associated with the
                APCs for the individual services, exceeds the maximum per diem payment
                rate for partial hospitalization services provided by a hospital, those
                specified mental health services will be paid through composite APC
                8010 (Mental Health Services Composite). In addition, we set the
                payment rate for composite APC 8010 for CY 2018 at the same payment
                rate that will be paid for APC 5863, which is the maximum partial
                hospitalization per diem payment rate for a hospital, and finalized a
                policy that the hospital will continue to be paid the payment rate for
                composite APC 8010. Under this policy, the I/OCE will continue to
                determine whether to pay for these specified mental health services
                individually, or to make a single payment at the same payment rate
                established for APC 5863 for all of the specified mental health
                services furnished by the hospital on that single date of service. We
                continue to believe that the costs associated with administering a
                partial hospitalization program at a hospital represent the most
                resource intensive of all outpatient mental health services. Therefore,
                we do not believe that we should pay more for mental health services
                under the OPPS than the highest partial hospitalization per diem
                payment rate for hospitals.
                 We proposed that when the aggregate payment for specified mental
                health services provided by one hospital to a single beneficiary on a
                single date of service, based on the payment rates associated with the
                APCs for the individual services, exceeds the maximum per diem payment
                rate for partial hospitalization services provided by a hospital, those
                specified mental health services would be paid through composite APC
                8010 for CY 2021. In addition, we proposed to set the proposed payment
                rate for composite APC 8010 at the same payment rate that we proposed
                for APC 5863, which is the maximum partial hospitalization per diem
                payment rate for a hospital, and that the hospital continue to be paid
                the proposed payment rate for composite APC 8010.
                 We did not receive any public comment on these proposals.
                Therefore, we are finalizing our proposal, without modification, that
                when the aggregate payment for specified mental health services
                provided by one hospital to a single beneficiary on a single date of
                service, based on the payment rates associated with the APCs for the
                individual services, exceeds the maximum per diem payment rate for
                partial hospitalization services provided by a hospital, those
                specified mental health services would be paid through composite APC
                8010 for CY 2021. In addition, we are finalizing our proposal to set
                the payment rate for composite APC 8010 for CY 2021 at the same payment
                rate that we set for APC 5863, which is the maximum partial
                hospitalization per diem payment rate for a hospital.
                (2) Multiple Imaging Composite APCs (APCs 8004, 8005, 8006, 8007, and
                8008)
                 Effective January 1, 2009, we provide a single payment each time a
                hospital submits a claim for more than one imaging procedure within an
                imaging family on the same date of service, to reflect and promote the
                efficiencies hospitals can achieve when performing multiple imaging
                procedures during a single session (73 FR 41448 through 41450). We
                utilize three imaging families based on imaging modality for purposes
                of this methodology: (1) Ultrasound; (2) computed tomography (CT) and
                computed tomographic angiography (CTA); and (3) magnetic resonance
                imaging (MRI) and magnetic resonance angiography (MRA). The HCPCS codes
                subject to the multiple imaging composite policy and their respective
                families are listed in Table 12 of the CY 2014 OPPS/ASC final rule with
                comment period (78 FR 74920 through 74924).
                 While there are three imaging families, there are five multiple
                imaging composite APCs due to the statutory requirement under section
                1833(t)(2)(G) of the Act that we differentiate payment for OPPS imaging
                services provided with and without contrast. While the ultrasound
                procedures included under the policy do not involve contrast, both CT/
                CTA and MRI/MRA scans can be provided either with or without contrast.
                The five multiple imaging composite APCs established in CY 2009 are:
                 APC 8004 (Ultrasound Composite);
                 APC 8005 (CT and CTA without Contrast Composite);
                 APC 8006 (CT and CTA with Contrast Composite);
                 APC 8007 (MRI and MRA without Contrast Composite); and
                 APC 8008 (MRI and MRA with Contrast Composite).
                 We define the single imaging session for the ``with contrast''
                composite APCs
                [[Page 85889]]
                as having at least one or more imaging procedures from the same family
                performed with contrast on the same date of service. For example, if
                the hospital performs an MRI without contrast during the same session
                as at least one other MRI with contrast, the hospital will receive
                payment based on the payment rate for APC 8008, the ``with contrast''
                composite APC.
                 We make a single payment for those imaging procedures that qualify
                for payment based on the composite APC payment rate, which includes any
                packaged services furnished on the same date of service. The standard
                (noncomposite) APC assignments continue to apply for single imaging
                procedures and multiple imaging procedures performed across families.
                For a full discussion of the development of the multiple imaging
                composite APC methodology, we refer readers to the CY 2009 OPPS/ASC
                final rule with comment period (73 FR 68559 through 68569).
                 For CY 2021, we proposed to continue to pay for all multiple
                imaging procedures within an imaging family performed on the same date
                of service using the multiple imaging composite APC payment
                methodology. We continue to believe that this policy would reflect and
                promote the efficiencies hospitals can achieve when performing multiple
                imaging procedures during a single session.
                 The proposed CY 2021 payment rates for the five multiple imaging
                composite APCs (APCs 8004, 8005, 8006, 8007, and 8008) were based on
                proposed geometric mean costs calculated from CY 2019 claims available
                for the CY 2021 OPPS/ASC proposed rule that qualified for composite
                payment under the current policy (that is, those claims reporting more
                than one procedure within the same family on a single date of service).
                To calculate the proposed geometric mean costs, we used the same
                methodology that we have used to calculate the geometric mean costs for
                these composite APCs since CY 2014, as described in the CY 2014 OPPS/
                ASC final rule with comment period (78 FR 74918). The imaging HCPCS
                codes referred to as ``overlap bypass codes'' that we removed from the
                bypass list for purposes of calculating the proposed multiple imaging
                composite APC geometric mean costs, in accordance with our established
                methodology as stated in the CY 2014 OPPS/ASC final rule with comment
                period (78 FR 74918), are identified by asterisks in Addendum N to this
                CY 2021 OPPS/ASC proposed rule (which is available via the internet on
                the CMS website) and are discussed in more detail in section II.A.1.b.
                of this CY 2021 OPPS/ASC proposed rule.
                 For the CY 2021 OPPS/ASC proposed rule, we were able to identify
                approximately 964,000 ``single session'' claims out of an estimated 4.9
                million potential claims for payment through composite APCs from our
                ratesetting claims data, which represents approximately 14 percent of
                all eligible claims, to calculate the proposed CY 2021 geometric mean
                costs for the multiple imaging composite APCs. Table 4 of the CY 2021
                OPPS/ASC proposed rule lists the proposed HCPCS codes that would be
                subject to the multiple imaging composite APC policy and their
                respective families and approximate composite APC proposed geometric
                mean costs for CY 2021.
                 We did not receive any public comments on this proposal. Therefore,
                we are finalizing our proposal to continue the use of multiple imaging
                composite APCs to pay for services providing more than one imaging
                procedure from the same family on the same date, without modification.
                Table 4 lists the HCPCS codes that will be subject to the multiple
                imaging composite APC policy and their respective families and
                approximate composite APC final geometric mean costs for CY 2021.
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                3. Changes to Packaged Items and Services
                a. Background and Rationale for Packaging in the OPPS
                 Like other prospective payment systems, the OPPS relies on the
                concept of averaging to establish a payment rate for services. The
                payment may be more or less than the estimated cost of providing a
                specific service or a bundle of specific services for a particular
                beneficiary. The OPPS packages payments for multiple interrelated items
                and services into a single payment to create incentives for hospitals
                to furnish services most efficiently and to manage their resources with
                maximum flexibility. Our packaging policies support our strategic goal
                of using larger payment bundles in the OPPS to maximize hospitals'
                incentives to provide care in the most efficient manner. For example,
                where there are a variety of devices, drugs, items, and supplies that
                could be used to furnish a service, some of which are more costly than
                others, packaging encourages hospitals to use the most cost-efficient
                item that meets the patient's needs, rather than to routinely use a
                more expensive item, which may occur if separate payment is provided
                for the item.
                 Packaging also encourages hospitals to effectively negotiate with
                manufacturers and suppliers to reduce the purchase price of items and
                services or to explore alternative group purchasing arrangements,
                thereby encouraging the most economical health care delivery.
                Similarly, packaging encourages hospitals to establish protocols that
                ensure that necessary services are furnished, while scrutinizing the
                services ordered by practitioners to maximize the efficient use of
                hospital resources. Packaging payments into larger payment bundles
                promotes the predictability and accuracy of payment for services over
                time. Finally, packaging may reduce the importance of refining service-
                specific payment because packaged payments include costs associated
                with higher cost cases requiring many ancillary items and services and
                lower cost cases requiring fewer ancillary items and services. Because
                packaging encourages efficiency and is an essential component of a
                prospective payment system, packaging payments for items and services
                that are typically integral, ancillary, supportive, dependent, or
                adjunctive to a primary service has been a fundamental part of the OPPS
                since its implementation in August 2000. For an extensive discussion of
                the history and background of the OPPS packaging policy, we refer
                readers to the CY 2000 OPPS final rule (65 FR 18434), the CY 2008 OPPS/
                ASC final rule with comment period (72 FR 66580), the CY 2014 OPPS/ASC
                final rule with comment period (78 FR 74925), the CY 2015 OPPS/ASC
                final rule with comment period (79 FR 66817), the CY 2016 OPPS/ASC
                final rule with comment period (80 FR 70343), the CY 2017 OPPS/ASC
                final rule with comment period (81 FR 79592), the CY 2018 OPPS/ASC
                final rule with comment period (82 FR 59250), the CY 2019 OPPS/ASC
                final rule with comment period (83 FR 58854), and the CY 2020 OPPS/ASC
                final rule with comment period (84 FR 61173). As we continue to develop
                larger payment groups that more broadly reflect services provided in an
                encounter or episode of care, we have expanded the OPPS packaging
                policies. Most, but not necessarily all, categories of items and
                services currently packaged in the OPPS are listed in 42 CFR 419.2(b).
                Our overarching goal is to make payments for all services under the
                OPPS more consistent with those of a prospective payment system and
                less like those of a per-service fee schedule, which pays separately
                for each coded item. As a part of this effort, we have continued to
                examine the payment for items and services provided under the OPPS to
                determine which OPPS services can be packaged to further achieve the
                objective of advancing the OPPS toward a more prospective payment
                system.
                 For CY 2021, we examined the items and services currently provided
                under the OPPS, reviewing categories of integral, ancillary,
                supportive, dependent, or adjunctive items and services for which we
                believe payment would be appropriately packaged into payment for the
                primary service that they support. Specifically, we examined the HCPCS
                code definitions (including CPT code descriptors) and outpatient
                hospital billing patterns to determine whether there were categories of
                codes for which packaging would be appropriate according to existing
                OPPS packaging policies or a logical expansion of those existing OPPS
                packaging policies. In CY 2021, we proposed no changes to this policy.
                We will continue to conditionally package the costs of selected newly
                identified ancillary services into payment for a primary service where
                we believe that the packaged item or service is integral, ancillary,
                supportive, dependent, or adjunctive to the provision of care that was
                reported by the primary service HCPCS code. Below we discuss the
                proposed changes to the packaging policies in CY 2021.
                 Comment: We received one comment asking CMS for an update regarding
                a comment solicitation from the CY 2018 OPPS/ASC Proposed Rule
                regarding the ``Comment Solicitation on Packaging of
                [[Page 85895]]
                Items and Services Under the OPPS'' (82 FR 33588).
                 Response: We thank the commenter for their inquiry. As noted in our
                response in the CY 2018 OPPS/ASC final rule with comment period, we
                appreciated the comments we received in response to this comment
                solicitation and will take them into consideration as we continue to
                explore and evaluate packaging policies that apply under the OPPS (82
                FR 59254).
                 Comment: We received a comment on balancing packaging policy with
                market access concerns after pass-through status expires. The commenter
                noted that some packaging policies create incentives that could limit
                patient access to certain items, services, and care. They requested
                that CMS reconsider packaging policies, especially in the ASC and HOPD
                setting, and review packaging decisions on a case-by-case basis upon
                pass-through status expiration and not via the ``integral to'' policy,
                applying a holistic separate payment policy for innovations.
                Specifically, this commenter asked CMS to evaluate drugs and devices on
                a case-by-case basis in order to determine the item's packaging status
                after pass-through expires. This commenter also stated CMS should take
                into consideration the drug or device's clinical value when determining
                packaging status.
                 Response: We thank the commenter for their input. We continue to
                believe our packaging policies support our strategic goal of using
                larger payment bundles to maximize incentives to provide care in the
                most efficient manner. However, we will take this comment into
                consideration for future rulemaking.
                 Comment: We received several comments from patient advocates,
                physicians, drug manufacturers, and professional medical societies
                regarding payment for blue light cystoscopy procedures involving
                Cysview[supreg] (hexaminolevulinate HCl) (described by HCPCS code
                C9275). Cysview[supreg] is a drug that functions as a supply in a
                diagnostic test or procedure and therefore payment for this product is
                packaged with payment for the primary procedure in the OPPS and ASC
                settings. Commenters stated that utilization of Cysview[supreg] is low
                in the HOPD and ASC settings, which they attributed to the fact that
                Cysview is packaged as a drug that functions as a supply in a
                diagnostic test or procedure. Commenters indicated that packaged
                payment does not adequately pay for the blue light cystoscopy
                procedures, particularly in the ASC setting where payment is generally
                approximately 55 percent of the HOPD payment. Commenters believe that
                providers have been deterred from the use of this technology,
                especially in the ASC setting, and as a result, a significant
                percentage of beneficiaries are not able to access the procedure.
                 Commenters also stated that there has been literature published
                showing that Blue Light Cystoscopy with Cysview[supreg] is more
                effective than white light cystoscopy alone at detecting and
                eliminating nonmuscle invasive bladder cancer tumors, leading to a
                reduction in bladder cancer recurrence.
                 Commenters made various recommendations for payment for blue light
                cystoscopy procedures involving Cysview[supreg], including to pay
                separately for Cysview[supreg] when it is used with blue light
                cystoscopy in the HOPD and ASC settings, similar to the policy
                finalized for Exparel[supreg] in the CY 2019 OPPS/ASC final rule with
                comment period (83 FR 58860), or to utilize our equitable adjustment
                authority at section 1833(t)(2)(E) of the Act to provide an ``add-on''
                or ``drug intensive'' payment to ASCs when using Cysview[supreg] in
                blue light cystoscopy procedures. Other commenters requested separate
                payment for all diagnostic imaging drugs (radiopharmaceuticals and
                contrast agents).
                 Response: We acknowledge the concerns of the numerous stakeholders
                who commented on this issue and understand the importance of blue light
                cystoscopy procedures involving Cysview[supreg]. Cysview has been
                packaged as a drug, biological, or radiopharmaceutical that functions
                as a supply in a diagnostic test or procedure since CY 2014 (78 FR
                74930). As we stated in the CY 2018 OPPS/ASC final rule with comment
                period (82 FR 59244), we recognize that blue light cystoscopy
                represents an additional elective but distinguishable service as
                compared to white light cystoscopy that, in some cases, may allow
                greater detection of bladder tumors in beneficiaries relative to white
                light cystoscopy alone. Given the additional equipment, supplies,
                operating room time, and other resources required to perform blue light
                cystoscopy in addition to white light cystoscopy, in CY 2018, we
                created a new HCPCS C-code to describe blue light cystoscopy and since
                CY 2018 have allowed for complexity adjustments to higher paying C-APCs
                for qualifying white light and blue light cystoscopy code combinations.
                At this time, we continue to believe that Cysview[supreg] is a drug
                that functions as a supply in a diagnostic test or procedure, and
                therefore, payment for this drug should be packaged with payment for
                the diagnostic procedure. Therefore, we do not believe it is necessary
                to pay separately for Cysview[supreg] when it is used with blue light
                cystoscopy in either the HOPD or ASC setting. We also do not believe
                that it would be appropriate to utilize our equitable adjustment
                authority at section 1833(t)(2)(E) of the Act to provide an ``add-on''
                or ``drug intensive'' payment to ASCs when using Cysview[supreg] in
                blue light cystoscopy procedures, as our equitable adjustment authority
                at section (t)(2)(E) only authorizes adjustments under the OPPS, not
                the ASC payment system. We do not have any evidence to show that
                separate payment for blue light cystoscopy procedures involving Cysview
                is required, based on commenter concerns regarding utilization and
                access issues for Cysview. However, we will continue to examine payment
                for blue light cystoscopy procedures involving Cysview to determine if
                any changes to this policy would be appropriate in future rulemaking.
                 Comment: Some commenters requested that we eliminate the packaging
                policy for drugs that function as a supply when used in a diagnostic
                test or procedure.
                 Response: In the CY 2014 OPPS/ASC final rule with comment period,
                we established a policy to package drugs, biologicals, and
                radiopharmaceuticals that function as supplies when used in a
                diagnostic test or procedure. In particular, we referred to drugs,
                biologicals, and radiopharmaceuticals that function as supplies as a
                part of a larger, more encompassing service or procedure, namely, the
                diagnostic test or procedure in which the drug, biological, or
                radiopharmaceutical is employed (78 FR 74927). At this time, we do not
                believe it is necessary to eliminate this policy. As previously noted,
                the OPPS packages payments for multiple interrelated items and services
                into a single payment to create incentives for hospitals to furnish
                services most efficiently and to manage their resources with maximum
                flexibility. Our packaging policies support our strategic goal of using
                larger payment bundles in the OPPS to maximize hospitals' incentives to
                provide care in the most efficient manner.
                 Comment: One commenter requested separate payment for add-on codes
                for Fractional Flow Reserve Studies (FFR/iFR) and Intravascular
                Ultrasound (IVUS). The commenter stated that they believe the packaging
                of these codes will disincentivize physicians to perform these adjunct
                procedures because of cost. The codes are:
                [[Page 85896]]
                 93571--Intravascular doppler velocity and/or pressure
                derived coronary flow reserve measurement (coronary vessel or graft)
                during coronary angiography including pharmacologically induced stress;
                initial vessel (list separately in addition to code for primary
                procedure);
                 93572--Intravascular doppler velocity and/or pressure
                derived coronary flow reserve measurement (coronary vessel or graft)
                during coronary angiography including pharmacologically induced stress;
                each additional vessel (list separately in addition to code for primary
                procedure));
                 92978--Endoluminal imaging of coronary vessel or graft
                using intravascular ultrasound (ivus) or optical coherence tomography
                (oct) during diagnostic evaluation and/or therapeutic intervention
                including imaging supervision, interpretation and report; initial
                vessel (list separately in addition to code for primary procedure); and
                 92979--Endoluminal imaging of coronary vessel or graft
                using intravascular ultrasound (ivus) or optical coherence tomography
                (oct) during diagnostic evaluation and/or therapeutic intervention
                including imaging supervision, interpretation and report; each
                additional vessel (list separately in addition to code for primary
                procedure)).
                 Response: As stated in the CY 2008 OPPS/ASC final rule with comment
                period (72 FR 66630), we continue to believe that IVUS and FFR are
                dependent services that are always provided in association with a
                primary service. Add-on codes represent services that are integral,
                ancillary, supportive, dependent, or adjunctive items and services for
                which we believe payment is appropriately packaged into payment for the
                primary service that they support. As we have noted in past rules, add-
                on codes do not represent standalone procedures and are inclusive to
                other procedures performed at the same time (79 FR 66818). We continue
                to believe it is unnecessary to provide separate payment for the
                previously mentioned add-on codes at this time.
                b. Packaging Policy for Non-Opioid Pain Management Therapies
                (1) Background on OPPS/ASC Non-Opioid Pain Management Packaging
                Policies
                 In the CY 2018 OPPS/ASC proposed rule (82 FR 33588), within the
                framework of existing packaging categories, such as drugs that function
                as supplies in a surgical procedure or diagnostic test or procedure, we
                requested stakeholder feedback on common clinical scenarios involving
                currently packaged items and services described by HCPCS codes that
                stakeholders believe should not be packaged under the OPPS. We also
                expressed interest in stakeholder feedback on common clinical scenarios
                involving separately payable HCPCS codes for which payment would be
                most appropriately packaged under the OPPS. Commenters who responded to
                the CY 2018 OPPS/ASC proposed rule expressed a variety of views on
                packaging under the OPPS. The public comments ranged from requests to
                unpackage most items and services that are unconditionally packaged
                under the OPPS, including drugs and devices, to specific requests for
                separate payment for a specific drug or device.
                 In the CY 2018 OPPS/ASC final rule with comment period (82 FR
                52485), we reiterated our position with regard to payment for
                Exparel[supreg], a non-opioid analgesic that functions as a surgical
                supply, stating that we believed that payment for this drug is
                appropriately packaged with the primary surgical procedure. We also
                stated in the CY 2018 OPPS/ASC final rule with comment period that we
                would continue to explore and evaluate packaging policies under the
                OPPS and consider these policies in future rulemaking.
                 In the CY 2019 OPPS/ASC final rule with comment period (83 FR 58855
                through 58860), we finalized a policy to unpackage and pay separately
                at ASP+6 percent for the cost of non-opioid pain management drugs that
                function as surgical supplies when they are furnished in the ASC
                setting for CY 2019, due to decreased utilization in the ASC setting.
                 For the CY 2020 OPPS/ASC proposed rule (84 FR 39423 through 39427),
                as required by section 1833(t)(22)(A)(i) of the Act, as added by
                section 6082(a) of the SUPPORT Act, we reviewed payments under the OPPS
                for opioids and evidence-based non-opioid alternatives for pain
                management (including drugs and devices, nerve blocks, surgical
                injections, and neuromodulation) with a goal of ensuring that there are
                not financial incentives to use opioids instead of non-opioid
                alternatives. We used currently available data to analyze the payment
                and utilization patterns associated with specific non-opioid
                alternatives, including drugs that function as a supply, nerve blocks,
                and neuromodulation products, to determine whether our packaging
                policies have reduced the use of non-opioid alternatives. For the CY
                2020 OPPS/ASC proposed rule (84 FR 39423 through 39427), we proposed to
                continue our policy to pay separately at ASP+6 percent for the cost of
                non-opioid pain management drugs that function as surgical supplies in
                the performance of surgical procedures when they are furnished in the
                ASC setting and to continue to package payment for non-opioid pain
                management drugs that function as surgical supplies in the performance
                of surgical procedures in the hospital outpatient department setting
                for CY 2020. In the CY 2020 OPPS/ASC final rule with comment period (84
                FR 61173 through 61180), after reviewing data from stakeholders and
                Medicare claims data, we did not find compelling evidence to suggest
                that revisions to our OPPS payment policies for non-opioid pain
                management alternatives were necessary for CY 2020. We finalized our
                proposal to continue to unpackage and pay separately at ASP+6 percent
                for the cost of non-opioid pain management drugs that function as
                surgical supplies when furnished in the ASC setting for CY 2020. Under
                this policy, the only drug that met these criteria in CY 2020 was
                Exparel.
                (2) Evaluation and CY 2021 Payment for Non-Opioid Alternatives
                 Section 1833(t)(22)(A)(i) of the Act, as added by section 6082(a)
                of the SUPPORT Act, states that the Secretary must review payments
                under the OPPS for opioids and evidence-based non-opioid alternatives
                for pain management (including drugs and devices, nerve blocks,
                surgical injections, and neuromodulation) with a goal of ensuring that
                there are not financial incentives to use opioids instead of non-opioid
                alternatives. As part of this review, under section 1833(t)(22)(A)(iii)
                of the Act, the Secretary must consider the extent to which revisions
                to such payments (such as the creation of additional groups of covered
                OPD services to separately classify those procedures that utilize
                opioids and non-opioid alternatives for pain management) would reduce
                the payment incentives for using opioids instead of non-opioid
                alternatives for pain management. In conducting this review and
                considering any revisions, the Secretary must focus on covered OPD
                services (or groups of services) assigned to C-APCs, APCs that include
                surgical services, or services determined by the Secretary that
                generally involve treatment for pain management. If the Secretary
                identifies revisions to payments pursuant to section
                1833(t)(22)(A)(iii) of the Act, section
                [[Page 85897]]
                1833(t)(22)(C) of the Act requires the Secretary to, as determined
                appropriate, begin making revisions for services furnished on or after
                January 1, 2020. Any revisions under this paragraph are required to be
                treated as adjustments for purposes of paragraph (9)(B), which requires
                any adjustments to be made in a budget neutral manner.
                 As noted in the background section above, we conducted an
                evaluation to determine whether there are payment incentives for using
                opioids instead of non-opioid alternatives in the CY 2020 OPPS/ASC
                final rule with comment period (84 FR 61176 through 61180). The results
                of our review and evaluation of our claims data did not provide
                evidence to indicate that the OPPS packaging policy had the unintended
                consequence of discouraging the use of non-opioid treatments for
                postsurgical pain management in the hospital outpatient department.
                Higher utilization may be a potential indicator that the packaged
                payment is not causing an access to care issue and that the payment
                rate for the primary procedure adequately reflects the cost of the
                drug. Our updated review of claims data showed a continued decline in
                the utilization of Exparel[supreg] in the ASC setting, which supported
                our proposal to continue paying separately for Exparel[supreg] in the
                ASC setting. Decreased utilization could potentially indicate that the
                packaging policy is discouraging use of that treatment and that
                providers are choosing less expensive treatments. However, it is
                difficult to attribute causality of changes in utilization to Medicare
                packaging payment policy only. We believe that unpackaging and paying
                separately for Exparel addresses decreased utilization because it
                eliminates any potential Medicare payment disincentive for the use of
                this non-opioid alternative, rather than prescription opioids.
                 We believe we fulfilled the statutory requirement to review
                payments for opioids and evidence-based non-opioid alternatives to
                ensure that there are not financial incentives to use opioids instead
                of non-opioid alternatives in CY 2020 OPPS/ASC rulemaking. We are
                committed to evaluating our current policies to adjust payment
                methodologies, if necessary, in order to ensure appropriate access for
                beneficiaries amid the current opioid epidemic. However, we did not
                believe conducting a similar CY 2021 review would yield significantly
                different outcomes or new evidence that would prompt us to change our
                payment policies under the OPPS or ASC payment system.
                 Therefore, for CY 2021, we proposed to continue our policy to pay
                separately at ASP+6 percent for the cost of non-opioid pain management
                drugs that function as surgical supplies in the performance of surgical
                procedures when they are furnished in the ASC setting and to continue
                to package payment for non-opioid pain management drugs that function
                as surgical supplies in the performance of surgical procedures in the
                hospital outpatient department setting for CY 2021.
                 Comment: Multiple commenters, including medical specialty societies
                and drug manufacturers, requested that we pay separately for Exparel
                and other drugs that may function as surgical supplies in the hospital
                outpatient setting. Some of these commenters noted that Exparel is more
                frequently used in this setting and the use of non-opioid pain
                management treatments should also be encouraged in the hospital
                outpatient department. Commenters believed that separate payment in the
                hospital outpatient department would significantly increase
                utilization, which would be beneficial in reducing opioid use.
                 Response: As we stated in the CY 2019 and CY 2020 OPPS/ASC final
                rules with comment period (83 FR 58856 and 84 FR 61177, respectively),
                we do not believe that there is sufficient evidence that non-opioid
                pain management drugs should be paid separately in the hospital
                outpatient setting at this time. The commenters did not provide
                convincing evidence that the OPPS packaging policy for Exparel (or
                other non-opioid drugs) creates a barrier to use of Exparel in the
                hospital setting. Further, while we received some public comments
                suggesting that, as a result of using Exparel in the OPPS setting,
                providers may prescribe fewer opioids for Medicare beneficiaries, we do
                not believe that the OPPS payment policy presents a barrier to use of
                Exparel or affects the likelihood that providers will prescribe fewer
                opioids in the HOPD setting. Several drugs are packaged under the OPPS
                and payment for such drugs is included in the payment for the
                associated primary procedure. We were not persuaded by the information
                supplied by commenters suggesting that some providers avoid use of non-
                opioid alternatives in the outpatient hospital setting (including
                Exparel) solely because of the OPPS packaged payment policy, as there
                was no evidence in our review and evaluation of claims data in the CY
                2020 OPPS/ASC final rule with comment period (84 FR 61176 through
                61180) to indicate that the OPPS packaging policy had the unintended
                consequence of discouraging the use of non-opioid treatments for
                postsurgical pain management in the hospital outpatient department. As
                noted above, we do not believe conducting a similar CY 2021 review
                would yield significantly different outcomes or new evidence that would
                prompt us to change our payment policy. Based on previously conducted
                analysis, we observed increasing Exparel utilization in the HOPD
                setting with the total units increasing from 14.8 million in 2018 to
                19.5 million in 2019, despite the drug payment being packaged into the
                procedure payment in the OPPS setting. This upward trend has been
                consistent since 2015, as the data shows approximately 6.5 million
                total units in 2015 and 8.1 million total units in 2016. Therefore, we
                do not believe that the current OPPS payment methodology for Exparel or
                other non-opioid pain management drugs presents a widespread barrier to
                their use.
                 In addition, increased use in the hospital outpatient setting not
                only supports the notion that the packaged payment for Exparel is not
                causing an access to care issue, but also that the payment rate for
                primary procedures in the HOPD using Exparel adequately reflects the
                cost of the drug. That is, because Exparel is commonly used and billed
                under the OPPS, the APC rates for the primary procedures reflect such
                utilization. Therefore, the increased utilization in the OPPS setting
                seems to indicate that the payment amount is sufficient for hospitals
                to furnish the drug. We remind readers that the OPPS is a prospective
                payment system, not a cost-based system and, by design, is based on a
                system of averages under which payment for certain cases may exceed the
                costs incurred, while for others, it may not. The OPPS packages
                payments for multiple interrelated items and services into a single
                payment to create incentives for hospitals to furnish services most
                efficiently and to manage their resources with maximum flexibility. Our
                packaging policies support our strategic goal of using larger payment
                bundles in the OPPS to maximize hospitals' incentives to provide care
                in the most efficient manner. We continue to invite stakeholders to
                share evidence, such as published peer-reviewed literature, on these
                non-opioid alternatives. We also intend to continue to analyze the
                evidence and monitor utilization of non-opioid alternatives in the HOPD
                setting for potential future rulemaking.
                 Comment: Some commenters encouraged CMS to establish permanent
                separate payment for drugs that are currently on drug pass-through
                status in
                [[Page 85898]]
                the OPPS and ASC settings, such as Dexycu (HCPCS code J1095). Regarding
                Dexycu specifically, the commenters stated they were conducting a new,
                comprehensive study of a longitudinal claim dataset that will provide
                deeper insights into the association between cataract surgery and
                opioid utilization, as well as the role of Dexycu in reducing the
                prescribing of opioids.
                 Response: We refer readers to section V.A., ``OPPS Transitional
                Pass-Through Payment for Additional Costs of Drugs, Biologicals, and
                Radiopharmaceuticals'' of this final rule with comment period regarding
                pass-through payments under the OPPS. Dexycu will receive separate
                payment due to its drug pass-through status through CY 2021. We will
                determine whether separate payment for this drug should be applied
                under the policy to pay separately for non-opioid pain management drugs
                that function as a surgical supply when furnished in the ASC setting
                when Dexycu's pass-through status expires. We thank commenters for
                conducting studies regarding their specific products and look forward
                to reviewing the results.
                 Comment: Several commenters requested that the drug Omidria, CPT
                J1097, (phenylephrine 10.16 mg/ml and ketorolac 2.88 mg/ml ophthalmic
                irrigation solution, 1 ml), be excluded from the OPPS policy to package
                drugs that function as surgical supplies once its pass-through status
                expires on September 30, 2020. Omidria is indicated for maintaining
                pupil size by preventing intraoperative miosis and reducing
                postoperative ocular pain in cataract or intraocular surgeries. The
                commenters stated that there is extensive clinical evidence and medical
                literature which supports their claims that Omidria reduces dependence
                on opioids for patients undergoing cataract surgery and postoperative
                prescription opioids. The commenters asserted that Omidria meets all of
                the requirements in regulation to qualify for separate payment in the
                ASC setting, as Omidria is FDA-approved for intraocular use in cataract
                procedures, a pain management drug, a non-opioid, and functions as a
                surgical supply during cataract surgery according to CMS' definition of
                a surgical supply. Commenters asserted that the use of Omidria
                decreases patients' need for fentanyl during surgeries and provided a
                manuscript stating that Omidria reduces opioid use based on pill counts
                after surgery.
                 Response: We thank commenters for their feedback on Omidria.
                Omidria received pass-through status for a 3-year period from 2015 to
                2017. After expiration of its pass-through status, payment for Omidria
                was packaged under both the OPPS and the ASC payment system.
                Subsequently, Omidria's pass-through status under the OPPS was
                reinstated beginning on October 1, 2018 through September 30, 2020, as
                required by section 1833(t)(6)(G) of the Act, as added by section
                1301(a)(1)(C) of the Consolidated Appropriations Act of 2018 (Pub. L.
                115-141), which means that Omidria continued to be paid separately
                under the ASC payment system through September 30, 2020.
                 Our previous review of the clinical evidence submitted indicated
                that the studies the commenter supplied were not sufficient to
                demonstrate that Omidria reduces opioid use. Moreover, the results of a
                CMS analysis of cataract procedures performed on Medicare beneficiaries
                in HOPDs and ASCs between January 2015 and July 2019, which compared
                procedures performed with Omidria to procedures performed without
                Omidria, did not demonstrate a significant decrease in fentanyl
                utilization during the cataract surgeries in the HOPDs and ASCs when
                Omidria was used. Our findings also did not suggest any decrease in
                opioid utilization post-surgery for procedures involving Omidria.
                 However, we will continue to apply separate payment for non-opioid
                pain management drugs that function as surgical supplies when furnished
                in the ASC setting for CY 2021, as discussed in section XIII.D.3, and
                as we have described in regulation at 42 CFR 416.164 and 416.171(b)(1).
                After careful consideration of the commenters' assertion that Omidria
                meets this definition, we believe that Omidria does qualify as a non-
                opioid pain management drug that functions as a surgical supply and are
                excluding Omidria from packaging under the ASC payment system beginning
                October 1, 2020 and in CY 2021, in accordance with this policy.
                 Comment: Two commenters briefly mentioned the drug IV acetaminophen
                (CPT code J0131), which they believe may reduce opioid usage if CMS
                paid separately for the drug. These commenters believed IV
                acetaminophen decreases use of post-operative opioids.
                 Response: We thank commenters for their comments. We do not find it
                appropriate to pay separately for IV acetaminophen as suggested by the
                commenters due to our drug packaging threshold policies. We remind
                stakeholders of our drug packaging threshold policies, as described in
                section V.B.1.a to this final rule with comment period. In accordance
                with section 1833(t)(16)(B) of the Act, we finalized our proposal to
                set the drug packaging threshold for CY 2021 to $130. To the extent
                that the items and services mentioned by the commenters are effective
                alternatives to opioid prescriptions, we encourage providers to use
                them when medically necessary. Additionally, please see section
                XIII.D.3 for a full discussion on our policies in the ASC setting.
                 Comment: Commenters suggested modified payment for ``pain block''
                CPT codes 64415, 64416, 64417, 64445, 64446, 64447, 64448, and 64450.
                Two commenters stated that providers use these pain blocks to mitigate
                the post-operative pain that is otherwise typically addressed with
                short-term opioid use. Additionally, a few commenters stated that CPT
                code J1096 (Dexamethasone, lacrimal ophthalmic insert, 0.1 mg) used for
                treatment of ocular inflammation and pain following ophthalmic surgery
                is administered through CPT code 0356T (Insertion of drug-eluting
                implant (including punctal dilation and implant removal when performed)
                into lacrimal canaliculus, each). These commenters felt CPT code 0356T,
                which describes the administration of the drug, should also receive
                separate or additional payment due to the purported clinical benefits
                of the drug, including treatment of pain.
                 Response: We thank the commenters for their suggestions. At this
                time, we have not found compelling evidence for the non-opioid pain
                management alternatives described above to warrant separate or modified
                payment under the OPPS or ASC payment systems for CY 2021.
                Additionally, we do not believe that the ``pain blocks'' described by
                stakeholders qualify as non-opioid pain management drugs that function
                as a surgical supply as the codes provided by stakeholders are used to
                describe procedures under the OPPS and not drugs. To the extent that
                the items and services mentioned by the commenters are effective
                alternatives to opioid prescriptions, we encourage providers to use
                them when medically necessary. For a greater discussion of CPT code
                0356T, please see section III. D. (Administration of Lacrimal
                Ophthalmic Insert Into Lacrimal Canaliculus (APC 5692)) of this final
                rule with comment period.
                 Comment: Commenters also requested separate payments for various
                non-opioid pain management treatments, such as ERAS[supreg] protocols
                or spinal cord stimulators (SCS), that they believe decrease the number
                of opioid prescriptions beneficiaries receive during and following an
                outpatient visit or procedure. For SCS, several commenters noted that
                this therapy may lead to a reduction in the use of opioids
                [[Page 85899]]
                for chronic pain patients. They noted that neurostimulation is a key
                alternative to opioid prescription for pain management and recommended
                that CMS increase access to SCS.
                 Response: We appreciate the commenters' information on this topic.
                At this time, we have not found compelling evidence for the non-opioid
                pain management alternatives described above to warrant separate
                payment under the OPPS or ASC payment systems for CY 2021. However, we
                plan to take these comments and suggestions into consideration for
                future rulemaking. We agree that providing incentives to avoid or
                reduce opioid prescriptions may be one of several strategies for
                addressing the opioid epidemic. To the extent that the items and
                services mentioned by the commenters are effective alternatives to
                opioid drugs, we encourage providers to use them when medically
                appropriate.
                 We look forward to working with stakeholders as we further consider
                suggested refinements to the OPPS and the ASC payment system that will
                encourage use of medically necessary items and services that have
                demonstrated efficacy in decreasing opioid prescriptions and/or opioid
                abuse or misuse during or after an outpatient visit or procedure.
                 After consideration of the public comments we received, we are
                finalizing the proposed policy, without modification, to unpackage and
                pay separately at ASP+6 percent for the cost of non-opioid pain
                management drugs that function as surgical supplies when they are
                furnished in the ASC setting for CY 2021. We will continue to analyze
                the issue of access to non-opioid pain management alternatives in the
                OPPS and the ASC settings as part of any subsequent reviews we conduct
                under section 1833(t)(22)(A)(ii). We are continuing to examine whether
                there are other non-opioid pain management alternatives for which our
                payment policy should be revised to allow separate payment. We will be
                reviewing evidence-based support, such as published peer-reviewed
                literature, that we could use to determine whether these products help
                to deter or avoid prescription opioid use and addiction as well as
                evidence that the current packaged payment for such non-opioid
                alternatives presents a barrier to access to care and therefore
                warrants revised, including possibly separate, payment under the OPPS.
                This policy is also discussed in section XIII.D.3 of this final rule
                with comment period.
                c. Clinical Diagnostic Laboratory Tests Packaging Policy
                (1) Background
                 Prior to CY 2014, clinical diagnostic laboratory tests were
                excluded from payment under the hospital OPPS because they were paid
                separately under the Clinical Laboratory Fee Schedule (CLFS). Section
                1833(t)(1)(B)(i) of the Act authorizes the Secretary to designate the
                hospital outpatient services that are paid under the OPPS. Under this
                authority, the Secretary excluded from the OPPS those services that are
                paid under fee schedules or other payment systems. Because laboratory
                services are paid separately under the CLFS, laboratory tests were
                excluded from separate payment under the OPPS. We codified this policy
                at 42 CFR 419.22(l).
                 However, in CY 2014, we revised the categories of packaged items
                and services under the OPPS to include certain laboratory tests. We
                stated that certain laboratory tests, similar to other covered
                outpatient services that are packaged under the OPPS, are typically
                integral, ancillary, supportive, dependent, or adjunctive to a primary
                hospital outpatient service and should be packaged under the hospital
                OPPS. We stated that laboratory tests and their results support
                clinical decision making for a broad spectrum of primary services
                provided in the hospital outpatient setting, including surgery and
                diagnostic evaluations (78 FR 74939). Consequently, we finalized the
                policy to package payment for most laboratory tests in the OPPS when
                they are integral, ancillary, supportive, dependent, or adjunctive to a
                primary service or services provided in the hospital outpatient setting
                (78 FR 74939 through 74942 and 42 CFR 419.2(b)(17)). In the same final
                rule, we clarified that certain laboratory tests would be excluded from
                packaging. Specifically, we stated that laboratory tests would be paid
                separately under the CLFS when the laboratory test is the only service
                provided to a beneficiary or when a laboratory test is conducted on the
                same date of service (DOS) as the primary service but is ordered for a
                different purpose than the primary service by a practitioner different
                than the practitioner who ordered the primary service or when the
                laboratory test is a molecular pathology test (78 FR 74942). As
                explained in the CY 2014 OPPS/ASC final rule, we excluded molecular
                pathology tests from packaging because we believe these tests are
                relatively new and may have a different pattern of clinical use, which
                may make them generally less tied to a primary service in the hospital
                outpatient setting than the more common and routine laboratory tests
                that we package (78 FR 74939). Based on these changes, we revised the
                regulation text at Sec. Sec. [thinsp]419.2(b) and 419.22(l) to reflect
                this laboratory test packaging policy.
                 In CY 2016, we made some modifications to this policy (80 FR 70348
                through 70350). First, we clarified that all molecular pathology tests
                would be excluded from our packaging policy, including any new codes
                that also describe molecular pathology tests. In the CY 2014 OPPS/ASC
                final rule, we stated that only those molecular pathology codes
                described by CPT codes in the ranges of 81200 through 81383, 81400
                through 81408, and 81479 were excluded from OPPS packaging (78 FR 74939
                through 74942). However, in 2016, we expanded this policy to include
                not only the original code range but also all new molecular pathology
                test codes (80 FR 70348). Secondly, we excluded preventive laboratory
                tests from OPPS packaging and provided that they would be paid
                separately under the CLFS. Laboratory tests that are considered
                preventive are listed in Section 1.2, Chapter 18 of the Medicare Claims
                Processing Manual (Pub. L. 100-04). As stated in the CY 2016 OPPS/ASC
                final rule, we make an exception to conditional packaging of ancillary
                services for ancillary services that are also preventive services (80
                FR 70348). For consistency, we excluded from OPPS packaging those
                laboratory tests that are classified as preventive services. In
                addition, we modified our conditional packaging policy so that
                laboratory tests provided during the same outpatient stay (rather than
                specifically provided on the same DOS as the primary service) are
                considered as integral, ancillary, supportive, dependent, or adjunctive
                to a primary service or services, except when a laboratory test is
                ordered for a different diagnosis and by a different practitioner than
                the practitioner who ordered the other hospital outpatient services. We
                explained in the CY 2016 OPPS/ASC final rule that this modification did
                not affect our policy to provide separate payment for laboratory tests:
                (1) If they are the only services furnished to an outpatient and are
                the only services on a claim and have a payment rate on the CLFS; or
                (2) if they are ordered for a different diagnosis than another hospital
                outpatient service by a practitioner different than the practitioner
                who ordered the other hospital outpatient service (80 FR 70349 through
                70350).
                 In CY 2017, we modified the policy to remove the ``unrelated''
                laboratory test exclusion and to expand the laboratory
                [[Page 85900]]
                test packaging exclusion to apply to laboratory tests designated as
                advanced diagnostic laboratory tests (ADLTs) under the CLFS. We
                clarified that the exception would only apply to those ADLTs that meet
                the criteria of section 1834A(d)(5)(A) of the Act, which are defined as
                tests that provide an analysis of multiple biomarkers of DNA, RNA, or
                proteins combined with a unique algorithm to yield a single patient-
                specific result (81 FR 79592 through 79594).
                (2) Current Categories of Clinical Diagnostic Laboratory Tests Excluded
                From OPPS Packaging
                 As we discussed in the CY 2021 OPPS/ASC proposed rule (85 FR
                48798), under our current policy, certain clinical diagnostic
                laboratory tests (CDLTs) that are listed on the CLFS are packaged as
                integral, ancillary, supportive, dependent, or adjunctive to the
                primary service or services provided in the hospital outpatient setting
                during the same outpatient encounter and billed on the same claim.
                While we package most CDLTs under the OPPS, when a CDLT is listed on
                the CLFS and meets one of the following four criteria, we do not pay
                for the test under the OPPS, but rather, we pay for it under the CLFS
                when it is: (1) The only service provided to a beneficiary on a claim;
                (2) considered a preventive service; (3) a molecular pathology test; or
                (4) an ADLT that meets the criteria of section 1834A(d)(5)(A) of the
                Act. Generally, when laboratory tests are not packaged under the OPPS
                and are listed on the CLFS, they are paid under the CLFS instead of the
                OPPS.
                (3) New Category of Laboratory Tests Excluded From OPPS Packaging
                (a) Background on Protein-Based MAAAs
                 As part of recent rulemaking cycles, stakeholders have suggested
                that some protein-based Multianalyte Assays with Algorithmic Analyses
                tests (MAAAs) may have a pattern of clinical use that makes them
                relatively unconnected to the primary hospital outpatient service (84
                FR 61439). In the CY 2018 OPPS/ASC final rule (82 FR 59299), we stated
                that stakeholders indicated that certain protein-based MAAAs,
                specifically those described by CPT codes 81490, 81503, 81535, 81536,
                81538, and 81539, are generally not performed in the HOPD setting and
                have similar clinical patterns of use as the DNA and RNA-based MAAA
                tests that are assigned to status indicator ``A'' under the OPPS and
                are paid separately under the CLFS. Notably, all of the tests described
                by these CPT codes (with the exception of CPT code 81490, which we
                discuss below) are cancer-related protein-based MAAAs. In the same
                final rule, stakeholders suggested that, based on the June 23, 2016
                CLFS final rule entitled ``Medicare Program; Medicare Clinical
                Diagnostic Laboratory Tests Payment System,'' in which CMS defined an
                ADLT under section 1834A(d)(5)(A) of the Act to include DNA, RNA, and
                protein-based tests, they believe that the reference to ``protein-based
                tests'' in the definition applies equally to the tests they identified,
                that is, protein-based MAAAs. Consequently, the stakeholders believed
                that protein-based MAAAs should be excluded from OPPS packaging and
                paid separately under the CLFS. As we noted in the CY 2021 OPPS/ASC
                proposed rule, one of the protein-based MAAAs previously requested by
                stakeholders to be excluded from OPPS packaging policy is CPT code
                81538 (Oncology (lung), mass spectrometric 8-protein signature,
                including amyloid a, utilizing serum, prognostic and predictive
                algorithm reported as good versus poor overall survival), which has
                been designated as an ADLT under section 1834A(d)(5)(A) of the Act as
                of December 21, 2018. Therefore, CPT code 81538 is currently excluded
                from the OPPS packaging policy and paid under the CLFS instead of the
                OPPS when it also meets the laboratory DOS requirements.
                (b) CY 2021 Cancer-Related Protein-Based MAAAs
                 As discussed in the CY 2021 OPPS/ASC proposed rule (85 FR 49032),
                we have continued to consider previous stakeholder requests to exclude
                some protein-based MAAAs from the OPPS packaging policy. We stated
                that, after further review of this issue, we believe that cancer-
                related protein-based MAAAs, in particular, may be relatively
                unconnected to the primary hospital outpatient service during which the
                specimen was collected from the patient. Similar to molecular pathology
                tests, which are currently excluded from the OPPS packaging policy,
                cancer-related protein-based MAAAs appear to have a different pattern
                of clinical use, which may make them generally less tied to the primary
                service in the hospital outpatient setting than the more common and
                routine laboratory tests that are packaged.
                 As we noted previously in the CY 2021 OPPS/ASC proposed rule and in
                this section of the final rule, commenters to the CY 2018 OPPS/ASC
                final rule identified specific cancer-related protein-based MAAAs as
                tests that are generally not performed in the HOPD setting (82 FR
                59299). In fact, those tests identified by commenters are used to guide
                future surgical procedures and chemotherapeutic interventions.
                Treatments that are based on the results of cancer-related protein-
                based MAAAs are typically furnished after the patient is no longer in
                the hospital, in which case they are not tied to the same hospital
                outpatient encounter during which the specimen was collected.
                 For these reasons, we proposed to exclude cancer-related protein-
                based MAAAs from the OPPS packaging policy and pay for them separately
                under the CLFS.
                 In the CY 2021 OPPS/ASC proposed rule (85 FR 48799), we explained
                that the AMA CPT 2020 manual currently describes MAAAs, in part, as
                ``procedures that utilize multiple results derived from panels of
                analyses of various types, including molecular pathology assays,
                fluorescent in situ hybridization assays, and non-nucleic acid based
                assays (for example, proteins, polypeptides, lipids, carbohydrates).''
                \1\ Additionally, the AMA CPT 2020 manual provides a MAAA code
                descriptor format which includes several specific characteristics,
                including but not limited to disease type (for example, oncology,
                autoimmune, tissue rejection), and material(s) analyzed (for example,
                DNA, RNA, protein, antibody). We noted that as the AMA CPT 2020 manual
                describes a MAAA, and the code descriptor of each MAAA distinguishes
                MAAAs that are cancer-related assays from those that test for other
                disease types, the AMA CPT manual is a potentially instructive tool to
                identify cancer-related MAAA tests that are ``protein-based''.
                Accordingly, in following the AMA CPT 2020 manual intent to identify
                MAAA tests that are cancer-related, and, of those tests, identifying
                the ones whose test analytes are proteins, we have determined there are
                currently six cancer-related protein-based MAAAs: CPT codes 81500,
                81503, 81535, 81536, 81538 and 81539. As discussed previously in the CY
                2021 OPPS/ASC proposed rule and in this section of the final rule, CPT
                code 81538 has been designated as an ADLT under section 1834A(d)(5)(A)
                of the Act as of December 21, 2018 and therefore, is already paid under
                the CLFS instead of the OPPS. As such, we proposed to assign status
                indicator ``A'' (``Not paid under OPPS. Paid by MACs under a fee
                schedule or payment system other than
                [[Page 85901]]
                OPPS'') to cancer-related protein-based MAAAs as described by CPT codes
                81500, 81503, 81535, 81536, and 81539. We also proposed that we would
                apply this policy to cancer-related protein-based MAAAs that do not
                currently exist, but that are developed in the future. Additionally, we
                stated that we intend to continue to study the list of laboratory tests
                excluded from the OPPS packaging policy and determine whether any
                additional changes are warranted and may consider proposing future
                changes to the laboratory DOS policy through notice-and-comment
                rulemaking.
                ---------------------------------------------------------------------------
                 \1\ Current Procedure Terminology (CPT[supreg]) page 586,
                copyright 2020 American Medical Association. All Rights Reserved.
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                 In the CY 2021 OPPS/ASC proposed rule (85 FR 49032), we noted that
                commenters to the CY 2018 OPPS/ASC proposed rule also identified CPT
                code 81490 as a protein-based MAAA that should be excluded from the
                OPPS packaging policy and paid outside of the OPPS. However, we stated
                that we believed that the results for the test described by CPT code
                81490 are used to determine disease activity in rheumatoid arthritis
                patients, guide current therapy to reduce further joint damage, and may
                be tied to the primary hospital outpatient service, that is, the
                hospital outpatient encounter during which the specimen was collected.
                Therefore, we stated that we believed that payment for CPT code 81490
                remains appropriately packaged under the OPPS.
                 We refer readers to section XVIII. of the CY 2021 OPPS/ASC proposed
                rule and section XVIII. of this final rule with comment period, which
                describe the related proposal to revise the laboratory DOS policy for
                cancer-related protein-based MAAAs.
                 We received public comments on the proposal to exclude cancer-
                related protein-based MAAAs from the OPPS packaging policy and pay for
                them separately under the CLFS. The following is a summary of the
                comments we received and our responses.
                 Comment: Generally, commenters supported the proposal to exclude
                cancer-related protein-based MAAAs from the OPPS packaging policy and
                add them to the list of test codes subject to the laboratory DOS
                exception for the hospital outpatient setting, leading to the test
                being paid at the CLFS rate and requiring that the laboratory bill
                Medicare for the test instead of seeking payment from the hospital.
                Commenters stated that changes to this policy will lead to improved
                beneficiary access to diagnostic tests while also reducing hospital
                administrative burden.
                 Response: We appreciate the support from commenters for our
                proposed revisions to the OPPS packaging policy for CDLTs. We agree
                that the revisions to the laboratory DOS policy that we proposed in the
                CY 2021 OPPS/ASC proposed rule and finalized in section XVIII of this
                final rule with comment period may potentially serve to reduce delay in
                access to laboratory tests by minimizing the likelihood that a hospital
                will postpone ordering a test until at least 14 days after the patient
                is discharged from the hospital outpatient department, or even cancel
                the order in order to avoid having to bill Medicare for the test under
                the laboratory DOS policy.
                 Comment: In addition to excluding the cancer-related protein-based
                MAAAs from OPPS packaging, several commenters suggested a similar
                change for pathology tests. Specifically, they recommended revising the
                existing laboratory test packaging policy to allow separate payment
                under the CLFS for the technical component of pathology tests.
                 Response: We appreciate the feedback and will consider the issue
                for future rulemaking.
                 Comment: Some commenters recommended further expansion of the list
                of test codes excluded from OPPS packaging to include various other
                CDLTs, including all protein-based MAAAs, AMA CPT Proprietary
                Laboratory Analyses (PLA) test codes that may have similar
                characteristics to AMA CPT MAAA tests but are not currently categorized
                as AMA CPT MAAA test codes, and several specific CPT test codes,
                including the OVERA test from Aspira Labs (CPT 0003U), EPI assay by
                Bio-Techne (CPT 0005U), TissueCypher assay from Cernostics (CPT 0108U),
                and KidneyIntelX (CPT 0105U).
                 Commenters also noted that while PLA test codes are not
                automatically included in the outpatient laboratory test packaging
                exclusion, some tests described by PLA codes are included under these
                policies if they qualify as a molecular pathology test or Criterion A
                ADLT. Therefore, the commenters asserted that CMS should continue its
                historical practice of applying the laboratory test packaging exclusion
                to PLA test codes as occurs with molecular pathology tests and ADLTs
                that have been assigned PLA codes.
                 Response: We believe that the commenters' suggested modifications
                to the list of codes excluded from OPPS packaging to include various
                CDLTs, including all protein-based MAAAs, AMA CPT PLA test codes that
                may have similar characteristics to AMA CPT MAAA tests but are not
                currently categorized as AMA CPT MAAA codes, and several specific AMA
                CPT test codes, are inconsistent with the current OPPS packaging policy
                and would result in allowing the laboratory to bill Medicare directly
                for a test that should be incorporated into the hospital OPPS bundled
                rate. CMS does not believe that all AMA CPT PLA test codes demonstrate
                a different pattern of clinical use that makes them less tied to the
                primary service in the hospital outpatient setting such that they
                should be included in the list of codes excepted from the OPPS
                packaging policy. Commenters asserted that these tests, as a group,
                should be excluded from OPPS packaging policy because the results of
                these tests may inform future interventions beyond the hospital
                outpatient encounter during which the specimen was collected and may be
                used by other health care providers to developed long-term plans for
                treatment. However, we are not convinced based on the commenters'
                descriptions of these tests that they are generally unconnected to the
                hospital encounter, the chief requirement for exclusion from OPPS
                packaging. Although commenters noted that the recommended tests may be
                utilized for the development of longer-term treatment plans, it is not
                clear that the clinical usage of these tests reaches the threshold of
                being ``generally unconnected'' to the hospital encounter.
                 Any addition to the list of test codes excluded from OPPS packaging
                requires careful evaluation as to whether a different pattern of
                clinical use makes a test generally less tied to a primary service in
                the hospital outpatient setting than the more common and routine
                laboratory tests that we package. For instance, as noted in the CY 2021
                OPPS/ASC proposed rule (85 FR 49035), in response to the changes in the
                laboratory DOS policy outlined in the CY 2018 OPPS/ASC final rule with
                comment period, stakeholders stated that some entities performing
                molecular pathology testing included on the list of codes excluded from
                OPPS packaging and subject to the laboratory DOS exception, such as
                blood banks and blood centers, may perform molecular pathology testing
                to enable hospitals to prevent adverse conditions associated with blood
                transfusions, rather than perform molecular pathology testing for
                diagnostic purposes. This led us to consider whether the molecular
                pathology testing performed by blood banks and centers is appropriately
                separable from the hospital stay.
                 We do not believe all protein-based MAAAs would meet this standard
                for exclusion from OPPS packaging. CMS has considered expanding the
                list of codes excluded from OPPS packaging to
                [[Page 85902]]
                include various additional categories of codes, including protein-based
                MAAAs. However, we note that some protein-based MAAAs include simple
                and commonly used protein analytes that may also be commonly performed
                to assist in managing patient care during a hospital outpatient
                encounter. Therefore, we believe that we cannot conclude that this
                category of tests is generally less tied to a primary service in the
                hospital outpatient setting, as some protein-based MAAA tests use
                common routine protein analytes that are appropriately packaged into
                OPPS payment. For these reasons, CMS does not believe that all protein-
                based MAAAs should be included in the list of codes excluded from the
                OPPS packaging policy.
                 However, we note that a protein-based MAAA that is designated by
                CMS as an ADLT under paragraph (1) of the definition of an ADLT in
                Sec. 414.502 would be added to the list of codes excluded from OPPS
                packaging, in accordance with our established policy.
                 Comment: Commenters also recommended that we exclude a particular
                protein-based MAAA test described by CPT code 81490 from the OPPS
                packaging policy. Commenters asserted that the use of the test
                described by CPT code 81490 is unconnected to the hospital outpatient
                encounter during which the specimen is collected and that the results
                of the test are used to determine potential future interventions
                outside of the hospital outpatient encounter. Commenters stated that
                this test appears to be generally less tied to a primary service in the
                hospital outpatient setting and does not appear to be a common or
                routine laboratory test that would otherwise be packaged into OPPS
                payment.
                 Response: In the CY 2021 OPPS/ASC proposed rule (85 FR 48799), we
                stated that we believed the results for the test described by CPT code
                81490 are used to determine disease activity in rheumatoid arthritis
                patients, guide current therapy to reduce further joint damage, and may
                be tied to the primary hospital outpatient service, that is, the
                hospital outpatient encounter during which the specimen was collected.
                Therefore, we stated that we believed that payment for CPT code 81490
                remains appropriately packaged under the OPPS.
                 However, given commenter feedback, we are convinced that the
                pattern of clinical use for CPT code 81490 is generally unconnected to
                the hospital outpatient encounter during which the specimen is
                collected as it is typically used to determine potential interventions
                outside of the hospital outpatient encounter and is generally used by
                the rheumatologist to make longer-term changes in RA treatment.
                Commenters informed us that physicians and patients utilize the
                objective information provided by the results of the test to make
                longer-term modifications in treatment, to monitor disease activity,
                and to prevent joint damage progression, and the results generally
                would not be utilized for purposes of the hospital outpatient
                encounter. The commenters further stated that the output of the test is
                used to assess disease activity, including evaluating response to
                therapy, directing choice of second-line treatment in patients with
                inadequate response to the current first line therapy, and identifying
                patients in stable remission for therapy reduction. The test results
                appear to guide longer-term therapies and treatments; therefore, we
                believe that this test, identified by CPT code 81490, is generally less
                tied to the primary service the patient receives in the hospital
                outpatient setting and does not appear to be a common or routine
                laboratory test that would otherwise be packaged into OPPS payment.
                Consequently, we believe that CPT code 81490 should be excluded from
                OPPS packaging policy.
                 As stated previously, we intend to continue to study the list of
                laboratory tests excluded from the OPPS packaging policy to determine
                whether any additional changes are warranted and may consider proposing
                future changes to this policy and the laboratory DOS policy through
                notice-and-comment rulemaking.
                 In conclusion, we continue to believe that cancer-related protein-
                based MAAAs, that is, those represented by CPT codes 81500, 81503,
                81535, 81536 and 81539, appear to have a different pattern of clinical
                use that make them generally less tied to a primary service in the
                hospital outpatient setting than the more common and routine laboratory
                tests that are packaged. We also believe that, given the similarity in
                its clinical pattern of use to the cancer-related protein-based MAAAs,
                CPT code 81490 should also be added to the list of codes excluded from
                the OPPS packaging and subject to the laboratory DOS exception at Sec.
                414.510(b)(5), which is discussed in section III.XX in this final rule.
                For the reasons discussed, we are revising the list of test codes
                excluded from the OPPS packaging policy to include CPT codes 81500,
                81503, 81535, 81536, 81539, and 81490. We are also finalizing that we
                will exclude cancer-related protein-based MAAAs that do not currently
                exist, but that are developed in the future, from the OPPS packaging
                policy.
                4. Calculation of OPPS Scaled Payment Weights
                 We established a policy in the CY 2013 OPPS/ASC final rule with
                comment period (77 FR 68283) of using geometric mean-based APC costs to
                calculate relative payment weights under the OPPS. In the CY 2020 OPPS/
                ASC final rule with comment period (84 FR 61180 through 61182), we
                applied this policy and calculated the relative payment weights for
                each APC for CY 2020 that were shown in Addenda A and B to that final
                rule with comment period (which were made available via the internet on
                the CMS website) using the APC costs discussed in sections II.A.1. and
                II.A.2. of that final rule with comment period. For CY 2021, as we did
                for CY 2020, we proposed to continue to apply the policy established in
                CY 2013 and calculate relative payment weights for each APC for CY 2021
                using geometric mean-based APC costs.
                 For CY 2012 and CY 2013, outpatient clinic visits were assigned to
                one of five levels of clinic visit APCs, with APC 0606 representing a
                mid-level clinic visit. In the CY 2014 OPPS/ASC final rule with comment
                period (78 FR 75036 through 75043), we finalized a policy that created
                alphanumeric HCPCS code G0463 (Hospital outpatient clinic visit for
                assessment and management of a patient), representing any and all
                clinic visits under the OPPS. HCPCS code G0463 was assigned to APC 0634
                (Hospital Clinic Visits). We also finalized a policy to use CY 2012
                claims data to develop the CY 2014 OPPS payment rates for HCPCS code
                G0463 based on the total geometric mean cost of the levels one through
                five CPT E/M codes for clinic visits previously recognized under the
                OPPS (CPT codes 99201 through 99205 and 99211 through 99215). In
                addition, we finalized a policy to no longer recognize a distinction
                between new and established patient clinic visits.
                 For CY 2016, we deleted APC 0634 and reassigned the outpatient
                clinic visit HCPCS code G0463 to APC 5012 (Level 2 Examinations and
                Related Services) (80 FR 70372). For CY 2021, as we did for CY 2020, we
                proposed to continue to standardize all of the relative payment weights
                to APC 5012. We believe that standardizing relative payment weights to
                the geometric mean of the APC to which HCPCS code G0463 is assigned
                maintains consistency in calculating unscaled weights that represent
                the cost of some of the most frequently provided OPPS services. For
                [[Page 85903]]
                CY 2021, as we did for CY 2020, we proposed to assign APC 5012 a
                relative payment weight of 1.00 and to divide the geometric mean cost
                of each APC by the geometric mean cost for APC 5012 to derive the
                unscaled relative payment weight for each APC. The choice of the APC on
                which to standardize the relative payment weights does not affect
                payments made under the OPPS because we scale the weights for budget
                neutrality.
                 We note that in the CY 2019 OPPS/ASC final rule with comment period
                (83 FR 59004 through 59015) and the CY 2020 OPPS/ASC final rule with
                comment period (84 FR 61365 through 61369), we discuss our policy,
                implemented on January 1, 2019, to control for unnecessary increases in
                the volume of covered outpatient department services by paying for
                clinic visits furnished at excepted off-campus provider-based
                department (PBD) at a reduced rate. While the volume associated with
                these visits is included in the impact model, and thus used in
                calculating the weight scalar, the policy has a negligible effect on
                the scalar. Specifically, under this policy, there is no change to the
                relativity of the OPPS payment weights because the adjustment is made
                at the payment level rather than in the cost modeling. Further, under
                this policy, the savings that result from the change in payments for
                these clinic visits are not budget neutral. Therefore, the impact of
                this policy will generally not be reflected in the budget neutrality
                adjustments, whether the adjustment is to the OPPS relative weights or
                to the OPPS conversion factor. We note that the volume control method
                for clinic visit services furnished by non-excepted off-campus PBDs is
                subject to litigation. For a full discussion of this policy and the
                litigation, we refer readers to the CY 2020 OPPS/ASC final rule with
                comment period (84 FR 61142).
                 Section 1833(t)(9)(B) of the Act requires that APC reclassification
                and recalibration changes, wage index changes, and other adjustments be
                made in a budget neutral manner. Budget neutrality ensures that the
                estimated aggregate weight under the OPPS for CY 2021 is neither
                greater than nor less than the estimated aggregate weight that would
                have been calculated without the changes. To comply with this
                requirement concerning the APC changes, we proposed to compare the
                estimated aggregate weight using the CY 2020 scaled relative payment
                weights to the estimated aggregate weight using the proposed CY 2021
                unscaled relative payment weights.
                 For CY 2020, we multiplied the CY 2020 scaled APC relative payment
                weight applicable to a service paid under the OPPS by the volume of
                that service from CY 2019 claims to calculate the total relative
                payment weight for each service. We then added together the total
                relative payment weight for each of these services in order to
                calculate an estimated aggregate weight for the year. For CY 2021, we
                proposed to apply the same process using the estimated CY 2021 unscaled
                relative payment weights rather than scaled relative payment weights.
                We proposed to calculate the weight scalar by dividing the CY 2020
                estimated aggregate weight by the unscaled CY 2021 estimated aggregate
                weight.
                 For a detailed discussion of the weight scalar calculation, we
                refer readers to the OPPS claims accounting document available on the
                CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html. Click on the CY 2021 OPPS
                proposed rule link and open the claims accounting document link at the
                bottom of the page.
                 We proposed to compare the estimated unscaled relative payment
                weights in CY 2021 to the estimated total relative payment weights in
                CY 2020 using CY 2019 claims data, holding all other components of the
                payment system constant to isolate changes in total weight. Based on
                this comparison, we proposed to adjust the calculated CY 2021 unscaled
                relative payment weights for purposes of budget neutrality. We proposed
                to adjust the estimated CY 2021 unscaled relative payment weights by
                multiplying them by a proposed weight scalar of 1.4443 to ensure that
                the proposed CY 2021 relative payment weights are scaled to be budget
                neutral. The proposed CY 2021 relative payment weights listed in
                Addenda A and B to the CY 2021 OPPS/ASC proposed rule (which are
                available via the internet on the CMS website) are scaled and
                incorporate the recalibration adjustments discussed in sections II.A.1.
                and II.A.2. of the CY 2021 OPPS/ASC proposed rule.
                 Section 1833(t)(14) of the Act provides the payment rates for
                certain SCODs. Section 1833(t)(14)(H) of the Act provides that
                additional expenditures resulting from this paragraph shall not be
                taken into account in establishing the conversion factor, weighting,
                and other adjustment factors for 2004 and 2005 under paragraph (9), but
                shall be taken into account for subsequent years. Therefore, the cost
                of those SCODs (as discussed in section V.B.2. of proposed rule) is
                included in the budget neutrality calculations for the CY 2021 OPPS.
                 We did not receive any public comments on the proposed weight
                scalar calculation. Therefore, we are finalizing our proposal to use
                the calculation process described in the proposed rule, without
                modification, for CY 2021. Using updated final rule claims data, we are
                updating the estimated CY 2021 unscaled relative payment weights by
                multiplying them by a weight scalar of 1.4341 to ensure that the final
                CY 2021 relative payment weights are scaled to be budget neutral. The
                final CY 2021 relative payments weights listed in Addenda A and B to
                this final rule with comment period (which are available via the
                internet on the CMS website) were scaled and incorporate the
                recalibration adjustments discussed in sections II.A.1. and II.A.2. of
                this final rule with comment period.
                B. Conversion Factor Update
                 Section 1833(t)(3)(C)(ii) of the Act requires the Secretary to
                update the conversion factor used to determine the payment rates under
                the OPPS on an annual basis by applying the OPD fee schedule increase
                factor. For purposes of section 1833(t)(3)(C)(iv) of the Act, subject
                to sections 1833(t)(17) and 1833(t)(3)(F) of the Act, the OPD fee
                schedule increase factor is equal to the hospital inpatient market
                basket percentage increase applicable to hospital discharges under
                section 1886(b)(3)(B)(iii) of the Act. In the FY 2021 IPPS/LTCH PPS
                proposed rule (85 FR 32738), consistent with current law, based on IHS
                Global, Inc.'s fourth quarter 2019 forecast of the FY 2021 market
                basket increase, the proposed FY 2021 IPPS market basket update was 3.0
                percent. Accordingly, we proposed a CY 2021 OPD fee schedule increase
                factor of 3.0 percent.
                 Specifically, section 1833(t)(3)(F)(i) of the Act requires that,
                for 2012 and subsequent years, the OPD fee schedule increase factor
                under subparagraph (C)(iv) be reduced by the productivity adjustment
                described in section 1886(b)(3)(B)(xi)(II) of the Act. Section
                1886(b)(3)(B)(xi)(II) of the Act defines the productivity adjustment as
                equal to the 10-year moving average of changes in annual economy-wide,
                private nonfarm business multifactor productivity (MFP) (as projected
                by the Secretary for the 10-year period ending with the applicable
                fiscal year, year, cost reporting period, or other annual period) (the
                ``MFP adjustment''). In the FY 2012 IPPS/LTCH PPS final rule (76 FR
                51689 through 51692), we finalized our methodology for calculating and
                [[Page 85904]]
                applying the MFP adjustment, and then revised this methodology, as
                discussed in the FY 2016 IPPS/LTCH PPS final rule (80 FR 49509). In the
                FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32739), the proposed MFP
                adjustment for FY 2021 was 0.4 percentage point.
                 Therefore, we proposed that the MFP adjustment for the CY 2021 OPPS
                would be 0.4 percentage point. We also proposed that if more recent
                data become subsequently available after the publication of the CY 2021
                OPPS/ASC proposed rule (for example, a more recent estimate of the
                market basket increase and/or the MFP adjustment), we would use such
                updated data, if appropriate, to determine the CY 2021 market basket
                update and the MFP adjustment, which are components in calculating the
                OPD fee schedule increase factor under sections 1833(t)(3)(C)(iv) and
                1833(t)(3)(F) of the Act, in the CY 2021 OPPS/ASC final rule.
                 We note that section 1833(t)(3)(F) of the Act provides that
                application of this subparagraph may result in the OPD fee schedule
                increase factor under section 1833(t)(3)(C)(iv) of the Act being less
                than 0.0 percent for a year, and may result in OPPS payment rates being
                less than rates for the preceding year. As described in further detail
                below, we proposed for CY 2021 an OPD fee schedule increase factor of
                2.6 percent for the CY 2021 OPPS (which is the proposed estimate of the
                hospital inpatient market basket percentage increase of 3.0 percent,
                less the proposed 0.4 percentage point MFP adjustment).
                 We proposed that hospitals that fail to meet the Hospital OQR
                Program reporting requirements would be subject to an additional
                reduction of 2.0 percentage points from the OPD fee schedule increase
                factor adjustment to the conversion factor that would be used to
                calculate the OPPS payment rates for their services, as required by
                section 1833(t)(17) of the Act. For further discussion of the Hospital
                OQR Program, we refer readers to section XIV. of the proposed rule.
                 The adjustment described in section 1833(t)(3)(F)(ii) was required
                only through 2019. The requirement in section 1833(t)(3)(F)(i) of the
                Act that we reduce the OPD fee schedule increase factor by the
                productivity adjustment described in section 1886(b)(3)(B)(xi)(II),
                however, applies for 2012 and subsequent years, and thus, continues to
                apply. In the CY 2020 OPPS/ASC final rule with comment period, we
                inadvertently did not amend the regulation at 42 CFR
                419.32(b)(1)(iv)(B) to reflect that the adjustment required by section
                1833(t)(3)(F)(i) of the Act is the only adjustment under section
                1833(t)(3)(F) that applies in CY 2020 and subsequent years.
                Accordingly, we proposed to amend our regulation at 42 CFR
                419.32(b)(1)(iv)(B) by adding a new paragraph (b)(1)(iv)(B)(11) to
                provide that, for CY 2020 and subsequent years, we reduce the OPD fee
                schedule increase factor by the MFP adjustment as determined by CMS.
                 To set the OPPS conversion factor for CY 2021, we proposed to
                increase the CY 2020 conversion factor of $80.793 by 2.6 percent. In
                accordance with section 1833(t)(9)(B) of the Act, we proposed further
                to adjust the conversion factor for CY 2021 to ensure that any
                revisions made to the wage index and rural adjustment were made on a
                budget neutral basis. We proposed to calculate an overall budget
                neutrality factor of 1.0017 for wage index changes. This adjustment was
                comprised of a 1.0027 proposed budget neutrality adjustment, using our
                standard calculation of comparing proposed total estimated payments
                from our simulation model using the proposed FY 2021 IPPS wage indexes
                to those payments using the FY 2020 IPPS wage indexes, as adopted on a
                calendar year basis for the OPPS as well as a 0.9990 proposed budget
                neutrality adjustment for the proposed CY 2021 5 percent cap on wage
                index decreases to ensure that this transition wage index is
                implemented in a budget neutral manner, consistent with the proposed FY
                2021 IPPS wage index policy (85 FR 32706). We stated in the proposed
                rule that we believed it was appropriate to ensure that the proposed
                wage index transition policy (that is, the proposed CY 2021 5 percent
                cap on wage index decreases) did not increase estimated aggregate
                payments under the OPPS beyond the payments that would be made without
                this transition policy. We proposed to calculate this budget neutrality
                adjustment by comparing total estimated OPPS payments using the FY 2021
                IPPS wage index, adopted on a calendar year basis for the OPPS, where a
                5 percent cap on wage index decreases is not applied to total estimated
                OPPS payments where the 5 percent cap on wage index decreases is
                applied. We stated in the proposed rule that these two proposed wage
                index budget neutrality adjustments would maintain budget neutrality
                for the proposed CY 2021 OPPS wage index (which, as we discuss in
                section II.C of the proposed rule, would use the FY 2021 IPPS post-
                reclassified wage index and any adjustments, including without
                limitation any adjustments finalized under the IPPS related to the
                proposed adoption of the revised OMB delineations).
                 We did not receive any public comments on our proposed methodology
                for calculating the wage index budget neutrality adjustment as
                discussed above. Therefore, for the reasons discussed above and in the
                CY 2021 OPPS/ASC proposed rule (85 FR 48801), we are finalizing our
                methodology for calculating the wage index budget neutrality adjustment
                as proposed, without modification. For CY 2021, based on updated data
                for this final rule with comment period, we are finalizing an overall
                budget neutrality factor of 1.0012 for wage index changes. This
                adjustment is comprised of a 1.0020 budget neutrality adjustment using
                our standard calculation of comparing total estimated payments from our
                simulation model using the final FY 2021 IPPS wage indexes to those
                payments using the FY 2020 IPPS wage indexes, as adopted on a calendar
                year basis for the OPPS, as well as a 0.9992 budget neutrality
                adjustment for the CY 2021 5 percent cap on wage index decreases to
                ensure that this transition wage index is implemented in a budget
                neutral manner.
                 For the CY 2021 OPPS, we proposed to maintain the current rural
                adjustment policy, as discussed in section II.E. of the CY 2021 OPPS/
                ASC proposed rule. Therefore, the proposed budget neutrality factor for
                the rural adjustment was 1.0000.
                 We proposed to continue previously established policies for
                implementing the cancer hospital payment adjustment described in
                section 1833(t)(18) of the Act, as discussed in section II.F. of the CY
                2021 OPPS/ASC proposed rule. We proposed to calculate a CY 2021 budget
                neutrality adjustment factor for the cancer hospital payment adjustment
                by comparing estimated total CY 2021 payments under section 1833(t) of
                the Act, including the proposed CY 2021 cancer hospital payment
                adjustment, to estimated CY 2021 total payments using the CY 2020 final
                cancer hospital payment adjustment, as required under section
                1833(t)(18)(B) of the Act. The proposed CY 2021 estimated payments
                applying the proposed CY 2021 cancer hospital payment adjustment were
                the same as estimated payments applying the CY 2020 final cancer
                hospital payment adjustment. Therefore, we proposed to apply a budget
                neutrality adjustment factor of 1.0000 to the conversion factor for the
                cancer hospital payment adjustment. In accordance with section
                1833(t)(18)(C), as added by section 16002(b) of the 21st Century Cures
                Act (Pub. L. 114-255), we
                [[Page 85905]]
                proposed to apply a budget neutrality factor calculated as if the
                proposed cancer hospital adjustment target payment-to-cost ratio was
                0.90, not the 0.89 target payment-to-cost ratio we applied as stated in
                section II.F. of the proposed rule.
                 For the CY 2021 OPPS/ASC proposed rule, we estimated that proposed
                pass-through spending for drugs, biologicals, and devices for CY 2021
                would equal approximately $783.2 million, which represented 0.93
                percent of total projected CY 2021 OPPS spending. Therefore, we stated
                that the proposed conversion factor would be adjusted by the difference
                between the 0.88 percent estimate of pass-through spending for CY 2020
                and the 0.93 percent estimate of proposed pass-through spending for CY
                2021, resulting in a proposed decrease to the conversion factor for CY
                2021 of 0.05 percent.
                 We also estimated a 0.85 percent upward adjustment to nondrug OPPS
                payment rates as a result of our payment proposal for separately
                payable nonpass-through drugs purchased under the 340B Program at a net
                rate of ASP minus 28.7 percent. Applying the proposed payment policy
                for drugs purchased under the 340B Program, as described in section
                V.B.6. of the CY 2021 OPPS/ASC proposed rule, would have resulted in an
                estimated reduction of approximately $427 million in separately paid
                OPPS drug payments. To ensure budget neutrality under the OPPS after
                applying this proposed payment methodology for drugs purchased under
                the 340B Program, we proposed to apply an offset of approximately $427
                million to the OPPS conversion factor, which would result in an
                adjustment of 1.0085 to the OPPS conversion factor.
                 Proposed estimated payments for outliers would remain at 1.0
                percent of total OPPS payments for CY 2021. We estimated for the
                proposed rule that outlier payments would be 1.01 percent of total OPPS
                payments in CY 2020; the 1.00 percent for proposed outlier payments in
                CY 2021 would constitute a 0.01 percent decrease in payment in CY 2021
                relative to CY 2020.
                 For the CY 2021 OPPS/ASC proposed rule, we also proposed that
                hospitals that fail to meet the reporting requirements of the Hospital
                OQR Program would continue to be subject to a further reduction of 2.0
                percentage points to the OPD fee schedule increase factor. For
                hospitals that fail to meet the requirements of the Hospital OQR
                Program, we proposed to make all other adjustments discussed above, but
                use a reduced OPD fee schedule update factor of 0.6 percent (that is,
                the proposed OPD fee schedule increase factor of 2.6 percent further
                reduced by 2.0 percentage points). This would result in a proposed
                reduced conversion factor for CY 2021 of $82.065 for hospitals that
                fail to meet the Hospital OQR Program requirements (a difference of
                1.632 in the conversion factor relative to hospitals that met the
                requirements).
                 In summary, for CY 2021, we proposed to amend Sec. 419.32 by
                adding a new paragraph (b)(1)(iv)(B)(11) to reflect the reductions to
                the OPD fee schedule increase factor that are required for CY 2020, CY
                2021, and subsequent years to satisfy the statutory requirements of
                section 1833(t)(3)(F) of the Act. We proposed to use a reduced
                conversion factor of $82.065 in the calculation of payments for
                hospitals that fail to meet the Hospital OQR Program requirements (a
                difference of -1.632 in the conversion factor relative to hospitals
                that met the requirements).
                 For CY 2021, we proposed to use a conversion factor of $83.697 in
                the calculation of the national unadjusted payment rates for those
                items and services for which payment rates are calculated using
                geometric mean costs; that is, the proposed OPD fee schedule increase
                factor of 2.6 percent for CY 2021, the required proposed wage index
                budget neutrality adjustment of approximately 1.0017, the proposed
                cancer hospital payment adjustment of 1.0000, the proposed budget
                neutrality adjustment of 1.0085 applying the proposed payment
                methodology of ASP minus 28.7 percent for CY 2021 for drugs purchased
                under the 340B Program, and the proposed adjustment of 0.05 percentage
                point of projected OPPS spending for the difference in pass-through
                spending that resulted in a proposed conversion factor for CY 2021 of
                $83.697.
                 Comment: One commenter suggested that we eliminate the MFP
                adjustment because of economic uncertainty as a result of the COVID-19
                pandemic. The commenter stated that CMS rules for fiscal year 2021 had
                a 0.0 percent multifactor productivity adjustment.
                 Response: We note that under section 1886(b)(3)(B)(xi)(I) of the
                Act, the Secretary is required to reduce the hospital market basket
                percentage increase by the 10-year moving average of changes in annual
                economy-wide, private nonfarm business MFP.
                 Comment: Multiple commenters supported our proposed CY 2021 OPD fee
                schedule increase factor percentage increase of 2.6 percent.
                 Response: We appreciate the support of the commenters.
                 After reviewing the public comments we received, we are finalizing
                these proposals with modification. For CY 2021, we proposed to continue
                previously established policies for implementing the cancer hospital
                payment adjustment described in section 1833(t)(18) of the Act
                (discussed in section II.F. of this final rule with comment period).
                Based on the final rule updated data used in calculating the cancer
                hospital payment adjustment in section II.F. of this final rule with
                comment period, the target payment-to-cost ratio for the cancer
                hospital payment adjustment, which was 0.89 for CY 2020, is also 0.89
                for CY 2021. As a result, we are applying a budget neutrality
                adjustment factor of 1.0000 to the conversion factor for the cancer
                hospital payment adjustment. We are implementing our alternative
                proposal for CY 2021 for the payment of drugs acquired through the 340B
                program. Drugs obtained through the 340B program will be paid at a net
                rate of ASP minus 22.5 percent. This has been the payment rate for
                drugs acquired through the 340B program in the OPPS since the policy
                was initially established in CY 2018. Since there is no change in the
                net payment rate, the final budget neutral adjustment factor regarding
                the payment of drugs acquired through the 340B program is 1.0000.
                 For this CY 2021 OPPS/ASC final rule with comment period, as
                published in the FY 2021 IPPS/LTCH PPS final rule, based on IGI's 2020
                second quarter forecast with historical data through the first quarter
                of 2020, the hospital market basket update for CY 2021 is 2.4 percent.
                 As described in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58797),
                it has typically been our practice to base the projection of the market
                basket price proxies and MFP for the IPPS/LTCH final rule on the second
                quarter IGI forecast. At the time of the FY 2021 IPPS/LTCH final rule,
                the 10-year moving average growth of MFP for FY 2021 based on IGI's
                second quarter 2020 forecast was 0.7 percentage point. However, for the
                FY 2021 IPPS/LTCH final rule, we finalized the use of the IGI June 2020
                macroeconomic forecast for MFP because it represented a more recent
                forecast, and we believed it was important to use more recent data
                during this period when economic trends, particularly employment and
                labor productivity, are notably uncertain because of the COVID-19
                pandemic. Based on these more recent data available for the FY 2021
                IPPS/LTCH final rule, the current estimate of the 10-year moving
                average growth of MFP for FY 2021 was -0.1 percentage point (85 FR
                58797).
                [[Page 85906]]
                 Mechanically subtracting the negative 10-year moving average growth
                of MFP from the hospital market basket percentage increase using the
                data from the IGI June 2020 macroeconomic forecast would have resulted
                in a 0.1 percentage point increase in the FY 2021 market basket update.
                However, we explained that under section 1886(b)(3)(B)(xi)(I) of the
                Act, the Secretary is required to reduce (not increase) the hospital
                market basket percentage increase by changes in economy-wide
                productivity. Accordingly, we applied a 0.0 percent MFP adjustment to
                the FY 2021 IPPS market basket percentage increase.
                 Section 1833(t)(3)(F)(i) of the Act also requires us to reduce (not
                increase) the OPD fee schedule increase factor by the MFP adjustment
                described in section 1886(b)(3)(B)(xi)(II) of the Act. Accordingly, we
                are applying a 0.0 percentage point MFP adjustment to the CY 2021 OPD
                fee schedule increase factor for the OPPS.
                 As a result of these finalized policies, the OPD fee schedule
                increase factor for the CY 2021 OPPS is 2.4 percent (which reflects the
                2.4 percent final estimate of the hospital inpatient market basket
                percentage increase with a 0.0 percentage point MFP adjustment since
                the 10-year moving average growth in MFP was estimated to be less than
                0.0 percent). For CY 2021, we are using a conversion factor of $82.797
                in the calculation of the national unadjusted payment rates for those
                items and services for which payment rates are calculated using
                geometric mean costs; that is, the OPD fee schedule increase factor of
                2.4 percent for CY 2021, the required wage index budget neutrality
                adjustment of 1.0012, the budget neutrality adjustment of 1.0000
                applying the final payment methodology for drugs purchased under the
                340B Program for CY 2021 of ASP minus 22.5 percent, and the adjustment
                of 0.04 percentage point of projected OPPS spending for the difference
                in pass-through spending that results in a conversion factor for CY
                2021 of $82.797.
                 We also are finalizing our proposal to amend the regulation at 42
                CFR 419.32(b)(1)(iv)(B) by adding a new paragraph (b)(1)(iv)(B)(11) to
                provide that, for CY 2020 and subsequent years, we reduce the OPD fee
                schedule increase factor by the MFP adjustment as determined by CMS.
                C. Wage Index Changes
                 Section 1833(t)(2)(D) of the Act requires the Secretary to
                determine a wage adjustment factor to adjust the portion of payment and
                coinsurance attributable to labor-related costs for relative
                differences in labor and labor-related costs across geographic regions
                in a budget neutral manner (codified at 42 CFR 419.43(a)). This portion
                of the OPPS payment rate is called the OPPS labor-related share. Budget
                neutrality is discussed in section II.B. of the CY 2021 OPPS/ASC
                proposed rule.
                 The OPPS labor-related share is 60 percent of the national OPPS
                payment. This labor-related share is based on a regression analysis
                that determined that, for all hospitals, approximately 60 percent of
                the costs of services paid under the OPPS were attributable to wage
                costs. We confirmed that this labor-related share for outpatient
                services is appropriate during our regression analysis for the payment
                adjustment for rural hospitals in the CY 2006 OPPS final rule with
                comment period (70 FR 68553). We proposed to continue this policy for
                the CY 2021 OPPS (85 FR 48802). We referred readers to section II.H. of
                the CY 2021 OPPS/ASC proposed rule for a description and an example of
                how the wage index for a particular hospital is used to determine
                payment for the hospital. We did not receive any public comments on
                this proposal. Accordingly, for the reasons discussed above and in the
                CY 2021 OPPS/ASC proposed rule, we are finalizing our proposal, without
                modification, to continue this policy for the CY 2021 OPPS.
                 As discussed in the claims accounting narrative included with the
                supporting documentation for this final rule with comment period (which
                is available via the internet on the CMS website), for estimating APC
                costs, we are standardizing 60 percent of estimated claims costs for
                geographic area wage variation using the same FY 2021 pre-reclassified
                wage index that we use under the IPPS to standardize costs. This
                standardization process removes the effects of differences in area wage
                levels from the determination of a national unadjusted OPPS payment
                rate and copayment amount.
                 Under 42 CFR 419.41(c)(1) and 419.43(c) (published in the OPPS
                April 7, 2000 final rule with comment period (65 FR 18495 and 18545)),
                the OPPS adopted the final fiscal year IPPS post-reclassified wage
                index as the calendar year wage index for adjusting the OPPS standard
                payment amounts for labor market differences. Therefore, the wage index
                that applies to a particular acute care, short-stay hospital under the
                IPPS also applies to that hospital under the OPPS. As initially
                explained in the September 8, 1998 OPPS proposed rule (63 FR 47576), we
                believe that using the IPPS wage index as the source of an adjustment
                factor for the OPPS is reasonable and logical, given the inseparable,
                subordinate status of the HOPD within the hospital overall. In
                accordance with section 1886(d)(3)(E) of the Act, the IPPS wage index
                is updated annually.
                 The Affordable Care Act contained several provisions affecting the
                wage index. These provisions were discussed in the CY 2012 OPPS/ASC
                final rule with comment period (76 FR 74191). Section 10324 of the
                Affordable Care Act added section 1886(d)(3)(E)(iii)(II) to the Act,
                which defines a frontier State and amended section 1833(t) of the Act
                to add paragraph (19), which requires a frontier State wage index floor
                of 1.00 in certain cases, and states that the frontier State floor
                shall not be applied in a budget neutral manner. We codified these
                requirements at Sec. 419.43(c)(2) and (3) of our regulations. For CY
                2021, we proposed to implement this provision in the same manner as we
                have since CY 2011 (85 FR 48802). Under this policy, the frontier State
                hospitals would receive a wage index of 1.00 if the otherwise
                applicable wage index (including reclassification, the rural floor, and
                rural floor budget neutrality) is less than 1.00. Because the HOPD
                receives a wage index based on the geographic location of the specific
                inpatient hospital with which it is associated, we stated that the
                frontier State wage index adjustment applicable for the inpatient
                hospital also would apply for any associated HOPD. We referred readers
                to the FY 2011 through FY 2020 IPPS/LTCH PPS final rules for
                discussions regarding this provision, including our methodology for
                identifying which areas meet the definition of ``frontier States'' as
                provided for in section 1886(d)(3)(E)(iii)(II) of the Act: for FY 2011,
                75 FR 50160 through 50161; for FY 2012, 76 FR 51793, 51795, and 51825;
                for FY 2013, 77 FR 53369 through 53370; for FY 2014, 78 FR 50590
                through 50591; for FY 2015, 79 FR 49971; for FY 2016, 80 FR 49498; for
                FY 2017, 81 FR 56922; for FY 2018, 82 FR 38142; for FY 2019, 83 FR
                41380; and for FY 2020, 84 FR 42312. We did not receive any public
                comments on this proposal. Accordingly, for the reasons discussed above
                and in the CY 2021 OPPS/ASC proposed rule, we are finalizing our
                proposal, without modification, to continue to implement the frontier
                State floor under the OPPS in the same manner as we have since CY 2011.
                 In addition to the changes required by the Affordable Care Act, we
                noted in the CY 2021 OPPS/ASC proposed rule (85
                [[Page 85907]]
                FR 48802) that the FY 2021 IPPS wage indexes continue to reflect a
                number of adjustments implemented in past years, including, but not
                limited to, reclassification of hospitals to different geographic
                areas, the rural floor provisions, an adjustment for occupational mix,
                an adjustment to the wage index based on commuting patterns of
                employees (the out-migration adjustment), and an adjustment to the wage
                index for certain low wage index hospitals to help address wage index
                disparities between low and high wage index hospitals. We referred
                readers to the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32695 through
                32734) for a detailed discussion of all proposed changes to the FY 2021
                IPPS wage indexes.
                 Furthermore, as discussed in the FY 2015 IPPS/LTCH PPS final rule
                (79 FR 49951 through 49963) and in each subsequent IPPS/LTCH PPS final
                rule, including the FY 2021 IPPS/LTCH PPS final rule (85 FR 58743), the
                Office of Management and Budget (OMB) issued revisions to the labor
                market area delineations on February 28, 2013 (based on 2010 Decennial
                Census data), that included a number of significant changes, such as
                new Core Based Statistical Areas (CBSAs), urban counties that became
                rural, rural counties that became urban, and existing CBSAs that were
                split apart (OMB Bulletin 13-01). This bulletin can be found at:
                https://obamawhitehouse.archives.gov/sites/default/files/omb/bulletins/2013/b13-01.pdf. In the FY 2015 IPPS/LTCH PPS final rule (79 FR 49950
                through 49985), for purposes of the IPPS, we adopted the use of the OMB
                statistical area delineations contained in OMB Bulletin No. 13-01,
                effective October 1, 2014. For purposes of the OPPS, in the CY 2015
                OPPS/ASC final rule with comment period (79 FR 66826 through 66828), we
                adopted the use of the OMB statistical area delineations contained in
                OMB Bulletin No. 13-01, effective January 1, 2015, beginning with the
                CY 2015 OPPS wage indexes. In the FY 2017 IPPS/LTCH PPS final rule (81
                FR 56913), we adopted revisions to statistical areas contained in OMB
                Bulletin No. 15-01, issued on July 15, 2015, which provided updates to
                and superseded OMB Bulletin No. 13-01 that was issued on February 28,
                2013. For purposes of the OPPS, in the CY 2017 OPPS/ASC final rule with
                comment period (81 FR 79598), we adopted the revisions to the OMB
                statistical area delineations contained in OMB Bulletin No. 15-01,
                effective January 1, 2017, beginning with the CY 2017 OPPS wage
                indexes.
                 On August 15, 2017, OMB issued OMB Bulletin No. 17-01, which
                provided updates to and superseded OMB Bulletin No. 15-01 that was
                issued on July 15, 2015. The attachments to OMB Bulletin No. 17-01
                provided detailed information on the update to the statistical areas
                since July 15, 2015, and were based on the application of the 2010
                Standards for Delineating Metropolitan and Micropolitan Statistical
                Areas to Census Bureau population estimates for July 1, 2014 and July
                1, 2015. In the CY 2019 OPPS/ASC final rule with comment period (83 FR
                58863 through 58865), we adopted the updates set forth in OMB Bulletin
                No. 17-01, effective January 1, 2019, beginning with the CY 2019 wage
                index.
                 On April 10, 2018 OMB issued OMB Bulletin No. 18-03 which
                superseded the August 15, 2017 OMB Bulletin No. 17-01. On September 14,
                2018, OMB issued OMB Bulletin No. 18-04 which superseded the April 10,
                2018 OMB Bulletin No. 18-03. Typically, interim OMB bulletins (those
                issued between decennial censuses) have only contained minor
                modifications to labor market delineations. However, as we stated in
                the FY 2021 IPPS/LTCH PPS proposed and final rules (85 FR 32696 through
                32697 and 58743), the April 10, 2018 OMB Bulletin No. 18-03 and the
                September 14, 2018 OMB Bulletin No. 18-04 included more modifications
                to the labor market areas than are typical for OMB bulletins issued
                between decennial censuses, including some material modifications that
                have a number of downstream effects, such as IPPS hospital
                reclassification changes. These bulletins established revised
                delineations for Metropolitan Statistical Areas, Micropolitan
                Statistical Areas, and Combined Statistical Areas, and provided
                guidance on the use of the delineations of these statistical areas. A
                copy of OMB Bulletin No. 18-04 may be obtained at https://www.whitehouse.gov/wpcontent/uploads/2018/09/Bulletin-18-04.pdf.
                According to OMB, ``[t]his bulletin provides the delineations of all
                Metropolitan Statistical Areas, Metropolitan Divisions, Micropolitan
                Statistical Areas, Combined Statistical Areas, and New England City and
                Town Areas in the United States and Puerto Rico based on the standards
                published on June 28, 2010 (75 FR 37246), and Census Bureau data.''
                 As noted previously, while OMB Bulletin No. 18-04 is not based on
                new census data, it includes some material changes to the OMB
                statistical area delineations. Specifically, as we stated in the CY
                2021 OPPS/ASC proposed rule (85 FR 48803), under the revised OMB
                delineations, there would be some new CBSAs, urban counties that would
                become rural, rural counties that would become urban, and some existing
                CBSAs that would be split apart. In addition, we stated in the FY 2021
                IPPS/LTCH PPS proposed rule that the revised OMB delineations would
                affect various hospital reclassifications, the outmigration adjustment
                (established by section 505 of Pub. L. 108-173), and treatment of
                hospitals located in certain rural counties (that is, ``Lugar''
                hospitals) under section 1886(d)(8)(B) of the Act. In the CY 2021 OPPS/
                ASC proposed rule, we referred readers to the FY 2021 IPPS/LTCH PPS
                proposed rule for a complete discussion of the revised OMB delineations
                we proposed to adopt under the IPPS and the effects of these revisions
                on the FY 2021 IPPS wage indexes (85 FR 32696 through 32707, 32717
                through 32728). We stated in the FY 2021 IPPS/LTCH PPS proposed rule
                that we believe using the revised delineations based on OMB Bulletin
                No. 18-04 would increase the integrity of the IPPS wage index system by
                creating a more accurate representation of geographic variations in
                wage levels. Therefore, in the FY 2021 IPPS/LTCH PPS proposed rule, we
                proposed to implement the revised OMB delineations as described in the
                September 14, 2018 OMB Bulletin No. 18-04, effective October 1, 2020
                beginning with the FY 2021 IPPS wage index. In addition, in the FY 2021
                IPPS/LTCH PPS proposed rule, we proposed to apply a 5 percent cap for
                FY 2021 on any decrease in a hospital's final wage index from the
                hospital's final wage index for FY 2020 as a proposed transition wage
                index to help mitigate any significant negative impacts of adopting the
                revised OMB delineations (85 FR 32706 through 32707). As discussed in
                the FY 2021 IPPS/LTCH PPS final rule (85 FR 58742 through 58755), as we
                proposed, we adopted the revised OMB delineations as described in the
                September 14, 2018 OMB Bulletin No. 18-04, effective October 1, 2020
                beginning with the FY 2021 IPPS wage index and a 5 percent cap for FY
                2021 on any decrease in a hospital's final wage index from the
                hospital's final wage index for FY 2020.
                 As further discussed below, in the CY 2021 OPPS/ASC proposed rule
                (85 FR 48803), we proposed to use the FY 2021 IPPS post-reclassified
                wage index including the updated OMB delineations and related IPPS wage
                index adjustments to calculate the CY 2021 OPPS wage indexes. Similar
                to our discussion in the FY 2021 IPPS/LTCH PPS proposed rule, we stated
                in the CY
                [[Page 85908]]
                2021 OPPS/ASC proposed rule that we believe using the revised
                delineations based on OMB Bulletin No. 18-04 would increase the
                integrity of the OPPS wage index system by creating a more accurate
                representation of geographic variations in wage levels.
                 A summary of the comments we received regarding the updated OMB
                delineations and our responses to those comments appear below:
                 Comment: One commenter supported our proposed adoption of the
                revised OMB delineations, but several commenters opposed our proposed
                implementation of the revised OMB delineations. These commenters stated
                that CMS is not bound to adopt the revised delineations, and suggested
                that CMS delay adoption of the revised delineations until the
                completion of the 2020 decennial census. Several comments specifically
                cited the lack of advance notice and the significant negative financial
                impacts to hospitals in several counties in the New York-Newark-Jersey
                City MSA resulting from the adoption of the revised delineations.
                Additional commenters recommended that CMS engage further with
                stakeholders to develop more comprehensive wage index reform to address
                the disparities that exist within the current wage index system.
                 Response: We appreciate these comments. We refer readers to the FY
                2021 IPPS/LTCH PPS final rule (85 FR 58744 through 58753) for a
                detailed discussion of the implementation of the revised OMB
                delineations and for responses to these and other comments relating to
                the revised delineations.
                 Consistent with our longstanding policy, we proposed in the CY 2021
                OPPS/ASC proposed rule (85 FR 48803) to use the FY 2021 IPPS post-
                reclassified wage index, which is based on the updated statistical area
                delineations set forth in OMB Bulletin No. 18-04, in determining the
                wage adjustments for both the OPPS payment and copayment rates for CY
                2021. Thus, as discussed in the CY 2021 OPPS/ASC proposed rule (85 FR
                48803), any adjustments for the FY 2021 IPPS post-reclassified wage
                index, including without limitation a one year 5 percent cap on any
                wage index decrease, would be reflected in the final CY 2021 OPPS wage
                index beginning on January 1, 2021. As we explained in the CY 2021
                OPPS/ASC proposed rule, we continue to believe that using the IPPS
                post-reclassified wage index as the source of an adjustment factor for
                the OPPS is reasonable and logical given the inseparable, subordinate
                status of the HOPD within the hospital overall. For this reason, as
                discussed later in this section, we are finalizing our proposal to use
                the FY 2021 IPPS post-reclassified wage index and applicable IPPS wage
                index adjustments in determining the wage adjustments for both the OPPS
                payment rate and the copayment rates for CY 2021. As noted above, in
                the FY 2021 IPPS/LTCH PPS final rule (85 FR 58742 through 58755), for
                purposes of calculating the IPPS wage index, we adopted the revised OMB
                delineations as described in OMB Bulletin No. 18-04 effective October
                1, 2020. Thus, effective January 1, 2021, the OPPS wage index also will
                be based on these updated OMB delineations. As we explained in the CY
                2021 OPPS/ASC proposed rule, we believe using the revised delineations
                based on OMB Bulletin No. 18-04 will increase the integrity of the wage
                index system by creating a more accurate representation of geographic
                variations in wage levels.
                 We concur with commenters that CMS is not bound by statute to use
                the OMB definitions in calculating the OPPS wage index. However, we
                believe we have broad authority under section 1833(t)(2)(D) of the Act
                to determine the methodology for calculating the OPPS wage index,
                including the labor market areas used for the OPPS wage index. As
                discussed above, we believe using the IPPS post-reclassified wage
                index, which is based on the revised OMB delineations, in determining
                the wage adjustments for both the OPPS payment rate and the copayment
                rate for CY 2021 is reasonable and logical given the inseparable,
                subordinate status of the HOPD within the hospital overall. In
                addition, consistent with our discussion in the FY 2021 IPPS/LTCH PPS
                final rule (85 FR 58745), we believe it is important to use the updated
                labor market area delineations in order to maintain a more accurate and
                up-to-date payment system that reflects the reality of current labor
                market conditions. In response to comments citing a lack of advance
                notice provided to hospitals regarding the proposed adoption of the
                revised delineations, as we stated in the FY 2021 IPPS/LTCH PPS final
                rule (85 FR 58746), the delineation files produced by OMB have been
                public for nearly 2 years, and OMB definitions and criteria are subject
                to separate notice and comment rulemaking. Finally, we note that to
                help mitigate significant negative impacts of the revised OMB
                delineations, consistent with the FY 2021 IPPS wage index, the CY 2021
                OPPS wage index will reflect a 5 percent cap on any wage index decrease
                compared to a hospital's final CY 2020 wage index. For these reasons,
                we do not believe it is necessary or appropriate to delay or alter
                implementation of the revised delineations.
                 In response to commenters who recommended that CMS engage further
                with stakeholders to develop a more comprehensive wage index reform to
                address wage index disparities, we appreciate the continued interest in
                wage index reform. As we noted in the FY 2021 IPPS/LTCH PPS final rule
                (85 FR 58745), as a first step toward comprehensive wage index reform,
                the FY 2021 President's Budget proposes the Secretary conduct and
                report on a demonstration to improve the Medicare inpatient hospital
                wage index.
                 After consideration of the public comments we received, for the
                reasons discussed above and in the CY 2021 OPPS/ASC proposed rule, we
                are finalizing, without modification, our proposal to adopt the revised
                OMB delineations as described in the September 14, 2018 OMB Bulletin
                No. 18-04, and related IPPS wage index adjustments to calculate the CY
                2021 OPPS wage index effective beginning January 1, 2021.
                 CBSAs are made up of one or more constituent counties. Each CBSA
                and constituent county has its own unique identifying codes. The FY
                2018 IPPS/LTCH PPS final rule (82 FR 38130) discussed the two different
                lists of codes to identify counties: Social Security Administration
                (SSA) codes and Federal Information Processing Standard (FIPS) codes.
                Historically, CMS listed and used SSA and FIPS county codes to identify
                and crosswalk counties to CBSA codes for purposes of the IPPS and OPPS
                wage indexes. However, the SSA county codes are no longer being
                maintained and updated, although the FIPS codes continue to be
                maintained by the U.S. Census Bureau. The Census Bureau's most current
                statistical area information is derived from ongoing census data
                received since 2010; the most recent data are from 2015. The Census
                Bureau maintains a complete list of changes to counties or county
                equivalent entities on the website at: https://www.census.gov/geo/reference/county-changes.html (which, as of May 6, 2019, migrated to:
                https://www.census.gov/programs-surveys/geography.html). In the FY 2018
                IPPS/LTCH PPS final rule (82 FR 38130), for purposes of crosswalking
                counties to CBSAs for the IPPS wage index, we finalized our proposal to
                discontinue the use of the SSA county codes and begin using only the
                FIPS county codes. Similarly, for the purposes of crosswalking counties
                to CBSAs for the OPPS wage index, in the CY 2018 OPPS/ASC final rule
                with comment period (82 FR 59260), we finalized our proposal to
                discontinue
                [[Page 85909]]
                the use of SSA county codes and begin using only the FIPS county codes.
                For CY 2021, under the OPPS, we are continuing to use only the FIPS
                county codes for purposes of crosswalking counties to CBSAs.
                 In the CY 2021 OPPS/ASC proposed rule (85 FR 48803), we proposed to
                use the FY 2021 IPPS post-reclassified wage index for urban and rural
                areas as the wage index for the OPPS to determine the wage adjustments
                for both the OPPS payment rate and the copayment rate for CY 2021.
                Therefore, we stated that any adjustments for the FY 2021 IPPS post-
                reclassified wage index, including, but not limited to, any adjustments
                that we may finalize related to the proposed adoption of the revised
                OMB delineations (such as a cap on wage index decreases and revisions
                to hospital reclassifications), would be reflected in the final CY 2021
                OPPS wage index beginning on January 1, 2021. (In the proposed rule, we
                referred readers to the FY 2021 IPPS/LTCH PPS proposed rule (85 FR
                32695 through 32734) and the proposed FY 2021 hospital wage index files
                posted on the CMS website.) With regard to budget neutrality for the CY
                2021 OPPS wage index, in the proposed rule, we referred readers to
                section II.B. of the CY 2021 OPPS/ASC proposed rule. We stated that we
                continue to believe that using the IPPS post-reclassified wage index as
                the source of an adjustment factor for the OPPS is reasonable and
                logical, given the inseparable, subordinate status of the HOPD within
                the hospital overall.
                 We received comments regarding certain adjustments included in the
                FY 2021 IPPS post-reclassified wage index (which would be reflected in
                the CY 2021 OPPS wage index). A summary of those comments and our
                responses appear below:
                 Comment: Some commenters, while opposing the proposed adoption of
                revised OMB delineations, generally supported the concept of the 5
                percent cap on any wage index decrease for FY 2021 (if the delineations
                are finalized). Some commenters requested that CMS reduce the amount of
                potential reduction in FY 2021, and extend transition adjustments to
                affected hospitals in future years. Other commenters suggested a
                multiple year transition period. One commenter requested that we apply
                the 5 percent cap policy to wage index increases as well.
                 Response: We thank the commenters for their suggestions. We refer
                readers to the FY 2021 IPPS/LTCH PPS final rule (85 FR 85753 through
                58755) for a detailed discussion of our rationale for adopting a one
                year 5 percent cap on any wage index decrease and for responses to
                these and other comments regarding this transition wage index.
                 As discussed previously, in the CY 2021 OPPS/ASC proposed rule (85
                FR 48803), we proposed to use the FY 2021 IPPS post-reclassified wage
                index, including any adjustments such as the one year 5 percent cap on
                wage index decreases, as the wage index for the OPPS to determine the
                wage adjustments for both the OPPS payment rate and the copayment rate
                for CY 2021. We continue to believe that using the IPPS post-
                reclassified wage index, including any adjustments, as the source of an
                adjustment factor for the OPPS is reasonable and logical given the
                inseparable, subordinate status of the HOPD within the hospital
                overall, and thus, as discussed below, we are finalizing this proposal
                without modification.
                 In response to the commenter that requested we also apply the 5
                percent cap to wage index increases, we note that as we explained in
                the FY 2021 IPPS/LTCH PPS final rule (85 FR 58753 through 58755), the
                purpose of the 5 percent cap is to mitigate significant wage index
                decreases and provide wage index stability for affected hospitals in
                light of our adoption of the revised OMB delineations. The purpose of
                the 5 percent cap is not to curtail the positive impact of such
                revisions. Thus, we do not think it would be appropriate to apply the
                cap to wage index increases as well.
                 Comments: Many commenters thanked CMS for implementing the IPPS low
                wage index hospital policy (pursuant to which CMS increases the IPPS
                wage index for certain low wage index hospitals) beginning in FY 2020
                in response to rural and other health care stakeholders' requests that
                CMS address ``circularity'' in the wage index (the cyclical effect of
                hospitals with relatively high wages receiving higher reimbursement due
                to relatively high wage indexes, which allows them to afford paying
                higher wages) and halt the ``death spiral'' perpetuating wage index
                disparities where relatively low wage index hospitals are forced to
                keep wages low due to low Medicare reimbursements that lag behind areas
                with higher wage indexes.
                 Other commenters opposed continuing the low wage index hospital
                policy in FY 2021. The commenters stated that the policy fails to
                recognize the legitimate differences in geographic labor markets.
                Commenters also noted that there is no requirement for hospitals to use
                the increased reimbursement to boost employee compensation, and
                suggested CMS begin evaluating the cost report data filed by hospitals
                in the lowest quartile to ascertain whether the increased funds are
                being used to raise employee compensation in deciding whether to
                continue this policy for FY 2022. Some commenters stated that the data
                lag CMS described in its rationale applies equally to all hospitals,
                not only those in the lowest quartile. Commenters questioned CMS's
                statutory authority to promulgate this IPPS policy under 42 U.S.C.
                1395ww(d)(3)(E), which requires the agency to adjust payments to
                reflect area differences in wages, because it artificially inflates
                wage index values and creates a wage index system not based on actual
                data. These commenters stated that CMS is using the wage index as a
                policy vehicle, not as a technical correction, and needs Congressional
                authority to provide additional funding to low-wage hospitals.
                 Response: We appreciate the many comments we received regarding our
                policy to provide an increase in the IPPS wage index beginning in FY
                2020 for hospitals with wage index values below the 25th percentile
                wage index value for a year (referred to as the low wage index hospital
                policy). We note that we did not propose or finalize any changes to
                this policy in the FY 2021 IPPS/LTCH PPS proposed and final rules. We
                refer readers to the FY 2020 IPPS/LTCH PPS final rule (84 FR 42326
                through 42332) and FY 2021 IPPS/LTCH PPS final rule (85 FR 58765
                through 58768) for a detailed discussion of the IPPS low wage index
                hospital policy and for responses to these and other comments regarding
                this policy. In the CY 2021 OPPS/ASC proposed rule (85 FR 48803), we
                proposed to use the FY 2021 IPPS post-reclassified wage index including
                any adjustments, such as the IPPS low wage index hospital policy, as
                the wage index for the OPPS to determine the wage adjustments for both
                the OPPS payment rate and the copayment rate for CY 2021. We continue
                to believe that using the IPPS post-reclassified wage index, including
                any adjustments, as the source of an adjustment factor for the OPPS is
                reasonable and logical given the inseparable, subordinate status of the
                HOPD within the hospital overall, and thus, as discussed below, we are
                finalizing this proposal without modification.
                 Comment: Many commenters supported increasing the wage index values
                of low-wage hospitals, but suggested that CMS do so in a non-budget-
                neutral manner. Commenters stated that this redistribution is
                counterproductive to CMS's larger goals
                [[Page 85910]]
                of high quality care and healthcare access because it forces high-wage,
                mostly urban hospitals to bear the cost of supporting lower-wage
                hospitals. Commenters stated that the budget neutrality adjustment
                penalizes many hospitals, including rural hospitals. Other commenters
                requested that CMS ensure that the budget neutrality adjustment factor
                not apply to hospitals falling below the 25th percentile.
                 Response: We refer readers to the FY 2020 IPPS/LTCH PPS final rule
                (84 FR 42328 through 42332) and FY 2021 IPPS/LTCH PPS final rule (85 FR
                58765 through 58768) for a detailed discussion of the budget neutrality
                adjustment for the IPPS low wage index hospital policy and for
                responses to these and other comments regarding this adjustment.
                 We refer readers to section II.B. of this final rule with comment
                period for a discussion of the OPPS wage index budget neutrality
                adjustment.
                 Comment: Many commenters recommended that CMS develop a
                comprehensive, long-term approach to wage index reform in place of the
                low wage index hospital policy finalized in the FY 2020 IPPS/LTCH PPS
                final rule. Two commenters suggested alternative solutions to address
                wage index disparities, including a national wage index floor for all
                hospitals. Other commenters recommended that CMS proactively address
                the effects of COVID-19, which the commenters believed would exacerbate
                wage index disparities, by excluding wage data collected during the
                public health emergency from future wage index calculations.
                 Response: We appreciate the commenters' suggested alternatives. We
                received similar comments in response to the FY 2021 IPPS/LTCH PPS
                proposed rule (85 FR 58767 through 58768). In the FY 2021 IPPS/LTCH PPS
                final rule (85 FR 58768), we stated that we considered these comments
                to be outside the scope of the FY 2021 IPPS/LTCH PPS proposed rule, and
                thus we did not address them in that final rule but stated that we may
                consider them in future rulemaking. Similarly, we consider these
                comments to be outside the scope of the CY 2021 OPPS/ASC proposed rule
                and thus are not addressing them in this final rule with comment
                period.
                 Comment: Multiple commenters specifically supported CMS's
                continuation of the policy, adopted in the FY 2020 IPPS/LTCH PPS final
                rule (84 FR 42332 through 42336), to exclude the wage data of urban
                hospitals that reclassify to rural when calculating each state's rural
                floor. Commenters stated that the change to the calculation of the
                rural floor limits the ability of hospitals to game the system and
                supports the overall goal of making the wage index reflective of
                variances in labor markets.
                 Response: We appreciate the commenters' support of our policy to
                exclude the wage data of hospitals reclassified under Sec. 412.103
                from the IPPS rural floor calculation. As stated in the FY 2020 IPPS/
                LTCH PPS final rule, we believe this policy is necessary and
                appropriate to address the unanticipated effects of rural
                reclassifications on the rural floor and the resulting wage index
                disparities, including the effects of the manipulation of the rural
                floor by certain hospitals (84 FR 42333 through 42336). We refer
                readers to the FY 2020 IPPS/LTCH PPS final rule (84 FR 42332 through
                42336) and the FY 2021 IPPS/LTCH PPS final rule (85 FR 58768) for a
                detailed discussion of this policy and for responses to these and other
                comments regarding this policy.
                 Comment: One commenter supported our proposals regarding the wage
                index and requested that we carry over policies from the IPPS to the
                OPPS to ensure consistency in hospital payments.
                 Response: We appreciate the commenter's support of our proposals
                regarding the wage index. As we discuss below, we are finalizing our
                proposal to use the FY 2021 IPPS post-reclassified wage index for urban
                and rural areas (including any applicable adjustments for the FY 2021
                IPPS post-reclassified wage index), as the wage index for the OPPS to
                determine the wage adjustments for both the OPPS payment rate and the
                copayment rate for CY 2021.
                 After consideration of the comments received, for the reasons
                discussed in this final rule with comment period and in the CY 2021
                OPPS/ASC proposed rule, we are finalizing, without modification, our
                proposal to use the FY 2021 IPPS post-reclassified wage index for urban
                and rural areas, based on the revised OMB delineations set forth in OMB
                Bulletin No. 18-04, as the wage index for the OPPS to determine the
                wage adjustments for both the OPPS payment rate and the copayment rate
                for CY 2021. Therefore, any applicable adjustments for the FY 2021 IPPS
                post-reclassified wage index (including, but not limited to, the low
                wage index hospital policy, the one year 5 percent cap on wage index
                decreases, the rural floor, and the frontier State floor) will be
                reflected in the final CY 2021 OPPS wage index beginning on January 1,
                2021. We continue to believe that using the IPPS post-reclassified wage
                index as the source of an adjustment factor for the OPPS is reasonable
                and logical given the inseparable, subordinate status of the HOPD
                within the hospital overall.
                 Hospitals that are paid under the OPPS, but not under the IPPS, do
                not have an assigned hospital wage index under the IPPS. Therefore, for
                non-IPPS hospitals paid under the OPPS, it is our longstanding policy
                to assign the wage index that would be applicable if the hospital was
                paid under the IPPS, based on its geographic location and any
                applicable wage index adjustments. In the CY 2021 OPPS/ASC proposed
                rule, we proposed to continue this policy for CY 2021, and included a
                brief summary of the major FY 2021 IPPS wage index policies and
                adjustments that we proposed to apply to these hospitals under the OPPS
                for CY 2021, which we have summarized below. We referred readers to the
                FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32695 through 32734) for a
                detailed discussion of the proposed changes to the FY 2021 IPPS wage
                indexes.
                 It has been our longstanding policy to allow non-IPPS hospitals
                paid under the OPPS to qualify for the out-migration adjustment if they
                are located in a section 505 out-migration county (section 505 of the
                Medicare Prescription Drug, Improvement, and Modernization Act of 2003
                (MMA)). Applying this adjustment is consistent with our policy of
                adopting IPPS wage index policies for hospitals paid under the OPPS. We
                note that, because non-IPPS hospitals cannot reclassify, they are
                eligible for the out-migration wage index adjustment if they are
                located in a section 505 out-migration county. This is the same out-
                migration adjustment policy that applies if the hospital were paid
                under the IPPS. For CY 2021, we proposed to continue our policy of
                allowing non-IPPS hospitals paid under the OPPS to qualify for the
                outmigration adjustment if they are located in a section 505 out-
                migration county (section 505 of the MMA). Furthermore, we stated in
                the proposed rule that the wage index that would apply for CY 2021 to
                non-IPPS hospitals paid under the OPPS would continue to include the
                rural floor adjustment and adjustments to the wage index finalized in
                the FY 2020 IPPS/LTCH PPS final rule to address wage index disparities
                (84 FR 42325 through 42337). In addition, we proposed that the wage
                index that would apply to non-IPPS hospitals paid under the OPPS would
                include any adjustments we may finalize for the FY 2021 IPPS post-
                reclassified wage index related to the adoption of the revised OMB
                delineations, as discussed in the CY 2021 OPPS/ASC proposed rule. We
                did not receive any public comments on these proposals. Accordingly,
                for the
                [[Page 85911]]
                reasons discussed above and in the CY 2021 OPPS/ASC proposed rule, we
                are finalizing these proposals, without modification.
                 For CMHCs, for CY 2021, we proposed to continue to calculate the
                wage index by using the post-reclassification IPPS wage index based on
                the CBSA where the CMHC is located. We also proposed that the wage
                index that would apply to CMHCs would include any adjustments we may
                finalize for the FY 2021 IPPS post-reclassified wage index related to
                the adoption of the revised OMB delineations, as discussed in the CY
                2021 OPPS/ASC proposed rule. In addition, we proposed that the wage
                index that would apply to CMHCs for CY 2021 would continue to include
                the rural floor adjustment and adjustments to the wage index finalized
                in the FY 2020 IPPS/LTCH PPS final rule to address wage index
                disparities. Also, we proposed that the wage index that would apply to
                CMHCs would not include the outmigration adjustment because that
                adjustment only applies to hospitals. We did not receive any public
                comments on these proposals. Therefore, for the reasons discussed above
                and in the CY 2021 OPPS/ASC proposed rule, we are finalizing these
                proposals without modification.
                 Table 4A associated with the FY 2021 IPPS/LTCH PPS final rule
                (available via the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index)
                identifies counties eligible for the out-migration adjustment. Table 2
                associated with the FY 2021 IPPS/LTCH PPS final rule (available for
                download via the website above) identifies IPPS hospitals that receive
                the out-migration adjustment for FY 2021. We are including the
                outmigration adjustment information from Table 2 associated with the FY
                2021 IPPS/LTCH PPS final rule as Addendum L to this CY 2021 OPPS/ASC
                final rule with comment period with the addition of non-IPPS hospitals
                that will receive the section 505 outmigration adjustment under this CY
                2021 OPPS/ASC final rule with comment period. Addendum L is available
                via the internet on the CMS website. We refer readers to the CMS
                website for the OPPS at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index. At this link, readers will
                find a link to the final FY 2021 IPPS wage index tables and Addendum L.
                D. Statewide Average Default Cost-To-Charge Ratios (CCRs)
                 In addition to using CCRs to estimate costs from charges on claims
                for ratesetting, we use overall hospital-specific CCRs calculated from
                the hospital's most recent cost report to determine outlier payments,
                payments for pass-through devices, and monthly interim transitional
                corridor payments under the OPPS during the PPS year. For certain
                hospitals, under the regulations at 42 CFR 419.43(d)(5)(iii), we use
                the statewide average default CCRs to determine the payments mentioned
                earlier if it is not possible to determine an accurate CCR for a
                hospital in certain circumstances. This includes hospitals that are
                new, hospitals that have not accepted assignment of an existing
                hospital's provider agreement, and hospitals that have not yet
                submitted a cost report. We also use the statewide average default CCRs
                to determine payments for hospitals whose CCR falls outside the
                predetermined ceiling threshold for a valid CCR or for hospitals in
                which the most recent cost report reflects an all-inclusive rate status
                (Medicare Claims Processing Manual (Pub. 100-04), Chapter 4, Section
                10.11).
                 We discussed our policy for using default CCRs, including setting
                the ceiling threshold for a valid CCR, in the CY 2009 OPPS/ASC final
                rule with comment period (73 FR 68594 through 68599) in the context of
                our adoption of an outlier reconciliation policy for cost reports
                beginning on or after January 1, 2009. For details on our process for
                calculating the statewide average CCRs, we refer readers to the CY 2021
                OPPS proposed rule Claims Accounting Narrative that is posted on our
                website. We proposed to update the default ratios for CY 2021 using the
                most recent cost report data. We stated that we would update these
                ratios in this final rule with comment period if more recent cost
                report data are available.
                 We are no longer publishing a table in the Federal Register
                containing the statewide average CCRs in the annual OPPS proposed rule
                and final rule with comment period. These CCRs with the upper limit
                will be available for download with each OPPS CY proposed rule and
                final rule on the CMS website. We refer readers to our website at:
                https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html;
                click on the link on the left of the page titled ``Hospital Outpatient
                Regulations and Notices'' and then select the relevant regulation to
                download the statewide CCRs and upper limit in the Downloads section of
                the web page.
                 We did not receive any public comments on our proposal to use
                statewide average default CCRs if a MAC cannot calculate a CCR for a
                hospital and to use these CCRs to adjust charges to costs on claims
                data for setting the final CY 2021 OPPS relative payment weights.
                Therefore, we are finalizing our proposal without modification.
                E. Adjustment for Rural Sole Community Hospitals (SCHs) and Essential
                Access Community Hospitals (EACHs) Under Section 1833(t)(13)(B) of the
                Act for CY 2021
                 In the CY 2006 OPPS final rule with comment period (70 FR 68556),
                we finalized a payment increase for rural sole community hospitals
                (SCHs) of 7.1 percent for all services and procedures paid under the
                OPPS, excluding drugs, biologicals, brachytherapy sources, and devices
                paid under the pass-through payment policy, in accordance with section
                1833(t)(13)(B) of the Act, as added by section 411 of the Medicare
                Prescription Drug, Improvement, and Modernization Act of 2003 (MMA)
                (Pub. L. 108-173). Section 1833(t)(13) of the Act provided the
                Secretary the authority to make an adjustment to OPPS payments for
                rural hospitals, effective January 1, 2006, if justified by a study of
                the difference in costs by APC between hospitals in rural areas and
                hospitals in urban areas. Our analysis showed a difference in costs for
                rural SCHs. Therefore, for the CY 2006 OPPS, we finalized a payment
                adjustment for rural SCHs of 7.1 percent for all services and
                procedures paid under the OPPS, excluding separately payable drugs and
                biologicals, brachytherapy sources, items paid at charges reduced to
                costs, and devices paid under the pass-through payment policy, in
                accordance with section 1833(t)(13)(B) of the Act.
                 In the CY 2007 OPPS/ASC final rule with comment period (71 FR 68010
                and 68227), for purposes of receiving this rural adjustment, we revised
                our regulations at Sec. 419.43(g) to clarify that essential access
                community hospitals (EACHs) are also eligible to receive the rural SCH
                adjustment, assuming these entities otherwise meet the rural adjustment
                criteria. Currently, two hospitals are classified as EACHs, and as of
                CY 1998, under section 4201(c) of Public Law 105-33, a hospital can no
                longer become newly classified as an EACH.
                 This adjustment for rural SCHs is budget neutral and applied before
                calculating outlier payments and
                [[Page 85912]]
                copayments. We stated in the CY 2006 OPPS final rule with comment
                period (70 FR 68560) that we would not reestablish the adjustment
                amount on an annual basis, but we may review the adjustment in the
                future and, if appropriate, would revise the adjustment. We provided
                the same 7.1 percent adjustment to rural SCHs, including EACHs, again
                in CYs 2008 through 2020. Further, in the CY 2009 OPPS/ASC final rule
                with comment period (73 FR 68590), we updated the regulations at Sec.
                419.43(g)(4) to specify, in general terms, that items paid at charges
                adjusted to costs by application of a hospital-specific CCR are
                excluded from the 7.1 percent payment adjustment.
                 For CY 2021, we proposed to continue the current policy of a 7.1
                percent payment adjustment that is done in a budget neutral manner for
                rural SCHs, including EACHs, for all services and procedures paid under
                the OPPS, excluding separately payable drugs and biologicals,
                brachytherapy sources, items paid at charges reduced to costs, and
                devices paid under the pass-through payment policy.
                 Comment: Multiple commenters supported the proposal to continue the
                7.1 percent payment adjustment.
                 Response: We appreciate the commenters' support.
                 Comment: Multiple commenters requested that CMS make the 7.1
                percent rural adjustment permanent. The commenters appreciated the
                policy that CMS adopted in CY 2019 and reaffirmed in CY 2020 where we
                stated that the 7.1 percent rural adjustment would continue to be in
                place until our data support establishing a different rural adjustment
                percentage. However, the commenters believed that this policy still
                does not provide enough certainty for rural SCHs and EACHs to know
                whether they should take into account the rural SCH adjustment when
                attempting to calculate expected revenues for their hospital budgets.
                 Response: We thank the commenters for their input. We believe that
                our current policy, which states that the 7.1 percent payment
                adjustment for rural SCHs and EACHs will remain in effect until our
                data show that a different percentage for the rural payment adjustment
                is necessary, provides sufficient budget predictability for rural SCHs
                and EACHs. Providers would receive notice in a proposed rule and have
                the opportunity to provide comments before any changes to the rural
                adjustment percentage would be implemented.
                 Comment: One commenter requested that CMS expand the payment
                adjustment for rural SCHs and EACHs to additional types of hospitals.
                The commenter requested that the payment adjustment apply to include
                urban SCHs because, according to the commenter, urban SCHs care for
                patient populations similar to rural SCHs and EACHs, face similar
                financial challenges to rural SCHs and EACHs, and act as safety net
                providers for rural areas despite their designation as urban providers.
                The same commenter requested that the payment adjustment also apply to
                Medicare-dependent hospitals (MDHs) because, according to the
                commenter, these hospitals face similar financial challenges to rural
                SCHs and EACHs, and MDHs play a similar safety net role to rural SCHs
                and EACHs, especially for Medicare. The commenter asked that CMS study
                whether it would be appropriate to provide a payment adjustment to MDHs
                that is similar to the current adjustment for rural SCHs.
                 Response: We thank the commenters for their comments. The analysis
                we did to compare costs of urban providers to those of rural providers
                did not support an add-on adjustment for providers other than rural
                SCHs and EACHs. In addition, section 1833(t)(13)(B) of the Act
                authorizes an adjustment for rural hospitals only. Accordingly, we do
                not believe we have a basis to expand the payment adjustment to any
                providers other than rural SCHs and EACHs under our authority at
                section 1833(t)(13)(B) of the Act.
                 After consideration of the public comments we received, we are
                finalizing our proposal, without modification, to continue the current
                policy of a 7.1 percent payment adjustment that is done in a budget
                neutral manner for rural SCHs, including EACHs, for all services and
                procedures paid under the OPPS, excluding separately payable drugs and
                biologicals, devices paid under the pass-through payment policy, and
                items paid at charges reduced to costs.
                F. Payment Adjustment for Certain Cancer Hospitals for CY 2021
                1. Background
                 Since the inception of the OPPS, which was authorized by the
                Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33), Medicare has paid
                the 11 hospitals that meet the criteria for cancer hospitals identified
                in section 1886(d)(1)(B)(v) of the Act under the OPPS for covered
                outpatient hospital services. These cancer hospitals are exempted from
                payment under the IPPS. With the Medicare, Medicaid and SCHIP Balanced
                Budget Refinement Act of 1999 (Pub. L. 106-113), the Congress
                established section 1833(t)(7) of the Act, ``Transitional Adjustment to
                Limit Decline in Payment,'' to determine OPPS payments to cancer and
                children's hospitals based on their pre-BBA payment amount (often
                referred to as ``held harmless'').
                 As required under section 1833(t)(7)(D)(ii) of the Act, a cancer
                hospital receives the full amount of the difference between payments
                for covered outpatient services under the OPPS and a ``pre-BBA
                amount.'' That is, cancer hospitals are permanently held harmless to
                their ``pre-BBA amount,'' and they receive transitional outpatient
                payments (TOPs) or hold harmless payments to ensure that they do not
                receive a payment that is lower in amount under the OPPS than the
                payment amount they would have received before implementation of the
                OPPS, as set forth in section 1833(t)(7)(F) of the Act. The ``pre-BBA
                amount'' is the product of the hospital's reasonable costs for covered
                outpatient services occurring in the current year and the base payment-
                to-cost ratio (PCR) for the hospital defined in section
                1833(t)(7)(F)(ii) of the Act. The ``pre-BBA amount'' and the
                determination of the base PCR are defined at 42 CFR 419.70(f). TOPs are
                calculated on Worksheet E, Part B, of the Hospital Cost Report or the
                Hospital Health Care Complex Cost Report (Form CMS-2552-96 or Form CMS-
                2552-10, respectively), as applicable each year. Section 1833(t)(7)(I)
                of the Act exempts TOPs from budget neutrality calculations.
                 Section 3138 of the Affordable Care Act amended section 1833(t) of
                the Act by adding a new paragraph (18), which instructs the Secretary
                to conduct a study to determine if, under the OPPS, outpatient costs
                incurred by cancer hospitals described in section 1886(d)(1)(B)(v) of
                the Act with respect to APC groups exceed outpatient costs incurred by
                other hospitals furnishing services under section 1833(t) of the Act,
                as determined appropriate by the Secretary. Section 1833(t)(18)(A) of
                the Act requires the Secretary to take into consideration the cost of
                drugs and biologicals incurred by cancer hospitals and other hospitals.
                Section 1833(t)(18)(B) of the Act provides that, if the Secretary
                determines that cancer hospitals' costs are higher than those of other
                hospitals, the Secretary shall provide an appropriate adjustment under
                section 1833(t)(2)(E) of the Act to reflect these higher costs. In
                2011, after conducting the study required by section 1833(t)(18)(A) of
                the Act, we determined that outpatient costs incurred by the 11
                specified cancer
                [[Page 85913]]
                hospitals were greater than the costs incurred by other OPPS hospitals.
                For a complete discussion regarding the cancer hospital cost study, we
                refer readers to the CY 2012 OPPS/ASC final rule with comment period
                (76 FR 74200 through 74201).
                 Based on these findings, we finalized a policy to provide a payment
                adjustment to the 11 specified cancer hospitals that reflects their
                higher outpatient costs, as discussed in the CY 2012 OPPS/ASC final
                rule with comment period (76 FR 74202 through 74206). Specifically, we
                adopted a policy to provide additional payments to the cancer hospitals
                so that each cancer hospital's final PCR for services provided in a
                given calendar year is equal to the weighted average PCR (which we
                refer to as the ``target PCR'') for other hospitals paid under the
                OPPS. The target PCR is set in advance of the calendar year and is
                calculated using the most recently submitted or settled cost report
                data that are available at the time of final rulemaking for the
                calendar year. The amount of the payment adjustment is made on an
                aggregate basis at cost report settlement. We note that the changes
                made by section 1833(t)(18) of the Act do not affect the existing
                statutory provisions that provide for TOPs for cancer hospitals. The
                TOPs are assessed, as usual, after all payments, including the cancer
                hospital payment adjustment, have been made for a cost reporting
                period. For CYs 2012 and 2013, the target PCR for purposes of the
                cancer hospital payment adjustment was 0.91. For CY 2014, the target
                PCR was 0.90. For CY 2015, the target PCR was 0.90. For CY 2016, the
                target PCR was 0.92, as discussed in the CY 2016 OPPS/ASC final rule
                with comment period (80 FR 70362 through 70363). For CY 2017, the
                target PCR was 0.91, as discussed in the CY 2017 OPPS/ASC final rule
                with comment period (81 FR 79603 through 79604). For CY 2018, the
                target PCR was 0.88, as discussed in the CY 2018 OPPS/ASC final rule
                with comment period (82 FR 59265 through 59266). For CY 2019, the
                target PCR was 0.88, as discussed in the CY 2019 OPPS/ASC final rule
                with comment period (83 FR 58871 through 58873). For CY 2020, the
                target PCR was 0.89, as discussed in the CY 2020 OPPS/ASC final rule
                with comment period (83 FR 61190 through 61192).
                2. Policy for CY 2021
                 Section 16002(b) of the 21st Century Cures Act (Pub. L. 114-255)
                amended section 1833(t)(18) of the Act by adding subparagraph (C),
                which requires that in applying Sec. 419.43(i) (that is, the payment
                adjustment for certain cancer hospitals) for services furnished on or
                after January 1, 2018, the target PCR adjustment be reduced by 1.0
                percentage point less than what would otherwise apply. Section 16002(b)
                also provides that, in addition to the percentage reduction, the
                Secretary may consider making an additional percentage point reduction
                to the target PCR that takes into account payment rates for applicable
                items and services described under section 1833(t)(21)(C) of the Act
                for hospitals that are not cancer hospitals described under section
                1886(d)(1)(B)(v) of the Act. Further, in making any budget neutrality
                adjustment under section 1833(t) of the Act, the Secretary shall not
                take into account the reduced expenditures that result from application
                of section 1833(t)(18)(C) of the Act.
                 We proposed to provide additional payments to the 11 specified
                cancer hospitals so that each cancer hospital's final PCR is equal to
                the weighted average PCR (or ``target PCR'') for the other OPPS
                hospitals, using the most recent submitted or settled cost report data
                that were available at the time of the development of the proposed
                rule, reduced by 1.0 percentage point, to comply with section 16002(b)
                of the 21st Century Cures Act.
                 We did not propose an additional reduction beyond the 1.0
                percentage point reduction required by section 16002(b) for CY 2021. To
                calculate the proposed CY 2021 target PCR, we used the same extract of
                cost report data from HCRIS, as discussed in section II.A. of this CY
                2021 OPPS/ASC proposed rule, used to estimate costs for the CY 2021
                OPPS. Using these cost report data, we included data from Worksheet E,
                Part B, for each hospital, using data from each hospital's most recent
                cost report, whether as submitted or settled.
                 We then limited the dataset to the hospitals with CY 2019 claims
                data that we used to model the impact of the proposed CY 2021 APC
                relative payment weights (3,527 hospitals) because it is appropriate to
                use the same set of hospitals that are being used to calibrate the
                modeled CY 2021 OPPS. The cost report data for the hospitals in this
                dataset were from cost report periods with fiscal year ends ranging
                from 2014 to 2019. We then removed the cost report data of the 49
                hospitals located in Puerto Rico from our dataset because we did not
                believe their cost structure reflected the costs of most hospitals paid
                under the OPPS, and, therefore, their inclusion may bias the
                calculation of hospital-weighted statistics. We also removed the cost
                report data of 14 hospitals because these hospitals had cost report
                data that were not complete (missing aggregate OPPS payments, missing
                aggregate cost data, or missing both), so that all cost reports in the
                study would have both the payment and cost data necessary to calculate
                a PCR for each hospital, leading to a proposed analytic file of 3,464
                hospitals with cost report data.
                 Using this smaller dataset of cost report data, we estimate that,
                on average, the OPPS payments to other hospitals furnishing services
                under the OPPS were approximately 90 percent of reasonable cost
                (weighted average PCR of 0.90). Therefore, after applying the 1.0
                percentage point reduction, as required by section 16002(b) of the 21st
                Century Cures Act, we proposed that the payment amount associated with
                the cancer hospital payment adjustment to be determined at cost report
                settlement would be the additional payment needed to result in a
                proposed target PCR equal to 0.89 for each cancer hospital.
                 We did not receive any public comments on our proposals. Therefore,
                we are finalizing our proposed cancer hospital payment adjustment
                methodology without modification. For this final rule with comment
                period, we are using the most recent cost report data through June 30,
                2020 to update the adjustment. This update yields a target PCR of 0.90.
                We limited the dataset to the hospitals with CY 2019 claims data that
                we used to model the impact of the CY 2021 APC relative payment weights
                (3,555 hospitals) because it is appropriate to use the same set of
                hospitals that we are using to calibrate the modeled CY 2021 OPPS. The
                cost report data for the hospitals in the dataset were from cost report
                periods with fiscal year ends ranging from 2014 to 2019. We then
                removed the cost report data of the 47 hospitals located in Puerto Rico
                from our dataset because we do not believe their cost structure
                reflects the cost of most hospitals paid under the OPPS and, therefore,
                their inclusion may bias the calculation of hospital-weighted
                statistics. We also removed the cost report data of 14 hospitals
                because these hospitals had cost report data that were not complete
                (missing aggregate OPPS payments, missing aggregate cost data, or
                missing both), so that all cost report in the study would have both the
                payment and cost data necessary to calculate a PCR for each hospital,
                leading to an analytic file of 3,494 hospitals with cost report data.
                 Using this smaller dataset of cost report data, we estimated a
                target PCR of 0.90. Therefore, after applying the 1.0 percentage point
                reduction as required by section 1602(b) of the 21st Century
                [[Page 85914]]
                Cures Act, we are finalizing that the payment amount associated with
                the cancer hospital adjustment to be determined at cost report
                settlement will be the additional payment needed to result in a PCR
                equal to 0.89 for each cancer hospital.
                 Table 5 shows the estimated percentage increase in OPPS payments to
                each cancer hospital for CY 2021, due to the cancer hospital payment
                adjustment policy. The actual amount of the CY 2021 cancer hospital
                payment adjustment for each cancer hospital will be determined at cost
                report settlement and will depend on each hospital's CY 2021 payments
                and costs. We note that the requirements contained in section
                1833(t)(18) of the Act do not affect the existing statutory provisions
                that provide for TOPs for cancer hospitals. The TOPs will be assessed,
                as usual, after all payments, including the cancer hospital payment
                adjustment, have been made for a cost reporting period.
                [GRAPHIC] [TIFF OMITTED] TR29DE20.009
                G. Hospital Outpatient Outlier Payments
                1. Background
                 The OPPS provides outlier payments to hospitals to help mitigate
                the financial risk associated with high-cost and complex procedures,
                where a very costly service could present a hospital with significant
                financial loss. As explained in the CY 2015 OPPS/ASC final rule with
                comment period (79 FR 66832 through 66834), we set our projected target
                for aggregate outlier payments at 1.0 percent of the estimated
                aggregate total payments under the OPPS for the prospective year.
                Outlier payments are provided on a service-by-service basis when the
                cost of a service exceeds the APC payment amount multiplier threshold
                (the APC payment amount multiplied by a certain amount) as well as the
                APC payment amount plus a fixed-dollar amount threshold (the APC
                payment plus a certain amount of dollars). In CY 2020, the outlier
                threshold was met when the hospital's cost of furnishing a service
                exceeded 1.75 times (the multiplier threshold) the APC payment amount
                and exceeded the APC payment amount plus $5,075 (the fixed-dollar
                amount threshold) (84 FR 61192 through 61194). If the cost of a service
                exceeds both the multiplier threshold and the fixed-dollar threshold,
                the outlier payment is calculated as 50 percent of the amount by which
                the cost of furnishing the service exceeds 1.75 times the APC payment
                amount. Beginning with CY 2009 payments, outlier payments are subject
                to a reconciliation process similar to the IPPS outlier reconciliation
                process for cost reports, as discussed in the CY 2009 OPPS/ASC final
                rule with comment period (73 FR 68594 through 68599).
                 It has been our policy to report the actual amount of outlier
                payments as a percent of total spending in the claims being used to
                model the OPPS. Our estimate of total outlier payments as a percent of
                total CY 2019 OPPS payments, using CY 2019 claims available for the CY
                2021 OPPS/ASC proposed rule, was approximately 1.0 percent of the total
                aggregated OPPS payments. Therefore, for CY 2019, we estimated that we
                paid the outlier target of 1.0 percent of total aggregated OPPS
                payments. Using an updated claims dataset for this CY 2021 OPPS/ASC
                final rule, we estimate that we paid approximately 0.97 percent of the
                total aggregated OPPS payments in outliers for CY 2019.
                 For the CY 2021 OPPS/ASC proposed rule, using CY 2019 claims data
                and CY
                [[Page 85915]]
                2020 payment rates, we estimated that the aggregate outlier payments
                for CY 2020 would be approximately 1.01 percent of the total CY 2020
                OPPS payments. We provided estimated CY 2021 outlier payments for
                hospitals and CMHCs with claims included in the claims data that we
                used to model impacts in the Hospital-Specific Impacts--Provider-
                Specific Data file on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
                2. Outlier Calculation for CY 2021
                 In the CY 2021 OPPS/ASC proposed rule (85 FR 48807 through 48808),
                for CY 2021, we proposed to continue our policy of estimating outlier
                payments to be 1.0 percent of the estimated aggregate total payments
                under the OPPS. We proposed that a portion of that 1.0 percent, an
                amount equal to less than 0.01 percent of outlier payments (or 0.0001
                percent of total OPPS payments), would be allocated to CMHCs for PHP
                outlier payments. This is the amount of estimated outlier payments that
                would result from the proposed CMHC outlier threshold as a proportion
                of total estimated OPPS outlier payments. As discussed in section
                VIII.C. of the CY 2021 OPPS/ASC proposed rule, we proposed to continue
                our longstanding policy that if a CMHC's cost for partial
                hospitalization services, paid under APC 5853 (Partial Hospitalization
                for CMHCs), exceeds 3.40 times the payment rate for proposed APC 5853,
                the outlier payment would be calculated as 50 percent of the amount by
                which the cost exceeds 3.40 times the proposed APC 5853 payment rate.
                 For further discussion of CMHC outlier payments, we refer readers
                to section VIII.C. of the CY 2021 OPPS/ASC proposed rule and this final
                rule with comment period.
                 To ensure that the estimated CY 2021 aggregate outlier payments
                would equal 1.0 percent of estimated aggregate total payments under the
                OPPS, we proposed that the hospital outlier threshold be set so that
                outlier payments would be triggered when a hospital's cost of
                furnishing a service exceeds 1.75 times the APC payment amount and
                exceeds the APC payment amount plus $5,300.
                 We calculated the proposed fixed-dollar threshold of $5,300 using
                the standard methodology most recently used for CY 2020 (84 FR 61192
                through 61194). For purposes of estimating outlier payments for the
                proposed rule, we used the hospital-specific overall ancillary CCRs
                available in the April 2020 update to the Outpatient Provider-Specific
                File (OPSF). The OPSF contains provider-specific data, such as the most
                current CCRs, which are maintained by the MACs and used by the OPPS
                Pricer to pay claims. The claims that we use to model each OPPS update
                lag by 2 years.
                 In order to estimate the CY 2021 hospital outlier payments for the
                proposed rule, we inflated the charges on the CY 2019 claims using the
                same inflation factor of 1.131096 that we used to estimate the IPPS
                fixed-dollar outlier threshold for the FY 2021 IPPS/LTCH PPS proposed
                rule (85 FR 32908). We used an inflation factor of 1.06353 to estimate
                CY 2020 charges from the CY 2019 charges reported on CY 2019 claims.
                The methodology for determining this charge inflation factor is
                discussed in the FY 2020 IPPS/LTCH PPS final rule (84 FR 42626 through
                42630). As we stated in the CY 2005 OPPS final rule with comment period
                (69 FR 65845), we believe that the use of these charge inflation
                factors is appropriate for the OPPS because, with the exception of the
                inpatient routine service cost centers, hospitals use the same
                ancillary and outpatient cost centers to capture costs and charges for
                inpatient and outpatient services.
                 As noted in the CY 2007 OPPS/ASC final rule with comment period (71
                FR 68011), we are concerned that we could systematically overestimate
                the OPPS hospital outlier threshold if we did not apply a CCR inflation
                adjustment factor. Therefore, we proposed to apply the same CCR
                inflation adjustment factor that we proposed to apply for the FY 2021
                IPPS outlier calculation to the CCRs used to simulate the proposed CY
                2021 OPPS outlier payments to determine the fixed-dollar threshold.
                Specifically, for CY 2021, we proposed to apply an adjustment factor of
                0.975271 to the CCRs that were in the April 2020 OPSF to trend them
                forward from CY 2020 to CY 2021. The methodology for calculating the
                proposed adjustment is discussed in the FY 2021 IPPS/LTCH PPS proposed
                rule (85 FR 32908 through 32909).
                 To model hospital outlier payments for the proposed rule, we
                applied the overall CCRs from the April 2020 OPSF after adjustment
                (using the proposed CCR inflation adjustment factor of 0.97571 to
                approximate CY 2021 CCRs) to charges on CY 2019 claims that were
                adjusted (using the proposed charge inflation factor of 1.131096 to
                approximate CY 2021 charges). We simulated aggregated CY 2021 hospital
                outlier payments using these costs for several different fixed-dollar
                thresholds, holding the 1.75 multiplier threshold constant and assuming
                that outlier payments would continue to be made at 50 percent of the
                amount by which the cost of furnishing the service would exceed 1.75
                times the APC payment amount, until the total outlier payments equaled
                1.0 percent of aggregated estimated total CY 2021 OPPS payments. We
                estimated that a proposed fixed-dollar threshold of $5,300, combined
                with the proposed multiplier threshold of 1.75 times the APC payment
                rate, would allocate 1.0 percent of aggregated total OPPS payments to
                outlier payments. For CMHCs, we proposed that, if a CMHC's cost for
                partial hospitalization services, paid under APC 5853, exceeds 3.40
                times the payment rate for APC 5853, the outlier payment would be
                calculated as 50 percent of the amount by which the cost exceeds 3.40
                times the APC 5853 payment rate.
                 Section 1833(t)(17)(A) of the Act, which applies to hospitals, as
                defined under section 1886(d)(1)(B) of the Act, requires that hospitals
                that fail to report data required for the quality measures selected by
                the Secretary, in the form and manner required by the Secretary under
                section 1833(t)(17)(B) of the Act, incur a 2.0 percentage point
                reduction to their OPD fee schedule increase factor; that is, the
                annual payment update factor. The application of a reduced OPD fee
                schedule increase factor results in reduced national unadjusted payment
                rates that will apply to certain outpatient items and services
                furnished by hospitals that are required to report outpatient quality
                data and that fail to meet the Hospital OQR Program requirements. For
                hospitals that fail to meet the Hospital OQR Program requirements, as
                we proposed, we are continuing the policy that we implemented in CY
                2010 that the hospitals' costs will be compared to the reduced payments
                for purposes of outlier eligibility and payment calculation. For more
                information on the Hospital OQR Program, we refer readers to section
                XIV. of this CY 2021 OPPS/ASC final rule with comment period.
                 We received no public comments on our proposal. Therefore, we are
                finalizing our proposal, without modification, to continue our policy
                of estimating outlier payments to be 1.0 percent of the estimated
                aggregate total payments under the OPPS and to use our established
                methodology to set the OPPS outlier fixed-dollar loss threshold for CY
                2021.
                3. Final Outlier Calculation
                 Consistent with historical practice, we used updated data for this
                final rule with comment period for outlier calculations. For CY 2021,
                we are
                [[Page 85916]]
                applying the overall CCRs from the October 2020 OPSF file after
                adjustment (using the CCR inflation adjustment factor of 0.974495 to
                approximate CY 2021 CCRs) to charges on CY 2019 claims that were
                adjusted using a charge inflation factor of 1.13218 to approximate CY
                2021 charges. These are the same CCR adjustment and charge inflation
                factors that were used to set the IPPS fixed-dollar threshold for the
                FY 2021 IPPS/LTCH PPS final rule (85 FR 59039 through 59040). We
                simulated aggregated CY 2021 hospital outlier payments using these
                costs for several different fixed-dollar thresholds, holding the 1.75
                multiple-threshold constant and assuming that outlier payments will
                continue to be made at 50 percent of the amount by which the cost of
                furnishing the service would exceed 1.75 times the APC payment amount,
                until the total outlier payment equaled 1.0 percent of aggregated
                estimated total CY 2021 OPPS payments. We estimated that a fixed-dollar
                threshold of $5,300 combined with the multiple-threshold of 1.75 times
                the APC payment rate, will allocate the 1.0 percent of aggregated total
                OPPS payments to outlier payments.
                 For CMHCs, if a CMHC's cost for partial hospitalization services,
                paid under APC 5853, exceeds 3.40 times the payment rate the outlier
                payment will be calculated as 50 percent of the amount by which the
                cost exceeds 3.40 times APC 5853.
                H. Calculation of an Adjusted Medicare Payment From the National
                Unadjusted Medicare Payment
                 The basic methodology for determining prospective payment rates for
                HOPD services under the OPPS is set forth in existing regulations at 42
                CFR part 419, subparts C and D. For this CY 2021 OPPS/ASC final rule
                with comment period, the payment rate for most services and procedures
                for which payment is made under the OPPS is the product of the
                conversion factor calculated in accordance with section II.B. of this
                final rule with comment period and the relative payment weight
                determined under section II.A. of this final rule with comment period.
                Therefore, the national unadjusted payment rate for most APCs contained
                in Addendum A to this final rule with comment period (which is
                available via the internet on the CMS website) and for most HCPCS codes
                to which separate payment under the OPPS has been assigned in Addendum
                B to this final rule with comment period (which is available via the
                internet on the CMS website) was calculated by multiplying the final CY
                2021 scaled weight for the APC by the CY 2021 conversion factor.
                 We note that section 1833(t)(17) of the Act, which applies to
                hospitals, as defined under section 1886(d)(1)(B) of the Act, requires
                that hospitals that fail to submit data required to be submitted on
                quality measures selected by the Secretary, in the form and manner and
                at a time specified by the Secretary, incur a reduction of 2.0
                percentage points to their OPD fee schedule increase factor, that is,
                the annual payment update factor. The application of a reduced OPD fee
                schedule increase factor results in reduced national unadjusted payment
                rates that apply to certain outpatient items and services provided by
                hospitals that are required to report outpatient quality data and that
                fail to meet the Hospital OQR Program (formerly referred to as the
                Hospital Outpatient Quality Data Reporting Program (HOP QDRP))
                requirements. For further discussion of the payment reduction for
                hospitals that fail to meet the requirements of the Hospital OQR
                Program, we refer readers to section XIV of this final rule with
                comment period.
                 We demonstrate the steps used to determine the APC payments that
                will be made in a CY under the OPPS to a hospital that fulfills the
                Hospital OQR Program requirements and to a hospital that fails to meet
                the Hospital OQR Program requirements for a service that has any of the
                following status indicator assignments: ``J1'', ``J2'', ``P'', ``Q1'',
                ``Q2'', ``Q3'', ``Q4'', ``R'', ``S'', ``T'', ``U'', or ``V'' (as
                defined in Addendum D1 to the final rule, which is available via the
                internet on the CMS website), in a circumstance in which the multiple
                procedure discount does not apply, the procedure is not bilateral, and
                conditionally packaged services (status indicator of ``Q1'' and ``Q2'')
                qualify for separate payment. We noted that, although blood and blood
                products with status indicator ``R'' and brachytherapy sources with
                status indicator ``U'' are not subject to wage adjustment, they are
                subject to reduced payments when a hospital fails to meet the Hospital
                OQR Program requirements.
                 Individual providers interested in calculating the payment amount
                that they will receive for a specific service from the national
                unadjusted payment rates presented in Addenda A and B to this final
                rule with comment period (which are available via the internet on the
                CMS website) should follow the formulas presented in the following
                steps. For purposes of the payment calculations below, we refer to the
                national unadjusted payment rate for hospitals that meet the
                requirements of the Hospital OQR Program as the ``full'' national
                unadjusted payment rate. We refer to the national unadjusted payment
                rate for hospitals that fail to meet the requirements of the Hospital
                OQR Program as the ``reduced'' national unadjusted payment rate. The
                reduced national unadjusted payment rate is calculated by multiplying
                the reporting ratio of 0.9805 times the ``full'' national unadjusted
                payment rate. The national unadjusted payment rate used in the
                calculations below is either the full national unadjusted payment rate
                or the reduced national unadjusted payment rate, depending on whether
                the hospital met its Hospital OQR Program requirements to receive the
                full CY 2021 OPPS fee schedule increase factor.
                 Step 1. Calculate 60 percent (the labor-related portion) of the
                national unadjusted payment rate. Since the initial implementation of
                the OPPS, we have used 60 percent to represent our estimate of that
                portion of costs attributable, on average, to labor. We refer readers
                to the April 7, 2000 OPPS final rule with comment period (65 FR 18496
                through 18497) for a detailed discussion of how we derived this
                percentage. During our regression analysis for the payment adjustment
                for rural hospitals in the CY 2006 OPPS final rule with comment period
                (70 FR 68553), we confirmed that this labor-related share for hospital
                outpatient services is appropriate.
                 The formula below is a mathematical representation of Step 1 and
                identifies the labor-related portion of a specific payment rate for a
                specific service.
                 X is the labor-related portion of the national unadjusted payment
                rate.
                 X = .60 * (national unadjusted payment rate).
                 Step 2. Determine the wage index area in which the hospital is
                located and identify the wage index level that applies to the specific
                hospital. We note that, for the CY 2021 OPPS wage index, we are
                adopting the updated OMB delineations based on OMB Bulletin No. 18-04
                and any related IPPS wage index adjustments that were finalized in the
                FY 2021 IPPS/LTCH PPS final rule, as discussed in section II.C. of this
                final rule with comment period. The wage index values assigned to each
                area reflect the geographic statistical areas (which are based upon OMB
                standards) to which hospitals are assigned for FY 2021 under the IPPS,
                reclassifications through the Medicare Geographic Classification Review
                Board (MGCRB), section 1886(d)(8)(B) ``Lugar'' hospitals, and
                reclassifications under section 1886(d)(8)(E) of the Act, as
                implemented in Sec. 412.103 of the regulations. We also are continuing
                to apply for the CY 2021
                [[Page 85917]]
                OPPS wage index any other adjustments for the FY 2021 IPPS post-
                reclassified wage index, including, but not limited to, the rural floor
                adjustment, a wage index floor of 1.00 in frontier states, in
                accordance with section 10324 of the Affordable Care Act of 2010, and
                an adjustment to the wage index for certain low wage index hospitals.
                For further discussion of the wage index we are applying for the CY
                2021 OPPS, we refer readers to section II.C. of this final rule with
                comment period.
                 Step 3. Adjust the wage index of hospitals located in certain
                qualifying counties that have a relatively high percentage of hospital
                employees who reside in the county, but who work in a different county
                with a higher wage index, in accordance with section 505 of Public Law
                108-173. Addendum L to this final rule with comment period (which is
                available via the internet on the CMS website) contains the qualifying
                counties and the associated wage index increase developed for the final
                FY 2021 IPPS wage index, which are listed in Table 2 associated with
                the FY 2021 IPPS/LTCH PPS final rule and available via the internet 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 2021 IPPS Final Rule Home Page''
                and select ``FY 2021 Final Rule Tables.'') This step is to be followed
                only if the hospital is not reclassified or redesignated under section
                1886(d)(8) or section 1886(d)(10) of the Act.
                 Step 4. Multiply the applicable wage index determined under Steps 2
                and 3 by the amount determined under Step 1 that represents the labor-
                related portion of the national unadjusted payment rate.
                 The formula below is a mathematical representation of Step 4 and
                adjusts the labor-related portion of the national unadjusted payment
                rate for the specific service by the wage index.
                 Xa is the labor-related portion of the national unadjusted payment
                rate (wage adjusted).
                 Xa = .60 * (national unadjusted payment rate) *
                applicable wage index.
                 Step 5. Calculate 40 percent (the nonlabor-related portion) of the
                national unadjusted payment rate and add that amount to the resulting
                product of Step 4. The result is the wage index adjusted payment rate
                for the relevant wage index area.
                 The formula below is a mathematical representation of Step 5 and
                calculates the remaining portion of the national payment rate, the
                amount not attributable to labor, and the adjusted payment for the
                specific service.
                 Y is the nonlabor-related portion of the national unadjusted
                payment rate.
                 Y = .40 * (national unadjusted payment rate).
                 Adjusted Medicare Payment = Y + Xa.
                 Step 6. If a provider is an SCH, as set forth in the regulations at
                Sec. 412.92, or an EACH, which is considered to be an SCH under
                section 1886(d)(5)(D)(iii)(III) of the Act, and located in a rural
                area, as defined in Sec. 412.64(b), or is treated as being located in
                a rural area under Sec. 412.103, multiply the wage index adjusted
                payment rate by 1.071 to calculate the total payment.
                 The formula below is a mathematical representation of Step 6 and
                applies the rural adjustment for rural SCHs.
                 Adjusted Medicare Payment (SCH or EACH) = Adjusted Medicare Payment
                * 1.071.
                 We are providing examples below of the calculation of both the full
                and reduced national unadjusted payment rates that will apply to
                certain outpatient items and services performed by hospitals that meet
                and that fail to meet the Hospital OQR Program requirements, using the
                steps outlined previously. For purposes of this example, we are using a
                provider that is located in Brooklyn, New York that is assigned to CBSA
                35614. This provider bills one service that is assigned to APC 5071
                (Level 1 Excision/Biopsy/Incision and Drainage). The final CY 2021 full
                national unadjusted payment rate for APC 5071 is $621.97. The reduced
                national unadjusted payment rate for APC 5071 for a hospital that fails
                to meet the Hospital OQR Program requirements is $609.84. This reduced
                rate is calculated by multiplying the reporting ratio of 0.9805 by the
                full unadjusted payment rate for APC 5071.
                 The final FY 2021 wage index for a provider located in CBSA 35614
                in New York, which includes the adoption of IPPS 2021 wage index
                policies, is 1.3468. The labor-related portion of the final full
                national unadjusted payment is approximately $502.60 (.60 * $621.97 *
                1.3468). The labor-related portion of the reduced national unadjusted
                payment is approximately $492.80 (.60 * $609.84 * 1.3468). The
                nonlabor-related portion of the full national unadjusted payment is
                approximately $248.79 (.40 * $621.97). The nonlabor-related portion of
                the reduced national unadjusted payment is approximately $243.94 (.40 *
                $609.84). The sum of the labor-related and nonlabor-related portions of
                the full national adjusted payment is approximately $751.39 ($502.60 +
                $248.79). The sum of the portions of the reduced national adjusted
                payment is approximately $736.74 ($492.80 + $243.94).
                 We did not receive any public comments on these steps under the
                methodology that we included in the proposed rule to determine the APC
                payments for CY 2021. Therefore, we are using the steps in the
                methodology specified above, to demonstrate the calculation of the
                final CY 2021 OPPS payments using the same parameters.
                I. Beneficiary Copayments
                1. Background
                 Section 1833(t)(3)(B) of the Act requires the Secretary to set
                rules for determining the unadjusted copayment amounts to be paid by
                beneficiaries for covered OPD services. Section 1833(t)(8)(C)(ii) of
                the Act specifies that the Secretary must reduce the national
                unadjusted copayment amount for a covered OPD service (or group of such
                services) furnished in a year in a manner so that the effective
                copayment rate (determined on a national unadjusted basis) for that
                service in the year does not exceed a specified percentage. As
                specified in section 1833(t)(8)(C)(ii)(V) of the Act, the effective
                copayment rate for a covered OPD service paid under the OPPS in CY
                2006, and in CYs thereafter, shall not exceed 40 percent of the APC
                payment rate.
                 Section 1833(t)(3)(B)(ii) of the Act provides that, for a covered
                OPD service (or group of such services) furnished in a year, the
                national unadjusted copayment amount cannot be less than 20 percent of
                the OPD fee schedule amount. However, section 1833(t)(8)(C)(i) of the
                Act limits the amount of beneficiary copayment that may be collected
                for a procedure (including items such as drugs and biologicals)
                performed in a year to the amount of the inpatient hospital deductible
                for that year.
                 Section 4104 of the Affordable Care Act eliminated the Medicare
                Part B coinsurance for preventive services furnished on and after
                January 1, 2011, that meet certain requirements, including flexible
                sigmoidoscopies and screening colonoscopies, and waived the Part B
                deductible for screening colonoscopies that become diagnostic during
                the procedure. Our discussion of the changes made by the Affordable
                Care Act with regard to copayments for preventive services furnished on
                and after January 1, 2011, may be found in section XII.B. of the CY
                2011 OPPS/ASC final rule with comment period (75 FR 72013).
                2. OPPS Copayment Policy
                 For CY 2021, we proposed to determine copayment amounts for new
                [[Page 85918]]
                and revised APCs using the same methodology that we implemented
                beginning in CY 2004. (We refer readers to the November 7, 2003 OPPS
                final rule with comment period (68 FR 63458).) In addition, we proposed
                to use the same standard rounding principles that we have historically
                used in instances where the application of our standard copayment
                methodology would result in a copayment amount that is less than 20
                percent and cannot be rounded, under standard rounding principles, to
                20 percent. (We refer readers to the CY 2008 OPPS/ASC final rule with
                comment period (72 FR 66687) in which we discuss our rationale for
                applying these rounding principles.) The proposed national unadjusted
                copayment amounts for services payable under the OPPS that would be
                effective January 1, 2021 are included in Addenda A and B to the
                proposed rule with comment period (which are available via the internet
                on the CMS website).
                 We did not receive any public comments on the proposed copayment
                amounts for new and revised APCs using the same methodology we
                implemented beginning in CY 2004 or the standard rounding principles we
                apply to our copayment amounts. Therefore, we are finalizing our
                proposed copayment policies, without modification.
                 As discussed in section XIV.E. of the CY 2021 OPPS/ASC proposed
                rule and this final rule with comment period, for CY 2021, the Medicare
                beneficiary's minimum unadjusted copayment and national unadjusted
                copayment for a service to which a reduced national unadjusted payment
                rate applies will equal the product of the reporting ratio and the
                national unadjusted copayment, or the product of the reporting ratio
                and the minimum unadjusted copayment, respectively, for the service.
                 We note that OPPS copayments may increase or decrease each year
                based on changes in the calculated APC payment rates, due to updated
                cost report and claims data, and any changes to the OPPS cost modeling
                process. However, as described in the CY 2004 OPPS final rule with
                comment period, the development of the copayment methodology generally
                moves beneficiary copayments closer to 20 percent of OPPS APC payments
                (68 FR 63458 through 63459).
                 In the CY 2004 OPPS final rule with comment period (68 FR 63459),
                we adopted a new methodology to calculate unadjusted copayment amounts
                in situations including reorganizing APCs, and we finalized the
                following rules to determine copayment amounts in CY 2004 and
                subsequent years.
                 When an APC group consists solely of HCPCS codes that were
                not paid under the OPPS the prior year because they were packaged or
                excluded or are new codes, the unadjusted copayment amount would be 20
                percent of the APC payment rate.
                 If a new APC that did not exist during the prior year is
                created and consists of HCPCS codes previously assigned to other APCs,
                the copayment amount is calculated as the product of the APC payment
                rate and the lowest coinsurance percentage of the codes comprising the
                new APC.
                 If no codes are added to or removed from an APC and, after
                recalibration of its relative payment weight, the new payment rate is
                equal to or greater than the prior year's rate, the copayment amount
                remains constant (unless the resulting coinsurance percentage is less
                than 20 percent).
                 If no codes are added to or removed from an APC and, after
                recalibration of its relative payment weight, the new payment rate is
                less than the prior year's rate, the copayment amount is calculated as
                the product of the new payment rate and the prior year's coinsurance
                percentage.
                 If HCPCS codes are added to or deleted from an APC and,
                after recalibrating its relative payment weight, holding its unadjusted
                copayment amount constant results in a decrease in the coinsurance
                percentage for the reconfigured APC, the copayment amount would not
                change (unless retaining the copayment amount would result in a
                coinsurance rate less than 20 percent).
                 If HCPCS codes are added to an APC and, after
                recalibrating its relative payment weight, holding its unadjusted
                copayment amount constant results in an increase in the coinsurance
                percentage for the reconfigured APC, the copayment amount would be
                calculated as the product of the payment rate of the reconfigured APC
                and the lowest coinsurance percentage of the codes being added to the
                reconfigured APC.
                 We noted in the CY 2004 OPPS final rule with comment period that we
                would seek to lower the copayment percentage for a service in an APC
                from the prior year if the copayment percentage was greater than 20
                percent. We noted that this principle was consistent with section
                1833(t)(8)(C)(ii) of the Act, which accelerates the reduction in the
                national unadjusted coinsurance rate so that beneficiary liability will
                eventually equal 20 percent of the OPPS payment rate for all OPPS
                services to which a copayment applies, and with section 1833(t)(3)(B)
                of the Act, which achieves a 20-percent copayment percentage when fully
                phased in and gives the Secretary the authority to set rules for
                determining copayment amounts for new services. We further noted that
                the use of this methodology would, in general, reduce the beneficiary
                coinsurance rate and copayment amount for APCs for which the payment
                rate changes as the result of the reconfiguration of APCs and/or
                recalibration of relative payment weights (68 FR 63459).
                3. Calculation of an Adjusted Copayment Amount for an APC Group
                 Individuals interested in calculating the national copayment
                liability for a Medicare beneficiary for a given service provided by a
                hospital that met or failed to meet its Hospital OQR Program
                requirements should follow the formulas presented in the following
                steps.
                 Step 1. Calculate the beneficiary payment percentage for the APC by
                dividing the APC's national unadjusted copayment by its payment rate.
                For example, using APC 5071, $124.40 is approximately 20 percent of the
                full national unadjusted payment rate of $621.97. For APCs with only a
                minimum unadjusted copayment in Addenda A and B to this final rule
                (which are available via the internet on the CMS website), the
                beneficiary payment percentage is 20 percent.
                 The formula below is a mathematical representation of Step 1 and
                calculates the national copayment as a percentage of national payment
                for a given service.
                 B is the beneficiary payment percentage.
                 B = National unadjusted copayment for APC/national unadjusted
                payment rate for APC.
                 Step 2. Calculate the appropriate wage-adjusted payment rate for
                the APC for the provider in question, as indicated in Steps 2 through 4
                under section II.H. of this final rule with comment period. Calculate
                the rural adjustment for eligible providers, as indicated in Step 6
                under section II.H. of this final rule with comment period.
                 Step 3. Multiply the percentage calculated in Step 1 by the payment
                rate calculated in Step 2. The result is the wage-adjusted copayment
                amount for the APC.
                 The formula below is a mathematical representation of Step 3 and
                applies the beneficiary payment percentage to the adjusted payment rate
                for a service calculated under section II.H. of this final rule with
                comment period, with and without the rural adjustment, to
                [[Page 85919]]
                calculate the adjusted beneficiary copayment for a given service.
                 Wage-adjusted copayment amount for the APC = Adjusted Medicare
                Payment * B.
                 Wage-adjusted copayment amount for the APC (SCH or EACH) =
                (Adjusted Medicare Payment * 1.071) * B.
                 Step 4. For a hospital that failed to meet its Hospital OQR Program
                requirements, multiply the copayment calculated in Step 3 by the
                reporting ratio of 0.9805.
                 The finalized unadjusted copayments for services payable under the
                OPPS that will be effective January 1, 2021, are shown in Addenda A and
                B to this final rule with comment period (which are available via the
                internet on the CMS website). We note that the finalized national
                unadjusted payment rates and copayment rates shown in Addenda A and B
                to this final rule with comment period reflect the CY 2021 OPD fee
                schedule increase factor discussed in section II.B. of this final rule
                with comment period.
                 In addition, as noted earlier, section 1833(t)(8)(C)(i) of the Act
                limits the amount of beneficiary copayment that may be collected for a
                procedure performed in a year to the amount of the inpatient hospital
                deductible for that year.
                III. OPPS Ambulatory Payment Classification (APC) Group Policies
                A. OPPS Treatment of New and Revised HCPCS Codes
                 Payments for OPPS procedures, services, and items are generally
                based on medical billing codes, specifically, Healthcare Common
                Procedure Coding System (HCPCS) codes, that are reported on hospital
                outpatient department (HOPD) claims. The HCPCS is divided into two
                principal subsystems, referred to as Level I and Level II of the HCPCS.
                Level I is comprised of Current Procedural Terminology (CPT), a numeric
                and alphanumeric coding system maintained by the American Medical
                Association (AMA), and consists of Category I, II, and III CPT codes.
                Level II, which is maintained by Centers for Medicare & Medicaid
                Services (CMS), is a standardized coding system that is used primarily
                to identify products, supplies, and services not included in the CPT
                codes. HCPCS codes are used to report surgical procedures, medical
                services, items, and supplies under the hospital OPPS. Specifically,
                CMS recognizes the following codes on OPPS claims:
                 Category I CPT codes, which describe surgical procedures,
                diagnostic and therapeutic services, and vaccine codes;
                 Category III CPT codes, which describe new and emerging
                technologies, services, and procedures; and
                 Level II HCPCS codes (also known as alphanumeric codes),
                which are used primarily to identify drugs, devices, ambulance
                services, durable medical equipment, orthotics, prosthetics, supplies,
                temporary surgical procedures, and medical services not described by
                CPT codes.
                 CPT codes are established by the AMA while the Level II HCPCS codes
                are established by the CMS HCPCS Workgroup. These codes are updated and
                changed throughout the year. CPT and Level II HCPCS code changes that
                affect the OPPS are published through the annual rulemaking cycle and
                through the OPPS quarterly update Change Requests (CRs). Generally,
                these code changes are effective January 1, April 1, July 1, or October
                1. CPT code changes are released by the AMA via their website while
                Level II HCPCS code changes are released to the public via the CMS
                HCPCS website. CMS recognizes the release of new CPT and Level II HCPCS
                codes and makes the codes effective (that is, the codes can be reported
                on Medicare claims) outside of the formal rulemaking process via OPPS
                quarterly update CRs. Based on our review, we assign the new codes to
                interim status indicators (SIs) and APCs. These interim assignments are
                finalized in the OPPS/ASC final rules with comment period. This
                quarterly process offers hospitals access to codes that more accurately
                describe items or services furnished and provides payment for these
                items or services in a timelier manner than if we waited for the annual
                rulemaking process. We solicit public comments on the new CPT and Level
                II HCPCS codes and finalize policies for these codes through our annual
                rulemaking process.
                 We note that, under the OPPS, the APC assignment determines the
                payment rate for an item, procedure, or service. Those items,
                procedures, or services not paid separately under the hospital OPPS are
                assigned to appropriate SIs. Certain payment SIs provide separate
                payment while other payment SIs do not. In section XI. (CY 2021 OPPS
                Payment Status and Comment Indicators) of this final rule with comment
                period, we discuss the various SIs used under the OPPS. We also provide
                a complete list of the SIs and their definitions in Addendum D1 to this
                CY 2021 OPPS/ASC final rule with comment period.
                1. HCPCS Codes That Were Effective April 1, 2020 for Which We Solicited
                Public Comments in the CY 2021 OPPS/ASC Proposed Rule
                 For the April 2020 update, there were no new CPT codes. However,
                thirteen new Level II HCPCS codes were established and made effective
                on April 1, 2020. These codes and their long descriptors were included
                in Table 6 of the proposed rule and are now listed in Table 6 of this
                final rule with comment period. Through the April 2020 OPPS quarterly
                update CR (Transmittal 10013, Change Request 11691, dated March 25,
                2020), we recognized several new Level II HCPCS codes for separate
                payment under the OPPS. In the CY 2021 OPPS/ASC proposed rule (85 FR
                48812 through 48813), we solicited public comments on the proposed APC
                and status indicator (SI) assignments for these Level II HCPCS codes,
                which were listed in Table 6 of the proposed rule.
                 We did not receive any public comments on the proposed OPPS APC and
                SI assignments for the new Level II HCPCS codes implemented in April
                2020. Therefore, we are finalizing the proposed APC and SI assignments
                for these codes, as indicated in Table 6. We note that several of the
                HCPCS C-codes have been replaced with HCPCS J-codes, effective January
                1, 2021. Their replacement codes are listed in Table 6. The final
                payment rates for these codes can be found in Addendum B to this final
                rule with comment period. In addition, the SI definitions can be found
                in Addendum D1 to this final rule with comment period. Both Addendum B
                and Addendum D1 are available via the internet on the CMS website.
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                3. October 2020 HCPCS Codes for Which We Are Soliciting Public Comments
                in This CY 2021 OPPS/ASC Final Rule With Comment Period
                 As has been our practice in the past, we incorporate those new
                HCPCS codes that are effective October 1 in the final rule with comment
                period, thereby updating the OPPS for the following calendar year, as
                displayed in Table 8 of the proposed rule and reprinted as Table 8 of
                this final rule with comment period. These codes are released to the
                public through the October OPPS
                [[Page 85930]]
                quarterly update CRs and via the CMS HCPCS website (for Level II HCPCS
                codes). For CY 2021, these codes are flagged with comment indicator
                ``NI'' in Addendum B to this OPPS/ASC final rule with comment period to
                indicate that we are assigning them an interim payment status which is
                subject to public comment. Specifically, the interim SI and APC
                assignments for codes flagged with comment indicator ``NI'' are open to
                public comment in this final rule with comment period, and we will
                respond to these public comments in the OPPS/ASC final rule with
                comment period for the next year's OPPS/ASC update.
                 In the CY 2021 OPPS/ASC proposed rule (85 FR 48823), we proposed to
                continue this process for CY 2021. Specifically, for CY 2021, we
                proposed to include in Addendum B to the CY 2021 OPPS/ASC final rule
                with comment period the new HCPCS codes effective October 1, 2020 that
                would be incorporated in the October 2020 OPPS quarterly update CR.
                Also, as stated above, the October 1, 2020 codes are flagged with
                comment indicator ``NI'' in Addendum B to this CY 2021 OPPS/ASC final
                rule with comment period to indicate that we have assigned the codes an
                interim OPPS payment status for CY 2021. We are inviting public
                comments on the interim SI and APC assignments for these codes, if
                applicable, that will be finalized in the CY 2021 OPPS/ASC final rule
                with comment period.
                 We note that we received a comment related to HCPCS codes C9757
                (Laminotomy (hemilaminectomy), with decompression of nerve root(s),
                including partial facetectomy, foraminotomy and excision of herniated
                intervertebral disc, and repair of annular defect with implantation of
                bone anchored annular closure device, including annular defect
                measurement, alignment and sizing assessment, and image guidance; 1
                interspace, lumbar) and P9099 (Blood component or product not otherwise
                classified), which were assigned to comment indicator ``NI'' (new code;
                comments will be accepted on the interim APC assignment) in Addendum B
                of the CY 2020 OPPS/ASC final rule with comment period. The comments
                and our responses can be found in section II.A.2(a)(1) (Blood Products)
                and III.D. (APC-Specific Policies) of this CY 2021 OPPS/ASC final rule
                with comment period.
                4. January 2021 HCPCS Codes
                a. New Level II HCPCS Codes for Which We Are Soliciting Public Comments
                in this CY 2021 OPPS/ASC Final Rule With Comment Period
                 As shown in Table 8, and as stated in the CY 2021 OPPS/ASC proposed
                rule (85 FR 48823 through 48825), consistent with past practice, we
                solicit comments on the new Level II HCPCS codes that will be effective
                January 1 in the OPPS/ASC final rule with comment period, thereby
                allowing us to finalize the SIs and APC assignments for the codes in
                the next OPPS/ASC final rule with comment period. Unlike the CPT codes
                that are effective January 1 and are included in the OPPS/ASC proposed
                rules, most Level II HCPCS codes are not released until sometime around
                November to be effective January 1. Because these codes are not
                available until November, we are unable to include them in the OPPS/ASC
                proposed rules. Consequently, for CY 2021, we proposed to include in
                Addendum B to the CY 2021 OPPS/ASC final rule with comment period the
                new Level II HCPCS codes effective January 1, 2021, that would be
                incorporated in the January 2021 OPPS quarterly update CR. These codes
                will be released to the public through the January OPPS quarterly
                update CRs and via the CMS HCPCS website (for Level II HCPCS codes).
                For CY 2021, the Level II HCPCS codes effective January 1, 2021 are
                flagged with comment indicator ``NI'' in Addendum B to this CY 2021
                OPPS/ASC final rule with comment period to indicate that we have
                assigned the codes an interim OPPS payment status for CY 2021. We are
                inviting public comments on the interim SI and APC assignments for
                these codes, if applicable, that will be finalized in the CY 2021 OPPS/
                ASC final rule with comment period.
                b. CPT Codes For Which We Solicited Public Comments in the CY 2021
                OPPS/ASC Proposed Rule
                 For CY 2021, we received the CY 2021 CPT code updates that would be
                effective January 1, 2021, from AMA in time for inclusion in the CY
                2021 OPPS/ASC proposed rule. We note that in the CY 2015 OPPS/ASC final
                rule with comment period (79 FR 66841 through 66844), we finalized a
                revised process of assigning APC and SIs for new and revised Category I
                and III CPT codes that would be effective January 1. Specifically, for
                the new/revised CPT codes that we receive in a timely manner from the
                AMA's CPT Editorial Panel, we finalized our proposal to include the
                codes that would be effective January 1 in the OPPS/ASC proposed rules,
                along with proposed APC and SI assignments for them, and to finalize
                the APC and SI assignments in the OPPS/ASC final rules beginning with
                the CY 2016 OPPS update. For those new/revised CPT codes that were
                received too late for inclusion in the OPPS/ASC proposed rule, we
                finalized our proposal to establish and use HCPCS G-codes that mirror
                the predecessor CPT codes and retain the current APC and SI assignments
                for a year until we can propose APC and SI assignments in the following
                year's rulemaking cycle. We note that even if we find that we need to
                create HCPCS G-codes in place of certain CPT codes for the PFS proposed
                rule, we do not anticipate that these HCPCS G-codes will always be
                necessary for OPPS purposes. We will make every effort to include
                proposed APC and SI assignments for all new and revised CPT codes that
                the AMA makes publicly available in time for us to include them in the
                annual proposed rule, and to avoid the resort to HCPCS G-codes and the
                resulting delay in utilization of the most current CPT codes. Also, we
                finalized our proposal to make interim APC and SI assignments for CPT
                codes that are not available in time for the proposed rule and that
                describe wholly new services (such as new technologies or new surgical
                procedures), solicit public comments, and finalize the specific APC and
                SI assignments for those codes in the following year's final rule.
                 As stated above, for the CY 2021 OPPS update, we received the CY
                2021 CPT codes from AMA in time for inclusion in the CY 2021 OPPS/ASC
                proposed rule. The new, revised, and deleted CY 2021 Category I and III
                CPT codes were included in Addendum B to the proposed rule (which is
                available via the internet on the CMS website). We noted in the
                proposed rule that the new and revised codes are assigned to new
                comment indicator ``NP'' to indicate that the code is new for the next
                calendar year or the code is an existing code with substantial revision
                to its code descriptor in the next calendar year as compared to current
                calendar year with a proposed APC assignment, and that comments will be
                accepted on the proposed APC and SI assignments.
                 Further, we reminded readers that the CPT code descriptors that
                appear in Addendum B are short descriptors and do not accurately
                describe the complete procedure, service, or item described by the CPT
                code. Therefore, we included the 5-digit placeholder codes and their
                long descriptors for the new and revised CY 2021 CPT codes in Addendum
                O to
                [[Page 85931]]
                the proposed rule (which is available via the internet on the CMS
                website) so that the public could adequately comment on the proposed
                APCs and SI assignments. The 5-digit placeholder codes were included in
                Addendum O, specifically under the column labeled ``CY 2021 OPPS/ASC
                Proposed Rule 5-Digit AMA Placeholder Code,'' to the proposed rule. We
                noted that the final CPT code numbers would be included in this CY 2021
                OPPS/ASC final rule with comment period. We also noted that not every
                code listed in Addendum O is subject to public comment. For the new and
                revised Category I and III CPT codes, we requested public comments on
                only those codes that are assigned comment indicator ``NP''.
                 In summary, in the CY 2021 OPPS/ASC proposed rule, we solicited
                public comments on the proposed CY 2021 SI and APC assignments for the
                new and revised Category I and III CPT codes that will be effective
                January 1, 2021. The CPT codes were listed in Addendum B to the
                proposed rule with short descriptors only. We listed them again in
                Addendum O to the proposed rule with long descriptors. We also proposed
                to finalize the SI and APC assignments for these codes (with their
                final CPT code numbers) in the CY 2021 OPPS/ASC final rule with comment
                period. The proposed SI and APC assignments for these codes were
                included in Addendum B to the proposed rule (which is available via the
                internet on the CMS website).
                 Commenters addressed several of the new CPT codes that were
                assigned to comment indicator ``NP'' in Addendum B to the CY 2021 OPPS/
                ASC proposed rule. We have responded to those public comments in
                sections III.C. (New Technology APCs), III.D. (OPPS APC-Specific
                Policies), and IV. (OPPS Payment for Devices) of this CY 2021 OPPS/ASC
                final rule with comment period.
                 The final SIs, APC assignments, and payment rates for the new CPT
                codes that are effective January 1, 2021 can be found in Addendum B to
                this final rule with comment period. In addition, the SI meanings can
                be found in Addendum D1 (OPPS Payment Status Indicators for CY 2021) to
                this final rule with comment period. Both Addendum B and D1 are
                available via the internet on the CMS website.
                 Finally, Table 8, which is a reprint of Table 8 from the CY 2021
                OPPS/ASC proposed rule, shows the comment timeframe for new and revised
                HCPCS codes. The table provides information on our current process for
                updating codes through our OPPS quarterly update CRs, seeking public
                comments, and finalizing the treatment of these codes under the OPPS.
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                B. OPPS Changes--Variations Within APCs
                1. Background
                 Section 1833(t)(2)(A) of the Act requires the Secretary to develop
                a classification system for covered hospital outpatient department
                services. Section 1833(t)(2)(B) of the Act provides that the Secretary
                may establish groups of covered OPD services within this classification
                system, so that services classified within each group are comparable
                clinically and with respect to the use of resources. In accordance with
                these provisions, we developed a grouping classification system,
                referred to as Ambulatory Payment Classifications (APCs), as set forth
                in regulations at 42 CFR[thinsp]419.31. We use Level I (also known as
                CPT codes) and Level II HCPCS codes (also known as alphanumeric codes)
                to identify and
                [[Page 85932]]
                group the services within each APC. The APCs are organized such that
                each group is homogeneous both clinically and in terms of resource use.
                Using this classification system, we have established distinct groups
                of similar services. We also have developed separate APC groups for
                certain medical devices, drugs, biologicals, therapeutic
                radiopharmaceuticals, and brachytherapy devices that are not packaged
                into the payment for the procedure.
                 We have packaged into the payment for each procedure or service
                within an APC group the costs associated with those items and services
                that are typically ancillary and supportive to a primary diagnostic or
                therapeutic modality and, in those cases, are an integral part of the
                primary service they support. Therefore, we do not make separate
                payment for these packaged items or services. In general, packaged
                items and services include, but are not limited to, the items and
                services listed in regulations at 42 CFR 419.2(b). A further discussion
                of packaged services is included in section II.A.3. of this final rule
                with comment period.
                 Under the OPPS, we generally pay for covered hospital outpatient
                services on a rate-per-service basis, where the service may be reported
                with one or more HCPCS codes. Payment varies according to the APC group
                to which the independent service or combination of services is
                assigned. In the CY 2021 OPPS/ASC proposed rule (85 FR 48799), for CY
                2021, we proposed that each APC relative payment weight represents the
                hospital cost of the services included in that APC, relative to the
                hospital cost of the services included in APC 5012 (Clinic Visits and
                Related Services). The APC relative payment weights are scaled to APC
                5012 because it is the hospital clinic visit APC and clinic visits are
                among the most frequently furnished services in the hospital outpatient
                setting.
                2. Application of the 2 Times Rule
                 Section 1833(t)(9)(A) of the Act requires the Secretary to review,
                not less often than annually, and revise the APC groups, the relative
                payment weights, and the wage and other adjustments described in
                paragraph (2) to take into account changes in medical practice, changes
                in technology, the addition of new services, new cost data, and other
                relevant information and factors. Section 1833(t)(9)(A) of the Act also
                requires the Secretary to consult with an expert outside advisory panel
                composed of an appropriate selection of representatives of providers to
                review (and advise the Secretary concerning) the clinical integrity of
                the APC groups and the relative payment weights. We note that the
                Hospital Outpatient Payment (HOP) Panel recommendations for specific
                services for the CY 2021 OPPS update are discussed in the relevant
                specific sections throughout this CY 2021 OPPS/ASC final rule with
                comment period.
                 In addition, section 1833(t)(2) of the Act provides that, subject
                to certain exceptions, the items and services within an APC group
                cannot be considered comparable with respect to the use of resources if
                the highest cost for an item or service in the group is more than 2
                times greater than the lowest cost for an item or service within the
                same group (referred to as the ``2 times rule''). The statute
                authorizes the Secretary to make exceptions to the 2 times rule in
                unusual cases, such as low-volume items and services (but the Secretary
                may not make such an exception in the case of a drug or biological that
                has been designated as an orphan drug under section 526 of the Federal
                Food, Drug, and Cosmetic Act). In determining the APCs with a 2 times
                rule violation, we consider only those HCPCS codes that are significant
                based on the number of claims. We note that, for purposes of
                identifying significant procedure codes for examination under the 2
                times rule, we consider procedure codes that have more than 1,000
                single major claims or procedure codes that both have more than 99
                single major claims and contribute at least 2 percent of the single
                major claims used to establish the APC cost to be significant (75 FR
                71832). This longstanding definition of when a procedure code is
                significant for purposes of the 2 times rule was selected because we
                believe that a subset of 1,000 or fewer claims is negligible within the
                set of approximately 100 million single procedure or single session
                claims we use for establishing costs. Similarly, a procedure code for
                which there are fewer than 99 single claims and that comprises less
                than 2 percent of the single major claims within an APC will have a
                negligible impact on the APC cost (75 FR 71832). In the CY 2021 OPPS/
                ASC proposed rule (85 FR 48826 through 48827), for CY 2021, we proposed
                to make exceptions to this limit on the variation of costs within each
                APC group in unusual cases, such as for certain low-volume items and
                services.
                 In the CY 2021 OPPS/ASC proposed rule, we identified the APCs with
                violations of the 2 times rule. Therefore, we proposed changes to the
                procedure codes assigned to these APCs in Addendum B to the proposed
                rule. We noted that Addendum B does not appear in the printed version
                of the Federal Register as part of the CY 2021 OPPS/ASC proposed rule.
                Rather, it is published and made available via the internet on the CMS
                website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html. To eliminate a violation of
                the 2 times rule and improve clinical and resource homogeneity, we
                proposed to reassign these procedure codes to new APCs that contain
                services that are similar with regard to both their clinical and
                resource characteristics. In many cases, the proposed procedure code
                reassignments and associated APC reconfigurations for CY 2021 included
                in the proposed rule were related to changes in costs of services that
                were observed in the CY 2019 claims data newly available for CY 2021
                ratesetting. Addendum B to the CY 2021 OPPS/ASC proposed rule
                identified with a comment indicator ``CH'' those procedure codes for
                which we proposed a change to the APC assignment or SI, or both, that
                were initially assigned in the July 1, 2020 OPPS Addendum B Update
                (available via the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Addendum-A-and-Addendum-B-Updates.html), which was the latest payment
                rate file for 2019 prior to issuance of the proposed rule.
                3. APC Exceptions to the 2 Times Rule
                 Taking into account the APC changes that we proposed to make for CY
                2021 in the CY 2021 OPPS/ASC proposed rule, we reviewed all of the APCs
                to determine which APCs would not meet the requirements of the 2 times
                rule. We used the following criteria to evaluate whether to propose
                exceptions to the 2 times rule for affected APCs:
                 Resource homogeneity;
                 Clinical homogeneity;
                 Hospital outpatient setting utilization;
                 Frequency of service (volume); and
                 Opportunity for upcoding and code fragments.
                 Based on the CY 2019 claims data available for the CY 2021 proposed
                rule, we found 18 APCs with violations of the 2 times rule. We applied
                the criteria as described above to identify the APCs for which we
                proposed to make exceptions under the 2 times rule for CY 2021, and
                found that all of the 18 APCs we identified met the criteria for an
                exception to the 2 times rule based on the CY 2019 claims data
                available for the proposed rule. We did not include in that
                determination those APCs where
                [[Page 85933]]
                a 2 times rule violation was not a relevant concept, such as APC 5401
                (Dialysis), which only has two HCPCS codes assigned to it that have a
                similar geometric mean costs and do not create a 2 time rule violation.
                Therefore, we only identified those APCs, including those with
                criteria-based costs, with violations of the 2 times rule.
                 We note that, for cases in which a recommendation by the HOP Panel
                appears to result in or allow a violation of the 2 times rule, we may
                accept the HOP Panel's recommendation because those recommendations are
                based on explicit consideration (that is, a review of the latest OPPS
                claims data and group discussion of the issue) of resource use,
                clinical homogeneity, site of service, and the quality of the claims
                data used to determine the APC payment rates.
                 Table 9 of the proposed rule listed the 18 APCs for which we
                proposed to make an exception for under the 2 times rule for CY 2021
                based on the criteria cited above and claims data submitted between
                January 1, 2019, and December 31, 2019, and processed on or before
                December 31, 2019. In the proposed rule, we stated that for the final
                rule with comment period, we intended to use claims data for dates of
                service between January 1, 2019, and December 31, 2019, that were
                processed on or before June 30, 2020, and updated CCRs, if available.
                We stated that the proposed geometric mean costs for covered hospital
                outpatient services for these and all other APCs that were used in the
                development of the proposed rule could be found on the CMS website at:
                https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.
                 Based on the updated final rule CY 2019 claims data used for this
                CY 2021 final rule with comment period, we found a total of 23 APCs
                with violations of the 2 times rule. Of these 23 total APCs, 18 were
                identified in the proposed rule and five are newly identified APCs. The
                five newly identified APCs with violations of the 2 times rule include
                the following:
                 APC 5101 (Level 1 Strapping and Cast Application)
                 APC 5161 (Level 1 ENT Procedures)
                 APC 5593 (Level 3 Nuclear Medicine and Related Services)
                 APC 5673 (Level 3 Pathology)
                 APC 5734 (Level 4 Minor Procedures)
                 Although we did not receive any comments on Table 9 of the proposed
                rule, we did receive comments on APC assignments for specific HCPCS
                codes. The comments, and our responses, can be found in section III.D.
                (OPPS APC-Specific Policies) of this final rule with comment period.
                 After considering the public comments we received on APC
                assignments and our analysis of the CY 2019 costs from hospital claims
                and cost report data available for this CY 2021 final rule with comment
                period, we are finalizing our proposals with some modifications.
                Specifically, we are finalizing our proposal to except 18 of the 18
                proposed APCs from the 2 times rule for CY 2021 and also excepting five
                additional APCs (APCs 5101, 5161, 5593, 5673, and 5734) for a total of
                23 APCs.
                 In summary, Table 9 lists the 23 APCs that we are excepting from
                the 2 times rule for CY 2021 based on the criteria described earlier
                and a review of updated claims data for dates of service between
                January 1, 2019 and December 31, 2019, that were processed on or before
                June 30, 2020, and updated CCRs, if available. We note that, for cases
                in which a recommendation by the HOP Panel appears to result in or
                allow a violation of the 2 times rule, we generally accept the HOP
                Panel's recommendation because those recommendations are based on
                explicit consideration of resource use, clinical homogeneity, site of
                service, and the quality of the claims data used to determine the APC
                payment rates. The geometric mean costs for hospital outpatient
                services for these and all other APCs that were used in the development
                of this final rule with comment period can be found on the CMS website
                at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.
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                [[Page 85934]]
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                C. New Technology APCs
                1. Background
                 In the CY 2002 OPPS final rule (66 FR 59903), we finalized changes
                to the time period in which a service can be eligible for payment under
                a New Technology APC. Beginning in CY 2002, we retain services within
                New Technology APC groups until we gather sufficient claims data to
                enable us to assign the service to an appropriate clinical APC. This
                policy allows us to move a service from a New Technology APC in less
                than 2 years if sufficient data are available. It also allows us to
                retain a service in a New Technology APC for more than 2 years if
                sufficient data upon which to base a decision for reassignment have not
                been collected.
                 In the CY 2004 OPPS final rule with comment period (68 FR 63416),
                we restructured the New Technology APCs to make the cost intervals more
                consistent across payment levels and refined the cost bands for these
                APCs to retain two parallel sets of New Technology APCs, one set with a
                status indicator of ``S'' (Significant Procedures, Not Discounted when
                Multiple. Paid under OPPS; separate APC payment) and the other set with
                a status indicator of ``T'' (Significant Procedure, Multiple Reduction
                Applies. Paid under OPPS; separate APC payment). These current New
                Technology APC configurations allow us to price new technology services
                more appropriately and consistently.
                 For CY 2020, there were 52 New Technology APC levels, ranging from
                the lowest cost band assigned to APC 1491 (New Technology--Level 1A
                ($0-$10)) through the highest cost band assigned to APC 1908 (New
                Technology--Level 52 ($145,001-$160,000)). We note that the cost bands
                for the New Technology APCs, specifically, APCs 1491 through 1599 and
                1901 through 1908, vary with increments ranging from $10 to $14,999.
                These cost bands identify the APCs to which new technology procedures
                and services with estimated service costs that fall within those cost
                bands are assigned under the OPPS. Payment for each APC is made at the
                mid-point of the APC's assigned cost band. For example, payment for New
                Technology APC 1507 (New Technology--Level 7 ($501-$600)) is made at
                $550.50.
                 Under the OPPS, one of our goals is to make payments that are
                appropriate for the services that are necessary for the treatment of
                Medicare beneficiaries. The OPPS, like other Medicare payment systems,
                is budget neutral and increases are limited to the annual hospital
                inpatient market basket increase adjusted for multifactor productivity.
                We believe that our payment rates reflect the costs that are associated
                with providing care to Medicare beneficiaries and are adequate to
                ensure access to services (80 FR 70374).
                 For many emerging technologies, there is a transitional period
                during which utilization may be low, often because providers are first
                learning about the technologies and their clinical
                [[Page 85935]]
                utility. Quite often, parties request that Medicare make higher payment
                amounts under the New Technology APCs for new procedures in that
                transitional phase. These requests, and their accompanying estimates
                for expected total patient utilization, often reflect very low rates of
                patient use of expensive equipment, resulting in high per-use costs for
                which requesters believe Medicare should make full payment. Medicare
                does not, and we believe should not, assume responsibility for more
                than its share of the costs of procedures based on projected
                utilization for Medicare beneficiaries and does not set its payment
                rates based on initial projections of low utilization for services that
                require expensive capital equipment. For the OPPS, we rely on hospitals
                to make informed business decisions regarding the acquisition of high-
                cost capital equipment, taking into consideration their knowledge about
                their entire patient base (Medicare beneficiaries included) and an
                understanding of Medicare's and other payers' payment policies. We
                refer readers to the CY 2013 OPPS/ASC final rule with comment period
                (77 FR 68314) for further discussion regarding this payment policy.
                 We note that, in a budget neutral system, payments may not fully
                cover hospitals' costs in a particular circumstance, including those
                for the purchase and maintenance of capital equipment. We rely on
                hospitals to make their decisions regarding the acquisition of high-
                cost equipment with the understanding that the Medicare program must be
                careful to establish its initial payment rates, including those made
                through New Technology APCs, for new services that lack hospital claims
                data based on realistic utilization projections for all such services
                delivered in cost-efficient hospital outpatient settings. As the OPPS
                acquires claims data regarding hospital costs associated with new
                procedures, we regularly examine the claims data and any available new
                information regarding the clinical aspects of new procedures to confirm
                that our OPPS payments remain appropriate for procedures as they
                transition into mainstream medical practice (77 FR 68314). For CY 2021,
                we included the proposed payment rates for New Technology APCs 1491 to
                1599 and 1901 through 1908 in Addendum A to this CY 2021 OPPS/ASC
                proposed rule (which is available via the internet on the CMS website).
                2. Establishing Payment Rates for Low-Volume New Technology Services
                 Services that are assigned to New Technology APCs are typically new
                services that do not have sufficient claims history to establish an
                accurate payment for the services. One of the objectives of
                establishing New Technology APCs is to generate sufficient claims data
                for a new service so that it can be assigned to an appropriate clinical
                APC. Some services that are assigned to New Technology APCs have very
                low annual volume, which we consider to be fewer than 100 claims. We
                consider services with fewer than 100 claims annually to be low-volume
                services because there is a higher probability that the payment data
                for a service may not have a normal statistical distribution, which
                could affect the quality of our standard cost methodology that is used
                to assign services to an APC. In addition, services with fewer than 100
                claims per year are not generally considered to be a significant
                contributor to the APC ratesetting calculations and, therefore, are not
                included in the assessment of the 2 times rule. As we explained in the
                CY 2019 OPPS/ASC final rule with comment period (83 FR 58890), we were
                concerned that the methodology we use to estimate the cost of a service
                under the OPPS by calculating the geometric mean for all separately
                paid claims for a HCPCS service code from the most recent available
                year of claims data may not generate an accurate estimate of the actual
                cost of the service for these low-volume services.
                 In accordance with section 1833(t)(2)(B) of the Act, services
                classified within each APC must be comparable clinically and with
                respect to the use of resources. As described earlier, assigning a
                service to a new technology APC allows us to gather claims data to
                price the service and assign it to the APC with services that use
                similar resources and are clinically comparable. However, where
                utilization of services assigned to a New Technology APC is low, it can
                lead to wide variation in payment rates from year to year, resulting in
                even lower utilization and potential barriers to access to new
                technologies, which ultimately limits our ability to assign the service
                to the appropriate clinical APC. To mitigate these issues, we
                determined in the CY 2019 OPPS/ASC final rule with comment period that
                it was appropriate to utilize our equitable adjustment authority at
                section 1833(t)(2)(E) of the Act to adjust how we determined the costs
                for low-volume services assigned to New Technology APCs (83 FR 58892
                through 58893). We have utilized our equitable adjustment authority at
                section 1833(t)(2)(E) of the Act, which states that the Secretary shall
                establish, in a budget neutral manner, other adjustments as determined
                to be necessary to ensure equitable payments, to estimate an
                appropriate payment amount for low-volume new technology services in
                the past (82 FR 59281). Although we have used this adjustment authority
                on a case-by-case basis in the past, we stated in the CY 2019 OPPS/ASC
                final rule with comment period that we believe it is appropriate to
                adopt an adjustment for low-volume services assigned to New Technology
                APCs in order to mitigate the wide payment fluctuations that have
                occurred for new technology services with fewer than 100 claims and to
                provide more predictable payment for these services.
                 For purposes of this adjustment, we stated that we believe that it
                is appropriate to use up to 4 years of claims data in calculating the
                applicable payment rate for the prospective year, rather than using
                solely the most recent available year of claims data, when a service
                assigned to a New Technology APC has a low annual volume of claims,
                which, for purposes of this adjustment, we define as fewer than 100
                claims annually. We adopted a policy to consider services with fewer
                than 100 claims annually as low-volume services because there is a
                higher probability that the payment data for a service may not have a
                normal statistical distribution, which could affect the quality of our
                standard cost methodology that is used to assign services to an APC. We
                explained that we were concerned that the methodology we use to
                estimate the cost of a service under the OPPS by calculating the
                geometric mean for all separately paid claims for a HCPCS procedure
                code from the most recent available year of claims data may not
                generate an accurate estimate of the actual cost of the low-volume
                service. Using multiple years of claims data will potentially allow for
                more than 100 claims to be used to set the payment rate, which would,
                in turn, create a more statistically reliable payment rate.
                 In addition, to better approximate the cost of a low-volume service
                within a New Technology APC, we stated that we believe using the median
                or arithmetic mean rather than the geometric mean (which ``trims'' the
                costs of certain claims out) could be more appropriate in some
                circumstances, given the extremely low volume of claims. Low claim
                volumes increase the impact of ``outlier'' claims; that is, claims with
                either a very low or very high payment
                [[Page 85936]]
                rate as compared to the average claim, which would have a substantial
                impact on any statistical methodology used to estimate the most
                appropriate payment rate for a service. We also explained that we
                believe having the flexibility to utilize an alternative statistical
                methodology to calculate the payment rate in the case of low-volume new
                technology services would help to create a more stable payment rate.
                Therefore, in the CY 2019 OPPS/ASC final rule with comment period (83
                FR 58893), we established that, in each of our annual rulemakings, we
                will seek public comments on which statistical methodology should be
                used for each low-volume service assigned to a New Technology APC. In
                the preamble of each annual rulemaking, we stated that we would present
                the result of each statistical methodology and solicit public comment
                on which methodology should be used to establish the payment rate for a
                low-volume new technology service. In addition, we will use our
                assessment of the resources used to perform a service and guidance from
                the developer or manufacturer of the service, as well as other
                stakeholders, to determine the most appropriate payment rate. Once we
                identify the most appropriate payment rate for a service, we will
                assign the service to the New Technology APC with the cost band that
                includes its payment rate.
                 Accordingly, for CY 2021, we proposed to continue the policy we
                adopted in CY 2019 under which we will utilize our equitable adjustment
                authority under section 1833(t)(2)(E) of the Act to calculate the
                geometric mean, arithmetic mean, and median using multiple years of
                claims data to select the appropriate payment rate for purposes of
                assigning services with fewer than 100 claims per year to a New
                Technology APC. Additional details on our policy is available in the CY
                2019 OPPS/ASC final rule with comment period (83 FR 58892 through
                58893).
                 We did not receive any public comments on our proposal. Therefore,
                we are finalizing our proposal without modification.
                3. Procedures Assigned to New Technology APC Groups for CY 2021
                 As we described in the CY 2002 OPPS final rule with comment period
                (66 FR 59902), we generally retain a procedure in the New Technology
                APC to which it is initially assigned until we have obtained sufficient
                claims data to justify reassignment of the procedure to a clinically
                appropriate APC.
                 In addition, in cases where we find that our initial New Technology
                APC assignment was based on inaccurate or inadequate information
                (although it was the best information available at the time), where we
                obtain new information that was not available at the time of our
                initial New Technology APC assignment, or where the New Technology APCs
                are restructured, we may, based on more recent resource utilization
                information (including claims data) or the availability of refined New
                Technology APC cost bands, reassign the procedure or service to a
                different New Technology APC that more appropriately reflects its cost
                (66 FR 59903).
                 Consistent with our current policy, for CY 2021, we proposed to
                retain services within New Technology APC groups until we obtain
                sufficient claims data to justify reassignment of the service to a
                clinically appropriate APC. The flexibility associated with this policy
                allows us to reassign a service from a New Technology APC in less than
                2 years if sufficient claims data are available. It also allows us to
                retain a service in a New Technology APC for more than 2 years if
                sufficient claims data upon which to base a decision for reassignment
                have not been obtained (66 FR 59902). We received no public comments on
                our proposal. Therefore, we will implement our proposal without
                modification.
                a. Magnetic Resonance-Guided Focused Ultrasound Surgery (MRgFUS)
                 Currently, there are four CPT/HCPCS codes that describe magnetic
                resonance image-guided, high-intensity focused ultrasound (MRgFUS)
                procedures, three of which we proposed to continue to assign to
                standard APCs, and one that we proposed to continue to assign to a New
                Technology APC for CY 2021. These codes include CPT codes 0071T, 0072T,
                and 0398T, and HCPCS code C9734. CPT codes 0071T and 0072T describe
                procedures for the treatment of uterine fibroids, CPT code 0398T
                describes procedures for the treatment of essential tremor, and HCPCS
                code C9734 describes procedures for pain palliation for metastatic bone
                cancer.
                 For the procedure described by CPT code 0398T, we have identified
                169 paid claims for CY 2019 with a geometric mean of $12,027.76. The
                number of claims for the service means that the procedure is no longer
                a low-volume new technology service, and we will use the geometric mean
                of the CY 2019 claims data to determine the cost of the service for its
                APC assignment. We reviewed the OPPS to determine whether CPT code
                0398T could be assigned to a clinical APC. The most appropriate
                clinical APC family for the service would be the Neurostimulator and
                Related Procedures APC series (APCs 5461 through 5464). However, there
                was a large payment rate difference between Level 2 Neurostimulator and
                Related Procedures (APC 5462) with a payment rate of $6,169.27 and
                Level 3 Neurostimulator and Related Procedures (APC 5463) with a
                payment rate of $19,737.37. Based on the geometric mean cost of CPT
                code 0398T available for the CY 2021 OPPS/ASC proposed rule, we believe
                the payment rate for APC 5462 would be too low for CPT code 0398T since
                it is more than $6,000 less than the geometric mean cost for CPT code
                0398T, and we believe the payment rate for APC 5463 would be too high
                since it is around $6,800 more than the geometric mean cost for CPT
                code 0398T.
                 In addition, given the significant difference in the payment rate
                between APC 5462 and 5463, we believed a restructuring of the APC
                family would be appropriate. We believed that creating an additional
                payment level between the two existing APC levels would allow for a
                smoother distribution of the costs between the different levels based
                on their resource costs and clinical characteristics. Please refer to
                section III.D.1 for detailed explanation of our proposal to reorganize
                the Neurostimulator and Related Procedures APCs (APCs 5461-5464).
                Reorganizing the Neurostimulator and Related Procedures APCs would
                create a proposed Level 3 APC to be referred to as ``Proposed APC
                5463'' with a payment rate of approximately $12,286 that is close to
                the geometric mean of CPT code 0398T which is approximately $12,798.
                The payment rate of proposed APC 5463 is representative of the cost of
                the service described by CPT code 0398T. Therefore, we proposed to
                reassign the service described by CPT code 0398T to the proposed new
                Level 3 APC for Neurostimulator and Related Procedures (Proposed APC
                5463) for CY 2021.
                 Comment: Multiple commenters supported our proposal to reassign CPT
                code 0398T to proposed new APC 5463 (Level 3 Neurostimulator and
                Related Procedures).
                 Response: We appreciate the support of the commenters for our
                proposal.
                 The final rule data shows the payment rate for the new APC 5463
                (Level 3 Neurostimulator and Related Procedures) is $11,236.21. While
                this payment rate is lower than what was calculated for the proposed
                rule, we continue to believe APC 5463 is an appropriate placement for
                CPT code 0398T. After our review of the public comments, we have
                decided to
                [[Page 85937]]
                implement our proposal to assign CPT code 0398T to APC 5463 for CY
                2021. The final APC assignment, status indicator, and payment rate for
                CPT code 0398T are found in Table 10. We refer readers to Addendum B of
                the final rule for the final payment rates for all codes reportable
                under the OPPS. Addendum B is available via the internet on the CMS
                website.
                [GRAPHIC] [TIFF OMITTED] TR29DE20.022
                Retinal Prosthesis Implant Procedure
                 CPT code 0100T (Placement of a subconjunctival retinal prosthesis
                receiver and pulse generator, and implantation of intra-ocular retinal
                electrode array, with vitrectomy) describes the implantation of a
                retinal prosthesis, specifically, a procedure involving the use of the
                Argus[supreg] II Retinal Prosthesis System. This first retinal
                prosthesis was approved by FDA in 2013 for adult patients diagnosed
                with severe to profound retinitis pigmentosa. Pass-through payment
                status was granted for the Argus[supreg] II device under HCPCS code
                C1841 (Retinal prosthesis, includes all internal and external
                components) beginning October 1, 2013, and this status expired on
                December 31, 2015. We note that after pass-through payment status
                expires for a medical device, the payment for the device is packaged
                into the payment for the associated surgical procedure. Consequently,
                for CY 2016, the device described by HCPCS code C1841 was assigned to
                OPPS status indicator ``N'' to indicate that payment for the device is
                packaged and included in the payment rate for the surgical procedure
                described by CPT code 0100T. For CY 2016, the procedure described by
                CPT code 0100T was assigned to New Technology APC 1599, with a payment
                rate of $95,000, which was the highest paying New Technology APC for
                that year. This payment included both the surgical procedure (CPT code
                0100T) and the use of the Argus[supreg] II device (HCPCS code C1841).
                However, stakeholders (including the device manufacturer and hospitals)
                believed that the CY 2016 payment rate for the procedure involving the
                Argus[supreg] II System was insufficient to cover the hospital cost of
                performing the procedure, which includes the cost of the retinal
                prosthesis at the retail price of approximately $145,000.
                 For CY 2017, analysis of the CY 2015 OPPS claims data used for the
                CY 2017 OPPS/ASC final rule with comment period showed 9 single claims
                (out of 13 total claims) for the procedure described by CPT code 0100T,
                with a geometric mean cost of approximately $142,003 based on claims
                submitted between January 1, 2015, through December 31, 2015, and
                processed through June 30, 2016. Based on the CY 2015 OPPS claims data
                available for the final rule with comment period and our understanding
                of the Argus[supreg] II procedure, we reassigned the procedure
                described by CPT code 0100T from New Technology APC 1599 to New
                Technology APC 1906, with a final payment rate of $150,000.50 for CY
                2017. We noted that this payment rate included the cost of both the
                surgical procedure (CPT code 0100T) and the retinal prosthesis device
                (HCPCS code C1841).
                 For CY 2018, the reported cost of the Argus[supreg] II procedure
                based on CY 2016 hospital outpatient claims data for 6 claims used for
                the CY 2018 OPPS/ASC final rule with comment period was approximately
                $94,455, which was more than $55,000 less than the payment rate for the
                procedure in CY 2017, but closer to the CY 2016 payment rate for the
                procedure. We noted that the costs of the Argus[supreg] II procedure
                are extraordinarily high compared to many other procedures paid under
                the OPPS. In addition, the number of claims submitted has been very low
                and has not exceeded 10 claims within a single year. We believed that
                it is important to mitigate significant payment differences, especially
                shifts of several tens of thousands of dollars, while also basing
                payment rates on available cost information and claims data. In CY
                2016, the payment rate for the Argus[supreg] II procedure was
                $95,000.50. The payment rate increased to $150,000.50 in CY 2017. For
                CY 2018, if we had established the payment rate based on updated final
                rule claims data, the
                [[Page 85938]]
                payment rate would have decreased to $95,000.50 for CY 2018, a decrease
                of $55,000 relative to CY 2017. We were concerned that these large
                fluctuations in payment could potentially create an access to care
                issue for the Argus[supreg] II procedure, and we wanted to establish a
                payment rate to mitigate the potential sharp decline in payment from CY
                2017 to CY 2018.
                 In accordance with section 1833(t)(2)(B) of the Act, we must
                establish that services classified within each APC are comparable
                clinically and with respect to the use of resources. Therefore, for CY
                2018, we used our equitable adjustment authority under section
                1833(t)(2)(E) of the Act, which states that the Secretary shall
                establish, in a budget neutral manner, other adjustments as determined
                to be necessary to ensure equitable payments, to maintain the payment
                rate for this procedure, despite the lower geometric mean costs
                available in the claims data used for the final rule with comment
                period. For CY 2018, we reassigned the Argus[supreg] II procedure to
                APC 1904 (New Technology--Level 50 ($115,001-$130,000)), which
                established a payment rate for the Argus[supreg] II procedure of
                $122,500.50, which was the arithmetic mean of the payment rates for the
                procedure for CY 2016 and CY 2017.
                 For CY 2019, the reported cost of the Argus[supreg] II procedure
                based on the geometric mean cost of 12 claims from the CY 2017 hospital
                outpatient claims data was approximately $171,865, which was
                approximately $49,364 more than the payment rate for the procedure for
                CY 2018. In the CY 2019 OPPS/ASC final rule with comment period, we
                continued to note that the costs of the Argus[supreg] II procedure are
                extraordinarily high compared to many other procedures paid under the
                OPPS (83 FR 58897 through 58898). In addition, the number of claims
                submitted continued to be very low for the Argus[supreg] II procedure.
                We stated that we continued to believe that it is important to mitigate
                significant payment fluctuations for a procedure, especially shifts of
                several tens of thousands of dollars, while also basing payment rates
                on available cost information and claims data because we are concerned
                that large decreases in the payment rate could potentially create an
                access to care issue for the Argus[supreg] II procedure. In addition,
                we indicated that we wanted to establish a payment rate to mitigate the
                potential sharp increase in payment from CY 2018 to CY 2019, and
                potentially ensure a more stable payment rate in future years.
                 As discussed in section III.C.2. of the CY 2019 OPPS/ASC final rule
                with comment period (83 FR 58892 through 58893), we used our equitable
                adjustment authority under section 1833(t)(2)(E) of the Act, which
                states that the Secretary shall establish, in a budget neutral manner,
                other adjustments as determined to be necessary to ensure equitable
                payments, to establish a payment rate that is more representative of
                the likely cost of the service. We stated that we believed the likely
                cost of the Argus[supreg] II procedure is higher than the geometric
                mean cost calculated from the claims data used for the CY 2018 OPPS/ASC
                final rule with comment period but lower than the geometric mean cost
                calculated from the claims data used for the CY 2019 OPPS/ASC final
                rule with comment period.
                 For CY 2019, we analyzed claims data for the Argus[supreg] II
                procedure using 3 years of available data from CY 2015 through CY 2017.
                These data included claims from the last year that the Argus[supreg] II
                received transitional device pass-through payments (CY 2015) and the
                first 2 years since device pass-through payment status for the
                Argus[supreg] II expired. We found that the geometric mean cost for the
                procedure was approximately $145,808, the arithmetic mean cost was
                approximately $151,367, and the median cost was approximately $151,266.
                As we do each year, we reviewed claims data regarding hospital costs
                associated with new procedures. We regularly examine the claims data
                and any available new information regarding the clinical aspects of new
                procedures to confirm that OPPS payments remain appropriate for
                procedures like the Argus[supreg] II procedure as they transition into
                mainstream medical practice (77 FR 68314). We noted that the proposed
                payment rate included both the surgical procedure (CPT code 0100T) and
                the use of the Argus[supreg] II device (HCPCS code C1841). For CY 2019,
                the estimated costs using all three potential statistical methods for
                determining APC assignment under the New Technology low-volume payment
                policy fell within the cost band of New Technology APC 1908, which is
                between $145,001 and $160,000. Therefore, we reassigned the
                Argus[supreg] II procedure (CPT code 0100T) to APC 1908 (New
                Technology--Level 52 ($145,001-$160,000)), with a payment rate of
                $152,500.50 for CY 2019.
                 For CY 2020, we identified 35 claims reporting the procedure
                described by CPT code 0100T for the 4-year period of CY 2015 through CY
                2018. We found the geometric mean cost for the procedure described by
                CPT code 0100T to be approximately $146,059, the arithmetic mean cost
                to be approximately $152,123, and the median cost to be approximately
                $151,267. All of the resulting estimates from using the three
                statistical methodologies fell within the same New Technology APC cost
                band ($145,001-$160,000), where the Argus[supreg] II procedure was
                assigned for CY 2019. Consistent with our policy stated in section
                III.C.2, we presented the result of each statistical methodology in the
                proposed rule, and we sought public comments on which method should be
                used to assign procedures described by CPT code 0100T to a New
                Technology APC. All three potential statistical methodologies used to
                estimate the cost of the Argus[supreg] II procedure fell within the
                cost band for New Technology APC 1908, with the estimated cost being
                between $145,001 and $160,000. Accordingly, we assigned CPT code 0100T
                in APC 1908 (New Technology--Level 52 ($145,001-$160,000)), with a
                payment rate of $152,500.50 for CY 2020.
                 For CY 2021, the number of reported claims for the Argus[supreg] II
                procedure continues to be very low with a substantial fluctuation in
                cost from year to year. The high annual variability of the cost of the
                Argus[supreg] II procedure continues to make it difficult to establish
                a consistent and stable payment rate for the procedure. As previously
                mentioned, in accordance with section 1833(t)(2)(B) of the Act, we are
                required to establish that services classified within each APC are
                comparable clinically and with respect to the use of resources.
                Therefore, for CY 2021, we proposed to apply the policy we adopted in
                CY 2019, under which we utilize our equitable adjustment authority
                under section 1833(t)(2)(E) of the Act to calculate the geometric mean,
                arithmetic mean, and median costs using multiple years of claims data
                to select the appropriate payment rate for purposes of assigning the
                Argus[supreg] II procedure (CPT code 0100T) to a New Technology APC.
                 For CY 2021, we identified 35 claims reporting the procedure
                described by CPT code 0100T for the 4-year period of CY 2016 through CY
                2019. We found the geometric mean cost for the procedure described by
                CPT code 0100T to be approximately $148,807, the arithmetic mean cost
                to be approximately $154,504, and the median cost to be approximately
                $151,974. All three potential statistical methodologies used to
                estimate the cost of the Argus[supreg] II procedure fall within the
                cost band for New Technology APC 1908, with the estimated cost being
                between $145,001 and $160,000.
                 Accordingly, we proposed to maintain the assignment of the
                procedure
                [[Page 85939]]
                described by CPT code 0100T in APC 1908 (New Technology--Level 52
                ($145,001-$160,000)), with a proposed payment rate of $152,500.50 for
                CY 2021. We note that the proposed payment rate includes both the
                surgical procedure (CPT code 0100T) and the use of the Argus[supreg] II
                device (HCPCS code C1841). We refer readers to Addendum B to the
                proposed rule for the proposed payment rates for all codes reportable
                under the OPPS. Addendum B is available via the internet on the CMS
                website.
                 For our analysis for the CY 2021 final rule, we identified 35
                claims reporting the procedure described by CPT code 0100T for the 4-
                year period of CY 2016 through CY 2019. We found the geometric mean
                cost for the procedure described by CPT code 0100T to be approximately
                $148,148, the arithmetic mean cost to be approximately $153,682, and
                the median cost to be approximately $151,974. The slight differences
                from the calculations using the proposed rule data are caused by
                changes to the wage indexes of a few providers. All three potential
                statistical methodologies used to estimate the cost of the
                Argus[supreg] II procedure fall within the cost band for New Technology
                APC 1908, with the estimated cost being between $145,001 and $160,000.
                 We received no public comments on our proposal. Therefore, we are
                finalizing our proposal without modification. We will maintain the
                assignment of the procedure described by CPT code 0100T in APC 1908
                (New Technology--Level 52 ($145,001-$160,000)), with a payment rate of
                $152,500.50 for CY 2021. We note that the final payment rate includes
                both the surgical procedure (CPT code 0100T) and the use of the
                Argus[supreg] II device (HCPCS code C1841). We refer readers to
                Addendum B to the final rule for the final payment rates for all codes
                reportable under the OPPS. Addendum B is available via the internet on
                the CMS website.
                c. Administration of Subretinal Therapies Requiring Vitrectomy (APC
                1561)
                 CPT code J3398 (Injection, voretigene neparvovec-rzyl, 1 billion
                vector genomes) is a gene therapy for a rare mutation-associated
                retinal dystrophy. Voretigene neparvovec-rzyl (Luxturna[supreg]), was
                approved by FDA in December of 2017, and is indicated as an adeno-
                associated virus vector-based gene therapy indicated for the treatment
                of patients with confirmed biallelic RPE65 mutation-associated retinal
                dystrophy.\2\ This therapy is administered through a subretinal
                injection, which stakeholders describe as an extremely delicate and
                sensitive surgical procedure. The FDA package insert describes one of
                the steps for administering Luxturna as, ``after completing a
                vitrectomy, identify the intended site of administration. The
                subretinal injection can be introduced via pars plana.'' \1\
                ---------------------------------------------------------------------------
                 \2\ Luxturna. FDA Package Insert. Available: https://www.fda.gov/media/109906/download.
                ---------------------------------------------------------------------------
                 Stakeholders, including the manufacturer of Luxturna[supreg],
                recommended HCPCS code 67036 (Vitrectomy, mechanical, pars plana
                approach) for the administration of the gene therapy.\3\ However, the
                manufacturer contends the administration is not currently described by
                any existing codes as HCPCS code 67036 (Vitrectomy, mechanical, pars
                plana approach) does not account for the administration itself. For
                HCPCS code J3398, a typical patient would receive a standard dose of
                150 billion vector genomes, with an approximate payment rate of
                $432,480 (we refer readers to Addendum B of the CY 2021 OPPS/ASC Final
                Rule with comment period rule for the payment rate associated with
                HCPCS code J3398).
                ---------------------------------------------------------------------------
                 \3\ LUXTURNA REIMBURSEMENT GUIDE FOR TREATMENT CENTERS. https://mysparkgeneration.com/pdf/Reimbursement_Guide_for_Treatment_Centers_Interactive_010418_FINAL.pdf.
                ---------------------------------------------------------------------------
                 It is important to note that HCPCS code J3398 was granted drug
                pass-through status under the OPPS as of July 1, 2018 and is assigned
                status indicator ``G''. (We refer readers to Addendum D of the CY 2021
                OPPS/ASC Final rule for the list of status indicator definitions for
                CY2021). HCPCS code J3398 is scheduled to have its drug pass-through
                status expire June 30, 2021, at which point the code would be packaged
                into the payment for any primary service with which it is billed when
                that primary service is assigned to a comprehensive APC (C-APC). A C-
                APC packages payment for adjunctive and secondary items, services, and
                procedures into the most costly primary procedure. (For a full
                discussion and background on C-APCs, see section II.A.2.b). Based on
                information from the manufacturer of Luxturna, we believe that HCPCS
                code J3398 (Injection, voretigene neparvovec-rzyl, 1 billion vector
                genomes) would commonly be billed with the service described by HCPCS
                code 67036 (Vitrectomy, mechanical, pars plana approach), which
                describes the administration of the gene therapy, and which is assigned
                to a comprehensive APC, (APC 5492--Level 2 Intraocular Procedures).
                Thus, when its pass-through status expires, payment for HCPCS code
                J3398, the primary therapy, would be packaged into payment for HCPCS
                code 67036, its administration procedure.
                 CMS recognizes the need to accurately describe the unique
                administration procedure that is required to administer the therapy
                described by HCPCS code J3398. We proposed to establish a new HCPCS
                code, C97X1 (Vitrectomy, mechanical, pars plana approach, with
                subretinal injection of pharmacologic/biologic agent) to describe this
                process. We believe that this new HCPCS code accurately describes the
                service associated with intraocular administration of HCPCS code J3398.
                CMS recognized that HCPCS code 67036 represents a similar procedure and
                process that approximates similar resource utilization that is
                associated with C97X1. CMS also recognized that it is not prudent for
                the code that describes the administration of this gene therapy, C97X1,
                to be assigned to the same C-APC to which HCPCS code 67036 is assigned,
                as this would package the primary therapy, HCPCS code J3398, into the
                code that represents the process to administer the gene therapy.
                 For CY 2021, we proposed to assign the services described by C97X1
                to a new technology payment band based on the geometric mean cost for
                HCPCS code 67036. For the CY 2021 OPPS/ASC Proposed Rule, HCPCS code
                67036 had a geometric mean cost of $3,407.84. Therefore, for the
                proposed rule we proposed to assign C97X1 to APC 1561--New Technology--
                Level 24 ($3001-$3500). See Table 11 for proposed descriptors and APC
                assignment.
                [[Page 85940]]
                [GRAPHIC] [TIFF OMITTED] TR29DE20.023
                 Comment: Commenters were largely supportive of our proposal to
                create a ``C'' code to describe the administration of J3398 and assign
                this newly created ``C'' code to New Technology APC 1561. Commenters
                largely advised CMS to finalize our proposal as proposed.
                 Response: We thank the commenters for their support on our
                proposal.
                 Comment: A small minority of commenters supported our approach to
                create a ``C'' code to describe the administration of J3398 and assign
                the newly created ``C'' code to a New Technology APC, but suggested
                alternate APC placements. The commenters' suggested alternate APC
                placements included APC 1562, based on a crosswalk of HCPCS code 67042,
                as well as APC 1564. Additionally, one commenter expressed uncertainty
                about when it would be appropriate to bill this code.
                 Response: We thank commenters for their feedback. Based on our
                review, we believe assigning C9770 to APC 1561 based on the geometric
                mean costs of HCPCS code 67036 is the most appropriate APC placement
                for this code. Our clinical review along with an overwhelming number of
                stakeholders have found that HCPCS code 67036 represents a similar
                procedure and process that approximates similar resource utilization
                that is associated with C9770. Additionally, regarding when C9770 may
                be billed, we remind stakeholders that HOPDs and ASCs may bill C9770
                under Medicare in the HOPD and ASC settings when reasonable and
                necessary services are furnished. HCPCS C-codes are reportable only on
                Medicare OPPS and ASC claims. HOPDs and ASCs are expected to make
                appropriate coding decisions based on instructions and other
                information available to them (for example, federal regulations, CMS
                instructions, MAC instructions, etc.).
                 Based on the above discussion, for CY 2021 we are finalizing our
                proposal without modification to establish C9770 and assign the code to
                a New Technology APC based on the geometric mean cost of HCPCS code
                67036. For CY 2021, HCPCS code 67036 has a geometric mean cost of
                $3,435.61. Therefore, as shown in Table 12, for CY 2021 we are
                finalizing our proposal to create C9770 (Vitrectomy, mechanical, pars
                plana approach, with subretinal injection of pharmacologic/biologic
                agent) and assign this code to APC 1561 (New Technology--Level 24
                ($3001-$3500)).
                [GRAPHIC] [TIFF OMITTED] TR29DE20.024
                d. Bronchoscopy With Transbronchial Ablation of Lesion(s) by Microwave
                Energy
                 Effective January 1, 2019, CMS established HCPCS code C9751
                (Bronchoscopy, rigid or flexible, transbronchial ablation of lesion(s)
                by microwave energy, including fluoroscopic guidance, when performed,
                with computed tomography acquisition(s) and 3-D rendering, computer-
                assisted, image-guided navigation, and endobronchial ultrasound (EBUS)
                guided transtracheal and/or transbronchial sampling (for example,
                aspiration[s]/biopsy[ies]) and all mediastinal and/or hilar lymph node
                stations or structures and therapeutic intervention(s)). This microwave
                ablation procedure utilizes a flexible catheter to access the lung
                tumor via a working channel and may be used as an alternative procedure
                to a percutaneous microwave approach. Based on our review of the New
                Technology APC application for this service and the service's clinical
                similarity to existing services paid under the OPPS, we estimated the
                likely cost of the procedure would be between $8,001 and $8,500.
                 In claims data available for CY 2019 for the CY 2021 OPPS/ASC
                proposed rule, there were 4 claims reported for bronchoscopy with
                transbronchial ablation of lesions by microwave energy. Given the low
                volume of claims for the service, we proposed for CY 2021 to apply the
                policy we adopted in CY 2019, under which we utilize our equitable
                adjustment authority under section 1833(t)(2)(E) of the Act to
                calculate the geometric mean, arithmetic mean, and median costs to
                calculate an
                [[Page 85941]]
                appropriate payment rate for purposes of assigning bronchoscopy with
                transbronchial ablation of lesions by microwave energy to a New
                Technology APC. We found the geometric mean cost for the service to be
                approximately $4,051, the arithmetic mean cost to be approximately
                $4,067, and the median cost to be approximately $4,067. All three
                potential statistical methodologies used to estimate the cost of the
                service procedure fall within the cost band for New Technology APC
                1563, with the estimated cost being between $4,001 and $4,500.
                Accordingly, we proposed to change the assignment of the HCPCS code
                C9751 to APC 1563 (New Technology--Level 26 ($4001-$4500)), with a
                proposed payment rate of $4,250.50 for CY 2021.
                 Comment: Two commenters did not support our proposal to assign
                HCPCS code C9751 to APC 1563 (New Technology--Level 26 ($4001-$4500)),
                with a proposed payment rate of $4,250.50 for CY 2021. The commenters
                stated that there was not enough claims data to change the APC
                assignment for HCPCS code C9751, and that HCPCS code C9751 should
                continue to be assigned to APC 1571 (New Technology--Level 34 ($8001-
                $8500)) with a proposed payment rate of $8,250.50.
                 Response: Because of the low number of claims for HCPCS C9751, we
                utilized our equitable adjustment authority under section 1833(t)(2)(E)
                of the Act for our final rule analysis to calculate the geometric mean,
                arithmetic mean, and median costs to calculate a payment rate to assign
                bronchoscopy with transbronchial ablation of lesions by microwave
                energy to a New Technology APC. Even though the number of claims are
                small, it is the best data available to determine the cost of the
                procedure. The assignment of HCPCS code C9751 to APC 1571 was based on
                guidance from the developer of the procedure and our best estimates of
                the cost of the procedure. The claims data, however limited, provide
                evidence of the cost of the procedure based on service utilization
                rather than having to forecast the cost of procedure.
                 Therefore, we decided to use our low-volume methodology for new
                technology services to determine the payment rate for the service
                described by HCPCS code C9751. We found for our final rule analysis
                that the geometric mean cost for the service to be approximately
                $2,693, the arithmetic mean cost to be approximately $3,086, and the
                median cost to be approximately $3,708. The median was the statistical
                methodology that estimated the highest cost for the service and
                provides a reasonable estimate of the midpoint cost of the three claims
                that have been paid for this service. The payment rate calculated using
                this methodology falls within the cost band for New Technology APC 1562
                (New Technology--Level 25 ($3501-$4000)). Based on our updated analysis
                of the data, we have decided to implement our original proposal with
                modifications. For CY 2021, we will change the assignment of HCPCS code
                C9751 to APC 1562 (New Technology--Level 25 ($3501-$4000)) using our
                equitable adjustment authority under section 1833(t)(2)(E) of the Act
                and our low-volume new technology service methodology. The payment rate
                for C9751 will be based on the median cost of claims reported for the
                service since CY 2019 as the median cost is the highest estimated cost
                for the service, and the median provides a reasonable estimate of the
                midpoint cost of the three claims that have been paid for this service.
                Details regarding HCPCS code C9751 are shown in Table 13. We refer
                readers to Addendum B of the final rule for the final payment rates for
                all codes reportable under the OPPS. Addendum B is available via the
                internet on the CMS website.
                [GRAPHIC] [TIFF OMITTED] TR29DE20.025
                e. Fractional Flow Reserve Derived From Computed Tomography (FFRCT)
                 Fractional Flow Reserve Derived from Computed Tomography (FFRCT),
                also known by the trade name HeartFlow, is a noninvasive diagnostic
                service that allows physicians to measure coronary artery disease in a
                patient through the use of coronary CT scans. The HeartFlow procedure
                is intended for clinically stable symptomatic patients with coronary
                artery disease, and, in many cases, may avoid the need for an invasive
                coronary angiogram procedure. HeartFlow uses a proprietary data
                analysis process performed at a central facility to develop a three-
                dimensional image of a patient's coronary arteries, which allows
                physicians to identify the fractional flow reserve to assess whether or
                not patients should undergo further invasive testing (that is, a
                coronary angiogram).
                 For many services paid under the OPPS, payment for analytics that
                are performed after the main diagnostic/
                [[Page 85942]]
                image procedure are packaged into the payment for the primary service.
                However, in CY 2018, we determined that HeartFlow should receive a
                separate payment because the service is performed by a separate entity
                (that is, a HeartFlow technician who conducts computer analysis
                offsite) rather than the provider performing the CT scan. We assigned
                CPT code 0503T, which describes the analytics performed, to New
                Technology APC 1516 (New Technology--Level 16 ($1,401-$1,500)), with a
                payment rate of $1,450.50 based on pricing information provided by the
                developer of the procedure that indicated the price of the procedure
                was approximately $1,500. We did not have Medicare claims data in CY
                2019 for CPT code 0503T, and we continued to assign the service to New
                Technology APC 1516 (New Technology--Level 16 ($1,401-$1,500)), with a
                payment rate of $1,450.50.
                 CY 2020 was the first year we had Medicare claims data to calculate
                the cost of HCPCS code 0503T. For the CY 2020 OPPS/ASC final rule,
                there were 957 claims with CPT code 0503T of which 101 of the claims
                were single frequency claims that were used to calculate the geometric
                mean of the procedure. We planned to use the geometric mean to report
                the cost of HeartFlow. However, the number of single frequency claims
                for CPT code 0503T was below the low-volume payment policy threshold
                for the proposed rule, and the number of single frequency claims was
                only two claims above the threshold for the new technology APC low-
                volume policy for the final rule. Therefore, we decided to use our
                equitable adjustment authority under section 1833(t)(2)(E) of the Act
                to calculate the geometric mean, arithmetic mean, and median using the
                CY 2018 claims data to determine an appropriate payment rate for
                HeartFlow using our new technology APC low-volume payment policy. While
                the number of single frequency claims was just above our threshold to
                use the low-volume payment policy, we still had concerns about the
                normal cost distribution of the claims used to calculate the payment
                rate for HeartFlow, and we decided the low-volume payment policy would
                be the best approach to address those concerns.
                 Our analysis found that the geometric mean cost for CPT code 0503T
                was $768.26, the arithmetic mean cost for CPT code 0503T was $960.12
                and that the median cost for CPT code 0503T was $900.28. Of the three
                cost methods, the highest amount was for the arithmetic mean. The
                arithmetic mean fell within the cost band for New Technology APC 1511
                (New Technology--Level 11 ($901-$1000)) with a payment rate of $950.50.
                The arithmetic mean helped to account for some of the higher costs of
                CPT code 0503T identified by the developer and other stakeholders that
                may not have been reflected by either the median or the geometric mean.
                 For CY 2021, we observed a significant increase in the number of
                claims billed with CPT code 0503T that were available for the CY 2021
                OPPS/ASC proposed rule. Specifically, using the most recently available
                data for the CY 2021 OPPS/ASC proposed rule (that is, CY 2019), we
                identified 2,820 claims billed with CPT code 0503T including 415 single
                frequency claims. These totals were well above the threshold of 100
                claims for a procedure to be evaluated using the new technology APC
                low-volume policy. Therefore, we proposed to use our standard
                methodology rather than the low-volume methodology we previously used
                to determine the cost of CPT code 0503T.
                 Our analysis of the available claims data for the proposed rule
                found the geometric mean cost for CPT code 0503T was approximately
                $851. Therefore, we proposed to reassign the service described by CPT
                code 0503T in order to adjust the payment rate to better reflect the
                cost for the service. While we considered proposing to reassign CPT
                code 0503T to APC 5724 (Level 4--Diagnostic Tests and Related
                Services), which had a proposed payment rate of around $903 based on
                the clinical and resource similarity to other services within that APC,
                we did not propose such reassignment because the payment rate for the
                new technology APC was closer to the geometric mean costs of CPT code
                0503T. Nonetheless, we welcomed comments on whether reassignment to the
                clinical APC would be more appropriate. Therefore, we proposed to
                reassign the service described by CPT code 0503T to New Technology APC
                1510 (New Technology--Level 10 ($801-$900)), with a proposed payment
                rate of $850.50 for CY 2021.
                 Comment: The developer of HeartFlow and multiple other commenters
                stated that the CPT code 0503T should not be assigned to New Technology
                APC 1510. Instead, they suggested that the HeartFlow procedure be
                assigned to APC 5593 (Level 3 Nuclear Medicine and Related Services)
                with a payment rate of around $1,270. The developer asserted that even
                though the payment for APC 5593 is substantially higher than the
                estimated cost of CPT code 0503T, the cost of the service fits
                reasonably well with the cost of other procedures assigned to APC 5593.
                The developer and other commenters also assert that the HeartFlow
                procedure has enough clinical similarity to other procedures currently
                assigned to the nuclear medicine and related services family. According
                to the developer and the other commenters, HeartFlow is comparable to
                other nuclear medicine procedures that are image analysis tests
                characterizing organ-specific function. The developer and the other
                commenters also note that cardiac CT procedures, which are used to
                identify coronary artery disease, are assigned to the nuclear medicine
                APC family. Finally, the developer cited two examples of procedures in
                the OPPS that are assigned to APCs where the procedure in question does
                not have clinical similarity to the other procedures in the APC.
                 Response: We disagree with the suggestion that CPT code 0503T
                should be assigned to APC 5593. The nuclear medicine and related
                procedures APC family describes diagnostic and therapeutic procedures,
                many of them involving imaging, where radiopharmaceuticals and other
                nuclear materials are critical supplies for the performance of the
                procedure. In comparison, HeartFlow is a computer algorithm that does
                not directly take images nor is it used on its own to generate a
                diagnosis for a patient. Instead, HeartFlow analyzes diagnostic images
                obtained through other medical procedures and assists with the
                interpretation of those diagnostic images to determine if a patient has
                coronary artery disease. There is little clinical similarity between
                the HeartFlow procedure and the procedures currently assigned to the
                nuclear medicine and related procedures, and we cannot support
                assigning CPT code 0503T to APC 5593.
                 Comment: Several commenters asserted the proposed payment rate for
                CPT code 0503T is too low and does not reflect their individual
                hospital's cost to use HeartFlow. Commenters mentioned cost issues,
                including the $1,100 list price for each individual HeartFlow service
                and the staff resources involved to transmit data to the HeartFlow
                analysis facility and review the results of the analyses performed by
                HeartFlow. Commenters suggested a range of potential payments for a
                HeartFlow procedure from $1,051 up to $1,451, and they encouraged CMS
                to use our equitable adjustment authority at section 1833(t)(2)(E) of
                the Act to establish a payment rate that would more closely reflect the
                costs the
                [[Page 85943]]
                commenters believe they are incurring to perform the HeartFlow
                procedure.
                 Response: For this CY 2021 OPPS/ASC final rule, we identified 3,188
                claims billed with CPT code 0503T including 465 single frequency claims
                for CPT code 0503T. Our analysis has found that the geometric mean for
                CPT code 0503T is $804.35, and the geometric mean cost falls within the
                cost band for New Technology APC 1510 (New Technology--Level 10 ($801-
                $900)), which is similar to our results for the proposed rule. However,
                multiple commenters have noted that the FFRCT service costs $1,100 and
                that there are additional staff costs related to the submission of
                coronary CT image data for processing by HeartFlow.
                 HeartFlow is one of the first procedures utilizing artificial
                intelligence to be separately payable in the OPPS, and providers are
                still learning how to accurately report their charges to Medicare when
                billing for artificial intelligence services. This is especially the
                case for allocating the cost of staff resources between the HeartFlow
                procedure and the coronary CT imaging services. Therefore, we feel it
                would be appropriate to use our equitable adjustment authority under
                section 1833(t)(2)(E) of the Act to assign CPT code 0503T to the same
                New Technology APC in CY 2021 as in CY 2020 in order to provide payment
                stability and equitable payment for providers as they continue to
                become more familiar with the proper cost reporting for HeartFlow and
                other artificial intelligence services. As mentioned earlier in this
                section, CPT code 0503T was assigned to New Technology APC 1511 (New
                Technology--Level 11 ($901-$1000)) with a payment rate of $950.50 for
                CY 2020, and we will continue to assign CPT code 0503T to New
                Technology APC 1511 for CY 2021.
                 After reviewing all of the public comments, we have decided to
                finalize our proposal with modification by using our equitable
                adjustment authority under section 1833(t)(2)(E) of the Act to continue
                to assign CPT code 0503T to New Technology APC 1511 (New Technology--
                Level 11 ($901-$1000)) for CY 2021. We refer readers to Addendum B of
                the final rule for the final payment rates for all codes reportable
                under the OPPS. Addendum B is available via the internet on the CMS
                website.
                f. Cardiac Positron Emission Tomography (PET)/Computed Tomography (CT)
                Studies
                 Effective January 1, 2020, we assigned three CPT codes (78431,
                78432, and 78433) that describe the services associated with cardiac
                PET/CT studies to New Technology APCs. CPT code 78431 was assigned to
                APC 1522 (New Technology--Level 22 ($2001-$2500)) with a payment rate
                of $2,250.50. CPT codes 78432 and 78433 were assigned to APC 1523 (New
                Technology--Level 23 ($2501-$3000)) with a payment rate of $2,750.50.
                 We had not received any claims billed with CPT codes 78431, 78432,
                or 78433 prior to the proposed rule. Therefore, we proposed to continue
                to assign these CPT codes to the same new technology APCs as they were
                in CY 2020. The proposed CY 2021 payment rate for the codes can be
                found in Addendum B to the CY 2021 OPPS/ASC proposed rule (which is
                available via the internet on the CMS website).
                 Comment: Several commenters expressed their support for our
                proposal to assign CPT code 78431 to APC 1522 (New Technology--Level 22
                ($2001-$2500)) with a payment rate of $2,250.50, and to assign CPT
                codes 78432 and 78433 to APC 1523 (New Technology--Level 23 ($2501-
                $3000)) with a payment rate of $2,750.50.
                 Response: We appreciate the support of the commenters for our
                proposal.
                 We have not received any claims for these services prior to this
                final rule. After our review of the public comments, we have decided to
                implement our proposal without modification. Table 14 reports code
                descriptors, status indicators, and APC assignments for these CPT
                codes.
                [[Page 85944]]
                [GRAPHIC] [TIFF OMITTED] TR29DE20.026
                g. Pathogen Test for Platelets/Rapid Bacterial Testing
                 For the July 2017 update, the HCPCS Workgroup established HCPCS
                code Q9987 (Pathogen(s) test for platelets) effective July 1, 2017.
                This new code and the OPPS APC assignment was announced in the July
                2017 OPPS quarterly update CR (Transmittal 3783, Change Request 10122,
                dated May 26, 2017). Because HCPCS code Q9987 represented a test to
                identify bacterial or other pathogen contamination in blood platelets,
                we assigned the code to a new technology APC, specifically, New
                Technology APC 1493 (New Technology--Level 1C ($21-$30)) with a status
                indicator ``S'' and a payment rate of $25.50. We note that temporary
                HCPCS code Q9987 was subsequently deleted on December 31, 2017, and
                replaced with permanent HCPCS code P9100 (Pathogen(s) test for
                platelets) effective January 1, 2018. For the January 2018 update, we
                continued to assign the new code to the same APC and status indicator
                as its predecessor code. Specifically, we assigned HCPCS code P9100 to
                New Technology APC 1493 and status indicator ``S''. For the CY 2019
                update, we made no change to the APC or status indicator assignment for
                P9100, however, for the CY 2020 update, we revised the APC assignment
                from New Technology APC 1493 to 1494 (New Technology--Level 1D ($31-
                $40) based on the latest claims data used to set the payment rates for
                CY 2020. We discussed the revision in the CY 2020 OPPS/ASC final rule
                (84 FR 61219) and indicated that the reassignment to APC 1494
                appropriately reflected the cost of the service.
                 For the CY 2021 OPPS/ASC proposed rule, we stated that we believed
                we had sufficient claims data to reassign the code from a New
                Technology APC to a clinical APC, and noted that HCPCS code P9100 has
                been assigned to a New Technology APC for over 3 years. As stated in
                section III.D. (New Technology APCs), a service is paid under a New
                Technology APC until sufficient claims data have been collected to
                allow CMS to assign the procedure to a clinical APC group that is
                appropriate in clinical and resource terms. We expect this to occur
                within two to three years from the time a new HCPCS code becomes
                effective. However, if we are able to collect sufficient claims data in
                less than 2 years, we would consider reassigning the service to an
                appropriate clinical APC. Since HCPCS code P9100 has been assigned to a
                new technology APC since July 2017, we believe that we should reassign
                the code to a clinical APC. Specifically, our claims data for the CY
                2021 OPPS/ASC proposed rule showed a geometric mean cost of
                approximately $30 for HCPCS code P9100 based on 70 single claims (out
                of 1,835 total claims).
                [[Page 85945]]
                Based on resource cost and clinical homogeneity to the other services
                assigned to APC 5732 (Level 2 Minor Procedures), we believed that HCPCS
                code P9100 should be reassigned to clinical APC 5732, which had a
                geometric mean cost of approximately $33.
                 As we have stated several times since the implementation of the
                OPPS on August 1, 2000, we review, on an annual basis, the APC
                assignments for all services and items paid under the OPPS based on our
                analysis of the latest claims data. For the CY 2021 OPPS update, based
                on claims submitted between January 1, 2019, and December 30, 2019, our
                analysis of the latest claims data for the CY 2021 OPPS/ASC proposed
                rule supports reassigning HCPCS code P9100 to APC 5732 based on its
                clinical and resource homogeneity to the procedures and services in the
                APC. Therefore, we proposed to reassign HCPCS code P9100 from New
                Technology APC 1494 to clinical APC 5732 for CY 2021. The proposed CY
                2021 payment rate for HCPCS code P9100 can be found in Addendum B to
                the CY 2021 OPPS/ASC proposed rule with comment period. In addition, we
                refer readers to Addendum D1 of the CY 2021 OPPS/ASC proposed rule with
                comment period for the status indicator (SI) meanings for all codes
                reported under the OPPS. Both Addendum B and D1 are available via the
                internet on the CMS website.
                 Comment: Two commenters expressed their support for our proposal.
                 Response: We appreciate the support of the commenters.
                 After reviewing the public comments for this proposal, we have
                decided to finalize our proposal without modification to reassign HCPCS
                code P9100 from New Technology APC 1494 to clinical APC 5732 for CY
                2021. The final rule data supports our decision. The data show a
                geometric mean cost of approximately $31 for HCPCS code P9100 based on
                75 single claims (out of 2,038 total claims), which is close to the
                payment rate of around $33 for APC 5732. The final CY 2021 payment rate
                for HCPCS code P9100 can be found in Addendum B to this CY 2021 OPPS/
                ASC final rule with comment period. In addition, we refer readers to
                Addendum D1 of this CY 2021 OPPS/ASC final rule with comment period for
                the status indicator (SI) meanings for all codes reported under the
                OPPS. Both Addendum B and D1 are available via the internet on the CMS
                website.
                h. V-Wave Medical Interatrial Shunt Procedure
                 A randomized, double-blinded, controlled IDE study is currently in
                progress for the V-Wave interatrial shunt. The V-Wave interatrial shunt
                is for patients with severe symptomatic heart failure and is designed
                to regulate left atrial pressure in the heart. All participants who
                passed initial screening for the study receive a right heart
                catheterization procedure described by CPT code 93451 (Right heart
                catheterization including measurement(s) of oxygen saturation and
                cardiac output, when performed). Participants assigned to the
                experimental group also receive the V-Wave interatrial shunt procedure
                while participants assigned to the control group only receive right
                heart catheterization. The developer of V-Wave was concerned that the
                current coding of these services by Medicare would reveal to the study
                participants whether they have received the interatrial shunt because
                an additional procedure code, CPT code 93799 (Unlisted cardiovascular
                service or procedure), would be included on the claims for participants
                receiving the interatrial shunt. Therefore, we created a temporary
                HCPCS code to describe the V-wave interatrial shunt procedure for both
                the experimental group and the control group in the study.
                Specifically, we established HCPCS code C9758 (Blinded procedure for
                NYHA class III/IV heart failure; transcatheter implantation of
                interatrial shunt or placebo control, including right heart
                catheterization, trans-esophageal echocardiography (TEE)/intracardiac
                echocardiography (ICE), and all imaging with or without guidance (for
                example, ultrasound, fluoroscopy), performed in an approved
                investigational device exemption (IDE) study) to describe the service,
                and we assigned the service to New Technology APC 1589 (New
                Technology--Level 38 ($10,001-$15,000)).
                 No claims have been reported for HCPCS code C9758. Therefore, we
                proposed to continue to assign the service to New Technology APC 1589
                for CY 2021. The proposed CY 2021 payment rate for V-Wave interatrial
                shunt procedure can be found in Addendum B to the proposed rule (which
                is available via the internet on the CMS website).
                 Comment: Three commenters including the developer of the V-Wave
                interatrial shunt procedure and the developer of the Corvia Medical
                interatrial shunt procedure requested that we delete HCPCS code C9758
                because V-Wave has decided to no longer seek Medicare payment for its
                interatrial shunt procedure trial. The commenters believe that deleting
                HCPCS code C9758 will help prevent provider confusion with billing
                procedures describing the implementation of interatrial shunts.
                 Response: We do not intend to delete HCPCS code C9758 and believe
                that HCPCS code C9758 is sufficiently distinct from HCPCS code C9760
                (Non-randomized, non-blinded procedure for nyha class ii, iii, iv heart
                failure; transcatheter implantation of interatrial shunt or placebo
                control, including right and left heart catheterization, transeptal
                puncture, trans-esophageal echocardiography (tee)/intracardiac
                echocardiography (ice), and all imaging with or without guidance (for
                example, ultrasound, fluoroscopy), performed in an approved
                investigational device exemption (ide) study) that providers will not
                be confused about the appropriate service code to report.
                 Comment: Two commenters, including the developer of the V-Wave
                interatrial shunt procedure and the developer of the Corvia Medical
                interatrial shunt procedure, provided information about procedures that
                had comparable non-device service costs similar to the interatrial
                shunt procedures. One commenter suggested using the non-device cost of
                CPT code 93580 (Percutaneous transcatheter closure of congenital
                interatrial communication (that is, fontan fenestration, atrial septal
                defect) with implant) to approximate non-device costs for this
                procedure. The other commenter suggested that interatrial septal shunt
                procedures and percutaneous intracardiac closure procedures (CPTs
                93580-93591) assigned to APC 5194 (Level 4--Endovascular Procedures)
                would describe the non-device costs of the interatrial shunt
                procedures.
                 Response: Based on the suggestions of the commenters, we averaged
                the non-device costs of the interatrial septal shunt procedures and
                percutaneous intracardiac closure procedures to estimate the non-device
                costs of the interatrial shunt procedures. Our estimate of the non-
                device costs of both the V-Wave interatrial shunt and Corvia Medical
                interatrial shunt procedures was around $6,500.
                 Comment: One commenter requested that we assign the V-Wave
                interatrial shunt procedure to a New Technology APC that reflects the
                cost of the procedure.
                 Response: We will assign the V-Wave interatrial shunt procedure to
                an APC that reasonably reflects the cost of the
                [[Page 85946]]
                procedure both when the device is implanted and when a placebo
                treatment occurs.
                 After reviewing the public comments and analyzing the cost of both
                the V-Wave interatrial shunt procedure and the Corvia Medical
                interatrial shunt procedure, we will finalize our proposal with
                modifications. We believe that similar resources and device costs are
                involved with the V-Wave interatrial shunt procedure and the Corvia
                Medical interatrial shunt procedure. Therefore, the difference in the
                payment for HCPCS codes C9758 and C9760 is based on how often the
                interatrial shunt is implanted when each code is billed. An interatrial
                shunt is implanted one-half of the time HCPCS code C9758 is billed.
                Therefore, we will reassign HCPCS code C9758 to New Technology APC
                1590, which reflects the cost of having surgery every time and
                receiving the interatrial shunt one-half of the time when the procedure
                is performed. Details about the HCPCS code and its APC assignment are
                shown in Table 15. The final CY 2021 payment rate for the V-Wave
                interatrial shunt procedure can be found in Addendum B to the final
                rule.
                [GRAPHIC] [TIFF OMITTED] TR29DE20.027
                i. Corvia Medical Interatrial Shunt Procedure
                 Corvia Medical is currently conducting their pivotal trial for
                their interatrial shunt procedure. The trial started in Quarter 1 of CY
                2017 and is scheduled to continue through CY 2021. On July 1, 2020, we
                established HCPCS code C9760 (Non-randomized, non-blinded procedure for
                nyha class ii, iii, iv heart failure; transcatheter implantation of
                interatrial shunt or placebo control, including right and left heart
                catheterization, transeptal puncture, trans-esophageal echocardiography
                (tee)/intracardiac echocardiography (ice), and all imaging with or
                without guidance (for example, ultrasound, fluoroscopy), performed in
                an approved investigational device exemption (ide) study) to facilitate
                the implantation of the Corvia Medical interatrial shunt.
                 In the CY 2021 OPPS/ASC proposed rule, we proposed to assign HCPCS
                code C9760 to New Technology APC 1589. The proposed CY 2021 payment
                rate for Corvia Medical interatrial shunt procedure was found in
                Addendum B to the proposed rule (which is available via the internet on
                the CMS website).
                 Comment: Several commenters recommended revising the code
                descriptor for HCPCS code C9760 since the current descriptor
                inaccurately suggests that the code may include placebo control
                subjects who would not receive a shunt implant. The commenters
                specifically requested deleting the phrase ``or placebo control'' to
                eliminate any confusion on how this code should be reported.
                 Response: We agree with the commenters and have revised the long
                descriptor effective January 1, 2021 to read ``Non-randomized, non-
                blinded procedure for NYHA Class II, III, IV heart failure;
                transcatheter implantation of interatrial shunt, including right and
                left heart catheterization, transeptal puncture, trans-esophageal
                echocardiography (TEE)/intracardiac echocardiography (ICE), and all
                imaging with or without guidance (for example, ultrasound,
                fluoroscopy), performed in an approved investigational device exemption
                (IDE) study.'' The revised long descriptor for HCPCS code C9760 can
                also be found in the 2021 Alpha Numeric HCPCS File that is posted on
                the CMS HCPCS website, specifically, at https://www.cms.gov/Medicare/Coding/HCPCSReleaseCodeSets/Alpha-Numeric-HCPCS.
                 Comment: Two commenters, including the developer of the Corvia
                Medical interatrial shunt procedure and the developer of the V-Wave
                interatrial shunt procedure, provided information about procedures that
                had comparable non-device service costs similar to the interatrial
                shunt procedures. One commenter suggested using the non-device cost of
                CPT code 93580 (Percutaneous transcatheter closure of congenital
                interatrial communication (that is, fontan fenestration, atrial septal
                defect) with implant). The other commenter suggested that interatrial
                septal shunt procedures and percutaneous intracardiac closure
                procedures (CPTs 93580-93591) assigned to APC 5194 (Level 4--
                Endovascular Procedures) would describe the non-device costs of the
                interatrial shunt procedures.
                 Response: Based on the suggestions of the commenters, we averaged
                the non-device costs of the interatrial septal shunt procedures and
                percutaneous intracardiac closure procedures to estimate the non-device
                costs of the interatrial shunt procedures. Our estimated cost of the
                non-device costs of the both the Corvia Medical interatrial shunt and
                V-Wave interatrial shunt procedures was around $6,500.
                 Comment: Multiple commenters, including the developer of the Corvia
                Medical interatrial shunt procedure and the developer of the V-Wave
                interatrial shunt procedure, requested a higher payment rate for the
                procedure. Several commenters were concerned that the payment rate
                established for HCPCS
                [[Page 85947]]
                code C9760 would discourage providers from participating in the
                clinical trial, and the developer of the Corvia Medical interatrial
                shunt procedure stated that they had to assume all costs for the trial
                because of inadequate payment for the Corvia Medical interatrial shunt
                procedure. The developer of the V-Wave interatrial shunt procedure
                mentioned that HCPCS code C9760 is the service code they will use to
                report interatrial shunt procedures for their continuing study.
                 Response: As mentioned earlier, we decided to estimate the non-
                device costs of both the Corvia Medical interatrial shunt procedure and
                the V-Wave interatrial shunt procedure. We also plan to combine the
                non-device costs of the procedures with the costs of the interatrial
                shunt device to create a new estimate of the payment rate for HCPCS
                code C9760. HCPCS code C9760 can be used to report any non-randomized,
                non-blinded study related to the implantation of interatrial shunts
                where the device is implanted for every procedure reported.
                 After our review of the public comments, we intend to finalize our
                proposal with modifications. We believe that similar resources and
                device costs are involved with the Corvia Medical interatrial shunt
                procedure and the V-Wave interatrial shunt procedure. Therefore, the
                difference in the payment for HCPCS codes C9760 and C9758 is based on
                how often the interatrial shunt is implanted when each code is billed.
                The Corvia Medical interatrial shunt is implanted every time HCPCS code
                C9760 is billed. Therefore, we will reassign HCPCS code C9760 to New
                Technology APC 1592. We also will implement the commenters' suggestion
                to modify the code descriptor for HCPCS code C9760 to remove the phrase
                ``or placebo control,'' from the descriptor. Details about the HCPCS
                code and its APC assignment are shown in Table 16. The final CY 2021
                payment rate for the Corvia Medical interatrial shunt procedure can be
                found in Addendum B to the final rule.
                [GRAPHIC] [TIFF OMITTED] TR29DE20.028
                j. Supervised Visits for Esketamine Self-Administration (HCPCS Codes
                G2082 and G2083 APCs 1508 and 1511)
                 On March 5, 2019, FDA approved Spravato\TM\ (esketamine) nasal
                spray, used in conjunction with an oral antidepressant, for treatment
                of depression in adults who have tried other antidepressant medicines
                but have not benefited from them (treatment-resistant depression
                (TRD)). Because of the risk of serious adverse outcomes resulting from
                sedation and dissociation caused by Spravato administration, and the
                potential for abuse and misuse of the product, it is only available
                through a restricted distribution system under a Risk Evaluation and
                Mitigation Strategy (REMS). A REMS is a drug safety program that FDA
                can require for certain medications with serious safety concerns to
                help ensure the benefits of the medication outweigh its risks.
                 A treatment session of esketamine consists of instructed nasal
                self-administration by the patient, followed by a period of post-
                administration observation of the patient under direct supervision of a
                health care professional. Esketamine is a noncompetitive N-methyl D-
                aspartate (NMDA) receptor antagonist. It is a nasal spray supplied as
                an aqueous solution of esketamine hydrochloride in a vial with a nasal
                spray device. This is the first FDA approval of esketamine for any use.
                Each device delivers two sprays containing a total of 28 mg of
                esketamine. Patients would require either two (2) devices (for a 56mg
                dose) or three (3) devices (for an 84 mg dose) per treatment.
                 Because of the risk of serious adverse outcomes resulting from
                sedation and dissociation caused by Spravato administration, and the
                potential for abuse and misuse of the product, Spravato is only
                available through a restricted distribution system under a REMS;
                patients must be monitored by a health care provider for at least 2
                hours after receiving their Spravato dose; the prescriber and patient
                must both sign a Patient Enrollment Form; and the product will only be
                administered in a certified medical office where the health care
                provider can monitor the patient. Please refer to the CY 2020 PFS final
                rule and interim final rule for more information about supervised
                visits for esketamine self-administration (84 FR 63102 through 63105).
                 To facilitate prompt beneficiary access to the new, potentially
                life-saving treatment for TRD using esketamine, we created two new
                HCPCS G codes, G2082 and G2083, effective January 1, 2020. HCPCS code
                G2082 is for an outpatient visit for the evaluation and management of
                an established patient that requires the supervision of a physician or
                other qualified health care professional and provision of up to 56 mg
                of esketamine nasal self-administration and includes 2 hours post-
                administration observation. HCPCS code G2082 was assigned to New
                Technology APC 1508 (New
                [[Page 85948]]
                Technology--Level 8 ($601-$700)) with a payment rate of $650.50. HCPCS
                code G2083 describes a similar service to HCPCS code G2082, but
                involves the administration of more than 56 mg of esketamine. HCPCS
                code G2083 was assigned to New Technology APC 1511 (New Technology--
                Level 11 ($901-$1000)) with a payment rate of $950.50.
                 No Medicare OPPS claims had been reported for either HCPCS code
                G2082 or G2083 prior to the CY 2021 OPPS/ASC proposed rule. Therefore,
                we proposed to continue to assign HCPCS code G2082 to New Technology
                APC 1508 and to assign HCPCS code G2083 to New Technology APC 1511. The
                proposed CY 2021 payment rate for esketamine self-administration can be
                found in Addendum B to proposed rule (which is available via the
                internet on the CMS website).
                 Comment: Two commenters supported our proposal.
                 Response: We appreciate the support of the commenters.
                 We have not received any OPPS claims for this code prior to this
                final rule. After reviewing the public comments for this proposal, we
                have decided to implement our proposal without modification to assign
                HCPCS code G2082 to New Technology APC 1508 and to assign HCPCS code
                G2083 to New Technology APC 1511. Details about the HCPCS codes and
                their APC assignments are shown in Table 17. The final CY 2021 payment
                rate for esketamine self-administration can be found in Addendum B to
                the proposed rule (which is available via the internet on the CMS
                website).
                [GRAPHIC] [TIFF OMITTED] TR29DE20.029
                D. APC-Specific Policies
                1. Administration of Lacrimal Ophthalmic Insert Into Lacrimal
                Canaliculus (APC 5692)
                 HCPCS code J1096 (Dexamethasone, lacrimal ophthalmic insert, 0.1
                mg) is a drug indicated ``for the treatment of ocular inflammation and
                pain following ophthalmic surgery.''\4\ Stakeholders assert that this
                drug is administered through CPT code 0356T (Insertion of drug-eluting
                implant (including punctal dilation and implant removal when performed)
                into lacrimal canaliculus, each). Stakeholders also state the drug is
                inserted in a natural opening in the eyelid (called the punctum) and
                that the drug is designed to deliver a tapered dose of dexamethasone to
                the ocular surface for up to 30 days.
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                 \4\ 1 Dextenza. FDA Package Insert. https://www.accessdata.fda.gov/drugsatfda_docs/label/2019/208742s001lbl.pdf.
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                 HCPCS code J1096 is currently on pass-through status and assigned
                to APC 9308 (Dexametha opth insert 0.1 mg) with status indicator ``G''.
                Please see section V.A.5. of this final rule with comment period for
                further information
                [[Page 85949]]
                regarding the pass-through status of J1096. CPT code 0356T is currently
                assigned to status indicator ``Q1,'' indicating conditionally packaged
                payment under the OPPS. Packaged payment applies if a code assigned
                status indicator ``Q1'' is billed on the same claim as a HCPCS code
                assigned status indicator ``S'', ``T'', or ``V''. Accordingly, based on
                the OPPS assigned status indicator, CPT code 0356T is assigned to
                payment indicator ``N1'' in the ASC setting, meaning a packaged
                service/item.
                 We refer readers to Addendum D1 of this final rule for a list of
                OPPS status indicators and their definitions, available via the
                internet on the CMS website. We also refer readers to Addendum AA for
                ASC payment indicator assignments and to Addendum DD1 for payment
                indicator definitions, available via the internet on the CMS website.
                 CPT code 0356T is assigned to APC 5692 (Level 2 Drug
                Administration). With regards to APCs 5691 (Level 1 Drug
                Administration) and APC 5692 (Level 2 Drug Administration), and as
                stated in the CY 2018 OPPS/ASC final rule with comment period, our
                overarching goal is to make OPPS payments for all services paid under
                the OPPS more consistent with those of a prospective payment system and
                less like those of a per-service fee schedule. To achieve this goal, it
                is important that we are consistent in our approach to packaging items
                and services under the established packaging categories. Therefore, in
                the CY 2018 OPPS/ASC final rule with comment period, after
                consideration of the public comments we received, we finalized, without
                modification, the proposed policy to conditionally package low-cost
                drug administration services assigned to APC 5691 and APC 5692 (82 FR
                52391 through 52393). Additionally, conditional packaging for Levels 1
                and 2 Drug Administration services is consistent with the ancillary
                packaging policy that was adopted in the 2015 OPPS/ASC Final Rule with
                comment period (79 FR 66819 through 66822). Accordingly, in the CY 2021
                OPPS/ASC Proposed Rule, we did not propose to change the OPPS status
                indicator assignment and APC placement, or ASC payment indicator
                assignment for CPT code 0356T.
                 Comment: Several commenters had concerns with continuing the same
                APC placement of APC 5692 for CPT code 0356T for CY 2021. Commenters
                generally advocated for separate payment for this CPT code through a
                change in status indicator. A few commenters suggested alternative APC
                placements, such as APC 5501 (Level 1 Extraocular, Repair, and Plastic
                Eye Procedures), APC 5693 (Level 3 Drug Administration), or APC 1504
                (New Technology--Level 4), whereas other commenters requested a larger
                payment in general without a specific APC placement suggestion. Several
                stakeholders commented that the clinical importance of providing HCPCS
                code J1096 to patients is that it reduces ocular pain, inflammation,
                and reduces the burden of topical eyedrop application.
                 Additionally, providers stated that they usually perform CPT code
                0356T to administer HCPCS code J1096 after the conclusion of ophthalmic
                surgeries. Most commonly, providers cited using CPT code 0356T to
                administer HCPCS code J1096 after surgeries such as cataract, glaucoma,
                and corneal surgeries. Commenters believe the procedure is a distinct
                surgical procedure that requires additional operating room time and
                resources. Commenters were concerned that the lack of increased or
                separate payment may reduce access to HCPCS J1096, particularly in the
                ASC setting.
                 Response: We thank commenters for their feedback. After careful
                consideration of the statements from commenters, we continue to believe
                that assignment of CPT code 0356T to APC 5692, with an OPPS status
                indicator ``Q1'' and an associated ASC payment indicator of ``N1'', is
                appropriate based on its clinical and resource use similarity to other
                services assigned to that APC. Commenters have stated that CPT code
                0356T is performed during ophthalmic surgeries such as cataract
                surgeries. We do not find it appropriate to compare CPT code 0356T to
                that of an independent procedure when performed during these other
                ophthalmic surgeries. We continue to believe that conditionally
                packaging the payment for CPT code 0356T into the payment for these
                primary procedures is appropriate. This is consistent with our policy
                to conditionally package low-cost drug administration services assigned
                to APC 5691 (Level 1 Drug Administration) and APC 5692 (Level 2 Drug
                Administration). We note the policy established in the CY 2018 OPPS to
                conditionally package low-cost drug administration services assigned to
                APC 5691 and APC 5692 (82 FR 52391 through 52393). Also, we note that
                the conditional packaging of drug administration supports our
                overarching goal to make payments for all services paid under the OPPS
                and ASC payment system more consistent with those of a prospective
                payment system and less like those of a per-service fee schedule. We
                believe that packaging encourages efficiency and is an essential
                component of a prospective payment system, and that packaging payments
                for items and services that are typically integral, ancillary,
                supportive, dependent, or adjunctive to a primary service is a
                fundamental part of the OPPS.
                 After consideration of the public comments, we are finalizing our
                proposed policy without modification to assign CPT code 0356T to APC
                5692 (Level 2 Drug Administration) with OPPS status indicator ``Q1'' in
                the CY 2021 OPPS. Based on those assignments, we are also finalizing an
                ASC payment indicator for CPT code 0356T of ``N1'' under the CY 2021
                ASC payment system.
                2. Chimeric Antigen Receptor T-Cell (CAR T-Cell) Therapy (APCs 5694,
                9035, 9194, and 9391)
                 Chimeric Antigen Receptor T-Cell (CAR T-cell) therapy is a cell-
                based gene therapy in which T-cells are collected and genetically
                engineered to express a chimeric antigen receptor that will bind to a
                certain protein on a patient's cancerous cells. The CAR T-cells are
                then administered to the patient to attack certain cancerous cells and
                the individual is observed for potential serious side effects that
                would require medical intervention. We refer readers to previous
                discussions in the OPPS/ASC final rules with comment period for
                background regarding the specific CAR T-cell products, in both the CY
                2020 OPPS/ASC final rule with comment period (84 FR 61231 through
                61234) and the CY 2019 OPPS/ASC final rule with comment period (83 FR
                58904 through 58908). In addition, for discussion about CY 2021 OPPS
                payment policies for separately paid drugs with pass-through status
                expiring or continuing in CY 2021, please see sections V.A.4. and
                V.A.5. of this final rule with comment period.
                 The AMA created four Category III CPT codes that are related to CAR
                T-cell therapy, effective January 1, 2019. As discussed in the CY 2019
                OPPS/ASC final rule with comment period (83 FR 58904 through 58908) and
                the CY 2020 OPPS/ASC final rule with comment period (84 FR 61231
                through 61234), we finalized our proposal to assign procedures
                described by CPT codes 0537T, 0538T, and 0539T to status indicator
                ``B'' (Codes that are not recognized by OPPS when submitted on an
                outpatient hospital Part B bill type (12x and 13x)) to indicate that
                the services are not paid under the OPPS. The procedures described by
                CPT codes 0537T, 0538T, and 0539T describe the various steps required
                to collect and
                [[Page 85950]]
                prepare the genetically modified T-cells, and Medicare does not
                generally pay separately for each step used to manufacture a drug or
                biological. We also finalized that the procedures described by CPT code
                0540T would be assigned status indicator ``S'' (Procedure or Service,
                Not Discounted when Multiple) and APC 5694 (Level 4 Drug
                Administration) for CY 2019 and CY 2020, and made no proposal to change
                the assignment for CY 2021. Additionally, the National Uniform Billing
                Committee (NUBC) established CAR T-cell-related revenue codes and a
                value code to be reportable on Hospital Outpatient Department (HOPD)
                claims effective for claims received on or after April 1, 2019.
                 We made no specific proposal related to the CAR T-cell preparation
                codes, as described by CPT codes 0537T, 0538T, 0539T. As listed in
                Addendum B of the CY 2021 OPPS/ASC proposed rule, we proposed to
                continue to assign procedures described by these CPT codes, 0537T,
                0538T, and 0539T, to status indicator ``B'' (Codes that are not
                recognized by OPPS when submitted on an outpatient hospital Part B bill
                type (12x and 13x)) to indicate that the services are not paid under
                the OPPS. We proposed to continue to assign CPT code 0540T to status
                indicator ``S'' (Procedure or Service, Not Discounted when Multiple)
                and APC 5694 (Level IV Drug Administration).
                 Comment: Several commenters opposed our proposal to continue to
                assign status indicator ``B'' to CPT codes 0537T, 0538T, and 0539T for
                CY 2021. Commenters stated that a change in status indicator would be
                appropriate, with a preference for assigning CPT codes 0537T, 0538T,
                and 0539T to status indicator ``Q1''. Commenters believed that the
                procedures these CPT codes describe did not represent the steps
                required to manufacture the CAR T-cell product, as CMS has stated.
                Generally, those advocating for a change in status indicator contend
                this change is necessary to allow services furnished to the patient to
                be eligible for payment and for hospitals to be paid appropriately for
                the services they provide during each step of the CAR T-cell process.
                Commenters asked CMS to release new cost centers and to revise the
                instructions in MLN Matters Article SE19009 accordingly.
                 Response: We thank the commenters for their feedback. CMS does not
                believe that separate or packaged payment under the OPPS is necessary
                for the procedures described by CPT codes 0537T, 0538T, and 0539T for
                CY 2021. The procedures described by CPT codes 0537T, 0538T, and 0539T
                describe the various steps required to collect and prepare the
                genetically modified T-cells and Medicare does not generally pay
                separately for each step used to manufacture a drug or biological
                product. Additionally, we note that CAR T-cell therapy is a unique
                therapy approved as a biologic, with unique preparation procedures,
                that cannot be directly compared to other therapies or existing CPT
                codes. We note that the current HCPCS coding for the currently approved
                CAR T-cell therapies include leukapheresis and dose preparation
                procedures, as these services are included in the manufacturing of
                these biologicals. Therefore, payment for these services is
                incorporated into the drug codes. Please see Table 18 for HCPCS coding
                for CAR T-cell therapies.
                [GRAPHIC] [TIFF OMITTED] TR29DE20.030
                 We note that although there is no payment associated with CPT codes
                0537T, 0538T, and 0539T for reasons stated previously, these codes can
                still be reported to CMS for tracking purposes. We thank commenters for
                their feedback related to cost centers and our guidance contained in
                MLN Matters Article SE19009.\5\ We are not revising this document at
                this time, but appreciate the feedback from stakeholders. Also, we
                would like to note that HOPDs can bill Medicare for reasonable and
                necessary services that are otherwise payable under the OPPS, and we
                believe that the comments in reference to payment for services in
                settings not payable under the OPPS are outside the scope of this
                proposed rule. Accordingly, we are not revising the existing codes for
                CAR T-cell therapies to remove leukapheresis and dose preparation
                procedures, and we are not accepting the recommendations at this time
                to revise the status indicators for procedures described by CPT codes
                0537T, 0538T, and 0539T. We will continue to evaluate and monitor
                payment for CAR T-cell therapies.
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                 \5\ https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/SE19009.pdf.
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                 In summary, after consideration of the public comments we received,
                we are finalizing our proposal to assign status indicator ``B'' to CPT
                codes 0537T, 0538T, and 0539T for CY 2021. Additionally, we are
                continuing our policy from CY 2019 to assign status indicator ``S'' to
                CPT code 0540T for CY 2021. Table 19 below shows the final SI
                [[Page 85951]]
                and APC assignments for HCPCS codes 0537T, 0538T, 0539T, and 0540T for
                CY 2021. For more information on CY 2021 OPPS final status indicators,
                APC assignments, and payment rates for HCPCS codes, including the CAR
                T-cell drug codes, we refer readers to Addendum B to this final rule
                with comment period. In addition, the status indicator definitions can
                be found in Addendum D1 (OPPS Payment Status Indicators for CY 2021) to
                this final rule with comment period. Both Addendum B and D1 are
                available via the internet on the CMS website.
                [GRAPHIC] [TIFF OMITTED] TR29DE20.031
                3. Eustachian Tube Balloon Dilation Procedure (APC 5165)
                 For the CY 2021 update, the CPT Editorial Panel established CPT
                codes 69705 and 69706 to describe the eustachian tube balloon dilation
                (ETBD) surgical procedure effective January 1, 2021. Prior to CY 2021,
                this surgical procedure was described by HCPCS code C9745.
                 In 2017, CMS received a new technology application for the
                transnasal flexible balloon catheter eustachian tube dilation surgical
                procedure, which is associated with the Acclarent Aera Eustachian Tube
                Balloon Dilation System, and established a new code, specifically,
                HCPCS code C9745. Based on the estimated cost for the bilateral
                placement of the eustachian tube balloon dilation devices, we assigned
                the code to APC 5165 (Level 5 ENT Procedures) with a payment rate of
                $4,130.94 effective July 1, 2017. We announced the new code, interim SI
                and APC assignments, and payment rate in the July 2017 quarterly update
                to the OPPS (Transmittal 3783, Change Request 10122, dated May 26,
                2017).
                 For the CY 2018 update, we made no change to the APC assignment and
                continued to assign HCPCS code C9745 to APC 5165 with a payment rate of
                $4,338.79. We note that OPPS payment rates for the CY 2018 update were
                based on claims submitted between January 1, 2016 through December 30,
                2016, that were processed on or before June 30, 2017. Because HCPCS
                code C9745 was established on July 1, 2017, we had no claims data for
                the procedure for use in CY 2018 ratesetting.
                 For the CY 2019 update, based on our analysis of the claims data,
                we made no change to the payment assignment and continued to assign
                HCPCS code C9745 to APC 5165. Specifically, our claims data showed a
                geometric mean cost of approximately $4,385 for HCPCS code C9745 based
                on 217 single claims (out of 218 total claims), which was consistent
                with the geometric mean cost of about $4,462 for APC 5165.
                Consequently, we retained HCPCS code C9745 in APC 5165.
                 Similarly, for CY 2020, we made no change to the APC assignment for
                HCPCS code C9745, consistent with our claims data. Based on claims
                submitted between January 1, 2018 through December 30, 2018, that were
                processed on or before June 30, 2019, the geometric mean cost for HCPCS
                code C9745 was approximately $4,547 based on 577 single claims (out of
                582 total claims), which is in line with the geometric mean cost of
                $4,746 for APC 5165. Therefore, we maintained HCPCS code C9745 in APC
                5165.
                 For CY 2021, we proposed to delete HCPCS code C9745 and assign CPT
                code 69705 to APC 5164 (Level 4 ENT Procedures) with a proposed OPPS
                payment of $2,776.63 and assign CPT code 69706 to APC 5165 (Level 5 ENT
                Procedures) with a proposed OPPS payment of $5,150.60. Because HCPCS
                code C9745 was on the ASC Covered Surgical Procedures list, we also
                proposed to assign CPT code 69705 to ASC payment indicator ``J8''
                (device-intensive) with a proposed ASC payment of $1,564.17. Similarly,
                we proposed to assign CPT code 69706 to ASC payment indicator ``J8''
                (device-intensive) with a proposed ASC payment of $3,453.23. We note
                that CPT codes 69705 and 69706 were listed as placeholder codes 697XX
                and 697X1, respectively, in OPPS Addendum B and ASC Addendum AA to the
                CY 2021 OPPS/ASC proposed rule.
                 Comment: Some commenters expressed concern with the proposed
                assignment to APC 5164 for CPT code 69705 (unilateral procedure) and
                stated that the proposed assignment will negatively affect the
                reimbursement of the procedure in the ASC setting, and ultimately
                decrease access to the procedure. They stated that the major portion of
                the procedure cost is the device used in the procedure, and reported
                the device cost is about $2,180, which is used for each procedure,
                regardless of whether it is a unilateral or bilateral procedure. In
                addition, they stated that in the CY 2021 Physician Fee Schedule (PFS)
                proposed rule, the
                [[Page 85952]]
                estimate for the non-facility payment for CPT codes 69705 and 69706
                includes the full cost of the device kit, specifically, $3,092.81 for
                CPT code 69705 (unilateral) and $3,183.14 for CPT code 69706
                (bilateral). To ensure fair reimbursement for unilateral procedures,
                they recommended that CMS assign both codes to APC 5165. However, in
                the event the recommendation is not accepted, they urged CMS to
                reconsider the device-intensive calculation for CPT code 69705 to
                reflect the cost of the device kit for unilateral procedures in the ASC
                setting; otherwise, commenters contended the ASC payment will be
                reduced below the actual cost of the device kit.
                 Response: Our medical advisors advised that the procedure described
                by CPT code 69705, while performed in the hospital outpatient setting,
                will primarily be performed in either the physician office or ASC
                setting. To ensure that Medicare beneficiaries have access to the
                procedure, we believe that it is appropriate to reassign CPT code 69705
                (unilateral) to the same APC as CPT code 69706 (bilateral). That is, we
                believe that reassigning CPT code 69705 to APC 5165 will better reflect
                the device cost to perform this procedure either unilaterally or
                bilaterally when furnished in either the hospital outpatient or the ASC
                setting.
                 In summary, after consideration of the public comments, we are
                finalizing our proposal, without modification, to assign CPT code 69706
                to APC 5165. However, we are finalizing our proposal, with
                modification, to assign CPT code 69705 to APC 5165 for CY 2021. We note
                that we are deleting HCPCS code C9745 on December 31, 2020, since it
                has been replaced with CPT codes 69705 and 69706 effective January 1,
                2021. Table 20 lists the final SI and APC assignments for the two
                codes. The final CY 2021 OPPS payment rate for the codes can be found
                in Addendum B to this final rule with comment period. In addition, we
                refer readers to Addendum D1 of this final rule with comment period for
                the status indicator (SI) meanings for all codes reported under the
                OPPS. Both Addendum B and D1 are available via the internet on the CMS
                website.
                [GRAPHIC] [TIFF OMITTED] TR29DE20.032
                4. Eye-Movement Analysis Without Spatial Calibration (APC 5734)
                 For July 2020, the CPT Editorial Panel established a new CPT code
                0615T, effective July 1, 2020, to describe eye-movement analysis
                without spatial calibration that involves the use of the EyeBOX system
                as an aid in the diagnosis of concussion, also known as mild traumatic
                brain injury (mTBI). The EyeBOX is intended to measure and analyze eye
                movements as an aid in the diagnosis of concussion within one week of
                head injury in patients 5 through 67 years of age in conjunction with a
                standard neurological assessment of concussion. A negative EyeBOX
                classification may correspond to eye movement that is consistent with a
                lack of concussion. A positive EyeBOX classification corresponds to eye
                movement that may be present in both patients with or without a
                concussion.
                 We included this new code in the July quarterly OPPS update CR
                (Transmittal 10224, Change Request 11814, dated July 15, 2020).
                Effective July 1, 2020, we assigned CPT code 0615T to APC 5734 (Level 4
                Minor Procedures) with status indicator ``Q1'' (conditionally packaged)
                and a CY 2020 OPPS payment rate of $109.03 as reflected in the Addendum
                B to the July 2020 quarterly OPPS update.
                 As displayed in the Addendum B to the 2021 ASC/OPPS Proposed Rule,
                we proposed to assign 0615T to APC 5734 with status indicator ``Q1''
                and a proposed OPPS payment rate of $113.23 for CY 2021. We also
                assigned this code to comment indicator ``NP'' in Addendum B to
                indicate that this code is new effective July 1, 2020, and that public
                comments would be accepted on its proposed status indicator assignment.
                 Comment: A commenter was concerned that what they believed was a
                lack of adequate, separate payment would strongly discourage hospitals
                from providing this important new technology to their patients. The
                commenter urged CMS to: (1) Change the APC assignment of CPT code 0615T
                to APC 5722 (Level 2 Diagnostic Tests and Related Services) with a
                proposed OPPS payment rate of $269.85 and (2) change the status
                indicator for the service to ``S'' to allow for a separate payment
                under the OPPS.
                 The commenter asked that CMS assign CPT code 0615T to APC 5722 for
                two reasons: (1) The current and proposed reimbursement rates for
                services in APC 5734 are inadequate to pay hospitals appropriately for
                the costs
                [[Page 85953]]
                of furnishing the EyeBOX test; and (2) the clinical characteristics and
                resources associated with 0615T are more similar to codes in APC 5722
                than services in APC 5734.
                 Response: We note that OPPS payment rates for the CY 2021 final
                rule are based on claims submitted between January 1, 2019 through
                December 31, 2019, that were processed on or before June 30, 2020.
                Because HCPCS code 0615T was established on July 1, 2020, we did not
                have claims data for CY 2021 OPPS ratesetting.
                 In terms of the resource similarity of CPT code 0615T to other eye-
                related diagnostic tests that are assigned to APC 5722, such as CPT
                code 92240 (Indocyanine-green angiography (includes multiframe imaging)
                with interpretation and report, unilateral or bilateral) and CPT code
                92242 (Fluorescein angiography and indocyanine-green angiography
                (includes multiframe imaging) performed at the same patient encounter
                with interpretation and report, unilateral or bilateral), the EyeBOX
                test does not involve an injection. Therefore, we do not believe that
                the resource costs for CPT code 0615T are comparable to other eye-
                related diagnostic tests in APC 5722. Updated claims data for this
                final rule with comment period indicate that the geometric mean cost of
                APC 5722 is $257.61, while the geometric mean cost of APC 5734 is
                $109.05. However, because there were no claims for CPT code 0615T in
                the CY 2021 updated data set, we have decided not to make any changes
                to the proposed CY 2021 APC assignment and to assign the code to the
                APC with the lower geometric mean cost. Based on these findings, we
                believe that maintaining assignment of APC 5734 for CPT code 0615T for
                CY 2021 is appropriate.
                 In response to the comment related to status indicator ``Q1'', we
                note that status indicator ``Q1'' listed in the OPPS Addendum D1 to
                this 2021 OPPS/ASC final rule with comment period allows for up to
                three potential payment assignments:
                 Packaged APC payment if billed on the same claim as a
                HCPCS code assigned status indicator ``S'', ``T'', or ``V''; or
                 Composite APC payment if billed with specific combinations
                of services based on OPPS composite-specific payment criteria. Payment
                is packaged into a single payment for specific combinations of
                services; or
                 In other circumstances, payment is made through a separate
                APC payment.
                 Depending on the procedures submitted on the claim and whether the
                procedure described by CPT code 0615T is performed with any other
                services on the same day, the procedure described by CPT code 0615T may
                be paid separately through an APC (in this case APC 5734) or receive
                packaged payment when accompanying a more significant procedure that is
                reported on the claim. Based on the nature of this procedure, which may
                be performed by itself or with other procedures on the same claim, we
                believe that the continued assignment of status indicator ``Q1'' is
                appropriate for the procedure described by CPT code 0615T.
                 As we do every year, we will reevaluate the APC assignment for CPT
                code 0615T for the next rulemaking cycle. We note that we review, on an
                annual basis, the APC assignments for all services and items paid under
                the OPPS.
                 After consideration of the public comments we received, we are
                finalizing our proposal, without modification, to assign CPT code 0615T
                to status indicator ``Q1'' and APC 5734 for CY 2021. The final CY 2021
                payment rate for the CPT code can be found in Addendum B to this final
                rule with comment period (which is available via the internet on the
                CMS website).
                5. Gynecologic Procedures and Services (APC 5416)
                 For CY 2021, we proposed to continue to assign CPT code 0404T
                (Transcervical uterine fibroid(s) ablation with ultrasound guidance,
                radiofrequency) to APC 5416 (Level 6 Gynecologic Procedures) with a
                proposed payment of $6,929.92. CPT code 0404T describes the procedure
                associated with the Sonata System, which is used for the treatment of
                symptomatic uterine fibroids. We note that CPT code 0404T was effective
                on January 1, 2016.
                 Comment: Several commenters stated that the proposed APC payment
                rate is insufficient to compensate hospital outpatient departments for
                the resources needed to perform the procedure. They indicated that the
                combined cost of the single-use handpiece, capital equipment, supplies,
                screening labs, anesthesia, medication, and facility and personnel
                overhead are higher than the OPPS payment rate. The commenters asserted
                that the proposed payment will significantly limit patient access to
                the procedure because it does not cover the total cost of the surgery.
                One commenter acknowledged that the proposed payment appropriately
                reimburses for hospital outpatient costs, but believed the ASC proposed
                payment of $2,763.68 significantly underpays for the procedure in the
                ASC setting. The same commenter explained that CMS has no claims data
                for the code because the procedure is rarely performed on Medicare
                patients, and also due to the device's commercial availability.
                Although the CPT code was effective January 2016, because of
                manufacturing issues, the company was unable to submit their FDA
                application until a couple of years later. The company eventually
                received market approval from the FDA in August 2018 and the device was
                commercially available in late summer/early Fall 2019. To ensure access
                to the procedure, the commenters suggested reassigning CPT code 0404T
                to either:
                 APC 5362 (Level 2 Laparoscopy and Related Services) with a
                proposed payment rate of $9,041.94 because the procedure cost is
                similar to these procedures:
                 [cir] CPT code 43210 (Esophagogastroduodenoscopy, flexible,
                transoral; with esophagogastric fundoplasty, partial or complete,
                includes duodenoscopy when performed);
                 [cir] CPT code 50593 (Ablation, renal tumor(s), unilateral,
                percutaneous, cryotherapy);
                 [cir] CPT code 58546 (Laparoscopy, surgical, myomectomy, excision;
                5 or more intramural myomas and/or intramural myomas with total weight
                greater than 250 g); and
                 [cir] CPT code 58674 (Laparoscopy, surgical, ablation of uterine
                fibroid(s) including intraoperative ultrasound guidance and monitoring,
                radiofrequency), or
                 APC 5376 (Level 6 Urology and Related Services) with a
                proposed payment of $8,395.62 because the procedure cost is similar to
                these procedures:
                 [cir] CPT code 55873 (Cryosurgical ablation of the prostate
                (includes ultrasonic guidance and monitoring); and
                 [cir] CPT code 0421T (Transurethral waterjet ablation of prostate,
                including control of post-operative bleeding, including ultrasound
                guidance, complete (vasectomy, meatotomy, cystourethroscopy, urethral
                calibration and/or dilation, and internal urethrotomy are included when
                performed)).
                 Response: For CY 2021, OPPS payments are developed based on claims
                submitted between January 1, 2019 through December 31, 2019, and
                processed through June 30, 2020. For this final rule with comment
                period, we have no claims data for this code. As explained by a
                commenter, CPT code 0404T is a procedure not commonly performed on
                Medicare beneficiaries. In addition, we disagree with the commenters'
                assessment that CPT code
                [[Page 85954]]
                0404T is similar to the codes they have referenced. CPT code 0404T is
                not a urology, kidney, or esophagogastroduodenum-related procedure, nor
                is it a laparoscopy procedure. We believe that the code is
                appropriately placed in APC 5416 based on its clinical homogeneity and
                resource costs to the other gynecology-related procedures in the APC.
                We agree with the commenter who believed that the proposed OPPS payment
                for the service is adequate to cover the cost of providing the
                procedure in the hospital outpatient setting.
                 For a discussion on the ASC payment for CPT code 0404T, we refer
                readers to the ASC payment section of this CY 2021 OPPS/ASC final rule
                with comment period, specifically, section XIII. (Updates to the
                Ambulatory Surgical Center (ASC) Payment System).
                 Comment: Some commenters suggested designating CPT code 0404T as
                device-intensive under the OPPS so that facilities can be paid
                appropriately for furnishing the procedure in the ASC setting. They
                also recommended establishing an offset percentage that is higher than
                the default 31 percent based on invoice pricing data provided to CMS by
                the device manufacturer so that payment for the procedure in the ASC
                setting includes the cost of the device.
                 Response: We refer readers to section IV. B. (Device-Intensive
                Procedures) for the discussion related to the OPPS device offset for
                the code. For a discussion of the ASC procedures designed as device
                intensive, please see section XIII.C.1. of this final rule with comment
                period.
                 In summary, after consideration of the public comments, we are
                finalizing our proposal, without modification, and assigning CPT code
                0404T to APC 5416 for CY 2021. The final CY 2021 OPPS payment rate for
                the code can be found in Addendum B to this final rule with comment
                period. In addition, we refer readers to Addendum D1 of this final rule
                with comment period for the status indicator (SI) assignments for all
                codes reported under the OPPS. Both Addendum B and D1 are available via
                the internet on the CMS website.
                6. Hemodialysis Arteriovenous Fistula (AVF) Procedures (APC 5194)
                 For CY 2019, based on two new technology applications received by
                CMS for hemodialysis arteriovenous fistula creation, CMS established
                two new HCPCS codes to describe the surgical procedure associated with
                the two technologies since no specific CPT codes exist. Specifically,
                CMS established HCPCS code C9754 for the Ellipsys System and C9755 for
                the WavelinQ System effective January 1, 2019. The complete descriptors
                for both codes are as follows:
                 C9754 (Creation of arteriovenous fistula, percutaneous;
                direct, any site, including all imaging and radiologic supervision and
                interpretation, when performed and secondary procedures to redirect
                blood flow (e.g., transluminal balloon angioplasty, coil embolization,
                when performed))
                 C9755 (Creation of arteriovenous fistula, percutaneous
                using magnetic-guided arterial and venous catheters and radiofrequency
                energy, including flow-directing procedures (e.g., vascular coil
                embolization with radiologic supervision and interpretation, when
                performed) and fistulogram(s), angiography, venography, and/or
                ultrasound, with radiologic supervision and interpretation, when
                performed)
                 Both HCPCS codes were assigned to APC 5193 (Level 3 Endovascular
                Procedures) with a payment rate of $9,669.04 for CY 2019. For CY 2020,
                as discussed in the CY 2020 OPPS/ASC final rule with comment period (84
                FR 61246), we revised the assignment for both codes to APC 5194 (Level
                4 Endovascular Procedures) with a payment rate of $15,939.97.
                 For the July 2020 update, we deleted HCPCS codes C9754 and C9755 on
                June 30, 2020, and replaced them with G-codes effective July 1, 2020 to
                enable physicians to report the procedures when performed in the
                physician office setting. Specifically, we deleted HCPCS code C9754 on
                June 30, 2020 because it was replaced with HCPCS code G2170 effective
                July 1, 2020. Similarly, we deleted HCPCS code C9755 on June 30, 2020
                because it was replaced with HCPCS code G2171 effective July 1, 2020.
                Below are the complete descriptors for HCPCS codes G2170 and G2171:
                 G2170 (Percutaneous arteriovenous fistula creation (AVF),
                direct, any site, by tissue approximation using thermal resistance
                energy, and secondary procedures to redirect blood flow (e.g.,
                transluminal balloon angioplasty, coil embolization) when performed,
                and includes all imaging and radiologic guidance, supervision and
                interpretation, when performed)
                 G2171 (Percutaneous arteriovenous fistula creation (AVF),
                direct, any site, using magnetic-guided arterial and venous catheters
                and radiofrequency energy, including flow-directing procedures (e.g.,
                vascular coil embolization with radiologic supervision and
                interpretation, when performed) and fistulogram(s), angiography,
                enography, and/or ultrasound, with radiologic supervision and
                interpretation, when performed)
                 We deleted the C-codes based on concerns from stakeholders that
                physicians are reluctant to perform the Ellipsys procedure in the
                physician office setting without a specific HCPCS code. With the
                deletion of the C-codes, we crosswalked the APC assignment and payment
                rate for the C-codes to the new G-codes. We note that C-codes are not
                reportable on Medicare physician office claims, whereas G-codes are
                reportable on physician office, hospital outpatient, and ambulatory
                surgical center claims.
                 For CY 2021, we proposed to reassign HCPCS code G2170 (Ellipsys
                System) from APC 5194 to APC 5193 (Level 3 Endovascular Procedures)
                with a proposed payment rate of $10,222.32, based on the latest claims
                data. Specifically, based on the predecessor HCPCS code C9754, our
                claims data for the proposed rule showed a HCPCS geometric mean cost of
                approximately $10,068 based on 57 single claims (out of 57 total
                claims), which is comparable to the geometric mean cost of about $9,850
                for APC 5193 rather than the geometric mean cost of approximately
                $15,753 for APC 5194. In addition, we proposed to maintain the
                assignment to APC 5194 for G2171 (WavelinQ System) because our claims
                data for the proposed rule, based on predecessor HCPCS code C9755,
                showed a geometric mean cost of about $13,519 based on 182 single
                claims (out of 186 total claims), which is consistent with the
                geometric mean cost of about $15,753 for APC 5194.
                 At the August 31, 2020 HOP Panel Meeting, a presenter requested
                that we maintain the assignment for the WavelinQ procedure (HCPCS code
                G2170) to APC 5194. The presenter stated that the number of single
                claims is too small to support a reassignment to APC 5193. Based on the
                discussion during the meeting, the HOP Panel recommended that CMS
                maintain the assignment of HCPCS code G2170 in APC 5194 for CY 2021.
                 Comment: Most commenters opposed the reassignment to APC 5193 for
                G2170 and suggested that we continue to assign the code to APC 5194
                based on the HOP Panel recommendation at the August 31, 2020 meeting.
                They argued that the number of single claims on which to base the
                reassignment is too low, and recommended that CMS maintain the current
                assignment to APC 5194 until more claims data can be gathered for
                appropriate APC assignment. However, one commenter suggested that we
                reassign HCPCS code G2170 to APC 5193 based on the 1-year
                [[Page 85955]]
                claims data, and stated that the HOP Panel recommendation to maintain
                the assignment to APC 5194 is not supported by the hospital claims
                data. This same commenter suggested that the 1-year hospital claims
                data does support maintaining HCPCS code G2171 in APC 5194. One
                commenter reported that reassigning the code to APC 5193 would be
                insufficient to cover the cost of the procedure in the ASC setting.
                According to the commenter, the proposed CY 2021 ASC payment for HCPCS
                code G2170 is $5,887.63, which does not cover the cost of the $6,000
                device used in the procedure.
                 Response: As noted above, HCPCS codes G2170 and G2171 are two
                technologies used for hemodialysis arteriovenous fistula creation. We
                note that these procedures are furnished to dialysis patients with
                chronic kidney disease, which affects thousands of Medicare
                beneficiaries. To ensure Medicare access to these dialysis-related
                procedures in both the hospital outpatient and ASC settings, which is
                in line with various HHS initiatives, including the HHS Initiative on
                ``Advancing American Kidney Health'', we believe that we should
                maintain both codes in APC 5194 for CY 2021. In addition, maintaining
                the assignment to APC 5194 for both codes is consistent with the HOP
                Panel's recommendation at the August 31, 2020 meeting. Moreover, given
                the low frequency of claims for HCPCS code G2170 (predecessor HCPCS
                code C9754), we also reviewed the arithmetic mean and median costs for
                the code, as we would do for New Technology APC services with fewer
                than 100 claims. We noted that HCPCS code G2170 and HCPCS code G2171
                (predecessor HCPCS code C9755) have very similar median costs, and
                combined with the low claims data for HCPCS code G2170, the fact that
                this is the first year of claims data available for these services, as
                well as the public comments and the HOP Panel recommendation, we
                believe that it would be inappropriate to assign these two services to
                different APCs. As a result, we are using 1833(t)(2)(E) to assign HCPCS
                code G2170 (predecessor HCPCS code C9754) to APC 5194 because its cost
                is similar to HCPCS code G2171 and both procedures are performed for
                ESRD patients that need dialysis. Therefore, we are using our equitable
                adjustment authority under section 1833(t)(2)(E) of the Act, which
                states that the Secretary shall establish, in a budget neutral manner,
                other adjustments as determined to be necessary to ensure equitable
                payments, to assign G2170 to APC 5194. We note that we review, on an
                annual basis, the APC assignments for all services and items paid under
                the OPPS, and continue to monitor the updated claims data for these
                codes as they become available.
                 In summary, after consideration of the public comments, we are
                finalizing our proposal with modification. Specifically, we are
                finalizing our APC proposal to assign HCPCS code G2171 to APC 5194, and
                assigning HCPCS code G2170 to APC 5194 for CY 2021 using our equitable
                adjustment authority. The final CY 2021 OPPS payment rates for the
                codes can be found in Addendum B to this final rule with comment
                period. In addition, we refer readers to Addendum D1 of this final rule
                with comment period for the status indicator (SI) meanings for all
                codes reported under the OPPS. Both Addendum B and D1 are available via
                the internet on the CMS website.
                7. Health and Behavior Services (APC 5822)
                 For CY 2021, we proposed to revise the payment rate associated with
                APC 5822 (Level 2 Health and Behavior Services) from $78.54 to $75.26
                based on the latest OPPS claims data.
                 Comment: Some commenters expressed concern with the proposed
                payment decrease for APC 5822. Several commenters noted that the APC
                includes a number of needed behavioral health services. Those services
                include group therapy as well as outpatient programs that are less
                intensive than PHPs but are still important for those who may not need
                a full day of treatment all week, but who still require substantial
                support. The commenters noted that the proposed payment rate decrease
                of $3.10 per group per patient equates to a reduction of approximately
                $9.30 per patient per day and that group psychotherapy makes up well
                over 95 percent of the services provided by programs under Hospital
                Partial Hospitalization Services. The commenters urged CMS to reexamine
                the data used in developing the payment for APC 5822. Other commenters
                requested we reconsider the proposed 4.2 percent payment rate decrease
                for APC 5822.
                 Response: The CY 2021 OPPS payment rates are based on claims
                submitted January 1, 2019 through December 31, 2019, processed through
                June 30, 2020. Based on our evaluation of the claims data for this
                final rule with comment period, the geometric mean cost of APC 5822 is
                approximately $72.94 based on 1,069,622 single claims (out of 1,085,044
                total claims).
                 Based on our review, we have no reason to believe that the services
                are miscoded. In addition, based on our analysis of the CY 2021 claims
                data used for this final rule with comment period, we are unable to
                determine whether facilities are misreporting the services. It is
                generally not our policy to judge the accuracy of provider coding and
                charging for purposes of ratesetting. We rely on providers to
                accurately report the use of HCPCS codes in accordance with their code
                descriptors and CPT and CMS instructions, and to report services on
                claims and charges and costs for the services on their Medicare
                hospital cost report appropriately. Also, we generally do not specify
                the methodologies that providers use to set charges for this or any
                other service. Furthermore, we state in Chapter 4 of the Medicare
                Claims Processing Manual that it is extremely important that facilities
                report all HCPCS codes consistent with their descriptors; CPT and/or
                CMS instructions; and correct coding principles, and that all charges
                for services they furnish, whether payment for the services is made
                separately paid or is packaged, are reported to enable CMS to establish
                future ratesetting for OPPS services. Therefore, we are finalizing our
                proposal, without modification, for APC 5822.
                8. High-Density Lipoprotein (HDL) Therapy (APC 5243)
                 For CY 2021, we proposed to continue to assign CPT code 0342T
                (Therapeutic apheresis with selective hdl delipidation and plasma
                reinfusion) to APC 5243 (Level 3 Blood Product Exchange and Related
                Services) with a proposed payment of $4,074.81.
                 Comment: One commenter reported that their company expects FDA
                Humanitarian Device Exemption approval in Q4 of 2020 for its ``PDS-2
                System,'' an HDL Therapy system that is designed to reduce plaque in
                coronary arteries and increase HDL levels in patients diagnosed with
                homozygous familial hypercholesterolemia (HoFH). The commenter
                indicated that the code associated with their device is CPT code 0342T.
                The commenter stated that they intend to apply to CMS for a new
                technology APC in early 2021. According to the commenter, the cost of
                the therapy described by CPT code 0342T is $77,100. The commenter
                suggested that the proposed payment of $4,074.81 for APC 5243 (Level 3
                Blood Product Exchange and Related Services) and $37,470.54 for APC
                5244 (Level 4 Blood Product Exchange and Related Services) does not
                capture the cost of providing the therapy, and
                [[Page 85956]]
                consequently, the company intends to submit an application for a new
                technology APC in 2021.
                 Response: We thank the commenter for making us aware of their
                intent to submit a new technology APC application. Once we receive the
                application, we will review it and make the appropriate determination.
                9. Imaging With and Without Contrast (APCs 5523, 5524, 5571, 5572, and
                5573)
                a. Cardiac Computed Tomography (CT) (APC 5571)
                 For CY 2021, we proposed to continue to assign the following
                cardiac CT exam codes to APC 5571 (Level 1 Imaging with Contrast) with
                a proposed payment rate of $181.41.
                 75572 (Computed tomography, heart, with contrast material,
                for evaluation of cardiac structure and morphology (including 3d image
                postprocessing, assessment of cardiac function, and evaluation of
                venous structures, if performed))
                 75573 (Computed tomography, heart, with contrast material,
                for evaluation of cardiac structure and morphology in the setting of
                congenital heart disease (including 3d image postprocessing, assessment
                of lv cardiac function, rv structure and function and evaluation of
                venous structures, if performed))
                 75574 (Computed tomographic angiography, heart, coronary
                arteries and bypass grafts (when present), with contrast material,
                including 3d image postprocessing (including evaluation of cardiac
                structure and morphology, assessment of cardiac function, and
                evaluation of venous structures, if performed))
                 We received many comments related to our proposed payment for the
                cardiac CT codes. Below is a summary of the public comments and our
                responses to the comments.
                 Comment: Many commenters opposed the assignment of CPT codes 75572,
                75573, and 75574, which are the codes that describe cardiac CT exams,
                to APC 5571. They stated that the proposed CY 2021 OPPS payment rate of
                $181.41 for APC 5571 is inadequate to cover the total cost of providing
                the service. They also indicated that the proposed payment will result
                in decreased reimbursement for cardiac CT for the fourth consecutive
                year. Commenters were particularly concerned with the proposed payment
                for CPT code 75574, for which, according to the commenters, the payment
                rate has decreased by 30 percent over the past 3 years. They reported
                that the cardiac CT exam is a complex exam and more time-consuming to
                perform and interpret than any other type of contrast CT scan. They
                also believe that the resource costs required to perform cardiac CT
                scans are similar to the tests that are assigned to APC 5573 rather
                than APC 5571. They noted that the low payment for the test limits
                patient access, and requested that CMS take action to increase
                reimbursement to levels in line with the actual testing costs. The
                commenters requested an APC reassignment for all three codes.
                Specifically, the commenters suggested reassigning CPT codes 75572 and
                75573 to APC 5572 and CPT code 75574 to APC 5573. Most of the
                commenters reported that cardiac CT scans are more resource intensive
                than other CT and x-ray scans and are similar to other cardiac stress
                imaging modalities like nuclear stress testing; therefore, cardiac CT
                scans should be reimbursed accordingly.
                 Another commenter reported that the test described by CPT code
                75574 generally takes about four times longer to perform than a CT scan
                of the thorax with contrast that is described by CPT code 71260
                (Computed tomography, thorax; with contrast material(s)) and also
                assigned to APC 5571. The commenters noted that based on clinical
                indications and performance/interpretation, CPT code 75574 is very much
                like a SPECT nuclear scan, which is described by CPT code 78452
                (Myocardial perfusion imaging, tomographic (spect) (including
                attenuation correction, qualitative or quantitative wall motion,
                ejection fraction by first pass or gated technique, additional
                quantification, when performed); multiple studies, at rest and/or
                stress (exercise or pharmacologic) and/or redistribution and/or rest
                reinjection) and assigned to APC 5593 (Level 3 Nuclear Medicine and
                Related Services) with a proposed payment rate of $1,336.28, rather
                than a CT scan of the thorax. The commenters further asserted that
                cardiac CT scans prior to invasive angiography lead to lower
                utilization of cardiac catheterization, PCI, and costs.
                 Response: Payments under the OPPS are based on our analysis of the
                latest available claims and cost report data submitted to Medicare. We
                have many years of claims data for CPT codes 75572, 75573, and 75574.
                The AMA established specific CPT codes for cardiac CT services
                beginning in 2006 when they were first described by Category III codes.
                The Category III CPT codes were subsequently deleted on December 31,
                2009, and replaced with Category I CPT codes 75572, 75573, and 75574,
                which were effective on January 1, 2010. Because OPPS payments are
                updated every year based on our analysis of the latest claims data, the
                payment rates have varied each year based on that data.
                 For CY 2021, OPPS payments are based on claims submitted between
                January 1, 2019 through December 31, 2019, that were processed on or
                before June 30, 2020. Based on our evaluation of the claims data for
                this final rule, the geometric mean costs for the cardiac CT scan codes
                range between $157 and $196. Specifically, as shown in Table 21, our
                analysis show a geometric mean cost of approximately $157 for CPT code
                75572 based on 14,262 single claims, approximately $194 for CPT code
                75573 based on 317 single claims, and approximately $196 for CPT code
                75574 based on 32,556 single claims. Based on the geometric mean costs
                for these codes, we do not believe that CPT codes 75572, 75573, and
                75574 utilize similar resources as the exams assigned to APC 5572 or
                APC 5573. The geometric mean costs for the tests placed in APC 5571
                range between $157 and $196, while the tests in APC 5572 range between
                $265 and $510, and for APC 5573, between $534 and $961.
                 In addition, our data shows that the resources associated with
                cardiac CT exams are unlike those of single photon emission CT (SPECT)
                nuclear scans (CPT code 78452). As listed in Table 21, our data shows
                that SPECT nuclear scans are more often performed on Medicare patients
                than cardiac CT exams. Specifically, CPT code 78452 shows a geometric
                mean cost of approximately $1,288 based on 591,344 single claims
                compared to 47,135 single claims for cardiac CT (CPT codes 75572,
                75573, and 75574). Although the commenters have indicated that the
                resource costs associated with cardiac CT exams are similar to SPECT
                nuclear scans, our analysis of the latest OPPS claims data reveal
                otherwise. Similarly, we found the same results for nuclear stress
                tests (CPT codes 93350 and 93351). That is, that the estimated resource
                costs to perform nuclear stress tests are higher than for cardiac CT.
                As noted in Table 21, the geometric mean costs for nuclear stress test
                range between $529 and $671 based on 92,670 single claims for CPT codes
                93350 and 93351, while the geometric mean costs for the cardiac CT
                codes range between $157 and $196.
                [[Page 85957]]
                [GRAPHIC] [TIFF OMITTED] TR29DE20.033
                 We believe our claims data accurately reflects the resources
                associated with providing cardiac CT exams in the HOPD setting. Because
                CPT codes 75572, 75573, and 5574 have been active for some time now, we
                have no reason to believe that HOPDs have issues with coding or
                reporting these exams correctly. We believe that HOPDs have had
                sufficient time to learn how to code and report these services
                accurately using the Category I CPT codes that were established in
                2010.
                 Moreover, we believe that we have substantial claims data for the
                cardiac CT services upon which to base the CY 2021 final OPPS payment
                rates. As noted in Table 22, the total number of claims for these codes
                has increased each year. The historical OPPS payments for cardiac CT
                services does not appear to have affected Medicare beneficiaries'
                access to these services. Given that these services have been paid
                under the OPPS for many years, with payments based on the latest
                hospital claims and Medicare cost report data, we believe we are
                providing a stable and consistent payment methodology that
                appropriately reflects the hospital resources required for cardiac CT.
                [GRAPHIC] [TIFF OMITTED] TR29DE20.034
                 Further, reassigning CPT codes 75572 and 75573 from APC 5571 to APC
                5572, and CPT code 75574 from APC 5571 to APC 5573 would potentially
                significantly overpay for the exams. As noted in Table 23, which shows
                the percent change for each code, reassigning the codes to APC 5572 and
                APC 5573 would pay at a rate that is two and three times the estimated
                cost of the service as reflected in the hospital outpatient claims
                data, and we do not believe that overpaying for the exams is
                appropriate. We note that we monitor our claims data every year to
                assess the appropriateness of the APC assignments for all services
                under the hospital OPPS.
                [[Page 85958]]
                [GRAPHIC] [TIFF OMITTED] TR29DE20.035
                 Every year, since the implementation of the OPPS on August 1, 2000,
                we receive many requests from specialty associations, device
                manufacturers, drug manufacturers, and consultants to increase the
                payments for codes associated with specific drugs, devices, services,
                and surgical procedures. Under the OPPS, one of our goals is to make
                payments that are appropriate for the items and services that are
                necessary for the treatment of Medicare beneficiaries. The OPPS, like
                other Medicare payment systems, is budget neutral and increases are
                generally limited to the annual payment update factor. As a budget
                neutral payment system, the OPPS does not pay the full hospital costs
                of services, however, we believe that our payment rates generally
                reflect the costs that are associated with providing care to Medicare
                beneficiaries. Furthermore, we believe that our payment rates are
                adequate to ensure access to services.
                 Comment: Commenters stated that the current methodology for
                determining OPPS payments disadvantages cardiac CT exams
                disproportionately and requested that CMS exercise its authority to
                create an exception to the current payment methodology for the three
                cardiac CT codes. As an alternative to the current methodology for
                establishing OPPS payment rates, the commenters suggested using the
                general cardiology revenue code to set the payment rates for CPT codes
                75572, 75573, and 75574. They stated that based on their study that
                used claims data from CY 2021 OPPS proposed rulemaking, the use of a
                general cardiology revenue code to set the payment rates matches the
                actual cost of cardiac exams. Specifically, their results reveal a
                geometric mean cost of about $400.55 for CPT code 75572, $479.74 for
                CPT code 75573, and $505.89 for CPT code 75574. Based on their
                analysis, the commenters contended that the geometric mean costs for
                CPT codes 75572 and 75573 justify their assignment to APC 5572, and CPT
                code 75574 to APC 5573.
                 Response: It is our standard ratesetting methodology to rely on
                hospital cost and charge information as it is reported to us through
                the claims and cost report data. We believe that the assignment to APC
                5571 for the cardiac CT codes is fully consistent with our standard
                ratesetting methodology, which provides appropriate incentives for
                efficiency. The OPPS is a prospective payment system that relies on
                hospital charges on the claims and cost report data from the hospitals
                that furnish the services in order to determine relative costs for OPPS
                ratesetting. We believe that the prospective payment rates for CPT
                codes 75572, 75573, and 75574, calculated based on the costs of those
                providers that furnished the services in CY 2019, provide appropriate
                payment to the providers who will furnish the services in CY 2021. We
                continue to believe that this standard ratesetting methodology
                accurately provides payment for cardiac CT exams furnished to hospital
                outpatients.
                 Comment: One commenter recommended that we decrease the payment for
                CPT code 78452 because the commenter believes SPECT is an outdated test
                for chest pain evaluation. The commenter also stated that the test is
                overutilized with no evidence of improvement in patient outcomes.
                 Response: As stated above, we review, on an annual basis, the APC
                assignments for all services and items paid under the OPPS based on our
                analysis of the latest claims data. For CY 2021, OPPS payments are
                based on claims data submitted between January 1, 2019 through December
                30, 2019, that were processed on or before June 30, 2020. Based on our
                analysis, and as shown in Table 21 above, the claims data for CPT code
                78452 show a geometric mean cost of approximately $1,288 based on
                591,344 single claims, which is consistent with the geometric mean cost
                of about $1,272 for APC 5593 (Level 3 Nuclear Medicine and Related
                Services). We believe that CPT code 78452 is appropriately assigned to
                APC 5593. Therefore, based on the latest claims data, we have no basis
                to reassign the SPECT exam CPT code 78452 to another APC with a lower
                payment rate.
                 Comment: Some commenters recommended that CMS allow facilities to
                submit charges for cardiac CT using revenue codes that they believe
                would more accurately estimate costs. They added that CMS should
                provide explicit permission via a line item to allow hospitals to
                submit charges for cardiac
                [[Page 85959]]
                CT tests under the cardiology stress testing revenue/cost centers. They
                noted that CMS guidance for all non-CT and MR CPT codes is for
                hospitals to submit claims utilizing revenue codes that most accurately
                reflect clinical and resource homogeneity. They believe that making an
                exception to the current policy and allowing HOPDs to submit charges
                for cardiac CT tests under the cardiology stress testing revenue/cost
                centers would provide better data in the future that reflects actual
                resource costs for cardiac CT.
                 Response: Hospital outpatient facilities make the final
                determination for reporting the appropriate cost centers and revenue
                codes. As stated in section 20.5 in Chapter 4 (Part B Hospital) of the
                Medicare Claims Processing, CMS ``does not instruct hospitals on the
                assignment of HCPCS codes to revenue codes for services provided under
                OPPS since hospitals' assignment of cost vary. Where explicit
                instructions are not provided, providers should report their charges
                under the revenue code that will result in the charges being assigned
                to the same cost center to which the cost of those services are
                assigned in the cost report.'' Therefore, HOPDs must determine the most
                appropriate cost center and revenue code for the cardiac CT exams.
                 In summary, after consideration of the public comments, we are
                finalizing our proposal, without modification, to assign the cardiac CT
                exam codes, specifically, CPT codes 75572, 75573, and 75574 to APC
                5571. The final CY 2021 OPPS payment rates for the codes can be found
                in Addendum B to this final rule with comment period. In addition, we
                refer readers to Addendum D1 of this final rule with comment period for
                the status indicator (SI) meanings for all codes reported under the
                OPPS. Both Addendum B and D1 are available via the internet on the CMS
                website.
                b. Cardiac Magnetic Resonance (CMR) Imaging (APC 5523, 5524, 5572, and
                5573)
                 For CY 2021, we proposed to continue to assign the following
                cardiac magnetic resonance imaging (MRI) CPT codes to APC 5523, 5524,
                5572, and 5573, respectively:
                 CPT code 75557 (Cardiac magnetic resonance imaging for
                morphology and function without contrast material) to APC 5523 (Level 3
                Imaging without Contrast) with a proposed payment of $235.05;
                 CPT code 75559 (Cardiac magnetic resonance imaging for
                morphology and function without contrast material; with stress imaging)
                to APC 5524 (Level 3 Imaging without Contrast) with a proposed payment
                of $490.52;
                 CPT code 75561 (Cardiac magnetic resonance imaging for
                morphology and function without contrast material(s), followed by
                contrast material(s) and further sequences) to APC 5572 (Level 2
                Imaging with Contrast) with a proposed payment of $375.33; and
                 CPT code 75563 (Cardiac magnetic resonance imaging for
                morphology and function without contrast material(s), followed by
                contrast material(s) and further sequences; with stress imaging) to APC
                5573 (Level 3 Imaging with Contrast) with a proposed payment of
                $722.74.
                 Comment: Some commenters expressed concern with the lack of payment
                stability for cardiac MRI services, specifically, those described by
                CPT codes 75557, 75559, 75561, and 75563. They indicated that the
                payments for these codes have decreased in the last several years, and
                prior to CY 2017, the codes were placed in appropriate APCs. Of
                significant concern are the payment rates for CPT codes 75561 and
                75563, which, according to the commenters, are grouped with services
                that are not clinically similar. The commenters stated that CPT code
                75561 is unlike CT of the abdomen or pelvis or MRI of the neck and
                spine in APC 5572, and instead, the code should be placed in APC 5573
                with comparable services. The commenters further added that CPT code
                75563 is labor-intensive and should be assigned to APC 5593 (Level 3
                Nuclear Medicine and Related Services).
                 Response: Payment changes from one year to the next are unavoidable
                in a relative weight payment system that depends on updated hospital
                charges and costs and in which reassignment of HCPCS codes from one APC
                to another is required by law in cases of 2 times rule violations. The
                statutory design of the OPPS and the evolution in the delivery of
                outpatient hospital services include elements that are responsible for
                some of the fluctuation in payment rates from year to year. The OPPS is
                based on HCPCS coding for which there are hundreds of changes each
                year. In addition, the entry of new technology into a budget neutral
                payment system results in a shift of funds away from previously
                existing services to provide payments for new services. These factors
                are reflections of the changes in services in the outpatient
                department, and shifts in payment mirror those changes.
                 Moreover, section 1833(t)(9)(A) of the Act requires the Secretary
                to review, not less often than annually, and revise the APC groups, the
                relative payment weights, and the wage and other adjustments to take
                into account changes in medical practice, changes in technology, the
                addition of new services, new cost data, and other relevant information
                and factors. Consequently, we review, on an annual basis, the APC
                assignments for all services and items paid under the OPPS based on our
                analysis of the latest claims data. For CY 2021, OPPS payments are
                based on claims data submitted between January 1, 2019 through December
                30, 2019, that were processed on or before June 30, 2020. Based on our
                analysis, and as shown in Table 24, the claims data for CPT code 75557
                show a geometric mean cost of approximately $250 based on 1,941 single
                claims, which is consistent with the geometric mean cost of about $224
                for APC 5523 (Level 3 Imaging Without Contrast). Similarly, the
                geometric mean cost for CPT code 75559 is approximately $403 based on
                57 single claims, which is in line with the geometric mean cost of
                about $470 for APC 5524. For CPT code 75561, the geometric mean cost is
                approximately $426 based on 17,216 single claims, which is in line with
                the geometric mean cost of approximately $359 for APC 5572. We note
                that the geometric mean cost of approximately $426 for CPT code 75561
                is within the range of the significant geometric mean cost for APC
                5572, which is between approximately $265 (for CPT code 74174) and
                about $510 (for CPT code 73525). For CPT code 75563, the geometric mean
                cost is about $761 based on 2,370 single claims, which is close to the
                geometric mean cost of approximately $697 for APC 5573. The geometric
                cost of approximately $761 for CPT code 75563 is within the range of
                the significant geometric mean cost for APC 5573, which is
                approximately between $534 (for CPT code C8923) and about $961 (for
                HCPCS code C8928). Based on the latest claims data, we believe that the
                cardiac MRI codes are appropriately assigned to APCs 5523, 5524, 5572,
                and 5573.
                [[Page 85960]]
                [GRAPHIC] [TIFF OMITTED] TR29DE20.036
                 In addition, based on the commenters' belief that the APC
                assignments for the cardiac MRI codes were appropriately placed prior
                to CY 2017 and not currently, we reviewed the OPPS payment rates from
                CY 2016 through CY 2021. Based on our evaluation, we believe that the
                payments for the cardiac MRI codes are appropriate. The OPPS, like
                other Medicare payment systems, is a prospective payment system based
                on averages. In some individual cases payment exceeds the average cost
                and in other cases payment is less than the average cost. Based on our
                review, we believe that the historical and current payment rates for
                CPT codes 75557, 75559, 75561, and 75563, reflect the geometric mean
                costs associated with the service that are consistent with providing
                cardiac MRI to Medicare beneficiaries in cost efficient settings.
                 Comment: Some commenters expressed concern with the clinical
                homogeneity in the Imaging APCs and requested more transparency. They
                also questioned the criteria for assigning HCPCS codes to specific APCs
                and as well as why the Imaging APCs were reduced from 17 to 7 APCs.
                 Response: Every year we publish an OPPS/ASC proposed rule that
                informs the public of our proposed policies, which include payment
                rates for specific HCPCS codes, for the upcoming year that will become
                effective on January 1. The proposed rules are subject to a 60-day
                public comment period, and comments received by the due dates are
                addressed in the final rules. In the April 7, 2000 OPPS final rule, we
                defined the term ``clinical homogeneity.'' As stated in the April 7,
                2000 final rule, ``The definition of each APC group should be
                `clinically meaningful,' that is, the procedures or services included
                within the APC group relate generally to a common organ system or
                etiology, have the same degree of extensiveness, and utilize the same
                method of treatment, for example, surgical, endoscopic, etc. The
                definition of clinical meaningfulness is, of course, dependent on the
                goal of the classification system. For APCs, the definition of clinical
                meaningfulness relates to the medical rationale for differences in
                resource use. If, on the other hand, classifying patient prognosis were
                the goal, the definition of patient characteristics that were
                clinically meaningful might be different.'' (68 FR 18457).
                 In addition, we believe that the combined annual proposed and final
                rules with their accompanying addenda and cost statistics files, as
                well as the quarterly OPPS and ASC update change request documents that
                are issued by CMS provide substantial transparency on APCs and,
                overall, the OPPS payment system.
                 With regard to the reduction from 17 to 7 APCs for the Imaging
                APCs, we discussed the issue in the CY 2017 OPPS/ASC final rule (81 FR
                79628 through 79631) and stated that the change was based on
                stakeholder recommendations. As a part of our CY 2016 (80 FR 70392
                through 70397) and CY 2017 (81 FR 79628 through 79631) comprehensive
                review of the structure of the imaging APCs and procedure code
                assignments, we examined the APCs that contained imaging services. For
                CY 2017, we proposed and updated the restructuring of the OPPS APC
                groupings for imaging services to more appropriately reflect the costs
                and clinical characteristics of the procedures within each APC grouping
                in the context of the OPPS. We believe that the updated restructuring
                and reconfiguration of the Imaging APCs appropriately reflect the
                similar resource costs and clinical characteristics of the procedures
                within each APC. We also believe that the current broader categories of
                Imaging APCs are appropriate for ratesetting under the OPPS because
                they support greater similarities in clinical characteristics and
                resource use of procedures assigned to the APCs, while improving the
                homogeneity of the APC structure.
                 In summary, after consideration of the public comments, we are
                finalizing our proposal, without modification, to assign CPT code 75557
                to APC 5523, CPT code 75559 to APC 5524, CPT code 75561 to APC 5572,
                and CPT code 75563 to APC 5573. The final CY 2021 payment rates for the
                codes can be found in Addendum B to this final rule with comment
                period. In addition, we refer readers to Addendum D1 of this final rule
                with comment period for the status indicator (SI) meanings for all
                codes reported under the OPPS. Both Addendum B and D1 are available via
                the internet on the CMS website.
                10. IDx-DR: Artificial Intelligence System To Detect Diabetic
                Retinopathy (APC 5733)
                 As stated in a press release issued by the FDA on April 11, 2018,
                the IDx-DR is the ``first medical device to use artificial intelligence
                (AI) to detect greater than a mild level of the eye disease diabetic
                retinopathy in adults who have diabetes'' (https://www.fda.gov/news-events/press-announcements/fda-permits-marketing-artificial-intelligence-based-device-detect-certain-diabetes-related-eye).
                Approved for marketing by the FDA in April 2018, the artificial
                intelligence
                [[Page 85961]]
                algorithm provides a clinical decision without the need for a clinician
                to also interpret the image. A provider uploads the digital images of
                the patient's retinas to a cloud server on which the IDx-DR software is
                installed, and once analysis is completed, the provider is given one of
                the following two results:
                 More than mild diabetic retinopathy detected: Refer to an
                eye care professional; or
                 negative for more than mild diabetic retinopathy; rescreen
                in 12 months.
                 The test itself generally takes about 5 minutes to complete and
                does not need to be performed by a clinician. The test associated with
                the IDx-DR technology received a new CPT code effective January 1,
                2021, specifically, CPT code 92229. With the establishment of the new
                code, the CPT Editorial Panel also revised the descriptors associated
                with existing CPT codes 92227 and 92228 to appropriately differentiate
                them from the IDx-DR test. Below are the complete descriptors for CPT
                codes 92227, 92228, and 92229 for CY 2021. We note that CPT code 92229
                was listed as placeholder 9225X in Addendum B of the CY 2021 OPPS/ASC
                proposed rule:
                 92227 (Imaging of retina for detection or monitoring of
                disease; with remote clinical staff review and report, unilateral or
                bilateral);
                 92228 (Imaging of retina for detection or monitoring of
                disease; with remote physician or other qualified health care
                professional interpretation and report, unilateral or bilateral); and
                 92229 (Imaging of retina for detection or monitoring of
                disease; point-of-care automated analysis and report, unilateral or
                bilateral).
                 As stated in the CY 2021 OPPS/ASC proposed rule (85 FR 48839),
                based on our evaluation of the service, we believe that IDx-DR is a
                diagnostic test that should be payable under the hospital OPPS, similar
                to existing CPT codes 92227 and 92228, which are assigned to APC 5732
                (Level 2 Minor Procedures) and status indicator ``Q1.'' Based on its
                clinical similarity to CPT codes 92227 and 92228, we believe that the
                IDx-DR test should also be assigned to APC 5732. Consequently, for CY
                2021, we proposed to assign the new IDx-DR CPT code to APC 5732 with a
                proposed payment rate of $33.16. We also proposed to assign the code to
                status indicator ``Q1'' to indicate that the code is conditionally
                packaged when performed with another service on the same day. Because
                the IDx-DR test will most often be performed as part of a visit, we
                believed that packaging the cost into the primary service is
                appropriate. We note that under the OPPS, the HOPD E&M visit code
                (G0463; CY 2021 OPPS proposed payment rate of $120.88) is paid
                separately when not billed with a C-APC, and we believed that payment
                would include the cost of providing the IDx-DR test. Generally, our
                policy for tests with minimal costs is to package the cost into the
                primary service.
                 Comment: Some commenters disagreed with the proposed payment amount
                and requested a revision in the assignment from APC 5732 to APC 5734
                (Level 4 Minor Procedures) with a proposed payment rate of $113.23 and
                assignment to status indicator ``Q1''. The commenters reported that the
                service described by new CPT code 92229, which was listed as
                placeholder CPT code 9225X in Addendum B to the CY 2021 OPPS/ASC
                proposed rule), is similar to the technical components described by
                existing CPT code 92250 (Fundus photography with interpretation and
                report), which was proposed for assignment to APC 5734 and status
                indicator ``Q1''. They stated that providers are currently billing on
                an interim basis under CPT code 92250 for the same service. The
                commenters further disagreed with the comparison to CPT code 92227 and
                92228, which are assigned to APC 5732 with a status indicator ``Q1''
                and stated that the tests described by these codes involve human
                readers while the service described by CPT code 92229 is artificial
                (AI) intelligence-related. The commenters indicated that APC 5734,
                which is the APC assigned to the predecessor CPT code 92250, is the
                more appropriate assignment for new CPT code 92229 until sufficient
                Medicare claims data can be collected by CMS to either retain that
                assignment or reassign to another APC.
                 Response: We stated in the CY 2021 OPPS/ASC proposed rule with
                comment period (85 FR 48839) that the CPT Editorial Panel revised the
                descriptors associated with existing CPT codes 92227 and 92228 to
                appropriately differentiate them from the IDx-DR test, which is
                described by new CPT code 92229. We note that the descriptors for all
                three codes involve tests that use imaging of the retina for detection
                or monitoring of disease. Based on the revisions to CPT code 92227 and
                92228 and placement of the new code, we believe that the IDx-DR test is
                similar to CPT code 92227 and 92228. We do not believe that CPT code
                92250, which the commenters reported to be the predecessor code, is
                similar to the IDx-DR test; otherwise, the placement of the new IDx-DR
                code would have been close to CPT code 92250. However, after further
                review and consideration of the issue, we believe that CPT code 92229
                should be assigned to APC 5733 (Level 3 Minor Procedures) rather than
                APC 5732 (Level 2 Minor Procedures).
                 We note that under the OPPS, one of our goals is to make payments
                that are appropriate for the services that are necessary for the
                treatment of Medicare beneficiaries. The OPPS, like other Medicare
                payment systems, is a prospective payment system. The payment rates
                that are established reflect the geometric mean costs associated with
                items and services assigned to an APC and we believe that our payment
                rates generally reflect the costs that are associated with providing
                care to Medicare beneficiaries in cost efficient settings. Moreover, we
                strive to establish rates that are adequate to ensure access to
                medically necessary services for Medicare beneficiaries.
                 For many emerging technologies there is a transitional period
                during which utilization may be low, often because providers are first
                learning about the techniques and their clinical utility. Quite often,
                the requests for higher payment amounts are for new procedures in that
                transitional phase. These requests, and their accompanying estimates
                for expected Medicare beneficiary or total patient utilization, often
                reflect very low rates of patient use, resulting in high per use costs
                for which requesters believe Medicare should make full payment.
                Medicare does not, and we believe should not, assume responsibility for
                more than its share of the costs of procedures based on Medicare
                beneficiary projected utilization and does not set its payment rates
                based on initial projections of low utilization for services that
                require expensive capital equipment.
                 We note that in a budget neutral environment, payments may not
                fully cover hospitals' costs, including those for the purchase and
                maintenance of capital equipment. We rely on hospitals to make their
                decisions regarding the acquisition of high cost equipment with the
                understanding that the Medicare program must be careful to establish
                its initial payment rates for new services that lack hospital claims
                data based on realistic utilization projections for all such services
                delivered in cost-efficient hospital outpatient settings. As the OPPS
                acquires claims data regarding hospital costs associated with new
                procedures, we annually review the claims data and any available new
                information regarding the clinical aspects of new procedures to confirm
                that OPPS payments remain appropriate for procedures as they transition
                into mainstream medical practice.
                [[Page 85962]]
                 Comment: Several commenters requested a reassignment from proposed
                APC 5732 to APC 5733 (Level 3 Minor Procedures) consistent with the APC
                assignment for CPT codes 92285 (External ocular photography with
                interpretation and report for documentation of medical progress (e.g.,
                close-up photography, slit lamp photography, goniophotography, stereo-
                photography) and 92134 (Scanning computerized ophthalmic diagnostic
                imaging, posterior segment, with interpretation and report, unilateral
                or bilateral; retina).
                 Response: The IDx-DR test generally takes about 5 minutes to
                complete and does not need to be performed by a clinician. Based on our
                evaluation of the service, we believe that IDx-DR is a diagnostic test
                that should be payable under the hospital OPPS. We do not believe that
                the services described by CPT code 92285 or 92134 are appropriate
                comparisons for the IDx-DR test because these tests generally involve
                physician work and require approximately 10 minutes to perform.
                However, after further review and deliberation of the issue, we believe
                that CPT code 92229 should be assigned to APC 5733 (Level 3 Minor
                Procedures) rather than APC 5732 (Level 2 Minor Procedures).
                 Comment: Some commenters requested a change in the proposed status
                indicator assignment for CPT code 92229 from ``Q1'' to ``S'' to ensure
                that the test is separately reimbursed when provided with an outpatient
                clinic visit or other service. The commenters indicated that assigning
                the code to ``Q1'' will not support patient access in the outpatient
                setting and will encourage less efficient care. They suggested that
                HOPDs would likely schedule patients to receive only the IDx-DR test
                during an outpatient visit, instead of performing the test during a
                clinic visit, and could discourage hospitals from offering the test
                altogether. They further suggested that diabetic patients receiving
                diabetic care in the outpatient setting would likely be asked to make
                separate appointments as a result of the status indicator ``Q1''
                assignment.
                 Response: With regard to HOPDs potentially scheduling the IDx-DR
                test on a separate day from the clinic visit to receive separate
                payment, we have concerns about this kind of manipulation of patient
                scheduling because such a practice could create an undue burden for
                Medicare beneficiaries. We expect HOPDs to furnish services in the most
                efficient way that meets the needs of the patient. After further review
                and deliberation on the issue, we are revising the status indicator to
                ``S'' to ensure patient access to the test.
                 In summary, after consideration of the public comments, we are
                finalizing our proposal, with modification. Specifically, we are
                assigning CPT code 92229 to APC 5733 with status indicator ``S.'' The
                final CY 2021 payment rate for the code can be found in Addendum B to
                this final rule with comment period. In addition, we refer readers to
                Addendum D1 of this final rule with comment period for the status
                indicator (SI) meanings for all codes reported under the OPPS. Both
                Addendum B and D1 are available via the internet on the CMS website.
                11. Implantable Interstitial Glucose Sensor System (APC 5051 and 5054)
                 For CY 2021, we proposed to assign CPT code 0447T to APC 5051
                (Level 1 Skin Procedures) with a proposed OPPS payment of $182.38. In
                addition, we proposed to assign CPT codes 0446T and 0448T to APC 5053
                (Level 3 Skin Procedures) with a proposed OPPS payment of $530.98. We
                note that the long descriptors for these codes can be found in Table 25
                below.
                 Comment: A commenter agreed with the proposed APC assignment for
                CPT code 0447T to APC 5051 but opposed the proposed assignment for CPT
                codes 0446T and 0448T to APC 5053. The commenter stated that the
                payment for APC 5053 does not include the provision of the service
                associated with the Eversense Implantable Continuous Glucose System
                (CGS), which is a technology that provides real-time glucose
                monitoring. Specifically, the payment for APC 5053 does not account for
                providing the glucose sensor and wireless transmitter, as well as
                implanting, removing, and replacing the glucose sensor. In contrast,
                the commenter believed that CPT codes 0446T and 0448T include those
                costs, referring to the discussion in the CY 2020 PFS final rule (84 FR
                62627). The commenter added that assignment to APC 5053 is
                inappropriate based on clinical homogeneity and resource cost, and
                suggested reassigning CPT codes 0446T and 0448T to either APC 5054
                (Level 4 Skin Procedures) with a proposed OPPS payment of $1,733.06 or
                New Technology APC 1523 (New Technology--Level 23 ($2501-$3000)) with a
                proposed OPPS payment of $2,750.50.
                 Response: Although CPT codes 0446T, 0447T, and 0448T were effective
                January 1, 2017, the Eversense CGM technology was only recently
                approved for marketing by the FDA on June 6, 2019. For CY 2021, OPPS
                payments are developed based on claims submitted between January 1,
                2019 through December 31, 2019, and processed through June 30, 2020.
                For this final rule with comment period, we have no claims data for CPT
                codes 0446T, 0447T, or 0448T for OPPS ratesetting purposes. However,
                based on our review of the issue, and feedback from our medical
                advisors, as well as the expected device costs associated with CPT
                codes 0446T and 0448T as discussed in the CY 2021 PFS proposed rule (85
                FR 50174), we believe that these codes should be reassigned to APC 5054
                (Level 4 Skin Procedures) rather than New Technology APC 1523 (New
                Technology--Level 23 ($2501-$3000)). Because we have neither claims
                data nor specific HOPD costs, including the cost to perform each exam
                (other than the supply cost discussed in the CY 2021 PFS proposed
                rule), we believe that APC 5054 is the most appropriate assignment at
                this time for CPT codes 0446T and 0448T.
                 Therefore, after consideration of the public comment, we are
                finalizing our proposal, with modification. Specifically, we are
                finalizing our proposal for CPT code 0447T and assigning the code to
                APC 5051, however, we are reassigning CPT codes 0446T and 0448T to APC
                5054. Table 25 list the long descriptors and final SI and APC
                assignments for the codes. The final CY 2021 payment rate for the codes
                can be found in Addendum B to this final rule with comment period. In
                addition, we refer readers to Addendum D1 of this final rule with
                comment period for the status indicator (SI) meanings for all codes
                reported under the OPPS. Both Addendum B and D1 are available via the
                internet on the CMS website.
                [[Page 85963]]
                [GRAPHIC] [TIFF OMITTED] TR29DE20.037
                12. Intervertebral Disc Allogeneic Cellular and/or Tissue-Based Product
                Percutaneous Injection (APC 5115)
                 In the CY 2021 OPPS/ASC Proposed Rule, we proposed to assign the
                procedures described by CPT codes 0627T (Percutaneous injection of
                allogeneic cellular and/or tissue-based product, intervertebral disc,
                unilateral or bilateral injection, with fluoroscopic guidance, lumbar;
                first level) and 0629T (Percutaneous injection of allogeneic cellular
                and/or tissue-based product, intervertebral disc, unilateral or
                bilateral injection, with CT guidance, lumbar; first level) to status
                indicator ``T'', APC 5443 (Level 3 Nerve Injections) with a proposed
                OPPS payment rate of $836.26 based on the estimated costs of these
                procedures.
                 We proposed to assign the procedures described by CPT codes 0628T
                (Percutaneous injection of allogeneic cellular and/or tissue-based
                product, intervertebral disc, unilateral or bilateral injection, with
                fluoroscopic guidance, lumbar; each additional level (List separately
                in addition to code for primary procedure) and 0630T (Percutaneous
                injection of allogeneic cellular and/or tissue-based product,
                intervertebral disc, unilateral or bilateral injection, with CT
                guidance, lumbar; each additional level (List separately in addition to
                code for primary procedure) to status indicator ``N'' to indicate that
                they are packaged under OPPS since they are add-on codes. These codes
                were listed as 0X32T, 0X33T, 0X34T, and 0X37T (the 5-digit CMS
                placeholder codes) in Addendum B with the short descriptor and also in
                Addendum O with the long descriptor, to the CY 2021 OPPS/ASC proposed
                rule.
                 We also proposed to assign these codes to comment indicator ``NP''
                in Addendum B to indicate that the codes are new for CY 2021 and that
                public comments would be accepted on the proposed status indicator
                assignment. We note that these codes will be effective January 1, 2021.
                 Comment: Some commenters disagreed with the assignment of codes
                0627T and 0629T to APC 5443 based on what the commenters believed was a
                lack of clinical and resource coherence with other procedures in this
                APC. They stated that CPT codes 0627T and 0629T involve percutaneous
                placement of an allogeneic cellular and/or tissue-based biologics to
                supplement and support deteriorating vertebral discs in patients
                suffering from degenerative disc disease. They believe that these
                procedures are not comparable to a simple nerve injection.
                 One commenter explained that the cost of these procedures is
                significantly higher than the proposed Level 3 Nerve Injection APC
                payment, which is $836.26. The cost of the VIA Disc Matrix Kit used for
                these procedures is $8,000 per kit. Therefore, they believed that a
                higher APC payment level more appropriately covers both the cost of the
                device and the non-device costs of the procedure.
                 Another commenter noted that the non-device costs of procedures
                0627T and 0629T are most appropriately crosswalked to CPT code 22514
                (Percutaneous vertebral augmentation, including cavity creation
                (fracture reduction and bone biopsy included when performed) using
                mechanical device (e.g. kyphoplasty), 1 vertebral body, unilateral or
                bilateral cannulation, inclusive of all imaging guidance; lumbar) that
                is assigned to APC 5114 (Level 4 Musculoskeletal Procedures) with the
                payment rate of $6,368.58.
                 A medical device company recently submitted a new technology APC
                application to CMS for VIA[supreg] Disc Allograft Supplementation
                described by codes 0627T and 0629T and requested that CMS assign CPT
                codes 0627T and 0629 to APC 1575 (New Technology APC Level 38 ($10,001-
                $15,000)) for CY 2021 based on total estimated non-device-related cost
                of APC 5114 ($4,524) plus the device-related costs ($8,000) or $12,524
                which is closest to APC 1575 with a CY 2021 proposed payment rate of
                $12,500.50.
                 The same device company recommended, because 0628T and 0630T are
                add-on codes used in conjunction with their primary procedural codes
                0627T and 0629T, that CMS uses the device-related cost for each
                additional VIA Disc mixing system kit of $8,000 plus an incremental
                thirty minute non-device cost to capture the additional operative time
                and costs in performing a separate intervertebral disc injection.
                 The commenter requested that CMS assign CPT codes 0628T and 0630T
                to APC 1571 (New Technology APC Level 34 ($8001-$8500)) for CY 2021
                since the total estimated cost of these codes is closest to APC 1571
                with a CY 2021 proposed payment rate of $8,250.50.
                [[Page 85964]]
                 Response: Based on our review of the application and input from our
                clinical advisors, we agree that the codes would be appropriately
                placed in an alternative APC that might better reflect their resource
                costs. Our updated claims data for this final rule with comment period
                shows that the geometric mean cost of APC 5115 is about $11,996.45,
                which is more similar to the device and procedure costs associated with
                these codes. Therefore, we are assigning CPT codes 0627T and 0629T to
                comprehensive APC 5115 (Level 5 Musculoskeletal Procedures) with status
                indicator ``J1'' for the CY 2021 OPPS.
                 CPT codes 0628T and 0630T would be assigned to status indicator
                ``N'' under OPPS for CY 2021 because the cost of an add-on code is
                packaged into the primary procedure under OPPS packaging policy, as
                discussed in the CY 2014 OPPS/ASC final rule (78 FR 74942).
                 In summary, after consideration of the public comments and our
                analysis of updated claims data for this final rule and other
                additional information, we are finalizing our proposal related to codes
                0627T and 0629T with modification. Specifically, we are revising the
                APC assignment for CPT codes 0627T and 0629T to APC 5115 and revising
                their status indicator to ``J1'' for the CY 2021 OPPS. For CPT codes
                0628T and 0630T, we are finalizing our proposal without modification
                and maintaining the assignment of status indicator ``N'' to these
                codes.
                 The final CY 2021 OPPS payment rate for CPT codes 0627T and 0629T
                and final status indicator assignment for 0628T and 0630T can be found
                in Addendum B to this final rule with comment period. In addition, we
                refer readers to Addendum D1 of this final rule with comment period for
                the status indicator (SI) meanings for all codes reported under the
                OPPS. Both Addendum B and D1 are available via the internet on the CMS
                website.
                 The final CY 2021 APC and SI assignments for 0627T through 0630T
                can be found in Table 26.
                [GRAPHIC] [TIFF OMITTED] TR29DE20.038
                13. Intraocular Procedures (APCs 5491 Through 5495)
                 In prior years, CPT code 0308T (Insertion of ocular telescope
                prosthesis including removal of crystalline lens or intraocular lens
                prosthesis) was assigned to the APC 5495 (Level 5 Intraocular
                Procedures) based on its estimated costs. In addition, its relative
                payment weight has been based on its median cost under our payment
                policy for low-volume device-intensive procedures because the APC
                contained a low volume of claims. The low volume device-intensive
                procedures payment policy was discussed in more detail in section
                III.C.2. of the proposed rule.
                 In the CY 2019 OPPS, we assigned procedure code CPT code 0308T to
                the APC 5494 (Level 4 Intraocular Procedures) (83 FR 58917 through
                58918). We made this change based on the similarity of the estimated
                cost for the single claim of $12,939.75 to that of the APC
                ($11,427.14). However, this created a discrepancy in payments between
                the OPPS setting and the ASC setting in which the ASC payments would be
                significantly lower than the OPPS payments for the same service because
                of the difference in estimated cost for the encounter determined under
                a comprehensive methodology within the OPPS and the estimated cost
                determined under the payment methodology for device intensive services
                within the ASC payment system.
                 In CY 2020 OPPS/ASC rulemaking, we reestablished APC 5495 (Level 5
                Intraocular Procedures) because we believed that the procedure
                described by CPT code 0308T would be most appropriately placed in the
                APC based on its estimated cost (84 FR 61249 through 61250). Assignment
                of the procedure to the Level 5 Intraocular Procedures APC was
                consistent with its historical placement and would also address the
                large discrepancy in payment for the procedure between the OPPS and the
                ASC payment system. We note that we also implemented a policy where the
                payment for a service when performed in an ASC (84 FR 61399 through
                61400), would be no higher than the OPPS payment rate for the
                [[Page 85965]]
                service when performed in the hospital outpatient setting.
                 In reviewing the claims data available for CY 2021 ratesetting,
                there was a single claim containing the code 0308T that was unable to
                be used for the ratesetting process. In addition, this code and its APC
                have historically had relatively low claims volume for ratesetting
                purposes. While there were no claims usable for ratesetting in the CY
                2021 OPPS proposed data under our standard process, we still needed to
                determine a payment weight for the APC. We believed that the most
                recently available data that we used to set payment for this service in
                the CY 2020 OPPS final rule was an appropriate proxy for both the
                procedure's estimated cost and its relative payment weight. We note
                that the proposed policy to use prior year claims data in ratesetting
                is similar to the application of a geometric mean cost floor to the
                Partial Hospitalization APCs, as initially established in the CY 2020
                OPPS/ASC final rule (84 FR 61339 through 61347). Therefore, we believed
                it was appropriate to propose to use the median cost of $20,229.78 for
                CPT 0308T, calculated from claims data used in the CY 2020 OPPS final
                rule with comment period, to establish the payment weight for the CY
                2021 OPPS for CPT code 0308T. We will continue to monitor the claims
                available for the procedure for ratesetting purposes.
                 To summarize, for CY 2021, we proposed to assign 0308T a payment
                weight based on the most recently available data, from the CY 2020 OPPS
                final rule, and therefore proposed to assign CPT code 0308T to APC 5495
                (Level 5 Intraocular Procedures). Under the proposal, the proposed CY
                2021 OPPS payment rate for the service would be established based on
                the median cost, as discussed in section V.A.5. of the proposed rule,
                because it is a device intensive procedure assigned to an APC with
                fewer than 100 total annual claims within the APC. Therefore, the
                proposed APC assignment for CPT code 0308T would be based on the CY
                2020 OPPS final rule median cost of $20,229.78.
                 Comment: We received one comment supporting our proposal to
                continue to assign the CPT code 0308T to APC 5495 (Level 5 Intraocular
                Procedures) and use the CY 2020 median cost as a proxy for use in
                developing the CY 2021 OPPS payment rate.
                 Response: We appreciate the commenter's support. While the updated
                final rule claims data includes two claims containing the code 0308T,
                those claims are unusable for OPPS ratesetting purposes. Therefore, we
                are finalizing our proposed policy to assign CPT code 0308T to APC 5495
                and use the CY 2020 median cost in determining a CY 2021 OPPS payment
                rate.
                 After consideration of the public comment we received, we are
                finalizing our proposal to continue to assign CPT code 0308T to APC
                5495 (Level 5 Intraocular Procedures) for the CY 2021 OPPS and, as a
                device intensive procedure assigned to an APC with fewer than 100 total
                claims, to establish the CY 2021 OPPS payment rate for the service
                using its CY 2020 median cost. Therefore, the CY 2021 OPPS payment rate
                for CPT 0308T will be based on the CY 2020 OPPS final rule median cost
                of $20,229.78.
                14. Irreversible Electroporation Ablation of Tumors (NanoKnife[supreg]
                System) (APC 5362)
                 Electroporation is a technique in which an electrical field is
                applied to cells in order to increase the permeability of the cell
                membranes through the formation of nanoscale defects in the lipid
                bilayer. The result is creation of nanopores in the cell membrane and
                disruption of intra-cellular homeostasis, ultimately causing cell
                death. After the NanoKnife[supreg] System delivers a sufficient number
                of high voltage pulses; the cells surrounded by the electrodes will be
                irreversibly damaged. This mechanism, which causes permanent cell
                damage, is referred to as Irreversible Electroporation (IRE). The
                NanoKnife[supreg] System with six outputs for the treatment of Stage
                III pancreatic cancer received FDA Breakthrough Device designation on
                January 18, 2018 and approval of an FDA investigational device
                exemption (IDE G180278) on March 28, 2019.
                 The CPT Editorial Panel established two new codes; specifically CPT
                codes 0600T and 0601T, to describe NanoKnife[supreg] System procedures
                effective July 1, 2020. The manufacturer also submitted a new
                technology application requesting new technology APC assignments for
                CPT codes 0600T and 0601T. Based on our review of the new technology
                APC application for the NanoKnife[supreg] System, we provided temporary
                APC and status indicators assignments for 0600T and 0601T. The
                temporary APC and SI assignments were publicly released in the July
                2020 quarterly update to the OPPS (Transmittal 10224, Change Request
                11814, and dated July 15, 2020). In addition, in the CY 2021 OPPS/ASC
                proposed rule with comment period, we proposed to assign the codes to
                APC 5361 (Level 1 Laparoscopy and Related Procedures) with a payment
                rate of $5,148.34, and status indicator `J1'' (Hospital Part B services
                paid through a comprehensive APC) based on clinical and resource
                similarities between 0600T, 0601T and other procedures in the same APC.
                We also proposed to assign these codes to comment indicator (CI) ``NP''
                in Addendum B to the proposed rule to indicate that the codes are new
                for CY 2020 and that public comments would be accepted on their
                proposed APC assignments.
                 Comment: We received one comment from the applicant on the proposed
                assignment to APC 5361 (Level 1 Laparoscopy and Related Procedures).
                According to the applicant, new Category III CPT codes 0600T and 0601T
                should not be assigned to APC 5361 because the clinical characteristics
                and resource costs associated with the procedures are significantly
                different from existing procedures assigned to that APC. The applicant
                noted that under the IPPS, the NanoKnife[supreg] System was estimated
                to have a technology added cost of approximately $11,086, and that the
                procedures for which the system would apply generally were not
                significantly different in the inpatient and outpatient settings. They
                believe that the codes would be more appropriately placed in New
                Technology APC 1576 (New Technology--Level 39 ($15,001-$20,000)) with a
                payment rate of $17,500.50, based on the estimated costs and complexity
                of the procedures.
                 Response: We thank the applicant for their comment and the
                additional information they have provided regarding the procedures and
                in particular their estimated costs. While we recognize that there are
                differences between the various ablation modalities, we believe that
                the APC levels 5361 and 5362 for ``Laparoscopy and Related Services''
                appropriately describe the resource costs and clinical characteristics
                of these procedures. However, we agree with the commenter that an
                alternative APC might better reflect the resource costs of the
                procedures. Therefore, we are revising the CY 2021 APC assignments for
                these codes. Specifically, we are assigning CPT codes 0600T and 0601T
                to APC 5362 (Level 2 Laparoscopy and Related Procedures) with a status
                indicator of ``J1'' in the CY 2021 OPPS.
                 After consideration of the public comment for the new irreversible
                electroporation codes, and based on our evaluation of the new
                technology application which provided the estimated costs for the
                services and described the components and characteristics of the new
                codes, we are finalizing our proposal with
                [[Page 85966]]
                modification, and reassigning CPT codes 0600T and 0601T to the final CY
                2021 OPPS APC 5362 (Level 2 Laparoscopy and Related Services). Table 27
                lists the four Category III CPT codes for the NanoKnife[supreg] System
                and their APC and SI assignments for CY 2021. The final CY 2021 OPPS
                payment rate for the codes can be found in Addendum B to this final
                rule with comment period (which is available via the internet on the
                CMS website).
                [GRAPHIC] [TIFF OMITTED] TR29DE20.039
                15. Medical Physics Dose Evaluation (APC 5611)
                 For CY 2021, we proposed to assign CPT code 76145 (Medical physics
                dose evaluation for radiation exposure that exceeds institutional
                review threshold, including report (medical physicist/dosimetrist)) in
                APC 5611 (Level 1 Therapeutic Radiation Treatment Preparation) with a
                proposed payment rate of $129.86. We note this is a new code that will
                be effective on January 1, 2021. Because the code is new, we requested
                public comments on the APC assignment for CY 2021. We also note that
                CPT code 76145 was listed as placeholder code 7615X in Addendum B and
                Addendum O of the CY 2021 OPPS/ASC proposed rule.
                 Comment: Several commenters disagreed with the assignment to APC
                5611 and requested a reassignment to APC 5724 (Level 4 Diagnostic Tests
                and Related Services) with a proposed payment rate of $936.70. The
                commenters indicated that CPT code 76145 is not a radiation oncology
                code, rather, it is a service that will be performed in interventional
                radiology or interventional cardiology. The commenters stated that the
                resource consumption in APC 5724 more closely aligns with the resources
                used to perform CPT code 76145. One commenter explained that CPT code
                76145 is used to describe the medical physicist's work in performing a
                patient-specific peak organ dose calculation subsequent to an
                interventional radiology or interventional cardiology procedure. The
                same commenter expressed concern that the new code will be included on
                the Deficit Reduction Act (DRA) cap designation list.
                 Response: Section 5102(b) of the Deficit Reduction Act of 2005
                (DRA) added section 1848(b)(4) to the statute to place a payment cap on
                the technical component (TC) of certain diagnostic imaging procedures
                and the TC portions of the global diagnostic imaging services at the
                amount paid under the OPPS. To implement this provision, the physician
                fee schedule (PFS) amount is compared to the OPPS payment amount and
                the lower amount is used for payment under the PFS. However, we note
                that the OPPS cap is a policy that applies to the PFS payment and is
                not applicable under the OPPS; and the list of services that are
                subject to the OPPS cap is published as part of the annual PFS final
                rules. In addition, based on our review of the service associated with
                CPT code 76145 and input from our medical advisors, we believe that APC
                code 5611 is the most appropriate assignment for the code. The code is
                new for CY 2021 and therefore we have no claims data available for OPPS
                ratesetting. However, once we have claims data, we will review the APC
                assignment and determine whether a change is necessary. We note that we
                review, on an annual basis, the APC assignments for all items and
                services paid under the OPPS.
                 In summary, after consideration of the public comments, we are
                finalizing our proposal, without modification, and assigning CPT code
                76145 to APC 5611 for CY 2021. The final CY 2021 payment rate for the
                code can be found in Addendum B to this final rule with comment period.
                In addition, we refer readers to Addendum D1 of this final rule with
                comment period for the status indicator (SI) meanings for all codes
                reported under the OPPS. Both Addendum B and D1 are available via the
                internet on the CMS website.
                16. Musculoskeletal Procedures (APCs 5111 Through 5116)
                 Prior to CY 2016, OPPS payment for musculoskeletal procedures was
                primarily divided according to anatomy and the type of musculoskeletal
                procedure. As part of the CY 2016 reorganization to better structure
                the OPPS payments towards prospective payment packages, we consolidated
                those individual APCs so that they became a general Musculoskeletal APC
                series (80 FR 70397 through 70398).
                 In the CY 2018 OPPS/ASC final rule with comment period (82 FR
                59300), we continued to apply a six-level structure for the
                Musculoskeletal APCs because doing so provided an appropriate
                distinction for resource costs at each level and provided clinical
                homogeneity. However, we indicated that we would continue to review the
                structure of these APCs to determine whether additional granularity
                would be necessary.
                 In the CY 2019 OPPS proposed rule (83 FR 37096), we recognized that
                commenters had previously expressed concerns regarding the granularity
                of the current APC levels and, therefore, requested comment on the
                establishment of additional levels. Specifically, we solicited comments
                on the creation of a new APC level between the current Level 5 and
                Level 6 within
                [[Page 85967]]
                the Musculoskeletal APC series. While some commenters suggested APC
                reconfigurations and requests for change to APC assignments, many
                commenters requested that we maintain the current six-level structure
                and continue to monitor the claims data as they become available.
                Therefore, in the CY 2019 OPPS/ASC final rule with comment period, we
                maintained the six-level APC structure for the Musculoskeletal
                Procedures APCs (83 FR 58920 through 58921).
                 Based on the claims data available for the CY 2021 OPPS/ASC
                proposed rule, we stated that we continued to believe that the six-
                level APC structure for the Musculoskeletal Procedures APC series is
                appropriate. Therefore, we proposed to maintain the APC structure for
                the CY 2021 OPPS update.
                 In the CY 2020 OPPS/ASC final rule, we discussed issues related to
                the APC assignment of CPT code 22869 (Insertion of interlaminar/
                interspinous process stabilization/distraction device, without open
                decompression or fusion, including image guidance when performed,
                lumbar; single level) to APC 5115 (84 FR 61253 through 61254).
                Specifically, commenters believed that the code was inappropriately
                assigned to APC 5115 due to one hospital inaccurately reporting its
                costs and charges. While we recognized the concerns that the commenters
                described, we noted that it is generally not our policy to judge the
                accuracy of hospital coding and charging for purposes of ratesetting.
                For the proposed CY 2021 OPPS, the geometric mean cost of CPT code
                22869 increased slightly relative to the prior year, from $11,023.45 to
                $12,788.56. However, the proposed geometric mean costs of the Level 5
                and Level 6 Musculoskeletal Procedures APCs were $12,102.02 and
                $15,975.08, respectively, and so, based on the data that was available,
                we continued to believe that it is appropriate to assign CPT code 22869
                to APC 5115 (Level 5 Musculoskeletal Procedures APC).
                 For the CY 2021 OPPS, we also proposed to eliminate the Inpatient
                Only (IPO) list over a three-year transition and to assign codes
                removed from the IPO list to clinical APCs. Many of the codes proposed
                to be removed from the IPO list are musculoskeletal procedures that we
                proposed to assign to APCs in the Musculoskeletal Procedures APC
                series, and so there may be effects on the geometric means as the
                limited claims data for those codes is included in OPPS ratesetting.
                For a more detailed discussion of the proposal to remove certain codes
                from the IPO list, please see section IX.B. of the CY 2021 OPPS/ASC
                proposed rule.
                 Table 28 displays the final CY 2021 Musculoskeletal Procedures APC
                series' structure and APC geometric mean costs.
                [GRAPHIC] [TIFF OMITTED] TR29DE20.040
                 Comment: One commenter recommended that CMS create a seventh
                Musculoskeletal APC level above APC 5116 to account for complex
                procedures that were proposed to be removed from the IPO list. Another
                commenter requested that CMS consider the development of an additional
                Musculoskeletal APC between current APCs 5114 and 5115.
                 Response: We appreciate the commenters' recommendation. We
                understand that the addition of codes removed from the IPO list may
                affect the geometric means of the Musculoskeletal Procedures APCs and
                we will continue to monitor the claims data as they become available.
                We also appreciate the goal of developing APC levels that appropriately
                reflect resource costs. At this time, we believe the six-level
                structure for the Musculoskeletal APCs continues to be appropriate.
                However, we will take these comments into consideration for future
                rulemaking
                 Comment: We received one comment recommending that CMS reassign CPT
                codes 28297 (Correction, hallux valgus (bunionectomy), with
                sesamoidectomy, when performed; with first metatarsal and medial
                cuneiform joint arthrodesis, any method) and 28740 (Arthrodesis,
                midtarsal or tarsometatarsal, single joint) to APC 5115 (Level 5
                Musculoskeletal Procedures) to resolve any 2 times rule violations.
                 Response: We appreciate the commenter's recommendation regarding
                the APC assignment of CPT 28297 and 28740. CPT codes 28297 and 28740
                are currently assigned to APC 5114 (Level 4 Musculoskeletal
                Procedures). Our review did not find that APC 5114 violates the 2 times
                rule. We also note that for purposes of identifying significant
                procedure codes for examination under the 2 times rule, we only
                consider procedure codes that have more than 1,000 single major claims
                or procedure codes that both have more than 99 single major claims and
                [[Page 85968]]
                contribute at least 2 percent of the single major claims used to
                establish the APC cost to be significant (75 FR 71832). Neither of
                these codes met this requirement and therefore were not considered
                significant procedure codes for 2 times rule purposes. Therefore, we
                are finalizing our proposal to continue to assign CPT codes 28297 and
                28740 to APC 5114 in the CY 2021 OPPS.
                 Comment: Commenters supported our proposal to continue to assign
                CPT code 22869 to APC 5115 (Level 5 Musculoskeletal Procedures). One
                commenter requested that CMS continue to monitor the geometric mean
                cost for CPT code 22869 and reestablish the code with assignment to APC
                5116 (Level 6 Musculoskeletal Procedures) when appropriate.
                 Response: We appreciate commenters' support. We will continue to
                review the most recent data and update the APC assignment for CPT code
                22869 as necessary.
                 Comment: One commenter requested that we assign CPT code 23473
                (Revision of total shoulder arthroplasty, including allograft when
                performed; humeral or glenoid component) from APC 5115 to APC 5116,
                based on their belief that the claims data was inaccurate and that the
                time required to perform the procedure was not reflected in the
                resource costs of the proposed APC placement.
                 Response: We note that CPT code 23473 has been established for some
                time, with an effective date of January 1, 2013 and that it was the
                initially established with a status indicator of ``T'' in the CY 2013
                OPPS. Therefore, some of the issues related to codes transitioning off
                the IPO list do not necessarily apply in this case and the actual data
                for the claims are more appropriate in ratesetting than alternative
                proxies. In the updated final rule claims data available for
                ratesetting, the estimated geometric mean cost of CPT 23473 is
                approximately $10,634 based on 287 claims, which is within the range of
                the significant procedure costs of APC 5115 from approximately $9,644
                to $12,902. As a result, we believe that the code is appropriately
                placed in APC 5115.
                 Comment: For the CY 2020 OPPS/ASC final rule, HCPCS code C9757
                (Laminotomy (hemilaminectomy), with decompression of nerve root(s),
                including partial facetectomy, foraminotomy and excision of herniated
                intervertebral disc, and repair of annular defect with implantation of
                bone anchored annular closure device, including annular defect
                measurement, alignment and sizing assessment, and image guidance; 1
                interspace, lumbar) was assigned to comment indicator ``NI'' in the
                OPPS Addendum B to indicate that the code was new and that we would be
                accepting comments on the interim APC assignment. A commenter supported
                the assignment to APC 5115 (Level 5 Musculoskeletal Procedures) with a
                CY 2020 payment rate of $11,900.71.
                 Response: As we stated in the CY 2020 OPPS/ASC final rule, we
                accepted comments on the interim OPPS payment assignment for new codes
                effective January 1, 2020 that are assigned to comment indicator ``NI''
                in the OPPS Addendum B (84 FR 61207). We further stated that the
                comments would be addressed, and if applicable, the APC assignment
                would be finalized in the CY 2021 OPPS/ASC final rule comment period.
                We appreciate the feedback. We note that for CY 2021, we are finalizing
                the assignment to APC 5115 (Level 5 Musculoskeletal Procedures) for
                HCPCS code C9757. The final payment rate for the code can be found in
                Addendum B to this final rule with comment period. In addition, the
                status indicator definitions can be found in Addendum D1 to this final
                rule with comment period. Both Addendum B and Addendum D1 are available
                via the internet on the CMS website.
                 After consideration of the comments, we are finalizing our proposal
                to maintain the six-level Musculoskeletal Procedures APC structure. We
                are also finalizing the proposed assignment of CPT codes 28297 and
                28740 to APC 5114, and the proposed assignment of CPT codes 22869 and
                23473 to APC 5115 for the CY 2021 OPPS.
                17. Neurostimulator and Related Procedures (APCs 5461 Through 5465)
                 In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66807
                through 66808), we finalized a restructuring of what were previously
                several neurostimulator procedure-related APCs into a four-level
                series. Since CY 2015, the four-level APC structure for the series has
                remained unchanged. In addition to that restructuring, in the CY 2015
                OPPS/ASC final rule, we also made the Level 2 through 4 APCs
                comprehensive APCs (79 FR 66807 through 66808). Later, in the CY 2020
                OPPS final rule, we also established the Level 1 Neurostimulator and
                Related Procedure APC (APC 5461) as a comprehensive APC (84 FR 61162
                through 61166).
                 In reviewing the claims data available for the CY 2021 OPPS
                proposed rule, we believed that it was appropriate to create an
                additional Neurostimulator and Related Procedures level, between the
                current Level 2 and 3 APCs. Creating this APC allows for a smoother
                distribution of the costs between the different levels based on their
                resource costs and clinical characteristics. Therefore, for the CY 2021
                OPPS, we proposed to establish a five-level APC structure for the
                Neurostimulator and Related Procedures series. We noted that in
                addition to creating the new level, we also proposed to assign CPT code
                0398T (Magnetic resonance image guided high intensity focused
                ultrasound (mrgfus), stereotactic ablation lesion, intracranial for
                movement disorder including stereotactic navigation and frame placement
                when performed) to the new Level 3 APC, as discussed in further detail
                in section III.C.3.A of the CY 2021 OPPS/ASC proposed rule with comment
                period.
                 Comment: Multiple commenters requested that we add a Level 6
                Neurostimulator and Related Procedures APC. The commenters are
                concerned that the payment rate for the current Level 4 APC and the
                proposed Level 5 APC is dominated by CPT code 63685 (Insertion or
                replacement of spinal neurostimulator pulse generator or receiver,
                direct or inductive coupling) which has a geometric mean of $29,123.02.
                The commenter indicated this means that higher cost neurostimulator
                services that have relatively low utilization are substantially
                underpaid. The commenters believe the lack of payment for these
                services is discouraging their use, and they want a Level 6 APC to
                establish a payment rate that more closely reflects the cost of these
                expensive, low utilization services.
                 Response: We appreciate the concerns of the commenters, but we
                reiterate that the OPPS is a prospective payment system. We group
                procedures with similar clinical characteristics and resource costs
                into APCs and establish a payment rate that reflects the geometric mean
                of all services in the group even though the cost of each service
                within the APC may be higher or lower than the APC's geometric mean. As
                a result, in the OPPS any individual procedure may potentially be
                overpaid or underpaid because the payment rate is based on the
                geometric mean of the entire group of services in the APC. However, the
                impact of these payment differences should be mitigated when
                distributed across a large number of APCs. If we were to establish a
                Level 6 APC for Neurostimulators and Related Procedures based on the
                commenters' request, we would find the payment rate for the APC would
                be closer to some of the services assigned to that APC but
                [[Page 85969]]
                other services would continue to receive payment that is substantially
                lower than those services' geometric mean cost. In the end, the only
                way to ensure each service receives payment equivalent to the cost of
                the service would be to establish separate APCs for each service the
                commenters believe is underpaid. That solution would be contrary to
                payment principles of the OPPS, which is based on prospective payment.
                Therefore, we believe it is appropriate to maintain the same five level
                structure as proposed in the CY 2021 OPPS.
                 Comment: Most commenters supported our proposal to create an
                additional Neurostimulator and Related Procedures level, between the
                current Level 2 and 3 APCs, which is described as the Level 3
                Neurostimulator and Related Procedures APC in our proposal.
                 Response: We appreciate the support of the commenters for our
                proposal.
                 Comment: One commenter noted that our proposal to establish an
                additional APC level would lead to a decrease in payment for services
                described by CPT codes 63650 (Percutaneous implantation of
                neurostimulator electrode array, epidural), 63685 (Insertion or
                replacement of spinal neurostimulator pulse generator or receiver,
                direct or inductive coupling), and 63688 (Revision or removal of
                implanted spinal neurostimulator pulse generator or receiver).
                 Response: We did not find that there would be a substantial
                decrease in the payment for the procedures described by CPT codes
                63650, 63685, and 63688 due to our proposal. Based on a review of our
                claims data, we found only a modest payment decrease for CPT code 63650
                and modest payment increases for CPT codes 63685 and 63688.
                 In addition, for CY 2021, we proposed to continue to assign CPT
                code 0587T to APC 5442 (Level 2 Nerve Injections) with a proposed
                payment of $644.55. We also proposed to continue to assign CPT code
                0588T to APC 5441 (Level 1 Nerve Injections) with a proposed payment of
                $267.50. We note that because both codes were effective on January 1,
                2020, we have no claims data available for OPPS ratesetting, as the CY
                2021 OPPS payment rates are based on claims submitted between January
                1, 2019 through December 31, 2019, and processed through June 30, 2020.
                The long descriptors for both codes can be found in Table 29 below.
                 Comment: A commenter explained that in May 2019 the AMA CPT
                Editorial Panel approved four (4) Category III CPT codes to describe
                the surgical procedures associated with the PROTECT PNS
                Neurostimulation System, specifically, CPT codes 0587T, 0588T, 0589T,
                and 0590T. The PROTECT PNS device is used for the treatment of
                overactive bladder (OAB) symptoms. The commenter added that on October
                19, 2016, CMS approved Medicare coverage for the Category B IDE study
                associated with the PROTECT PNS device. In addition, the commenter also
                stated that CMS incorrectly assigned CPT codes 0587T and 0588T to
                inappropriate APC assignments.
                 For CPT code 0587T, the commenter clarified that CPT code 0587T is
                not an injection; rather, the code describes an implantation or
                replacement of an integrated single device neurostimulation system,
                similar to the procedures assigned to the Neurostimulator and Related
                Procedures (APCs 5461 through 5465) family. The commenter recommended
                reassigning CPT code 0587T to one of these APCs to adequately capture
                the correct clinical characteristics and resource costs of the
                technology similar to other neurostimulation devices in APCs 5461
                through 5465. The commenter specifically recommended the reassignment
                to APC 5464 (Level 4 Neurostimulator and Related Procedures) with a
                proposed payment rate of $20,789.82, since the procedure is very
                similar to CPT code 64590 (Insertion or replacement of peripheral or
                gastric neurostimulator pulse generator or receiver, direct or
                inductive coupling), which is assigned to APC 5464. According to the
                commenter, the cost of the PROTECT implantable device and transmitter
                kit that is used in the procedure is about $15,820. Based on the
                commenter's estimated cost of approximately $20,032, which includes the
                non-device cost of $2,737 and the PROTECT device cost of $15,820, the
                appropriate assignment for the code until OPPS claims are available is
                APC 5464.
                 For CPT code 0588T, the commenter explained that the code is not an
                injection procedure, rather, the code describes the surgical removal of
                the device. The commenter suggested reassigning the code to APC 5461
                (Level 1 Neurostimulator and Related Procedures) with a proposed
                payment of $3,498.13 because it is comparable to CPT code 64595
                (Revision or removal of peripheral or gastric neurostimulator pulse
                generator or receiver) based on clinical similarity and resource costs.
                 Response: We do not agree that CPT code 0587T is comparable to CPT
                code 64590. Based on our review of the clinical characteristics of the
                procedure and input from our medical advisors, we believe CPT code
                0587T is more similar to the procedures assigned to APC 5462 (Level 2
                Neurostimulator and Related Procedures). However, we agree that CPT
                code 0588T is similar to the procedures in APC 5461, and are therefore
                assigning the code to APC 5461 in the CY 2021 OPPS.
                 In summary, after consideration of the public comment, we are
                finalizing our proposal with modification, and reassigning CPT code
                0587T to APC 5462 and CPT code 0588T to APC 5461. Table 29 below list
                the four Category III CPT codes for the PROTECT PNS System and their
                APC and SI assignments for CY 2021. The final CY 2021 OPPS payment
                rates for the codes can be found in Addendum B of this final rule with
                comment period. In addition, we refer readers to Addendum D1 of this
                final rule with comment period for the status indicator meanings for
                all codes reported under the OPPS for CY 2021. Both Addendum B and
                Addendum D1 are available via the internet on the CMS website.
                BILLING CODE 4120-01-P
                [[Page 85970]]
                [GRAPHIC] [TIFF OMITTED] TR29DE20.041
                 Comment: Two commenters supported our proposal to change the APC
                assignment for CPT code 0398T (Magnetic resonance image guided high
                intensity focused ultrasound (mrgfus), stereotactic ablation lesion,
                intracranial for movement disorder including stereotactic navigation
                and frame placement when performed) to the proposed new Level 3
                Neurostimulator and Related Procedures APC.
                 Response: We appreciate the support of the commenters for our
                proposal.
                 After consideration of the public comments we received, we are
                finalizing our proposal, without modification, to establish a five-
                level APC structure for the Neurostimulator and Related Procedures
                series. In addition to creating this new level, we also finalizing our
                proposal to assign CPT 0398T (Magnetic resonance image guided high
                intensity focused ultrasound (mrgfus), stereotactic ablation lesion,
                intracranial for movement disorder including stereotactic navigation
                and frame placement when performed) to this new Level 3 APC. Table 30
                displays the proposed and final CY 2021 Neurostimulator and Related
                Procedures APC series' structure and APC geometric mean costs.
                [[Page 85971]]
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                BILLING CODE 4120-01-C
                18. Noncontact Real-Time Fluorescence Wound Imaging/MolecuLight (APC
                5722)
                 For the July 2020 update, the CPT Editorial Panel established two
                new codes, specifically, CPT codes 0598T and 0599T, to report
                noncontact real-time fluorescence wound imaging for bacterial presence
                in chronic and acute wounds. The codes and their long descriptors were
                listed in Table 7 (New HCPCS Codes Effective July 1, 2020) of the CY
                2021 OPPS/ASC final rule with comment period (85 FR 48815 through
                48823). We note that CMS recently received a new technology application
                for the MolecuLight i: X procedure, which is described by CPT codes
                0598T and 0599T. In determining the appropriate payment for CPT code
                0598T, we considered whether there should be separate or conditionally
                packaged payment for the procedure since the use of the MolecuLight
                imaging device will most often involve another procedure or service
                during the same session (for example, debridement of the wound,
                laboratory service, or another skin-related procedure). In addition, we
                considered whether the code should be placed in either the Diagnostic
                Procedures or Minor Procedures APC group. Based on our review of the
                application and input from our physicians, we assigned CPT code 0598T
                to APC 5722 (Level 2 Diagnostic Tests and Related Services) and status
                indicator ``T'' with a payment rate of $253.10 effective July 1, 2020.
                In addition, because CPT code 0599T is an add-on code, we assigned the
                code to status indicator ``N'' to indicate that the payment is included
                in the primary procedure. We note that the new technology application
                indicated a higher projected cost involving care in an operating room
                (OR), however, based on our review of the MolecuLight service, we
                removed OR-associated costs because it was not clear to us that the
                test would routinely be performed in the OR setting. However, in the CY
                2021 OPPS/ASC proposed rule we solicited public comments from hospital-
                based providers that have used MolecuLight on the appropriate OPPS
                payment, particularly with respect to the cost of providing the service
                in the hospital outpatient setting.
                 For CY 2021, we proposed to continue to assign CPT code 0598T to
                APC 5722 (Level 2 Diagnostic Tests and Related Services) with a
                proposed payment rate of $269.85. We proposed to maintain a status
                indicator of ``N'' for CPT code 0599T, which is an add-on code, to
                indicate that the payment is included in the primary procedure. The
                long descriptors and proposed SI and APC assignments for both codes can
                be found in Table 31 below.
                 Comment: Some commenters agreed with the APC assignment to APC 5722
                for CPT code 0598T, however, they had concerns with the packaged status
                indicator assignment for CPT code 0599T, and suggested assigning the
                code to a different APC and revising the status indicator from ``N''
                (packaged) to ``S'' (Procedure or Service, Not Discounted When
                Multiple). One commenter indicated that the payment is insufficient to
                cover the cost of the procedure and contended that the low
                reimbursement will dissuade hospitals from offering the service. The
                commenter reported that the procedure requires the use of a Dark Drape
                technology and also requires significant time because the second ulcer
                and subsequent ulcers typically involve different anatomical locations.
                Another commenter reported that hospital outpatient charges for CPT
                code 0598T are between $850 and $2,500 for the first wound and between
                $850 and $1,850 for subsequent anatomic sites. The same commenter
                suggested that OPPS payment is inadequate, especially in cases that
                involve additional wounds in different anatomic sites such as the
                sacrum, abdomen, toe, or leg, all of which require additional resource
                costs. Consequently, the commenter requested a revision in the APC
                assignment for both codes. Specifically, the commenter recommended
                reassigning CPT code 0598T from APC 5722 to APC 5723 (Level 3
                Diagnostic Tests and Related Services) with a proposed payment of
                $497.96, and to assign CPT code 0599T to APC 5722 with a proposed
                payment of $269.85. In addition, the commenter recommended assigning
                both codes status indicator ``S''.
                 Response: With regard to CPT code 0598T, based on our evaluation of
                the new technology application submitted to CMS as well as input from
                our physicians, we believe that we should maintain the assignment to
                APC 5722 for CY 2021. In addition, because CPT code 0599T is an add-on
                code, we are maintaining its status indicator assignment of ``N''
                (packaged). As specified in section Sec. 419.2(b)(18), add-on codes
                are generally packaged under
                [[Page 85972]]
                the hospital OPPS. As explained in the CY 2014 OPPS/ASC final rule with
                comment period (78 FR 74942 through 74945), we finalized a policy to
                unconditionally package procedures described by add-on codes.
                Procedures described by add-on codes represent an extension or
                continuation of a primary procedure, which means that they are
                typically supportive, dependent, or adjunctive to a primary service.
                The primary code defines the purpose and typical scope of the patient
                encounter and the add-on code describes incremental work, when the
                extent of the procedure encompasses a range rather than a single
                defined endpoint applicable to all patients. Given the dependent nature
                and adjunctive characteristics of procedures described by add-on codes
                and in light of longstanding OPPS packaging principles, we finalized a
                policy to unconditionally package add-on codes with the primary
                procedure.
                 In summary, after consideration of the public comments, we are
                finalizing our proposal, without modification, to assign CPT code 0598T
                to APC 5722 with status indicator ``T'' and to assign CPT code 0599T
                status indicator ``N'' for CY 2021. The final CY 2021 payment rate for
                CPT code 0598T can be found in Addendum B to this final rule with
                comment period. In addition, we refer readers to Addendum D1 of this
                final rule with comment period for the status indicator (SI) meanings
                for all codes reported under the OPPS. Both Addendum B and D1 are
                available via the internet on the CMS website.
                [GRAPHIC] [TIFF OMITTED] TR29DE20.044
                19. Nuclear Medicine Services: Single-Photon Emission Computed
                Tomography (SPECT) Studies (APC 5593)
                 For CY 2021, we proposed to reassign CPT code 78803
                (Radiopharmaceutical localization of tumor, inflammatory process or
                distribution of radiopharmaceutical agent(s) (includes vascular flow
                and blood pool imaging, when performed); tomographic (spect), single
                area (e.g., head, neck, chest, pelvis), single day imaging) from APC
                5593 (Level 3 Nuclear Medicine and Related Services) with a payment
                rate of $1,272.19 to APC 5592 (Level 2 Nuclear Medicine and Related
                Services) with a proposed payment rate of $501.45.
                 Comment: Several commenters objected to the reassignment of CPT
                code 78803 to APC 5592 and requested that we not finalize our proposal
                but rather maintain the current placement in APC 5593. They stated that
                the significant payment decrease would limit patient access, affect
                patient care, and restrict hospitals from offering the test. One
                commenter reported that the Medicare payment for CPT code 78803 is
                insufficient, and as a result, many hospitals refuse to offer the
                service. This same commenter reported that lowering the payment for the
                test may force some hospitals that currently offer the test to stop
                providing it altogether. The commenter added that many patients travel
                hours to access a SPECT scan exam and lowering the payment for the test
                would not improve patient care. Some commenters reminded us that for CY
                2020, CPT code 78803 replaced seven codes that were deleted on December
                31, 2019. Most commenters stated that the more appropriate placement
                for CPT code 78803 is APC 5593, based on resource use and clinical
                similarity to the other procedures in the APC.
                 Response: We discussed the issue related to the seven deleted codes
                in the CY 2020 OPPS/ASC final rule (84 FR 61257 through 61258) and
                noted that based on the geometric mean costs for CPT code 78803 and the
                deleted codes, we believe it was necessary for us to maintain the APC
                assignment for CPT code 78803 in APC 5593. Because the CY 2021 OPPS
                payments are based on claims submitted between January 1, 2019 through
                December 31, 2019, and processed through June 30, 2020, we again
                reviewed the claims data for the deleted codes to determine the
                appropriate placement for CPT code 78803. As listed in Table 32, the
                range of geometric mean costs for CPT code 78803 and the seven deleted
                codes is between $408 and $1,508. Similar to our CY 2020 findings, we
                note that several of the deleted codes were assigned to APC 5593, and
                based on our review of these codes, we believe it would be appropriate
                to maintain assignment of CPT code 78803 to APC 5593 for CY 2021.
                [[Page 85973]]
                [GRAPHIC] [TIFF OMITTED] TR29DE20.045
                 Comment: One commenter agreed with the proposal to maintain the
                four levels of nuclear medicine APCs for CY 2021 but requested that CMS
                consider establishing additional APCs as needed to ensure that the
                nuclear medicine APCs do not violate the 2-times rule when the cost of
                packaged diagnostic radiopharmaceuticals drugs are included.
                 Response: We appreciate the feedback and will consider in future
                rulemaking whether establishing additional nuclear medicine APCs would
                be appropriate.
                 In summary, after consideration of the public comments, and after
                our analysis of the updated claims data for this final rule with
                comment period, we are finalizing a modification to our proposal.
                Specifically, we are revising the APC assignment for CPT code 78803 to
                APC 5593 for CY 2021. The final CY 2021 payment rate for the code can
                be found in Addendum B to this final rule with comment period (which is
                available via the internet on the CMS website).
                 As we do every year, we will reevaluate the APC assignment for CPT
                code 78803 for the next rulemaking cycle. We note that we review, on an
                annual basis, the APC assignments for all services and items paid under
                the OPPS.
                20. Pathogen Test for Platelets/Rapid Bacterial Testing (APC 5732)
                 For the July 2017 update, the HCPCS Workgroup established HCPCS
                code Q9987 (Pathogen(s) test for platelets) effective July 1, 2017.
                This new code and the OPPS APC assignment were announced in the July
                2017 OPPS quarterly update CR (Transmittal 3783, Change Request 10122,
                dated May 26, 2017). Because HCPCS code Q9987 represented a test to
                identify bacterial or other pathogen contamination in blood platelets,
                we assigned the code to a new technology APC, specifically, New
                Technology APC 1493 (New Technology--Level 1C ($21-$30)) with a status
                indicator ``S'' and a payment rate of $25.50. We note that temporary
                HCPCS code Q9987 was subsequently deleted on December 31, 2017, and
                replaced with permanent HCPCS code P9100 (Pathogen(s) test for
                platelets) effective January 1, 2018. For the January 2018 update, we
                continued to assign the new code to the same APC and status indicator
                as its predecessor code. Specifically, we assigned HCPCS code P9100 to
                New Technology APC 1493 and status indicator ``S''. For the CY 2019
                update, we made no change to the APC or status indicator assignment for
                P9100, however, for the CY 2020 update, we revised the APC assignment
                from New Technology APC 1493 to 1494 (New Technology--Level 1D ($31-
                $40)) based on the latest claims data used to set the payment rates for
                CY 2020. We discussed the revision in the CY 2020 OPPS/ASC final rule
                (84 FR 61219) and indicated that the reassignment to APC 1494
                appropriately reflected the cost of the service.
                 For the CY 2021 proposed rule, we believed that we had sufficient
                claims data to reassign the code from a New Technology APC to a
                clinical APC, and noted that HCPCS code P9100 had been assigned to a
                New Technology APC for over 3 years. As stated in section III.D. (New
                Technology APCs), a service is paid under a New Technology APC until
                sufficient claims data have been collected to allow CMS to assign the
                procedure to a clinical APC group that is appropriate in clinical and
                resource terms. We expect this to occur within two to three years from
                the time a new HCPCS code becomes effective. However, if we are able to
                collect sufficient claims data in less than 2 years, we would consider
                reassigning the service to an appropriate clinical APC. Since HCPCS
                code P9100 has been assigned to a new technology APC since July 2017,
                we believed that we should reassign the code to a clinical APC.
                Specifically, our claims data for the proposed rule showed a geometric
                mean cost of approximately $30 for HCPCS code P9100 based on 70 single
                claims (out of 1,835 total claims). Based on resource cost and clinical
                homogeneity to the other services assigned to APC 5732 (Level 2 Minor
                Procedures), we believed that HCPCS code P9100 should be reassigned to
                clinical APC 5732, which had a geometric mean cost of approximately
                $33.
                 As we have stated several times since the implementation of the
                OPPS on August 1, 2000, we review, on an annual basis, the APC
                assignments for all services and items paid under the OPPS based on our
                analysis of the latest claims data. For the CY 2021 OPPS update, based
                on claims submitted between January 1, 2019, and December
                [[Page 85974]]
                30, 2019, our analysis of the latest claims data for the proposed rule
                supported reassigning HCPCS code P9100 to APC 5732 based on its
                clinical and resource similarity to the procedures and services in the
                APC. Therefore, we proposed to reassign HCPCS code P9100 from New
                Technology APC 1494 to clinical APC 5732 for CY 2021.
                 Comment: A commenter supported our proposal to revise the APC
                assignment for HCPCS code P9100 to APC 5732.
                 Response: We appreciate the support for our proposal. Based on our
                review of the updated claims data for this final rule with comment
                period, which is based on claims submitted between January 1, 2019, and
                December 30, 2019, and processed through June 30, 2020, we continue to
                believe that reassigning HCPCS code P9100 to APC 5732 is appropriate.
                Specifically, our claims data show a geometric mean cost of
                approximately $30.86 for HCPCS P9100 based on 75 single claims (out of
                2,038 total claims), which is consistent with the geometric mean cost
                of about $32.97 for APC 5732.
                 In summary, after consideration of the public comment, and after
                our analysis of the updated claims data for this final rule with
                comment period, we are finalizing our proposal, without modification,
                to assign HCPCS code P9100 to APC 5732 for CY 2021. The final CY 2021
                payment rate for the code can be found in Addendum B to this final rule
                with comment period. In addition, we refer readers to Addendum D1 of
                this final rule with comment period for the status indicator (SI)
                meanings for all codes reported under the OPPS. Both Addendum B and D1
                are available via the internet on the CMS website.
                21. Payment for Radioisotopes Derived From Non-Highly Enriched Uranium
                (Non-HEU) Sources (APC 1442)
                 Radioisotopes are widely used in modern medical imaging,
                particularly for cardiac imaging and predominantly for the Medicare
                population. Some of the Technetium-99 (Tc-99m), the radioisotope used
                in the majority of such diagnostic imaging services, is produced in
                legacy reactors outside of the United States using highly enriched
                uranium (HEU).
                 The United States would like to eliminate domestic reliance on
                these reactors, and is promoting the conversion of all medical
                radioisotope production to non-HEU sources. Alternative methods for
                producing Tc-99m without HEU are technologically and economically
                viable, and conversion to such production has begun. We expect that
                this change in the supply source for the radioisotope used for modern
                medical imaging will introduce new costs into the payment system that
                are not accounted for in the historical claims data.
                 Therefore, beginning in CY 2013, we finalized a policy to provide
                an additional payment of $10 for the marginal cost for radioisotopes
                produced by non-HEU sources (77 FR 68323). Under this policy, hospitals
                report HCPCS code Q9969 (Tc-99m from non-highly enriched uranium
                source, full cost recovery add-on per study dose) once per dose along
                with any diagnostic scan or scans furnished using Tc-99m as long as the
                Tc-99m doses used can be certified by the hospital to be at least 95
                percent derived from non-HEU sources (77 FR 68321).
                 Comment: One commenter requested that we increase the payment rate
                for HCPCS add-on code Q9969 from $10. The commenter noted that we have
                not increased the payment rate for Q9969 since the code was established
                in CY 2013. The commenter suggested increasing the payment for Q9969 by
                the annual market basket increase for CY 2021 along with a one-time
                increase to reflect prior increases to the market basket between CY
                2013 and CY 2021. Alternatively, the commenter suggested the payment
                rate could be increased by the change in the drug cost threshold
                packaging amount between CY 2013 and CY 2021.
                 Response: We appreciate the information we received from the
                commenter supporting an increase to the payment rate of $10 for HCPCS
                code Q9969. As discussed in the CY 2013 OPPS/ASC final rule with
                comment period, we did not finalize a policy to use the usual OPPS
                methodologies to update the non-HEU add-on payment (77 FR 68317). The
                purpose of the additional payment is limited to mitigating any adverse
                impact of transitioning to non-HEU sources and we believe the add-on is
                appropriate at this time.
                 Comment: Multiple commenters supported the current payment amount
                for HCPCS code Q9969 and they requested that we finalize our proposed
                payment rate for the add-on.
                 Response: We appreciate the support of the commenters for the
                proposed payment rate for HCPCS code Q9969.
                 After consideration of the public comments we received, we are
                finalizing our proposal, without modification, to continue the policy
                of providing an additional $10 payment for radioisotopes produced by
                non-HEU sources for CY 2021 and subsequent years as represented by
                HCPCS code Q9969.
                22. Percutaneous Transcatheter Ultrasound Nerve Ablation
                 The Therapeutic Intra-Vascular Ultrasound System
                (TIVUSTM) is a high intensity, non-focused, ultrasound
                catheter system, which enables remote, localized, controlled and
                repeatable thermal modulation of nerves adjacent to arterial vessel
                wall for performing therapeutic pulmonary artery sympathetic
                denervation and is used for the treatment of pulmonary arterial
                hypertension (PAH). In 2020, the TIVUSTM system was approved
                by FDA for a Category B (Nonexperimental/investigational)
                Investigational Device Exemption (IDE) for the device to be used in a
                clinical study. The study sponsors have also requested Medicare
                coverage of the Category B IDE study to allow for coverage of the
                TIVUSTM system and the routine care items and services in
                the clinical trial. To date, CMS has not established approval of
                Medicare coverage for the Category B IDE study for the
                TIVUSTM system.
                 The TIVUSTM system is used with CPT code 0632T
                (Percutaneous transcatheter ultrasound ablation, nerves innervating the
                pulmonary arteries, including right heart catheterization, radiological
                supervision and interpretation and pulmonary artery angiography), which
                will become effective January 1, 2021. In the CY 2021 OPPS/ASC proposed
                rule, CPT code 0632T was assigned status indicator ``E1'', which
                describes items, codes, and services not covered by any Medicare
                outpatient benefit category, statutorily excluded by Medicare, or not
                reasonable and necessary. These items, codes, and services are not paid
                by Medicare when submitted on outpatient claims.
                 Comment: One commenter, the manufacturer of the TIVUSTM
                system, requested that, in anticipation of approval of Medicare
                coverage for the Category B IDE study for the TIVUSTM
                system, CMS assign CPT code 0632T status indicator ``J1'', which
                describes services paid through a comprehensive APC (C-APC) instead of
                status indicator ``E1'' for CY 2021. The commenter also requested that
                CMS assign CPT code 0632T to C-APC 5213 (Level 3 Electrophysiologic
                Procedures) for CY 2021, stating that the procedure is similar in
                clinical characteristics and resource costs to CPT code 93656
                (Comprehensive electrophysiologic evaluation including transseptal
                catheterizations, insertion and repositioning of multiple electrode
                catheters with induction or attempted induction of an arrhythmia
                including
                [[Page 85975]]
                left or right atrial pacing/recording, when necessary, right
                ventricular pacing/recording when necessary, and his bundle recording
                when necessary with intracardiac catheter ablation of atrial
                fibrillation by pulmonary vein isolation), which is assigned to C-APC
                5213 for CY 2021.
                 Response: For approved Category B IDE studies, CMS allows for
                coverage of the Category B device and the routine care items and
                services in the clinical trial. To date, coverage for the Category B
                IDE clinical study for the TIVUSTM system has not been
                approved by CMS. We do not believe that it is appropriate to assign a
                payable status indicator under the OPPS to CPT code 0632T prior to the
                approval of the Category B IDE study. Therefore, for CY 2021, we are
                finalizing the assignment of status indicator ``E1'' to CPT code 0632T.
                23. Peripheral Intravascular Lithotripsy (IVL) Procedure (APCs 5192,
                5193, and 5194)
                 The IVL system has three components: A proprietary IVL Catheter, an
                IVL Generator, and an IVL Connector Cable. It is a lithotripsy-enhanced
                balloon catheter used to dilate lesions, including calcified lesions,
                in the peripheral vasculature, including the iliac, femoral, ilio-
                femoral, popliteal, infra-popliteal, and renal arteries. The IVL
                catheter has integrated lithotripsy emitters and is designed to enhance
                percutaneous transluminal angioplasty by enabling delivery of the
                calcium disrupting capability of lithotripsy prior to full balloon
                dilatation at low pressures. The application of lithotripsy mechanical
                pulse waves alters the structure of an occlusive vascular deposit
                (stenosis) prior to low-pressure balloon dilation of the stenosis and
                facilitates the passage of blood and is used for the treatment of
                peripheral artery disease (PAD).
                 In 2019, FDA cleared 510(k) submission based on a determination of
                substantial equivalence to a legally marketed predicate device. The
                manufacturer also submitted a new technology application requesting new
                technology APC assignment for IVL procedures. Based on our review of
                the New Technology APC application for this service and the service's
                clinical similarity to existing APCs in the OPPS, we created four new
                HCPCS codes for these services and assigned these codes to existing
                clinical APCs. Specifically, CMS proposed to add HCPCS code C9764
                (Revascularization, endovascular, open or percutaneous, any vessel(s);
                with intravascular lithotripsy, includes angioplasty within the same
                vessel(s), when performed), C9765 (Revascularization, endovascular,
                open or percutaneous, any vessel(s); with intravascular lithotripsy,
                and transluminal stent placement(s), includes angioplasty within the
                same vessel(s), when performed) C9766 (Revascularization, endovascular,
                open or percutaneous, any vessel(s); with intravascular lithotripsy and
                atherectomy, includes angioplasty within the same vessel(s), when
                performed), and C9767 (Revascularization, endovascular, open or
                percutaneous, any vessel(s); with intravascular lithotripsy and
                transluminal stent placement(s), and atherectomy, includes angioplasty
                within the same vessel(s), when performed), effective July 1, 2020. We
                assigned code C9764 to APC 5192 (Level 2 Endovascular Procedures) with
                a payment rate of $4,953.91; C9765 and C9766 to APC 5193 (Level 3
                Endovascular Procedures) with a payment rate of $9,908.48; and C9767 to
                APC 5194 (Level 4 Endovascular Procedures) with a payment rate of
                $15,939.97 for CY 2020. In the CY 2021 OPPS/ASC proposed rule, we
                proposed to maintain these APC assignments for these codes in CY 2021.
                 At the August 31, 2020 HOP Panel Meeting, a presenter requested
                that we reassign IVL procedure C9764 to APC 5193 and procedures C9765
                and C9766 to APC 5194. The presenter indicated that the APC payment
                associated with HCPCS code(s) C9764, C9765 and C9766 is inadequate to
                cover the cost of the procedures. According to the presenter, the
                proposed CY 2021 geometric mean cost for the procedures range from
                $6,619.26 to $22,305.36, not including the additional cost of the IVL
                catheter. The presenter reported that the cost of one catheter is
                $2,800 but each procedure requires an average of 1.2 catheters,
                bringing the total cost of catheters to $3,360 per procedure. The
                presenter stated that the payment rate for the IVL procedures on tibial
                and peroneal vessels was lower than the payment rate for similar
                procedures without IVL. The presenter believed that hospitals will
                limit access to IVL, reducing patient access, because payment for the
                procedure is inadequate. They argued that limiting IVL access to
                patients suffering from critical limb ischemia in tibial and peroneal
                arteries could lead to higher complications associated with current
                treatment modalities. They believe that traditional treatments are
                associated with higher risk of distal embolization, perforation and
                possible amputation. Based on the information presented at the meeting,
                the HOP Panel recommended CMS reassign HCPCS code C9764 to APC 5193 and
                HCPCS codes C9765 and C9766 to APC 5194, as long as the cost of the IVL
                device is within 10 percent of other devices currently available.
                However, we are unable to identify devices that are similar to IVL and
                therefore cannot complete the data analysis recommended by the HOP
                Panel.
                 Comment: Several commenters disagreed with CMS' proposed APC
                assignments for the peripheral intravascular lithotripsy service
                described by HCPCS codes C9764, C9765 and C9766. They reported that,
                based on the resource cost of the service described by HCPCS code
                C9764, APC 5192 does not provide adequate reimbursement for the
                service, and recommended reassignment to APC 5193 (Level 3 Endovascular
                Procedures) with a proposed payment rate of $10,222.32. Similarly, for
                HCPCS codes C9765 and C9766, the commenters indicated that APC 5193
                would not adequately cover the resource costs associated with these
                procedures, and recommended their reassignment to APC 5194 (Level 4
                Endovascular Procedures) with a proposed payment rate of $16,348.66.
                 Response: APC assignment for a code is based on similarity to other
                codes within an APC in terms of clinical homogeneity and resource
                costs. As specified in 42 CFR 419.31(a)(1), CMS classifies outpatient
                services and procedures that are comparable clinically and in terms of
                resource use into APC groups. As we stated in the CY 2012 OPPS/ASC
                final rule (76 FR 74224), the OPPS is a prospective payment system that
                provides payment for groups of services that share clinical and
                resource use characteristics. For all new codes, our policy has been to
                assign the service or procedure to an APC informed by a variety of
                sources, including but not limited to, review of the clinical
                similarity of the service to existing procedures; advice from CMS
                medical advisors; information from interested specialty societies; and
                review of all other information available to us, including information
                provided to us by the public, whether through meetings with
                stakeholders or additional information that is mailed or otherwise
                communicated to us.
                 Based on the comments we received, the HOP Panel recommendation,
                information provided in the new technology application, and advice from
                our medical advisors, we believe we should add new HCPCS codes to
                describe tibial and peroneal IVL procedures, for a total of eight IVL
                procedure codes, and revise the long
                [[Page 85976]]
                descriptors for HCPCS codes C9764, C9765, C9766, and C9767 by deleting
                the words ``any vessel(s)'' and replacing with ``lower extremity
                artery(ies), except tibial/peroneal'' effective January 1, 2021. We
                agree with commenters that the resources associated with tibial and
                peroneal IVL procedures are higher than iliac, femoral and popliteal
                procedures. Therefore, we are creating new HCPCS codes C9772, C9773,
                C9774, and C9775 to describe tibial and peroneal procedures and
                assigning these codes to APCs as listed in the Table 33 below.
                 In summary, after consideration of public comments, we are
                finalizing our proposal with modification, to provide new HCPCS codes
                C9772, C9773, C9774 and C9775 and assign these codes to APCs listed in
                Table 33. Table 33 also lists revised long descriptors for HCPCS codes
                C9764, C9765, C9766, and C9767, and final SI and APC assignments for
                all eight codes. The final CY 2021 payment rate for these codes can be
                found in Addendum B to this final rule with comment period. In
                addition, we refer readers to Addendum D1 of this final rule with
                comment period for the status indicator (SI) meanings for all codes
                reported under the OPPS. Both Addendum B and D1 are available via the
                internet on the CMS website.
                BILLING CODE 4120-01-P
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                [[Page 85977]]
                BILLING CODE 4120-01-C
                24. Remote Physiological Monitoring (APC 5741)
                a. Initial Remote Monitoring of Physiologic Parameters (APC 5741)
                 For the CY 2019 update, the CPT Editorial Panel established a new
                code, specifically, CPT code 99454, to describe initial remote
                monitoring of physiological parameters effective January 1, 2019. In
                the CY 2019 update, we assigned this code to APC 5741 (Level 1
                Electronic Analysis of Devices) with status indicator ``Q1''
                (conditionally packaged) and a payment rate of $37.16 effective January
                1, 2019, based on the clinical and resource similarity with CPT code
                93270 (External patient and, when performed, auto activated
                electrocardiographic rhythm derived event recording with symptom-
                related memory loop with remote download capability up to 30 days, 24-
                hour attended monitoring; recording (includes connection, recording,
                and disconnection)). The new code appeared in the OPPS Addendum B of
                the CY 2019 OPPS/ASC final rule.
                 For CY 2020 OPPS/ASC final rule, we maintained the assignment of
                CPT code 99454 to APC 5741 with a payment rate of $36.25. We note that
                we had no claims data for CPT code 99454 for the CY 2020 final rule
                since the code was established on January 1, 2019. For the CY 2021
                OPPS/ASC proposed rule, we proposed to maintain the assignment of CPT
                code 99454 to APC 5741 with the proposed payment rate of $37.76.
                 Comment: One commenter was concerned that the current reimbursement
                rate is too low, which the commenter believes discourages providers
                from using much-needed equipment and services. The commenter stated
                that CMS must ensure that life-saving RPM technology would be available
                to Medicare beneficiaries by updating the status indicator and
                increasing reimbursement rate for CPT code 99454. The commenter
                requested: (1) A change in the status indicator for CPT code 99454 from
                ``Q1'' to ``S,'' so that it will be paid when used in conjunction with
                other services; and (2) reassignment of CPT code 99454 from APC 5741
                (Level 1 Electronic Analysis of Devices) to APC 5742 (Level 2
                Electronic Analysis of Devices).
                 Response: As we have stated every year since the implementation of
                the OPPS on August 1, 2000, we review, on an annual basis, the APC
                assignments for all services and items paid under the OPPS based on our
                analysis of the latest claims data. For CY 2021, based on claims
                submitted between January 1, 2019 through December 31, 2019, that were
                processed on or before June 30, 2020, our analysis of the latest claims
                data for this final rule with comment period supports continuing to
                assign CPT code 99454 to APC 5741. Specifically, our claims data shows
                a geometric mean cost of approximately $28.06 for CPT 99454 based on
                185 single claims (out of 275 total claims), which is comparable to the
                geometric mean cost of about $36.19 for APC 5741, rather than the
                geometric mean cost of approximately $97.72 for APC 5742.
                 We proposed to assign code 99454 to status indicator ``Q1'' for CY
                2021 to indicate that the payment for CPT code 99454 is packaged when
                the code is billed on the same claim as a HCPCS code assigned to OPPS
                status indicator ``S'', ``T'', or ``V'', but is paid separately when it
                is the only major service on the claim. Because the service described
                by CPT code 99454 will most often be performed as part of another
                significant procedure, we believe that packaging the cost associated
                with CPT code 99454 into the primary service is appropriate. Therefore,
                assignment of status indicator ``Q1'' to CPT 99454 is appropriate.
                 In summary, after consideration of the public comments and after
                evaluation of our claims data for this final rule with comment period,
                we are finalizing our proposal, without modification, for CPT code
                99454. The final CY 2021 payment rate for the CPT code 99454 can be
                found in Addendum B to this final rule with comment period (which is
                available via the internet on the CMS website).
                 As we do every year, we will reevaluate the APC assignment for CPT
                code 99454 for the next rulemaking cycle. We remind hospitals that we
                review, on an annual basis, the APC assignments for all services and
                items paid under the OPPS based on the latest claims data.
                b. Remote Physiological Monitoring Services, Virtual Check-In, E-
                Visits, Telephone E/M, and Medication Management Services
                 For CY 2021, we proposed to continue to assign CPT code 99091
                (Collection and interpretation of physiologic data (e.g., ecg, blood
                pressure, glucose monitoring) digitally stored and/or transmitted by
                the patient and/or caregiver to the physician or other qualified health
                care professional, qualified by education, training, licensure/
                regulation (when applicable) requiring a minimum of 30 minutes of time,
                each 30 days) to status indicator ``N'' (packaged) to indicate that the
                payment for the service is included in the primary service reported
                with the code. We also proposed to continue to assign CPT codes 99457
                (Remote physiologic monitoring treatment management services, clinical
                staff/physician/other qualified health care professional time in a
                calendar month requiring interactive communication with the patient/
                caregiver during the month; first 20 minutes) and 99458 (Remote
                physiologic monitoring treatment management services, clinical staff/
                physician/other qualified health care professional time in a calendar
                month requiring interactive communication with the patient/caregiver
                during the month; each additional 20 minutes (list separately in
                addition to code for primary procedure)) to status indicator ``B'' (not
                recognized under OPPS) to indicate that the codes are not paid under
                the hospital OPPS but may be paid under a different Medicare payment
                system other than the OPPS. However, if the services described by
                either CPT code 99457 or 99458 are performed in the hospital outpatient
                facility, the facility should report an alternate code. These codes are
                listed in Table 34 along with the descriptors and status indicator
                assignments. In addition, the definitions for all the OPPS status
                indicators can be found in Addendum D1.
                 We note that for CY 2020, we revised the status indicator for CPT
                code 99457 from ``M'' (Items and Services Not Billable to the MAC. Not
                paid under OPPS) to ``B,'' and for CPT code 99458, which is an add-on
                code, from ``N'' (packaged) to ``B'' effective March 1, 2020. We made
                the changes to enable Critical Access Hospitals (CAHs) to bill under
                CAH's Method II for these waiver services so that claims with these
                codes would process appropriately in the Integrated Outpatient Code
                Editor (IOCE). We announced the revisions in the July 2020 OPPS
                Quarterly Update CR (Transmittal 10224, Change Request 11814, dated
                July 15, 2020).
                 At the August 31, 2020 HOP Panel Meeting, a presenter requested
                that we revise the status indicators for these codes. Specifically, the
                presenter suggested that CPT codes 99091 and 99457 should be treated
                similar to HCPCS G0463 (Hospital outpatient clinic visit for assessment
                and management of a patient), which is assigned to status indicator
                ``V'' (Clinic or Emergency Department Visit) and APC 5012 (Clinic
                Visits and Related Services) which has a CY 2021 proposed payment rate
                of $120.88. Based on the discussion at the Panel Meeting, the HOP Panel
                recommended that the status indicator for CPT codes 99091 and 99457 be
                revised to ``V'' and the status indicator for CPT code 99458 be revised
                [[Page 85978]]
                to ``N''. We note that we are not accepting the Panel's recommendation
                because we believe that we need further review to determine whether
                these type of services (i.e., remote physiologic monitoring) should be
                paid separately under the OPPS. We appreciate the HOP Panel's
                recommendations on the status indicator revisions for CPT codes 99091,
                99457, and 99458, and will consider them in future rulemaking.
                 Comment: For CPT code 99091, one commenter disagreed with the
                status indicator assignment of ``N,'' and stated the code should not be
                packaged because the service may be the only OPPS service furnished
                during a month for a registered hospital outpatient. The commenter
                recommended assigning the code to either status indicator ``V'' or
                treating it similar to CPT code 99454 (Remote monitoring of physiologic
                parameter(s) (e.g., weight, blood pressure, pulse oximetry, respiratory
                flow rate), initial; device(s) supply with daily recording(s) or
                programmed alert(s) transmission, each 30 days), which has a payable
                status indicator of ``Q1'' (STV-Packaged Codes) and assigned to APC
                5741 (Level 1 Electronic Analysis of Devices) with a CY 2021 proposed
                payment of $37.76.
                 Response: Although we are sensitive to the concern raised by the
                commenter, we do not believe that revising the status indicator for CPT
                code 99091 would be appropriate at this time. We believe we need
                further review of this code, along with all the remote physiological
                monitoring (PRM) service codes, to determine whether these types of
                services should be separately payable under the OPPS. Therefore, for CY
                2021, we are finalizing our proposal, without modification and will
                continue to assign CPT code 99091 to status indicator ``N,'' and
                consider the suggestion to revise the status indicator in future
                rulemaking. The final CY 2021 status indicator for CPT code 99091 can
                also be found in Table 34 below.
                 Comment: For CPT code 99457, several commenters suggested
                reassigning the code to status indicator ``V,'' similar to CPT code
                99453 (Remote monitoring of physiologic parameter(s) (e.g., weight,
                blood pressure, pulse oximetry, respiratory flow rate), initial; set-up
                and patient education on use of equipment), which has a payable status
                indicator of ``V'' and assigned to APC 5012 with a CY 2021 proposed
                payment of $120.88. The commenters stated that in the CY 2020 Physician
                Fee Schedule (PFS), CMS clarified that ``CPT codes 99457 and 99458 can
                be furnished by clinical staff under the general supervision of the
                physician or NPP.'' Based on this statement, the commenters believe
                that CPT code 99457 should be paid separately under the OPPS. The
                commenters reported that because the code is currently assigned to
                status indicator ``B,'' hospital outpatient facilities do not receive
                any reimbursement when the service is provided by clinical staff in a
                hospital outpatient setting. One commenter stated that the status
                indicator should be revised to ``V'' to support the service being
                provided to Medicare beneficiaries under the order of a physician.
                 Response: We appreciate the commenters' suggestions, however, we
                believe we need further evaluation of this code, along with the rest of
                the RPM service codes, to determine whether this type of service should
                be separately payable under the OPPS. Therefore, for CY 2021, we are
                finalizing our proposal, without modification, to assign CPT code 99457
                to status indicator ``B.'' We will consider the commenters' suggestion
                to revise the status indicator for future rulemaking. The final CY 2021
                status indicator for CPT code 99457 can also be found in Table 34
                below. Also, as noted above, we revised the status indicator for CPT
                code 99457 from ``M'' to ``B'' effective March 1, 2020, to enable
                Critical Access Hospitals (CAHs) to bill under CAH's Method II for
                these waiver services so that claims with this code would process
                appropriately in the Integrated Outpatient Code Editor (IOCE). We
                announced the revisions in the July 2020 OPPS Quarterly Update CR
                (Transmittal 10224, Change Request 11814, dated July 15, 2020).
                 Comment: For CPT code 99458, the commenters suggested the
                reassignment to status indicator ``N'' because this is an add-on code.
                 Response: As noted above, similar to CPT code 99457, we revised the
                status indicator for CPT code 99458 to ``B'' effective March 1, 2020,
                to enable Critical Access Hospitals (CAHs) to bill under CAH's Method
                II for the service so that claims with this code would process
                appropriately in the Integrated Outpatient Code Editor (IOCE). We
                announced the revisions in the July 2020 OPPS Quarterly Update CR
                (Transmittal 10224, Change Request 11814, dated July 15, 2020). We
                appreciate the commenters' suggestions, however, we believe we need
                further evaluation of this code, along with the rest of the RPM service
                codes, to determine whether this type of service should be separately
                payable under the OPPS. Therefore, for CY 2021, we are finalizing our
                proposal, without modification, to assign CPT code 99458 to status
                indicator ``B,'' and we will consider the suggestion to revise the
                status indicator in future rulemaking. The final CY 2021 status
                indicator for CPT code 99458 can be found in Table 34 below.
                 Comment: One commenter indicated that CMS is currently paying
                separately for certain RPM services and have assigned the codes to
                separately payable status indicator ``V,'' ``S,'' or ``Q1,'' however,
                some other RPM codes are assigned to non-payable status indicators such
                as ``B'' and ``M''. The commenter added that the status indicator
                assignments for the RPM codes are inconsistent and confusing to
                providers. The same commenter suggested that CMS recognize each
                distinct RPM CPT code that require hospital resources and assign the
                codes consistently to payable status indicators. The commenter
                recommended reassigning CPT codes 93264, 93268, 93297, 93298 from
                status indicator ``M'' to ``S'' and assigning the code to either APC
                5741 (Level 1 Electronic Analysis of Devices) with a proposed CY 2021
                payment rate of $37.76, APC 5742 (Level 2 Electronic Analysis of
                Devices) with a proposed CY 2021 payment rate of $101.76, or APC 5743
                (Level 3 Electronic Analysis of Devices) with a proposed CY 2021
                payment rate of $272.91. The commenter stated that CPT codes 93264,
                93268, 93297, 93298 should be covered and payable, similar to CPT code
                93296 (Interrogation device evaluation(s) (remote), up to 90 days;
                single, dual, or multiple lead pacemaker system, leadless pacemaker
                system, or implantable defibrillator system, remote data
                acquisition(s), receipt of transmissions and technician review,
                technical support and distribution of results), which is assigned to
                APC 5741 with a proposed CY 2021 payment rate of $37.76. The same
                commenter suggested reassigning CPT code 99474 from status indicator
                ``B'' to ``V'' and assigning it to APC 5012, similar to CPT code 99453
                (Remote monitoring of physiologic parameter(s) (e.g., weight, blood
                pressure, pulse oximetry, respiratory flow rate), initial; set-up and
                patient education on use of equipment).
                 Response: We appreciate the commenter's suggestions, however, we
                believe that we need further evaluation of the codes to determine
                whether all RPM CPT codes should be paid separately under the OPPS.
                Therefore, for CY 2021, we are finalizing our proposal, without
                modification, to assign CPT codes 93264, 93268, 93297, and 93298 to
                status indicator ``M,'' and consider the suggestions to revise the
                status indicator and assign appropriate APCs to the codes in future
                rulemaking. Similarly, we are finalizing our
                [[Page 85979]]
                proposal, without modification, to assign CPT code 99474 to status
                indicator B'' for CY 2021. The final status indicators for CPT codes
                93264, 93268, 93297, 93298, and 99474 can be found in Table 34 below.
                 Commenter: One commenter suggested revising the status indicator
                for 19 CPT codes that describe virtual check-ins, e-visits, and
                telephone evaluation and management services from non-payable to
                separately payable under the OPPS. The 19 codes, along with the
                proposed status indicator assignments and descriptors, can be found in
                Table 34 below. The commenter explained that when clinicians furnish
                virtual check-ins, e-visits, and telephone E/M services to hospital
                outpatients, hospital resources are used to support the clinician. The
                commenter stated that while the codes are separately payable under the
                PFS, the hospital resources are not paid separately under the OPPS. The
                commenter believes that under 42 CFR 419.22, virtual or remote services
                are not excluded from OPPS and, therefore, the facility expense should
                be paid separately under the OPPS.
                 Response: We appreciate the commenter's suggestions, however, we
                believe that we need further evaluation of the 19 codes to determine
                whether the services should be paid separately under the OPPS.
                Therefore, for CY 2021, we are finalizing our proposal, without
                modification, to assign the codes to either status indicator ``A'' or
                ``B'' for the 19 codes listed in Table 34 as virtual check-in, e-visit,
                and telephone E/M services.
                 Comment: One commenter suggested revising the status indicator for
                two medication therapy management (MTM) codes from ``E1'' to ``B,'' and
                indicated that the codes should be assigned to the same status
                indicator as genetic counseling code CPT 96040 (Medical genetics and
                genetic counseling services, each 30 minutes face-to-face with patient/
                family), which is assigned to status indicator ``B'' under the OPPS.
                Specifically, the commenter recommended reassigning CPT codes 99605
                (Medication therapy management service(s) provided by a pharmacist,
                individual, face-to-face with patient, with assessment and intervention
                if provided; initial 15 minutes, new patient) and 99606 (Medication
                therapy management service(s) provided by a pharmacist, individual,
                face-to-face with patient, with assessment and intervention if
                provided; initial 15 minutes, established patient) from ``E1'' to
                ``B.'' The commenter explained that the CY 2021 PFS proposed rule
                clarified that genetic counseling and pharmacist services can be
                considered ``incident to'' a professional service in the office
                setting. Specifically, the commenter noted that the 2021 PFS proposed
                rule (85 FR 50146) states ``Medication management is covered under both
                Medicare Part B and Part D. We are reiterating the clarification we
                provided in the May 1st COVID-19 IFC (85 FR 27550 through 27629), that
                pharmacists fall within the regulatory definition of auxiliary
                personnel under our regulations at Sec. 410.26. As such, pharmacists
                may provide services incident to the services, and under the
                appropriate level of supervision, of the billing physician or NPP, if
                payment for the services is not made under the Medicare Part D
                benefit.'' In light of the statements, the commenter believes that when
                MTM services are furnished in the HOPD setting, the hospital outpatient
                facility is reporting for the pharmacists' services, which the
                commenter believes meet the definition of outpatient services at 42 CFR
                410.27 and the definition of OPPS services at 42 CFR 419.21.
                Consequently, the commenter believes that MTM services should be paid
                separately under the OPPS.
                 Response: We appreciate the commenter's suggestions, however, we
                believe that we need further evaluation of the two MTM codes to
                determine whether the services should be paid separately under the
                OPPS. We note that policies discussed in the PFS proposed rules
                typically do not apply to OPPS policies; however, we will review the
                issue. Therefore, for CY 2021, we are finalizing our proposal, without
                modification, to assign the codes to status indicator ``E1'' for the 2
                MTM codes listed in Table 34.
                 Comment: One commenter suggested that CMS treat all telehealth and
                communication technology-based services (CTBS) consistently with OPPS
                payable status indicators and ambulatory payment classification (APC)
                assignments. The commenter explained that these issues were discussed
                in the 2021 PFS proposed rule.
                 Response: We appreciate the commenter's suggestion, however, we
                believe that we need further evaluation of the issue to determine
                whether all the codes that describe telehealth and communication
                technology-based services (CTBS) should be paid separately under the
                OPPS. In addition, we made no proposals regarding these issues in the
                CY 2021 OPPS/ASC proposed rule. As stated above, the proposed policies
                discussed in the PFS proposed rules typically do not apply to OPPS
                policies because they are two different Medicare payment systems.
                However, we will review the issue for potential future rulemaking.
                 In summary, after consideration of the public comments, we are
                finalizing our proposal, without modification, for the 29 codes listed
                in Table 34 for CY 2021. In addition, we refer readers to Addendum D1
                of this final rule with comment period for the status indicator (SI)
                meanings for all codes reported under the OPPS. Both Addendum B and D1
                are available via the internet on the CMS website.
                BILLING CODE 4120-01-P
                [[Page 85980]]
                [GRAPHIC] [TIFF OMITTED] TR29DE20.047
                [[Page 85981]]
                [GRAPHIC] [TIFF OMITTED] TR29DE20.048
                [[Page 85982]]
                [GRAPHIC] [TIFF OMITTED] TR29DE20.049
                BILLING CODE 4120-01-C
                25. Review of Electrocorticograms From an Implanted Brain
                Neurostimulator (APC 5741)
                 For CY 2021, we proposed to continue to assign CPT code 95836
                (Electrocorticogram from an implanted brain neurostimulator pulse
                generator/transmitter, including recording, with interpretation and
                written report, up to 30 days) to APC 5741 (Level 1 Electronic Analysis
                of Devices) with a proposed payment of $37.76.
                 Comment: A commenter urged CMS to reassign CPT code 95836 from APC
                5741 to APC 5742 (Level 2 Electronic Analysis of Devices) with a
                proposed payment rate of $101.76, and stated that the payment for APC
                5741 does not adequately reflect the resources used by HOPDs in
                performing this procedure.
                 Response: Based on our analysis of the hospital outpatient claims
                data for this final rule, we disagree that the resource cost to perform
                the service is inappropriate. Our evaluation of the latest claims data
                show a geometric mean cost of about $14 based on 21 single claims (out
                of 213 total claims). We believe that reassigning the code to APC 5742,
                whose geometric mean cost is approximately $98, would significantly
                overpay for the service. Additionally, we believe that the payment for
                CPT code 95836 is sufficient to cover the hospital cost of performing
                the service.
                 In summary, after consideration of the public comment, we are
                finalizing our proposal, without modification, to continue to assign
                CPT code 95836 to APC 5741 for CY 2021. The final CY 2021 payment rate
                for the code can be found in Addendum B to this final rule with comment
                period. In addition, we refer readers to Addendum D1 of this final rule
                with comment period for the status indicator (SI) meanings for all
                codes reported under the OPPS. Both Addendum B and D1 are available via
                the internet on the CMS website.
                 As we do every year, we will reevaluate the APC assignment for CPT
                code 95836 in the next rulemaking cycle. We remind hospitals that we
                review, on an annual basis, the APC assignments for all services and
                items paid under the OPPS based on the latest claims data available to
                us.
                26. Therapeutic Apheresis
                 The LIXELLE[supreg] [beta]2-microglobulin Apheresis Column is
                indicated for use in the treatment of dialysis-related amyloidosis
                (DRA), a disease that affects people with end-stage renal disease
                (ESRD) who have been receiving dialysis for five or more years. The
                LIXELLE[supreg] device is used in an apheresis procedure that
                selectively removes [beta]2-microglobulin (``[beta]2m'') from the
                circulating blood of patients with DRA. LIXELLE[supreg] is used
                pursuant to a physician prescription in conjunction with hemodialysis
                and is intended to be used at each hemodialysis session (i.e.,
                frequency of treatment is expected to be three times per week).
                 In March 2015, FDA approved LIXELLE[supreg] as a Class III
                Humanitarian Use Device (HUD) with an approved Humanitarian Device
                Exemption (HDE). FDA regulations require the manufacturer to conduct a
                post-approval study (PAS) to evaluate the safety of the LIXELLE[supreg]
                Apheresis procedure in U.S. patients on chronic hemodialysis with
                clinically-diagnosed DRA, and assess the probable benefit of
                LIXELLE[supreg] Apheresis to increase the [beta]2m reduction rate in
                these patients in successive dialysis sessions (compared to dialysis
                without LIXELLE[supreg]). Currently, there is no payment under the OPPS
                for the apheresis procedure used with the LIXELLE[supreg] device.
                 Comment: One commenter, the manufacturer of the LIXELLE[supreg]
                device,
                [[Page 85983]]
                requested that CMS provide payment for the apheresis procedure used
                with the device under the OPPS. The commenter stated that the
                LIXELLE[supreg] apheresis procedure may be administered in either a
                dialysis facility or the hospital outpatient department and that the
                HOPD was the more clinically appropriate setting. Specifically, the
                commenter requested that CMS provide payment through the OPPS via one
                of three potential pathways: (1) Allow payment for the apheresis
                procedure used with the LIXELLE[supreg] device through CPT code 36516
                (Therapeutic apheresis with extracorporeal immunoadsorption, selective
                adsorption or selective filtration and plasma reinfusion), which was
                proposed to be assigned to APC 5243 (Level 3 Blood Product Exchange and
                Related Services) for CY 2021, and require the use of a modifier or
                add-on code when the LIXELLE[supreg] apheresis procedure is billed to
                reduce the payment for the procedure to the payment rate for APC 5242
                (Level 2 Blood Product Exchange and Related Services); (2) allow
                payment for the dialysis performed as part of LIXELLE[supreg] apheresis
                procedure through HCPCS code G0257 (Unscheduled or emergency dialysis
                treatment for an ESRD patient in a hospital outpatient department that
                is not certified as an ESRD facility), which is assigned to APC 5401
                (Dialysis) for CY 2021, and require the use of a modifier or add-on
                code to provide additional payment beyond that provided by APC 5401; or
                (3) create a HCPCS C code or G code for the LIXELLE[supreg] apheresis
                procedure and assign the code to APC 5242 (Level 2 Blood Product
                Exchange and Related Services). Finally, the commenter also noted that
                they have been unable to complete the FDA-required post-approval study
                as a condition of the HDE, due to difficulty in securing patient
                enrollment because of lack of CMS payment for the LIXELLE[supreg]
                apheresis procedure.
                 Response: We appreciate these comments and understand the various
                issues related to coverage and payment for the LIXELLE[supreg]
                apheresis procedure. We will consider these comments for future
                rulemaking.
                27. Tympanostomy Using an Automated Tube Delivery System (APC 5163)
                 As displayed in Addendum B to the CY 2021 OPPS/ASC proposed rule,
                we proposed to assign CPT code 0583T (Tympanostomy (requiring insertion
                of ventilating tube), using an automated tube delivery system,
                iontophoresis local anesthesia) to status indicator (SI) ``E1'' to
                indicate that the code is not payable by Medicare when submitted on
                outpatient claims (any outpatient bill type) because the services
                associated with these codes are either not covered by any Medicare
                outpatient benefit category, are statutorily excluded from Medicare
                payment, or are not reasonable and necessary.
                 Comment: Some commenters reported that the device associated with
                CPT code 0583T received FDA approval in November 2019 and requested
                separate payment for the code. They specifically requested assignment
                to APC 5164 (Level 4 ENT Procedures), with a proposed payment of
                $2,776.63, and also requested assignment to either status indicator
                ``S'' (Procedure or Service, Not Discounted When Multiple) or ``T''
                (Procedure or Service, Multiple Procedure Reduction Applies). They
                reported that assignment to APC 5164 would match the resources
                furnished when providing this service. The manufacturer for the device
                associated with the code explained that while the surgical procedure
                described by CPT code 0583T is primarily performed on children, the
                device is approved for all ages above 6 months. The manufacturer also
                indicated that the procedure will be extremely important for the
                Medicaid population and Medicaid programs who often refer to Medicare
                to establish coverage and payment. One commenter reported that the
                total cost for the complete procedure is approximately $2,776, while
                the device manufacturer reported a cost of about $1,400 for the device.
                 Response: Based on our review of the procedure and input from our
                medical advisors, we believe that the surgical procedure described by
                CPT code 0583T is most similar, in terms of clinical homogeneity and
                resource cost, to CPT code 69436 (Tympanostomy (requiring insertion of
                ventilating tube), local or topical anesthesia), which is assigned to
                APC 5163 (Level 3 ENT Procedures) with a proposed payment of about
                $1,395. Both procedures (as described by CPT codes 0583T and 69436)
                require ventilating tubes that require anesthesia. Therefore, we
                believe that the most appropriate APC assignment for CPT code 0583T is
                APC 5163, which is associated with status indicator ``J1'' (Hospital
                Part B services paid through a comprehensive APC).
                 In summary, after consideration of the public comments, we are
                finalizing our proposal with modification, and assigning CPT code 0583T
                to APC 5163 with a status indicator of ``J1'' for CY 2021. The final CY
                2021 payment rate for the code can be found in Addendum B to this final
                rule with comment period. In addition, we refer readers to Addendum D1
                of this final rule with comment period for the status indicator (SI)
                meanings for all codes reported under the OPPS. Both Addendum B and D1
                are available via the internet on the CMS website.
                28. Unlisted Dental Procedure (APC 5161)
                 For CY 2021, we proposed to continue to assign CPT code 41899
                (Unlisted procedure, dentoalveolar structures) to APC 5161 (Level 1 ENT
                Procedures) with a payment rate of $213.59.
                 Comment: Two dental specialty societies expressed concern with the
                payment rate for CPT code 41899. They explained that this is the only
                CPT code available for dental surgery and its low reimbursement is
                insufficient to cover the facility costs. The commenters added that the
                low payment rate has resulted in many dentists, especially pediatric
                dentists, experiencing difficulty in obtaining operating room (OR) time
                to perform surgical procedures under general anesthesia. They stated
                that the problem has been exacerbated by the COVID-19 pandemic, with
                further limited access to ORs to address patient dental needs.
                 Response: CPT code 41899 is designated as an unlisted code. Some
                HCPCS codes are used to report items, services, and procedures that do
                not define the exact item, service, or surgical procedure furnished.
                They are commonly called ``unlisted'' codes. The code descriptors often
                contain phrases such as: ``unlisted procedure,'' ``not otherwise
                classified,'' or ``not otherwise specified.'' The unlisted codes
                typically fall within a clinical or procedural category, but they lack
                the specificity needed to describe the resources used. Until a more
                specific HCPCS code is established, as an interim, the unlisted code
                provides a way for providers to report items, services, and procedures
                furnished. In general, unlisted codes are reported when no other
                specific CPT or Level II HCPCS code accurately describes the item,
                procedure, or service. Because of the lack of specificity, unlisted
                codes are assigned to the lowest level, clinically appropriate APC
                group under the OPPS. The assignment of the unlisted codes to the
                lowest level APC in the clinical category specified in the code
                provides a reasonable means for interim payment until such time as
                there is a code that specifically describes what is being paid. It also
                encourages the creation of codes where appropriate and protects against
                overpayment of services that are not clearly identified on the claim.
                As a reminder, unlisted codes are not used in establishing the percent
                of claims contributing to the APC, nor are their
                [[Page 85984]]
                costs used in the calculation of the APC geometric mean (80 FR 70321),
                because, by the code's definition, we do not know what service or
                combination of services is reflected in the claims billed with the
                unlisted code. Currently, we have five levels of ENT Procedure APCs,
                Levels 1 through 5, with Level 1 assigned to the lowest paying of the
                five APCs. Because the code is designated as an unlisted code, we
                believe that CPT 41899 code is appropriately assigned to APC 5161,
                which is the lowest level ENT APC.
                 In addition, because unlisted codes are non-specific, HOPDs are
                reminded that Medicare Administrative Contractors (MACs) may have
                additional documentation requirements for how the codes should be
                reported to receive payment. Refer to section 180.3 (Unlisted Service
                or Procedure) in Chapter 4 (Part B Hospital) of the Medicare Claims
                Processing Manual for information on how MACs review claims with
                unlisted codes.
                 We note that AMA establishes new CPT codes, depending on the code
                type, quarterly and annually. Interested parties that desire more
                specific codes for unlisted codes should consult the AMA. Information
                on CPT codes and the process for requesting new codes can be found on
                the AMA website: https://www.ama-assn.org/about/cpt-editorial-panel/cpt-code-process.
                 In summary, after consideration of the public comments, we are
                finalizing our proposal, without modification, to assign CPT code 41899
                to APC 5161 for CY 2021. The final CY 2021 payment rate for the code
                can be found in Addendum B to this final rule with comment period. In
                addition, we refer readers to Addendum D1 of this final rule with
                comment period for the status indicator (SI) meanings for all codes
                reported under the OPPS. Both Addendum B and D1 are available via the
                internet on the CMS website.
                29. Urology and Related Services (APCs 5371 Through 5378)
                 We received comments on the CY 2020 OPPS/ASC proposed rule
                suggesting we revise the APC assignments for the services assigned to
                the Urology & Related Services APCs. The commenter specifically noted
                that a reorganization for APCs 5374 through 5376 would be appropriate,
                but added that there were other adjustments across services within the
                Urology APCs that could improve the structure of these APCs. In
                response to this comment, we stated in the CY 2020 OPPS/ASC final rule
                with comment period that we would consider revisions to the urology
                APCs in future rulemaking.
                 Currently, for CY 2020, there are seven levels of APCs for urology
                services. We reviewed the geometric mean cost for APCs 5371 through
                5377 and, after our analysis of the claims data for the CY 2021 OPPS/
                ASC proposed rule, we believed that a modification to the urology APCs
                would be appropriate.
                 For the CY 2021 OPPS/ASC proposed rule, we evaluated the claims
                data and noted the large difference in geometric mean cost between APC
                5376 (level 6) and APC 5377 (level 7) has continued to grow. This
                difference in the geometric mean cost from APC 5376 to APC 5377 would
                have been about $9,700, with the geometric mean cost for APC 5377 at
                approximately 220 percent of the geometric mean cost of APC 5376. Based
                on the proposed rule claims data, which showed an unusually large
                difference between the geometric mean costs of the Level 6 Urology APC
                and the Level 7 Urology APC on both a dollar and percentage basis, we
                believed that creating an additional APC in the urology and related
                series would provide an appropriate structure, distinguishing between
                clinical and cost similarity for the procedures in the different
                levels. Therefore, for CY 2021, we proposed to establish an additional
                level for the urology and related services APCs, specifically, APC 5378
                (Level 8 Urology and Related Services) and to re-organize the current
                APCs 5376 (Level 6 Urology and Related Services) and 5377 (Level 7
                Urology and Related Services). We believed this re-organization would
                address the lack of an appropriate level for procedures with geometric
                mean costs that fall between current APC 5376 and current APC 5377.
                 As we stated in the proposed rule (85 FR 48842), the proposed
                reorganization would reassign CPT 53440 (Male sling procedure) and CPT
                0548T (Transperineal periurethral balloon continence device; bilateral
                placement, including cystoscopy and fluoroscopy) from the current APC
                5376 to APC 5377.
                 In addition, the proposed revision would reassign the following
                services from APC 5377 to APC 5378:
                 CPT 54416 (Removal and replacement of non-inflatable
                (semi-rigid) or inflatable (self-contained) penile prosthesis at the
                same operative session).
                 CPT 53444 (Insert tandem cuff).
                 CPT 54410 (Removal and replacement of all component(s) of
                a multi-component, inflatable penile prosthesis at the same operative
                session).
                 CPT 54411 (Removal and replacement of all components of a
                multi-component inflatable penile prosthesis through an infected field
                at the same operative session, including irrigation and debridement of
                infected tissue).
                 CPT 54401 (Insertion of penile prosthesis; inflatable
                (self-contained)).
                 CPT 54405 (Insertion of multi-component, inflatable penile
                prosthesis, including placement of pump, cylinders, and reservoir).
                 CPT 53447 (Removal and replacement of inflatable urethral/
                bladder neck sphincter including pump, reservoir, and cuff at the same
                operative session).
                 CPT 53445 (Insertion of inflatable urethral/bladder neck
                sphincter, including placement of pump, reservoir, and cuff).
                 As further stated in the proposed rule, the proposed APC
                reassignment for these 10 codes results in geometric mean costs for
                Levels 6, 7, and 8 of the Urology APCs that we believe more
                appropriately align with the geometric mean costs for services in these
                APCs than the current structure. Specifically, as listed in Table 19 of
                the proposed rule, and reprinted below, the geometric mean cost of
                $8,089.78 for APC 5376, $11,275.15 for APC 5377, and $18,015.54 for APC
                5378 reduces the unusually large gaps on both a dollar and percentage
                basis in geometric mean costs between each APC level.
                [[Page 85985]]
                [GRAPHIC] [TIFF OMITTED] TR29DE20.050
                 We received many comments on our proposal. Below are the comments
                and our responses.
                 Comment: Several commenters supported our proposal to establish an
                additional Urology and Related Services APC, specifically, APC 5378
                (Level 8 Urology and Related Services), and re-organize the current
                APCs 5376 (Level 6 Urology and Related Services) and 5377 (Level 7
                Urology and Related Services). These commenters agreed that the
                addition of APC 5378 within the Urology APCs would better align
                procedures based on their resource cost and clinical homogeneity.
                 Response: We appreciate the commenters' support for our proposal to
                establish new APC 5378 and to re-organize the procedures in the Urology
                APCs. We note that each year, under the OPPS, we revise and make
                changes to the APC groupings based on the latest hospital outpatient
                claims data to appropriately place procedures and services in APCs
                based on clinical characteristics and resource similarity. We note that
                based on our review of the claims data for the final rule, we are also
                finalizing our proposal without modification to reassign CPT codes
                53440 and 0548T to APC 5377. Similarly, we are finalizing our proposal
                without modification to reassign CPT codes 54416, 53444, 54410, 54411,
                54401, 54405, 53447, and 53445 to APC 5378.
                 Comment: A commenter supported the continued assignment of HCPCS
                code C9739 (Cystourethroscopy, with insertion of transprostatic
                implant; 1 to 3 implants) to APC 5375 and HCPCS C9740
                (Cystourethroscopy, with insertion of transprostatic implant; 4 or more
                implants) to APC 5376.
                 Response: We appreciate the commenter's support for our APC
                assignments, which are based on our review of the latest claims data.
                We are finalizing our proposal and assigning these codes to the
                proposed APCs in this final rule.
                 Comment: Several commenters also recommended additional changes
                within APCs 5371 to APC 5376. Specifically, for APCs 5371 and 5372, the
                commenters recommended the following reassignments from APC 5371 to APC
                5372:
                 CPT 51720 (Bladder instillation of anticarcinogenic agent
                (including retention time);
                 CPT 43763 (lacement of gastrostomy tube, percutaneous,
                includes removal, when performed, without imaging or endoscopic
                guidance; requiring revision of gastrostomy tract);
                 51725 Simple cystometrogram (cmg) (e.g., spinal
                manometer);
                 51726 Complex cystometrogram (i.e., calibrated electronic
                equipment); and
                 51040 Cystostomy, cystotomy with drainage.
                 Also, the commenters suggested the reassignment of the following
                codes from APC 5373 to APC 5374:
                 52287 Cystourethroscopy, with injection(s) for
                chemodenervation of the bladder
                 52276 Cystourethroscopy with direct vision internal
                urethrotomy
                 54840 Excision of spermatocele, with or without
                epididymectomy
                 53854 Transurethral destruction of prostate tissue; by
                radiofrequency generated water vapor thermotherapy
                 In addition, the commenters recommended reassigning the following
                codes from APC 5375 to APC 5376:
                 53420 Urethroplasty, 2-stage reconstruction or repair of
                prostatic or membranous urethra; first stage;
                 C9747 Ablation of prostate, transrectal, high intensity
                focused ultrasound (hifu), including imaging guidance;
                 53410 Urethroplasty, 1-stage reconstruction of male
                anterior urethra;
                 50553 Renal endoscopy through established nephrostomy or
                pyelostomy, with or without irrigation, instillation, or
                ureteropyelography, exclusive of radiologic service; with ureteral
                catheterization, with or without dilation of ureter;
                 54111 Excision of penile plaque (peyronie disease); with
                graft to 5 cm in length;
                 55875 Transperineal placement of needles or catheters into
                prostate for interstitial radioelement application, with or without
                cystoscopy;
                 54660 Insertion of testicular prosthesis (separate
                procedure);
                 50576 Renal endoscopy through nephrotomy or pyelotomy,
                with or without irrigation, instillation, or ureteropyelography,
                exclusive of radiologic service; with fulguration and/or incision, with
                or without biopsy; and
                 0549T Transperineal periurethral balloon continence
                device; unilateral placement, including cystoscopy and fluoroscopy;
                 Further, the commenters suggested revising the assignment for these
                codes from APC 5376 to APC 5377:
                [[Page 85986]]
                 55873 Cryosurgical ablation of the prostate (includes
                ultrasonic guidance and monitoring);
                 50081 Percutaneous nephrostolithotomy or
                pyelostolithotomy, with or without dilation, endoscopy, lithotripsy,
                stenting, or basket extraction; over 2 cm; and
                 50562 Renal endoscopy through established nephrostomy or
                pyelostomy, with or without irrigation, instillation, or
                ureteropyelography, exclusive of radiologic service; with resection of
                tumor.
                 Response: Based on our review of the claims data for the final
                rule, we do not believe that reassigning these 21 urology procedures to
                the suggested APCs is appropriate. Our review of the claims data for
                this CY 2021 OPPS/ASC final rule with comment period show that the
                procedures are appropriately placed in the proposed APCs based on
                clinical homogeneity and resource costs. Consequently, we are
                finalizing our proposal without modification for the 21 urology
                procedures discussed above.
                 In summary, after consideration of the public comments, and after
                our analysis of the updated claims data for this final rule with
                comment period, we are finalizing our proposal, without modification,
                to reorganize the Urology and Related Services APCs. The final CY 2021
                payment rate for the codes for all the codes discussed above can be
                found in Addendum B to this final rule with comment period. In
                addition, we refer readers to Addendum D1 of this final rule with
                comment period for the status indicator (SI) meanings for all codes
                reported under the OPPS. Both Addendum B and D1 are available via the
                internet on the CMS website.
                a. High-Intensity Focused Ultrasound of the Prostate (HIFU) Procedure
                (APC 5375)
                 In 2017, CMS received a new technology application for the prostate
                HIFU procedure and established a new code, specifically, HCPCS code
                C9747 (Ablation of prostate, transrectal, high intensity focused
                ultrasound (hifu), including imaging guidance). Based on the estimated
                cost provided in the new technology application, we assigned the new
                code to APC 5376 (Level 6 Urology and Related Services) with a payment
                rate of $7,452.66 effective July 1, 2017. We announced the SI and APC
                assignment in the July 2017 OPPS quarterly update CR (Transmittal 3783,
                Change Request 10122, dated May 26, 2017).
                 For the CY 2018 update, we maintained the assignment of HCPCS code
                C9747 to APC 5376 with a payment rate of $7,596.26. We note that the
                payment rates for the CY 2018 OPPS update were based on claims
                submitted between January 1, 2016 through December 30, 2016, that were
                processed on or before June 30, 2017. Since HCPCS code C9747 was
                established on July 1, 2017, we had no claims data for the procedure
                for use in ratesetting for CY 2018.
                 However, for the CY 2019 update, based on the latest claims data
                for the final rule, we revised the APC assignment for HCPCS code C9747
                from APC 5376 to APC 5375 with a payment rate of $4,020.54. We note
                that the payment rates for CY 2019 were based on claims submitted
                between January 1, 2017 through December 30, 2017, that were processed
                on or before June 30, 2018. Our claims data showed a geometric mean
                cost of approximately $5,000 for HCPCS code C9747 based on 64 single
                claims (out of 64 total claims), which was significantly lower than the
                geometric mean cost of about $7,717 for APC 5376. We believed that the
                geometric mean cost for HCPCS code C9747 was more comparable to the
                geometric mean cost of approximately $4,055 for APC 5375. Consequently,
                we reassigned the code from APC 5376 to APC 5375 (Level 5 Urology and
                Related Services) for CY 2019 and C9747 remained in APC 5376 for CY
                2020.
                 For CY 2021, we proposed to continue to assign HCPCS code C9747 to
                APC 5375 with a proposed payment rate $4,487.87. In addition, we noted
                that HCPCS C9747 will be replaced with CPT 55880 beginning January
                2021.
                 Comment: Many commenters stated that the APC 5375 payment rate does
                not cover the hospital facility cost for this procedure, and thus,
                discourages hospitals from providing this procedure for Medicare
                patients. Some commenters argued that HIFU is a device-intensive
                procedure, believed that the average cost of the HIFU procedure is
                closer to the APC 5376 proposed payment rate of $8,395.87, and
                requested a reassignment to enable Medicare beneficiaries to receive
                the treatment. They projected that maintaining the assignment in APC
                5375 will deter HOPD facilities from offering the HIFU treatment to
                Medicare beneficiaries because the payment is insufficient to cover the
                cost of the procedure. Several commenters recommended we assign this
                procedure to APC 5376 because they believe the service is clinically
                similar and comparable in terms of resources to cryoablation of the
                prostate, which is described by CPT code 55873 (Cryosurgical ablation
                of the prostate (includes ultrasonic guidance and monitoring) and
                assigned to APC 5376 (Level 6 Urology and Related Services), with a
                proposed payment rate of $8,395.62.
                 Response: As we have stated every year since the implementation of
                the OPPS on August 1, 2000, we review, on an annual basis, the APC
                assignments for all services and items (including devices) paid under
                the OPPS based on our analysis of the latest claims data. For CY 2021,
                based on claims submitted between January 1, 2019 through December 30,
                2019, that were processed on or before June 30, 2020, our analysis of
                the latest claims data for this final rule supports maintaining HCPCS
                code C9747 in APC 5375. Specifically, our claims data shows a geometric
                mean cost of approximately $5,744 for HCPCS code C9747 based on 279
                single claims, which is more comparable to the geometric mean cost of
                about $4,300 for APC 5375, rather than the geometric mean cost of
                approximately $8,045 for APC 5376. Furthermore, the claims data do not
                indicate that HCPCS code C9747 meets the device-intensive threshold of
                30 percent. Therefore, we are not designating HCPCS code C9747 as a
                device-intensive procedure.
                 With regard to the issue of similarity to CPT code 55873, while we
                agree both procedures are intended to treat prostate cancer, we
                disagree that the resource costs associated with the prostate HIFU
                procedure are necessarily similar to those of cryoablation of the
                prostate. Specifically, our claims data for cryoablation of the
                prostate shows a geometric mean cost of about $8,423 based on 1,226
                single claims. The geometric mean cost for CPT code 55873 is reasonably
                consistent with APC 5376, which has a geometric mean cost of
                approximately $8,045.
                 In summary, after careful consideration of the public comments and
                after our analysis of the updated claims data for this final rule with
                comment period, we are maintaining the APC assignment for HCPCS code
                C9747 in APC 5375. We note that for the CY 2021 update, the CPT
                Editorial Panel established CPT code 55880 (Ablation of malignant
                prostate tissue, transrectal, with high intensity--focused ultrasound
                (HIFU), including ultrasound guidance) to describe HIFU effective
                January 1, 2021. Therefore, we are deleting HCPCS code C9747 on
                December 31, 2020 because it will be replaced with CPT code 55880. The
                final CY 2021 payment rate for CPT code 55880 can be found in Addendum
                B to this final rule with comment period. In addition, we refer readers
                to Addendum D1 of this final rule with comment period for the status
                indicator (SI) meanings for all codes
                [[Page 85987]]
                reported under the OPPS. Both Addendum B and D1 are available via the
                internet on the CMS website.
                b. Optilume Procedure--Optilume Drug Coated Balloon Catheter System
                (APC 5375)
                 For the July 2020 update, the CPT Editorial Panel established a new
                code, specifically, Category III CPT code 0619T (Cystourethroscopy with
                transurethral anterior prostate commissurotomy and drug delivery,
                including transrectal ultrasound and fluoroscopy, when performed), to
                describe the surgical procedure associated with the Optilume Drug
                Coated Balloon Catheter System used to treat benign prostate
                hyperplasia (BPH). We announced the APC assignment for CPT code 0619T
                in the July 2020 OPPS quarterly update CR (Transmittal 10207, Change
                Request 11814, dated July 2, 2020).
                 Specifically, we assigned CPT code 0619T to APC 5375 (Level 5
                Urology and Related Services) with a payment rate of approximately
                $4,232 effective July 1, 2020 and also assigned the code a status
                indicator of ``J1'' (Hospital Part B services paid through a
                comprehensive APC). Based on input from our medical advisors and the
                nature of the procedure, we believed that the procedure described by
                CPT code 0619T was similar, based on clinical homogeneity and resource
                cost, to CPT code 52601 (Transurethral electrosurgical resection of
                prostate, including control of postoperative bleeding, complete
                (vasectomy, meatotomy, cystourethroscopy, urethral calibration and/or
                dilation, and internal urethrotomy are included)).
                 Comment: A commenter asserted that CPT code 0619T should be
                reassigned to APC 5376 (Level 6 Urology and Related Services). The
                commenter reported that the CPT code 0619T is more clinically similar
                to HCPCS C9740 (Cystourethroscopy, with insertion of transprostatic
                implant; 4 or more implants) in terms of clinical characteristics,
                physician work/intraoperative intensity, and resource costs including
                both non-device related and device related costs. Furthermore, the
                commenter also indicated that CPT code 0619T has additional non-device
                costs, including transrectal ultrasound, fluoroscopy and use of a
                rectal steeper device. The commenter stated that CPT code 0619T has
                similar resource cost to HCPCS code C9740 in terms of its device and
                non-device cost.
                 Response: We appreciate the commenter's input on this subject and
                we understand that this is a new procedure without a predecessor code.
                Based on our evaluation, we do not agree that CPT code 0619T is similar
                to HCPCS code C9740. Based on the nature of the procedure and input
                from our medical advisors, we believe CPT code 0619T is more comparable
                to HCPCS code C9739 (Cystourethroscopy, with insertion of
                transprostatic implant; 1 to 3 implants), and CPT 52601 (Transurethral
                electrosurgical resection of prostate, including control of
                postoperative bleeding, complete (vasectomy, meatotomy,
                cystourethroscopy, urethral calibration and/or dilation, and internal
                urethrotomy are included)), which are both currently assigned to APC
                5375 (Level 5 Urology and Related Services). We believe the assignment
                of CPT code 0619T to APC 5375 and its device-offset of 31 percent is
                appropriate until CMS receives more cost data to support a reassignment
                to another APC or a different device offset adjustment.
                 In summary, after consideration of the comment, we are finalizing
                our proposal without modification to continue to assign CPT code 0619T
                to APC 5375 for CY 2021. The final CY 2021 payment rate for this code
                can be found in Addendum B to this final rule with comment period. In
                addition, we refer readers to Addendum D1 of this final rule with
                comment period for the status indicator (SI) meanings for all codes
                reported under the OPPS. Both Addendum B and D1 are available via the
                internet on the CMS website.
                30. Venous Mechanical Thrombectomy (APC 5193)
                 For CY 2020, CPT code 37187 (Percutaneous transluminal mechanical
                thrombectomy, vein(s), including intraprocedural pharmacological
                thrombolytic injections and fluoroscopic guidance) is assigned to APC
                5192 (Level 2 Endovascular Procedures) with a payment of $4,953.91. For
                CY 2021, we proposed to reassign CPT code 37187 from APC 5192 to APC
                5193 (Level 3 Endovascular Procedures) with a proposed payment of
                $10,222.32.
                 Comment: A commenter approved of our proposal to reassign CPT code
                37187 to APC 5193 and requested that CMS finalize the proposal. The
                commenter noted that the geometric mean cost of CPT code 37187 is well
                aligned with APC 5193, and stated that the cost of the venous
                mechanical thrombectomy procedure is comparable to other clinically
                similar procedures within the APC.
                 Response: We appreciate the support for our proposal to reassign
                CPT code 37187 from APC 5192 to APC 5193. The claims data for the final
                rule, which is based on claims submitted between January 1, 2019,
                through December 31, 2019, processed through June 30, 2020, show that
                the geometric mean cost for CPT code 37187 is approximately $10,385,
                which is within the range of procedures of significant volume within
                APC 5193. Procedures with significant volume in APC 5193 range between
                $7,278 for CPT code 36905 and $13,492 for CPT code 37225. We believe
                that reassigning CPT code 37187 is appropriate based on its clinical
                homogeneity and similarity in resource costs to the other thrombectomy
                procedures (e.g., 36905, 37225) assigned to APC 5193.
                 In summary, after consideration of the public comment, we are
                finalizing our proposal to assign CPT code 37187 to APC 5193 for CY
                2021. The final CY 2021 payment rate for this code can be found in
                Addendum B to this final rule with comment period. In addition, we
                refer readers to Addendum D1 of this final rule with comment period for
                the status indicator (SI) meanings for all codes reported under the
                OPPS. Both Addendum B and D1 are available via the internet on the CMS
                website.
                IV. OPPS Payment for Devices
                A. Pass-Through Payment for Devices
                1. Beginning Eligibility Date for Device Pass-Through Status and
                Quarterly Expiration of Device Pass-Through Payments
                a. Background
                 The intent of transitional device pass-through payment, as
                implemented at 42 CFR 419.66, is to facilitate access for beneficiaries
                to the advantages of new and truly innovative devices by allowing for
                adequate payment for these new devices while the necessary cost data is
                collected to incorporate the costs for these devices into the procedure
                APC rate (66 FR 55861). Under section 1833(t)(6)(B)(iii) of the Act,
                the period for which a device category eligible for transitional pass-
                through payments under the OPPS can be in effect is at least 2 years
                but not more than 3 years. Prior to CY 2017, our regulation at 42 CFR
                419.66(g) provided that this pass-through payment eligibility period
                began on the date CMS established a particular transitional pass-
                through category of devices, and we based the pass-through status
                expiration date for a device category on the date on which pass-through
                payment was effective for the category. In the CY 2017 OPPS/ASC final
                rule with comment period (81 FR 79654), in accordance with section
                1833(t)(6)(B)(iii)(II) of the Act, we amended Sec. 419.66(g) to
                provide that the
                [[Page 85988]]
                pass-through eligibility period for a device category begins on the
                first date on which pass-through payment is made under the OPPS for any
                medical device described by such category.
                 In addition, prior to CY 2017, our policy was to propose and
                finalize the dates for expiration of pass-through status for device
                categories as part of the OPPS annual update. This means that device
                pass-through status would expire at the end of a calendar year when at
                least 2 years of pass-through payments had been made, regardless of the
                quarter in which the device was approved. In the CY 2017 OPPS/ASC final
                rule with comment period (81 FR 79655), we changed our policy to allow
                for quarterly expiration of pass-through payment status for devices,
                beginning with pass-through devices approved in CY 2017 and subsequent
                calendar years, to afford a pass-through payment period that is as
                close to a full 3 years as possible for all pass-through payment
                devices.
                 We refer readers to the CY 2017 OPPS/ASC final rule with comment
                period (81 FR 79648 through 79661) for a full discussion of the current
                device pass-through payment policy.
                 We also have an established policy to package the costs of the
                devices that are no longer eligible for pass-through payments into the
                costs of the procedures with which the devices are reported in the
                claims data used to set the payment rates (67 FR 66763).
                b. Expiration of Transitional Pass-Through Payments for Certain Devices
                 As stated earlier, section 1833(t)(6)(B)(iii) of the Act requires
                that, under the OPPS, a category of devices be eligible for
                transitional pass-through payments for at least 2 years, but not more
                than 3 years. There currently are 7 device categories eligible for
                pass-through payment: C1823-Generator, neurostimulator (implantable),
                nonrechargeable, with transvenous sensing and stimulation leads);
                C1824-Generator, cardiac contractility modulation (implantable); C1982-
                Catheter, pressure-generating, one-way valve, intermittently occlusive;
                C1839-Iris prosthesis; C1734-Orthopedic/device/drug matrix for opposing
                bone-to-bone or soft tissue-to bone (implantable); C2596-Probe, image-
                guided, robotic, waterjet ablation; and C1748-Endoscope, single-use
                (that is disposable), Upper GI, imaging/illumination device
                (insertable).
                 The pass-through payment status of the device category for HCPCS
                code C1823 will end on December 31, 2021; the pass-through payment
                status of the device category for HCPCS code C1748 will end on June 30,
                2023; and the pass-through payment status of the device categories for
                HCPCS codes C1824, C1982, C1839, C1734, and C2596 will end on December
                31, 2022. Table 35 shows the expiration of transitional pass-through
                payments for these devices. All of these HCPCS codes will have pass-
                through payment status and will continue to receive pass-through
                payments in CY 2021.
                [GRAPHIC] [TIFF OMITTED] TR29DE20.051
                [[Page 85989]]
                2. New Device Pass-Through Applications
                a. Background
                 Section 1833(t)(6) of the Act provides for pass-through payments
                for devices, and section 1833(t)(6)(B) of the Act requires CMS to use
                categories in determining the eligibility of devices for pass-through
                payments. As part of implementing the statute through regulations, we
                have continued to believe that it is important for hospitals to receive
                pass-through payments for devices that offer substantial clinical
                improvement in the treatment of Medicare beneficiaries to facilitate
                access by beneficiaries to the advantages of the new technology.
                Conversely, we have noted that the need for additional payments for
                devices that offer little or no clinical improvement over previously
                existing devices is less apparent. In such cases, these devices can
                still be used by hospitals, and hospitals will be paid for them through
                appropriate APC payment. Moreover, a goal is to target pass-through
                payments for those devices where cost considerations might be most
                likely to interfere with patient access (66 FR 55852; 67 FR 66782; and
                70 FR 68629). We note that, as discussed in section IV.A.4. of this CY
                2021 OPPS/ASC proposed rule, we created an alternative pathway in the
                CY 2020 OPPS/ASC final rule that granted fast-track device pass-through
                payment under the OPPS for devices approved under the FDA Breakthrough
                Device Program for OPPS device pass-through payment applications
                received on or after January 1, 2020. We refer readers to section
                IV.A.4. of this CY 2021 OPPS/ASC proposed rule for a complete
                discussion of this pathway.
                 As specified in regulations at 42 CFR 419.66(b)(1) through (3), to
                be eligible for transitional pass-through payment under the OPPS, a
                device must meet the following criteria:
                 If required by FDA, the device must have received FDA
                marketing authorization (except for a device that has received an FDA
                investigational device exemption (IDE) and has been classified as a
                Category B device by the FDA), or meet another appropriate FDA
                exemption; and the pass-through payment application must be submitted
                within 3 years from the date of the initial FDA marketing
                authorization, if required, unless there is a documented, verifiable
                delay in U.S. market availability after FDA marketing authorization is
                granted, in which case CMS will consider the pass-through payment
                application if it is submitted within 3 years from the date of market
                availability;
                 The device is determined to be reasonable and necessary
                for the diagnosis or treatment of an illness or injury or to improve
                the functioning of a malformed body part, as required by section
                1862(a)(1)(A) of the Act; and
                 The device is an integral part of the service furnished,
                is used for one patient only, comes in contact with human tissue, and
                is surgically implanted or inserted (either permanently or
                temporarily), or applied in or on a wound or other skin lesion.
                 In addition, according to Sec. 419.66(b)(4), a device is not
                eligible to be considered for device pass-through payment if it is any
                of the following: (1) Equipment, an instrument, apparatus, implement,
                or item of this type for which depreciation and financing expenses are
                recovered as depreciation assets as defined in Chapter 1 of the
                Medicare Provider Reimbursement Manual (CMS Pub. 15-1); or (2) a
                material or supply furnished incident to a service (for example, a
                suture, customized surgical kit, or clip, other than a radiological
                site marker).
                 Separately, we use the following criteria, as set forth under Sec.
                419.66(c), to determine whether a new category of pass-through payment
                devices should be established. The device to be included in the new
                category must--
                 Not be appropriately described by an existing category or
                by any category previously in effect established for transitional pass-
                through payments, and was not being paid for as an outpatient service
                as of December 31, 1996;
                 Have an average cost that is not ``insignificant''
                relative to the payment amount for the procedure or service with which
                the device is associated as determined under Sec. 419.66(d) by
                demonstrating: (1) The estimated average reasonable cost of devices in
                the category exceeds 25 percent of the applicable APC payment amount
                for the service related to the category of devices; (2) the estimated
                average reasonable cost of the devices in the category exceeds the cost
                of the device-related portion of the APC payment amount for the related
                service by at least 25 percent; and (3) the difference between the
                estimated average reasonable cost of the devices in the category and
                the portion of the APC payment amount for the device exceeds 10 percent
                of the APC payment amount for the related service (with the exception
                of brachytherapy and temperature-monitored cryoablation, which are
                exempt from the cost requirements as specified at Sec. 419.66(c)(3)
                and (e)); and
                 Demonstrate a substantial clinical improvement, that is,
                substantially improve the diagnosis or treatment of an illness or
                injury or improve the functioning of a malformed body part compared to
                the benefits of a device or devices in a previously established
                category or other available treatment.
                 Beginning in CY 2016, we changed our device pass-through evaluation
                and determination process. Device pass-through applications are still
                submitted to CMS through the quarterly subregulatory process, but the
                applications will be subject to notice-and-comment rulemaking in the
                next applicable OPPS annual rulemaking cycle. Under this process, all
                applications that are preliminarily approved upon quarterly review will
                automatically be included in the next applicable OPPS annual rulemaking
                cycle, while submitters of applications that are not approved upon
                quarterly review will have the option of being included in the next
                applicable OPPS annual rulemaking cycle or withdrawing their
                application from consideration. Under this notice-and-comment process,
                applicants may submit new evidence, such as clinical trial results
                published in a peer-reviewed journal or other materials for
                consideration during the public comment process for the proposed rule.
                This process allows those applications that we are able to determine
                meet all of the criteria for device pass-through payment under the
                quarterly review process to receive timely pass-through payment status,
                while still allowing for a transparent, public review process for all
                applications (80 FR 70417 through 70418).
                 In the CY 2020 annual rulemaking process, we finalized an
                alternative pathway for devices that are granted a Breakthrough Device
                designation (84 FR 61295) and receive Food and Drug Administration
                (FDA) marketing authorization. Under this alternative pathway, devices
                that are granted a FDA Breakthrough Device designation are not
                evaluated in terms of the current substantial clinical improvement
                criterion at Sec. 419.66(c)(2) for the purposes of determining device
                pass-through payment status, but do need to meet the other requirements
                for pass-through payment status in our regulation at Sec. 419.66.
                Devices that are part of the Breakthrough Devices Program, have
                received FDA marketing authorization, and meet the other criteria in
                regulation can be approved through the quarterly process and announced
                through that process (81 FR 79655). Proposals regarding these devices
                and whether pass-through
                [[Page 85990]]
                payment status should continue to apply are included in the next
                applicable OPPS rulemaking cycle. This process promotes timely pass-
                through payment status for innovative devices, while also recognizing
                that such devices may not have a sufficient evidence base to
                demonstrate substantial clinical improvement at the time of FDA
                marketing authorization.
                 More details on the requirements for device pass-through payment
                applications are included on the CMS website in the application form
                itself at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-
                Payment/HospitalOutpatientPPS/passthrough_payment.html, in the
                ``Downloads'' section. In addition, CMS is amenable to meeting with
                applicants or potential applicants to discuss research trial design in
                advance of any device pass-through application or to discuss
                application criteria, including the substantial clinical improvement
                criterion.
                 Comment: Some commenters requested that CMS waive the criteria for
                establishing new device categories specified at Sec. 419.66(c)(1),
                which states that a device to be included in the category is not
                appropriately described by any of the existing categories or by any
                category previously in effect, and was not being paid for as an
                outpatient service as of December 31, 1996, for devices that are
                granted a FDA Breakthrough Device designation. The commenters stated
                that these devices should automatically be considered not to be
                described by any of the existing (either currently active or expired)
                categories established for transitional device pass-through payments
                because the FDA Breakthrough Device designation implies that the device
                is a first of kind. These commenters noted that under the IPPS New
                Technology Add-on Payment (NTAP), devices granted a Breakthrough Device
                designation that have received FDA marketing authorization are
                considered new and not substantially similar to an existing technology
                for purposes of the NTAP.
                 Response: We continue to believe that it is necessary to evaluate
                whether a device that has been granted a FDA Breakthrough Device
                designation is already described by any of the current device pass-
                through categories or by any category previously in effect to ensure
                that no device is described by more than one category. We also remind
                stakeholders that the criteria for establishing a new device category
                described in the regulation at 42 CFR 419.66(c)(1) are unique to the
                OPPS device pass-through policy.
                b. Applications Received for Device Pass-Through Payment for CY 2021
                 We received five complete applications by the March 1, 2020
                quarterly deadline, which was the last quarterly deadline for
                applications to be received in time to be included in the CY 2021 OPPS/
                ASC proposed rule. We received one of the applications in the second
                quarter of 2019, two of the applications in the fourth quarter of 2019,
                and two of the applications in the first quarter of 2020. Two of the
                applications were approved for device pass-through payment during the
                quarterly review process: CUSTOMFLEX[supreg] ARTIFICIALIRIS and
                EXALTTM Model D Single-Use Duodenoscope. CUSTOMFLEX[supreg]
                ARTIFICIALIRIS received fast-track approval under the alternative
                pathway effective January 1, 2020. EXALTTM Model D Single-
                Use Duodenoscope received fast-track approval under the alternative
                pathway effective July 1, 2020. As previously stated, all applications
                that are preliminarily approved upon quarterly review will
                automatically be included in the next applicable OPPS annual rulemaking
                cycle. Therefore, CUSTOMFLEX[supreg] ARTIFICIALIRIS and
                EXALTTM Model D Single-Use Duodenoscope are discussed below
                in section IV.2.b.1.
                 Applications received for the later deadlines for the remaining
                2020 quarters (June 1, September 1, and December 1), if any, will be
                presented in the CY 2022 OPPS/ASC proposed rule. We note that the
                quarterly application process and requirements have not changed in
                light of the addition of rulemaking review. Detailed instructions on
                submission of a quarterly device pass-through payment application are
                included on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Downloads/catapp.pdf.
                 A discussion of the applications received by the March 1, 2020
                deadline is presented below.
                1. Alternative Pathway Device Pass-Through Applications
                 We received three device pass-through applications by the March
                2020 quarterly application deadline for devices that have received
                Breakthrough Device designation from FDA and FDA marketing
                authorization, and therefore are eligible to apply under the
                alternative pathway. As stated above in section IV.2.a of this final
                rule with comment, under this alternative pathway, devices that are
                granted a FDA Breakthrough Device designation are not evaluated in
                terms of the substantial clinical improvement criterion at Sec.
                419.66(c)(2)(i) for purposes of determining device pass-through payment
                status, but will need to meet the other requirements for pass-through
                payment status in our regulation at Sec. 419.66.
                (1) CUSTOMFLEX[supreg] ARTIFICIALIRIS
                 VEO Ophthalmics submitted an application for a new device category
                for transitional pass-through payment status for the CUSTOMFLEX[supreg]
                ARTIFICIALIRIS by the June 2019 quarterly deadline. The
                CUSTOMFLEX[supreg] ARTIFICIALIRIS device is described as a foldable
                iris prosthesis that is custom-made for each individual patient who
                requires one. The applicant stated that the CUSTOMFLEX[supreg]
                ARTIFICIALIRIS comes in two models-With Fiber or Fiber Free. The two
                models are identical in every respect except that the With Fiber model
                has a polyester meshwork layer embedded in it to provide adequate tear
                strength to withstand suturing.
                 The applicant provided that the CUSTOMFLEX[supreg] ARTIFICIALIRIS
                is intended to serve as an artificial iris prosthesis, inserted at the
                time of cataract surgery or during a subsequent stand-alone procedure.
                The CUSTOMFLEX[supreg] ARTIFICIALIRIS is indicated for use in children
                and adults for the treatment of full or partial aniridia resulting from
                congenital aniridia, acquired defects, or other conditions associated
                with full or partial aniridia. The conditions that the
                CUSTOMFLEX[supreg] ARTIFICIALIRIS treats are rare; congenital aniridia
                is present in approximately 1.8 in 100,000 live births (1 in 40,000 to
                1 in 100,000),6-2 congenital IridoCorneal Endothelial
                Syndrome (ICE) syndrome is even less common (incidence not available).
                Iris defects such as iatrogenic iridodialysis as a complication of
                cataract surgery has variable prevalence, ranging from 0-0.84 percent
                of surgeries,3-8 and may
                [[Page 85991]]
                occur in approximately 0.2 percent of blunt orbital trauma.\9\ Although
                rare, these conditions are cosmetically and functionally limiting. The
                applicant provided that in addition to a noticeably absent or irregular
                iris/pupil, affected patients frequently experience photophobia (light
                sensitivity) and glare as well as symptoms such as dry
                eye.10 11
                ---------------------------------------------------------------------------
                 \6\ Berlin HS, Ritch R. The treatment of glaucoma secondary to
                aniridia. Mt Sinai J Med. 1981;48:11.
                 \2\ Nelson LB, Spaeth GL, Nowinski TS, et al. Aniridia. A
                review. Surv Ophthalmol. 1984; 28:621-642.
                 \3\ Greenberg PB, Tseng VL, Wu WC, et.al. Prevalence and
                predictors of ocular complications associated with cataract surgery
                in United States veterans. Ophthalmology. 2011 Mar;118(3):507-14.
                 \4\ Jaycock P, Johnston RL, Taylor H, et al., UK EPR User Group.
                The Cataract National Dataset electronic multi-centre audit of
                55,567 operations: Updating benchmark standards of care in the
                United Kingdom and internationally. Eye (Lond). 2009;23:38-49.
                 \5\ Lum F, Schein O, Schachat AP, et al. Initial two years of
                experience with the AAO National Eyecare Outcomes Network (NEON)
                cataract surgery database. Ophthalmology. 2000;107:691-697.
                 \6\ Steinberg EP, Tielsch JM, Schein OD, et.al. National study
                of cataract surgery outcomes: Variation in 4-month postoperative
                outcomes as reflected in multiple outcomes measures Ophthalmology.
                1994;101:1131-1140.
                 \7\ Schein OD, Steinberg EP, Javitt JC, et al. Variation in
                cataract surgery practice and clinical outcomes. Ophthalmology.
                1994;101:1142-1152.
                 \8\ Powe NR, Schein OD, Gieser SC, et al. Cataract Patient
                Outcome Research Team Synthesis of the literature on visual acuity
                and complications following cataract extraction with intraocular
                lens implantation. Arch Ophthalmol, 1994;112:239-252.
                 \9\ Kreidl KO, Kim DY, Mansour SE. Prevalence of significant
                intraocular sequelae in blunt orbital trauma. Am J Emerg Med. 2003
                Nov;21(7):525-8.
                 \10\ Weissbart SB, Ayres BD. Management of aniridia and iris
                defects: An update on iris prosthesis options. Curr Opin Ophthalmol.
                2016 May;27(3):244-9.
                 \11\ Lee HJ, Colby KA. A review of the clinical and genetic
                aspects of aniridia. Semin Ophthalmol. 2013 Sep-Nov;28(5-6):306-12.
                ---------------------------------------------------------------------------
                 According to the applicant, currently available treatments for
                symptomatic glare, photophobia, and cosmesis are limited, and an FDA-
                approved, commercially available iris prosthesis fills a needed gap.
                Alternatives include tinted spectacles or contact lenses, iris
                reconstruction (for example, pupilloplasty or iridodialysis repair),
                and corneal tattooing.\10\ Among these, tinted spectacles can provide
                some symptomatic relief, but the applicant stated that they do not
                address the underlying problem and cannot be used in all settings. Iris
                reconstruction requires that sufficient iris tissue be present. Tinted
                contact lenses and corneal tattooing are cosmetically not ideal and
                have an associated risk of corneal infection (corneal ulcer and
                infectious keratitis). According to the applicant, in addition, corneal
                tattooing has a risk of surface toxicity, anterior segment
                inflammation, and/or corneal epithelial defect. The only other
                artificial iris devices in the U.S. were previously available under FDA
                compassionate use exemption (Morcher 50F, 96F; Ophtec 311 aniridia
                lens).\10\ However, these devices are no longer available following FDA
                approval of the CUSTOMFLEX[supreg] ARTIFICIALIRIS.
                 With respect to the newness criterion at Sec. 419.66(b)(1), the
                FDA designated the CUSTOMFLEX[supreg] ARTIFICIALIRIS as a Breakthrough
                Device on December 21, 2017, and approved the premarket approval
                application (PMA) for CUSTOMFLEX[supreg] ARTIFICIALIRIS (P170039) on
                May 30, 2018 for use in the treatment of full or partial aniridia
                resulting from congenital or acquired defects. The applicant provided
                that there was a roughly 3-month market delay after receipt of PMA
                approval while final labeling in its printed form was submitted to FDA
                and FDA completed its review and approval process. The applicant notes
                that commercial availability of the device commenced on September 12,
                2018 after it received FDA approval for the final labeling. We received
                the application for a new device category for transitional pass-through
                payment status for the CUSTOMFLEX[supreg] ARTIFICIALIRIS on May 31,
                2019, which is within 3 years of the date of the initial FDA marketing
                authorization. We solicited public comment on whether the
                CUSTOMFLEX[supreg] ARTIFICIALIRIS meets the newness criterion.
                 Comment: Commenters claimed that the CUSTOMFLEX[supreg]
                ARTIFICIALIRIS meets the newness criterion as described at Sec.
                419.66(b)(1).
                 Response: After consideration of the public comments and our review
                of the application, we agree that the CUSTOMFLEX[supreg] ARTIFICIALIRIS
                meets the newness criterion as described at Sec. 419.66(b)(1).
                 With respect to the eligibility criterion at Sec. 419.66(b)(3),
                the applicant stated that the device is implanted via injection through
                a 2.75-4 mm clear corneal incision. Depending on the site of
                implantation (capsular bag, ciliary sulcus, sutured to sclera), the
                device is cut (trephined) to the correct diameter. The device can also
                be sutured to an intraocular lens if an intraocular lens is also
                implanted at the time of surgery. The applicant further provided that
                the CUSTOMFLEX[supreg] ARTIFICIALIRIS is integral to the service
                provided, is used for one patient only, comes in contact with human
                tissue, and is surgically implanted. The applicant also claimed that
                the CUSTOMFLEX[supreg] ARTIFICIALIRIS meets the device eligibility
                requirements of Sec. 419.66(b)(4) because it is not an instrument,
                apparatus, implement, or item for which depreciation and financing
                expenses are recovered, and it is not a supply or material furnished
                incident to a service. We solicited public comment on whether the
                CUSTOMFLEX[supreg] ARTIFICIALIRIS meets the eligibility criteria at
                Sec. 419.66(b).
                 Comment: Commenters believed that the CUSTOMFLEX[supreg]
                ARTIFICIALIRIS meets the eligibility criteria as described at Sec.
                419.66(b).
                 Response: After consideration of the public comments we received
                and our review of the application, we agree that the CUSTOMFLEX[supreg]
                ARTIFICIALIRIS meets the eligibility criteria as described at Sec.
                419.66(b).
                 The criteria for establishing new device categories are specified
                at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
                provides that CMS determines that a device to be included in the
                category is not appropriately described by any of the existing
                categories or by any category previously in effect, and was not being
                paid for as an outpatient service as of December 31, 1996. Upon review,
                it did not appear that there were any other existing pass-through
                payment categories that might apply to the CUSTOMFLEX[supreg]
                ARTIFICIALIRIS and we solicited public comments on this issue.
                 Comment: Commenters claimed that the CUSTOMFLEX[supreg]
                ARTIFICIALIRIS meets the criterion for establishing new device
                categories specified at Sec. 419.66(c)(1).
                 Response: After consideration of the public comments we received,
                we have determined that there are no existing pass-through categories
                that appropriately describe the CUSTOMFLEX[supreg] ARTIFICIALIRIS and
                we have determined the CUSTOMFLEX[supreg] ARTIFICIALIRIS meets the
                criterion for establishing new device categories specified at Sec.
                419.66(c)(1).
                 The second criterion for establishing a device category, at Sec.
                419.66(c)(2), provides that CMS determines either of the following: (i)
                That a device to be included in the category has demonstrated that it
                will substantially improve the diagnosis or treatment of an illness or
                injury or improve the functioning of a malformed body part compared to
                the benefits of a device or devices in a previously established
                category or other available treatment; or (ii) for devices for which
                pass-through status will begin on or after January 1, 2020, as an
                alternative to the substantial clinical improvement criterion, the
                device is part of the FDA's Breakthrough Devices Program and has
                received FDA marketing authorization. As stated in section IV.2.a
                above, devices that apply under the alternative pathway for devices
                that have a Breakthrough Device designation with a FDA marketing
                authorization are not subject to evaluation for substantial clinical
                improvement (84 FR 61295). The CUSTOMFLEX[supreg] ARTIFICIALIRIS was
                designated as a Breakthrough Device by FDA on December 21, 2017.
                 We did not receive comments on whether the CUSTOMFLEX[supreg]
                ARTIFICIALIRIS meets the second criterion for establishing a device
                category at Sec. 419.66(c)(2)(i). Based on its Breakthrough Device
                designation, we
                [[Page 85992]]
                have determined that CUSTOMFLEX[supreg] ARTIFICIALIRIS meets this
                criterion.
                 The third criterion for establishing a device category, at Sec.
                419.66(c)(3), requires us to determine that the cost of the device is
                not insignificant, as described in Sec. 419.66(d). Section 419.66(d)
                includes three cost significance criteria that must each be met. The
                applicant provided the following information in support of the cost
                significance requirements. The applicant stated that the
                CUSTOMFLEX[supreg] ARTIFICIALIRIS would be reported with CPT code
                66999--Unlisted procedure, anterior segment of eye, which was assigned
                to APC 5491 (Level 1 Intraocular Procedures) for Calendar Year (CY)
                2020. To meet the cost criterion for device pass-through payment
                status, a device must pass all three tests of the cost criterion for at
                least one APC. For our calculations, we used APC 5491, which had a CY
                2019 payment rate of $1,917. Beginning in CY 2017, we calculated the
                device offset amount at the HCPCS/CPT code level instead of the APC
                level (81 FR 79657). CPT code 66999 had a device offset amount of
                $149.80 at the time the application was received. According to the
                applicant, the cost of the CUSTOMFLEX[supreg] ARTIFICIALIRIS is $7,700,
                for both the Fiber Free and with Fiber models.
                 Section 419.66(d)(1), the first cost significance requirement,
                provides that the estimated average reasonable cost of devices in the
                category must exceed 25 percent of the applicable APC payment amount
                for the service related to the category of devices. The estimated
                average reasonable cost of $7,700 for the CUSTOMFLEX[supreg]
                ARTIFICIALIRIS is 402 percent of the applicable APC payment amount for
                the service related to the category of devices of $1,917 (($7,700/
                $1,917) x 100 = 402 percent). Therefore, we stated in the CY 2021 OPPS/
                ASC proposed rule that we believe the CUSTOMFLEX[supreg] ARTIFICIALIRIS
                meets the first cost significance requirement.
                 The second cost significance requirement, at Sec. 419.66(d)(2),
                provides that the estimated average reasonable cost of the devices in
                the category must exceed the cost of the device-related portion of the
                APC payment amount for the related service by at least 25 percent,
                which means that the device cost needs to be at least 125 percent of
                the offset amount (the device-related portion of the APC found on the
                offset list). The estimated average reasonable cost of $7,700 for the
                CUSTOMFLEX[supreg] ARTIFICIALIRIS is 5,140 percent of the cost of the
                device-related portion of the APC payment amount for the related
                service of $150 (($7,700/$150) x 100 = 5,140 percent). Therefore, we
                stated in the CY 2021 OPPS/ASC proposed rule that we believe that the
                CUSTOMFLEX[supreg] ARTIFICIALIRIS meets the second cost significance
                requirement.
                 The third cost significance requirement, at Sec. 419.66(d)(3),
                provides that the difference between the estimated average reasonable
                cost of the devices in the category and the portion of the APC payment
                amount for the device must exceed 10 percent of the APC payment amount
                for the related service. The difference between the estimated average
                reasonable cost of $7,700 for the CUSTOMFLEX[supreg] ARTIFICIALIRIS and
                the portion of the APC payment amount for the device of $1,917 is 394
                percent of the APC payment amount for the related service of $150
                (($7,700 - $150)/$1,917) x 100 = 394 percent). Therefore, we stated in
                the CY 2021 OPPS/ASC proposed rule that we believe that the
                CUSTOMFLEX[supreg] ARTIFICIALIRIS meets the third cost significance
                requirement.
                 We solicited public comment on whether the CUSTOMFLEX[supreg]
                ARTIFICIALIRIS meets the device pass-through payment criteria discussed
                in this section, including the cost criterion.
                 Comment: We received comments indicating that the
                CUSTOMFLEX[supreg] ARTIFICIALIRIS meets the device pass-through payment
                criteria, including the cost criterion.
                 Response: After considering the public comments received and our
                review of the application, we have determined that the
                CUSTOMFLEX[supreg] ARTIFICIALIRIS meets the device pass-through payment
                criteria, including the cost criterion.
                 As stated above, we received the application for the
                CUSTOMFLEX[supreg] ARTIFICIALIRIS application by the June 1, 2019
                quarterly deadline and preliminarily approved it for transitional pass-
                through payment under the alternative pathway for CY 2020, effective
                January 1, 2020. We solicited public comment on whether the
                CUSTOMFLEX[supreg] ARTIFICIALIRIS should continue to receive
                transitional pass-through payment under the alternative pathway for
                devices that have FDA's Breakthrough Device designation and marketing
                authorization.
                 Comment: Commenters stated that CUSTOMFLEX[supreg] ARTIFICIALIRIS
                should continue to receive transitional pass-through payment.
                 Response: After consideration of the public comments we received
                and our review of the device pass-through application, we have
                determined that the CUSTOMFLEX[supreg] ARTIFICIALIRIS meets the
                requirements for device pass-through payment status described at Sec.
                419.66. As stated previously, devices that are granted a FDA
                Breakthrough Device designation are not evaluated in terms of the
                current substantial clinical improvement criterion at Sec.
                419.66(c)(2)(i) for purposes of determining device pass-through payment
                status, but must meet the other criteria for device pass-through
                status, which we believe CUSTOMFLEX[supreg] ARTIFICIALIRIS does.
                Therefore, we are finalizing approval for device pass-through payment
                status for CUSTOMFLEX[supreg] ARTIFICIALIRIS under the alternative
                pathway for devices that have a FDA Breakthrough Device designation and
                are FDA market authorized. For CY 2021, we will continue the device
                pass-through payment status for CUSTOMFLEX[supreg] ARTIFICIALIRIS.
                (2) EXALTTM Model D Single-Use Duodenoscope
                 Boston Scientific Corporation submitted an application before the
                March 2020 quarterly deadline for a new device category for
                transitional pass-through payment status for the EXALTTM
                Model D Single-Use Duodenoscope. The EXALTTM Model D Single-
                Use Duodenoscope is described as a sterile, single-use, flexible
                duodenoscope used to examine the duodenum and perform endoscopic
                retrograde cholangiopancreatography (ERCP) procedures by facilitating
                access to the pancreaticobiliary system. The applicant stated that it
                has designed the technology of the EXALTTM Model D Single-
                Use Duodenoscope to eliminate the risk of nosocomial infections due to
                improper reprocessing of a reusable duodenoscope. As stated above, the
                EXALTTM Model D Single-Use Duodenoscope is used during ERCP
                procedures that are performed to examine bile and pancreatic ducts.
                According to the applicant, the EXALTTM Model D Single-Use
                Duodenoscope enables passage and manipulation of accessory devices in
                the pancreaticobiliary system for diagnostic and therapeutic purposes,
                as necessary. During the ERCP procedure, the physician inserts the
                duodenoscope through the patient's mouth, passes the duodenoscope
                through the esophagus and stomach and enters into the first part of the
                small intestine (duodenum). The applicant stated that during ERCP a
                cannula is passed through the duodenoscope via a working channel and
                used to cannulate a small opening on the duodenal wall. Once that step
                is complete, the physician injects contrast while x-rays are taken to
                study the bile and/or pancreatic ducts. If the physician
                [[Page 85993]]
                identifies an area that warrants further investigation, accessory
                devices can be inserted through the working channel of the scope and
                into the pancreaticobiliary system for diagnosis or treatment.
                According to the applicant, after the conclusion of the procedure, the
                single-use EXALTTM Model D Single-Use Duodenoscope device
                has no further medical use and is fully disposable.
                 With respect to the newness criterion at Sec. 419.66(b)(1), the
                FDA designated the EXALTTM Model D Single-Use Duodenoscope
                as a Breakthrough Device on November 19, 2019, and approved the
                premarket approval application (K193202) for EXALTTM Model D
                Single-Use Duodenoscope on December 13, 2019. We received the
                application for a new device category for transitional pass-through
                payment status for the EXALTTM Model D Single-Use
                Duodenoscope on January 17, 2020, which is within 3 years of the date
                of the initial FDA premarket approval. We solicited public comment on
                whether the EXALTTM Model D Single-Use Duodenoscope meets
                the newness criterion.
                 Comment: The manufacturer of EXALTTM Model D Single-Use
                Duodenoscope believes the device meets the eligibility criteria for
                device pass-through payment under the regulation at Sec. 419.66, which
                includes the newness criterion, based on FDA Breakthrough Device
                designation it received on December 13, 2019 and the 510(k) premarket
                approval it received on November 19, 2019.
                 Response: We appreciate the commenter's input. After consideration
                of the public comment we received and based on the fact that the
                EXALTTM Model D Single-Use Duodenoscope application was
                received January 17, 2020, within 3 years of FDA premarket approval,
                which was on November 19, 2019, and FDA Breakthrough Device designation
                on December 13, 2019, we believe that the EXALTTM Model D
                Single-Use Duodenoscope meets the newness criterion.
                 With regard to the eligibility criterion at Sec. 419.66(b)(3),
                according to the applicant, the EXALTTM Model D Single-Use
                Duodenoscope is integral to the ERCP service provided, is used for one
                patient only, and is surgically inserted as it is inserted through the
                patient's mouth, down the esophagus, into the stomach, and then into
                the first part of the small intestine. The applicant also stated that
                the EXALTTM Model D Single-Use Duodenoscope meets the device
                eligibility requirements of Sec. 419.66(b)(4) because it is not an
                instrument, apparatus, implement, or item for which depreciation and
                financing expenses are recovered, and it is not a supply or material
                furnished incident to a service.
                 Comment: The manufacturer of EXALTTM Model D Single-Use
                Duodenoscope believed that the EXALTTM Model D Single-Use
                Duodenoscope met the eligibility criteria at Sec. 419.66(b). They
                maintained that the EXALTTM Model D Single-Use Duodenoscope
                meets the criterion at Sec. 419.66(b)(3) because it is integral to the
                ERCP service provided, is used for one patient only, and is surgically
                inserted through the patient's mouth, down the esophagus, into the
                stomach, and then into the first part of the small intestine. The
                commenter believes the device meets eligibility requirements at Sec.
                419.66(b)(4) because it is not an instrument, apparatus, implement, or
                item for which depreciation and financing expenses are recovered, and
                it is not a supply or material furnished incident to a service.
                 Response: We appreciate the commenter's feedback. Based on the
                information we have received from the commenter and our review of the
                application, we have determined that EXALTTM Model D Single-
                Use Duodenoscope meets the eligibility criteria at Sec. 419.66(b)(3)
                and (b)(4) because, as previously discussed, the device is integral to
                the service furnished, is used for one patient only, and is inserted
                through the patient's mouth, down the esophagus, into the stomach, and
                finally into the first part of the small intestine. It also is not an
                instrument, apparatus, implement, or item for which depreciation and
                financing expenses are recovered, and it is not a supply or material
                furnished incident to a service.
                 The criteria for establishing new device categories are specified
                at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
                provides that CMS determines that a device to be included in the
                category is not appropriately described by any of the existing
                categories or by any category previously in effect, and was not being
                paid for as an outpatient service as of December 31, 1996. With respect
                to the existence of a previous pass-through device category that
                describes EXALTTM Model D Single-Use Duodenoscope, the
                applicant suggested a category descriptor of ``Duodenoscope, single-
                use.'' The applicant also provided an existing device category ``C1749,
                Endoscope, retrograde imaging/illumination colonoscope device
                (implantable),'' for pass-through payment for another endoscope and
                explained why they believe the category descriptor is not applicable to
                EXALTTM Model D Single-Use Duodenoscope. The applicant
                stated that HCPCS C1749 does not appropriately describe the EXALT Model
                D, as C1749 is intended to describe endoscopic imaging devices that are
                inserted through a colonoscope and into the colon. The applicant argued
                that EXALT Model D is the first and only single-use duodenoscope
                through which devices can be passed, and it is utilized in ERCP
                procedures. The applicant further stated that the scope that is the
                subject of this request provides access to a different part of the
                anatomy, specifically, the pancreaticobiliary system and facilitates
                access for diagnostic and therapeutic purposes, as opposed to the
                devices described by C1749, which are endoscopic imaging devices that
                are inserted through a colonoscope and into the colon, providing access
                to a different part of the anatomy. Upon review, we agreed with the
                applicant that it does not appear that there are any other existing
                pass-through payment categories that might apply and we solicited
                public comment on this issue.
                 Comment: Several commenters stated they did not believe there is an
                existing pass-through payment category that describes the
                EXALTTM Model D Single-Use Duodenoscope. They commented that
                the existing device category that CMS identified does not adequately
                describe critical aspects of the device. The commenters also noted that
                existing category, C1749 Endoscope, retrograde imaging/illumination
                colonoscope device (implantable), does not appropriately describe
                single-use endoscopes that provide access to a different part of the
                anatomy, specifically the upper gastrointestinal (GI) tract.
                 Response: We appreciate the commenters' input. After consideration
                of the public comments we received, we agree there is no existing pass-
                through payment category that appropriately describes the
                EXALTTM Model D Single-Use Duodenoscope because it is a
                single use endoscope with internal channel that provides access to the
                duodenum and the hepatopancreatic duct. Based on this information, we
                have determined that the EXALTTM Model D Single-Use
                Duodenoscope meets the eligibility criterion at Sec. 419.66(c)(1).
                 The second criterion for establishing a device category, at Sec.
                419.66(c)(2), provides that CMS determines either of the following: (i)
                That a device to be included in the category has demonstrated that it
                will substantially improve the diagnosis or treatment of an illness or
                injury or improve the functioning of a malformed body part
                [[Page 85994]]
                compared to the benefits of a device or devices in a previously
                established category or other available treatment; or (ii) for devices
                for which pass-through status will begin on or after January 1, 2020,
                as an alternative to the substantial clinical improvement criterion,
                the device is part of the FDA's Breakthrough Devices Program and has
                received FDA marketing authorization. As previously discussed in
                section IV.2.a above, we finalized the alternative pathway for devices
                that are granted a Breakthrough Device designation and receive FDA
                marketing authorization in the CY 2020 OPPS/ASC final rule (84 FR
                61295). The EXALTTM Model D Single-Use Duodenoscope has a
                Breakthrough Device designation and marketing authorization from the
                FDA and therefore is not evaluated based on substantial clinical
                improvement.
                 We did not receive comments on whether EXALTTM Model D
                Single-Use Duodenoscope meets the second criterion for establishing a
                device category at Sec. 419.66(c)(2). We have determined that the
                EXALTTM Model D Single-Use Duodenoscope meets this
                criterion.
                 The third criterion for establishing a device category, at Sec.
                419.66(c)(3), requires us to determine that the cost of the device is
                not insignificant, as described in Sec. 419.66(d). Section 419.66(d)
                includes three cost significance criteria that must each be met. The
                applicant provided the following information in support of the cost
                significance requirements. The applicant stated that the
                EXALTTM Model D Single-Use Duodenoscope would be reported
                with CPT code 43274 which is associated with APC 5331 (Complex GI
                Procedures). To meet the cost criterion for device pass-through payment
                status, a device must pass all three tests of the cost criterion for at
                least one APC. We used APC 5331 for our calculations, which had a CY
                2020 payment rate of $4,780.30 at the time the application was
                received. Beginning in CY 2017, we calculate the device offset amount
                at the HCPCS/CPT code level instead of the APC level (81 FR 79657). CPT
                code 43274 had a device offset amount of $1,287.81 at the time the
                application was received. According to the applicant, the cost of the
                EXALTTM Model D Single-Use Duodenoscope is $2,930.
                 Section 419.66(d)(1), the first cost significance requirement,
                provides that the estimated average reasonable cost of devices in the
                category must exceed 25 percent of the applicable APC payment amount
                for the service related to the category of devices. The estimated
                average reasonable cost of $2,930 for the EXALTTM Model D
                Single-Use Duodenoscope is 61 percent of the applicable APC payment
                amount for the service related to the category of devices of $4,780.30
                ($2,930/$4,780.30 x 100 = 61.3 percent). Therefore, we believe the
                EXALTTM Model D Single-Use Duodenoscope meets the first cost
                significance requirement.
                 The second cost significance requirement, at Sec. 419.66(d)(2),
                provides that the estimated average reasonable cost of the devices in
                the category must exceed the cost of the device-related portion of the
                APC payment amount for the related service by at least 25 percent,
                which means that the device cost needs to be at least 125 percent of
                the offset amount (the device-related portion of the APC found on the
                offset list). The estimated average reasonable cost of $2,930 for the
                EXALTTM Model D Single-Use Duodenoscope is 228 percent of
                the cost of the device-related portion of the APC payment amount for
                the related service of $1,287.81 ($2,930/$1,287.81) x 100 = 227.5
                percent. Therefore, we believe that the EXALTTM Model D
                Single-Use Duodenoscope meets the second cost significance requirement.
                 The third cost significance requirement, at Sec. 419.66(d)(3),
                provides that the difference between the estimated average reasonable
                cost of the devices in the category and the portion of the APC payment
                amount for the device must exceed 10 percent of the APC payment amount
                for the related service. The difference between the estimated average
                reasonable cost of $2,930 for the EXALTTM Model D Single-Use
                Duodenoscope and the portion of the APC payment amount for the device
                of $1,287.81 is 34 percent of the APC payment amount for the related
                service of $4,780.30 (($2,930-$1,287.81)/$4,780.30) x 100 = 34.4
                percent). Therefore, we believe that the EXALTTM Model D
                Single-Use Duodenoscope meets the third cost significance requirement.
                We solicited public comment on whether the EXALTTM Model D
                Single-Use Duodenoscope meets the device pass-through payment criteria
                discussed in this section, including the cost criterion.
                 As specified above, the EXALTTM Model D Single-Use
                Duodenoscope application was preliminarily approved for transitional
                pass-through payment under the alternative pathway effective July 1,
                2020. We solicited public comment on whether the EXALTTM
                Model D Single-Use Duodenoscope should continue to receive transitional
                pass-through payment under the alternative pathway for devices that
                have a FDA Breakthrough Device designation and are FDA market
                authorized.
                 Comment: Several commenters, including the manufacturer of the
                EXALTTM Model D Single-Use Duodenoscope, believed that the
                device meets the cost criterion for device pass-through payment status.
                Some commenters recommended we not apply a device offset amount for
                EXALTTM Model D Single-Use Duodenoscope because they
                believed that single-use duodenscopes are not replacing devices that
                are packaged into the APC payment rate and thus, should not be subject
                to the device offset.
                 Response: We appreciate the commenters input. Section
                1833(t)(6)(D)(ii) of the Act requires that the amount of payment for a
                pass-through device be the amount by which a hospital's charges,
                adjusted to cost, exceeds the portion of the otherwise applicable APC
                payment amount that the Secretary determines is associated with the
                device. The portion of the APC payment amount that we determine is
                associated with the cost of the pass-through device is referred to as
                the device offset. The device offset is used to reduce the otherwise
                applicable APC payment amount for the applicable pass-through device.
                 After further review, we agree with the commenters. We have
                determined that the costs associated with the EXALTTM Model
                D Single-Use Duodenoscope are not already reflected in the device
                portions of APCs 5303 (Level 3 Upper GI Procedures) or 5331 (Complex GI
                Procedures) because there were no single-use duodenoscopes on the
                market previously so no operating cost data associated with such
                devices could be included historical OPPS claims data. Therefore, we
                are not applying a device offset for the EXALTTM Model D
                Single-Use Duodenoscope.
                 After consideration of the public comments we received, we believe
                that EXALTTM Model D Single-Use Duodenoscope meets the cost
                criterion for device pass-through payment status.
                 For CY 2021, we will continue the device pass-through payment
                status for EXALTTM Model D Single-Use Duodenoscope. As
                stated previously, devices that are designated as Breakthrough Devices
                by the FDA are not evaluated in terms of the current substantial
                clinical improvement criterion at Sec. 419.66(c)(2)(i) for purposes of
                determining device pass-through payment status, but must meet the other
                criteria for device pass-through status, which we believe
                EXALTTM Model D Single-Use Duodenoscope does. Therefore, we
                are finalizing approval for
                [[Page 85995]]
                device pass-through payment status for EXALTTM Model D
                Single-Use Duodenoscope under the alternative pathway for devices that
                have FDA Breakthrough Device designation and FDA market authorization
                beginning CY 2021.
                (3) BAROSTIM NEOTM System
                 CVRx, Inc. submitted an application for the BAROSTIM
                NEOTM System by the December 2019 quarterly deadline. The
                applicant provided that the BAROSTIM NEOTM is indicated for
                the treatment of symptoms of patients with advanced heart failure. The
                applicant asserted that the BAROSTIM therapy triggers the body's main
                cardiovascular reflex to regulate blood pressure and address the
                underlying causes of the progression of heart failure. According to the
                applicant, increased sympathetic and decreased parasympathetic activity
                contribute to heart failure (HF) symptoms and disease progression.
                Barostim's mechanism of action is stimulating the carotid baroreceptor
                which results in centrally mediated reduction of sympathetic and
                increase in parasympathetic activity. A single 2 mm coated electrode
                with a 7 mm silicone backer is sutured to the carotid artery to
                activate the baroreceptors. It is connected to an implantable pulse
                generator in the chest which provides control of baroreflex activation
                energy. The BAROSTIM NEOTM System uses CVRx patented
                BAROSTIM THERAPYTM technology to trigger the body's own
                natural systems (baroreflex) by electrically activating the carotid
                baroreceptors, the body's natural cardiovascular regulation sensors.
                 According to the applicant, in conditions such as hypertension and
                heart failure, it is believed the baroreceptors, the body's natural
                sensors, are not functioning properly and are not sending sufficient
                signals to the brain. This results in the brain sending signals to
                other parts of the body (heart, blood vessels, kidneys) to constrict
                the blood vessels, retain water and salt by the kidneys and increase
                stress-related hormones. The applicant provided that when the
                baroreceptors are activated by the BAROSTIM NEOTM system,
                signals are sent through neural pathways to the brain. In response, the
                brain works to counteract this stimulation by sending signals to other
                parts of the body (heart, blood vessels, and kidneys) that relax the
                blood vessels and inhibit the production of stress-related hormones.
                These changes act to reduce cardiac after-load and enable the heart to
                increase blood output, while maintaining or reducing its workload.
                Parameters are programmed into the Implantable Pulse Generator (IPG)
                using telemetry via a wireless external programming system. The
                applicant stated that the BAROSTIM NEOTM System is fully
                programmable to adjust the therapy to each patient's needs.
                 With respect to the newness criterion at Sec. 419.66(b)(1), the
                FDA designated the BAROSTIM NEOTM System as a Breakthrough
                Device and approved the premarket approval application (P180050) on
                August 16, 2019 based on the improvement of symptoms of heart failure--
                quality of life, six-minute hall walk, and functional status--for
                patients who remain symptomatic despite treatment with guideline-
                directed medical therapy, are New York Heart Association (NYHA) Class
                III or Class II (who had a recent history of Class III), have a left
                ventricular ejection fraction TM on November 27, 2019, which is within
                3 years of the date of the initial FDA premarketing approval. We
                solicited public comment on whether the BAROSTIM NEOTM meets
                the newness criterion.
                 Comment: The manufacturer stated that BAROSTIM NEOTM
                meets the newness criterion as described by Sec. 419.66(b) because the
                FDA designated the BAROSTIM NEOTM System as a Breakthrough
                Device and approved the premarket application (P180050) on August 16,
                2019 based on the improvement of symptoms of heart failure--quality of
                life, six-minute hall walk, and functional status--for patients who
                remain symptomatic despite treatment.
                 Response: We appreciate the commenter's input. After consideration
                of the public comments we received and because the BAROSTIM
                NEOTM application was received November 27, 2019 and
                received FDA premarketing approval on August 16, 2019 which is within 3
                years, we agree that the BAROSTIM NEOTM meets the newness
                criterion.
                 With respect to the eligibility criterion at Sec. 419.66(b)(3),
                according to the applicant, the use of BAROSTIM NEOTM is
                integral to the service of providing baroreflex therapy, is used for
                one patient only, comes in contact with human skin and is surgically
                implanted or inserted. The applicant also claimed the BAROSTIM
                NEOTM meets the device eligibility requirements of Sec.
                419.66(b)(4) because it is not an instrument, apparatus, implement, or
                item for which depreciation and financing expenses are recovered, and
                it is not a supply or material furnished incident to a service. We
                solicited public comments on whether the BAROSTIM NEOTM
                meets the eligibility criteria at Sec. 419.66(b).
                 Comment: The manufacturer of BAROSTIM NEOTM felt that
                their device met the eligibility criteria at Sec. 419.66(b) because it
                is used for one patient only, comes in contact with human skin and is
                surgically implanted or inserted. The applicant claimed the BAROSTIM
                NEOTM meets the device eligibility requirements of Sec.
                419.66(b)(4) because it is not an instrument, apparatus, implement, or
                item for which depreciation and financing expenses are recovered, and
                it is not a supply or material furnished incident to a service.
                 Response: Based on the information we have received and our review
                of the application, we agree with the commenter that the device is used
                for one patient only, comes in contact with human skin and is
                surgically implanted or inserted. We also agree with the commenter that
                BAROSTIM NEOTM meets the device eligibility requirements of
                Sec. 419.66(b)(4) because it is not an instrument, apparatus,
                implement, or item for which depreciation and financing expenses are
                recovered, and it is not a supply or material furnished incident to a
                service. Based on this assessment we have determined that BAROSTIM
                NEOTM meets the eligibility criterion at Sec. 419.66(b)(3)
                and (4).
                 The criteria for establishing new device categories are specified
                at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
                provides that CMS determines that a device to be included in the
                category is not appropriately described by any existing categories or
                by any category previously in effect, and was not being paid for as an
                outpatient service as of December 31, 1996. With respect to the
                existence of a previous pass-through device category that described
                BAROSTIM NEOTM, the applicant suggested a category
                descriptor of ``Generator, neurostimulator (implantable), non-
                rechargeable with carotid sinus stimulation lead.'' The applicant also
                provided a list of current and expired device categories for pass-
                through payment for other neurostimulation systems and their rationale
                for why they believed the category descriptors are not applicable to
                BAROSTIM NEOTM.
                 The applicant stated that BAROSTIM NEOTM is not
                described by existing device category C1767, Generator, neurostimulator
                (implantable), non-
                [[Page 85996]]
                rechargeable. The applicant stated that similar to the traditional
                spinal cord stimulation (SCS) systems included in this category, the
                BAROSTIM NEOTM System is not rechargeable; however, it is
                the only system that works to deliver CVRx's proprietary baroreflex
                activation therapy (BAT). The applicant provided that BAT uses afferent
                signaling to the brain by stimulating the carotid artery to reduce the
                sympathetic signal and increase the parasympathetic signal. The
                applicant stated that this unique therapy works to rebalance the
                autonomic input to the heart to improve heart failure symptoms.
                 Additionally, the applicant stated that traditional devices provide
                pain relief by disrupting the pain signals traveling between the spinal
                cord's nervous system and the brain, but the BAROSTIM NEO System uses
                the generator to stimulate the baroreceptors in the carotid artery to
                treat the symptoms of patients with advanced heart failure. The
                applicant stated that the BAROSTIM NEO generator is unique in its
                capability to drive electricity up to 20 mA/100 Hz with sufficient
                battery capacity to provide the required therapy through the BAROSTIM
                NEOTM carotid sinus lead. The applicant described that the
                BAROSTIM NEOTM carotid sinus lead is sutured to the carotid
                wall, where the baroreceptors (stretch fibers) are located. Electrical
                current radiating from the carotid sinus lead activates the
                baroreceptors. When activated, the baroreceptors send afferent signals
                through the Carotid Sinus Nerve to the brain. The brain interprets
                these afferent signals and reacts by reducing the sympathetic tone and
                increasing the parasympathetic tone. The applicant stated that the
                BAROSTIM NEOTM System is the only device currently approved
                by FDA that leverages this mechanism of action to treat the symptoms of
                patients with advanced heart failure.
                 The applicant stated that BAROSTIM NEOTM is not
                described by existing device category C1823, Generator, neurostimulator
                (implantable), non-rechargeable, with transvenous sensing and
                stimulation leads. They contended that existing device category C1823
                is exclusively used to describe a complete system comprised of a
                generator implanted in the chest, a stimulation lead attached to the
                phrenic nerve and a sensing lead to control the function of the
                diaphragm for the treatment of moderate to severe central sleep apnea.
                The applicant also stated that the BAROSTIM NEOTM System
                utilizes a single stimulation lead positioned on the carotid artery to
                stimulate baroreceptors. The stimulation of the baroreceptors creates
                afferent nerve traffic through the Carotid Sinus Nerve, and results in
                the activation of the baroreflex. The applicant again stated that the
                BAROSTIM NEOTM System is the only device currently approved
                by FDA that leverages this mechanism of action to improve quality of
                life and functional status in heart failure.
                 The applicant also provided that BAROSTIM NEOTM is not
                described by existing device category C1778, Lead, neurostimulator
                (implantable). The applicant stated that leads used in traditional
                neurostimulation are implanted on nerves (for example, spinal cord,
                peripheral nerves). The applicant contended that in contrast, the
                BAROSTIM NEO carotid sinus lead is sutured onto the carotid artery and
                is the only lead that is designed to be secured on an arterial wall to
                stimulate sensors located inside the arterial wall (baroreceptors). The
                applicant provided that stimulation is delivered to the arterial wall,
                where the baroreceptors (stretch fibers) are located. The applicant
                stated that the BAROSTIM NEOTM generator is uniquely
                designed to send electric current via the BAROSTIM NEOTM
                carotid sinus lead and that the BAROSTIM NEOTM carotid sinus
                lead is uniquely designed to only interface with the BAROSTIM NEO
                generator. Again, the applicant provided that the BAROSTIM
                NEOTM System is the only device currently approved by FDA
                that leverages this mechanism of action to treat the symptoms of
                patients with advanced heart failure.
                 We stated in the CY 2021 OPPS/ASC proposed rule that we were
                concerned that the BAROSTIM NEOTM System may be
                appropriately described by existing pass-through payment categories.
                For example, we believed that the BAROSTIM NEOTM System may
                be appropriately described by C1767 as the BAROSTIM NEOTM
                device consists of a generator, a neurostimulator, and a lead. We
                solicited public comment on this issue.
                 Comment: The manufacturer of the device stated that it does not
                believe there is an existing pass-through payment category that
                describes the BAROSTIM NEOTM System, commenting that the
                existing device categories that CMS identified do not adequately
                describe critical aspects of the device. The manufacturer noted that
                existing categories, such as C1767, Generator, neurostimulator
                (implantable), non-rechargeable, C1823, Generator, neurostimulator
                (implantable), non-rechargeable, with transvenous sensing and
                stimulation leads, and C1778, Lead, neurostimulator (implantable), do
                not appropriately describe systems that activate special receptors in
                the carotid artery known as baroreceptors, which are in a different
                anatomical location than nerves. The manufacturer stated that
                baroreceptors are sensory cells that respond to mechanical pressure.
                They have ion channels that open to allow ions to pass through when
                they are stretched. Baroreceptors are mechanosensitive ion channels,
                which according to the manufacturer, are functionally very different
                from the voltage gate ion channels of nerves. In addition, the
                manufacturer continued, BAROSTIM NEO stimulates baroreceptors deep
                within the arterial wall of the carotid sinus, as opposed to direct
                activation of the carotid sinus nerve. The manufacturer explained that
                the carotid sinus nerve contains afferent nerve fibers leading from
                baroreceptors, but also contains afferent nerve fibers leading from the
                chemoreceptors, which can cause unwanted side effects. The manufacturer
                stated that BAROSTIM NEOTM uses electricity to activate the
                baroreceptors and stimulate the baroreflex and does not directly
                stimulate neurons and therefore, is not appropriately described by
                existing categories.
                 Response: We appreciate the commenter's input. After consideration
                of the public comments we received, we agree that there is no existing
                pass-through payment category that appropriately describes BAROSTIM
                NEOTM because it is an implantable generator with surgically
                placed lead providing selective stimulation of carotid sinus
                baroreceptors and activation of baroreflex, which then stimulates the
                autonomic nervous system. Based on this information, we have determined
                that BAROSTIM NEOTM meets the eligibility criterion at Sec.
                419.66(c)(1).
                 The second criterion for establishing a device category, at Sec.
                419.66(c)(2), provides that CMS determines either of the following: (i)
                That a device to be included in the category has demonstrated that it
                will substantially improve the diagnosis or treatment of an illness or
                injury or improve the functioning of a malformed body part compared to
                the benefits of a device or devices in a previously established
                category or other available treatment; or (ii) for devices for which
                pass-through status will begin on or after January 1, 2020, as an
                alternative to the substantial clinical improvement criterion, the
                device has received FDA marketing authorization and is part of the
                FDA's Breakthrough Devices Program. As stated in section IV.2.a above,
                devices
                [[Page 85997]]
                that apply under the alternative pathway for devices with FDA
                premarketing approval and a Breakthrough Device designation are not
                subject to evaluation for substantial clinical improvement (84 FR
                61295). The BAROSTIM NEOTM System has Breakthrough Device
                designation and FDA premarketing approval, and therefore is not
                evaluated based on substantial clinical improvement.
                 We did not receive comments on whether BAROSTIM NEOTM
                meets the second criterion for establishing a device category at Sec.
                419.66(c)(2). We have determined that the BAROSTIM NEOTM
                meets this criterion.
                 The third criterion for establishing a device category, at Sec.
                419.66(c)(3), requires us to determine that the cost of the device is
                not insignificant, as described in Sec. 419.66(d). Section 419.66(d)
                includes three cost significance criteria that must each be met. The
                applicant provided the following information in support of the cost
                significance requirements. The applicant stated that the BAROSTIM
                NEOTM would be reported with CPT code 0266T, which they
                consider to be a total system code. CPT code 0266T is assigned to APC
                5464 (Level 4 Neurostimulator and Related Procedures). To meet the cost
                criterion for device pass-through payment status, a device must pass
                all three tests of the cost criterion for at least one APC. For our
                calculations, we used APC 5464, which has a CY 2020 payment rate of
                $29,115.50. Beginning in CY 2017, we calculated the device offset
                amount at the HCPCS/CPT code level instead of the APC level (81 FR
                79657). CPT code 0266T had a device offset amount of $24,253 at the
                time the application was received. According to the applicant, the cost
                of the BAROSTIM NEOTM is $35,000.
                 Section 419.66(d)(1), the first cost significance requirement,
                provides that the estimated average reasonable cost of devices in the
                category must exceed 25 percent of the applicable APC payment amount
                for the service related to the category of devices. The estimated
                average reasonable cost of $35,000 for the BAROSTIM NEOTM is
                120 percent of the applicable APC payment amount for the service
                related to the category of devices of $29,116 (($35,000/29,116) x 100 =
                120.2 percent). Therefore, we believe the BAROSTIM NEOTM
                meets the first cost significance requirement.
                 The second cost significance requirement, at Sec. 419.66(d)(2),
                provides that the estimated average reasonable cost of the devices in
                the category must exceed the cost of the device-related portion of the
                APC payment amount for the related service by at least 25 percent,
                which means that the device cost needs to be at least 125 percent of
                the offset amount (the device-related portion of the APC found on the
                offset list). The estimated average reasonable cost of $35,000 for the
                BAROSTIM NEOTM is 144 percent of the cost of the device-
                related portion of the APC payment amount for the related service of
                $24,253 (($35,000/$24,253) x 100 = 144.3 percent). Therefore, we
                believe that the BAROSTIM NEOTM meets the second cost
                significance requirement.
                 The third cost significance requirement, at Sec. 419.66(d)(3),
                provides that the difference between the estimated average reasonable
                cost of the devices in the category and the portion of the APC payment
                amount for the device must exceed 10 percent of the APC payment amount
                for the related service. The difference between the estimated average
                reasonable cost of $35,000 for BAROSTIM NEOTM and the
                portion of the APC payment amount for the device of $24,253 is 37
                percent of the APC payment amount for the related service of $29,116
                (($35,000-$24,253)/$29,116) x 100 = 36.9 percent). Therefore, we
                believe that the BAROSTIM NEOTM System meets the third cost
                significance requirement.
                 We solicited public comment on whether the BAROSTIM
                NEOTM System meets the device pass-through payment criteria
                discussed in this section, including the cost criterion.
                 Comment: The manufacturer of the BAROSTIM NEOTM System
                believed that the device meets the cost criterion for device pass-
                through payment status.
                 Response: We appreciate the manufacturer's input. After
                consideration of the public comments we received and our cost threshold
                calculations, we agree that BAROSTIM NEOTM meets the cost
                criterion for device pass-through payment status.
                 After consideration of the public comments we received and our
                review of the device pass-through application, we have determined that
                the BAROSTIM NEOTM qualifies for device pass-through
                payment. As stated previously, devices that receive FDA Breakthrough
                Device designation are not evaluated in terms of the current
                substantial clinical improvement criterion at Sec. 419.66(c)(2)(i) for
                purposes of determining device pass-through payment status, but must
                meet the other criteria for device pass-through status, which we
                believe BAROSTIM NEOTM does. Therefore, we are finalizing
                approval for device pass-through payment status beginning CY 2021 for
                BAROSTIM NEOTM under the alternative pathway for devices
                that receive FDA Breakthrough Device designation and FDA premarket
                approval. Please refer to section IV.B.1.b of this final rule with
                comment for more information on the device offset for BAROSTIM
                NEOTM device.
                2. Traditional Device Pass-Through Applications
                (1) Hemospray[supreg] Endoscopic Hemostat
                 Cook Medical submitted an application for a new device category for
                transitional pass-through payment status for the Hemospray[supreg]
                Endoscopic Hemostat (Hemospray) for CY 2021. Hemospray[supreg]
                Endoscopic Hemostat is a prescription use device consisting of a
                hemostatic agent and a delivery system. The hemostatic agent is an
                inert, bentonite powder, naturally sourced from aluminum phyllosilicate
                clay, developed for endoscopic hemostasis. According to the applicant,
                Hemospray[supreg] is indicated by the FDA for hemostasis of nonvariceal
                gastrointestinal bleeding. Using an endoscope to access the
                gastrointestinal tract, the Hemospray delivery system is passed through
                the accessory channel of the endoscope and positioned just above the
                bleeding site without making contact with the GI tract wall. The
                Hemospray[supreg] powder is propelled through the application catheter,
                either a 7 or 10 French polyethylene catheter, by release of
                CO2 from the cartridge located in the device handle and
                sprayed onto the bleeding site. Bentonite can absorb five to ten times
                its weight in water and swell up to 15 times its dry volume. Bentonite
                rapidly absorbs water and becomes cohesive to itself and adhesive to
                tissue, forming a physical barrier to aqueous fluid (for example,
                blood). Hemospray[supreg] is not absorbed by the body and does not
                require removal as it passes through the GI tract within 72 hours.
                Hemospray[supreg] is single-use and disposable.
                 With respect to the newness criterion at Sec. 419.66(b)(1), the
                FDA granted a de novo request classifying the Hemospray[supreg]
                Endoscopic Hemostat (Hemospray[supreg]) as a Class II device under
                section 513(f)(2) of the Federal Food, Drug, and Cosmetic Act on May 7,
                2018. We received the application for a new device category for
                transitional pass-through payment status for the Hemospray[supreg]
                Endoscopic Hemostat on December 2, 2019, which is within 3 years of the
                date of the initial FDA marketing authorization. We solicited public
                comments on whether Hemospray[supreg] meets the newness criterion.
                 Comment: The manufacturer of Hemospray[supreg] believed this device
                meets
                [[Page 85998]]
                the newness eligibility criteria for device pass-through payment under
                the regulation at Sec. 419.66(b)(1) since Hemospray[supreg] was
                granted de novo marketing authorization and classified as a Class II
                device on May 7, 2018.
                 Response: We appreciate the commenter's input. After consideration
                of the public comments we received and based on the fact that the
                Hemospray[supreg] application was received on May 7, 2018, within 3
                years of FDA approval, we agree that the Hemospray[supreg] System meets
                the newness criterion.
                 With respect to the eligibility criterion at Sec. 419.66(b)(3),
                according to the applicant, Hemospray[supreg] is integral to the
                service provided, is used for one patient only, comes in contact with
                human skin, and is applied in or on a wound or other skin lesion. The
                applicant also claimed that Hemospray[supreg] meets the device
                eligibility requirements of Sec. 419.66(b)(4) because it is not an
                instrument, apparatus, implement, or item for which depreciation and
                financing expenses are recovered, and it is not a supply or material
                furnished incident to a service. We solicited public comments on
                whether Hemospray[supreg] meets the eligibility criteria at Sec.
                419.66(b).
                 Comment: Three commenters, including the manufacturer of
                Hemospray[supreg], believed that the Hemospray[supreg] meets the
                eligibility criteria at Sec. 419.66(b)(3) stating that
                Hemospray[supreg] is a prescription single use device consisting of a
                hemostatic agent and a delivery system that is integral to the service
                provided.
                 Response: We appreciate the commenters' input. Based on the public
                comments we have received and our review of the application, we have
                determined that Hemospray[supreg] meets the eligibility criterion at
                Sec. 419.66(b)(3) and (4).
                 The criteria for establishing new device categories are specified
                at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
                provides that CMS determines that a device to be included in the
                category is not appropriately described by any of the existing
                categories or by any category previously in effect, and was not being
                paid for as an outpatient service as of December 31, 1996. We stated in
                the CY 2021 OPPS/ASC proposed rule that we have not identified an
                existing pass-through payment category that describes
                Hemospray[supreg]. We solicited public comment on whether
                Hemospray[supreg] meets the device category criterion.
                 Comment: Two commenters, including the manufacturer of the
                Hemospray[supreg], indicated that there is not an existing pass-through
                payment category that describes the device.
                 Response: We appreciate the commenters' input. After consideration
                of the public comments we received, we continue to believe that there
                is not an existing pass-through payment category that describes
                Hemospray[supreg], and therefore, Hemospray[supreg] meets the device
                category eligibility criterion at Sec. 419.66(c)(1).
                 The second criterion for establishing a device category, at Sec.
                419.66(c)(2), provides that CMS determines either of the following: (i)
                That a device to be included in the category has demonstrated that it
                will substantially improve the diagnosis or treatment of an illness or
                injury or improve the functioning of a malformed body part compared to
                the benefits of a device or devices in a previously established
                category or other available treatment; or (ii) for devices for which
                pass-through status will begin on or after January 1, 2020, as an
                alternative to the substantial clinical improvement criterion, the
                device is part of the FDA's Breakthrough Devices Program and has
                received FDA marketing authorization. The applicant stated that
                Hemospray[supreg] represents a substantial clinical improvement over
                existing technologies. With respect to this criterion, the applicant
                submitted studies that examined the impact of Hemospray[supreg] on
                endoscopic hemostasis outcomes, rebleeding occurrence, and mortality.
                 According to the applicant, Hemospray[supreg] is a topically
                applied mineral powder that offers a novel primary treatment option for
                endoscopic bleeding management, serves as an option for patients who
                fail conventional endoscopic treatments, and serves as an alternative
                to interventional radiology hemostasis (IRH) and surgery. Broadly, the
                applicant outlined two treatment areas in which it stated
                Hemospray[supreg] would provide a substantial clinical improvement: (1)
                As a primary treatment or a rescue treatment after the failure of a
                conventional method, and (2) in use for the treatment of malignant
                lesions. The applicant provided seven articles specifically for the
                purpose of addressing the substantial clinical improvement criterion.
                 The first article provided by the applicant was a prospective,
                single-armed, multicenter Phase 2 safety and efficacy study performed
                in France.\7\ From March 2013 to January 2015, 64 endoscopists in 20
                centers enrolled 202 patients in the study in which Hemospray[supreg]
                was used as either a first line treatment (46.5 percent) or salvage
                therapy (53.5 percent) following unsuccessful treatment with another
                method. The indication for Hemospray[supreg] as a first-line therapy or
                salvage therapy was at the discretion of the endoscopist. Of the 202
                patients, the mean age was 68.9, 69.3 percent were male, and all
                patients were classified into four primary etiologic groups: Ulcers
                (37.1 percent), malignant lesions (30.2 percent), post-endoscopic
                bleeding (17.3 percent), and other (15.3 percent). Patients were
                further classified by the American Society of Anesthesiologist (ASA)
                physical status scores with 4.5 percent as a normal healthy patient,
                24.3 percent as a patient with mild systemic disease, 46 percent as a
                patient with severe systemic disease, 22.8 percent as a patient with
                severe systemic disease that is a constant threat to life, and 2.5
                percent as a moribund patient who is not expected to survive without an
                operation.8 9 Immediate hemostasis was achieved in 96.5
                percent across all patients; among treatment subtypes, immediate
                hemostasis was achieved in 96.8 percent of first-line treated patients
                and 96.3 percent of salvage therapy patients. At day 30, the overall
                rebleeding was 33.5 percent of 185 patients with cumulative incidences
                of 41.4 percent for ulcers, 37.7 percent for malignant lesions, 17.6
                percent for post-endoscopic bleedings, and 25 percent for others. When
                Hemospray[supreg] was used as a first-line treatment, rebleeding at day
                30 occurred in 26.5 percent (22/83) of overall lesions, 30.8 percent of
                ulcers, 33.3 percent of malignant lesions, 13.6 percent of post-
                endoscopic bleedings, and 22.2 percent of other. When Hemospray[supreg]
                was used as a salvage therapy, rebleeding at day 30 occurred in 39.2
                percent (40/102) of overall lesions, 43.9 percent of ulcers, 50.0
                percent of malignant lesions, 25.0 percent of post-endoscopic
                bleedings, and 26.3 percent for others. According to the article, the
                favorable hemostatic results seen from Hemospray[supreg] are due to its
                threefold mechanism of action: Formation of a mechanical barrier;
                concentration of clotting factors at the bleeding site; and enhancement
                of clot formation.\10\ No severe adverse events
                [[Page 85999]]
                were noted, however the authors note the potential for pain exists due
                to the use of carbon dioxide. Lastly, the authors stated that while
                Hemospray[supreg] was found to reduce the need for radiological
                embolization and surgery as salvage therapies, it was not found to be
                better than other hemostatic methods in terms of preventing rebleeding
                of ulcers.
                ---------------------------------------------------------------------------
                 \7\ Haddara S, Jacques J, Lecleire S et al. A novel hemostatic
                powder for upper gastrointestinal bleeding: A multicenter study (the
                GRAPHE registry). Endoscopy 2016; 48: 1084-95.
                 \8\ Ibid.
                 \9\ ASA House of Delegates/Executive Committee. (2014, October
                15). ASA Physical Status Classification System. Retrieved from
                American Society of Anesthesiologists: https://www.asahq.org/standards-and-guidelines/asa-physical-status-classification-system.
                 \10\ Haddara S, Jacques J, Lecleire S et al. A novel hemostatic
                powder for upper gastrointestinal bleeding: A multicenter study (the
                GRAPHE registry). Endoscopy 2016; 48: 1084-95.
                ---------------------------------------------------------------------------
                 The applicant provided a second article consisting of an abstract
                from another systematic review article.\11\ The abstract purports to
                cover a review of prospective, retrospective, and randomized control
                trials evaluating Hemospray[supreg] as a rescue therapy. Eighty-five
                articles were initially identified and 23 were selected for review. Of
                those, 5 studies were selected which met the inclusion criteria of the
                analysis. The median age of patients was 69; 68 percent were male. The
                abstract concludes that when used as a rescue therapy after the failure
                of conventional endoscopic modalities in nonvariceal gastrointestinal
                bleeding, Hemospray[supreg] seems to have significantly higher rates of
                immediate hemostasis.
                ---------------------------------------------------------------------------
                 \11\ Moole, V., Chatterjee, T., Saca, D., Uppu, A., Poosala, A.,
                & Duvvuri, A. A Systematic review and meta-analysis: Analyzing the
                efficacy of hemostatic nanopowder (TC-325) as rescue therapy in
                patients with nonvariceal upper gastrointestinal bleeding.
                Gastroenterology 2019; 156(6), S-741
                ---------------------------------------------------------------------------
                 A third article provided by the applicant described a single-arm
                retrospective analytical study of 261 enrolled patients conducted at 21
                hospitals in Spain.\12\ The mean age was 67 years old, 69 percent of
                patients were male, and the overall technical success, defined as
                correct assembled and delivery of Hemospray[supreg] to a bleeding
                lesion, was 97.7 percent (95.1 percent-99.2 percent). The most common
                causes of bleeding in patients were peptic ulcer (28 percent),
                malignancy (18.4 percent), therapeutic endoscopy-related (17.6
                percent), and surgical anastomosis (8.8 percent). Overall, 93.5 percent
                (89.5 percent to 96 percent) of procedures achieved hemostasis.
                Recurrent bleeding, defined as (1) a new episode of bleeding symptoms,
                (2) a decrease in hemoglobin of >2 g/dL within 48 hours of an index
                endoscopy or >3g/dL in 24 hours, or (3) direct visualization of active
                bleeding at the previously treated lesion on repeat endoscopy, had a
                cumulative incidence at 3 and 30 days of 16.1 percent (11.9 percent-21
                percent) and 22.9 percent (17.8 percent-28.3 percent) respectively. The
                overall risk of Hemospray[supreg] failure at 3 and 30 days was 21.1
                percent (16.4 percent-26.2 percent) and 27.4 percent (22.1 percent-32.9
                percent) respectively with no statistically significant differences
                (p=0.07) between causes at 30 days (for example, peptic ulcer,
                malignancy, anastomosis, therapeutic endoscopy-related, and other
                causes). With the use of multivariate analysis, spurting bleeding vs.
                nonspurting bleeding (subdistribution hazard ratio [sHR] 1.97 (1.24-
                3.13)), hypotension vs. normotensive (sHR 2.14 (1.22-3.75)), and the
                use of vasoactive drugs (sHR 1.80 (1.10-2.95)) were independently
                associated with Hemospray[supreg] failure. The overall 30-day survival
                was 81.9 percent (76.5 percent-86.1 percent) with 46 patients dying
                during follow-up and 22 experiencing bleeding related deaths; twenty
                patients (7.6 percent) with intraprocedural hemostasis died before day
                30. The authors indicated the majority of Hemospray[supreg] failures
                occurred within the first 3 days and the rate of immediate hemostasis
                was similar to literature reports of intraprocedural success rates of
                over 90 percent. The authors stated that the hemostatic powder of
                Hemospray[supreg] is eliminated from the GI tract as early as 24 hours
                after use, which could explain the wide ranging recurrent bleeding
                percentage. The authors reported that importantly, adverse events are
                rare, but cases of abdominal distension, visceral perforation,
                transient biliary obstruction, and splenic infarct have been reported;
                one patient involved in this study experienced an esophageal
                perforation without a definitive causal relationship.
                ---------------------------------------------------------------------------
                 \12\ Rodriguez de Santiago E, Burgos-Santamaria D, Perez-Carazo
                L, et al. Hemostatic spray TC-325 for GI bleeding in a nationwide
                study: Survival analysis and predictors of failure via competing
                risks analysis. Gastrointest Endosc 2019; 90(4), 581-590.
                ---------------------------------------------------------------------------
                 A fourth article provided by the applicant described a single-arm
                multicenter prospective registry involving 314 patients in Europe which
                collected data on days 0, 1, 3, 7, 14, and 30 after endotherapy with
                Hemospray[supreg].\13\ The outcomes of interest in this study were
                immediate endoscopic hemostasis (observed cessation of bleeding within
                5 minutes post Hemospray[supreg] application) with secondary outcomes
                of rebleeding immediately following treatment and during follow-up, 7
                and 30 day all-cause mortality, and adverse events. The sample was 74
                percent male with a median age of 71 with the most common pathologies
                of peptic ulcer (53 percent), malignancy (16 percent), post-endoscopic
                bleeding (16 percent), bleeding from severe inflammation (11 percent),
                esophageal variceal bleeding (2.5 percent), and cases with no obvious
                cause (1.6 percent). The median baseline Blatchford score (BS) and RS
                were 11 and 7 respectively. The BS ranges from 0 to 23 with higher
                scores indicating increasing risk for required endoscopic intervention
                and is based upon the blood urea nitrogen, hemoglobin, systolic blood
                pressure, pulse, presence of melena, syncope, hepatic disease, and/or
                cardiac failure.\14\ The RS ranges from 0 to 11 with higher scores
                indicating worse potential outcomes and is based upon age, presence of
                shock, comorbidity, diagnosis, and endoscopic stigmata of recent
                hemorrhage.\15\ Immediate hemostasis was achieved in 89.5 percent of
                patients following the use of Hemospray[supreg]; only the BS was found
                to have a positive correlation with treatment failure in multivariate
                analysis (OR 1.21 (1.10-1.34)). Rebleeding occurred in 10.3 percent of
                patients who achieved immediate hemostasis again with only the BS
                having a positive correlation with rebleeding (OR: 1.13 (1.03-1.25)).
                At 30 days, the all-cause mortality was 20.1 percent; 78 percent of
                these patients had achieved immediate endoscopic hemostasis and had a
                cause of death resulting from the progression of other comorbidities. A
                subgroup analysis of treatment type (monotherapy, combination therapy,
                and rescue therapy groups) was performed showing no statistically
                significant difference in immediate hemostasis across groups (92.4
                percent, 88.7 percent, and 85.5 percent respectively). Higher all-cause
                mortality rates at 30 days were highest in the monotherapy group (25.4
                percent, p=0.04) as compared to all other groups. According to the
                authors, in comparison to major recent studies, they were able to show
                lower rebleeding rates overall and in all subgroups despite the high-
                risk population.\16\ The authors further note limitations in that the
                inclusion of patients was nonconsecutive and at the discretion of the
                endoscopist at the time of the endoscopy, which allows for the
                potential introduction of selection bias,
                [[Page 86000]]
                which may have affected these study results.
                ---------------------------------------------------------------------------
                 \13\ Alzoubaidi D, Hussein M, Rusu R, et al. Outcomes from an
                international multicenter registry of patients with acute
                gastrointestinal bleeding undergoing endoscopic treatment with
                Hemospray. Digestive Endoscopy 2019.
                 \14\ Saltzman, J. (2019, October). Approach to acute upper
                gastrointestinal bleeding in adults. (M. Feldman, Editor) Retrieved
                from UpToDate: https://www.uptodate.com/contents/approach-to-acute-upper-gastrointestinal-bleeding-in-adults.
                 \15\ Ibid.
                 \16\ Alzoubaidi D, Hussein M, Rusu R, et al. Outcomes from an
                international multicenter registry of patients with acute
                gastrointestinal bleeding undergoing endoscopic treatment with
                Hemospray. Digestive Endoscopy 2019.
                ---------------------------------------------------------------------------
                 The fourth article also described the utility of Hemospray[supreg]
                in the treatment of malignant lesions. According to the applicant,
                malignant lesions pose a significant clinical challenge as successful
                hemostasis rates are as low as 40 percent with high recurrent bleeding
                over 50 percent within 1 month following standard
                treatments.17 18 The applicant added that bleeding from
                tumors is often diffuse and consists of friable mucosa decreasing the
                utility of traditional treatments (for example, ligation, cautery).
                From the fourth article, the applicant noted that 50 patients were
                treated for malignant bleeding with an overall immediate hemostasis in
                94 percent of patients.\19\ Of the 50 patients, 33 were treated with
                Hemospray[supreg] alone, 11 were treated with Hemospray[supreg] as the
                final treatment, and 4 were treated with Hemospray[supreg] as a rescue
                therapy of which 100 percent, 84.6 percent and 75 percent experienced
                immediate hemostasis respectively.\20\ Similarly, from the first
                discussed article, the applicant noted that among malignant bleeding
                patients, 95.1 percent achieved immediate hemostasis with lower
                rebleeding rates at 8 days when Hemospray[supreg] was used as a primary
                treatment compared to when used as a rescue therapy (17.1 percent vs.
                46.7 percent respectively).\21\ The applicant concluded that
                Hemospray[supreg] may provide an advantage as a primary treatment to
                patients with malignant bleeding.
                ---------------------------------------------------------------------------
                 \17\ Kim YI, Choi IJ, Cho SJ, et al. Outcome of endoscopic
                therapy for cancer bleeding in patients with unresectable gastric
                cancer. J Gastroenterol Hepatol 2013;28:1489-95.
                 \18\ Roberts SE, Button LA, Williams JG. Prognosis following
                upper gastrointestinal bleeding. PLoS One 2012;7:e49507.
                 \19\ Alzoubaidi D, Hussein M, Rusu R, et al. Outcomes from an
                international multicenter registry of patients with acute
                gastrointestinal bleeding undergoing endoscopic treatment with
                Hemospray. Digestive Endoscopy 2019.
                 \20\ Alzoubaidi D, Hussein M, Rusu R, et al. Outcomes from an
                international multicenter registry of patients with acute
                gastrointestinal bleeding undergoing endoscopic treatment with
                Hemospray. Digestive Endoscopy 2019.
                 \21\ Haddara S, Jacques J, Lecleire S et al. A novel hemostatic
                powder for upper gastrointestinal bleeding: A multicenter study (the
                GRAPHE registry). Endoscopy 2016; 48: 1084-95.
                ---------------------------------------------------------------------------
                 The applicant provided a fifth article, which consisted of a
                journal pre-proof article detailing a 1:1 randomized control trial of
                20 patients treated with Hemospray[supreg] versus the standard of care
                (for example, thermal and injection therapies) in the treatment of
                malignant gastrointestinal bleeding.\22\ The goals of this pilot study
                were to determine the feasibility of a definitive trial. The primary
                outcome of the study was immediate hemostasis (absence of bleeding
                after 3 minutes) with secondary outcomes of recurrent bleeding at days
                1, 3, 30, 90, and 180 and adverse events at days 1, 30, and 180. The
                mean age of patients was 67.2, 75 percent were male, and on average
                patients presented with 2.9 1.7 comorbidities. All
                patients had active bleeding at endoscopy and the majority of patients
                had an ASA score of 2 (45 percent) or 3 (40 percent). Immediate
                hemostasis was achieved in 90 percent of Hemospray[supreg] patients and
                40 percent of standard of care patients (5 injection alone, 3 thermal,
                1 injection with clips, and 1 unknown). Of those patients in the
                control group, 83.3 percent crossed over to the Hemospray[supreg]
                treatment. One patient died while being treated with Hemospray[supreg]
                from exsanguination; post-mortem examination demonstrated that bleeding
                was caused by rupture of a malignant inferior mesenteric artery
                aneurysm. Overall, 86.7 percent of patients treated with
                Hemospray[supreg] initially or as crossover treatment achieved
                hemostasis. Recurrent bleeding was lower in the Hemospray[supreg] group
                (20 percent) as compared to the control group (60 percent) at 180 days.
                Forty percent of the treated group received blood transfusions as
                compared to 70 percent of the control group. The overall length of stay
                was 14.6 days among treated patients as compared to 9.4 in the control
                group. Mortality at 180 days was 80 percent in both the treated and
                control groups. The authors noted the potential for operator bias in
                the use of Hemospray[supreg] prior to switching to another method when
                persistent bleeding exists. Lastly, the authors noted that while they
                did not occur during this study, there are concerns around the risks of
                perforation, obstruction, and systemic embolization with the use of
                Hemospray[supreg].
                ---------------------------------------------------------------------------
                 \22\ Chen Y-I, Wyse J, Lu Y, Martel M, Barkun AN, TC-325
                hemostatic powder versus current standard of care in managing
                malignant GI bleeding: A pilot randomized clinical trial.
                Gastrointestinal Endoscopy (2019), doi: https://doi.org/10.1016/j.gie.2019.08.005.
                ---------------------------------------------------------------------------
                 A sixth article provided by the applicant was a case-controlled
                study with 10 patients with active upper gastrointestinal bleeding from
                tumor compared with 10 conventional therapy patients selected as
                historical controls, matched by type of tumor.\23\ The study evaluated
                efficacy for tumor-related bleeding and compared Hemospray[supreg] to
                conventional therapies, specifically examining 14-day rebleeding rates,
                lengths of hospital stay (LOS), and mortality rate at 30-day follow up.
                Historical controls were selected from patient medical records from
                2010 to 2014. Among the patients who received Hemospray[supreg], the
                14-day rebleeding rate (10 percent vs. 30 percent; P=0.60) and the 30-
                day mortality rates (10 percent vs. 30 percent, P=0.7) were three times
                lower compared to the control group; neither rate was statistically
                significant. There was no difference in LOS between the
                Hemospray[supreg] and conventional therapy patients.
                ---------------------------------------------------------------------------
                 \23\ Pittayanon, R., Prueksapanich, P., & Rerknimitr, R. (2016).
                The efficacy of Hemospray in patients with upper gastrointestinal
                bleeding from tumor. Endoscopy international open, 4(09), E933-E936.
                ---------------------------------------------------------------------------
                 A seventh article provided by the applicant described a single-arm
                multicenter retrospective study from 2011 to 2016 involving 88 patients
                who bled as a result of either a primary GI tumor or metastases to the
                GI tract.\24\ In this study the authors define immediate hemostasis as
                no further bleeding at least one minute after treatment with
                Hemospray[supreg], and recurrent bleeding was suspected if one of seven
                criteria were met: (1) Hematemesis or bloody nasogastric tube >6 hours
                after endoscopy; (2) melena after normalization of stool color; (3)
                hematochezia after normalization of stool color or melena; (4)
                development of tachycardia or hypotension after >1 hour of vital sign
                stability without other cause; (5) decrease in hemoglobin level greater
                than or equal to 3 hours apart; (6) tachycardia or hypotension that
                does not resolve within 8 hours after index endoscopy; or (7)
                persistent decreasing hemoglobin of >3 g/dL in 24 hours associated with
                melena or hematochezia). The sample for this study consisted of 88
                patients (with a mean age of 65 years old and 70.5 percent male) of
                which 33.3 percent possessed no co-morbid illness, and 25 percent were
                on current antiplatelet/anticoagulant medication. The mean BS was 8.7
                plus or minus 3.7 with a range from 0 to 18. Overall, 72.7 percent of
                patients had a stage 4 adenocarcinoma, squamous cell carcinoma, or
                lymphoma. Immediate hemostasis was achieved in 97.7 percent of
                patients. Recurrent bleeding occurred in 13 of 86 (15 percent) and 1 of
                53 (1.9 percent) at 3 and 30 days, respectively. A total of 25 patients
                (28.4 percent) died during the 30-day follow up period. Overall, 27.3
                percent of patients re-bled within 30 days after treatment of which
                half were within 3 days. Using multivariate analysis, the authors found
                patients
                [[Page 86001]]
                with good performance status, no end-stage cancer, or receiving any
                combination of definitive hemostasis treatment modalities had
                significantly greater survival. The authors acknowledged the recurrent
                bleeding rate post Hemospray[supreg] treatment at 30 days of 38 percent
                is comparable with that seen in sole conventional hemostatic techniques
                and state this implies that Hemospray[supreg] does not differ from
                conventional techniques and remains unsatisfactory.
                ---------------------------------------------------------------------------
                 \24\ Pittayanon R, Rerknimitr R, Barkun A. Prognostic factors
                affecting outcomes in patients with malignant GI bleeding treated
                with a novel endoscopically delivered hemostatic powder.
                Gastrointest Endosc 2018; 87:991-1002.
                ---------------------------------------------------------------------------
                 Ultimately, the applicant concluded nonvariceal gastrointestinal
                bleeding is associated with significant morbidity and mortality in
                older patients with multiple co-morbid conditions. Inability to achieve
                hemostasis and early rebleeding are associated with increased cost and
                greater resource utilization. According to the applicant, patients with
                bleeding from malignant lesions have few options that can provide
                immediate hemostasis without further disrupting fragile mucosal tissue
                and worsening the active bleed. The applicant stated Hemospray[supreg]
                is an effective agent that provides immediate hemostasis in patients
                with GI bleeding as part of multimodality treatment, as well as when
                used as rescue therapy in patients who have failed more conventional
                endoscopic modalities. Furthermore, the applicant stated that in
                patients with malignant bleeding in the GI tract, Hemospray[supreg]
                provides a high rate of immediate hemostasis and fewer recurrent
                bleeding episodes, which, in combination with definitive cancer
                treatment, may lead to improvements in long term survival. Lastly, the
                applicant stated Hemospray[supreg] is an important new technology that
                permits immediate and long-term hemostasis in GI bleeding cases where
                standard of care treatment with clip ligation or cautery are not
                effective.
                 In the CY 2021 OPPS/ASC proposed rule, we noted that the majority
                of studies provided lacked a comparator when assessing the
                effectiveness of Hemospray[supreg]. Three of the articles provided were
                systematic reviews of the literature. While we found these articles
                helpful in establishing a background for the use of Hemospray[supreg],
                we were concerned that they may not provide strong evidence of
                substantial clinical improvement. Four studies appeared to be single-
                armed studies assessing the efficacy of Hemospray[supreg] in the
                patient setting. In all of these articles, comparisons were made
                between Hemospray[supreg] and standard of care treatments; however,
                without the ability to control for factors such as study design,
                patient characteristics, etc., it is difficult to determine if any
                differences seen resulted from Hemospray[supreg] or confounding
                variables. Furthermore, within the retrospective and prospective
                studies lacking a control subset, some level of selection bias appeared
                to potentially be introduced in that providers may have been allowed to
                select the manner and order in which patients were treated, thereby
                potentially influencing outcomes seen in these studies.
                 Additionally, one randomized control trial provided by the
                applicant appeared to be in the process of peer-review and was not yet
                published. Furthermore, this article was written as a feasibility study
                for a potentially larger randomized control trial and contained a
                sample of only 20 patients. This small sample size left us concerned
                that the results were not representative of the larger Medicare
                population. Lastly, as described, we were concerned the control group
                could receive one of multiple treatments which lacked a clear
                designation methodology beyond physician choice. For instance, 50
                percent of the control patients received injection therapy alone, which
                according to the literature provided by the applicant is not an
                acceptable treatment for endoscopic bleeding. Accordingly, it was not
                clear whether performance seen in the treated group as compared to the
                control group was due to Hemospray[supreg] itself or due to confounding
                factors.
                 Third, we stated in the CY 2021 OPPS/ASC proposed rule that we were
                concerned with the samples chosen in many of the studies presented.
                Firstly, the Medicare population is approximately 54 percent female and
                46 percent male.\25\ Many of the samples provided by the applicant were
                overwhelmingly male. Secondly, many of the studies provided were
                performed in Europe and other settings outside of the U.S. We were
                therefore concerned that the samples chosen within the literature
                provided may not represent the Medicare population.
                ---------------------------------------------------------------------------
                 \25\ https://www.cms.gov/files/document/2018-mdcr-enroll-ab-5.pdf.
                ---------------------------------------------------------------------------
                 Lastly, we were concerned about the potential for adverse events
                resulting from Hemospray[supreg]. It was unclear from the literature
                provided by the applicant what the likelihood of these events is and
                whether or not an evaluation for the safety of Hemospray[supreg] was
                performed. About one-third of the articles submitted specifically
                addressed adverse events with Hemospray[supreg]. However, the
                evaluation of adverse events was limited and most of the patients in
                the studies died of disease progression. A few of the provided articles
                mentioned the potential for severe adverse reactions (for example,
                abdominal distension, visceral perforation, biliary obstruction,
                splenic infarct). Specifically, one article \26\ recorded adverse
                events related to Hemospray[supreg], including abdominal distention and
                esophageal perforation.
                ---------------------------------------------------------------------------
                 \26\ Rodriguez de Santiago E, Burgos-Santamaria D, Perez-Carazo
                L, et al. Hemostatic spray TC-325 for GI bleeding in a nationwide
                study: Survival analysis and predictors of failure via competing
                risks analysis. Gastrointest Endosc 2019; 90(4), 581-590.
                ---------------------------------------------------------------------------
                 According to information submitted by the applicant, Cook Medical
                had voluntarily recalled Hemospray[supreg] Endoscopic Hemostat due to
                complaints received that the handle and/or activation knob on the
                device in some cases had cracked or broken when the device was
                activated and in some cases had caused the carbon dioxide cartridge to
                exit the handle. The applicant stated that Cook Medical had received
                one report of a superficial laceration to the user's hand that had
                required basic first aid; however, there were no reports of laceration,
                infection, or permanent impairment of a body structure to users or to
                patients due to the carbon dioxide cartridge exiting the handle. The
                applicant stated that Cook Medical had initiated an investigation and
                would determine the appropriate corrective action(s) to prevent
                recurrence of this issue. According to the applicant, although the
                recall did restrict availability of the device, they wished to continue
                their application as they believed the use of Hemospray[supreg]
                significantly improves clinical outcomes for certain patient
                populations compared to currently available treatments.
                 Based upon the evidence presented, we solicited public comments on
                whether the Hemospray[supreg] Endoscopic Hemostat meets the substantial
                clinical improvement criterion.
                 Comment: The manufacturer responded to several statements regarding
                Hemospray[supreg] and substantial clinical improvement in the CY 2021
                OPPS/ASC proposed rule, and asserted that Hemospray[supreg] meets the
                substantial clinical improvement criterion. The manufacturer agreed the
                data presented is primarily from single arm and retrospective studies
                and may suffer from selection bias. However, the manufacturer suggested
                that CMS should consider that Hemospray[supreg] is commonly used when
                the conventional standard of care, such as injection plus clips or
                cautery, is inadequate to treat patients undergoing an urgent catheter-
                based embolization or surgery. The manufacturer stated that the
                selection
                [[Page 86002]]
                bias is toward patients with the highest risk of morbidity or mortality
                and the high rate of successful treatment for those patients with
                Hemospray[supreg] represents substantial clinical improvement. They
                cited several studies that found that, after all other conventional
                treatments failed, there was overall treatment success in cases where
                Hemospray[supreg] was used.
                 In response to CMS' concerns about the unpublished randomized
                controlled trial presented, the manufacturer stated that the study has
                been published with no changes and noted that, despite the small sample
                size, they believe the results are representative of the general
                population with malignant gastrointestinal bleeding and consistent with
                other published retrospective studies.
                 The manufacturer stated that the research and studies for
                Hemospray[supreg] are largely international because Hemospray[supreg]
                was commercially available outside the U.S. for 5 to 7 years before the
                FDA awarded the product de Novo 510(k) status. They believed that this
                data is representative of the U.S. population, as the treatment
                strategy and patient outcomes are similar. The manufacturer
                acknowledged that study populations are predominantly male but noted
                that 60 percent of patients undergoing endoscopic control of bleeding
                are male, according to the 2016 Healthcare Cost and Utilization
                Project. The manufacturer mentioned that the mean age of study
                populations varied from 67-71 years, which is representative of the
                Medicare population.
                 Regarding the potential for adverse events, the manufacturer stated
                that FDA has determined the product is safe and effective for its
                intended use, has an acceptable risk/benefit ratio, and cleared
                Hemospray[supreg] to return to the market as of July 2020 after the
                issue was addressed. The manufacturer also mentioned that they
                understand the potential risks associated with Hemospray[supreg] and
                have clearly labeled the product, conducted physician training,
                diligently monitor reported complaints or complications, and will take
                appropriate steps to correct any future issues that arise.
                 Response: We appreciate the manufacturer's response to our
                questions regarding Hemospray[supreg]. After reviewing the information
                provided in the public comment, we agree with the applicant's
                statements that any potential bias introduced was toward the patients
                with the highest risk of negative outcomes and that this potential bias
                is no longer a concern. Regarding the applicant's comment on study
                samples, we agree with the applicant that these samples are adequately
                representative of the Medicare population. We also appreciate the
                comment response regarding the potential for adverse events and the
                update on the status of the Hemospray[supreg] voluntary recall. We will
                continue to monitor available data for Hemospray[supreg] in regard to
                any potential risk of adverse events.
                 As we noted in the FY 2021 IPPS final rule (85 FR 58672), while we
                acknowledge some of the data limitations, we believe that
                Hemospray[supreg] represents a substantial clinical improvement for the
                treatment of gastrointestinal bleeding for the following reasons. We
                believe that, given the results from the RCT trials and the single-
                armed studies, Hemospray[supreg] provides a treatment benefit for those
                with bleeding from gastrointestinal malignancies. We also see the
                clinical importance of Hemospray as an alternative to invasive
                treatments traditionally used as salvage therapy. Lastly, we note that
                Hemospray[supreg] provides treatment for bleeding, without requiring
                tissue trauma or precise targeting.
                 After consideration of the public comments we received, we have
                determined that Hemospray[supreg] meets the substantial clinical
                improvement criterion.
                 The third criterion for establishing a device category, at Sec.
                419.66(c)(3), requires us to determine that the cost of the device is
                not insignificant, as described in Sec. 419.66(d). Section 419.66(d)
                includes three cost significance criteria that must each be met. The
                applicant provided the following information in support of the cost
                significance requirements. The applicant stated that Hemospray[supreg]
                would be reported with HCPCS codes 43227, 43255, 44366, 44378, 44391,
                45334, and 45382. To meet the cost criterion for device pass-through
                payment status, a device must pass all three tests of the cost
                criterion for at least one APC. For our calculations in the CY 2021
                OPPS/ASC proposed rule, we used APC 5312, which had a CY 2020 payment
                rate of $1,004.10 at the time the application was received. Beginning
                in CY 2017, we calculate the device offset amount at the HCPCS/CPT code
                level instead of the APC level (81 FR 79657). HCPCS code 45382 had a
                device offset amount of $33.54 at the time the application was
                received. According to the applicant, the cost of the Hemospray[supreg]
                Endoscopic Hemostat is $2,500.
                 Section 419.66(d)(1), the first cost significance requirement,
                provides that the estimated average reasonable cost of devices in the
                category must exceed 25 percent of the applicable APC payment amount
                for the service related to the category of devices. The estimated
                average reasonable cost of $2,500 for Hemospray[supreg] was 249 percent
                of the applicable APC payment amount for the service related to the
                category of devices of $1004.10 (($2,500/$1,004.10) x 100 = 249
                percent). Therefore, we stated in the CY 2021 OPPS/ASC proposed rule
                that we believe Hemospray[supreg] meets the first cost significance
                requirement.
                 The second cost significance requirement, at Sec. 419.66(d)(2),
                provides that the estimated average reasonable cost of the devices in
                the category must exceed the cost of the device-related portion of the
                APC payment amount for the related service by at least 25 percent,
                which means that the device cost needs to be at least 125 percent of
                the offset amount (the device-related portion of the APC found on the
                offset list). The estimated average reasonable cost of $2,500 for
                Hemospray[supreg] was 7,454 percent of the cost of the device-related
                portion of the APC payment amount for the related service of $33.54
                (($2,500/$33.54) x 100 = 7,453.8 percent). Therefore, we stated in the
                CY 2021 OPPS/ASC proposed rule that we believe that Hemospray[supreg]
                meets the second cost significance requirement.
                 The third cost significance requirement, at Sec. 419.66(d)(3),
                provides that the difference between the estimated average reasonable
                cost of the devices in the category and the portion of the APC payment
                amount for the device must exceed 10 percent of the APC payment amount
                for the related service. The difference between the estimated average
                reasonable cost of $2,500 for Hemospray[supreg] and the portion of the
                APC payment amount for the device of $33.54 was 246 percent of the APC
                payment amount for the related service of $1004.10 t ((($2,500-$33.54)/
                $1004.10) x 100 = 245.6 percent). Therefore, we stated in the CY 2021
                OPPS/ASC proposed rule that we believe that Hemospray[supreg] meets the
                third cost significance requirement.
                 We solicited public comment on whether the Hemospray[supreg]
                Endoscopic Hemostat meets the device pass-through payment criteria
                discussed in this section, including the cost criterion for device
                pass-through payment status.
                 Comment: Three commenters, including the manufacturer of the
                Hemospray[supreg], believe that the device meets the cost criterion for
                device pass-through payment status.
                 Response: We appreciate the manufacturer's input. After
                consideration of the public comments we received and consideration of
                the
                [[Page 86003]]
                cost criterion, we have determined that Hemospray[supreg] meets the
                cost criterion for device pass-through payment status.
                 After consideration of the public comments we received, we are
                approving the Hemospray[supreg] for device pass-through payment status
                beginning in CY 2021.
                (2) The SpineJack[supreg] Expansion Kit
                 Stryker, Inc., submitted an application for a new device category
                for transitional pass-through payment status for the SpineJack[supreg]
                Expansion Kit (hereinafter referred to as the SpineJack[supreg] system)
                by the March 2020 quarterly deadline. The applicant described the
                SpineJack[supreg] system as an implantable fracture reduction system,
                which is indicated for use in the reduction of painful osteoporotic
                vertebral compression fractures (VCFs) and is intended to be used in
                combination with Stryker VertaPlex and VertaPlex High Viscosity (HV)
                bone cement.
                 The applicant described the SpineJack[supreg] system as including
                two cylindrical implants constructed from Titanium-6-Aluminum-4-
                Vanadium (Ti6Al4V) with availability in three sizes: 4.2 mm (12.5 mm
                expanded), 5.0 mm (17 mm expanded) and 5.8 mm (20 mm expanded). The
                applicant explained implant size selection is based upon the internal
                cortical diameter of the pedicle. According to the SpineJack[supreg]
                system Instructions for Use, the use of two implants is recommended to
                treat a fractured VB. According to the applicant, multiple VBs can also
                be treated in the same operative procedure as required. Additionally,
                the applicant explained that titanium alloy allows for plastic
                deformation when it encounters the hard cortical bone of the endplate
                yet still provides the lift force required to restore midline VB height
                in the fractured vertebra. The applicant stated that the
                SpineJack[supreg] system notably contains a self-locking security
                mechanism that restricts further expansion of the device when extreme
                load forces are concentrated on the implant. As a result, the applicant
                stated that this feature significantly reduces the risk of vertebral
                endplate breakage while it further allows functional recovery of the
                injured disc.\27\
                ---------------------------------------------------------------------------
                 \27\ Vanni D et al. ``Third-generation percutaneous vertebral
                augmentation systems.'' Journal of Spine Surgery. 2016, vol 2(1),
                pp. 13-20.
                ---------------------------------------------------------------------------
                 The applicant stated that the implants are then progressively
                expanded though actuation of an implant tube that pulls the two ends of
                the implant towards each other in situ to mechanically restore VB
                height. The applicant explained that the mechanical working system of
                the implant allows for progressive and controlled reduction of the
                vertebral fracture.\28\ The applicant stated that when expanded, each
                SpineJack[supreg] implant exerts a lifting pressure on the fracture
                through a mechanism that may be likened to the action of a scissor car
                jack, and that the longitudinal compression on the implant causes it to
                open in a craniocaudal direction. The applicant explained that the
                implant is locked into the desired expanded position as determined and
                controlled by the treating physician.\29\
                ---------------------------------------------------------------------------
                 \28\ Vanni D., et al., ``Third-generation percutaneous vertebral
                augmentation systems,'' J. Spine Surg., 2016, vol. 2(1) pp. 13-20.
                 \29\ Noriega D. et al., ``Clinical Performance and Safety of 108
                SpineJack Implantations: 1-Year Results of a Prospective Multicentre
                Single-Arm Registry Study,'' BioMed Res. Int., 2015, vol. 173872.
                ---------------------------------------------------------------------------
                 The applicant further explained that the expansion of the
                SpineJack[supreg] implants creates a preferential direction of flow for
                the bone cement, and once the desired expansion has been obtained,
                polymethylmethacrylate (PMMA) bone cement is deployed from the center
                of the implant into the VB. The applicant stated that when two implants
                are symmetrically positioned in the VB, this allows for a more
                homogenous spread of PMMA bone cement. The applicant stated that the
                interdigitation of bone cement creates a broad supporting ring under
                the endplate, which is essential to confer stability to the VB.
                 According to the applicant, osteoporosis is one of the most common
                bone diseases worldwide that disproportionately affects aging
                individuals. The applicant explained that in 2010, approximately 54
                million Americans aged 50 years or older had osteoporosis or low bone
                mass,\30\ which resulted in more than 2 million osteoporotic fragility
                fractures in that year alone.\31\ The applicant stated it has been
                estimated that more than 700,000 VCFs occur each year in the United
                States (U.S.),\32\ and of these VCFs, about 70,000 result in hospital
                admissions with an average length of stay of 8 days per patient.\33\
                Furthermore, the applicant noted that in the first year after a painful
                vertebral fracture, patients have been found to require primary care
                services at a rate 14 times greater than the general population.\34\
                The applicant explained that medical costs attributed to VCFs in the
                U.S. exceeded $1 billion in 2005 and are predicted to surpass $1.6
                billion by 2025.\35\
                ---------------------------------------------------------------------------
                 \30\ National Osteoporosis Foundation. (2019). What is
                osteoporosis and what causes it? Available from: https://www.nof.org/patients/what-is-osteoporosis/.
                 \31\ King A and Fiorentino D. ``Medicare payment cuts for
                osteoporosis testing reduced use despite tests' benefit in reducing
                fractures.'' Health Affairs (Millwood), 2011, vol. 30(12), pp. 2362-
                2370.
                 \32\ Riggs B and Melton L. ``The worldwide problem of
                osteoporosis: Insights afforded by epidemiology.'' Bone, 1995, vol.
                17(Suppl 5), pp. 505-511.
                 \33\ Siemionow K and Lieberman I. ``Vertebral augmentation in
                osteoporotic and osteolytic fractures: Current Opinion in Supportive
                and Palliative Care.'' 2009, vol. 3(3), pp. 219-225.
                 \34\ Wong C and McGirt M. ``Vertebral compression fractures: A
                review of current management and multimodal therapy.'' Journal of
                Multidisciplinary Healthcare, 2013, vol 6, pp. 205-214.
                 \35\ Burge R et al. ``Incidence and economic burden of
                osteoporosis-related fractures in the United States: 2005-2025.''
                Journal of Bone and Mineral Research. 2007, vol 22(3), pp. 465-475.
                ---------------------------------------------------------------------------
                 The applicant explained that osteoporotic VCFs occur when the
                vertebral body (VB) of the spine collapses and can result in chronic
                disabling pain, excessive kyphosis, loss of functional capability,
                decreased physical activity, and reduced quality of life. The applicant
                stated that as the spinal deformity progresses, it reduces the volume
                of the thoracic and abdominal cavities, which may lead to crowding of
                internal organs. The applicant noted that the crowding of internal
                organs may cause impaired pulmonary function, abdominal protuberance,
                early satiety and weight loss. The applicant indicated that other
                complications may include bloating, distention, constipation, bowel
                obstruction, and respiratory disturbances such as pneumonia,
                atelectasis, reduced forced vital capacity and reduced forced
                expiratory volume in 1 second.
                 The applicant explained that the SpineJack[supreg] implants provide
                symmetric, broad load support for osteoporotic vertebral collapse,
                which is based upon precise placement of bilateral ``struts'' that are
                encased in PMMA bone cement, whereas BKP and vertebroplasty (VP) do not
                provide structural support via an implanted device. The applicant
                explained that the inflatable balloon tamps utilized in BKP are not
                made from titanium and are not a permanent implant. According to the
                applicant, the balloon tamps are constructed from thermoplastic
                polyurethane, which have limited load bearing capacity. The applicant
                noted that although the balloon tamps are expanded within the VB to
                create a cavity for bone cement, they do not remain in place and are
                removed before the procedure is completed. The applicant explained that
                partial lift to the VB is obtained during inflation, resulting in
                kyphotic deformity
                [[Page 86004]]
                correction and partial gains in anterior VB height restoration, but
                inflatable balloon tamps are deflated prior to removal so some of the
                VB height restoration obtained is lost upon removal of the bone tamps.
                According to the applicant, BKP utilizes the placement of PMMA bone
                cement to stabilize the fracture and does not include an implant that
                remains within the VB to maintain fracture reduction and midline VB
                height restoration.
                 The applicant stated that if VB collapse is >50 percent of the
                initial height, segmental instability will ensue. As a result, the
                applicant explained that adjacent levels of the VB must support the
                additional load and this increased strain on the adjacent levels may
                lead to additional VCFs. Furthermore, the applicant summarized that
                VCFs also lead to significant increases in morbidity and mortality risk
                among elderly patients, as evidenced by a 2015 study by Edidin et al.,
                in which researchers investigated the morbidity and mortality of
                patients with a newly diagnosed VCF (n = 1,038,956) between 2005 to
                2009 in the U.S. Medicare population. For the osteoporotic VCF
                subgroup, the adjusted 4-year mortality was 70 percent higher in the
                conservatively managed group than in the balloon kyphoplasty procedures
                (BKP)-treated group, and 17 percent lower in the BKP group than in the
                vertebroplasty (VP) group. According to the applicant, when evaluating
                treatment options for osteoporotic VCFs, one of the main goals of
                treatment is to restore the load bearing bone fracture to its normal
                height and stabilize the mechanics of the spine by transferring the
                adjacent level pressure loads across the entire fractured vertebra and
                in this way, the intraspinal disc pressure is restored and the risk of
                adjacent level fractures (ALFs) is reduced.
                 The applicant explained that treatment of osteoporotic VCFs in
                older adults most often begins with conservative care, which includes
                bed rest, back bracing, physical therapy and/or analgesic medications
                for pain control. According to the applicant, for those patients that
                do not respond to conservative treatment and continue to have
                inadequate pain relief or pain that substantially impacts quality of
                life, vertebral augmentation (VA) procedures may be indicated. The
                applicant explained that VP and BKP are two minimally invasive
                percutaneous VA procedures that are most often used in the treatment of
                osteoporotic VCFs, and another VA treatment option includes the use of
                a spiral coiled implant made from polyetheretherketone (PEEK), which is
                part of the Kiva[supreg] system.
                 According to the applicant, among the treatment options available,
                BKP is the most commonly performed procedure and the current gold
                standard of care for VA treatment. The applicant stated that it is
                estimated that approximately 73 percent of all vertebral augmentation
                procedures performed in the U.S. between 2005 and 2010 were BKP.\36\
                According to the applicant, the utilization of the Kiva[supreg] system
                is relatively low in the U.S. and volume information was not available
                in current market research data.\37\
                ---------------------------------------------------------------------------
                 \36\ Goz V et al. ``Vertebroplasty and kyphoplasty: National
                outcomes and trends in utilization from 2005 through 2010.'' The
                Spine Journal. 2015, vol. 15(5), pp. 959-965.
                 \37\ Lin M. ``Minimally invasive vertebral compression fracture
                treatments. Medtech 360, Market Insights, Millennium Research Group.
                2019.
                ---------------------------------------------------------------------------
                 The applicant stated that VA treatment with VP may alleviate pain,
                but it cannot restore VB height or correct spinal deformity. The
                applicant stated that BKP attempts to restore VB height, but the
                temporary correction obtained cannot be sustained over the long term.
                The applicant stated that the Kiva[supreg] implant attempts to
                mechanically restore VB height, but it has not demonstrated superiority
                to BKP for this clinical outcome.\38\
                ---------------------------------------------------------------------------
                 \38\ Ibid.
                ---------------------------------------------------------------------------
                 The applicant provided additional detail comparing the construction
                and mechanism of action for other VA treatments, provided below.
                According to the applicant the Kiva[supreg] system is constructed of a
                nitinol coil and PEEK-OPTIMA sheath, with sizes including a 4-loop
                implant (12 mm expanded) and a 5-loop implant (15 mm expanded), and
                unlike the SpineJack[supreg] system, is not made of titanium and does
                not include a locking scissor jack design. The applicant stated that
                the specific mechanism of action for the Kiva[supreg] system is
                different from the SpineJack[supreg] system. The applicant explained
                that during the procedure that involves implanting the Kiva[supreg]
                system, nitinol coils are inserted into the VB to form a cylindrical
                columnar cavity. The applicant stated that the PEEK-OPTIMA is then
                placed over the nitinol coil. The applicant explained that the nitinol
                coil is removed from the VB and the PEEK material is filled with PMMA
                bone cement. The applicant stated that the deployment of 5 coils
                equates to a maximum height of 15 mm. The applicant stated that the
                lifting direction of the Kiva implant is caudate and unidirectional.
                According to the applicant, in the KAST (Kiva Safety and Effectiveness
                Trial) pivotal study, it was reported that osteoporotic VCF patients
                treated with the Kiva[supreg] system had an average of 2.6 coils
                deployed.\39\ Additionally, in a biomechanical comparison conducted for
                the Kiva[supreg] system and BKP using a loading cycle of 200-500
                Newtons in osteoporotic human cadaver spine segments filled with bone
                cement, there were no statistically significant differences observed
                between the two procedures for VB height restoration, stiffness at high
                or low loads, or displacement under compression.\40\
                ---------------------------------------------------------------------------
                 \39\ Tutton S et al. KAST Study: The Kiva system as a vertebral
                augmentation treatment--a safety and effectiveness trial: A
                randomized, noninferiority trial comparing the Kiva system with
                balloon kyphoplasty in treatment of osteoporotic vertebral
                compression fractures. Spine. 2015; 40(12):865-875.
                 \40\ Wilson D et al. An ex vivo biomechanical comparison of a
                novel vertebral compression fracture treatment system to
                kyphoplasty. Clinical Biomechanics. 2012; 27(4):346-353.
                ---------------------------------------------------------------------------
                 The applicant summarized the differences and similarities of the
                SpineJack[supreg], BKP, and PEEK coiled implant as follows: (1) With
                respect to construction, SpineJack[supreg] is made of Titanium-6-
                Aluminum-4-Vanadium compared to thermoplastic polyurethanes for BKP and
                nitinol and PEEK for the PEEK coiled implant; (2) with respect to
                mechanism of action, the SpineJack[supreg] uses a locking scissor jack
                encapsulated in PMMA bone cement compared to hydrodynamic cavity
                creation and PMMA cavity filler for BKP and coil cavity creation and
                PEEK implant filled with PMMA bone cement for the PEEK coiled implant;
                (3) with respect to plastic deformation, SpineJack[supreg] and BKP
                allow for plastic deformation while the PEEK coiled implant does not;
                (4) with respect to craniocaudal expansion, SpineJack[supreg] allows
                for craniocaudal expansion, whereas BKP and the PEEK coiled implant do
                not; (5) with respect to bilateral load support, SpineJack[supreg]
                provides bilateral load support whereas BKP and the PEEK coiled implant
                do not; and (6) with respect to lift pressure of >500 N,
                SpineJack[supreg] provides lift pressure of >500 N whereas BKP and the
                PEEK coiled implant do not. The applicant summarized that the
                SpineJack[supreg] system is uniquely constructed and utilizes a
                different mechanism of action than BKP, which is the gold standard of
                treatment for osteoporotic VCFs, and that the construction and
                mechanism of action of the SpineJack[supreg] system is further
                differentiated when compared with the PEEK coiled implant.
                 With respect to the newness criterion, the SpineJack[supreg]
                Expansion Kit received FDA 510(k) clearance on August 30, 2018, based
                on a determination of substantial equivalence to a legally
                [[Page 86005]]
                marketed predicate device. The applicant explained that although the
                SpineJack[supreg] Expansion Kit received FDA 510(k) clearance on August
                30, 2018, due to the time required to prepare for supply and
                distribution channels, it was not available on the U.S. market until
                October 2018. As we discussed previously, the SpineJack[supreg]
                Expansion Kit is indicated for use in the reduction of painful
                osteoporotic VCFs and is intended to be used in combination with
                Stryker VertaPlex and VertaPlex High Viscosity (HV) bone cements. We
                received the application for a new device category for transitional
                pass-through payment status for the SpineJack[supreg] Expansion Kit on
                February 4, 2020, which is within 3 years of the date of the initial
                FDA marketing authorization. We solicited public comments on whether
                the SpineJack[supreg] Expansion Kit meets the newness criterion.
                 Comment: The applicant reaffirmed that the SpineJack[supreg] system
                meets the newness criteria as it received FDA 510(k) clearance on
                August 30, 2018 and was commercially available in the United States on
                October 11, 2018.
                 Response: We appreciate the commenter's input. After consideration
                of the public comments we received and based on the fact that the
                SpineJack[supreg] Expansion Kit application was received within 3 years
                of FDA approval, we have determined that the SpineJack[supreg]
                Expansion Kit meets the newness criterion.
                 With respect to the eligibility criterion at Sec. 419.66(b)(3),
                according to the applicant, the use of the SpineJack[supreg] Expansion
                Kit is integral to the service of reducing painful osteoporotic
                vertebral compression fractures (VCFs), is used for one patient only,
                comes in contact with human skin, and is surgically implanted or
                inserted into the patient. Specifically, the applicant explained that
                the SpineJack[supreg] system is designed to be implanted into a
                collapsed vertebral body (VB) via a percutaneous transpedicular
                approach under fluoroscopic guidance. According to the applicant, the
                implants remain within the VB with the delivered bone cement. The
                applicant also claimed the SpineJack[supreg] Expansion Kit meets the
                device eligibility requirements of Sec. 419.66(b)(4) because it is not
                an instrument, apparatus, implement, or item for which depreciation and
                financing expenses are recovered, and it is not a supply or material
                furnished incident to a service. We solicited public comments on
                whether the SpineJack[supreg] Expansion Kit meets the eligibility
                criteria at Sec. 419.66(b).
                 Comment: The applicant stated that the SpineJack[supreg] system
                meets each of the device eligibility requirements at Sec. 419.66(b)(3)
                for transitional pass-through payment under the OPPS as it is integral
                to a service provided, and is not an instrument, apparatus, implement,
                or item for which depreciation and financing expenses are recovered nor
                is it a material or supply furnished incident to a service.
                 Response: We appreciate the comment's input. Based on the
                information we have received and our review of the application, we have
                determined that the SpineJack[supreg] system meets the eligibility
                criteria at Sec. 419.66(b)(3) and (4).
                 The criteria for establishing new device categories are specified
                at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
                provides that CMS determines that a device to be included in the
                category is not appropriately described by any of the existing
                categories or by any category previously in effect, and was not being
                paid for as an outpatient service as of December 31, 1996. The
                applicant describes the SpineJack[supreg] Expansion Kit as an
                implantable fracture reduction system used to treat vertebral
                compression fractures (VCFs). The applicant reported that it does not
                believe that the SpineJack[supreg] Expansion Kit is described by an
                existing category and requested category descriptor ``Vertebral body
                height restoration device, scissor jack (implantable).'' We identified
                one existing pass-through payment categories that may be applicable to
                SpineJack[supreg] Expansion Kit. The SpineJack[supreg] Expansion Kit
                may be described by HCPCS code C1821 (interspinous process distraction
                device (implantable)). We solicited public comments on this issue.
                 Comment: In response to CMS' comment about whether
                SpineJack[supreg] is described by an existing category, the applicant
                stated that the SpineJack[supreg] system and implantable interspinous
                process distraction devices are vastly different medical devices that
                are distinguished by several attributes. According to the applicant,
                where the SpineJack[supreg] system involves the insertion of two
                bilateral expandable titanium implants into the vertebral body within
                the anterior portion of the spinal column, the interspinous spacer uses
                a single non-expandable device that is implanted between the spinous
                processes of two adjacent veterbral bodies in the posterior portion of
                the spinal column. The applicant further noted that the
                SpineJack[supreg] system differs from interspinous spacers in terms of
                the FDA submission type, the intended use, the mechanism of action, and
                whether bone cement is used as a method of fixation. The applicant
                reaffirmed their belief that the SpineJack[supreg] system meets the
                requirement at Sec. 419.66(c)(1) that the device is not appropriately
                described by any of the existing categories or by any category
                previously in effect.
                 Response: We appreciate the additional information provided by the
                applicant. After consideration of the public comments we received, we
                believe there is no existing pass-through device category that
                appropriately describes the SpineJack[supreg] system, due to the many
                differences which exist between the predicate device and HCPCS code
                C1821--interspinous process distraction device (implantable). Based on
                this information, we believe that the SpineJack[supreg] system meets
                the eligibility criterion at Sec. 419.66(c)(1).
                 The second criterion for establishing a device category, at Sec.
                419.66(c)(2), provides that CMS determines either of the following: (i)
                That a device to be included in the category has demonstrated that it
                will substantially improve the diagnosis or treatment of an illness or
                injury or improve the functioning of a malformed body part compared to
                the benefits of a device or devices in a previously established
                category or other available treatment; or (ii) for devices for which
                pass-through status will begin on or after January 1, 2020, as an
                alternative to the substantial clinical improvement criterion, the
                device is part of the FDA's Breakthrough Devices Program and has
                received FDA marketing authorization. With respect to the substantial
                clinical improvement criterion, the applicant submitted 8 studies and
                19 other references to support assertions that the treatment of
                osteoporotic vertebral compression fracture (VCF) patients with the
                SpineJack[supreg] system represents a substantial clinical improvement
                over existing technologies because clinical research supports that it
                reduces future interventions, hospitalizations, and physician visits
                through a decrease in adjacent level fractures (ALFs), which the
                applicant stated are clinically significant adverse events associated
                with osteoporotic VCF. The applicant also stated that treatment with
                the SpineJack[supreg] system greatly reduces pain scores and pain
                medication use when compared to BKP, which the applicant stated is the
                current gold standard in vertebral augmentation (VA) treatment.
                 The applicant explained that the SpineJack[supreg] system has been
                available for the treatment of patients with osteoporotic VCFs for over
                10 years in Europe. The applicant explained that, as
                [[Page 86006]]
                a result, the SpineJack[supreg] implant has been extensively studied,
                and claims from smaller studies are supported by the results from a
                recent, larger prospective, randomized study known as the SAKOS
                (SpineJack[supreg] versus Kyphoplasty in Osteoporotic Patients) study.
                The applicant cited the SAKOS study \41\ in support of multiple
                substantial clinical improvement claims: Reduction in adjacent level
                fractures, superiority in mid-vertebral body height restoration, and
                pain relief. The applicant explained that the SAKOS study was the
                pivotal trial conducted in support of the FDA 510(k) clearance for the
                SpineJack[supreg] system and that the intent of the study was to
                compare the safety and effectiveness of the SpineJack[supreg] system
                with the KyphX Xpander Inflatable Bone Tamp (BKP) for treatment of
                patients with painful osteoporotic VCFs in order to establish a non-
                inferiority finding for use of the SpineJack[supreg] system versus
                balloon kyphoplasty procedure (BKP).
                ---------------------------------------------------------------------------
                 \41\ Noriega, D., et al., ``A prospective, international,
                randomized, noninferiority study comparing an implantable titanium
                vertebral augmentation device versus balloon kyphoplasty in the
                reduction of vertebral compression fractures (SAKOS study),'' The
                Spine Journal, 2019, vol. 19(11), pp. 1782-1795.
                ---------------------------------------------------------------------------
                 The SAKOS study is a prospective, international, randomized, non-
                inferiority study comparing a titanium implantable vertebral
                augmentation device (TIVAD), the SpineJack[supreg] system, versus BKP
                in the reduction of vertebral compression fractures with a 12-month
                follow-up. The primary endpoint was a 12-month responder rate based on
                a composite of three components: (1) Reduction in VCF fracture-related
                pain at 12 months from baseline by >20 mm as measured by a 100-mm
                Visual Analog Scale (VAS) measure; (2) maintenance or functional
                improvement of the Oswestry Disability Index (ODI) score at 12 months
                from baseline; and (3) absence of device-related adverse events or
                symptomatic cement extravasation requiring surgical reintervention or
                retreatment at the index level. If the primary composite endpoint was
                successful, a fourth component (absence of ALF) was added to the three
                primary components for further analysis. If the analysis of this
                additional composite endpoint was successful, then midline target
                height restoration at 6 and 12 months was assessed. According to the
                applicant, freedom from ALFs and midline VB height restoration were two
                additional superiority measures that were tested. According to the
                SAKOS study, secondary clinical outcomes included changes from baseline
                in back pain intensity, ODI score, EuroQol 5-domain (EQ-5D) index score
                (to evaluate quality of life), EQ-VAS score, ambulatory status,
                analgesic consumption, and length of hospital stay. Radiographic
                endpoints included restoration of vertebral body height (mm), and Cobb
                angle at each follow-up visit. Adverse events (AEs) were recorded
                throughout the study period. The applicant explained that researchers
                did not blind the treating physicians or patients, so each group was
                aware of the treatment allocation prior to the procedure; however, the
                three independent radiologists that performed the radiographic reviews
                were blinded to the personal data of the patients, study timepoints,
                and results of the study.
                 The SAKOS study recruited patients from 13 hospitals across 5
                European countries and randomized 152 patients with osteoporotic
                vertebral compression fractures (OVCFs) (1:1) to either
                SpineJack[supreg] or BKP procedures. Specifically, patients were
                considered eligible for inclusion if they met a number of criteria,
                including: (1) At least 50 years of age; (2) had radiographic evidence
                of one or two painful VCF between T7 and L4, aged less than 3 months,
                due to osteoporosis; (3) fracture(s) that showed loss of height in the
                anterior, middle, or posterior third of the VB >=15 percent but =50 mm at 6 weeks after
                initiation of fracture care or a VAS pain score of >=70 percent mm at 2
                weeks after initiation of fracture care. Eleven of the originally
                recruited patients were subsequently excluded from surgery (9
                randomized to SpineJack[supreg] and 2 to BKP). A total of 141 patients
                underwent surgery, and 126 patients completed the 12-month follow-up
                period (61 TIVAD and 65 BKP). The applicant contended that despite the
                SAKOS study being completed outside the U.S., results are applicable to
                the Medicare patient population, noting that 82 percent (116 of 141) of
                the patients in the SAKOS trial that received treatment
                (SpineJack[supreg] system or BKP) were age 65 or older. The applicant
                explained further that the FDA evaluated the applicability of the SAKOS
                clinical data to the U.S. population and FDA concluded that although
                the SAKOS study was performed in Europe, the final study demographics
                were very similar to what has been reported in the literature for U.S.-
                based studies of BKP. The applicant also explained that FDA determined
                that the data was acceptable for the SpineJack[supreg] system 510(k)
                clearance, including two clinical superiority claims versus BKP.
                 The SAKOS study reported that analysis on the intent to treat
                population using the observed case method resulted in a 12-month
                responder rate of 89.8 percent and 87.3 percent, for SpineJack[supreg]
                and BKP respectively (p=0.0016). The additional composite endpoint
                analyzed in observed cases resulted in a higher responder rate for
                SpineJack[supreg] compared to BKP at both 6 months (88.1 percent vs.
                60.9 percent; p
                2.61 mm vs 0.31 2.22 mm; p=0.0246) and at 12 months (1.31
                 2.58 mm vs. 0.10 2.23 mm; p=0.0035), with
                similar results in the per protocol (PP) population.
                 Also, according to the SAKOS study, decrease in pain intensity
                versus baseline was more pronounced in the SpineJack[supreg] group
                compared to the BKP group at 1 month (p=0.029) and 6 months (p=0.021).
                At 12 months, the difference in pain intensity was no longer
                statistically significant between the groups, and pain intensity at 5
                days post-surgery was not statistically different between the groups.
                The SAKOS study publication also reported that at each timepoint, the
                percentage of patients with reduction in pain intensity >20 mm was >=90
                percent in the SpineJack[supreg] group and >=80 percent in the BKP
                group, with a statistically significant difference in favor of
                SpineJack[supreg] at 1-month post-procedure (93.8 percent vs 81.4
                percent; p=0.03). The study also reported: (1) No statistically
                significant difference in disability (ODI score) between groups during
                the follow-up period, although there was a numerically greater
                improvement in the SpineJack[supreg] group at most time points; (2) at
                each time point, the percentage of patients with maintenance or
                improvement in functional capacity was at or close to 100 percent; and
                (3) in both groups, a clear and progressive improvement in quality of
                life was observed throughout the 1-year follow-up period without any
                statistically significant between-group differences.
                 In the SAKOS study, both groups had similar proportions of VCFs
                with cement extravasation outside the treated VB (47.3 percent for
                TIVAD, 41.0 percent for BKP; p=0.436). No symptoms of cement leakage
                were reported. The SAKOS study also reported that the BKP group had a
                rate
                [[Page 86007]]
                of adjacent fractures more than double the SpineJack[supreg] group
                (27.3 percent vs. 12.9 percent; p=0.043). The SAKOS study also reported
                that the BKP group had a rate of non-adjacent subsequent thoracic
                fractures nearly 3 times higher than the SpineJack[supreg] group (21.9
                percent vs. 7.4 percent) (a p-value was not reported for this result).
                The most common AEs reported over the study period were back pain (11.8
                percent with SpineJack[supreg], 9.6 percent with BKP), new lumbar
                vertebral fractures (11.8 percent with SpineJack[supreg], 12.3 percent
                with BKP), and new thoracic vertebral fractures (7.4 percent with
                SpineJack[supreg], 21.9 percent with BKP). The most frequent SAEs were
                lumbar vertebral fractures (8.8 percent with SpineJack[supreg]; 6.8
                percent with BKP) and thoracic vertebral fractures (5.9 percent with
                SpineJack[supreg], 9.6 percent with BKP). We also note that the length
                of hospital stay (in days) for osteoporotic VCF patients treated in the
                SAKOS trial was 3.8 3.6 days for the SpineJack[supreg]
                group and 3.3 2.4 days for the BKP group (p=0.926,
                Wilcoxon test).
                 The applicant also submitted additional studies, which are
                described in more detail in this section, related to the applicant's
                specific assertions regarding substantial clinical improvement.
                 As stated previously, the applicant stated that the
                SpineJack[supreg] system represents a substantial clinical improvement
                over existing technologies because it will reduce future interventions,
                hospitalizations, and physician visits through a decrease in ALFs. The
                applicant explained that ALFs are considered clinically significant
                adverse events associated with osteoporotic VCFs, citing studies by
                Lindsay et al.\42\ and Ross et al.\43\ The applicant explained that
                these studies reported, respectively, that having one or more VCFs
                (irrespective of bone density) led to a 5-fold increase in the
                patient's risk of developing another vertebral fracture, and the
                presence of two or more VCFs at baseline increased the risk of ALF by
                12-fold. The applicant stated that analysis of the additional composite
                endpoint in the SAKOS study demonstrated statistical superiority of the
                SpineJack[supreg] system over BKP (p 2.61 mm vs 0.31 2.22 mm;
                p=0.0246) and 12 months (1.31 2.58 mm vs. 0.10 2.23 mm; p=0.0035) post-procedure. The applicant noted that
                similar results were also observed in the PP population (134 patients
                in the intent-to-treat population without any major protocol
                deviations).
                ---------------------------------------------------------------------------
                 \44\ Lin J et al. Better height restoration, greater kyphosis
                correction, and fewer refractures of cemented vertebrae by using an
                intravertebral reduction device: A 1-year follow-up study. World
                Neurosurgery. 2016; 90:391-396.
                 \45\ Tzermiadianos M., et al., ``Altered disc pressure profile
                after an osteoporotic vertebral fracture is a risk factor for
                adjacent vertebral body fracture,'' European Spine Journal, 2008,
                vol. 17(11), pp. 1522-1530.
                ---------------------------------------------------------------------------
                 The applicant also provided two prospective studies, a
                retrospective study, and two cadaveric studies in support of its
                assertions regarding superior VB height restoration. The applicant
                stated that in a prospective comparative study by Noriega D., et
                al.,\46\ VB height restoration outcomes utilizing the SpineJack[supreg]
                system were durable out to 3 years. This study was a safety and
                clinical performance pilot that randomized 30 patients with painful
                osteoporotic vertebral compression fractures to SpineJack[supreg]
                (n=15) or BKP (n=15).\47\ Twenty-eight patients completed the 3-year
                study (14 in each group). The clinical endpoints of analgesic
                consumption, back pain intensity, ODI, and quality of life were
                recorded preoperatively and through 36-months post-surgery.\48\ Spine
                X-rays were also taken 48 hours prior to the procedure and at 5 days,
                6, 12, and 36 months post-surgery.\49\ The applicant explained that
                over the 3-year follow-up period, VB height restoration and kyphosis
                correction was better compared to BKP, specifically that VB height
                restoration and kyphotic correction was still evident at 36 months with
                a greater mean correction of anterior VB height (10 13
                percent vs 2 8 percent for BKP, p=0.007) and midline VB
                height (10 11 percent vs 3 7 percent for BKP,
                p=0.034), while there was a larger correction of the VB angle (-
                4.97[deg] 5.06[deg] vs 0.42[deg] 3.43[deg];
                p=0.003) for the SpineJack[supreg] group. The applicant stated that
                this study shows superiority with regards to VB height restoration.
                ---------------------------------------------------------------------------
                 \46\ Noriega D., et al., ``Long-term safety and clinical
                performance of kyphoplasty and SpineJack procedures in the treatment
                of osteoporotic vertebral compression fractures: a pilot,
                monocentric, investigator-initiated study,'' Osteoporosis
                International, 2019, vol. 30, pp. 637-645.
                 \47\ Ibid.
                 \48\ Ibid.
                 \49\ Ibid.
                ---------------------------------------------------------------------------
                 The applicant stated that Arabmotlagh M., et al., also supported
                superiority with regard to VB height restoration. Arabmotlagh M., et
                al. reported an observational case series (with no comparison group) of
                SpineJack[supreg]. They enrolled 42 patients with osteoporotic
                vertebral compression fracture of the thoracolumbar, who were
                considered for kyphoplasty, 31 of whom completed the clinical and
                radiological evaluations up to 12 months after the procedure.\50\
                According to materials provided by the applicant, the purpose of the
                study was to evaluate the efficacy of kyphoplasty with the
                SpineJack[supreg] system to correct the kyphotic deformity and to
                analyze parameters affecting the restoration and maintenance of spinal
                alignment. The
                [[Page 86008]]
                applicant explained that the mean VB height calculated prior to
                fracture was 2.8 cm (standard deviation (SD) of 0.47), which decreased
                to 1.5 cm (SD of 0.59) after the fracture. According to the applicant,
                following the procedure performed with the SpineJack[supreg] device,
                the VB height significantly increased to 1.9 cm (SD of 0.64; p20 mm was >=90 percent in the
                SpineJack[supreg] system group and >=80 percent in the BKP group, with
                a statistically significant difference in favor of the
                SpineJack[supreg] system at 1 month post-procedure (93.8 percent vs.
                81.5 percent; p=0.030). The applicant also noted that although
                continued pain score improvements were seen out to 1 year for patients
                treated with the SpineJack[supreg] system, the difference between the
                treatment groups did not meet statistical significance (p=0.061). The
                applicant also explained that in the SAKOS study, at 5 days after
                surgery, there were significantly fewer patients taking central
                analgesic agent medications in the SpineJack[supreg] implant-treated
                group as compared to those in the BKP-treated group (SJ 7.4 percent vs.
                BKP 21.9 percent, p=0.015). According to the applicant, central
                analgesic agents included medications such as non-steroidal anti-
                inflammatory drugs (NSAIDS), salicylates, or opioid analgesics.
                 The applicant also cited a prospective consecutive observational
                study by Noriega D., et al. for statistically significant pain relief
                immediately after surgery and at both 6 and 12 months. Noriega D., et
                al. was a European multicenter, single-arm registry study that aimed to
                confirm the safety and clinical performance of the SpineJack[supreg]
                system for the treatment of vertebral compression fractures of
                traumatic origin (no comparison procedure).\57\ The study enrolled 103
                patients (median age: 61.6 years) with 108 VCFs due to trauma (n=81),
                or traumatic VCF with associated osteoporosis (n=22) who had a
                SpineJack[supreg] procedure. Twenty-three patients withdrew from the
                study before
                [[Page 86009]]
                the 12-month visit. The study reported a significant improvement in
                back pain at 48 hours after SpineJack[supreg] procedure, with the mean
                VAS pain score decreasing from 6.6 2.6 cm at baseline to
                1.4 1.3 cm (mean change: -5.2 2.7 cm;
                pclinicaltrials.gov comparing SpineJack[supreg] system to
                conservative orthopedic management consisting of brace and pain
                medication in acute stable traumatic vertebral fractures in subjects
                aged 18 to 60 years old. The clinicaltrials.gov entry indicated that
                findings should be forthcoming in 2020. Additionally, we noted that the
                recent systematic reviews of the management of vertebral compression
                fracture (Buchbinder et al. for Cochrane (2018), Ebeling et al. (2019)
                for the American Society for Bone and Mineral Research (ASBMR)), did
                not support vertebral augmentation procedures due to lack of evidence
                compared to conservative medical management.\60\ The ASBMR recommended
                more rigorous study of treatment options including ``larger sample
                sizes, inclusion of a placebo control and more data on serious AEs
                (adverse events).''
                ---------------------------------------------------------------------------
                 \60\ Buchbinder R., Johnston R.V., Rischin K.J., Homik J., Jones
                C.A., Golmohammadi K., Kallmes D.F., ``Percutaneous vertebroplasty
                for osteoporotic vertebral compression fracture,'' Cochrane Database
                Syst Rev. 2018 Apr 4 and Nov 6. PMID: 29618171; Ebeling P.R.,
                Akesson K., Bauer D.C., Buchbinder R., Eastell R., Fink H.A.,
                Giangregorio L., Guanabens N., Kado D., Kallmes D., Katzman W.,
                Rodriguez A., Wermers R., Wilson H.A., Bouxsein M.L., ``The Efficacy
                and Safety of Vertebral Augmentation: A Second ASBMR Task Force
                Report.'' J Bone Miner Res., 2019, vol. 34(1), pp. 3-21.
                ---------------------------------------------------------------------------
                 We solicited public comment on whether the SpineJack[supreg] system
                meets the substantial clinical improvement criterion.
                 Comment: Many commenters expressed their support for approval of
                the SpineJack[supreg] system for device pass-through status. Many of
                these commenters shared their academic knowledge of and first-hand
                clinical experience with vertebral augmentation procedures, including
                claims of familiarity and expertise with the use of the Kiva[supreg]
                system, BKP and the SpineJack[supreg] system. According to many of
                these commenters, the SpineJack[supreg] system provides a significant
                benefit beyond that which is achieved by other vertebral augmentation
                technology. Many commenters also indicated that the price compared to
                the reimbursement rate has been an impediment to use of the
                SpineJack[supreg] system in some cases. Finally, several of these
                commenters expressed their belief that the SpineJack[supreg] system may
                reduce costs to hospitals and the U.S. health system overall by
                preventing the onset of additional adjacent fractures in patients.
                 The applicant and multiple commenters disagreed with CMS' concern
                that recent systematic reviews of the management of vertebral
                compression fracture do not support vertebral augmentation procedures
                according to the ASBMR, which also suggested more rigorous study of
                treatment options. The applicant stated that the latest clinical
                evidence and a policy statement from the International Society for the
                Advancement of Spine Surgery (ISASS) provide robust support for the use
                of vertebral augmentation (VA) over non-surgical management (NSM) in
                the treatment of osteoporotic vertebral compression fractures. Another
                commenter disagreed with CMS' interpretation of the ASBMR report and
                emphasized that the study found kyphoplasty was associated with
                significantly more reduction in pain, more reduction in RMDQ scale, and
                improvement in quality of life as compared to nonsurgical management;
                the commenter concluded that it is not accurate to group kyphoplasty
                with vertebroplasty data.
                 The applicant referenced a systematic review and meta-analysis of
                25 prospective studies, which found that patients treated with balloon
                kyphoplasty and vertebroplasty had greater pain reduction that those
                treated with non-surgical management. Further, the applicant stated
                that the most compelling evidence for the use of vertebral augmentation
                in the treatment of osteoporotic VCF patients comes from the recently
                published Local Coverage Determination (LCD) on Percutaneous Vertebral
                Augmentation (PVA) for Osteoporotic Vertebral Compression Fracture by
                the seven regional MACs, which currently appear in either a proposed or
                final state.
                 The applicant and commenters also responded to CMS' concern that
                the
                [[Page 86010]]
                SAKOS trial results do not appear to be corroborated in any other
                randomized controlled study. Commenters stated it is unfair of CMS to
                require results from multiple randomized control trials (RCTs) because
                these studies take a large amount of time and resources to conduct,
                which is at odds with the characteristics inherent in applicants for
                device pass-through payment status given the newness criterion
                requiring FDA approval within three years of application. The applicant
                stated that multiple RCTs are often not conducted to corroborate level
                one evidence that has been published in journals. They added that there
                are a minimum of 16 journal articles that highlight the clinical
                benefit that the SpineJack[supreg] system provides to patients.
                 In response to CMS' concern that SpineJack[supreg] was not compared
                to the PEEK coiled implant, the applicant and multiple commenters
                stated that the PEEK coiled system has not demonstrated clinical
                superiority to BKP, which is the gold standard treatment for
                osteoporotic VCFs. Commenters added that the PEEK coiled implants are
                not widely used in the United States because of the very limited scope
                of use, the high price, and the difficulty of use as compared to other
                procedures.
                 In response to CMS' concern that the SpineJack[supreg] system was
                not compared to conservative medical therapy, many commenters and the
                applicant stated that this comparison would be inappropriate primarily
                because of the large body of research showing improvements for patients
                who receive treatment for VCFs with VA as opposed to NSM. One commenter
                stated that there is a subset of patients who suffer compression
                fractures for which no vertebral augmentation is advised but these
                patients would not currently receive balloon kyphoplasty nor would they
                likely receive treatment with the SpineJack[supreg] system. The
                applicant stated that there is clinical evidence showing improved
                outcomes for patients with VCFs treated with BKP as compared to NSM.
                The applicant concluded that based upon the body of evidence available,
                the use of NSM as a comparator treatment to the SpineJack[supreg]
                system for a new clinical study would not be in the best interest of
                osteoporotic VCF patients, primarily due to the increased risk of
                morbidity and mortality that has been reported in this patient
                population, particularly among the elderly. Lastly the applicant stated
                that the SpineJack[supreg] system is not indicated for use in the
                treatment of traumatic vertebral fractures in the United States.
                 In regard to CMS' statement that a study by Lin et al. did not
                compare the SpineJack[supreg] system to BKP, the applicant agreed and
                added that the publication provides further support of the claim for
                superior mid-vertebral body height restoration with the
                SpineJack[supreg] system as compared to other treatment options such as
                vertebroplasty, which the applicant asserted continue to be widely
                performed in Medicare patients.
                 In regard to CMS' statement that findings from the Arabmotlagh M.
                et al. study did not report results for midline VB height, the
                applicant stated that the publication shows that it is possible to
                achieve anterior VB height restoration with the SpineJack[supreg]
                system in addition to midline VB height restoration demonstrated in the
                SAKOS trial.
                 In response to CMS' assertion that the Noriega et al. article did
                not report results for six months and does not include results of mean
                improvement as stated by the applicant, the applicant stated that they
                would like to correct an error in their application attachment for the
                2015 Noriega et al. publication. The data presented in their
                application reflects findings from another citation \61\ in which the
                overall improvements in visual analog scale back pain scores were
                statistically significant at multiple time points.
                ---------------------------------------------------------------------------
                 \61\ Noriega D et al. Long-term safety and clinical performance
                of kyphoplasty and SpineJack procedures in the treatment of
                osteoporotic vertebral compression fractures: A pilot, monocentric,
                investigator-initiated study. Osteoporosis International. 2019;
                30:637-645.
                ---------------------------------------------------------------------------
                 Lastly, the applicant supplied minor corrections regarding the
                SAKOS study results. Specifically the applicant stated that for the
                midline VB height restoration reported at 12 months post-procedure for
                the SpineJack[supreg] system compared to BKP in the SAKOS trial, an
                error in the standard deviation value for the BKP data is reported in
                the CY 2021 OPPS/ASC proposed rule. The applicant stated that this
                value should be revised to 2.34 mm rather than the 2.23 mm reported
                previously.
                 One commenter, a manufacturer of BKP implants, criticized the
                evidence the applicant submitted to support its position that the
                SpineJack[supreg] system meets the substantial clinical improvement
                criterion. The commenter emphasized that although the applicant cited
                the SAKOS study as the basis for concluding that the SpineJack[supreg]
                system meets the substantial clinical improvement criterion, the SAKOS
                study compared the SpineJack[supreg] system to older BKP technology
                (KyphX), rather than to the most current BKP technology available at
                the time of the study (Xpander II and Express II). According to the
                commenter, these newer generation balloons have been available since
                2011, generate lift force in excess of 1200 Newtons, and are the only
                BKP products indicated for the cement resistance technique, whereby one
                bone tamp is left in place during cement injection and curing to
                maximize height restoration in a collapsed vertebral body. The
                commenter stated that BKP does offer craniocaudal expansion while
                creating a void for safer cement fill. Furthermore, with respect to
                bilateral load support, according to the commenter, BKP has been
                offered since 1998 as a bilateral procedure option to maximize lift
                potential and reduce stress exerted on endplates. The commenter went on
                to explain that BKP provides bilateral symmetric load support to
                fractured endplates by providing a larger surface area when restoring
                height. The commenter suggested that if the SAKOS study had compared
                the SpineJack[supreg] system to these second-generation BKP implants,
                then the SpineJack[supreg] system might not have demonstrated superior
                performance on secondary outcome measures.
                 The commenter also offered several additional criticisms of the
                SAKOS study. The commenter pointed out that the SAKOS study design did
                not involve an even distribution of the spine levels treated across
                study arms, and that it is possible that a difference in the levels
                treated could have contributed to the reduction of ALFs in the
                SpineJack[supreg] system group. The commenter asserted that the
                vertebral levels T11-L1 are commonly known for higher number of
                fractures, and that these spinal segments had 14 more levels treated
                with BKP than with the SpineJack[supreg] system in the SAKOS study.
                According to the commenter, further analysis would be needed to
                determine if the location of fractures had an effect on the occurrence
                of ALFs between the two study arms in SAKOS. The commenter also pointed
                out that it was unclear whether there was any difference in the two
                treatment groups' bone density metrics, as this was not disclosed in
                the SAKOS study.
                 The commenter went on to emphasize that the clinical comparison in
                the SAKOS study demonstrated the SpineJack[supreg] system was non-
                inferior to BKP at the time of the primary endpoint (12 months);
                however, there was no significant difference between groups in pain
                intensity visual analog scale (VAS) score at the final time point, and
                no difference in Oswestry Disability Index (ODI) or the EQ-5D health
                status questionnaire at any time point during the study. The commenter
                acknowledged that SAKOS
                [[Page 86011]]
                demonstrated superiority for the SpineJack[supreg] system for mid-
                vertebral height restoration, but emphasized that measures of anterior
                height, posterior height, and cobb angle showed no difference across
                the study arms, within the secondary endpoints. The commenter also
                observed that the SAKOS study showed a similar number of adverse events
                between study arms, with the SpineJack[supreg] system population seeing
                a higher percentage of serious adverse events.
                 Finally, the commenter disputed the applicant's assertion that
                vertebral augmentation treatment with vertebroplasty may alleviate
                pain, but cannot restore vertebral body height or correct spinal
                deformity. The commenter likewise disputed the applicant's assertion
                that BKP attempts to restore vertebral body height, but the temporary
                correction obtained cannot be sustained over the long-term. In
                countering the applicant's assertions, the commenter referenced three
                published articles with empirical evidence regarding the impact of BKP
                on kyphotic angle and VB height restoration.62 63 64 Lastly
                the commenter stated that any mortality benefits have only been studies
                for BKP and vertebroplasty and not for SpineJack[supreg]. According to
                the commenter, it is therefore not appropriate to use this information
                to demonstrate the mortality benefits from using the SpineJack[supreg]
                technology.
                ---------------------------------------------------------------------------
                 \62\ Van Meirhaeghe JV, et al. 2013; 38(12): 971-983.
                 \63\ Dohm M, et al. 2014. (24 Months), Am J Neuroradiol.
                2014;35:2227-2236.
                 \64\ Bozkurt M, et al. 2014. Asian Spine J. 2014; 8(1):27-34.
                ---------------------------------------------------------------------------
                 Response: We appreciate all the comments we received related to the
                SpineJack[supreg] system, and we have taken them into consideration in
                making our determination, including the applicant's submission of
                additional information to address the concerns presented in the CY 2021
                OPPS/ASC proposed rule and the comments expressing concerns with the
                design and results of the SAKOS study.
                 After consideration of the public comments received, we believe
                that commenters have addressed our concerns regarding whether the
                SpineJack[supreg] system meets the substantial clinical improvement
                criterion and that the SpineJack[supreg] system represents a
                substantial clinical improvement over existing technologies based on
                the data received from commenters. The data provided from the
                commenters with clinical experience with vertebral augmentation
                procedures and the SpineJack[supreg] system, which included improved
                pain, VB height restoration and ALF outcomes for patients with
                osteoporotic VCFs when compared with existing treatments, demonstrates
                substantial clinical improvement.
                 The third criterion for establishing a device category, at Sec.
                419.66(c)(3), requires us to determine that the cost of the device is
                not insignificant, as described in Sec. 419.66(d). Section 419.66(d)
                includes three cost significance criteria that must each be met. The
                applicant provided the following information in support of the cost
                significance requirements. The applicant stated that the
                SpineJack[supreg] system would be reported with CPT code 22513, which
                is assigned to APC 5114 (Level 4 Musculoskeletal Procedures). To meet
                the cost criterion for device pass-through payment status, a device
                must pass all three tests of the cost criterion for at least one APC.
                For our calculations, we used APC 5114, which has a CY 2019 payment
                rate of $5,891.95. Beginning in CY 2017, we calculated the device
                offset amount at the HCPCS/CPT code level instead of the APC level (81
                FR 79657). CPT code 22513 had a device offset amount of $1,127 at the
                time the application was received. According to the applicant, the cost
                of the SpineJack[supreg] system is $5,623.
                 Section 419.66(d)(1), the first cost significance requirement,
                provides that the estimated average reasonable cost of devices in the
                category must exceed 25 percent of the applicable APC payment amount
                for the service related to the category of devices. The estimated
                average reasonable cost of $5,622.64 for the SpineJack[supreg] system
                is 94 percent of the applicable APC payment amount for the service
                related to the category of devices of SpineJack[supreg] system
                (($5,622.64/$5,981.28) x 100 = 94 percent). Therefore, we believe the
                SpineJack[supreg] system meets the first cost significance requirement.
                 The second cost significance requirement, at Sec. 419.66(d)(2),
                provides that the estimated average reasonable cost of the devices in
                the category must exceed the cost of the device-related portion of the
                APC payment amount for the related service by at least 25 percent,
                which means that the device cost needs to be at least 125 percent of
                the offset amount (the device-related portion of the APC found on the
                offset list). The estimated average reasonable cost of $5,622.64 for
                the SpineJack[supreg] system is 499 percent of the cost of the device-
                related portion of the APC payment amount for the related service of
                $1,126.87(($5,622.64/$1,126.87) x 100 = 499 percent). Therefore, we
                believe that the SpineJack[supreg] system meets the second cost
                significance requirement.
                 The third cost significance requirement, at Sec. 419.66(d)(3),
                provides that the difference between the estimated average reasonable
                cost of the devices in the category and the portion of the APC payment
                amount for the device must exceed 10 percent of the APC payment amount
                for the related service. The difference between the estimated average
                reasonable cost of $5,622.64 for the SpineJack[supreg] system and the
                portion of the APC payment amount for the device of $1,126.87 is 75
                percent of the APC payment amount for the related service of $5,987.28
                (($5,622.64-$1,126.87)/$5,981.28) = 75.2 percent). Therefore, we
                believe that the SpineJack[supreg] Expansion Kit meets the third cost
                significance requirement.
                 We solicited public comment on whether the SpineJack[supreg]
                Expansion Kit meets the device pass-through payment criteria discussed
                in this section, including the cost criterion.
                 Comment: The applicant agreed with CMS' conclusion that the
                SpineJack[supreg] system meets all three of the cost significance
                requirements for establishing a device pass-through category as
                described in Sec. 419.66(d).
                 Response: We appreciate the applicant's input.
                 After consideration of the public comments we received, we have
                determined that the SpineJack[supreg] Expansion Kit qualifies for
                device pass-through payment status and we are approving the application
                for device pass-through payment status for the SpineJack[supreg]
                Expansion Kit beginning in CY 2021.
                3. Technical Clarification to the Alternative Pathway to the OPPS
                Device Pass-Through Substantial Clinical Improvement Criterion for
                Certain Transformative New Devices
                 As described previously, in the CY 2020 annual rulemaking process,
                we finalized an alternative pathway for devices that receive Food and
                Drug Administration (FDA) marketing authorization and are granted a
                Breakthrough Device designation (84 FR 61295 through 61297). Under this
                alternative pathway, devices that are granted an FDA Breakthrough
                Device designation are not evaluated in terms of the current
                substantial clinical improvement criterion at Sec. 419.66(c)(2) for
                purposes of determining device pass-through payment status, but will
                need to meet the other requirements for pass-through payment status in
                our regulation at Sec. 419.66. Similarly, in the FY 2020 IPPS/LTCH PPS
                final rule, we finalized an alternative pathway for new
                [[Page 86012]]
                technology add-on payments for certain transformative new devices.
                Under the existing regulations at Sec. 412.87(c), to be eligible for
                approval for IPPS new technology add-on payments under this alternative
                pathway, the device must be part of the FDA's Breakthrough Devices
                Program and have received FDA marketing authorization.
                 We have received questions from the public regarding CMS's intent
                with respect to the ``marketing authorization'' required for purposes
                of approval under the alternative pathway for certain transformative
                new devices at Sec. 412.87(c). Some of the public appear to assert
                that so long as a technology has received marketing authorization for
                any indication, even if that indication differs from the indication for
                which the technology was designated by FDA as part of the Breakthrough
                Devices Program, the technology would meet the marketing authorization
                requirement at Sec. 412.87(c). Because of this potential confusion, we
                clarified in the FY 2021 IPPS/LTCH PPS proposed rule that an applicant
                cannot combine a marketing authorization for an indication that differs
                from the technology's indication under the Breakthrough Device Program,
                and for which the applicant is seeking to qualify for the new
                technology add-on payment, for purposes of approval under the
                alternative pathway for certain transformative devices (85 FR 32692).
                 We clarified in the CY 2021 OPPS/ASC proposed rule that the same
                policy applies for purposes of the OPPS alternative pathway policy.
                Specifically, we clarified that under the OPPS, in order to be eligible
                for the alternative pathway, the device must receive marketing
                authorization for the indication covered by the Breakthrough Devices
                Program designation and we are making a conforming change to the
                regulations at Sec. 419.66(c)(2). We also noted that the transitional
                pass-through payment application for the device must be received within
                2 to 3 years of the initial FDA marketing authorization (or a
                verifiable market delay) for the device for the indication covered by
                the Breakthrough Devices Program designation.
                 In summary, in the CY 2021 OPPS/ASC proposed rule, we proposed to
                amend the regulations in Sec. 419.66(c)(2)(ii) to state that ``A new
                medical device is part of the FDA's Breakthrough Devices Program and
                has received marketing authorization for the indication covered by the
                Breakthrough Device designation.''
                 We did not receive any comments regarding the technical
                clarification outlined in the CY 2021 OPPS/ASC proposed rule that in
                order to be eligible for the alternative pathway to the OPPS device
                pass-through substantial clinical improvement criterion, the device
                must receive marketing authorization for the indication covered by the
                Breakthrough Devices Program designation. Therefore we are finalizing
                our proposal to amend the regulations in Sec. 419.66(c)(2)(ii) to
                provide that ``a new medical device is part of the FDA's Breakthrough
                Devices Program and has received marketing authorization for the
                indication covered by the Breakthrough Device designation.''
                4. Comment Solicitation on Continuing To Provide Separate Payment in
                CYs 2022 and Future Years for Devices With OPPS Device Pass-Through
                Payment Status During the COVID-19 Public Health Emergency (PHE)
                 In the CY 2021 OPPS/ASC proposed rule, we solicited comments on
                whether we should adjust future payments for devices currently eligible
                to receive transitional pass-through payments that may have been
                impacted by the PHE, and if so, how we should implement that adjustment
                and for how long the adjustment should apply. On January 31, 2020, HHS
                Secretary Azar determined that a PHE exists retroactive to January 27,
                2020 \65\ under section 319 of the Public Health Service Act (42 U.S.C.
                247d) in response to COVID-19, and on April 21, 2020 Secretary Azar
                renewed, effective April 26, 2020 and again effective July 25, 2020,
                the determination that a PHE exists.\66\ On March 13, 2020, the
                President of the United States declared that the