Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; Price Transparency of Hospital Standard Charges; Radiation Oncology Model

Citation86 FR 63458
Record Number2021-24011
Published date16 November 2021
SectionRules and Regulations
CourtCenters For Medicare & Medicaid Services
Federal Register, Volume 86 Issue 218 (Tuesday, November 16, 2021)
[Federal Register Volume 86, Number 218 (Tuesday, November 16, 2021)]
                [Rules and Regulations]
                [Pages 63458-63998]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2021-24011]
                [[Page 63457]]
                Vol. 86
                Tuesday,
                No. 218
                November 16, 2021
                Part IIDepartment of Health and Human Services-----------------------------------------------------------------------Centers for Medicare & Medicaid Services-----------------------------------------------------------------------42 CFR Parts 412, 416, 419, et al.
                45 CFR Part 180Medicare Program: Hospital Outpatient Prospective Payment and
                Ambulatory Surgical Center Payment Systems and Quality Reporting
                Programs; Price Transparency of Hospital Standard Charges; Radiation
                Oncology Model; Final Rule
                Federal Register / Vol. 86, No. 218 / Tuesday, November 16, 2021 /
                Rules and Regulations
                [[Page 63458]]
                -----------------------------------------------------------------------
                DEPARTMENT OF HEALTH AND HUMAN SERVICES
                Centers for Medicare & Medicaid Services
                42 CFR Parts 412, 416, 419, and 512
                Office of the Secretary
                45 CFR Part 180
                [CMS-1753-FC]
                RIN 0938-AU43
                Medicare Program: Hospital Outpatient Prospective Payment and
                Ambulatory Surgical Center Payment Systems and Quality Reporting
                Programs; Price Transparency of Hospital Standard Charges; Radiation
                Oncology Model
                AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of
                Health and Human Services (HHS).
                ACTION: 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)
                2022 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, updates Hospital
                Price Transparency requirements, and updates and refines the design of
                the Radiation Oncology Model.
                DATES:
                 Effective date: The provisions of the final rule with comment are
                effective January 1, 2022.
                 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-1753-FC) must be received at one of
                the addresses provided in the ADDRESSES section no later than 5 p.m.
                EST on December 2, 2021.
                ADDRESSES: In commenting, please refer to file code CMS-1753-FC.
                 Comments, including mass comment submissions, must be submitted in
                one of the following three ways (please choose only one of the ways
                listed):
                 1. Electronically. You may submit electronic comments on this
                regulation to http://www.regulations.gov. Follow the ``Submit a
                comment'' instructions.
                 2. By regular mail. You may mail written comments to the following
                address ONLY: Centers for Medicare & Medicaid Services, Department of
                Health and Human Services, Attention: CMS-1753-FC, P.O. Box 8010,
                Baltimore, MD 21244-1810.
                 Please allow sufficient time for mailed comments to be received
                before the close of the comment period.
                 3. By express or overnight mail. You may send written comments to
                the following address ONLY: Centers for Medicare & Medicaid Services,
                Department of Health and Human Services, Attention: CMS-1753-FC, Mail
                Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
                 For information on viewing public comments, see the beginning of
                the SUPPLEMENTARY INFORMATION section.
                FOR FURTHER INFORMATION CONTACT: [email protected] or at 410-
                786-4617.
                 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 at [email protected] or Mitali Dayal via email
                at [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 at
                [email protected].
                 Cancer Hospital Payments, contact Scott Talaga via email at
                [email protected].
                 CMS Web Posting of the OPPS and ASC Payment Files, contact Chuck
                Braver via email at [email protected].
                 Comment Solicitation on Temporary Policies for the PHE for COVID-
                19, contact Emily Yoder via email at [email protected] or Abigail
                Cesnik via email at [email protected].
                 Composite APCs (Low Dose Brachytherapy and Multiple Imaging),
                contact Au'Sha Washington via email at [email protected].
                 Comprehensive APCs (C-APCs), contact Mitali Dayal via email at
                [email protected].
                 Hospital Inpatient Quality Reporting Program--Administration
                Issues, contact Julia Venanzi, [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 Janis Grady via email [email protected].
                 Hospital Outpatient Visits (Emergency Department Visits and
                Critical Care Visits), contact Allison Bramlett via email at
                [email protected], or Emily Yoder via email at
                [email protected].
                 Hospital Price Transparency, contact the Hospital Price
                Transparency email box at [email protected].
                 Inpatient Only (IPO) Procedures List, contact Au'Sha Washington via
                email at [email protected], or Allison Bramlett at
                [email protected], or Abigail Cesnik at
                [email protected].
                 Medical Review of Certain Inpatient Hospital Admissions under
                Medicare Part A for CY 2022 and Subsequent Years (2-Midnight Rule),
                contact Abigail Cesnik via email at [email protected].
                 New Technology Intraocular Lenses (NTIOLs), contact Scott Talaga
                via email at [email protected].
                 No Cost/Full Credit and Partial Credit Devices, contact Scott
                Talaga via email at [email protected].
                 OPPS Brachytherapy, contact Scott Talaga via email at
                [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 at
                [email protected], or Scott Talaga via email at
                [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 Cory Duke via email at [email protected],
                or Au'Sha Washington via email at [email protected]
                 OPPS New Technology Procedures/Services, contact the New Technology
                [[Page 63459]]
                APC mailbox at [email protected].
                 OPPS Packaged Items/Services, contact Mitali Dayal via email at
                [email protected] or Cory Duke 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 at [email protected].
                 Partial Hospitalization Program (PHP) and Community Mental Health
                Center (CMHC) Issues, contact the PHP Payment Policy Mailbox at
                [email protected].
                 RO Model, contact [email protected] or at 844-711-2664,
                Option 5.
                 Skin Substitutes, contact Josh McFeeters via email at
                [email protected].
                 Supervision of Outpatient Therapeutic Services in Hospitals and
                CAHs, contact Josh McFeeters via email at [email protected].
                 All Other Issues Related to Hospital Outpatient Payments Not
                Previously Identified, contact the OPPS mailbox at
                [email protected].
                 All Other Issues Related to the Ambulatory Surgical Center Payments
                Not Previously Identified, contact the ASC mailbox at
                [email protected].
                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 2021 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 2022 OPPS/ASC
                Proposed Rule
                 G. Public Comments Received on the CY 2021 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 2022
                 F. Payment Adjustment for Certain Cancer Hospitals for CY 2022
                 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 2022
                 C. Outlier Policy for CMHCs
                IX. Services That Would Be Paid Only as Inpatient Services
                 A. Background
                 B. Changes to the Inpatient Only (IPO) List
                 C. Summary of Final Policy and Changes to the IPO List for CY
                2022
                X. Nonrecurring Policy Changes
                 A. Medical Review of Certain Inpatient Hospital Admissions Under
                Medicare Part A for CY 2022 and Subsequent Years
                 B. Changes to Beneficiary Coinsurance for Additional Procedures
                Furnished During the Same Clinical Encounter as Certain Colorectal
                Cancer Screening Tests
                 C. Low Volume Policy for Clinical and Brachytherapy APCs
                 D. Comment Solicitation on Temporary Policies To Address the
                COVID-19 PHE
                 E. Use of CY 2019 Claims Data for CY 2022 OPPS and ASC Payment
                System Ratesetting Due to the PHE
                 F. Separate Payment in CY 2022 for the Device Category, Drugs,
                and Biologicals With Transitional Pass-Through Payment Status
                Expiring Between December 31, 2021 and September 30, 2022
                XI. CY 2022 OPPS Payment Status and Comment Indicators
                 A. CY 2022 OPPS Payment Status Indicator Definitions
                 B. CY 2022 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
                [[Page 63460]]
                 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. Advancing to Digital Quality Measurement and the Use of Fast
                Healthcare Interoperability Resources (FHIR) in Outpatient Quality
                Programs--Request for Information
                 A. Background
                 B. Definition of Digital Quality Measures
                 C. Use of FHIR for Current eCQMs
                 D. Changes Under Consideration to Advance Digital Quality
                Measurement: Potential Actions in Four Areas to Transition to
                Digital Quality Measures by 2025
                 E. Solicitation of Comments
                XV. 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 2022 Payment
                Determination
                XVI. 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
                XVII. Radiation Oncology Model
                 A. Introduction
                 B. Background
                 C. RO Model Regulations
                XVIII. Updates to Requirements for Hospitals To Make Public a List
                of Their Standard Charges
                 A. Introduction and Overview
                 B. Increasing the Civil Monetary Penalty (CMP) Amounts Using a
                Scaling Factor
                 C. Deeming of Certain State Forensic Hospitals as Having Met
                Requirements
                 D. Improving Access to the Machine-Readable File
                 E. Clarification and Requests for Comment
                XIX. Additional Hospital Inpatient Quality Reporting (IQR) Program
                Policies
                XX. Additional Medicare Promoting Interoperability Program Policies
                XXI. Files Available to the Public via the Internet
                XXII. Collection of Information Requirements
                 A. Statutory Requirement for Solicitation of Comments
                 B. ICRs for the Hospital OQR Program
                 C. ICRs for the ASCQR Program
                XXIII. Response to Comments
                XXIV. 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. Conclusion
                 H. Federalism Analysis
                I. Summary and Background
                A. Executive Summary of This Document
                1. Purpose
                 In this final rule with comment period, we are updating the payment
                policies and payment rates for services furnished to Medicare
                beneficiaries in hospital outpatient departments (HOPDs) and ambulatory
                surgical centers (ASCs), beginning January 1, 2022. 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, the ASC Quality Reporting (ASCQR) Program, Hospital Price
                Transparency requirements, and the design of the Radiation Oncology
                Model.
                2. Summary of the Major Provisions
                 OPPS Update: For 2022, we are increasing the payment rates
                under the OPPS by an Outpatient Department (OPD) fee schedule increase
                factor of 2.0 percent. This increase factor is based on the proposed
                hospital inpatient market basket percentage increase of 2.7 percent for
                inpatient services paid under the hospital inpatient prospective
                payment system (IPPS) reduced by a proposed productivity adjustment of
                0.7 percentage point. 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) 2022 would be approximately $82.078 billion, an
                increase of approximately $5.913 billion compared to estimated CY 2022
                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 0.9804 to the OPPS payments and copayments for all applicable
                services.
                 Data used in CY 2022 OPPS/ASC Ratesetting: To set CY 2022
                OPPS and ASC payment rates, we would normally use the most updated
                claims and cost report data available. However, because the CY 2020
                claims data include services furnished during the COVID-19 PHE, which
                significantly affected outpatient service utilization, we have
                determined that CY 2019 data would better approximate expected CY 2022
                outpatient service utilization than CY 2020 data. As a result, we are
                utilizing CY 2019 data to set CY 2022 OPPS and ASC payment rates.
                 Partial Hospitalization Update: For CY 2022, we are using
                the CMHC and hospital-based PHP (HB PHP) geometric mean per diem costs,
                consistent with existing methodology, but with a cost floor that will
                maintain the per diem costs finalized in CY 2021. We are also using the
                CY 2019 claims and cost report data for each provider type, consistent
                with the use of claims and cost report data prior to the PHE within the
                broader CY 2022 OPPS ratesetting.
                 Changes to the Inpatient Only (IPO) List: For 2022, we are
                finalizing our proposal with modification to pause the elimination of
                the IPO list and add back to the IPO list the services removed in 2021,
                except for CPT code 22630 (Arthrodesis, posterior interbody technique,
                including laminectomy and/or discectomy to prepare interspace (other
                than for decompression), single interspace; lumbar); CPT code 23472
                (Arthroplasty, glenohumeral joint; total shoulder (glenoid and proximal
                humeral replacement (for example, total shoulder))); CPT code 27702
                (Arthroplasty, ankle; with implant (total ankle)) and their
                corresponding anesthesia codes: CPT code 00630 (Anesthesia for
                procedures in lumbar region; not otherwise specified), CPT code 00670
                (Anesthesia for extensive spine and spinal cord procedures (e.g.,
                spinal instrumentation or vascular procedures)); CPT code 01638
                (Anesthesia for open or surgical arthroscopic procedures on humeral
                [[Page 63461]]
                head and neck, sternoclavicular joint, acromioclavicular joint, and
                shoulder joint; total shoulder replacement); and CPT 01486 (Anesthesia
                for open procedures on bones of lower leg, ankle, and foot; total ankle
                replacement). We are also classifying CPT code 0643T (Transcatheter
                left ventricular restoration device implantation including right and
                left heart catheterization and left ventriculography when performed,
                arterial approach) as an inpatient only procedure. We are finalizing
                our proposal to amend the regulation at Sec. 419.22(n) to remove the
                reference to the elimination of the list of services and procedures
                designated as requiring inpatient care through a 3-year transition and
                to codify our five longstanding criteria for determining whether a
                service or procedure should be removed from the IPO list in the
                regulation in a new Sec. 419.23.
                 Medical Review of Certain Inpatient Hospital Admissions
                under Medicare Part A for CY 2021 and Subsequent Years (2-Midnight
                Rule): For CY 2022, we are finalizing a policy to exempt procedures
                that are removed from the inpatient only (IPO) list under the OPPS
                beginning on or after January 1, 2022, 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) for a time period of
                2 years.
                 340B-Acquired Drugs: For CY 2022, 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.
                 Device Pass-Through Payment Applications: For CY 2022, we
                received eight applications for device pass-through payments. One of
                these applications received preliminary approval for pass-through
                payment status through our quarterly review process. We solicited
                public comment on all eight of these applications and are making final
                determinations on these applications in this CY 2022 OPPS/ASC final
                rule with comment period.
                 Equitable Adjustment for Device Category, Drugs, and
                Biologicals with Expiring Pass-through Status: As a result of our
                proposal to use CY 2019 claims data, rather than CY 2020 claims data,
                to inform CY 2022 ratesetting, we are using our equitable adjustment
                authority under 1833(t)(2)(E) to provide up to four quarters of
                separate payment for 27 drugs and biologicals and one device category
                whose pass-through payment status will expire between December 31, 2021
                and September 30, 2022.
                 Cancer Hospital Payment Adjustment: For CY 2022, 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, we
                are using a target PCR of 0.89 to determine the CY 2022 cancer hospital
                payment adjustment to be paid at cost report settlement. That is, the
                payment adjustments will be the additional payments needed to result in
                a PCR equal to 0.89 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
                2022, we are increasing payment rates under the ASC payment system by
                2.0 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 2.7 percent reduced by a productivity adjustment
                of 0.7 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 2022 would be
                approximately 5.41 billion, an increase of approximately 40 million
                compared to estimated CY 2021 Medicare payments.
                 ASC Payment Policy for Non-Opioid Pain Management Drugs
                and Biologicals under Section 6082 of the SUPPORT Act (Section
                1833(t)(22) of the Social Security Act): Under section 1833(t)(22)(A)
                of the Act, the Secretary was required to conduct a review (part of
                which may include a request for information) of payments 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. Section
                1833(t)(22)(A)(ii) provides that the Secretary may, as the Secretary
                determines appropriate, conduct subsequent reviews of such payments.
                 In accordance with our review and comments from stakeholders, for
                CY 2022, we are finalizing our proposal to modify the current non-
                opioid pain management payment policy and regulatory text to require
                that evidence-based non-opioid alternatives for pain management must be
                approved under a new drug application under section 505(c) of the
                Federal Food, Drug, and Cosmetic Act, under an abbreviated new drug
                application under section 505(j), or, in the case of a biological
                product, be licensed under section 351 of the Public Health Service
                Act. We further proposed that the drug or biological must also have an
                FDA-approved indication for pain management or analgesia and have a
                per-day cost in excess of the OPPS drug packaging threshold, which is
                finalized at $130 for CY 2022 and described in section V.B.1.a. of this
                final rule with comment period, to qualify for separate payment in the
                ASC setting. We appreciate the comments received on our multiple
                comment solicitations. We are not finalizing any policy modifications
                or additional criteria as a result of these comments but will take this
                information into consideration for future notice and comment
                rulemaking.
                 For CY 2022, in accordance with our finalized criteria, CMS review,
                and stakeholder comments, we will pay separately in the ASC setting for
                four drugs that are non-opioid pain management drugs that function as
                surgical supplies.
                 Changes to the List of ASC Covered Surgical Procedures:
                For CY 2022, we are reinstating the ASC Covered Procedures List (CPL)
                criteria that were in effect in CY 2020 and removing several of the
                procedures that were added to the ASC CPL in CY 2021. We requested
                comments on whether any of the procedures that we proposed to remove
                from the ASC CPL in CY 2021 met the CY 2020 criteria that we proposed
                to reinstate. After reviewing these recommendations, we determined that
                a total of six procedures should either remain on or be added to the
                CPL We are also finalizing our proposal to adopt a nomination process,
                under which stakeholders may nominate procedures they believe meet the
                requirements to be added to the ASC CPL. CMS will provide subregulatory
                guidance on the nomination process in early 2022, with procedure
                nominations due in March 2022, and the formal nomination process
                beginning in CY 2023.
                [[Page 63462]]
                 Hospital Outpatient Quality Reporting (OQR) Program: For
                the Hospital OQR Program, we proposed changes for the CY 2023, CY 2024,
                CY 2025, and CY 2026 payment determinations and subsequent years in the
                CY 2022 OPPS/ASC proposed rule (86 FR 42018). In this final rule, we
                are finalizing our proposals to: (1) Remove the OP-02: Fibrinolytic
                Therapy Received Within 30 Minutes of ED Arrival measure beginning with
                the CY 2025 payment determination; (2) remove the OP-3: Median Time to
                Transfer to Another Facility for Acute Coronary Intervention measure
                beginning with the CY 2025 payment determination; (3) adopt OP-38:
                COVID-19 Vaccination Coverage Among Health Care Personnel (HCP) measure
                beginning with the CY 2024 payment determination; (4) adopt OP-39: The
                Breast Screening Recall Rates measure beginning with the CY 2023
                payment determination; (5) adopt OP-40: The ST-Segment Elevation
                Myocardial Infarction (STEMI) electronic clinical quality measure
                (eCQM) beginning with voluntary reporting for the CY 2023 reporting
                period and mandatory reporting beginning with the CY 2024 reporting
                period/CY 2026 payment determination; and (6) restart reporting of the
                OP-37a-e: Outpatient and Ambulatory Surgery Consumer Assessment of
                Healthcare Providers and Systems (OAS CAHPS) Survey-based measures
                beginning with voluntary reporting during the CY 2023 reporting period
                and mandatory reporting beginning with the CY 2024 reporting period/CY
                2026 payment determination. We are finalizing as proposed the data
                submission requirements for the OAS CAHPS Survey-based measures and the
                COVID-19 Vaccination Coverage Among HCP measure (OP-38). Similarly, we
                are finalizing as proposed the data submission and certification
                requirements for eCQMs and expanding our Extraordinary Circumstances
                Exemption (ECE) policy to these measures.
                 Beginning with the CY 2024 payment determination, we are finalizing
                as proposed three updates to our validation requirements to: (1) Use
                electronic file submissions for chart-abstracted measure medical record
                requests; (2) change the chart validation requirements and methods; and
                (3) update the targeting criteria. In the CY 2022 OPPS/ASC proposed
                rule (86 FR 42018) we requested comment from stakeholders on: (1) The
                potential future development and inclusion of a patient-reported
                outcomes measure following elective total hip and/or total knee
                arthroplasty (THA/TKA); (2) the possibility of expanding our current
                disparities methods to include reporting by race and ethnicity; and (3)
                the possibility of hospital collection of standardized demographic
                information for quality reporting and measure stratification. We also
                requested feedback across programs on potential actions and priority
                areas that would enable the continued transformation of our quality
                measurement toward greater digital capture of data and use of the FHIR
                standard.
                 We are finalizing with modification, our proposal to make mandatory
                the reporting of the OP-31: Cataracts: Improvement in Patient's Visual
                Function within 90 Days Following Cataract Surgery measure. We are
                finalizing to make reporting of this measure mandatory beginning with
                the CY 2027 payment determination, instead of the CY 2025 payment
                determination.
                 Ambulatory Surgical Center Quality Reporting (ASCQR)
                Program: For the ASCQR Program, we proposed changes for the CY 2024, CY
                2025, and CY 2026 payment determinations and subsequent years in the CY
                2022 OPPS/ASC proposed rule (86 FR 42018). For the ASCQR Program
                measure set, we are finalizing our proposals to: (1) Adopt ASC-20:
                COVID-19 Vaccination Coverage Among HCP measure beginning with the CY
                2024 payment determination; and (2) resume data collection for four
                measures beginning with the CY 2025 payment determination: (a) ASC-1:
                Patient Burn; (b) ASC-2: Patient Fall; (c) ASC-3: Wrong Site, Wrong
                Side, Wrong Patient, Wrong Procedure, Wrong Implant; and (d) ASC-4:
                All-Cause Hospital Transfer/Admission. We are also finalizing as
                proposed the data submission requirements for the OAS CAHPS Survey-
                based measures and the COVID-19 Vaccination Coverage Among HCP measure
                (ASC-20).
                 We are finalizing, with modification, the proposal to require the
                ASC-15a-e: OAS CAHPS Survey-based measures with voluntary reporting
                beginning with the CY 2024 reporting period and mandatory reporting
                beginning with the CY 2025 reporting period/CY 2027 payment
                determination.
                 We are also finalizing with modification the proposal to require
                the ASC-11: Cataracts: Improvement in Patient's Visual Function within
                90 Days Following Cataract Surgery measure. We are finalizing mandatory
                reporting of this measure beginning with the CY 2027 payment
                determination, instead of the CY 2025 payment determination.
                 In the CY 2022 OPPS/ASC proposed rule (86 FR 42018) we requested
                stakeholder comment on: (1) The potential future development and
                inclusion of a patient-reported outcomes measure following elective
                THA/TKA; (2) potential measurement approaches or social risk factors
                that influence health disparities in the ASC setting; and (3) the
                future inclusion of a measure to assess pain management surgical
                procedures performed in ASCs. We also requested feedback across
                programs on potential actions and priority areas that would enable the
                continued transformation of our quality measurement toward greater
                digital capture of data and use of the FHIR standard.
                 Hospital Inpatient Quality Reporting (IQR) Program Update:
                In the CY 2022 OPPS/ASC proposed rule (86 FR 25549 through 25628) we
                requested information from stakeholders on potential measure updates on
                reporting and submission requirements for the Safe Use of Opioids--
                Concurrent Prescribing eCQM.
                 Updates to Requirements for Hospitals to Make Public a
                List of Their Standard Charges: We are amending several hospital price
                transparency policies codified at 45 CFR part 180 in order to encourage
                compliance. We are: (1) Increasing the amount of the penalties for
                noncompliance through the use of a scaling factor based on hospital bed
                count; (2) deeming state forensic hospitals that meet certain
                requirements to be in compliance with the requirements of 45 CFR part
                180; and (3) finalizing a requirement that the machine-readable file be
                accessible to automated searches and direct downloads. In addition, we
                clarify the expected output of hospital online price estimator tools
                when hospitals choose to use an online price estimator tool in lieu of
                posting its standard charges for the required shoppable services in a
                consumer-friendly format.
                 Radiation Oncology Model (RO Model): Section 133 of the
                Consolidated Appropriations Act (CAA), 2021 (Pub. L. 116-260), enacted
                on December 27, 2020, includes a provision that prohibits the RO Model
                from beginning before January 1, 2022. This law supersedes the RO Model
                delayed start date established in the CY 2021 OPPS/ASC final rule with
                comment period. We are finalizing proposed provisions related to the
                additional delayed implementation of the RO Model due to the CAA, 2021,
                as well as modifications to certain RO Model policies not related to
                the delay.
                [[Page 63463]]
                 Comment Solicitation on Temporary Policies for the PHE for
                COVID-19: In response to the COVID-19 pandemic, CMS undertook emergency
                rulemaking to implement a number of flexibilities to address the
                pandemic, such as preventing spread of the infection and supporting
                diagnosis of COVID-19. While many of these flexibilities will expire at
                the conclusion of the PHE, we sought comment on whether there are
                certain policies that should be made permanent. Specifically, we sought
                comment on services furnished by hospital staff to beneficiaries in
                their homes through use of communication technology, direct supervision
                when the supervising practitioner is available through two-way, audio/
                video communication technology, and a code and payment for COVID-19
                specimen collection. We will consider comments received for future
                rulemaking.
                 Changes to Beneficiary Coinsurance for Colorectal Cancer
                Screening Test: Section 122 of the Consolidated Appropriations Act
                (CAA) of 2021 amends section 1833(a) of the Act to offer a special
                coinsurance rule for screening flexible sigmoidoscopies and screening
                colonoscopies regardless of the code that is billed for the
                establishment of a diagnosis as a result of the test, or for the
                removal of tissue or other matter or other procedure, that is furnished
                in connection with, as a result of, and in the same clinical encounter
                as the colorectal cancer screening test. We are finalizing our proposal
                that all surgical services furnished on the same date as a planned
                screening colonoscopy or planned flexible sigmoidoscopy could be viewed
                as being furnished in connection with, as a result of, and in the same
                clinical encounter as the screening test for purposes of determining
                the coinsurance required of Medicare beneficiaries for planned
                colorectal cancer screening tests that result in additional procedures
                furnished in the same clinical encounter.
                3. Summary of Costs and Benefits
                 In sections XXIV. and XXV. of this final rule with comment period,
                we set forth a detailed analysis of the regulatory and federalism
                impacts that the changes would have on affected entities and
                beneficiaries. Key estimated impacts are described below.
                a. Impacts of All OPPS Changes
                 Table 84 in section XXIV.C. of this final rule with comment period
                displays the distributional impact of all the OPPS changes on various
                groups of hospitals and CMHCs for CY 2022 compared to all estimated
                OPPS payments in CY 2021. We estimate that the policies in this final
                rule with comment period will result in a 1.6 percent overall increase
                in OPPS payments to providers. We estimate that total OPPS payments for
                CY 2022, including beneficiary cost-sharing, to the approximately 3,659
                facilities paid under the OPPS (including general acute care hospitals,
                children's hospitals, cancer hospitals, and CMHCs) will increase by
                approximately $1.3 billion compared to CY 2021 payments, excluding our
                estimated changes in enrollment, utilization, and case-mix.
                 We estimated the isolated impact of our OPPS policies on CMHCs
                because CMHCs are only paid for partial hospitalization services under
                the OPPS. Continuing the provider-specific structure we adopted
                beginning in CY 2011, and basing payment fully on the type of provider
                furnishing the service, we estimate a 1.1 percent increase in CY 2022
                payments to CMHCs relative to their CY 2021 payments.
                b. Impacts of the Updated Wage Indexes
                 We estimate that our update of the wage indexes based on the FY
                2022 IPPS final rule wage indexes will result in no change for urban
                hospitals under the OPPS and no change 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 2022 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 2022 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 2021, and therefore has no budget neutrality
                adjustment.
                d. Impacts of the OPD Fee Schedule Increase Factor
                 For the CY 2022 OPPS/ASC, we are establishing an OPD fee schedule
                increase factor of 2.0 percent and applying that increase factor to the
                conversion factor for CY 2022. 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 2.1 percent and that rural hospitals will experience an
                increase in payments of 2.3 percent. Classifying hospitals by teaching
                status, we estimate nonteaching hospitals will experience an increase
                in payments of 2.2 percent, minor teaching hospitals will experience an
                increase in payments of 2.2 percent, and major teaching hospitals will
                experience an increase in payments of 1.8 percent. We also classified
                hospitals by the type of ownership. We estimate that hospitals with
                voluntary ownership will experience an increase of 2.2 percent in
                payments, while hospitals with government ownership would experience an
                increase of 1.7 percent in payments. We estimate that hospitals with
                proprietary ownership will experience an increase of 2.3 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 2022 payment
                rates, compared to estimated CY 2021 payment rates, generally ranges
                between an increase of 2 and 4 percent, depending on the service, with
                some exceptions. We estimate the impact of applying the hospital market
                basket update to ASC payment rates will increase payments by $80
                million under the ASC payment system in CY 2022.
                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.
                [[Page 63464]]
                 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; 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; the Further Consolidated Appropriations Act, 2020 (Pub. L. 116-
                94), enacted on December 20, 2019; the Coronavirus Aid, Relief, and
                Economic Security Act (Pub. L. 116-136), enacted on March 27, 2020; and
                the Consolidated Appropriations Act, 2021 (Pub. L. 116-260), enacted on
                December 27, 2020.
                 Under the OPPS, we generally pay for hospital Part B services on a
                rate-per-service basis that varies according to the APC group to which
                the service is assigned. We use the Healthcare Common Procedure Coding
                System (HCPCS) (which includes certain Current Procedural Terminology
                (CPT) codes) to identify and group the services within each APC. The
                OPPS includes payment for most hospital outpatient services, except
                those identified in section I.C. of this final rule with comment
                period. Section 1833(t)(1)(B) of the Act provides for payment under the
                OPPS for hospital outpatient services designated by the Secretary
                (which includes partial hospitalization services furnished by CMHCs),
                and certain inpatient hospital services that are paid under Medicare
                Part B.
                 The OPPS rate is an unadjusted national payment amount that
                includes the Medicare payment and the beneficiary copayment. This rate
                is divided into a labor-related amount and a nonlabor-related amount.
                The labor-related amount is adjusted for area wage differences using
                the hospital inpatient wage index value for the locality in which the
                hospital or CMHC is located.
                 All services and items within an APC group are comparable
                clinically and with respect to resource use, 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
                [[Page 63465]]
                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 (the PHS Act), which gives
                discretionary authority to the Secretary to convene advisory councils
                and committees, the Secretary expanded the panel's scope to include the
                supervision of hospital outpatient therapeutic services in addition to
                the APC groups and weights. To reflect this new role of the panel, the
                Secretary changed the panel's name to the Advisory Panel on Hospital
                Outpatient Payment (the HOP Panel or the Panel). The 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 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 23, 2021, 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
                [[Page 63466]]
                section, and the FACA database at http://facadatabase.gov.
                F. Public Comments Received in Response to the CY 2022 OPPS/ASC
                Proposed Rule
                 We received approximately 18,864 timely pieces of correspondence on
                the CY 2022 OPPS/ASC proposed rule that appeared in the Federal
                Register on August 4, 2021 (86 FR 42018). We note that we received some
                public comments that were outside the scope of the CY 2022 OPPS/ASC
                proposed rule. Out-of-scope-public comments are not addressed in this
                CY 2022 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 2021 OPPS/ASC Final Rule With
                Comment Period
                 We received approximately 32 timely pieces of correspondence on the
                CY 2021 OPPS/ASC final rule with comment period that appeared in the
                Federal Register on December 2, 2020 (85 FR 85866), 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).
                II. Updates Affecting OPPS Payments
                A. Recalibration of APC Relative Payment Weights
                1. Database Construction
                a. Use of CY 2019 Data in the CY 2022 OPPS Ratesetting
                 We primarily use two data sources in OPPS ratesetting: Claims data
                and cost report data. Our goal is always to use the best available data
                overall for ratesetting. Ordinarily, the best available full year of
                claims data would be the data from the year two years prior to the
                calendar year that is the subject of the rulemaking. As discussed in
                further detail in Section X.E. of the CY 2022 OPPS/ASC proposed rule
                (86 FR 42188 through 42190), given our concerns with CY2020 data as a
                result of the COVID-19 PHE we proposed to generally use CY 2019 claims
                data and the data components related to it in establishing the CY 2022
                OPPS. As discussed in further detail in Section X.E. of this final rule
                with comment period, we are finalizing our proposal to generally use CY
                2019 claims data and the data components related to it in establishing
                the CY 2022 OPPS.
                b. 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 2022 OPPS, we proposed to recalibrate the APC relative
                payment weights for services furnished on or after January 1, 2022, and
                before January 1, 2023 (CY 2022), using the same basic methodology that
                we described in the CY 2021 OPPS/ASC final rule with comment period (85
                FR 85873), using CY 2019 claims data. That is, we proposed to
                recalibrate the relative payment weights for each APC based on claims
                and cost report data for hospital outpatient department (HOPD) services
                to construct a database for calculating APC group weights.
                 For the purpose of recalibrating the proposed APC relative payment
                weights for CY 2022, we began with approximately 180 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 93
                million final action claims to develop the proposed CY 2022 OPPS
                payment weights. For exact numbers of claims used and additional
                details on the claims accounting process, we refer readers to the
                claims accounting narrative under supporting documentation for the CY
                2022 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 2022 OPPS/ASC proposed rule (which is
                available via the internet on the CMS website at: http://www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html) includes the proposed
                list of bypass codes for CY 2022. The proposed list of bypass codes
                contains codes that are reported on claims for services in CY 2019 and,
                therefore, includes codes that were in effect in CY 2019 and used for
                billing. We proposed to retain deleted bypass codes on the proposed CY
                2022 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 2022 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 are identified by asterisks (*) in the third column of
                Addendum N to the proposed rule. HCPCS codes that we proposed to add
                for CY 2022 are identified by asterisks (*) in the fourth column of
                Addendum N.
                 We did not receive any public comments on our general proposal to
                recalibrate the relative payment weights for each APC based on claims
                and cost report data for HOPD services or on our proposed bypass code
                process. We are adopting as final the proposed ``pseudo'' single claims
                process and the final CY 2022 bypass list of 173 HCPCS codes, as
                displayed in Addendum N to this final rule with comment period (which
                is available via the internet on the CMS website). For this final rule
                with comment period, for the purpose of recalibrating the final APC
                relative payment weights for CY 2022, we used approximately 93 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. For exact numbers
                of claims used and additional details on the claims accounting process,
                we refer readers to the claims accounting narrative under supporting
                documentation for this final rule with comment period on the CMS
                website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
                c. Calculation and Use of Cost-to-Charge Ratios (CCRs)
                 For 2022, in the CY 2022 OPPS/ASC proposed rule (86 FR 42046) 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 2022 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 hospital
                [[Page 63467]]
                cost reports available for the CY 2021 OPPS/ASC final rule with comment
                period ratesetting, which, in most cases, are from CY 2019. For the
                proposed CY 2022 OPPS payment rates, we used the set of CY 2019 claims
                processed through June 30, 2020. 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 2022 OPPS payment
                rates) and updates to the National Uniform Billing Committee (NUBC)
                2020 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 CY 2022 OPPS/ASC proposed rule.
                 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 comments we received from our CY 2014 OPPS/ASC
                proposed rule, we finalized a policy in 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. As finalized
                in the CY 2020 OPPS/ASC final rule with comment period (84 FR 61152),
                beginning in CY 2021, we use 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 CT and MRI APCs.
                 Comment: One commenter stated that coronary CT angiography (CCTA)
                requires considerably more resources than the procedures that are
                currently assigned to the CT cost center. The commenter suggests that
                this has resulted in over a decade of inadequate reimbursement for CCTA
                below the actual cost of performing the test. The commenter recommends
                that CMS provide specific instructions that allow hospitals to submit
                charges for cardiac CT using revenue codes that provide more accurate
                cost estimates. The commenter stated that hospitals do not have the
                ability to directly report costs for cardiac CT services and that CMS
                regulations mandate that cardiac CT be lumped into generic diagnostic
                CT revenue codes.
                 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 Manual, 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 charge 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.
                 After consideration of the public comment we received on the
                general CCR process, we are finalizing for CY 2022 using the hospital-
                specific overall ancillary and departmental CCRs to convert charges to
                estimated costs through application of a revenue code-to-cost center
                crosswalk and the established methodology.
                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 2022. The
                Hospital OPPS page on the CMS website on which the CY 2022 OPPS/ASC
                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
                proposed 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 the CY 2022 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.
                 We did not receive any public comments on our proposed process and
                are finalizing our proposed methodology to continue to use geometric
                mean costs to calculate the relative weights on which the final CY 2022
                OPPS payment rates are based.
                 We used the methodology described in sections II.A.2.a. through
                II.A.2.c. of this final rule with comment period to calculate the costs
                we used to establish the final relative payment weights used in
                calculating the OPPS payment rates for CY 2022 shown in Addenda A and B
                to the CY 2022 OPPS/ASC final rule with comment period (which are
                available via the internet on the CMS website at: http://www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html). We refer readers to
                section II.A.4. of this final rule with comment period for a discussion
                of the
                [[Page 63468]]
                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 2022 OPPS, we will continue
                to remove claim lines with modifier ``PN'' from the ratesetting
                process.
                 For details of the claims accounting process used in the CY 2022
                OPPS/ASC final rule with comment period, we refer readers to the claims
                accounting narrative under supporting documentation for the CY 2022
                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
                 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-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 2022 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 using this methodology in
                CY 2022 would result in costs for blood and blood products that
                appropriately reflect the relative estimated costs of these products
                for hospitals without blood cost centers and, therefore, for these
                blood products in general.
                 We note that 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 would 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 66795 through 66796) for more
                information about our policy not to make separate payments for blood
                and blood products when they appear on the same claims as services
                assigned to a C-APC).
                 We refer readers to Addendum B to the CY 2022 OPPS/ASC proposed
                rule (which is available via the internet on the CMS website) for the
                proposed CY 2022 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 2022, 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. Please refer to Addendum
                B to the CY 2022 OPPS/ASC final rule with comment period (which is
                available via the internet on the CMS website) for the final CY 2022
                payment rates for blood and blood products.
                (2) Brachytherapy Sources
                 Section 1833(t)(2)(H) of the Act mandates the creation of
                additional groups of covered OPD services that classify devices of
                brachytherapy consisting of a seed or seeds (or radioactive source)
                (``brachytherapy sources'') separately from other services or groups of
                services. The statute provides certain criteria for the additional
                groups. For the history of OPPS payment for brachytherapy sources, we
                refer readers to prior OPPS final rules, such as the CY 2012 OPPS/ASC
                final rule with comment period (77 FR 68240 through 68241). As we have
                stated in prior OPPS updates, we believe that adopting the general OPPS
                prospective payment methodology for brachytherapy sources is
                appropriate for a number of reasons (77 FR 68240). The general OPPS
                methodology uses costs based on claims data to set the relative payment
                weights for hospital outpatient services. This payment methodology
                results in more consistent, predictable, and equitable payment amounts
                per
                [[Page 63469]]
                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 2022, except where otherwise indicated, we proposed to use
                the costs derived from CY 2019 claims data to set the proposed CY 2022
                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 2022 OPPS.
                With the exception of the proposed payment rate for brachytherapy
                source C2645 (Brachytherapy planar source, palladium-103, per square
                millimeter) and brachytherapy source C2636 (Brachytherapy linear
                source, non-stranded, palladium-103, per 1 mm), 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 2022 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 2022 payment rates
                for brachytherapy sources are included in Addendum B to the CY 2022
                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 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. Similarly, in the absence of sufficient
                claims data to establish an APC payment rate, in the CY 2021 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
                to maintain the CY 2019 payment rate of $4.69 per mm\2\ for HCPCS code
                C2645 for CY 2021.
                 As discussed in Section X.E. of the CY 2022 OPPS/ASC proposed rule,
                given our concerns with CY 2020 data as a result of the COVID-19 PHE,
                in general we proposed to use CY 2019 claims data and the data
                components related to it in establishing the CY 2022 OPPS. Therefore,
                we proposed to use our equitable adjustment authority under section
                1833(t)(2)(E) of the Act to maintain the CY 2019 payment rate of $4.69
                per mm\2\ for HCPCS code C2645 for CY 2022.
                 We received no public comments and are finalizing our proposal,
                without modification, to use our equitable adjustment authority under
                section 1833(t)(2)(E) of the Act to maintain the CY 2019 payment rate
                of $4.69 per mm\2\ for HCPCS code C2645 for CY 2022.
                 Additionally, for CY 2022 and subsequent calendar years, as
                discussed in Section X.C. of the CY 2022 OPPS/ASC proposed rule, we
                proposed to establish a Low Volume APC policy for New Technology APCs,
                clinical APCs, and brachytherapy APCs. For these APCs with fewer than
                100 single claims that can be used for ratesetting purposes in the
                existing claims year, we proposed to use up to four years of claims
                data to establish a payment rate for each item or service as we
                currently do for low volume services assigned to New Technology APCs.
                Further, we proposed to calculate the cost for Low Volume APCs based on
                the greatest of the arithmetic mean cost, median cost, or geometric
                mean cost. We proposed to designate 5 brachytherapy APCs as Low Volume
                APCs for CY 2022 as these APCs met our proposed criteria to be
                designated as a Low Volume APC. In Section X.C. of this final rule with
                comment period, we are finalizing our proposal to designate 5
                brachytherapy APCs as Low Volume APCs for CY 2022. For more information
                on the brachytherapy APCs we are designating as Low Volume APCs, see
                Section X.C. of this final rule with comment period.
                 We continue to invite stakeholders to submit recommendations for
                new codes to describe new brachytherapy sources. Such recommendations
                should be directed 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 2022
                (1) Background
                 In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74861
                [[Page 63470]]
                through 74910), we finalized a comprehensive payment policy that
                packages payment for adjunctive and secondary items, services, and
                procedures into the most costly primary procedure under the OPPS at the
                claim level. The policy was finalized in CY 2014 but the effective date
                was delayed until January 1, 2015, to allow additional time for further
                analysis, opportunity for public comment, and systems preparation. The
                comprehensive APC (C-APC) policy was implemented effective January 1,
                2015, with modifications and clarifications in response to public
                comments received regarding specific provisions of the C-APC policy (79
                FR 66798 through 66810).
                 A C-APC is defined as a classification for the provision of a
                primary service and all adjunctive services provided to support the
                delivery of the primary service. We established C-APCs as a category
                broadly for OPPS payment and implemented 25 C-APCs beginning in CY 2015
                (79 FR 66809 through 66810). In the CY 2016 OPPS/ASC final rule with
                comment period (80 FR 70332), we finalized 10 additional C-APCs to be
                paid under the existing C-APC payment policy and added one additional
                level to both the Orthopedic Surgery and Vascular Procedures clinical
                families, which increased the total number of C-APCs to 37 for CY 2016.
                In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79584
                through 79585), we finalized another 25 C-APCs for a total of 62 C-
                APCs. In the CY 2018 OPPS/ASC final rule with comment period, we did
                not change the total number of C-APCs from 62. In the CY 2019 OPPS/ASC
                final rule with comment period, we created three new C-APCs, increasing
                the total number to 65 (83 FR 58844 through 58846). 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).
                Most recently, in the CY 2021 OPPS/ASC final rule, we created two new
                C-APCs, increasing the total number to 69 C-APCs (85 FR 85885).
                 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 2022 OPPS/ASC
                final rule (which is available via the internet on the CMS website at
                https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices).
                 In the interim final rule with request for comments (IFC) titled,
                ``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 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
                following two 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 FDA letter of
                authorization for the emergency use of the drug or biological product,
                or the drug or biological product must be approved by 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 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 November 6, 2020 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
                one day before the date of service for HCPCS code G0378 that are
                described by one of the following codes: HCPCS code G0379
                [[Page 63471]]
                (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 set 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 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-
                [[Page 63472]]
                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 this final rule with
                comment period, 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 2022, we proposed to apply the frequency and cost
                criteria thresholds discussed above, testing claims reporting one unit
                of a single primary service assigned to status indicator ``J1'' and any
                number of units of a single add-on code for the primary ``J1'' service.
                If the frequency and cost criteria thresholds for a complexity
                adjustment are met and reassignment to the next higher cost APC in the
                clinical family is appropriate (based on meeting the criteria outlined
                above), we make a complexity adjustment for the code combination; that
                is, we reassign the primary service code reported in conjunction with
                the add-on code to the next higher cost C-APC within the same clinical
                family of C-APCs. As previously stated, we package payment for add-on
                codes into the C-APC payment rate. If any add-on code reported in
                conjunction with the ``J1'' primary service code does not qualify for a
                complexity adjustment, payment for the add-on service continues to be
                packaged into the payment for the primary service and is not reassigned
                to the next higher cost C-APC. We list the complexity adjustments for
                ``J1'' and add-on code combinations for CY 2022, along with all of the
                other final complexity adjustments, in Addendum J to the CY 2022 OPPS/
                ASC final rule (which is available via the internet on the CMS website
                at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices).
                 Addendum J to the CY 2022 OPPS/ASC final 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 2022 OPPS/ASC final 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 finalized 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 four 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 2022 OPPS/
                ASC proposed rule allows stakeholders the opportunity to better assess
                the impact associated with the proposed assignment of claims with each
                of the paired code combinations eligible for a complexity adjustment.
                 Comment: One commenter expressed support of CMS' proposal to
                maintain existing complexity adjustment code pairs that were in effect
                for 2021 and to create new complexity adjustments for certain code
                pairs for CY 2022.
                 Response: We thank the commenter for their support.
                 Comment: Several commenters requested that CMS modify or eliminate
                the established C-APC complexity adjustment eligibility criteria of 25
                or more claims reporting the code combination (frequency) and a
                violation of the 2 times rule in the originating C-APC (cost) to allow
                additional code combinations to qualify for complexity adjustments.
                These commenters expressed concern that CMS' methodology for
                determining complexity adjustments is unnecessarily restrictive,
                specifically the 25-claim threshold. One commenter also requested that
                CMS apply the complexity adjustment to all blue light cystoscopy
                procedures performed with Cysview [supreg]in the HOPD. The specific C-
                APC complexity adjustments requested by the commenters are listed in
                Table 1 below.
                 Several commenters reiterated their request to allow clusters of
                procedures, consisting of a ``J1'' code-pair and multiple other
                associated add-on codes used in combination with that ``J1''
                [[Page 63473]]
                code-pair to qualify for complexity adjustments, stating that this may
                allow for more accurate reflection of medical practice when multiple
                procedures are performed together or there are certain complex
                procedures that include numerous add-on codes. Commenters also
                requested that CMS continue to monitor and report on the impact of
                applying complexity criteria on APC assignments for code combinations
                within C-APCs.
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                 Response: We appreciate these comments. We note that we did not
                propose that claims with the code combinations suggested by commenters
                would receive complexity adjustments because they failed to meet either
                the cost or frequency criteria. We also note that, 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 we stated in the CY 2017 OPPS/ASC
                final rule (81 FR 79582), we 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, are appropriate to determine if a combination of procedures
                represents a complex, costly subset of the primary service that should
                qualify for the adjustment and be paid at the next higher paying C-APC
                in the clinical family. 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
                [[Page 63474]]
                criteria receive the C-APC payment rate associated with the primary
                ``J1'' service. As we previously stated in the CY 2020 OPPS/ASC final
                rule with comment period (84 FR 61161), 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.
                 As stated in the CY 2019 OPPS/ASC final rule with comment period
                (83 FR 58843), we do not believe that it is necessary to adjust the
                complexity adjustment criteria to allow claims that include more than
                two ``J1'' procedures or procedures that are not assigned to C-APCs to
                qualify for a complexity adjustment. As previously mentioned, we
                believe the current criteria are adequate to determine if a combination
                of procedures represents a complex, costly subset of the primary
                service. We will continue to monitor the application of the complexity
                adjustment criteria.
                 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 2022 as proposed. We are also
                finalizing the complexity adjustments 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 two years if sufficient data are available.
                It also allows us to retain a service in a New Technology APC for more
                than two 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 are 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). We proposed to continue to exclude payment for any
                procedure that is assigned to a New Technology APC (APCs 1491 through
                1599 and APCs 1901 through 1908) from being packaged when included on a
                claim with a ``J1'' or ``J2'' service assigned to a C-APC.
                 We did not receive any comments on this policy. We are finalizing
                as proposed without modification to continue this exclusion policy.
                (3) Additional C-APCs for CY 2022
                 In the CY 2022 proposed rule, 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 standard APCs to C-APCs in CY 2022, thus we proposed that
                the number of C-APCs for CY 2022 would be the same as the number for CY
                2021, which is 69 C-APCs.
                 Comment: One commenter requested that CMS designate APC 5372 (Level
                2 Urology and Related Services) as a Comprehensive APC, noting that all
                other Urology and Related Services APCs are C-APCs and multiple
                procedures within this APC would qualify for complexity adjustments.
                 Response: We appreciate the commenter's suggestion and will
                consider it for future rulemaking.
                 Comment: Several commenters requested that CMS discontinue the C-
                APC payment policy for all surgical insertion codes required for
                brachytherapy treatment. The commenters were concerned that the C-APC
                methodology lacks the charge capture mechanisms to accurately reflect
                the cost of radiation oncology services, 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, use of serial billing, and the potential for different sites of
                service for the initial surgical device insertion and subsequent
                treatment delivery or other supportive services. These commenters
                suggested that CMS assign brachytherapy procedures to traditional APCs,
                move brachytherapy procedures to higher paying C-APC, or pay separately
                for preparation and planning services to fully account for the costs
                associated with these procedures.
                 Response: We appreciate the comments. The calculations provided by
                commenters as to the cost of these services do not match how we
                calculate C-APC costs. We believe that the current C-APC methodology is
                appropriately applied to these surgical procedures and is accurately
                capturing costs. We will continue to examine these concerns and will
                determine if any modifications to this policy are warranted in future
                rulemaking.
                 After consideration of the public comments we received, we are
                finalizing our C-APC policy and the proposed C-APCs as proposed for CY
                2022. Table 2 below lists the final C-APCs for CY 2022, all of which
                were established in past rules. All C-APCs are displayed in Addendum J
                to this CY 2022 OPPS/ASC final rule with comment period (which is
                available via the internet at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices). 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 2022.
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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. 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 2022. In addition, we proposed to set the 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 and are
                finalizing them as proposed. In particular, 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 2022. In addition, we are
                finalizing our proposal to set the payment rate for composite APC 8010
                for CY 2022 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 3 below.
                 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
                [[Page 63478]]
                provided either with or without contrast. The five multiple imaging
                composite APCs established in CY 2009 are:
                 APC 8004 (Ultrasound Composite);
                 APC 8005 (CT and CTA without Contrast Composite);
                 APC 8006 (CT and CTA with Contrast Composite);
                 APC 8007 (MRI and MRA without Contrast Composite); and
                 APC 8008 (MRI and MRA with Contrast Composite).
                 We define the single imaging session for the ``with contrast''
                composite APCs as having at least one or more imaging procedures from
                the same family performed with contrast on the same date of service.
                For example, if the hospital performs an MRI without contrast during
                the same session as at least one other MRI with contrast, the hospital
                will receive payment based on the payment rate for APC 8008, the ``with
                contrast'' composite APC.
                 We make a single payment for those imaging procedures that qualify
                for payment based on the composite APC payment rate, which includes any
                packaged services furnished on the same date of service. The standard
                (noncomposite) APC assignments continue to apply for single imaging
                procedures and multiple imaging procedures performed across families.
                For a full discussion of the development of the multiple imaging
                composite APC methodology, we refer readers to the CY 2009 OPPS/ASC
                final rule with comment period (73 FR 68559 through 68569).
                 For CY 2022, 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.
                 For CY 2022, except where otherwise indicated, we proposed to use
                the costs derived from CY 2019 claims data to set the proposed CY 2022
                payment rates. Therefore, for CY 2022, the payment rates for the five
                multiple imaging composite APCs (APCs 8004, 8005, 8006, 8007, and 8008)
                are based on proposed geometric mean costs calculated from CY 2019
                claims available for the CY 2022 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 the CY 2022 OPPS/ASC proposed rule (which is available
                via the internet on the CMS website\1\) and are discussed in more
                detail in section II.A.1.b. of the CY 2022 OPPS/ASC proposed rule (86
                FR 42034 through 42040).
                ---------------------------------------------------------------------------
                 \1\ CY 2022 Medicare Hospital Outpatient Prospective Payment
                System and Ambulatory Surgical Center Payment System Proposed Rule
                (CMS-1753-P); Notice of Proposed Rulemaking. Available at: https://www.cms.gov/medicaremedicare-fee-service-paymenthospitaloutpatientppshospital-outpatient-regulations-and-notices/cms-1753-p.
                ---------------------------------------------------------------------------
                 For the CY 2022 OPPS/ASC proposed rule, we were able to identify
                approximately 1.04 million ``single session'' claims out of an
                estimated 2.2 million potential claims for payment through composite
                APCs from our ratesetting claims data, which represents approximately
                47 percent of all eligible claims, to calculate the proposed CY 2022
                geometric mean costs for the multiple imaging composite APCs. Table 2
                of the CY 2022 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 2022 (86 FR 42037 through 42040).
                 We did not receive any public comments on these proposals. 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 3 below lists the HCPCS codes that will be subject to the
                multiple imaging composite APC policy and their respective families and
                approximate composite APC final geometric mean costs for CY 2022.
                BILLING CODE 4120-01-P
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                [GRAPHIC] [TIFF OMITTED] TR16NO21.006
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                BILLING CODE 4120-01-C
                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 with comment period (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), the CY 2020 OPPS/ASC final rule with comment period (84 FR
                61173), and the CY 2021 OPPS/ASC final rule with comment period (85 FR
                85894). 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 2022, 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 hospital
                outpatient department 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.
                 For CY 2022, we proposed no changes to the overall packaging policy
                previously discussed. We proposed to 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 a proposed change to an ASC payment system
                packaging policy for CY 2022 and solicit comment on potential
                additional changes to that policy and application of that policy to the
                OPPS.
                 We did not receive any public comments on the overall OPPS
                packaging policy and are finalizing our packaging policy as proposed.
                Specific packaging concerns are discussed in detail in their respective
                sections throughout this final rule with comment period.
                b. ASC Payment System Policy for Non-Opioid Pain Management Drugs and
                Biologicals That Function as Surgical Supplies
                (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
                [[Page 63484]]
                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. While several commenters supported
                maintaining packaging policies, most of 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 particular 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), we explained that, in addition to stakeholder feedback
                regarding OPPS packaging policies, the President's Commission on
                Combating Drug Addiction and the Opioid Crisis (the Commission) \2\ had
                recently recommended that CMS examine payment policies for certain
                drugs that function as a supply, specifically non-opioid pain
                management treatments. The Commission was established in 2017 to study
                the scope and effectiveness of the Federal response to drug addiction
                and the opioid crisis and to make recommendations to the President for
                improving the Federal response to the crisis. The Commission's report
                included a recommendation for CMS to `` . . . review and modify
                ratesetting policies that discourage the use of non-opioid treatments
                for pain, such as certain bundled payments that make alternative
                treatment options cost prohibitive for hospitals and doctors,
                particularly those options for treating immediate postsurgical pain. .
                . .'' We explained that, as discussed in the CY 2019 OPPS/ASC proposed
                rule (83 FR 37068 through 37071), in response to stakeholder comments
                on the CY 2018 OPPS/ASC proposed rule and in light of the
                recommendations regarding payment policies for certain drugs, we had
                recently evaluated the impact of our packaging policy for drugs that
                function as a supply when used in a surgical procedure on the
                utilization of these drugs in both the hospital outpatient department
                and the ASC setting. We stated that, although we found increases in
                utilization of Exparel when it was paid under the OPPS, we noticed
                decreased utilization of Exparel under the ASC payment system.
                Accordingly, 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 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.
                Historically, we stated that we consider all items related to the
                surgical outcome and provided during the hospital stay in which the
                surgery is performed, including postsurgical pain management drugs, to
                be part of the surgery for purposes of our drug and biological surgical
                supply packaging policy (79 FR 66875).
                ---------------------------------------------------------------------------
                 \2\ https://www.federalregister.gov/documents/2017/04/03/2017-06716/establishing-the-presidents-commission-on-combating-drug-addiction-and-the-opioid-crisis.
                ---------------------------------------------------------------------------
                 On October 24, 2018, the Substance Use-Disorder Prevention that
                Promotes Opioid Recovery and Treatment for Patients and Communities Act
                (SUPPORT) Act (Pub. L. 115-271) was enacted. 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 outpatient
                department (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 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. Revisions
                under this paragraph are required to be treated as adjustments for
                purposes of paragraph (9)(B) of the Act, which requires any adjustments
                to be made in a budget neutral manner. Section 1833(i)(8) of the Act,
                as added by section 6082(b) of the SUPPORT Act, requires the Secretary
                to conduct a similar type of review as required for the OPPS and to
                make revisions to the ASC payment system in an appropriate manner, as
                determined by the Secretary.
                 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, 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 may 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
                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 non-opioid pain management drugs that function as surgical supplies
                when furnished in the ASC setting for CY 2020. Under this
                [[Page 63485]]
                policy, for CY 2020, the only drug that qualified for separate payment
                in the ASC setting as a non-opioid pain management drug that functions
                as a surgical supply was Exparel.
                 In the CY 2021 OPPS/ASC final rule with comment period (85 FR 85896
                to 85899), we continued the policy to pay separately at ASP+6 percent
                for 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. For CY 2021, only two drug products met the criteria as
                non-opioid pain management drugs that function as surgical supplies in
                the ASC setting, and thus receive separate payment under the ASC
                payment system. These drugs are Exparel and Omidria.
                (2) CY 2022 Evaluation of Payments for Opioids and Non-Opioid
                Alternatives for Pain Management and Comment Solicitation on Extending
                the Policy to the OPPS
                 As noted in the background above, over the past several years we
                have reviewed non-opioid alternatives and evaluated the impact of our
                packaging policies on access to these products. In our previous
                evaluations, 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 may have reduced the use of non-opioid alternatives. In the CY
                2021 OPPS/ASC final rule with comment period (85 FR 85896 through
                85899), we stated that we would continue to analyze the issue of access
                to non-opioid pain management alternatives in the HOPD and the ASC
                settings as part of any reviews we conduct under section
                1833(t)(22)(A)(ii) of the Act, with a specific focus on whether there
                is evidence that our current payment policies are creating access
                barriers for other non-opioid pain management alternatives for which
                there is evidence-based support that these products help to deter or
                avoid prescription opioid use and opioid use disorder.
                 For CY 2022, we conducted a subsequent review of payments for
                opioids and non-opioid alternatives as authorized by section
                1833(t)(22)(A)(ii) of the Act. We analyzed utilization patterns in both
                the HOPD and ASC settings for multiple non-opioid pain management
                drugs, including the two drugs that are receiving separate payment when
                furnished in the ASC setting under our current policy for CY 2021:
                Exparel and Omidria. The results of our CY 2022 review were similar to
                the results of our reviews in previous years. Generally, utilization of
                non-opioid pain management drugs continued to increase year after year
                in the HOPD setting, where payment for these non-opioid alternatives is
                packaged with the payment for the associated surgical procedure. In the
                ASC setting, where Exparel and Omidria are separately paid, we also saw
                utilization increases for these two drugs. However, in the ASC setting,
                the rate of increase in utilization is much more substantial than in
                the HOPD setting. In particular, in the HOPD setting where payment for
                Exparel is packaged, utilization of Exparel increased from 19.7 million
                units in 2019 to 21.8 million units in 2020, whereas utilization of
                Exparel increased from 1.5 million units in 2019 to 3.3 million units
                in 2020 in the ASC setting, where Exparel is separately paid. We note
                that a number of reasons could explain this discrepancy other than our
                policy to pay separately for Exparel under the ASC payment system,
                including evolving clinical practice in the ASC setting, which could
                increase the number of surgeries performed in ASCs for which Exparel is
                an appropriate pain management drug.
                 We have consistently explained, including as recently as in the CY
                2021 OPPS/ASC final rule with comment period (85 FR 85894), that 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. We have
                not found conclusive evidence to support the notion that the OPPS
                packaging policy, under which non-opioid drugs and biologicals are
                packaged when they function as a supply in a surgical procedure, has
                created financial incentives to use opioids instead of evidence-based
                non-opioid alternatives for pain management. For example, we have not
                observed decreased utilization of non-opioid alternatives for pain
                management in the HOPD setting. Therefore, for CY 2022, we proposed 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.
                 As explained earlier in this section, while packaging encourages
                efficiency and is a fundamental component of a prospective payment
                system, where there is an overriding policy objective to reduce
                disincentives for use of non-opioid products to the extent possible, we
                believe it may be appropriate to establish payment that reduces
                disincentives for use of non-opioid drugs and biologicals for pain
                management when there is evidence that use of those products reduces
                unnecessary opioid use. For these reasons, we solicited comment as to
                whether we should expand our current policy that only applies in the
                ASC setting--to pay separately at ASP+6 percent for non-opioid pain
                management drugs that function as surgical supplies in the performance
                of surgical procedures when they are furnished in the ASC setting--to
                the HOPD setting.
                 In the CY 2022 OPPS/ASC proposed rule, we stated we were interested
                in learning from stakeholders whether similar disincentives for the use
                of non-opioid pain management drugs and biologicals identified in the
                ASC setting exist in the HOPD setting. Previously, in the CY 2019 OPPS/
                ASC final rule with comment period (83 FR 59067), we identified several
                disincentives that were unique to the ASC setting compared to the HOPD
                setting, including the fact that ASCs tend to provide specialized care
                and a more limited range of services in comparison to hospital
                outpatient departments. Also, ASCs are paid, in aggregate,
                approximately 55 percent of the OPPS rate. Therefore, fluctuations in
                payment rates for specific services may affect these providers more
                acutely than hospital outpatient departments; and ASCs may be less
                likely to choose to furnish non-opioid postsurgical pain management
                treatments, which are typically more expensive than opioids, as a
                result. Additionally, we sought comment on what evidence supports the
                expansion of this policy to the HOPD setting, including the clinical
                benefit that Medicare beneficiaries may receive from the availability
                of separate or modified payment for these products in the HOPD setting.
                 Finally, in the proposed rule we sought comment on if we should
                treat
                [[Page 63486]]
                products the same depending on the setting, ASC or HOPD. For example,
                we sought comment on whether products should have the same eligibility
                requirements to qualify for revised payment in the ASC and the HOPD
                settings. We also sought comment on how the additional comment
                solicitations described below, which refer to the ASC setting, could
                also be applied to the HOPD setting.
                 Comment: MedPAC commented that while it appreciated CMS's interest
                in addressing the issue of opioid overuse it continued to support a
                policy that maintains the packaging of drugs that function as supplies
                in surgical procedures. MedPAC stated that this policy is contrary to
                CMS's efforts to increase the size of payment bundles in the OPPS to
                increase incentives for efficient delivery of care.
                 Response: We appreciate this feedback. We agree that packaging
                policies are a fundamental component of the OPPS and ASC payment
                systems. We strive to balance the importance of our packaging policies
                with the importance of addressing the opioid epidemic. In this specific
                scenario, we believe separate payment in the ASC setting for non-opioid
                pain management drugs and biologicals that function as surgical
                supplies is appropriate given the financial disincentives we have
                observed for these products in the ASC setting. As previously
                discussed, we identified several disincentives that were unique to the
                ASC setting compared to the HOPD setting, including the fact that ASCs
                tend to provide specialized care and a more limited range of services
                in comparison to hospital outpatient departments.
                 Comment: Most commenters were in favor of expanding the policy to
                provide separate payment under the ASC payment system for certain non-
                opioid pain management drugs that function as surgical supplies to the
                HOPD setting. Many providers commented that non-opioid pain management
                therapies are often superior to opioid-based ones in reducing pain, and
                indicated that they generally would prefer to use non-opioid therapies.
                However, many stated that payment dictated whether they could use a
                specific therapy. As such, commenters stated that the pain management
                therapies available in the ASC setting are not used to the same degree
                as in the HOPD setting. Commenters stated that although there has not
                been a drastic decrease in HOPD utilization of non-opioid pain
                management drugs, the utilization of opioid alternatives could be much
                higher if separate payment for these products was provided. Similarly,
                several commenters acknowledged that the disincentives to provide non-
                opioid pain management drugs in the HOPD setting were not as
                substantial as the ASC setting; however, according to these
                stakeholders, there are still financial disincentives to use opioids
                instead of opioid alternatives in the HOPD setting. A drug manufacturer
                discussed its view on the disparities in utilization and access to non-
                opioid pain management therapies in the HOPD setting compared to the
                ASC setting. Based on this commenter's geo-sociodemographic analysis,
                they believe that ASC access to their drug outpaced access in the HOPD
                setting due to CMS payment policies. A few drug manufacturers provided
                specific data on utilization of their individual products. Omeros, the
                manufacturer of the drug Omidria, cited that the drug's utilization
                had, in their view, decreased in the HOPD setting as a result of CMS
                packaging polices. Many commenters suggested that opioids were more
                cost effective for their HOPD facilities to use compared to non-opioid
                pain management drugs due to CMS payment policies. Some commenters
                suggested that a greater number of surgeries, particularly those with
                higher acuity and complexity that require pain management drugs, occur
                in the HOPD setting, compared to the ASC setting. The commenters
                contended that separate payment for non-opioid pain management drugs in
                this setting could potentially increase access to these treatments.
                Therefore, the commenters encouraged CMS to expand this policy to the
                HOPD setting.
                 The commenters generally encouraged payment parity across the ASC
                and HOPD settings in order to enhance site neutrality and prevent a
                diversion of patients to the ASC setting based solely on the
                availability of separate payment for non-opioid pain management drugs.
                MedPAC had concerns that our proposed policy would further distort
                payment differences between two care settings that are the sites of
                many of the same services, creating financial incentives for providers
                to direct patients to one setting of care. Many commenters and
                providers pointed to the clinical benefit of non-opioid treatments, and
                encouraged CMS to pay separately, incentivize, or otherwise recognize
                the value of these drugs in the HOPD setting, regardless of utilization
                patterns. Commenters provided literature supporting the benefits of
                non-opioid pain management approaches, including how certain non-opioid
                pain management products were effective for pain and reduced opioid
                consumption.
                 Response: We appreciate the many detailed comments we received from
                a wide variety of stakeholders in response to our comment solicitation
                on expanding our non-opioid pain management payment policy to the HOPD
                setting as well as those regarding the clinical benefit of non-opioid
                pain management treatments used in their clinical practice.
                 As discussed in the CY 2022 OPPS/ASC proposed rule, we did not make
                a proposal to expand this policy to the HOPD setting based on many
                factors, including our continued claims analysis that demonstrates
                increasing utilization year after year of these products in the HOPD
                setting. In the proposed rule, we described our claims analysis for
                Exparel, a drug for which we have more than five years of reliable
                claims data. As stated in the proposed rule, even while Exparel was
                packaged in the HOPD setting, claims data shows that utilization
                continued to steadily increase year over year. For other drugs
                described by stakeholders, we found similar increases over years of
                claims data. We will continue to track the utilization in the HOPD and
                ASC settings for all of these drugs. However, as Exparel is the only
                drug that has been not recently been on pass-through and has been
                packaged in the HOPD setting over the last three years, we believe that
                Exparel's utilization is a good indicator of whether our payment
                policies are causing disincentives for non-opioids in the HOPD setting.
                We have explained in several prior rulemakings, including in the CY
                2021 OPPS/ASC final rule with comment period (85 FR 85894), that 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. As previously discussed, we strive to
                balance the importance of our packaging policies with the importance of
                addressing the opioid epidemic. In this specific scenario, we believe
                separate payment in the ASC setting for non-opioid pain management
                drugs and biologicals that function as surgical supplies is
                appropriate, given the financial disincentives we have observed for
                these products in the ASC setting. We identified several disincentives
                that were unique to the ASC setting compared to the HOPD setting,
                including the fact that ASCs tend to provide specialized care and a
                more limited range of services in comparison to hospital outpatient
                departments. Also, ASCs are paid, in aggregate, approximately 55
                percent of the OPPS
                [[Page 63487]]
                rate. Therefore, fluctuations in payment rates for specific services
                may affect these providers more acutely than hospital outpatient
                departments; and ASCs may be less likely to choose to furnish non-
                opioid postsurgical pain management treatments, which are typically
                more expensive than opioids, as a result. We have not observed the same
                financial disincentives in the HOPD setting. We have also not observed
                conclusive trends that our packaging policies for non-opioid pain
                management are shifting patients from the HOPD setting to the ASC
                setting.
                 After reviewing the public comments received, as described
                previously, we have not found conclusive evidence to support the notion
                that the OPPS packaging policy, under which non-opioid drugs and
                biologicals are packaged when they function as a supply in a surgical
                procedure, has created financial incentives to use opioids instead of
                evidence-based non-opioid alternatives for pain management. Our goal is
                to eliminate the disincentive to use non-opioid pain management drugs,
                rather than to incentivize products in the HOPD setting as some
                commenters have suggested. At this time, we have not observed any clear
                and conclusive financial disincentive to use non-opioid pain management
                drugs over opioids in the HOPD setting. However, based on the comments
                we received, we will continue to carefully analyze utilization data and
                engage with stakeholders.
                 Therefore, for CY 2022, we are finalizing as proposed our proposal
                to continue to package payment under the OPPS for non-opioid pain
                management drugs that function as surgical supplies in the performance
                of surgical procedures in the HOPD setting.
                (3) Criteria for Eligibility for Separate Payment Under the ASC Payment
                System for Non-Opioid Pain Management Drugs and Biologicals That
                Function as Surgical Supplies
                 As described in section 1833(t)(22)(A)(i) of the Act, the Secretary
                shall conduct a review of payments for opioids and evidence-based non-
                opioid alternatives for pain management with a goal of ensuring that
                there are not financial incentives to use opioids instead of non-opioid
                alternatives. In any future reviews the Secretary may determine
                appropriate to conduct under section 1833(t)(22)(A)(ii) of the Act, we
                believe it is important to establish the evidence base for non-opioid
                alternatives for pain management when evaluating whether current
                payment policies result in an incentive for providers to use opioids
                instead of such evidence-based non-opioid alternatives for pain
                management.
                 Accordingly, for CY 2022 and subsequent years, we proposed two
                criteria that non-opioid pain management drugs and biologicals would be
                required to meet to be eligible for a payment revision under the ASC
                payment system in accordance with section 1833(t)(22)(C). The proposed
                criteria were intended to identify non-opioid pain management drugs and
                biologicals that function as supplies in surgical procedures for which
                revised payment under the ASC payment system would be appropriate.
                 Comment: Most commenters supported continuing our policy of
                separate payment for non-opioid pain management drugs that function as
                surgical supplies in the ASC setting. Commenters believe continuing
                separate payment in the ASC setting is essential given the continued
                overall low utilization of these drugs in the ASC setting and the
                positive clinical benefit the drugs provide.
                 Response: We thank commenters for their support for our proposal.
                In the following sections we discuss in greater detail the specific
                aspects of the policy that commenters addressed.
                 Comment: MedPAC expressed reservations regarding our policy to pay
                ASCs separately for non-opioid pain management drugs that function as
                supplies. It stated this policy is contrary to CMS's policy efforts to
                increase the size of payment bundles in order to increase incentives
                for efficient delivery of care. Additionally, it stated paying
                separately in the ASC would distort payment differences between the ASC
                and HOPD settings. Generally, MedPAC supported a policy that maintains
                the packaging of drugs that function as supplies in surgical
                procedures, especially in the absence of evidence in peer-reviewed
                publications indicating that the drug in question reduces the use of
                opioids.
                 Response: We appreciate this comment and agree with the importance
                of maintaining our overarching packaging policies in the OPPS and ASC
                payment systems. However, given the seriousness of the opioid epidemic,
                we continue to believe this policy plays an important role in
                maintaining beneficiary access and enhancing patient care in the ASC
                setting by eliminating the financial disincentive to use non-opioid
                pain management drugs that function as surgical supplies over opioids.
                 Based on public comments received, for CY 2022, we are finalizing
                our proposal as proposed to continue our current policy to pay
                separately for non-opioid pain management drugs that function as
                surgical supplies in the performance of surgical procedures in the ASC
                setting. We are also finalizing the new additional eligibility criteria
                we proposed for this policy, as discussed in the following section.
                 Specifically, for CY 2022, we proposed the following criteria that
                non-opioid pain management drugs and biologicals that function as
                surgical supplies would be required to meet to be eligible for separate
                payment under the ASC payment system in accordance with section
                1833(t)(22)(C) of the Act.
                Criterion One: FDA Approval and FDA-Approved Indication for Pain
                Management or Analgesia
                 We proposed that the drug or biological product must be safe and
                effective, as determined by FDA. We proposed that the drug must be
                approved under a new drug application under section 505(c) of the
                Federal Food, Drug, and Cosmetic Act (FDCA), under an abbreviated new
                drug application under section 505(j), or, in the case of a biological
                product, be licensed under section 351 of the Public Health Service Act
                (the PHS Act). We further proposed that the drug or biological must
                also have an FDA-approved indication for pain management or analgesia.
                We believe FDA approval is an appropriate requirement for a drug or
                biological to be eligible for this policy because FDA reviews new drugs
                and biologicals for safety and effectiveness, which would allow us to
                identify safe and effective non-opioid products to which this separate
                payment policy would apply. Given that FDA has an existing and detailed
                review process already in place, we believe it would be appropriate and
                administratively efficient to utilize FDA approval as a requirement to
                ensure that the new drugs and biologicals approved under this policy
                are safe and effective for their intended use. We believe the vast
                majority of drugs and biologicals on the market have undergone FDA
                review and approval, and we do not anticipate this criterion would
                prevent otherwise eligible drugs or biologicals from qualifying. In
                addition, section 1833(t)(22)(A) of the Act, our current policy, and
                our proposed policy all focus on pain management products.
                Specifically, section 1833(t)(22)(A) of the Act refers to reviews of
                opioid and evidence-based non-opioid products for pain management.
                Therefore, we proposed to require an FDA-approved indication for pain
                management or analgesia for a drug or biological to qualify as a pain
                management product.
                [[Page 63488]]
                The FDA approval process would also allow us to confirm that a drug or
                biological is, in fact, a non-opioid. Drugs and biologicals that are
                characterized as opioids or opioid agonists in the labeling for the
                FDA-approved product would not be eligible for separate payment under
                this policy.
                 Comment: Many commenters recommended CMS finalize its proposal to
                require an FDA-approved indication for pain management or analgesia for
                a drug or biological to qualify as a pain management product. Numerous
                commenters believe that this criterion is objective and would provide a
                transparent requirement for this policy moving forward. Commenters
                stated that FDA has a thorough and comprehensive process for evaluating
                drugs for approval and for specific FDA-approved indications. Other
                commenters did not express outright support for this criterion, but
                rather said they were not opposed to it. Generally, commenters were in
                favor of establishing an FDA approval requirement.
                 Response: We thank commenters for their support. As described in
                our proposal, we agree with the importance of utilizing FDA approval
                and an indication for pain management as a criterion for separate
                payment for eligible non-opioids.
                 Comment: Some commenters did not support requiring a specific FDA-
                approved indication for pain management or analgesia because the
                commenters believed this requirement may limit the number of products
                to which the policy would apply. One commenter asked us to clarify
                whether an FDA-approved indication for the treatment of pain would be
                considered appropriate and satisfy this criterion. One drug
                manufacturer more generally asked for flexibility in the exact FDA-
                approved indication. This commenter stated CMS should allow flexibility
                for a variety of indication statements that demonstrate that a drug
                mitigates or otherwise alleviates pain. Additionally, this commenter
                asked CMS to clarify if providing a drug during the pre-operative,
                post-operative, or intraoperative period could potentially qualify
                under the proposed policy. Some commenters asked CMS to expand this
                FDA-approved indication criterion to include anesthesia drugs, drugs
                used to treat inflammation, or more generally, any drugs that may have
                pain management properties. An additional commenter suggested limiting
                eligibility to drugs or biologicals with more restrictive FDA-approved
                indications, such as those drugs with opioid-sparing pain management
                indications.
                 Response: Regarding comments on a specific FDA-approved indication,
                we believe an FDA-approved indication for pain management or analgesia
                is appropriate for this policy. Section 1833(t)(22) of the Act required
                us to assess incentives to use opioids rather than non-opioid products
                used for pain management. We believe using the FDA-approved indications
                as a method to determine which drug products are safe and effective for
                pain management is appropriate. Therefore, we do not believe drugs or
                biologicals that do not have an FDA--approved indication for pain
                management or as an analgesic, such as certain anesthesia drugs
                mentioned by stakeholders, would be appropriate under this policy. We
                do believe ``treatment of pain'' as described by one commenter, would
                be an appropriate indication to satisfy this criterion. In response to
                the recommendation that we include drugs used to treat inflammation, or
                more generally, any drugs that may have pain management properties, we
                are not modifying our proposal to include these types of drugs in the
                definition of an FDA-approved indication for pain management or
                analgesia.
                 Additionally, we remind commenters that we consider all items
                related to the surgical outcome and provided during the hospital stay
                in which the surgery is performed, including postsurgical pain
                management drugs, to be part of the surgery for purposes of our drug
                and biological surgical supply packaging policy (83 FR 58855).
                Additionally, a drug product must meet all other requirements for
                payment and coverage under Medicare Part B in order to be paid and
                covered under this policy. We believe including those drugs with FDA-
                approved indications for pain management or analgesia will capture the
                appropriate drug products intended for this policy without being so
                broad as to include drugs that may not be used for pain management or
                so restrictive as to exclude potentially useful non-opioid pain
                management products.
                 Based on our review of public comments, we are finalizing criterion
                one as proposed, under which the drug or biological product must be
                safe and effective, as determined by FDA, and that the drug must be
                approved under a new drug application under section 505(c) of FDCA,
                under an abbreviated new drug application under section 505(j), or, in
                the case of a biological product, be licensed under section 351 of the
                PHS Act. We are also finalizing for CY 2022 as part of criterion one
                the requirement that the drug or biological also have an FDA-approved
                indication for pain management or analgesia.
                Criterion Two: Cost of the Product
                 Currently under the OPPS, drugs that are not policy-packaged are
                subject to the drug packaging threshold. In accordance with section
                1833(t)(16)(B) of the Act, the threshold for establishing separate APCs
                for payment of drugs and biologicals was set at $50 per administration
                during CYs 2005 and 2006. We set the packaging threshold for
                establishing separate APCs for drugs and biologicals through annual
                notice and comment rulemaking. The proposed per-day drug packaging
                threshold for CY 2022 was $130, and the finalized per-day drug
                packaging threshold for CY 2022 is $130, as described in V.B.1.a of
                this final rule with comment period.
                 As our second criterion, we proposed that a drug or biological
                would only be eligible for a payment revision under the ASC payment
                system in accordance with section 1833(t)(22)(C) of the Act if its per-
                day cost exceeds the drug packaging threshold described in section
                V.B.1.a. of this final rule with comment period. We believe this is an
                appropriate requirement because we believe that not all non-opioid
                alternative treatments are equally disincentivized by our packaging
                policies. In particular, when the cost of non-opioid drugs and
                biologicals falls below the packaging threshold of $130 per-day, we
                believe the drug does not generally have a significant impact on the
                overall procedure costs; therefore, we believe use of these drugs and
                biologicals is less likely to be disincentivized by CMS packaging
                policies. However, when the per-day cost of the drug is above the drug
                packaging threshold, we believe the cost of these drugs or biologicals
                is more likely to have a significant impact on the overall procedure
                costs. Section 1833(t)(22)(A)(i) of the Act discusses financial
                incentives to use opioids instead of non-opioid alternative treatments.
                As such, we do not believe non-opioid pain management drugs that are
                lower in cost are generally disincentivized by our packaging policies,
                as their cost is more easily absorbed into the payment for the primary
                procedure in which they are used when compared to drugs and biologicals
                with costs above the threshold. We proposed to use the existing OPPS
                drug packaging threshold as it is familiar to stakeholders and its
                application to drugs and biologicals under this policy creates
                uniformity across the OPPS and ASC payment systems. Therefore, CMS
                proposed that drugs and biologicals would be required to have a per-day
                cost that exceeds the drug packaging threshold that CMS sets
                [[Page 63489]]
                annually through notice and comment rulemaking.
                 We also believe the use of this threshold as an eligibility
                criterion for drugs under consideration for separate payment under this
                policy is appropriate, as it conforms with the broader goals of the
                OPPS and ASC payment systems. 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, including the drug packaging threshold, support our strategic
                goal of using larger payment bundles to maximize hospitals' incentives
                to provide care in the most efficient manner. Packaging payments into
                larger payment bundles promotes the predictability and accuracy of
                payment for services over time. For the reasons mentioned above, we
                believe it is appropriate to continue to package drugs that would
                otherwise qualify for separate payment under this policy where their
                per-day cost is below the OPPS drug packaging threshold.
                 Comment: Most commenters supported this criterion. Some commenters
                stated that they agreed with CMS's rationale that use of drugs and
                biologicals with per-day costs below the packaging threshold is not
                generally disincentivized by CMS packaging policies. Commenters
                generally thought this was a clear, transparent, and objective
                criterion. Other commenters did not express outright support for this
                criterion but stated that they were not opposed to it.
                 Response: We thank commenters for their support of this proposed
                criterion.
                 Comment: A few commenters stated that non-opioid pain management
                drugs that fall below the drug packaging threshold are still expensive
                relative to opioids, and therefore, the commenters believed CMS should
                not finalize a cost threshold for this policy. Specifically, the
                manufacturer of Anjeso (HCPCS code J1738; Injection, meloxicam, 1 mg),
                Baudax Bio, supported CMS adopting policies that encourage use of non-
                opioid pain alternatives. However, they recognized that the per-day
                cost of their product fell below the drug packaging threshold and
                disagreed with CMS's proposed criterion two regarding per-day cost,
                because they indicated that the relative cost of opioids is still less
                than most non-opioid pain management products. Other commenters
                recommended that CMS pay for drugs and biologicals with per-day costs
                that fall below the drug packaging threshold, such as intravenous (IV)
                acetaminophen.
                 Response: We thank the commenters for their feedback on this
                proposed criterion. At this time, we continue to believe that drugs and
                biologicals with per-day costs below the OPPS drug packaging threshold
                are not generally disincentivized by CMS packaging policies, as the
                drug cost is less likely to represent a substantial portion of the
                payment rate of the primary procedure in which the product is used.
                This criterion aligns with our policy objective of eliminating
                financial disincentives to use of non-opioid pain management products.
                 Based on our rationale described above and feedback from
                stakeholders, we believe it is appropriate to finalize the second
                criterion as proposed. For CY 2022, we are finalizing our proposal that
                a non-opioid pain management drug or biological that functions as a
                supply in a surgical procedure would only be eligible for separate
                payment under the ASC payment system if its per-day cost exceeds the
                drug packaging threshold described in section V.B.1.a. of this final
                rule with comment period.
                 In addition, we proposed that non-opioid drugs and biologicals
                currently receiving transitional drug pass-through status in the OPPS
                would not be candidates for this policy as they are already paid
                separately under the OPPS and ASC payment system. We proposed that once
                transitional drug pass-through status expires, the non-opioid drug or
                biological may qualify for separate payment under the ASC payment
                system if it meets the proposed eligibility requirements.
                 Comment: Commenters requested that CMS determine the payment status
                of non-opioid drugs and biologicals after pass-through status expires
                as soon as possible through rulemaking.
                 Response: We thank commenters for their feedback. We will make
                payment determinations for applicable drugs in the appropriate calendar
                year rule. For example, those drugs that may be eligible for separate
                payment under this policy for the first time in CY 2023 will be
                discussed during the CY 2023 rulemaking cycle and evaluated against the
                appropriate eligibility criteria for that year.
                 Based on stakeholder feedback, we are finalizing as proposed that
                non-opioid pain management drugs and biologicals that function as
                supplies in surgical procedures that are already paid separately, or
                have transitional drug pass-through status under the OPPS, would not be
                candidates for this policy as they are already paid separately under
                the OPPS and ASC payment system. We also note that if a product has not
                received transitional pass-through status in the OPPS and ASC settings,
                separate payment in the ASC setting through this policy for non-opioid
                pain management drugs that function as surgical supplies does not
                preclude the manufacturer from applying for and receiving transitional
                pass-through status for their drug or biological if the drug or
                biological meets the criteria for transitional drug pass-through
                status. Please see section V.A., OPPS Transitional Pass-Through Payment
                for Additional Costs of Drugs, Biologicals, and Radiopharmaceuticals,
                of this CY 2022 OPPS/ASC final rule for additional details on
                transitional pass-through payments.
                (4) Regulation Text Changes
                 We proposed to codify our proposed criteria for separate payment
                for qualifying non-opioid pain management drugs and biologicals that
                function as surgical supplies in the regulation text for the ASC
                payment system in a new Sec. 416.174. In particular, we proposed to
                provide in a new Sec. 416.174(a)(1) that non-opioid pain management
                drugs or biologicals that function as a supply in a surgical procedure
                are eligible for separate payment if they are approved under a new drug
                application under section 505(c) of FDCA, under an abbreviated new drug
                application under section 505(j) of FDCA, or, in the case of a
                biological product, are licensed under section 351 of the PHS Act.
                Section 416.174(a)(1) would also provide that the drug or biological
                must have an FDA-approved indication for pain management or analgesia.
                New Sec. 416.174(a)(2) would require that the per-day cost of the drug
                or biological must exceed the OPPS drug packaging threshold set
                annually through notice and comment rulemaking.
                 We also proposed to amend Sec. 416.164(b)(6) to provide that non-
                opioid pain management drugs and biologicals that function as a supply
                when used in a surgical procedure as determined by CMS under Sec.
                416.174 are ancillary items that are integral to a covered surgical
                procedure and for which separate payment is allowed. We also proposed
                to amend Sec. 416.171(b)(1) to provide that the payment rate for non-
                opioid pain management drugs and biologicals that function as a supply
                when used in a surgical procedure as determined by CMS under Sec.
                416.174 are
                [[Page 63490]]
                not paid an amount derived from the payment rate for the equivalent
                item or service under the OPPS.
                 We received no comments on the specific regulation text changes. As
                we are finalizing the two criteria as proposed, we are also finalizing
                the corresponding regulation text changes as proposed.
                (5) Eligibility for Separate Payment in CY 2022 for Exparel, Omidria,
                and Other Non-Opioid Drugs or Biologicals for Pain Management
                 As discussed in the CY 2021 OPPS/ASC final rule with comment
                period, there are two products receiving separate payment in the ASC
                setting in CY 2021 under our current policy to pay separately for non-
                opioid pain management treatments that function as surgical supplies
                when furnished in the ASC setting (85 FR 86171). These two products are
                Exparel (HCPCS Code C9290, Injection, bupivacaine liposome, 1 mg) and
                Omidria (HCPCS Code J1097, phenylephrine 10.16 mg/ml and ketorolac 2.88
                mg/ml ophthalmic irrigation solution, 1 ml). Based on the current
                information available to us, as we explain below, we proposed that both
                products would be eligible for separate payment in CY 2022 under our
                proposed policy. We sought comment on whether there are any other non-
                opioid drug or biological products that would meet the proposed
                criteria if finalized. We have included our evaluations of these
                products based on stakeholder comments in the follow sections.
                (a) Eligibility for Separate Payment in CY 2022 for Exparel
                 We proposed that Exparel (C9290; Injection, bupivacaine liposome, 1
                mg) would continue to receive separate payment in the ASC setting as a
                non-opioid pain management drug that functions as a surgical supply for
                CY 2022. As we stated in the CY 2022 OPPS/ASC proposed rule, based on
                CMS's internal review, we believed Exparel met criterion one. Exparel
                was approved by FDA with a New Drug Application (NDA #022496) on 10/28/
                2011.\3\ Exparel's FDA-approved indication is ``in patients 6 years of
                age and older for single-dose infiltration to produce postsurgical
                local analgesia (1). In adults as an interscalene brachial plexus nerve
                block to produce postsurgical regional analgesia''.\4\ No component of
                Exparel is opioid-based. Accordingly, we proposed that Exparel meets
                criterion one.
                ---------------------------------------------------------------------------
                 \3\ Exparel. FDA Letter. 28 October 2011. https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2011/022496s000ltr.pdf.
                 \4\ Exparel. FDA Package Insert. 22 March 2021. https://www.accessdata.fda.gov/drugsatfda_docs/label/2021/022496s035lbl.pdf.
                ---------------------------------------------------------------------------
                 As discussed in section (3) above, for criterion two we proposed
                that a drug or biological would only be eligible for separate payment
                under this policy if its per-day cost exceeds the drug packaging
                threshold described in section V.B.1.a. of this final rule with comment
                period. The finalized per-day cost threshold for CY 2022 is $130. Using
                the methodology described at V.B.1.a. of this final rule with comment
                period, the per-day cost of Exparel exceeds the $130 per-day cost
                threshold. Therefore, we proposed that Exparel meets criterion two.
                 Based on the above discussion, we proposed that Exparel meets
                criteria 1 and 2, and should receive separate payment under the ASC
                payment system for CY 2022.
                 Comment: The manufacturer of Exparel, Pacira BioSciences, supported
                finalizing both criteria as proposed and urged CMS to finalize the
                proposal to pay separately for Exparel in the ASC setting. The
                manufacturer also noted that numerous peer-reviewed studies demonstrate
                that Exparel can reduce or even replace use of postsurgical opioid pain
                medication and lead to improved patient outcomes. Several commenters,
                including a hospital association and surgery associations, also
                supported CMS's proposal to continue to unpackage and pay separately
                for Exparel in the ASC setting.
                 Response: We appreciate the commenters' input. After reviewing the
                information provided during the public comment period, and as described
                in our proposal above, we have determined that Exparel meets criterion
                one for FDA approval and an FDA-approved pain management indication and
                that the per-day cost of Exparel exceeds the finalized $130 per-day
                cost threshold, meeting criterion two. Additionally, no component of
                Exparel is opioid-based.
                 After consideration of the public comments we received and
                consistent with the eligibility criteria we are adopting, we are
                finalizing our proposal that Exparel will continue to receive separate
                payment under the ASC payment system in CY 2022 as a non-opioid pain
                management drug that functions as a surgical supply.
                (b) Eligibility for Separate Payment for Omidria in CY 2022
                 We proposed that Omidria (J1097; Phenylephrine 10.16 mg/ml and
                ketorolac 2.88 mg/ml ophthalmic irrigation solution, 1 ml) would
                continue to receive separate payment in the ASC setting as a non-opioid
                pain management drug that functions as a surgical supply for CY 2022.
                Based on our internal review during the proposed rule, we stated that
                we believed Omidria would meet criterion one. Omidria was approved by
                FDA with a New Drug Application (NDA #205388) on May 30, 2014.\5\
                Additionally, Omidria's FDA-approved indication is as ``an alpha 1-
                adrenergic receptor agonist and nonselective cyclooxygenase inhibitor
                indicated for: Maintaining pupil size by preventing intraoperative
                miosis; Reducing postoperative pain''.\6\ No component of Omidria is
                opioid-based. Therefore, we proposed that Omidria would meet proposed
                criterion one.
                ---------------------------------------------------------------------------
                 \5\ Omidria. FDA Letter. 30 May 2014. https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2014/205388Orig1s000ltr.pdf.
                 \6\ Omidria. FDA Package Insert. 08 December 2017. https://www.accessdata.fda.gov/drugsatfda_docs/label/2017/205388s006lbl.pdf.
                ---------------------------------------------------------------------------
                 Using the methodology described at V.B.1.a. of this final rule with
                comment period, the per-day cost of Omidria exceeds the $130 per-day
                cost threshold. Therefore, we proposed that Omidria meets criterion
                two.
                 Because we proposed that Omidria meets criteria one and two, we
                proposed that it should receive separate payment under the ASC payment
                system for CY 2022.
                 Comment: The manufacturer of Omidria, Omeros, agreed with CMS's
                proposal that Omidria would satisfy the proposed criteria for CY 2022
                and noted their support for Omidria continuing to receive separate
                payment in ASC setting. The manufacturer noted that Omidria decreases
                the need for the opioid fentanyl during surgery and reduces opioids
                prescribed post operatively, but did not submit literature to support
                these assertions. One commenter, a hospital association, also supported
                CMS's proposal to continue to unpackage Omidria in the ASC setting.
                However, another individual commenter stated their opposition to this
                proposal, noting that Omidria should be treated as an incidental part
                of an ophthalmic surgery and not paid for separately, as, in this
                commenter's view, Omidria does not meaningfully ameliorate the opioid
                crisis, is not indicated or useful for the treatment of an opioid use
                disorder, and that separate payment does not provide a clinical benefit
                for Medicare beneficiaries. Additionally, this commenter noted that
                ophthalmic surgeons rarely prescribe opioids.
                 Response: We appreciate the public comments on our proposal. We
                note that we have not proposed or adopted a requirement that a product
                must meaningfully ameliorate the opioid crisis or have a clinically
                significant
                [[Page 63491]]
                impact on opioid usage. As such, after reviewing the information
                provided during the public comment period, and as described in our
                proposal above, we have determined that Omidria meets finalized
                criterion one because it is FDA approved and has an FDA-approved pain
                management indication and meets finalized criterion two because it has
                a per-day cost that exceeds the $130 per-day cost threshold.
                 After consideration of the public comments we received and our
                review of the criteria, we are finalizing the proposal for Omidria to
                continue to receive separate payment under the ASC payment system as a
                non-opioid pain management drug that functions as a surgical supply for
                CY 2022.
                (c) Eligibility for Separate Payment in CY 2022 for Other Non-Opioid
                for Pain Management Drugs and Biologicals
                 We received comments on the CY 2022 OPPS/ASC proposed rule on
                additional non-opioid pain management drugs and biologicals that
                commenters believe would be eligible for separate payment in CY 2022
                under our proposed policy. We have included a summary of these comments
                below as well as our analysis of whether these products meet the final
                eligibility criteria.
                 Comment: The manufacturer of Dextenza (J1096; Dexamethasone,
                lacrimal ophthalmic insert, 0.1 mg), Ocular Therapeutix, commented that
                separate payment for Dextenza is necessary in the ASC setting for
                beneficiary access, as it is frequently used in that setting. The
                manufacturer requested continued separate payment after Dextenza's
                pass-through status expires.
                 Response: Based on CMS's internal review, we believe Dextenza meets
                criterion one. Dextenza was approved by FDA with a New Drug Application
                (NDA #208742) on November 30, 2018.\7\ Dextenza's FDA-approved
                indication is as ``a corticosteroid indicated for the treatment of
                ocular pain following ophthalmic surgery''.\8\ No component of Dextenza
                is opioid-based. Accordingly, we believe that Dextenza meets criterion
                one.
                ---------------------------------------------------------------------------
                 \7\ Dextenza. FDA Letter. 30 November 2018. https://www.accessdata.fda.gov/drugsatfda_docs/nda/2018/208742Orig1s000Approv.pdf.
                 \8\ Dextenza. FDA Labeling. 30 November 2018. https://www.accessdata.fda.gov/drugsatfda_docs/nda/2018/208742Orig1s000Lbl.pdf.
                ---------------------------------------------------------------------------
                 As discussed in section (3) above, for criterion two we proposed
                that a drug or biological would only be eligible for separate payment
                under this policy if its per-day cost exceeds the drug packaging
                threshold described in section V.B.1.a. of this final rule with comment
                period. Using that methodology, the per-day cost of Dextenza exceeds
                the $130 per-day cost threshold. Therefore, we believe that Dextenza
                meets criterion two.
                 We agree that Dextenza meets criteria one and two, and would be
                eligible to receive separate payment under the ASC payment system as a
                non-opioid pain management drug that functions as a surgical supply for
                CY 2022 if it was not already receiving separate payment-in CY 2022 as
                a pass-through drug. Please see section V.A. ``OPPS Transitional Pass-
                Through Payment for Additional Costs of Drugs, Biologicals, and
                Radiopharmaceuticals'' of this final rule with comment period for
                additional details on transitional pass-through payments for drugs and
                biologicals, as well as section X. F. of this final rule with comment
                period, ``Separate Payment in CY 2022 for the Device Category, Drugs,
                and Biologicals with Transitional Pass-Through Payment Status Expiring
                between December 31, 2021, and September 30, 2022.''
                 Comment: The manufacturer of Dexycu (J1095; Injection,
                dexamethasone 9 percent, intraocular, 1 microgram), EyePoint
                Pharmaceuticals, commented that Dexycu should be eligible for separate
                payment in the ASC setting as a non-opioid pain management drug that
                functions as a surgical supply. An individual commenter, an
                ophthalmologist, noted that Dexycu is indicated for the treatment of
                inflammation following ocular surgery and provided summaries of several
                studies that discussed Dexycu's utility in controlling pain. Other
                commenters more broadly suggested that CMS provide separate payment for
                products that prevent inflammation.
                 Response: Based on CMS's internal review, we do not believe Dexycu
                meets criterion one. Dexycu was approved by FDA with a New Drug
                Application (NDA #208912) on February 9, 2018.\9\ Dexycu's FDA-approved
                indication is as ``a corticosteroid indicated for the treatment of
                postoperative inflammation''.\10\ No component of Dexycu is opioid-
                based. However, Dexycu does not have an FDA-approved indication for
                pain management or analgesia. Accordingly, we do not believe Dexycu
                meets criterion one.
                ---------------------------------------------------------------------------
                 \9\ Dexycu. FDA Letter. 09 February 2018. https://www.accessdata.fda.gov/drugsatfda_docs/nda/2018/208912Orig1s000Approv.pdf.
                 \10\ Dexycu. FDA Labeling. 09 February 2018. https://www.accessdata.fda.gov/drugsatfda_docs/nda/2018/208912Orig1s000Lbl.pdf.
                ---------------------------------------------------------------------------
                 As discussed in section II.A.3. of this final rule with comment
                period, for criterion two we proposed that a drug or biological would
                only be eligible for separate payment under this policy if its per-day
                cost exceeds the drug packaging threshold described in section V.B.1.a.
                of this final rule with comment period. Using that methodology, the
                per-day cost of Dexycu does exceed the $130 per-day cost threshold.
                Therefore, we believe Dexycu meets criterion two.
                 After consideration of the public comments we received and our
                review of the criteria, we have determined that Dexycu does not meet
                criteria one and, therefore, would not eligible to receive separate
                payment under the ASC payment system as a non-opioid pain management
                drug that functions as a surgical supply for CY 2022. Additionally, we
                note that Dexycu is already receiving separate payment through CY 2022.
                Please see section V.A. ``OPPS Transitional Pass-Through Payment for
                Additional Costs of Drugs, Biologicals, and Radiopharmaceuticals'' of
                this final rule with comment period for additional details on
                transitional pass-through payments for drugs and biologicals as well as
                section X. F. ``Separate Payment in CY 2022 for the Device Category,
                Drugs, and Biologicals with Transitional Pass-Through Payment Status
                Expiring between December 31, 2021, and September 30, 2022.''
                 Comment: The manufacturer of Xaracoll, Innocoll Pharmaceuticals,
                commented that Xaracoll meets the two proposed CMS criteria and
                qualifies for separate payment as a non-opioid pain management drug
                that functions as a surgical supply in the ASC setting. The
                manufacturer also provided additional details regarding the clinical
                benefit of their product, including discussion of studies in which
                Xaracoll demonstrated significant pain relief and opioid reduction in
                open inguinal hernia repair.
                 Response: We appreciate the commenter's input. Based on CMS's
                internal review, we believe Xaracoll meets criterion one. Xaracoll was
                approved by FDA with a New Drug Application (NDA #209511) on August 28,
                2020.\11\ Regarding the specific FDA-approved indication requirement,
                Xaracoll is ``indicated in adults for placement into the surgical site
                to produce postsurgical analgesia for up to 24 hours following open
                inguinal hernia repair''.\12\ No component of Xaracoll is
                [[Page 63492]]
                opioid-based. Accordingly, we believe that Xaracoll meets criterion
                one.
                ---------------------------------------------------------------------------
                 \11\ Xaracoll. FDA Letter. 30 November 2018. https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2020/209511Orig1s000ltr.pdf.
                 \12\ Xaracoll. FDA Labeling. 30 November 2018. https://www.accessdata.fda.gov/drugsatfda_docs/label/2020/209511s000lbl.pdf.
                ---------------------------------------------------------------------------
                 As discussed in section II.A.3. of this final rule with comment
                period, for criterion two we proposed that a drug or biological would
                only be eligible for separate payment under this policy if its per-day
                cost exceeds the drug packaging threshold described in section V.B.1.a.
                of this final rule with comment period. Using that methodology, the
                per-day cost of Xaracoll exceeds the $130 per-day cost threshold.
                Therefore, we believe that Xaracoll meets criterion two.
                 After consideration of the public comments we received and our
                review of the finalized criteria, we have determined that Xaracoll
                meets criteria one and two, and are approving Xaracoll (C9089;
                Bupivacaine, collagen-matrix implant, 1 mg) to receive separate payment
                under the ASC payment system as a non-opioid pain management drug that
                functions as a surgical supply for CY 2022.
                 Comment: The manufacturer of Zynrelef, Heron Therapeutics, stated
                how Zynrelef meets CMS's proposed criteria for separate payment in the
                ASC setting and should be receive separate payment in that setting. The
                manufacturer also provided additional details regarding the clinical
                benefit of their product, including studies where Zynrelef demonstrated
                reduced opioid use.
                 Response: We appreciate the commenter's input. Based on CMS's
                internal review, we believe Zynrelef meets criterion one. Zynrelef was
                approved by FDA with a New Drug Application (NDA #211988) on May 12,
                2021.\13\ Regarding the specific FDA-approved indication requirement,
                Zynrelef is ``indicated in adults for soft tissue or periarticular
                instillation to produce postsurgical analgesia for up to 72 hours after
                bunionectomy, open inguinal herniorrhaphy and total knee
                arthroplasty''.\14\ No component of Zynrelef is opioid-based.
                Accordingly, we believe that Zynrelef meets criterion one.
                ---------------------------------------------------------------------------
                 \13\ Zynrelef. FDA Letter. 05 May 2021. https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2021/211988Orig1s000ltr.pdf.
                 \14\ Zynrelef. FDA Labeling. 05 May 2021. https://www.accessdata.fda.gov/drugsatfda_docs/label/2021/211988s000lbl.pdf.
                ---------------------------------------------------------------------------
                 As discussed in section (3) above, for criterion two we proposed
                that a drug or biological would only be eligible for separate payment
                under this policy if its per-day cost exceeds the drug packaging
                threshold described in section V.B.1.a. of this final rule with comment
                period. Using that methodology, the per-day cost of Zynrelef exceeds
                the $130 per-day cost threshold. Therefore, we believe that Zynrelef
                meets criterion two.
                 After consideration of the public comments we received and our
                review of the finalized criteria, we have determined that Zynrelef
                meets criteria one and two, and are approving Zynrelef (C9088;
                Instillation, bupivacaine and meloxicam, 1 mg/0.03 mg) to receive
                separate payment under the ASC payment system as a non-opioid pain
                management drug that functions as a surgical supply for CY 2022.
                 Comment: The manufacturer of Anjeso (HCPCS code J1738; Injection,
                meloxicam, 1 mg), Baudax Bio, expressed support for policies that
                encourage the use of non-opioid pain alternatives. In their comment,
                Baudax Bio discussed the clinical benefits of their product.
                 Response: We appreciate the commenter's input. Based on CMS's
                internal review, we believe Anjeso meets criterion one. Anjeso was
                approved by FDA with a New Drug Application (NDA #210583) on February
                20, 2020.\15\ Anjeso's FDA-approved indication is ``indicated for use
                in adults for the management of moderate-to-severe pain, alone or in
                combination with non-NSAID analgesics''.\16\ No component of Anjeso is
                opioid-based. Accordingly, we believe that Anjeso meets criterion one.
                ---------------------------------------------------------------------------
                 \15\ Anjeso. FDA Letter. 02 February 2020. https://www.accessdata.fda.gov/drugsatfda_docs/nda/2020/210583Orig1s000Approv.pdf.
                 \16\ Anjeso. FDA Labeling. 02 February 2020. https://www.accessdata.fda.gov/drugsatfda_docs/nda/2020/210583Orig1s000lbl.pdf.
                ---------------------------------------------------------------------------
                 As discussed in section II.A.3. of this final rule with comment
                period, for criterion two we proposed that a drug or biological would
                only be eligible for separate payment under this policy if its per-day
                cost exceeds the drug packaging threshold described in section V.B.1.a.
                of this final rule with comment period. Using that methodology, the
                per-day cost of Anjeso does not exceed the $130 per-day cost threshold.
                Therefore, we do not believe that Anjeso meets criterion two.
                 After consideration of the public comments we received and our
                review of the finalized criteria, we have determined that Anjeso meets
                criteria one but not criterion two, and would not be eligible to
                receive separate payment under the ASC payment system as a non-opioid
                pain management drug that functions as a surgical supply for CY 2022.
                However, Anjeso remains on transitional pass-through status throughout
                CY 2022 and accordingly, is already receiving separate payment in the
                HOPD and ASC settings for CY 2022. Please see section V.A., OPPS
                Transitional Pass-Through Payment for Additional Costs of Drugs,
                Biologicals, and Radiopharmaceuticals, of this final rule with comment
                period for additional details on transitional pass-through payments for
                drugs and biologicals.
                 Comment: Several commenters, including hospital and professional
                associations, recommended separate payment for Ofirmev, IV
                acetaminophen, stating they believed it decreased use of post-operative
                opioids.
                 Response: We appreciate the commenters' input. Based on CMS's
                internal review, we believe Ofirmev meets criterion one. Ofirmev was
                approved by FDA with a New Drug Application (NDA #022450) on October 2,
                2010.\17\ Ofirmev's FDA-approved indication is ``management of mild to
                moderate pain, management of moderate to severe pain with adjunctive
                opioid analgesics, and reduction of fever''.\18\ No component of
                Ofirmev is opioid-based. Accordingly, we believe that Ofirmev meets
                criterion one.
                ---------------------------------------------------------------------------
                 \17\ Ofirmev. FDA Letter. 02 November 2010. https://www.accessdata.fda.gov/drugsatfda_docs/nda/2010/022450Orig1s000Approv.pdf.
                 \18\ Ofirmev. FDA Labeling. 02 November 2010. https://www.accessdata.fda.gov/drugsatfda_docs/nda/2010/022450Orig1s000Lbl.pdf.
                ---------------------------------------------------------------------------
                 As discussed in section (3) above, under criterion two a drug or
                biological is only eligible for separate payment if its per-day cost
                exceeds the drug packaging threshold described in section V.B.1.a. of
                this final rule with comment period. Using the methodology described at
                V.B.1.a. of this final rule with comment period, the per-day cost of
                Ofirmev does not exceed the $130 per-day cost threshold. Therefore, we
                do not believe Ofirmev meets criterion two.
                 After consideration of the public comments we received and our
                review of the criteria, we have determined that Ofirmev meets criteria
                one but not criterion two and is not eligible to receive separate
                payment under the ASC payment system as a non-opioid pain management
                drug that functions as a surgical supply for CY 2022.
                 Comment: Several commenters, including professional and hospital
                associations, commented that classes of drugs, such as NSAIDS,
                including IV ibuprofen and IV ketorolac, may reduce opioid usage if CMS
                paid separately for them. However, they did not request that CMS
                consider a specific non-opioid product for separate payment in the ASC
                setting.
                 Response: We thank commenters for their comments. For both of these
                [[Page 63493]]
                products, we did not receive recommendations for a specific product,
                for a specific FDA approval, or from a specific manufacturer. We note
                that based on our review of these products, we do believe IV ibuprofen
                and IV ketorolac products, which have FDA approval and an FDA-approved
                indication for pain management or as an analgesic, would satisfy
                criterion one. However, based on our review of these products, using
                the methodology described at V.B.1.a. of this final rule with comment
                period, the per-day costs of HCPCS code 1741 (Injection, ibuprofen, 100
                mg) and HCPCS code J1885 (Injection, ketorolac tromethamine, per 15 mg)
                do not exceed the packaging threshold for criterion two.
                 Comment: Commenters requested CMS consider the clinical value of
                Prialt (HCPCS Code J2278; Injection, ziconotide, 1 microgram) and
                Dsuvia, a sufentanil sublingual tablet, for separate payment in the ASC
                setting
                 Response: Prialt is not eligible for separate payment under our
                final policy because it is not a drug that functions as a supply in a
                surgical procedure and is already receiving separate payment. Dsuvia is
                not eligible for separate payment under our final policy because it
                contains an opioid and therefore is not a non-opioid drug. We are not
                revising our policy to provide separate payment for opioid pain
                management products for CY 2022.
                 As previously explained above, we are not modifying the eligibility
                criteria for our policy to include such products. However, we
                appreciate these comments and suggestions from stakeholders and will
                take them into consideration for future rulemaking.
                (6) Comment Solicitation on Policy Modifications and Potential
                Additional Criteria for Revised Payment for Non-Opioid Pain Management
                Treatments
                 In addition to the proposed eligibility criteria above, we also
                sought comment on potential policy modifications and additional
                criteria that may help further align this policy with the intent of
                section 1833(t)(22) of the Act. Below we discuss potential additional
                criteria. We noted in the CY 2022 OPPS/ASC proposed rule that,
                depending on the public comments we received and our continued
                consideration of these potential criteria, we may adopt these criteria
                as part of our final policy and include them in the final regulation
                text; accordingly, we provided substantial details, explanations, and
                considerations about these potential criteria. We welcomed input from
                stakeholders on these and any additional policy modifications or
                criteria they believe would enhance our proposed policy. We also sought
                comment on other barriers to access to non-opioid pain management
                products that may exist, and to what extent our policies under the OPPS
                or ASC payment system could be modified to address these barriers.
                 Comment: A few comments from providers and drug manufacturers
                discussed additional barriers they faced in providing non-opioid pain
                management products. One commenter recommended CMS provide education to
                providers on non-opioid pain medications and to encourage patients to
                ask their providers about which medications they are being prescribed.
                One commenter noted that not allowing separate payment for non-opioid
                products in the HOPD setting limits the expansion of patient access to
                non-opioid therapies in new geographic areas. Another commenter noted
                that rural and underserved areas have been disproportionately harmed by
                opioid addiction and that geography, lack of provider education and
                training, and payment and coverage for these services may be barriers
                to treatment in these communities.
                 Response: We are committed to implementing measures to combat the
                opioid epidemic. We appreciate stakeholders' comments in response to
                this solicitation. We will take these comments into consideration for
                future rulemaking.
                 Comment: Many commenters appreciated CMS soliciting comment on
                potential additional criteria in the proposed rule. A few commenters
                recommended that CMS not finalize additional criteria based on
                responses to the comment solicitations. Rather, they suggested CMS
                finalize the two proposed criteria and assess the policy in the future
                to assess whether additional criteria are warranted.
                 Response: We thank commenters for their input. We are not
                finalizing additional criteria or policy modifications based on the
                comments were received in response to the comment solicitations in the
                CY 2022 OPPS/ASC proposed rule. Please see the following sections for a
                summary of the comments received.
                (a) Utilization of the Product
                 We have historically used utilization as a metric to determine
                whether a change in our payment policy was necessary to determine
                whether our policies create a disincentive to use non-opioid
                alternatives. For example, as previously discussed, Exparel's
                decreasing utilization in the ASC setting caused us to propose to pay
                separately for non-opioid pain management drugs that function as
                surgical supplies in the ASC setting. We have used currently available
                claims data in prior years to analyze the payment and utilization
                patterns associated with specific non-opioid alternatives to determine
                whether our packaging policies may have reduced the use of non-opioid
                alternatives. We believe that 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 or biological. We also believe decreased
                utilization could potentially indicate that our packaging policy is
                discouraging use of a drug or biological and that providers are
                choosing less expensive treatments. We note that it is difficult to
                attribute product-specific changes in utilization to our packaging
                policies alone. Nonetheless, while we acknowledge certain limitations
                of utilization data, we believe analyzing utilization either on a
                product-specific basis or on a broader basis could be an important
                criterion in determining whether separate payment is warranted for a
                non-opioid pain management alternative.
                 Therefore, we solicited comment on whether specific evidence of
                reduced utilization should be part of our evaluation and determination
                as to whether a non-opioid pain management product should qualify for
                modified payment. This data may help to demonstrate that our packaging
                policies are causing an access issue for these products. Additionally,
                we realize that new products to the market may not have utilization
                data available, or reliable utilization data may be difficult to obtain
                for some products; therefore, we also requested comment on whether
                utilization data requirements should vary based on the newness of a
                product or its FDA marketing approval date.
                 Comment: Generally, commenters did not support adding a utilization
                requirement criterion. Several commenters stated that utilization data
                was useful in the original analysis to establish the original policy in
                the ASC setting, but they believe would be inappropriate to require new
                products to prove they are disincentivized by CMS packaging policies.
                These commenters noted it would take significant time for this data to
                be available after a new drug was introduced to the market.
                Additionally, several comments stated that utilization data is
                imperfect, as CMS described in the CY 2022 OPPS/ASC proposed rule.
                [[Page 63494]]
                 Response: We thank commenters for their feedback on a potential
                utilization requirement. However, we are not finalizing any policy
                modifications, including adopting a utilization requirement, for CY
                2022. We will take these comments into consideration for future
                rulemaking.
                (b) FDA-Approved Indication for Pain Management or Analgesia for the
                Drug or Biological Product
                 As previously discussed, section 1833(t)(22)(A) of the Act
                specifically refers to reviews of opioid and evidence-based non-opioid
                products for pain management. We believe the majority of drugs and
                biologicals that would meet the requirements of our proposed policy
                would already have FDA approval as a pain management drug or as an
                analgesic. However, we acknowledge there may be other non-opioid
                products that would benefit from inclusion under this policy, but do
                not have a specific FDA-approved indication for pain management or
                analgesia, and would not satisfy criterion one. Therefore, we solicited
                comment on whether we should allow certain FDA-approved drugs and
                biologicals to be eligible for separate payment under this policy
                without a specific FDA-approved indication for pain management or as an
                analgesic drug. In lieu of an FDA-approved indication for pain
                management or analgesia, we sought comment on whether it would be
                appropriate to approve a product for inclusion under this policy if the
                pain-management or analgesia attributes of the drug or biological are
                recognized by a medical compendium. Similarly, we sought comment as to
                whether we should consider specialty society or national organization
                (such as a national surgery organization) recommendations of non-opioid
                pain management products that function as surgical supplies and reduce
                opioid use in the ASC setting, as evidence that a product meets
                criterion one, when a drug or biological does not have an FDA-approved
                indication for pain management or analgesia.
                 Comment: Some commenters were supportive of CMS taking into
                consideration other factors, such as specialty society endorsements,
                medical compendia, or inclusion in clinical practice guidelines, as
                part of the qualifying criteria if an FDA-approved indication for pain
                management or analgesia was not present. Commenters stated a specific
                FDA-approved indication may be too restrictive as some products may be
                used off-label for pain management. A few commenters suggested CMS take
                an individualized and holistic approach to each drug it evaluates, and
                therefore, consider association recommendations outside of FDA-approved
                indications. Commenters thought this would support increased access to
                drugs for off-label uses.
                 Response: We appreciate the comments received as a part of this
                specific comment solicitation; however, for CY 2022, we are not making
                any policy modifications based on the public comments we received in
                response to this comment solicitation.
                (c) Peer-Reviewed Literature Requirement Comment Solicitation
                 We note that section 1833(t)(22)(B) of the Act requires the
                Secretary to focus on covered OPD services (or groups of services)
                assigned to a comprehensive ambulatory payment classification,
                ambulatory payment classifications that primarily include surgical
                services, and other services determined by the Secretary that generally
                involve treatment for pain management. Therefore, we solicited comment
                as to whether we should only adopt a payment revision for drugs and
                biologicals that function as surgical supplies in the ASC setting when
                those products have evidence in peer-reviewed literature supporting
                that the product actually decreases opioid usage associated with the
                surgical procedure. We believe this may be appropriate to ensure
                Medicare payment policies would not financially incentivize use of
                opioids rather than evidence-based non-opioid alternative treatments,
                as required by section 1833(t)(22)(A)(iii) of the Act. Specifically, we
                sought comment as to whether the drug or biological's use in a surgical
                procedure as a non-opioid pain management product should be supported
                by peer-reviewed literature demonstrating a clinically significant
                decrease in opioid usage compared to the standard of care, and we
                sought comment on whether such decreases in opioid usage should be
                sustained decreases that continue into the post-operative period.
                 Additionally, we sought input from commenters as to what they
                believe the requirements for peer-reviewed literature should be. For
                example, we solicited stakeholder feedback as to whether peer-reviewed
                literature should demonstrate that use of the drug or biological
                results in at least one, or several, of the following: decreased post-
                operative opioid use following surgery, decreased opioid misuse
                following surgery, or decreased opioid use disorder and dependency
                following surgery.
                 Additionally, we asked stakeholders if specific thresholds are
                necessary to determine whether these decreases are statistically and
                clinically significant and whether the decreases should simply be
                measured against placebo or the standard of care. We also requested
                information on how stakeholders would define the standard of care in
                these circumstances. In the proposed rule we stated, when evaluating
                literature, we would expect to examine the study methods, sample size,
                limitations, possible conflicts of interest, patient populations
                studied, and how the evidence supports the conclusion that the product
                can serve as a non-opioid pain management product and provide a
                clinically significant reduction in opioid use that continues into the
                post-operative period. However, we welcomed input from stakeholders
                about additional aspects of these studies that they believe CMS should
                focus on for this potential criterion. Additionally, we stated we would
                expect to use our discretion to assess whether the submitted studies
                meet these criteria, as well as for clinical applicability, literature
                integrity, and potential biases in consultation with our clinical
                advisors.
                 In order to provide stakeholders with some examples of what
                supporting evidence CMS may consider for this potential criterion, we
                stated in the proposed rule that we believed it would be helpful for
                CMS to receive literature demonstrating that use of a non-opioid drug
                or biological results in a statistically and clinically significant
                decreased day supply of outpatient opioids prescribed after surgery
                discharge compared to the generally accepted standard of care, or a
                statistically and clinically significant decreased morphine milligram
                equivalents (MME) per opioid dose prescribed after surgery discharge
                compared to the generally accepted standard of care. We would consider
                the generally accepted standard of care to include pain management
                therapy a patient would receive in the absence of the non-opioid
                alternative, such as the use of localized analgesia and/or an opioid.
                As previously discussed, we would then expect the use of a non-opioid
                pain management drug or biological to result in a decline in opioids
                used compared to the pain management therapy a patient would receive in
                the absence of the non-opioid alternative. We would expect this decline
                in opioids to include a decreased number of opioids received by a
                patient intraoperatively, post-operatively, and most significantly at
                discharge. We solicited comment on additional examples or measures that
                [[Page 63495]]
                would be beneficial for CMS to take into consideration. Additionally,
                we sought comment on whether we should require a specific objective
                measure for this criterion. We also sought input on how to assess
                whether changes are statistically and clinically significant. We
                requested comment on whether stakeholders believe evidence of
                statistical significance should be sufficient, or whether stakeholders
                believe the literature should also demonstrate clinically significant
                differences between treatment groups as well.
                 Comment: Many commenters did not support CMS finalizing any
                additional criteria, including a peer-reviewed literature requirement.
                A few commenters disagreed that a peer-reviewed literature requirement
                was necessary as they believed an FDA-approved indication for pain
                management or analgesia would be sufficient. Several commenters
                suggested CMS collect, review, and consider peer-reviewed literature,
                but not explicitly require it.
                 Response: We appreciate the comments received as a part of this
                specific comment solicitation; however, for CY 2022, we are not making
                any policy modifications based on the public comments we received in
                response to this comment solicitation. We will take these comments into
                consideration for future rulemaking.
                 Comment: A few commenters supported CMS requiring peer-reviewed
                literature that demonstrates that the drug in question reduces opioid
                use in the post-operative period. One commenter specified which type of
                literature endpoints would be important to incorporate into our review
                process. Specifically, one drug manufacturer recommended that CMS
                require that use of a drug demonstrate a significant reduction in the
                need for opioids and increase the number of patients who are opioid
                free in a randomized, well-controlled, head-to-head clinical trial
                versus an active comparator. A number of commenters requested that CMS
                provide separate payment for evidence-based, non-opioid pain management
                drugs. Specifically, in regards to peer-reviewed literature, MedPAC
                asserted that separately payable status should only be granted when
                evidence in peer-reviewed publications indicates that the drug in
                question reduces the use of opioids. Other commenters supported a
                criterion that requires a product to demonstrate the ability to
                replace, reduce, or avoid opioid use or the quantity of opioids
                prescribed.
                 Response: We thank commenters for their detailed comments. We agree
                it is important that a non-opioid pain management product serve as an
                alternative to an opioid, and therefore replace, reduce, or avoid
                opioid use.
                 We once again thank commenters for their detailed insights on this
                comment solicitation; however, for CY 2022, we are not making any
                policy modifications based on the public comments we received in
                response to this comment solicitation. We will take these comments into
                consideration for future rulemaking.
                (d) Alternative Payment Mechanisms for Non-Opioid Drugs and Biologicals
                 As previously discussed, for CY 2022, we proposed to pay separately
                at ASP+6 percent for non-opioid pain management drugs and biologicals
                that function as surgical supplies in the performance of surgical
                procedures when they are furnished in the ASC setting and meet our
                other proposed criteria. Section 1833(t)(22)(A)(iii) of the Act
                requires the Secretary to consider the extent to which revisions to
                payments (such as the creation of additional groups of covered OPD
                services to classify separately those procedures that utilize opioids
                and non-opioid alternatives for pain management) would reduce payment
                incentives to use opioids instead of non-opioid alternatives for pain
                management. Accordingly, separate payment is not the only possible
                revision that may be appropriate. We sought comment on additional
                payment mechanisms that may be appropriate aside from separate payment.
                For instance, we requested feedback from stakeholders as to whether a
                single, flat add-on payment, or separate APC assignment, for products
                or procedures that use a product that meets eligibility criteria would
                be preferable to separate payment. We note that any revisions the
                Secretary determines appropriate under section 1833(t)(22)(C) of the
                Act must be applied in a budget neutral manner under section
                1833(t)(9)(B) of the Act. We also sought input from stakeholders on any
                other innovative payment mechanisms for eligible non-opioid drugs and
                biologicals for pain management.
                 Comment: Most commenters opposed any other payment methodologies
                aside from paying separately for non-opioid pain management drugs or
                biologicals at ASP+6 percent. Several commenters contended that an add-
                on payment would not be appropriate because this would create
                differentials in payment across care settings, such as physician
                offices, and emphasized that stakeholders are more familiar with the
                ASP payment methodology. Some commenters also emphasized that drugs and
                biologicals are generally paid at ASP+6 percent when furnished in the
                physician office setting and encouraged CMS to pay ASP+6 percent under
                this policy to ensure payment parity across the different treatment
                settings.
                 One commenter asked that CMS apply its final payment policy for
                340B-acquired drugs, to pay for non-opioid drug products at ASP minus
                22.5 percent instead of ASP+ 6 percent. Additionally, one commenter
                asked that CMS create new CPT codes in order to account for the work
                associated with opioid-sparing therapies furnished by surgeons.
                 Response: We appreciate the comments received as a part of this
                specific comment solicitation; however, for CY 2022, we are not making
                any policy modifications based on the public comments we received in
                response to this comment solicitation. We will take these comments into
                consideration for future rulemaking.
                (e) Non-Drug Products
                 In the CY 2022 OPPS/ASC proposed rule, we stated we were also
                interested in information on any non-opioid non-drug products that
                function as surgical supplies that commenters believe should be
                eligible for separate payment under this policy. Although we have not
                currently identified any non-opioid pain management non-drug products
                that are disincentivized by CMS packaging policies based on utilization
                data, we believe it is reasonable to assume that if disincentives exist
                for the use of non-opioid pain management drugs and biological products
                under the ASC payment system, they may also exist for non-opioid, non-
                drug products under the ASC payment system. If this is the case, we
                would like to address these disincentives given the severity and
                importance of combatting the opioid epidemic, regardless of whether the
                non-opioid product is a drug, biological, or non-drug product. We
                remain interested in whether there are any non-opioid non-drug products
                that may meet the proposed eligibility criteria and should qualify for
                separate or modified payment as discussed in section (d) above, in the
                ASC setting. Similarly, we also sought comment on whether there are
                unique qualities of non-drug products that would make revised payment
                in the HOPD setting appropriate instead of, or in addition to, the ASC
                setting.
                 We sought comment on whether it is appropriate to require non-drug
                products to meet the same criteria being proposed for drugs and
                biologicals. Additionally, we sought comment from
                [[Page 63496]]
                stakeholders on whether they believe it would be appropriate to create
                a broad category for non-drug products, or if a more limited category,
                such as for devices, would be appropriate. Specifically, we sought
                comment on whether there is information in the FDA approval for devices
                that would be an appropriate criterion to determine eligibility for
                separate payment, similar to how we proposed to require FDA approval
                with an FDA-approved indication for pain management or analgesia for
                drugs and biologicals. We sought comment on whether, if the non-drug
                product is a ``device'' as defined in section 201(h) of FDCA, the
                device should have received FDA premarket approval (PMA), grant of a de
                novo request, 510(k) clearance or meet an exemption from premarket
                review. Finally, we solicited comment on all aspects of an extension of
                our current policy to include appropriate products that are not drugs
                or biologicals.
                 We also sought comment on how peer-reviewed literature and
                utilization claims data could be used as potential criteria for a
                policy that would apply to non-drug products. Additionally, should a
                payment revision be determined necessary, we solicited comment on
                appropriate payment mechanisms for non-opioid, non-drug products,
                including assigning the non-drug product to its own APC to ensure that
                the product is paid separately or establishing an add-on adjustment for
                the cost of the non-drug product in addition to the payment for the APC
                to which the non-drug product is assigned. Additionally, we sought
                comment on whether it would be appropriate to subject non-drug products
                to a cost threshold similar to the one we proposed to apply to drugs
                and biologicals.
                 Comment: A few commenters supported CMS exploring a payment
                adjustment for non-opioid, non-drug items, including items such as
                devices. Some commenters discussed the benefit of spinal cord
                stimulators, and one commenter recommended an add-on payment for a
                narrowly constructed payment category, such as spinal cord stimulators.
                Commenters also cited the CMS prior authorization policy on spinal cord
                stimulators as inappropriately creating barriers to access to these
                devices, as beneficiaries could be prescribed opioids for longer
                periods of time while waiting for prior authorization to be approved.
                Commenters recommended CMS provide separate payment for nerve blocks,
                pain blocks (represented by CPT codes 64415, 64416, 64417, 64445,
                64446, 64447, 64448, 64450), joint injections, and neuromodulation.
                 Some commenters stated that barriers for non-drug items are often
                more severe in the ASC setting. Commenters also suggested CMS consider
                payment methodologies for various other non-drug items, including for
                multi-modal pain management ERAS protocols, physical therapy,
                acupuncture, massage therapy, ON-Q pain relief system, devices that use
                ice water, dry needling, THC oil applied topically, and polar ice
                devices.
                 Commenters pointed to the opioid-sparing abilities of some of these
                products. For example, commenters noted that spinal cord stimulators
                are useful in reducing opioid usage for chronic pain patients.
                Commenters urged CMS to change payment polices to make spinal cord
                stimulators a front-line option in combating chronic pain.
                 Response: We appreciate the responses from commenters on this
                topic. As discussed in prior rulemaking (85 FR 85899), we have not
                found compelling evidence for non-drug, non-opioid pain management
                alternatives that commenters described to warrant separate payment
                under the OPPS or ASC payment system. For CY 2022, we are not
                finalizing any policy modifications in response to the comments we
                received on this comment solicitation. We will take these comments into
                consideration for future rulemaking.
                 Comment: Some commenters recommended that criteria similar to those
                proposed for drug items also apply to non-drug items, including a
                potential requirement for peer-reviewed literature demonstrating that
                the product significantly limits or eliminates prescription opioids.
                 Response: We thank commenters for their feedback regarding
                potential criteria for non-drug items and how we may incorporate non-
                drug products into our non-opioid pain management packaging policy in
                the future. We will take these comments into consideration for future
                rulemaking.
                (f) Coinsurance Waiver Request
                 Comment: Multiple commenters, including providers and the
                manufacturer of Prialt, an intrathecal drug, requested CMS waive the 20
                percent coinsurance requirement for non-opioid pain management drugs.
                Specifically, these commenters discussed that waiving coinsurance for
                non-opioid drugs that are indicated for severe chronic pain in patients
                requiring intrathecal therapy could bolster patient access
                 Response: The services described here, including intrathecal
                therapy, do not meet the statutory requirements process for
                ``additional preventive services'' in section 1861(ddd)(1) of the Act
                that would be subject to coinsurance waiver under 1833(a)(1)(W).
                Providers may waive coinsurance amounts only if they comply with
                applicable law, including the Federal Anti-Kickback Statute and the
                civil monetary penalty provision prohibiting inducements to
                beneficiaries. We note that the drugs these commenters describe are
                already paid separately. Additionally, the intrathecal drug, Prialt,
                frequently described by commenters, does not function as a supply to a
                surgical procedure. As such, it would not qualify under our current
                policy to pay separately in the ASC setting for non-opioid pain
                management drugs and biologicals that function as surgical supplies.
                However, we appreciate the commenters' input about the potential value
                of these drugs.
                Summary of Finalized Policy
                 As discussed in the preceding sections, after consideration of the
                public comments we received, we are finalizing the proposed policy for
                CY 2022 to unpackage and pay separately at ASP plus 6 percent for non-
                opioid pain management drugs that function as surgical supplies when
                they are furnished in the ASC setting, are FDA-approved, have an FDA-
                approved indication for pain management or as an analgesic, and have a
                per-day cost above the OPPS/ASC drug packaging threshold for CY 2022.
                As noted above, we are finalizing the proposed regulation text changes
                at Sec. 416.164(a)(4) and (b)(6), Sec. 416.171(b)(1), and Sec.
                416.174 as proposed. We determined that four products are eligible for
                separate payment in the ASC setting under our final policy for CY 2022.
                Future products, or products not discussed in this rulemaking that may
                be eligible for separate payment under this policy will be evaluated in
                future notice and comment rulemaking. 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) of the Act, which would be discussed in
                future notice and comment rulemaking. We will also continue to evaluate
                whether there are other non-opioid pain management alternatives for
                which our payment policy should be revised to allow separate payment in
                future rulemaking. Table 4 below lists the four
                [[Page 63497]]
                drugs that meet our finalized criteria and will receive separate
                payment under the ASC payment system when furnished in the ASC setting
                for CY 2022.
                BILLING CODE 4120-01-P
                [GRAPHIC] [TIFF OMITTED] TR16NO21.010
                BILLING CODE 4120-01-C
                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 2021 OPPS/
                ASC final rule with comment period (85 FR 85902 through 85903), we
                applied this policy and calculated the relative payment weights for
                each APC for CY 2021 that were shown in Addenda A and B of the CY 2021
                OPPS/ASC 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 the CY 2021 OPPS/ASC final rule with
                comment period. For CY 2022, as we did for CY 2021, we proposed to
                continue to apply the policy established in CY 2013 and calculate
                relative payment weights for each APC for CY 2022 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 2022, as we did for CY 2021, we
                proposed to continue to standardize all of the relative payment weights
                to APC 5012. We believe that standardizing relative payment weights to
                the geometric mean of the APC to which HCPCS code G0463 is assigned
                maintains consistency in calculating unscaled weights that represent
                the cost of some of the most frequently provided OPPS services. For CY
                2022, as we did for CY 2021, 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
                [[Page 63498]]
                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. For a full discussion of this policy, 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 2022 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 2021 scaled relative payment
                weights to the estimated aggregate weight using the proposed CY 2022
                unscaled relative payment weights.
                 For CY 2021, we multiplied the CY 2021 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 2022, we
                proposed to apply the same process using the estimated CY 2022 unscaled
                relative payment weights rather than scaled relative payment weights.
                We proposed to calculate the weight scalar by dividing the CY 2021
                estimated aggregate weight by the unscaled CY 2022 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 link labeled
                ``CY 2022 OPPS/ASC Notice of Proposed Rulemaking'', which can be found
                under the heading ``Hospital Outpatient Prospective Payment System
                Rulemaking'' and open the claims accounting document link at the bottom
                of the page, which is labeled ``2022 NPRM OPPS Claims Accounting
                (PDF)''.
                 We proposed to compare the estimated unscaled relative payment
                weights in CY 2022 to the estimated total relative payment weights in
                CY 2021 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 2022 unscaled
                relative payment weights for purposes of budget neutrality. We proposed
                to adjust the estimated CY 2022 unscaled relative payment weights by
                multiplying them by a proposed weight scalar of 1.4436 to ensure that
                the proposed CY 2022 relative payment weights are scaled to be budget
                neutral. The proposed CY 2022 relative payment weights listed in
                Addenda A and B to the CY 2022 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 2022 OPPS/ASC proposed rule (86 FR 42026).
                 Section 1833(t)(14) of the Act provides the payment rates for
                certain specified covered outpatient drugs (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 the CY 2022 OPPS/ASC proposed rule (86 FR
                42131 through 42133) is included in the budget neutrality calculations
                for the CY 2022 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 2022. Using updated final rule claims data, we are
                updating the estimated CY 2022 unscaled relative payment weights by
                multiplying them by a weight scalar of 1.4416 to ensure that the final
                CY 2022 relative payment weights are scaled to be budget neutral. The
                final CY 2022 relative payments weights listed in Addenda A and B of
                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 2022 IPPS/LTCH PPS
                proposed rule (86 FR 25435), consistent with current law, based on IHS
                Global, Inc.'s fourth quarter 2020 forecast of the FY 2022 market
                basket increase, the proposed FY 2022 IPPS market basket update was 2.5
                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
                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 2022 IPPS/LTCH PPS proposed rule (86 FR 25435), the proposed MFP
                adjustment for FY 2022 was 0.2 percentage point.
                 Therefore, we proposed that the MFP adjustment for the CY 2022 OPPS
                is 0.2 percentage point. We also proposed that if more recent data
                become subsequently available after the publication of the CY 2022
                OPPS/ASC proposed rule (for example, a more recent estimate of the
                market basket increase and/or the MFP adjustment), we will use such
                updated data, if appropriate, to determine the CY 2022 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 2022 OPPS/ASC final rule.
                [[Page 63499]]
                 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 2022 an OPD fee schedule increase factor of
                2.3 percent for the CY 2022 OPPS (which is the proposed estimate of the
                hospital inpatient market basket percentage increase of 2.5 percent,
                less the proposed 0.2 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.
                 To set the OPPS conversion factor for 2022, we proposed to increase
                the CY 2021 conversion factor of $82.797 by 2.3 percent. In accordance
                with section 1833(t)(9)(B) of the Act, we proposed further to adjust
                the conversion factor for CY 2022 to ensure that any revisions made to
                the wage index and rural adjustment are made on a budget neutral basis.
                We proposed to calculate an overall budget neutrality factor of 1.0012
                for wage index changes by comparing proposed total estimated payments
                from our simulation model using the proposed FY 2022 IPPS wage indexes
                to those payments using the FY 2021 IPPS wage indexes, as adopted on a
                calendar year basis for the OPPS.
                 For the CY 2022 OPPS, we proposed to maintain the current rural
                adjustment policy, as discussed in section II.E. of the CY 2022 OPPS/
                ASC proposed rule. Therefore, the proposed budget neutrality factor for
                the rural adjustment is 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
                2022 OPPS/ASC proposed rule. We proposed to calculate a CY 2022 budget
                neutrality adjustment factor for the cancer hospital payment adjustment
                by comparing estimated total CY 2022 payments under section 1833(t) of
                the Act, including the proposed CY 2022 cancer hospital payment
                adjustment, to estimated CY 2022 total payments using the CY 2021 final
                cancer hospital payment adjustment, as required under section
                1833(t)(18)(B) of the Act. The proposed CY 2022 estimated payments
                applying the proposed CY 2022 cancer hospital payment adjustment were
                the same as estimated payments applying the CY 2021 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 are applying 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 2022 OPPS/ASC proposed rule, we estimated that proposed
                pass-through spending for drugs, biologicals, and devices for CY 2022
                would equal approximately $1.03 billion, which represented 1.24 percent
                of total projected CY 2022 OPPS spending. Therefore, the proposed
                conversion factor would be adjusted by the difference between the 0.92
                percent estimate of pass-through spending for CY 2021 and the 1.24
                percent estimate of proposed pass-through spending for CY 2022,
                resulting in a proposed decrease to the conversion factor for CY 2022
                of 0.32 percent.
                 Proposed estimated payments for outliers would remain at 1.0
                percent of total OPPS payments for CY 2022. We estimated for the
                proposed rule that outlier payments would be 1.06 percent of total OPPS
                payments in CY 2021; the 1.00 percent for proposed outlier payments in
                CY 2022 would constitute a 0.06 percent decrease in payment in CY 2022
                relative to CY 2021.
                 For the CY 2022 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 0.3 percent (that is,
                the proposed OPD fee schedule increase factor of 2.3 percent further
                reduced by 2.0 percentage points). This would result in a proposed
                reduced conversion factor for CY 2022 of $82.810 for hospitals that
                fail to meet the Hospital OQR Program requirements (a difference of -
                1.647 in the conversion factor relative to hospitals that met the
                requirements).
                 In summary, for 2022, we proposed to use a reduced conversion
                factor of $82.810 in the calculation of payments for hospitals that
                fail to meet the Hospital OQR Program requirements (a difference of -
                1.647 in the conversion factor relative to hospitals that met the
                requirements).
                 For 2022, we proposed to use a conversion factor of $84.457 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
                2.3 percent for CY 2022, the required proposed wage index budget
                neutrality adjustment of approximately 1.0012, the proposed cancer
                hospital payment adjustment of 1.0000, and the proposed adjustment of
                0.32 percentage point of projected OPPS spending for the difference in
                pass-through spending that resulted in a proposed conversion factor for
                CY 2022 of $84.457.
                 Comment: Two commenters request that the OPD fee schedule update
                factor be larger than the proposed 2.3 percent increase. One commenter
                cited a MedPAC study \19\ that reported for 2019 that the aggregate
                Medicare margin for inpatient hospital providers was -8.7 percent among
                all inpatient hospital providers, and that the median Medicare margin
                was -1 percent for relatively efficient providers. This commenter
                appeared to request the OPD fee schedule update factor be increased
                sufficiently to substantially reduce the aggregate margin for hospital
                providers. The commenter also mentioned that the annual Consumer Price
                Index was 5.4 percent which was over 3 percentage points higher than
                the proposed 2.3 percent OPD fee schedule increase. The second
                commenter, a state hospital association, claimed that unspecified
                recent payment cuts for outpatient hospital services have hurt the
                financial position of hospitals in their state. The commenter asks us
                to identify additional ways to increase hospital payment more than the
                proposed 2.3 percent OPD fee schedule increase.
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                 \19\ Medicare Payment Advisory Commission, Report to the
                Congress: Medicare Payment Policy, v, 499 (Mar. 2021), http://medpac.gov/docs/default-source/reports/mar21_medpac_report_to_the_congress_sec.pdf.
                ---------------------------------------------------------------------------
                 Response: The OPD fee schedule update factor is designed to
                maintain a consistent level of payment for outpatient hospital services
                in Medicare year over year after taking into account changes in medical
                inflation and business productivity. In addition, the
                [[Page 63500]]
                OPPS conversion factor is not designed to redress payment reductions
                made in a non-budget neutral manner. The MedPAC study cited by one of
                the commenters reported, in addition to the aggregate Medicare margin
                for inpatient hospital providers, that the median margin for Medicare
                spending for relatively efficient hospitals was around -1 percent for
                2019. The same MedPAC study also recommended a 2.0 percent increase in
                outpatient hospital spending for 2022, which is actually lower than our
                proposed conversion factor update of 2.3 percent.
                 The same commenter also suggested that the Consumer Price Index may
                be a better measure of medical inflation than the hospital market
                basket index used by CMS. The percentage change in the hospital market
                basket reflects the average change in the price of goods and services
                purchased by hospitals in order to provide medical care. A general
                measure of health care inflation (such as the Consumer Price Index for
                Medical Care Services) would not be appropriate as it is not specific
                to hospital medical services and is not reflective of the input price
                changes experienced by hospitals but rather the inflation experienced
                by the consumer for their medical expenses.
                 Comment: Two commenters supported our proposed CY 2022 OPD fee
                schedule increase factor percentage increase of 2.3 percent.
                 Response: We appreciate the support of the commenters.
                 After reviewing the public comments that we received, we are
                finalizing these proposals with modification. For CY 2022, 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 0.90 for CY 2021, is also 0.90
                for CY 2022. As a result, we are applying a budget neutrality
                adjustment factor of 1.0000 to the conversion factor for the cancer
                hospital payment adjustment.
                 For this CY 2022 OPPS/ASC final rule with comment period, as
                published in the FY 2022 IPPS/LTCH PPS final rule (86 FR 45214), based
                on IGI's 2021 second quarter forecast with historical data through the
                first quarter of 2021, the hospital market basket update for CY 2022 is
                2.7 percent and the estimate of the 10-year moving average growth of
                MFP for FY 2022 is 0.7 percent.
                 We note that as a result of the modifications in final policy for
                the CY 2022 wage index we are also including a change to the wage index
                budget neutrality adjustment so that the final overall budget
                neutrality factor of 1.0000 would apply for wage index changes. This
                adjustment is comprised of a 1.0001 budget neutrality adjustment, using
                our standard calculation of comparing proposed total estimated payments
                from our simulation model using the final FY 2022 IPPS wage indexes to
                those payments using the FY 2022 IPPS wage indexes, as adopted on a
                calendar year basis for the OPPS as well as a 0.9999 budget neutrality
                adjustment for the final CY 2022 5 percent cap on wage index decreases,
                requiring application of the 5 percent cap on CY 2021 wages, to ensure
                that this transition wage index is implemented in a budget neutral
                manner, consistent with the proposed FY 2022 IPPS wage index policy (86
                FR 45552).
                 As a result of these finalized policies, the OPD fee schedule
                increase factor for the CY 2022 OPPS is 2.0 percent (which reflects the
                2.7 percent final estimate of the hospital inpatient market basket
                percentage increase with a 0.7 percentage point MFP adjustment). For CY
                2022, we are using a conversion factor of $84.177 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 2.0 percent for CY 2022, the
                required wage index budget neutrality adjustment of 1.0000, and the
                adjustment of-0.32 percentage point of projected OPPS spending for the
                difference in pass-through spending that results in a conversion factor
                for CY 2022 of $84.177.
                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 2022 OPPS/ASC
                proposed rule (86 FR 42048 through 42049).
                 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 2022 OPPS. We referred readers to section II.H. of the CY 2022
                OPPS/ASC proposed rule (86 FR 42056 through 42058) 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 2022 OPPS/ASC proposed rule, we are finalizing our
                proposal, without modification, to continue this policy for the CY 2022
                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 2022 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
                [[Page 63501]]
                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 2022, we proposed to
                implement this provision in the same manner as we have since CY 2011.
                Under this policy, the frontier State hospitals would receive a wage
                index of 1.00 if the otherwise applicable wage index (including
                reclassification, the rural floor, and rural floor budget neutrality)
                is less than 1.00. Because the HOPD receives a wage index based on the
                geographic location of the specific inpatient hospital with which it is
                associated, the frontier State wage index adjustment applicable for the
                inpatient hospital also would apply for any associated HOPD. We
                referred readers to the FY 2011 through FY 2021 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; for FY 2020, 84 FR 42312; and for FY 2021, 85 FR
                58765. We did not receive any public comments on this proposal.
                Accordingly, for the reasons discussed above and in the CY 2022 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 2022 OPPS/ASC proposed rule (86 FR 42050) that the
                proposed FY 2022 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. In addition, we noted that in the FY
                2022 IPPS/LTCH PPS proposed rule (86 FR 25405 through 25407), we
                proposed to implement section 9831 of the American Rescue Plan Act of
                2021 (Pub. L. 117-2) which reinstates the imputed floor wage index
                adjustment under the IPPS for hospitals in all-urban states effective
                for discharges on or after October 1, 2021 (FY 2022) using the
                methodology described in Sec. 412.64(h)(4)(vi) as in effect for FY
                2018. Specifically, section 1886(d)(3)(E)(iv)(I) and (II) of the Act,
                as added by section 9831 of the American Rescue Plan Act, provides that
                for discharges occurring on or after October 1, 2021, the area wage
                index applicable under the IPPS to any hospital in an all-urban State
                may not be less than the minimum area wage index for the fiscal year
                for hospitals in that State established using the methodology described
                in Sec. 412.64(h)(4)(vi) as in effect for FY 2018. We further noted in
                the FY 2022 IPPS/LTCH PPS proposed rule that, given the recent
                enactment of section 9831 of Public Law 117-2 on March 11, 2021, there
                was not sufficient time available to incorporate the changes required
                by this statutory provision (the reinstatement of the imputed floor
                wage index) into the calculation of the IPPS provider wage index for
                the FY 2022 IPPS/LTCH PPS proposed rule, and we stated that we would
                include the imputed floor wage index adjustment in the calculation of
                the IPPS provider wage index in the FY 2022 IPPS/LTCH PPS final rule.
                We noted that CMS posted, concurrent with the issuance of the FY 2022
                IPPS/LTCH proposed rule, estimated imputed floor values by state in a
                separate data file on the FY 2022 IPPS Proposed Rule web page on the
                CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index. In addition, we stated in the FY 2022
                IPPS/LTCH PPS proposed rule that, based on data available for the FY
                2022 IPPS/LTCH PPS proposed rule, the following States would be all-
                urban States as defined in section 1886(d)(3)(E)(iv)(IV) of the Act,
                and thus hospitals in such States would be eligible to receive an
                increase in their wage index due to application of the imputed floor
                for FY 2022: New Jersey, Rhode Island, Delaware, Connecticut, and
                Washington, DC. We referred readers to the FY 2022 IPPS/LTCH PPS
                proposed rule (86 FR 25396 through 25417) for a detailed discussion of
                all proposed changes to the FY 2022 IPPS wage indexes.
                 A summary of the comments we received regarding the rural floor and
                the imputed floor for all-urban states and our responses to those
                comments appear below:
                 Comment: Some commenters expressed their support for the
                application of the rural floor policy which included support for the
                continued exclusion of the wage data of hospitals that have
                reclassified as rural under Sec. 412.103 when calculating the wage
                index for the rural floor.
                 Response: We appreciate the commenters' support for the application
                of the rural floor policy.
                 Comment: Some commenters opposed the continued application of a
                nationwide rural floor budget neutrality adjustment, noting that the
                policy does nothing more than benefit a few hospitals and exacerbate a
                downward spiral of the wage index for low wage index hospitals.
                 Response: We appreciate the commenters' concerns about application
                of the nationwide rural floor budget neutrality policy. However, as
                stated in the FY 2017 IPPS/LTCH PPS final rule (81 FR 56920), for
                discharges occurring on or after October 1, 2010, for purposes of
                applying the rural floor, section 3141 of the Affordable Care Act
                replaced the statewide budget neutrality adjustment policy with the
                national budget neutrality adjustment policy that was in place during
                FY 2008. That is, section 3141 required that budget neutrality for the
                rural floor be applied ``through a uniform, national adjustment to the
                area wage index'' instead of within each State beginning in FY 2011 (75
                FR 50160).
                 We continue to believe it is reasonable and appropriate to continue
                the current policy of applying budget neutrality for the rural floor
                under the OPPS on a national basis, consistent with the IPPS. We
                believe that hospital inpatient and outpatient departments are subject
                to the same labor cost environment, and therefore, the wage index and
                any applicable wage index adjustments (including the rural floor and
                rural floor budget neutrality) should be applied in the same manner
                under the IPPS and OPPS. Furthermore, we believe that applying the
                rural floor and rural floor budget neutrality in the same manner under
                the IPPS and OPPS is reasonable and logical, given the inseparable,
                subordinate status of the HOPD within the hospital overall. In
                addition, we believe the application of different wage indexes and wage
                index adjustments under the IPPS and OPPS would add a level of
                administrative complexity that is overly burdensome and unnecessary.
                Therefore, we are
                [[Page 63502]]
                continuing the current policy of applying budget neutrality for the
                rural floor under the OPPS on a national basis, consistent with the
                IPPS.
                 Comment: Some commenters supported the proposed implementation of
                the imputed floor wage index policy. However, one commenter opposed the
                reinstatement of the imputed floor, stating that it exacerbates wage
                index disparities, but acknowledged that the proposal was in accordance
                with legislation enacted by Congress. This commenter requested CMS
                include details by state of the effects of the imputed floor.
                Commenters both in support and in opposition of the imputed floor
                policy applauded its implementation without the application of budget
                neutrality, per section 9831 of the American Rescue Plan Act of 2021. A
                commenter specifically concurred with CMS' interpretation that the
                definition of an all-urban state according to section 9831 of the
                American Rescue Plan Act of 2021 is one in which no hospital receives
                the rural area wage index.
                 Response: We appreciate the commenters' support of the proposed
                implementation of the imputed floor policy, which we note has been
                finalized in the FY 2022 IPPS/LTCH PPS final rule (86 FR 45176 through
                45178). Responding to the commenter opposed to this policy, we
                underscore that, as the commenter itself pointed out, the imputed floor
                has been reinstated by statute in section 9831 of the American Rescue
                Plan Act of 2021. We believe that it is appropriate to apply the
                imputed floor policy in the OPPS in the same manner as under the IPPS,
                given the inseparable, subordinate status of the HOPD within the
                hospital overall.
                 In response to the commenter's request for details by state of the
                effects of the imputed floor, we direct the commenter to the data file
                that CMS posted concurrent with the FY 2022 IPPS/LTCH PPS proposed rule
                with estimated imputed floor value by state at https://www.cms.gov/files/zip/fy2022-ipps-nprm-imputed-state-floors.zip. Finally, we note
                that section 9831 of the American Rescue Plan Act of 2021 excluded the
                imputed floor from the budget neutrality requirement under the IPPS
                (section 1886(d)(3)(E)(i) of the Act) but did not specify that the same
                budget neutral treatment also would apply under the OPPS. As a result,
                the changes related to the reinstatement of the imputed floor would be
                budget neutralized through the standard OPPS wage index budget
                neutrality adjustment, as discussed in section II.B. of this final rule
                with comment period.
                 For more information about the imputed floor required by section
                1886(d)(3)(E)(iv) of the Act, we refer readers to the regulations at
                Sec. 412.64(e)(1) and (4) and (h)(4) and (5), and the discussion in
                the FY 2022 IPPS/LTCH PPS final rule (86 FR 45176 through 45178).
                 In the CY 2022 OPPS/ASC proposed rule (86 FR 42050), we noted that
                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 through
                58755), 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. For purposes of the OPPS, 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, 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 new CBSAs, urban counties that became rural, rural counties that
                became urban, and some existing CBSAs that were split apart. In
                addition, some of these modifications had a number of downstream
                effects, such as 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. For
                purposes of the OPPS, in the CY 2021 OPPS/ASC final rule with comment
                period (85 FR 85907 through 85908), we adopted the updates set forth in
                OMB Bulletin No. 18-04 effective January 1, 2021, beginning with the CY
                2021 wage index. For a complete discussion of the adoption of the
                updates set forth in OMB Bulletin No. 18-04, we refer readers to the CY
                2021 OPPS/ASC final rule with comment period.
                 On March 6, 2020, OMB issued Bulletin No. 20-01, which provided
                updates to and superseded OMB Bulletin No. 18-04 that was issued on
                September 14, 2018. The attachments to OMB Bulletin No. 20-01 provided
                detailed information on the updates to statistical areas since
                September 14, 2018, 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, 2017 and July
                1, 2018. (For a copy of this bulletin, we refer readers to the
                following website: https://www.whitehouse.gov/wp-content/uploads/2020/03/Bulletin-20-01.pdf.) In
                [[Page 63503]]
                OMB Bulletin No. 20-01, OMB announced one new Micropolitan Statistical
                Area, one new component of an existing Combined Statistical Area and
                changes to New England City and Town Area (NECTA) delineations. As we
                stated in the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25397), after
                reviewing OMB Bulletin No. 20-01, we determined that the changes in
                Bulletin 20-01 encompassed delineation changes that would not affect
                the Medicare IPPS wage index for FY 2022. Specifically, the updates
                consisted of changes to NECTA delineations and the creation of a new
                Micropolitan Statistical Area, which was then added as a new component
                to an existing Micropolitan Statistical Area. The Medicare wage index
                does not utilize NECTA definitions, and, as most recently discussed in
                FY 2021 IPPS/LTCH PPS final rule (85 FR 58746), we include hospitals
                located in Micropolitan Statistical areas in each State's rural wage
                index. Therefore, consistent with our discussion in the FY 2022 IPPS/
                LTCH PPS final rule (86 FR 45164), while we are adopting the updates
                set forth in OMB Bulletin No. 20-01 consistent with our general policy
                of adopting OMB delineation updates, we note that specific OPPS wage
                index updates would not be necessary for CY 2022 as a result of
                adopting these OMB updates. In other words, these OMB updates would not
                affect any hospital's geographic area for purposes of the OPPS wage
                index calculation for CY 2022.
                 For CY 2022, we are continuing to use the OMB delineations that
                were adopted beginning with FY 2015 (based on the revised delineations
                issued in OMB Bulletin No. 13-01) to calculate the area wage indexes,
                with updates as reflected in OMB Bulletin Nos. 15-01, 17-01, 18-04, and
                20-01, although as noted above the latter Bulletin did not require any
                wage area updates.
                 We noted in the CY 2022 OPPS/ASC proposed rule (86 FR 42051) that,
                in connection with our adoption in FY 2021 of the updates in OMB
                Bulletin 18-04, we adopted a policy to place a 5 percent cap, for FY
                2021, on any decrease in a hospital's wage index from the hospital's
                final wage index in FY 2020 so that a hospital's final wage index for
                FY 2021 would not be less than 95 percent of its final wage index for
                FY 2020. We referred the reader to the FY 2021 IPPS/LTCH PPS final rule
                (85 FR 58753 through 58755) for a complete discussion of this
                transition. As finalized in the FY 2021 IPPS/LTCH PPS final rule, this
                transition was set to expire at the end of FY 2021. However, as
                discussed in the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25397),
                given the unprecedented nature of the ongoing COVID-19 PHE, we sought
                comment in the FY 2022 IPPS/LTCH PPS proposed rule on whether it would
                be appropriate to continue to apply a transition for the FY 2022 IPPS
                wage index for hospitals negatively impacted by our adoption of the
                updates in OMB Bulletin 18-04. For example, we stated that such an
                extended transition could potentially take the form of holding the FY
                2022 IPPS wage index for those hospitals harmless from any reduction
                relative to their FY 2021 wage index. We further stated that if we were
                to apply a transition to the FY 2022 IPPS wage index for hospitals
                negatively impacted by our adoption of the updates in OMB Bulletin 18-
                04, we also sought comment on making this transition budget neutral
                under the IPPS, as is our usual practice, in the same manner that the
                FY 2021 IPPS wage index transition was made budget neutral as discussed
                in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58755).
                 A summary of the comments we received regarding a wage index
                transition policy for 2022 as described above, and our responses to
                those comments, appear below:
                 Comment: We received multiple comments strongly recommending CMS
                extend a transition policy similar to that implemented in FY 2020 and
                FY 2021 in the IPPS. Multiple commenters, citing the severity and
                continuing impact of changes related to the OMB updates, the low wage
                index policy, and the lingering financial burden caused by the COVID-19
                PHE, urged CMS to add an additional year of transition for both
                inpatient hospital and outpatient hospital providers, applied in a
                budget neutral manner. These commenters stated that given the wide-
                ranging factors impacting wage index values, it would not be equitable
                to limit the transition adjustment only to the effects of the revised
                labor market delineations. The commenters requested the transition be
                implemented more broadly to all hospitals experiencing large declines
                in wage index values. Many of these commenters recommended CMS consider
                making a permanent 5 percent maximum reduction policy to protect
                hospitals from large year-to-year variations in wage index values as a
                means to reduce overall volatility.
                 Multiple commenters requested that CMS extend a hold harmless
                policy for all hospitals negatively affected by CMS' adoption of
                revised delineations until OMB releases further revisions predicated on
                the results of the 2020 decennial census. A commenter recommended a
                hold-harmless transition be applied specifically to hospitals in CBSAs
                that were negatively affected by the FY 2021 adoption of revised CBSAs,
                citing specific CBSAs they believed warranted an additional transition
                adjustment.
                 Multiple commenters, while supporting some form of transition
                adjustment for negatively affected hospitals, requested any such
                adjustment be made in a non-budget neutral manner. These commenters
                expressed their preference that any such adjustment should not come at
                the expense of the providers themselves. Some commenters stated that
                such a budget neutrality adjustment would disadvantage providers who
                have increased their wage index values due to a variety of factors.
                 Response: We refer readers to the FY 2022 IPPS/LTCH PPS final rule
                (86 FR 45164 through 45165) for a detailed discussion of the wage index
                transition policy finalized for the FY 2022 IPPS wage index and for
                responses to these and other comments relating to the wage index
                transition policy.
                 As we noted, in the FY 2022 IPPS/LTCH PPS final rule (86 FR 45164
                through 45165), we finalized a wage index transition policy for the FY
                2022 IPPS wage index. Specifically, for hospitals that received the
                transition in FY 2021, we are continuing a wage index transition for FY
                2022 under which we will apply a 5 percent cap on any decrease in the
                hospital's wage index compared to its wage index for FY 2021 to
                mitigate significant negative impacts of, and provide additional time
                for hospitals to adapt to, the CMS decision to adopt the revised OMB
                delineations (86 FR 45164). We stated that, as discussed in the FY 2021
                IPPS/LTCH final rule, we believe applying a 5-percent cap on any
                decrease in a hospital's wage index from the hospital's final wage
                index from the prior fiscal year is an appropriate transition as it
                provides predictability in payment levels from FY 2021 to the upcoming
                FY 2022 as well as effectively mitigating any significant decreases in
                the wage index for FY 2022 (86 FR 45164). We considered and responded
                to comments requesting that we apply the transition adjustment in FY
                2022 to all hospitals with significant reductions in wage index values
                (not just those that received the transition adjustment in FY 2021), as
                well as comments recommending a 5-percent cap become a permanent policy
                for future fiscal years (86 FR 45164 through 45165). In addition, we
                considered and responded to comments recommending we not apply the
                transition in a budget neutral manner (86 FR 45165). We stated that
                [[Page 63504]]
                for FY 2022, similar to FY 2021, we are applying a budget neutrality
                adjustment to the standardized amount so that our transition, as
                previously described, is implemented in a budget neutral manner under
                our authority in section 1886(d)(5)(I) of the Act (86 FR 45165).
                 In the CY 2022 OPPS/ASC proposed rule (86 FR 42051 through 42052),
                we proposed to use the FY 2022 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 2022. Therefore, as we stated in the CY 2022 OPPS/ASC proposed
                rule (86 FR 42052), any adjustments for the FY 2022 IPPS post-
                reclassified wage index, including without limitation any wage index
                transition policy that may be applied, would be reflected in the final
                CY 2022 OPPS wage index beginning on January 1, 2022. 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 2022 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 2022, which will include the wage index
                transition policy discussed previously.
                 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 the use of SSA county codes and begin using only the FIPS
                county codes. For CY 2022, under the OPPS, we are continuing to use
                only the FIPS county codes for purposes of crosswalking counties to
                CBSAs.
                 We proposed to use the FY 2022 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 2022. Therefore, we stated that any adjustments for the FY
                2022 IPPS post-reclassified wage index, including, but not limited to,
                the imputed floor adjustment and any transition that may be applied (as
                discussed previously), would be reflected in the final CY 2022 OPPS
                wage index beginning on January 1, 2022. (We referred readers to the FY
                2022 IPPS/LTCH PPS proposed rule (86 FR 25396 through 25417) and the
                proposed FY 2022 hospital wage index files posted on the CMS website.)
                With regard to budget neutrality for the CY 2022 OPPS wage index, we
                referred readers to section II.B. of the CY 2022 OPPS/ASC proposed rule
                (86 FR 42048 through 42049). 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 refer readers to the discussion of comments on the wage index
                transition policy for 2022, and our responses to those comments,
                earlier in this section. We did not receive any additional comments on
                this proposal and are finalizing it without modification.
                 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 2022 OPPS/ASC proposed
                rule, we proposed to continue this policy for CY 2022, and included a
                brief summary of the major proposed FY 2022 IPPS wage index policies
                and adjustments that we proposed to apply to these hospitals under the
                OPPS for CY 2022. which we have summarized below. We referred readers
                to the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25396 through 25417)
                for a detailed discussion of the proposed changes to the FY 2022 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 would apply if the hospital were paid
                under the IPPS. For CY 2022, 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 proposed
                that the wage index that would apply for CY 2022 to non-IPPS hospitals
                paid under the OPPS would continue to include the rural floor
                adjustment and any adjustments applied to the IPPS wage index to
                address wage index disparities. In addition, the wage index that would
                apply to non-IPPS hospitals paid under the OPPS would include any
                transition we may finalize for the FY 2022 IPPS wage index as discussed
                previously.
                 We did not receive any comments on these proposals and are
                finalizing them without modification.
                 For CMHCs, for CY 2022, 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. Furthermore, we proposed that the
                wage index that would apply to CMHCs for CY 2022 would continue to
                include the rural floor adjustment and any adjustments applied to the
                IPPS wage index to address wage index disparities. In addition, the
                wage index that would apply to CMHCs would include any transition we
                may finalize for the FY 2022 IPPS wage index as discussed above. Also,
                we proposed that the wage index that would apply to CMHCs would not
                include the outmigration adjustment because that
                [[Page 63505]]
                adjustment only applies to hospitals. We did not receive any comments
                on these proposals and are finalizing them without modification.
                 Table 4A associated with the FY 2022 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 2022 IPPS/LTCH PPS final rule (available for
                download via the website above) identifies IPPS hospitals that receive
                the out-migration adjustment for FY 2022. We are including the
                outmigration adjustment information from Table 2 associated with the FY
                2022 IPPS/LTCH PPS final rule as Addendum L to the CY 2022 OPPS/ASC
                final rule with the addition of non-IPPS hospitals that will receive
                the section 505 outmigration adjustment under the CY 2022 OPPS/ASC
                final rule. 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 2022 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 2022
                OPPS final rule Claims Accounting Narrative that is posted on our
                website. We proposed to calculate the default ratios for CY 2022 using
                cost report data from the same set of cost reports we originally used
                in the CY 2021 OPPS ratesetting, consistent with the broader proposal
                regarding 2022 OPPS ratesetting discussed in section X.E. of the CY
                2022 OPPS/ASC proposed rule (86 FR 42188 through 42190).
                 We did not receive any public comments on our proposal and are
                finalizing our proposal, without modification, to calculate the default
                ratios for CY 2022 using cost report data from the same set of cost
                reports we originally used in the CY 2021 OPPS ratesetting.
                 We no longer publish 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.
                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 2022
                 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 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 2021. 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 2022, 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: One commenter requested that CMS make the 7.1 percent
                rural adjustment permanent. The commenter appreciated the policy that
                CMS
                [[Page 63506]]
                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 commenter believes 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 commenter 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.
                 After consideration of the public comment 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 passthrough payment policy, and
                items paid at charges reduced to costs.
                F. Payment Adjustment for Certain Cancer Hospitals for CY 2022
                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 added
                section 1833(t)(7), ``Transitional Adjustment to Limit Decline in
                Payment,'' to the Act, which requires the Secretary to determine OPPS
                payments to cancer and children's hospitals based on their pre-BBA
                payment amount (these hospitals are often referred to under this policy
                as ``held harmless'' and their payments are often referred to as ``hold
                harmless'' payments).
                 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 Sec. 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 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. Table 5 displays the target PCR for purposes of the cancer
                hospital adjustment for CY 2012 through CY 2021.
                [[Page 63507]]
                [GRAPHIC] [TIFF OMITTED] TR16NO21.011
                2. Policy for CY 2022
                 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) of the 21st Century Cures Act for CY 2022.
                 Under our established policy, to calculate the proposed CY 2022
                target PCR, we would use the same extract of cost report data from
                HCRIS used to estimate costs for the CY 2022 OPPS which would be the
                most recently available hospital cost reports which, in most cases,
                would be from CY 2020. However, as discussed in section II.A.1.a of the
                CY 2022 OPPS/ASC proposed rule, given our concerns with CY 2020 claims
                data as a result of the PHE, we believe a target PCR based on CY 2020
                claims and the most recently available cost reports may provide a less
                accurate estimation of cancer hospital PCRs and non-cancer hospital
                PCRs than the data used for the CY 2021 rulemaking cycle. Therefore,
                for CY 2022, we proposed to continue to use the CY 2021 target PCR of
                0.89. This proposed CY 2022 target PCR of 0.89 includes the 1.0-
                percentage point reduction required by section 16002(b) of the 21st
                Century Cures Act for CY 2022. For a description of the CY 2021 target
                PCR calculation, we refer readers to the CY 2021 OPPS/ASC final rule
                with comment period (84 FR 85912 through 85914).
                 We did not receive any public comments on our proposal and we are
                finalizing our proposal to continue to use the CY 2021 target PCR of
                0.89 for the 11 specified cancer hospitals for CY 2022 without
                modification.
                 Table 6 shows the estimated percentage increase in OPPS payments to
                each cancer hospital for CY 2022, due to the cancer hospital payment
                adjustment policy. The actual amount of the CY 2022 cancer hospital
                payment adjustment for each cancer hospital will be determined at cost
                report settlement and will depend on each hospital's CY 2022 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.
                BILLING CODE 4120-01-P
                [[Page 63508]]
                [GRAPHIC] [TIFF OMITTED] TR16NO21.012
                BILLING CODE 4120-01-C
                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 2021, 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 $5,300 (the fixed-dollar
                amount threshold) (85 FR 85914 through 85916). 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. Using CY 2019 claims available for this final rule with
                comment period, we estimate that we paid approximately 0.89 percent of
                the total aggregated OPPS payments in outliers for CY 2019. Therefore,
                for CY 2019, we estimate that we paid 0.11 percentage points below the
                CY 2019 outlier target of 1.0 percent of total aggregated OPPS
                payments.
                 For this final rule with comment period, using CY 2019 claims data
                and CY 2021 payment rates, we estimate that the aggregate outlier
                payments for CY 2021 would be approximately 1.07 percent of the total
                CY 2021 OPPS payments. We provide 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 2022
                 For CY 2022, 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. 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
                [[Page 63509]]
                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 2022 OPPS/ASC proposed rule.
                 To ensure that the estimated CY 2022 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 $6,100.
                 We calculated the proposed fixed-dollar threshold of $6,100 using
                the standard methodology most recently used for CY 2021 (85 FR 85914
                through 85916). For purposes of estimating outlier payments for the CY
                2022 OPPS/ASC 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 generally
                use to model each OPPS update lag by 2 years. However, as discussed in
                section X.E. of the CY 2022 OPPS/ASC proposed rule, we proposed to use
                CY 2019 claims in establishing the CY 2022 OPPS.
                 In order to estimate the CY 2022 hospital outlier payments for the
                proposed rule, we inflated the charges on the CY 2019 claims using the
                same inflation factor of 1.20469 that we used to estimate the IPPS
                fixed-loss cost threshold for the FY 2022 IPPS/LTCH PPS proposed rule
                (86 FR 25718). We used an inflation factor of 1.13218 to estimate CY
                2021 charges from the CY 2019 charges reported on CY 2019 claims,
                applying the charge inflation factor for two years, to estimate CY 2021
                hospital outlier payments. The methodology for determining this charge
                inflation factor is discussed in the FY 2021 IPPS/LTCH PPS final rule
                (85 FR 59037 through 59040). As we stated in the CY 2005 OPPS final
                rule with comment period (69 FR 65844 through 65846), 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 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 2022
                IPPS outlier calculation to the CCRs used to simulate the proposed CY
                2022 OPPS outlier payments to determine the fixed-dollar threshold.
                Specifically, for CY 2022, we proposed to apply an adjustment factor of
                0.94964 (or 0.974495 * 0.974495) to the CCRs that were in the April
                2020 OPSF to trend them forward from CY 2020 to CY 2022. We note that
                we proposed to use the April 2020 OPSF to address concerns regarding
                the impact of the PHE on data used in OPPS ratesetting, as discussed in
                section X.E. of the CY 2022 OPPS/ASC proposed rule. The methodology for
                calculating the proposed adjustment is discussed in the FY 2022 IPPS/
                LTCH PPS proposed rule (86 FR 25717 through 25719).
                 To model hospital outlier payments for the CY 2022 OPPS/ASC
                proposed rule, we applied the overall CCRs from the April 2020 OPSF
                after adjustment (using the proposed CCR inflation adjustment factor of
                0.94964 to approximate CY 2022 CCRs) to charges on CY 2019 claims that
                were adjusted (using the proposed charge inflation factor of 1.20469 to
                approximate CY 2022 charges). We note that the additional year in the
                charge inflation factor and CCR inflation factors is a result of the
                use of claims and OPSF data from a year earlier than the year that we
                would typically use in a standard ratesetting cycle. 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 $6,100, 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, we
                proposed to continue the policy that we implemented in CY 2010 that the
                hospitals' costs will be compared to the reduced payments for purposes
                of outlier eligibility and payment calculation. For more information on
                the Hospital OQR Program, we refer readers to section XIV. of the CY
                2022 OPPS/ASC proposed rule.
                 Comment: One commenter recommended that, in light of the PHE, CMS
                should not update the OPPS outlier fixed-dollar threshold at a time
                when hospitals are struggling financially.
                 Response: We maintain the target outlier percentage of 1.0 percent
                of estimated aggregate total payments under the OPPS and have a fixed-
                dollar threshold so that OPPS outlier payments are made only when the
                hospital would experience a significant loss for furnishing a
                particular service. We continue to believe that the 1.0 percent OPPS
                outlier spending target appropriately mitigates the financial risk
                associated with exceptionally costly or complex cases. In addition, in
                a budget neutral system any spending for OPPS outliers would require a
                corresponding reduction to all other OPPS payments, which would have a
                universal impact on hospitals because every OPPS payment would be
                reduced. The fixed-dollar outlier threshold is specifically developed
                in order to best estimate aggregate outlier payments of 1.0 percent of
                the OPPS and ensure that outlier payments are directed towards the high
                cost and complex procedures associated with potential financial risk.
                Failing to update this outlier threshold would systemically
                underestimate the
                [[Page 63510]]
                amount of OPPS outlier payments and result in OPPS outlier payments in
                excess of 1.0 percent of aggregate OPPS payments.
                 After consideration of the public comment we received, we are
                finalizing our proposal, without modification, to continue our policy
                of estimating outlier payments to be 1.0 percent of the estimated
                aggregate total payments under the OPPS and to use our established
                methodology to set the OPPS outlier fixed-dollar loss threshold for CY
                2022.
                3. Final Outlier Calculation
                 Historically, we have used updated data for the outlier fixed-
                dollar threshold calculation for the final rule. However, as discussed
                in section X.E. of the CY 2022 OPPS/ASC proposed rule (86 FR 42188
                through 42190) claims and other data that we would typically have used
                as part of our ratesetting process would have been affected by the PHE.
                As a result, we proposed to use CY 2019 OPPS claims as part of the CY
                2022 OPPS ratesetting process. For purposes of estimating the outlier
                threshold, we are finalizing our proposal to apply the same CCR
                inflation adjustment factor that we finalized to apply for the FY 2022
                IPPS outlier calculation to the CCRs used to simulate the final CY 2022
                OPPS outlier payments to determine the fixed-dollar threshold. As
                discussed in the FY 2022 IPPS/LTCH PPS final rule with comment period
                (86 FR 45537 through 45543), there are some changes to the typical
                charge and CCR inflation factors we would use for outlier estimating
                purposes as a result of the proposed and final policy to use data prior
                to the PHE. Ordinarily, we would use updated CCRs of the OPSF and apply
                an adjustment factor to adjust the CCRs from the most recent update of
                OPSF. However, as discussed previously, we believe the most recent CCRs
                in the OPSF may be significantly impacted by the PHE. As a result, and
                similar to the proposed use of CY 2019 claims in CY 2022 OPPS
                ratesetting more broadly, we proposed to use OPSF CCRs from the April
                2020 OPSF for CY 2022 outlier estimation purposes. The claims and OPSF
                data are not the most updated data available and therefore to properly
                update them for the prospective year--CY 2022--we needed to apply an
                additional year of CCRs and charge inflation. For CY 2022, we are
                applying the overall CCRs from the April 2020 OPSF file (using the CCR
                inflation adjustment factor of 0.94964 to approximate CY 2021 CCRs) to
                charges on CY 2019 claims that were adjusted using a charge inflation
                factor of 1.20469 to approximate CY 2022 charges. These are the same
                CCR adjustment and charge inflation factors that were used to set the
                IPPS fixed-loss cost threshold for the FY 2022 IPPS/LTCH PPS final rule
                (86 FR 45537 through 45543). We simulate aggregate CY 2022 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 total outlier payments equal 1.0
                percent of aggregated estimated total CY 2022 OPPS payments. We
                estimate that a fixed-dollar amount threshold of $6,175 combined with
                the multiplier threshold of 1.75 times the APC payment rate, will
                allocate the 1.0 percent of aggregated total OPPS payments to outlier
                payments. For CY 2022, we are finalizing a multiplier threshold of 1.75
                times the APC payment rate and a fixed-dollar amount threshold of
                $6,175.
                 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 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 2022 scaled weight for the
                APC by the CY 2022 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 proposed rule, which is available via the
                internet on the CMS website), in a circumstance in which the multiple
                procedure discount does not apply, the procedure is not bilateral, and
                conditionally packaged services (status indicator of ``Q1'' and ``Q2'')
                qualify for separate payment. We note that, although blood and blood
                products with status indicator ``R'' and brachytherapy sources with
                status indicator ``U'' are not subject to wage adjustment, they are
                subject to reduced payments when a hospital fails to meet the Hospital
                OQR Program requirements.
                 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 the proposed
                rule (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
                [[Page 63511]]
                national unadjusted payment rate is calculated by multiplying the
                reporting ratio of 0.9804 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 2022 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. The wage index values assigned to each area would reflect the
                geographic statistical areas (which are based upon OMB standards) to
                which hospitals are assigned for FY 2022 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 are continuing to
                apply for the CY 2022 OPPS wage index any adjustments for the FY 2022
                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 2022 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 Pub. L.
                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 2022 IPPS wage index, which are listed in Table 2 associated with
                the FY 2022 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 2022 IPPS Final Rule Home Page''
                and select ``FY 2022 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 CY 2022 full
                national unadjusted payment rate for APC 5071 is $635.54. The proposed
                reduced national unadjusted payment rate for APC 5071 for a hospital
                that fails to meet the Hospital OQR Program requirements is $623.08.
                This proposed reduced rate is calculated by multiplying the reporting
                ratio of 0.9804 by the full unadjusted payment rate for APC 5071.
                 The FY 2022 wage index for a provider located in CBSA 35614 in New
                York, which includes the proposed adoption of IPPS 2022 wage index
                policies, is 1.3427. The labor-related portion of the proposed full
                national unadjusted payment is approximately $512.00 (.60 * $635.54 *
                1.3427). The labor-related portion of the proposed reduced national
                unadjusted payment is approximately $501.97 (.60 * $623.08 * 1.3427).
                The nonlabor-related portion of the proposed full national unadjusted
                payment is approximately $254.22 (.40 * $635.54). The nonlabor-related
                portion of the proposed reduced national unadjusted payment is
                approximately $249.23 (.40 * $623.08). The sum of the labor-related and
                nonlabor-related portions of the proposed full national adjusted
                payment is approximately $766.22 ($512.00 + $254.22). The sum of the
                portions of the proposed reduced national adjusted payment is
                approximately $751.20 ($501.97 + $249.23).
                 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 2022. Therefore, we are using the steps in the
                methodology specified above, as we proposed, to demonstrate the
                calculation of the final
                [[Page 63512]]
                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. For a discussion of the changes made by the Affordable
                Care Act with regard to copayments for preventive services furnished on
                and after January 1, 2011 we refer readers to section XII.B. of the CY
                2011 OPPS/ASC final rule with comment period (75 FR 72013).
                2. OPPS Copayment Policy
                 For CY 2022, we proposed to determine copayment amounts for new and
                revised APCs using the same methodology that we implemented beginning
                in CY 2004. (We refer readers to the November 7, 2003 OPPS final rule
                with comment period (68 FR 63458).) In addition, we proposed to use the
                same standard rounding principles that we have historically used in
                instances where the application of our standard copayment methodology
                would result in a copayment amount that is less than 20 percent and
                cannot be rounded, under standard rounding principles, to 20 percent.
                (We refer readers to the CY 2008 OPPS/ASC final rule with comment
                period (72 FR 66687) in which we discuss our rationale for applying
                these rounding principles.) The proposed national unadjusted copayment
                amounts for services payable under the OPPS that would be effective
                January 1, 2022 are included in Addenda A and B to the proposed rule
                (which are available via the internet on the CMS website).
                 As discussed in section XIV.E. of the CY 2022 OPPS/ASC proposed
                rule and this final rule with comment period, for CY 2022, 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).
                 Section 122 of the Consolidated Appropriations Act (CAA) of 2021
                (Pub. L. 116-260), Waiving Medicare Coinsurance for Certain Colorectal
                Cancer Screening Tests, amends section
                [[Page 63513]]
                1833(a) of the Act to offer a special coinsurance rule for screening
                flexible sigmoidoscopies and screening colonoscopies, regardless of the
                code that is billed for the establishment of a diagnosis as a result of
                the test, or for the removal of tissue or other matter or other
                procedure, that is furnished in connection with, as a result of, and in
                the same clinical encounter as the colorectal cancer screening test. We
                refer readers to section X.B., ``Changes to Beneficiary Coinsurance for
                Certain Colorectal Cancer Screening Tests'' of this final rule with
                comment period for the full discussion of this policy.
                 Comment: One commenter requested that CMS waive the patient
                coinsurance and deductible for Biomechanical Computed Tomography (BCT)
                analysis, CPT 0554T to 0558T under the Medicare preventive services
                benefit 42 CFR 410.152(l)(6). The commenter stated that these codes are
                considered preventive services for diagnostic screening of osteoporosis
                and that Change Request (CR) 11392 directed contractors to apply the
                same rules applied to CPT code 77078 (Computed tomography, bone mineral
                density study, 1 or more sites, axial skeleton (for example, hips,
                pelvis, spine)) to these BCT codes.
                 Response: We disagree with the commenter that the BCT codes are not
                subject to coinsurance and the Part B deductible at this time. The
                service described by CPT code 77078 meets the National Coverage
                Determination (NCD) process for preventive services coverage and
                subject to its coinsurance and deductible waiver. However, the USPSTF
                has not changed its current recommendation for bone measurement testing
                (available here: https://www.uspreventiveservicestaskforce.org/uspstf/recommendation/osteoporosis-screening#fullrecommendationstart) since
                2018. These new BCT codes became effective July 1, 2019, and the
                services described by these codes are not specifically included in the
                USPSTF grade B recommendation. Therefore, they do not meet requirements
                to have beneficiary coinsurance and deductible waived. We note that CMS
                may add preventive services coverage through the National Coverage
                Determination (NCD) process if the service meets all of the following
                criteria: Reasonable and necessary for prevention or early detection of
                illness or disability, USPSTF recommended with grade A or B, and
                appropriate for individuals entitled to benefits under Part A or
                enrolled under Medicare Part B. In the event that the USPSTF updates
                its recommendation for bone measurement testing to specifically include
                these services described by the new BCT codes, CMS would reevaluate
                whether to apply the coinsurance and deductible waiver.
                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, $127.11 is approximately 20 percent of the
                full national unadjusted payment rate of $635.54. For APCs with only a
                minimum unadjusted copayment in Addenda A and B to the CY 2022 OPPS/ASC
                proposed 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 the CY 2022 OPPS/ASC proposed rule. Calculate
                the rural adjustment for eligible providers, as indicated in Step 6
                under section II.H. of the CY 2022 OPPS/ASC proposed rule.
                 Step 3. Multiply the percentage calculated in Step 1 by the payment
                rate calculated in Step 2. The result is the wage-adjusted copayment
                amount for the APC.
                 The formula below is a mathematical representation of Step 3 and
                applies the beneficiary payment percentage to the adjusted payment rate
                for a service calculated under section II.H. of this final rule with
                comment period, with and without the rural adjustment, to calculate the
                adjusted beneficiary copayment for a given service.
                Wage-adjusted copayment amount for the APC = Adjusted Medicare Payment
                * B.
                Wage-adjusted copayment amount for the APC (SCH or EACH) = (Adjusted
                Medicare Payment * 1.071) * B.
                 Step 4. For a hospital that failed to meet its Hospital OQR Program
                requirements, multiply the copayment calculated in Step 3 by the
                reporting ratio of 0.9804.
                 The unadjusted copayments for services payable under the OPPS that
                will be effective January 1, 2022 are shown in Addenda A and B to this
                final rule with comment period (which are available via the internet on
                the CMS website). We note that the national unadjusted payment rates
                and copayment rates shown in Addenda A and B to this final rule with
                comment period reflect the CY 2022 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, HCPCS codes, that are
                reported on 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 CPT (Current Procedural Terminology) codes, 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 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
                [[Page 63514]]
                procedures, and medical services not described by CPT codes.
                 CPT codes are established by the AMA and the Level II HCPCS codes
                are established by the CMS HCPCS Workgroup. These codes are updated and
                changed throughout the year. CPT and 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. This quarterly process offers
                hospitals access to codes that more accurately describe the 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,
                status indicators, and APC assignments 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 exclusively paid separately under the
                hospital OPPS are assigned to appropriate status indicators. Certain
                payment status indicators provide separate payment while other payment
                status indicators do not. In section XI. ``CY 2022 OPPS Payment Status
                and Comment Indicators'' of this final rule with comment period, we
                discuss the various status indicators used under the OPPS. We also
                provide a complete list of status indicators and their definitions in
                Addendum D1 to this final rule with comment period.
                1. HCPCS Codes That Were Effective April 1, 2021 for Which We Solicited
                Public Comments in the CY 2022 OPPS/ASC Proposed Rule
                 For the April 2021 update, 26 new HCPCS codes were established and
                made effective on April 1, 2021. These codes and their long descriptors
                were included in Table 5 of the proposed rule and are now listed in
                Table 7 of this final rule with comment period. Through the April 2021
                OPPS quarterly update CR (Transmittal 10666, Change Request 12175,
                dated March 8, 2021), we recognized several new HCPCS codes for
                separate payment under the OPPS. In the CY 2022 OPPS/ASC proposed rule,
                we solicited public comments on the proposed APC and status indicator
                assignments for the codes which were listed in Table 5 of this CY 2022
                OPPS/ASC proposed rule with comment period.
                 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
                2021. Therefore, we are finalizing the proposed APC and SI assignments
                for these codes, as indicated in Table 7.
                 The status indicator, APC assignment, and payment rate for each
                HCPCS code can be found in Addendum B to this final rule with comment
                period. In addition, the complete list of status indicators and
                corresponding definitions used under the OPPS can be found in Addendum
                D1 to this final rule with comment period. These new codes that were
                effective April 1, 2021 were assigned to comment indicator ``NP'' in
                Addendum B to the CY 2022 OPPS/ASC proposed rule to indicate that the
                codes were assigned to an interim APC assignment and that comments
                would be accepted on their interim APC assignments. Also, the complete
                list of comment indicators and definitions used under the OPPS can be
                found in Addendum D2 to this final rule with comment period. We note
                that OPPS Addendum B, Addendum D1, and Addendum D2 are available via
                the internet on the CMS website.
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                2. HCPCS Codes That Were Effective July 1, 2021 for Which We Solicited
                Public Comments in the CY 2022 OPPS/ASC Proposed Rule
                 For the July 2021 update, 55 new codes were established and made
                effective July 1, 2021. The codes and long descriptors were listed in
                Table 6 of the proposed rule and are now also listed in Table 8 of this
                final rule with comment period. Through the July 2021 OPPS quarterly
                update CR (Transmittal 10825, Change Request 12316, dated June 11,
                2021), we recognized several new codes for separate payment and
                assigned them to appropriate interim OPPS status indicators and APCs.
                In the CY 2022 OPPS/ASC proposed rule, we solicited public comments on
                the proposed APC and status indicator assignments for the codes
                implemented on July 1, 2021, all of which are listed in Table 8.
                 We did not receive any public comments on the proposed OPPS APC and
                SI assignments for the new Level II HCPCS codes implemented in July
                2021 and we are finalizing the proposed APC and SI assignments for
                these codes, as indicated in Table 8. We note that several of the HCPCS
                C-codes have been replaced with HCPCS J-codes, effective October 1,
                2021. Their replacement codes are listed in Table 8. The final payment
                rates for these codes can be found in Addendum B to this final rule
                with comment period.
                 The status indicator, APC assignment, and payment rate for each
                HCPCS code can be found in Addendum B to this final rule with comment
                period. The complete list of status indicators and corresponding
                definitions used under the OPPS can be found in Addendum D1 to this
                final rule with comment period. These new codes that were effective
                July 1, 2021 were assigned to comment indicator ``NP'' in Addendum B to
                the CY 2022 OPPS/ASC proposed rule to indicate that the codes were
                assigned to an interim APC assignment and that comments would be
                accepted on their interim APC assignments. Also, the complete list of
                comment indicators and definitions used under the OPPS can be found in
                Addendum D2 to this final rule with comment period. We note that OPPS
                Addendum B, Addendum D1, and Addendum D2 are available via the internet
                on the CMS website.
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                3. October 2021 HCPCS Codes for Which We Are Soliciting Public Comments
                in the CY 2022 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 7 of the CY 2022 OPPS/ASC proposed rule with comment
                period and reprinted as Table 9 of this final rule with comment period.
                These codes are released to the public through the October OPPS
                quarterly update CRs and via the CMS HCPCS website (for Level II HCPCS
                codes). For CY 2022, 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 2022 OPPS/ASC proposed rule (86 FR 42068), we proposed to
                continue this process for CY 2022. Specifically, for CY 2022, we
                proposed to include in Addendum B to the CY 2022 OPPS/ASC final rule
                with comment period the new HCPCS codes effective October 1, 2021 that
                would be incorporated in the October 2021 OPPS quarterly update CR.
                Also, as stated above, the October 1, 2021 codes are flagged with
                comment indicator ``NI'' in Addendum B to this CY 2022 OPPS/
                [[Page 63523]]
                ASC final rule with comment period to indicate that we have assigned
                the codes an interim OPPS payment status for CY 2022. We are inviting
                public comments on the interim SI and APC assignments for these codes,
                if applicable, that will be finalized in the CY 2023 OPPS/ASC final
                rule with comment period.
                4. January 2022 HCPCS Codes
                a. New Level II HCPCS Codes for Which We Are Soliciting Public Comments
                in This CY 2022 OPPS/ASC Final Rule With Comment Period
                 Consistent with past practice, we are soliciting comments on the
                new Level II HCPCS codes that will be effective January 1, 2022 of this
                final rule with comment period, thereby allowing us to finalize the
                status indicators and APC assignments for the codes in the CY 2023
                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,
                and except for the G-codes listed in Addendum O of the CY 2022 OPPS/ASC
                proposed rule, 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 2022, we proposed to
                include in Addendum B to this final rule with comment period the new
                Level II HCPCS codes effective January 1, 2022 that would be
                incorporated in the January 2022 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 2022, the Level II HCPCS codes effective January 1, 2022 are
                flagged with comment indicator ``NI'' in Addendum B to this final rule
                with comment period to indicate that we have assigned the codes an
                interim OPPS payment status for CY 2022. We are inviting public
                comments on the interim SI and APC assignments for these codes, if
                applicable, that will be finalized in the CY 2023 OPPS/ASC final rule
                with comment period.
                b. CPT Codes for Which We Solicited Public Comments in the CY 2022
                OPPS/ASC Proposed Rule
                 In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66841
                through 66844), we finalized a revised process of assigning APC and
                status indicators for new and revised Category I and III CPT codes that
                would be effective January 1. Specifically, for the new/revised CPT
                codes that we receive in a timely manner from the AMA's CPT Editorial
                Panel, we finalized our proposal to include the codes that would be
                effective January 1 in the OPPS/ASC proposed rules, along with proposed
                APC and status indicator assignments for them, and to finalize the APC
                and status indicator assignments in the OPPS/ASC final rules beginning
                with the CY 2016 OPPS update. For those new/revised CPT codes that were
                received too late for inclusion in the OPPS/ASC proposed rule, we
                finalized our proposal to establish and use HCPCS G-codes that mirror
                the predecessor CPT codes and retain the current APC and status
                indicator assignments for a year until we can propose APC and status
                indicator assignments in the following year's rulemaking cycle. We note
                that even if we find that we need to create HCPCS G-codes in place of
                certain CPT codes for the PFS proposed rule, we do not anticipate that
                these HCPCS G-codes will always be necessary for OPPS purposes. We will
                make every effort to include proposed APC and status indicator
                assignments for all new and revised CPT codes that the AMA makes
                publicly available in time for us to include them in the proposed rule,
                and to avoid resorting to use of HCPCS G-codes and the resulting delay
                in utilization of the most current CPT codes. Also, we finalized our
                proposal to make interim APC and status indicator assignments for CPT
                codes that are not available in time for the proposed rule and that
                describe wholly new services (such as new technologies or new surgical
                procedures), to solicit public comments in the final rule, and to
                finalize the specific APC and status indicator assignments for those
                codes in the following year's final rule.
                 For the CY 2022 OPPS update, we received the CPT codes that will be
                effective January 1, 2022 from the AMA in time to be included in the CY
                2022 OPPS/ASC proposed rule. The new, revised, and deleted CPT codes
                can be found in Addendum B to the CY 2022 OPPS/ASC proposed rule (which
                is available via the internet on the CMS website). We note that the new
                and revised CPT codes are assigned to comment indicator ``NP'' in
                Addendum B of the CY 2022 OPPS/ASC proposed rule 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 the current calendar year with a proposed APC
                assignment, and that comments will be accepted on the proposed APC
                assignment and status indicator.
                 Further, we note 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 the long
                descriptors for the new and revised CY 2022 CPT codes in Addendum O to
                the CY 2022 OPPS/ASC proposed rule (which is available via the internet
                on the CMS website) so that the public can adequately comment on our
                proposed APCs and status indicator assignments. The 5-digit placeholder
                codes can be found in Addendum O, specifically under the column labeled
                ``CY 2022 OPPS/ASC Proposed Rule 5-Digit AMA Placeholder Code''. The
                final CPT code numbers would be included in this 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 CPT codes, we
                requested public comments on only those codes that are assigned comment
                indicator ``NP''.
                 In summary, in the CY 2022 OPPS/ASC proposed rule, we solicited
                public comments on the proposed CY 2022 status indicators and APC
                assignments for the new and revised CPT codes that will be effective
                January 1, 2022. Because the CPT codes listed in Addendum B appear with
                short descriptors only, we listed them again in Addendum O to the CY
                2022 OPPS/ASC proposed rule with long descriptors. In addition, we
                proposed to finalize the status indicator and APC assignments for these
                codes (with their final CPT code numbers) in this final rule with
                comment period. The proposed status indicator and APC assignment for
                these codes can be found in Addendum B to the CY 2022 OPPS/ASC 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 of the 2022 OPPS/ASC
                Proposed Rule. We have responded to those public comments in sections
                III.D. ``OPPS APC-Specific Policies'' of this final rule with comment
                period.
                 Finally, in Table 9, which is a reprint of Table 7 from the CY 2022
                OPPS/ASC proposed rule, we summarize 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 419.31. We use Level I (also known as CPT
                codes) and Level II HCPCS codes (also known as alphanumeric codes) to
                identify and group the services within each APC. The APCs are organized
                such that each group is homogeneous both clinically and in terms of
                resource use. Using this classification system, we have established
                distinct groups of similar services. We also have developed separate
                APC groups for certain medical devices, drugs, biologicals, therapeutic
                radiopharmaceuticals, and brachytherapy devices that are not packaged
                into the payment for the procedure.
                 We have packaged into the payment for each procedure or service
                within an APC group the costs associated with those items and services
                that are typically ancillary and supportive to a primary diagnostic or
                therapeutic modality and, in those cases, are an integral part of the
                primary service they support. Therefore, we do not make separate
                payment for these packaged items or services. In general, packaged
                items and services include, but are not limited to, the items and
                services listed in regulations at 42 CFR 419.2(b). A further discussion
                of packaged services is included in section II.A.3. of this final rule
                with comment period.
                 Under the OPPS, we generally pay for covered hospital outpatient
                services on a rate-per-service basis, where the service may be reported
                with one or more HCPCS codes. Payment varies according to the APC group
                to which the independent service or combination of services is
                assigned. For CY 2022, 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)
                [[Page 63525]]
                the clinical integrity of the APC groups and the relative payment
                weights. We note that the HOP Panel recommendations for specific
                services for the CY 2022 OPPS update will be discussed in the relevant
                specific sections throughout this 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 for 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 (FDCA)). 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 this section of the
                CY 2022 OPPS/ASC proposed rule, for CY 2022, 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.
                 For the CY 2022 OPPS update, in the CY 2022 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 CY 2022 OPPS/ASC proposed rule. We noted that
                Addendum B does not appear in the printed version of the Federal
                Register as part of the CY 2022 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 2022 included
                in the CY 2022 OPPS/ASC proposed rule are related to changes in costs
                of services that were observed in the CY 2019 claims data available for
                CY 2022 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 status indicator,
                or both, that were initially assigned in the July 1, 2021 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).
                3. APC Exceptions to the 2 Times Rule
                 Taking into account the APC changes that we proposed to make for CY
                2022, 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 2022 proposed
                rule, we found 23 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 2022, and
                found that all of the 23 APCs we identified meet the criteria for an
                exception to the 2 times rule based on the CY 2019 claims data
                available for the CY 2022 OPPS/ASC proposed rule. We did not include in
                that determination those APCs where a 2 times rule violation was not a
                relevant concept, such as APC 5401 (Dialysis), which only has two HCPCS
                codes assigned to it that have similar geometric mean costs and do not
                create a 2 times rule violation. Therefore, we only identified those
                APCs, including those with criteria-based costs, such as device-
                dependent CPT/HCPCS codes, with violations of the 2 times rule.
                 We note that, for cases in which a recommendation by the HOP Panel
                appears to result in or allow a violation of the 2 times rule, we may
                accept the HOP Panel's recommendation because those recommendations are
                based on explicit consideration (that is, a review of the latest OPPS
                claims data and group discussion of the issue) of resource use,
                clinical homogeneity, site of service, and the quality of the claims
                data used to determine the APC payment rates.
                 Table 8 of the CY 2022 OPPS/ASC proposed rule listed the 23 APCs
                for which we proposed to make an exception 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 June 30, 2020, and updated CCRs, if available. The proposed
                geometric mean costs for covered hospital outpatient services for these
                and all other APCs that were used in the development of the CY 2022
                OPPS/ASC proposed rule can be found on the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html.
                 Based on the updated final rule CY 2019 claims data used for this
                final rule with comment period, we identified the same 23 APCs that
                appeared in Table 8 of the CY 2022 OPPS/ASC proposed rule.
                 Comment: We received two comments that agreed with the proposed
                exceptions identified in Table 8 of the CY 2021 OPPS proposed rule.
                 Response: We appreciate the commenters' support.
                 Comment: One commenter requested that CMS adjust the definition of
                a significant procedure code for cost significance purposes in
                evaluating the 2 times rule to only require 500 single claims rather
                than the current requirement of 1,000 single claims.
                 Response: As stated earlier, in determining whether a 2 times rule
                violation exists in an APC, we consider only those HCPCS codes that are
                significant based on the number of claims for the codes. For purposes
                of identifying significant HCPCS codes to examine for 2 times rule
                violations, we consider codes that have more than 1,000 single major
                claims or codes that have both greater than 99 single major
                [[Page 63526]]
                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 HCPCS code is significant for
                purposes of the 2 times rule was selected because we believe that a
                subset of 1,000 claims is negligible within the set of approximately
                100 million single procedure or single session claims we use for
                establishing costs. Similarly, a HCPCS code for which there are fewer
                than 99 single claims and which comprises less than 2 percent of the
                single major claims within an APC will have a negligible impact on the
                APC cost. We continue to believe that these definitions remain
                appropriate and are therefore making no changes in this final rule with
                comment period.
                 Comment: One commenter opposed the allowance of a 2 times rule
                exception for APC 5161 (Level 1 ENT Procedures) in Table 8 of the CY
                2021 OPPS proposed rule, based on the current construct of codes
                included in the APC.
                 Response: We have reviewed the CY 2019 claims data available for CY
                2022 OPPS ratesetting for APC 5161 and believe that this APC remains
                appropriate as currently structured because it optimizes clinical and
                resource cost homogeneity. In addition, we note that the 2 times rule
                violation is based on the cost range of approximately $155.55 for CPT
                code 31500 (Insert emergency airway) and $315.60 for CPT code 69100
                (Biopsy of external ear) between the geometric mean costs for the
                lowest and highest cost significant codes in the APC. The difference
                between the geometric mean costs for CPT codes 31500 and 69100 violates
                the 2 times rule by a minimal amount and does not suggest there is a
                broader issue with the APC. However, we will continue to monitor the
                claims data for APC 5161 as they become available.
                 After considering the public comments we received on proposed APC
                assignments and our analysis of the CY 2019 costs from hospital claims
                and cost report data available for this final rule with comment period,
                we are finalizing our proposals, with some modifications. Specifically,
                we are finalizing our proposal to except the 23 proposed APCs from the
                2 times rule for CY 2022.
                 Table 10 below lists the 23 APCs that we are excepting from the 2
                times rule for CY 2022 based on the criteria described earlier and a
                review of claims data for dates of service between January 1, 2019, and
                December 31, 2019, that were processed on or before June 30, 2020. 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.
                BILLING CODE 4120-01-P
                [[Page 63527]]
                [GRAPHIC] [TIFF OMITTED] TR16NO21.022
                BILLING CODE 4120-01-C
                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 2021, there were 52 New Technology APC levels, ranging from
                the lowest cost band assigned to APC 1491 (New Technology--Level 1A
                ($0-$10)) to 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
                market basket increase reduced by the productivity adjustment. 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 utility. Quite
                often, parties request that Medicare make higher payments under the New
                Technology APCs for new procedures in that transitional phase.
                [[Page 63528]]
                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 2022,
                we included the proposed payment rates for New Technology APCs 1491 to
                1599 and 1901 through 1908 in Addendum A to the CY 2022 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 believed it was 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 believed that it
                was 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 defined 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 believed 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 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 believed having the flexibility to
                utilize an alternative statistical
                [[Page 63529]]
                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
                would 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 explained that we
                would 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 identified the most appropriate payment rate for a service, we
                would assign the service to the New Technology APC with the cost band
                that includes its payment rate.
                 For CY 2022, we proposed to continue to utilize our equitable
                adjustment authority under section 1833(t)(2)(E) of the Act to
                calculate the geometric mean, arithmetic mean, and median using up to 4
                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. However, we proposed to utilize our equitable
                adjustment authority through our proposed universal low volume APC
                policy described in section X.C. of the CY 2022 OPPS/ASC proposed rule.
                Our proposed universal low volume APC policy is similar to our current
                New Technology APC low volume policy with the difference between the
                two policies being that the universal low volume APC policy would apply
                to clinical APCs and brachytherapy APCs, in addition to procedures
                assigned to New Technology APCs, and would use the highest of the
                geometric mean, arithmetic mean, or median based on up to 4 years of
                claims data to set the payment rate for the APC. For New Technology
                APCs with fewer than 100 single claims at the procedure level that can
                be used for ratesetting, we would apply our proposed methodology for
                determining a low volume APC's cost, choosing the ``greatest of'' the
                median, arithmetic mean, or geometric mean at the procedure level, to
                apply to the individual services assigned to New Technology APCs and
                provide the final New Technology APC assignment for each procedure. We
                proposed to end our separate New Technology APC low volume policy if we
                adopt the proposed universal low volume APC policy, as it also applies
                to New Technology APCs as well as clinical and brachytherapy APCs.
                 We did not receive any comments on our proposal to end our separate
                New Technology APC low volume policy if we adopt the proposed universal
                low volume APC policy and we have decided to implement our universal
                low volume APC policy as described in section X.C. of this final rule
                with comment period. Therefore, we are implementing our proposal
                without modification and applying our universal low volume APC policy
                to procedures assigned to New Technology APCs as well as clinical and
                brachytherapy APCs.
                3. Procedures Assigned to New Technology APC Groups for CY 2022
                 As we described in the CY 2002 OPPS final rule (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 2022, we proposed to
                retain services within New Technology APC groups until we obtain
                sufficient claims data to justify reassignment of the service to an
                appropriate clinical APC. The flexibility associated with this policy
                allows us to reassign a service from a New Technology APC in less than
                2 years if we have not obtained sufficient claims data. It also allows
                us to retain a service in a New Technology APC for more than 2 years if
                we have not obtained sufficient claims data upon which to base a
                reassignment decision (66 FR 59902).
                a. Retinal Prosthesis Implant Procedure (APC 1908)
                 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. For information on the
                utilization and payment history of the Argus[supreg] II procedure and
                the Argus[supreg] II device prior to CY 2020, please refer to the CY
                2021 OPPS final rule (85 FR 85937 through 85938).
                 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 of this final rule with comment period, we presented the result
                of each statistical methodology in the CY 2022 OPPS/ASC 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 continued 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 continued 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
                [[Page 63530]]
                comparable clinically and with respect to the use of resources. 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. 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,
                and accordingly, we assigned the Argus II procedure to New Technology
                APC 1908 for CY 2021.
                 For 2022, we proposed to utilize our equitable adjustment authority
                under section 1833(t)(2)(E) of the Act to establish the universal low
                volume APC policy described in section X.C. of the CY 2022 OPPS/ASC
                proposed rule. Consistent with this proposed policy, we calculated 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. We proposed to use claims data from CY 2016 through CY
                2019, which are the last 4 years of available OPPS claims data that we
                believe are appropriate for ratesetting, to determine the proposed
                payment rate for the Argus[supreg] II procedure for CY 2022. The claims
                data are the same 35 claims that were used to determine the payment
                rate for CPT code 0100T in CY 2021, and the estimates of the geometric
                mean ($148,148), the arithmetic mean ($153,682), and the median
                ($151,974) are the same as the estimates for CY 2021. All three
                potential statistical methodologies used to estimate the cost of the
                Argus[supreg] II procedure are within the cost band for New Technology
                APC 1908, with the proposed payment rate being between $145,001 and
                $160,000. Accordingly, we proposed to continue to assign the
                Argus[supreg] II procedure to New Technology APC 1908 for CY 2022.
                 For our analysis for this final rule with comment period, we
                identified 35 claims reporting the procedure described by CPT code
                0100T for the 4-year period of CY 2016 through CY 2019, which were the
                same claims analyzed for the CY 2022 OPPS/ASC proposed rule. 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, which are the same results that we calculated for the
                proposed rule. 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). Please see Table 11 below
                for the final OPPS APC and status indicator for the Argus[supreg] II
                procedure (CPT code 0100T) for CY 2022.
                [GRAPHIC] [TIFF OMITTED] TR16NO21.023
                [[Page 63531]]
                b. Administration of Subretinal Therapies Requiring Vitrectomy (APC
                1561)
                 Effective January 1, 2021, CMS established HCPCS code C9770
                (Vitrectomy, mechanical, pars plana approach, with subretinal injection
                of pharmacologic/biologic agent) and assigned it to a New Technology
                APC based on the geometric mean cost of HCPCS code 67036. For CY 2021,
                HCPCS code C9770 was assigned to APC 1561 (New Technology--Level 24
                ($3001-$3500)). This procedure may be used to describe the
                administration of CPT code J3398 (Injection, voretigene neparvovec-
                rzyl, 1 billion vector genomes). This procedure was previously
                discussed in the CY 2021 OPPS/ASC final rule with comment period (85 FR
                85939 through 85940).
                 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.\20\ 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.''
                ---------------------------------------------------------------------------
                 \20\ 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.\21\ However, the
                manufacturer previously contended the administration was not accurately
                described by any existing codes as HCPCS code 67036 (Vitrectomy,
                mechanical, pars plana approach) does not account for the
                administration itself.
                ---------------------------------------------------------------------------
                 \21\ LUXTURNA REIMBURSEMENT GUIDE FOR TREATMENT CENTERS. https://mysparkgeneration.com/pdf/Reimbursement_Guide_for_Treatment_Centers_Interactive_010418_FINAL.pdf.
                ---------------------------------------------------------------------------
                 CMS recognized the need to accurately describe the unique
                administration procedure that is required to administer the therapy
                described by HCPCS code J3398. Therefore, in the CY 2021 OPPS/ASC
                proposed rule (85 FR 48832), 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
                stated that we believed that this new HCPCS code accurately described
                the unique service associated with intraocular administration of HCPCS
                code J3398. We recognized that HCPCS code 67036 represents a clinically
                similar procedure and process that approximates similar resource
                utilization that is associated with C97X1. However, we also recognized
                that it is not prudent for the code that describes the administration
                of this unique 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.
                 Therefore, for CY 2021, we proposed to assign the services
                described by C97X1 to a New Technology APC with a cost band that
                contains the geometric mean cost for HCPCS code 67036. The placeholder
                code C97X1 was replaced by C9770 in this final rule with comment
                period. For CY 2021, we finalized our proposal to create C9770
                (Vitrectomy, mechanical, pars plana approach, with subretinal injection
                of pharmacologic/biologic agent), and we assigned this code to APC 1561
                (New Technology--Level 24 ($3,001-$3,500)) using the geometric mean
                cost of HCPCS code 67036. See Table 12 for the final descriptor and APC
                assignment of HCPCS code C9770 for CY 2021.
                 For CY 2022, we proposed to continue our policy from CY 2021 to
                assign the services described by HCPCS code C9770 to a New Technology
                APC with a cost band that contains the geometric mean cost for HCPCS
                code 67036. We proposed to continue to assign the services described by
                C9770 to a New Technology APC with a payment band based on the
                geometric mean cost for HCPCS code 67036 based on its geometric mean
                cost using CY 2019 claims data for CY 2022. Based on this data, the
                geometric mean cost of HCPCS code 67036 is $3,434.91. Therefore, we
                proposed to assign C9770 to the corresponding New Technology APC
                payment band, APC 1561 New Technology--Level 24 ($3,001-$3,500), with a
                payment rate of $3,250.50. Refer to Table 12 below for the proposed
                OPPS APC and status indicator for HCPCS code C9770 for CY 2022.
                [GRAPHIC] [TIFF OMITTED] TR16NO21.024
                [[Page 63532]]
                 We received no comment on this proposal. Therefore, we are
                finalizing our proposal as proposed to continue our policy from CY 2021
                to assign the services described by HCPCS code C9770 to a New
                Technology APC with a cost band that contains the geometric mean cost
                for HCPCS code 67036. As we proposed to continue to assign the services
                described by C9770 to a New Technology APC with a payment band based on
                the geometric mean cost for HCPCS code 67036 based on its geometric
                mean cost using CY 2019 claims data for CY 2022, we are finalizing this
                proposal. Based on CY 2019 claims data, the geometric mean cost of
                HCPCS code 67036 is $3,435.25 Therefore, we will assign C9770 to the
                corresponding New Technology APC payment band, APC 1561 New
                Technology--Level 24 ($3,001-$3,500), with a payment rate of $3,250.50.
                Please see Table 13 below for the final and proposed OPPS APC and
                status indicator for HCPCS code C9770 for CY 2022.
                [GRAPHIC] [TIFF OMITTED] TR16NO21.025
                c. Bronchoscopy With Transbronchial Ablation of Lesion(s) by Microwave
                Energy (APC 1562)
                 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 final
                rule with comment period, there were four 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 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 $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 provided 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
                fell within the cost band for New Technology APC 1562 (New Technology--
                Level 25 ($3,501-$4,000)). Therefore, we assigned HCPCS code C9751 to
                APC 1562 for CY 2021.
                 For CY 2022, the only available claims for HCPCS code C9751 are
                from CY 2019. Therefore, we proposed given the low number of claims for
                this procedure to 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 appropriate payment
                rate for purposes of assigning bronchoscopy with transbronchial
                ablation of lesions by microwave energy to a New Technology APC,
                consistent with our proposed universal low volume APC policy. Because
                we proposed to use the same claims as we did for CY 2021, we found the
                same values for the geometric mean cost, arithmetic mean cost, and the
                median cost for CY 2022. Once again, the median was the statistical
                methodology that estimated the highest cost for the service and
                provided 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 again within the cost band for New Technology
                APC 1562 (New Technology--Level 25 ($3,501-$4,000)). Therefore, we
                proposed to continue to assign HCPCS code C9751 to APC 1562 (New
                Technology--Level 25 ($3,501-$4,000)), with a proposed payment rate of
                $3,750.50 for CY 2022.
                 For our analysis for this final rule with comment period, we again
                used CY 2019 data, and we identified the same four claims reported for
                bronchoscopy with transbronchial ablation of lesions by microwave
                energy that were analyzed for the proposed rule and in CY 2021. Since
                the same claims were analyzed we received the same values for the
                geometric mean cost ($2,693), arithmetic mean cost ($3,086), and the
                median cost ($3,708) as we did for the proposed rule. As before, 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 again within the cost band
                for New Technology APC 1562 (New Technology--Level 25 ($3,501-$4,000)).
                 We did not receive any public comments regarding our proposal. We
                [[Page 63533]]
                are finalizing our proposal without modification to continue to assign
                HCPCS code C9751 to APC 1562 (New Technology--Level 25 ($3,501-
                $4,000)), with a final payment rate of $3,750.50 for CY 2022. Details
                regarding HCPCS code C9751 are included in Table 14.
                [GRAPHIC] [TIFF OMITTED] TR16NO21.026
                d. Fractional Flow Reserve Derived From Computed Tomography (FFRCT)
                (APC 1511)
                 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/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 for which we had Medicare claims data to
                calculate the cost of HCPCS code 0503T. For the CY 2020 OPPS/ASC final
                rule with comment period, 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 claims for CPT code 0503T was below the low-volume payment
                policy threshold for the proposed rule, and this number of single
                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 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-$1,000)) 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. Specifically, using CY 2019 data, we
                identified 3,188 claims billed with CPT code 0503T including 465 single
                frequency claims. These totals are well above the threshold of 100
                claims for a procedure to be evaluated using the New Technology APC
                low-volume policy. Therefore, we used our standard methodology rather
                than the low-volume methodology we previously
                [[Page 63534]]
                used to determine the cost of CPT code 0503T. Our analysis found that
                the geometric mean for CPT code 0503T was $804.35, and the geometric
                mean cost for the service fell within the cost band for New Technology
                APC 1510 (New Technology--Level 10 ($801-$900)). However, providers and
                other stakeholders 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.
                 We noted that 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 (85 FR
                85943). This is especially the case for allocating the cost of staff
                resources between the HeartFlow procedure and the coronary CT imaging
                services. Therefore, we decided 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. Accordingly, we assigned CPT code 0503T to New Technology APC
                1511 (New Technology--Level 11 ($901-$1,000)) with a payment rate of
                $950.50 for CY 2020, and we continued to assign CPT code 0503T to New
                Technology APC 1511 for CY 2021.
                 For CY 2022, we proposed to use claims data from CY 2019 to
                estimate the cost of the HeartFlow service. Because we are using the
                same claims data as in CY 2021, these data continue to reflect that
                providers were learning how to accurately report their charges to
                Medicare when billing for artificial intelligence services. Therefore,
                we proposed to continue 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 2022 as in CY 2020 and CY 2021: New Technology
                APC 1511 (New Technology--Level 11 ($901-$1000)), with a payment rate
                of $950.50 for CY 2022, which is the same payment rate for the service
                as in CY 2020 and CY 2021.
                 Comment: The developer of HeartFlow and multiple other commenters
                stated that 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 APCs. 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. As we stated in the CY 2021 OPPS/ASC
                final rule with comment period (85 FR 85942), the Nuclear Medicine and
                Related Procedures APCs describe 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. We appreciate that there may be a limited
                number of examples where a procedure may have only a little clinical
                similarity to other procedures in the same APC, but we attempt to make
                those situations an exception rather than our regular practice. There
                is little clinical similarity between the HeartFlow procedure and the
                procedures currently assigned to the Nuclear Medicine and Related
                Procedures APCs and we are therefore not assigning CPT code 0503T to
                APC 5593.
                 Comment: One commenter, the developer, suggested that, if we
                decided not to assign CPT code 0503T to a Nuclear Medicine and Related
                Services APC, that we assign the service to APC 5724 (Level 4--Level 4
                Diagnostic Tests and Related Services) with a payment rate of $896.09.
                The commenter states Heartflow generates critical diagnostic
                information for the treating physician and an anatomical mapping of FFR
                values that assists the physician in determining whether an invasive
                procedure is needed for a patient. Because HeartFlow generates
                diagnostic information, the commenter believes it can be described as a
                diagnostic service or a service related to a diagnostic service and can
                be assigned to APC 5724. The commenter gives examples of software-based
                services that are already assigned to APC 5724 and notes that the
                geometric mean cost of CPT code 0503T places the service in the
                midrange of cost for separately paid services assigned to APC 5724.
                 Response: We appreciate the commenter's suggestion. However, one of
                the key reasons we assigned CPT code 0503T to a New Technology APC for
                CY 2021 and proposed assigning the service again to a New Technology
                APC for CY 2022, is that we are continuing to seek more cost data for
                the service before assigning it to a clinical APC. As mentioned
                earlier, we want to get a better understanding of the cost of HeartFlow
                as providers become more familiar with reporting and billing for
                artificial intelligence services. More broadly, we believe we need at
                least one more year of cost data before assigning HeartFlow to a
                clinical APC. Our concerns that the CY 2020 claims data and may not
                represent the outpatient hospital experience in CY 2022 make it
                challenging to refine or update our payment quality for HeartFlow given
                the need for additional claims data.
                 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 $1,151 up to $2,100, and they encouraged CMS
                to use our equitable adjustment authority at section 1833(t)(2)(E) of
                the Act to establish an OPPS payment rate that would more closely
                reflect the costs the commenters believe they are incurring to perform
                the HeartFlow procedure.
                 Response: For this final rule with comment period, we identified
                3,188
                [[Page 63535]]
                claims billed with CPT code 0503T including 465 single frequency claims
                for CPT code 0503T using claims from CY 2019. Our analysis has found
                that the geometric mean for CPT code 0503T is $807.58, and the
                geometric mean cost is lower than the cost band for New Technology APC
                1511 New Technology--Level 11 ($901-$1000) where CPT code 0503T is
                assigned. This result is similar to our results for the proposed rule
                and the CY 2021 OPPS/ASC final rule, which all used CY 2019 claims
                data. 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. Also, the COVID-19 PHE
                potentially has affected the quality of the claims and cost data from
                CY 2020, and we have decided not to use that data to determine the
                payment rate for CPT code 0503T. That means it is difficult to
                determine whether the additional costs for HeartFlow that commenters
                state that their practices are incurring are reflected in the cost data
                for the service.
                 Therefore, we believe it is appropriate to continue 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 2022 as
                in CY 2020 and CY 2021 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 until we can review more recent
                reliable claims data. 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
                2022.
                 After reviewing all of the public comments, we are finalizing our
                proposal without modification to use 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 2022. Refer to Table 15 below for the final OPPS APC and
                status indicator for CPT code 0503T for CY 2022.
                [GRAPHIC] [TIFF OMITTED] TR16NO21.027
                e. Cardiac Positron Emission Tomography (PET)/Computed Tomography (CT)
                Studies (APCs 1522 and 1523)
                 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. Table 16 lists the code
                descriptors, status indicators, and APC assignments for these CPT
                codes. 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 did not receive any claims
                data for these services for CY 2021. Therefore, we continued to assign
                CPT code 78431 to APC 1522 (New Technology--Level 22 ($2001-$2500))
                with a payment rate of $2,250.50. Likewise, CPT codes 78432 and 78433
                continued to be assigned to APC 1523 (New Technology--Level 23 ($2501-
                $3000)) with a payment rate of $2,750.50.
                 For CY 2022, we proposed to use CY 2019 claims data to determine
                the payment rates for CPT codes 78431, 78432, and 78433. Because these
                codes did not become active until CY 2020, there are no claims for
                these three services. Accordingly, we proposed to continue to assign
                CPT code 78431 to APC 1522 (New Technology--Level 22 ($2001-$2500))
                with a payment rate of $2,250.50. Likewise, we proposed that CPT codes
                78432 and 78433 would continue to be assigned to APC 1523 (New
                Technology--Level 23 ($2501-$3000)) with a payment rate of $2,750.50.
                 Comment: Multiple commenters supported 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
                [[Page 63536]]
                ($2501-$3000)) with a payment rate of $2,750.50. Commenters noted that
                there were no available claims data for these services as we are using
                CY 2019 claims data for CY 2022 ratesetting, and these codes did not
                become active until January 2020.
                 Response: We appreciate the support of the commenters for our
                policy. After our review of the public comments, we have decided to
                implement our proposal without modification. Table 16 lists code
                descriptors, status indicators, and APC assignments for these CPT
                codes.
                BILLING CODE 4120-01-P
                [GRAPHIC] [TIFF OMITTED] TR16NO21.028
                BILLING CODE 4120-01-C
                f. V-Wave Medical Interatrial Shunt Procedure (APC 1590)
                 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, for CY 2020, 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
                [[Page 63537]]
                (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)).
                 We stated in the CY 2021 OPPS/ASC final rule with comment period
                that we believe that similar resources and device costs are involved
                with the V-Wave interatrial shunt procedure and the Corvia Medical
                interatrial shunt procedure (85 FR 85946). 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.
                Accordingly, for CY 2021, we reassigned 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.
                 For CY 2022, we are using the same claims data that we did for CY
                2021. Because there are no claims reporting HCPCS code C9758, we
                proposed to continue to assign HCPCS code C9758 to New Technology APC
                1590 with a payment rate of $17,500.50 for CY 2022.
                 Comment: Multiple commenters including the manufacturer supported
                our proposal to continue to assign HCPCS code C9758 to New Technology
                APC 1590 with a payment rate of $17,500.50 for CY 2022.
                 Response: We appreciate the support of the commenters for our
                proposal. After reviewing the public comments, we are finalizing our
                proposal without modification. Details about the HCPCS code and its APC
                assignment are shown in Table 17. The final CY 2022 payment rate for
                C9758 can be found in Addendum B to this final rule with comment
                period.
                [GRAPHIC] [TIFF OMITTED] TR16NO21.029
                g. Corvia Medical Interatrial Shunt Procedure (APC 1592)
                 Corvia Medical is currently conducting its pivotal trial for their
                interatrial shunt procedure. The trial started in Quarter 1 of CY 2017
                and is scheduled to continue through CY 2021.\22\ 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.
                ---------------------------------------------------------------------------
                 \22\ https://clinicaltrials.gov/ct2/show/NCT03088033?term=NCT03088033&rank=1.
                ---------------------------------------------------------------------------
                 As we stated in the CY 2021 OPPS final rule with comment period, we
                believe that similar resources and device costs are involved with the
                Corvia Medical interatrial shunt procedure and the V-Wave interatrial
                shunt procedure (85 FR 85947). 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, for CY 2021, we assigned HCPCS code C9760 to New Technology
                APC 1592 (New Technology--Level 41 ($25,001-$30,000)) with a payment
                rate of $27,500.50. We also modified the code descriptor for HCPCS code
                C9760 to remove the phrase ``or placebo control,'' from the descriptor.
                For CY 2022, we proposed to use the same claims data as in CY 2021 to
                establish payment rates for services. Therefore, there are no claims
                for HCPCS code C9760, and we proposed to continue to assign HCPCS code
                C9760 to New Technology APC 1592.
                 Comment: Multiple commenters, including the manufacturer, supported
                our proposal to continue to assign HCPCS code C9760 to New Technology
                APC 1592.
                 Response: We appreciate the support of the commenters of our
                proposal.
                 Comment: One commenter, the manufacturer, requested that CPT code
                0613T (Percutaneous transcatheter implantation of interatrial septal
                shunt device, including right and left heart catheterization,
                intracardiac echocardiography, and imaging guidance by the
                proceduralist, when performed) be assigned to comprehensive APC 5194
                (Level 4
                [[Page 63538]]
                Endovascular Procedures) for CY 2022 and assigned a status indicator of
                ``J1''. CPT code 0613T is the CPT code that will be used to report the
                Corvia Medical interatrial shunt procedure once the Corvia Medical
                interatrial shunt device associated with the procedure receives
                approval from the FDA, which the manufacturer believes will occur in CY
                2022. Currently, CPT code 0613T is a non-payable service code and is
                assigned a status indicator of ``E1''.
                 Response: We will assign CPT code 0613T to a payable status
                indicator and assign the service to a clinically-appropriate APC when
                the Corvia Medical interatrial shunt device associated with the
                procedure has received approval from the FDA. OPPS payment policies are
                updated quarterly through a sub-regulatory process. If the Corvia
                Medical interatrial shunt device receives FDA approval, we will work to
                ensure a timely transition for the overall procedure to be reported
                with CPT code 0613T and end reporting of the service with HCPCS code
                C9760. We will also work to assign CPT code 0613T to an APC that
                reflects clinical and resource similarity to CPT code 0613T.
                 Details about the HCPCS code and its APC assignment are shown in
                Table 18. The final CY 2022 payment rate for C9760 can be found in
                Addendum B to this final rule with comment period.
                [GRAPHIC] [TIFF OMITTED] TR16NO21.030
                h. Supervised Visits for Esketamine Self-Administration (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 56 mg
                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 through nasal self-administration and includes 2 hours
                post-administration observation. HCPCS code G2082 was assigned to New
                Technology APC 1508 (New Technology--Level 8 ($601--$700)) with a
                payment rate of $650.50. HCPCS code G2083 describes a similar
                [[Page 63539]]
                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.
                 For CY 2022, we are using CY 2019 claims data to determine the
                payment rates for HCPCS codes G2082 and G2083. Since these codes did
                not become active until CY 2020, there are no claims for these two
                services. Therefore, for CY 2022, we proposed to continue to assign
                HCPCS code G2082 to New Technology APC 1508 (New Technology--Level 8
                ($601-$700)) and to assign HCPCS code G2083 to New Technology APC 1511
                (New Technology--Level 11 ($901-$1000)).
                 Comment: One commenter, the manufacturer, while understanding the
                rationale for our proposal to use CY 2019 claims data for CY 2022
                ratesetting, asked us to take into consideration CY 2020 claims data to
                finalize payment rates for HCPCS codes G2082 and G2083. The commenter
                noted that HCPCS codes G2082 and G2083 were not payable in CY 2019, and
                therefore there is no cost information in the CY 2019 claims data for
                these two procedures. The commenter also believes that CY 2020 data may
                show that the cost of G2082 and G2083 is substantially higher than the
                current New Technology APC assignments for the two services.
                 Response: We reviewed the available CY 2020 OPPS claims data in
                response to the request by the commenter for HCPCS codes G2082 and
                G2083, but we decided that there were not enough data available to
                determine whether to change the APC assignments for HCPCS codes G2082
                and G2083. We would like to review another year of claims data for
                HCPCS codes G2082 and G2083 to assess the reliability of the cost
                information for CY 2020 and CY 2021 before using claims data to base
                our APC assignments for these services. Therefore, we will continue to
                use the same APC assignments for HCPCS codes G2082 and G2083 for CY
                2022 as for CY 2021.
                 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 19. The final CY 2022 payment rate for
                esketamine self-administration can be found in Addendum B to this final
                rule with comment period.
                [GRAPHIC] [TIFF OMITTED] TR16NO21.031
                i. DARI Motion Procedure (APC 1505)
                 CPT code 0693T (Comprehensive full body computer-based markerless
                3D kinematic and kinetic motion analysis and report) will be effective
                January 1, 2022. The technology consists of eight cameras that surround
                a patient. The cameras send live video to a computer workstation that
                analyzes the video to create a 3D reconstruction of the patient without
                the need for special clothing, markers or devices attached to the
                patient's clothing or skin. The technology is intended to guide health
                care providers on pre and post-operative surgical intervention and on
                the best course of physical therapy and rehabilitation for patients.
                 As displayed in Addendum B to the CY 2022 OPPS/ASC proposed rule,
                we
                [[Page 63540]]
                proposed to assign CPT code 0693T to APC 5721 (Level 1 Diagnostics and
                Related Services) with a proposed payment rate of $143.21. We note that
                CPT code 0693T was listed as placeholder code 0X60T in OPPS Addendum B
                of the CY 2021 OPPS/ASC proposed rule.
                 Comment: One commenter, the manufacturer of the DARI Motion
                procedure, requested that CMS assign CPT code 0693T to APC 5723 (Level
                3 Diagnostics and Related Services) with a payment rate of $498.53. The
                commenter believed that the payment rate for APC 5721 is inadequate and
                will create a barrier to patient access.
                 Response: We appreciate the concerns of the commenter and, for the
                reasons set forth below, agree that the proposed payment rate for CPT
                code 0693T may be too low and the procedure should be reassigned to a
                different APC.
                 The AMA releases Category III codes in January, for implementation
                beginning the following July, and in July, for implementation beginning
                the following January. DARI Motion received a Category III code
                scheduled for implementation January 1, 2022. Some Category III CPT
                codes describe services that we have determined are not compatible with
                an existing clinical APC, yet are appropriately provided in the
                hospital outpatient setting. In these cases, we may assign the Category
                III CPT code to what we estimate is an appropriately priced New
                Technology APC (71 FR 68015). In addition, it should be noted that,
                with all new codes, CMS's policy has been to assign the service to an
                APC based on input from a variety of sources, including but not limited
                to review of the clinical similarity of the service to existing
                procedures, input from CMS medical advisors, information from
                interested specialty societies, 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 information
                from the manufacturer, resources involved for the procedure described
                by CPT code 0693T appear to be higher than the payment rate for APC
                5721 (Level 1 Diagnostics and Related Services). CPT code 0693T is new
                for CY 2022 and, therefore, we had no claims data available for OPPS
                ratesetting. Further, based on input from our medical advisors and our
                understanding of the service, we believe that it is more appropriate to
                assign the DARI Motion procedure to APC 1505 (New Technology--Level 5
                ($301-$400)), for CY 2022. We believe that assigning CPT code 0693T to
                New Technology APC 1505 will allow CMS to collect claims data before
                assigning CPT code 0693T to a clinical APC.
                 Comment: A commenter argued the assignment of CPT code 0693T to APC
                5721 would create a 2 times rule violation within the APC based on
                geometric mean costs. The commenter calculated the 2-times threshold by
                multiplying the lowest cost significant procedure by 2 and arrived at a
                2-times threshold. According to the commenter, the 2-times threshold
                they calculated for APC 5721 is a lower payment rate than the
                technology described by CPT code 0693T. The commenter asserted that
                assigning CPT code 0693T to APC 5721 is a violation of the 2 times
                rule.
                 Response: We thank the commenter for their feedback. To clarify, we
                determine APC 2 times rule violations by considering 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). CPT code 0693T is new for CY 2022 and, therefore, we had no
                claims data available for purposes of determining whether a 2 times
                rule violation occurs based on the code.
                 In summary, after consideration of the public comments, we are
                finalizing our proposal with modification, and assigning CPT code 0693T
                to New Technology APC 1505 (New Technology--Level 5 ($301-$400)), for
                CY 2022. The final APC assignment and status indicator for CPT code
                0693T are found in Table 20. We refer readers to Addendum B of this
                final rule with comment period or the final payment rates for all codes
                reportable under the OPPS. Addendum B is available via the internet on
                the CMS website.
                 As we do for all codes, we will reevaluate the APC assignments for
                CPT code 0693T once we have claims data. 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.
                [GRAPHIC] [TIFF OMITTED] TR16NO21.032
                [[Page 63541]]
                j. Histotripsy Service (APC 1575)
                 Histotripsy is a non-invasive, non-thermal, mechanical process that
                uses a focused beam of sonic energy to destroy targeted cancerous liver
                tumors. The AMA's CPT Editorial Panel established a new code to
                describe the service associated with histotripsy, specifically,
                Category III CPT code, 0686T (Histotripsy (that is, non-thermal
                ablation via acoustic energy delivery) of malignant hepatocellular
                tissue, including image guidance), effective July 1, 2021.
                 As displayed in Addendum B of the CY 2022 OPPS/ASC proposed rule
                with comment period, for CY 2022, we proposed to assign the new code to
                APC 5311 (Level 1 Lower GI Procedures) with a payment rate of $814.44
                effective January 1, 2022.
                 Comment: One commenter, the manufacturer of histotripsy, stated
                that histotripsy is a new technology that delivers short pulses of
                ultrasound energy, resulting in acoustic cavitation that mechanically
                destroys the targeted cancerous liver tumors while avoiding damage to
                intervening or surrounding healthy tissues. The commenter stated that
                the proposed assignment of CPT code 0686T to APC 5311 (Level 1 Lower GI
                Procedures) was not clinically or resource cohesive to histotripsy. The
                commenter reported a list of HCPCS codes currently assigned to APC 5311
                and argued that the codes are not clinically or resource similar to
                histotripsy. The commenter referenced histotripsy's IDE clinical study
                (G200253-NCT04573881) and provided a description of the histotripsy
                procedure and a breakdown of the associated resource components. The
                commenter also provided a cost estimate of each resource, such as the
                device cost, the associated imaging cost, and total room time. The
                commenter stated that the total cost for the procedure is $22,782.51
                and requested assignment to a New Technology APC 1577 for the
                histotripsy service.
                 Response: We appreciate the commenter's input on this new
                technology. As stated in the CY 2002 OPPS final rule, CMS staff will
                obtain information on cost from other appropriate sources before making
                a final determination on the cost of the procedure or service to
                hospital outpatient facilities (66 FR 59900). We note that for Category
                A IDE studies, Medicare may not furnish payment for costs associated
                with the histotripsy device since Category A devices are statutorily
                excluded from Medicare coverage. Based on our evaluation, for CY 2022,
                we estimated the cost of histotripsy, after removing the device cost,
                is within the cost band between $10,001 and $15,000. Accordingly, we
                believe reassigning CPT code 0686T to APC 1575 (New Technology--Level
                38 ($10,001-$15,000)), with a payment rate of $12,500.50, more
                appropriately reflects the costs for which Medicare may provide
                payment. We note that we retain services within New Technology APC
                groups until we obtain sufficient claims data to justify reassignment
                of the service to a clinically appropriate APC.
                 In summary, after consideration of the public comments, we are
                finalizing our proposal with modifications. Specifically, we are
                assigning CPT code 0686T to APC 1575 for CY 2022. The final CY 2022
                OPPS payment rates 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 SI meanings
                for all codes reported under the OPPS. Both Addenda B and D1 are
                available via the internet on the CMS website.
                k. Liver Multiscan Service (APC 1511)
                 Liver MultiScan is a Software as a medical Service (SaaS) that is
                intended to aid the diagnosis and management of chronic liver disease,
                the most prevalent of which is Non-Alcoholic Fatty Liver Disease
                (NAFLD). It provides standardized, quantitative imaging biomarkers for
                the characterization and assessment of inflammation, hepatocyte
                ballooning, and fibrosis, as well as steatosis, and iron accumulation.
                The SaaS receives MR images acquired from patients' providers and
                analyzes the images using their proprietary Artificial Intelligence
                (AI) algorithms. The SaaS then send the providers a quantitative metric
                report of the patient's liver fibrosis and inflammation. The AMA CPT
                Editorial Panel established two new codes, specifically, Category III
                CPT codes 0648T and 0649T for LiverMultiScan effective July 1, 2021,
                and CMS assigned the Category III CPT code 0648T to APC 5523 (Level 3
                Imaging without Contrast) with a status indicator of ``S'' effective
                July 1, 2021. We note that CPT code 0649T is packaged per our packaging
                policy for add-on code procedures. For the complete code descriptors
                for both codes, refer to Table 21.
                 For CY 2022, we proposed to assign CPT code 0648T to APC 5523
                (Level 3 Imaging without Contrast) with a payment rate of $236.14
                effective January 1, 2022, and assign the add-on code, CPT code 0649T,
                to OPPS status indicator ``N'' (packaged) to indicate that payment for
                the add-on service is included in the primary service.
                [[Page 63542]]
                [GRAPHIC] [TIFF OMITTED] TR16NO21.033
                 Comment: Several commenters stated that LiverMultiScan is a new
                technology that represents a breakthrough for the diagnosis and
                monitoring of chronic parenchymal liver disease that will reduce the
                number of invasive procedures. The commenters stated that
                LiverMultiScan is an MRI measure of hepatic steatosis with performance
                equivalent to liver biopsy and superior to liver fat measures using
                ultrasound. Some commenters cited that biopsy is the gold standard for
                diagnosis, but it is not commonly used because of cost, patient
                discomfort, risk of complications, and possible sampling error. Another
                commenter stated that LiverMultiScan has excellent diagnostic accuracy
                for at-risk Nonalcoholic steotohepatitis (NASH), detects changes in
                response to investigational treatments within a very short timeframe,
                and predicts clinical outcomes in patients with liver disease as well
                as liver biopsy. The commenters believe LiverMultiScan improves the
                management of NAFLD by helping patients connect with their liver
                health, which encourages these patients to their recommended course of
                treatment. The commenters stated the assignment of CPT code 0648T to
                APC 5523 (Level 3 Imaging without Contrast) does not adequately cover
                the cost of delivering this service and discourages adoption of
                advanced liver care. The commenters stated that their hospital
                outpatient cost for the service is between $1,300 to $1,500 (versus
                approximately $7,000 for a liver biopsy), and they requested assignment
                of LiverMultiScan to a New Technology APC. One commenter referenced
                CMS's decision on Heartflow, which was initially packaged and then
                later recognized as a distinct service. The commenter requested CMS
                recognize LiverMultiScan as a distinct service.
                 Response: We appreciate the commenters' feedback on this new
                technology. We note that before we assign a new service to a New
                Technology APC, we first perform our own cost analysis and cost
                estimate. As we stated in the CY 2002 OPPS final rule (66 FR 59900), we
                do not limit our determination of the cost of the procedure to
                information suggested by the commenters (or information submitted by
                the applicant for New Technology applications). To appropriately assign
                a service to a New Technology APC, our staff will obtain information on
                cost from other appropriate sources, including acquiring input from our
                medical advisors on the appropriateness of the service in the hospital
                outpatient setting, before making a final determination on the cost of
                the procedure or service. Based on the information provided, we
                recognize that LiverMultiScan is a new technology that will aid in the
                management of beneficiaries with NAFLD, which may avoid liver biopsies.
                We note that liver biopsy remains the current gold standard for
                diagnosing NASH, determining grade disease severity, and accurately
                staging fibrosis. Based on our evaluation of the service, we agree with
                the commenter's suggested reference to Heartflow. That is, we believe
                that LiverMultiScan and Heartflow share similar characteristics based
                on the nature of how the service is provided in the hospital outpatient
                setting. Both LiverMultiScan and Heartflow require the acquisition of
                radiological images as well as analysis of the images using proprietary
                AI algorithms to assist clinicians in appropriately diagnosing a
                patient's medical condition. In addition, our analysis of the estimated
                cost associated for this service is between $901 and $1,000. Therefore,
                after further evaluation of the service and the resources required to
                perform the LiverMultiScan analysis, we believe it is appropriate to
                assign this service to a New Technology APC, specifically, APC 1511
                (New Technology--Level 11 ($901-$1000)), which is the same APC
                assignment for Heartflow. Accordingly, we are assigning CPT code 0648T
                to New Technology APC 1511). We note that we retain services within New
                Technology APC groups until we obtain sufficient claims data to justify
                reassignment of the service to a clinically appropriate APC. For CPT
                code 0649T, an add-on code, we believe that our assignment of the
                status indicator of ``N'' is appropriate under 42 CFR 419.2(b). We note
                that CMS does not create the Category III CPT codes or their
                descriptors, but we follow an established set of payment policies
                consistent with our OPPS packaging policy. As stated in section III.A.
                ``OPPS Treatment of New and Revised HCPCS Codes'' of this final rule
                with comment period, CPT codes are established and maintained by the
                American Medical Association (AMA), and changes to CPT codes should be
                referred to the AMA.
                 In summary, after consideration of the public comment, we are
                finalizing our proposal with modification, to assign CPT code 0648T to
                New Technology APC 1511 ((New Technology--Level 11 ($901-$1000), for CY
                2022. Also, we are finalizing our proposal, without
                [[Page 63543]]
                modification, for CPT code 0649T and assigning the code to OPPS status
                indicator ``N'' for CY 2022. The final APC assignment and status
                indicators for CPT codes 0648T and 0649T can be found in OPPS Addendum
                B. We refer readers to Addendum B of the final rule for the final
                payment rates for all codes reportable under the OPPS. In addition, we
                refer readers to Addendum D1 of this final rule with comment period for
                the SI meanings for all codes reported under the OPPS. Both Addendum B
                and Addendum D1 are available via the internet on the CMS website.
                l. Minimally Invasive Glaucoma Surgery (MIGS) (APCs 5491 and 5492)
                 Prior to CY 2022, extracapsular cataract removal with insertion of
                intraocular lens was reported using CPT codes describing cataract
                removal alongside a CPT code for device insertion. Specifically, the
                procedure was described using CPT codes 66982 (Extracapsular cataract
                removal with insertion of intraocular lens prosthesis (1-stage
                procedure), manual or mechanical technique (for example, irrigation and
                aspiration or phacoemulsification), complex, requiring devices or
                techniques not generally used in routine cataract surgery (for example,
                iris expansion device, suture support for intraocular lens, or primary
                posterior capsulorrhexis) or performed on patients in the amblyogenic
                developmental stage; without endoscopic cyclophotocoagulation) or 66984
                (Extracapsular cataract removal with insertion of intraocular lens
                prosthesis (1-stage procedure), manual or mechanical technique (for
                example, irrigation and aspiration or phacoemulsification); without
                endoscopic cyclophotocoagulation) and 0191T (Insertion of anterior
                segment aqueous drainage device, without extraocular reservoir,
                internal approach, into the trabecular meshwork; initial insertion).
                For CY 2022, the AMA's CPT Editorial Panel created two new Category I
                CPT codes describing extracapsular cataract removal with insertion of
                intraocular lens prosthesis, specifically, CPT codes 66989 and 6691,
                deleted a Category III CPT code, specifically, CPT code 0191T,
                describing insertion of anterior segment aqueous drainage device, and
                created a new Category III CPT code, specifically, CPT code 0671T,
                describing interior segment aqueous drainage device without concomitant
                cataract removal. We proposed the following APC assignment:
                 CPT code 66989 (Extracapsular cataract removal with
                insertion of intraocular lens prosthesis (1-stage procedure), manual or
                mechanical technique (e.g., irrigation and aspiration or
                phacoemulsification), complex, requiring devices or techniques not
                generally used in routine cataract surgery (e.g., iris expansion
                device, suture support for intraocular lens, or primary posterior
                capsulorrhexis) or performed on patients in the amblyogenic
                developmental stage; with insertion of intraocular (e.g., trabecular
                meshwork, supraciliary, suprachoroidal) anterior segment aqueous
                drainage device, without extraocular reservoir, internal approach, one
                or more) to APC 5492 (Level 2 Intraocular Procedures) with a proposed
                status indicator (SI) of ``J1'' and proposed payment rate of $4,018.82.
                We note this code was listed as placeholder code 669X1 in the OPPS
                Addendum B of the CY 2022 OPPS/ASC proposed rule.
                 CPT code 66991 (Extracapsular cataract removal with
                insertion of intraocular lens prosthesis (1 stage procedure), manual or
                mechanical technique (for example, irrigation and aspiration or
                phacoemulsification); with insertion of intraocular (for example,
                trabecular meshwork, supraciliary, suprachoroidal) anterior segment
                aqueous drainage device, without extraocular reservoir, internal
                approach, one or more) to APC 5492. We note this code was listed as
                placeholder code 669X2 in the OPPS Addendum B of the CY 2022 OPPS/ASC
                proposed rule.
                 CPT code 0671T (Insertion of anterior segment aqueous
                drainage device into the trabecular meshwork, without external
                reservoir, and without concomitant cataract removal, one or more) to
                APC 5491 (Level 1 Intraocular Procedures) with a proposed SI of ``J1''
                and a proposed payment rate of $2,131.25. We note this code was listed
                as placeholder code 0X12T in the OPPS Addendum B of the CY 2022 OPPS/
                ASC proposed rule.
                 At the August 23, 2021 HOP Panel Meeting, a presenter requested
                that we reassign CPT codes 66989 and 66991 to APC 5493 (Level 3
                Intraocular Procedures) with a proposed payment rate of $7,529.00, and
                reassign 0671T to APC 5492, citing concerns over a decrease in payment
                for MIGS between how it is currently coded and how it will be coded
                beginning January 1, 2022. Based on the discussion during the meeting,
                the HOP Panel recommended that CMS reassign CPT codes 66989 and 66991
                to APC 5493 and reassign 0671T to APC 5492.
                 Comment: Most commenters opposed the proposed APC assignment for
                these services and recommended that CMS implement the APC assignments
                recommended by the HOP Panel. They stated that the proposed APC
                assignments do not accurately account for the costs associated with
                MIGS and would result in an overall decrease in payment for MIGS from
                the current payment rates and that this decrease would negatively
                impact access to this service. Commenters stated placement in APC 5493
                and APC 5492 would better account for the resources associated with
                performing CPT codes 66989 and 66991, and CPT code 0671T, respectively.
                Commenters also suggested that CMS could consider assignment of these
                services to a New Technology APC or create an incremental intraocular
                APC between APC 5492 and 5493.
                 Response: We do not believe that the costs associated with
                performing MIGS are accurately reflected by APC 5493. We note that
                while APC 5491 (Level 1 Intraocular Procedures) and APC 5492 have 40 or
                greater separately payable services assigned to them, only one service
                is assigned to the APCs 5493, 5494, and 5495 (Level 3-5 Intraocular
                Procedures, respectively). In instances where a single procedure is
                assigned to an APC, the geometric mean cost and the resulting payment
                rate is largely based on the geometric mean of the individual service
                assigned to the APC. However, we note that while only one service is
                assigned to APC 5493, there are certain complexity adjustments that
                move certain services assigned to the APC 5492 to APC 5493 when billed
                concurrently. These changes are also reflected in the claims data we
                use to develop geometric mean costs and the resulting payment rates. We
                note that the proposed payment rate for APC 5493 is almost double the
                payment rate for APC 5492. We also believe that the change in coding
                for MIGS is significant in that it changes longstanding billing for the
                service from reporting two separate CPT codes to reporting a single
                bundled code. Without claims data, and given the magnitude of the
                coding change, we do not believe we have the necessary information on
                the costs associated with CPT codes 66989 and 66991 to assign them to a
                clinical APC at this time. We agree with commenters that reassignment
                to a New Technology APC will maintain payment accuracy for these
                services while we collect cost data to support reassignment to the
                relevant clinical APC. We believe that APC 1526 (New Technology--Level
                26 ($4001-$4500)), with a payment rate of $4,250.50, most accurately
                accounts for the resources associated with furnishing MIGS.
                 We regard to CPT code 0671T, we note that this code describes
                insertion of
                [[Page 63544]]
                intraocular lens without concurrent cataract removal and would not be
                billed alongside CPT codes 66989 or 66991. Based on our review of the
                clinical characteristics of the procedure and input from our medical
                advisors, we continue to believe that this service is more similar to
                the other services in APC 5491.
                 In summary, after consideration of the public comments, we are
                finalizing the reassignment of CPT codes 66989 and 66991 to APC 1526
                and assignment of CPT code 0671T to APC 5491. The final CY 2022 OPPS
                payment rates for this code can be found in Addendum B to this final
                rule with comment period. In addition, we refer readers to Addendum D1
                to 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.
                m. Scalp Cooling (APC 1520)
                 For July 1, 2021, the CPT Editorial Panel created CPT code 0662T to
                describe initial measurement and calibration of a scalp cooling device
                for use during chemotherapy administration to prevent hair loss. For CY
                2022, we proposed to assign CPT code 0662T (Scalp cooling, mechanical;
                initial measurement and calibration of cap) to APC 5732 (Level 2 Minor
                Procedures) with a proposed payment rate of $34.72.
                 At the August 23, 2021 HOP Panel Meeting, a presenter requested
                that we reassign CPT code 0662T to one of the following APCs:
                 APC 5054 (Level 4 Skin Procedures) with a proposed payment
                rate of $1,759.21,
                 APC 5055 (Level 5 Skin Procedures) with a proposed payment
                rate of $3,613.14,
                 APC 1519 (New Technology--Level 19 ($1,701-$1,800)) with a
                proposed payment rate of $1,750.50, or
                 APC 1520 (New Technology--Level 20 ($1,801-$1,900)) with a
                proposed payment rate of $1,850.50
                 Based on the information presented, the HOP Panel recommended that
                CMS assign CPT code 0662T to a New Technology APC.
                 Comment: Commenters encouraged CMS to accept the HOP Panel's
                recommendation and assign CPT code 0662T to APC 1519 or 1520 or
                reassign CPT code 0662T to either APC 5054 or 5055. Commenters stated
                that the cost of the scalp cooling cap itself was around $600 and that
                the rest of the costs associated with performing the measurement and
                calibration were around $2,500-$3,000.
                 Response: Based on the information presented at the HOP Panel
                meeting, as well as input from our clinical advisors, and analysis of
                the information provided by the commenters, we believe that the
                procedure described by CPT code 0662T should be assigned to a New
                Technology APC. We note that according to Medicare's National Coverage
                Determination (NCD) policy, specifically, NCD 110.6 (Scalp Hypothermia
                During Chemotherapy to Prevent Hair Loss), the scalp cooling cap itself
                is classified as an incident to supply to a physician service, and
                would not be paid under the OPPS; however, stakeholders have indicated
                that there are substantial resource costs associated with calibration
                and fitting of the cap. Based on the estimate of costs provided by the
                commenter, without taking into account the costs of the cap, the
                overall cost associated with CPT code 0662T is between $1,900-$2,400,
                supporting reassignment to New Technology APC 1520. CPT guidance states
                that CPT code 0662T should be billed once per chemotherapy session,
                which we interpret to mean once per course of chemotherapy. Therefore,
                if a course of chemotherapy involves 6 or 18 sessions, HOPDs should
                report CPT 0662T only once for that 6 or 18 therapy sessions. 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 with modification. Specifically, we are
                finalizing assignment of CPT code 0662T to APC New Technology 1520. The
                final CY 2022 OPPS 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.
                D. OPPS APC-Specific Policies
                1. AccuCinch Ventricular Restoration Procedure
                 For the July 2021 update, the AMA's CPT Editorial Panel established
                CPT code 0643T (Transcatheter left ventricular restoration device
                implantation including right and left heart catheterization and left
                ventriculography when performed, arterial approach) to describe the
                AccuCinch device implantation procedure. For CY 2022, we proposed to
                assign the code to OPPS status indicator ``E1'' (Items, codes, and
                services not covered by any Medicare outpatient benefit category;
                statutorily excluded; not reasonable and necessary) to indicate that
                the service is not covered by Medicare.
                 Comment: A commenter requested the reassignment in the status
                indicator to OPPS status indicator ``C'' (inpatient-only) since this is
                the more appropriate assignment for the ventricular restoration therapy
                based on the complex patient population enrolled in the US clinical
                trial. The commenter explained that the investigational device, the
                AccuCinch[supreg] Ventricular Restoration System, is currently under
                evaluation in the CORCINCH-HF pivotal trial (NCT04331769).
                 Response: Based on our review of the clinical study, input from our
                medical advisors, as well review of Medicare's coverage policy for this
                clinical trial, we agree with the commenter. Review of the clinical
                study indicates that the CORCINCH-HF study (https://clinicaltrials.gov/ct2/show/NCT04331769) is a prospective, randomized, control multicenter
                clinical study that evaluates the safety and efficacy of the AccuCinch
                Ventricular Restoration System in patients with heart failure and
                reduced ejection fraction (HFrEF). Based on the interventional
                structural heart (SH) technique involved in the procedure, use of an
                experimental device, and close monitoring of the patient that is
                required during the intra- and post-op period consistent with the
                resources available in the hospital inpatient setting, we believe the
                AccuCinch procedure should be designated as an inpatient-only
                procedure. We note that the CORCINCH-HF pivotal trial (NCT04331769) was
                approved by Medicare and meet's CMS' standards for coverage as an
                Investigation Device Exemption (IDE) study effective November 11, 2020.
                 In summary, after consideration of the public comment, we are
                modifying our proposal and revising the status indicator for CPT code
                0643T from ``E1'' to ``C'' (inpatient-only) for CY 2022. We refer
                readers to Addendum D1 of this final rule with comment period for the
                SI meanings for all codes reported under the OPPS. Addendum D1 is
                available via the internet on the CMS website.
                2. Administration of Lacrimal Ophthalmic Insert Into Lacrimal
                Canaliculus (APC 5694)
                 HCPCS code J1096 (Dexamethasone, lacrimal ophthalmic insert, 0.1
                mg) is a drug indicated ``for the treatment of ocular inflammation and
                pain following
                [[Page 63545]]
                ophthalmic surgery.'' \23\ 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. 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 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 with comment period
                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. For CY 2021, CPT code 0356T is assigned to APC 5692 (Level 2
                Drug Administration). Effective January 1, 2022, CPT code 0356T will be
                deleted. CPT code 68841, represented by placeholder code 68XXX in the
                proposed rule, will become effective on January 1, 2022.
                ---------------------------------------------------------------------------
                 \23\ Dextenza FDA Package Insert: https://www.accessdata.fda.gov/drugsatfda_docs/label/2019/208742s001lbl.pdf.
                ---------------------------------------------------------------------------
                 Due to the similarity between CPT code 0356T and CPT code 68841, we
                proposed to assign CPT code 68841 to the same APC, status indicator,
                and payment indicator assignments as CPT code 0356T.
                 Additionally, we note that the manufacturer of the product that is
                usually administered through 0356T and placeholder code 68XXX, brought
                the issue of payment of this code to the Advisory Panel on Hospital
                Outpatient Payment (also known as HOP Panel) in 2021 for CY 2022
                rulemaking and requested a new APC placement. The HOP Panel did not
                make a recommendation to reassign placeholder code 68XXX to a different
                APC, OPPS status indicator, or ASC payment indicator as suggested by
                the presenters.
                 Comment: Commenters asserted that the proposed placeholder code
                68XXX is used to describe the administration of Dextenza and the drug
                insertion procedure is typically performed after the completion of an
                ophthalmic procedure, such as a cataract, glaucoma, or retina
                procedure. Commenters state this procedure is typically done in the ASC
                setting 80 percent of the time, and is performed in the HOPD setting 20
                percent of the time.
                 Several commenters had concerns with continuing the same APC
                placement of APC 5692 for CPT code 68XXX for CY 2022. Commenters
                generally advocated for increased payment for this CPT code in the HOPD
                and ASC settings. Some commenters did not make a specific suggestion as
                to what the final APC assignment should be, rather they argued the
                proposed payment was inadequate. However, some commenters made specific
                recommendations to change the APC assignment to APC 5503 (Level 3
                Extraocular, Repair and Plastic Eye Procedures). Commenters felt this
                would be a more appropriate and fair APC placement due to its resource
                similarity to procedures in this APC. Commenters frequently cited CPT
                66030 (Injection, anterior chamber of eye (separate procedure);
                medication) and CPT 0X78T (Injection, posterior chamber of eye;
                medication), which were proposed to be assigned to APC 5491 (Level 1
                Intraocular Procedures), as similar procedures to which 68XXX should be
                compared. However, commenters did recognize that 68XXX represents an
                extraocular procedure; therefore, they felt APC 5503 (Level 3
                Extraocular, Repair, and Plastic Eye Procedures) would be an
                appropriate alternative APC assignment.
                 A minority of commenters discussed the proposed status indicator
                assignment and payment indicator assignment for 68XXX. Some said a
                ``Q1'' status indicator was inappropriate, but did not provide an
                alternative suggestion. One commenter provided an alternate crosswalk
                for 68XXX and stated that, in their view, 68XXX was clinically similar
                to CPT Code 68761 (Closure of the lacrimal punctum; by plug, each),
                which is assigned to APC 5501 (Level 1 Extraocular, Repair and Plastic
                Eye Procedures), and is assigned to status indicator ``T''.
                 Additionally, a commenter mentioned using available 2020 claims
                data for 0356T, instead of the zero claims data available using 2019
                claims as proposed, which would suggest a higher APC placement.
                 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 the procedure
                to administer Dextenza after the conclusion of ophthalmic 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 Dextenza, particularly in the ASC setting.
                 Response: We thank commenters for their feedback. We note that
                placeholder code 68XXX will be replaced by CPT code 68841, and we will
                refer to this code from here on. Based on input from stakeholders, we
                believe an APC reassignment is appropriate for CY 2022. After careful
                consideration of the statements from commenters, we analyzed available
                claims data and similar procedures that approximate the clinical
                resources associated with CPT code 68841. We agree with a commenter
                that CPT code 68761 (Closure of the lacrimal punctum; by plug, each)
                may more appropriately approximate the resources associated with CPT
                code 68841. We also believe that CPT code 68801 (Dilation of lacrimal
                punctum, with or without irrigation) represents a clinically similar
                procedure and would also be an appropriate procedure with which to
                compare CPT code 68841. Additionally, based on our review of comments,
                we do not find it appropriate to use the three single frequency claims
                that are associated with the CY 2020 claims data for CPT code 0356T as
                a basis for CPT code 68841, as they seem anomalous compared to the
                1,543 total frequency claims available in the CY 2020 claims data
                dataset. Additionally, we do not find it appropriate to use CY 2019
                claims data for 0356T as there are zero single frequency claims, 53
                total frequency claims, and a zero-dollar geometric mean. Rather, we
                believe estimating the clinical resources needed for CPT code 68841
                through comparison to clinically similar codes is more appropriate for
                CY 2022.
                 Based on the CY 2019 claims data available for CY 2022 OPPS
                ratesetting, the geometric mean cost associated with CPT code 68761 is
                $211.17 and the geometric mean cost associated with CPT code 68801 is
                $300.27. Based on these geometric mean costs, we believe assignment of
                CPT code 68841 to APC 5694 (Level 4 Drug Administration) is
                [[Page 63546]]
                appropriate. Additionally, we continue to believe that assignment of
                CPT code 68841 to an OPPS status indicator ``Q1'' and an associated ASC
                payment indicator of ``N1'', is appropriate. Commenters have stated
                that CPT code 68841 is performed during ophthalmic surgeries, such as
                cataract surgeries. A status indicator ``Q1'', conditionally packaged
                procedure, describes a HCPCS code where the payment is packaged when it
                is provided with a significant procedure but is separately paid when
                the service appears on the claim without a significant procedure.
                Because ASC services always include a surgical procedure, HCPCS codes
                that are conditionally packaged under the OPPS are generally packaged
                (payment indictor ``N1'') under the ASC payment system. Although
                stakeholders state this is an independent surgical procedure and should
                not be packaged into the primary ophthalmic procedure in which the drug
                and drug administration are associated, based on stakeholder comment
                regarding clinical patterns as to how the drug is used, we do not
                agree. We find it appropriate to conditionally package CPT code 68841
                based on its clinical use patterns as described by commenters. This is
                consistent with 42 CFR 419.2(b). The conditional packaging of this code
                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. We therefore believe packaging of CPT
                code 68841 is appropriate.
                 After consideration of the public comments, we are finalizing our
                proposal to assign CPT code 68841 to APC 5694 (Level 4 Drug
                Administration) with OPPS status indicator ``Q1'' for CY 2022. In
                addition, based on the OPPS assignments, we are finalizing an ASC
                payment indicator of ``N1'' for CPT code 68841 for CY 2022. Please see
                Table 22 for the code descriptor, APC assignment, status indicator
                assignment, and payment indicator assignment for CPT code 68841 for CY
                2022.
                [GRAPHIC] [TIFF OMITTED] TR16NO21.034
                3. Allergy Testing (APC 5724)
                 For CY 2022, we proposed to continue to assign CPT code 95004
                (Percutaneous tests (scratch, puncture, prick) with allergenic
                extracts, immediate type reaction, including test interpretation and
                report, specify number of tests) and CPT code 95044 to APC 5724 (Level
                4 Diagnostic Tests and Related Services) with a proposed payment rate
                of $943.96.
                 Comment: One commenter expressed concerns with the overall
                reimbursement for allergy testing, stating that reimbursement has
                increased dramatically over time for what the commenter asserted was a
                relatively routine procedure. The commenter recommended that CMS review
                the payment rates for these services to ensure that they are being
                accurately reimbursed.
                 Response: We thank the commenter for their insight and will
                consider it for future rulemaking.
                 In summary, after consideration of the public comment, we are
                finalizing our proposal without modification. Specifically, we are
                finalizing assignment of CPT codes 95004 and 95044 to APC 5724. The
                final CY 2022 OPPS payment rates 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.
                4. Blood Not Otherwise Classified (NOC) (APC 9537)
                 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 by CY 2022, 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
                [[Page 63547]]
                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. We had
                concerns about this approach because providers would not receive
                separate payment for the blood products reported with HCPCS code P9099,
                and providers would have had to wait at least two years for the primary
                service billed with HCPCS code P9099 to potentially reflect some of the
                cost of the unclassified product. After considering the other payment
                options for HCPCS code P9099 and comments from providers and
                stakeholders, we decided against packaging HCPCS code P9099 for CY
                2021.
                 The CMS HOP Panel and multiple stakeholders suggested another
                payment alternative to have unclassified blood products paid separately
                by 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.
                Stakeholders believed 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. Other stakeholders 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.
                 We decided against paying for HCPCS code P9099 through either a
                weighted average payment, charges reduced to cost, or reasonable cost
                for CY 2021. We had concerns that these payment methods 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 HCPCS code 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 code even for higher-cost
                products, which would delay our ability to track payment for individual
                blood products.
                 After considering our options, we decided for CY 2021 to pay for
                HCPCS code P9099 by making the blood not otherwise classified code
                separately payable, assigning it a status indicator of ``R'', and
                paying 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. This policy aligns with our overall OPPS policy 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. Our policy 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. For CY 2022, we proposed to continue our policy that was
                established in CY 2021 without modification.
                 Comment: The HOP Panel and multiple commenters have requested that
                unclassified blood products assigned to HCPCS code P9099 be paid based
                on reasonable cost and that HCPCS code P9099 be assigned a status
                indicator of ``F'' (paid at reasonable cost). Unclassified blood
                products paid on the basis of reasonable cost would receive payment
                based on individual invoices submitted by the provider that detail the
                actual cost of the unclassified blood products for the provider. The
                commenters believe our current policy severely underpays for most
                unclassified blood products, which limits the ability of providers to
                use these new products, and discourages innovation in the blood
                products field. Commenters assert that the universe of blood products
                is very heterogeneous with each product having its own APC and payment
                rate, and our policy that assigns unclassified clinical services HCPCS
                codes to the lowest-paying APC in a clinical series is not appropriate
                for the payment of blood products.
                 Commenters also believe the administrative burdens of submitting
                claims to receive payment through reasonable cost would encourage blood
                product manufacturers to classify their unclassified products.
                Relatedly, two other commenters urged us to reduce administrative
                burden for providers if we decide to implement reasonable cost payment
                for HCPCS code P9099.
                 Response: We have concerns about paying unclassified blood products
                using reasonable cost and assigning HCPCS code P9099 a status indicator
                of ``F''. Although reasonable cost would likely provide a more granular
                reflection of 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. We agree with the commenters that the administrative burdens
                of seeking payment through reasonable cost methodology may provide some
                incentive to classify currently unclassified blood products. However,
                we believe that providers will prefer to receive full cost
                reimbursement for an unclassified blood product rather than risk
                receiving a prospective payment that could be less than full cost of
                the blood product if the blood product is classified and assigned a
                HCPCS code. Finally, we do not support reasonable cost payment for
                HCPCS code P9099 because the OPPS is a prospective payment system, and
                we
                [[Page 63548]]
                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 received, we have decided to
                implement our proposal without modification to keep HCPCS code P9099
                separately payable with 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. Therefore, we
                are finalizing our proposal to continue to assign HCPCS code P9099 to
                APC 9537 (Blood component/product noc) for CY 2022. We appreciate that
                establishing a fair and equitable payment methodology for HCPCS code
                P9099 continues to be a challenge, and we plan to explore other
                possible ideas for the payment of HCPCS code P9099 in future
                rulemaking.
                5. Bone Substitute Material Injection (APC 5113)
                 For January 1, 2022, the AMA's CPT Editorial Panel established new
                CPT code 0707T (Injection(s), bone substitute material (for example,
                calcium phosphate) into subchondral bone defect (that is, bone marrow
                lesion, bone bruise, stress injury, microtrabecular fracture),
                including imaging guidance and arthroscopic assistance for joint
                visualization). We note that CPT code 0707T was listed as placeholder
                code 0X79T in OPPS Addendum B of the CY 2022 OPPS/ASC proposed rule.
                For CY 2022, we proposed to assign CPT code 0707T to APC 5111 (Level 1
                Musculoskeletal Procedures) with a proposed payment rate of $211.47.
                 Comment: Commenters did not agree with our proposed APC assignment.
                Instead, commenters stated that CPT code 0707T should be assigned to
                APC 5114 (Level 4 Musculoskeletal Procedure) with a proposed payment
                rate of $6,428.51 based on its clinical and resource homogeneity to the
                procedures and services in the APC. Commenters stated that 0707T is
                most clinically similar to Zimmer Biomet's AccuFill BSM procedure,
                which is the service described by CPT code 29855 (Arthroscopically
                aided treatment of tibial fracture, proximal (plateau); unicondylar,
                includes internal fixation, when performed (includes arthroscopy)), and
                assigned to APC 5114. Commenters stated that the injection of a bone
                substitute material into a subchondral bone defect is mainly accounted
                for by two products, Zimmer Biomet's AccuFill BSM and Anika, which
                range in price from $2,600-$2,800.
                 Response: We do not agree that CPT code 0707T is comparable to CPT
                code 29855; however, based on our review of the clinical
                characteristics of the procedure and input from our medical advisors,
                we believe CPT code 0707T is more similar to the procedures assigned to
                APC 5113 (Level 3 Musculoskeletal Procedures) with a proposed payment
                rate of $2,906.75, and this payment rate better accounts for the cost
                of the procedure as well as the bone substitute material.
                 In summary, after consideration of the public comments, we are
                assigning CPT code 0707T to APC 5113 for CY 2022 based on its resource
                and clinical similarity to the procedures in APC 5113. The final CY
                2022 OPPS payment rates for this code can be found in Addendum B to
                this final rule with comment period. In addition, we refer readers to
                Addendum D1 to this final rule with comment period for the 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 0707T 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.
                6. Calculus Aspiration With Lithotripsy Procedure (APC 5376)
                 For CY 2022, we proposed to assign HCPCS code C9761
                (Cystourethroscopy, with ureteroscopy and/or pyeloscopy, with
                lithotripsy (ureteral catheterization is included) and vacuum
                aspiration of the kidney, collecting system and urethra if applicable)
                to APC 5375 (Level 5 Urology and Related Services) with a proposed
                payment of $4,527.23. HCPCS code C9761 describes the procedure that
                uses a sterile, single-use aspiration-irrigation catheter that is
                designed to assist in the removal of stone fragments during standard
                ureteroscopy. Based on our analysis of the latest CY 2020 claims data
                for this CY 2022 OPPS/ASC final rule with comment period, our data
                reveals two single claims for HCPCS code C9761 with a geometric mean
                cost of $9,342.
                 Comment: Several commenters expressed concerns that a significant
                difference between cost and payment prevented hospitals from providing
                this procedure to their patients. The commenters urged CMS to change
                the APC assignment of HCPCS code C9761 to APC 5376 (Level 6 Urology and
                Related Services). The commenters asked that CMS assign HCPCS code
                C9761 to APC 5376 for two reasons: (1) The current and proposed
                reimbursement rates for services in APC 5375 are inadequate to pay
                hospitals appropriately for the costs of furnishing the Steerable
                Ureteroscopic Renal Evacuation (SURE) procedure; and (2) the clinical
                characteristics and resources associated with HCPCS code C9761 are
                similar to codes in APC 5376 than services in APC 5375.
                 Response: We thank the commenters for their feedback. Based on
                information from the manufacturer, resources involved for the procedure
                described by HCPCS code C9761 appear to be higher than for those
                procedures assigned to APC 5375. At this time, only two CY 2020 claims
                are available to assist in identifying costs associated with the
                procedure. The geometric mean cost of $9,342 for the two claims
                indicate that the cost of HCPCS code C9761 is substantially higher than
                the proposed payment rate of $4,527.23. However, two claims is not a
                significant data set; and we have concerns that the costs reported from
                the two claims for the procedure described by HCPCS code C9761 may not
                accurately reflect the geometric mean costs of the procedure. We also
                note that, in the manufacturer's 2020 New Technology APC application,
                they indicated that an appropriate payment for the procedure described
                by HCPCS code C9761 would be approximately $5,627.39 and that
                assignment to New Technology APC 1566 (New Technology--Level 29
                ($5,501-$6,000)) would be appropriate. Based on the claims data along
                with the reported costs associated with the procedure presented to us
                by the manufacturer, we believe that it is appropriate to assign the
                procedure described by HCPCS code C9761 to APC 5376 (Level 6 Urology
                and Related Services), for CY 2022. As we do every year we will
                reevaluate the APC assignment for CPT code 9761 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.
                 In summary, after consideration of the public comments we received,
                we are modifying our proposal for the APC assignment of HCPCS code
                C9761. Instead of assigning this code to APC 5375 (Level 5 Urology and
                Related Services), for CY 2022, we are reassigning HCPCS code C9761 to
                APC 5376 (Level 6 Urology and Related Services). Table 23 below lists
                the final CY 2022 status indicator and APC assignments for the calculus
                aspiration
                [[Page 63549]]
                with lithotripsy procedure. We refer readers to Addendum B to this
                final rule with comment period for the final payment rates for all
                codes reportable under the OPPS. Addendum B is available via the
                internet on the CMS website.
                [GRAPHIC] [TIFF OMITTED] TR16NO21.035
                7. Cardiac Computed Tomography (CT) (APC 5571)
                 For CY 2022, 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 $183.30:
                 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)); and
                 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)).
                 Comment: Many commenters opposed the assignment of CPT codes 75572,
                75573, and 75574 to APC 5571. They stated that the proposed CY 2022
                OPPS payment rate for APC 5571 is inadequate to cover the total cost of
                providing the service.
                 Commenters stated that 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 (Level 2 Imaging with Contrast) and
                CPT code 75574 to APC 5573 (Level 3 Imaging with Contrast). Most of the
                commenters reported that cardiac CT scans are more resource intensive
                than other CT and x-ray scans in APC 5571 and expressed concerns that
                APC-misallocation would suppress utilization for these services.
                 Response: As we stated in the CY 2021 OPPS final rule with comment
                period (85 FR 85956), 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. 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. We refer
                readers to the CY 2021 OPPS final rule with comment period for a more
                detailed discussion of the pricing methodology for CPT codes 75572,
                75573, and 75574 (85 FR 85956 through 85959).
                 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 2022 OPPS payment rates 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 SI meanings for all codes reported under the OPPS. Both Addendum B
                and D1 are available via the internet on the CMS website.
                8. Cardiac Magnetic Resonance (CMR) Imaging (APC 5523, 5524, 5572, and
                5573)
                 For CY 2022, 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 $236.14;
                 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 $495.76;
                 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 $377.80; 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
                $733.76.
                 Comment: A few 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
                [[Page 63550]]
                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: As stated in the CY 2021 OPPS final rule with comment
                period, 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 75561 and 75563. Based on the
                geometric mean costs for these codes, we do not believe that CPT codes
                75561 and 75563 utilize similar resources as the exams assigned to APC
                5573 or APC 5593. We refer readers to the CY 2021 OPPS final rule with
                comment period for a more detailed discussion of the pricing
                methodology for CPT codes 75561 and 75563 (85 FR 85959 through 85960).
                 In summary, after consideration of the public comments, we are
                finalizing our proposal, without modification, to assign the cardiac
                MRI codes, specifically, CPT codes 75561 and 75563 to APCs 5572 and
                5573. The final CY 2022 OPPS payment rates 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 SI meanings for all codes reported under the OPPS. Both Addendum B
                and D1 are available via the internet on the CMS website.
                9. Chimeric Antigen Receptor Therapy (CAR-T) (APCs 5694, 9035, 9194,
                9391, 9413, and 9422)
                 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 2022 OPPS
                payment policies for separately paid drugs with pass-through status
                expiring or continuing in CY 2022, 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), the CY 2020 OPPS/
                ASC final rule with comment period (84 FR 61231 through 61234), and the
                CY 2021 OPPS/ASC final rule with comment period (85 FR 85949 through
                85951) 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 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,
                CY 2020, and CY 2021 and made no proposal to change the assignment for
                CY 2022. 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 2022
                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: Two commenters opposed our proposal to continue to assign
                status indicator ``B'' to CPT codes 0537T, 0538T, and 0539T for CY
                2022. One commenter did not have a specific recommendation, but rather
                suggested CMS take into consideration the complex process and
                separately recognize the efforts associated with leukapheresis, cell
                handling, and processing. This commenter additionally mentioned the
                administrative burden associated with CAR T-cell therapy
                administration, among other resources that are specific to the process
                in which CAR-T is processed, manufactured, and then administered.
                 The other commenter discussed a wide variety of topics related to
                CAR T-cell therapy and 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''. This commenter 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, this commenter advocated for a change in status indicator as
                they believed 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. This commenter pointed out that a number of patients
                may receive the preparation procedures, but then fail to receive the
                final CAR-T product. Accordingly, this commenter asked CMS to release
                new cost centers and to revise the instructions in MLN Matters Article
                SE19009 in order to no longer allow hospitals to put outpatient cell
                collection and process charges occurring more than three days prior to
                an inpatient stay on inpatient claims or to report cell collection and
                cell processing charges as part of the product charge.
                 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 2022. 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
                [[Page 63551]]
                biologicals. Therefore, payment for these services is incorporated into
                the drug codes. Please see Table 24 for HCPCS coding for CAR T-cell
                therapies.
                [GRAPHIC] [TIFF OMITTED] TR16NO21.036
                 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 our guidance contained in MLN Matters Article
                SE19009. We are not revising this document at this time as we believe
                these instructions are consistent with our longstanding policies, but
                we appreciate the feedback from stakeholders. We believe that the
                comments in reference to payment for services in settings not payable
                under the OPPS are outside the scope of the CY 2022 OPPS/ASC 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.
                 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 2022. Additionally, we are
                continuing our policy from CY 2019 to assign status indicator ``S'' to
                CPT code 0540T for CY 2022. Table 25 below shows the final SI and APC
                assignments for HCPCS codes 0537T, 0538T, 0539T, and 0540T for CY 2022.
                For more information on CY 2022 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 2022) to
                this final rule with comment period. Both Addendum B and D1 are
                available via the internet on the CMS website.
                [[Page 63552]]
                [GRAPHIC] [TIFF OMITTED] TR16NO21.037
                10. ClariFix Procedure (APC 5164)
                 For CY 2022, we proposed to continue to assign HCPCS code C9771
                (Nasal/sinus endoscopy, cryoablation nasal tissue(s) and/or nerve(s),
                unilateral or bilateral)) to APC 5164 Level 4 ENT Procedures. We
                created HCPCS code C9771 to describe the technology associated with
                nasal endoscopy with cryoablation of nasal tissues and/or nerves, based
                on our review of a New Technology APC application submitted by the
                manufacturer of the technology. HCPCS code C9771 was effective on
                January 1, 2021.
                 Comment: We received one comment from the manufacturer requesting
                that HCPCS code C9771 be reassigned to APC 5165 Level 5 ENT Procedures,
                which had a proposed CY 2022 OPPS payment rate of $5,218.17. The
                commenter believed that assigning HCPCS code C9771 to APC 5165 would be
                more appropriate due to the resource and clinical similarity to the
                procedures in that APC.
                 Response: We thank the commenter for their recommendation. After
                reviewing the comment, and after further evaluation of the procedure,
                as well as input from our medical advisors, we continue to believe that
                the current APC assignment for HCPCS code C9771 is appropriate, based
                on its resource and clinical similarity to the procedures in APC 5164.
                Therefore, we are not accepting the commenter's recommendation. We
                remind hospitals that every year we review the APC assignments for all
                services and items paid under the OPPS. We will reassess the APC
                assignment for the procedure described by HCPCS C9771 once we have
                claims data for the code. We note that the first year that claims data
                will be available for HCPCS code C9771 will be during the CY 2023
                rulemaking cycle.
                 In summary, after consideration of the public comment, we are
                finalizing our proposal without modification. The final CY 2022 OPPS
                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.
                11. Dilapan-S Cervical Dilation Procedure (APC 5412)
                 For CY 2022, we proposed to continue to assign CPT code 59200
                (Insertion of cervical dilator (for example, laminaria, prostaglandin)
                (separate procedure)) to APC 5412 (Level 2 Gynecologic Procedures) with
                a proposed payment rate of $289.30.
                 Comment: A few commenters requested that CMS reassign CPT code
                59200 to APC 5413 (Level 3 Gynecologic Procedures) with a proposed
                payment rate of $650.81. These commenters state that the cost of
                Dilapan-S, a cervical softening and dilation device, is not reflected
                in the payment rate for APC 5412.
                 Response: For CY 2022, 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 with comment period, the geometric mean cost for
                CPT code 59200 is $456.73, which, while it does fall outside the range
                of geometric mean costs for APC 5412 ($206.24-$402.55) it does not fall
                within the range of geometric mean costs for APC 5413 ($516.27-
                $874.50.) Given that the Dilapan-S device and CPT code 59200 have both
                existed for a significant period of time, the fact that payment for CPT
                code 59200 does not reflect the costs of Dilapan-S suggests that this
                device is not routinely used to furnish CPT code 59200. Furthermore,
                based on our review of the clinical characteristics of the procedure
                and input from our medical advisors, we continue to believe that CPT
                code 59200 is more clinically similar to the other services in APC
                5412.
                 In summary, after consideration of the public comments, we are
                finalizing our proposal to continue to assign CPT code 59200 to APC
                5412. The final CY 2022 OPPS payment rates 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 SI meanings for all codes reported under the OPPS. Both Addendum B
                and D1 are available via the internet on the CMS website.
                [[Page 63553]]
                12. Ellipsys System Hemodialysis Arteriovenous Fistula (AVF) Procedure
                (APC 5194)
                 For CY 2022, we proposed to continue to assign HCPCS code G2170 to
                APC 5194 (Level 4 Endovascular Procedures) with a proposed payment rate
                of $16,484.41.
                 Comment: Commenters supported this proposal.
                 Response: We appreciate commenters' support.
                 In summary, after consideration of the public comments, we are
                finalizing our proposal without modification. Specifically, we are
                finalizing our APC proposal to continue to assign HCPCS code G2170 to
                APC 5194.
                 The final CY 2022 OPPS 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.
                13. Esophagogastroduodenoscopy (APC 5331)
                 For CY 2022, we proposed to continue to assign CPT code 43240
                (Esophagogastroduodenoscopy, flexible, transoral; with transmural
                drainage of pseudocyst (includes placement of transmural drainage
                catheter[s]/stent[s], when performed, and endoscopic ultrasound, when
                performed)) to APC 5303 (Level 3 Upper GI Procedures) with a proposed
                payment rate of $3,160.76.
                 Comment: One commenter requested the reassignment of CPT code 43240
                to APC 5331 (Complex GI Procedures) with a proposed payment rate of
                $5,159.81. The commenter stated that the geometric mean cost of CPT
                code 43240 ($5827.94) exceeds the 2 times threshold for APC 5303 and is
                within the range of the geometric mean costs for APC 5331 ($4,706.48-
                $6,277.12). Furthermore, the commenter stated that CPT code 43240 is
                more clinically similar to the services in APC 5331, which includes all
                other gastroenterology stent placement codes.
                 Response: Based on our review of the cost data and input from our
                clinical advisors, we agree that CPT code 43240 would be more
                appropriately placed in APC 5331 based on its clinical and resource
                homogeneity to the procedures in the APC. Therefore, we are reassigning
                CPT code 43240 to APC 5331.
                 In summary, after consideration of the public comments, we are
                finalizing the reassignment of CPT code 43240 to APC 5331. The final CY
                2022 OPPS 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 SI meanings
                for all codes reported under the OPPS. Both Addendum B and D1 are
                available via the internet on the CMS website.
                14. External Electrocardiogram (ECG) (APCs 5733 and 5734)
                 For CY 2022, we proposed to continue to assign CPT code 93242
                (External ECG recording for more than 48 hours up to 7 days by
                continuous rhythm recording) to APC 5732 (Level 2 Minor Procedures)
                with a proposed payment rate of $34.72 and CPT code 93243 (External ECG
                recording for more than 48 hours up to 7 days scanning analysis with
                report) to APC 5733 (Level 3 Minor Procedures) with a proposed payment
                rate of $57.12.
                 Comment: A few commenters suggested that, based on clinical
                similarity to CPT codes 93225 (External electrocardiographic recording
                up to 48 hours by continuous rhythm recording and storage; recording
                (includes connection, recording, and disconnection)) and 93226
                (External electrocardiographic recording up to 48 hours by continuous
                rhythm recording and storage; scanning analysis with report), which
                include payment for a holter monitor, CMS should reassign CPT codes
                93242 and 93243 to APC 5734 (Level 4 Minor Procedures) with a proposed
                payment rate of $115.71. Commenters further stated that placement in
                APC 5734 would be consistent with the placement of the predecessor
                codes, CPT codes 0296T (External electrocardiographic recording for
                more than 48 hours up to 21 days by continuous rhythm recording and
                storage; recording (includes connection and initial recording)) and
                0296T (External electrocardiographic recording for more than 48 hours
                up to 21 days by continuous rhythm recording and storage; scanning
                analysis with report).
                 Response: Based on our review of the clinical characteristics of
                the procedure and input from our medical advisors, we agree with
                commenters that resources associated with furnishing CPT codes 93242
                and 93243 may not be accurately reflected in their current APC
                assignment. We do not agree with commenters that both codes should be
                reassigned to APC 5734. We note that the predecessor codes, CPT codes
                0296T and 0297T, described 21 days of continuous monitoring, while the
                current codes, CPT codes 93242 and 93243, describe 7 days of
                monitoring. We believe that CPT code 93242 shares greater clinical and
                cost similarities to the services in APC 5733 (Level 3 Minor
                Procedures), which has a proposed payment rate of $57.12. We agree with
                commenters, however, the CPT code 93243 does share clinical and cost
                similarities with the other services in APC 5734.
                 In summary, after consideration of the public comments, we are
                finalizing our proposal with modification. Specifically, we are
                assigning CPT code 93242 to APC 5733 and CPT code 93243 to APC 5734.
                The final CY 2022 OPPS payment rates 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 SI meanings for all codes reported under the OPPS. Both Addendum B
                and D1 are available via the internet on the CMS website.
                15. Eye-Movement Analysis Without Spatial Calibration (CPT Code 0615T)
                 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).
                 As displayed in the Addendum B to the CY 2022 ASC/OPPS proposed
                rule, we proposed to continue to assign 0615T to APC 5734 with status
                indicator ``Q1'' and a proposed OPPS payment rate of $115.71 for CY
                2022.
                 Comment: The manufacturer of the EyeBOX resubmitted their comment
                again this year because they are still concerned that the lack of
                adequate, separate reimbursement will strongly discourage hospitals
                from providing this important technology to their patients.
                [[Page 63554]]
                The commenter urged CMS to: (1) Change the APC assignment of CPT code
                0615T to APC 5722 (Level 2 Diagnostic Tests and Related Services); and
                (2) change the status indicator for the service to ``S'' to allow for
                separate payment under the OPPS. The commenter continues to claim that
                the proposed reimbursement rate for services in APC 5734 is inadequate
                to pay hospitals appropriately for the costs of furnishing the EyeBOX
                test. They assert the EyeBOX test costs hospitals at least $200.00 to
                provide and 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 2022 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 available for CY 2022 OPPS ratesetting.
                 As far as 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 continue to believe
                that the resource costs for CPT code 0615T are not comparable to other
                eye-related diagnostic tests in APC 5722. Updated CY 2019 claims data
                for this final rule with comment period indicate that the geometric
                mean cost of APC 5722 is 257.89, while the geometric mean cost of APC
                5734 is $109.88. Based on the lack of claims data, we believe that
                maintaining assignment of APC 5734 for CPT code 0615T for CY 2022
                continues to be appropriate.
                 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.
                 We are finalizing our proposal, without modification, to continue
                to assign CPT code 0615T to status indicator ``Q1'' and APC 5734 for CY
                2022. The final CY 2022 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).
                16. FemSelect Enplace Procedure (APC 5415)
                 For CY 2022, we proposed to continue to assign HCPCS code C9778
                (Colpopexy, vaginal; minimally invasive extra-peritoneal approach
                (sacrospinous)) to APC 5414 Level 4 Gynecologic Procedures. We created
                HCPCS code C9778 to describe the technology associated with vaginal
                colpopexy by sacrospinous ligament fixation, based on our review of a
                New Technology APC application submitted by the manufacturer of the
                technology. HCPCS code C9778 was effective on July 1, 2021.
                 Comment: We received many comments from providers and the
                manufacturer requesting that HCPCS code C9778 be reassigned to APC 5415
                Level 5 Gynecologic Procedures, which had a proposed CY 2022 OPPS
                payment rate of $4,525.49. Commenters stated that the resource cost
                exceeded the payment provided by APC 5414, and that APC 5415 would be a
                more appropriate APC assignment.
                 Response: We thank the commenters for their recommendations. Based
                on input from our medical advisors, further evaluation of the resources
                to perform the surgery, and its similarity to existing procedures, we
                believe that HCPCS code C9778 should be reassigned to APC 5415. Based
                on our assessment, we believe that the service described by HCPCS code
                C9778 shares similar resource and clinical characteristics to the
                procedures included in APC 5415.
                 In summary, after consideration of the public comments, we are
                reassigning HCPCS code C9778 to APC 5415 Level 5 Gynecologic Procedures
                for CY 2022, as shown in Table 26 below. The final CY 2022 OPPS payment
                rates 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 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
                HCPCS code C9778 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. The first year that claims data will be available for
                HCPCS code C9778 will be during the CY 2023 rulemaking cycle.
                [GRAPHIC] [TIFF OMITTED] TR16NO21.038
                [[Page 63555]]
                17. Hypoglossal Nerve Neurostimulator (HGNS) Procedure (APC 5465)
                 Effective January 1, 2022, the AMA's CPT Editorial Panel created a
                new code to describe open implantation of hypoglossal nerve
                neurostimulator array. For CY 2022, we proposed to assign CPT code
                64582 to APC 5465 (Level 5 Neurostimulator and Related Procedures) with
                a proposed payment rate of $30,208.51. We note that CPT code 64582 was
                listed as placeholder code 645X1 in OPPS Addendum B of the CY 2022
                OPPS/ASC proposed rule.
                 Comment: One commenter expressed support for the proposed APC
                assignment.
                 Response: We thank the commenter for their support.
                 In summary, after consideration of the public comments, we are
                finalizing our proposal without modification. Specifically, we are
                finalizing our APC proposal to assign CPT code 64582 to APC 5465. The
                final CY 2022 OPPS 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 SI
                meanings for all codes reported under the OPPS. Both Addendum B and D1
                are available via the internet on the CMS website.
                18. IDx-DR: Artificial Intelligence System To Detect Diabetic
                Retinopathy (APC 5733)
                 For CY 2022, we proposed to continue to assign CPT code 92229
                (Imaging of retina for detection or monitoring of disease; with point-
                of care automated analysis with diagnostic report; unilateral or
                bilateral) to APC 5733 (Level 3 Minor Procedures) with a proposed
                payment rate of $57.12.
                 Comment: Some commenters disagreed with the proposed payment amount
                and requested a revision in the assignment from APC 5733 to APC 5734
                (Level 4 Minor Procedures) with a proposed payment rate of $115.71. The
                commenters reported that the service described by CPT code 92229 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. They stated that providers
                previously billed for this service on an interim basis under CPT code
                92250. The commenters indicated that APC 5734, which is the APC
                assigned to the predecessor CPT code 92250, is the more appropriate
                assignment for CPT code 92229 until sufficient Medicare claims data can
                be collected by CMS to either retain that assignment or reassign to
                another APC.
                 One commenter expressed support for our proposal to continue APC
                assignment of CPT code 92229 to APC 5733.
                 Response: As discussed in the CY 2021 OPPS final rule with comment
                period (85 FR 85962), 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. As the commenter did not provide any
                additional clinical information or cost data, we continue to believe
                that CPT code 92229 should be assigned to APC 5733.
                 In summary, after consideration of the public comments, we are
                finalizing our proposal without modification. Specifically, we are
                continuing to assign CPT code 92229 to APC 5733. The final CY 2022
                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.
                19. Intravascular Lithotripsy (IVL) Procedure (APCs 5193 and 5194)
                 As explained in the CY 2021 OPPS/ASC final rule with comment
                period, we finalized our proposal to assign HCPCS codes C9764
                (Revascularization, endovascular, open or percutaneous, lower extremity
                artery(ies), except tibial/peroneal; with intravascular lithotripsy,
                includes angioplasty within the same vessel(s), when performed) and
                C9765 (Revascularization, endovascular, open or percutaneous, lower
                extremity artery(ies), except tibial/peroneal; with intravascular
                lithotripsy, and transluminal stent placement(s), includes angioplasty
                within the same vessel(s), when performed) to APC 5192 and C9766
                (Revascularization, endovascular, open or percutaneous, lower extremity
                artery(ies), except tibial/peroneal; with intravascular lithotripsy and
                atherectomy, includes angioplasty within the same vessel(s), when
                performed) to APC 5193 (85 FR 85975 through 85976). For a detailed
                discussion on the APC assignments for HCPCS code(s) describing the IVL
                procedures, we refer readers to the CY 2021 OPPS/ASC final rule with
                comment period (85 FR 85975 through 85976).
                 At the August 23, 2021 meeting, the HOP Panel recommended that 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.
                 Comment: Several commenters, including the manufacturer, disagreed
                with CMS's proposed CY 2022 APC assignments for the IVL service
                described by HCPCS codes C9764, C9765, and C9766. They argued that, for
                new procedures that did not have claims in the CY 2019 claims data,
                current claims data should be used when reviewing for APC placement.
                The commenter also noted the CY 2020 claims data provided evidence to
                support their argument that the service described by HCPCS code C9764
                is not adequately reimbursed under APC 5192, and recommended
                reassignment to APC 5193 (Level 3 Endovascular Procedures). Similarly,
                the commenters indicated that assignment of HCPCS codes C9765 and C9766
                to APC 5193 does not provide adequate payment for the service based on
                2020 claims data and that those codes should instead be placed in APC
                5194 (Level 4 Endovascular Procedures).
                 Response: In the CY 2022 OPPS/ASC proposed rule, we proposed to use
                2019 claims data in the OPPS due to the effects of the PHE on the CY
                2020 claims data. As the commenter noted, claims data are not available
                for HCPCS codes C9764 through C9766 in the CY 2019 claims data, only in
                CY 2020. As discussed in more detail in section X.E. of this final rule
                with comment period, we are not using CY 2020 claims data for
                ratesetting because of data integrity concerns with respect to the
                broader OPPS; however, based on stakeholder request, we are reviewing
                the CY 2020 claims data for determining potential APC assignments in
                cases where CY 2019 claims data did not include any information on new
                procedures.
                 Under what would otherwise be the standard ratesetting process, we
                would typically use CY 2020 claims data submitted for services
                furnished in CY 2020, that were processed on or before June 30, 2021.
                Our analysis of that CY 2020 claims data supports reassigning CPT code
                C9764 to APC 5193 and CPT codes C9765 and C9766 to APC 5194, based on
                their estimated geometric mean costs. Specifically, our claims data
                show a geometric mean cost of approximately $11,442.47 for HCPCS code
                C9764 based on 253 single claims, which is comparable to the geometric
                mean cost of about $10,258.49 for APC 5193, rather than the geometric
                mean cost of approximately $5,061.89 for APC 5192. The geometric mean
                cost of approximately $17,372.02 for HCPCS code C9765 and the geometric
                mean
                [[Page 63556]]
                cost of approximately $19,285.11 for HCPCS code C9766 is also
                consistent with the costs for significant services in APC 5194, which
                range between about $10,670.16 (for HCPCS code C9754) to $24,311.10
                (for HCPCS code C9767). Based on our analysis of the latest available
                CY 2020 claims data, we believe that HCPCS codes C9765 and C9766 are
                more appropriately assigned to APC 5194.
                 In summary, after consideration of the public comments, we are
                assigning HCPCS code C9764 to APC 5193 and HCPCS codes C9765 and C9766
                to APC 5194. Table 27 below lists the three HCPCS codes for the IVL
                procedure and their APC and SI assignments for CY 2022. The final CY
                2022 OPPS payment rates for the codes can be found in Addendum B of
                this final rule with comment period. Addendum B is available via the
                internet on the CMS website.
                [GRAPHIC] [TIFF OMITTED] TR16NO21.039
                20. Lixelle Apheresis
                 Lixelle [beta]2-microglobulin Apheresis Column is indicated for use
                in the treatment of dialysis[hyphen]related amyloidosis (DRA), a
                disease that affects people with end-stage renal disease (ESRD). DRA is
                a metabolic disorder from the failure of the kidney to filter and
                remove [beta]2-microglobulin, typically from chronic hemodialysis
                (typically 5 years or longer). The Lixelle device is used in an
                apheresis procedure that selectively removes [beta]2-microglobulin from
                circulating blood and used pursuant to a physician prescription in
                conjunction with hemodialysis. It is intended to be used at each
                hemodialysis session (that is, frequency of treatment is expected to be
                3 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). There are currently no specific HCPCS or CPT
                code that represent the Lixelle service.
                 Comment: Two commenters, including the manufacturer of Lixelle
                apheresis column, requested payment for the procedure under the OPPS.
                One commenter stated that Lixelle is the only device available for the
                treatment DRA and that all DRA patients are Medicare beneficiaries. The
                commenter stated 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 apheresis procedure. The commenter stated that
                CMS should rely upon the HUD program requirements and post-approval
                clinical studies mandated and approved by FDA for coverage and payment
                of Lixelle apheresis in the OPPS. The commenter acknowledged that
                Medicare payment under the ESRD PPS is not possible at this time but
                stated that payment under the OPPS may be more clinically appropriate.
                The commenter requested that CMS provide payment under the OPPS because
                the Lixelle apheresis is not eligible for Medicare payment when
                furnished in the dialysis facility at this time, and therefore, these
                treatments (even though technically not ``scheduled'' or ``non-
                routine'') should be eligible for payment when furnished in the
                hospital outpatient department under the OPPS. Specifically, the
                commenter requested that CMS provide payment under the OPPS using the
                following pathways: (1) By paying for the apheresis procedure used with
                the Lixelle device through CPT code 36516 (Therapeutic apheresis with
                extracorporeal immunoadsorption, selective adsorption or selective
                filtration and plasma reinfusion), proposed to be assigned to APC 5243
                (Level 3 Blood Product Exchange and Related Services) for CY 2022, and
                requiring the use of a modifier or add-on code when the Lixelle
                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) by allowing payment for
                [[Page 63557]]
                the dialysis performed as part of Lixelle 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
                2022, and requiring the use of a modifier or add-on code to provide
                additional payment beyond that provided for APC 5401; or (3) by
                creating a HCPCS C code or G code for the Lixelle apheresis procedure
                and assigning the code to APC 5242 (Level 2 Blood Product Exchange and
                Related Services).
                 Response: We appreciate the commenters' input on the Lixelle device
                and will consider their recommendations for future rulemaking.
                21. Low Dose Computed Tomography (LDCT) (APC 5522)
                 For CY 2022, we proposed to continue to assign CPT code 71271
                (Computed tomography, thorax, low dose for lung cancer screening,
                without contrast material(s)) to APC 5521 (Level 1 Imaging without
                Contrast) with a proposed payment rate of $83.01.
                 Comment: Several commenters stated that CPT code 71271 should be
                reassigned to APC 5523 (Level 3 Imaging without Contrast) with a
                proposed payment rate of $236.14. These commenters stated that CPT code
                71271 should not be in a lower APC than CPT code 71270 (Computed
                tomography, thorax; without contrast material, followed by contrast
                material(s) and further sections) given that CPT code 71271 has
                additional resource costs, such as greater clinical staff time. The
                commenter noted that we proposed to assign CPT code 71270 to APC 5571
                (Level 1 Imaging With Contrast) with a payment rate of $183.30.
                 Response: The predecessor code to CPT code 71271 was HCPCS code
                G0297 (Low dose ct (ldct) scan for lung cancer screening) which was
                assigned to APC 5521. However, in the CY 2021 Physician Fee Schedule
                final rule, we stated that it was a longstanding CMS policy that the
                payment for HCPCS code G0297 match the payment rate for CPT code 71250,
                which we proposed to assign to APC 5522 (Level 2 Imaging without
                Contrast) with a payment rate of $111.73, as the services are almost
                identical in terms of clinical similarity and resource costs (85 FR
                84621 through 84622). In the interests of preserving the relationship
                between the predecessor code and CPT code 71250, and based on our
                review of the clinical characteristics of the procedure and input from
                our medical advisors, we believe that CPT code 71271 should be
                reassigned to APC 5522 (Level 2 Imaging without Contrast). We believe
                that assignment to APC 5522 for both CPT codes 71250 and 71271
                accurately reflects the resources associated with performing this
                service.
                 In summary, after consideration of the public comments, we are
                finalizing our proposal, with modification. Specifically, we are
                reassigning CPT code 71271 to APC 5522. The final CY 2022 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 to this
                final rule with comment period for the SI meanings for all codes
                reported under the OPPS. Both Addendum B and D1 are available via the
                internet on the CMS website.
                22. Magnetic Resonance-Guided Focused Ultrasound Surgery (MRgFUS) (APC
                5463)
                 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) describes MRgFUS procedures for the treatment
                of essential tremor. We have identified 175 paid claims for CY 2019
                with a geometric mean of $12,334.67. CPT code 0398T had been assigned
                to a New Technology APC for several years. Then, in CY 2021, we
                reorganized the Neurostimulator and Related Procedures APCs to add a
                new Level 3 category (APC 5463) that had a geometric mean of
                approximately $10,950. While the payment rate for APC 5463 was somewhat
                lower than the geometric mean of CPT code 0398T, it was a reasonable
                estimate of the cost of MRgFUS for the treatment of essential tremor in
                a prospective payment system where some services receive more payment
                than their geometric mean cost, while other services receive less
                payment than their geometric mean cost. For CY 2022, we proposed
                continuing to assign CPT code 0398T to APC 5463 with a payment rate of
                approximately $10,956.33.
                 Comment: One commenter, the manufacturer, requests a higher paying
                APC for CPT code 0398T because the current payment rate for APC 5463
                (Level 3 Neurostimulator and Related Procedures) of approximately
                $10,956.33 is substantially lower than the geometric mean cost of the
                service. According to the commenter, the geometric mean of CPT code
                0398T has steadily increased from $10,136 in CY 2018 to $13,907 in CY
                2020.
                 Response: We appreciate the commenter's concerns about the level of
                payment for CPT code 0398T. However, the OPPS is a prospective payment
                system and it is expected that any individual service may be paid more
                or less than the geometric mean cost of the service. The current
                payment difference between the geometric mean cost of CPT code 0398T
                and the payment rate for APC 5463 is $1,153.66 ($12,109.99 minus
                $10,956.33) with the payment rate of APC 5463 equal to $10,956.33. That
                means there is no violation of the two-times rule to assign CPT code
                0398T to APC 5463, and the service is assigned to an APC that covers
                around 90 percent of the geometric mean cost of the service. Also, CPT
                code 0398T is grouped with other neurostimulator and related procedures
                that have clinical and resource similarity to the MRgFUS.
                 After our review of the public comments, we have decided to
                implement our proposal without modification to continue to assign CPT
                code 0398T to APC 5463 (Level 3 Neurostimulator and Related
                Procedures). The final CY 2022 payment rate for CPT code 0398T can be
                found in Addendum B to this final rule with comment period, which is
                available via the internet on the CMS website.
                23. Medical Physics Dose (APC 5612)
                 For CY 2022, we proposed to continue 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 $130.19.
                 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 $943.96. The
                commenters stated that the services assigned to APC 5724 require
                similar resource use as CPT code 76145. Commenters also stated that APC
                5724 contains a range of services that are clinically similar to CPT
                76145.
                 Response: Given that we have no claims data for this service, and
                that APC 5724 does not contain any radiation oncology services, we do
                not believe that APC 5724 is an appropriate assignment on the basis of
                clinical similarity or similar costs. However, based on our review of
                the service associated with CPT code 76145 and input from our medical
                advisors, we believe that APC code 5612, with a proposed payment rate
                of $347.44, may be a more appropriate assignment for
                [[Page 63558]]
                the code. APC 5612 contains CPT code 77307 (Teletherapy isodose plan;
                complex (multiple treatment areas, tangential ports, the use of wedges,
                blocking, rotational beam, or special beam considerations), includes
                basic dosimetry calculation(s)), which is clinically similar to CPT
                code 76145 in that CPT code 77307 describes the work of a medical
                physicist and dosimetrist. 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
                reassigning CPT code 76145 to APC 5612. The final CY 2022 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 to this
                final rule with comment period for the SI meanings for all codes
                reported under the OPPS. Both Addendum B and D1 are available via the
                internet on the CMS website.
                24. MiVu Mucosal Integrity Testing System (APC 5303)
                 For CY 2022, we proposed to continue to assign HCPCS code C9777
                (Esophageal mucosal integrity testing by electrical impedance,
                transoral (list separately in addition to code for primary procedure))
                to OPPS status indicator ``N,'' to indicate that the payment for HCPCS
                code C9777 is packaged into the payment for the primary procedure. We
                created HCPCS code C9777 to describe mucosal integrity testing by
                electrical impedance, based on our review of a New Technology APC
                application submitted by the manufacturer of the technology. HCPCS code
                C9777 was effective on April 1, 2021. Based on the application
                submitted to CMS and our initial review of the procedure, we believed
                the MiVu test to be performed with another primary procedure on the
                same day. Because the MiVu test is always performed as an add-on test
                to either an esophagoscopy or esophagogastroduodenoscopy, we
                established a C-code to appropriately describe the add-on component.
                Under the regulation at 42 CFR 419.2, payment for add-on codes is
                packaged or conditionally packaged into the payment for the related
                procedures or services under the OPPS.
                 Comment: We received several comments from providers and the
                manufacturer requesting that HCPCS code C9777 be separately reimbursed
                and reassigned to APC 5303 Level 3 Upper GI Procedures, which had a
                proposed CY 2022 OPPS payment rate of $3,160.76. Commenters argued that
                MiVu\TM\ should be considered the primary procedure, not the
                esophagoscopy or esophagogastroduodenoscopy and that based on the cost
                of the device and procedure, the appropriate APC assignment is APC
                5303.
                 Response: We thank the commenters for their recommendations. After
                further evaluation of procedures performed in conjunction with the MiVu
                test on the same day, review of the comments, and input from our
                medical advisors, we believe that modifying the descriptor for the C-
                code is appropriate. We believe that revising the long descriptor to
                describe the service of performing both the MiVu test with either an
                esophagoscopy or esophagogastroduodenoscopy on the same day would
                ensure accurate tracking and reporting of the service and minimize
                inappropriate reporting of the services. Consequently, effective
                January 1, 2022, we are revising the descriptor for HCPCS code C9777 to
                read ``Esophageal mucosal integrity testing by electrical impedance,
                transoral, includes esophagoscopy or esophagogastroduodenoscopy,'' to
                accurately reflect how the procedure is currently performed in the
                hospital outpatient setting. With the change in the descriptor for
                HCPCS code C9777, we are assigning HCPCS code C9777 to APC 5303 based
                on its resource and clinical homogeneity to the other procedures in the
                APC. We remind hospitals that because HCPCS code C9777 describes both
                the MiVu test performed with either an esophagoscopy or
                esophagogastroduodenoscopy on the same day, HOPDs should not report
                separate HCPCS codes for the esophagoscopy or
                esophagogastroduodenoscopy.
                 In summary, after consideration of the public comments, we are
                modifying the long descriptor for HCPCS code C9777, as shown in Table
                28 below, and reassigning HCPCS code C9777 to APC 5303 (Level 3 Upper
                GI Procedures) for CY 2022. The final CY 2022 OPPS payment rates 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 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
                HCPCS code C9777 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.
                [GRAPHIC] [TIFF OMITTED] TR16NO21.040
                [[Page 63559]]
                25. Musculoskeletal Procedures (APCs 5111 Through 5116)
                 Prior to the CY 2016 OPPS, payment for musculoskeletal procedures
                was primarily divided according to anatomy and the type of
                musculoskeletal procedure. As part of the CY 2016 reorganization to
                better structure the OPPS payments to utilize prospective payment
                packages, we consolidated these 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 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 2022 OPPS/ASC
                proposed rule, we continued to believe that the six-level APC structure
                for the Musculoskeletal Procedures APC series is appropriate and we
                proposed to maintain the it for the CY 2022 OPPS update.
                 Comment: One commenter requested that we assign CPT code 28297
                (Correction, hallux valgus (bunionectomy), with sesamoidectomy, when
                performed; with first metatarsal and medial cuneiform joint
                arthrodesis, any method) and CPT code 28740 (Arthrodesis, midtarsal or
                tarsometatarsal, single joint) from APC 5114 to APC 5115. They noted
                that if these codes were considered cost significant for purposes of
                the 2 times rule, then these codes would cause 2 times rule violations
                in APC 5114.
                 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). We note that APC 5114 does not currently have a 2 times
                rule violation, under the requirements for cost significance as
                described in section III.B.2. of this final rule with comment period.
                In addition, we have reviewed the codes' geometric mean cost in both
                the CY 2019 and CY 2020 claims data available as well as their clinical
                similarity to other codes within APC 5114 and believe that their
                current APC assignment continues to be appropriate.
                 Comment: One commenter supported the proposed assignment of HCPCS
                code 0627T (Percutaneous injection of allogeneic cellular and/or
                tissue-based product, intervertebral disc, unilateral or bilateral
                injection, with fluoroscopic guidance, lumbar; first level) and HCPCS
                code 0629T (Percutaneous injection of allogeneic cellular and/or
                tissue-based product, intervertebral disc, unilateral or bilateral
                injection, with ct guidance, lumbar; first level) to APC 5115. Another
                commenter supported the proposed assignment of HCPCS code 0627T
                (Percutaneous injection of allogeneic cellular and/or tissue-based
                product, intervertebral disc, unilateral or bilateral injection, with
                fluoroscopic guidance, lumbar; first level) 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 APC 5115.
                 Response: We appreciate the commenters' support. We note that that
                the availability of these codes does not mean that the product(s) are
                legally marketed under the Federal Food, Drug and Cosmetic Act and/or
                the Public Health Service Act.
                 Comment: A commenter requested that we allow an exception from the
                broader proposed OPPS ratesetting process to use the CY 2020 claims
                data for ratesetting for the musculoskeletal APC series (5111 through
                5116). Two commenters also requested that we allow an exception for the
                use of CY 2020 claims data for CPT code 27130 (Arthroplasty, acetabular
                and proximal femoral prosthetic replacement (total hip arthroplasty),
                with or without autograft or allograft), which was removed from the IPO
                list beginning in CY 2020.
                 Response: We appreciate the commenters' concerns regarding
                available data and its use in OPPS ratesetting. However, we note that
                widespread use of claims data from two different years to set rates for
                a items and services in a single year could distort the OPPS relative
                payment weights, which we believe would be inappropriate and
                unnecessary when claims data from a single year--in this case, 2019--
                are largely available for ratesetting and using these data generally to
                set CY 2022 rates allows us to avoid this sort of distortion. As a
                result, we are establishing a final policy of using CY 2019 claims for
                establishing the OPPS relative weights but allowing limited use of CY
                2020 claims for informational purposes where CY 2019 claims are not
                otherwise available. For additional detail regarding the use of CY 2019
                claims in CY 2022 OPPS ratesetting, please see section X.E. of this
                final rule with comment period.
                 After consideration of the comments, we are finalizing the proposed
                assignment of CPT codes 28297 and 28740 to APC 5114, and the proposed
                assignment of CPT codes 0627T, 0629T and 0630T to APC 5115 for the CY
                2022 OPPS.
                26. 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 Tc99m 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
                [[Page 63560]]
                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: Multiple commenters requested that we increase the payment
                rate for HCPCS add-on code Q9969 from $10 and to make the add-on code
                permanent. The commenters noted that we have not increased the payment
                rate for Q9969 since the code was established in CY 2013, and one of
                the commenters believes that we have made only token efforts to promote
                the use of non-HEU produced Mo-99, the parent nuclide to Tc-99m.
                 One of the commenters supported a rate increase to Q9969 to fully
                reflect the additional cost to providers to obtain non-HEU medical
                isotopes. The same commenter suggested that if such a cost-analysis
                could not be done for CY 2022, we should increase the payment for Q9969
                by the annual market basket increase for CY 2022 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 2022.
                 Response: We appreciate the information we received from the
                commenters supporting an increase to the payment rate of $10 for HCPCS
                code Q9969, especially since the conversion to non-HEU sources for
                medical isotopes has not been completed by all producers. 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 2022 as represented by HCPCS code Q9969.
                27. Nuclear Medicine Services: Single-Photon Emission Computed
                Tomography (SPECT) Studies (APC 5593)
                 For CY 2022, we proposed to continue to assign 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 (eg, head, neck, chest, pelvis), single day imaging)) to APC 5593
                (Level 3 Nuclear Medicine and Related Services) with a proposed payment
                rate of $1,340.84.
                 Comment: One commenter expressed support for the proposed APC
                assignment.
                 Response: We thank the commenter for their support. We note that,
                based on our analysis of the claims data for this CY 2022 OPPS/ASC
                final rule with comment period, our data reveals a geometric mean cost
                of about $529.69 based on 4157 single claims (out of 9451 total
                claims), which is in line with the geometric mean cost of $1,273.36 for
                APC 5593.
                 In summary, after consideration of the public comments, we are
                finalizing our proposal without modification to assign CPT code 78803
                to APC 5593. The final CY 2022 OPPS 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 SI meanings for all codes reported under the
                OPPS. Both Addendum B and D1 are available via the internet on the CMS
                website.
                28. Pathogen Test(s) for Platelets (APC 5733)
                 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). Subsequently, HCPCS code Q9987 was deleted on
                December 31, 2017, and replaced with permanent HCPCS code P9100
                (Pathogen(s) test for platelets) effective January 1, 2018. Each of the
                HCPCS codes were assigned to New Technology APCs for the period of July
                2017 through December 2020 with payment rates for the service ranging
                between $25.50 and $35.50. Starting in January 2021, we decided to
                assign P9100 to APC 5732 (Level 2 Minor Procedures) with a payment rate
                of approximately $33.
                 From July 2017 until 2021, only one type of pathogen test for
                platelets, rapid bacterial testing, was described by HCPCS code P9100.
                The estimated cost for a rapid bacterial test was around $30, which has
                been confirmed through claims data. Starting in 2021, a new type of
                pathogen test for platelets, culture-based bacterial testing, using
                large volume delayed sampling (LVDS), was introduced. This culture-
                based method is used to test for bacterial contamination of leukocyte-
                reduced apheresis platelets and leukocyte-reduced whole blood platelet
                concentrates. We do not have claims data describing the cost of the
                LVDS test. For CY 2022, we proposed to assign HCPCS code P9100 to APC
                5732 (Level 2 Minor Procedures with a payment rate of approximately
                $33, which is the same APC assignment for HCPCS code P9100 as in CY
                2021.
                 Comment: Two commenters requested we increase the payment rate for
                HCPCS code P9100 by moving the service from APC 5732 (Level 2 Minor
                Procedures) with payment rate of $32.98 to APC 5733 (Level 3 Minor
                Procedures) with a payment rate of $54.24. The commenters claim that
                the cost of the LVDS test is either $75 or $83, depending on which
                manufacturer's test is used, which is substantially higher than the
                approximately $30 cost of the rapid bacterial test for platelets. The
                commenters believe that the proposed payment rate of $32.98 for APC
                5732 is too low to adequately compensate hospitals for the share of
                pathogen tests for platelets using the more expensive culture-based
                test, using LVDS. Commenters believed assigning HCPCS code P9100 to APC
                5733 with a payment rate of $54.24 would better reflect the mixture of
                costs between culture-based platelet tests using LVDS and rapid
                bacterial tests.
                 Response: We agree with the commenters that the payment rate for
                HCPCS code P9100 should better reflect the resource cost of the
                anticipated mixture of rapid bacterial platelet tests and culture-based
                platelet tests, using LVDS, that will be used in CY 2022 to test for
                bacterial contamination in platelets. Therefore, we support the
                suggestion of the commenters to reassign HCPCS code P9100 to APC 5733
                (Level 3 Minor Procedures) with a payment rate of $54.24.
                 After reviewing the public comments, we have decided to modify our
                proposal and reassign HCPCS code P9100 from APC 5732 (Level 2 Minor
                Procedures) to APC 5733 (Level 3 Minor Procedures) for CY 2022. The
                final CY 2022 payment rate for HCPCS code P9100 can be found in
                Addendum B to this CY 2022 OPPS/ASC final rule with comment period
                [[Page 63561]]
                which is available via the internet on the CMS website.
                29. Pulmonary Rehabilitation (APC 5733)
                 For CY 2022, the AMA's CPT Editorial Panel created two new codes
                describing pulmonary rehabilitation services and requested that CMS
                delete HCPCS code G0424 (Pulmonary rehabilitation, including exercise
                (includes monitoring), one hour, per session, up to two sessions per
                day). We proposed to assign CPT code 94625 (Physician or other
                qualified health care professional services for outpatient pulmonary
                rehabilitation; without continuous oximetry monitoring (per session))
                and CPT code 94626 (Physician or other qualified health care
                professional services for outpatient pulmonary rehabilitation; with
                continuous oximetry monitoring (per session)) to APC 5733 (Level 3
                Minor Procedures) with a proposed payment rate of $57.12. We note that
                CPT codes 94625 and 94626 were listed as placeholder codes 946X1 and
                946X2, respectively, in OPPS Addendum B of the CY 2022 OPPS/ASC
                proposed rule.
                 Comment: Several commenters disagreed with the proposed APC
                assignment and requested that CMS reassign CPT codes 94625 and 94626 to
                either APC 5721 (Level 1 Diagnostic Tests and Related Services) with a
                proposed payment rate of $143.21 or to APC 5771 (Cardiac
                Rehabilitation) with a proposed payment rate of $119.09. These
                commenters stated that these APCs better reflected the clinical
                similarity and costs associated with furnishing these services.
                 Response: CPT codes 94625 and 94626 do not describe diagnostic
                tests and so are not clinically similar to the other services in APC
                5721. While clinically similar to cardiac rehabilitation services,
                predecessor HCPCS code G0424 has a geometric mean cost of $45.63 based
                on 198,132 single claims (out of 199,356 total claims), which is
                significantly lower than the geometric mean cost of $113.12 for the
                services in APC 5771. Based on our analysis, we believe that assignment
                of CPT codes 94625 and 94626 to APC 5733 is appropriate because their
                costs are consistent with the cost data of the predecessor code. We
                note that we review, on an annual basis, the APC assignments for all
                items and services paid under the OPPS. We will consider whether the
                current APC structure adequately reflects the clinical similarities and
                costs associated with pulmonary rehabilitation services in future
                rulemaking.
                 In summary, after consideration of the public comments, we are
                finalizing our proposal without modification to assign CPT codes 94625
                and 94626 to APC 5733. The final CY 2022 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 SI meanings for all codes reported under
                the OPPS. Both Addendum B and D1 are available via the internet on the
                CMS website.
                30. Sclerotherapy (APC 5054)
                 For CY 2022, we proposed to continue assignment of both CPT codes
                36465 (Injection of non-compounded foam sclerosant with ultrasound
                compression maneuvers to guide dispersion of the injectate, inclusive
                of all imaging guidance and monitoring; single incompetent extremity
                truncal vein (for example, great saphenous vein, accessory saphenous
                vein)) and CPT code 36466 (Injection of non-compounded foam sclerosant
                with ultrasound compression maneuvers to guide dispersion of the
                injectate, inclusive of all imaging guidance and monitoring; multiple
                incompetent truncal veins (for example, great saphenous vein, accessory
                saphenous vein), same leg) to APC 5054 (Level 4 Skin Procedures) with a
                proposed payment rate of $1,759.21.
                 Comment: One commenter disagreed with the proposed assignment of
                the procedures described by CPT codes 36465 and 36466 to APC 5054 and
                requested a reassignment to APC 5183 (Level 3 Vascular Procedures),
                which had a proposed payment rate of $2,937.76. The commenter stated
                that the per-procedure cost for the Varithena foam sclerosant used in
                the procedure is $1,054. The commenter stated that APC 5183 is more
                clinically appropriate and reflects the resources required to perform
                the procedure. Specifically, the commenter indicated that the
                procedures described by CPT codes 36465 and 36466 share similar
                clinical and resource characteristics to the following surgical
                procedures that are assigned to APC 5183:
                 CPT code 36473 (Endovenous ablation therapy of incompetent
                vein, extremity, inclusive of all imaging guidance and monitoring,
                percutaneous, mechanochemical; first vein treated);
                 CPT code 36475 (Endovenous ablation therapy of incompetent
                vein, extremity, inclusive of all imaging guidance and monitoring,
                percutaneous, radiofrequency; first vein treated); and
                 CPT code 36478 (Endovenous ablation therapy of incompetent
                vein, extremity, inclusive of all imaging guidance and monitoring,
                percutaneous, laser; first vein treated).
                 The commenter also stated that the proposed geometric mean cost of
                $1,567.45 for 36465 would not be the lowest cost procedure if placed in
                APC 5183 and that the geometric mean costs of CPT code 36466 would be
                better aligned with APC 5183.
                 Response: Based on input from our clinical advisors, we believe
                that the procedures described by CPT codes 36465 and 36466 are
                clinically similar to the procedures assigned to APC 5054. We do not
                believe that the resources used for the procedures described by CPT
                codes 36465 and 36466 are comparable to the procedures described by CPT
                codes 36473, 36475, and 36478, which are assigned to APC 5183. We also
                note that the proposed geometric mean cost of $2,314.25 for CPT code
                36466 is greater than the other codes with significant volume in APC
                5183 and above the highest geometric mean cost of codes with
                significant volume in the next lower APC 5182 (Level 2 Vascular
                Procedures). Consequently, we believe that APC 5054 appropriately
                reflects the resources and clinical characteristics associated with the
                procedures described by CPT codes 36465 and 36466. We note that the
                geometric mean cost for APC 5054 is approximately $1,668.97, which
                exceeds the cost of the Varithena foam sclerosant ($1,054, as reported
                by the commenter) used in the procedure. We also note that the
                geometric mean costs for CPT codes 36465 and 36466 are well within the
                range of significant costs associated with APC 5054 ($1,402.75-
                $2,752.68).
                 Therefore, after consideration of the public comment received, we
                are finalizing our proposal without modification for assignment of the
                procedures described by CPT codes 36465 and 36466 to APC 5054. The
                final CY 2022 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 SI
                meanings for all codes reported under the OPPS. Both Addendum B and D1
                are available via the internet on the CMS website.
                31. Stromal Vascular Fraction (SVF) Therapy
                 For CY 2022, we proposed to continue assignment of CPT codes 0565T
                (Autologous cellular implant derived from adipose tissue for the
                treatment of osteoarthritis of the knees; tissue harvesting and
                cellular implant creation) and 0566T (Autologous
                [[Page 63562]]
                cellular implant derived from adipose tissue for the treatment of
                osteoarthritis of the knees; injection of cellular implant into knee
                joint including ultrasound guidance, unilateral) to status indicator
                ``E1'', indicating that these services are not paid by Medicare when
                submitted on outpatient claims.
                 Comment: One commenter supported this proposal and indicated that
                adipose-derived stromal vascular fraction (SVF) therapy for
                osteoarthritis is an unproven treatment. The commenter stated that FDA
                has issued several warnings about unproven cellular therapies and
                regenerative medicines since they offer no proven clinical benefits and
                may harm patients. The commenter further reported there is no
                indication for which SVF has been proven to be safe and effective in
                well-controlled clinical trials. To eliminate abuse by businesses
                seeking to profit from unproven treatments, the commenter suggested not
                paying for SVF therapy since unproven therapies create economic burdens
                on health systems and patients.
                 Response: We thank the commenter for their support.
                 In summary, after consideration of the public comment, we are
                finalizing our proposal without modification to continue assignment of
                CPT codes 0565T and 0566T to status indicator ``E1''. We refer readers
                to Addendum D1 of this final rule with comment period for the SI
                meanings for all codes reported under the OPPS. Addendum D1 is
                available via the internet on the CMS website.
                32. Synthetic Resorbable Skin Substitute
                 The CY 2014 OPPS/ASC final rule with comment period describes skin
                substitute products as ``. . . a category of products that are most
                commonly used in outpatient settings for the treatment of diabetic foot
                ulcers and venous leg ulcers . . . [T]hese products do not actually
                function like human skin that is grafted onto a wound; they are not a
                substitute for a skin graft. Instead, these products are applied to
                wounds to aid wound healing and through various mechanisms of action
                that stimulate the host to regenerate lost tissue.'' (78 FR 74930
                through 74931). The CY 2014 OPPS/ASC final rule with comment period
                also described skin substitutes as ``. . . a class of products that we
                treat as biologicals . . .'' and mentioned that prior to CY 2014, skin
                substitutes were separately paid in the OPPS as if they were
                biologicals according to the ASP methodology (78 FR 74930 through
                74931).
                 The CY 2014 OPPS final rule with comment period did not
                specifically mention whether synthetic products could be considered to
                be skin substitute products in the same manner as biological products,
                because there were no synthetic products at that time that were
                identified as skin substitute products. Then in 2018, a manufacturer
                made a request that an entirely synthetic product that it claimed is
                used in the same manner as biological skin substitutes, receive a HCPCS
                code that would allow the product to be billed with graft skin
                substitute procedure codes, including CPT codes 15271 through 15278 and
                C5271 through C5278, starting in 2019. Initially, the synthetic product
                was not described as a graft skin substitute product. However, we now
                believe that both biological and synthetic products could be considered
                to be skin substitutes for Medicare payment purposes.
                 This view is supported by a paper referenced in a report we cited
                in the CY 2014 OPPS/ASC final rule with comment period titled ``Skin
                Substitutes for Treating Chronic Wounds Technology Assessment Report at
                ES- 2'', which is available on the AHRQ website at: https://www.ahrq.gov/sites/default/files/wysiwyg/research/findings/ta/skinsubs/HCPR0610_skinsubst-final.pdf.
                 That paper, titled ``Regenerative medicine in dermatology:
                biomaterials, tissue engineering, stem cells, gene transfer and
                beyond'' by Dieckmann et al., states that skin substitutes should be
                divided into two broad categories: Biomaterial and cellular. The paper
                explains that ``. . . biomaterial skin substitutes do not contain cells
                (acellular) and are derived from natural or synthetic sources . . .''
                The paper continues by describing biomaterial skin substitutes further:
                ``Synthetic sources include various degradable polymers such as
                polylactide and polyglycolide. Whether natural or synthetic, the
                biomaterial provides an extracellular matrix that allows for
                infiltration of surrounding cells.'' The paper by Dieckmann et al.
                indicates that skin substitute products may be synthetic products as
                well as biological products.
                 For CY 2021, we established a policy to include synthetic products
                in addition to biological products in our description of skin
                substitutes. Our new description defines skin substitutes as a category
                of biological and synthetic products that are most commonly used in
                outpatient settings for the treatment of diabetic foot ulcers and
                venous leg ulcers. We also retained the additional description of skin
                substitute products from the CY 2014 OPPS final rule which states ``. .
                . that skin substitute products do not actually function like human
                skin that is grafted onto a wound; they are not a substitute for a skin
                graft. Instead, these products are applied to wounds to aid wound
                healing and through various mechanisms of action they stimulate the
                host to regenerate lost tissue . . .'' (78 FR 74930 through 74931).
                Finally, our definition of skin substitutes does not include bandages
                or standard dressings and these items cannot be assigned to either the
                high cost or low cost skin substitute groups or be reported with either
                CPT codes 15271 through 15278 or HCPCS codes C5271 through C5278. For
                CY 2022, we proposed to continue to report synthetic graft skin
                substitute products using HCPCS code C1849 in the same manner as in CY
                2021.
                 Comment: As previously requested for CY 2021, several commenters
                requested that we establish product-specific HCPCS codes for synthetic
                graft skin substitute products and requested that we delete HCPCS code
                C1849 because the code is not product-specific. The primary reason
                commenters want product-specific codes for synthetic graft skin
                substitute is they feel that synthetic products should be assigned to
                either the high cost or low cost skin substitute group based on the
                cost of each individual product in a similar manner to biological skin
                substitute products. Commenters feel that because multiple synthetic
                graft skin substitute products can be assigned to HCPCS code C1849,
                there may be some synthetic products that should be in the low cost
                skin substitute group that will receive payment in the high cost skin
                substitute group if HCPCS code C1849 is assigned to the high cost
                group. Commenters also expressed concern about the opposite situation,
                in which high cost synthetic products would potentially be underpaid if
                HCPCS code C1849 is assigned to the low cost skin substitute group.
                Commenters believed the only resolution to these issues with HCPCS code
                C1849 is to delete the code and replace it with product-specific HCPCS
                codes for each graft synthetic product so there are not cases of
                synthetic products being either overpaid or underpaid.
                 Response: HCPCS code C1849 was established in response to the need
                to pay for graft skin substitute application services performed with
                synthetic graft skin substitute products in the OPPS in a manner
                comparable to how we pay for graft skin substitute application services
                performed with biological graft skin substitute products. As mentioned
                earlier in this section, when we established our policy in the CY 2014
                OPPS/ASC final rule with comment period to package graft skin
                substitute
                [[Page 63563]]
                products into their associated application procedures (78 FR 74930
                through 74931), we did not specifically mention whether synthetic
                products could be considered skin substitute products in the same
                manner as biological products. The reason for this was that there were
                no synthetic products at that time that were identified as skin
                substitute products.
                 We note that unless a graft skin substitute product has pass-
                through status, graft skin substitute products are not paid separately
                under unique HCPCS or CPT codes in OPPS. However, in CY 2018, a
                manufacturer requested that CMS develop methodologies to allow
                synthetic graft skin substitute products to receive payment in the
                outpatient hospital setting and in the physician office setting. After
                extensive review, we made the determination to assign the synthetic
                product in CY 2019 to HCPCS codes A6460 and A6461, which were newly
                created HCPCS codes to report synthetic, resorbable wound dressings.
                HCPCS codes A6460 and A6461 are packaged under the OPPS and cannot be
                assigned to either the high cost or low cost skin substitute group.
                This meant that graft skin substitute products could not be billed with
                CPT codes 15271 through 15278 or HCPCS codes C5271 through C5278, even
                though synthetic graft skin substitute products and biological graft
                skin substitute products perform the same function and have similar
                efficacy. We quickly realized that using HCPCS codes A6460 and A6461
                would not work to appropriately describe the application of synthetic
                graft products when used in similar manner to biological graft skin
                substitute products. Therefore, we needed to consider other approaches
                to this issue.
                 Because all skin substitutes, except those with pass-through
                status, are packaged under the OPPS, we explored solutions that would
                permit synthetic skin substitute products to be billed with either CPT
                codes 15271 through 15278 or HCPCS codes C5271 though C5278. We decided
                to create HCPCS code C1849 to describe any synthetic graft skin
                substitute product, and we revised the payment logic for the graft skin
                substitute application procedure codes to allow HCPCS code C1849 to be
                billed with those procedures. Multiple synthetic graft skin substitute
                products have now been identified as being described by HCPCS code
                C1849. We will average the pricing data from the various products to
                determine an amount for the products described by HCPCS code C1849 to
                compare against the MUC threshold. This comparison will determine if
                HCPCS code C1849 should be assigned to the high cost or low cost skin
                substitute category.
                 We appreciate the concerns expressed by commenters that one service
                code for synthetic products could lead to low cost synthetic graft
                products receiving excess payment if HCPCS code C1849 is assigned to
                the high cost group, or lead to high cost synthetic graft products
                being underpaid if HCPCS code C1849 is assigned to the low cost group.
                We will take these concerns into consideration in future rulemaking.
                 Comment: One commenter suggested that, if we do not establish
                product-specific HCPCS codes for each synthetic graft skin substitute
                product, we delete C1849 and establish two new HCPCS codes in its
                place. Specifically, the commenter recommended that one HCPCS code
                would be for high cost synthetic graft skin substitute products and the
                other HCPCS code would be for low cost synthetic graft skin substitute
                products. These two payment codes would ensure that all synthetic graft
                skin substitute products are assigned to the cost group that reflects
                whether the mean unit cost of any given synthetic graft skin substitute
                product is above or below the mean unit cost threshold for determining
                assignment to the high cost or low cost skin substitute group.
                 Response: We appreciate the suggestion from the commenter. We note
                that our policy is to allow all synthetic skin substitutes described by
                C1849 to bill the skin graft application CPT codes for high cost skin
                substitute products (CPT codes 15271 through 15278). We appreciate the
                commenters suggestion, which we will consider for future rulemaking.
                 Comment: One commenter provided suggestions on how we could revise
                our definition of synthetic graft skin substitute products to reduce
                the possibility that synthetic dressings or non-resorbable polymeric
                sheets could be considered synthetic skin substitute products and be
                reported using HCPCS code C1849.
                 Response: We thank the commenter for their suggestions. Currently,
                we do not believe that there is an issue with the definition of
                synthetic skin substitute products that we established for the CY 2021
                OPPS/ASC final rule (85 FR 86064 through 86067). If during future
                rulemaking we find that synthetic graft products that do not function
                as skin substitutes are being reported using HCPCS code C1849, we may
                refer to the commenter's suggestions to help us revise our definition
                of synthetic graft skin substitute products.
                33. Therapeutic Ultrafiltration (APC 5241)
                 As displayed in Addendum B to the CY 2022 OPPS/ASC proposed rule,
                we proposed to assign placeholder CPT code 0692T (Therapeutic
                Ultrafiltration) to SI ``E1'' to indicate that the code is not payable
                by Medicare when submitted on outpatient claims (any outpatient bill
                type) because the service associated with the code is either not
                covered by any Medicare outpatient benefit category, is statutorily
                excluded from Medicare payment, or is not reasonable and necessary. We
                note that CPT code 0692T was listed as placeholder code 057XT in OPPS
                Addendum B of the CY 2022 OPPS/ASC proposed rule.
                 Comment: Some commenters reported that the device associated with
                the CPT code 0692T describing therapeutic ultrafiltration received FDA
                approval by the U.S. Food and Drug Administration (FDA) in 2020 and
                requested separate payment for the code. They specifically requested
                assignment to APC 5242 (Level 2 Blood Product Exchange and Related
                Services) and SI ``S'' (Paid under OPPS; separate APC payment). They
                stated that CPT codes 36511 (Therapeutic apheresis; for white blood
                cells), and 36514 (Therapeutic apheresis; for plasma pheresis), which
                are assigned to APC 5242 and SI ``S,'' can be considered similar to
                therapeutic ultrafiltration in clinical and resource coherence.
                 Response: For CY 2022, OPPS payments are based on claims submitted
                between January 1, 2019, through December 31, 2019, and processed
                through June 30, 2020. Because CPT code 0692T is a new code that will
                be effective January 1, 2022, we have no claims data available for
                ratesetting. However, after further review of the service, we believe
                that CPT code 0692T shares similar clinical characteristics and
                resource costs as CPT code 36513 (Therapeutic apheresis; for
                platelets), which is currently assigned to APC 5241 (Level 1 Blood
                Product Exchange and Related Services). Therefore, we are assigning CPT
                code 0692T to APC 5241 and SI ``S'' for CY 2022. The final payment rate
                for the code 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.
                 We note that we review, on an annual basis, the APC assignments for
                all services and items paid under the OPPS. As a result, we will
                reevaluate the APC
                [[Page 63564]]
                placement for CPT code 0692T for the next rulemaking cycle.
                34. Transcatheter Implantation of Coronary Sinus Reduction Device
                 The Neovasc Reducer System is a novel device implanted into the
                coronary sinus vein using minimally invasive techniques. The Reducer is
                implanted by transvenous percutaneous approach from the right or left
                jugular vein into the coronary sinus. After positioning the balloon
                catheter at the implantation site, the Reducer is deployed by inflating
                the balloon catheter until apposition of the vessel wall is achieved.
                The balloon catheter is then deflated and removed from the coronary
                sinus, leaving the Reducer permanently inflated. After 6 to 8 weeks the
                hourglass shaped wire mesh is covered with endothelium and narrowing
                becomes effective by redistributing blood flow to ischemic areas of the
                heart.
                 In 2021, Neovasc received FDA approval for the Investigational
                Device Exemption (IDE) regarding the COSIRA-II Clinical Trial. COSIRA-
                II is a randomized, sham-controlled trial investigating the safety and
                effectiveness of the Reducer for patients suffering from refractory
                angina. Neovasc has been classified as a Category B device by FDA.
                 In addition, the AMA's Editorial Panel established a new code,
                specifically, CPT code 0645T (Transcatheter implantation of coronary
                sinus reduction device including vascular access and closure, right
                heart catheterization, venous angiography, coronary sinus angiography,
                imaging guidance, and supervision and interpretation, when performed),
                to describe the implantation of a coronary sinus reduction device that
                is associated with the Neovasc Reducer System. This code was effective
                July 1, 2021.
                 For CY 2022, we proposed to assign CPT code 0645T to SI ``E1'' to
                indicate that the code is not paid by Medicare when submitted on
                outpatient claims (any outpatient bill type).
                 Comment: One commenter, specifically, the manufacturer of the
                Neovasc Reducer System, requested assignment to either New Technology
                APC 1576 (New Technology--Level 39 ($15,001-$20,000) with the payment
                rate of $17,500.50, or New Technology APC 1577 (New Technology--Level
                40 ($20,001-$25,000) with the payment rate of $22,500.50, in
                anticipation of its approval by Medicare for its Category B IDE study.
                The company stated there are no other surgical procedures that are
                similar in terms of resource costs and clinical homogeneity that would
                allow for the Neovasc Reducer System to be assigned to an appropriate
                clinical APC.
                 Response: Based on the information presented by the commenter, and
                our review of the IDE study, we do not believe that it is appropriate
                to assign a payable status indicator under the OPPS to CPT code 0645T
                prior to the approval of the Category B IDE study. In addition, the
                clinical study has not yet met CMS' standards for coverage, nor does it
                appear on the CMS Approved IDE List, which can be found at this CMS
                website: https://www.cms.gov/Medicare/Coverage/IDE/Approved-IDE-Studies.html. Because the Neovasc Reducer System has not been approved
                for Medicare coverage as a Category B IDE, we believe that we should
                continue to assign CPT code 0645T to status indicator ``E1''. If this
                technology later meets CMS's standards for coverage, we will assess the
                APC assignment for the code in a future quarterly update and/or
                rulemaking cycle.
                 Therefore, after consideration of the public comment, we are
                finalizing our proposal, without modification, to assign CPT code 0645T
                to SI ``E1''. We refer readers to Addendum D1 to this final rule with
                comment period for the complete list of the OPPS payment status
                indicators and their definitions for CY 2022. Addendum D1 is available
                via the internet on the CMS website.
                35. Tympanostomy Using an Automated Tube Delivery System (APC 5163)
                 For CY 2022, we proposed to continue to assign CPT code 0583T to
                APC 5163 (Level 3 ENT Procedures) with a proposed payment rate of
                $1,387.72.
                 Comment: A few commenters disagreed with our proposed APC
                assignment. These commenters stated that CPT code 0583T should be
                reassigned to APC 5164 (Level 4 ENT Procedures) or APC 1523 (New
                Technology--Level 23 ($2,501-$3,000)) with proposed payment rates of
                $2,806.94 and $2,750.50, respectively. Commenters stated that CPT code
                0583T is clinically similar to CPT code 69421 (Myringotomy including
                aspiration and/or eustachian tube inflation requiring general
                anesthesia), which is assigned to APC 5164. Commenters further stated
                that APC 5164 also includes many other middle ear procedures that
                involve an incision, revision, repair, and removal of tubes.
                 Response: We disagree with commenters on the clinical similarity
                between CPT code 0583T and the other services in APC 5164. For the
                reasons discussed in the CY 2021 OPPS final rule with comment period
                (85 FR 85983), based on our review of the procedure and input from our
                medical advisors, we continue to 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. Both procedures (as
                described by CPT codes 0583T and 69436) require ventilating tubes that
                require anesthesia.
                 In summary, after consideration of the public comments, we are
                finalizing our proposal without modification to continue assignment of
                CPT code 0583T to APC 5163. The final CY 2022 OPPS payment rates 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 SI meanings for all codes reported under
                the OPPS. Both Addendum B and D1 are available via the internet on the
                CMS website.
                36. Urology and Related Services (APCs 5371 Through 5378)
                 For CY 2016, we established the APC reorganization and developed a
                urology specific series of APCs 5371-5377. Since that time, we have
                maintained that structure and added an additional level 8, APC 5378
                (Level 8 Urology and Related Services). Based on our analysis of the CY
                2019 claims available for ratesetting, we proposed to continue the 8
                level structure of Urology APCs in the CY 2022 OPPS. We received
                comments on the CY 2022 OPPS/ASC proposed rule suggesting we revise the
                APC assignments for the services assigned to the Urology & Related
                Services APCs. A commenter specifically noted that a reorganization for
                APCs 5375 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.
                 We received several comments on APC reassignments. Below are the
                comments and our responses.
                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.
                [[Page 63565]]
                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 5375 for CY
                2020.
                 For the CY 2021 update, we replaced HCPCS code C9747 with CPT code
                55880 (Ablation of malignant prostate tissue, transrectal, with high
                intensity-focused ultrasound (hifu), including ultrasound guidance) on
                January 1, 2019. We maintained the assignment of HCPCS code C9747 to
                APC 5375 with a payment rate of $4,413.90. We note that the payment
                rates for the CY 2021 OPPS update were based on claims submitted
                between January 1, 2019 through December 30, 2019, that were processed
                on or before June 30, 2020. Our claims data showed a geometric mean
                cost of approximately $5,744,43 for HCPCS code C9747 (CPT code 55880)
                based on 279 single claims (out of 284 total claims), which was
                assigned to APC 5375 with a geometric mean cost of about $4,299.81.
                 For CY 2022, we proposed to continue to assign HCPCS code C9747 to
                APC 5375 with a proposed payment rate $4,527.23.
                 Comment: Several commenters requested CPT code 55880 be reassigned
                to APC 5376 from APC 5375. The commenters argued that the average cost
                of the HIFU procedure is closer to the APC 5376 proposed payment rate
                of $8,468.32. 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
                $8,468.32. They also stated that the new CPT code 55880 descriptor
                treats malignant prostate tissue, which requires additional resources
                relative to its predecessor code descriptor that treated BPH. Some
                commenters stated that the CY 2019 OPPS reassignment of HCPCS code
                C9747 to APC 5375 from APC 5376 was due to inaccurate and incomplete
                claims that did not include the substantial cost of the disposable
                device required for the procedure and stated that HIFU is a device-
                intensive procedure. They alleged the underpayment for HIFU discourages
                hospitals from providing this procedure for Medicare patients because
                the APC 5375 payment rate does not cover the hospital facility cost for
                this procedure. They alleged 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 argued that the current HIFU
                payment is a health equity issue because Americans in a lower socio-
                economic class will have less access to high-quality healthcare.
                Furthermore, the commenters stated that prostate cancer affects more
                men of color whose rate of death is almost twice that of non-Hispanic
                white men.
                 Response: 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
                predecessor HCPCS code C9747, our claims data supported maintaining CPT
                code 55880 in APC 5375. For CY 2022, based on our analysis of the
                claims for this CY 2022 OPPS/ASC final rule with comment period, our
                data shows a geometric mean cost of approximately $5,708 for HCPCS code
                C9747 based on 279 single claims, which is more comparable to the
                geometric mean cost of about $4,299 for APC 5375, rather than the
                geometric mean cost of approximately $8,042 for APC 5376. Although we
                are not applying the CY 2020 claims data for the CY 2022 ratesetting
                due to the PHE, we noted that the geometric mean cost associated with
                HCPCS code C9747 is about $6,654, which is between the geometric means
                of APC 5375 and APC 5376. Our clinical advisors also acknowledge the
                clinical and resource similarity between CPT code 55880 and CPT code
                55873, both of which are treatment options for prostate cancer. We
                performed several APC modeling studies on the impact of reassigning a
                set of codes to better balance the procedures within APC 5375 and 5376,
                and we found that the reassignment of these codes would impact the
                payment level of both APC 5375 and 5376.
                 In summary, after careful consideration of the public comments, and
                after our analysis of the claims data for this final rule with comment
                period, we are maintaining the APC assignment for CPT code 55880 in APC
                5375, but will consider its reassignment in future rulemaking. The
                final CY 2022 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 to this final rule with comment period for the SI
                meanings for all codes reported under the OPPS. Both Addendum B and D1
                are available via the internet on the CMS website.
                b. Rez[umacr]m Procedure--Water Vapor Thermotherapy (APC 5373)
                 In 2018, CMS established a new code, specifically, HCPCS code C9748
                (Transurethral destruction of prostate tissue; by radiofrequency water
                vapor (steam) thermal therapy). Based on its estimated cost, we
                assigned the new code to APC 5373 (Level 3 Urology and Related
                Services) with a payment rate of $1,695.68 effective January 1, 2018.
                We announced the SI and APC assignment in the January 2018 OPPS
                quarterly update CR (Transmittal 3941, Change Request 10417, dated
                December 22, 2017).
                 For the CY 2019 update, we replaced HCPCS code C9748 with CPT 53854
                (Transurethral destruction of prostate tissue; by radiofrequency
                generated water vapor thermotherapy) on January 1, 2019. We maintained
                the assignment of CPT 53854 (HCPCS code C9748) to APC 5373 with a
                payment rate of $1,695.57. We note that the payment rates for the CY
                2018 OPPS update were based on claims submitted between January 1, 2017
                through December 30, 2017, that were processed on or before June 30,
                2018. Since HCPCS code C9748
                [[Page 63566]]
                was established on January 1, 2018, we had no claims data for the
                procedure for use in ratesetting for CY 2019.
                 For the CY 2020 update, we maintained the assignment of HCPCS code
                53854 to APC 5373 with a payment rate of $1,771.35. We note that the
                payment rates for the CY 2020 OPPS update were based on claims
                submitted between January 1, 2018 through December 30, 2018, that were
                processed on or before June 30, 2019. Our claims data showed a
                geometric mean cost of approximately $1,899.18 for HCPCS code C9748
                based on 191 single claims (out of 192 total claims), which was
                assigned to APC 5373 with a geometric mean of about $1,733.35.
                 For the CY 2021 update, we maintained the assignment of HCPCS code
                53854 to APC 5373 with a payment rate of $1,792.99. We note that the
                payment rates for the CY 2020 OPPS update were based on claims
                submitted between January 1, 2019, through December 30, 2019, that were
                processed on or before June 30, 2020. Our claims data showed a
                geometric mean cost of approximately $2,414.69 for HCPCS code 53854
                based on 751 single claims (out of 752 total claims), which was
                assigned to APC 5373 with a geometric mean cost of about $1,746.64.
                 For CY 2022, we proposed to continue to assign HCPCS code 53854 to
                APC 5373 with a proposed payment rate $1,839.83.
                 Comment: A commenter requested the reassignment of CPT code 53854
                to APC 5374 (Level 4 Urology and Related Services) from APC 5373 (Level
                3 Urology and Related Services). The commenter stated the geometric
                mean costs associated with CPT Code 53854 are significantly higher than
                either all significant or almost all significant other procedures in
                APC 5373. The commenter further stated that based on the CY 2019 claims
                data, CPT code 53854 yields a geometric mean cost of about $2,410 with
                751 single frequency claims and suggested the geometric mean cost of
                CPT code 53854 is much closer to the geometric mean cost of APC 5374,
                which is approximately $2,996. The commenter cited the year over year
                increase in geometric cost of 18 percent or $423 from 2019 to 2020. In
                addition, the commenter stated CPT 53854 is a transurethral procedure
                for the treatment of benign prostatic hyperplasia (BPH) and is more
                clinically similar to the two transurethral BPH procedure codes CPT
                53850 (Transurethral destruction of prostate tissue; by microwave
                thermotherapy) and CPT 53852 (Transurethral destruction of prostate
                tissue; by radiofrequency thermotherapy) assigned to APC 5374.
                 Response: We appreciate the commenter's input on this subject.
                Based on our evaluation of the latest claims data for this final rule
                with comment period, we noted the geometric mean cost associated with
                CPT code 53854 (HCPCS C9748) increased from $1,899.18 (from the CY 2018
                claims data) to $2,412.55 (from the CY 2019 claims data), which
                represented an approximately 27 percent increase year-over-year. Based
                on our review, our medical advisors agreed with the commenter that CPT
                code 53854 is similar to CPT code 53850 and CPT code 53852 in terms of
                clinical characteristics and resource. We noted that CPT codes 53850
                and 53852 represent treatment options for BPH which are assigned to APC
                5374 (Level 4 Urology and Related Services) while there are no BPH
                treatment procedures assigned to APC 5373 with the exception of CPT
                code 53854.
                 In summary, after consideration of the public comments, we are
                finalizing our proposal with modification and reassigning CPT code
                53854 to APC 5374 from APC 5373 for CY 2022. The final CY 2022 OPPS
                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
                to this final rule with comment period for the SI meanings for all
                codes reported under the OPPS. Both Addendum B and D1 are available via
                the internet on the CMS website.
                37. VisONE Synchronized Diaphragmatic Stimulation (SDS) System
                 For CY 2022, the CPT Editorial Panel created CPT codes 0674T
                through 0685T, which are listed in Table 29, to describe the
                VisONE[supreg] Synchronized Diaphragmatic StimulationTM
                (SDS[supreg]) System. For CY 2022, we proposed to assign these codes to
                OPPS SI ``E1'', indicating that these services are not paid by Medicare
                when submitted on outpatient claims. We note these codes were listed as
                placeholder codes 050XT through 055XT in OPPS Addendum B of the CY 2022
                OPPS/ASC proposed rule.
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                 Comment: A commenter reported that the device associated with these
                codes has been approved for Breakthrough Device Designation by the FDA.
                The commenter added that they are currently in the process of applying
                for Medicare national coverage for the clinical trial as a Category B
                IDE study. The commenter requested that we crosswalk the new codes to
                the SIs and APC assignments of comparable procedures involving other
                stimulation technologies so that appropriate hospital outpatient
                payment may be made in the event the Category B IDE study is approved
                for Medicare coverage. The commenter listed the comparable codes with
                the SI and APCs assignments. See Table 30 for SI and APC assignments
                requested by commenter.
                [[Page 63569]]
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                 Response: The clinical trial associated with CPT codes 0674T
                through 0685T does not appear on the CMS Approved IDE List, which can
                be found at this CMS website: https://www.cms.gov/Medicare/Coverage/IDE/Approved-IDE-Studies.html. While we recognize the commenter's
                assertion that is was accepted for FDA's Breakthrough Device
                Designation and that it intends to apply for Medicare coverage as a
                Category B IDE clinical trial, since the clinical trial associated with
                these codes has not been approved for Medicare coverage, we believe we
                should continue to assign CPT codes 0674T through 0685T to SI ``E1''
                for CY 2022. If Medicare approves the clinical trial as a Category B
                IDE study, we will reassess the SI and APC assignments for the codes.
                 In summary, after consideration of the public comments, we are
                finalizing our proposal without modification. Specifically, we are
                finalizing our continued assignment of CPT code=0674T through 0685T to
                OPPS SI ``E1.''
                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 Sec. 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 Sec.
                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 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
                [[Page 63570]]
                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 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).
                 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.
                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. Currently, there are 11 device categories eligible for
                pass-through payment. These devices are listed in Table 31. Below, we
                detail the expiration dates of pass-through payment status for each of
                the 11 devices currently receiving device pass-through payment.
                 The pass-through payment status of the device category for HCPCS
                code C1823 is scheduled to expire on December 31, 2021. Typically, we
                would propose to package the costs of the device described by C1823
                into the costs related to the procedure with which the device is
                reported in the hospital claims data for CY 2022. The data for the CY
                2022 OPPS proposed rule ratesetting for the procedure reported with
                C1823 would have been set using CY 2020 outpatient claims data
                processed through December 31, 2020, however, as described in section
                X.E. of the CY 2022 OPPS/ASC proposed rule (86 FR 42188), due to the
                effects of the COVID-19 PHE, we proposed to use CY 2019 claims data
                instead of CY 2020 claims data in establishing the CY 2022 OPPS rates
                and to use cost report data from the same set of cost reports
                originally used in final rule 2021 OPPS ratesetting. Therefore, we
                proposed to use our equitable adjustment authority under section
                1833(t)(2)(E) of the Act to provide separate payment for C1823 for four
                quarters of CY 2022 to end on December 31, 2022. This would allow for
                CY 2021 claims data to inform CY 2023 rate setting for the procedure
                reported with C1823. This is the only device whose costs would
                typically be packaged into the related procedure in CY 2022 using CY
                2020 claims data for ratesetting and is the only device to which this
                proposed policy would apply. A full discussion of this finalized policy
                is included in section X.F. of this CY 2022 OPPS/ASC final rule.
                 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 categories for HCPCS codes C1824, C1982, C1839,
                C1734, and C2596 is set to expire on December 31, 2022. The pass-
                through payment status of the device category for HCPCS code C1748 is
                set to expire on June 30, 2023. The pass-through payment status of the
                device category for HCPCS codes C1052, C1062, and C1825 is set to
                expire on December 31, 2023 and the pass-through payment status of the
                device category for HCPCS code C1761 is set to expire on June 30, 2024.
                Table 31 shows the expiration dates of transitional pass-through
                payments for these devices.
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                2. New Device Pass-Through Applications for CY 2022
                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 are 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.2. of the CY 2022
                OPPS/ASC proposed rule (86 FR 42085), 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 the CY 2022 OPPS/ASC proposed rule for a complete
                discussion of this pathway.
                 As specified in regulations at Sec. 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 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
                [[Page 63572]]
                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 FDA marketing authorization.
                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 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 the regulation
                can be approved through the quarterly process and announced through
                that process (81 FR 79655). Proposals regarding these devices and
                whether pass-through 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: One commenter recommended that, for devices with FDA
                Breakthrough Device designation, CMS remove the requirement that the
                device prove they are not described by an existing transitional pass-
                through category. The commenter asserted that FDA Breakthrough Device
                designation implies that a device is a first of kind in addressing the
                condition for which it is indicated.
                 Response: We appreciate the commenter's input but note that we did
                not propose to eliminate the device category requirement in the CY 2022
                OPPS/ASC proposed rule. Moreover, section 1833(t)(6)(B)(ii) requires
                the Secretary to establish categories of medical devices in a manner
                such that no medical device is described by more than one category and
                to promptly establish a new category of medical devices for any new
                medical devices for which none of the categories in effect or
                previously in effect is appropriate.
                 Comment: One commenter asked that CMS provide additional guidance
                to medical technology innovators to help clarify requirements for
                demonstrating ``substantial clinical improvement'' for purposes of
                transitional pass-through payment eligibility. The commenter stated
                that greater clarity should be provided in particular with regard to
                the evidence types and study designs that may be considered in
                evaluating substantial clinical improvement, including methods beyond
                randomized clinical trials (RCTs) that would produce evidence
                sufficient to demonstrate substantial clinical
                [[Page 63573]]
                improvement in a shorter period of time and at reduced cost.
                 Response: We appreciate the commenter's input, but note that this
                comment is outside the scope of this rulemaking. We refer the commenter
                to the Device Pass-through application located on the CMS website
                (https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Downloads/catapp.pdf) for further information
                regarding what evidence is considered in evaluating substantial
                clinical improvement of devices.
                 Comment: One commenter offered their general support for our
                proposal to approve all eight applications for device pass-through
                status included in the CY 2022 OPPS/ASC proposed rule. The commenter
                added that CMS needs to ensure that pass-through payment amounts
                adequately cover the cost of the device to ensure that Medicare
                beneficiaries have access to innovative services and reduce facilities'
                economic burdens. The commenter also believed CMS should refrain from
                factoring a procedure off-set amount into the calculation of payment
                for these transitional pass though approved services.
                 Response: We appreciate the general support for our proposals to
                approve the applications discussed in the CY 2022 OPPS/ASC proposed
                rule and the recommendations provided by the commenter. Our
                determinations on each application are described in detail in the next
                section. As we have in prior years, CMS continues to evaluate the
                application of the device offset amount on a case by case basis to
                ensure the appropriate payment is made for a device on pass-through
                status. In cases where a device on pass-through status replaces
                previously existing technologies, we continue to believe it is
                appropriate to apply the device offset amount.
                b. Applications Received for Device Pass-Through Payment for CY 2022
                 We received eight complete applications by the March 1, 2021
                quarterly deadline, which was the last quarterly deadline for
                applications to be received in time to be included in the CY 2022 OPPS/
                ASC proposed rule. We received three of the applications in the third
                quarter of 2020, two of the applications in the fourth quarter of 2020,
                and three of the applications in the first quarter of 2021. One of the
                applications was approved for device pass-through payment during the
                quarterly review process: the Shockwave C\2\ Coronary Intravascular
                Lithotripsy (IVL) catheter, which received fast-track approval under
                the alternative pathway effective July 1, 2021. 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, the Shockwave C\2\ Coronary Intravascular
                Lithotripsy (IVL) catheter is discussed in section IV.2.b.1. of this
                final rule with comment period.
                 Applications received for the later deadlines for the remaining
                2021 quarters (June 1, September 1, and December 1), if any, will be
                discussed in the CY 2023 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.
                 Discussions of the applications we received by the March 1, 2021
                deadline are included below.
                1. Alternative Pathway Device Pass-through Applications
                 We received two device pass-through applications by the March 2021
                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 the CY2022
                OPPS/ASC proposed rule, under this alternative pathway, devices that
                are granted an 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 need to meet the other requirements for pass-through
                payment status in our regulation at Sec. 419.66.
                (1) RECELL[supreg] System
                 AVITA Medical submitted an application for a new device category
                for transitional pass-through payment status for the RECELL[supreg]
                System (RECELL[supreg]) for CY 2022. According to the applicant,
                RECELL[supreg] is used to process autologous donor tissue into a cell
                suspension autograft that is then immediately applied to the surgically
                prepared acute thermal burn wound.
                 The applicant stated RECELL[supreg] is a stand-alone, single-use,
                battery-powered device used to process and apply an autologous skin
                cell suspension. According to the applicant, RECELL[supreg] is a Class
                III medical device indicated for the treatment of acute partial-
                thickness and full-thickness/mixed depth thermal burn wounds and is not
                categorized as a skin substitute.
                 According to the applicant, the autograft procedure utilizing the
                RECELL[supreg] system involves harvesting a small graft from the
                patient's healthy skin and placing it into the RECELL[supreg] System
                for immediate processing into an autologous skin cell suspension. The
                applicant asserts that a significantly smaller autograft harvest is
                needed for procedures involving RECELL[supreg] when compared to
                procedures involving a split-thickness skin graft (STSG) without
                RECELL[supreg]; where typical STSG expansion ranges from 2:1 to 6:1,
                RECELL[supreg] may expand skin by up to 80:1. The applicant adds the
                entire procedure takes place in the operating room, including
                surgically preparing the acute burn wound, harvesting the autograft,
                processing the skin cell suspension through a disaggregation process,
                and applying the cell suspension autograft to the wound with no
                culturing in a laboratory.
                 The applicant described the RECELL[supreg] procedure in 27 steps:
                (1) The autograft site is identified; (2) the patient is anesthetized
                and prepared; (3) the nurse opens and transfers the sterile
                RECELL[supreg] System to the operative field; (4) a self-test is
                performed; (5) the nurse prepares and dispenses the enzyme into the
                incubation well; (6) the buffer solution is drawn and dispensed into
                the buffering and rinsing well; (7) the RECELL[supreg] processing unit
                is activated to heat the enzyme; (8) a thin epidermal autograft is
                harvested; (9) the harvested skin graft is placed in the enzyme; (10)
                the donor graft incubates for 15-20 minutes; (11) the sample is placed
                dermal side down in the mechanical scraping tray; (12) a scalpel is
                used to scrape the edges of the skin sample; (13) once ready, the donor
                skin is rinsed in the buffer solution; (14) the skin is returned to the
                mechanical scraping tray; (15) buffer is applied to the skin sample;
                (16) the skin sample is held in place with forceps; (17) the surgeon
                scrapes the epidermal cells; (18) the buffer syringe is used to rinse
                the disaggregated skin cells; (19) the surgeon draws up the autologous
                skin cell suspension from the tray into a syringe; (20) the suspension
                is then dispensed through the cell strainer to filter the suspension;
                (21) the filtered autologous skin cell suspension is drawn into a new
                10 ml syringe; (22) the cell suspension autograft is prepared; (23) the
                burn wound is debrided; (24) the primary dressing (non-adherent,
                [[Page 63574]]
                non-absorbent, small pore) is fixed or held only at the lower aspect of
                the burn wound; (25) the cell suspension autograft is applied by either
                spraying or dripping over the prepared wound bed; (26) after
                application, the primary dressing is immediately secured over the wound
                bed; and (27) absorbent and protective dressings are then applied as
                needed.
                 The applicant states the autologous skin cell suspension prepared
                using the RECELL[supreg] System contains keratinocytes, fibroblasts and
                melanocytes. According to the applicant, keratinocytes are the primary
                cells of the epidermis that are responsible for healing; fibroblasts
                enable the creation of new extracellular matrix proteins; and
                melanocytes produce melanin to allow restoration of normal
                pigmentation. The applicant asserts the unique delivery system allows
                for broad and even distribution of the cell suspension autograft
                directly onto a prepared wound surface or in combination with a meshed
                skin graft.
                 According to the applicant, there is one commercially available
                product (Epicel) that is also used to create an autograft from the
                patient's skin that is then applied to treat acute thermal burns. The
                applicant's claims regarding the differences between the two products
                are summarized in the following Table 32:
                BILLING CODE 4120-01-P
                [GRAPHIC] [TIFF OMITTED] TR16NO21.045
                [[Page 63575]]
                [GRAPHIC] [TIFF OMITTED] TR16NO21.046
                BILLING CODE 4120-01-C
                ---------------------------------------------------------------------------
                 \24\ Instructions for use--RECELL [reg] Autologous Cell
                Harvesting Device. Food and Drug Administration. https://www.fda.gov/media/116382/download.
                 \25\ Ibid.
                 \26\ Humanitarian Device Exemption (HDE) Program--Guidance for
                Industry and FDA Staff. U.S. Department of Health and Human
                Services. Food and Drug Administration. Issued September 6, 2019.
                Accessed on March 30, 2021 and available at: https://www.fda.gov/media/74307/download.
                 \27\ Manufacturer Important Drug Warning: Serious Risk with Use
                of Epicel (cultured epidermal autografts): Squamous Cell Carcinoma
                (SCC). June 2014. Food and Drug Administration. Accessed on March
                30, 2021 and available at: https://www.fda.gov/media/102746/download.
                 \28\ Directions for Use--Epicel (cultured epidermal
                autograpfts). Food and Drug Administration. https://www.fda.gov/vaccines-blood-biologics/approved-blood-products/epicel-cultured-epidermal-autografts.
                 \29\ Epicel Surgical Guidelines. Epicel website. Accessed on
                March 30, 2021 and available at: https://www.epicel.com/pdfs/Epicel%20SurgicalGuide%202018%20DIGITAL.pdf.
                ---------------------------------------------------------------------------
                 With respect to the newness criterion at Sec. 419.66(b)(1),
                RECELL[supreg] is part of the FDA Breakthrough Devices Program. The
                applicant stated that RECELL[supreg] received PMA on September 20,
                2018. The applicant added that RECELL[supreg] is a Class III medical
                device indicated for the treatment of acute thermal burn wounds in
                patients 18 years of age and older. We received the application for a
                new device category for transitional pass-through payment status for
                RECELL[supreg] on August 7, 2020, which is within 3 years of the date
                of the initial FDA marketing authorization. We invited public comment
                on whether the RECELL[supreg] meets the newness criterion.
                 Comment: The applicant reiterated that RECELL[supreg] received FDA
                PMA on September 20, 2018.
                 Response: We appreciate the commenter's input. Because we received
                the RECELL[supreg] pass-through application on August 7, 2020, which is
                within 3 years of September 20, 2018, the date of FDA premarketing
                approval, we agree that the RECELL[supreg] meets the newness criterion.
                With respect to the eligibility criterion at Sec. 419.66(b)(3),
                according to the applicant, RECELL[supreg] is integral to the service
                provided, 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. The
                applicant also claimed that RECELL[supreg] meets the device eligibility
                requirements of Sec. 419.66(b)(4) because it is not equipment, 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. However, given the applicant's
                description of RECELL[supreg] as a device that processes tissue into an
                autograft, we stated that it appears that the RECELL[supreg] system may
                not be surgically implanted or inserted (either permanently or
                temporarily) or applied in or on a wound or other skin lesion. We noted
                that we believed the product of the RECELL[supreg] system, the
                suspension, may be applied on a wound, but we were not certain that
                this suspension qualifies as a device. We invited public comments on
                whether RECELL[supreg] meets the eligibility criteria at Sec.
                419.66(b).
                 Comment: In response to our concern regarding whether the
                suspension, that is applied in or on a wound or other skin lesion is
                the device for purposes of the requirement in Sec. 419.66(b) one
                commenter stated that FDA approved all components of the RECELL[supreg]
                as a device, and that in order to treat a patient, all components of
                the RECELL[supreg] device are required to treat the patient. Multiple
                commenters stated the process of harvesting, creating and applying the
                suspension as one continuous process would not be possible without the
                device hardware; the hardware and suspension are tightly integrated and
                there is no treatment without the suspension. Another commenter added
                that the buffer solution is a component of the RECELL[supreg] device,
                which allows the expansion of the donor skin and provides a suspension
                mechanism for the skin cells to be applied directly on the patient's
                burn wound.
                 Response: We thank the commenters for their input. We have taken
                this information into consideration in our final determination of
                whether the device meets the criteria in Sec. 419.66(b)(3) and Sec.
                419.66(b)(4), discussed below.
                 Comment: The applicant asserted that RECELL[supreg] is an integral
                part of the service, which cannot be performed without all device
                components including the suspension, is used for a single patient only,
                comes in contact with human tissue and is applied on a wound, and
                therefore, the applicant believes the RECELL[supreg] device meets the
                criteria in Sec. 419.66(b)(3).
                 In response to our concern that the device is not applied in or on
                a wound or other skin lesion, the applicant stated that the
                RECELL[supreg] device is intended to harvest the cells from the
                patient's own donor skin to create a skin cell suspension which is then
                applied directly on the debrided and excised burn wound using a syringe
                fitted with a spray nozzle. According to the applicant, the RES
                Regenerative Epidermal Suspension (``Suspension'') contains autologous
                skin cells and buffer solution, a RECELL[supreg] device component,
                which is directly applied in or on a wound. The applicant added that
                the buffer is a pH neutral solution (sodium lactate) in liquid form
                that is used to carry, expand, and deliver the harvested skin cells in
                the RES Suspension for direct application to the burn wound. According
                to the applicant, RECELL[supreg] could not accomplish its intended use
                as described in its FDA label without the buffer, which is a necessary
                component of the device. The applicant and another commenter also
                contended that the Suspension qualifies as a device under FDA's
                definition, and cited provisions of the Federal Food, Drug, and
                Cosmetic Act and FDA guidance that they believed supported this
                position,
                 Response: We appreciate the additional information from the
                applicant and commenters. The applicant and commenters indicated that
                the RECELL[supreg] device consists of several components, one of which
                is the buffer, which is combined with harvested skin cells to create
                the suspension that is then applied to a wound. Because the buffer, a
                component of the device, is part of the
                [[Page 63576]]
                suspension that is applied in or on a wound, RECELL[supreg] meets the
                eligibility criterion specified at Sec. 419.66(b)(3)). We did not
                receive any comments in regard to Sec. 419.66(b)(4), whether the
                device is equipment, an instrument, apparatus, implement, or item for
                which depreciation and financing expenses are recovered, and whether
                the device is a supply or material furnished incident to a service.
                Because the applicant asserted that the RECELL[supreg] device met the
                eligibility requirements at Sec. 419.66(b)(4) and we agree, we
                conclude that the RECELL[supreg] device meets this eligibility
                criterion.
                 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 2022 OPPS/ASC proposed rule that we have not yet identified an
                existing pass-through payment category that describes RECELL[supreg].
                We invited public comment on whether RECELL[supreg] meets the device
                category criterion.
                 Comment: The applicant asserted the RECELL[supreg] meets the first
                criterion for establishing a new device category at Sec. 419.66(c)(1)
                because there are no existing categories established for device TPT
                that describe the RECELL[supreg] device.
                 Response: We agree there is no existing pass-through payment
                category that appropriately describes the RECELL[supreg] because no
                current category appropriately describes a device that creates a
                suspension from an autograft of the patient's skin that is then applied
                to treat acute thermal burns. Based on this information, we have
                determined that the RECELL[supreg] meets the first 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 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
                RECELL[supreg] System has a Breakthrough Device designation and
                marketing authorization from FDA, and therefore, is not evaluated for
                substantial clinical improvement. We note that the applicant applied
                for new technology add-on payment under the alternative pathway for
                Breakthrough devices, as discussed in the FY 2022 IPPS/LTCH PPS final
                rule (86 FR 45150 through 45151). While we have determined that the
                RECELL[supreg] device meets the newness criterion for OPPS device pass-
                through eligibility, in the FY 2022 IPPS/LTCH PPS final rule, we found
                that the RECELL[supreg] device was not within the newness period for FY
                2022 for eligibility for new technology add-on payments and was
                therefore ineligible to receive these payments (86 FR 45151).
                 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 RECELL[supreg]
                would be reported with the HCPCS codes listed in the following Table
                33:
                [GRAPHIC] [TIFF OMITTED] TR16NO21.047
                [[Page 63577]]
                 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. In the CY 2022 OPPS/ASC proposed rule, we stated that for our
                calculations, we used APC 5054--Level 4 Skin Procedures, which had a CY
                2020 payment rate of $1,622.74 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 15110 had a device offset amount of $13.47 at the time the
                application was received. According to the applicant, the cost of the
                RECELL[supreg] is $7,500.
                 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 $7,500 for RECELL[supreg] is 462 percent of
                the applicable APC payment amount for the service related to the
                category of devices of $1,622.74 ((7,500/1,622.74) x 100 = 462.2
                percent). Therefore, we stated in the CY 2022 OPPS/ASC proposed rule
                that we believe RECELL[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 $7,500 for
                RECELL[supreg] is 55,679 percent of the cost of the device-related
                portion of the APC payment amount for the related service of $13.47
                (($7,500/$13.47) x 100 = 55,679.3 percent). Therefore, we stated in the
                CY 2022 OPPS/ASC proposed rule that we believe RECELL[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 $7,500 for RECELL[supreg] and the portion of the APC
                payment amount for the device of $13.47 is 461 percent of the APC
                payment amount for the related service of $1,622.74 ((($7,500-$13.47)/
                $1,622.74) x 100 = 461.4 percent). Therefore, we stated in the CY 2022
                OPPS/ASC proposed rule that we believe RECELL[supreg] meets the third
                cost significance requirement.
                 We invited public comment on whether the RECELL[supreg] meets the
                device pass-through payment criteria discussed in this section,
                including the cost criterion for device pass-through payment status.
                 Comment: One commenter asserted that RECELL[supreg] expands the
                donor skin by up to 80x compared to 2-4x for most autografts, the
                current standard of care. The commenter stated this is an important
                treatment option in light of the ongoing COVID-19 pandemic and its
                drain on the availability of inpatient bed space. The commenter
                respectfully requested that CMS approve the RECELL[supreg] pass-through
                payment application to make RECELL[supreg] available in the outpatient
                setting. A second commenter offered their general support for approval
                of RECELL[supreg] based on what they believe to be substantial
                improvements compared to current burn treatments. A third commenter
                urged CMS to finalize pass-through status for RECELL[supreg] so that
                they could offer the treatment to patients on an outpatient basis.
                 Response: We thank the commenters for their support and we note
                that, as explained further below, we are approving RECELL[supreg] for
                device pass-through status beginning in CY 2022.
                 Comment: The applicant stated that the cost of RECELL[supreg] is
                not insignificant and exceeds 25 percent of the applicable APC amount
                for the relevant procedures that would be reported with RECELL[supreg].
                The applicant further stated that the cost of the RECELL[supreg] device
                also exceeds the device-related portion of the applicable APC amount by
                more than 25 percent for the relevant procedures that would be reported
                with RECELL[supreg].
                 Response: After consideration of the public comments we received
                and our review of the device pass-through application, we have
                determined that RECELL[supreg] meets the requirements for device pass-
                through payment status described at Sec. 419.66. As stated previously,
                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)(i) for purposes of determining device
                pass-through payment status, but must meet the other criteria for
                device pass-through status, and we believe RECELL[supreg] meets those
                other criteria.
                 Therefore, effective beginning January 1, 2022, we are finalizing
                approval for device pass-through payment status for RECELL[supreg]
                under the alternative pathway for devices that have an FDA Breakthrough
                Device designation and have received FDA marketing authorization.
                (2) Shockwave C\2\ Coronary Intravascular Lithotripsy (IVL) Catheter
                 Shockwave Medical submitted an application for a new device
                category for transitional pass-through payment status for the Shockwave
                C\2\ Coronary Intravascular Lithotripsy (IVL) catheter (Coronary IVL
                Catheter) for CY 2022. The applicant asserts the Coronary IVL Catheter
                is a proprietary lithotripsy device delivered through the coronary
                arterial system of the heart to the site of an otherwise difficult to
                treat calcified stenosis, including calcified stenosis that is
                anticipated to exhibit resistance to full balloon dilation or
                subsequent uniform coronary stent expansion. According to the
                applicant, energizing the lithotripsy device generates intermittent
                sound waves within the target treatment site, disrupting calcium within
                the lesion and allowing subsequent dilation of a coronary artery
                stenosis using low balloon pressure. According to the applicant, the
                Coronary IVL System is comprised of the following components:
                 (1) IVL Generator--a portable, rechargeable power source that is
                capital equipment and reusable.
                 (2) IVL Connect Cable--a reusable cable used to connect the IVL
                Generator to the IVL Catheter.
                 (3) Coronary IVL Catheter--a sterile, single-use catheter that
                delivers intravascular lithotripsy within the target coronary lesion.
                 According to the applicant, during a percutaneous coronary
                intervention (PCI) procedure, the physician determines that a lesion
                has severe calcification. The applicant states the Coronary IVL
                Catheter is introduced into the lesion where lithotripsy is delivered
                to crack the calcification to facilitate the optimal dilatation of the
                vessel and placement of a coronary stent. The applicant adds that the
                Coronary IVL Catheter is removed, and the physician then implants a
                coronary stent to treat the lesion.
                 The applicant asserts that the Coronary IVL Catheter is different
                from other devices used during PCI procedures as it delivers localized
                lithotripsy to crack the calcified lesion prior to the placement of a
                coronary stent. According to the applicant there are other devices that
                may be utilized to remove calcium within the vessel (that is,
                atherectomy), however, these devices utilize some form of cutting or
                laser to remove or ablate the calcium and can
                [[Page 63578]]
                only address the calcium nearest to the vessel lumen. According to the
                applicant, the Coronary IVL Catheter addresses the calcium within the
                lumen as well as within the vessel walls.
                 According to the applicant, the Coronary IVL Catheter is used to
                treat a subset of patients identified for a PCI procedure to treat
                their coronary artery disease where approximately 15 percent of lesions
                in patients being eligible for a PCI procedure have severe
                calcification. The applicant adds the Coronary IVL Catheter is utilized
                during PCI procedures and does not replace any devices currently
                utilized to complete the procedure (for example, guidewires,
                angioplasty balloons, stent(s), vascular closure, etc.) that are
                packaged into the APC payment rate. According to the applicant, based
                on the FDA labeling for the Coronary IVL catheter, it is utilized prior
                to the placement of a coronary stent.
                 With respect to the newness criterion at Sec. 419.66(b)(1), the
                Coronary IVL Catheter received FDA PMA for the Shockwave Intravascular
                Lithotripsy (IVL) System with Shockwave C2 Coronary Intravascular
                Lithotripsy (IVL) Catheter on February 12, 2021 and is indicated for
                lithotripsy-enabled, low-pressure balloon dilatation of severely
                calcified, stenotic de novo coronary arteries prior to stenting. The
                Coronary IVL Catheter received FDA Breakthrough Device designation on
                August 19, 2019, and is indicated for lithotripsy-enabled, low-pressure
                dilatation of calcified, stenotic de novo coronary arteries prior to
                stenting. We received the application for a new device category for
                transitional pass-through payment status for the Coronary IVL Catheter
                on February 26, 2021, which is within 3 years of the date of the
                initial FDA marketing authorization. We invited public comment on
                whether the Coronary IVL Catheter meets the newness criterion.
                 Comment: One commenter stated that the Coronary IVL Catheter meets
                the newness criteria.
                 Response: We thank the commenter for the information.
                 Comment: In their comment the applicant concurred with CMS'
                conclusion that Coronary IVL Catheter meets the transitional pass-
                through criteria and supported CMS finalizing the transitional-pass
                through status for three years.
                 Response: Because we received the Coronary IVL Catheter pass-
                through application on February 26, 2021, which is within 3 years of
                February 12, 2021, the date of FDA premarketing approval for the
                device, we agree that the Coronary IVL Catheter meets the newness
                criterion.
                 With respect to the eligibility criterion at Sec. 419.66(b)(3),
                according to the applicant, the Coronary IVL Catheter is integral to
                the service provided, is used for one patient only, comes in contact
                with human tissue, and is surgically inserted in a patient until the
                procedure is completed. The applicant also claimed that the Coronary
                IVL Catheter meets the device eligibility requirements of Sec.
                419.66(b)(4) because it is not equipment, 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. In the CY 2022 OPPS/ASC proposed rule, we invited public
                comments on whether the Coronary IVL Catheter meets the eligibility
                criteria at Sec. 419.66(b).
                 Comment: One commenter stated that the regulation at Sec.
                419.66(b)(3) is clear that pass-through is not appropriate for
                ``equipment, an instrument, apparatus, implement, or item for which
                depreciation and financing expenses are recovered as depreciable assets
                as defined in Chapter 1 of the Medicare Provider Reimbursement Manual
                (CMS Pub. 15-1).'' \30\ The commenter stated we acknowledged in the CY
                2022 OPPS/ASC proposed rule that the Shockwave System Generator, which
                is the ``power source'' for the Shockwave System, is ``capital
                equipment'' \31\ with the list price referenced for the Coronary IVL
                System and not just the Coronary IVL Catheter.\32\ Next the commenter
                stated that the proposed rule does not consider if the Generator, an
                excluded piece of capital equipment, is the key component of the
                Coronary IVL System, and contended that CMS did not consider whether
                the Generator, an excluded piece of capital equipment is a ``key
                therapeutic component'' of the Shockwave System, and as such, that the
                Shockwave System as a whole should not be eligible for device pass-
                through status.
                ---------------------------------------------------------------------------
                 \30\ 42 CFR 419.66(b)(4); Medicare Provider Reimbursement
                Manual, Ch. 1, section 104.1.
                 \31\ 86 FR 42089.
                 \32\ 86 FR 45153.
                ---------------------------------------------------------------------------
                 Response: As we stated in the CY 2022 OPPS/ASC proposed rule (86 FR
                42089), Shockwave Medical submitted an application for a new device
                category for transitional pass-through payment status for the Coronary
                IVL Catheter, and not for the remainder of the Coronary IVL System,
                which includes the IVL Cable and Generator. Given that the IVL Cable
                and Generator are not single-use devices, they are not eligible for
                device pass-through status. The only part of this device that is
                eligible for device pass-through status is the Coronary IVL Catheter--a
                sterile, single-use catheter.
                 In terms of the commenter's contention that we have not evaluated
                which portion of the device is the key therapeutic component, we
                emphasize that the Coronary IVL Catheter is the device for which the
                applicant submitted an application for device pass-through status. We
                also note that we consider which portion of a combination product is
                the key therapeutic or diagnostic component solely for purposes of
                determining whether implantable biological products should be evaluated
                as drugs or devices for pass-through payment purposes (74 FR 60476). We
                do not determine which portion of a combination product is the key
                therapeutic or diagnostic component for purposes of analyzing a
                device's eligibility for pass-through status. Nonetheless, if we were
                to consider the Shockwave Coronary IVL System as a whole, we would
                conclude that the Coronary IVL Catheter is the key therapeutic
                component as it is the component in the Shockwave System that is
                introduced into the lesion where lithotripsy is delivered to crack the
                calcification to facilitate the optimal dilatation of the vessel and
                placement of a coronary stent.
                 Comment: The applicant concurred with CMS' conclusion that the
                Coronary IVL Catheter meets the transitional pass-through criteria,
                including the criteria at Sec. 419.66(b), and supported CMS finalizing
                the transitional-pass through status for the Coronary IVL Catheter for
                3 years.
                 Response: Based on the information we have received and our review
                of the application, we agree with the applicant that the Coronary IVL
                Catheter is used for one patient only, comes in contact with human
                tissue, and is surgically implanted or inserted, and therefore meets
                the requirements in Sec. 419.66(b)(3). We also agree with the
                commenter that the Coronary IVL Catheter meets the device eligibility
                requirements of Sec. 419.66(b)(4) because it is not equipment, 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 the Coronary IVL Catheter 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
                [[Page 63579]]
                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 identified
                five established categories which they believe are not appropriate
                representatives of the Coronary IVL Catheter: (1) C1714 and C1724,
                which include devices that use mechanical cutting tools; (2) C1725,
                which includes balloon angioplasty; (3) C1885, which uses laser, beams
                of light to break up vessel obstructions; and (4) C2623, which includes
                a drug coated balloon. We stated in the CY 2022 OPPS/ASC proposed rule
                that we had not identified an existing pass-through device category
                that describes Coronary IVL Catheter and we invited public comment on
                this issue.
                 Comment: In its comment, the applicant concurred with CMS'
                conclusion that Coronary IVL Catheter meets the transitional pass-
                through device category eligibility criteria at Sec. 419.66(c)(1) and
                supported CMS finalizing transitional pass-through status for three
                years.
                 Response: We agree there is no existing pass-through device
                category that appropriately describes the Coronary IVL Catheter because
                no current category describes a balloon catheter that generates sonic
                pressure waves using lithotripsy that can break up calcification in
                arterial walls. Based on this information, we have determined that the
                Coronary IVL Catheter 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 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
                Coronary IVL Catheter has a Breakthrough Device designation and
                marketing authorization from FDA, and therefore, is not evaluated for
                substantial clinical improvement. We note that the applicant applied
                for the new technology add-on payment under the alternative pathway for
                Breakthrough devices as discussed in the FY 2022 IPPS/LTCH PPS final
                rule (86 FR 45151 through 45153). In the FY 2022 IPPS/LTCH PPS final
                rule (86 FR 45153), CMS approved the Coronary IVL Catheter for new
                technology add-on payments.
                 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 Coronary
                IVL Catheter meeting the cost significance requirements. The applicant
                stated that the Coronary IVL Catheter would be reported with the HCPCS
                codes listed in the following Table 34:
                BILLING CODE 4120-01-P
                [[Page 63580]]
                [GRAPHIC] [TIFF OMITTED] TR16NO21.048
                BILLING CODE 4120-01-C
                 To meet the cost criterion for establishing a device category, a
                device must pass all three cost criteria for at least one APC. For our
                calculations for the CY 2022 OPPS/ASC proposed rule, we used APC 5193--
                Level 3 Endovascular Procedures, which had a CY 2021 payment rate of
                $10,042.94 at the time the application was received.
                 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 for the Coronary IVL Catheter of $5,640 is 56
                percent of the applicable APC payment amount for the service related to
                the category of devices of $10,042.94 (($5,640/10,042.94) x 100 = 56
                percent). Therefore, we stated in the CY 2022 OPPS/ASC proposed rule
                that we believe the Coronary IVL Catheter 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). 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 92928 had a device offset amount of $3,607.42 at the
                time the application was received. The estimated average reasonable
                cost for the Coronary IVL Catheter of $5,640 is 156 percent of the cost
                of the device-related portion of the APC payment amount for the related
                service of $3,607.42 (($5,640/$3,607.42) x 100 = 156 percent).
                Therefore, we stated in the CY 2022 OPPS/ASC proposed rule that we
                believe that the Coronary IVL Catheter 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 $5,640 for the Coronary IVL Catheter and the portion
                of the APC payment amount for the device of $3,607.42 is 20 percent of
                the APC payment amount for the related service of $10,042.94 (($5,640-
                $3,607.42)/$10,042.94) x 100= 20 percent). Therefore, we stated in the
                CY 2022 OPPS/ASC proposed rule that we believe that the Coronary IVL
                Catheter meets the third cost significance requirement.
                 We invited public comment on whether the Coronary IVL Catheter
                meets the device pass-through payment criteria discussed in this
                section,
                [[Page 63581]]
                including the cost criterion for device pass-through payment status.
                 Comment: One commenter asserted that CMS' review of the Shockwave
                System (Coronary IVL) was based on an incorrect CPT/APC pairing and an
                assessment of charges, not actual costs.
                 The commenter stated that CMS' analysis is contrary to its own
                regulation because it did not reference ``the applicable APC.'' \33\
                According to the commenter, if APC 5194 (Level 4 Endovascular
                Procedures) is used to assess the Shockwave System, and not APC 5193
                (Level 3 Endovascular Procedures), it is clear that the Shockwave
                System would not meet any of the three cost criteria. The commenter
                makes a number of arguments about why it believes APC 5194 is ``the
                applicable APC,'' including that that the applicant referenced 92933
                (Percutaneous transluminal coronary atherectomy, with intracoronary
                stent, with coronary angioplasty when performed; single major coronary
                artery or branch) which the commenter explains maps to APC 5194, not
                APC 5193.\34\ According to the commenter, the applicant is clearly
                targeting this APC, as the applicant references a targeted population
                of patients with calcified lesions of approximately 15 percent of
                patients; \35\ this population maps to I25.84 (Coronary atherosclerosis
                due to calcified coronary lesion) for which a matching percentage of
                patients links to 92933 (and APC 5194), not 92928 (Percutaneous
                transcatheter placement of intracoronary stent(s), with coronary
                angioplasty when performed; single major coronary artery or branch)
                (and APC 5193).\36\ The commenter further asserted that in its
                development of the Shockwave System, the applicant references coronary
                orbital atherectomy (OA), which, in fact, breaks up and removes
                calcium, as occurs in atherectomy.\37\ According to the commenter, the
                applicant's public comments clearly present the Shockwave System as a
                replacement to atherectomy.\38\ The commenter stated that the proposed
                rule states that the pass-through criteria can be satisfied if ``any''
                APC meets the criteria but refers to the regulation, which states the
                pass-through cost criteria can be met if ``the applicable'' APC is
                used. The commenter contended that it is clear the applicable APC for
                the Shockwave System is 5194 and not 5193. The commenter added that
                some stakeholders are under a misconception that, if the Shockwave
                System is granted pass-through status based on an analysis of the cost
                criterion using a pairing of 92928 and APC 5153, additional pass-
                through payments will nevertheless be available when the Shockwave
                System is billed under APC 5194. The commenter asked CMS to ensure, if
                the agency confirms its quarterly pass-through determination for the
                Shockwave System, that appropriate safeguards are in place so that
                inappropriate payments are not made in connection with APC 5194.
                ---------------------------------------------------------------------------
                 \33\ 42 CFR 419.66(d)(1).
                 \34\ See CY 2022 OPPS Notice of Proposed Rulemaking Addendum B.
                 \35\ 86 FR 42018, 42089 (August 4, 2021).
                 \36\ 2019 Medicare Outpatient Claims data (showing 17.21 percent
                of 92933 is associated with I25.84).
                 \37\ The Shockwave System's PMA was based in part on results
                from DISRUPT CAD III, which was designed to enroll the same
                population, using the same definitions and endpoints as in ORBIT II,
                which was the pivotal trial that paved the way for orbital
                atherectomy's approval in 2013. See Shelley Wood, MD, ``FDA Approves
                Shockwave Intravascular Lithotripsy for Calcified Coronaries'',
                available at https://www.tctmd.com/news/fda-approves-shockwave-intravascular-lithotripsy-calcified-coronaries (Feb. 16, 2021).
                 \38\ See Shockwave Investor Presentation (August 2021),
                available at https://ir.shockwavemedical.com/static-files/84cb0382-3ad6-435e-a6de-1a132160ff68 (stating that the Shockwave System is a
                ``Solution'' to ``Atherectomy'' and its ``Serious Complications'').
                ---------------------------------------------------------------------------
                 The commenter next asserted that the Shockwave System cost
                significance test is based on list prices and not costs, is
                inadequately supported, and is inconsistent with available cost data.
                According to the commenter, the device cost used in assessing the cost
                criteria requirement reflects a list price and is contrary to publicly
                available information on Shockwave System pricing. The commenter stated
                that there are substantially more C9600 (Percutaneous transcatheter
                placement of drug eluting intracoronary stent(s), with coronary
                angioplasty when performed; single major coronary artery or branch)
                claims (i.e., 90,889) with drug-eluting stents than 92928 (i.e., 6,357)
                with bare metal stents, where the device-related portion is higher. The
                commenter asserted that CMS did not provide any information in the CY
                2022 OPPS/ASC proposed rule about why 92928 was used instead of C9600.
                The commenter explained that it is not clear to them why CMS chose
                92928 instead of C9600 to perform the cost significance calculations
                for the cost criterion.
                 The commenter then asserted that CMS, without providing factual
                support, stated that the average reasonable cost for Coronary IVL is
                $5,640. According to the commenter, in the IPPS/LTCH final rule (86 FR
                44774, 45153) CMS used a value of $5,640 for the Shockwave System, but
                did not reference the IPPS/LTCH final rule in the CY 2022 OPPS/ASC
                proposed rule. The commenter went on to explain that CMS based this
                figure on a cost for the Shockwave System of $4,700 per device x 1.2
                devices required per case, and stated that CMS finalized this cost for
                the System ``as a whole'' without supporting this calculation except
                using preliminary information from the applicant. The commenter
                asserted that, under the Administrative Procedures Act, 5 U.S.C.
                553(b), an agency is required, in order to provide stakeholders with
                reasonable notice and opportunity to comment, to provide the factual
                basis that supports its proposal; the commenter added that CMS' failure
                to provide any support for its proposal is precisely the kind of defect
                in process that courts have repeatedly cautioned against.
                 According to the commenter, in a published article, citing a
                Shockwave earnings call, the Shockwave national list price was stated
                to be $4,700.\39\ The commenter asserted that a list price is a charge
                and not a reflection of actual cost and does not address any discounts,
                rebates, free goods contingent on a purchase, or other price
                concessions. The commenter noted that blinded market research revealed
                prices to some purchasers as low as $4,200 and possibly lower.
                ---------------------------------------------------------------------------
                 \39\ Shelley Wood, tctMD, ``FDA Approves Shockwave Intravascular
                Lithotripsy for Calcified Coronaries'', available at https://www.tctmd.com/news/fda-approves-shockwave-intravascular-lithotripsy-calcified-coronaries (February 16, 2021).
                ---------------------------------------------------------------------------
                 Additionally, the commenter noted that in the proposed rule the
                applicant used a multiplier of 1.2 devices required per case to
                calculate the $5,640 used in assessing whether the device meets the
                cost criterion. According to the commenter, such a multiplier is not
                cited in the proposed rule and was not, therefore, framed appropriately
                for comment as part of this rulemaking. The commenter added three
                concerns related to the multiplier: (1) Use of a multiplier magnifies
                the invalid impact of incorrectly included ``equipment'' (the
                Generator) and a reusable item (the Cable) because the Generator and
                Cable would not be used in more than one case; (2) neither the CY 2022
                OPPS proposed rule nor the FY 2022 IPPS/LTCH final rule included data
                or support for the assertion that 1.2 devices are required per case;
                and (3) use of a multiplier is not appropriate where, as here, the
                pass-through regulation requires a ``reasonable'' estimate of costs and
                more than one device would be used in less than twenty percent of all
                cases. The commenter contended that CMS should use medians, rather than
                [[Page 63582]]
                averages, because of what the commenter believed was the inaccurate
                nature of averages in circumstances like these.\40\
                ---------------------------------------------------------------------------
                 \40\ 42 CFR 419.66(d).
                ---------------------------------------------------------------------------
                 Response: We appreciate the additional information provided by the
                commenter. We disagree with the commenter's assertion that the proposed
                rule references the incorrect HCPCS/APC pairing. Question D.7. of the
                device pass-through application states: Using Healthcare Common
                Procedure Coding System (HCPCS) Level I and/or Level II code(s), list
                all of the specific procedure(s) and/or services with which the
                nominated device is used. The applicant for the Coronary IVL Catheter
                provided a complete list of HCPCS codes with which their device can be
                billed. CMS evaluated the complete list of HCPCS codes to ensure each
                code represented a procedure with which the Coronary IVL Catheter could
                be used. Consistent with our evaluation of every other device pass-
                through application, we identify the applicable APC with which to
                evaluate the cost of the device against the cost significance tests at
                Sec. 419.66(d). There are numerous APCs to which procedures with which
                the Coronary IVL Catheter can be performed are assigned. As we
                explained in the CY 2005 OPPS final rule (69 FR 65775), we generally
                use the lowest APC payment rate applicable for use with the nominated
                device when we assess whether a device meets the cost significance
                criterion, thus increasing the probability the device will pass the
                cost significance test. Furthermore, we disagree with the commenter's
                assertion that CMS should limit pass-through payments to one APC (5193)
                versus another (5194). The applicant identified HCPCS codes which CMS
                agrees align appropriately to both APC 5193 and 5194. Consistent with
                CMS' policy, we are not limited in applying pass-through payments to
                only the HCPCS/APC combination that was used in the cost significance
                test, but rather the entire list of procedures which appropriately
                represent the technology.
                 We disagree with the commenter's assertions that the CY 2022 OPPS/
                ASC proposed rule uses an assessment of charges, as opposed to cost,
                and failed to give commenters an opportunity to comment. As we stated
                in the proposed rule, according to the applicant the Coronary IVL
                System is comprised of the following components: (1) IVL Generator--a
                portable, rechargeable power source that is capital equipment and
                reusable; (2) IVL Connect Cable--a reusable cable used to connect the
                IVL Generator to the IVL Catheter; (3) Coronary IVL Catheter--a
                sterile, single-use catheter that delivers intravascular lithotripsy
                within the target coronary lesion. Given that parts one and two are not
                single-use devices, they are not under consideration for device pass-
                through status. The only part of this device which is under
                consideration for device pass-through payments is the Coronary IVL
                Catheter--a sterile, single-use catheter. According to the applicant,
                the expected average sales price of each Shockwave C2 Coronary IVL
                single-use catheter is $4,700. We acknowledge that in the CY 2022 OPPS/
                ASC proposed rule, we did not state that, per the applicant, the
                average number of catheters required per case is 1.2 based on the
                applicant's clinical trial experience; the applicant therefore
                calculated an expected cost to hospitals on a per-case basis for the
                Coronary IVL Catheter of $5,640. Based on our analysis, which includes
                a review by CMS clinical professionals, we agree with the applicant
                that the average number of catheters required per case is 1.2 and
                therefore, that a multiplier of 1.2 is appropriate in this situation.
                We appreciate the commenter identifying this information. We note that
                regardless of the value used, $4,700 (for one Coronary IVL Catheter per
                case) or $5,640 (for 1.2 Coronary IVL Catheters per case), the Coronary
                IVL Catheter meets the cost significance tests at Sec. 419.66(d).
                Finally, we are clarifying that although the FY 2022 IPPS/LTCH PPS
                final rule referred to the Shockwave C2 Intravascular Lithotripsy (IVL)
                System when discussing whether the device met the cost criterion for
                new technology add-on payments, we considered the cost only of the
                Coronary IVL Catheter in that determination.
                 Comment: This same commenter asserts that the proposed rule failed
                to provide stakeholders with a reasonable opportunity to comment on
                issues central to the pass-through determination. The commenter
                asserted that the quarterly, sub-regulatory determination made for
                pass-through status for the Coronary IVL Catheter is invalid following
                the Supreme Court's decision in Azar v. Allina Health Services, 139 S.
                Ct. 1804 (2019). Based on these assertions, the commenter stated that
                the Coronary IVL Catheter should not be approved for pass-through
                status and the quarterly determination should be rescinded. The
                commenter stated that our process of approving applications for device
                pass-through status on a quarterly basis predates the Supreme Court's
                decision in Allina and should ``appropriately conform to the rulemaking
                obligations set forth in Allina''.\41\ The commenter concludes that the
                Shockwave System pass-through determination was invalid and in excess
                of CMS' authority and it should, therefore, be rescinded.
                ---------------------------------------------------------------------------
                 \41\ CMS Memorandum, Impact of Allina on Medicare Payment Rules,
                at 1 (Oct. 31, 2019). See also section 1871(a)(2) of the Act.
                ---------------------------------------------------------------------------
                 Response: We disagree with the commenter's assertion that the
                quarterly determination process is invalid, and that the quarterly,
                sub-regulatory determination to grant pass-through status for the
                Coronary IVL Catheter is invalid following Allina. We note that in the
                CY 2016 OPPS/ASC final rule (80 FR 70417-70418) CMS finalized through
                notice and comment rulemaking its proposal to revise the application
                process for device pass-through payments. Specifically, CMS stated that
                starting in CY 2016 all device pass-through payment applications
                submitted through the quarterly process would be subject to notice-and-
                comment rulemaking in the next applicable OPPS annual rulemaking cycle.
                Furthermore, under the finalized policy, CMS stated that all
                applications that are approved upon quarterly review will automatically
                be included in the next applicable OPPS annual rulemaking cycle, and
                any information provided by the applicant would be available for
                consideration during the public comment process for the proposed rule.
                CMS stated that this process would allow those applications that meet
                all criteria to receive timely pass-through payment status, while also
                allowing for a transparent public review process for all applications
                as part of the next available rulemaking. Finally, we note that the
                quarterly approval process does not establish or change a substantive
                legal standard governing the scope of benefits or the payment for
                services, but only applies substantive legal standards adopted through
                notice and comment rulemaking to determine whether a particular device
                should qualify for pass-through status.
                 Comment: In their public comment, the applicant stated that there
                are two issues associated with CMS' evaluation and implementation of
                transitional device pass-through payment status for the Coronary IVL
                Catheter that they wanted to bring to CMS' attention. In CMS
                Transmittal 10825, dated June 11, 2021, CMS limited HCPCS code C1761 to
                being reported with two procedures that describe placement of a
                coronary stent (HCPCS codes 92928 and C9600). The applicant noted that
                CMS most recently published Transmittal 10997, dated September 16,
                2021, which added four additional HCPCS codes--92933,
                [[Page 63583]]
                92943, C9602, and C9607--that can also be billed in conjunction with
                HCPCS code C1761 and be eligible for transitional pass-through
                effective July 1, 2021. The applicant noted that CMS included the
                device offset associated with these codes when calculating the
                incremental transitional pass-through payment when HCPCS code C1761 is
                billed. The applicant believes CMS applied the device offset for HCPCS
                codes 92933, 92943, C9602, and C9607 as an oversight, and requested
                that CMS remove the device offset for these codes when calculating the
                incremental transitional pass-through payment when billed in
                conjunction with C1761 because, similar to the determination for HCPCS
                codes 92928 and C9600, no device offset should be implemented as IVL
                costs are completely additive to the procedure and the devices
                represented by the device offset in each procedure are still required.
                 Response: We disagree with the applicant's request to remove the
                device offset for HCPCS codes 92933, 92943, C9602 and C9607 when
                calculating the incremental transitional pass-through payment when
                billed in conjunction with HCPCS code C1761. In the above-identified
                procedures, the Coronary IVL Catheter is used in lieu of atherectomy to
                achieve a therapeutic outcome. Therefore, we believe a device offset as
                identified in Transmittal 10997 dated September 16, 2021 is warranted
                when HCPCS code C1761 is used in conjunction with these particular
                procedures.
                 Comment: The applicant stated that while they agree that Coronary
                IVL Catheter meets all three cost criteria based on CMS' methodology,
                they are concerned that the methodology CMS utilizes is not the most
                appropriate for procedures that require the use of multiple devices.
                The applicant contends that CMS utilizes the entire device-related
                portion (DRP) as reported for the applicable procedure instead of
                evaluating the cost of the new technology relative to the specific
                devices that it is replacing. The applicant asserted that CMS has
                removed the device offset for other technologies that have received
                transitional pass-through payment where new technologies are completely
                additive to the procedure. The applicant stated that CMS does not
                utilize a similar methodology when evaluating the three cost criteria.
                The applicant asserted that this may create an artificially high bar
                that would make new technology that would otherwise qualify for pass-
                through status ineligible, which the applicant believes is the case for
                the EluviaTM system. The applicant requested that CMS update
                its methodology for current and future transitional pass-through
                applications where multiple devices are utilized.
                 Response: We thank the applicant for their input in regard to the
                calculation of the cost significance criterion, which we will take into
                consideration for future rulemaking. For a more detailed discussion of
                this issue as it relates to the EluviaTM system, please see
                section IV(a)(2)(b)(3) of this final rule with comment period.
                 After consideration of the public comments we received and our
                review of the device pass-through application, we have determined that
                Coronary IVL Catheter meets the requirements for device pass-through
                payment status described at Sec. 419.66. As stated previously, devices
                that are granted an 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 must meet the other criteria for device pass-
                through status, which we believe the Coronary IVL Catheter does.
                 As specified above, the Coronary IVL Catheter pass-through
                application was preliminarily approved for transitional pass-through
                payment under the alternative pathway effective July 1, 2021. We note
                that in the CY 2022 OPPS/ASC proposed rule we invited public comments
                on whether the Coronary IVL Catheter should continue to receive
                transitional pass-through payment under the alternative pathway for
                devices that are FDA market authorized and that have an FDA
                Breakthrough Device designation.
                 We are finalizing our proposal to continue in 2022 device pass-
                through payment status for the Coronary IVL Catheter under the
                alternative pathway for devices that have an FDA Breakthrough Device
                designation and have FDA marketing authorization.
                2. Traditional Device Pass-Through Applications
                (1) AngelMed Guardian[supreg] System
                 Angel Medical Systems submitted an application for a new device
                category for transitional pass-through payment status for the AngelMed
                Guardian[supreg] System (the Guardian[supreg]) for CY 2022. The
                applicant asserted that the Guardian[supreg] is a proactive diagnostic
                technology that monitors a patient's heart's electrical activity for
                changes that may indicate an Acute Coronary Syndrome (ACS) event (that
                is, STEMI, NSTEMI, or unstable angina) related to blockage of a
                coronary artery which prevents the heart muscle from receiving
                sufficient oxygen. The Guardian[supreg] is a device implanted in the
                upper left chest and connects to an active fixation intracardiac lead
                attached to the apex of the right ventricle. The applicant asserts the
                Guardian[supreg] consists of an implantable medical device (IMD) which
                is composed of the header with an antenna for communication and the can
                with circuitry, radio, vibratory motor, and battery. According to the
                applicant, the Guardian[supreg] system also includes an external device
                that communicates with the IMD and provides redundant patient
                notification using auditory and visual alarms. Lastly, the applicant
                states the Guardian[supreg] system includes a physician programmer, a
                capital device, used to program the IMD and download cardiac data
                captured by the IMD.
                 According to the applicant, the Guardian[supreg] system relies upon
                the gold standard of changes to the ST-segment of a patient's heartbeat
                to diagnose a heart attack. According to the applicant, the
                Guardian[supreg] system uses an intracardiac lead to sense cardiac data
                and proprietary machine learning algorithms to assess acute changes to
                the ST-segment on a continuous, real-time basis. The applicant asserts
                these changes are compared to a patient's normal baseline reference
                that is computed over the prior twenty-four hours of monitored heart
                activity. According to the applicant, if the Guardian[supreg] detects a
                statistically abnormal acute change relative to this baseline, it
                notifies the patient to the potential ACS event by providing an alarm:
                The implanted device will vibrate, and the external device will flash
                and beep. According to the applicant, patients are instructed to seek
                urgent medical assistance when the system activates, even in the
                absence of ACS symptoms.
                 According to the applicant, the Guardian[supreg] system
                implantation will typically be an outpatient procedure and, following
                10-14 days, is programmed in the physician office. The applicant
                asserts the patient undergoes training on the Guardian[supreg] and has
                follow-up visits every six months to review the device data. The
                applicant states that the emergency alarm is intended to be used as an
                adjunct to symptoms; in the absence of an emergency alarm patients are
                instructed not to ignore symptoms of an ACS event. The applicant
                asserts that while current technologies detect and provide therapy for
                cardiac medical conditions related to abnormal heart rate and rhythm,
                the AngelMed Guardian[supreg] system is the only FDA-
                [[Page 63584]]
                approved technology for providing detection and patient notification of
                ACS events so that patients more reliably and urgently seek medical
                care.
                 With respect to the newness criterion at Sec. 419.66(b)(1), the
                AngelMed Guardian[supreg] system first received FDA 510(k) clearance on
                April 9, 2018 under PMA number P150009. The manufacturers received a
                Category B Investigational Device Exemption (IDE) as of January 27,
                2020 for the use of the device in their continued access study,
                AngelMed for Early Recognition and Treatment of STEMI (ALERTS).
                According to the applicant, the device is anticipated for US market
                availability in quarter three of 2021. We received the application for
                a new device category for transitional pass-through payment status for
                the Guardian[supreg] system on February 28, 2021, which is within 3
                years of the date of the initial FDA marketing authorization. We
                solicited public comment in the CY 2022 OPPS/ASC proposed rule on
                whether the Guardian[supreg] system meets the newness criterion.
                 Comment: The applicant reasserted that the Guardian[supreg] meets
                the newness criterion at Sec. 419.66(b)(1) as the application was
                submitted within 3 years of FDA approval.
                 Response: We appreciate the commenter's input and agree that
                because we received the application for the Guardian[supreg] on
                February 28, 2021, which was within 3 years of the FDA premarketing
                approval on April 9, 2018, the Guardian[supreg] meets the newness
                criterion.
                 With respect to the eligibility criterion at Sec. 419.66(b)(3),
                according to the applicant, the Guardian[supreg] is integral to the
                service provided, is used for one patient only, comes in contact with
                human tissue, and is surgically inserted temporarily. The applicant
                also claimed that the Guardian[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 invited public comments in the CY 2022 OPPS/
                ASC proposed rule on whether the Guardian[supreg] meets the eligibility
                criteria at Sec. 419.66(b).
                 Comment: The applicant stated the Guardian[supreg] meets the
                eligibility criteria at Sec. 419.66(b)(3) and 419.66(b)(4) as the
                Guardian[supreg] is used for one patient only, comes in contact with
                human tissue, and is surgically inserted.
                 Response: Based on the information we have received and our review
                of the application, we agree with the applicant that the device is used
                for one patient only, comes in contact with human tissue, and is
                surgically implanted or inserted. We also agree with the commenter that
                the Guardian[supreg] meets the device eligibility requirements of Sec.
                419.66(b)(4) because it is not equipment, 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 the
                Guardian[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 2022 OPPS/ASC proposed rule that we have not yet identified an
                existing pass-through payment category that describes the
                Guardian[supreg]. We invited public comment on whether the
                Guardian[supreg] meets the device category criterion.
                 Comment: The applicant asserted the Guardian[supreg] meets the
                first criterion for establishing a new device category, at Sec.
                419.66(c)(1), as no existing categories or categories previously in
                effect appropriately describe the technology.
                 Response: We agree there is no existing pass-through payment
                category that appropriately describes the Guardian[supreg] because no
                current or previously in effect category describes a device that
                provides detection of ACS events and notification to a patient. Based
                on this information, we have determined that the Guardian[supreg] 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 FDA's Breakthrough Devices Program and has received
                FDA marketing authorization.
                 The applicant stated that the Guardian[supreg] represents a
                substantial clinical improvement over existing technologies. With
                respect to this criterion, the applicant asserted that the
                Guardian[supreg] offers the ability to diagnose a medical condition in
                a patient population where that medical condition is currently
                undetectable or offers the ability to diagnose a medical condition
                earlier in a patient population than is currently possible and this
                earlier diagnosis results in better outcomes.\42\ In support of this
                claim the applicant submitted two published articles, the first by
                Gibson et al. and the second by Holmes et al.43 44
                ---------------------------------------------------------------------------
                 \42\ 66 FR 55852, November 2, 2001.
                 \43\ Gibson, C.M., Holmes, D., Mikdadi, G., Presser, D., Wohns,
                D., Yee, M.K., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd, Iteld, B.,
                & Krucoff, M.W. (2019). Implantable Cardiac Alert System for Early
                Recognition of ST-Segment Elevation Myocardial Infarction. Journal
                of the American College of Cardiology, 73(15), 1919-1927.
                 \44\ Holmes, D.R., Jr, Krucoff, M.W., Mullin, C., Mikdadi, G.,
                Presser, D., Wohns, D., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd,
                Iteld, B., Fischell, D.R., Fischell, T., Keenan, D., John, M.S., &
                Gibson, C.M. (2019). Implanted Monitor Alerting to Reduce Treatment
                Delay in Patients with Acute Coronary Syndrome Events. JACC, 74(16),
                2047-2055.
                ---------------------------------------------------------------------------
                 The first study is a randomized control trial with 907 subjects who
                were implanted with the Guardian[supreg] system and randomized 1:1 to
                either active or deactivated alarms.\45\ According to the authors, all
                subjects received education regarding the importance of minimizing
                symptom-to-door time in the presence of chest pain or ischemic
                equivalents, regardless of alarm status. The authors state that
                patients were not blinded to their randomization status. After
                randomization patients returned for follow-up visits at 1, 3, 6, and
                every six months thereafter. In all patients, the Guardian[supreg]
                system captured electrogram data up to 24 hours before and 8 hours
                after a triggered alarm for later review. According to the authors, the
                primary safety endpoint was the absence of system-related complications
                that required a system revision or invasive intervention to resolve in
                at least 90 percent of subjects through six months. The primary
                efficacy endpoint was a composite of: (1) Cardiac or unexplained death;
                (2) new Q-wave MI; and (3) detection-to-presentation time >2 h for a
                documented coronary occlusion event. Electrocardiogram (ECG) tracings
                were obtained prior to implantation, at randomization, at 1, 3, and 6
                months, and at every emergency presentation to evaluate for a Q-wave MI
                not present at baseline. An exploratory
                [[Page 63585]]
                dual baseline ECG analysis was performed, according to the authors,
                because Q-waves may be transient between implantation and
                randomization. The dual baseline ECG analysis evaluates for the
                presence of new Q waves across subsequent ECGs. At the start of the
                trial, 456 patients were identified as controls and 451 as treated; at
                6 months, 446 controls remained and 437 treated remained. The authors
                stated that subject enrollment ceased after 900 subjects were
                randomized and therefore an alpha penalty of 0.25 was taken for the
                interim look at event rates after 600 subjects.
                ---------------------------------------------------------------------------
                 \45\ Gibson, C.M., Holmes, D., Mikdadi, G., Presser, D., Wohns,
                D., Yee, M.K., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd, Iteld, B.,
                & Krucoff, M.W. (2019). Implantable Cardiac Alert System for Early
                Recognition of ST-Segment Elevation Myocardial Infarction. Journal
                of the American College of Cardiology, 73(15), 1919-1927.
                ---------------------------------------------------------------------------
                 According to the authors, the control and treatment groups were
                well matched at baseline.\46\ The primary safety endpoint was met with
                96.7 percent freedom (posterior probability >0.999) with a total of 31
                system-related complications in 30 (3.3 percent) subjects with
                infections being the predominant cause of complications. The authors
                stated that ACS events occurrence was low. At 7, 30, 50, 70, and 90
                days there were no statistical differences between the control and
                treated groups on the primary composite efficacy endpoint. At each time
                interval, the treated group had lower rates of the primary endpoint
                than the control group. Statistical differences were observed between
                treated and control groups in the dual baseline ECG exploratory
                analysis particularly at 50, 70, and 90 days after a confirmed
                occlusive event favoring the treated group. At the pre-specified 7-day
                look back window, the median time from the Guardian[supreg]
                notification to arrival at a medical facility was 51 minutes for the
                treated subjects as compared to 30.6 hours for control subjects (Pr [pt
                0.999). Subject arrival within 2 hours of a detected and
                confirmed coronary occlusion occurred in 85 percent (29 of 34) of the
                treatment group compared with only 5 percent of the control group, with
                the majority of patients in the control arm presenting after 7 days.
                However, the authors asserted that despite a numerical reduction in new
                Q-wave MI using single and dual baseline ECGs at any of the pre-
                specified look-back windows, the posterior probability of superiority
                did not reach statistical significance. The applicant added that 22
                percent (42/193) of the confirmed ACS events were detected due to
                Emergency Department (ED) visits prompted by alarms in the absence of
                symptoms; that silent MIs typically account for approximately 30
                percent of all MIs and are historically associated with increased rates
                of morbidity and mortality.\47\
                ---------------------------------------------------------------------------
                 \46\ Gibson, C.M., Holmes, D., Mikdadi, G., Presser, D., Wohns,
                D., Yee, M.K., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd, Iteld, B.,
                & Krucoff, M.W. (2019). Implantable Cardiac Alert System for Early
                Recognition of ST-Segment Elevation Myocardial Infarction. Journal
                of the American College of Cardiology, 73(15), 1919-1927.
                 \47\ Gibson, C.M., Holmes, D., Mikdadi, G., Presser, D., Wohns,
                D., Yee, M.K., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd, Iteld, B.,
                & Krucoff, M.W. (2019). Implantable Cardiac Alert System for Early
                Recognition of ST-Segment Elevation Myocardial Infarction. Journal
                of the American College of Cardiology, 73(15), 1919-1927.
                ---------------------------------------------------------------------------
                 The second article expanded on the previously discussed study with
                a post hoc analysis of two coprimary efficacy endpoints: Superiority of
                positive predictive value (PPV) and noninferiority of false positive
                rate for ED visits prompted by alarms compared to symptoms-only.\48\
                According to the authors, these primary endpoints were assessed by
                comparing ED visits for an Alarms OFF group (control subjects during
                the randomized 6-month period) to those of an Alarms ON group
                (including both the treatment subjects during the first 6 months and
                all implanted patients beyond 6 months with alarms activated). The
                authors stated the expanded analysis adjudicated ED visits into either
                true or false-positive ACS events based on independent review of
                cardiac test data. The authors stated that the annual rate for Clinical
                Events Committee (CEC)-adjudicated ACS events was 0.151 (33 of 218.15)
                in the Alarms OFF group and 0.124 (193 of 1,557.64) in the Alarms ON
                group. In the Alarms OFF group, of the 181 ED visits, the CEC
                adjudicated 33 (18 percent) as ACS events (MI = 22 [67 percent];
                unstable angina (UA) \1/4\ 11 [33 percent]), with the remaining visits
                adjudicated as due to either stable CAD or indeterminate etiology. The
                median symptom-to-door time for Alarms OFF ACS events was 8.0 h (95
                percent confidence interval [CI]: 3.2 to 47.5 h). In Alarms ON
                subjects, of the 970 ED visits, the CEC adjudicated 193 (20 percent) as
                ACS events, with the remainder classified as stable CAD, indeterminate
                events, and/or a false-positive alarm. Of the 193 ACS events, 89 events
                (46 percent) were prompted by alarms (with or without symptoms; MI \1/
                4\ 40 [45 percent]; UA \1/4\ 49 [55 percent]). The remaining 104 visits
                (54 percent) were prompted by symptoms only (MI \1/4\ 60 [58 percent];
                UA \1/4\ 44 [42 percent]). An overall median arrival time of 1.7 h was
                found for the Alarms ON group composite including all 3 prompt types
                for ED arrival (alarms only, alarms [thorn] symptoms, or symptoms
                only), which was significantly shorter than the 8.0 h delay of the
                Alarms OFF group (p 49 50 51 and associated downstream sequelae. More
                specifically, the applicant asserts that based on the results of the
                second discussed study, the Guardian[supreg] system Alarms ON group
                showed reduced pre-hospital delays, with 55 percent (95 percent
                confidence interval [CI]: 46 percent to 63 percent) of Emergency
                department visits for ACS events 55 56 57 58 The applicant asserts that prompt
                responsiveness to symptoms and decreased pre-hospital delay is a
                universally understood benefit which improves the health outcomes of
                ACS events. According to the applicant, the American Heart Association
                (Mission Lifeline), American College of Cardiology (Door to Balloon
                (D2B) Alliance), Society for Angiographic Intervention (Seconds
                CountTM program) and the National Heart, Lung, and Blood
                Institute have organized task forces and launched national programs
                with the goal of improving patient awareness and response to symptoms
                which are indicative of potential ACS events and reducing total
                ischemia time (that is, prehospital delay and in-hospital delay) to
                improve outcomes.
                ---------------------------------------------------------------------------
                 \49\ Weaver WD, Cerqueira M, Hallstrom AP, et al. Prehospital-
                Initiated vs Hospital-Initiated Thrombolytic Therapy: The Myocardial
                Infarction Triage and Intervention Trial. JAMA. 1993;270(10):1211-
                1216.
                 \50\ Hasche ET, Fernandes C, Freedman SB, Jeremy RW. Relation
                between ischemia time, infarct size, and left ventricular function
                in humans. Circulation. 1995;92:710-719.
                 \51\ Liem AL, van `t Hof AW, Hoorntje JC, de Boer MJ,
                Suryapranata H, Zijlstra F. Influence of treatment delay on infarct
                size and clinical outcome in patients with acute myocardial
                infarction treated with primary angioplasty. J Am Coll Cardiol.
                1998;32:629-633.
                 \52\ Holmes, D.R., Jr, Krucoff, M.W., Mullin, C., Mikdadi, G.,
                Presser, D., Wohns, D., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd,
                Iteld, B., Fischell, D.R., Fischell, T., Keenan, D., John, M.S., &
                Gibson, C.M. (2019). Implanted Monitor Alerting to Reduce Treatment
                Delay in Patients With Acute Coronary Syndrome Events. Journal of
                the American College of Cardiology, 74(16), 2047-2055.
                 \53\ Holmes, D.R., Jr, Krucoff, M.W., Mullin, C., Mikdadi, G.,
                Presser, D., Wohns, D., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd,
                Iteld, B., Fischell, D.R., Fischell, T., Keenan, D., John, M.S., &
                Gibson, C.M. (2019). Implanted Monitor Alerting to Reduce Treatment
                Delay in Patients With Acute Coronary Syndrome Events. Journal of
                the American College of Cardiology, 74(16), 2047-2055.
                 \54\ Holmes, D.R., Jr, Krucoff, M.W., Mullin, C., Mikdadi, G.,
                Presser, D., Wohns, D., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd,
                Iteld, B., Fischell, D.R., Fischell, T., Keenan, D., John, M.S., &
                Gibson, C. M. (2019). Implanted Monitor Alerting to Reduce Treatment
                Delay in Patients With Acute Coronary Syndrome Events. Journal of
                the American College of Cardiology, 74(16), 2047-2055.
                 \55\ Guerchicoff A, Brener SJ, Maehara A, et al. Impact of delay
                to reperfusion on reperfusion success, infarct size, and clinical
                outcomes in patients with ST-segment elevation myocardial
                infarction: the INFUSE-AMI Trial (INFUSE-Anterior Myocardial
                Infarction). JACC Cardiovasc Interv. 2014;7(7):733-740.
                 \56\ Flynn A, Moscucci M, Share D, et al. Trends in door-to-
                balloon time and mortality in patients with ST elevation myocardial
                infarction undergoing primary percutaneous coronary intervention.
                Arch Intern Med. 2010;170(20):1842-1849.
                 \57\ De Luca G, Suryapranata H, Zijlstra F, et al. Symptom-
                onset-to-balloon time and mortality in patients with acute
                myocardial infarction treated by primary angioplasty. J Am Coll
                Cardiol. 2003;42(6):991-997.
                 \58\ Gersh BJ, Stone GW. Pharmacological facilitation of
                coronary intervention in ST-segment elevation myocardial infarction:
                Time is of the essence. JACC Cardiovasc Interv. 2010;3(12):1292-
                1294.
                ---------------------------------------------------------------------------
                 The applicant next asserts the device offers more rapid beneficial
                resolution of the disease process because the use of the
                Guardian[supreg] system, as compared to the standard of care relying on
                symptoms alone, being in the Alarm ON group was associated with a
                reduction in the rate of new onset of left ventricular dysfunction.\59\
                ---------------------------------------------------------------------------
                 \59\ Holmes, D.R., Jr, Krucoff, M.W., Mullin, C., Mikdadi, G.,
                Presser, D., Wohns, D., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd,
                Iteld, B., Fischell, D.R., Fischell, T., Keenan, D., John, M.S., &
                Gibson, C.M. (2019). Implanted Monitor Alerting to Reduce Treatment
                Delay in Patients With Acute Coronary Syndrome Events. Journal of
                the American College of Cardiology, 74(16), 2047-2055.
                ---------------------------------------------------------------------------
                 Lastly the applicant asserts the use of the Guardian[supreg] system
                will decrease the number of future hospitalizations or physician
                visits. According to the applicant, the Guardian[supreg] system reduces
                the annual false positive rate (FPR) of Emergency Department visits
                (that is, spurious ED visits where no ACS is found) by 26 percent.\60\
                The applicant states that the FPR for all alarms on emergency visits
                was 0.499 per patient-year compared to 0.678 for alarms off (p 62 63 We note that the first
                study (Gibson et al. 2019) did not demonstrate statistically
                significant superiority of the intervention during the pre-determined
                study window. The authors noted a lower than expected frequency of
                events and the study was terminated early, two factors which may have
                affected these results. The results from the second study are based
                entirely on a post hoc analysis of data from the first article. We note
                that the findings presented are valuable but we sought comment on
                whether a post hoc analysis provides sufficient evidence to support the
                claim of substantial clinical improvement. Furthermore, we note that
                the primary efficacy endpoint was a composite of three outcomes. We are
                not certain that this endpoint is an appropriate measure with which to
                evaluate substantial clinical improvement among patients experiencing
                ACS events. We invited public comments on whether the Guardian[supreg]
                system meets the substantial clinical improvement criterion.
                ---------------------------------------------------------------------------
                 \62\ Ibid.
                 \63\ Holmes, D.R., Jr, Krucoff, M.W., Mullin, C., Mikdadi, G.,
                Presser, D., Wohns, D., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd,
                Iteld, B., Fischell, D.R., Fischell, T., Keenan, D., John, M.S., &
                Gibson, C.M. (2019). Implanted Monitor Alerting to Reduce Treatment
                Delay in Patients With Acute Coronary Syndrome Events. Journal of
                the American College of Cardiology, 74(16), 2047-2055.
                ---------------------------------------------------------------------------
                 Comment: Many commenters offered support for the approval of the
                Guardian[supreg]. Numerous commenters noted that according to published
                studies a reduction in ischemic time is associated with less cardiac
                damage and better outcomes for ACS events; these commenters asserted
                that the Guardian[supreg] brought patients to the emergency room
                earlier and more reliably, which resulted in better outcomes. Some
                commenters stated that the two studies submitted by the applicant and
                described in the CY 2022 OPPS/ASC proposed rule 64 65
                support the finding of a substantial clinical improvement. Some
                commenters noted that detection of silent MI enables the diagnosis of a
                medical condition that is currently undetectable, which the commenters
                believe is a substantial clinical improvement. Many commenters stated
                that the use of the Guardian[supreg] will reduce unnecessary medical
                utilization, will be beneficial particularly for those who experience
                silent myocardial infarction, and will prevent cardiac deaths. Many
                commenters offered patient stories that in their opinion showed that
                the Guardian[supreg] offers an improvement over existing treatment
                options. Multiple commenters noted that the Guardian[supreg] offers
                patients positive mental health outcomes given a reduction in
                experience anxiety in high-risk ACS patients. Additionally, multiple
                commenters stated that the total false positive rate for the ALERTS ON
                group was statistically less than that of the ALERTS OFF group.
                ---------------------------------------------------------------------------
                 \64\ Holmes, D.R., Jr, Krucoff, M.W., Mullin, C., Mikdadi, G.,
                Presser, D., Wohns, D., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd,
                Iteld, B., Fischell, D.R., Fischell, T., Keenan, D., John, M.S., &
                Gibson, C.M. (2019). Implanted Monitor Alerting to Reduce Treatment
                Delay in Patients With Acute Coronary Syndrome Events. Journal of
                the American College of Cardiology, 74(16), 2047-2055.
                 \65\ Gibson, C.M., Holmes, D., Mikdadi, G., Presser, D., Wohns,
                D., Yee, M.K., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd, Iteld, B.,
                & Krucoff, M.W. (2019). Implantable Cardiac Alert System for Early
                Recognition of ST-Segment Elevation Myocardial Infarction. Journal
                of the American College of Cardiology, 73(15), 1919-1927.
                ---------------------------------------------------------------------------
                 One commenter stated they have been using the Guardian[supreg] for
                more than ten years, that the device is a valuable addition to
                diagnostic capabilities, and that in many cases it reduces health care
                utilization. A second commenter stated this technology represents a
                significant improvement to detecting myocardial infarction promptly.
                One commenter who described their experience seeing the exam prevent
                multiple cardiac catheterizations noted the exam is invaluable to
                modern medicine and that a reduction in reimbursement would threaten
                its realization in the appropriate context. Another commenter noted
                that almost all patients requested replacement of the Guardian[supreg]
                when it reached end of battery life, which is indicative of its safety
                and effectiveness.
                 Response: We thank the commenters for additional information to
                support their belief that the Guardian[supreg] device is a substantial
                clinical improvement over
                [[Page 63587]]
                devices in existing categories or other available treatments.
                 Comment: The applicant asserted the Guardian[supreg] meets the
                second criterion for establishing a new device category, at Sec.
                419.66(c)(2), by providing a substantial clinical improvement over
                existing therapies because the Guardian[supreg] ``has demonstrated that
                it will substantially improve the diagnosis or treatment of an illness
                or injury compared to the benefits of a device or devices in a
                previously established category or other available treatment''.
                 The applicant pointed out that in the CY 2022 OPPS/ASC proposed
                rule we stated that the positive predictive value (PPV), false positive
                rate (FPR), and Silent myocardial infarction (MI) endpoints were
                reported in the ``second study'' (that is, Holmes et al.). The
                applicant clarified that Gibson et al. reported on both the original
                study analysis and the Expanded analysis, including the PPV, FPR, and
                Silent MI endpoints; Holmes et al. reported on pre-hospital delays and
                their distribution as a function of both prompt (alarm only, alarm +
                symptom, symptom only) and group (Alarms On vs Alarms OFF).
                 In response to our concerns about the primary endpoints lacking
                statistical significance the applicant stated both AngelMed and FDA
                have expressed the position that the results of the ALERTS study are
                best assessed using the lens that statistical significance of primary
                endpoints should be assessed with respect to the totality of the data.
                The applicant stated the endpoint analyses requested by FDA for primary
                endpoints during its evaluation of the study data (for example, event
                based or crossover analysis) reached statistical significance. The
                applicant added as an example that an event-based analyses of the
                composite primary endpoints of the original study reached statistical
                significance when multiple events within patients were counted, rather
                than relying upon a patient-based analysis in which each patient could
                only be counted once. According to the applicant, since multiple events
                may occur in a single patient, they believe that the primary endpoint
                data is also valid and more accurately and realistically reflects
                Medicare patient experiences. The applicant added that the non-primary
                endpoint of sustained left ventricular ejection fraction (LVEF), which
                was independent of the primary endpoint measures, was statistically
                superior (Gibson et al. 2019, p. 1924).\66\ The applicant added that
                the Expanded analysis was explicitly designed to address the event rate
                seen in the original study design by leveraging the post-randomization
                data to derive a dataset covering an approximately three times larger
                study interval, which according to the applicant, greatly increased the
                number of events and statistical power. The applicant concluded that
                while not all endpoints reached statistical significance, AngelMed
                believes that the totality of the data supports substantial clinical
                improvement.
                ---------------------------------------------------------------------------
                 \66\ Gibson, C.M., Holmes, D., Mikdadi, G., Presser, D., Wohns,
                D., Yee, M.K., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd, Iteld, B.,
                & Krucoff, M.W. (2019). Implantable Cardiac Alert System for Early
                Recognition of ST-Segment Elevation Myocardial Infarction. Journal
                of the American College of Cardiology, 73(15), 1919-1927.
                ---------------------------------------------------------------------------
                 In response to our concerns about post-hoc validity, the applicant
                believes the Expanded analysis supports substantial clinical
                improvement for a number of reasons. The applicant acknowledged as
                noted by Gibson et al.,\67\ some post-hoc analyses were done in the
                original analysis but that the Expanded analysis was not post-hoc. The
                applicant asserted the Expanded analysis was a pre-specified analysis
                proposed by FDA, and agreed upon by AngelMed, that was completed using
                data both from the original randomized period and a large amount of
                data from the post-randomization period. While the post-randomization
                data was captured with the same rigor and predefined procedures as the
                randomization period, the Expanded analysis increased the pool of data
                from less than 450 years to 1,500 years. The applicant explained that
                this approach was adopted by FDA and AngelMed specifically with the aim
                of greatly increasing the number of endpoint events and maximizing the
                statistical power of the Expanded analysis for the new endpoints, new
                definition of acute coronary syndrome (ACS), etc. The applicant added
                that the Expanded analysis used a new analysis protocol which resulted
                in data which were analyzed to obtain new, distinct, and meaningful
                endpoints that used clearer measurements than the ALERTS design.
                ---------------------------------------------------------------------------
                 \67\ Gibson, C.M., Holmes, D., Mikdadi, G., Presser, D., Wohns,
                D., Yee, M.K., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd, Iteld, B.,
                & Krucoff, M.W. (2019). Implantable Cardiac Alert System for Early
                Recognition of ST-Segment Elevation Myocardial Infarction. Journal
                of the American College of Cardiology, 73(15), 1919-1927.
                ---------------------------------------------------------------------------
                 Lastly, the applicant responded to our concerns regarding
                appropriate measure[s] with which to evaluate substantial clinical
                improvement. The applicant reasserted that the original analysis used a
                composite primary efficacy endpoint of three outcomes that provided an
                initial assessment of the technology. The applicant asserted that the
                individual components of the primary efficacy endpoint for arrival
                times and new Q-waves were consistently in favor of the
                Guardian[supreg] with arrival times reaching significance. The
                applicant stated, as CMS noted, in the original ALERTS analysis ``at
                the pre-specified 7-day look back window, the median time from the
                Guardian[supreg] notification to arrival at a medical facility was 51
                minutes for the treated subjects as compared to 30.6 hours for control
                subjects (Pr [pt 0.999)'' (86 FR 42092). The applicant added
                these results should be combined with the Expanded analysis endpoints,
                which used new measures that reflected a better understanding by FDA
                and AngelMed for how best to evaluate the real-world impact of the
                Guardian System, when assessing substantial clinical improvement. The
                applicant asserted that more specifically, the co-primary endpoints
                (i.e., PPV and FPR) reflected real-world performance measures that were
                suggested by FDA and that more accurately demonstrate, and provide a
                complementary view of, the clinical benefit than the composite
                endpoints of the original ALERTS design.
                 The applicant asserted that the main topics of interest for the
                Expanded analysis were the alarms in terms of frequency and accuracy,
                and how the subjects responded (e.g., distribution of patient pre-
                hospital delay for each of the different prompts: Alarm + symptom;
                alarms only; or, symptom only). According to the applicant the Expanded
                analysis not only assessed device performance but also the behavior of
                the individual subjects in the Alarms ON group prompted by the alarms,
                symptoms or both. The applicant contended that the combination of the
                original study endpoints and Expanded analysis endpoints are the
                correct measures since these are able to show substantial clinical
                improvement according to multiple device pass-through criteria the
                ability to diagnose a medical condition that is currently undetectable,
                diagnose a medical condition earlier in a patient population then is
                currently available, decrease future hospitalizations, and improve
                patient outcomes.
                 The applicant asserted that all the ALERTS data consistently showed
                compelling and statistically significant reduction in pre-hospital
                delays in the Alarms ON group compared to the Alarms OFF group.
                According to the applicant, reduced total ischemic time is a correct
                measure for assessing substantial clinical improvement since
                [[Page 63588]]
                it is a universal axiom that decreased delay decreases the associated
                risk of heart damage (e.g., larger infarct size, ejection fraction
                decrement);68 69 70 the applicant asserted that shorter
                total ischemic time is associated with better outcomes for ACS
                events.71 72 73 74 That is why, according to the applicant,
                multiple national agencies, including ACC, SCAI, AMA and NHLBI, have
                created programs specifically focused on reducing time to treatment for
                ACS events and have used time-based metrics as their sole assessment of
                provider quality for ACS care.\75\ For these reasons the applicant
                believes that the combination of original and Expanded analysis results
                provides clear evidence of substantial clinical improvement for high-
                risk ACS patients experiencing ACS events.
                ---------------------------------------------------------------------------
                 \68\ Weaver W.D., Cerqueira M., Hallstrom A.P., et al.
                Prehospital-Initiated vs. Hospital-Initiated Thrombolytic Therapy:
                The Myocardial Infarction Triage and Intervention Trial. JAMA.
                1993;270(10):1211-1216.
                 \69\ Hasche E.T., Fernandes C., Freedman S.B., Jeremy R.W.
                Relation between ischemia time, infarct size, and left ventricular
                function in humans. Circulation. 1995;92:710-719.
                 \70\ Liem A.L., van `t Hof A.W., Hoorntje J.C., de Boer M.J.,
                Suryapranata H., Zijlstra F. Influence of treatment delay on infarct
                size and clinical outcome in patients with acute myocardial
                infarction treated with primary angioplasty. J Am Coll Cardiol.
                1998;32:629-633.
                 \71\ Guerchicoff A., Brener S.J., Maehara A., et al. Impact of
                delay to reperfusion on reperfusion success, infarct size, and
                clinical outcomes in patients with ST-segment elevation myocardial
                infarction: The INFUSE-AMI Trial (INFUSE-Anterior Myocardial
                Infarction). JACC Cardiovasc Interv. 2014;7(7):733-740.
                 \72\ Flynn A., Moscucci M., Share D., et al. Trends in door-to-
                balloon time and mortality in patients with ST elevation myocardial
                infarction undergoing primary percutaneous coronary intervention.
                Arch Intern Med. 2010;170(20):1842-1849.
                 \73\ De Luca G., Suryapranata H., Zijlstra F., et al. Symptom-
                onset-to-balloon time and mortality in patients with acute
                myocardial infarction treated by primary angioplasty. J Am Coll
                Cardiol. 2003;42(6):991-997.
                 \74\ Gersh B.J., Stone G.W. Pharmacological facilitation of
                coronary intervention in ST-segment elevation myocardial infarction:
                Time is of the essence. JACC Cardiovasc Interv. 2010;3(12):1292-
                1294.
                 \75\ CMS. Timely & Effective Care. URL: https://data.cms.gov/provider-data/topics/hospitals/timely-effective-care#heart-attack-care.
                ---------------------------------------------------------------------------
                 Response: We appreciate the additional information provided by the
                commenters. In the proposed rule, we articulated tour concern about the
                sufficiency of a post-hoc analysis. In their public comment the
                applicant asserted that while some post-hoc analyses were performed,
                the expanded analysis was a pre-specified analysis proposed by FDA. We
                further appreciate the clarification from the applicant that the
                expanded analysis increased the number of endpoint events. Given the
                additional endpoints evaluated in the expanded analysis that
                specifically show faster visits for real events while not increasing
                unnecessary emergency department visits, we agree that the
                Guardian[supreg] system meets the substantial clinical improvement
                criterion at Sec. 419.66(c)(2).
                 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
                Guardian[supreg] would be reported with the HCPCS codes listed in the
                following Table 35:
                [GRAPHIC] [TIFF OMITTED] TR16NO21.049
                 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 for the CY 2022 OPPS/ASC proposed rule,
                we used APC 5222--Level 2 Pacemaker and Similar Procedures, which had a
                CY 2021 payment rate of $8,152.58 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 0527T was assigned to APC 5222 and had a device
                [[Page 63589]]
                offset amount of $1,598.72 at the time the application was received.
                 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 for the Guardian[supreg] is 126 percent of the
                applicable APC payment amount for the service related to the category
                of devices of $8,152.58 ((10,250/8,153) * 100 = 125.7 percent).
                Therefore, we stated in the CY 2022 OPPS/ASC proposed rule that we
                believe the Guardian[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). We stated in the CY 2022 OPPS/ASC proposed rule that the
                estimated average reasonable cost for the Guardian[supreg] is 641
                percent of the cost of the device-related portion of the APC payment
                amount for the related service of $1,598.72 ((10,250/1,599) * 100 =
                641.0 percent). Therefore, we stated that we believe that the
                Guardian[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. We stated in the CY 2022 OPPS/ASC proposed
                rule that the difference between the estimated average reasonable cost
                for the Guardian[supreg] and the portion of the APC payment amount for
                the device of $1,598.72 is 106 percent of the APC payment amount for
                the related service of $8,152.58 (((10,250-1,599)/8,153) * 100 = 106.1
                percent). Therefore, we explained that we believe that the
                Guardian[supreg] meets the third cost significance requirement. In the
                CY 2022 OPPS/ASC proposed rule we invited public comment on whether the
                Guardian[supreg] meets the device pass-through payment criteria,
                including the cost criterion for device pass-through payment status.
                 Comment: The applicant stated the Guardian[supreg] meets the three
                cost criteria at Sec. 419.66(d), consistent with CMS' analysis.
                 Response: We appreciate the applicant's input and agree that the
                Guardian[supreg] meets the cost criterion for device pass-through
                payment status.
                 After considering the public comments we received and our review of
                the device pass-through application, we have determined that the
                Guardian[supreg] system meets the criteria for device pass-through.
                Therefore, we are finalizing approval for device pass-through payment
                status for the Guardian[supreg] system effective beginning January 1,
                2022.
                (2) BONEBRIDGE Bone Conduction Implant System
                 MED-EL Corporation submitted an application for a new device
                category for transitional pass-through payment status for the
                BONEBRIDGE Bone Conduction Implant System (hereinafter referred to as
                the BONEBRIDGE) by the March 2021 quarterly deadline for CY 2022. The
                BONEBRIDGE is a transcutaneous, active auditory osseointegrated device
                that replaces the function of the damaged outer or middle ear and can
                help people for whom hearing aids are ineffective or not recommended.
                According to the applicant, the device consists of a bone conduction
                implant and electronics components, and an externally worn audio
                processor. The bone conduction implant is called the BONEBRIDGE Bone
                Conduction Implant (BCI 602) and the externally worn audio processor is
                called the SAMBA 2 Audio Processor. The BCI 602 consists of two main
                sections, the coil section and the transducer section. The BCI 602
                consists of a magnet surrounded by the receiver coil, the transition,
                the Bone Conduction Floating Mass Transducer (BC-FMT), and the
                electronics package in a hermetic housing. The SAMBA 2 Audio Processor
                is 30.4 mm x 36.4 mm x 10.2 mm and weighs 9.3g, including the battery
                and magnet (strength 1). It has an 18-band digital equalizer, 18
                independent compression channels, and an audio frequency range of 250
                Hz to 8kHz. The audio processor is powered by a non-rechargeable 675
                zinc-air button cell with a nominal 1.4-volt supply and 600mA-Hrs of
                capacity offering the user up to 133 hours (8 to 10 days) on a single
                battery.
                 The applicant stated that the bone conduction implant is surgically
                attached to the skull, is subcutaneous, and is connected to the
                external audio processor by transcutaneous magnetic attraction. The
                external audio processor picks up sound from the environment and
                converts those sounds to a radiofrequency (RF) signal that can be
                transmitted across the skin to the implant. The implant converts the
                signal to controlled vibrations which are conducted via the skull and
                perceived as sound. More specifically, the applicant stated that the
                BCI 602 is activated by placing the external audio processor over the
                magnet of the BCI 602. The signal and the energy to drive the BC-FMT
                are transferred via an inductive link to the internal coil, and then
                relayed to the BC-FMT. The BC-FMT transduces the signal into mechanical
                vibrations, which are conducted to the skull via the cortical titanium
                screws. These vibrations stimulate the auditory system through the bone
                conduction pathway to allow the patient to hear.
                 With respect to the newness criterion at Sec. 419.66(b)(1), FDA
                granted a de novo request classifying the BONEBRIDGE as a Class II
                device under section 513(f)(2) of the Federal Food, Drug, and Cosmetic
                Act on July 20, 2018. The BONEBRIDGE is indicated for use in the
                following patients: (1) Patients 12 years of age or older; and (2)
                patients who have a conductive or mixed hearing loss and still can
                benefit from sound amplification. The pure tone average (PTA) bone
                conduction (BC) threshold (measured at 0.5, 1, 2, and 3 kHz) should be
                better than or equal to 45 dB HL; (3) Bilateral fitting of the
                BONEBRIDGE is intended for patients having a symmetrically conductive
                or mixed hearing loss. The difference between the left and right sides'
                BC thresholds should be less than 10 dB on average measured at 0.5, 1,
                2, and 3 kHz, or less than 15 dB at individual frequencies; (4)
                Patients who have profound sensorineural hearing loss in one ear and
                normal hearing in the opposite ear (that is, single-sided deafness or
                ``SSD''). The pure tone average air conduction hearing thresholds of
                the hearing ear should be better than or equal to 20 dB HL (measured at
                0.5, 1, 2, and 3 kHz); (5) The BONEBRIDGE for SSD is also indicated for
                any patient who is indicated for an air conduction contralateral
                routing of signals (AC CROS) hearing aid, but who for some reason
                cannot or will not use an AC CROS. Prior to receiving the device, it is
                recommended that an individual have experience with appropriately fit
                air conduction or bone conduction hearing aids. We received the
                application for a new device category for transitional pass-through
                payment status for the BONEBRIDGE on December 10, 2020, which is within
                3 years of the date of the initial FDA marketing authorization. In the
                CY 2022 OPPS/ASC proposed rule, we invited public comments on
                [[Page 63590]]
                whether the BONEBRIDGE meets the newness criterion.
                 We did not receive any comments in regard to whether the BONEBRIDGE
                meets the newness criterion at Sec. 419.66(b)(1). Because we received
                the BONEBRIDGE application on December 10, 2020, which is within 3
                years of the FDA premarketing approval date of July 20, 2018, which is
                within 3 years, we have concluded that the BONEBRIDGE meets the newness
                criterion.
                 With respect to the eligibility criterion at Sec. 419.66(b)(3),
                according to the applicant, the BONEBRIDGE is integral to the service
                provided, is used for one patient only, comes in contact with human
                skin and is surgically implanted or inserted. The applicant also
                claimed that the BONEBRIDGE meets the device eligibility requirements
                of Sec. 419.66(b)(4) because it is not equipment, 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.
                 Additionally, the BONEBRIDGE is not subject to the hearing aid
                exclusion at Sec. 411.15(d)(1). The BONEBRIDGE Bone Conduction Implant
                (BCI 602) component is an osseointegrated implant, surgically attached
                to the skull that converts a radiofrequency signal from an external
                audio processor to controlled vibrations which are conducted via the
                skull to the cochlea. Therefore, we explained in the CY 2022 OPPS/ASC
                proposed rule that we believe the BONEBRIDGE meets the criterion at
                Sec. 411.15(d)(2)(i) and is not subject to the hearing aid exclusion.
                In accordance with the Medicare Benefit Policy Manual, Chapter 16
                ``General Exclusions from Coverage,'' section 100, certain devices that
                produce perception of sound by replacing the function of the middle
                ear, cochlea or auditory nerve are payable by Medicare as prosthetic
                devices. These include osseointegrated implants, that is, devices
                implanted in the skull that replace the function of the middle ear and
                provide mechanical energy to the cochlea via a mechanical transducer.
                We believe the BONEBRIDGE device meets the criteria for this benefit
                category. We invited public comments on whether the BONEBRIDGE meets
                the eligibility criteria at Sec. 419.66(b) as well as the criterion at
                Sec. 411.15(d)(2)(i).
                 Comment: One commenter agreed with CMS that BONEBRIDGE is not
                subject to the hearing aid exclusion at Sec. 411.15(d)(1).
                 Response: We did not receive any comments on whether the BONEBRIDGE
                meets the eligibility criteria at Sec. 419.66(b)(3) or Sec.
                419.66(b)(4). We agree with the applicant that the BONEBRIDGE device
                meets the criteria of Sec. 419.66(b). We believe discussion concerning
                Sec. 411.15(d)(2)(i) is beyond the scope of the discussion here.
                 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 stated that the previous device category, L8690
                (Auditory osseointegrated device, includes all internal and external
                components), which was in effect from January 1, 2007 through December
                31, 2008 does not appropriately describe the BONEBRIDGE. The applicant
                stated that at the time the category was established, BONEBRIDGE did
                not exist and the devices described by the category included auditory
                osseointegrated implant (AOI) devices or bone-anchored hearing aids
                (BAHAs). The applicant claimed that AOI devices and BAHAs are distinct
                from the BONEBRIDGE because they are implant systems composed of an
                external sound processor connected via a percutaneous abutment to a
                titanium implant that is implanted in the skull. In these devices, the
                titanium implant protrudes through the skin creating a titanium post,
                which directly attaches to an external sound processor. The system
                replaces the function of the middle ear by transmitting mechanical
                energy from the external transducer/sound processor directly to the
                titanium implant to the cochlea thereby resulting in better hearing.
                The applicant stated that the titanium abutment used by percutaneous
                systems permanently pierce the skin to allow the sound processor to
                transmit sound and create vibrations within the skull that stimulate
                the nerve fibers of the inner ear. The applicant also stated that in
                the percutaneous systems, the external component (sound processor)
                receives and processes the sound and generates the vibrations.
                 The applicant claimed that the BONEBRIDGE is a new technology
                compared to the AOI devices and BAHAs and unlike these devices, it does
                not use a percutaneous abutment. The applicant described BONEBRIDGE as
                an active, transcutaneous device that consists of a completely
                implanted transducer and electronics components, and an externally worn
                audio processor. The active implant is surgically attached to the
                skull, is subcutaneous, and is connected to the external audio
                processor by transcutaneous magnetic attraction. The external audio
                processor picks up sound from the environment and converts those sounds
                to a radiofrequency (RF) signal that can be transmitted across the skin
                to the implant. The implant converts the signal to controlled
                vibrations, which are conducted via the skull and perceived as sound.
                The applicant proposed the device pass-through category descriptor
                ``Auditory osseointegrated device, transcutaneous, with implanted
                transducer and radiofrequency link to external sound processor'' and
                suggested that L8690 be revised to read, ``Auditory osseointegrated
                device, percutaneous, includes all internal and external components''.
                The applicant stated that the Cochlear Osia[supreg]2 System, which also
                submitted a device pass-through application for CY 2022, would also be
                described by the proposed additional category.
                 Web stated in the CY 2022 OPPS/ASC proposed rule that we believe
                that the BONEBRIDGE is described by L8690 --Auditory osseointegrated
                device, includes all internal and external components. The applicant
                has noted differences between the BONEBRIDGE and the devices that were
                described by L8690, specifically percutaneous, auditory osseointegrated
                devices, regarding the connection between the implanted transducer and
                the external audio processor (percutaneous abutment vs. transcutaneous
                magnetic attraction). However, we believe that there is a similar
                mechanism of action for all these devices specifically, vibratory
                stimulation of the skull to stimulate the receptors in the cochlea
                (inner ear). Further, we believe that the broad descriptor for L8690 of
                ``Auditory osseointegrated device, includes all internal and external
                components'' includes the applicant's device.
                 In the CY 2022 OPPS/ASC proposed rule, we invited public comment on
                whether the BONEBRIDGE meets the device category criterion.
                 Comment: One commenter stated they do not support CMS' position
                that the BONEBRIDGE and Osia[supreg] 2 system should not be granted a
                new category, because these devices take much longer to implant
                surgically than percutaneous bone conduction implants, they are active
                sound processors, and they work differently than percutaneous devices
                like the BAHA or Oticon implants.
                 Another commenter who also disagreed with CMS that the BONEBRIDGE
                and Osia[supreg] 2 system are
                [[Page 63591]]
                adequately described by L8690 stated that the BONEBRIDGE and
                Osia[supreg] 2 system are transcutaneous hearing implants, and that CMS
                should create a new HCPCS code that describes both the procedure and
                the implant for these devices. The commenter expressed their
                disappointment in what they described as CMS' continual resistance to
                conduct rulemaking specifically on Middle Ear Implants (MEIs) because
                they believe CMS should hear the opinions of clinical experts,
                physicians, and Medicare beneficiaries regarding the appropriateness of
                classifying MEIs as prosthetic implants.
                 A different commenter supported CMS' conclusion in the proposed
                rule that BONEBRIDGE and Cochlear Osia[supreg] are appropriately
                described by a pass-through category previously in effect
                 Two commenters stated that CMS must support the inclusion of middle
                ear implants in the prosthetic category. The commenters asserted that
                not including these devices denies beneficiaries access to all FDA-
                approved hearing prosthetics and discourages in new technology for the
                hearing impaired.
                 Response: We appreciate the input provided by these commenters. We
                have taken this information into consideration in our determination of
                the eligibility criterion at Sec. 419.66(c)(1), discussed below. We
                note some of the comments, those addressing hearing prosthetics, are
                outside of the scope of this rule.
                 Comment: The applicant stated that BONEBRIDGE is not appropriately
                described by the previous device category L8690, ``Auditory
                osseointegrated device, includes all internal and external
                components''. The applicant asserted that even though the mechanism of
                action is the same (that is, replacing the function of the middle ear
                by transmitting mechanical energy from the external transducer/audio
                processor to the cochlea), there are significant differences between
                BONEBRIDGE and the devices described by the previous category of L8690,
                ``Auditory osseointegrated device, includes all internal and external
                components'' that enable BONEBRIDGE to furnish a substantial clinical
                improvement over existing technology. According to the applicant, L8690
                was established in 2007 at a time when the technology to fully implant
                a transducer did not exist; the devices for which L8960 was established
                were percutaneous passive devices.
                 According to the applicant, FDA created a new device classification
                for active implantable bone conduction hearing systems in response to
                BONEBRIDGE's application in 2018 (21 CFR 874.3340) which is
                specifically for active systems as opposed to passive systems (21 CFR
                874.3300). According to the applicant, FDA's description of active
                implantable bone conduction is that the transducer is implanted and the
                description of the technical method refers to the transcutaneous nature
                of the technology. The applicant stated that while they recognize that
                FDA and CMS classify devices differently for different purposes, they
                believe that the way FDA classifies bone conduction implants reinforces
                why CMS should distinguish active implantable bone conduction devices
                from passive, percutaneous systems for purposes of transitional pass-
                through payment status.
                 The applicant asserted that CMS has modified broadly worded device
                categories to recognize technological advances within a device class
                and to grant transitional pass-through payment status to the newer
                technologies. According to the applicant, in the neurostimulator
                category, the original descriptor of HCPCS code C1767 was ``Generator,
                neurostimulator (implantable).'' The applicant asserted that CMS
                modified this descriptor to ``Generator, neurostimulator (implantable),
                non-rechargeable'' to create a new device category and grant
                transitional pass-through payment status for rechargeable
                neurostimulators described by HCPCS codes C1820 (Generator,
                neurostimulator (implantable), with rechargeable battery and charging
                system) and C1822 (Generator, neurostimulator (implantable), high
                frequency, with rechargeable battery and charging system). The
                applicant added that CMS previously recognized differences in
                transluminal angioplasty catheters to support transitional pass-through
                payment status (for example, C2623, C1885, and C1725). The applicant
                asserted the new pass-through device category code should specifically
                describe active devices, which are those that have a fully implanted
                transducer attached transcutaneously to the external audio processor.
                The applicant suggested: CXXXX (Active auditory osseointegrated device,
                transcutaneous, requires implanted transducer and radiofrequency link
                to external sound processor). The applicant further suggested that CMS
                could refine L8960 to (Passive auditory osseointegrated device,
                percutaneous or transcutaneous, includes all internal and external
                components (new language underlined)). The applicant concluded that
                effective on January 1, 2022 there will be new and revised CPT codes
                that differentiate the surgical procedures for osseointegrated implants
                by the type of attachment (for example, 69X50 (Implantation,
                osseointegrated implant, skull; with magnetic transcutaneous attachment
                to external speech processor), 69X51 (Revision/replacement (including
                removal of existing device), osseointegrated implant, skull; with
                magnetic transcutaneous attachment to external speech processor)),
                69717 (Revision/replacement (including removal of existing device),
                osseointegrated implant, skull; with percutaneous attachment to
                external speech processor), and 69X51 (Revision/replacement (including
                removal of existing device), osseointegrated implant, skull; with
                magnetic transcutaneous attachment to external speech processor).
                 Response: After consideration of the public comments we received,
                we agree there is no existing pass-through payment category that
                appropriately describes the BONEBRIDGE. The BONEBRIDGE device consists
                of an external processor that receives sound pressure energy and
                converts this to a radiofrequency signal which communicates with a
                surgically implanted subcutaneous transducer/actuator which is
                osseointegrated into the skull with screws. The transducer/actuator
                converts this signal to mechanical vibrations that are transmitted to
                the skull and inner ear. As stated by the applicant, when the existing
                pass-through category, Auditory osseointegrated device (L8690), was
                issued in 2007, the technology to implant the transducer/actuator did
                not exist. Based on this information, we have determined that the
                BONEBRIDGE meets the eligibility criterion at Sec. 419.66(c)(1). Due
                to the similarity between the devices, we refer the reader to section
                IV(A)(2)(b)(4) of this rule for a similar discussion of the
                Osia[supreg]2 system.
                 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 FDA's Breakthrough
                [[Page 63592]]
                Devices Program and has received FDA marketing authorization. With
                respect to the substantial clinical improvement criterion, the
                applicant stated that the BONEBRIDGE represents a substantial clinical
                improvement because it provides a reduced rate of device-related
                complications and a more rapid beneficial resolution of the disease
                process treated because of the use of the device compared to currently
                available treatments. The applicant submitted six studies to support
                these claims. The applicant also submitted references for four
                retrospective case studies of complications with percutaneous devices,
                specifically BAHAs, including infections, pain, soft tissue
                hypertrophy, loss of osseointegration, and need for further surgery.
                These studies did not involve the applicant's device.
                 In support of the claim that the BONEBRIDGE reduced the rate of
                device-related complications compared to currently available
                treatments, the applicant submitted a white paper that reviewed the
                literature reporting on safety outcomes in bone conduction implants
                authored by the manufacturer of the BONEBRIDGE, MED-EL.\76\ The review
                included five products used to treat conductive hearing loss, mixed
                hearing loss or single side deafness, which were either percutaneous
                systems that had an abutment that permanently pierced through the skin
                or transcutaneous systems without permanent skin penetration. The
                authors further defined the products as either active or passive,
                depending on the placement of the vibrating (or active) device
                component. According to the authors, active bone conduction systems,
                the active device component, is located within the implantable part of
                the system. According to the authors, passive bone conduction systems,
                the vibrating device component, is located outside of the skull.\77\
                ---------------------------------------------------------------------------
                 \76\ MED-EL Medical Electronics. (2019). Safety outcomes of bone
                conduction implants: A systematic review [White paper].
                 \77\ Ibid.
                ---------------------------------------------------------------------------
                 The literature review compared the safety outcomes of the BAHA
                Connect and the Ponto, (passive, percutaneous systems,) the BONEBRIDGE,
                (an active, transcutaneous systems), and the Sophono Alpha and the BAHA
                Attract, (passive, transcutaneous systems). In total, 156 studies were
                included in the literature review. There were seven studies with 234
                patients reported on the Ponto, thirteen studies with 175 patients
                reported on the BONEBRIDGE, twelve publications with 143 patients
                reported on the Sophono Alpha, seven studies reported on the BAHA
                Attract system with 114 patients, and 117 studies reported on the BAHA
                Connect system with a total of 6,965 patients. Of all reported adverse
                events, 38 percent were major and 62 percent were minor. Major adverse
                events reported in the review included revision surgery, explantation,
                removal at patient request, implant loss, implant device failure, skin
                revision surgery or skin infection. Minor adverse events included skin
                infections, soft tissue reactions, and healing difficulties. The
                results showed that 9.8 percent of patients using the BONEBRIDGE system
                experienced an adverse event (major or minor), compared to 68.4 percent
                of BAHA Attract patients, 46.9 percent of Sophono Alpha patients, 44.0
                percent of Ponto system patients and 51.7 percent of BAHA Connect
                patients. When comparing the percentage of patients who experienced a
                major adverse event, 2.9 percent of BONEBRIDGE patients had a major
                adverse event compared to 1.8 percent of BAHA Attract patients, 4.2
                percent of Sophono Alpha patients, 5.1 percent of Ponto system
                patients, and 21.1 percent of BAHA Connect patients.
                 To support the claim that the BONEBRIDGE reduced the rate of
                device-related complications compared to currently available
                treatments, the applicant also submitted a systematic review of the
                current literature on safety, efficacy and subjective benefit after
                implantation with the BONEBRIDGE device.\78\ The systematic review
                assessed 39 publications and included randomized controlled trials,
                clinical controlled trials and cohort studies, case series and case
                reports investigating subjective and objective outcomes. In the 39
                publications included in the review, 487 participants were evaluated;
                303 participants had conductive hearing loss, 67 participants had mixed
                hearing loss, and 53 participants had single-sided deafness. The mean
                age of the patients in the included studies was 35.616.9
                years. Using the guidelines available from the Cochrane Collaboration,
                a search strategy and review protocol was developed using PubMed
                (MEDLINE) and Cochrane databases to identify all publications on the
                BONEBRIDGE from 2012 to October 31, 2018. The researchers excluded
                studies that assessed a device or treatment other than the BONEBRIDGE,
                did not include human participants, focused on a type of hearing loss
                other than the losses that BONEBRIDGE is indicated for (that is,
                conductive hearing loss, mixed hearing loss or single-sided deafness),
                did not report on safety or performance/quality of life data, were not
                related to hearing loss or treatment thereof, lacked sufficient
                information for evaluation, and included overlapping samples.
                ---------------------------------------------------------------------------
                 \78\ Magele, A., Schoerg, P, Stanek, B. et al. (2019). Active
                transcutaneous bone conduction hearing implants: Systematic review
                and meta-analysis. PLoS ONE 14(9); e0221484 https://doi.org/10.1371/journal.pone.0221484.
                ---------------------------------------------------------------------------
                 The outcomes extracted from the studies were assessed via meta-
                analysis. The safety of the device was assessed by collecting
                information on complications during surgery and adverse events in the
                postoperative period. Of the 39 identified studies, there were 25
                studies that reported on safety during a mean period of 11.7 months
                (range 3-36 months). The reported complications were categorized into
                minor and major complications, with a major complication described as
                requiring surgical attention leading to revision surgery or
                explantation. Minor complications included skin edema or erythema, skin
                infections, and hematomas. Out of 286 ears implanted with the device,
                there were no complications in 259 ears (90.6 percent). Minor
                complications occurred in 22 ears (7.7 percent) over a cumulative
                period of reported mean follow-up of 12.7 years (mean: 11.7 months
                 4.5). Major complications occurred in three studies
                comprising five ears (1.7 percent).\79\
                ---------------------------------------------------------------------------
                 \79\ Ibid.
                ---------------------------------------------------------------------------
                 The applicant submitted an additional study by Schmerber, et al. to
                support the claim that the BONEBRIDGE reduced the rate of device-
                related complications compared to currently available treatments.\80\
                The study of 28 participants was a multicenter, prospective study with
                intra-subject measurements with the purpose of the study to validate
                the safety and efficacy of the BONEBRIDGE 12 months after
                implementation. The study included nine university hospitals, seven in
                France and two in Belgium. Sixteen participants with conductive or
                mixed hearing loss with bone-conduction hearing thresholds under the
                upper limit of 45 dB HL for each frequency from 500 to 4000 Hz, and 12
                participants with SSD (contralateral hearing within normal range) were
                enrolled in the study. Three of the 28 participants (with mixed or
                conductive hearing loss) did not complete the study; one requested that
                the device be removed (due to ``severe psychological problems'') and
                two were lost to follow
                [[Page 63593]]
                up. The skin safety of the participants was evaluated by the surgeon
                who implanted the device up to 12 months post-operatively using an
                ordinal scale (``very good'', ``good'', ``acceptable'', ``bad skin
                condition'') and a visual analogue scale (between 1 and 10 from ``very
                bad'' to ``excellent'') to rate cutaneous tolerance. In the study, no
                complications or device failures occurred, no revision surgery was
                necessary and no skin injury was reported. The scoring was judged as
                `excellent' or `good' for all subjects (n = 25), corresponding to
                scores 8 to 10 on the scale. No complication (0 percent) was observed
                [95 percent confidence interval = (0 percent-14.9 percent)]. The
                authors stated that there was a lower rate of complications for the
                BONEBRIDGE device compared to percutaneous systems, like the BAHA,
                whose complication rate was up to 24 percent in a large series of 602
                ears and a revision surgery rate of 12 percent.81 82
                ---------------------------------------------------------------------------
                 \80\ Schmerber, S., Deguine, O., Marx, M. et al. (2017). Safety
                and effectiveness of the Bonebridge transcutaneous direct-drive
                bone-conduction hearing implant at 1-year device use. Eur Arch
                Otorhinolaryngol 274: 1835-1851 doi 10.1007/s00405-016-4228-6.
                 \81\ Schmerber, S., Deguine, O., Marx, M. et al. (2017). Safety
                and effectiveness of the Bonebridge transcutaneous direct-drive
                bone-conduction hearing implant at 1-year device use. Eur Arch
                Otorhinolaryngol 274: 1835-1851 doi 10.1007/s00405-016-4228-6.
                 \82\ Hobson, J.C., Roper, A.J., Andrew, R., Rothera, M.P., Hill,
                P., Green, K.M. (2010) Complications of bone-anchored hearing aid
                implantation. J Laryngol Otol 124(2):132-136. doi:10.1017/
                S0022215109991708.
                ---------------------------------------------------------------------------
                 The applicant also submitted a study by Siegel et al. as evidence
                to support the claim that the BONEBRIDGE reduced the rate of device-
                related complications compared to currently available treatments.\83\
                The study was a retrospective review that included 37 adult patients
                with conductive/mixed hearing loss who met the indications for use and
                were implanted with BONEBRIDGE over a 5-year period from April 2013 to
                May 2018. Patient charts were reviewed for surgical outcomes and
                complications over the 6-year period. The mean time of follow-up was 32
                months (range: 9-71 months). There were no events of surgical
                complications in the patients included in the study, specifically no
                instances of dural injury, cerebrospinal fluid (CSF) leak, or
                intracranial bleeding. There were also no skin complications and no
                postoperative symptoms of tinnitus/vertigo or dizziness.\84\
                ---------------------------------------------------------------------------
                 \83\ Siegel, L.H., You, P., Zimmerman, K. et al. (2020). Active
                transcutaneous bone conduction implant: Audiometric outcomes
                following a novel middle fossa approach with self-drilling screws.
                Otol Neurotol 41(5): 605-613. doi: 10.1097/MAO.0000000000002597.
                 \84\ Siegel, L.H., You, P., Zimmerman, K. et al. (2020). Active
                transcutaneous bone conduction implant: Audiometric outcomes
                following a novel middle fossa approach with self-drilling screws.
                Otol Neurotol 41(5): 605-613. doi: 10.1097/MAO.0000000000002597.
                ---------------------------------------------------------------------------
                 In support of the assertion that the use of BONEBRIDGE resulted in
                a more rapid beneficial resolution of the disease process compared to
                currently available treatments, the applicant also referenced the
                Magele et al., and Siegel et al. studies as well as a study conducted
                by Yang et al.85 86 87
                ---------------------------------------------------------------------------
                 \85\ Ibid.
                 \86\ Ibid.
                 \87\ Ibid.
                ---------------------------------------------------------------------------
                 As previously noted, the Magele et al. study assessed 39
                publications that included 487 participants; 303 participants had
                conductive hearing loss, 67 participants had mixed hearing loss, and 53
                participants had single-sided deafness.\88\ Functional gain was
                available for analysis from 14 articles and was measured as the
                difference between unaided and aided (with the BONEBRIDGE) warble tone
                thresholds. On average, functional gain of 32.7 dB 16dB was
                observed. Overall, the results showed a 30.89 dB (95 percent CI 27.53
                dB-34.24 dB) improvement at speech presentation level; for the 30
                conductive hearing loss patients, the improvement was 39.48 dB (95
                percent CI 35.25 dB-43.71 dB); for the mixed hearing loss group, the
                improvement was 29.08 dB (95 percent CI 26.32 dB--31.83 dB) and the
                improvement was 28.94 dB (95 percent CI 16.92 dB--40.96 dB) for the 10
                subjects with single-sided deafness.
                ---------------------------------------------------------------------------
                 \88\ Ibid.
                ---------------------------------------------------------------------------
                 The applicant also noted the study by Siegel et al. to support the
                claim that the use of BONEBRIDGE resulted in a more rapid beneficial
                resolution of the disease process compared to currently available
                treatments.\89\ As previously stated, in this study, 37 adult patients
                with conductive/mixed hearing loss who met the indications for use were
                implanted with BONEBRIDGE over a 6-year period. The patients' charts
                were reviewed for surgical outcomes and complications over the 6-year
                period. Preoperative air conduction (AC), preoperative bone conduction
                (BC), and 3-month postoperative aided thresholds were recorded. Speech
                perception was assessed using two different tests, consonant-nucleus-
                consonant (CNC) words and AzBio sentences. Pure-tone averages (PTAs;
                measured at 0.5, 1.0, 2.0 and 3.0 kHz), air-bone gap (ABG), and
                functional gain (FG) were calculated. The preoperative air-bone gap was
                calculated as the difference between AC thresholds and BC thresholds of
                the implanted ear. The postoperative ABG was calculated as the
                difference between the preoperative BC and postoperative BONEBRIDGE
                aided thresholds measured at 3 months postoperatively. Functional gain
                was calculated as the difference between preoperative AC thresholds and
                BONEBRIDGE aided thresholds measured 3 months postoperatively.
                ---------------------------------------------------------------------------
                 \89\ Siegel, L.H., You, P., Zimmerman, K. et al. (2020). Active
                transcutaneous bone conduction implant: Audiometric outcomes
                following a novel middle fossa approach with self-drilling screws.
                Otol Neurotol 41(5): 605-613. doi: 10.1097/MAO.0000000000002597.
                ---------------------------------------------------------------------------
                 The results of this study showed audiological improvement in the 37
                patients with a functional gain (averaged over 4 frequencies, 500 kHz
                to 3000 kHz) of 40.3 dB (19.0 dB) for air conduction 3
                months postoperatively. The difference between the average air to bone
                conduction gap fell from 44.9 dB preoperative to 4.6 dB three months
                after surgery. The postoperative air conduction thresholds for the 21
                patients with mixed hearing loss ranged between 30-40 dB and the air
                conduction thresholds for the 16 patients with conductive hearing loss
                ranged between 20-30 dB. For patients with mixed hearing loss, nearly a
                full ABG closure was achieved at all frequencies by 3 months
                postoperatively.
                 In the same study, speech perception testing was available for 21
                patients (57 percent). At activation, mean speech perception results
                for CNC words (13 patients) and AzBio sentences (14 patients) were 79
                and 93 percent, respectively. At six months postoperatively, CNC words
                (17 patients) and AzBio sentences (21 patients) were 81 and 93 percent,
                respectively. The authors stated that the results of the study were
                comparable with what has been accomplished using traditional
                percutaneous conduction devices and passive transcutaneous bone
                conduction devices.
                 Lastly, to support the claim that the use of the BONEBRIDGE
                resulted in a more rapid beneficial resolution of the disease process,
                the applicant submitted a study that compared the use of the BONEBRIDGE
                with a non-implantable bone conduction hearing aid (BCHA).\90\ This
                single center, prospective study involved 100 patients in Beijing,
                China with bilateral congenital microtia-atresia (CMA). The patients
                had a mean age of 11.9 6.0 years old at the time the
                BONEBRIDGE was implanted. All patients had worn the passive bone
                anchored hearing aid for at least a year prior to the implantation of
                the BONEBRIDGE and patients were tested
                [[Page 63594]]
                an average of 25 weeks after surgery. Measured outcomes in the study
                included sound field thresholds (SFT), functional gain (FG) [aided
                threshold minus the unaided threshold], word recognition, speech
                reception thresholds (SRT), preoperative and postoperative bone and air
                conduction and patient subjective satisfaction. Bone conduction of pure
                tones at any frequency did not change significantly from preoperative
                to postoperative testing. The mean bone-conduction pure-tone threshold
                (PTA) before implantation was 8.7 6.1 dB HL and after
                surgery was 8.9 5.6 dB HL (p > .745, paired t-test).
                Furthermore, bone conduction did not significantly change at any
                frequency after surgery (p > .05, t-test). The mean SFT of the
                BONEBRIDGE (61.6 7.1 dB HL) was significantly higher than
                the BCHA (31.3 6.1 dB HL) (paired t-test, p https://doi.org/10.1080/00016489.2020.1762929.
                ---------------------------------------------------------------------------
                 Regarding the applicant's evidence of substantial clinical
                improvement, we noted in the CY 2022 OPPS/ASC proposed rule that the
                studies submitted did not involve a direct comparison to other
                currently available treatments, namely percutaneous or passive,
                transcutaneous auditory osseointegrated devices. Therefore, we
                explained that it was difficult to determine whether the BONEBRIDGE
                provided a substantial clinical improvement over existing devices. We
                also indicated that the studies submitted included a small number of
                participants which may affect the generalizability of the data provided
                in support of the device.
                 In the white paper by MED-EL, the authors compared the complication
                rates associated with various studies that differed by design,
                population characteristics and follow-up time. We explained in the CY
                2022 OPPS/ASC proposed rule we are not confident that differences seen
                or elucidated by the applicant are due to the differences in treatments
                or instead due to differences in study characteristics. Additionally,
                although the overall, both major and minor, adverse event ratio was
                significantly lower for the BONEBRIDGE device (9.8 percent) versus
                other bone conduction hearing devices in the study, we noted that when
                comparing the percent of patients who experienced a major adverse
                event, BONEBRIDGE patients had a major adverse event (2.9 percent) that
                was more comparable to other devices included in the paper. With regard
                to the Yang et al. study, given the young age of the patients and the
                congenital nature of the hearing loss being treated, we stated in the
                proposed rule that we are concerned that these results may not be
                generalizable to the Medicare population, which tends to be
                significantly older in age and potentially less likely to have hearing
                loss related to congenital causes. We invited public comments on
                whether BONEBRIDGE meets the substantial clinical improvement
                criterion.
                 Comment: The applicant submitted a comment in response to CMS'
                concerns regarding the lack of direct comparison to existing
                technology; differences in adverse events; and small number of study
                participants in the studies submitted to illustrate that BONEBRIDGE
                meets the substantial clinical improvement criterion. In response to
                CMS' concern about a direct comparison to existing technology, the
                applicant stated that direct head-to-head trials are not necessary or
                appropriate in this situation. According to the applicant, differences
                in the devices make a blinded randomized controlled trial impossible.
                The applicant asserted that while a non-blinded randomized trial would
                be possible, it is unclear what additional data would be gained from
                that approach because the applicant believed the pass-through
                application already contained extensive, robust, and definitive data to
                support that BONEBRIDGE is a substantial clinical improvement over
                existing technologies. The applicant asserted that enrolling patients
                in a head-to-head trial in which the primary difference is expected to
                be adverse events associated with one treatment arm is extremely
                challenging.
                 The applicant stated that the studies on BONEBRIDGE that were
                submitted with the pass-through application are primarily controlled
                case series and case reports. The applicant asserted that because the
                submitted studies used measures of device performance and adverse
                events that are consistent with studies of other devices, they allowed
                for direct comparison between different devices which demonstrate that
                BONEBRIDGE represents a substantial improvement over other bone
                conduction technology by achieving comparable performance in hearing
                improvement with fewer adverse events.
                 In regard to CMS' concerns about differences in adverse events, the
                applicant agreed with CMS that the occurrence of both overall and minor
                adverse event ratio was significantly lower for BONEBRIDGE than other
                devices but disagreed with CMS' characterization of the major adverse
                event rate. The applicant stated that major adverse events are far less
                common across all devices, including BONEBRIDGE, than minor events.
                 Next the applicant responded to CMS' concern that the small number
                of study participants could affect the generalizability of the data
                provided and that, because of the young age of the patients and the
                congenital nature of the hearing loss being treated, the study results
                may not be generalizable to the Medicare population. The applicant
                stated that BONEBRIDGE is indicated for patient who are 12 years or
                older, with conductive or mixed hearing loss and still can benefit from
                sound amplification, and who have profound sensorineural hearing loss
                in one ear and normal hearing in the opposite ear (i.e., single-sided
                deafness or ``SSD''). The applicant stated that the study sample sizes
                (and overall number of patients in those studies) are consistent with
                the anticipated number of implantations. The applicant stated that
                while the typical BONEBRIDGE patient is expected to be under age 65,
                several studies included patients of Medicare age and the experience of
                those patients was consistent with overall experience. The applicant
                concluded that the studies are generalizable to the Medicare population
                and reflective of expected results in the indicated population
                generally. Lastly, the applicant asserted the otologic community has
                accepted and adopted active transcutaneous devices as the standard of
                care for implanted bone conduction devices.
                 Response: We appreciate the additional information from commenters'
                about the BONEBRIDGE device but note that none of the commenters
                provided new empirical evidence that demonstrates that BONEBRIDGE is a
                substantial clinical improvement over existing treatment options. Based
                on our review of the study evidence, the only purported differences
                between BONEBRIDGE and predicate technologies relate to the major and
                minor adverse events from the respective technologies. Based on the
                information we have, it appears that
                [[Page 63595]]
                while there is a difference amongst the rates of minor adverse event
                incidence favoring BONEBRIDGE, patients had a major adverse event
                occurrence (2.9 percent) that was comparable to other devices included
                in the provided evidence. While the incidence of minor adverse events
                (e.g., skin infections, soft tissue reactions, and healing
                difficulties) may benefit BONEBRIDGE, we believe these are less
                impactful on patient outcomes as compared to the incidence of major
                adverse events (e.g., revision surgery, explantation, removal at
                patient request, implant loss, implant device failure, skin revision
                surgery or skin infection) which is comparable to previous
                technologies. We maintain our concerns listed in the proposed rule,
                that the studies submitted included a small number of participants
                which may affect the generalizability of the data provided in support
                of the device, and the applicant's comparison of outcome data across
                multiple studies as opposed to direct comparisons controlling for
                confounding variables. Because of these reasons, we do not believe that
                BONEBRIDGE represents a substantial clinical improvement relative to
                existing therapies currently available. After consideration of the
                public comments we received and our review of the device pass-through
                application, we are not approving BONEBRIDGE for transitional pass-
                through payment status in CY 2022 because the product does not meet the
                substantial clinical improvement criterion. Because we have determined
                that BONEBRIDGE does not meet the substantial clinical improvement
                criterion, we are not evaluating whether the device meets the cost
                criterion.
                (3) Eluvia\TM\ Drug-Eluting Vascular Stent System
                 Boston Scientific Corporation submitted an application for device
                pass-through status for the Eluvia\TM\ Drug-Eluting Vascular Stent
                System (the Eluvia\TM\ system) for CY 2022. According to the applicant,
                the Eluvia\TM\ system is a combination product composed of an
                implantable endoprosthesis, a non-bonded freely dispersed drug layer (a
                formulation of paclitaxel contained in a polymer matrix), and a stent
                delivery system indicated for the treatment of symptomatic de novo or
                restenotic lesions in the native superficial femoral artery (SFA) and/
                or proximal popliteal artery (PPA).
                 According to the applicant, the Eluvia\TM\ system stent is a laser-
                cut self-expanding stent composed of nickel titanium alloy with
                radiopaque markers made of tantalum on the proximal and distal ends.
                The applicant states that the 6-French delivery system is a triaxial
                design with an outer shaft to stabilize the stent delivery system, a
                middle shaft to protect and constrain the stent, and an inner shaft to
                provide a guidewire lumen. The delivery system is compatible with 0.035
                inch (0.89mm) guidewires and is offered in two working lengths (75 and
                130 cm).
                 According to the applicant, peripheral artery disease (PAD) occurs
                when fatty or calcified material (plaque) builds up in the walls of the
                arteries and makes them narrower, thus restricting blood flow. The
                applicant asserts that when this occurs, the muscles in the legs cannot
                get enough blood and oxygen, especially during exertion such as
                exercise or walking. According to the applicant, the main symptoms of
                PAD are pain, burning sensation, or general discomfort in the muscles
                of the feet, calves, or thighs. As the disease progresses, plaque
                accumulation may significantly reduce blood flow through the arteries,
                resulting in claudication and increasing disability, with severe cases
                often leading to amputation of the affected limb. The applicant states
                that according to the Centers for Disease Control and Prevention
                approximately 8.5 million people age 40 and older in the United States
                have PAD, including 6-26 percent of individuals older than age 60.\91\
                According to the applicant, PAD disproportionately affects African
                American and American Indian populations \92\ and nonrevascularized
                lower extremity PAD is among the most common causes of lower extremity
                amputation.
                ---------------------------------------------------------------------------
                 \91\ Centers for Disease Control and Prevention. https://www.cdc.gov/heartdisease/pad.htm.
                 \92\ Virani SS, et al. AHA Statistical Update: Heart Disease and
                Stroke Statistics-2020 Update, A Report from the American Heart
                Association. Circulation. 2020;141:e139-e596.
                ---------------------------------------------------------------------------
                 According to the applicant, the Eluvia\TM\ system is designed to
                restore blood flow in the peripheral arteries above the knee,
                specifically the superficial femoral artery and proximal popliteal
                artery. The applicant states that the stent features a unique drug-
                polymer combination intended to facilitate sustained elution of the
                drug paclitaxel that can prevent narrowing (restenosis) of the vessel.
                The applicant adds that restenosis is often the cause of pain and
                disability for patients diagnosed with PAD.
                 The applicant asserts that no other endovascular technologies that
                are approved for the treatment of PAD provide sustained elution of a
                drug over at least 12 months to prevent restenosis. According to the
                applicant, two of the most common endovascular treatments for PAD are
                angioplasty and stenting. The applicant states that following an
                intervention within the SFA or PPA, these arteries elicit a healing
                response that leads to restenosis starting with inflammation, followed
                by smooth muscle cell proliferation and matrix formation.\93\ According
                to the applicant, because of the unique mechanical forces in the SFA
                and PPA, the restenotic process can continue well beyond 12 months from
                the initial intervention. The applicant asserts the Eluvia\TM\ system
                is designed to elute anti-restenotic drug paclitaxel beyond 12 months,
                which is longer than the two-month duration of drug applied from drug-
                coated balloons and the drug-coated stent Zilver PTX.
                ---------------------------------------------------------------------------
                 \93\ Forrester JS, et al. A paradigm for restenosis based on
                cell biology: Clues for the development of new preventive therapies.
                J Am Coll Cardiol. 1991 Mar 1;17(3):758-69.
                ---------------------------------------------------------------------------
                 With respect to the newness criterion at Sec. 419.66(b)(1), the
                Eluvia\TM\ system received FDA PMA on September 18, 2018. The
                application for a new device category for transitional pass-through
                payment status for the Eluvia\TM\ system was received on February 26,
                2021, which is within 3 years of the date of the initial FDA approval
                or clearance. In the CY 2022 OPPS/ASC proposed rule we invited public
                comments on whether the Eluvia\TM\ system meets the newness criterion.
                 Comment: The applicant stated that the EluviaTM system
                application was submitted within three years of regulatory approval and
                therefore meets the newness criterion for transitional device pass-
                through eligibility.
                 Response: We appreciate the commenter's input. and agree that the
                Eluvia\TM\ system meets the newness criterion because we received its
                device pass-through application on February 26, 2021, which is within 3
                years of the September 18, 2018, the date of FDA PMA.
                 With respect to the eligibility criterion at Sec. 419.66(b)(3),
                according to the applicant, the Eluvia\TM\ system is integral to the
                service provided, is used for one patient only, comes in contact with
                human tissue, and is surgically impacted or inserted. The applicant
                also claimed that the Eluvia\TM\ system meets the device eligibility
                requirements of Sec. 419.66(b)(4) because it is not equipment, an
                instrument, apparatus, implement, or items for which depreciation and
                financing expenses are recovered, and it is not a supply or material
                furnished incident to a service. In the CY 2020 OPPS/ASC final rule
                with comment period, we stated that we determined that the Eluvia\TM\
                system
                [[Page 63596]]
                device meets the eligibility criteria at Sec. 419.66(b)(3) and (4) in
                response to a pass-through application that the applicant submitted on
                November 15, 2018 (84 FR 61286). Because the applicant submitted a new
                application for device pass-through status for the Eluvia\TM\ system,
                we again invited public comments on whether the Eluvia\TM\ system
                continues to meet the eligibility criteria at Sec. 419.66(b(3) and
                (4).
                 Comment: The applicant stated that the EluviaTM system
                continues to meet the transitional pass-through eligibility criteria at
                Sec. 419.66(b)(3) and (4) as CMS initially concluded in the CY 2020
                OPPS/ASC final rule with comment period.
                 Response: We agree with the applicant and continue to believe that
                the EluviaTM 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. We stated
                that we have not identified an existing pass-through payment category
                that describes the Eluvia\TM\ system. The applicant proposed a category
                descriptor for the Eluvia\TM\ system of ``Stent, non-coronary, polymer
                matrix, minimum 12-month sustained drug release, with delivery
                system.'' Previously, we invited public comment and subsequently
                determined that the Eluvia\TM\ system device meets the device category
                eligibility criterion. For a complete discussion of comments received,
                please see the CY 2020 OPPS/ASC final rule with comment period (84 FR
                61286 through 61287). We invited public comments on whether the
                Eluvia\TM\ system continues to meet this criterion.
                 Comment: One commenter, a manufacturer of a competing product
                stated that CMS has reviewed drug-eluting vascular stents in the past
                and determined they fell into an already existing pass-through payment
                category. The commenter stated that in August of 2002, CMS concluded
                that coronary drug-eluting stents were described by existing pass-
                through device categories C1874 (Stent, coated/covered, with delivery
                system) and C1875 (Stent, coated/covered, without delivery system).\94\
                The commenter stated that at the time drug eluting stents were coated
                with paclitaxel and the same polymer currently used on the
                EluviaTM system. The commenter stated that in 2012, Zilver
                PTX DES was denied pass-through payment status and quotes a letter
                received from CMS which stated, ``. . . the outpatient clinical review
                team believes that the Zilver PTX Stent is appropriately described by
                previously active device pass-through category C1874, Stent, coated/
                covered, with delivery system. This category describes drug-eluting
                stents.'' \95\ According to the commenter, FDA has grouped the
                EluviaTM system and Zilver PTX DES into the same product
                code:
                ---------------------------------------------------------------------------
                 \94\ Federal Register/Vol. 67, No. 154/Proposed Rules/Page
                52106.
                 \95\ Correspondence with Dr. John McInnes, Director, Division of
                Outpatient Care.
                 ``NIU: Stent, Superficial Femoral Artery, Drug-Eluting--a metal
                scaffold with a drug coating placed via a delivery catheter into the
                SFA to maintain the lumen. The drug coating is intended to inhibit
                ---------------------------------------------------------------------------
                restenosis. Class III; Cardiovascular Review Panel.''
                 The commenter asserted that both devices are self-expanding nitinol
                stents coated with the drug paclitaxel.96 97 The commenter
                further asserted that the EluviaTM system's underlying stent
                platform and delivery system is the same as Boston Scientific's Innova
                self-expanding stent (an uncoated stent for treating the superficial
                femoral artery); \98\ the drug paclitaxel is the same drug used on the
                Zilver PTX DES and earlier generation coronary drug-eluting stents; and
                the polymers used in the EluviaTM system coating are the
                same polymers as those used in the Xience V and Promus Element coronary
                stents.\99\ The commenter stated that this history precludes the
                establishment of a new device category for the EluviaTM
                system.
                ---------------------------------------------------------------------------
                 \96\ https://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfPCD/classification.cfm?id=1076.
                 \97\ https://www.accessdata.fda.gov/cdrh_docs/pdf18/P180011B.pdf.
                 \98\ Gray W, et al. A polymer-coated, paclitaxel-eluting stent
                (Eluvia) versus a polymer-free, paclitaxel-coated stent (Zilver PTX)
                for endovascular femoropopliteal intervention (IMPERIAL): A
                randomised, non-inferiority trial. Lancet; Published Online
                September 22, 2018; http://dx.doi.org/10.1016/S0140-6736(18)32262-1.
                 \99\ https://www.accessdata.fda.gov/cdrh_docs/pdf18/P180011B.pdf.
                ---------------------------------------------------------------------------
                 Response: We appreciate the information provided by the commenter
                and have taken this into consideration in making our determination of
                Sec. 419.66(c)(1), discussed below.
                 Comment: The applicant stated that in the CY 2020 OPPS/ASC proposed
                rule CMS stated that no existing device category describes the
                EluviaTM system and that since that time no new categories
                that would describe the system have been established.
                 Response: We appreciate the information submitted by the
                commenters. Given the additional information provided by commenters CMS
                is concerned that the applicant's proposed long descriptor of `Stent,
                non-coronary, polymer matrix, minimum 12-month sustained drug release,
                with delivery system'' may not suitably differentiate the
                EluviaTM system from Zilver PTX. Specifically, given that
                CMS has previously determined that coronary drug-eluting stents were
                described by existing pass-through device categories C1874 (Stent,
                coated/covered, with delivery system) and C1875 (Stent, coated/covered,
                without delivery system), that FDA has classified the
                EluviaTM system and Zilver PTX into the same product code,
                and finally that CMS previously denied pass-through status to Zilver
                PTX, stating that it is appropriately described by previously active
                device pass-through category C1874 (Stent, coated/covered, with
                delivery system), we believe the same pass-through category code C1874
                appropriately describes the EluviaTM system. We note that
                HCPCS code C1874 is agnostic to the length of time a drug is released
                and therefore encapsulates the EluviaTM system's proposed
                long descriptor. Further, we do not believe it is appropriate for a
                discussion of substantial clinical improvement, i.e., the length of
                time a drug release is maintained, to be the primary motivating
                determinant in a determination of whether a device meets the device
                category criterion in Sec. 419.66(c)(1).
                 After consideration of the public comments we received, we conclude
                there is an existing pass-through payment category or pass-through
                category previously in effect that appropriately describes the
                EluviaTM system. Based on this information, we have
                determined that the EluviaTM system does not 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 that a device to be included
                in the category has demonstrated that it will substantially improve the
                diagnosis or treatment of an illness or injury or improve the
                functioning of a malformed body part compared to the benefits of a
                device or devices in a previously established category or other
                available treatment. With respect to this criterion, the applicant
                claims the Eluvia\TM\ system provides a substantial clinical
                improvement over existing technologies for the following reasons: (1)
                The Eluvia\TM\ system achieves superior primary patency; (2) the
                Eluvia\TM\
                [[Page 63597]]
                system achieves reduced lesion revascularization, leading to a reduced
                rate of subsequent therapeutic interventions at one year and a
                statistically significant reduction of target lesion revascularization
                (TLR) at 2 years; (3) the Eluvia\TM\ system decreases the number of
                future hospitalizations or physician visits; (4) the Eluvia\TM\ system
                reduces hospital readmission rates; (5) the Eluvia\TM\ system reduces
                the rate of device-related complications; and (6) the Eluvia\TM\ system
                achieves similar functional outcomes and quality of life index values
                while associated with half the rate of TLRs.
                 Many of the assertions made by the applicant are derived from the
                IMPERIAL trial which is reported in three citations supplied by the
                applicant.100 101 102 We discuss results from the MAJESTIC
                study and then these publications from the IMPERIAL study to provide
                context for the assertions made by the applicant.
                ---------------------------------------------------------------------------
                 \100\ Gray WA et al. A polymer-coated, paclitaxel-eluting stent
                (Eluvia) versus a polymer-free, paclitaxel-coated stent (Zilver PTX)
                for endovascular femoropopliteal intervention (IMPERIAL): A
                randomised, non-inferiority trial. Lancet. 2018;392:1541-51.
                 \101\ M[uuml]ller-H[uuml]lsbeck S et al. Two-Year Efficacy and
                Safety Results from the IMPERIAL Randomized Study of the Eluvia
                Polymer-Coated Drug-Eluting Stent and the Zilver PTX Polymer-free
                Drug-Coated Stent. Cardiovasc Intervent Radiol. 2021;44:368-375.
                 \102\ Golzar J et al. Effectiveness and Safety of a Paclitaxel-
                Eluting Stent for Superficial Femoral Artery Lesions up to 190 mm:
                One-Year Outcomes of the Single-Arm IMPERIAL Long Lesion Substudy of
                the Eluvia Drug-Eluting Stent. Journal of Endovascular Therapy.
                2020;27(2):296-303.
                ---------------------------------------------------------------------------
                 The first article, by M[uuml]ller-H[uuml]lsbeck et al., discusses
                the three-year results of the MAJESTIC study, the first-in-human
                prospective, single-arm, multicenter, clinical trial involving 57
                patients with symptomatic lower limb ischemia and lesions in the
                superficial femoral artery or proximal popliteal artery.\103\ Patients
                who were treated with the Eluvia\TM\ system were followed for a 3-year
                time period during which they took acetylsalicylic acid as an
                antiplatelet therapy. At 24 months, patients received a duplex
                ultrasound, ankle-brachial index, and Rutherford classification at a
                clinical visit. At 36 months patients completed a telephone or clinical
                visit which included adverse event and antiplatelet medication
                assessments. The authors report that long-term results from the
                MAJESTIC study of the Eluvia\TM\ system continue to demonstrate good
                technical and clinical outcomes (assessed through 2 years) and a low
                reintervention rate (through 3 years).
                ---------------------------------------------------------------------------
                 \103\ M[uuml]ller-H[uuml]lsbeck S, Keirse K, Zeller T, Schroe H,
                Diaz-Cartelle J. Long-Term Results from the MAJESTIC Trial of the
                Eluvia Paclitaxel-Eluting Stent for Femoropopliteal Treatment: 3-
                Year Followup. Cardiovasc Interv Ther. 2017;40(12):1832-1838.
                ---------------------------------------------------------------------------
                 The second article, by Gray et al., discusses the IMPERIAL trial, a
                prospective randomized (2:1) (the Eluvia\TM\ system vs. Zilver PTX),
                single-blind, non-inferiority study in 465 patients with symptomatic
                lower-limb ischemia manifesting as claudication with atherosclerotic
                lesions in the native superficial femoral artery or proximal popliteal
                artery across 65 centers and multiple countries.\104\ Of the 465
                patients enrolled, 309 were assigned to the Eluvia\TM\ system and 156
                were assigned to Zilver PTX. The authors state the overall sample size
                in the randomized trial was selected to preserve adequate statistical
                power for non-inferiority testing of the primary efficacy and safety
                endpoints at a prespecified, one-sided significance level of 5 percent
                for each, without adjustment for multiplicity.
                ---------------------------------------------------------------------------
                 \104\ Gray WA et al. A polymer-coated, paclitaxel-eluting stent
                (Eluvia) versus a polymer-free, paclitaxel-coated stent (Zilver PTX)
                for endovascular femoropopliteal intervention (IMPERIAL): A
                randomised, non-inferiority trial. Lancet. 2018;392:1541-51.
                ---------------------------------------------------------------------------
                 The authors state baseline demographic, clinical, and angiographic
                characteristics were similar between the two study groups, indicative
                of successful randomization. The primary efficacy endpoint of the trial
                was primary vessel patency at 12 months which was a binary endpoint
                based on a duplex ultrasound peak systolic velocity ratio of 2.4 or
                lower in the absence of clinically driven target lesion
                revascularization or bypass of the target lesion. Secondary endpoints
                at 12 months were technical success, procedural success, adverse
                events, stent integrity, major adverse events, and clinical outcomes.
                The authors note that the funder of the study was involved in study
                design, data collection, data analysis, data interpretation, and
                writing of the report. To identify statistically meaningful results for
                the non-inferiority test, the authors used a test such as the
                Farrington-Manning method, to estimate the lower bound for the 95
                percent CI of the difference between treatment groups.\105\ According
                to the authors, if this lower bound was greater than the non-
                inferiority margin of -10 percent, the Eluvia\TM\ system would be
                considered non-inferior to Zilver PTX in terms of device efficacy. For
                all other statistical comparisons, the authors used a p value of less
                than 0.05 as indicative of a significant difference.
                ---------------------------------------------------------------------------
                 \105\ Gray WA et al. A polymer-coated, paclitaxel-eluting stent
                (Eluvia) versus a polymer-free, paclitaxel-coated stent (Zilver PTX)
                for endovascular femoropopliteal intervention (IMPERIAL): A
                randomised, non-inferiority trial. Lancet. 2018;392:1541-51.
                ---------------------------------------------------------------------------
                 According to the authors, the primary non-inferiority analyses were
                done when 409 patients (276 in the Eluvia group and 133 in the Zilver
                PTX group) had completed 12 months of follow-up or had a primary
                efficacy or safety endpoint event.\106\ Primary patency was observed
                for 231 (87 percent) of 266 patients in the Eluvia\TM\ system group and
                for 106 (82 percent) of 130 patients in the Zilver PTX stent group
                (difference 5.3 percent [one-sided lower bound of 95 percent CI -0.66];
                p TM Drug-Eluting Vascular Stent System
                meets the substantial clinical improvement criterion.
                 Comment: One commenter, a manufacturer of a competitor device,
                asserted that EluviaTM does not meet the substantial
                clinical improvement criterion. The commenter asserted that the
                MAJESTIC study is inadequate to demonstrate substantial clinical
                improvement as use of a single arm study to support this criterion is
                problematic due to the small (n=57) and highly selective patient
                population (e.g., lesion length limited to a maximum of 11 cm).\117\
                Further, the commenter stated that despite a very high primary patency
                rate of 96.4 percent at 12 months the rate drops substantially to 77.9
                percent at just 25 months,\118\ which suggests the potential of late
                catch-up phenomenon as previously observed with other polymer-coated
                peripheral DES.119 120 The commenter added that the target
                lesion revascularization (TLR) rate appears to double each year (i.e.,
                quadruple from year 1 to year 3), increasing from 3.6 percent at 1 year
                to 7.2 percent at 2 years to 14.7 percent at 3 years.\121\
                ---------------------------------------------------------------------------
                 \117\ M[uuml]ller-H[uuml]lsbeck S, et al. Twelve-Month Results
                From the MAJESTIC Trial of the Eluvia Paclitaxel-Eluting Stent for
                Treatment of Obstructive Femoropopliteal Disease. J Endovasc Ther.
                2016;23(5):701-7.
                 \118\ M[uuml]ller-H[uuml]lsbeck S, et al. Long-Term Results from
                the MAJESTIC Trial of the Eluvia Paclitaxel-Eluting Stent for
                Femoropopliteal Treatment: 3-Year Follow-up. Cardiovasc Intervent
                Radiol. 2017;40(12):1832-1838.
                 \119\ Duda SH, et al. Drug-eluting and Bare Nitinol Stents for
                the Treatment of Atherosclerotic Lesions in the Superficial Femoral
                Artery: Long-Term Results From the SIROCCO Trial. J Endovasc Ther.
                2006;13(6):701-710.
                 \120\ Lammer J, et al. First Clinical Trial of Nitinol Self-
                Expanding Everolimus-Eluting Stent Implantation for Peripheral
                Arterial Occlusive Disease. J Vasc Surg. 2011;54(2):394-401.
                 \121\ M[uuml]ller-H[uuml]lsbeck S, et al. Long-Term Results from
                the MAJESTIC Trial of the Eluvia Paclitaxel-Eluting Stent for
                Femoropopliteal Treatment: 3-Year Follow-up. Cardiovasc Intervent
                Radiol. 2017;40(12):1832-1838.
                ---------------------------------------------------------------------------
                 The commenter next asserted that errors in the data analysis have
                been reported in scientific meetings\122\ and require a correction of
                the 1-year publication and results;\123\ the commenter also asserted
                that other publications also require a correction.\124\ The commenter
                stated that patency results are inconsistently presented and also
                contended that the primary endpoint of the 12-month patency study
                (n=409) indicate primary patency of 86.8 percent (231/266) for Eluvia
                vs. 81.5 percent (106/130) for Zilver PTX with the subsequent post-hoc
                analysis showing a larger difference of 86.8 percent (243/280) for
                EluviaTM vs. 77.5 percent (110/142) for Zilver PTX. The
                commenter asserted that the post-hoc analysis represents an additional
                14 EluviaTM and 12 Zilver PTX patients; the commenter notes
                that the results for the final 12 Zilver PTX patients added to the
                post-hoc analysis appear to be outliers who had significantly worse
                outcomes than the primary patient cohort (patency 77.5 percent [110/
                142] in primary cohort vs. 33.3 percent [4/12] in post-hoc cohort,
                p=0.002) and raises doubt about the poolability of the data between
                these two cohorts.
                ---------------------------------------------------------------------------
                 \122\ Gray WA. 2-year Outcomes from the IMPERIAL Randomized Head
                to Head Study of Eluvia DES and Zilver PTX. Oral presentation at:
                The Leipzig Interventional Course (LINC) Annual Meeting; January
                2020; Leipzig, Germany.
                 \123\ Gray WA, et al. A polymer-coated, paclitaxel-eluting stent
                (Eluvia) versus a polymer-free, paclitaxel-coated stent (Zilver PTX)
                for endovascular femoropopliteal intervention (IMPERIAL): A
                randomised, non-inferiority trial. Lancet. 2018;392(10157):1541-
                1551.
                 \124\ Soga Y, et al. Japanese Patients Treated in the IMPERIAL
                Randomized Trial Comparing Eluvia and Zilver PTX Stents. Cardiovasc
                Intervent Radiol. 2020;43(2):215-222.
                ---------------------------------------------------------------------------
                 The commenter also asserted that in the most recently presented 2-
                year results (with data correction),\125\ there is no significant
                difference in patency between Eluvia and Zilver PTX at 2 years (83.0
                percent vs. 77.1 percent, p=0.10, not significant). The commenter
                contended that based on these results a claim of superior primary
                patency cannot be maintained. The commenter was concerned by the claim
                of ``highest reported'' two-year primary patency, stating: (1) The
                modified definition of primary patency is inconsistent across multiple
                studies, (example, the Zilver PTX randomized trial and the IMPERIAL
                trial) which limits appropriate comparability; (2) the second Zilver
                PTX randomized trial, which had a higher 2-year primary patency rate of
                83.4 percent compared with 83.0 percent for the EluviaTM
                system, was excluded from the comparison; \126\ and (3) the claim of
                superiority requires head-to-head comparative studies or at a minimum
                an attempt to account for differences between compared studies.
                ---------------------------------------------------------------------------
                 \125\ Gray WA. 2-year Outcomes from the IMPERIAL Randomized Head
                to Head Study of Eluvia DES and Zilver PTX. Oral presentation at:
                The Leipzig Interventional Course (LINC) Annual Meeting; January
                2020; Leipzig, Germany.
                 \126\ Dake MD, et al. Durable Clinical Effectiveness With
                Paclitaxel-Eluting Stents in the Femoropopliteal Artery 5-Year
                Results of the Zilver PTX Randomized Trial. Circulation.
                2016;133(15):1472-1483.
                ---------------------------------------------------------------------------
                 The commenter next asserted that the long-term safety of the
                EluviaTM system has not been demonstrated due to: (1) A lack
                of long-term safety data; (2) multiple reports noting the presence of
                aneurysmal degeneration, peri-stent inflammation, or negative late
                lumen loss associated with the EluviaTM system,; (3) the
                total dose and not just the density must be considered; (4) paclitaxel
                is released directly to the target lesion by the Zilver PTX DES and not
                by the EluviaTM system; (5) avoiding use of a polymer, if
                possible, is a preferred stent design; and (6) long-term paclitaxel
                release may not be necessary or desired.
                 Another commenter stated that the EluviaTM system meets
                the substantial clinical improvement criterion because CMS already
                concluded the same in the FY 2022 IPPS/LTCH final rule for new
                technology add-on payment.
                 Response: We appreciate the information provided by the commenters
                and have taken this into consideration when making our determination of
                the substantial clinical improvement criterion, discussed below.
                 Comment: The applicant submitted a comment in support of the
                substantial clinical improvement criterion. The applicant stated that
                in the CY 2022 OPPS/ASC proposed rule CMS referenced the FY 2021 IPPS/
                LTCH final
                [[Page 63600]]
                rule (85 FR 58657) and stated that CMS no longer has concerns about the
                long-term mortality signal. The applicant further stated that in the FY
                2021 IPPS/LTCH final rule, CMS determined that the EluviaTM
                system represents a substantial clinical improvement over existing
                technologies. The applicant added that despite the assessment in the FY
                2021 IPPS/LTCH final rule, in the CY 2022 OPPS/ASC proposed rule, CMS
                asked for input regarding whether the EluviaTM system meets
                the substantial clinical improvement criterion, even raising concerns
                that CMS agreed were not an issue in the discussion of its NTAP
                decision. The applicant asserted that the regulations governing the
                substantial clinical improvement criterion for NTAP and for
                transitional device pass-through status are nearly identical. The
                applicant asserted that in its discussion of substantial clinical
                improvement for the EluviaTM system under the IPPS NTAP
                application, CMS found that the EluviaTM system met the
                criterion based on the following endpoints: Superior primary patency;
                reduced rate of subsequent therapeutic interventions; decreased future
                hospitalizations and physician visits; reduced hospital readmission
                rates; reduced rate of device-related complications; and similar
                functional outcomes and EQ-5D index values with half the rate of target
                lesion revascularizations (TLRs). The applicant added that these
                endpoints are clinically meaningful for all patients with PAD and not
                just for those in the inpatient setting. The applicant asserted that
                there is no evidence-based rationale that would lead CMS to a reach a
                different conclusion regarding substantial clinical improvement for the
                EluviaTM system for transitional device pass-through status
                versus NTAP. The applicant added that there is no difference in the
                indicated patient population for the EluviaTM system based
                on site of service, which is determined by physicians based on the
                totality of a patient's condition.
                 Response: We appreciate the additional information provided by the
                commenters. We note in the FY 2021 IPPS/LTCH final rule (85 FR 58657)
                CMS determined that the EluviaTM system met the substantial
                clinical improvement criterion after consideration of the comments
                received and for the reasons discussed, including the improved outcomes
                shown in the IMPERIAL and MAJESTIC trials as well as the updated August
                7, 2019 FDA guidance in regard to paclitaxel-coated devices. As we
                stated in the FY 2021 IPPS/LTCH final rule, the applicant provided the
                following two-year results from the IMPERIAL global randomized
                controlled clinical trial, comparing the EluviaTM system to
                Zilver[supreg] PTX[supreg]:
                 The EluviaTM system maintains higher primary
                patency than Zilver[supreg] PTX[supreg] at 2 years, 83.0 percent
                compared to 77.1 percent. The applicant contended that guidelines
                recognize the importance of primary patency in assessing the efficacy
                of peripheral endovascular therapies.\127\
                ---------------------------------------------------------------------------
                 \127\ Writing Committee Members, Gerhard-Herman MD, Gornik HL et
                al. 2016 AHA/ACC Guideline on the Management of Patients with Lower
                Extremity Peripheral Artery Disease: Executive Summary. Vasc Med.
                2017 Jun; 22(3):NP1-NP43.
                ---------------------------------------------------------------------------
                 The EluviaTM system's 2-year primary patency is
                the highest reported in a superficial femoral artery US pivotal trial
                for a drug-eluting stent or drug coated balloon.\128\ Per the
                applicant, the 2-year primary patency results are consistent with the
                2-year TLR results released earlier in 2019.\129\ According to the
                applicant, the EluviaTM system sustained a statistically
                significant reduction in TLR at 2 years compared to Zilver PTX, 12.9
                percent vs. 20.5 percent (p = 0.0472).\130\
                ---------------------------------------------------------------------------
                 \128\ Highest 2-year primary patency based on 24-month Kaplan-
                Meier estimates reported for IMPERIAL, IN.PACT SFA, ILLUMENATE,
                LEVANT II and Primary Randomization for Zilver PTX RCT.
                 \129\ BSC Data on File. As-treated ELUVIA and PTxControl data
                from IMPERIAL RCT.FDA PTA reference based on FDA Executive Summary
                (median of PTA arms).Abbreviations: DES, drug eluting stent; TLR,
                target lesion revascularization; PTx, paclitaxel.
                 \130\ Boston Scientific Presentation to the Circulatory System
                Devices Panel of the Medical Devices Advisory Committee Meeting,
                June 19, 2019.
                ---------------------------------------------------------------------------
                 In a subgroup analysis of patients 65 years and older
                (Medicare population), the primary patency rate in the
                EluviaTM system stent group is 92.6 percent, compared to
                75.0 percent for the Zilver[supreg] PTX[supreg] stent group (p=0.0386).
                 One commenter identified potential issues with the data used to
                evaluate the EluviaTM system for substantial clinical
                improvement. In spite of the information presented by the commenter, we
                concur with the assessment discussed in the FY 2021 IPPS/LTCH final
                rule and the applicant's additional clarification concerning the
                specific endpoints for which they believe the EluviaTM
                system meets the substantial clinical improvement criterion. We note
                one commenter takes issue with two of the above points that CMS relied
                upon in the FY 2021 IPPS/LTCH final rule in its determination of
                substantial clinical improvement, (e.g. the higher primary patency, the
                2-year primary patency being the ``highest reported'', and the target
                lesion revascularization rate). However, based upon the data and
                comments received we note that the EluviaTM system group
                maintained a higher primary patency rate than the Zilver[supreg]
                PTX[supreg] stent group (92.6 percent vs. 75.0 percent, p TM
                system meets the substantial clinical improvement criterion at Sec.
                419.66(c)(2).
                 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 Eluvia\TM\ system
                would be reported with the HCPCS codes in the following Table 36:
                [GRAPHIC] [TIFF OMITTED] TR16NO21.050
                [[Page 63601]]
                 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 5193--Level 3 Endovascular
                Procedures, which had a CY 2021 payment rate of $10,042.94 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 37226 had a device offset amount of
                $4,843.71 at the time the application was received.
                 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 the Eluvia\TM\ system is 56 percent of the
                applicable APC payment amount for the service related to the category
                of devices of $10,042.94 ((5,645/10,042.94) x 100 = 56.2 percent).
                Therefore, we stated in the CY 2022 OPPS/ASC proposed rule that we
                believe the Eluvia\TM\ 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 for the Eluvia\TM\
                system is 117 percent of the cost of the device-related portion of the
                APC payment amount for the related service of $4,843.71 ((5,645/
                4,843.71) x 100 = 116.5 percent). Therefore, we stated in the CY 2022
                OPPS/ASC proposed rule that we do not believe that the Eluvia\TM\
                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 for the Eluvia\TM\ system and the portion of the APC
                payment amount for the device of $4,843.71 is 8 percent of the APC
                payment amount for the related service of $10,042.94 (((5,645-
                4,843.71)/10,042.94) x 100 = 7.98 percent). Therefore, we stated in the
                CY 2022 OPPS/ASC proposed rule that we do not believe that the
                Eluvia\TM\ system meets the third cost significance requirement.
                 We invited public comments on whether the Eluvia\TM\ system meets
                the device pass-through payment criteria discussed in this section,
                including the cost criterion for device pass-through payment status.
                 Comment: A manufacturer of a competitor device and a second
                commenter agreed that based on calculations included in the CY 2022
                OPPS/ASC proposed rule for the second and third cost significance
                tests, the EluviaTM system does not meet the cost
                significance requirements for device pass-through payment.
                 A third commenter stated that in response to the CY 2021 OPPS/ASC
                proposed rule they noted that a device that meets the newness and
                substantial clinical improvement criteria for transitional pass-through
                payment may only replace some of the devices included in the device-
                related portion (DRP).
                 Multiple commenters asserted that the EluviaTM system
                meets the cost criteria for transitional device pass-through status.
                The commenters stated that the current methodology of the cost
                significance criterion uses a single number, which includes all devices
                utilized in a particular procedure. The commenters explained that since
                the DRP contains all devices for respective claims, the DRP is
                artificially high as a benchmark for the EluviaTM system
                since it only replaces one stent in the procedure. The commenters
                concluded that as a result of this issue, the EluviaTM
                system does not meet the cost criteria because the average sales price
                of the device is not sufficient to account for all the other devices
                included in the DRP, and not just the stent it is replacing.
                 Response: We appreciate the information provided by the commenters
                and have taken this into consideration in making our final
                determination of the cost significance criterion discussed below.
                 Comment: The applicant agreed that the EluviaTM system
                meets the first cost test. Regarding the second and third cost
                significance tests, the applicant stated that CMS overestimated the DRP
                used in the cost significance tests. According to the applicant, when
                calculating the OPPS payment for a procedure that uses a pass-through
                device, CMS has an established policy of only subtracting (as the DRP)
                the cost of those devices that are replaced by the transitional pass-
                through device. The applicant asserted that the payment policy
                methodology for calculating the DRP should also be applied to the
                calculating cost significance for the cost criteria.
                 The applicant asserted of the cost significance tests that the
                first question addresses the cost of the transitional pass-through
                device relative to total payment, whereas the second two questions
                address cases where the transitional pass-through device would replace
                device costs currently reflected in the associated procedure payment
                amount. The applicant offered three scenarios concerning candidate
                devices and the DRP: (1) A candidate device may replace all or nearly
                all of the devices that are accounted for in the DRP of the related
                procedures (e.g., neurostimulators); (2) a candidate device may replace
                only some of the devices included in the DRP (e.g., the
                EluviaTM system); and (3) a candidate device may not replace
                any of the devices included in the DRP (e.g., a single-use endoscope).
                According to the applicant, CMS' calculation of the DRP to include all
                the devices used in the related procedure overestimates the DRP in the
                latter two scenarios. The applicant asserted that because of this novel
                technologies that otherwise meet the transitional pass-through criteria
                would fail the cost significance tests since they will be compared to
                the cost of all devices used in a procedure and manufacturers may
                establish higher device prices to exceed an inflated DRP.
                 The applicant asserted that CMS' current approach to calculating
                the DRP is contrary to the intent of the TPT program, which is to
                recognize the costs associated with novel, clinically beneficial
                technologies that are not yet incorporated into the procedural cost
                calculation with temporary, separate device-related payment until the
                new device cost is reflected in rate setting data. The applicant added,
                the intent of the DRP in the cost significance test is to compare the
                cost of the pass-through candidate device to the costs of the device(s)
                that the pass-through candidate device would replace and not to compare
                the costs of the candidate device to the total costs of all devices
                used in a procedure to include those that are unrelated and not
                replaced by the candidate device.
                 Next the applicant stated that in its discussion of the pass-
                through device offset policy for OPPS payment in the CY 2004 Outpatient
                Prospective Payment System (OPPS) Final Rule, CMS stated, ``Beginning
                with the implementation of the 2002 OPPS update (April 1, 2002), we
                deduct from the pass-through payments for the identified devices an
                amount that offsets the portion of the APC payment amount that we
                determine is associated with the
                [[Page 63602]]
                device, as required by section 1833(t)(6)(D)(ii) of the Act.''\131\ The
                applicant continued, ``We will apply an offset to a new device category
                only when we are able to determine that an APC contains costs
                associated with the new device. We will also continue our existing
                methodology for determining any offset amount if we find that device
                costs associated with a new device category are packaged into the APCs.
                We will include information about any applicable offset in the
                transmittal we issue to announce information regarding the new
                category''.\132\
                ---------------------------------------------------------------------------
                 \131\ Department of Health and Human Services. Centers for
                Medicare & Medicaid Services. 42 CFR parts 410 and 419. [CMS-1471-
                FC]. Federal Register. 2003;68(216): 63438-9.
                 \132\ Department of Health and Human Services. Centers for
                Medicare & Medicaid Services. 42 CFR parts 410 and 419. [CMS-1471-
                FC]. Federal Register. 2003;68(216): 63439.
                ---------------------------------------------------------------------------
                 The applicant stated that on at least two occasions, CMS has
                referenced the above-stated policy in decisions not to apply a device
                offset when calculating payment for pass-through devices. The applicant
                cited two instances where they believe CMS has chosen to not apply a
                device offset, first with C2623 (Drug coated angioplasty balloon) \133\
                and C1748 (Single use [disposable] endoscope).\134\ According to the
                applicant, with these two decisions, CMS has acknowledged that it does
                not consider the cost of devices that are not replaced by the pass-
                through device when calculating the pass-through payment amount. The
                applicant asserted that given these decisions and the associated
                payment policy, CMS has not only shown that it has the authority to
                define the DRP calculation methodology, but it has also established a
                precedent for defining the DRP as only those devices that are replaced
                by the pass-through device. The applicant stated that it is therefore
                inconsistent for CMS to apply a different DRP methodology in the cost
                test for devices seeking transitional pass-through payment.
                ---------------------------------------------------------------------------
                 \133\ CMS Transmittal 3280 (R3280CP, June 5, 2015) https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R3280CP.pdf.
                 \134\ CMS Transmittal 10541 (R10541CP, December 31, 2020)
                https://www.cms.gov/files/document/r10541cp.pdf.
                ---------------------------------------------------------------------------
                 According to the applicant the prior precedents and this
                inconsistency are central to the application of the TPT cost
                significance test for the EluviaTM system. The applicant
                stated that as requested in their 2018 transitional pass-through
                application submission, they again ask CMS to consider only the cost of
                those devices replaced by the EluviaTM system when
                calculating the DRP for CPT Code 37226 (Revascularization,
                endovascular, open or percutaneous, femoral, popliteal artery(s),
                unilateral; with transluminal stent placement(s), includes angioplasty
                within the same vessel, when performed). According to the applicant the
                average femoral, popliteal stent placement procedure (CPT 37226)
                includes ancillary (non-stent) device costs of $2,311.26 and average
                stent device costs of $3,406.93. The applicant asserts then that a more
                appropriate comparison is of the EluviaTM system to the
                $3,406.93 in average stent device costs. The applicant contends that
                the non-stent devices should not be considered in the DRP utilized in
                the 3-part cost significance test because the EluviaTM
                system is not replacing these costs associated with the non-stent
                devices. The applicant concluded that should the $3,406.93 be used as
                the DRP, then the EluviaTM system passes the second and
                third cost significance tests at approximately 166 percent and 22
                percent, respectively.
                 Response: As we stated above in section IV.2.a. of this final rule
                with comment period, to be eligible for device pass-through payments a
                device must 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). Since the CY
                2017 OPPS/ASC final rule (81 FR 79648 through 79649), CMS has described
                the manner in which it evaluates device pass-through applicants against
                the cost significance criterion at Sec. 419.66(d). Per the applicant,
                CMS has stated in prior rules that we will deduct from the pass-through
                payments for a device an amount that offsets the portion of the APC
                payment amount that we determine is associated with the device. Once a
                device is approved for pass-through payments CMS appropriately applies
                this rationale to determine the payment rate for devices with pass-
                through status. However, except in rare circumstances, CMS has
                consistently applied the full device offset amount associated with the
                applicable APC used to evaluate the cost significance tests at Sec.
                419.66(d). In this manner we believe we are identifying devices whose
                average cost is not ``insignificant''.
                 In reference to the prior precedents identified by the applicant
                (C2623 and C1748) where CMS determined to not apply an offset we
                disagree with the applicant's conclusion that these situations apply to
                the EluviaTM system and the request for a partial device
                offset. In some cases, CMS determines that none of the costs of a new
                device are included in the applicable APC. For example, in the CY 2021
                OPPS/ASC final rule (85 FR 85994), CMS determined for the
                EXALTTM Model D Single-Use Duodenoscope that the costs
                associated with the device were 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 in the historical OPPS claims data.
                Additionally, none of the costs associated with the device were
                reflected in the device portions of the applicable APCs. This is
                similarly reflected in the CMS transmittal 10541 dated December 31,
                2020 where CMS stated, ``we have determined that the costs associated
                with C1748 are not already reflected in APCs 5303 or 5331''.\135\
                ---------------------------------------------------------------------------
                 \135\ CMS Transmittal 10541 (R10541CP, December 31, 2020)
                https://www.cms.gov/files/document/r10541cp.pdf.
                ---------------------------------------------------------------------------
                 In its comment to CMS, the applicant asserts that the
                EluviaTM system replaces a portion of the previous related
                devices and not all of previous related devices. This is further
                evidenced by the applicant's request for a partial device-related
                portion (that is, device offset) of $3,406.93. CMS has historically
                used a full device offset related to the applicable APC in the majority
                of cases when assessing the cost criterion; to our knowledge CMS has
                never utilized a partial device offset in this manner. If CMS desired
                to change the cost criterion evaluation it must do so through notice
                and comment rulemaking to provide ample notice and an opportunity for
                public comment. Therefore, we do not believe the use of a partial
                device offset, as the applicant has requested, would be consistent with
                CMS' application of the cost significance criterion specified at Sec.
                419.66(d). Because the applicant did not meet the second and third cost
                significance tests, we do not believe the EluviaTM system
                meets the cost significance criterion specified at Sec. 419.66(d).
                 After consideration of the public comments we received and our
                review of the device pass-through application, we are not approving the
                EluviaTM system for transitional pass-through payment status
                in CY 2022 because the product does not meet the cost significance
                criterion.
                (4) CochlearTM Osia[supreg] 2 System
                 Cochlear Americas submitted an application for a new device
                category
                [[Page 63603]]
                for transitional pass-through payment status for the
                CochlearTM Osia[supreg] 2 System (hereinafter referred to as
                the Osia[supreg] 2 System) by the December 2020 quarterly deadline for
                CY 2022. The Osia[supreg] 2 System is a transcutaneous, active auditory
                osseointegrated device that replaces the function of the middle ear by
                providing mechanical energy to the cochlea. According to the applicant,
                the device consists of four components including: (1) An external sound
                processor, the Osia 2 Sound Processor; (2) the Osia OSI200 Implant
                Piezo PowerTM transducer; (3) the BI300 osseointegrated
                implant for anchoring and single point transmission; and (4) a fixation
                screw for attaching the OSI200 implant to the BI300 implant which is
                implanted in the skull.
                 The external sound processor captures environmental sounds and
                converts the sound signal into a digital signal transmitted as a
                radiofrequency. The external sound processor also contains a magnet and
                a battery (rechargeable 675 zinc air button 1.4Volt; 600 mA-hrs
                capacity). The magnets couple the external and internal components
                across the skin. The transducer (Piezo PowerTM) detects the
                radiofrequency signals after they pass through the intact skin and
                transforms the signal to vibrations, which are then transmitted to the
                bone-implanted fixation screw. The screw vibrates the skull bone
                (temporal portion) which stimulates the cochlea (inner ear) to transmit
                the information to the brain so that the vibrations are perceived as
                sounds. The implanted portion is 7.2 cm x 3 cm x 0.49 cm. The system
                has a fitting range of 55 dB sensory neural hearing loss. The applicant
                stated that unlike hearing aids, which make sounds louder, an auditory
                osseointegrated device, such as the Osia[supreg] 2 System can improve
                clarity of hearing and improve hearing at higher frequencies.
                 With respect to the newness criterion at Sec. 419.66(b)(1), the
                Osia[supreg] 2 System received FDA 510(k) clearance on November 15,
                2019, based on a determination of substantial equivalence to a legally
                marketed predicate device. The Osia[supreg] 2 System is intended for
                the following patients and indications: (1) Patients 12 years of age or
                older; (2) patients who have a conductive or mixed hearing loss and
                still can benefit from sound amplification. The pure tone average (PTA)
                bone conduction (BC) threshold (measured at 0.5, 1, 2, and 3 kHz)
                should be better than or equal to 55 dBHL; (3) Bilateral fitting of the
                Osia[supreg] 2 System is intended for patients having a symmetrically
                conductive or mixed hearing loss. The difference between the left and
                right sides' BC thresholds should be less than 10 dB on average
                measured at 0.5, 1, 2, and 3 kHz, or less than 15 dB at individual
                frequencies; (4) patients who have profound sensorineural hearing loss
                in one ear and normal hearing in the opposite ear (that is, single-
                sided deafness or ``SSD''). The pure tone average air conduction
                hearing thresholds of the hearing ear should be better than or equal to
                20 dB HL (measured at 0.5, 1, 2, and 3 kHz). The Osia[supreg] 2 System
                for SSD is also indicated for any patient who is indicated for an air-
                conduction contralateral routing of signals (AC CROS) hearing aid, but
                who for some reason cannot or will not use an AC CROS. Prior to
                receiving the device, it is recommended that an individual have
                experience with appropriately fitted air conduction or bone conduction
                hearing aids.
                 We received the application for a new device category for
                transitional pass-through payment status for the Osia[supreg] 2 System
                on December 1, 2020, which is within 3 years of the date of the initial
                FDA marketing authorization. We invited public comments on whether the
                Osia[supreg] 2 System meets the newness criterion.
                 Comment: The applicant asserted that the Osia[supreg] 2 system is
                new because it received FDA clearance on November 15, 2019 and its
                predicate device received FDA clearance on July 3, 2019, both of which
                are within 3 years of December 1, 2020, the date on which we received
                the device pass-through application for the Osia[supreg] 2 System. The
                applicant asserted that the predicate to these devices, the BONEBRIDGE
                System, received FDA authorization on July 20, 2018 which is also
                within the newness period for transitional pass-through status.
                 Response: We appreciate the applicant's input and agree that the
                Osia[supreg] 2 system meets the newness criterion.
                 With respect to the eligibility criterion at Sec. 419.66(b)(3),
                according to the applicant, the Osia[supreg] 2 System is integral to
                the service provided, is used for one patient only, comes in contact
                with human skin, and is surgically implanted or inserted. The applicant
                also claimed that the Osia[supreg] 2 System meets the device
                eligibility requirements of Sec. 419.66(b)(4) because it is not
                equipment, 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 invited public
                comments on whether the Osia[supreg] 2 System meets the eligibility
                criteria at Sec. 419.66(b).
                 We did not receive public comments in regard to whether the
                Osia[supreg] 2 system meets the eligibility criteria at Sec.
                419.66(b)(3) or Sec. 419.66(b)(4), therefore we agree with the
                applicant that the Osia[supreg] 2 system meets the criteria of 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.
                 The applicant stated that the Osia[supreg] 2 System differs
                significantly from the devices that were included in the previous
                category for auditory osseointegrated devices (L8690--Auditory
                osseointegrated device, includes all internal and external components)
                which was effective from effective from January 1, 2007 through
                December 31, 2008. The applicant claimed that the devices that were
                described by this category include a transducer/actuator and sound
                processor that is worn externally with the transducer/actuator
                connected to the skull by a percutaneous post or abutment that
                penetrates the skin. In these devices, the sound processor converts
                sound into a digital signal which the transducer/actuator converts to
                vibrations that are transmitted to the skull through the abutment. The
                vibrations are transmitted directly to the inner ear and are reproduced
                as sound.
                 The applicant stated that the Osia[supreg] 2 System is distinct
                from devices with a percutaneous connection between the transducer and
                the sound processor because the transducer/actuator for the
                Osia[supreg] 2 system is surgically implanted and has a magnetic
                transcutaneous attachment to the external sound processor. The
                applicant also claimed that the percutaneously coupled osseointegrated
                devices included in the previous device pass-through category convert
                sound to mechanical vibrations in the external sound processor/
                actuator, then transmit the vibrations to the internal components. The
                applicant claimed that the Osia[supreg] 2 system instead converts the
                sound to mechanical vibrations after it has reached the internal
                components. The applicant claimed that the technology to fully implant
                the transducer/actuator did not exist when the previous device pass-
                through category was established. The applicant proposed the device
                pass-
                [[Page 63604]]
                through category descriptor ``Auditory osseointegrated device,
                including implanted transducer/actuator with radiofrequency link to
                external sound processor''. The applicant stated that the BONEBRIDGE
                Bone Conduction Implant System, which also submitted a device pass-
                through application for CY 2022 and is described in this section under
                number (2) above, would also be described by the proposed additional
                category.
                 We stated in the CY 2022 OPPS/ASC proposed rule that we believe
                that the Osia[supreg] 2 system is described by L8690--Auditory
                osseointegrated device, includes all internal and external components.
                The applicant has noted differences between the Osia[supreg] 2 system
                and the devices that were described by L8690, specifically
                percutaneous, auditory osseointegrated devices, regarding the
                connection between the implanted transducer and the external audio
                processor (percutaneous abutment vs. transcutaneous magnetic
                attraction) however, we believe that there is a similar mechanism of
                action for all these devices specifically, vibratory stimulation of the
                skull to stimulate the receptors in the cochlea (inner ear). Further,
                we believe that the broad descriptor for L8690 of ``Auditory
                osseointegrated device, includes all internal and external components''
                includes the applicant's device. In the CY 2022 OPPS/ASC proposed rule,
                we invited public comment on whether the Osia[supreg] 2 system meets
                the device category criterion.
                 Comment: We received multiple comments addressing Sec.
                419.66(c)(1) for both BONEBRIDGE and the Osia[supreg] 2 system. One
                commenter stated they do not support CMS' position that the BONEBRIDGE
                and Osia[supreg] 2 system should not be granted a new category, because
                these devices take much longer to implant surgically than percutaneous
                bone conduction implants, they are active sound processors, and they
                work differently than percutaneous devices like the BAHA or Oticon
                implants.
                 Another commenter who also disagreed with CMS that the BONEBRIDGE
                and Osia[supreg] 2 system are adequately described by L8690 stated that
                the BONEBRIDGE and Osia[supreg] 2 system are transcutaneous hearing
                implants, and that CMS should create a new HCPCS code that describes
                both the procedure and the implant because both are new. The commenter
                expressed their disappointment in what they described as CMS' continual
                resistance to conduct rulemaking specifically on Middle Ear Implants
                (MEIs) because they believe CMS should hear the opinions of clinical
                experts, physicians, and Medicare beneficiaries regarding the
                appropriateness of classifying MEIs as prosthetic implants.
                 A different commenter stated their support for CMS' conclusion in
                the proposed rule that BONEBRIDGE and Cochlear Osia[supreg] are
                appropriately described by a pass-through category previously in
                effect.
                 Two commenters stated that CMS must support the inclusion of middle
                ear implants in the prosthetic category. The commenters asserted that
                not including these devices denies beneficiaries access to all FDA-
                approved hearing prosthetics and discourages in new technology for the
                hearing impaired.
                 Response: We appreciate the input provided by these commenters. We
                have taken this information into consideration in our determination of
                the eligibility criterion at Sec. 419.66(c)(1), discussed below. We
                note some of the comments, those addressing hearing prosthetics, are
                outside of the scope of this rule. Please refer to the above section
                (2) BONEBRIDGE where we summarize these comments in full.
                 Comment: One commenter stated that the pass-through category
                identified by CMS, L8690, does not provide an accurate description of
                the Osia[supreg] 2 system as it does not account for several material
                differences that exist between Osia (and other active auditory
                osseointegrated implant (AOI) systems) and the devices intended to be
                described by L8690. The commenter asserted that the mechanism by which
                the vibrations are generated and reach the skull are entirely
                different, which is reflected by the FDA device classification. The
                commenter asserted that L8690, developed in 2007, could not account for
                active devices.
                 Response: We appreciate the information provided by the commenter
                and have taken this into account in our determination of the Sec.
                419.66(c)(1) eligibility criterion, discussed below.
                 Comment: The applicant stated that L8690 does not describe active,
                transcutaneous systems like Osia[supreg] 2 and BONEBRIDGE. First, the
                applicant stated that L8690 did not extend to active, transcutaneous
                active osseointegrated implants (AOIs) when it was created in 2007
                because the only osseointegrated implant at that time was passive and
                percutaneous. Second, the applicant, responding to CMS' statement,
                ``that there is a similar mechanism of action for all these devices . .
                .'' \136\, stated that the mechanism by which the vibrations are
                generated and reach the skull are entirely different and can affect
                safety, clinical outcomes, and patient quality of life. The applicant
                asserted that the active nature of the Osia[supreg] 2 system, which
                diminishes skin-related complications associated with percutaneous
                devices and at the same time improves audiological outcomes, differs
                from passive systems which involve the transmission of mechanical
                vibrations from the external components to the internal components. As
                opposed to previous technologies, the applicant asserted that active
                systems incorporate a new mechanism of action that sends digital
                signals from the external sound processor to the internal components,
                which then convert a digital signal to a vibration directly at the
                point of bone contact, eliminating the need for percutaneous
                attachment. The applicant stated that although both active and passive
                systems ultimately generate a vibration to stimulate the cochlea, the
                way they do so and where the vibration is generated are entirely
                different. The applicant added that FDA created a new device
                classification for active implantable bone conducting hearing systems
                in response to BONEBRIDGE's application in 2018 (21 CFR 874.3340),
                which is specifically for active systems as opposed to that for passive
                systems (21 CFR 874.3300). The applicant stated that while they
                recognize that FDA and CMS classify devices differently for different
                purposes, they believe that the way FDA classifies bone conduction
                implants reinforces why CMS should distinguish active implantable bone
                conduction devices from passive, percutaneous systems for purposes of
                transitional device pass-through payment status.
                ---------------------------------------------------------------------------
                 \136\ 86 FR at 42104.
                ---------------------------------------------------------------------------
                 The applicant next stated that in other situations, CMS has
                modified broadly worded device categories to recognize technological
                advances within a device class. The applicant noted that the descriptor
                for HCPCS code C1767--``Generator, neurostimulator (implantable)''--was
                modified to ``Generator, neurostimulator (implantable), non-
                rechargeable'' to create a new device pass-through category for HCPCS
                codes C1820 (Generator, neurostimulator (implantable), with
                rechargeable battery and charging system) and C1822 (Generator,
                neurostimulator (implantable), high frequency, with rechargeable
                battery and charging system).
                 Response: After consideration of the public comments we received,
                we agree there is no existing pass-through payment category that
                appropriately describes the Osia[supreg] 2 system. The Osia[supreg] 2
                system device consists of an external
                [[Page 63605]]
                processor that receives sound pressure energy and converts this to a
                radiofrequency signal which communicates with a surgically implanted
                subcutaneous transducer/actuator via a stud. The transducer/actuator
                converts this signal to mechanical vibrations that are transmitted to
                the skull and inner ear. As stated by the applicant, when the existing
                pass-through category, Auditory osseointegrated device (L8690), was
                issued in 2007, the technology to implant the transducer/actuator did
                not exist. Based on this information, we have determined that the
                Osia[supreg] 2 system meets the eligibility criterion at Sec.
                419.66(c)(1). Due to the similarity between the devices, we refer the
                reader to section IV(A)(2)(b)(2) of this rule for a similar discussion
                of the BONEBRIDGE.
                 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 FDA's Breakthrough Devices Program and has received
                FDA marketing authorization. With respect to the substantial clinical
                improvement criterion, the applicant stated that the Osia[supreg] 2
                system represents a substantial clinical improvement because it
                provides a reduced rate of device-related complications compared to
                currently available treatments. The applicant submitted five references
                to retrospective case series that studied the long-term complications
                associated with percutaneous osseointegrated bone conduction hearing
                devices, specifically bone-anchored hearing
                aids.137 138 139 140 141 The applicant stated that
                complications associated with bone-anchored hearing aids include
                irritation and/or infection of the skin surrounding the abutment, skin
                flap necrosis, wound dehiscence, bleeding or hematoma formation, soft
                tissue overgrowth and persistent pain.142 143 144 145 146
                Additionally, the applicant also submitted five references to clinical
                studies and case series involving the use of transcutaneous
                osseointegrated bone conduction hearing devices. Of these five
                references, three of these studies involved the use of the BONEBRIDGE
                device and have been previously discussed in this section, one study
                that involved the use of the BAHA Attract device, and one study that
                involved the use of the Osia[supreg] system, an earlier version of the
                Osia[supreg] 2 system.
                ---------------------------------------------------------------------------
                 \137\ Kraai T, Brown C, Neeff M, Fisher K. Complications of
                bone-anchored hearing aids in pediatric patients. Int J Pediatr
                Otorhinolaryngol. 2011 Jun;75(6):749-53.
                 \138\ Badran K, Arya AK, Bunstone D, Mackinnon N. Long-term
                complications of bone-anchored hearing aids: a 14-year experience. J
                Laryngol Otol. 2009 Feb;123(2):170-6.
                 \139\ House JW, Kutz JW Jr. Bone-anchored hearing aids:
                incidence and management of postoperative complications. Otol
                Neurotol. 2007 Feb;28(2):213-7.
                 \140\ Asma A, Ubaidah MA, Hasan SS, Wan Fazlina WH, Lim BY, Saim
                L, Goh BS. Surgical outcome of bone anchored hearing aid (baha)
                implant surgery: A 10 years experience. Indian J Otolaryngol Head
                Neck Surg. 2013 Jul;65(3):251-4.
                 \141\ Shirazi MA, Marzo SJ, Leonetti JP. Perioperative
                complications with the bone-anchored hearing aid. Otolaryngol Head
                Neck Surg. 2006 Feb;134(2):236-9.
                 \142\ Ibid.
                 \143\ Ibid.
                 \144\ Ibid.
                 \145\ Ibid.
                 \146\ Ibid.
                ---------------------------------------------------------------------------
                 In support of their claim that the Osia[supreg] 2 system reduced
                the rate of device-related complications compared to currently
                available treatments, the applicant submitted a multicenter prospective
                within-subject study conducted at five centers in Europe, Australia,
                and USA. This study investigated clinical performance, safety, and
                benefit of the Osia[supreg] system and included 51 adult subjects with
                mixed and conductive hearing loss (MHL/CHL, n[hairsp]=[hairsp]37) and
                single-sided sensorineural deafness (SSD, n[hairsp]=[hairsp]14). In
                regard to safety outcomes, patients experienced the following minor
                adverse events including pain (n[hairsp]=[hairsp]7), numbness
                (n[hairsp]=[hairsp]1), vertigo (n[hairsp]=[hairsp]3), swelling
                (n[hairsp]=[hairsp]3), tension implant site (n[hairsp]=[hairsp]1),
                warmth at the SP site (n[hairsp]=[hairsp]3), headache
                (n[hairsp]=[hairsp]3), hematoma/bleeding (n[hairsp]=[hairsp]2).\147\
                One participant developed an implant-site infection three days after
                implantation, which subsequently developed into skin necrosis and
                dehiscence. The implant had to be removed 55 days after implantation.
                ---------------------------------------------------------------------------
                 \147\ Mylanos, E.A.M., Hua, H., Arndt, S. 2020. Multicenter
                clinical investigation of a new active osseointegrated steady-state
                implant system. Otol Neurotol 41: 1249-1257.
                ---------------------------------------------------------------------------
                 In the CY 2022 OPPS/ASC proposed rule, we expressed concern that
                the applicant did not submit studies that involved the use of the
                Osia[supreg] 2 system to demonstrate substantial clinical improvement
                of the device. The applicant submitted one study that investigated the
                Osia[supreg] system that utilizes an earlier model of the device. We
                explained in the proposed rule that we were concerned that the evidence
                of substantial clinical improvement submitted by the applicant did not
                directly compare the Osia[supreg] 2 system to other currently available
                treatments, namely percutaneous or passive, transcutaneous auditory
                osseointegrated devices. Therefore, in the CY 2022 OPPS/ASC proposed
                rule we explained that we were concerned that we are unable to
                determine a substantial clinical improvement of the Osia 2 system as
                compared to existing devices. We stated that we would be interested in
                any additional studies that involve the use of the Osia[supreg] 2
                system and compare the device to other currently available auditory
                osseointegrated devices. We invited public comments in the CY 2022
                OPPS/ASC proposed rule on whether the Osia[supreg] 2 system meets the
                substantial clinical improvement criterion.
                 Comment: In response to our concerns about whether the Osia[supreg]
                2 system meets the substantial clinical improvement criterion, one
                commenter stated that head-to-head comparisons are not a requirement
                for transitional pass-through status. The commenter added that because
                the Osia[supreg] 2 System and its predecessor system are substantially
                similar as determined by FDA, the clinical evidence for the predecessor
                system applies equally to the Osia[supreg] 2 System. The commenter
                asserted that the clinical evidence submitted by the applicant, as
                described by CMS in the CY 2022 OPPS/ASC proposed rule, supports that
                the Osia[supreg] 2 System is a substantial clinical improvement
                compared to percutaneous systems.
                 Response: We thank the commenter for the information and have taken
                it into consideration in our determination of whether the Osia[supreg]
                2 System meets the substantial clinical improvement, discussed below.
                 Comment: The applicant submitted a comment in support of its
                position that the Osia[supreg] 2 System meets the substantial clinical
                improvement criterion. The applicant contended, based on the discussion
                in the CY 2022 OPPS/ASC proposed rule, that CMS does not appear to be
                concerned that there is insufficient evidence to conclude that active/
                transcutaneous systems are a substantial clinical improvement over
                passive/percutaneous systems. Rather, the applicant believes our
                concerns relate to the fact that
                [[Page 63606]]
                evidence was submitted for Osia[supreg] 1 and not Osia[supreg] 2.\148\
                ---------------------------------------------------------------------------
                 \148\ 86 FR at 42,105.
                ---------------------------------------------------------------------------
                 In response to CMS' concerns, the applicant stated that first,
                head-to-head trials are not a requirement for demonstrating substantial
                clinical improvement for purposes of qualifying for transitional pass-
                through device--status and would not be appropriate in this situation.
                First, the applicant stated that enrolling patients in a head-to-head
                trial in which the primary difference is expected to be adverse events
                associated with one treatment arm is extremely challenging, and it is
                unclear what additional data would be gained, particularly since the
                nature and frequency of device-related complications between passive
                percutaneous and transcutaneous devices is established and commonly
                reported in the literature. Second, the applicant stated that clinical
                studies involving the first Osia[supreg] device are applicable to the
                Osia[supreg] 2 System because the devices are substantially equivalent
                and only minor differences exist between the two versions of the
                device. The applicant notes that the FDA 510(k) clearance for the
                Osia[supreg] 2 system expressly noted clinical performance data did not
                reveal significant differences in hearing performance between either
                system and did not raise new issues of safety or effectiveness.
                 Next the applicant discussed two studies that involve the
                Osia[supreg] 2 system. The first study reported the surgical and
                audiological experience with the Osia 2 System based on a U.S.
                nationwide controlled market release (CMR) conducted between December
                9, 2019 and February 14, 2020 involving 23 surgeons who performed 44
                operations on 43 recipients.\149\ The applicant noted that no device-
                related complications were reported and five complications not
                associated with the Osia[supreg] 2 system were reported that were all
                successfully resolved. According to the applicant, the authors
                concluded that the Osia[supreg] 2 system, ``. . . represents an
                important advance in hearing implant technology. Utilizing innovative
                digital piezoelectric stimulation, this active auditory osseointegrated
                implant (OSI) delivers high-power output and improved high frequency
                gain for optimizing speech perception while maintaining safety and
                engendering high patient satisfaction.'' \150\
                ---------------------------------------------------------------------------
                 \149\ Goldstein MR, Bourn S, Jacob A. Early Osia[supreg] 2 bone
                conduction hearing implant experience: Nationwide controlled-market
                release data and single-center outcomes.
                 \150\ Ibid.
                ---------------------------------------------------------------------------
                 The second study is a systematic review that, according to the
                applicant, provides evidence of substantial clinical improvement for
                both the Osia[supreg] and Osia[supreg] 2 systems.\151\ According to the
                applicant, the authors reported their findings from reviewing adverse
                event reports associated with active transcutaneous bone conduction
                implants (atBCls) in the Manufacturer and User Facility Device
                Experience (MAUDE) database of FDA. According to the applicant, after
                removing irrelevant reports and duplicates, 83 MDRs describing 91
                adverse events (patient injuries and device malfunctions) were
                analyzed, all of which occurred postoperatively. The applicant asserted
                that the five most comment types of events, device malfunctions leading
                to a lack of conduction or hearing (n=26, 29 percent), infections
                (n=14, 15 percent), device malfunctions of intermittent or reduced
                hearing (n=12, 13 percent), and pain and wound formation (n=9 or 10
                percent), accounted for 77 percent of all events reported. The
                applicant asserted that device malfunctions were predominantly
                associated with BONEBRIDGE (93 percent of all device malfunctions
                reported), while patient injuries such as infections were more commonly
                reported for Osia[supreg] (67 percent of all reported injuries).
                According to the applicant, the authors concluded that complications
                observed with active transcutaneous BCI use are similar to those with
                passive transcutaneous BCIs.\152\
                ---------------------------------------------------------------------------
                 \151\ Crowder HR, Bestourous DE, Reilly BK. Adverse events
                associated with Bonebridge and Osia bone conduction implant devices.
                Am J Otolaryngol. 2021 ;42(4):102968. doi:10.1016/
                j.amjoto.2021.102968 PubMed ID: 33676070.
                 \152\ Ibid.
                ---------------------------------------------------------------------------
                 In regard to evidence submitted with their application, the
                applicant stated commonly reported adverse events which include ear
                inflammations, dizziness, and headache, are clearly not related to the
                implantation. Based on reported events in a comparison between the
                Osia[supreg] system \153\ and the Baha Connect System \154\ the
                applicant asserted that it is clear that the Osia[supreg] System has
                significantly lower rates of implantation-related adverse events than
                the passive/percutaneous system.
                ---------------------------------------------------------------------------
                 \153\ Mylanus EAM et al. in the submission; Clinica/Trials.gov
                Identifier: NCT03086135.
                 \154\ van Hoof M et al. 2020, PubMed JD: 32231633; Clinica/
                Trials.gov Identifier: NCT01796236.
                ---------------------------------------------------------------------------
                 Response: We thank the applicant for their submission and the
                additional information provided. Because of the overlap between
                comments for the Osia[supreg] 2 system and BONEBRIDGE, we direct
                readers to section (IV)(2)(b)(2)(2) of this final rule with comment
                period.
                 We appreciate the commenters' responses on the Osia[supreg]2 system
                application. We disagree with the applicant's comment that commonly
                reported adverse events which include ear inflammations, dizziness, and
                headache, are clearly not related to the implantation. We note, the
                term ``dizziness'' can be used to explain a variety of symptoms that
                can include weakness, lightheadedness, unsteadiness and vertigo, and an
                argument against causality may be reasonable. ``Headache'', however, is
                pain affecting the head or face. To dismiss a possible connection
                between the skull implantation procedure and a complaint of post-
                procedure headache does not seem reasonable.
                 While new evidence was submitted by the applicant which attempts to
                address substantial clinical improvement for the Osia[supreg] 2 system,
                we are unable to conclude that the device meets the substantial
                clinical improvement criterion. Specifically, we note that the results
                of a meta-analysis are informative, however without controlling for the
                differences across studies (for example, study design, sampling
                technique, etc.) we are unable to determine if the treatment effects
                seen are due to the Osia[supreg] 2 system or due to differences in
                study design. In regard to commenter's suggestion that a head-to-head
                analysis not being required for an assessment of substantial clinical
                improvement, we agree in part. While it may be the case that a direct
                head-to-head comparison may not always be feasible or appropriate, we
                acknowledge that this is the ideal manner in which to address
                comparisons between one technology and another. For example, CMS
                utilized meta-analyses and historical controls as evidence of
                substantial clinical improvement when robust critical efforts have been
                made to account for variations in study design (i.e., confounding) in
                the former and comprehensive reviews to establish the validity of the
                latter. In regard to the second study \155\ discussed in the
                applicant's comment, we note that the small sample size of 43
                recipients and 44 procedures may not be generalizable to a larger
                Medicare beneficiary population. Therefore, we are unable to determine
                a substantial clinical
                [[Page 63607]]
                improvement of the Osia[supreg] 2 system as compared to existing
                devices.
                ---------------------------------------------------------------------------
                 \155\ Goldstein MR, Bourn S, Jacob A. Early Osia[supreg] 2 bone
                conduction hearing implant experience: Nationwide controlled-market
                release data and single-center outcomes.
                ---------------------------------------------------------------------------
                 After consideration of the public comments and additional
                information we have received, we are not approving the Osia[supreg] 2
                system for transitional pass-through payment status in CY 2022 because
                the product does not meet the substantial clinical improvement
                criterion. Because we have determined that the Osia[supreg] 2 system
                does not meet the substantial clinical improvement criterion, we have
                not evaluated the cost criterion.
                (5) Pure-Vu[supreg] System
                 Motus GI submitted an application for a new device category for
                transitional pass-through payment status for the Pure-Vu[supreg] System
                (Pure-Vu[supreg]) for CY 2022. The applicant asserted that the Pure-
                Vu[supreg] System helps to avoid aborted and delayed colonoscopy
                procedures due to poor visualization of the colon mucosa by creating a
                unique High Intensity, Pulsed Vortex Irrigation Jet that consists of a
                mixture of air and water to break-up fecal matter, blood clots, and
                other debris, and scrub the walls of the colon while simultaneously
                removing the debris through two suction channels. The applicant stated
                that the suction channels have a sensor to detect the formation of a
                clog in the channels, triggering the system to automatically purge and
                then revert to suction mode once the channel is clear. According to the
                applicant, this combination of the agitation of the fluid in the colon
                via the pulsed vortex irrigation and simultaneous removal of the debris
                allows the physician to visualize the colon and achieve a successful
                colonoscopy or other advanced procedure through the colonoscope even if
                the patient is not properly prepped and has debris either blocking the
                ability to navigate the colon or covering the colon wall obscuring the
                mucosa and any pathology that may be present. The applicant asserted
                that the constant volume suction pumps do not cause the colon to
                collapse, which allows the physician to continue to navigate the colon
                while cleansing and avoids the need to constantly insufflate the colon,
                which may be required with other colonoscopy irrigation systems.
                 The applicant stated that the Pure-Vu[supreg] System is comprised
                of a workstation that controls the function of the system, a disposable
                oversleeve that is mounted on a colonoscope and inserted into the
                patient, and a disposable connector with tubing (umbilical tubing with
                main connector) that provides the interface between the workstation,
                the oversleeve, and off the shelf waste containers.
                 The applicant explained that the workstation has two main
                functions: Cleansing via irrigation and evacuation, and acting as the
                user interface of the system. The applicant explained that the
                irrigation into the colon is achieved by an electrical pump that
                supplies pressurized gas (air) and a peristaltic pump that supplies the
                liquid (water or saline). According to the applicant, the pressurized
                gas and liquid flow through the ``main connector'' and are mixed upon
                entry into the umbilical tubing that connects to the oversleeve. The
                applicant explained that the gas pressure and flow are controlled via
                regulators and the flow is adjusted up or down depending on the
                cleansing mode selected. The applicant stated that a foot pedal
                connected to the user interface activates the main functions of the
                system so that the user's hands are free to perform the colonoscope
                procedure in a standard fashion.
                 The applicant stated that the evacuation mode (also referred to as
                suction) removes fecal matter and fluids out of the colon. The
                applicant noted that the evacuation function is active during cleansing
                so that fluid is inserted and removed from the colon simultaneously.
                The applicant explained that the evacuation pumps are designed in a
                manner that prevents the colon from collapsing when suctioning, which
                facilitates the ability to simultaneously irrigate and evacuate the
                colon. According to the applicant, during evacuation, the system
                continuously monitors the pressure in the evacuation channels of the
                oversleeve and if the pressure drops below pre-set limits the pumps
                will automatically reverse the flow. The applicant explained that the
                clog sensor triggers the system to automatically purge the material out
                of the channel and back into the colon where it can be further
                emulsified by the Pulsed Vortex Irrigation Jet, and then automatically
                reverts back into evacuation mode once the channel is cleared. The
                applicant stated that the evacuation (suction) that drains fecal matter
                and fluids out of the colon is generated by peristaltic pumps that can
                rotate in both directions, either to evacuate fluids and fecal matter
                from the colon through the evacuation tubes and into a waste container,
                or while in the reverse direction, to purge the evacuation tubes. The
                applicant claimed the suction created by this type of pump creates a
                constant volume draw of material from the colon and therefore prevents
                the colon from collapsing rapidly. According to the applicant, purging
                of evacuation tubes may be activated in two ways: The purging cycle is
                automatically activated when low pressure is noted by the evacuation-
                line sensor (it is also activated for the first 0.5 seconds when
                evacuation is activated to make sure the line is clear from the start);
                or a manual purge may be activated by the user by pushing the ``manual
                purge'' button on the foot pedal. The applicant claimed the pressure-
                sensing channel is kept patent by using an air perfusion mechanism
                where an electrical pump is used to perfuse air through the main
                connector and into the oversleeve, while the sensor located in the
                workstation calculates the pressure via sensing of the channel.
                 The applicant explained the Pure-Vu[supreg] System is loaded over a
                colonoscope and that the colonoscope with the Pure-Vu[supreg]
                Oversleeve is advanced through the colon in the same manner as a
                standard colonoscopy. The applicant stated that the body of the
                oversleeve consists of inner and outer sleeves with tubes intended for
                providing fluid path for the cleansing irrigation (2X), the evacuation
                of fluids (2X), the evacuation sensor (1X) and that the flexible head
                is at the distal end of the oversleeve and is designed to align with
                the colonoscope's distal end in a consistent orientation. The applicant
                explained that the distal cleansing and evacuation head contains the
                irrigation ports, evacuation openings, and a sensing port. According to
                the applicant, the system gives the physician the control to cleanse
                the colon as needed based on visual feedback from the colonoscope to
                make sure they have an unobstructed view of the colon mucosa to detect
                and treat any pathology. The applicant noted that since the Pure-
                Vu[supreg] System does not interfere with the working channel of the
                colonoscope, the physician is able to perform all diagnostic or
                therapeutic interventions in a standard fashion with an unobstructed
                field of view.
                 With respect to the newness criterion at Sec. 419.66(b)(1), the
                Pure-Vu[supreg] System first received FDA 510(k) clearance on September
                22, 2016 under 510(k) number K60015. Per the applicant, this initial
                device was very cumbersome to set up and required direct support from
                the company and therefore was not viable for a small company with
                limited resources to market the device. The applicant noted that the
                initial device could have been sold starting on January 27, 2017 when
                the first device came off the manufacturing line. Per the applicant,
                the device was allocated for clinical evaluations but 10 institutions
                throughout the country did purchase the device outside of any true
                clinical study, mostly based on the fact that
                [[Page 63608]]
                physicians wanted to try the product prior to committing to a clinical
                trial. The applicant further noted that minor modifications were made
                to the Pure-Vu[supreg] System in additional 510(k) clearances dated
                December 12, 2017 and June 21, 2018. The current marketed Pure-
                Vu[supreg] System was then granted 510(k) clearance on June 6, 2019
                under 510(k) number K191220. Per the applicant, this clearance changed
                the entire set-up of the device, redesigned the user interface, and
                reduced the size, among other changes. According to the applicant, this
                updated version was commercially available as of September 19, 2019.
                 Comment: In response to CMS' summary, the applicant stated that the
                Pure-Vu[supreg] System Generation 1 (Gen 1) received FDA 510(k)
                clearance in September 2016. The applicant added that the Gen 1 version
                of the system was used to gather clinical data using disposables sold
                at a discounted rate to one institution and five institutions in 2017
                and 2018, respectively. According to the applicant, after receiving
                feedback from providers concerning the Gen 1 system, the company
                decided not to make the Gen 1 product available to the market.
                According to the applicant, the Generation 2 (Gen 2) version of the
                Pure-Vu[supreg] System obtained FDA 510(k) clearance in June 2019. The
                applicant clarified that no application for the Gen 1 device was
                submitted for pass-through payment in the outpatient setting and
                asserted that since only a few institutions purchased the device, the
                cost burden of the Gen 1 system is not factored into the current
                marketplace. The applicant stated that the Gen 2 version is the product
                for which the applicant is seeking transitional device pass-through
                status.
                 Response: We appreciate the commenter's input and agree that the
                Pure-Vu[supreg] System meets the newness criterion because we received
                its device pass-through application on September 1, 2020, which is
                within 3 years of the June 21, 2018, the date of FDA PMA.
                 With respect to the eligibility criterion at Sec. 419.66(b)(3),
                according to the applicant, Pure-Vu[supreg] is integral to the service
                provided, is used for one patient only, comes in contact with human
                tissue, and is surgically inserted temporarily. The applicant also
                claimed that Pure-Vu[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 invited public comments on whether Pure-Vu[supreg] meets
                the eligibility criteria at Sec. 419.66(b).
                 We did not receive any comments on whether Pure-Vu[supreg] meets
                the eligibility criteria at Sec. 419.66(b)(3) or Sec. 419.66(b)(4).
                We agree with the applicant that Pure-Vu[supreg] device meets the
                criteria of 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. We stated in
                the CY 2022 OPPS/ASC proposed rule that we have not identified an
                existing pass-through payment category that describes Pure-Vu[supreg].
                We invited public comment on whether Pure-Vu[supreg] meets the device
                category criterion.
                 We did not receive any comments on whether Pure-Vu[supreg] meets
                the eligibility criteria at Sec. 419.66(c)(1). We continue to believe
                that Pure-Vu[supreg] device meets the criteria of Sec. 419.66(c)(1)
                because we have not identified an existing pass-through payment
                category that describes Pure-Vu[supreg].
                 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 Pure-
                Vu[supreg] represents a substantial clinical improvement over existing
                technologies. With respect to this criterion, the applicant submitted
                studies that examined the impact of Pure-Vu[supreg] on endoscopic
                hemostasis outcomes, rebleeding occurrence, and mortality. We note that
                the applicant has applied for and was denied the New Technology Add-on
                Payment in the FY 2022 IPPS/LTCH proposed rule (86 FR 25299 through
                25304).
                 According to the applicant, the Pure-Vu[supreg] System offers the
                ability to achieve rapid beneficial resolution of the disease process
                treatment by achieving rapid and full visualization of the colon, which
                will improve diagnostic yield and the effectiveness of treatment of
                diseases of the bowel. The applicant claimed that Pure-Vu[supreg] is
                indicated for use in emergent issues such as acute lower
                gastrointestinal (GI) bleeding, unknown abdominal pain, foreign body
                removal, chronic disease management, and preventive medicine such as
                screening and surveillance. The applicant states these procedures are
                typically performed using a colonoscope to visualize the colon and
                provide a conduit to deliver therapeutic treatments. According to the
                applicant, the current standard of care requires the colon to be
                cleansed to ensure the success of any procedure. The applicant asserts
                that in the case where pre-procedural preparations are not adequate to
                achieve proper visualization, current technology provides limited
                ability to remove debris from the colon during the procedure to
                facilitate the process. The applicant states that regardless of
                indication, the bowel preparation remains the constant across patients
                who may have a wide range of comorbidities which may limit patient
                tolerability. According to the applicant the consumption of a purgative
                and the dietary restriction to be on clear liquids for approximately 24
                hours can be problematic for the diabetic and elderly populations.\156\
                ---------------------------------------------------------------------------
                 \156\ Parra-Blanco A, Ruiz A, Alvarez-Lobos M, Amoros A, Gana
                JC, Ibanez P, et al. Achieving the best bowel preparation for
                colonoscopy. World J Gastroenterol. 2014;20(47):17709- 26.
                ---------------------------------------------------------------------------
                 In support of its application, the applicant submitted three
                outpatient clinical studies to demonstrate the Pure-Vu[supreg] System's
                capability to convert patients to adequate preparation where
                preparation was previously inadequate and the visualization was poor
                based on the Boston Bowel Preparation Scale (BBPS). In the first study,
                Perez J., et al. conducted an outpatient prospective pilot study using
                the Pure-Vu[supreg] System.\157\ The study observed 50 patients with
                poorly prepared colons undergoing colonoscopy at two outpatient
                clinical sites in Spain and Israel, respectively. The applicant claimed
                study patients underwent a reduced bowel preparation consisting of the
                following: No dried fruits, seeds, or nuts starting 2 days before the
                colonoscopy, a clear liquid diet starting 18 to 24 hours before
                colonoscopy, and a split dose of 20mg oral bisacodyl. The study found
                the number of patients with
                [[Page 63609]]
                an adequate cleansing level (BBPS>=2 in each colon segment) increased
                significantly from 31 percent (15/49) prior to use of the Pure-Vu
                System (baseline) to 98 percent (48/49) after use of the Pure-
                Vu[supreg] System (P =2 in all evaluated
                colon segments. The study found that in 79 of the 94 patients (84
                percent), the physician was able to successfully diagnose or rule out a
                GI bleed in the colon per the patients' colonoscopy indication using
                only the Pure-Vu[supreg] System. The analysis showed statistically
                significant visualization improvement in each colon segment after Pure-
                Vu[supreg] use with a mean BBPS score in the descending colon, sigmoid,
                and rectum of 1.74 pre-Pure-Vu[supreg] use and 2.89 post-Pure-
                Vu[supreg] use (P 5 compared to 24 percent for patients with a BBPS score of
                TM
                 Xenocor Inc. submitted an application for a new device category for
                transitional pass-through payment status for the Articulating Xenoscope
                Laparoscope (hereinafter referred to as the XenoscopeTM) by
                the March 2021 quarterly deadline for CY 2022. The applicant described
                the XenoscopeTM as a disposable laparoscope which consists
                of a high-definition camera chip on the tip of a composite shaft,
                paired with led lights with a handle comprised of a clamshell design
                and made with molded plastic. The applicant stated that the
                XenoscopeTM provides visualization in the abdominal and
                thoracic cavities through small, minimally invasive incisions for
                diagnostic and therapeutic laparoscopic procedures in a similar fashion
                to established, reusable versions of laparoscopes. It is paired with an
                image processing unit, the Xenobox, that can plug into any HD monitor
                to display anatomy in the abdomen, pelvis or chest. The Xenobox uses
                pre-installed firmware that is upgradable.
                 The applicant claimed that the XenoscopeTM is the first
                disposable laparoscope. The applicant also claimed that the use of the
                XenoscopeTM reduces the number of cords in the operating
                room, eliminates intraoperative fogging and associated image compromise
                and eliminates up-front capital expenditures associated with reusable
                laparoscopes.
                 With respect to the newness criterion, the XenoscopeTM
                received FDA 510(k) clearance on January 27, 2020, based on
                [[Page 63612]]
                a determination of substantial equivalence to a legally marketed
                predicate device. The XenoscopeTM is indicated for use in
                diagnostic and therapeutic procedures for endoscopy and endoscopic
                surgery within the thoracic and peritoneal cavities including the
                female reproductive organs. We received the application for a new
                device category for transitional pass-through payment status for the
                XenoscopeTM on August 6, 2020, which is within 3 years of
                the date of the initial FDA marketing authorization. We invited public
                comments in the CY 2022 OPPS/ASC proposed rule on whether the
                XenoscopeTM meets the newness criterion.
                 We did not receive any comments with respect to the newness
                criterion.
                 We agree with the applicant that the XenoscopeTM meets
                the newness criterion because we received its device pass-through
                application on August 6, 2020, which is within 3 years of January 27,
                2020, the date of FDA 510(k) clearance.
                 With respect to the eligibility criterion at Sec. 419.66(b)(3),
                according to the applicant, the use of the XenoscopeTM is
                integral to the service, 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
                XenoscopeTM is plugged into the Xenobox image processing
                unit (which is connected to an HD monitor and an A/C power source). A
                surgeon then makes a small incision and a trocar (tube-like device with
                a seal to maintain abdominal pressure) is inserted to gain access to
                the body cavity. The XenoscopeTM is then inserted through
                the trocar in order to provide a full view of the anatomy for
                diagnostic and therapeutic procedures.
                 The applicant also claimed the XenoscopeTM 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 invited public comments on whether
                the XenoscopeTM meets the eligibility criteria at Sec.
                419.66(b).
                 We did not receive any comments in regard to the eligibility
                criteria at Sec. 419.66(b). We agree with the applicant and believe
                that the XenoscopeTM 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. The
                applicant described the XenoscopeTM as disposable
                laparoscope. The applicant reported that it does not believe that the
                XenoscopeTM is described by an existing category and
                requested category descriptor ``Single-use laparoscopes.'' The
                applicant also stated that the currently existing category, C1748--
                Endoscope, single-use (that is, disposable), upper gi, imaging/
                illumination device (insertable), did not describe this device because
                it is limited to single-use duodenoscopes inserted orally, to reach the
                small intestine versus minimally invasive abdominal surgery
                (laparoscopy). We stated in the CY 2022 OPPS/ASC proposed rule that we
                have not identified an existing pass-through payment category that is
                applicable to the XenoscopeTM. We invited public comment on
                whether the XenoscopeTM meets the device category criterion.
                 We did not receive any comments in regard to the eligibility
                criteria at Sec. 419.66(c). We continue to believe that the
                XenoscopeTM meets the eligibility criterion at Sec.
                419.66(c)(1) because we have not identified an existing pass-through
                payment category that is applicable to the XenoscopeTM.
                 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 stated that the XenoscopeTM provides a substantial
                clinical improvement over reusable laparoscopes because of its single-
                use nature. Specifically, the applicant claimed that because the
                XenoscopeTM is a disposable, single-use device, the
                XenoscopeTM provides for less risk of scope-related cross-
                contamination and infection from improperly handled or reprocessed
                scopes compared to traditional laparoscopy.
                 The applicant also claimed that the XenoscopeTM includes
                a fog-free scope and provides a substantial clinical improvement over
                currently available laparoscopes which, according to the applicant, fog
                often, and can put patients at risk for surgical errors and more time
                under anesthesia. Additionally, the applicant claimed that the
                XenoscopeTM reaches 104 degrees Fahrenheit at the tip,
                eliminating risk of patient burns and drape fires associated with
                hotter Xenon bulbs used in currently available laparoscopes.
                 Lastly, that applicant stated that there can be significant
                economic benefits through the use of the XenoscopeTM due to
                the processing costs and up-front capital expenditures required for
                reusable laparoscopes.
                 In support of the assertion that the XenoscopeTM reduces
                the risk of cross-contamination from improperly cleaned reusable
                laparoscopic instruments, the applicant referenced two articles. The
                first article was published in 2002 and describes the problem of
                surgical site infection (SSI), the Centers for Disease Control (CDC)
                guidelines for SSI, and some cases of SSI related to improper cleaning
                of reusable laparoscopic instruments. The article also discusses
                practices to avoid these infections.\170\ The applicant also submitted
                a draft of a manuscript titled ``Novel Laparoscopic System for Quality
                Improvement and Increased Efficiency'' that summarizes some of the
                evidence that laparoscopy, in general, is superior to open surgical
                approaches in terms of pain management and infection risk.\171\
                ---------------------------------------------------------------------------
                 \170\ Hewitt, A. (2002, November 1). Laparoscopic Instruments:
                Handle with Care. Infection Control Today. https://www.infectioncontroltoday.com/view/laparoscopic-instruments-handle-care.
                 \171\ Elliott, K.W. & Heilbraun, E. (2020). Novel Laparoscopic
                System for Quality Improvement and Increased Efficiency. Manuscript
                submitted for publication.
                ---------------------------------------------------------------------------
                 In support of the claim that the XenoscopeTM eliminates
                the risk of patient burns and drape fires associated with Xenon bulbs
                used by currently available laparoscopes, the applicant submitted two
                articles. The first was an article published in 2011 that discusses the
                problem of laparoscopic related burn injuries and a potential solution
                using Active Electrode Monitoring (AEM).\172\ AEM instruments
                reportedly use a ``shielded and monitored'' design to prevent the risk
                of stray energy burn injury from insulation failure and capacitive
                coupling. According to the article, the AEM technology is currently
                [[Page 63613]]
                licensed by Intuitive Surgical's da Vinci[supreg] Surgical Systems. The
                applicant does not compare the XenoscopeTM to AEM technology
                in terms of burn injury reduction. The second article examined the
                variation and extent of thermal injuries that could be induced by
                laparoscopic light sources to porcine tissue. In the study, the maximum
                temperature at the tip of the optical cable varied between 119.5
                degrees C and 268.6 degrees C. When surgical drapes were exposed to the
                tip of the light source, the time to char was 3-6 seconds. The degree
                and volume of injury increased with longer exposure times, and
                significant injury was recorded with the optical cable 3 mm from the
                skin.\173\
                ---------------------------------------------------------------------------
                 \172\ Encision Inc. (2011, April 1). Method of Reducing Stray
                Energy Burns in Laparoscopic Surgery. Medical Design Briefs. https://www.medicaldesignbriefs.com/component/content/article/mdb/tech-briefs/9500.
                 \173\ Hindle, A.K., Brody, F., Hopkins, V., Rosales, G.,
                Gonzalez, F., & Schwartz, A. (2009). Thermal injury secondary to
                laparoscopic fiber-optic cables. Surgical endoscopy, 23(8), 1720-
                1723. https://doi.org/10.1007/s00464-008-0219-z.
                ---------------------------------------------------------------------------
                 In support of the claim that there could be significant economic
                benefits realized through the use the XenoscopeTM compared
                to reusable laparoscopes, the applicant also referenced the manuscript
                entitled ``Novel Laparoscopic System for Quality Improvement and
                Increased Efficiency''.\174\ In this study, a three-page survey was
                created to collect data regarding laparoscope-related practices and
                costs. The survey was completed by three different institutions,
                including an ambulatory surgery center (ASC), a rural hospital and a
                suburban hospital. The sites provided the capital equipment cost
                required at the time of purchase at their facility which ranged from
                $837,184 to $2,786,348. The average cost per use for one surgical
                procedure involving a reusable laparoscope was $1,019.24 across the
                three institutions.
                ---------------------------------------------------------------------------
                 \174\ Ibid.
                ---------------------------------------------------------------------------
                 We stated in the CY 2022 OPPS/ASC proposed rule that we are
                concerned that the application and the articles submitted as evidence
                of substantial clinical improvement discuss potential adverse effects
                from laparoscopic procedures, but do not appear to directly show any
                clinical improvement that result from the use of the
                XenoscopeTM. The applicant has provided evidence which seems
                to rely on indirect inferences from other sources of data. The articles
                provided did not involve the clinical use of the XenoscopeTM
                and did not compare the device to an appropriate comparator, such as a
                reusable laparoscope. Therefore, we stated that it is difficult to
                determine whether the XenoscopeTM offers substantial
                clinical improvement over standard, reusable laparoscopes based on the
                information provided. In order to demonstrate substantial clinical
                improvement over currently available treatments, we consider supporting
                evidence, preferably published peer-reviewed clinical trials, that
                shows improved clinical outcomes, such as reduction in mortality,
                complications, subsequent interventions, future hospitalizations,
                recovery time, pain, or a more rapid beneficial resolution of the
                disease process compared to the standard of care.
                 We invited public comment on whether the XenoscopeTM
                meets the substantial clinical improvement criterion.
                 Comment: One commenter stated their opposition to the use of HCPCS
                code 58570 (Tlh uterus 250 g or less) in conjunction with the
                XenoscopeTM. The commenter stated that multiple searches in
                PubMed did not produce evidence of use or clinical improvement for
                gynecologic laparoscopic procedures, including HCPCS code 58570 (Tlh
                uterus 250 g or less). The commenter asserted that Obstetrician-
                gynecologists and gynecologic oncologists are the primary billers of
                58570 and employ laparoscopy for many other surgeries such as tubal
                ligation and hysterectomy, positioning them as potential high-utilizers
                of new devices such as the XenoscopeTM. The commenter stated
                their concern for the unintended consequences of promoting the payment
                of a device for which a substantial clinical improvement in gynecologic
                surgery is undetermined.\175\
                ---------------------------------------------------------------------------
                 \175\ Choosing the route of hysterectomy for benign disease.
                Committee Opinion No. 701. American College of Obstetricians and
                Gynecologists. Obstet Gynecol 2017:129:e155-9.
                ---------------------------------------------------------------------------
                 Response: We appreciate the input from the commenter and we have
                noted the lack of data demonstrating evidence of use or clinical
                improvement for gynecologic laparoscopic procedures. We refer the
                commenter to our final response and determination regarding the
                substantial clinical improvement criterion below for a discussion of
                this concern. However, we note that the indication for use as stated by
                the FDA in the 510(k) clearance letter is, ``The Articulating
                XenoscopeTM is intended to be used in diagnostic and
                therapeutic procedures for endoscopy and endoscopic surgery within the
                thoracic and peritoneal cavities including the female reproductive
                organs.'' Given the role of the FDA in defining device indications, we
                believe the device is appropriately described by HCPCS 58570.
                 Comment: A commenter representing Xenocor, Inc. stated that the
                safety profile for patients could be improved in the following ways:
                (1) Cross-contamination for the XenoscopeTM is not possible;
                (2) the XenoscopeTM has a top temperature of 129 degrees
                Fahrenheit where one of the most frequent causes of operating room
                fires and burns are traditional, reusable laparoscopes which often
                exceed 350 degrees Fahrenheit; (3) the XenoscopeTM's
                composite shaft is non-conductive which avoids risks with traditional
                laparoscopes which can arc stray current when using monopolar
                electrocautery where the scope acts as an antenna and burns adjacent
                structures; and (4) the XenoscopeTM eliminates fog and sees
                better through smoke and steam than any currently marketed resuables.
                 We also received multiple comments stating general support for the
                XenoscopeTM. Two of the commenters stated that the
                XenoscopeTM reaches a temperature of 129 [deg]F, as opposed
                to the 350 [deg]F reached by light cords which can cause burns or
                patient injury, is fully shielded and will not cause stray energy burns
                or arcing issues that exist with other like products, its single-use
                nature ensures complete sterility and consistent image quality due to
                the new out of the box feature with each use, and the fog-free picture
                helps to ensure a consistent clear visualization of critical anatomy.
                 One commenter stated the benefits of the XenoscopeTM are
                critical to both patient safety and cost control. Another commenter
                stated that having a disposable scope would enable surgery to be done
                more easily in a wider variety of places while also eliminating many
                problems associated with traditional scopes. Another commenter added
                that the ability to use XenoscopeTM with any USB enabled
                video device obviates the need for expensive auxiliary light sources,
                video drivers, etc.
                 Response: We thank the commenters for their input. We agree that
                improved patient safety and a reduction in complications are clinical
                outcomes that may represent a substantial clinical improvement.
                However, we remain concerned that we did not receive any data to
                demonstrate improved outcomes using the XenoscopeTM.
                Further, we remain concerned that the applicant did not provide any
                comparison to existing technologies such as reusable scopes to
                demonstrate an improvement in clinical outcomes. Lastly, we note that
                the cost effectiveness of a technology does not substantially improve
                the diagnosis or treatment of a disease and therefore is not relevant
                to the discussion of substantial clinical improvement.
                [[Page 63614]]
                 After consideration of the public comments we received and our
                review of the device pass-through application, we are not approving the
                XenoscopeTM for transitional pass-through payment status in
                CY 2022 because the product does not meet the substantial clinical
                improvement criterion. Because we have determined that the
                XenoscopeTM does not meet the substantial clinical
                improvement criterion, we are not evaluating whether the device meets
                the cost criterion.
                B. Device-Intensive Procedures
                1. Background
                 Under the OPPS, prior to CY 2017, device-intensive status for
                procedures was determined at the APC level for APCs with a device
                offset percentage greater than 40 percent (79 FR 66795). Beginning in
                CY 2017, CMS began determining device-intensive status at the HCPCS
                code level. In assigning device-intensive status to an APC prior to CY
                2017, the device costs of all the procedures within the APC were
                calculated and the geometric mean device offset of all of the
                procedures had to exceed 40 percent. Almost all of the procedures
                assigned to device-intensive APCs utilized devices, and the device
                costs for the associated HCPCS codes exceeded the 40-percent threshold.
                The no cost/full credit and partial credit device policy (79 FR 66872
                through 66873) applies to device-intensive APCs and is discussed in
                detail in section IV.B. of the CY 2022 OPPS/ASC proposed rule (86 FR
                42112 through 42114). A related device policy was the requirement that
                certain procedures assigned to device-intensive APCs require the
                reporting of a device code on the claim (80 FR 70422) and is discussed
                in detail in section IV.B.3 of the CY 2022 OPPS/ASC proposed rule (86
                FR 42114). For further background information on the device-intensive
                APC policy, we refer readers to the CY 2016 OPPS/ASC final rule with
                comment period (80 FR 70421 through 70426).
                a. HCPCS Code-Level Device-Intensive Determination
                 As stated earlier, prior to CY 2017, under the device-intensive
                methodology we assigned device-intensive status to all procedures
                requiring the implantation of a device that were assigned to an APC
                with a device offset greater than 40 percent and, beginning in CY 2015,
                that met the three criteria listed below. Historically, the device-
                intensive designation was at the APC level and applied to the
                applicable procedures within that APC. In the CY 2017 OPPS/ASC final
                rule with comment period (81 FR 79658), we changed our methodology to
                assign device-intensive status at the individual HCPCS code level
                rather than at the APC level. Under this policy, a procedure could be
                assigned device-intensive status regardless of its APC assignment, and
                device-intensive APC designations were no longer applied under the OPPS
                or the ASC payment system.
                 We believe that a HCPCS code-level device offset is, in most cases,
                a better representation of a procedure's device cost than an APC-wide
                average device offset based on the average device offset of all of the
                procedures assigned to an APC. Unlike a device offset calculated at the
                APC level, which is a weighted average offset for all devices used in
                all of the procedures assigned to an APC, a HCPCS code-level device
                offset is calculated using only claims for a single HCPCS code. We
                believe that this methodological change results in a more accurate
                representation of the cost attributable to implantation of a high-cost
                device, which ensures consistent device-intensive designation of
                procedures with a significant device cost. Further, we believe a HCPCS
                code-level device offset removes inappropriate device-intensive status
                for procedures without a significant device cost that are granted such
                status because of their APC assignment.
                 Under our existing policy, procedures that meet the criteria listed
                in section IV.B.1.b. of the CY 2022 OPPS/ASC proposed rule (86 FR 42112
                through 42114) are identified as device-intensive procedures and are
                subject to all the policies applicable to procedures assigned device-
                intensive status under our established methodology, including our
                policies on device edits and no cost/full credit and partial credit
                devices discussed in sections IV.B.3. and IV.B.4. of the CY 2022 OPPS/
                ASC proposed rule, respectively (86 FR 42114 thorough 42115).
                b. Use of the Three Criteria To Designate Device-Intensive Procedures
                 We clarified our established policy in the CY 2018 OPPS/ASC final
                rule with comment period (82 FR 52474), where we explained that device-
                intensive procedures require the implantation of a device and
                additionally are subject to the following criteria:
                 All procedures must involve implantable devices that would
                be reported if device insertion procedures were performed;
                 The required devices must be surgically inserted or
                implanted devices that remain in the patient's body after the
                conclusion of the procedure (at least temporarily); and
                 The device offset amount must be significant, which is
                defined as exceeding 40 percent of the procedure's mean cost.
                 We changed our policy to apply these three criteria to determine
                whether procedures qualify as device-intensive in the CY 2015 OPPS/ASC
                final rule with comment period (79 FR 66926), where we stated that we
                would apply the no cost/full credit and partial credit device policy--
                which includes the three criteria listed previously--to all device-
                intensive procedures beginning in CY 2015. We reiterated this position
                in the CY 2016 OPPS/ASC final rule with comment period (80 FR 70424),
                where we explained that we were finalizing our proposal to continue
                using the three criteria established in the CY 2007 OPPS/ASC final rule
                with comment period for determining the APCs to which the CY 2016
                device intensive policy will apply. Under the policies we adopted in
                CYs 2015, 2016, and 2017, all procedures that require the implantation
                of a device and meet the previously described criteria are assigned
                device-intensive status, regardless of their APC placement.
                2. Device-Intensive Procedure Policy for CY 2019 and Subsequent Years
                 As part of our effort to better capture costs for procedures with
                significant device costs, in the CY 2019 OPPS/ASC final rule with
                comment period (83 FR 58944 through 58948), for CY 2019, we modified
                our criteria for device-intensive procedures. We had heard from
                stakeholders that the criteria excluded some procedures that
                stakeholders believed should qualify as device-intensive procedures.
                Specifically, we were persuaded by stakeholder arguments that
                procedures requiring expensive surgically inserted or implanted devices
                that are not capital equipment should qualify as device-intensive
                procedures, regardless of whether the device remains in the patient's
                body after the conclusion of the procedure. We agreed that a broader
                definition of -device-intensive procedures was warranted, and made two
                modifications to the criteria for CY 2019 (83 FR 58948). First, we
                allowed procedures that involve surgically inserted or implanted
                single-use devices that meet the device offset percentage threshold to
                qualify as device-intensive procedures, regardless of whether the
                device remains in the patient's body after the conclusion of the
                procedure. We established this policy because we no longer believe that
                whether a device remains in the patient's body should
                [[Page 63615]]
                affect a procedure's designation as a device-intensive procedure, as
                such devices could, nonetheless, comprise a large portion of the cost
                of the applicable procedure. Second, we modified our criteria to lower
                the device offset percentage threshold from 40 percent to 30 percent,
                to allow a greater number of procedures to qualify as device-intensive.
                We stated that we believe allowing these additional procedures to
                qualify for -device-intensive status will help ensure these procedures
                receive more appropriate payment in the ASC setting, which will help
                encourage the provision of these services in the ASC setting. In
                addition, we stated that this change would help to ensure that more
                procedures containing relatively high-cost devices are subject to the
                device edits, which leads to more correctly coded claims and greater
                accuracy in our claims data. Specifically, for CY 2019 and subsequent
                years, we finalized that--device-intensive procedures will be subject
                to the following criteria:
                 All procedures must involve implantable devices assigned a
                CPT or HCPCS code;
                 The required devices (including single-use devices) must
                be surgically inserted or implanted; and
                 The device offset amount must be significant, which is
                defined as exceeding 30 percent of the procedure's mean cost (83 FR
                58945).
                 In addition, to further align the device-intensive policy with the
                criteria used for device pass-through payment status, we finalized, for
                CY 2019 and subsequent years, that for purposes of satisfying the
                device-intensive criteria, a device-intensive procedure must involve a
                device that:
                 Has received FDA marketing authorization, has received an
                FDA investigational device exemption (IDE), and has been classified as
                a Category B device by FDA in accordance with Sec. Sec. 405.203
                through 405.207 and 405.211 through 405.215, or meets another
                appropriate FDA exemption from premarket review;
                 Is an integral part of the service furnished;
                 Is used for one patient only;
                 Comes in contact with human tissue;
                 Is surgically implanted or inserted (either permanently or
                temporarily); and
                 Is not either of the following:
                 (a) Equipment, an instrument, apparatus, implement, or item of the
                type for which depreciation and financing expenses are recovered as
                depreciable assets as defined in Chapter 1 of the Medicare Provider
                Reimbursement Manual (CMS Pub. 15-1); or
                 (b) A material or supply furnished incident to a service (for
                example, a suture, customized surgical kit, scalpel, or clip, other
                than a radiological site marker) (83 FR 58945).
                 In addition, for new HCPCS codes describing procedures requiring
                the implantation of devices that do not yet have associated claims
                data, in the CY 2017 OPPS/ASC final rule with comment period (81 FR
                79658), we finalized a policy for CY 2017 to apply device-intensive
                status with a default device offset set at 41 percent for new HCPCS
                codes describing procedures requiring the implantation or insertion of
                a device that did not yet have associated claims data until claims data
                are available to establish the HCPCS code-level device offset for the
                procedures. This default device offset amount of 41 percent was not
                calculated from claims data; instead, it was applied as a default until
                claims data were available upon which to calculate an actual device
                offset for the new code. The purpose of applying the 41-percent default
                device offset to new codes that describe procedures that implant or
                insert devices was to ensure ASC access for new procedures until claims
                data become available.
                 As discussed in the CY 2019 OPPS/ASC proposed rule and final rule
                with comment period (83 FR 37108 through 37109 and 58945 through 58946,
                respectively), in accordance with our policy stated previously to lower
                the device offset percentage threshold for procedures to qualify as
                device-intensive from greater than 40 percent to greater than 30
                percent, for CY 2019 and subsequent years, we modified this policy to
                apply a 31-percent default device offset to new HCPCS codes describing
                procedures requiring the implantation of a device that do not yet have
                associated claims data until claims data are available to establish the
                HCPCS code-level device offset for the procedures. In conjunction with
                the policy to lower the default device offset from 41 percent to 31
                percent, we continued our current policy of, in certain rare instances
                (for example, in the case of a very expensive implantable device),
                temporarily assigning a higher offset percentage if warranted by
                additional information such as pricing data from a device manufacturer
                (81 FR 79658). Once claims data are available for a new procedure
                requiring the implantation or insertion of a device, device-intensive
                status is applied to the code if the HCPCS code-level device offset is
                greater than 30 percent, according to our policy of determining--
                device-intensive status by calculating the HCPCS code-level device
                offset.
                 In addition, in the CY 2019 OPPS/ASC final rule with comment
                period, we clarified that since the adoption of our policy in effect as
                of CY 2018, the associated claims data used for purposes of determining
                whether or not to apply the default device offset are the associated
                claims data for either the new HCPCS code or any predecessor code, as
                described by CPT coding guidance, for the new HCPCS code. Additionally,
                for CY 2019 and subsequent years, in limited instances where a new
                HCPCS code does not have a predecessor code as defined by CPT, but
                describes a procedure that was previously described by an existing
                code, we use clinical discretion to identify HCPCS codes that are
                clinically related or similar to the new HCPCS code but are not
                officially recognized as a predecessor code by CPT, and to use the
                claims data of the clinically related or similar code(s) for purposes
                of determining whether or not to apply the default device offset to the
                new HCPCS code (83 FR 58946). Clinically related and similar procedures
                for purposes of this policy are procedures that have little or no
                clinical differences and use the same devices as the new HCPCS code. In
                addition, clinically related and similar codes for purposes of this
                policy are codes that either currently or previously describe the
                procedure described by the new HCPCS code. Under this policy, claims
                data from clinically related and similar codes are included as
                associated claims data for a new code, and where an existing HCPCS code
                is found to be clinically related or similar to a new HCPCS code, we
                apply the device offset percentage derived from the existing clinically
                related or similar HCPCS code's claims data to the new HCPCS code for
                determining the device offset percentage. We stated that we believe
                that claims data for HCPCS codes describing procedures that have minor
                differences from the procedures described by new HCPCS codes will
                provide an accurate depiction of the cost relationship between the
                procedure and the device(s) that are used, and will be appropriate to
                use to set a new code's device offset percentage, in the same way that
                predecessor codes are used. If a new HCPCS code has multiple
                predecessor codes, the claims data for the predecessor code that has
                the highest individual HCPCS-level device offset percentage is used to
                determine whether the new HCPCS code qualifies for device-intensive
                status. Similarly, in the event that a new HCPCS code does
                [[Page 63616]]
                not have a predecessor code but has multiple clinically related or
                similar codes, the claims data for the clinically related or similar
                code that has the highest individual HCPCS level device offset
                percentage is used to determine whether the new HCPCS code qualifies
                for device-intensive status.
                 As we indicated in the CY 2019 OPPS/ASC proposed rule and final
                rule with comment period, additional information for our consideration
                of an offset percentage higher than the default of 31 percent for new
                HCPCS codes describing procedures requiring the implantation (or, in
                some cases, the insertion) of a device that do not yet have associated
                claims data, such as pricing data or invoices from a device
                manufacturer, should be directed to the Division of Outpatient Care,
                Mail Stop C4-01-26, Centers for Medicare & Medicaid Services, 7500
                Security Boulevard, Baltimore, MD 21244-1850, or electronically at
                [email protected] Additional information can be submitted
                prior to issuance of an OPPS/ASC proposed rule or as a public comment
                in response to an issued OPPS/ASC proposed rule. Device offset
                percentages will be set in each year's final rule.
                 As discussed in section X.E of the CY 2022 OPPS/ASC proposed rule
                (86 FR 42188 through 42190), given our concerns regarding CY 2020 data
                as a result of the COVID-PHE, we proposed to use CY 2019 claims data to
                establish CY 2022 prospective rates. While we continue to believe CY
                2019 represents the best full year of claims data for ratesetting, we
                believe our policy of temporarily assigning a higher offset percentage
                if warranted by additional information would provide a more accurate
                device offset percentage for certain procedures. Specifically, for
                procedures that were assigned device-intensive status, but were
                assigned a default device offset percentage of 31 percent or a device
                offset percentage based on claims from a clinically-similar code in the
                absence of CY 2019 claims data, we proposed to assign a device offset
                percentage for such procedures based on CY 2020 data if CY 2020 claims
                information is available. While we believe that CY 2019 claims data is
                a better basis for CY 2022 OPPS rates overall, because we have
                specifically noted that we would consider using more recent data than
                the data available for ratesetting in a given year to determine device
                offset percentages for services that do not have any claims data in the
                year used for ratesetting, we believe it would be consistent with this
                policy for us to use CY 2020 claims data to determine the device offset
                percentage for services that meet the above criteria.
                 For CY 2022, our proposal would assign device offset percentages
                using CY 2020 claims data to the following 11 procedures:
                 0266T (Implantation or replacement of carotid sinus
                baroreflex activation device; total system (includes generator
                placement, unilateral or bilateral lead placement, intra-operative
                interrogation, programming, and repositioning, when performed));
                 0414T (Removal and replacement of permanent cardiac
                contractility modulation system pulse generator only);
                 0511T (Removal and reinsertion of sinus tarsi implant);
                 0587T (Percutaneous implantation or replacement of
                integrated single device neurostimulation system including electrode
                array and receiver or pulse generator, including analysis, programming,
                and imaging guidance when performed, posterior tibial nerve);
                 0600T (Ablation, irreversible electroporation; 1 or more
                tumors per organ, including imaging guidance, when performed,
                percutaneous);
                 0614T (Removal and replacement of substernal implantable
                defibrillator pulse generator);
                 66987 (Extracapsular cataract removal with insertion of
                intraocular lens prosthesis (1-stage procedure), manual or mechanical
                technique (for example, irrigation and aspiration or
                phacoemulsification), complex, requiring devices or techniques not
                generally used in routine cataract surgery (for example, iris ansion
                device, suture support for intraocular lens, or primary posterior
                capsulorrhexis) or performed on patients in the amblyogenic
                developmental stage; with endoscopic cyclophotocoagulation);
                 66988 (Extracapsular cataract removal with insertion of
                intraocular lens prosthesis (1 stage procedure), manual or mechanical
                technique (for example, irrigation and aspiration or
                phacoemulsification); with endoscopic cyclophotocoagulation);
                 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);
                 C9765 (Revascularization, endovascular, open or
                percutaneous, lower extremity artery(ies), except tibial/peroneal; with
                intravascular lithotripsy, and transluminal stent placement(s),
                includes angioplasty within the same vessel(s), when performed); and
                 C9767 (Revascularization, endovascular, open or
                percutaneous, lower extremity artery(ies), except tibial/peroneal; with
                intravascular lithotripsy and transluminal stent placement(s), and
                atherectomy, includes angioplasty within the same vessel(s), when
                performed).
                 Comment: Many commenters supported our proposal to establish the CY
                2022 device offset percentage using CY 2020 claims data for device-
                intensive procedures with no claims in the CY 2019 claims data. One
                commenter requested that we use CY 2020 claims where CY 2020 claims
                volume is greater than CY 2019 claims volume. Another commenter
                requested that we apply the greater of the device offset percentage
                when comparing CY 2019 claims with CY 2020 claims.
                 Response: We thank the commenters for their support. We are not
                accepting the recommendation to apply data from CY 2020 claims where CY
                2020 claims volume is greater than CY 2019 claims volume or to apply
                the greater of the device offset percentage when comparing CY 2019
                claims with CY 2020 claims. Specifically, as discussed in section X.E
                of this final rule with comment period, we continue to believe CY 2019
                represents the best full year of claims data for ratesetting.
                Therefore, we believe our proposal provides a more accurate device
                offset percentage only for certain device-intensive procedures that had
                no claims data in CY 2019 and for which the device offset percentage
                would otherwise be based on the default percentage or a similar
                procedure code's device offset percentage. Comment: Many commenters
                requested that we set the device offset percentage for several new
                procedures using the predecessor code's device offset percentage based
                on CY 2019 claims data. These procedures include:
                 The predecessor CPT code 0191T in assigning the device
                offset percentage for CPT code 66989 (Extracapsular cataract removal
                with insertion of intraocular lens prosthesis (1-stage procedure),
                manual or mechanical technique (for example, irrigation and aspiration
                or phacoemulsification), complex, requiring devices or techniques not
                generally used in routine cataract surgery (for example, iris expansion
                device, suture support for intraocular lens, or primary posterior
                capsulorrhexis) or performed on patients in the amblyogenic
                developmental stage; with insertion of intraocular (for example,
                trabecular
                [[Page 63617]]
                meshwork, supraciliary, suprachoroidal) anterior segment aqueous
                drainage device, without extraocular reservoir, internal approach, one
                or more);
                 The predecessor CPT code 0191T in assigning the device
                offset percentage for CPT code 66991 (Extracapsular cataract removal
                with insertion of intraocular lens prosthesis (1 stage procedure),
                manual or mechanical technique (for example, irrigation and aspiration
                or phacoemulsification); with insertion of intraocular (for example,
                trabecular meshwork, supraciliary, suprachoroidal) anterior segment
                aqueous drainage device, without extraocular reservoir, internal
                approach, one or more);
                 The predecessor CPT code 0191T in assigning the device
                offset percentage for CPT code 0671T (Insertion of anterior segment
                aqueous drainage device into the trabecular meshwork, without external
                reservoir, and without concomitant cataract removal, one or more);
                 The predecessor CPT code 0548T in assigning the device
                offset percentage for CPT code 53451 (Periurethral transperineal
                adjustable balloon continence device; bilateral insertion, including
                cystourethroscopy and imaging guidance);
                 The predecessor CPT code 0549T in assigning the device
                offset percentage for CPT code 53452 (Periurethral transperineal
                adjustable balloon continence device; unilateral insertion, including
                cystourethroscopy and imaging guidance); and
                 The predecessor HCPCS code C9752 in assigning the device
                offset percentage for CPT code 64628 (Thermal destruction of
                intraosseous basivertebral nerve, including all imaging guidance; first
                2 vertebral bodies, lumbar or sacral).
                 Additionally, at the August 23, 2021 HOP Panel Meeting, a presenter
                requested that we use the predecessor CPT code 64568 in assigning the
                device offset percentage for CPT code 64582 (Open implantation of
                hypoglossal nerve neurostimulator array, pulse generator, and distal
                respiratory sensor electrode or electrode array). Based on the
                information presented at the meeting, the HOP Panel recommended we use
                CPT code 64568 to assign the device offset percentage for CPT code
                64582.
                 Response: We agree with the commenters and the HOP Panel's
                recommendation. We note that we inadvertently did not apply the device
                offset percentage to several new HCPCS codes where claims data for a
                predecessor code was available. Therefore, we are revising the device
                offset percentage for these procedures for this final rule with comment
                period using CY 2019 claims data from these procedures' predecessor
                codes.
                 Comment: A number of commenters recommended we assign device-
                intensive status to 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 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)).
                 Response: We appreciate the commenters' recommendation. As we
                stated in the CY 2022 OPPS/ASC proposed rule (86 FR 42113), we
                finalized, for CY 2019 and subsequent years, that for purposes of
                satisfying the device-intensive criteria, a device-intensive procedure
                must involve a device that ``has received FDA marketing authorization,
                has received an FDA investigational device exemption (IDE), and has
                been classified as a Category B device by FDA in accordance with
                Sec. Sec. 405.203 through 405.207 and 405.211 through 405.215, or
                meets another appropriate FDA exemption from premarket review.'' The
                products involved when reporting CPT code 0627T and 0630T that the
                commenter believed should necessitate a device intensive designation do
                not meet this requirement. Therefore, we are not accepting the
                commenters' recommendations and are not granting device-intensive
                status to these codes.
                 Comment: One commenter requested that we assign HCPCS code C9778
                (Colpopexy, vaginal; minimally invasive extra-peritoneal approach
                (sacrospinous)) device-intensive status as this procedure meets our
                device-intensive criteria.
                 Response: After further review, we agree with the commenter that
                HCPCS code C9778 meets our criteria for device-intensive status. We are
                accepting the commenter's recommendation and assigning a default device
                offset percentage of 31 percent to HCPCS code C9778 for CY 2022.
                 Comment: One commenter recommended assigning CPT code 66179
                (Aqueous shunt to extraocular equatorial plate reservoir, external
                approach; without graft) as device-intensive as the procedure's device
                offset percentage is 32.78 percent in Addendum P to the CY 2022 OPPS/
                ASC proposed rule, which exceeds our 30-percent threshold for device-
                intensive status.
                 Response: We have reviewed this procedure code with our medical
                officers and have determined that this procedure satisfies all of our
                device-intensive criteria. In particular, we agree with the commenter
                that this procedure involves an implantable single-use device and that
                the device meets the requirements for the procedure to receive device-
                intensive assignment.
                 Comment: Commenters requested that we assign device-intensive
                status to:
                 CPT code 0499T (Cystourethroscopy, with mechanical
                dilation and urethral therapeutic drug delivery for urethral stricture
                or stenosis, including fluoroscopy, when performed);
                 CPT code 58674 (Laparoscopy, surgical, ablation of uterine
                fibroid(s) including intraoperative ultrasound guidance and monitoring,
                radiofrequency);
                 CPT code 50590 (Lithotripsy, extracorporeal shock wave);
                 CPT code 59200 (Insertion of cervical dilator (e.g.,
                laminaria, prostaglandin) (separate procedure));
                 CPT code 66174 (Transluminal dilation of aqueous outflow
                canal; without retention of device or stent);
                 CPT code 66175 (Transluminal dilation of aqueous outflow
                canal; with retention of device or stent);
                 CPT code 93571 (Intravascular doppler velocity and/or
                pressure derived coronary flow reserve measurement (coronary vessel or
                graft) during coronary angiography including pharmacologically induced
                stress; initial vessel (list separately in addition to code for primary
                procedure); and
                 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).
                 Response: Based on CY 2019 claims data available for this final
                rule with comment period, the procedures requested by commenters do not
                have device offset percentages that exceed the 30-percent threshold
                required for device-intensive status and, therefore, are not eligible
                to be assigned device-intensive status under the OPPS.
                 Comment: Some commenters submitted invoices and requested a greater
                device offset amount and greater device offset percentage to reflect
                the invoice price of a particular device.
                [[Page 63618]]
                Other commenters also recommended utilizing invoice prices to establish
                device offset percentages for procedures with low or no claims volume
                or to correct situations commenters contend reflect underreported
                device costs attributable to hospital confusion when reporting HCPCS
                code C1889 (Implantable/insertable device, not otherwise classified).
                 Response: While we appreciate the recommendations and additional
                information submitted by commenters, we are not applying the invoice
                prices submitted by commenters to establish the device offset amount
                and device offset percentage for these procedures. None of the invoice
                prices that were submitted suggest that we should apply our policy of
                temporarily applying a higher device offset percentage if warranted by
                additional information. As we have stated in previous rulemaking (85 FR
                86015), this policy of temporarily assigning a higher device offset
                percentage should be applied in rare instances, such as using CY 2020
                claims data in light of the COVID-19 PHE or where a device has an
                extremely abnormal cost and, in the absence of claims data, may be
                significantly underpaid under our policy to apply a default device
                offset percentage for the procedure that involves such device.
                 Additionally, it would be inappropriate to apply a higher device
                offset percentage or increase the payment rate in the ASC setting
                simply because a device's invoice price is greater than the procedure's
                device offset amount. Our packaging policies are intended to promote
                the efficient use of resources both in the HOPD as well as ASC setting
                and these policies include the packaging of medical devices. While we
                provide separate transitional pass-through payments for devices for the
                cost of devices approved for transitional pass-through status, as we
                stated previously, the intent of transitional pass-through status for
                devices is to facilitate access for beneficiaries to the advantages of
                truly innovative devices by allowing for adequate payment for these new
                devices while the necessary cost data is collected. We believe it would
                be inappropriate to provide a similar method of calculating payment
                solely based on a device's cost or invoice price for devices that are
                not approved for transitional pass-through status.
                 Lastly, we have heard concerns from stakeholders regarding
                hospitals' coding decisions for particular devices. Specifically,
                stakeholders have contended that hospitals do not report HCPCS code
                C1889 for a particular insertable device as the NUBC billing guidelines
                recommend that such HCPCS code crosswalk to revenue code 0278--Other
                Implants--and this revenue code would be inappropriate for the costs
                attributable to devices that are insertable and not implantable. While
                we understand stakeholder concerns regarding accurate device cost
                reporting, we expect hospitals to adhere to the guidelines of correct
                coding and append the correct device code to the claim when applicable.
                However, while we do not believe additional guidance from CMS or
                adjustment to the device offset calculation to exclude certain claims
                is warranted at this time, we will continue to monitor this issue going
                forward.
                 After reviewing the public comments we received, we are finalizing
                our proposal to assign a device offset percentage based on CY 2020 data
                if CY 2020 claims information is available, for procedures that were
                assigned device-intensive status, but, because CY 2019 claims data is
                not available, would otherwise be assigned a default device offset
                percentage of 31 percent or a device offset percentage based on claims
                from a clinically-similar code. Based on updated data for this CY 2022
                OPPS/ASC final rule with comment period, we are applying device offset
                percentages from 2020 claims data to 14 procedures. These include the
                11 procedures described previously plus three additional procedures
                that were assigned default device offset percentages for CY 2021 and
                have available device offset percentages from CY 2020 claims data:
                 CPT code 0519T (Removal and replacement of wireless
                cardiac stimulator for left ventricular pacing; pulse generator
                component(s) (battery and/or transmitter));
                 CPT code 0618T (Insertion of iris prosthesis, including
                suture fixation and repair or removal of iris, when performed; with
                secondary intraocular lens placement or intraocular lens exchange); and
                 HCPCS code C9761 (Cystourethroscopy, with ureteroscopy
                and/or pyeloscopy, with lithotripsy (ureteral catheterization is
                included) and vacuum aspiration of the kidney, collecting system and
                urethra if applicable).
                 Additionally, in this final rule with comment period, we are
                correcting the device offset percentages for several new device-
                intensive procedures to reflect available claims data from predecessor
                codes.
                 The full listing of the final CY 2022 device-intensive procedures
                can be found in Addendum P to the CY 2022 OPPS/ASC final rule with
                comment period (which is available via the internet on the CMS
                website). Further, our claims accounting narrative contains a
                description of our device offset percentage calculation. Our claims
                accounting narrative for this final rule with comment period can be
                found under supporting documentation for the CY 2022 OPPS/ASC final
                rule on our website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
                3. Device Edit Policy
                 In the CY 2015 OPPS/ASC final rule with comment period (79 FR
                66795), we finalized a policy and implemented claims processing edits
                that require any of the device codes used in the previous device-to-
                procedure edits to be present on the claim whenever a procedure code
                assigned to any of the APCs listed in Table 5 of the CY 2015 OPPS/ASC
                final rule with comment period (the CY 2015 device-dependent APCs) is
                reported on the claim. In addition, in the CY 2016 OPPS/ASC final rule
                with comment period (80 FR 70422), we modified our previously existing
                policy and applied the device coding requirements exclusively to
                procedures that require the implantation of a device that are assigned
                to a device-intensive APC. In the CY 2016 OPPS/ASC final rule with
                comment period, we also finalized our policy that the claims processing
                edits are such that any device code, when reported on a claim with a
                procedure assigned to a device-intensive APC (listed in Table 42 of the
                CY 2016 OPPS/ASC final rule with comment period (80 FR 70422)) will
                satisfy the edit.
                 In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79658
                through 79659), we changed our policy for CY 2017 and subsequent years
                to apply the CY 2016 device coding requirements to the newly defined
                device-intensive procedures. For CY 2017 and subsequent years, we also
                specified that any device code, when reported on a claim with a--
                device-intensive procedure, will satisfy the edit. In addition, we
                created HCPCS code C1889 to recognize devices furnished during a
                device-intensive procedure that are not described by a specific Level
                II HCPCS Category C-code. Reporting HCPCS code C1889 with a device-
                intensive procedure will satisfy the edit requiring a device code to be
                reported on a claim with a device-intensive procedure. In the CY 2019
                OPPS/ASC final rule with comment period, we revised the description of
                HCPCS code C1889 to remove the specific applicability to device-
                intensive procedures (83 FR 58950). For CY 2019 and subsequent years,
                the description of
                [[Page 63619]]
                HCPCS code C1889 is ``Implantable/insertable device, not otherwise
                classified''.
                 We did not propose any changes to this policy for CY 2022.
                 Comment: Some commenters recommended that we reinstate specific
                device-to-procedure edits. One commenter recommended we reinstate
                specific device-to-procedure edits for arthroplasty procedures and
                another commenter recommended we reinstate specific device edits for C-
                code device-intensive procedures. One commenter contended that the
                removal of specific device-to-procedure edits has contributed to
                erosion in accuracy in the data highlighted by certain procedures
                having device offset percentages that are nearly 100 percent of the
                procedures' costs.
                 Response: As we stated in the CY 2015 OPPS/ASC final rule with
                comment period (79 FR 66794), we continue to believe that the
                elimination of device-to-procedure edits and procedure-to-device edits
                is appropriate due to the experience hospitals now have in coding and
                reporting these claims fully. More specifically, for the most costly
                devices, we believe the C-APCs reliably reflect the cost of the device
                if charges for the device are included anywhere on the claim. We note
                that, under our current policy, hospitals are still expected to adhere
                to the guidelines of correct coding and append the correct device code
                to the claim when applicable. We also note that, as with all other
                items and services recognized under the OPPS, we expect hospitals to
                code and report their costs appropriately, regardless of whether there
                are claims processing edits in place.
                 Additionally, we have not observed any increase in frequency of
                procedures with device offset percentages that are nearly 100 percent;
                and we do not believe the absence of device-to-procedure edits has
                precipitated an erosion in accuracy of our device cost statistics.
                Procedures with extremely significant device offset percentages of
                greater than 90 percent can be attributed to procedures with little
                claims volume as well as extremely significant device costs and not the
                absence of device-to-procedure edits. Therefore, we are not accepting
                the commenters' recommendations to reinstate device-to-procedure edits.
                4. Adjustment to OPPS Payment for No Cost/Full Credit and Partial
                Credit Devices
                a. Background
                 To ensure equitable OPPS payment when a hospital receives a device
                without cost or with full credit, in CY 2007, we implemented a policy
                to reduce the payment for specified device-dependent APCs by the
                estimated portion of the APC payment attributable to device costs (that
                is, the device offset) when the hospital receives a specified device at
                no cost or with full credit (71 FR 68071 through 68077). Hospitals were
                instructed to report no cost/full credit device cases on the claim
                using the ``FB'' modifier on the line with the procedure code in which
                the no cost/full credit device is used. In cases in which the device is
                furnished without cost or with full credit, hospitals were instructed
                to report a token device charge of less than $1.01. In cases in which
                the device being inserted is an upgrade (either of the same type of
                device or to a different type of device) with a full credit for the
                device being replaced, hospitals were instructed to report as the
                device charge the difference between the hospital's usual charge for
                the device being implanted and the hospital's usual charge for the
                device for which it received full credit. In CY 2008, we expanded this
                payment adjustment policy to include cases in which hospitals receive
                partial credit of 50 percent or more of the cost of a specified device.
                Hospitals were instructed to append the ``FC'' modifier to the
                procedure code that reports the service provided to furnish the device
                when they receive a partial credit of 50 percent or more of the cost of
                the new device. We refer readers to the CY 2008 OPPS/ASC final rule
                with comment period for more background information on the ``FB'' and
                ``FC'' modifiers payment adjustment policies (72 FR 66743 through
                66749).
                 In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75005
                through 75007), beginning in CY 2014, we modified our policy of
                reducing OPPS payment for specified APCs when a hospital furnishes a
                specified device without cost or with a full or partial credit. For CY
                2013 and prior years, our policy had been to reduce OPPS payment by 100
                percent of the device offset amount when a hospital furnishes a
                specified device without cost or with a full credit and by 50 percent
                of the device offset amount when the hospital receives partial credit
                in the amount of 50 percent or more of the cost for the specified
                device. For CY 2014, we reduced OPPS payment, for the applicable APCs,
                by the full or partial credit a hospital receives for a replaced
                device. Specifically, under this modified policy, hospitals are
                required to report on the claim the amount of the credit in the amount
                portion for value code ``FD'' (Credit Received from the Manufacturer
                for a Replaced Device) when the hospital receives a credit for a
                replaced device that is 50 percent or greater than the cost of the
                device. For CY 2014, we also limited the OPPS payment deduction for the
                applicable APCs to the total amount of the device offset when the
                ``FD'' value code appears on a claim. For CY 2015, we continued our
                policy of reducing OPPS payment for specified APCs when a hospital
                furnishes a specified device without cost or with a full or partial
                credit and to use the three criteria established in the CY 2007 OPPS/
                ASC final rule with comment period (71 FR 68072 through 68077) for
                determining the APCs to which our CY 2015 policy will apply (79 FR
                66872 through 66873). In the CY 2016 OPPS/ASC final rule with comment
                period (80 FR 70424), we finalized our policy to no longer specify a
                list of devices to which the OPPS payment adjustment for no cost/full
                credit and partial credit devices would apply and instead apply this
                APC payment adjustment to all replaced devices furnished in conjunction
                with a procedure assigned to a device-intensive APC when the hospital
                receives a credit for a replaced specified device that is 50 percent or
                greater than the cost of the device.
                b. Policy for No Cost/Full Credit and Partial Credit Devices
                 In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79659
                through 79660), for CY 2017 and subsequent years, we finalized a policy
                to reduce OPPS payment for device-intensive procedures, by the full or
                partial credit a provider receives for a replaced device, when a
                hospital furnishes a specified device without cost or with a full or
                partial credit. Under our current policy, hospitals continue to be
                required to report on the claim the amount of the credit in the amount
                portion for value code ``FD'' when the hospital receives a credit for a
                replaced device that is 50 percent or greater than the cost of the
                device.
                 In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75005
                through 75007), we adopted a policy of reducing OPPS payment for
                specified APCs when a hospital furnishes a specified device without
                cost or with a full or partial credit by the lesser of the device
                offset amount for the APC or the
                [[Page 63620]]
                amount of the credit. We adopted this change in policy in the preamble
                of the CY 2014 OPPS/ASC final rule with comment period and discussed it
                in subregulatory guidance, including Chapter 4, Section 61.3.6 of the
                Medicare Claims Processing Manual. Further, in the CY 2021 OPPS/ASC
                final rule with comment period (85 FR 86017 through 86018, 86302), we
                made conforming changes to our regulations at Sec. 419.45(b)(1) and
                (2) that codified this policy.
                 We did not propose any changes and we did not receive any public
                comments related to our policies regarding payment for no cost/full
                credit and partial credit devices in CY 2022.
                5. Payment Policy for Low-Volume Device-Intensive Procedures
                 In CY 2016, we used our equitable adjustment authority under
                section 1833(t)(2)(E) of the Act and used the median cost (instead of
                the geometric mean cost per our standard methodology) to calculate the
                payment rate for the implantable miniature telescope procedure
                described by CPT code 0308T (Insertion of ocular telescope prosthesis
                including removal of crystalline lens or intraocular lens prosthesis),
                which is the only code assigned to APC 5494 (Level 4 Intraocular
                Procedures) (80 FR 70388). We noted that, as stated in the CY 2017
                OPPS/ASC proposed rule (81 FR 45656), we proposed to reassign the
                procedure described by CPT code 0308T to APC 5495 (Level 5 Intraocular
                Procedures) for CY 2017, but it would be the only procedure code
                assigned to APC 5495. The payment rates for a procedure described by
                CPT code 0308T (including the predecessor HCPCS code C9732) were
                $15,551 in CY 2014, $23,084 in CY 2015, and $17,551 in CY 2016. The
                procedure described by CPT code 0308T is a high-cost device-intensive
                surgical procedure that has a very low volume of claims (in part
                because most of the procedures described by CPT code 0308T are
                performed in ASCs). We believe that the median cost is a more
                appropriate measure of the central tendency for purposes of calculating
                the cost and the payment rate for this procedure because the median
                cost is impacted to a lesser degree than the geometric mean cost by
                more extreme observations. We stated that, in future rulemaking, we
                would consider proposing a general policy for the payment rate
                calculation for very low-volume device-intensive APCs (80 FR 70389).
                 For CY 2017, we proposed and finalized a payment policy for low-
                volume device-intensive procedures that is similar to the policy
                applied to the procedure described by CPT code 0308T in CY 2016. In the
                CY 2017 OPPS/ASC final rule with comment period (81 FR 79660 through
                79661), we established our current policy that the payment rate for any
                device-intensive procedure that is assigned to a clinical APC with
                fewer than 100 total claims for all procedures in the APC be calculated
                using the median cost instead of the geometric mean cost, for the
                reasons described previously for the policy applied to the procedure
                described by CPT code 0308T in CY 2016. For CYs 2019 through 2021, we
                continued our policy of establishing the payment rate for any device-
                intensive procedure that is assigned to a clinical APC with fewer than
                100 total claims for all procedures in the APC by using the median cost
                instead of the geometric mean (85 FR 86019).
                 As discussed in further detail in Section X.C of the CY 2022 OPPS/
                ASC proposed rule (86 FR 42181 through 42185), we proposed to establish
                a universal low volume APC policy for clinical APCs, brachytherapy
                APCs, and New Technology APCs with fewer than 100 single claims in the
                claims data used for ratesetting (for CY 2022 rates, this is proposed
                to be the CY 2019 claim data). For APCs designated as low volume APCs
                (those with fewer than 100 single claims in the claims year) under our
                proposed policy, we proposed to establish a payment rate using the
                highest of the median cost, arithmetic mean cost, or the geometric mean
                cost. In conjunction with our new, broader low volume APC proposal for
                clinical APCs, brachytherapy APCs, and New Technology APCs, we proposed
                to eliminate our payment policy for low-volume device-intensive
                procedures for CY 2022 and subsequent calendar years. Currently, CPT
                code 0308T is the only code subject to our low-volume device-intensive
                policy. Given that our proposed universal low volume APC policy would
                utilize a greater number of claims and provide additional cost metric
                alternatives for ratesetting than our existing low-volume device-
                intensive policy, we believe that the cost and ratesetting issues
                previously discussed with respect to CPT code 0308T would be
                appropriately addressed under our broader universal low volume APC
                proposal.
                 We did not receive any public comments on our proposal to eliminate
                our payment policy for low-volume device-intensive procedures and
                address low-volume, device-intensive procedures through our broader
                proposal to designate low volume APCs among eligible clinical APCs,
                brachytherapy APCs, and New Technology APCs and we are finalizing our
                proposal without modification. Public comments related to our proposed
                Low Volume APC policy are discussed in section X.C (Low Volume Policy
                for Clinical and Brachytherapy APCs) of this final rule with comment
                period.
                V. OPPS Payment Changes for Drugs, Biologicals, and
                Radiopharmaceuticals
                A. OPPS Transitional Pass-Through Payment for Additional Costs of
                Drugs, Biologicals, and Radiopharmaceuticals
                1. Background
                 Section 1833(t)(6) of the Act provides for temporary additional
                payments or ``transitional pass-through payments'' for certain drugs
                and biologicals. Throughout the proposed rule, the term ``biological''
                is used because this is the term that appears in section 1861(t) of the
                Act. A ``biological'' as used in the proposed rule includes (but is not
                necessarily limited to) a ``biological product'' or a ``biologic'' as
                defined under section 351 of the PHS Act. As enacted by the Medicare,
                Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 (BBRA) (Pub.
                L. 106-113), this pass-through payment provision requires the Secretary
                to make additional payments to hospitals for: current orphan drugs for
                rare diseases and conditions, as designated under section 526 of the
                Federal Food, Drug, and Cosmetic Act; current drugs and biologicals and
                brachytherapy sources used in cancer therapy; and current
                radiopharmaceutical drugs and biologicals. ``Current'' refers to those
                types of drugs or biologicals mentioned above that are hospital
                outpatient services under Medicare Part B for which transitional pass-
                through payment was made on the first date the hospital OPPS was
                implemented.
                 Transitional pass-through payments also are provided for certain
                ``new'' drugs and biologicals that were not being paid for as an HOPD
                service as of December 31, 1996, and whose cost is ``not
                insignificant'' in relation to the OPPS payments for the procedures or
                services associated with the new drug or biological. For pass-through
                payment purposes, radiopharmaceuticals are included as ``drugs.'' As
                required by statute, transitional pass-through payments for a drug or
                biological described in section 1833(t)(6)(C)(i)(II) of the Act can be
                made for a period of at least 2 years, but not more than 3 years, after
                the payment was first made for the drug as a hospital outpatient
                service under Medicare Part B. Proposed CY 2022 pass-through drugs and
                [[Page 63621]]
                biologicals and their designated APCs are assigned status indicator
                ``G'' in Addenda A and B to the proposed rule (which are available via
                the internet on the CMS website).
                 Section 1833(t)(6)(D)(i) of the Act specifies that the pass-through
                payment amount, in the case of a drug or biological, is the amount by
                which the amount determined under section 1842(o) of the Act for the
                drug or biological exceeds the portion of the otherwise applicable
                Medicare OPD fee schedule that the Secretary determines is associated
                with the drug or biological. The methodology for determining the pass-
                through payment amount is set forth in regulations at 42 CFR 419.64.
                These regulations specify that the pass-through payment equals the
                amount determined under section 1842(o) of the Act minus the portion of
                the APC payment that CMS determines is associated with the drug or
                biological.
                 Section 1847A of the Act establishes the average sales price (ASP)
                methodology, which is used for payment for drugs and biologicals
                described in section 1842(o)(1)(C) of the Act furnished on or after
                January 1, 2005. The ASP methodology, as applied under the OPPS, uses
                several sources of data as a basis for payment, including the ASP, the
                wholesale acquisition cost (WAC), and the average wholesale price
                (AWP). In the proposed rule, the term ``ASP methodology'' and ``ASP-
                based'' are inclusive of all data sources and methodologies described
                therein. Additional information on the ASP methodology can be found on
                our website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/index.html.
                 The pass-through application and review process for drugs and
                biologicals is described on our website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/passthrough_payment.html.
                2. Transitional Pass-Through Payment Period for Pass-Through Drugs,
                Biologicals, and Radiopharmaceuticals and Quarterly Expiration of Pass-
                Through Status
                 As required by statute, transitional pass-through payments for a
                drug or biological described in section 1833(t)(6)(C)(i)(II) of the Act
                can be made for a period of at least 2 years, but not more than 3
                years, after the payment was first made for the drug or biological as a
                hospital outpatient service under Medicare Part B. Our current policy
                is to accept pass-through applications on a quarterly basis and to
                begin pass-through payments for newly approved pass-through drugs and
                biologicals on a quarterly basis through the next available OPPS
                quarterly update after the approval of a drug's or biological's pass-
                through status. However, prior to CY 2017, we expired pass-through
                status for drugs and biologicals on an annual basis through notice-and-
                comment rulemaking (74 FR 60480). In the CY 2017 OPPS/ASC final rule
                with comment period (81 FR 79662), we finalized a policy change,
                beginning with pass-through drugs and biologicals newly approved in CY
                2017 and subsequent calendar years, to allow for a quarterly expiration
                of pass-through payment status for drugs, biologicals, and
                radiopharmaceuticals to afford a pass-through payment period that is as
                close to a full 3 years as possible for all pass-through drugs,
                biologicals, and radiopharmaceuticals.
                 This change eliminated the variability of the pass-through payment
                eligibility period, which previously varied based on when a particular
                application was initially received. We adopted this change for pass-
                through approvals beginning on or after CY 2017, to allow, on a
                prospective basis, for the maximum pass-through payment period for each
                pass-through drug without exceeding the statutory limit of 3 years.
                Notice of drugs whose pass-through payment status is ending during the
                calendar year will continue to be included in the quarterly OPPS Change
                Request transmittals.
                 Comment: One commenter commended CMS for continuing the policy to
                provide for quarterly expiration of pass-through payment status, which
                allows a pass-through period that is as close to a full 3 years as
                possible.
                 Response: We thank the commenter for their input and support of
                this policy, which was adopted in the CY 2017 OPPS/ASC final rule (81
                FR 79654 through 79655).
                3. Drugs and Biologicals With Expiring Pass-Through Payment Status in
                CY 2021
                 There are 25 drugs and biologicals whose pass-through payment
                status will expire during CY 2021, as listed in Table 37. Most of these
                drugs and biologicals will have received OPPS pass-through payment for
                3 years during the period of April 1, 2018, through December 31, 2021.
                In accordance with the policy finalized in CY 2017 and described
                earlier, pass-through payment status for drugs and biologicals newly
                approved in CY 2017 and subsequent years will expire on a quarterly
                basis, with a pass-through payment period as close to 3 years as
                possible. With the exception of those groups of drugs and biologicals
                that are always packaged when they do not have pass-through payment
                status (specifically, anesthesia drugs; drugs, biologicals, and
                radiopharmaceuticals that function as supplies when used in a
                diagnostic test or procedure (including diagnostic
                radiopharmaceuticals, contrast agents, and stress agents); and drugs
                and biologicals that function as supplies when used in a surgical
                procedure), our standard methodology for providing payment for drugs
                and biologicals with expiring pass-through payment status in an
                upcoming calendar year is to determine the product's estimated per day
                cost and compare it with the OPPS drug packaging threshold for that
                calendar year (which is proposed to be $130 for CY 2022), as discussed
                further in section V.B.1. of the CY 2022 OPPS/ASC proposed rule (86 FR
                42127 through 42148). We proposed that if the estimated per day cost
                for the drug or biological is less than or equal to the applicable OPPS
                drug packaging threshold, we would package payment for the drug or
                biological into the payment for the associated procedure in the
                upcoming calendar year. If the estimated per day cost of the drug or
                biological is greater than the OPPS drug packaging threshold, we
                proposed to provide separate payment at the applicable ASP-based
                payment amount (which is proposed at ASP+6 percent for non-340B drugs
                for CY 2022, as discussed further in section V.B.2. of the CY 2022
                OPPS/ASC proposed rule (86 FR 42132).
                 We did not receive any public comments regarding our proposals.
                Therefore, we are adopting these proposals as final for CY 2022 without
                modification. Refer to Table 37 for the list of drugs and biologicals
                for which pass-through payment status will expire between March 31,
                2021 and December 31, 2021. The packaged or separately payable status
                of each of these drugs or biologicals is listed in Addendum B of the CY
                2022 OPPS/ASC final rule (which is available via the internet on the
                CMS website).
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                4. Drugs, Biologicals, and Radiopharmaceuticals With Pass-Through
                Payment Status Expiring in CY 2022
                 We proposed to end pass-through payment status in CY 2022 for 26
                drugs and biologicals. These drugs and biologicals, which were approved
                for pass-through payment status between April 1, 2019, and January 1,
                2020, are listed in Table 28 of the CY 2022 OPPS/ASC proposed rule (86
                FR 42121 through 42122). The APCs and HCPCS codes for these drugs and
                biologicals, which have pass-through payment status that will end by
                December 31, 2022, are assigned status indicator ``G'' in Addenda A and
                B to the CY 2022 OPPS/ASC proposed rule (which are available via the
                internet on the CMS website).
                 Section 1833(t)(6)(D)(i) of the Act sets the amount of pass-through
                payment for pass-through drugs and biologicals (the pass-through
                payment amount) as the difference between the amount authorized under
                section 1842(o) of the Act and the portion of the otherwise applicable
                OPD fee schedule that the Secretary determines is associated with the
                drug or biological. For 2022, we proposed to continue to pay for pass-
                through drugs and biologicals at ASP+6 percent, equivalent to the
                payment rate these drugs and biologicals would receive in the
                physician's office setting in CY 2022. We proposed that a $0 pass-
                through payment amount would be paid for pass-through drugs and
                biologicals that are not policy-packaged as described in section
                V.B.1.c. (86 FR 42120) under the CY 2022 OPPS because the difference
                between the amount authorized under section 1842(o) of the Act, which
                is proposed at ASP+6 percent, and the portion of the otherwise
                applicable OPD fee schedule that the Secretary determines is
                appropriate, which is proposed at ASP+6 percent, is $0.
                 In the case of policy-packaged drugs (which include the following:
                Anesthesia drugs; drugs, biologicals, and radiopharmaceuticals that
                function as supplies when used in a diagnostic test or procedure
                (including contrast agents, diagnostic radiopharmaceuticals, and stress
                agents); and drugs and biologicals that function as supplies when used
                in a surgical procedure), we proposed that their pass-through payment
                amount would be equal to ASP+6 percent for CY 2022 minus a payment
                offset for the portion of the otherwise applicable OPD fee schedule
                that the Secretary determines is associated with the drug or biological
                as described in section V.A.6. of the CY 2022 OPPS/ASC proposed rule
                (86 FR 42126). We proposed this policy because, if not for the pass-
                through payment status of these policy-packaged products, payment for
                these products would be packaged into the associated procedure.
                 We proposed to continue to update pass-through payment rates on a
                quarterly basis on the CMS website during CY 2022 if later quarter ASP
                submissions (or more recent WAC or AWP information, as applicable)
                indicate that adjustments to the payment rates for these pass-through
                payment drugs or biologicals are necessary. For a full description of
                this policy, we refer readers to the CY 2006 OPPS/ASC final rule with
                comment period (70 FR 68632 through 68635).
                 For CY 2022, consistent with our CY 2021 policy for diagnostic and
                therapeutic radiopharmaceuticals, we proposed to provide payment for
                both diagnostic and therapeutic radiopharmaceuticals that are granted
                pass-through payment status based on the ASP methodology. As stated
                earlier, for purposes of pass-through payment, we consider
                radiopharmaceuticals to be drugs under the OPPS. Therefore, if a
                diagnostic or therapeutic radiopharmaceutical receives pass-through
                payment status during CY 2022, we proposed to follow the standard ASP
                methodology to determine the pass-through payment rate that drugs
                receive under section 1842(o) of the Act, which is proposed at ASP+6
                percent. If ASP data are not available for a radiopharmaceutical, we
                proposed to provide pass-through payment at WAC+3 percent (consistent
                with our proposed policy in section V.B.2.b. of the CY 2022 OPPS/ASC
                proposed rule (86 FR 42132)), the equivalent payment provided to pass-
                through drugs and biologicals without ASP information. Additional
                detail on the WAC+3 percent payment policy can be found in section
                V.B.2.b. of the CY 2022 OPPS/ASC proposed rule. If WAC information also
                is not available, we proposed to provide payment for the pass-through
                radiopharmaceutical at 95 percent of its most recent AWP. Refer to
                Table 38 below for the list of drugs and biologicals with pass-through
                payment status expiring during CY 2022.
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                5. Drugs, Biologicals, and Radiopharmaceuticals With Pass-Through
                Payment Status Continuing in CY 2022
                 We proposed to continue pass-through payment status in CY 2022 for
                46 drugs and biologicals. These drugs and biologicals, which were
                approved for pass-through payment status with effective dates beginning
                between April 1, 2020, and January 1, 2022, are listed in Table 39. The
                APCs and HCPCS codes for these drugs and biologicals, which have pass-
                through payment status that will continue after December 31, 2022, are
                assigned status indicator ``G'' in Addenda A and B to the CY 2022 OPPS/
                ASC proposed rule (which are available via the internet on the CMS
                website).
                 Section 1833(t)(6)(D)(i) of the Act sets the amount of pass-through
                payment for pass-through drugs and biologicals (the pass-through
                payment amount) as the difference between the amount authorized under
                section 1842(o) of the Act and the portion of the otherwise applicable
                OPD fee schedule that the Secretary determines is associated with the
                drug or biological. For 2023, we proposed to continue to pay for pass-
                through drugs and biologicals at ASP+6 percent, equivalent to the
                payment rate these drugs and biologicals would receive in the
                physician's office setting in CY 2022. We proposed that a $0 pass-
                through payment amount would be paid for pass-through drugs and
                biologicals that are not policy-packaged as described in section
                V.B.1.c. under the CY 2022 OPPS because the difference between the
                amount authorized under section 1842(o) of the Act, which is proposed
                at ASP+6 percent, and the portion of the otherwise applicable OPD fee
                schedule that the Secretary determines is appropriate, which is
                proposed at ASP+6 percent, is $0. In the case of policy-packaged drugs
                (which include the following: Anesthesia drugs; drugs, biologicals, and
                radiopharmaceuticals that function as supplies when used in a
                diagnostic test or procedure (including contrast agents, diagnostic
                radiopharmaceuticals, and stress agents); and drugs and biologicals
                that function as supplies when used in a surgical procedure), we
                proposed that their pass-through payment amount would be equal to ASP+6
                percent for CY 2022 minus a payment offset for any predecessor drug
                products contributing to the pass-through payment as described in
                section V.A.6. of the CY 2022 OPPS/ASC proposed rule (86 FR 42126). We
                proposed this policy because, if not for the pass-through payment
                status of these policy-packaged products, payment for these products
                would be packaged into the associated procedure.
                 We proposed to continue to update pass-through payment rates on a
                quarterly basis on our website during CY 2022 if later quarter ASP
                submissions (or more recent WAC or AWP information, as applicable)
                indicate that adjustments to the payment rates for these pass-through
                payment drugs or biologicals are necessary. For a full description of
                this policy, we refer readers to the CY 2006 OPPS/ASC final rule with
                comment period (70 FR 68632 through 68635).
                 For CY 2022, consistent with our CY 2021 policy for diagnostic and
                therapeutic radiopharmaceuticals, we proposed to provide payment for
                both diagnostic and therapeutic radiopharmaceuticals that are granted
                pass-through payment status based on the ASP methodology. As stated
                earlier, for purposes of pass-through payment, we consider
                radiopharmaceuticals to be drugs under the OPPS. Therefore, if a
                diagnostic or therapeutic radiopharmaceutical receives pass-through
                payment status during CY 2023, we proposed to follow the standard ASP
                methodology to determine the pass-through payment rate that drugs
                receive under section 1842(o) of the Act, which is proposed at ASP+6
                percent. If ASP data are not available for a radiopharmaceutical, we
                proposed to provide pass-through payment at WAC+3 percent (consistent
                with our proposed policy in section V.B.2.b. of the CY 2022 OPPS/ASC
                proposed rule (86 FR 42132)), the equivalent payment provided to pass-
                through drugs and biologicals without ASP information. Additional
                detail on the WAC+3 percent payment policy can be found in section
                V.B.2.b. of the CY 2022 OPPS/ASC proposed rule. If WAC information also
                is not available, we proposed to provide payment for the pass-through
                radiopharmaceutical at 95 percent of its most recent AWP.
                 The drugs and biologicals that we proposed to have pass-through
                payment status expire after December 31, 2022, are shown in Table 39.
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                6. Provisions for Reducing Transitional Pass-Through Payments for
                Policy-Packaged Drugs, Biologicals, and Radiopharmaceuticals to Offset
                Costs Packaged Into APC Groups
                 Under the regulation at 42 CFR 419.2(b), nonpass-through drugs,
                biologicals, and radiopharmaceuticals that function as supplies when
                used in a diagnostic test or procedure are packaged in the OPPS. This
                category includes diagnostic radiopharmaceuticals, contrast agents,
                stress agents, and other diagnostic drugs. Also, under the regulation
                at 42 CFR 419.2(b), nonpass-through drugs and biologicals that function
                as supplies in a surgical procedure are packaged in the OPPS. This
                category includes skin substitutes and other surgical-supply drugs and
                biologicals. As described earlier, section 1833(t)(6)(D)(i) of the Act
                specifies that the transitional pass-through payment amount for pass-
                through drugs and biologicals is the difference between the amount paid
                under section 1842(o) of the Act and the otherwise applicable OPD fee
                schedule amount. Because a payment offset is necessary in order to
                provide an appropriate transitional pass-through payment, we deduct
                from the pass-through payment for policy-packaged drugs, biologicals,
                and radiopharmaceuticals an amount reflecting the portion of the APC
                payment associated with predecessor products in order to ensure no
                duplicate payment is made. This amount reflecting the portion of the
                APC payment associated with predecessor products is called the payment
                offset.
                 The payment offset policy applies to all policy-packaged drugs,
                biologicals, and radiopharmaceuticals. For a full description of the
                payment offset policy as applied to policy-packaged drugs, which
                include diagnostic radiopharmaceuticals, contrast agents, stress
                agents, and skin substitutes, we refer readers to the discussion in the
                CY 2016 OPPS/ASC final rule with comment period (80 FR 70430 through
                70432). For CY 2022, as we did in CY 2021, we proposed to continue to
                apply the same policy-packaged offset policy to payment for pass-
                through diagnostic radiopharmaceuticals, pass-through contrast agents,
                pass-through stress agents, and pass-through skin substitutes. The
                proposed APCs to which a payment offset may be applicable for pass-
                through diagnostic radiopharmaceuticals, pass-through contrast agents,
                pass-through stress agents, and pass-through skin substitutes are
                identified in Table 40.
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                 We proposed to continue to post annually on our website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Annual-Policy-Files.html a file that contains the
                APC offset amounts that will be used for that year for purposes of both
                evaluating cost significance for candidate pass-through payment device
                categories and drugs and biologicals and establishing any appropriate
                APC offset amounts. Specifically, the file will continue to provide the
                amounts and percentages of APC payment associated with packaged
                implantable devices, policy-packaged drugs, and threshold packaged
                drugs and biologicals for every OPPS clinical APC.
                 Comment: One commenter requested that CMS release a copy of the APC
                offset file with future OPPS/ASC proposed rules to enable the public to
                calculate the percentage of APC payment associated with packaged drug
                costs using APC offset data for the upcoming calendar year.
                 Response: We thank the commenter for their suggestion, and we will
                consider addressing this request in future rulemaking.
                B. OPPS Payment for Drugs, Biologicals, and Radiopharmaceuticals
                Without Pass-Through Payment Status
                1. Criteria for Packaging Payment for Drugs, Biologicals, and
                Radiopharmaceuticals
                a. Packaging Threshold
                 In accordance with section 1833(t)(16)(B) of the Act, the threshold
                for establishing separate APCs for payment of drugs and biologicals was
                set to $50 per administration during CYs 2005 and 2006. In CY 2007, we
                used the four quarter moving average Producer Price Index (PPI) levels
                for Pharmaceutical Preparations (Prescription) to trend the $50
                threshold forward from the third quarter of CY 2005 (when the Pub. L.
                108-173 mandated threshold became effective) to the third quarter of CY
                2007. We then rounded the resulting dollar amount to the nearest $5
                increment in order to determine the CY 2007 threshold amount of $55.
                Using the same methodology as that used in CY 2007 (which is discussed
                in more detail in the CY 2007 OPPS/ASC final rule with comment period
                (71 FR 68085 through 68086)), we set the packaging threshold for
                establishing separate APCs for drugs and biologicals at $130 for CY
                2021 (84 FR 61312 through 61313).
                 Following the CY 2007 methodology, for the CY 2022 OPPS/ASC
                proposed rule, we used the most recently available four quarter moving
                average PPI levels to trend the $50 threshold forward from the third
                quarter of CY 2005 to the third quarter of CY 2022 and rounded the
                resulting dollar amount ($132.44) to the nearest $5 increment, which
                yielded a figure of $130. In performing this calculation, we used the
                most recent forecast of the quarterly index levels for the PPI for
                Pharmaceuticals for Human Use (Prescription) (Bureau of Labor
                Statistics series code WPUSI07003) from CMS's Office of the Actuary.
                For the CY 2022 OPPS/ASC proposed rule, based on these calculations
                using the CY 2007 OPPS methodology, we proposed a packaging threshold
                for CY 2022 of $130.
                 Comment: Two commenters expressed their support for maintaining the
                drug packaging threshold for CY 2022 at $130. One commenter believes,
                however, that the drug packaging threshold has been increasing faster
                than payment increases under the OPPS. This commenter would like us to
                research if the drug packaging threshold should be lowered in future
                years.
                 Response: We appreciate the support of the commenters of the drug
                packaging threshold level of $130. We also thank the one commenter for
                their suggestion to consider reducing the drug packaging threshold in
                future years and will consider it for future rulemaking.
                 After consideration of the public comments, we repeated our drug
                packaging threshold calculations for the final rule with the most
                current data available. Once again, we calculated a drug packaging
                threshold for CY 2022 of
                [[Page 63636]]
                $130. Therefore, we are finalizing our proposal without modification to
                have a drug packaging threshold for CY 2022 of $130.
                b. Packaging of Payment for HCPCS Codes That Describe Certain Drugs,
                Certain Biologicals, and Certain Therapeutic Radiopharmaceuticals Under
                the Cost Threshold (``Threshold-Packaged Drugs'')
                 To determine the proposed CY 2022 packaging status for all nonpass-
                through drugs and biologicals that are not policy packaged, we
                calculated, on a HCPCS code-specific basis, the per day cost of all
                drugs, biologicals, and therapeutic radiopharmaceuticals that had a
                HCPCS code in CY 2019 and were paid (via packaged or separate payment)
                under the OPPS. We used data from CY 2019 claims processed through June
                30, 2020, for this calculation. However, we did not perform this
                calculation for those drugs and biologicals with multiple HCPCS codes
                that include different dosages, as described in section V.B.1.d. of the
                CY 2022 OPPS/ASC proposed rule (86 FR 42129), or for the following
                policy-packaged items that we proposed to continue to package in CY
                2022: Anesthesia drugs; drugs, biologicals, and radiopharmaceuticals
                that function as supplies when used in a diagnostic test or procedure;
                and drugs and biologicals that function as supplies when used in a
                surgical procedure.
                 In order to calculate the per day costs for drugs, biologicals, and
                therapeutic radiopharmaceuticals to determine their proposed packaging
                status in CY 2022, we use the methodology that was described in detail
                in the CY 2006 OPPS proposed rule (70 FR 42723 through 42724) and
                finalized in the CY 2006 OPPS final rule with comment period (70 FR
                68636 through 68638). For each drug and biological HCPCS code, we used
                an estimated payment rate of ASP+6 percent (which is the payment rate
                we proposed for separately payable drugs and biologicals (other than
                340B drugs)) for CY 2022, as discussed in more detail in section
                V.B.2.b. of the proposed rule) to calculate the CY 2022 proposed rule
                per day costs. We used the manufacturer-submitted ASP data from the
                fourth quarter of CY 2020 (data that were used for payment purposes in
                the physician's office setting, effective April 1, 2021) to determine
                the proposed rule per day cost. While the CY 2020 ASP data were
                collected during the PHE, ASP data are not affected by changes in
                utilization the way non-drug services are for setting payment rates,
                and so we believe CY 2020 ASP data continues to be representative of
                the price of drugs in the market. We have continued to use ASP data
                from CY 2020 to report quarterly drug rates for CY 2020 and CY 2021.
                 As is our standard methodology, for 2022, we proposed to use
                payment rates based on the ASP data from the fourth quarter of CY 2020
                for budget neutrality estimates, packaging determinations, impact
                analyses, and completion of Addenda A and B to the proposed rule (which
                are available via the internet on the CMS website) because these are
                the most recent data available for use at the time of development of
                the proposed rule. These data also were the basis for drug payments in
                the physician's office setting, effective April 1, 2021. For items that
                did not have an ASP-based payment rate, such as some therapeutic
                radiopharmaceuticals, we used their mean unit cost derived from the CY
                2019 hospital claims data to determine their per day cost.
                 We proposed to package items with a per day cost less than or equal
                to $130, and identify items with a per day cost greater than $130 as
                separately payable unless they are policy-packaged. Consistent with our
                past practice, we cross-walked historical OPPS claims data from the CY
                2019 HCPCS codes that were reported to the CY 2021 HCPCS codes that we
                display in Addendum B to the CY 2022 OPPS/ASC proposed rule (which is
                available via the internet on the CMS website) for proposed payment in
                CY 2022.
                 Our policy during previous cycles of the OPPS has been to use
                updated ASP and claims data to make final determinations of the
                packaging status of HCPCS codes for drugs, biologicals, and therapeutic
                radiopharmaceuticals for the OPPS/ASC final rule with comment period.
                We note that it is also our policy to make an annual packaging
                determination for a HCPCS code only when we develop the OPPS/ASC final
                rule with comment period for the update year. Only HCPCS codes that are
                identified as separately payable in the final rule with comment period
                are subject to quarterly updates. For our calculation of per day costs
                of HCPCS codes for drugs and biologicals in the CY 2022 OPPS/ASC
                proposed rule, we proposed to use ASP data from the fourth quarter of
                CY 2020, which is the basis for calculating payment rates for drugs and
                biologicals in the physician's office setting using the ASP
                methodology, effective April 1, 2021, along with updated hospital
                claims data from CY 2019. We note that we also proposed to use these
                data for budget neutrality estimates and impact analyses for the CY
                2022 OPPS/ASC proposed rule.
                 Payment rates for HCPCS codes for separately payable drugs and
                biologicals included in Addenda A and B of the final rule with comment
                period will be based on ASP data from the second quarter of CY 2021.
                These data will be the basis for calculating payment rates for drugs
                and biologicals in the physician's office setting using the ASP
                methodology, effective October 1, 2021. These payment rates would then
                be updated in the January 2022 OPPS update, based on the most recent
                ASP data to be used for physicians' office and OPPS payment as of
                January 1, 2022. For items that do not currently have an ASP-based
                payment rate, we proposed to recalculate their mean unit cost from all
                of the CY 2019 claims data and update cost report information available
                for the CY 2022 final rule with comment period to determine their final
                per day cost.
                 Consequently, the packaging status of some HCPCS codes for drugs,
                biologicals, and therapeutic radiopharmaceuticals in the proposed rule
                may be different from the same drugs' HCPCS codes' packaging status
                determined based on the data used for the final rule with comment
                period. Under such circumstances, we proposed to continue to follow the
                established policies initially adopted for the CY 2005 OPPS (69 FR
                65780) in order to more equitably pay for those drugs whose costs
                fluctuate relative to the proposed CY 2022 OPPS drug packaging
                threshold and the drug's payment status (packaged or separately
                payable) in CY 2021. These established policies have not changed for
                many years and are the same as described in the CY 2016 OPPS/ASC final
                rule with comment period (80 FR 70434). Specifically, for CY 2022,
                consistent with our historical practice, we proposed to apply the
                following policies to these HCPCS codes for drugs, biologicals, and
                therapeutic radiopharmaceuticals whose relationship to the drug
                packaging threshold changes based on the updated drug packaging
                threshold and on the final updated data:
                 HCPCS codes for drugs and biologicals that were paid
                separately in CY 2021 and that are proposed for separate payment in CY
                2022, and that then have per day costs equal to or less than the CY
                2022 final rule drug packaging threshold, based on the updated ASPs and
                hospital claims data used for the CY 2022 final rule, would continue to
                receive separate payment in CY 2022.
                 HCPCS codes for drugs and biologicals that were packaged
                in CY 2021 and that are proposed for separate payment in CY 2022, and
                that then have
                [[Page 63637]]
                per day costs equal to or less than the CY 2022 final rule drug
                packaging threshold, based on the updated ASPs and hospital claims data
                used for the CY 2022 final rule, would remain packaged in CY 2022.
                 HCPCS codes for drugs and biologicals for which we
                proposed packaged payment in CY 2022 but that then have per-day costs
                greater than the CY 2022 final rule drug packaging threshold, based on
                the updated ASPs and hospital claims data used for the CY 2022 final
                rule, would receive separate payment in CY 2022.
                 We did not receive any public comments on our proposal to
                recalculate the mean unit cost for items that do not currently have an
                ASP-based payment rate from all of the CY 2019 claims data and updated
                cost report information available for this CY 2022 final rule with
                comment period to determine their final per day cost. We also did not
                receive any public comments on our proposal to continue to follow the
                established policies, initially adopted for the CY 2005 OPPS (69 FR
                65780), when the packaging status of some HCPCS codes for drugs,
                biologicals, and therapeutic radiopharmaceuticals in the proposed rule
                may be different from the same drug HCPCS code's packaging status
                determined based on the data used for the final rule with comment
                period. For CY 2022, we are finalizing these two proposals without
                modification. Please refer to Addendum B to this final rule with
                comment period, which is available via the internet on the CMS website,
                for information on the packaging status of drugs, biologicals, and
                therapeutic radiopharmaceuticals.
                c. Policy-Packaged Drugs, Biologicals, and Radiopharmaceuticals
                 As mentioned earlier in this section, under the OPPS, we package
                several categories of nonpass-through drugs, biologicals, and
                radiopharmaceuticals, regardless of the cost of the products. Because
                the products are packaged according to the policies in 42 CFR 419.2(b),
                we refer to these packaged drugs, biologicals, and radiopharmaceuticals
                as ``policy-packaged'' drugs, biologicals, and radiopharmaceuticals.
                These policies are either longstanding or based on longstanding
                principles and inherent to the OPPS and are as follows:
                 Anesthesia, certain drugs, biologicals, and other
                pharmaceuticals; medical and surgical supplies and equipment; surgical
                dressings; and devices used for external reduction of fractures and
                dislocations (Sec. 419.2(b)(4));
                 Intraoperative items and services (Sec. 419.2(b)(14));
                 Drugs, biologicals, and radiopharmaceuticals that function
                as supplies when used in a diagnostic test or procedure (including, but
                not limited to, diagnostic radiopharmaceuticals, contrast agents, and
                pharmacologic stress agents) (Sec. 419.2(b)(15)); and
                 Drugs and biologicals that function as supplies when used
                in a surgical procedure (including, but not limited to, skin
                substitutes and similar products that aid wound healing and implantable
                biologicals) (Sec. 419.2(b)(16)).
                 The policy at Sec. 419.2(b)(16) is broader than that at Sec.
                419.2(b)(14). As we stated in the CY 2015 OPPS/ASC final rule with
                comment period: ``We consider all items related to the surgical outcome
                and provided during the hospital stay in which the surgery is
                performed, including postsurgical pain management drugs, to be part of
                the surgery for purposes of our drug and biological surgical supply
                packaging policy'' (79 FR 66875). The category described by Sec.
                419.2(b)(15) is large and includes diagnostic radiopharmaceuticals,
                contrast agents, stress agents, and some other products. The category
                described by Sec. 419.2(b)(16) includes skin substitutes and some
                other products. We believe it is important to reiterate that cost
                consideration is not a factor when determining whether an item is a
                surgical supply (79 FR 66875).
                 Comment: One commenter requested that we develop a policy to
                provide separate payment for drugs that are administered at the time of
                ophthalmic surgery and have an FDA-approved indication to treat or
                prevent postoperative issues.
                 Response: A surgical procedure episode consists of both pre-
                operative and post-operative care in addition to the surgical procedure
                itself. If a drug used to address a post-operative concern, such as
                pain management, is billed together with a surgical procedure, we
                assume that the pain management drug was given as a part of the overall
                surgical procedure. Since the pain management drug is ancillary to the
                primary ophthalmic surgery procedure, it is considered a surgical
                supply. The pain management drug is only administered to the patient
                because the patient has received ophthalmic surgery, and the drug would
                not have been administered to the patient if the patient did not have
                the surgery. In the OPPS, we pay one rate for the entire surgical
                procedure, and payment for supplies, such as pain management drugs, is
                packaged into the payment rate for the surgical procedure. We note
                exceptions to this policy in the ASC setting are discussed in II.A.3.b.
                (Payment Policy for Non-Opioid Pain Management Drugs and Biologicals
                that Function as Surgical Supplies under the ASC Payment System) of
                this final rule with comment period.
                 Comment: One commenter recommended that CMS continue to apply
                radiolabeled product edits to the nuclear medicine procedures to ensure
                that all packaged costs are included on nuclear medicine claims in
                order to establish appropriate payment rates in the future. The
                commenter was concerned that many providers performing nuclear medicine
                procedures are not including the cost of diagnostic
                radiopharmaceuticals used for the procedures in their claims
                submissions. The commenter believes this lack of drug cost reporting
                could be causing the cost of nuclear medicine procedures to be
                underreported and therefore request that the radiolabeled product edits
                be reinstated.
                 Response: We appreciated the commenter's feedback; however, we are
                not reinstating the radiolabeled product edits to nuclear medicine
                procedures, which required a diagnostic radiopharmaceutical to be
                present on the same claim as a nuclear medicine procedure for payment
                to be made under the OPPS. As previously discussed in the CY 2020 OPPS/
                ASC final rule with comment period (85 FR 86033 through 86034), the
                edits were in place between CY 2008 and CY 2014 (78 FR 75033). We
                believe the period of time in which the edits were in place was
                sufficient for hospitals to gain experience reporting procedures
                involving radiolabeled products and to become accustomed to ensuring
                that they code and report charges so that their claims fully and
                appropriately reflect the costs of those radiolabeled products. As with
                all other items and services recognized under the OPPS, we expect
                hospitals to code and report their costs appropriately, regardless of
                whether there are claims processing edits in place.
                 Comment: Several commenters requested that diagnostic
                radiopharmaceuticals be paid separately in all cases, not just when the
                drugs have pass-through payment status. One commenter suggested payment
                based upon ASP, WAC, AWP, or mean unit cost data derived from hospital
                claims. Some commenters mentioned that pass-through payment status
                helps the diffusion of new diagnostic radiopharmaceuticals into the
                market, but is not enough to make up for what the commenters believe is
                inadequate payment after pass-through status
                [[Page 63638]]
                expires. Commenters opposed incorporating the cost of the drug into the
                associated APC, and provided evidence showing procedures in which
                diagnostic radiopharmaceuticals are considered to be a surgical supply,
                which the commenter believed are often paid at a lower rate than the
                payment rate for the diagnostic radiopharmaceutical itself when the
                drug had pass-through payment status. Additionally, commenters proposed
                alternative payment methodologies such as subjecting diagnostic
                radiopharmaceuticals to the drug packaging threshold, creating separate
                APC payments for diagnostic radiopharmaceuticals that cost more than
                $500, or using ASP, WAC, or AWP to account for packaged
                radiopharmaceutical costs.
                 Response: We thank commenters for their suggestions. Commenters
                have made many of these suggestions in the past and we addressed them
                in previous rules, including the CY 2020 OPPS/ASC final rule (84 FR
                61314 through 61315) and the CY 2021 OPPS/ASC final rule (85 FR 86034).
                We continue to believe that diagnostic radiopharmaceuticals are an
                integral component of many nuclear medicine and imaging procedures and
                charges associated with them should be reported on hospital claims to
                the extent they are used, and accordingly, the payment for the
                radiopharmaceuticals is reflected within the payment for the primary
                procedure.
                 In response to the comment regarding the proposed cost of the
                packaged procedure in CY 2022 being substantially lower than the
                payment rate of the radiopharmaceutical when it was on pass-through
                payment status plus the payment rate of the procedure associated with
                the radiopharmaceutical, we note that rates are established in a manner
                that uses the geometric mean of reported costs to furnish the procedure
                based on data submitted to CMS from all hospitals paid under the OPPS
                to set the payment rate for the service. Accordingly, the costs that
                are calculated by Medicare reflect the average costs of items and
                services that are packaged into a primary procedure and will not
                necessarily equal the sum of the cost of the primary procedure and the
                average sales price of the specific items and services used in the
                procedure in each case. Furthermore, the costs will be based on the
                reported costs submitted to Medicare by the hospitals and not the list
                price established by the manufacturer. Claims data that include the
                radiopharmaceutical packaged with the associated procedure reflect the
                combined cost of the procedure and the radiopharmaceutical used in the
                procedure. Additionally, we do not believe it is appropriate to create
                a new packaging threshold specifically for diagnostic
                radiopharmaceuticals as such a threshold would not align with our
                overall packaging policy and commenters have submitted only limited
                data to support a specific threshold.
                 With respect to the request that we create a new APC for each
                radiopharmaceutical product, we do not believe it is appropriate to
                create unique APCs for diagnostic radiopharmaceuticals. Diagnostic
                radiopharmaceuticals function as supplies during a diagnostic test or
                procedure and following our longstanding packaging policy, these items
                are packaged under the OPPS. Packaging supports our goal of making OPPS
                payments consistent with those of a prospective payment system, which
                packages costs into a single aggregate payment for a service,
                encounter, or episode of care. Furthermore, diagnostic
                radiopharmaceuticals function as supplies that enable the provision of
                an independent service, and are not themselves the primary therapeutic
                modality, and therefore, we do not believe they warrant separate
                payment through creation of a unique APC at this time. We welcome
                ongoing dialogue with stakeholders regarding suggestions for payment
                changes for consideration in future rulemaking.
                 Comment: One commenter expressed their approval of the drugs
                proposed to be included in our policy-packaged drug policy.
                 Response: We appreciate the support of the commenter.
                 After consideration of the public comments we received, we are
                finalizing our proposals without modification to continue our drug
                packaging policies, which are included in the regulation text 42 CFR
                419.2(b).
                d. Packaging Determination for HCPCS Codes That Describe the Same Drug
                or Biological but Different Dosages
                 In the CY 2010 OPPS/ASC final rule with comment period (74 FR 60490
                through 60491), we finalized a policy to make a single packaging
                determination for a drug, rather than an individual HCPCS code, when a
                drug has multiple HCPCS codes describing different dosages because we
                believe that adopting the standard HCPCS code-specific packaging
                determinations for these codes could lead to inappropriate payment
                incentives for hospitals to report certain HCPCS codes instead of
                others. We continue to believe that making packaging determinations on
                a drug-specific basis eliminates payment incentives for hospitals to
                report certain HCPCS codes for drugs and allows hospitals flexibility
                in choosing to report all HCPCS codes for different dosages of the same
                drug or only the lowest dosage HCPCS code. Therefore, we proposed to
                continue our policy to make packaging determinations on a drug-specific
                basis, rather than a HCPCS code-specific basis, for those HCPCS codes
                that describe the same drug or biological but different dosages in CY
                2022.
                 For CY 2022, in order to propose a packaging determination that is
                consistent across all HCPCS codes that describe different dosages of
                the same drug or biological, we aggregated both our CY 2019 claims data
                and our pricing information at ASP+6 percent across all of the HCPCS
                codes that describe each distinct drug or biological in order to
                determine the mean units per day of the drug or biological in terms of
                the HCPCS code with the lowest dosage descriptor. The following drugs
                did not have pricing information available for the ASP methodology for
                the CY 2022 OPPS/ASC proposed rule, and as is our current policy for
                determining the packaging status of other drugs, we used the mean unit
                cost available from the CY 2019 claims data to make the proposed
                packaging determinations for these drugs: HCPCS code C9257 (Injection,
                bevacizumab, 0.25 mg); HCPCS code J1840 (Injection, kanamycin sulfate,
                up to 500 mg); HCPCS code J1850 (Injection, kanamycin sulfate, up to 75
                mg); HCPCS code J3472 (Injection, hyaluronidase, ovine, preservative
                free, per 1000 usp units); HCPCS code J7100 (Infusion, dextran 40, 500
                ml); and HCPCS code J7110 (Infusion, dextran 75, 500 ml).
                 For all other drugs and biologicals that have HCPCS codes
                describing different doses, we then multiplied the proposed weighted
                average ASP+6 percent per unit payment amount across all dosage levels
                of a specific drug or biological by the estimated units per day for all
                HCPCS codes that describe each drug or biological from our claims data
                to determine the estimated per day cost of each drug or biological at
                less than or equal to the proposed CY 2022 drug packaging threshold of
                $130 (so that all HCPCS codes for the same drug or biological would be
                packaged) or greater than the proposed CY 2022 drug packaging threshold
                of $130 (so that all HCPCS codes for the same drug or biological would
                be separately payable). The proposed packaging status of each drug and
                biological HCPCS code to which this methodology would apply in CY 2022
                is displayed in Table 41.
                [[Page 63639]]
                 Comment: One commenter supported our proposal to continue our
                current policy to make packaging determinations on a drug-specific
                basis rather than a HCPCS code basis when multiple HCPCS codes are used
                to describe different quantities of a drug or biological.
                 Response: We appreciate the support of the commenter.
                 After reviewing the public comments, we are finalizing our
                proposal, without modification, to continue our policy to make
                packaging determinations on a drug-specific basis, rather than a HCPCS
                code-specific basis, for those HCPCS codes that describe the same drug
                or biological but different dosages. The packaging status of each drug
                and biological HCPCS code to which this methodology applies in CY 2022
                is displayed in Table 41.
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                [[Page 63640]]
                2. Payment for Drugs and Biologicals Without Pass-Through Status That
                Are Not Packaged
                a. Payment for Specified Covered Outpatient Drugs (SCODs) and Other
                Separately Payable Drugs and Biologicals
                 Section 1833(t)(14) of the Act defines certain separately payable
                radiopharmaceuticals, drugs, and biologicals and mandates specific
                payments for these items. Under section 1833(t)(14)(B)(i) of the Act, a
                ``specified covered outpatient drug'' (known as a SCOD) is defined as a
                covered outpatient drug, as defined in section 1927(k)(2) of the Act,
                for which a separate APC has been established and that either is a
                radiopharmaceutical agent or is a drug or biological for which payment
                was made on a pass-through basis on or before December 31, 2002.
                 Under section 1833(t)(14)(B)(ii) of the Act, certain drugs and
                biologicals are designated as exceptions and are not included in the
                definition of SCODs. These exceptions are--
                 A drug or biological for which payment is first made on or
                after January 1, 2003, under the transitional pass-through payment
                provision in section 1833(t)(6) of the Act.
                 A drug or biological for which a temporary HCPCS code has
                not been assigned.
                 During CYs 2004 and 2005, an orphan drug (as designated by
                the Secretary).
                 Section 1833(t)(14)(A)(iii) of the Act requires that payment for
                SCODs in CY 2006 and subsequent years be equal to the average
                acquisition cost for the drug for that year as determined by the
                Secretary, subject to any adjustment for overhead costs and taking into
                account the hospital acquisition cost survey data collected by the
                Government Accountability Office (GAO) in CYs 2004 and 2005, and later
                periodic surveys conducted by the Secretary as set forth in the
                statute. If hospital acquisition cost data are not available, the law
                requires that payment be equal to payment rates established under the
                methodology described in section 1842(o), section 1847A, or section
                1847B of the Act, as calculated and adjusted by the Secretary as
                necessary for purposes of paragraph (14). We refer to this alternative
                methodology as the ``statutory default.'' Most physician Part B drugs
                are paid at ASP+6 percent in accordance with section 1842(o) and
                section 1847A of the Act.
                 Section 1833(t)(14)(E)(ii) of the Act provides for an adjustment in
                OPPS payment rates for SCODs to take into account overhead and related
                expenses, such as pharmacy services and handling costs. Section
                1833(t)(14)(E)(i) of the Act required MedPAC to study pharmacy overhead
                and related expenses and to make recommendations to the Secretary
                regarding whether, and if so how, a payment adjustment should be made
                to compensate hospitals for overhead and related expenses. Section
                1833(t)(14)(E)(ii) of the Act authorizes the Secretary to adjust the
                weights for ambulatory procedure classifications for SCODs to take into
                account the findings of the MedPAC study.\176\
                ---------------------------------------------------------------------------
                 \176\ Medicare Payment Advisory Committee. June 2005 Report to
                the Congress. Chapter 6: Payment for pharmacy handling costs in
                hospital outpatient departments. Available at: http://www.medpac.gov/docs/default-source/reports/June05_ch6.pdf?sfvrsn=0.
                ---------------------------------------------------------------------------
                 It has been our policy since CY 2006 to apply the same treatment to
                all separately payable drugs and biologicals, which include SCODs, and
                drugs and biologicals that are not SCODs. Therefore, we apply the
                payment methodology in section 1833(t)(14)(A)(iii) of the Act to SCODs,
                as required by statute, but we also apply it to separately payable
                drugs and biologicals that are not SCODs, which is a policy
                determination rather than a statutory requirement. In the CY 2022 OPPS/
                ASC proposed rule, we proposed to apply section 1833(t)(14)(A)(iii)(II)
                of the Act to all separately payable drugs and biologicals, including
                SCODs. Although we do not distinguish SCODs in this discussion, we note
                that we are required to apply section 1833(t)(14)(A)(iii)(II) of the
                Act to SCODs, but we also are applying this provision to other
                separately payable drugs and biologicals, consistent with our history
                of using the same payment methodology for all separately payable drugs
                and biologicals.
                 For a detailed discussion of our OPPS drug payment policies from CY
                2006 to CY 2012, we refer readers to the CY 2013 OPPS/ASC final rule
                with comment period (77 FR 68383 through 68385). In the CY 2013 OPPS/
                ASC final rule with comment period (77 FR 68386 through 68389), we
                first adopted the statutory default policy to pay for separately
                payable drugs and biologicals at ASP+6 percent based on section
                1833(t)(14)(A)(iii)(II) of the Act. We have continued this policy of
                paying for separately payable drugs and biologicals at the statutory
                default for CYs 2014 through 2021.
                b. CY 2022 Payment Policy
                 For 2022, we proposed to continue our payment policy that has been
                in effect since CY 2013 to pay for separately payable drugs and
                biologicals, with the exception of 340B-acquired drugs, at ASP+6
                percent in accordance with section 1833(t)(14)(A)(iii)(II) of the Act
                (the statutory default). We proposed to pay for separately payable
                nonpass-through drugs acquired with a 340B discount at a rate of ASP
                minus 22.5 percent (as described in section V.B.6). We refer readers to
                the CY 2018 OPPS/ASC final rule with comment period (82 FR 59353
                through 59371), and the CY 2021 OPPS/ASC final rule with comment period
                (85 FR 86042 through 86055) for more information about our current
                payment policy for drugs and biologicals acquired with a 340B discount.
                 In the case of a drug or biological during an initial sales period
                in which data on the prices for sales of the drug or biological are not
                sufficiently available from the manufacturer, section 1847A(c)(4) of
                the Act permits the Secretary to make payments that are based on WAC.
                Under section 1833(t)(14)(A)(iii)(II) of the Act, the amount of payment
                for a separately payable drug equals the average price for the drug for
                the year established under, among other authorities, section 1847A of
                the Act. As explained in greater detail in the CY 2019 PFS final rule,
                under section 1847A(c)(4) of the Act, although payments may be based on
                WAC, unlike section 1847A(b) of the Act (which specifies that payments
                using ASP or WAC must be made with a 6 percent add-on), section
                1847A(c)(4) of the Act does not require that a particular add-on amount
                be applied to WAC-based pricing for this initial period when ASP data
                is not available. Consistent with section 1847A(c)(4) of the Act, in
                the CY 2019 PFS final rule (83 FR 59661 to 59666), we finalized a
                policy that, effective January 1, 2019, WAC-based payments for Part B
                drugs made under section 1847A(c)(4) of the Act will utilize a 3-
                percent add-on in place of the 6-percent add-on that was being used
                according to our policy in effect as of CY 2018. For the CY 2019 OPPS,
                we followed the same policy finalized in the CY 2019 PFS final rule (83
                FR 59661 to 59666). For CYs 2020 and 2021, we adopted a policy to
                utilize a 3-percent add-on instead of a 6-percent add-on for drugs that
                are paid based on WAC under section 1847A(c)(4) of the Act pursuant to
                our authority under section 1833(t)(14)(A)(iii)(II) (84 FR 61318 and 85
                FR 86039). For 2022, we proposed to continue to utilize a 3-percent
                add-on instead of a 6-percent add-on for drugs that are paid based on
                WAC pursuant to our authority under section 1833(t)(14)(A)(iii)(II) of
                the Act, which
                [[Page 63641]]
                provides, in part, that the amount of payment for a SCOD is the average
                price of the drug in the year established under section 1847A of the
                Act. We also proposed to apply this provision to non-SCOD separately
                payable drugs. Because we proposed to establish the average price for a
                drug paid based on WAC under section 1847A of the Act as WAC+3 percent
                instead of WAC+6 percent, we believe it is appropriate to price
                separately payable drugs paid based on WAC at the same amount under the
                OPPS. We proposed that, if finalized, our proposal to pay for drugs or
                biologicals at WAC+3 percent, rather than WAC+6 percent, would apply
                whenever WAC-based pricing is used for a drug or biological under
                1847A(c)(4). For drugs and biologicals that would otherwise be subject
                to a payment reduction because they were acquired under the 340B
                Program, the payment amount for these drugs (proposed as a rate of WAC
                minus 22.5 percent) would continue to apply. We refer readers to the CY
                2019 PFS final rule (83 FR 59661 to 59666) for additional background on
                this policy.
                 We proposed that payments for separately payable drugs and
                biologicals would be included in the budget neutrality adjustments,
                under the requirements in section 1833(t)(9)(B) of the Act. We also
                proposed that the budget neutral weight scalar would not be applied in
                determining payments for these separately payable drugs and
                biologicals.
                 We note that separately payable drug and biological payment rates
                listed in Addenda A and B to the CY 2022 OPPS/ASC proposed rule
                (available via the internet on the CMS website), which illustrate the
                proposed CY 2022 payment of ASP+6 percent for separately payable
                nonpass-through drugs and biologicals and ASP+6 percent for pass-
                through drugs and biologicals, reflect either ASP information that is
                the basis for calculating payment rates for drugs and biologicals in
                the physician's office setting effective April 1, 2021, or WAC, AWP, or
                mean unit cost from CY 2019 claims data and updated cost report
                information available for the CY 2022 OPPS/ASC proposed rule. In
                general, these published payment rates are not the same as the actual
                January 2022 payment rates. This is because payment rates for drugs and
                biologicals with ASP information for January 2022 will be determined
                through the standard quarterly process where ASP data submitted by
                manufacturers for the third quarter of CY 2021 (July 1, 2021, through
                September 30, 2021) will be used to set the payment rates that are
                released for the quarter beginning in January 2022 in December 2021. In
                addition, payment rates for drugs and biologicals in Addenda A and B to
                the proposed rule for which there was no ASP information available for
                April 2021 are based on mean unit cost in the available CY 2019 claims
                data. If ASP information becomes available for payment for the quarter
                beginning in January 2022, we will price payment for these drugs and
                biologicals based on their newly available ASP information. Finally,
                there may be drugs and biologicals that have ASP information available
                for the proposed rule (reflecting April 2021 ASP data) that do not have
                ASP information available for the quarter beginning in January 2022.
                These drugs and biologicals would then be paid based on mean unit cost
                data derived from CY 2019 hospital claims. Therefore, the proposed
                payment rates listed in Addenda A and B to the proposed rule are not
                for January 2022 payment purposes and are only illustrative of the CY
                2022 OPPS payment methodology using the most recently available
                information at the time of issuance of the proposed rule.
                 Comment: Multiple commenters expressed their support for paying for
                separately payable drugs and biologicals at ASP+6 percent. The
                commenters believe this policy is consistent with statute and
                Congressional intent, and generates more predictable payment for
                providers than previous payment methodologies for drugs and
                biologicals. The commenters believe the ASP+6 percent payment policy
                ensures equivalent payment for drugs and biologicals between the
                outpatient hospital setting and the physician office, which encourages
                Medicare beneficiaries to receive care in the most clinically
                appropriate setting.
                 Response: We appreciate the commenters' feedback.
                 Comment: One commenter requested that an add-on percentage of
                greater than 6 percent of ASP be paid for separately payable
                radiopharmaceuticals to reflect higher overhead and handling costs for
                these products.
                 Response: The add-on percentage of 6 percent is generally viewed as
                reflecting the overhead and handling cost of most drugs,
                radiopharmaceuticals, and biologicals that are separately payable in
                the OPPS even though the overhead and handling costs for individual
                products may be higher or lower than 6 percent of the ASP. We believe
                that the add-on percentage of 6 percent is appropriate for separately
                payable radiopharmaceuticals.
                 Comment: Two commenters requested that we exclude both diagnostic
                and therapeutic radiopharmaceuticals from our proposed policy that
                during an initial sales period in which data on the prices for sales of
                the drug or biological are not sufficiently available from the
                manufacturer, that payments can be made for drugs using WAC pricing
                plus a 3 percent price add-on. The commenters believe the cost of
                preparing radiopharmaceuticals is higher than the cost of preparing
                other drugs and biologicals and a 6 percent price add-on should be
                required anytime that we use WAC to price a radiopharmaceutical.
                 Response: The WAC of a drug or biological is defined in section
                1847A(c)(6)(B) of the Act as the manufacturer's list price for the drug
                or biological to wholesalers or direct purchasers in the United States,
                not including prompt pay or other discounts, rebates or reductions in
                price, for the most recent month for which the information is
                available, as reported in wholesale price guides or other publications
                of drug or biological pricing data. Because the WAC does not include
                discounts, it typically exceeds ASP, and the use of a WAC-based payment
                amount for the same drug results in higher dollar payments than the use
                of an ASP-based payment amount. Also, MedPAC in their June 2017 Report
                to the Congress (http://www.medpac.gov/docs/default-source/reports/jun17_reporttocongress_sec.pdf, pages 42 through 44) suggested that
                greater parity between ASP-based acquisition costs and WAC-based
                payments for Part B drugs could be achieved and recommended changing
                the 6 percent add-on for WAC-based payments to 3 percent. Given this
                evidence that WAC pricing tends to overestimate drug cost, we believe
                our current and proposed policy to pay drugs at WAC plus 3 percent for
                all drugs, biologicals, and radiopharmaceuticals when ASP is not
                available more accurately reflects the cost of new products recently
                entering the market than does WAC plus 6 percent.
                 After considering the public comments we received, we are
                finalizing our proposals related to payment for SCODs and other
                separately payable drugs and biologicals without modification.
                c. Biosimilar Biological Products
                 For CY 2016 and CY 2017, we finalized a policy to pay for
                biosimilar biological products based on the payment allowance of the
                product as determined under section 1847A of the
                [[Page 63642]]
                Act and to subject nonpass-through biosimilar biological products to
                our annual threshold-packaged policy (for CY 2016, 80 FR 70445 through
                70446; and for CY 2017, 81 FR 79674). In the CY 2018 OPPS/ASC proposed
                rule (82 FR 33630), for CY 2018, we proposed to continue this same
                payment policy for biosimilar biological products.
                 In the CY 2018 OPPS/ASC final rule with comment period (82 FR
                59351), we noted that, with respect to comments we received regarding
                OPPS payment for biosimilar biological products, in the CY 2018 PFS
                final rule, CMS finalized a policy to implement separate HCPCS codes
                for biosimilar biological products. Therefore, consistent with our
                established OPPS drug, biological, and radiopharmaceutical payment
                policy, HCPCS coding for biosimilar biological products is based on the
                policy established under the CY 2018 PFS final rule.
                 In the CY 2018 OPPS/ASC final rule with comment period (82 FR
                59351), after consideration of the public comments we received, we
                finalized our proposed payment policy for biosimilar biological
                products, with the following technical correction: All biosimilar
                biological products are eligible for pass-through payment and not just
                the first biosimilar biological product for a reference product. In the
                CY 2019 OPPS/ASC proposed rule (83 FR 37123), for CY 2019, we proposed
                to continue the policy in place from CY 2018 to make all biosimilar
                biological products eligible for pass-through payment and not just the
                first biosimilar biological product for a reference product.
                 In addition, in CY 2018, we adopted a policy that biosimilars
                without pass-through payment status that were acquired under the 340B
                Program would be paid the ASP of the biosimilar minus 22.5 percent of
                the reference product's ASP (82 FR 59367). We adopted this policy in
                the CY 2018 OPPS/ASC final rule with comment period because we believe
                that biosimilars without pass-through payment status acquired under the
                340B Program should be treated in the same manner as other drugs and
                biologicals acquired through the 340B Program. As noted earlier,
                biosimilars with pass-through payment status are paid their own ASP+6
                percent of the reference product's ASP. Separately payable biosimilars
                that do not have pass-through payment status and are not acquired under
                the 340B Program are also paid their own ASP plus 6 percent of the
                reference product's ASP. If a biosimilar does not have ASP pricing, but
                instead has WAC pricing, the WAC pricing add-on of either 3 percent or
                6 percent is calculated from the biosimilar's WAC and is not calculated
                from the WAC price of the reference product.
                 As noted in the CY 2019 OPPS/ASC proposed rule (83 FR 37123),
                several stakeholders raised concerns to us that the payment policy for
                biosimilars acquired under the 340B Program could unfairly lower the
                OPPS payment for biosimilars not on pass-through payment status because
                the payment reduction would be based on the reference product's ASP,
                which would generally be expected to be priced higher than the
                biosimilar, thus resulting in a more significant reduction in payment
                than if the 22.5 percent was calculated based on the biosimilar's ASP.
                We agreed with stakeholders that the current payment policy could
                unfairly lower the price of biosimilars without pass-through payment
                status that are acquired under the 340B Program. In addition, we noted
                that we believed that these changes would better reflect the resources
                and production costs that biosimilar manufacturers incur. We also
                stated that we believe this approach is more consistent with the
                payment methodology for 340B-acquired drugs and biologicals, for which
                the 22.5 percent reduction is calculated based on the drug or
                biological's ASP, rather than the ASP of another product. In addition,
                we explained that we believed that paying for biosimilars acquired
                under the 340B Program at ASP minus 22.5 percent of the biosimilar's
                ASP, rather than 22.5 percent of the reference product's ASP, will more
                closely approximate hospitals' acquisition costs for these products.
                 Accordingly, in the CY 2019 OPPS/ASC proposed rule (83 FR 37123),
                we proposed changes to our Medicare Part B drug payment methodology for
                biosimilars acquired under the 340B Program. Specifically, for CY 2019
                and subsequent years, in accordance with section
                1833(t)(14)(A)(iii)(II) of the Act, we proposed to pay nonpass-through
                biosimilars acquired under the 340B Program at ASP minus 22.5 percent
                of the biosimilar's ASP instead of the biosimilar's ASP minus 22.5
                percent of the reference product's ASP. This proposal was finalized
                without modification in the CY 2019 OPPS/ASC final rule with comment
                period (83 FR 58977).
                 For 2022, we proposed to continue our policy to make all biosimilar
                biological products eligible for pass-through payment and not just the
                first biosimilar biological product for a reference product. We also
                proposed to continue our current policy of paying for nonpass-through
                biosimilars acquired under the 340B program at the biosimilar's ASP
                minus 22.5 percent of the biosimilar's ASP instead of the biosimilar's
                ASP minus 22.5 percent of the reference product's ASP, in accordance
                with section 1833(t)(14)(A)(iii)(II) of the Act.
                 Comment: One commenter supported our proposal to continue our
                policy from CY 2018 to make biosimilar biological products eligible for
                pass-through payment and not just the first biosimilar biological
                product for a reference product.
                 Response: We appreciate the commenter's support of this established
                policy.
                 Comment: Multiple commenters supported our proposal to pay nonpass-
                through biosimilars acquired under the 340B Program at ASP minus 22.5
                percent of the biosimilar's ASP, rather than the reference product's
                ASP.
                 Response: We appreciate the commenters' support. Please see section
                V.B.6. of this final rule with comment period for a discussion of
                payment policy for drugs and biologicals acquired under the 340B
                program.
                 Comment: One commenter did not support our proposal to continue our
                CY 2018 policy to make all biosimilar biological products eligible for
                pass-through payment and not just the first biosimilar biological
                product for a reference product. The commenter believes that there
                should be a ``level playing field'' between biosimilars and their
                reference products in order to increase competition and reduce costs
                for beneficiaries. The commenter does not believe it is fair for
                biosimilars of a reference product to be receiving passthrough payment
                of ASP plus 6 percent of the reference product's ASP. The commenter
                pointed out that when the reference product is no longer eligible for
                pass-through payment, if it is acquired under the 340B program,
                hospitals would be paid for the product at ASP minus 22.5 percent,
                while the biosimilar that has pass-through status continues to receive
                payment at ASP plus 6 percent of the reference product's ASP. The
                commenter believes that this difference in the payment rates for
                biosimilars and their reference products could potentially lead to
                increased Medicare spending on biosimilars as providers utilize
                biosimilars instead of the biosimilars' reference products because of
                the higher payment rates for biosimilars in these circumstances.
                 Response: As discussed in the CY 2019 OPPS/ASC final rule with
                comment period (83 FR 58977), we continue to believe that eligibility
                for pass-through payment status reflects the unique, complex nature of
                biosimilars
                [[Page 63643]]
                and is important as biosimilars become established in the market, just
                as it is for all other new drugs and biologicals. In terms of the
                potential increased payment for biosimilars under our policy to allow
                biosimilars to be eligible for pass-through status, overall increased
                competition due to the presence of more biosimilars on the market as a
                result of this policy is expected to drive payments down for both
                Medicare and for beneficiaries over time, even if there may be
                increased spending on biosimilars in the short term.
                 After consideration of the public comments we received, we are
                finalizing our proposed payment policy for biosimilar products, without
                modification, to continue the policy established in CY 2018 to make all
                biosimilar biological products eligible for pass-through payment and
                not just the first biosimilar biological product for a reference
                product. We are also finalizing our proposal to continue to pay
                nonpass-through biosimilars acquired under the 340B Program at the
                biosimilar's ASP minus 22.5 percent of the biosimilar's, rather than
                the reference product's ASP. Our final policy regarding the payment
                rate for drugs and biologicals that are acquired under the 340B program
                is described in section V.B.6 of this final rule with comment period.
                3. Payment Policy for Therapeutic Radiopharmaceuticals
                 For CY 2022, we proposed to continue the payment policy for
                therapeutic radiopharmaceuticals that began in CY 2010. We pay for
                separately payable therapeutic radiopharmaceuticals under the ASP
                methodology adopted for separately payable drugs and biologicals. If
                ASP information is unavailable for a therapeutic radiopharmaceutical,
                we base therapeutic radiopharmaceutical payment on mean unit cost data
                derived from hospital claims. We believe that the rationale outlined in
                the CY 2010 OPPS/ASC final rule with comment period (74 FR 60524
                through 60525) for applying the principles of separately payable drug
                pricing to therapeutic radiopharmaceuticals continues to be appropriate
                for nonpass-through, separately payable therapeutic
                radiopharmaceuticals in CY 2022. Therefore, we proposed for CY 2022 to
                pay all nonpass-through, separately payable therapeutic
                radiopharmaceuticals at ASP+6 percent, based on the statutory default
                described in section 1833(t)(14)(A)(iii)(II) of the Act. For a full
                discussion of ASP-based payment for therapeutic radiopharmaceuticals,
                we refer readers to the CY 2010 OPPS/ASC final rule with comment period
                (74 FR 60520 through 60521). We also proposed to rely on CY 2019 mean
                unit cost data derived from hospital claims data for payment rates for
                therapeutic radiopharmaceuticals for which ASP data are unavailable and
                to update the payment rates for separately payable therapeutic
                radiopharmaceuticals according to our usual process for updating the
                payment rates for separately payable drugs and biologicals on a
                quarterly basis if updated ASP information is unavailable. For a
                complete history of the OPPS payment policy for therapeutic
                radiopharmaceuticals, we refer readers to the CY 2005 OPPS final rule
                with comment period (69 FR 65811), the CY 2006 OPPS final rule with
                comment period (70 FR 68655), and the CY 2010 OPPS/ASC final rule with
                comment period (74 FR 60524). The proposed CY 2022 payment rates for
                nonpass-through, separately payable therapeutic radiopharmaceuticals
                are included in Addenda A and B to the CY 2022 OPPS/ASC proposed rule
                (which are available via the internet on the CMS website).
                 Comment: One commenter supported the continuation of this policy to
                provide a predicable payment methodology and avoid the payment swings
                that occurred prior to adoption of the statutory default rate for
                therapeutic radiopharmaceuticals.
                 Response: We thank the commenter for their support.
                 We did not receive any additional public comments on this proposal
                and are finalizing our proposal, without modification, to continue to
                pay all nonpass-through, separately payable therapeutic
                radiopharmaceuticals at ASP+6 percent. We are also finalizing our
                proposal to continue to rely on CY 2019 mean unit cost data derived
                from hospital claims data for payment rates for therapeutic
                radiopharmaceuticals for which ASP data are unavailable. The CY 2022
                final payment rates for nonpass-through separately payable therapeutic
                radiopharmaceuticals are included in Addenda A and B to this final rule
                with comment period (which are available via the internet on the CMS
                website).
                4. Payment for Blood Clotting Factors
                 For CY 2021, we provided payment for blood clotting factors under
                the same methodology as other nonpass-through separately payable drugs
                and biologicals under the OPPS and continued paying an updated
                furnishing fee (85 FR 86041). That is, for CY 2021, we provided payment
                for blood clotting factors under the OPPS at ASP+6 percent, plus an
                additional payment for the furnishing fee. We note that when blood
                clotting factors are provided in physicians' offices under Medicare
                Part B and in other Medicare settings, a furnishing fee is also applied
                to the payment. The CY 2021 updated furnishing fee was $0.238 per unit.
                 For 2022, we proposed to pay for blood clotting factors at ASP+6
                percent, consistent with our proposed payment policy for other nonpass-
                through, separately payable drugs and biologicals, and to continue our
                policy for payment of the furnishing fee using an updated amount. Our
                policy to pay a furnishing fee for blood clotting factors under the
                OPPS is consistent with the methodology applied in the physician's
                office and in the inpatient hospital setting. These methodologies were
                first articulated in the CY 2006 OPPS final rule with comment period
                (70 FR 68661) and later discussed in the CY 2008 OPPS/ASC final rule
                with comment period (72 FR 66765). The proposed furnishing fee update
                is based on the percentage increase in the Consumer Price Index (CPI)
                for medical care for the 12-month period ending with June of the
                previous year. Because the Bureau of Labor Statistics releases the
                applicable CPI data after the PFS and OPPS/ASC proposed rules are
                published, we are not able to include the actual updated furnishing fee
                in the proposed rules. Therefore, in accordance with our policy, as
                finalized in the CY 2008 OPPS/ASC final rule with comment period (72 FR
                66765), we proposed to announce the actual figure for the percent
                change in the applicable CPI and the updated furnishing fee calculated
                based on that figure through applicable program instructions and
                posting on our website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/index.html.
                 We proposed to provide payment for blood clotting factors under the
                same methodology as other separately payable drugs and biologicals
                under the OPPS and to continue payment of an updated furnishing fee. We
                will announce the actual figure of the percent change in the applicable
                CPI and the updated furnishing fee calculation based on that figure
                through the applicable program instructions and posting on the CMS
                website.
                 Comment: One commenter supports our proposal to continue to pay for
                blood clotting factors at ASP+6 percent plus a furnishing fee for the
                clotting factor update annually using the CPI. The commenter also
                supports our policy to pay the same clotting factor
                [[Page 63644]]
                furnishing fee in both the hospital outpatient and physician office
                settings.
                 Response: We appreciate the commenter's support for our policies.
                 After reviewing the public comment that we received, we are
                finalizing our proposal, without modification, to provide payment for
                blood clotting factors under the same methodology as other separately
                payable drugs and biologicals under the OPPS and to continue payment of
                an updated furnishing fee. We will announce the actual figure of the
                percent change in the applicable CPI and the updated furnishing fee
                calculation based on that figure through the applicable program
                instructions and posting on the CMS website.
                5. Payment for Nonpass-Through Drugs, Biologicals, and
                Radiopharmaceuticals With HCPCS Codes But Without OPPS Hospital Claims
                Data
                 For CY 2022, we proposed to continue to use the same payment policy
                as in CY 2021 for nonpass-through drugs, biologicals, and
                radiopharmaceuticals with HCPCS codes but without OPPS hospital claims
                data, which describes how we determine the payment rate for drugs,
                biologicals, or radiopharmaceuticals without an ASP. For a detailed
                discussion of the payment policy and methodology, we refer readers to
                the CY 2016 OPPS/ASC final rule with comment period (80 FR 70442
                through 70443). The proposed CY 2022 payment status of each of the
                nonpass-through drugs, biologicals, and radiopharmaceuticals with HCPCS
                codes but without OPPS hospital claims data is listed in Addendum B to
                the CY 2022 OPPS/ASC proposed rule, which is available via the internet
                on the CMS website.
                 We did not receive any comments on our proposal. Therefore, we are
                finalizing our CY 2022 proposal without modification, including our
                proposal to assign drug or biological products status indicator ``K''
                and pay for them separately for the remainder of CY 2022 if pricing
                information becomes available. The CY 2022 payment status of each of
                the nonpass-through drugs, biologicals, and radiopharmaceuticals with
                HCPCS codes but without OPPS hospital claims data is listed in Addendum
                B to this final rule with comment period, which is available via the
                internet on the CMS website.
                6. CY 2022 OPPS Payment Methodology for 340B Purchased Drugs
                a. Overview
                 Under the OPPS, payment rates for drugs are generally provided for
                in section 1833(t)(14)(A). Under that provision, the payment amount is
                more specifically set forth by cross-reference to section 1847A, which
                generally sets a default rate of ASP+6 percent for certain drugs;
                however, the Secretary has statutory authority to adjust that rate
                under the OPPS. As described below, beginning in CY 2018, the Secretary
                adjusted the 340B drug payment rate to ASP minus 22.5 percent to
                approximate a minimum average discount for 340B drugs, which was based
                on findings of the GAO and MedPAC that hospitals were acquiring drugs
                at a significant discount under HRSA's 340B Drug Pricing Program. As
                described in the following sections, in December 2018, the United
                States District Court for the District of Columbia (the district court)
                concluded that the Secretary lacks the authority to bring the default
                rate in line with average acquisition cost unless the Secretary obtains
                survey data from hospitals on their acquisition costs. On July 10,
                2019, the district court entered final judgment. The agency appealed to
                the United States Court of Appeals for the District of Columbia Circuit
                (hereinafter referred to as ``the D.C. Circuit''), and on July 31,
                2020, the court entered an opinion reversing the district court's
                judgment in this matter. Following the D.C. Circuit's reversal of the
                lower court's decision, appellees' petition for panel rehearing and
                petition for rehearing en banc were denied on October 16, 2020. For CY
                2021, CMS continued its policy of paying for drugs and biologicals
                acquired through the 340B Program at ASP minus 22.5 percent.
                 On January 10, 2021, the appellees filed a petition for a writ of
                certiorari in the United States Supreme Court. On July 2, 2021, the
                Supreme Court granted their petition for a writ of certiorari and
                directed the parties to argue whether the petitioners' suit challenging
                HHS's 340B drugs payment adjustment is precluded by section
                1833(t)(12).\177\
                ---------------------------------------------------------------------------
                 \177\ https://www.supremecourt.gov/orders/courtorders/070221zor_4gc5.pdf. Accessed July 8, 2021.
                ---------------------------------------------------------------------------
                b. Background
                 In the CY 2018 OPPS/ASC proposed rule (82 FR 33558 through 33724),
                we proposed changes to the OPPS payment methodology for drugs and
                biologicals (hereinafter referred to collectively as ``drugs'')
                acquired under the 340B Program. We proposed these changes to better,
                and more accurately, reflect the resources and acquisition costs that
                these hospitals incur. We stated our belief that such changes would
                allow Medicare beneficiaries (and the Medicare program) to pay a more
                appropriate amount when hospitals participating in the 340B Program
                furnish drugs to Medicare beneficiaries that are purchased under the
                340B Program. Subsequently, in the CY 2018 OPPS/ASC final rule with
                comment period (82 FR 59369 through 59370), we finalized our proposal
                and adjusted the payment rate for separately payable drugs and
                biologicals (other than drugs with pass-through payment status and
                vaccines) acquired under the 340B Program from ASP+6 percent to ASP
                minus 22.5 percent. We stated that our goal was to make Medicare
                payment for separately payable drugs more aligned with the resources
                expended by hospitals to acquire such drugs, while recognizing the
                intent of the 340B Program to allow covered entities, including
                eligible hospitals, to stretch scarce resources in ways that enable
                hospitals to continue providing access to care for Medicare
                beneficiaries and other patients. Congress created the 340B Drug
                Pricing Program so that the eligible entities--safety net providers
                identified in the statute--could stretch scarce Federal resources as
                far as possible, reaching more eligible patients and providing more
                comprehensive services. By design, the 340B Program increases the
                resources available to these safety net providers by providing
                discounts on covered outpatient drugs that generate savings that can be
                used to support patient care or other services. When the program was
                created, there was an understanding that many of the patients seen by
                these safety net providers were Medicare and Medicaid beneficiaries.
                This rule aims to fulfill the goals of different Federal programs, each
                of which helps ensure access to care for vulnerable populations. We
                note, however, that the 340B program does not contemplate subsidization
                from Medicare in the form of payments far exceeding hospitals'
                acquisition costs. We also note that critical access hospitals are not
                paid under the OPPS, and therefore are not subject to the OPPS payment
                policy for 340B-acquired drugs. We also excepted rural sole community
                hospitals, children's hospitals, and PPS-exempt cancer hospitals from
                the 340B payment adjustment in CY 2018. In addition, as stated in the
                CY 2018 OPPS/ASC final rule with comment period, this policy change
                does not apply to drugs with pass-through payment status, which are
                required to be paid based on the ASP methodology, or vaccines, which
                are excluded from the 340B Program.
                 In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79699
                [[Page 63645]]
                through 79706), we implemented section 603 of the Bipartisan Budget Act
                of 2015. As a general matter, applicable items and services furnished
                in certain off-campus outpatient departments of a provider on or after
                January 1, 2017, are not considered covered outpatient services for
                purposes of payment under the OPPS and are paid ``under the applicable
                payment system,'' which is generally the Physician Fee Schedule (PFS).
                However, consistent with our policy to pay separately payable, covered
                outpatient drugs and biologicals acquired under the 340B Program at ASP
                minus 22.5 percent, rather than ASP+6 percent, when billed by a
                hospital paid under the OPPS that is not excepted from the payment
                adjustment, in the CY 2019 OPPS/ASC final rule with comment period (83
                FR 59015 through 59022), we finalized a policy to pay ASP minus 22.5
                percent for 340B-acquired drugs and biologicals furnished in non-
                excepted off-campus PBDs paid under the PFS. We adopted this payment
                policy effective for CY 2019 and subsequent years.
                 We clarified in the CY 2019 OPPS/ASC proposed rule (83 FR 37125)
                that the 340B payment adjustment applies to drugs that are priced using
                either WAC or AWP, and that it has been our policy to subject 340B-
                acquired drugs that use these pricing methodologies to the 340B payment
                adjustment since the policy was first adopted. The 340B payment
                adjustment for WAC-priced drugs is WAC minus 22.5 percent. 340B-
                acquired drugs that are priced using AWP are paid an adjusted amount of
                69.46 percent of AWP. The 69.46 percent of AWP is calculated by first
                reducing the original 95 percent of AWP price by 6 percent to generate
                a value that is similar to ASP or WAC with no percentage markup. Then
                we apply the 22.5 percent reduction to ASP/WAC-similar AWP value to
                obtain the 69.46 percent of AWP, which is similar to either ASP minus
                22.5 percent or WAC minus 22.5 percent.
                 As discussed in the CY 2018 OPPS/ASC final rule with comment period
                (82 FR 59369 through 59370), to effectuate the payment adjustment for
                340B-acquired drugs, we implemented modifier ``JG'', effective January
                1, 2018. Hospitals paid under the OPPS, other than a type of hospital
                excluded from the OPPS (such as critical access hospitals), or excepted
                from the 340B drug payment policy for CY 2018, were required to report
                modifier ``JG'' on the same claim line as the drug HCPCS code to
                identify a 340B-acquired drug. For CY 2018, rural sole community
                hospitals, children's hospitals and PPS-exempt cancer hospitals were
                excepted from the 340B payment adjustment. These hospitals were
                required to report informational modifier ``TB'' for 340B-acquired
                drugs, and continue to be paid ASP+6 percent. We refer readers to the
                CY 2018 OPPS/ASC final rule with comment period (82 FR 59353 through
                59370) for a full discussion and rationale for the CY 2018 policies and
                use of modifiers ``JG'' and ``TB''.
                 In the CY 2019 OPPS/ASC final rule with comment period (83 FR
                58981), we continued the Medicare 340B payment policies that were
                implemented in CY 2018 and adopted a policy to pay for nonpass-through
                340B-acquired biosimilars at ASP minus 22.5 percent of the biosimilar's
                ASP, rather than of the reference product's ASP. In the CY 2020 OPPS/
                ASC final rule with comment period (84 FR 61321), we continued the 340B
                policies that were implemented in CY 2018 and CY 2019.
                 Our CY 2018 and 2019 OPPS payment policies for 340B-acquired drugs
                have been the subject of ongoing litigation. On December 27, 2018, in
                the case of American Hospital Association, et al. v. Azar, et al., the
                district court concluded in the context of reimbursement requests for
                CY 2018 that the Secretary exceeded his statutory authority by
                adjusting the Medicare payment rates for drugs acquired under the 340B
                Program to ASP minus 22.5 percent for that year.\178\ In that same
                decision, the district court recognized the ``havoc that piecemeal
                review of OPPS payment could bring about' in light of the budget
                neutrality requirement,'' and ordered supplemental briefing on the
                appropriate remedy.\179\ On May 6, 2019, after briefing on remedy, the
                district court issued an opinion that reiterated that the 2018 rate
                reduction exceeded the Secretary's authority, and declared that the
                rate reduction for 2019 (which had been finalized since the Court's
                initial order was entered) also exceeded his authority.\180\ Rather
                than ordering HHS to pay plaintiffs their alleged underpayments,
                however, the district court recognized that crafting a remedy is ``no
                easy task, given Medicare's complexity,'' \181\ and initially remanded
                the issue to HHS to devise an appropriate remedy while also retaining
                jurisdiction. The district court acknowledged that ``if the Secretary
                were to retroactively raise the 2018 and 2019 340B rates, budget
                neutrality would require him to retroactively lower the 2018 and 2019
                rates for other Medicare Part B products and services.'' \182\ ``And
                because HHS has already processed claims under the previous rates, the
                Secretary would potentially be required to recoup certain payments made
                to providers; an expensive and time-consuming prospect.'' \183\
                ---------------------------------------------------------------------------
                 \178\ American Hosp. Ass'n, et al. v. Azar, et al., No. 1:18-cv-
                2084 (D.D.C. Dec. 27, 2018).
                 \179\ Id. at 35 (quoting Amgen, Inc. v. Smith, 357 F.3d 103, 112
                (D.C. Cir. 2004) (citations omitted)).
                 \180\ See May 6, 2019 Memorandum Opinion, Granting in Part
                Plaintiffs' Motion for a Permanent Injunction; Remanding the 2018
                and 2019 OPPS Rules to HHS at 10-12.
                 \181\ Id. at 13.
                 \182\ Id. at 19.
                 \183\ Id. (citing Declaration of Elizabeth Richter).
                ---------------------------------------------------------------------------
                 We respectfully disagreed with the district court's understanding
                of the scope of the Secretary's adjustment authority. On July 10, 2019,
                the district court entered final judgment. The agency appealed to the
                D.C. Circuit, and on July 31, 2020, the court entered an opinion
                reversing the district court's judgment in this matter. Following the
                D.C. Circuit's decision, appellees' petition for panel rehearing and
                petition for rehearing en banc were denied on October 16, 2020. In
                January of 2021, appellees petitioned the United States Supreme Court
                for a writ of certiorari. On July 2, 2021, the Court granted the
                petition.
                 Before the D.C. Circuit upheld our authority to pay ASP minus 22.5
                percent, we stated in the CY 2020 OPPS/ASC final rule with comment
                period that we were taking the steps necessary to craft an appropriate
                remedy in the event of an unfavorable decision on appeal. Notably,
                after the CY 2020 OPPS/ASC proposed rule was issued, we announced in
                the Federal Register (84 FR 51590) our intent to conduct a 340B
                hospital survey to collect drug acquisition cost data for certain
                quarters in CY 2018 and 2019. We stated that such survey data may be
                used in setting the Medicare payment amount for drugs acquired by 340B
                hospitals for cost years going forward, and also may be used to devise
                a remedy for prior years if the district court's ruling was upheld on
                appeal. The district court itself acknowledged that CMS may base the
                Medicare payment amount on average acquisition cost when survey data
                are available.\184\ No 340B hospital disputed in the rulemakings for CY
                2018 and 2019 that the ASP minus 22.5 percent formula was a
                conservative adjustment that represented the minimum discount that
                hospitals receive for drugs acquired through the 340B program, which is
                significant because 340B hospitals have internal data regarding their
                own drug acquisition costs. We stated in the CY 2020 OPPS/ASC final
                rule with comment period that we thus
                [[Page 63646]]
                anticipated that survey data collected for CY 2018 and 2019 would
                confirm that the ASP minus 22.5 percent rate is a conservative amount
                that overcompensates covered entity hospitals for drugs acquired under
                the 340B program. We also explained that a remedy that relies on such
                survey data could avoid the complexities referenced in the district
                court's opinion. For a complete discussion of the Hospital Acquisition
                Cost Survey for 340B-Acquired Specified Covered Outpatient Drugs, we
                refer readers to the CY 2021 OPPS/ASC proposed rule (85 FR 48882
                through 48891) and the CY 2021 OPPS/ASC final rule with comment period
                (85 FR 86042 through 86055).
                ---------------------------------------------------------------------------
                 \184\ See American Hosp. Assoc. v. Azar, 348 F. Supp. 3d 62, 82
                (D.D.C. 2018).
                ---------------------------------------------------------------------------
                 We proposed a payment rate for 340B drugs of ASP minus 28.7 percent
                based on survey data, and also proposed in the alternative that the
                agency could continue its current policy of paying ASP minus 22.5
                percent for CY 2021. We explained that we adopted the OPPS 340B payment
                policy based on the average minimum discount for 340B-acquired drugs
                being approximately ASP minus 22.5 percent. The estimated discount was
                based on a MedPAC analysis identifying 22.5 percent as a conservative
                minimum discount that 340B entities receive when they purchase drugs
                under the 340B program, which we discussed in the CY 2018 OPPS/ASC
                final rule with comment period (82 FR 52496). We emphasized that we
                continue to believe that ASP minus 22.5 percent is an appropriate
                payment rate for 340B-acquired drugs under the authority of section
                1833(t)(14)(A)(iii)(II) for the reasons we stated when we adopted this
                policy in CY 2018 (82 FR 59216). We pointed out that on July 31, 2020,
                the D.C. Circuit reversed the decision of the district court, holding
                that this interpretation of the statute was reasonable. Therefore, we
                also proposed in the alternative that the agency could continue the
                current Medicare payment policy for CY 2021. If adopted, we stated that
                this proposed policy would continue the current Medicare payment policy
                for CY 2021.
                 Based on feedback from stakeholders, we stated that we believed
                maintaining the current payment policy of paying ASP minus 22.5 percent
                for 340B drugs was appropriate in order to maintain consistent and
                reliable payment for these drugs both for the remainder of the PHE, and
                after its conclusion, to give hospitals increased certainty as to
                payments for these drugs. We explained that continuing our current
                policy also gives us more time to conduct further analysis of hospital
                survey data for potential future use for 340B drug payment. We also
                noted that any changes to the current 340B payment policy would be
                adopted through public notice and comment rulemaking.
                 Finally, we stated that while we believe our methods to conduct the
                340B Drug Acquisition Cost Survey, as well as the methodology we used
                to calculate the proposed average or typical discount received by 340B
                entities on 340B drugs, are valid, we nonetheless recognize the
                comments that we received from stakeholders. Utilization of the survey
                data is complex, and we emphasized that we wish to continue to evaluate
                how to balance and weigh the use of the survey data, the necessary
                adjustments to the data, and the weighting and incorporation of ceiling
                prices--all to determine how best to take the relevant factors into
                account for potentially using the survey to set Medicare OPPS drug
                payment policy. We stated that we would continue to assess commenters'
                feedback as we explore whether survey data should be considered
                hospital acquisition cost data for purposes of paying for drugs
                acquired under section 1833(t)(14)(A)(iii)(I) of the Act.
                c. CY 2022 Proposed 340B Drug Payment Policy
                 For CY 2022, we proposed to continue our current policy of paying
                ASP minus 22.5 percent for 340B-acquired drugs and biologicals,
                including when furnished in nonexcepted off-campus PBDs paid under the
                PFS. We proposed, in accordance with section 1833(t)(14)(A)(iii)(II) of
                the Act, to pay for separately payable Medicare Part B drugs and
                biologicals (assigned status indicator ``K''), other than vaccines and
                drugs on pass-through status, that are acquired through the 340B
                Program at ASP minus 22.5 percent when billed by a hospital paid under
                the OPPS that is not excepted from the payment adjustment. We proposed
                to continue our current policy for calculating payment for 340B-
                acquired biosimilars, which is discussed in section V.B.2.c. of the CY
                2019 OPPS/ASC final rule with comment period, and would continue the
                policy we finalized in CY 2019 to pay ASP minus 22.5 percent for 340B-
                acquired drugs and biologicals furnished in nonexcepted off-campus PBDs
                paid under the PFS.
                 We also proposed to continue the 340B payment adjustment for WAC-
                priced drugs, which is WAC minus 22.5 percent. 340B-acquired drugs that
                are priced using AWP would continue to be paid an adjusted amount of
                69.46 percent of AWP. Additionally, we proposed to continue to exempt
                rural sole community hospitals (as described under the regulations at
                Sec. 412.92 and designated as rural for Medicare purposes), children's
                hospitals, and PPS-exempt cancer hospitals from the 340B payment
                adjustment. We stated that these hospitals would continue to report
                informational modifier ``TB'' for 340B-acquired drugs, and would
                continue to be paid ASP+6 percent. We also explained that we may
                revisit our policy to exempt rural SCHs, as well as other hospital
                types, from the 340B drug payment reduction in future rulemaking.
                 We stated that we are also continuing to require hospitals to use
                modifiers to identify 340B-acquired drugs. We refer readers to the CY
                2018 OPPS/ASC final rule with comment period (82 FR 59353 through
                59370) for a full discussion and rationale for the CY 2018 policies and
                the requirements for use of modifiers ``JG'' and ``TB''. We explained
                that we believe maintaining the current policy of paying ASP minus 22.5
                percent for 340B drugs is appropriate given the July 31, 2020 D.C.
                Circuit decision, which reversed the district court's decision and held
                that the interpretation of the statute was reasonable when the 340B
                drug payment policy was implemented in CY 2018. We noted that any
                changes to the current 340B payment policy would be adopted through
                public notice and comment rulemaking.
                 While we believe the Secretary has discretion to propose a payment
                rate for 340B drugs based on the 2020 survey results, we explained that
                we also continue to believe that the current payment rate of ASP minus
                22.5 percent represents the minimum discount that 340B covered entities
                receive, which more closely aligns the payment rate with the resources
                expended by 340B hospitals to acquire such drugs compared to a payment
                rate of ASP+6 percent, while also recognizing the intent of the 340B
                program to allow covered entities, including eligible hospitals, to
                stretch scarce resources in ways that enable hospitals to continue
                providing access to care for Medicare beneficiaries and other patients.
                Additionally, we stated that we continue to believe it is important to
                provide consistency and reliable payment for these drugs both for the
                remainder of the PHE, and after its conclusion, to give hospitals
                increased certainty as to payments for these drugs.
                d. Comments on the Proposed CY 2022 340B Payment Policy
                 Comment: Several commenters, including a hospital association,
                pharmaceutical research and manufacturing companies, and a community
                oncology association,
                [[Page 63647]]
                supported the current OPPS payment policy for 340B-acquired drugs. They
                believed that approximating payment based on acquisition costs is
                appropriate; however, they also recommended reform to the 340B program
                itself. Some of these commenters believed the policy would continue to
                address the inappropriate growth of the 340B Program, stem physician
                practice consolidation with hospitals, and preserve patient access to
                community-based care.
                 Response: We thank the commenters for their support of our 340B
                payment policies. We note that comments related to the reform of the
                340B program are outside of the scope of this final rule and we also
                note that the 340B program is administered by the Health Resources and
                Services Administration, not CMS; however, we thank commenters for
                their input.
                 Comment: A commenter inquired if the 340B drug payment policy
                applies to therapeutic radiopharmaceuticals that are paid based on the
                mean unit cost data, stating that it would be inappropriate and
                inaccurate to apply the 22.5 percent reduction to these payment
                amounts. Another commenter opposed the 340B drug payment policy
                specifically for therapeutic radiopharmaceuticals, citing the unique
                cost structure of radiopharmaceuticals. Another commenter requested a
                similar-product specific exemption for Chimeric Antigen Receptor T-cell
                (CAR T-cell) therapy when purchased through the 340B program.
                 Response: The 340B drug payment policy applies to OPPS separately
                payable drugs (status indicator ``K'') purchased through the 340B drug
                program, which include therapeutic radiopharmaceuticals when these
                products are acquired through the 340B drug program. The classes of
                drugs exempted from the policy are vaccines (status indicator ``L'' or
                ``M''), and drugs with transitional pass-through payment status (status
                indicator ``G''). We note that the drug cost methodology has no impact
                on the application of the 340B discount. As we noted above, our policy
                applies to all drugs purchased through the 340B drug program except for
                vaccines and drugs with transitional pass-through payment status. While
                we acknowledge that radiopharmaceuticals necessitate special handling,
                we note that there are other drug classes that also necessitate special
                handling under the 340B program. Therefore, we disagree with the
                commenter that therapeutic radiopharmaceuticals purchased through the
                340B drug program should qualify for an exemption from application of
                the payment adjustment. We note that, under the OPPS, the 340B payment
                adjustment is ASP minus 22.5 percent, WAC minus 22.5 percent, or 69.46
                percent of AWP. We reiterate, these payment rates are based on the
                minimum average discount for products purchased through the 340B
                program, with the actual acquisition costs likely being much lower.
                 Comment: Some commenters had concerns that new biosimilars on pass-
                through status would have a competitive advantage over their reference
                product as a result of the disparity in OPPS payment for these products
                when a biosimilar has pass-through status. Commenters believed the
                disparity resulting from the combined 340B drug payment and pass-
                through policies would advantage biosimilars receiving pass-through
                payment if the applicable reference product is acquired under the 340B
                program and not receiving pass-through payment. The commenters believe
                the disparity would lead to inappropriate prescribing inconsistent with
                clinical guidelines and/or standards of care.
                 Response: We disagree with commenters that the current payment
                policy would unfairly place reference products at a competitive
                disadvantage relative to their applicable biosimilars. We believe the
                continuation of our current biosimilar policy will allow for
                appropriate payment and access to these important treatments. As noted
                in the CY 2021 OPPS/ASC final rule with comment period (85 FR 86043),
                we do not believe that the biosimilars' temporary payments provided by
                pass-through status will create the substantial competitive advantage
                that commenters described. We note that the advantage of pass-through
                payment exists under the current 340B policy that includes both new
                drugs and biosimilars. We also note we are continuing the policy from
                previous years regarding biosimilars and 340B payment. Please see
                section V.B.2.C. of this final rule with comment period for additional
                discussion regarding biosimilars and section V.A.1. for additional
                discussion on drug pass-through payments. We note that the advantage of
                pass-through payment exists under the current 340B policy that includes
                both new drugs and biosimilars. We are continuing the policy from
                previous years regarding payment for biosimilars acquired under the
                340B program.
                 Comment: Several commenters disagreed that ASP minus 22.5 was a
                conservative adjustment that represented the minimum discount that
                hospitals receive when they acquire drugs through the 340B program.
                They contended that they are losing money when dispensing certain drugs
                as the price paid by CMS is significantly lower than the price paid by
                the entity.
                 Response: We thank the commenters for their feedback. The 22.5
                percent discount off of ASP is a conservative minimum discount for
                products acquired under the 340B program based on a 2015 MedPAC
                analysis, which we discussed in the CY 2018 OPPS/ASC final rule with
                comment period (82 FR 52496). Our 2020 Hospital Acquisition Cost Survey
                for 340B-Acquired SCODs has shown the average discount to be about 34.7
                percent. As noted in the 2021 OPPS/ASC final rule with comment period
                (85 FR 86045), the 2020 Hospital Acquisition Cost Survey for 340B-
                Acquired SCODS incorporated the 340B ceiling prices for hospitals that
                did not affirmatively respond to the survey and may have skewed the
                average discount determined based on survey results (34.7 percent off
                of ASP) towards the minimum average discount (that is, the ceiling
                price) that a 340B hospital would receive on a drug. Since the ceiling
                price is the maximum amount covered entities may permissibly be
                required to pay for a drug under section 340B(a)(1) of the Public
                Health Service Act, we would not expect any 340B hospital to have
                acquisition costs for any acquired drug that are greater than ASP minus
                22.5 percent. Therefore, we disagree that covered entities are, on
                average, losing money under the current 340B drug payment policy of ASP
                minus 22.5 percent for drugs purchased through the 340B drug program.
                 Comment: Several commenters requested that we make our 340B
                exemptions policy permanent. Additionally, commenters asked CMS to
                extend the exemption to urban SCHs, Medicare Dependent Hospitals, Rural
                Referral Centers.
                 Response: We thank commenters for their recommendations. At this
                time, we do not believe it is appropriate to revise our 340B exemptions
                policy and believe we should maintain our current policy for CY 2022.
                Nonetheless, we will take these comments into consideration for future
                rulemaking.
                 Comment: Several commenters stated that CMS has not provided
                sufficient analysis for the continuation of the 340B payment policy,
                expressing their belief that CMS has not considered changes in
                utilization or volume for hospitals that are actively participating in
                the 340B program since the implementation of the policy. They further
                noted that CMS has not analyzed the impact of the prior year's
                reimbursement changes for drugs acquired under the 340B program for the
                affected hospitals. They contended
                [[Page 63648]]
                that CMS has not provided evidence that the payment policy remains
                budget neutral by recalculating the policy's impact to make sure the
                conversion factor is properly adjusted over time to reflect changes in
                inflation or 340B drug utilization.
                 Response: In the CY 2018 OPPS/ASC final rule with comment period
                (82 FR 59369 through 59370), we implemented the 340B drug payment
                policy and adjusted the payment rate for separately payable drugs and
                biologicals (other than drugs with pass-through payment status and
                vaccines) acquired under the 340B Program. This adjustment changed the
                payment rate from ASP+6 percent to ASP minus 22.5 percent for drugs
                subject to this policy. In that rule, we stated that our goal was to
                make Medicare payment for separately payable drugs more aligned with
                the resources expended by hospitals to acquire such drugs. We believe
                the current 340B drug payment policy reflects the average minimum
                discount that 340B participating hospitals receive for drugs acquired
                under the 340B Program, and we believe it is inappropriate for Medicare
                to subsidize other programs through Medicare payments for separately
                payable drugs. We note the data collected in our 2020 Hospital
                Acquisition Cost Survey for 340B-acquired SCODs found the average 340B
                program drug discount to be 34.7 percent.
                 With respect to OPPS budget neutrality and the conversion factor,
                OPPS budget neutrality is generally developed on a prospective basis by
                isolating the effect of any changes in payment policy or data under the
                prospective OPPS with all other factors held constant. We note that
                since the CY 2018 implementation of the 340B drug payment policy in
                which we developed a budget neutrality adjustment for the policy, the
                adjusted percentage payment has remained at ASP minus 22.5 percent. As
                a result, while some of the claims may change based on drug payment and
                billing, as indicated by the ``JG'' modifier, these drugs, including
                their utilization and expected payments, would be included as part of
                the broader budget neutrality adjustments, but collectively they would
                not have a separate budget neutrality adjustment specifically for the
                340B drug payment policy. We note that in the rules in which we
                proposed to establish or modify the adjustment, we have included in the
                impact analysis the estimated effects on different categories of
                providers based on the policy. Finally, we note that we monitor the
                payment and utilization patterns associated with this adjustment and
                for drug spending more broadly, and will continue to do so.
                 Comment: Several commenters called on CMS to suspend the current
                340B drug payment policy and restore the 340B drug and biological
                payment rate to the statutory ASP+6 percent until the litigation is
                resolved in the U.S. Supreme Court. Other commenters recommended CMS
                postpone any changes to the 340B drug payment policy until the court
                case has concluded. Others recommended CMS suspend the policy amid the
                COVID-19 Public Health Emergency (PHE).
                 Response: We acknowledge that the issue of the Secretary's
                authority to adjust the 340B drug payment rate is subject to litigation
                before the U.S. Supreme Court. As explained at prior stages of the
                litigation, we believe that the suit now before the Court is precluded
                by 1833(t)(12), and, in the alternative, that our 340B drug payment
                policy is within the statutory authority under 1833(t)(14)(A), which
                was confirmed by the D.C. Circuit. While the litigation involving this
                policy is pending, we believe maintaining the current payment policy
                for CY 2022 would be appropriate in order to maintain consistent and
                reliable payment. Regarding payment during the COVID-19 PHE, we believe
                maintaining consistent payment is important; therefore, we are
                maintaining our proposed policy. We note that any changes to this
                payment policy would be adopted through notice and comment rulemaking.
                 Comment: Many commenters opposed the CY 2022 proposal to pay for
                drugs acquired under the 340B program at the payment rate of ASP minus
                22.5 percent. These commenters urged CMS to withdraw its proposed
                policy and contended that the policy was an unlawful application of the
                CMS's authority.
                 Many commenters opposed the current 340B policy and argued that it
                redistributes resources designated for safety net hospitals to
                subsidize non-340B or private hospitals because the payment reduction
                is budget neutral. The commenters requested that CMS end its policy of
                paying for drugs obtained through the 340B program at ASP minus 22.5
                percent and restore the statutory default payment rate of ASP+6
                percent.
                 Many commenters also alleged that private pharmacy benefit managers
                and third-party payers are citing Medicare's payment reduction to
                justify implementing similar policies that provide lower reimbursement
                for 340B drugs compared to non-340B drugs.
                 Response: We respectfully disagree with the commenters' assertions
                that our 340B drug payment policy is illegal or an unlawful application
                of the law. We disagree with commenters that the OPPS 340B payment
                policy has taken away resources designated for safety net hospitals and
                our internal analyses have not demonstrated any issues related to
                access of separately payable drugs as a result of the implementation of
                this policy. As discussed in this section of the CY 2022 final rule
                with comment period, the D.C. Circuit has confirmed that our 340B drug
                payment policy is within our authority in section 1833(t)(14) of the
                Act.
                 We note that CMS does not control policies created by private
                pharmacy benefit managers and third-party payers regarding payment for
                340B drugs compared to non-340B drugs.
                 After reviewing the public comments for CY 2022, we are finalizing
                our proposal, without modification, to pay ASP minus 22.5 percent for
                340B-acquired drugs, including when furnished in nonexcepted off-campus
                PBDs paid under the PFS. Our finalized proposal continues the 340B
                Program policies that were implemented in CY 2018 with the exception of
                the way we are calculating payment for 340B-acquired biosimilars, which
                is discussed in section V.B.2.c. of the CY 2019 OPPS/ASC final rule
                with comment period, and would continue the policy we finalized in CY
                2019 to pay ASP minus 22.5 percent for 340B-acquired drugs and
                biologicals furnished in nonexcepted off-campus PBDs paid under the
                PFS.
                 We believe that the current payment rate of ASP minus 22.5 percent
                represents the minimum discount that 340B covered entities receive,
                which more closely aligns the payment rate with the resources expended
                by 340B hospitals to acquire such drugs compared to a payment rate of
                ASP+6 percent, while also recognizing the intent of the 340B program to
                allow covered entities, including eligible hospitals, to stretch scarce
                resources in ways that enable hospitals to continue providing access to
                care for Medicare beneficiaries and other patients. Additionally, we
                continue to believe it is important to provide consistent and reliable
                payment for these drugs both for the remainder of the PHE, and after
                its conclusion, to give hospitals increased certainty as to payments
                for these drugs. We note that any changes to this payment policy would
                be adopted through notice and comment rulemaking.
                [[Page 63649]]
                7. High Cost/Low Cost Threshold for Packaged Skin Substitutes
                a. Background
                 In the CY 2014 OPPS/ASC final rule with comment period (78 FR
                74938), we unconditionally packaged skin substitute products into their
                associated surgical procedures as part of a broader policy to package
                all drugs and biologicals that function as supplies when used in a
                surgical procedure. As part of the policy to package skin substitutes,
                we also finalized a methodology that divides the skin substitutes into
                a high cost group and a low cost group, in order to ensure adequate
                resource homogeneity among APC assignments for the skin substitute
                application procedures (78 FR 74933).
                 Skin substitutes assigned to the high cost group are described by
                HCPCS codes 15271 through 15278. Skin substitutes assigned to the low
                cost group are described by HCPCS codes C5271 through C5278. Geometric
                mean costs for the various procedures are calculated using only claims
                for the skin substitutes that are assigned to each group. Specifically,
                claims billed with HCPCS code 15271, 15273, 15275, or 15277 are used to
                calculate the geometric mean costs for procedures assigned to the high
                cost group, and claims billed with HCPCS code C5271, C5273, C5275, or
                C5277 are used to calculate the geometric mean costs for procedures
                assigned to the low cost group (78 FR 74935).
                 Each of the HCPCS codes described earlier are assigned to one of
                the following three skin procedure APCs according to the geometric mean
                cost for the code: APC 5053 (Level 3 Skin Procedures): HCPCS codes
                C5271, C5275, and C5277; APC 5054 (Level 4 Skin Procedures): HCPCS
                codes C5273, 15271, 15275, and 15277; or APC 5055 (Level 5 Skin
                Procedures): HCPCS code 15273. In CY 2021, the payment rate for APC
                5053 (Level 3 Skin Procedures) was $524.17, the payment rate for APC
                5054 (Level 4 Skin Procedures) was $1,715.36, and the payment rate for
                APC 5055 (Level 5 Skin Procedures) was $3,522.15. This information also
                is available in Addenda A and B of the CY 2021 OPPS/ASC final rule with
                comment period, as issued with the final rule correction notice (86 FR
                11428) (the correction notice and corrected Addenda A and B are
                available via the internet on the CMS website).
                 We have continued the high cost/low cost categories policy since CY
                2014, and we proposed to continue it for CY 2022. Under the current
                policy, skin substitutes in the high cost category are reported with
                the skin substitute application CPT codes, and skin substitutes in the
                low cost category are reported with the analogous skin substitute HCPCS
                C-codes. For a discussion of the CY 2014 and CY 2015 methodologies for
                assigning skin substitutes to either the high cost group or the low
                cost group, we refer readers to the CY 2014 OPPS/ASC final rule with
                comment period (78 FR 74932 through 74935) and the CY 2015 OPPS/ASC
                final rule with comment period (79 FR 66882 through 66885).
                 For a discussion of the high cost/low cost methodology that was
                adopted in CY 2016 and has been in effect since then, we refer readers
                to the CY 2016 OPPS/ASC final rule with comment period (80 FR 70434
                through 70435). Beginning in CY 2016 and in subsequent years, we
                adopted a policy where we determined the high cost/low cost status for
                each skin substitute product based on either a product's geometric mean
                unit cost (MUC) exceeding the geometric MUC threshold or the product's
                per day cost (PDC) (the total units of a skin substitute multiplied by
                the mean unit cost and divided by the total number of days) exceeding
                the PDC threshold. We assigned each skin substitute that exceeded
                either the MUC threshold or the PDC threshold to the high cost group.
                In addition, we assigned any skin substitute with a MUC or a PDC that
                does not exceed either the MUC threshold or the PDC threshold to the
                low cost group (85 FR 86059).
                 However, some skin substitute manufacturers have raised concerns
                about significant fluctuation in both the MUC threshold and the PDC
                threshold from year to year using the methodology developed in CY 2016.
                The fluctuation in the thresholds may result in the reassignment of
                several skin substitutes from the high cost group to the low cost group
                which, under current payment rates, can be a difference of over $1,000
                in the payment amount for the same procedure. In addition, these
                stakeholders were concerned that the inclusion of cost data from skin
                substitutes with pass-through payment status in the MUC and PDC
                calculations would artificially inflate the thresholds. Skin substitute
                stakeholders requested that CMS consider alternatives to the current
                methodology used to calculate the MUC and PDC thresholds and also
                requested that CMS consider whether it might be appropriate to
                establish a new cost group in between the low cost group and the high
                cost group to allow for assignment of moderately priced skin
                substitutes to a newly created middle group.
                 We share the goal of promoting payment stability for skin
                substitute products and their related procedures as price stability
                allows hospitals using such products to more easily anticipate future
                payments associated with these products. We have attempted to limit
                year-to-year shifts for skin substitute products between the high cost
                and low cost groups through multiple initiatives implemented since CY
                2014, including: Establishing separate skin substitute application
                procedure codes for low-cost skin substitutes (78 FR 74935); using a
                skin substitute's MUC calculated from outpatient hospital claims data
                instead of an average of ASP+6 percent as the primary methodology to
                assign products to the high cost or low cost group (79 FR 66883); and
                establishing the PDC threshold as an alternate methodology to assign a
                skin substitute to the high cost group (80 FR 70434 through 70435).
                 To allow additional time to evaluate concerns and suggestions from
                stakeholders about the volatility of the MUC and PDC thresholds, in the
                CY 2018 OPPS/ASC proposed rule (82 FR 33627), we proposed that a skin
                substitute that was assigned to the high cost group for CY 2017 would
                be assigned to the high cost group for CY 2018, even if it did not
                exceed the CY 2018 MUC or PDC thresholds. We finalized this policy in
                the CY 2018 OPPS/ASC final rule with comment period (82 FR 59347). We
                stated in the CY 2018 OPPS/ASC proposed rule that the goal of our
                proposal to retain the same skin substitute cost group assignments in
                CY 2018 as in CY 2017 was to maintain similar levels of payment for
                skin substitute products for CY 2018 while we study our skin substitute
                payment methodology to determine whether refinements to the existing
                policies are consistent with our policy goal of providing payment
                stability for skin substitutes.
                 We stated in the CY 2018 OPPS/ASC final rule with comment period
                (82 FR 59347) that we would continue to study issues related to the
                payment of skin substitutes and take these comments into consideration
                for future rulemaking. We received many responses to our request for
                comments in the CY 2018 OPPS/ASC proposed rule about possible
                refinements to the existing payment methodology for skin substitutes
                that would be consistent with our policy goal of providing payment
                stability for these products. In addition, several stakeholders have
                made us aware of additional concerns and recommendations since the
                release of the CY 2018 OPPS/ASC final rule with comment period. As
                discussed in
                [[Page 63650]]
                the CY 2019 OPPS/ASC final rule with comment period (83 FR 58967
                through 58968), we identified four potential methodologies that have
                been raised to us that we encouraged the public to review and provide
                comments on. We stated in the CY 2019 OPPS/ASC final rule with comment
                period that we were especially interested in any specific feedback on
                policy concerns with any of the options presented as they relate to
                skin substitutes with differing per day or per episode costs and sizes
                and other factors that may differ among the dozens of skin substitutes
                currently on the market.
                 For CY 2020, we sought more extensive comments on the two policy
                ideas that generated the most comment from the CY 2019 comment
                solicitation. One of the ideas was to establish a payment episode
                between 4 to 12 weeks where a lump-sum payment would be made to cover
                all of the care services needed to treat the wound. There would be
                options for either a complexity adjustment or outlier payments for
                wounds that require a large amount of resources to treat. The other
                policy idea would be to eliminate the high cost and low cost categories
                for skin substitutes and have only one payment category and set of
                procedure codes for the application of all graft skin substitute
                products. Please refer to the CY 2019 OPPS final rule (83 FR 58967 to
                58968) and the CY 2020 OPPS final rule (84 FR 61328 to 61331) for a
                detailed summary and discussion of the comments we received in response
                to these comment solicitations. We are continuing to consider the
                comments we received in response to these comment solicitations from CY
                2019 and CY 2020.
                 Comment: Multiple commenters provided suggestions on changes to the
                payment methodology for graft skin substitute payment policy for future
                rulemaking.
                 Response: We appreciate the additional advice regarding possible
                changes to the payment methodology for graft skin substitute products,
                and we will consider this information as a part of future rulemaking.
                b. Packaged Skin Substitutes for CY 2022
                 For CY 2022, consistent with our policy since CY 2016, we proposed
                to continue to determine the high cost/low cost status for each skin
                substitute product based on either a product's geometric MUC exceeding
                the geometric MUC threshold or the product's PDC (the total units of a
                skin substitute multiplied by the MUC and divided by the total number
                of days) exceeding the PDC threshold. Consistent with the methodology
                as established in the CY 2014 OPPS/ASC through CY 2018 OPPS/ASC final
                rules with comment period, we analyzed CY 2019 claims data to calculate
                the MUC threshold (a weighted average of all skin substitutes' MUCs)
                and the PDC threshold (a weighted average of all skin substitutes'
                PDCs). The proposed CY 2022 MUC threshold is $48 per cm\2\ (rounded to
                the nearest $1) and the proposed CY 2022 PDC threshold is $949 (rounded
                to the nearest $1). We also proposed that our definition of skin
                substitutes includes synthetic skin substitute products in addition to
                biological skin substitute products as described in section V.B.7. (86
                FR 42137 through 42143) of the CY 2022 OPPS/ASC proposed rule. We also
                want to clarify that the availability of an HCPCS code for a particular
                human cell, tissue, or cellular or tissue-based product (HCT/P) does
                not mean that that product is appropriately regulated solely under
                section 361 of the PHS Act and the FDA regulations in 21 CFR part 1271.
                Manufacturers of HCT/Ps should consult with the FDA Tissue Reference
                Group (TRG) or obtain a determination through a Request for Designation
                (RFD) on whether their HCT/Ps are appropriately regulated solely under
                section 361 of the PHS Act and the regulations in 21 CFR part 1271.
                 For CY 2022, as we did for CY 2021, we proposed to assign each skin
                substitute that exceeds either the MUC threshold or the PDC threshold
                to the high cost group. In addition, we proposed to assign any skin
                substitute with a MUC or a PDC that does not exceed either the MUC
                threshold or the PDC threshold to the low cost group. For CY 2022, we
                proposed that any skin substitute product that was assigned to the high
                cost group in CY 2021 would be assigned to the high cost group for CY
                2022, regardless of whether it exceeds or falls below the CY 2022 MUC
                or PDC threshold. This policy was established in the CY 2018 OPPS/ASC
                final rule with comment period (82 FR 59346 through 59348).
                 For CY 2022, we proposed to continue to assign skin substitutes
                with pass-through payment status to the high cost category. We proposed
                to assign skin substitutes with pricing information but without claims
                data to calculate a geometric MUC or PDC to either the high cost or low
                cost category based on the product's ASP+6 percent payment rate as
                compared to the MUC threshold. If ASP is not available, we proposed to
                use WAC+3 percent to assign a product to either the high cost or low
                cost category. Finally, if neither ASP nor WAC is available, we
                proposed to use 95 percent of AWP to assign a skin substitute to either
                the high cost or low cost category. We proposed to continue to use
                WAC+3 percent instead of WAC+6 percent to conform to our proposed
                policy described in section V.B.2.b of the CY 2022 OPPS/ASC proposed
                rule (86 FR 42132) to establish a payment rate of WAC+3 percent for
                separately payable drugs and biologicals that do not have ASP data
                available. New skin substitutes without pricing information would be
                assigned to the low cost category until pricing information is
                available to compare to the CY 2022 MUC and PDC thresholds. We also
                proposed to continue to include synthetic products in addition to
                biological products in our description of skin substitutes. For a
                discussion of our existing policy under which we assign skin
                substitutes without pricing information to the low cost category until
                pricing information is available, we refer readers to the CY 2016 OPPS/
                ASC final rule with comment period (80 FR 70436). For a discussion of
                how we determined that synthetic skin graft sheet products can be
                reported with graft skin substitute procedure codes, we refer readers
                to the CY 2021 OPPS/ASC final rule (85 FR 86064 to 86067).
                 Comment: The HOP Panel recommended and several commenters supported
                ending the packaging of the graft skin substitute add-on codes (CPT
                codes 15272, 15274, 15276, and 15278; HCPCS codes C5272, C5274, C5276,
                and C5278). The HOP Panel and the commenters request that these codes
                be assigned to APCs that reflect the estimated costs of these service
                codes. Commenters claim that packaging the graft skin substitute add-on
                codes eliminates the variation of payment for wound care treatment
                based on the size of the wound. They assert that providers are
                discouraged from treating wounds between 26 and 99 cm\2\ and over 100
                cm\2\ in the outpatient hospital setting because of the financial
                losses they experience to provide such care. Commenters believe that
                packaging graft skin substitute add-on codes disrupts the methodology
                of how the American Medical Association (AMA), the organization that
                manages CPT service codes, intended graft skin substitute procedures to
                be paid.
                 Response: We do not believe the recommendation of the HOP Panel and
                the commenters is appropriate for paying for graft skin substitutes
                under the OPPS. The OPPS is a prospective payment system and not a fee-
                for-service payment system. That means that we generally attempt to
                make one payment for all of the services billed with the primary
                medical procedure, including add-on procedures such as
                [[Page 63651]]
                the ones described by CPT codes 15272, 15274, 15276, and 15278, and
                HCPCS codes C5272, C5274, C5276, and C5278.
                 More specifically, we calculate the OPPS payment rate by first
                calculating the geometric mean cost of the procedure. This calculation
                includes claims for individual services that used a lower level of
                resources and claims for individual services that used a higher level
                of resources. The resulting geometric mean cost will reflect the median
                service cost for a given medical procedure. Next, we group the medical
                procedure with other medical procedures with clinical and resource
                similarity in an APC and calculate the geometric mean of these related
                procedures to generate a base payment rate for all procedures assigned
                to the APC.
                 A prospective payment system like the OPPS is designed to pay
                providers the geometric mean cost of the primary service they provide,
                and such a system encourages efficiencies and cost-savings in the
                administration of health care. However, a prospective payment system is
                not intended to discourage providers from rendering medically-necessary
                to patients. For example, it's possible that a provider could
                experience a financial loss when they perform a service where a patient
                receives 85 cm\2\ of a graft skin substitute product, but that same
                provider could see a financial gain when the next patient receives a
                skin graft where only 10 cm\2\ of product is used. Paying separately
                for add-on codes in a prospective payment system defeats the goals of
                such a payment system. If providers are paid at cost or nearly at cost
                for each individual service they render, there is no incentive for them
                to control costs. Add-on codes should be packaged with the primary
                medical service to be able to establish a median payment rate that
                gives providers incentives to keep their costs in line with typical
                providers throughout the Medicare program. The need for cost
                efficiencies in the application of graft skin substitutes to treat
                wounds is no different than need for cost efficiencies in other
                procedures administered in the outpatient hospital setting. Therefore,
                add-on codes, including the add-on codes for the administration of
                graft skin substitutes must remain packaged to maintain the integrity
                of the OPPS.
                 Comment: The HOP Panel recommended and several commenters support
                ensuring that the payment rate of graft skin substitute procedures be
                the same no matter where on the body the graft skin substitute product
                is applied to the patient. There are four graft skin substitute
                application procedures for high cost skin substitute products (CPT
                codes 15271, 15273, 15275, and 15277) and a similar four graft skin
                substitute applications for low cost skin substitute products (HCPCS
                codes C5272, C5274, C5276, and C5278). The reason there are four
                application service codes is that there are different service codes for
                applying graft skin substitutes to children and infants as compared to
                adults and there are different service codes for applying graft skin
                substitutes to the trunk, arms, and legs as compared to the face,
                scalp, eyelids, mouth, neck, ears, orbits, genitalia, hands, feet,
                fingers, and toes. Commenters claim that the cost to apply graft skin
                substitute products does not depend on the location of the wound
                because the same amount of product is used on the wound and the same
                clinical resources are used to treat the wound independent of the
                location of the wound.
                 Response: We appreciate commenters concerns and note that that
                current codes describing the application of high and low cost graft
                skin substitutes for adults (CPT codes 15271 and 15275, and HCPCS codes
                C5272 and C5276) have been assigned the same APC (5054). Because they
                are currently included in the same APC, OPPS payment for them is the
                same, and this payment policy is consistent with the recommendation
                from the HOP Panel and other commenters. We note that the codes
                describing the application of high and low cost products for children
                and infants in the trunk, arms, and legs (CPT code 15273 or HCPCS code
                C5274) have been assigned to a lower-paying APC (APC 5054) than the APC
                assignment for the application of high and low cost graft skin
                substitute products for children in the face, scalp, eyelids, mouth,
                neck, ears, orbits, genitalia, hand, feet, fingers, and toes--CPT code
                15277 or HCPCS code C5277, which are assigned to APC 5055. These APCs
                have different payment rates. We note that these services--the
                application of skin substitutes for children--are fairly low volume
                services in the OPPS because Medicare beneficiaries tend to be older.
                In addition, the differences in costs that have determined APC
                assignments for these services for children have been supported by
                historical cost data. We also note that none of these service codes are
                in violation of the 2-times rule. While we do not believe we should
                change the APC assignments for these services at this time, we are
                interested in additional feedback on this issue, including whether we
                should revaluate APC assignments for the application of skin
                substitutes for children in the future.
                 Comment: One commenter did not support our proposal to assign graft
                skin substitute products to a high cost or a low cost group based on if
                the MUC or PDC of a product exceeds a weighted average of either the
                MUC or PDC of all graft skin substitute products. The commenter
                believes the current two-tier system provides incentives for providers
                to use higher-cost graft skin substitute products instead of lower-cost
                products that have similar efficacy to the higher-cost products. The
                commenter supports a payment system where the high cost and low cost
                groups have been eliminated. The commenter believes geometric mean
                payment rate for each graft skin substitute application service code
                would be calculated using all of the separately paid claims for a given
                code without consideration to the mean unit cost of the graft skin
                substitute product used in the service. The commenter believes this
                approach would reduce spending on graft skin substitute procedures by
                encouraging the use of lower-cost graft skin substitute products and
                will reduce administration burden for providers as they only need to
                use one set of product application codes.
                 Response: As we explained in the CY 2014 OPPS/ASC final rule (78 FR
                74933), the graft skin substitute procedures described by CPT codes
                15271 through 15278 are clinically homogeneous, but there is resource
                heterogeneity between different skin substitute products with the cost
                per cm\2\ ranging from under $10 per cm\2\ to over $200 per cm\2\. As
                we discussed in prior rules, establishing high cost and low cost groups
                for skin substitutes makes the payment for these products more
                homogeneous and reduces the risk of excessive overpayment or
                underpayment to a provider when a skin substitute product is used.
                However, we appreciate the commenter's proposal and note that
                establishing a payment policy in which with only one set of product
                application service codes may have other benefits, such as simplifying
                coding and payments for these procedures and products, and we may
                explore these concepts in future rulemaking.
                 Comment: Two commenters supported our proposal to continue to
                assign skin substitutes to the low cost or high cost group. Commenters
                also supported our proposal that any skin substitute product that was
                assigned to the high cost group in CY 2020 would be assigned to the
                high cost group for CY 2021, regardless of whether it exceeds or falls
                below the CY 2021 MUC or PDC threshold.
                [[Page 63652]]
                 Response: We appreciate the support of the commenters for our
                proposals.
                 Comment: Two commenters supported our inclusion of synthetic
                products in our definition of skin substitute products.
                 Response: We appreciate the support of the commenters.
                 Comment: One commenter requested that CMS no longer use the term
                ``skin substitutes'' to describe products that do not function like
                human skin that is grafted onto a wound and are not substitutes for
                skin grafts, but do aid in wound healing by stimulating the patient to
                regenerate lost tissue. Instead, the commenters request that we use the
                term ``cellular and/or tissue based products for skin wounds'' that is
                abbreviated ``CTPs''.
                 Response: We appreciate the suggestion by the commenter, but we do
                not believe it is appropriate at this time to end our use of the term
                ``skin substitute.'' Notably, the CPT and HCPCS codes used to report
                graft procedures using cellular and tissue based products to heal skin
                wounds, CPT codes 15271 through 15278 and HCPCS codes C5271 through
                C5278, use the term ``skin substitute'' in the descriptor. We feel that
                we should use terminology that reflects the service descriptors that
                are reported in the OPPS. Also, we believe the term ``skin substitute''
                is well-understood by providers and industry stakeholders.
                 Comment: Two commenters wanted us to confirm that our proposed rule
                language that encourages manufacturers of HCT/Ps to consult with the
                FDA Tissue Reference Group (TRG) or obtain a determination through a
                Request for Designation (RFD) on whether their HCT/Ps are appropriately
                regulated solely under section 361 of the PHS Act and the regulations
                in 21 CFR part 1271 applied only to those HCT/Ps that do not have
                either an FDA 510(k) clearance, premarket approval (PMA), or biologic
                license application (BLA) approval. These commenters are supportive of
                the policy as long as no consultation or determination is required for
                HCT/Ps with either a 510(k) clearance, a PMA, or a BLA approval.
                 Response: We can confirm that our suggestion for manufacturers of
                HCT/Ps to consult with the FDA Tissue Reference Group (TRG) or obtain a
                determination through a Request for Designation (RFD) on whether their
                HCT/Ps are appropriately regulated solely under section 361 of the PHS
                Act and the regulations in 21 CFR part 1271 does apply only to those
                HCT/Ps that do not have either a 510(k) clearance, a PMA, or a BLA
                approval from FDA.
                 Comment: Multiple commenters stated that HCPCS code C1849, which is
                used to report synthetic graft skin substitute products, should be
                assigned to the low cost skin substitute group by default, similar to
                how we pay for HCPCS code Q4100 (Skin substitute, not otherwise
                specified), which is used to report multiple biological skin substitute
                products that do not have product-specific HCPCS codes. Commenters also
                expressed concerns that synthetic graft skin substitute products that
                should receive payment through the low cost skin substitute group would
                instead receive payment in the high cost skin substitute group and
                increase overall graft skin substitute costs for Medicare.
                 Response: We were aware of one synthetic graft skin substitute
                product that was described by HCPCS code C1849 when the code was
                established in July 2020. The manufacturer provided pricing data that
                showed the cost of the product is above the MUC threshold for graft
                skin substitute products and therefore HCPCS code C1849 should be
                assigned to the high cost skin substitute group. We note that we used
                pricing data to assign HCPCS code C1849 to the high cost group, and the
                assignment of HCPCS code C1849 to the high cost skin substitute group
                was not automatic. As more synthetic graft skin substitute products are
                identified, we will use their pricing data to calculate an average
                price for the products described by HCPCS code C1849 and compare that
                average price to the overall MUC threshold to determine whether HCPCS
                code C1849 should be assigned to the high cost or low cost skin
                substitute group.
                 Comment: One commenter noted that CMS previously assigned HCPCS
                code Q4117 (Hyalomatrix, per square centimeter) to a product considered
                a synthetic skin substitute which demonstrates that synthetic skin
                substitutes can function within the current coding under both the PFS
                and OPPS frameworks. The commenter stated that it would be better for
                CMS to judiciously assign HCPCS codes to synthetic products that meet
                these application requirements.
                 Response: We will take this suggestion into consideration for
                future rulemaking as we continue our work to address payment for all
                skin substitutes across settings, taking into account the intersection
                between biological, bioengineered, and synthetic components of these
                products. We also plan to further evaluate the characteristics of
                products with an existing Q-code for future rulemaking.
                 Comment: One commenter, the manufacturer, has requested that HCPCS
                codes Q4122 (Dermacell, per square centimeter) and Q4150 (Allowrap ds
                or dry, per square centimeter) continue to be assigned to the high-cost
                skin substitute group.
                 Response: HCPCS codes Q4122 and Q4150 were both assigned to the
                high cost group in CY 2021 and also were proposed to be assigned to the
                high-cost group for CY 2022. Any skin substitute assigned to the high
                cost group in CY 2021 will continue to be assigned to the high cost
                group in CY 2022 even if the MUC and PDC for the skin substitute
                product is below the overall MUC and PDC thresholds for all skin
                substitute products. Accordingly, we are finalizing our proposal to
                assign HCPCS codes Q4122 and Q4150 to the high-cost group in CY 2022.
                 After consideration of the public comments we received, we are
                finalizing our proposal to assign a skin substitute with a MUC or a PDC
                that does not exceed either the MUC threshold or the PDC threshold to
                the low cost group, unless the product was assigned to the high cost
                group in CY 2021, in which case we would assign the product to the high
                cost group for CY 2022, regardless of whether it exceeds the CY 2022
                MUC or PDC threshold. We are also finalizing our proposal to assign to
                the high cost group any skin substitute product that exceeds the CY
                2022 MUC or PDC thresholds and assign to the low cost group any skin
                substitute product that does not exceed the CY 2021 MUC or PDC
                thresholds and was not assigned to the high cost group in CY 2021. We
                are finalizing our proposal to continue to use payment methodologies,
                including ASP+6 percent and 95 percent of AWP, for skin substitute
                products that have pricing information but do not have claims data to
                determine if their costs exceed the CY 2022 MUC. In addition, we are
                finalizing our proposal to continue to use WAC+3 percent instead of
                WAC+6 percent for skin substitute products that do not have ASP pricing
                information or claims data to determine if those products' costs exceed
                the CY 2022 MUC. We also are finalizing our proposal to retain our
                established policy to assign new skin substitute products with pricing
                information to the low cost group. Table 42 includes the final CY 2022
                cost category assignment for each skin substitute product.
                BILLING CODE 4120-01-P
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                BILLING CODE 4120-01-C
                VI. Estimate of OPPS Transitional Pass-Through Spending for Drugs,
                Biologicals, Radiopharmaceuticals, and Devices
                A. Amount of Additional Payment and Limit on Aggregate Annual
                Adjustment
                 Section 1833(t)(6)(E) of the Act limits the total projected amount
                of transitional pass-through payment for drugs, biologicals, and
                categories of devices for a given year to an ``applicable percentage,''
                currently not to exceed 2.0 percent of total program payments estimated
                to be made for all covered services under the OPPS furnished for that
                year. If we estimate before the beginning of the calendar year that the
                total amount of pass-through payments in that year would exceed the
                applicable percentage, section 1833(t)(6)(E)(iii) of the Act requires a
                uniform prospective reduction in the amount of each of the transitional
                pass-through payments made in that year to ensure that the limit is not
                exceeded. We estimate the pass-through spending to determine whether
                payments exceed the applicable percentage and the appropriate pro rata
                reduction to the conversion factor for the projected level of pass-
                through spending in the following year to ensure that total estimated
                pass-through spending for the prospective payment year is budget
                neutral, as required by section 1833(t)(6)(E) of the Act.
                 For devices, developing a proposed estimate of pass-through
                spending in CY 2022 entails estimating spending for two groups of
                items. The first group of items consists of device categories that are
                currently eligible for pass-through payment and that will continue to
                be eligible for pass-through payment in CY 2022. The CY 2008 OPPS/ASC
                final rule with comment period (72 FR 66778) describes the methodology
                we have used in previous years to develop the pass-through spending
                estimate for known device categories continuing into the applicable
                update year. The second group of items consists of devices that we know
                are newly eligible, or project may be newly eligible, for device pass-
                through payment in the remaining quarters of CY 2021 or beginning in CY
                2022. The sum of the proposed CY 2022 pass-through spending estimates
                for these two groups of device categories equaled the proposed total CY
                2022 pass-through spending estimate for device categories with pass-
                through payment status. We determined the device pass-through estimated
                payments for each device category based on the amount of payment as
                required by section 1833(t)(6)(D)(ii) of the Act, and as outlined in
                previous rules, including the CY 2014 OPPS/ASC final rule with
                [[Page 63659]]
                comment period (78 FR 75034 through 75036). We note that, beginning in
                CY 2010, the pass-through evaluation process and pass-through payment
                methodology for implantable biologicals newly approved for pass-through
                payment beginning on or after January 1, 2010, that are surgically
                inserted or implanted (through a surgical incision or a natural
                orifice) use the device pass-through process and payment methodology
                (74 FR 60476). As has been our past practice (76 FR 74335), in the
                proposed rule, we proposed to include an estimate of any implantable
                biologicals eligible for pass-through payment in our estimate of pass-
                through spending for devices. Similarly, we finalized a policy in CY
                2015 that applications for pass-through payment for skin substitutes
                and similar products be evaluated using the medical device pass-through
                process and payment methodology (76 FR 66885 through 66888). Therefore,
                as we did beginning in CY 2015, for CY 2022, we also proposed to
                include an estimate of any skin substitutes and similar products in our
                estimate of pass-through spending for devices.
                 For drugs and biologicals eligible for pass-through payment,
                section 1833(t)(6)(D)(i) of the Act establishes the pass-through
                payment amount as the amount by which the amount authorized under
                section 1842(o) of the Act (or, if the drug or biological is covered
                under a competitive acquisition contract under section 1847B of the
                Act, an amount determined by the Secretary equal to the average price
                for the drug or biological for all competitive acquisition areas and
                year established under such section as calculated and adjusted by the
                Secretary) exceeds the portion of the otherwise applicable fee schedule
                amount that the Secretary determines is associated with the drug or
                biological. Our proposed estimate of drug and biological pass-through
                payment for CY 2022 for this group of items was $462.4 million, as
                discussed below, because we proposed that most non pass-through
                separately payable drugs and biologicals would be paid under the CY
                2022 OPPS at ASP+6 percent with the exception of 340B-acquired
                separately payable drugs, which we proposed would be paid at ASP minus
                22.5 percent, and because we proposed to pay for CY 2022 pass-through
                payment drugs and biologicals at ASP+6 percent, as we discuss in
                section V.A. of the CY 2022 OPPS/ASC proposed rule (86 FR 42116).
                 Furthermore, payment for certain drugs, specifically diagnostic
                radiopharmaceuticals and contrast agents without pass-through payment
                status, is packaged into payment for the associated procedures, and
                these products are not be separately paid. In addition, we policy-
                package all non pass-through drugs, biologicals, and
                radiopharmaceuticals that function as supplies when used in a
                diagnostic test or procedure, drugs and biologicals that function as
                supplies when used in a surgical procedure, drugs and biologicals used
                for anesthesia, and other categories of drugs and biologicals, as
                discussed in section V.B.1.c. of the CY 2022 OPPS/ASC proposed rule (86
                FR 42129 through 42131). We proposed that all of these policy-packaged
                drugs and biologicals with pass-through payment status will be paid at
                ASP+6 percent, like other pass-through drugs and biologicals, for CY
                2022, less the policy-packaged drug APC offset amount described below.
                Our estimate of pass-through payment for policy-packaged drugs and
                biologicals with pass-through payment status approved prior to CY 2022
                is not $0. This is because the pass-through payment amount and the fee
                schedule amount associated with the drug or biological will not be the
                same, unlike for separately payable drugs and biologicals. In section
                V.A.6. of the CY 2022 OPPS/ASC proposed rule (86 FR 42126 through
                42127), we discuss our policy to determine if the costs of certain
                policy-packaged drugs or biologicals are already packaged into the
                existing APC structure. If we determine that a policy-packaged drug or
                biological approved for pass-through payment resembles predecessor
                drugs or biologicals already included in the costs of the APCs that are
                associated with the drug receiving pass-through payment, we proposed to
                offset the amount of pass-through payment for the policy-packaged drug
                or biological. For these drugs or biologicals, the APC offset amount is
                the portion of the APC payment for the specific procedure performed
                with the pass-through drug or biological, which we refer to as the
                policy-packaged drug APC offset amount. If we determine that an offset
                is appropriate for a specific policy-packaged drug or biological
                receiving pass-through payment, we proposed to reduce our estimate of
                pass-through payments for these drugs or biologicals by the APC offset
                amount.
                 Similar to pass-through spending estimates for devices, the first
                group of drugs and biologicals requiring a pass-through payment
                estimate consists of those products that were recently made eligible
                for pass-through payment and that will continue to be eligible for
                pass-through payment in CY 2022. The second group contains drugs and
                biologicals that we know are newly eligible, or project will be newly
                eligible, in the remaining quarters of CY 2021 or beginning in CY 2022.
                The sum of the CY 2022 pass-through spending estimates for these two
                groups of drugs and biologicals equals the total CY 2022 pass-through
                spending estimate for drugs and biologicals with pass-through payment
                status.
                B. Estimate of Pass-Through Spending for CY 2022
                 For 2022, we proposed to set the applicable pass-through payment
                percentage limit at 2.0 percent of the total projected OPPS payments
                for CY 2022, consistent with section 1833(t)(6)(E)(ii)(II) of the Act
                and our OPPS policy from CY 2004 through CY 2021 (85 FR 86068). The
                pass-through payment percentage limit is calculated using pass-through
                spending estimates for devices and for drugs and biologicals.
                 For the first group of devices, consisting of device categories
                that are currently eligible for pass-through payment and will continue
                to be eligible for pass-through payment in CY 2022, there are 9 active
                categories for CY 2022. The active categories are described by HCPCS
                codes C2596, C1734, C1982, C1824, C1839, C1748, C1825, C1052, and
                C1062. Based on the information from the device manufacturers, we
                estimate that HCPCS code C2596 will cost $11.3 million in pass-through
                expenditures in CY 2022, HCPCS C1734 will cost $36.9 million in pass-
                through expenditures in CY 2022, HCPCS code C1982 will cost $116.3
                million in pass-through expenditures in CY 2022, HCPCS code C1824 will
                cost $46 million in pass-through expenditures in CY 2022, HCPCS code
                C1839 will cost $500,000 in pass-through expenditures in CY 2022, HCPCS
                code C1748 will cost $39.1 million in pass-through expenditures in CY
                2022, HCPCS code C1825 will cost $3.5 million pass-through expenditures
                in CY 2022, HCPCS code C1052 will cost $40 million in pass-through
                expenditures in CY 2022, and HCPCS code C1062 will cost $14.3 million
                in pass-through expenditures in CY 2022. Therefore, we proposed an
                estimate for the first group of devices of $307.9 million.
                 In estimating our proposed CY 2022 pass-through spending for device
                categories in the second group, we included: device categories that we
                assumed at the time of the development of the CY 2022 OPPS/ASC proposed
                rule will be newly eligible for pass-through payment in CY 2022;
                additional device categories that we estimated
                [[Page 63660]]
                could be approved for pass-through status after the development of the
                proposed rule and before January 1, 2022; and contingent projections
                for new device categories established in the second through fourth
                quarters of CY 2022. For CY 2022, we proposed to use the general
                methodology described in the CY 2008 OPPS/ASC final rule with comment
                period (72 FR 66778), while also taking into account recent OPPS
                experience in approving new pass-through device categories. The
                proposed estimate of CY 2022 pass-through spending for this second
                group of device categories is $244.4 million.
                 We did not receive any public comments on this proposal. As stated
                earlier in this final rule with comment period, we are approving three
                devices for pass-through payment status in the CY 2022 rulemaking
                cycle: RECELL[supreg] Autologous Cell Harvesting Device, Shockwave C2
                Coronary Intravascular Lithotripsy (IVL) catheter, and AngelMed
                Guardian[supreg] System. The manufacturers of these systems provided
                utilization and cost data that indicate the amount of spending for the
                devices would be approximately $18.4 million for RECELL[supreg]
                Autologous Cell Harvesting Device, $118.4 million for Shockwave C2
                Coronary Intravascular Lithotripsy (IVL) catheter, and $5.1 million for
                AngelMed Guardian[supreg] System. Therefore, we are finalizing an
                estimate of $141.9 million for this second group of devices for CY
                2022.
                 To estimate proposed CY 2022 pass-through spending for drugs and
                biologicals in the first group, specifically those drugs and
                biologicals recently made eligible for pass-through payment and
                continuing on pass-through payment status for at least one quarter in
                CY 2022, we proposed to use the CY 2019 Medicare hospital outpatient
                claims data regarding their utilization, information provided in the
                respective pass-through applications, other historical hospital claims
                data, pharmaceutical industry information, and clinical information
                regarding these drugs and biologicals to project the CY 2022 OPPS
                utilization of the products.
                 For the known drugs and biologicals (excluding policy-packaged
                diagnostic radiopharmaceuticals, contrast agents, drugs, biologicals,
                and radiopharmaceuticals that function as supplies when used in a
                diagnostic test or procedure, and drugs and biologicals that function
                as supplies when used in a surgical procedure) that will be continuing
                on pass-through payment status in CY 2022, we estimate the pass-through
                payment amount as the difference between ASP+6 percent and the payment
                rate for non pass-through drugs and biologicals that will be separately
                paid. Separately payable drugs are paid at a rate of ASP+6 percent with
                the exception of 340B-acquired drugs, for which we proposed to pay ASP
                minus 22.5 percent. Therefore, the proposed payment rate difference
                between the pass-through payment amount and the non pass-through
                payment amount is $462.4 million for this group of drugs.
                 Because payment for policy-packaged drugs and biologicals is
                packaged if the product is not paid separately due to its pass-through
                payment status, we proposed to include in the CY 2022 pass-through
                estimate of the difference between payment for the policy-packaged drug
                or biological at ASP+6 percent (or WAC+6 percent, or 95 percent of AWP,
                if ASP or WAC information is not available) and the policy-packaged
                drug APC offset amount, if we determine that the policy-packaged drug
                or biological approved for pass-through payment resembles a predecessor
                drug or biological already included in the costs of the APCs that are
                associated with the drug receiving pass-through payment, which we
                estimate for CY 2022 for the first group of policy-packaged drugs to be
                $0 since there are currently no policy-packaged drugs for which we have
                cost data that will be on pass-through in CY 2022.
                 We did not receive any public comments on our proposal. Using our
                methodology for this final rule with comment period, we calculated a CY
                2022 spending estimate for this first group of drugs and biologicals of
                approximately $466.7 million based on our decision to maintain our
                current policy of paying ASP minus 22.5 percent for 340B-acquired
                drugs.
                 To estimate proposed CY 2022 pass-through spending for drugs and
                biologicals in the second group (that is, drugs and biologicals that we
                knew at the time of development of the proposed rule were newly
                eligible or recently became eligible for pass-through payment in CY
                2022, additional drugs and biologicals that we estimated could be
                approved for pass-through status subsequent to the development of the
                proposed rule and before January 1, 2022, and projections for new drugs
                and biologicals that could be initially eligible for pass-through
                payment in the second through fourth quarters of CY 2022), we proposed
                to use utilization estimates from pass-through applicants,
                pharmaceutical industry data, clinical information, recent trends in
                the per unit ASPs of hospital outpatient drugs, and projected annual
                changes in service volume and intensity as our basis for making the CY
                2022 pass-through payment estimate. We also proposed to consider the
                most recent OPPS experience in approving new pass-through drugs and
                biologicals. Using our proposed methodology for estimating CY 2022
                pass-through payments for this second group of drugs, we calculated a
                proposed spending estimate for this second group of drugs and
                biologicals of approximately $10 million.
                 We did not receive any public comments on our proposal. Since the
                release of the CY 2022 OPPS/ASC proposed rule, we have identified seven
                additional policy-packaged drugs in addition to the three policy-
                packaged drugs that had pass-through status when the proposed rule was
                released. Our original proposed estimate of $10 million of additional
                pass-through payments for the second group of drugs and biologicals did
                anticipate the approval of some of the additional policy-packaged drugs
                and biologicals with pass-through status, but not all of them.
                Therefore, for this final rule, we are revising our estimate of pass-
                through spending for the second group of drugs and biologicals to be
                $20 million.
                 We estimate for this final rule with comment period that the amount
                of pass-through spending for the device categories and the drugs and
                biologicals that are continuing to receive pass-through payment in CY
                2022 and those device categories, drugs, and biologicals that first
                become eligible for pass-through payment during CY 2022 would be
                approximately $936.5 million (approximately $449.8 million for device
                categories and approximately $486.7 million for drugs and biologicals)
                which represents 1.14 percent of total projected OPPS payments for CY
                2022 (approximately $82 billion). Therefore, we estimate that pass-
                through spending in CY 2022 will not amount to 2.0 percent of total
                projected OPPS CY 2022 program spending. As discussed in section X.E.
                of the CY 2022 OPPS/ASC proposed rule (86 FR 42188 through 42190), due
                to the effects of the COVID-19 PHE, we proposed to generally use CY
                2019 claims data instead of CY 2020 claims data to establish the CY
                2022 OPPS rates and to use cost report data from the same set of cost
                reports originally used in CY 2021 final rule OPPS ratesetting. We
                stated that if our proposal to use CY 2019 data, rather than CY 2020
                data, to inform CY 2022 ratesetting is finalized, we would effectively
                remove approximately one year of pass-through data collection time for
                ratesetting purposes. Therefore, for CY 2022, in section X.F. of the CY
                2022 OPPS/ASC proposed rule (86 FR 42190 through 42193), we proposed to
                [[Page 63661]]
                use our equitable adjustment authority under 1833(t)(2)(E) to provide
                up to four quarters of separate payment for 21 drugs and biologicals
                whose pass-through payment status will expire on March 31, 2022, June
                30, 2022, or September 30, 2022 and six drugs and biologicals and one
                device category whose pass-through payment status will expire on
                December 31, 2021. This would ensure that we have a full year of claims
                data from CY 2021 to use for CY 2023 ratesetting and would allow us to
                avoid using CY 2020 data to set rates for these pass-through drugs,
                biologicals, and the device category for CY 2022.
                 We estimated the spending for the drugs, biologicals, and device
                category for which we proposed to provide separate payment for the
                remainder of CY 2022 using our equitable adjustment authority. To
                estimate proposed CY 2022 spending for the one device pass-through
                category with pass-through status expiring on December 31, 2021, we
                also used the general methodology described in the CY 2008 OPPS/ASC
                final rule with comment period (72 FR 66778). For this device category,
                we calculate a proposed spending estimate of $34.5 million. To estimate
                proposed CY 2022 spending for the six drugs with pass-through status
                expiring on December 21, 2021 and the 18 drugs and three biologicals
                with pass-through status expiring on March 30, 2022, June 30, 2022, and
                September 30, 2022, we performed an analysis similar to the analysis
                for the first group of drugs and biologicals described earlier in this
                section where we estimated the pass-through payment amount as the
                difference between ASP+6 percent and the payment rate for non pass-
                through drugs and biologicals that will be separately paid. For this
                group, we calculate a proposed spending estimate for CY 2022 of $44.4
                million. We estimate that total spending for these 27 drugs and
                biologicals and one device category would be approximately $78.9
                million for CY 2022. The drugs, biologicals, and device category for
                which we proposed to provide separate payment for one to four quarters
                in CY 2022 are listed in Table 43 below. Please refer to section X.F.
                of this final rule with comment period regarding our decision to
                implement our proposal to utilize our equitable adjustment authority to
                pay separately for the remainder of CY 2022 for the device category,
                drugs, and biologicals with pass-through status that expires between
                December 31, 2021, and September 30, 2022.
                BILLING CODE 4120-01-P
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                BILLING CODE 4120-01-C
                VII. OPPS Payment for Hospital Outpatient Visits and Critical Care
                Services
                 For CY 2022, we proposed to continue with our current clinic and
                emergency department (ED) hospital outpatient visits payment policies.
                For a description of the current clinic and ED hospital outpatient
                visits policies, we refer readers to the CY 2016 OPPS/ASC final rule
                with comment period (80 FR 70448). We also proposed to continue our
                payment policy for critical care services for CY 2022. For a
                description of the current payment policy for critical care services,
                we refer readers to the CY 2016 OPPS/ASC final rule with comment period
                (80 FR 70449), and for the history of the payment policy for critical
                care services, we refer readers to the CY 2014 OPPS/ASC final rule with
                comment period (78 FR 75043). In the CY 2022 OPPS/ASC proposed rule, we
                sought public comments on any changes to these codes that we should
                consider for future rulemaking cycles. We continue to encourage
                commenters to provide the data and analysis necessary to justify any
                suggested changes.
                 In the CY 2022 OPPS/ASC proposed rule, we stated that we would
                continue the clinic visit payment policy for CY 2022 and beyond. More
                specifically, we stated that we would continue to utilize a PFS-
                equivalent payment rate for the hospital outpatient clinic visit
                service described by HCPCS code G0463 when
                [[Page 63664]]
                it is furnished by excepted off-campus provider-based departments. The
                PFS-equivalent rate for CY 2022 is 40 percent of the proposed OPPS
                payment (that is, 60 percent less than the proposed OPPS rate). Under
                this policy, these departments will be paid approximately 40 percent of
                the OPPS rate (100 percent of the OPPS rate minus the 60-percent
                payment reduction that is applied in CY 2022) for the clinic visit
                service in CY 2022. We stated that we would continue to monitor the
                effect of this change in Medicare payment policy, including the volume
                of these types of OPD services.
                 Comment: We received several comments on our payment policy for
                hospital outpatient visits. Many commenters expressed concerns that
                CMS's policy to pay the PFS-equivalent rate for outpatient clinic
                visits furnished in excepted off-campus provider-based departments
                would cause financial harm to hospitals. Other commenters suggested
                that CMS develop a set of national guidelines for coding ED visits, and
                a few of commenters provided specific edits to the descriptor of the
                HCPCS code for hospital outpatient clinic visits (G0463).
                 Response: We appreciate commenters' concerns and will continue to
                examine these concerns and determine if any modifications to these
                policies are warranted in future rulemaking.
                 After consideration of the public comments, we are finalizing our
                proposal to continue to utilize a PFS-equivalent payment rate for the
                hospital outpatient clinic visit service described by HCPCS code G0463
                when it is furnished by excepted off-campus provider-based departments
                as proposed. We are also finalizing our proposal to continue our
                current ED outpatient visits and critical care payment policies.
                VIII. Payment for Partial Hospitalization Services
                A. Background
                 A partial hospitalization program (PHP) is an intensive outpatient
                program of psychiatric services provided as an alternative to inpatient
                psychiatric care for individuals who have an acute mental illness,
                which includes, but is not limited to, conditions such as depression,
                schizophrenia, and substance use disorders. Section 1861(ff)(1) of the
                Act defines partial hospitalization services as the items and services
                described in paragraph (2) prescribed by a physician and provided under
                a program described in paragraph (3) under the supervision of a
                physician pursuant to an individualized, written plan of treatment
                established and periodically reviewed by a physician (in consultation
                with appropriate staff participating in such program), which sets forth
                the physician's diagnosis, the type, amount, frequency, and duration of
                the items and services provided under the plan, and the goals for
                treatment under the plan. Section 1861(ff)(2) of the Act describes the
                items and services included in partial hospitalization services.
                Section 1861(ff)(3)(A) of the Act specifies that a PHP is a program
                furnished by a hospital to its outpatients or by a community mental
                health center (CMHC), as a distinct and organized intensive ambulatory
                treatment service, offering less than 24-hour-daily care, in a location
                other than an individual's home or inpatient or residential setting.
                Section 1861(ff)(3)(B) of the Act defines a CMHC for purposes of this
                benefit. We refer readers to sections 1833(t)(1)(B)(i), 1833(t)(2)(B),
                1833(t)(2)(C), and 1833(t)(9)(A) of the Act and 42 CFR 419.21, for
                additional guidance regarding PHP.
                 In CY 2008, we began efforts to strengthen the PHP benefit through
                extensive data analysis, along with policy and payment changes by
                implementing two refinements to the methodology for computing the PHP
                median. For a detailed discussion on these policies, we refer readers
                to the CY 2008 OPPS/ASC final rule with comment period (72 FR 66670
                through 66676). In CY 2009, we implemented several regulatory, policy,
                and payment changes. For a detailed discussion on these policies, we
                refer readers to the CY 2009 OPPS/ASC final rule (73 FR 68688 through
                68697). In CY 2010, we retained the two-tier payment approach for
                partial hospitalization services and used only hospital-based PHP data
                in computing the PHP APC per diem costs, upon which PHP APC per diem
                payment rates are based (74 FR 60556 through 60559). In CY 2011 (75 FR
                71994), we established four separate PHP APC per diem payment rates:
                Two for CMHCs (APC 0172 and APC 0173) and two for hospital-based PHPs
                (APC 0175 and APC 0176) and instituted a 2-year transition period for
                CMHCs to the CMHC APC per diem payment rates. For a detailed
                discussion, we refer readers to section X.B. of the CY 2011 OPPS/ASC
                final rule with comment period (75 FR 71991 through 71994). In CY 2012,
                we determined the relative payment weights for partial hospitalization
                services provided by CMHCs based on data derived solely from CMHCs and
                the relative payment weights for partial hospitalization services
                provided by hospital-based PHPs based exclusively on hospital data (76
                FR 74348 through 74352). In the CY 2013 OPPS/ASC final rule with
                comment period, we finalized our proposal to base the relative payment
                weights that underpin the OPPS APCs, including the four PHP APCs (APCs
                0172, 0173, 0175, and 0176), on geometric mean costs rather than on the
                median costs. For a detailed discussion on this policy, we refer
                readers to the CY 2013 OPPS/ASC final rule with comment period (77 FR
                68406 through 68412).
                 In the CY 2014 OPPS/ASC proposed rule (78 FR 43621 through 43622)
                and CY 2015 OPPS/ASC final rule with comment period (79 FR 66902
                through 66908), we continued to apply our established policies to
                calculate the four PHP APC per diem payment rates based on geometric
                mean per diem costs using the most recent claims data for each provider
                type. For a detailed discussion on this policy, we refer readers to the
                CY 2014 OPPS/ASC final rule with comment period (78 FR 75047 through
                75050). In the CY 2016, we described our extensive analysis of the
                claims and cost data and ratesetting methodology, corrected a cost
                inversion that occurred in the final rule data with respect to
                hospital-based PHP providers and renumbered the PHP APCs. In CY 2017
                OPPS/ASC final rule with comment period (81 FR 79687 through 79691), we
                continued to apply our established policies to calculate the PHP APC
                per diem payment rates based on geometric mean per diem costs and
                finalized a policy to combine the Level 1 and Level 2 PHP APCs for
                CMHCs and for hospital-based PHPs. We also implemented an eight-percent
                outlier cap for CMHCs to mitigate potential outlier billing
                vulnerabilities. For a comprehensive description of PHP payment policy,
                including a detailed methodology for determining PHP per diem amounts,
                we refer readers to the CY 2016 and CY 2017 OPPS/ASC final rules with
                comment period (80 FR 70453 through 70455 and 81 FR 79678 through
                79680).
                 In the CYs 2018 and 2019 OPPS/ASC final rules with comment period
                (82 FR 59373 through 59381, and 83 FR 58983 through 58998,
                respectively), we continued to apply our established policies to
                calculate the PHP APC per diem payment rates based on geometric mean
                per diem costs, designated a portion of the estimated 1.0 percent
                hospital outpatient outlier threshold specifically for CMHCs, and
                proposed updates to the PHP allowable HCPCS codes. We finalized these
                proposals in the CY 2020 OPPS/ASC final rule with
                [[Page 63665]]
                comment period (84 FR 61352). We refer readers to section VIII.D. of
                the CY 2022 OPPS/ASC proposed rule for a discussion of the proposed
                updates and the applicability for CY 2021.
                 In the CY 2020 OPPS/ASC final rule with comment period (84 FR 61339
                through 61350), we finalized our proposal to use the calculated CY 2020
                CMHC geometric mean per diem cost and the calculated CY 2020 hospital-
                based PHP geometric mean per diem cost, but with a cost floor equal to
                the CY 2019 final geometric mean per diem costs as the basis for
                developing the CY 2020 PHP APC per diem rates. Also, we continued to
                designate a portion of the estimated 1.0 percent hospital outpatient
                outlier threshold specifically for CMHCs, consistent with the
                percentage of projected payments to CMHCs under the OPPS, excluding
                outlier payments.
                 In the April 30, 2020 interim final rule with comment (85 FR 27562
                through 27566), effective as of March 1, 2020 and for the duration of
                the COVID-19 Public Health Emergency (PHE), hospital and CMHC staff are
                permitted to furnish certain outpatient therapy, counseling, and
                educational services (including certain PHP services), incident to a
                physician's services, to beneficiaries in temporary expansion
                locations, including the beneficiary's home, so long as the location
                meets all conditions of participation to the extent not waived. A
                hospital or CMHC can furnish such services using telecommunications
                technology to a beneficiary in a temporary expansion location if that
                beneficiary is registered as an outpatient. These provisions apply only
                for the duration of the COVID-19 PHE.
                 In the CY 2021 final rule (85 FR 86073 through 86080), we finalized
                a CMHC geometric mean per diem cost of $136.14 and a final hospital-
                based PHP geometric mean per diem cost of $253.76 using the most recent
                updated claims and cost data. In the CY 2021 proposed rule (85 FR 48901
                through 48905), we had proposed, for CY 2021 and subsequent years, to
                use the CY 2021 CMHC geometric mean per diem cost calculated in
                accordance with our existing methodology, but with a cost floor equal
                to the per diem cost for CMHCs of $121.62 that was calculated for CY
                2020 ratesetting (84 FR 61339 through 61344), as the basis for
                developing the CY 2021 CMHC APC per diem rate. We had also proposed,
                for CY 2021 and subsequent years, to use the CY 2021 hospital-based
                geometric mean per diem cost calculated in accordance with our existing
                methodology, but with a cost floor equal to the per diem cost for
                hospital-based providers of $222.76 that was calculated for CY 2020
                ratesetting (84 FR 61344 through 61345). We explained in the CY 2021
                final rule that the final calculated geometric mean per diem costs for
                both CMHCs and hospital-based PHPs were significantly higher than each
                proposed cost floor, therefore a floor was not necessary at the time,
                and we did not finalize the proposed cost floors in the CY 2021 OPPS/
                ASC final rule with comment period.
                B. PHP APC Update for CY 2022
                1. PHP APC Geometric Mean Per Diem Costs
                 In summary, for CY 2022 only, we proposed to use the CY 2022 CMHC
                geometric mean per diem cost calculated in accordance with our existing
                methodology, but with a cost floor equal to the per diem cost for CMHCs
                of $136.14, which is the final CMHC geometric mean per diem cost
                calculated last year for CY 2021 ratesetting (85 FR 86080), as the
                basis for developing the CY 2022 CMHC APC per diem rate. We also
                proposed, for CY 2022 only, to use the CY 2022 hospital-based geometric
                mean per diem cost calculated in accordance with our existing
                methodology, but with a cost floor equal to the per diem cost for
                hospital-based providers of $253.76 calculated last year for CY 2021
                ratesetting (85 FR 86080). Following this methodology, we proposed to
                use the cost floor value of $136.14 for CMHCs as the basis for
                developing the CY 2022 CMHC APC per diem rate, and to use the cost
                floor value of $253.76 as the basis for developing the CY 2021
                hospital-based APC per diem rate. We also proposed to use the latest
                available CY 2019 claims and cost data from the CY 2021 rulemaking to
                determine CY 2022 geometric mean per diem costs in the CY 2022 OPPS/ASC
                proposed rule, and we proposed that if the final CY 2022 cost for CMHCs
                or hospital-based PHPs was calculated to be above the proposed floor
                for that provider type, we would use the final calculated cost instead
                of the floor. Lastly, in accordance with our longstanding policy, we
                proposed to continue to use CMHC APC 5853 (Partial Hospitalization
                (three or More Services Per Day)) and hospital-based PHP APC 5863
                (Partial Hospitalization (three or More Services Per Day)).
                 We are finalizing these proposals in this CY 2022 OPPS/ASC final
                rule as proposed, and we discuss our rationale and the public comments
                received on these proposals in the following sections.
                2. Development of the PHP APC Geometric Mean Per Diem Costs
                 In preparation for CY 2022, we followed the PHP ratesetting
                methodology described in section VIII.B.2. of the CY 2016 OPPS/ASC
                final rule with comment period (80 FR 70462 through 70466) to calculate
                the PHP APCs' geometric mean per diem costs and payment rates for APCs
                5853 and 5863, incorporating the modifications made in the CY 2017
                OPPS/ASC final rule with comment period. As discussed in section
                VIII.B.1. of the CY 2017 OPPS/ASC final rule with comment period (81 FR
                79680 through 79687), the geometric mean per diem cost for hospital-
                based PHP APC 5863 is based upon actual hospital-based PHP claims and
                costs for PHP service days providing three or more services. Similarly,
                the geometric mean per diem cost for CMHC APC 5853 is based upon actual
                CMHC claims and costs for CMHC service days providing three or more
                services. In addition, for CY 2022, we proposed to use cost and charge
                data from the Hospital Cost Report Information System (HCRIS) as the
                source for the CMHC cost-to-charge ratios (CCRs), instead of using the
                Outpatient Provider Specific File (OPSF). As discussed in section
                VIII.B.2.a of this OPPS/ASC final rule, we are finalizing our proposal
                to use HCRIS as the source for CMHC CCRs.
                 As discussed in section X.E of the OPPS/ASC proposed rule (86 FR
                42188 through 42190), we analyzed OPPS cost and claims information from
                CY 2019 and CY 2020 to better understand the effects of the COVID-19
                PHE on outpatient services, including PHP, and to identify which data
                would be the best available for ratesetting. As discussed in that
                section of the proposed rule, we observed a number of changes, likely
                as a result of the COVID-19 PHE, in the CY 2020 OPPS claims that we
                would ordinarily use for ratesetting, and this includes changes in the
                claims for partial hospitalization, and we continue to observe those
                changes in the data for this OPPS/ASC final rule. For PHP services in
                particular, we observe that for hospital-based PHPs, the number of PHP
                days in our trimmed CY 2020 claims dataset is approximately 49 percent
                less than the number of PHP days in our trimmed CY 2019 claims dataset;
                and for CMHCs, the number of PHP days in our trimmed CY 2020 claims
                dataset is approximately 51 percent less than the number of PHP days in
                our trimmed CY 2019 claims dataset.
                 For this CY 2022 ratesetting, we proposed to use CY 2019 claims and
                the
                [[Page 63666]]
                cost information from prior to the COVID-19 PHE, that is, the cost
                information that was available for the CY 2021 OPPS/ASC rulemaking. We
                explained that we believe this is appropriate and necessary for PHP
                services, because of the substantial decrease in the number of PHP days
                in the CY 2020 claims dataset, which we would normally use for
                ratesetting. Furthermore, there was a substantial decrease in the
                number of PHP providers in the CY 2020 data that we continue to observe
                for this CY 2022 OPPS/ASC final rule. Our trimmed CY 2020 claims
                dataset for this final rule contains cost and claim information from 31
                fewer hospital-based PHP providers than are in the CY 2019 data. These
                significant decreases in utilization and in the number of hospital-
                based PHP providers who submitted CY 2020 claims led us to believe that
                CY 2020 data are not the best overall approximation of expected PHP
                services in CY 2022. We stated that we believe the CY 2019 data, as the
                most recent complete calendar year of data prior to the COVID-19 PHE,
                are a better approximation of expected CY 2022 PHP services. Therefore,
                as discussed in section X.E of the OPPS/ASC proposed rule (86 FR 42188
                through 42190), and consistent with what CMS proposed to do for other
                APCs under the OPPS, we proposed to use CY 2019 claims and the cost
                information from prior to the COVID-19 PHE, that is, the cost
                information that was available for the CY 2021 OPPS/ASC rulemaking, for
                calculating the CY 2022 CMHC and hospital-based PHP APC per diem costs.
                 Comment: We received 6 comments, which were all in support of our
                proposal to use the CY 2019 claims and the cost information from prior
                to the COVID-19 PHE, that is, the cost information that was available
                for the CY 2021 OPPS/ASC rulemaking, for calculating the CY 2022 CMHC
                and hospital-based PHP APC per diem costs. Several commenters stated
                their agreement with CMS' assessment that the ongoing COVID-19 PHE has
                disrupted the provision PHP services, and acknowledged that the
                proposed PHP payment rate methodology outlined in the proposed rule
                should help lessen the impact of COVID-19 on providers. One national
                organization expressed its belief that ensuring financial stability and
                sustainability for these programs is critical to ensuring access to
                this level of care for some of Medicare's most vulnerable patients.
                 Response: We thank commenters for their support. We agree with
                commenters that ensuring access to PHP services is critical, especially
                within the context of the COVID-19 PHE. As discussed above, we have
                analyzed more recent data for this CY 2022 OPPS/ASC final rule, and
                continue to observe significant changes from the CY 2019 PHP claims,
                which lead us to continue to believe that the CY 2019 data, as the most
                recent complete calendar year of data prior to the COVID-19 PHE, are a
                better approximation of expected CY 2022 PHP services.
                 After careful consideration of the comments we received and after
                analyzing more recent data, we are finalizing our proposal to use the
                CY 2019 claims and the cost information from prior to the COVID-19 PHE,
                that is, the cost information that was available for the CY 2021 OPPS/
                ASC rulemaking, for calculating the CY 2022 CMHC and hospital-based PHP
                APC per diem costs.
                 The CMHC and hospital-based PHP APC per diem costs are the
                provider-type specific costs derived from the latest updated CY 2019
                claims and cost data from the CY 2021 rulemaking. The CMHC and
                hospital-based PHP APC per diem payment rates are the national
                unadjusted payment rates calculated from the CMHC and hospital-based
                PHP APC geometric mean per diem costs, respectively, after applying the
                OPPS budget neutrality adjustments described in section II.A.4 of this
                CY 2022 OPPS/ASC final rule.
                a. CMHC Data Preparation: Data Trims, Exclusions, and CCR Adjustments
                 For this CY 2022 OPPS/ASC final rule, we prepared data consistent
                with our policies as described in the CY 2016 OPPS/ASC final rule with
                comment period (80 FR 70463 through 70465). However, as discussed
                above, we finalized our proposal to use CY 2019 claims data and the
                cost information from prior to the COVID-19 PHE, that is, the cost
                information that was available for the CY 2021 OPPS/ASC rulemaking, for
                calculating the CY 2022 CMHC PHP APC per diem cost.
                 For CY 2022 and future years, we also proposed to use cost and
                charge information from HCRIS as the basis for determining the CMHC
                CCRs used to calculate the geometric mean per diem cost for CMHC APC
                5853. Following the methodology described in the CY 2016 OPPS/ASC final
                rule with comment period (80 FR 70462), we calculated the CCR based on
                Medicare costs and charges. However, we noted that CMHCs are now
                reporting their costs using the newer cost reporting form, Form CMS
                2088-17, which has different lines and columns than the ones described
                in the CY 2016 OPPS/ASC final rule for Form CMS 2088-92. Therefore, to
                calculate each CMHC's CCR for the CY 2022 OPPS/ASC proposed rulemaking,
                we divided costs from Worksheet C, Line 50, Column 5 by charges from
                Worksheet C, Line 50, Column 4.
                 As noted above, prior to this year's proposed rulemaking, our
                longstanding methodology for calculating CCRs for CMHCs had been to use
                the CCRs from the OPSF. As discussed in the CY 2004 OPPS/ASC final rule
                (68 FR 63468), a Program Memorandum was issued on January 17, 2003,
                which directed the fiscal intermediaries to recalculate hospital and
                CMHC cost-to-charge ratios and to update the cost-to-charge ratios on
                an ongoing basis in the OPSF, which was used as the basis for the CCRs
                used in calculating the geometric mean per diem costs for CMHCs.
                Subsequently, in the CY 2009 OPPS/ASC final rule (73 FR 68690),
                commenters addressed the fact that cost report information for CMHCs
                was not at that time included in HCRIS, and recommended that CMS base
                its calculations only in the cost report information that the agency
                can verify directly and not on data provided by the fiscal
                intermediary. CMS responded in the same OPPS/ASC final rule that it was
                working to include CMHC cost reports in the system, but that the CCRs
                from the OPSF continued to be the best available data for ratesetting.
                In the CY 2011 OPPS/ASC final rule (75 FR 71993 through 71994),
                commenters requested that CMHC cost report information be included in
                HCRIS, and CMS explained that CMHC cost reports would begin to be
                available in HCRIS starting in early 2011. Since that time, CMHC cost
                reports have become available in HCRIS. Because the data is now
                available and consistently populated based on the cost reports that
                CMHCs submit, we stated that we believe using cost information from
                HCRIS would be more consistent with the methodology for calculating
                most other OPPS services, including hospital-based PHP services.
                Therefore, we proposed for CY 2022 and future years to use HCRIS as the
                source for CMHC cost information used for calculating the geometric
                mean per diem cost for CMHC APC 5853.
                 We did not receive any comments on this proposal, and we are
                finalizing it as proposed. For CY 2022 and future years, we will use
                HCRIS as the source for CMHC cost information used for calculating the
                geometric mean per diem cost for CMHC APC 5853. Accordingly, we used
                HCRIS as the source for the CMHC cost information for this CY 2022
                OPPS/ASC final rule.
                [[Page 63667]]
                 Prior to calculating the final geometric mean per diem cost for
                CMHC APC 5853, we prepared the data by first applying trims and data
                exclusions, and assessing CCRs as described in the CY 2016 OPPS/ASC
                final rule with comment period (80 FR 70463 through 70465), so that
                ratesetting is not skewed by providers with extreme data. Before any
                trims or exclusions were applied, there were 40 CMHCs in the PHP claims
                data file. Under the 2 standard deviation trim policy, we
                excluded any data from a CMHC for ratesetting purposes when the CMHC's
                geometric mean cost per day was more than 2 standard
                deviations from the geometric mean cost per day for all CMHCs. In
                applying this trim for CY 2022 ratesetting, one CMHC had geometric mean
                costs per day below the trim's lower limit of $32.94, and one had
                geometric mean costs per day above the trim's upper limit of $486.92.
                Therefore, we are excluding data for ratesetting from these 2 CMHCs.
                 In accordance with our PHP ratesetting methodology (80 FR 70465),
                we also remove service days with no wage index values, because we use
                the wage index data to remove the effects of geographic variation in
                costs prior to APC geometric mean per diem cost calculation (80 FR
                70465). For this CY 2022 final rule ratesetting, no CMHC was missing
                wage index data for all of its service days and, therefore, no CMHC was
                excluded. We also exclude providers without any days containing 3 or
                more units of PHP-allowable services. One provider is excluded from
                ratesetting because it had no days containing 3 or more units of PHP-
                allowable services. In addition to our trims and data exclusions,
                before calculating the PHP APC geometric mean per diem costs, we also
                assess CCRs (80 FR 70463). Our longstanding PHP OPPS ratesetting
                methodology defaults any CMHC CCR that is not available or any CMHC CCR
                greater than one to the statewide hospital CCR associated with the
                provider's urban/rural designation and their state location (80 FR
                70463). For the CY 2022 OPPS/ASC proposed rule ratesetting and this
                OPPS/ACS final rule, there are 3 CMHCs with CCRs greater than one, and
                12 CMHCs with missing CCR information. Therefore, we are defaulting the
                CCRs for these 15 CMHCs for ratesetting to the applicable statewide
                hospital CCR for each CMHC based on its urban/rural designation and its
                state location.
                 In summary, the application of these data preparation steps
                resulted in an adjusted CCR during our ratesetting process for 15 CMHCs
                having either a CCR greater than one or having no CCR. We are also
                excluding one CMHC because it had no days containing 3 or more services
                and 2 CMHCs for failing the 2 standard deviation trim,
                resulting in the inclusion of 37 CMHCs. There were 564 CMHC claims
                removed during data preparation steps due to the 2 standard
                deviation trim or because they either had no PHP allowable-codes or had
                zero payment days, leaving 10,370 CMHC claims in our CY 2022 final rule
                ratesetting modeling. After applying all of the previously listed
                trims, exclusions, and adjustments, we followed the methodology
                described in the CY 2016 OPPS/ASC final rule with comment period (80 FR
                70464 through 70465) and modified in the CY 2017 OPPS/ASC final rule
                with comment period (81 FR 79687 through 79688, and 79691), using the
                CMHC CCRs calculated based on the cost information from HCRIS as
                discussed in this OPPS/ASC final rule, to calculate the CMHC APC
                geometric mean per diem cost.\185\ The calculated CY 2022 geometric
                mean per diem cost for all CMHCs for providing three or more services
                per day (CMHC APC 5853) is $129.93, a decrease from $136.14 calculated
                last year for CY 2021 ratesetting (85 FR 86080).
                ---------------------------------------------------------------------------
                 \185\ Each revenue code on the CMHC claim must have a HCPCS code
                and charge associated with it. We multiply each claim service line's
                charges by the CMHC's overall CCR (or statewide CCR, where the
                overall CCR was greater than 1 or was missing) to estimate CMHC
                costs. Only the claims service lines containing PHP allowable HCPCS
                codes and PHP allowable revenue codes from the CMHC claims remaining
                after trimming are retained for CMHC cost determination. The costs,
                payments, and service units for all service lines occurring on the
                same service date, by the same provider, and for the same
                beneficiary are summed. CMHC service days must have three or more
                services provided to be assigned to CMHC APC 5853. The final
                geometric mean per diem cost for CMHC APC 5853 is calculated by
                taking the nth root of the product of n numbers, for days where
                three or more services were provided. CMHC service days with costs
                3 standard deviations from the geometric mean costs
                within APC 5853 are deleted and removed from modeling. The remaining
                PHP service days are used to calculate the final geometric mean per
                diem cost for each PHP APC by taking the nth root of the product of
                n numbers for days where three or more services were provided.
                ---------------------------------------------------------------------------
                 In the CY 2022 OPPS/ASC proposed rule (86 FR 42151 through 42152),
                we proposed a cost floor of $136.14, which is equal to the final CY
                2021 geometric mean per diem cost for CMHC APC 5853, in order to
                stabilize the geometric mean per diem costs for CY 2022 only. We
                recognized the disruption that the ongoing COVID-19 PHE appears to be
                having on CMHCs' operations, and stated that we believe it is important
                for CMS to continue to support Medicare beneficiaries' access to
                critical PHP services during the COVID-19 PHE by helping to maintain
                the stability of payments to PHP providers. We stated that we were
                concerned that the calculated geometric mean per diem cost of $130.41
                for the proposed rule would result in a disruption to CMHC payments at
                a time when the need for mental health services has increased.\186\
                ---------------------------------------------------------------------------
                 \186\ https://www.cdc.gov/mmwr/volumes/70/wr/mm7013e2.htm.
                ---------------------------------------------------------------------------
                 Because the calculated geometric mean per diem cost for CMHC APC
                5853 was below the cost floor, we proposed to calculate the CY 2022
                CMHC APC 5853 payment rate based on the cost floor of $136.14. We also
                proposed that if the final CY 2022 geometric mean per diem cost is
                calculated to be higher than $136.14, then we would use the calculated
                geometric mean per diem cost.
                 Comment: We received 3 comments on our proposed calculation of the
                geometric mean per diem cost for CMHC APC 5853. All commenters were
                supportive of the proposed cost floor to stabilize the geometric mean
                per diem costs finalized in the prior year, CY 2021. Commenters also
                encouraged CMS to consider long-term approaches to addressing cost
                fluctuations in PHP services and provide more stable payment rates to
                ensure access to these important services. Additionally, one commenter
                urged CMS to consider making CMHCs financially whole, which should
                include payment that will expand their capacity to meet growing need,
                particularly in underserved communities.
                 Response: We appreciate commenters' support for the proposed
                policies. We agree with commenters about the importance of maintaining
                stable payment rates to ensure access to PHP services. We continue to
                recognize that because the CMHC ratesetting dataset is small (n=37),
                changes in costs from a small number of providers can influence the
                overall geometric mean per diem cost calculation. We are considering
                approaches to address cost fluctuations in future years; however, since
                we did not propose a methodology for future years, we are not
                finalizing any methodology in this CY 2022 OPPS/ASC final rule to
                address cost fluctuations in future years.
                 We also appreciate the commenter's suggestion about the need for
                ensuring that CMS supports the capacity of CMHCs to meet the growing
                needs of underserved communities. We recognize the critical role that
                CMHCs play in the communities they serve. The commenter did not offer
                specific information about which growing community needs CMHCs are
                facing or
                [[Page 63668]]
                what mechanism CMS should consider for enabling CMHCs to expand
                capacity in order to meet these needs, but we note that section
                1866(e)(2) of the Act only authorizes Medicare to make payments to
                CMHCs for PHP services.
                 We agree with the commenter that PHP payment rates should
                accurately reflect the financial costs to providers of providing PHP
                services to their communities. Sections 1833(t)(2) and 1833(t)(9) of
                the Act set forth the requirements for establishing and adjusting OPPS
                payment rates, which are based on costs, and which include PHP payment
                rates. Because our PHP ratesetting methodology depends heavily on
                provider-reported costs, we strongly encourage CMHCs to review cost
                reporting instructions to be sure they are reporting their costs
                correctly. These instructions are available in chapter 45 of the
                Provider Reimbursement Manual (PRM), Part 2, available on the CMS
                website at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals. We want to reiterate that it is a
                requirement for CMHCs, unless they are approved as a low-utilization or
                no-utilization provider in accordance with PRM-1, chapter 1, section
                110 (42 CFR 413.24(g) and (h)), to file full cost reports, which helps
                us capture accurate CMHC costs in rate setting. We furthermore
                encourage those CMHCs that do not file full cost reports to consider
                doing so.
                 After careful consideration of the comments received, we are
                finalizing our proposal to establish a cost floor for CY 2022 equal to
                the final CY 2021 geometric mean per diem cost for CMHC APC 5853, which
                is $136.14. The calculated CY 2022 geometric mean per diem cost for all
                CMHCs for providing three or more services per day (CMHC APC 5853) is
                $129.93. Because this amount is below the cost floor, we are finalizing
                our proposal to calculate the CY 2022 CMHC APC 5853 payment rate based
                on the cost floor of $136.14.
                b. Hospital-Based PHP Data Preparation: Data Trims and Exclusions
                 For this CY 2022 final rule, we prepared data consistent with our
                policies as described in the CY 2016 OPPS/ASC final rule with comment
                period (80 FR 70463 through 70465) for hospital-based PHP providers,
                which is similar to that used for CMHCs. However, as discussed above,
                we finalized our proposal to use CY 2019 claims data and the cost
                information from prior to the COVID-19 PHE, that is, the cost
                information that was available for the CY 2021 OPPS/ASC rulemaking, for
                calculating the CY 2022 hospital-based PHP APC per diem cost. The CY
                2019 PHP claims included data for 449 hospital-based PHP providers for
                our calculations in the CY 2022 OPPS/ASC final rule.
                 Consistent with our policies, as stated in the CY 2016 OPPS/ASC
                final rule with comment period (80 FR 70463 through 70465), we prepared
                the data by applying trims and data exclusions. We applied a trim on
                hospital service days for hospital-based PHP providers with a CCR
                greater than 5 at the cost center level. To be clear, the CCR greater
                than 5 trim is a service day-level trim in contrast to the CMHC 2 standard deviation trim, which is a provider-level trim.
                Applying the CCR greater than 5 trim removed affected service days from
                one hospital-based PHP provider from our proposed ratesetting. However,
                100 percent of the service days for this hospital-based PHP provider
                had at least one service associated with a CCR greater than 5, so the
                trim removed this provider entirely from our proposed ratesetting. In
                addition, 68 hospital-based PHPs were removed for having no days with
                PHP payment. Two hospital-based PHPs were removed because none of their
                days included PHP-allowable HCPCS codes. No hospital-based PHPs were
                removed for missing wage index data, and a single hospital-based PHP
                was removed by the OPPS 3 standard deviation trim on costs
                per day. (We refer readers to the OPPS Claims Accounting Document,
                available online at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html).\187\
                ---------------------------------------------------------------------------
                 \187\ Click on the link labeled ``CY 2022 OPPS/ASC Notice of
                Proposed Rulemaking'', which can be found under the heading
                ``Hospital Outpatient Prospective Payment System Rulemaking'' and
                open the claims accounting document link at the bottom of the page,
                which is labeled ``2022 NPRM OPPS Claims Accounting (PDF)''.
                ---------------------------------------------------------------------------
                 Overall, we removed 72 hospital-based PHP providers (1 with all
                service days having a CCR greater than 5) + (68 with no PHP payment) +
                (2 with no PHP-allowable HCPCS codes) + (1 provider with geometric mean
                costs per day outside the 3 SD limits)], resulting in 377
                (449 total-72 excluded) hospital-based PHP providers in the data used
                for calculating ratesetting.
                 After completing these data preparation steps, we calculated the CY
                2022 geometric mean per diem cost for hospital-based PHP APC 5863 by
                following the methodology described in the CY 2016 OPPS/ASC final rule
                with comment period (80 FR 70464 through 70465) and modified in the CY
                2017 OPPS/ASC final rule with comment period (81 FR 79687 and
                79691).\188\ The calculated CY 2022 hospital-based PHP APC geometric
                mean per diem cost for hospital-based PHP providers that provide three
                or more services per service day (hospital-based PHP APC 5863) is
                $253.02, which is a very slight decrease from $253.76 calculated last
                year for CY 2021 ratesetting (85 FR 86080).
                ---------------------------------------------------------------------------
                 \188\ Each revenue code on the hospital-based PHP claim must
                have a HCPCS code and charge associated with it. We multiply each
                claim service line's charges by the hospital's department-level CCR;
                in CY 2020 and subsequent years, that CCR is determined by using the
                PHP-only revenue-code-to-cost-center crosswalk. Only the claims
                service lines containing PHP-allowable HCPCS codes and PHP-allowable
                revenue codes from the hospital-based PHP claims remaining after
                trimming are retained for hospital-based PHP cost determination. The
                costs, payments, and service units for all service lines occurring
                on the same service date, by the same provider, and for the same
                beneficiary are summed. Hospital-based PHP service days must have
                three or more services provided to be assigned to hospital-based PHP
                APC 5863. The final geometric mean per diem cost for hospital-based
                PHP APC 5863 is calculated by taking the nth root of the product of
                n numbers, for days where three or more services were provided.
                Hospital-based PHP service days with costs 3 standard
                deviations from the geometric mean costs within APC 5863 are deleted
                and removed from modeling. The remaining hospital-based PHP service
                days are used to calculate the final geometric mean per diem cost
                for hospital-based PHP APC 5863.
                ---------------------------------------------------------------------------
                 In the CY 2022 OPPS/ASC proposed rule (86 FR 42151 through 42152),
                we proposed a cost floor of $253.76, which is equal to the final CY
                2021 geometric mean per diem cost for CMHC APC 5863, in order to
                stabilize the geometric mean per diem costs for CY 2022 only. We noted
                that, in general, a decrease of the magnitude calculated for the
                proposed rule would not be unexpected due to normal variation in cost
                and claims data. However, we recognized the disruption that the ongoing
                COVID-19 PHE appears to be having on the operations of hospital-based
                PHPs, and stated that we believe it is important for CMS to continue to
                support Medicare beneficiaries' access to critical PHP services during
                the COVID-19 PHE by helping to maintain the stability of payments to
                PHP providers. We stated that while the decrease in the geometric mean
                per diem cost for hospital-based PHP APC 5863 would be very slight
                based on the CY 2019 claims and cost data used for the CY 2022 OPPS/ASC
                proposed rule, we continue to believe, as we have stated before in
                recent years, that access is better supported when geometric mean per
                diem costs do not fluctuate greatly. We also noted that the proposed
                cost floor would protect access to PHP services at hospital-based PHPs
                if the final CY 2022 calculated hospital-based PHP APC geometric mean
                per diem cost is significantly less,
                [[Page 63669]]
                which we were concerned would result in a disruption to hospital-based
                PHP payments at a time when the need for mental health services has
                increased.
                 Because the calculated geometric mean per diem cost for hospital-
                based PHP APC 5863 was below the cost floor, we proposed to calculate
                the CY 2022 hospital-based PHP APC 5863 payment rate based on the cost
                floor of $253.76. We also proposed that if the final CY 2022 geometric
                mean per diem cost is calculated to be higher than $253.76, then we
                would use the calculated geometric mean per diem cost.
                 Comment: We received 5 comments on our proposed calculation of the
                geometric mean per diem cost for CMHC APC 5863. All commenters were
                supportive of the proposed cost floor to stabilize the geometric mean
                per diem costs finalized in the prior year, CY 2021. Commenters also
                encouraged CMS to consider long-term approaches to addressing cost
                fluctuations in PHP services and provide more stable payment rates to
                ensure access to these important services. Three national provider
                associations commented that while the PHE has magnified the need for
                improved access to behavioral healthcare, there are severe shortages of
                behavioral healthcare providers in many parts of the United States,
                stating their belief that the proposed ratesetting methodology should
                help lessen the impact of COVID-19 on PHP providers.
                 Response: We appreciate commenters' support for the proposed
                policies. We share commenters' concerns about ensuring that Medicare
                beneficiaries continue to have access to PHP services, particularly in
                light of the impact of the COVID-19 PHE. We also continue to recognize,
                as we have noted in past years, that changes in costs from a small
                number of providers can influence the overall geometric mean per diem
                cost calculation. We are considering approaches to address cost
                fluctuations in future years; however, since we did not propose a
                methodology for future years, we are not finalizing any methodology in
                this CY 2022 OPPS/ASC final rule to address cost fluctuations in future
                years.
                 After careful consideration of the comments received, we are
                finalizing our proposal to establish a cost floor for CY 2022 equal to
                the final CY 2021 geometric mean per diem cost for CMHC APC 5863, which
                is $253.76. The calculated CY 2022 geometric mean per diem cost for all
                hospital-based PHPs for providing three or more services per day (CMHC
                APC 5863) is $253.02. Because this amount is below the cost floor, we
                are finalizing our proposal to calculate the CY 2022 hospital-based PHP
                APC 5863 payment rate based on the cost floor of $253.76.The final CY
                2022 PHP geometric mean per diem costs are shown in Table 44 and are
                used to derive the proposed CY 2022 PHP APC per diem rates for CMHCs
                and hospital-based PHPs. The final CY 2022 PHP APC per diem rates are
                included in Addendum A to the CY 2022 OPPS/ASC proposed rule (which is
                available on our website at:https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html).\189\
                ---------------------------------------------------------------------------
                 \189\ As discussed in section XX. of the CY 2022 OPPS/ASC
                proposed rule, OPPS APC geometric mean per diem costs (including PHP
                APC geometric mean per diem costs) are divided by the geometric mean
                per diem costs for APC 5012 (Clinic Visits and Related Services) to
                calculate each PHP APC's unscaled relative payment weight. An
                unscaled relative payment weight is one that is not yet adjusted for
                budget neutrality. Budget neutrality is required under section
                1833(t)(9)(B) of the Act, and ensures that the estimated aggregate
                weight under the OPPS for a calendar year is neither greater than
                nor less than the estimated aggregate weight that would have been
                made without the changes. To adjust for budget neutrality (that is,
                to scale the weights), we compare the estimated aggregated weight
                using the scaled relative payment weights from the previous calendar
                year at issue. We refer readers to the ratesetting procedures
                described in Part 2 of the OPPS Claims Accounting narrative and in
                section II. of the CY 2022 OPPS/ASC proposed rule for more
                information on scaling the weights, and for details on the final
                steps of the process that leads to final PHP APC per diem payment
                rates. The OPPS Claims Accounting narrative is available on the CMS
                website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html.
                [GRAPHIC] [TIFF OMITTED] TR16NO21.073
                C. Outlier Policy for CMHCs
                 For 2022, we proposed to continue to calculate the CMHC outlier
                percentage, cutoff point and percentage payment amount, outlier
                reconciliation, outlier payment cap, and fixed dollar- threshold
                according to previously established policies. These topics are
                discussed in more detail. We refer readers to section II.G.1 of this CY
                2022 OPPS/ASC final rule for our general policies for hospital
                outpatient outlier payments.
                 We did not receive any public comments on our proposal, and are
                finalizing it as proposed.
                1. Background
                 As discussed in the CY 2004 OPPS final rule with comment period (68
                FR 63469 through 63470), we noted a significant difference in the
                amount of outlier payments made to hospitals and CMHCs for PHP
                services. Given the difference in PHP charges between hospitals and
                CMHCs, we did not believe it was appropriate to make outlier payments
                to CMHCs using the outlier percentage target amount and threshold
                established for hospitals. Therefore, beginning in CY 2004, we created
                a separate outlier policy specific to the estimated costs and OPPS
                payments provided to CMHCs. We designated a portion of the estimated
                OPPS outlier threshold specifically for CMHCs, consistent with the
                percentage of projected payments to CMHCs under the OPPS each year,
                excluding outlier payments, and established a separate outlier
                threshold for CMHCs. This
                [[Page 63670]]
                separate outlier threshold for CMHCs resulted in $1.8 million in
                outlier payments to CMHCs in CY 2004 and $0.5 million in outlier
                payments to CMHCs in CY 2005 (82 FR 59381). In contrast, in CY 2003,
                more than $30 million was paid to CMHCs in outlier payments (82 FR
                59381).
                2. CMHC Outlier Percentage
                 In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59267
                through 59268), we described the current outlier policy for hospital
                outpatient payments and CMHCs. We note that we also discussed our
                outlier policy for CMHCs in more detail in section VIII.C. of that same
                final rule (82 FR 59381). We set our projected target for all OPPS
                aggregate outlier payments at 1.0 percent of the estimated aggregate
                total payments under the OPPS (82 FR 59267). This same policy was also
                reiterated in the CY 2019 OPPS/ASC final rule with comment period (83
                FR 58996), the CY 2020 OPPS/ASC final rule with comment period (84 FR
                61350), and the CY 2021 OPPS/ASC final rule with comment period (85 FR
                86082).
                 We estimate CMHC per diem payments and outlier payments by using
                the most recent available utilization and charges from CMHC claims,
                updated CCRs, and the updated payment rate for APC 5853. For increased
                transparency, we are providing a more detailed explanation of the
                existing calculation process for determining the CMHC outlier
                percentages. To calculate the CMHC outlier percentage, we follow three
                steps:
                 Step 1: We multiply the OPPS outlier threshold, which is
                1.0 percent, by the total estimated OPPS Medicare payments (before
                outliers) for the prospective year to calculate the estimated total
                OPPS outlier payments:
                (0.01 x Estimated Total OPPS Payments) = Estimated Total OPPS Outlier
                Payments.
                 Step 2: We estimate CMHC outlier payments by taking each
                provider's estimated costs (based on their allowable charges multiplied
                by the provider's CCR) minus each provider's estimated CMHC outlier
                multiplier threshold (we refer readers to section VIII.C.3. of the CY
                2022 OPPS/ASC proposed rule). That threshold is determined by
                multiplying the provider's estimated paid days by 3.4 times the CMHC
                PHP APC payment rate. If the provider's costs exceed the threshold, we
                multiply that excess by 50 percent, as described in section VIII.C.3.
                of the CY 2022 OPPS/ASC proposed rule, to determine the estimated
                outlier payments for that provider. CMHC outlier payments are capped at
                8 percent of the provider's estimated total per diem payments
                (including the beneficiary's copayment), as described in section
                VIII.C.5. of the CY 2022 OPPS/ASC proposed rule, so any provider's
                costs that exceed the CMHC outlier cap will have its payments adjusted
                downward. After accounting for the CMHC outlier cap, we sum all of the
                estimated outlier payments to determine the estimated total CMHC
                outlier payments.
                (Each Provider's Estimated Costs - Each Provider's Estimated Multiplier
                Threshold) = A. If A is greater than 0, then (A x 0.50) = Estimated
                CMHC Outlier Payment (before cap) = B. If B is greater than (0.08 x
                Provider's Total Estimated Per Diem Payments), then cap adjusted B =
                (0.08 x Provider's Total Estimated Per Diem Payments); otherwise, B =
                B. Sum (B or cap-adjusted B) for Each Provider = Total CMHC Outlier
                Payments.
                 Step 3: We determine the percentage of all OPPS outlier
                payments that CMHCs represent by dividing the estimated CMHC outlier
                payments from Step 2 by the total OPPS outlier payments from Step 1:
                (Estimated CMHC Outlier Payments/Total OPPS Outlier Payments).
                 We proposed to continue to calculate the CMHC outlier percentage
                according to previously established policies, and we did not propose
                any changes to our current methodology for calculating the CMHC outlier
                percentage for CY 2022. Therefore, based on our CY 2022 payment
                estimates, CMHCs are projected to receive 0.02 percent of total
                hospital outpatient payments in CY 2022, excluding outlier payments. We
                proposed to designate approximately less than 0.01 percent of the
                estimated 1.0 percent hospital outpatient outlier threshold for CMHCs.
                This percentage is based upon the formula given in Step 3.
                 We did not receive any public comments on our proposal, and are
                finalizing it as proposed.
                3. Cutoff Point and Percentage Payment Amount
                 As described in the CY 2018 OPPS/ASC final rule with comment period
                (82 FR 59381), our policy has been to pay CMHCs for outliers if the
                estimated cost of the day exceeds a cutoff point. In CY 2006, we set
                the cutoff point for outlier payments at 3.4 times the highest CMHC PHP
                APC payment rate implemented for that calendar year (70 FR 68551). For
                CY 2018, the highest CMHC PHP APC payment rate is the payment rate for
                CMHC PHP APC 5853. In addition, in CY 2002, the final OPPS outlier
                payment percentage for costs above the multiplier threshold was set at
                50 percent (66 FR 59889). In CY 2018, we continued to apply the same 50
                percent outlier payment percentage that applies to hospitals to CMHCs
                and continued to use the existing cutoff point (82 FR 59381).
                Therefore, for CY 2018, we continued to pay for partial hospitalization
                services that exceeded 3.4 times the CMHC PHP APC payment rate at 50
                percent of the amount of CMHC PHP APC geometric mean per diem costs
                over the cutoff point. For example, for CY 2018, if a CMHC's cost for
                partial hospitalization services paid under CMHC PHP APC 5853 exceeds
                3.4 times the CY 2018 payment rate for CMHC PHP APC 5853, the outlier
                payment would be calculated as 50 percent of the amount by which the
                cost exceeds 3.4 times the CY 2018 payment rate for CMHC PHP APC 5853
                [0.50 x (CMHC Cost-(3.4 x APC 5853 rate))]. This same policy was also
                reiterated in the CY 2019 OPPS/ASC final rule with comment period (83
                FR 58996 through 58997), CY 2020 OPPS/ASC final rule with comment
                period (84 FR 61351) and the CY 2021 OPPS/ASC final rule with comment
                period (85 FR 86082 through 86083). For CY 2022, we proposed to
                continue to pay for partial hospitalization services that exceed 3.4
                times the proposed CMHC PHP APC payment rate at 50 percent of the CMHC
                PHP APC geometric mean per diem costs over the cutoff point. That is,
                for CY 2022, if a CMHC's cost for partial hospitalization services paid
                under CMHC PHP APC 5853 exceeds 3.4 times the payment rate for CMHC APC
                5853, the outlier payment will be calculated as [0.50 x (CMHC Cost-(3.4
                x APC 5853 rate))].
                 We did not receive any public comments on our proposal, and are
                finalizing it as proposed.
                4. Outlier Reconciliation
                 In the CY 2009 OPPS/ASC final rule with comment period (73 FR 68594
                through 68599), we established an outlier reconciliation policy to
                address charging aberrations related to OPPS outlier payments. We
                addressed vulnerabilities in the OPPS outlier payment system that lead
                to differences between billed charges and charges included in the
                overall CCR, which are used to estimate cost and would apply to all
                hospitals and CMHCs paid under the OPPS. We initiated steps to ensure
                that outlier payments appropriately account for the financial risk when
                providing an extraordinarily costly and
                [[Page 63671]]
                complex service, but are only being made for services that legitimately
                qualify for the additional payment.
                 For a comprehensive description of outlier reconciliation, we refer
                readers to the CY 2019 OPPS/ASC final rules with comment period (83 FR
                58874 through 58875 and 81 FR 79678 through 79680).
                 We proposed to continue these policies for partial hospitalization
                services provided through PHPs for CY 2022. The current outlier
                reconciliation policy requires that providers whose outlier payments
                meet a specified threshold (currently $500,000 for hospitals and any
                outlier payments for CMHCs) and whose overall ancillary CCRs change by
                plus or minus 10 percentage points or more, are subject to outlier
                reconciliation, pending approval of the CMS Central Office and Regional
                Office (73 FR 68596 through 68599). The policy also includes provisions
                related to CCRs and to calculating the time value of money for
                reconciled outlier payments due to or due from Medicare, as detailed in
                the CY 2009 OPPS/ASC final rule with comment period and in the Medicare
                Claims Processing Manual (73 FR 68595 through 68599 and Medicare Claims
                Processing Internet Only Manual, Chapter 4, Section 10.7.2 and its
                subsections, available online at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c04.pdf).
                 We did not receive any public comments on our proposal, and are
                finalizing it as proposed.
                5. Outlier Payment Cap
                 In the CY 2017 OPPS/ASC final rule with comment period, we
                implemented a CMHC outlier payment cap to be applied at the provider
                level, such that in any given year, an individual CMHC will receive no
                more than a set percentage of its CMHC total per diem payments in
                outlier payments (81 FR 79692 through 79695). We finalized the CMHC
                outlier payment cap to be set at 8 percent of the CMHC's total per diem
                payments (81 FR 79694 through 79695). This outlier payment cap only
                affects CMHCs, it does not affect other provider types (that is,
                hospital-based PHPs), and is in addition to and separate from the
                current outlier policy and reconciliation policy in effect. In the CY
                2020 OPPS/ASC final rule with comment period (84 FR 61351), we
                finalized a proposal to continue this policy in CY 2020 and subsequent
                years. In the CY 2022 OPPS/ASC proposed rule, we did not propose any
                changes to this policy.
                6. Fixed-Dollar Threshold
                 In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59267
                through 59268), for the hospital outpatient outlier payment policy, we
                set a fixed-dollar threshold in addition to an APC multiplier
                threshold. Fixed-dollar thresholds are typically used to drive outlier
                payments for very costly items or services, such as cardiac pacemaker
                insertions. CMHC PHP APC 5853 is the only APC for which CMHCs may
                receive payment under the OPPS, and is for providing a defined set of
                services that are relatively low cost when compared to other OPPS
                services. Because of the relatively low cost of CMHC services that are
                used to comprise the structure of CMHC PHP APC 5853, it is not
                necessary to also impose a fixed-dollar threshold on CMHCs. Therefore,
                in the CY 2018 OPPS/ASC final rule with comment period, we did not set
                a fixed-dollar threshold for CMHC outlier payments (82 FR 59381). This
                same policy was also reiterated in the CY 2020 OPPS/ASC final rule with
                comment period (84 FR 61351) and the CY 2021 OPPS/ASC final rule with
                comment period (85 FR 86083). We proposed to continue this policy for
                CY 2022.
                 We did not receive any public comments on our proposal, and are
                finalizing it as proposed.
                IX. Services That Will Be Paid Only as Inpatient Services
                A. Background
                 Established in rulemaking as part of the initial implementation of
                the OPPS, the inpatient only (IPO) list identifies services for which
                Medicare will only make payment when the services are furnished in the
                inpatient hospital setting because of the nature of the procedure, the
                underlying physical condition of the patient, or the need for at least
                24 hours of postoperative recovery time or monitoring before the
                patient can be safely discharged (70 FR 68695). The IPO list was
                created based on the premise (rooted in the practice of medicine at
                that time), that Medicare should not pay for procedures furnished as
                outpatient services that are performed on an inpatient basis virtually
                all of the time for the Medicare population, either because of the
                invasive nature of the procedures, the need for postoperative care, or
                the underlying physical condition of the patient who would require such
                surgery, because performing these procedures on an outpatient basis
                would not be safe or appropriate, and therefore not reasonable and
                necessary under Medicare rules (63 FR 47571). Services included on the
                IPO list were those determined to require inpatient care, such as those
                that are highly invasive, result in major blood loss or temporary
                deficits of organ systems (such as neurological impairment or
                respiratory insufficiency), or otherwise require intensive or extensive
                postoperative care (65 FR 67826). There are some services designated as
                inpatient only that, given their clinical intensity, would not be
                expected to be performed in the hospital outpatient setting. For
                example, we have traditionally considered certain surgically invasive
                procedures on the brain, heart, and abdomen, such as craniotomies,
                coronary-artery bypass grafting, and laparotomies, to require inpatient
                care (65 FR 18456). Designation of a service as inpatient-only does not
                preclude the service from being furnished in a hospital outpatient
                setting, but means that Medicare will not make payment for the service
                if it is furnished to a Medicare beneficiary in the hospital outpatient
                setting (65 FR 18443). Conversely, the absence of a procedure from the
                list should not be interpreted as identifying those procedures as
                appropriately performed only in the hospital outpatient setting (70 FR
                68696).
                 As part of the annual update process, we have historically worked
                with interested stakeholders, including professional societies,
                hospitals, surgeons, hospital associations, and beneficiary advocacy
                groups, to evaluate the IPO list and to determine whether services
                should be added to or removed from the list. Stakeholders were
                encouraged to request reviews for a particular code or group of codes;
                and we have asked that their requests include evidence that
                demonstrates that the procedure was performed on an outpatient basis in
                a safe and appropriate manner in a variety of different types of
                hospitals--including but not limited to--operative reports of actual
                cases, peer-reviewed medical literature, community medical standards
                and practice, physician comments, outcome data, and post-procedure care
                data (67 FR 66740).
                 Prior to CY 2021, we traditionally used five criteria to determine
                whether a procedure should be removed from the IPO list (65 FR 18455).
                As noted in the CY 2012 OPPS/ASC final rule with comment period (76 FR
                74353), we assessed whether a procedure or service met these criteria
                to determine whether or not it should be removed from the IPO list and
                assigned to an APC group for payment under the OPPS when provided in
                the hospital outpatient setting. We have explained that a
                [[Page 63672]]
                procedure is not required to meet all of the established criteria to be
                removed from the IPO list. The criteria for assessing procedures for
                removal from the IPO list prior to CY 2021 are the following:
                 Most outpatient departments are equipped to provide the
                services to the Medicare population.
                 The simplest procedure described by the code may be
                furnished in most outpatient departments.
                 The procedure is related to codes that we have already
                removed from the IPO list.
                 A determination is made that the procedure is being
                furnished in numerous hospitals on an outpatient basis.
                 A determination is made that the procedure can be
                appropriately and safely furnished in an ASC and is on the list of
                approved ASC services or has been proposed by us for addition to the
                ASC list.
                 In the past, we have requested that stakeholders submit
                corresponding evidence in support of their claims that a code or group
                of codes met the longstanding criteria for removal from the IPO list
                and was safe to perform on the Medicare population in the hospital
                outpatient setting--including, but not limited to case reports,
                operative reports of actual cases, peer-reviewed medical literature,
                medical professional analysis, clinical criteria sets, and patient
                selection protocols. Our clinicians thoroughly reviewed all information
                submitted within the context of the established criteria and if,
                following this review, we determined that there was sufficient evidence
                to confirm that the code could be safely and appropriately performed on
                an outpatient basis, we assigned the service to an APC and included it
                as a payable procedure under OPPS (67 FR 66740).
                 We stated in prior rulemaking that, over time, given advances in
                technology and surgical technique, we would continue to evaluate
                services to determine whether they should be removed from the IPO list.
                Our goal is to ensure that inpatient only designations are consistent
                with current standards of practice. We have asserted in prior
                rulemaking that, insofar as advances in medical practice mitigate
                concerns about these procedures being performed on an outpatient basis,
                we would be prepared to remove procedures from the IPO list and provide
                for payment for them under the OPPS (65 FR 18443). Prior to CY 2021,
                changes to the IPO list have been gradual. Further, CMS has at times
                had to reclassify codes as inpatient only services with the emergence
                of new information.
                 We refer readers to the CY 2012 OPPS/ASC final rule with comment
                period (76 FR 74352 through 74353) for a full discussion of our
                historic policies for identifying services that are typically provided
                only in an inpatient setting and, therefore, that will not be paid by
                Medicare under the OPPS, as well as the criteria we have used to review
                the IPO list to determine whether or not any services should be
                removed.
                 In the CY 2021 OPPS/ASC final rule with comment period (85 FR 86084
                through 86088), we significantly adjusted our approach to the IPO list.
                As we stated in that final rule, we no longer saw the need for CMS to
                restrict payment for certain procedures by maintaining the IPO list to
                identify services that require inpatient care. In that final rule, we
                acknowledged the seriousness of the concerns regarding patient safety
                and quality of care that various stakeholders expressed regarding
                removing procedures from the IPO list or eliminating the IPO list
                altogether. But we stated that we believed that the developments in
                surgical technique and technological advances in the practice of
                medicine, as well as various safeguards, including, but not limited to,
                physician clinical judgment, state and local regulations, accreditation
                requirements, medical malpractice laws, hospital conditions of
                participation, CMS quality and monitoring initiatives and programs and
                other CMS initiatives would continue to ensure that procedures removed
                from the IPO list and provided in the hospital outpatient setting could
                be performed safely on appropriately selected beneficiaries. We also
                stated that given our increasing ability to measure the safety of
                procedures performed in the hospital outpatient setting and to monitor
                the quality of care, in addition to the other safeguards detailed
                above, we believed that quality of care was unlikely to be affected by
                the elimination of the IPO list. We noted that we do not require
                services that are not included on the IPO list to be performed solely
                in the hospital outpatient setting and that services that were
                previously identified as inpatient only can continue to be performed in
                the inpatient setting. We emphasized that physicians should use their
                clinical knowledge and judgment, together with consideration of the
                beneficiary's specific needs, to determine whether a procedure can be
                performed appropriately in a hospital outpatient setting or whether
                inpatient care is required for the beneficiary, subject to the general
                coverage rules requiring that any procedure be reasonable and
                necessary. We also stated that the elimination of the IPO list would
                ensure maximum availability of services to beneficiaries in the
                hospital outpatient setting. Finally, we stressed that as medical
                practice continues to develop, we believed that the difference between
                the need for inpatient care and the appropriateness of outpatient care
                has become less distinct for many services.
                 Accordingly, in the CY 2021 OPPS/ASC final rule with comment period
                (85 FR 86084 through 86088), we finalized, with modification, our
                proposal to eliminate the IPO list over the course of three years (85
                FR 86093). We revised our regulation at Sec. 419.22(n) to state that,
                effective on January 1, 2021, the Secretary shall eliminate the list of
                services and procedures designated as requiring inpatient care through
                a 3-year transition. As part of the first phase of this elimination of
                the IPO list, we removed 298 codes, including 266 musculoskeletal-
                related services, from the list beginning in CY 2021 and, because we
                proposed to eliminate the IPO list entirely, the removed procedures
                were not assessed against our longstanding criteria for removal (85 FR
                86094).
                B. Changes to the Inpatient Only (IPO) List
                 In the CY 2022 OPPS/ASC proposed rule, for CY 2022, we proposed to
                halt the elimination of the IPO list and, after clinical review of the
                services removed from the IPO list in CY 2021 as part of the first
                phase of eliminating the IPO list, we proposed to add the 298 services
                removed from the IPO list in CY 2021 back to the IPO list beginning in
                CY 2022. In accordance with this proposal, we proposed to amend the
                regulation at Sec. 419.22(n) to remove the reference to the
                elimination of the list of services and procedures designated as
                requiring inpatient care through a three-year transition. We also
                proposed to codify the five longstanding criteria for determining
                whether a service or procedure should be removed from the IPO list in
                the regulation in a new Sec. 419.23.
                1. Proposal To Halt the Elimination of the IPO List
                 Following the CY 2021 OPPS/ASC final rule with comment period,
                stakeholders continued to express concerns regarding the pace at which
                the IPO list would be eliminated, the perceived lack of transparency in
                determining the order of removal of procedures over the course of the
                elimination process, and what stakeholders believed were insufficient
                [[Page 63673]]
                details concerning rate setting for procedures for which payment would
                be made when furnished in the hospital outpatient department (HOPD)
                setting, as well as the accuracy of those rates for the HOPD setting.
                We have received stakeholder requests to reconsider the elimination of
                the IPO list, to reevaluate procedures removed from the IPO list due to
                safety and quality concerns, and to, at a minimum, extend the timeframe
                for eliminating the list.
                 In the CY 2022 OPPS/ASC proposed rule, we stated that after further
                consideration of the policy we adopted in the CY 2021 OPPS/ASC final
                rule with comment period and the concerns stakeholders have raised
                since the final rule was issued, we believe that we should halt the
                elimination of the IPO list to ensure that any service removed from the
                IPO list is evaluated against the previous longstanding criteria for
                removal from the IPO list before it is removed. We stated that we
                believe assessing whether a procedure or service meets the criteria for
                removal would allow for a more gradual removal of services from the IPO
                list--which would also allow stakeholders more time to evaluate the
                safety of the service in the HOPD and to prepare to safely furnish the
                services migrating off of the IPO list, if they so choose. We stated
                that after further consideration, we continue to believe that the IPO
                list is a valuable tool for ensuring that the OPPS only pays for
                services that can safely be performed in the hospital outpatient
                setting, and we had therefore reconsidered eliminating the IPO list at
                that time. We stated that we believe that there are many surgical
                procedures that cannot be safely performed on a typical Medicare
                beneficiary in the hospital outpatient setting, and therefore, it would
                be inappropriate for us to assign them separately payable status
                indicators and establish payment rates in the OPPS (78 FR 75055). We
                recognized that while physicians are able to make safety determinations
                for a specific beneficiary, CMS is in the position to make safety
                determinations for the broader population of Medicare beneficiaries,
                that is, the typical Medicare beneficiary. Furthermore, we explained
                that while we want to afford physicians and hospitals the maximum
                flexibility in choosing the most clinically appropriate site of service
                for the procedure, as long as the characteristics of the procedure are
                consistent with the criteria listed above, we believe that the IPO list
                was a necessary safeguard that considers the broader Medicare
                population.
                 In the CY 2021 OPPS/ASC final rule with comment period, we
                recognized that stakeholders may need time to adjust to the removal of
                procedures from the list, especially given the significant number of
                services removed beginning in CY 2021 (85 FR 86085 and 86092). We also
                recognized that providers may need time to prepare, update their
                billing systems, and gain experience with newly removed procedures
                eligible to be paid under either the IPPS or the OPPS (85 FR 86086). We
                also acknowledged that it will take time for clinical staff and
                providers to gain experience furnishing these services to the
                appropriate Medicare beneficiaries in the HOPD, and to develop
                comprehensive patient selection criteria and other protocols to
                identify whether a beneficiary can safely have these procedures
                performed in the hospital outpatient setting (85 FR 86088). In the CY
                2021 OPPS/ASC proposed rule, we also reiterated that the removal of a
                particular procedure from the IPO list does not require that all
                beneficiaries be treated in the hospital outpatient setting, but
                explained that we are cognizant that it does require the physician and
                clinical care team to exercise complex medical judgment to determine
                the appropriate setting of care, in accordance with the 2-midnight
                rule.
                 Separately, we also acknowledged the numerous challenges that
                providers are facing due to the COVID-19 PHE (85 FR 86089). After
                further experience with the PHE and its impact on provider and
                beneficiary behavior, we recognized that the COVID-19 PHE has likely
                reduced providers' ability to prepare to furnish these services in the
                hospital outpatient setting in the manner they would absent the PHE. We
                acknowledged that the COVID-19 PHE may have negatively impacted the
                time and resources that providers have to adapt to the removal of these
                procedures from the IPO list-- making it more difficult for providers
                to prepare, update their billing systems, and gain experience with
                newly removed procedures eligible to be paid under either the IPPS or
                the OPPS. We also recognized that the COVID-19 PHE has negatively
                impacted clinical staff and providers' opportunity to develop the
                comprehensive patient selection criteria and other protocols necessary
                to identify whether a Medicare beneficiary could safely have these
                procedures performed in the hospital outpatient setting while
                guaranteeing them appropriate quality of care.
                 We explained in the CY 2022 OPPS/ASC proposed rule that after
                further consideration and review of the additional feedback from
                stakeholders, we recognized that the timeframe we finalized in the CY
                2021 OPPS/ASC final rule with comment period for eliminating the IPO
                list did not, and would not, give us a sufficient opportunity to
                carefully assess whether a procedure should be payable in the HOPD
                setting, with considerations to beneficiary safety and medical
                advancements. We also explained that the unprecedented removal of the
                298 codes from the IPO list transpired quickly. Given the significant
                policy shift and work required to operationalize the elimination of the
                IPO list, we acknowledged that more time is required to separately
                evaluate and consider the inpatient only classification of each service
                and its potential APC assignment. In addition, we stated that we
                believe that we should continue to use the longstanding criteria for
                removing services from the IPO list to evaluate each service before
                proposing to remove it from the list, and, as noted above, we proposed
                to codify these criteria in the regulation in a new Sec. 419.23.
                 We emphasized in the CY 2022 OPPS/ASC proposed rule that we still
                believe that as medical practice continues to develop, the difference
                between the need for inpatient care and the appropriateness of
                outpatient care has become less distinct for many services. We stated
                that while we recognize that there are services currently classified as
                inpatient only that may be appropriate in the hospital outpatient
                setting for some Medicare beneficiaries, we continue to strive to
                balance the goals of increasing physician and patient choice of setting
                of care with considerations to patient safety for all Medicare
                beneficiaries. We explained that we must also consider the timing with
                which we remove services from the IPO list and the availability of
                evidence that may support the removal of those services. We stated that
                we believe that with additional time stakeholders can provide
                supportive evidence to aid in the evaluation of each individual
                procedure's assignment to the IPO list, as well as the appropriate APC
                assignment and corresponding payment for any codes, including but not
                limited to case reports, operative reports of actual cases, peer-
                reviewed medical literature, medical professional analysis, clinical
                criteria sets, and patient selection protocols.
                 Furthermore, we explained that an initial review of 2021 billing
                data through May 21, 2021 supported our proposal to halt the
                elimination of the list, revealing that 131 of the 298 codes removed
                from the IPO list in the CY 2021 OPPS/ASC final rule with comment
                period appeared on either zero or one OPPS claim and 269 of the 298
                [[Page 63674]]
                codes appeared on fewer than 100 claims. These data indicated that
                fewer than 3 percent of the services removed from the IPO list in 2021
                had seen notable volume in the hospital outpatient setting following
                their removal from the IPO list. For perspective, we also note that
                even before we removed these codes from the IPO list, it was not
                uncommon to see at least some volume for these codes in the claims
                data. In CY 2020, when these codes were still not payable under the
                OPPS, 188 of the codes had at least one outpatient claim and 18 codes
                had greater than 100 claims, for reasons undetermined. We stated that,
                as a result, it was likely that not all of the reported claims
                represent services provided in the hospital outpatient setting due to
                these services being removed from the IPO list in CY 2021.
                 Therefore, we proposed to halt the elimination of the IPO list in
                order to allow for greater consideration of the impact removing
                services from the list has on beneficiary safety and to allow providers
                impacted by the COVID-19 PHE additional time to prepare to furnish
                appropriate services safely and efficiently before continuing to remove
                large numbers of services from the list.
                 Comment: Many commenters, including hospital associations, health
                systems, medical specialty societies, professional organizations, and
                advocacy groups supported our proposal to halt the elimination of the
                IPO list. Several commenters thanked CMS for listening to stakeholders'
                concerns about beneficiary safety and reconsidering the elimination of
                the IPO list. Commenters stated that the IPO list is a necessary tool
                and an important programmatic safeguard, and that maintaining the IPO
                list is necessary to set a national standard for services that should
                be restricted to the inpatient setting.
                 Specifically, commenters who supported halting the elimination of
                the IPO list wanted to maintain the IPO list due to patient safety
                concerns. These commenters stated that the high-risk, invasive
                procedures that require post-operative monitoring and care coordination
                that are included on the IPO list would not be safe to perform on
                Medicare beneficiaries in the hospital outpatient setting. Commenters
                noted that complications can occur with any surgical procedure,
                particularly during the post-operative period and that for many
                services on the IPO list, such post-operative complications are best
                identified early and treated promptly in the inpatient hospital
                setting. Several commenters responded that even with future
                advancements in medical practice and technology, they could not
                anticipate that such complicated procedures could ever be provided
                safely in the hospital outpatient setting, given their clinical nature.
                Commenters noted that physicians are in the best position to make
                safety determinations for their patients, but CMS must make policies
                for the broader, average beneficiary population. The commenters
                suggested that a careful review is needed before removing extensive
                surgical procedures performed on patients with complications and/or
                comorbidities, which are common in the Medicare population.
                 Supporters of maintaining the IPO list acknowledged operational and
                administrative concerns with maintaining the IPO list, largely focused
                on the 2-midnight rule and burden of proof required to allow services
                removed from the IPO list to be furnished inpatient, but contended that
                eliminating the IPO list would create new clinical and operational
                challenges for both practitioners and facilities that would require
                additional time and resources to adjust to. Several commenters also
                expressed concerns that the elimination of the IPO list could
                potentially inappropriately shift costs onto patients and subsequently
                discourage beneficiaries from seeking necessary care. Most supporters
                of maintaining the IPO list also supported CMS retaining its current
                process for evaluating and removing procedures from the IPO list
                through rulemaking.
                 Response: We thank the commenters for their support and we refer
                readers to sections 1X.B.2. and B.4. of this final rule with comment
                period for additional discussion of commenters' feedback on policy
                modifications, including whether CMS should maintain the longer-term
                objective of eliminating the IPO list or maintain the IPO list but
                continue to systematically scale the list back so that inpatient only
                designations are consistent with current standards of practice.
                 Comment: We also received comments from physicians and medical
                specialty societies who stated that, while they agreed that physicians
                should be the primary arbiters regarding the clinically appropriate
                site of service for a procedure for a particular beneficiary, they
                support maintaining the IPO list because a physician's medical judgment
                is not always the primary factor in determining whether a procedure is
                furnished in the inpatient or outpatient hospital setting. These
                commenters stated that many of the adverse impacts from removing
                procedures from the IPO list arise from hospitals that drive provider
                admission decisions. These commenters noted that when procedures are
                removed from the IPO list, many hospitals and other payers, including
                Medicare Advantage plans, make rules establishing outpatient status as
                the assumed baseline site of service for these procedures, regardless
                of patient characteristics or the physician's clinical assessment.
                Commenters divulged various reasons for this action on the part of
                hospitals and payers, including a desire to have the procedure
                performed in a lower cost setting, misinterpretation of CMS' rulemaking
                guidance, a desire for administrative simplicity, concerns regarding
                the application of the 2-midnight benchmark to services that are
                removed from the IPO list, the potential for claim denials if this
                benchmark is not met and/or excessive administrative burden to support
                the case-by-case exception to the 2-midnight rule. According to
                commenters, physicians must, at times, convince a hospital or payer
                that a particular patient should receive a given procedure in an
                inpatient setting due to patient safety concerns.
                 Commenters requested that CMS provide robust stakeholder education
                and issue various forms of guidance as a means of reducing
                administrative and operational burden, to support site of service
                decisions and to encourage consideration of and deference to the
                judgment of the physician, professional societies, and hospital
                associations regarding the procedures that are appropriate to be
                performed in the HOPD setting. Commenters referenced prior CMS guidance
                as a useful tool for providers and hospitals. One commenter noted that
                guidance increases the likelihood of hospital awareness of CMS preamble
                statements on patient selection. One commenter acknowledged CMS'
                historical reticence to define clinical criteria in light of our
                deference to physician judgment but reasoned that a CMS-established
                baseline protocol would not limit clinical decision-making, as
                clinicians would still be able to provide supporting clinical
                documentation to justify inpatient stays for patients that may
                otherwise be candidates for outpatient surgery. Commenters also
                requested that CMS institute a safeguard against inappropriate payer
                behavior that requires services to be furnished in the HOPD setting,
                despite the clinical judgment of the physician or needs of the patient.
                 Response: We thank the commenters for their support and we
                acknowledge the commenters' concerns regarding the administrative
                burden associated with the IPO list and the removal of
                [[Page 63675]]
                procedures from the list. As we have stated in previous rulemaking (85
                FR 86087; 84 FR 61354; 82 FR 59384; 81 FR 79697) when commenters raised
                similar concerns, the removal of a service from the IPO list does not
                require the service to be performed only on an outpatient basis.
                Rather, it allows for payment under the OPPS when the service is
                performed on a registered hospital outpatient. We reiterate that
                services that are removed from the IPO list can be and are performed on
                individuals who are admitted as inpatients (as well as individuals who
                are registered hospital outpatients) when the patient's condition
                warrants inpatient admission (65 FR 18456). It is a misinterpretation
                of CMS payment policy for providers to create policies or guidelines
                that establish the hospital outpatient setting as the baseline or
                default site of service for a procedure based on its removal from the
                IPO list. As stated in previous rulemaking, services that are no longer
                included on the IPO list are payable in either the inpatient or
                hospital outpatient setting subject to the general coverage rules
                requiring that any procedure be reasonable and necessary, and payment
                should be made pursuant to the otherwise applicable payment policies
                (84 FR 61354; 82 FR 59384; 81 FR 79697).
                 We also recognize commenters' concerns regarding the need for
                additional stakeholder education on considerations that would support
                physician decision-making in selecting an appropriate site of service
                for procedures furnished to Medicare beneficiaries. We note the balance
                between several factors on this important issue, namely, the
                prohibition on CMS interfering with the practice of medicine in Section
                1801 of the Social Security Act, the need to provide clear information
                about CMS billing and payment rules that ensures hospitals, physicians
                and other stakeholders can understand and operate within them, and that
                the specific decision about the most appropriate care setting for a
                given surgical procedure is a complex medical judgment made by the
                physician based on the beneficiary's individual clinical needs and
                preferences and on the general coverage rules requiring that any
                procedure be reasonable and necessary (84 FR 61354). We note that, in
                the past when services have come off the IPO list, we have attempted to
                provide general educational information regarding our billing and
                payment rules. For example, we published Medicare Learning Network
                (MLN) Booklet 909065 regarding major hip and knee replacement
                procedures, which is available here: https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/jointreplacement-ICN909065.pdf.
                 We also note the Beneficiary and Family-Centered Care Quality
                Improvement Organizations (BFCC-QIOs) are contracted by CMS to review a
                sample of Medicare fee-for-service (FFS) short-stay inpatient claims
                (claims with hospital stays lasting less than 2 midnights after formal
                inpatient admission) for compliance with the 2-Midnight Rule. In the CY
                2020 OPPS/ASC final rule with comment period (84 FR 61364 through
                61365) the BFCC-QIO program adopted a period of exemption from certain
                medical review activities for procedures newly removed from the IPO
                list where the length of stay after inpatient admission is less than 2
                midnights. During the exemption period, BFCC-QIOs may conduct medical
                reviews for education purposes but will not deny claims or make
                referrals to RACs for noncompliance with the 2-midnight rule for
                procedures that are removed from the IPO list within the first 2 years
                of their removal. This exemption period was intended to allow providers
                time to become more familiar with the application of the 2-midnight
                rule to procedures newly removed from the IPO list, and allows the
                BFCC-QIOs the opportunity to provide education regarding application of
                that payment policy to such procedures. In section X.A of this CY 2022
                OPPS/ASC final rule with comment period we are reinstating this 2-year
                exemption policy, and believe that this will give providers needed time
                to adapt when procedures are newly removed from the IPO list starting
                January 1, 2022.
                 In addition to the 2-year exemption period for certain medical
                review activities, in the coming months we plan to use our experience
                gained through BFCC-QIO reviews to engage stakeholders to determine if
                developing additional materials for services that are newly removed
                from the IPO list would be helpful, including materials that are
                similar to MLN Booklet 909065 noted above. We reiterate that any such
                materials will not supersede physicians' medical judgment about whether
                a procedure should be performed in the inpatient or outpatient hospital
                setting. With regard to the behavior of commercial payers and site
                selection for outpatient services, we believe that these comments are
                out of the scope of the proposed rule.
                 We refer readers to section X. of this final rule with comment
                period for additional discussion regarding the 2-midnight rule. We also
                refer readers to sections 1X.B.2. and B.4. of this final rule with
                comment period for additional discussion of commenters' feedback on
                policy modifications, including whether CMS should maintain the longer-
                term objective of eliminating the IPO list or maintain the IPO list but
                continue to systematically scale the list back so that inpatient only
                designations are consistent with current standards of practice.
                 Comment: Numerous commenters, including some health systems,
                individual physicians and certain payers, opposed halting the
                elimination of the IPO list. Most of these commenters opposed halting
                the elimination of the IPO list due to administrative and operational
                issues that they believe stem from the existence of the IPO list,
                including site of service claims denials and compliance documentation.
                Other commenters contended that eliminating the IPO list would reduce
                administrative and operational burden and allow for necessary
                flexibility that could help providers serve the diversity of clinical
                needs and health statuses among Medicare beneficiaries and would
                increase patient choice and access to advances in surgical care that
                have made outpatient procedures safe, effective and efficient.
                Commenters who supported eliminating the IPO list maintained that the
                existence of the IPO list did not impact the quality of care
                beneficiaries receive as there is no distinction between inpatient and
                outpatient care. Specifically, a few commenters insisted that, for most
                hospitals the IPO list has no impact on the quality of care provided:
                Procedures are done in the same operating rooms, with the same
                infrastructure and the same staff. One commenter asserted that it is an
                inaccurate conclusion that the provision of services is less safe when
                conducted in an hospital outpatient setting. The commenter argued that
                no data has been provided to demonstrate that the removal of services
                from the IPO list in 2021 resulted in higher incidences of adverse
                events or increased risk to patient safety when performed in the
                hospital outpatient setting. Another commenter requested clarification
                on why CMS believes the IPO list is in the best interest of patient
                safety. The commenter stated that while there may be enhanced safety
                for surgeries performed in a hospital versus an ASC or physician
                office, it is unclear how patient safety differs between the hospital
                inpatient and hospital outpatient settings. They claimed that
                utilization of outpatient services
                [[Page 63676]]
                increased across all plan types with the 2021 elimination of the IPO
                list, highlighting the impact across the healthcare system. The
                commenter noted high levels of patient satisfaction and no compromise
                in quality as measured by unplanned returns to the emergency department
                or operating room and no readmissions following services performed in
                the hospital outpatient setting. Several commenters acknowledged that
                there will be patients for whom an inpatient procedure remains the
                safest and most clinically appropriate option but believed that there
                should be additional flexibility for Medicare beneficiaries who meet
                relevant clinical criteria. In addition, one commenter suggested that
                the elimination of the IPO list should occur over 5 to 7 instead of 3.
                 Response: We appreciate the commenter's feedback. We again
                acknowledge commenters' concerns regarding the administrative and
                operational challenges associated with the IPO list, including the
                application of the 2-midnight benchmark to services that are removed
                from the IPO list. In addition to the mechanisms that are already in
                place, including the case-by-case exceptions to the 2-midnight
                benchmark and the exemption from certain medical review activities
                related to the 2-midnight rule for procedures that have been recently
                removed from the IPO list, CMS will continue to work with stakeholders
                to address these operational concerns in future rulemaking. We again
                refer readers to section X. of this final rule with comment period for
                additional discussion regarding the 2-midnight rule.
                 We also acknowledge stakeholders' concerns regarding the lack of
                definitive data that shows a difference between services performed in
                the inpatient and outpatient settings. In the absence of data
                demonstrating that these procedures can be safely furnished to the
                typical Medicare beneficiary in the hospital outpatient setting we
                continue to believe that it is necessary to prioritize the potential
                impact that removing services from the IPO list has on beneficiary
                safety and quality of care and develop additional ways to monitor
                safety prior to removing such a large number of services from the IPO
                list. We note that certain commenters in this rulemaking cycle (and
                past OPPS rules) have indicated that hospitals and other payers may use
                the circumstance of CMS removing a service from the IPO list to
                encourage that service to be performed outpatient, even when not
                clinically appropriate for the patient, and we remain concerned about
                these potential spillover effects due to changes in our policy. As
                described above, we also believe that the policy to eliminate the IPO
                list transpired quickly, and we believe it is necessary to halt the
                elimination of the IPO list and reinstate a more measured process of
                separately evaluating the inpatient only classification of each service
                against the five longstanding criteria.
                 We also note and appreciate commenters concerns about the varying
                clinical appropriateness of furnishing a given service in the hospital
                outpatient setting based on a beneficiary's clinical status; that is,
                we acknowledge that it may be appropriate to furnish certain services
                in the hospital outpatient setting for a certain number of
                beneficiaries due to their clinical circumstances, while at the same
                time it may not be appropriate to furnish those same services in the
                hospital outpatient setting for many other beneficiaries. As stated in
                the CY 2022 OPPS/ASC proposed rule, we continue to believe that
                physicians should use their complex clinical judgment, together with
                consideration of the beneficiary's needs, to determine the appropriate
                site of service. We continue to strive to balance the goals of
                increasing physician and patient choice of setting of care with
                consideration of patient safety for all Medicare beneficiaries.
                 After consideration of the comments, we are finalizing our proposal
                without modification to halt the elimination of the IPO list. In
                accordance with this proposal, we are finalizing our proposal to amend
                the regulation at Sec. 419.22(n) to remove the reference to the
                elimination of the list of services and procedures designated as
                requiring inpatient care through a 3-year transition.
                 We refer readers to section IX.B.3 of this final rule with comment
                period for a discussion on the services removed in CY 2021 that we
                proposed to return to the IPO list in CY 2022.
                2. Proposal To Codify Longstanding Criteria
                 As we stated in the CY 2022 OPPS/ASC proposed rule, we continue to
                believe that physicians must use their complex clinical judgment,
                together with consideration of the beneficiary's needs, to determine
                the appropriate site of service, but we explained that the broad
                removal of services from the IPO list in CY 2021 did not allow us to
                assess whether procedures proposed for removal met the longstanding
                removal criteria that we have historically used in consideration of the
                typical Medicare beneficiary. As discussed above and in the proposed
                rule, to ensure beneficiary safety, we have historically used
                longstanding criteria to determine if a procedure should be removed
                from the IPO list, but we noted that the procedures removed from the
                IPO list beginning in CY 2021 were not assessed against these criteria
                because we adopted a policy to eliminate the IPO list entirely. After
                further consideration, we explained that we believe it is important to
                continue to assess whether services individually meet any of the
                criteria for removal from the IPO list before being removed. In the CY
                2022 OPPS/ASC proposed rule, we proposed to codify in the regulation
                text in a new Sec. 419.23 our five longstanding criteria, listed
                above, for determining whether a service or procedure should be removed
                from the IPO list.
                 Comment: A majority of commenters, including hospital systems,
                medical specialty societies, and professional organizations, supported
                our proposal to codify the five longstanding criteria to determine if a
                procedure should be removed from the IPO list and supported using the
                criteria to evaluate the 298 procedures removed from the IPO list in
                the CY 2021 OPPS/ASC final rule with comment period. Many commenters
                supported the criteria as proposed, stating that the longstanding
                criteria appropriately reflect progress and allow us to efficiently
                assess if outpatient departments are equipped to provide the services
                under consideration for removal.
                 Response: We thank commenters for their support.
                 Comment: Some commenters suggested modifications to the five
                proposed criteria. One commenter requested that CMS modify the first
                two criteria to change ``most outpatient departments'' to ``outpatient
                departments conducting surgical procedures,'' due to concerns that the
                proposed language is undefined and vague. The commenter also expressed
                that our third criterion--that the procedure is related to codes that
                we have already removed from the IPO list--was limiting and should be
                modified to address codes that do not have related codes being
                considered for removal from the IPO list. We also received comments
                requesting that we modify the fourth criterion (a determination is made
                that the procedure is being furnished in numerous hospitals on an
                outpatient basis) to further define ``outpatient basis'' and
                ``numerous''. We also received a comment citing concerns that many
                hospitals do submit claims to Medicare for procedures on the IPO list
                when they are performed in the hospital outpatient setting due to lack
                of payment. We also received two
                [[Page 63677]]
                comments requesting that we remove the fifth criterion due to concerns
                that CMS is comparing the capabilities and safety of performing a
                service in the ASC setting to that of the hospital setting, noting that
                hospitals have greater resources and are able to admit patients if
                complications arise.
                 Further, a few commenters believed our longstanding pre-2021 policy
                of requiring a service to meet only one criterion to be removed from
                the IPO list was too lenient and prevented stakeholders from
                anticipating when a procedure would be eligible for removal from the
                IPO list. The commenters recommended that we require services to meet
                all five criteria in order to be removed from the IPO list.
                 Response: We appreciate the commenters' recommendations and will
                consider them for future rulemaking. Due in part to the overwhelming
                support we received from commenters to codify in regulation the current
                five criteria as well as our position that the criteria remain
                appropriate, we do not believe it is necessary to change them at this
                time. However, we plan to continue to engage stakeholders and consider
                feedback on modifications to the criteria.
                 As we stated in previous rulemaking, we created the first three
                criteria because we identified services that were often safely
                performed in the hospital outpatient setting based on comments we
                received. We also identified additional services where the simplest
                procedure described by the code may be performed safely in the hospital
                outpatient setting or that they were related to codes we removed from
                the IPO list (65 FR 18456). We established the fourth and fifth
                criteria in later rulemaking after identifying procedures that were on
                the IPO list but were also being performed on an outpatient basis or
                being safely and appropriately performed in the ASC setting (67 FR
                66741). These criteria were created to ensure consistency between the
                IPO list and the ASC CPL and to identify services that are included on
                the ASC CPL, and therefore should be removed from the IPO list. These
                criteria were created to help independently identify procedures that
                could be appropriately performed in the hospital outpatient setting and
                we reiterate that a service does not need to meet all of the criteria
                to be removed from the IPO list, meaning that a service does not need
                to have related codes already removed from the IPO list or does not
                need to be safely furnished in the ASC setting to be removed from the
                IPO list.
                 Additionally, we do not believe that our policy to only require a
                service to meet one criterion to be removed from the IPO list is too
                lenient. We believe that not requiring a service to meet multiple
                criteria allows for greater flexibility to determine if a service is
                appropriate to remove from the IPO list, as some criteria are
                irrelevant to certain services. As stated above, while we only require
                a service to meet one criterion to be considered for removal,
                satisfying only one criterion does not guarantee that the service will
                be removed, instead, the case for removal is strengthened with the more
                criteria the service meets.
                 Comment: Commenters also recommended additional criteria as well as
                methods of evaluating the five existing criteria. We also received
                multiple comments recommending that criteria used to determine if a
                service is appropriate to remove from the IPO list should consider
                clinical factors and social factors, including patient's age and
                comorbidities, support systems, access to care, health literacy, prior
                hospitalizations, and functional status. Numerous commenters stressed
                that without consideration of clinical and social factors, patients,
                surgeons, and hospitals in underserved communities could bear a
                disproportionate burden and experience unintended consequences of more
                services being payable in the hospital outpatient setting. Commenters
                recommended that we also evaluate the out-of-pocket financial impact
                that moving a service to the hospital outpatient setting would have on
                Medicare beneficiaries.
                 Commenters suggested that changes to the IPO list should be based
                upon scientific evidence on safety, quality, and advancements in
                medical technology. They acknowledged that a majority of inpatient
                procedures have limited or no evidence on the safety of performing them
                in the hospital outpatient setting and that at least some of the
                evidence available is based on limited, incomplete, or conflicting data
                from other claims.
                 We also received some comments with recommendations regarding the
                data that CMS uses for evaluating services on the IPO list. We received
                several comments suggesting that CMS analyze claims data for services
                that had a stay less than 2-midnights and use this data to determine if
                a service should be eligible to be paid when furnished in the hospital
                outpatient setting. One commenter also requested that CMS clarify how
                different data, including commercial data, would be considered when
                evaluating services for removal using the five criteria as the general
                patient population used in the collection of the data may vary from the
                Medicare population.
                 One commenter urged CMS not to use billed and denied outpatient
                claims as a source of data to determine if hospitals are equipped to
                provide a service in the hospital outpatient setting. The commenter
                advised that there would be few outpatient claims for services on the
                IPO list because hospitals would avoid billing claims that would be
                denied. The commenter suggested that CMS should instead analyze the
                geometric mean or median length of stay for IPPS claims reported with
                procedures on the IPO list, and crosswalk the ICD-10-PCS codes on the
                IPPS claims to the CPT codes on the IPO list, so that CMS could analyze
                data where the patient would remain in the hospital post-procedure, but
                require less time, less intensive care, or pose less risk than the
                typical hospital inpatient. The commenter also suggested that CMS
                analyze data on short-stay inpatient hospitalizations from the
                Beneficiary Family Centered Care-Quality Improvement Organizations
                (BFCC-QIOs), with the QIOs nominating procedures that they commonly see
                in their reviews. Finally, we also received comments recommending that
                CMS work closely with stakeholders and providers and consider their
                feedback when evaluating services on the IPO list against our criteria,
                and to allow for the consideration of factors in addition to the five
                criteria.
                 Response: We appreciate the commenters' recommendations. We note
                that we take clinical evidence into consideration when evaluating a
                service for removal from the IPO list. We also consider all other
                available data, including outpatient, inpatient, and professional
                claims data. This includes data on length-of-stay, and we have
                continuously encouraged stakeholders to bring decreasing length-of-
                stays and successful same day discharges to our attention to aid our
                review (65 FR 18456). We agree that there are limitations in the
                studies and data available to aid our assessment of the appropriateness
                of removing procedures from the IPO list, particularly studies that
                compare outcomes for services furnished in the inpatient hospital
                setting versus the outpatient hospital setting as well as studies that
                analyze outcomes for the typical Medicare beneficiary. More
                specifically, while studies may demonstrate safety for a given
                procedure in the outpatient hospital setting, those studies may not
                focus on a Medicare-aged population, or involve patients with certain
                comorbid conditions that are common for patients 65 and older. We
                continue to explore
                [[Page 63678]]
                ways to engage stakeholders to effectively address limitations in these
                studies, and we look forward to future work on these important issues.
                We reiterate that we do not believe it is appropriate at this time to
                modify the criteria, which were overwhelmingly supported by commenters,
                as we reinstate and codify them in regulation text. However, as
                previously stated, we will continue to engage stakeholders and consider
                feedback on modifications to the criteria for removal from the IPO
                list.
                 Comment: One commenter opposed codifying the five longstanding
                criteria and expressed concern that codifying the criteria would delay
                timely updates to the IPO. The commenter was concerned that the process
                of submitting a request to add or remove a service and providing
                evidence, including peer-reviewed medical literature, physician
                comments, and outcome data, is time consuming and may cause unnecessary
                delays in hospitals' ability to provide care and be paid under the OPPS
                when services are furnished in the hospital outpatient setting for
                beneficiaries for whom the services are clinically appropriate.
                 Response: We appreciate the commenter's response. We believe that
                using our five criteria to evaluate services for removal from the IPO
                list is necessary to ensure OPPS payment is available for services that
                are safe for the typical Medicare beneficiary to receive in the
                hospital outpatient setting. We also believe that the comments and
                evidence we receive are an important aspect of determining whether it
                is appropriate to remove a service from the IPO list. Because we review
                requests to add or remove services from the IPO list annually and
                address those removals or additions in notice-and-comment rulemaking,
                we do not believe that use of criteria to assess whether procedures
                should be removed causes unnecessary delays in making payment available
                for appropriate procedures under the OPPS.
                 After reviewing the public comments we received we are finalizing
                our proposal without modification to codify our five longstanding
                criteria for determining whether a service or procedure should be
                removed from the IPO list in the regulation text in a new Sec. 419.23.
                3. Returning Procedures Removed in CY 2021 to the IPO List for CY 2022
                 As discussed earlier in section IX.A. of this final rule with
                comment period, we typically evaluate whether a service should be
                removed from the IPO list using five criteria and, while a service does
                not need to meet all of the criteria to be removed from the IPO list,
                it should meet at least one criterion, with the case for removing the
                service from the IPO list strengthened with the more criteria the
                service meets. For CY 2021, in light of our proposal to eliminate the
                IPO list over a three-year transition, we proposed that musculoskeletal
                services would be the first group of services removed from the IPO
                list. We stated that we proposed to remove this group of services first
                for several reasons. In recent years, due to new technologies and
                advances in surgical care protocols, expedited rehabilitation
                protocols, and significant enhancements in postoperative processes, we
                have removed TKA and THA, which are both musculoskeletal services, from
                the IPO list. During the process of proposing and finalizing removing
                TKA and THA from the IPO list, stakeholders have continuously requested
                that CMS remove other musculoskeletal services from the IPO list as
                well, citing shortened length of stay times, advancements in
                technologies and surgical techniques, and improved postoperative
                processes. Additionally, we noted that, more often than not,
                stakeholders historically requested that we remove musculoskeletal
                services from the IPO list more than other types of services. We also
                recognized that there is already a set of comprehensive APCs for
                musculoskeletal services for payment under the OPPS, which facilitates
                payment for these services and further supported their removal for CY
                2021. Specifically, because we had previously removed codes from the
                IPO list that are similar clinically and in terms of resource cost and
                assigned them to these comprehensive APCs, we explained that these APCs
                generally describe appropriate ranges for the musculoskeletal codes
                removed in CY 2021, which we believed allowed for appropriate payment.
                We also proposed to remove additional related services that were
                recommended for removal by stakeholders during the annual HOP panel
                meeting. As stated above, because these services were being removed
                from the IPO list as the first phase of the elimination of the list, we
                did not evaluate each of these services against the longstanding
                criteria for removing a service from the IPO list.
                 During the 2021 rulemaking process, a number of commenters
                supported the removal of the 298 services, but the vast majority of
                commenters were opposed to removing the services and shared concerns
                regarding their inability to properly review the clinical nature of
                this large number of procedures and to provide comprehensive feedback
                on their removal from the list. Some commenters were able to review the
                individual services and requested that specific CPT codes remain
                payable in the inpatient setting only, including CPT codes 27280
                (Arthrodesis, open, sacroiliac joint, including obtaining bone graft,
                including instrumentation, when performed) and 22857 (Total disc
                arthroplasty (artificial disc), anterior approach, including discectomy
                to prepare interspace (other than for decompression), single
                interspace, lumbar) due to concerns about the safety of these
                procedures if they are performed in the hospital outpatient setting.
                 As previously stated in the CY 2021 OPPS/ASC final rule with
                comment period (85 FR 86087), an overwhelming number of stakeholders
                supported the previously established methodology for identifying
                appropriate changes to the IPO list. CMS received numerous requests to
                continue to use the established criteria to review and analyze services
                proposed for removal as opposed to removing large numbers of services
                in groups or categories. Commenters noted that they preferred the
                historical process for assessing services for removal from the IPO list
                using the five criteria, as they believed this process was more
                manageable for patients, providers, and other stakeholders, allowing
                them to provide meaningful input on a procedure-by-procedure basis.
                 We stated in the CY 2022 OPPS/ASC proposed rule that because we
                proposed to halt elimination of the IPO list, we also believe it is
                appropriate to continue to evaluate services that we proposed for
                removal against the longstanding criteria, and include with our
                proposals an in-depth analysis of whether most outpatient departments
                are equipped to provide the services to the Medicare population;
                whether the simplest procedure described by the code may be performed
                in most outpatient departments; whether the procedure is related to
                codes that we have already removed from the IPO list; whether the
                procedure is being performed in numerous hospitals on an outpatient
                basis; and whether the procedure can be appropriately and safely
                performed in an ASC, is on the list of approved ASC procedures, or has
                been proposed by us for addition to the ASC list. Historically, we have
                included discussions of the individual codes proposed for removal in
                the proposed rule and stakeholders have had the opportunity to comment
                with evidence in support of or opposition to the service's assignment
                to the IPO list, and we believe it is appropriate to continue to do so.
                [[Page 63679]]
                 Furthermore, we explained in the CY 2022 OPPS/ASC proposed rule
                that in light of ongoing stakeholder feedback, we reviewed each of the
                procedures removed from the IPO list in CY 2021 to determine whether
                they individually meet the longstanding criteria for removal from the
                list for CY 2022. Our review considered the clinical intensity and
                characteristics of the service, the underlying condition of the
                beneficiary who would require the service, peer-reviewed medical
                literature, case reports, clinical criteria sets, and utilization data.
                This initial review determined that none of the services removed in CY
                2021 have sufficient supporting evidence that the service can be safely
                performed on the Medicare population in the hospital outpatient
                setting, that most outpatient departments are equipped to provide the
                services to the Medicare population, or that the services are being
                performed safely on an outpatient basis. For a large number of the
                removed services, we did not find vignettes, claims or utilization
                data, or literature to support their removal under our longstanding
                criteria. For the few services that did have some data supporting their
                removal from the list, we found the data to be either incomplete or to
                be countered by conflicting data. For example, a few services,
                including CPT code 21627 (sternal debridement), showed increasing
                migration to the hospital outpatient setting, but we could not locate
                supportive medical literature case studies or outcomes data to support
                that the services are safe for the Medicare population in the hospital
                outpatient setting. Some services, such as CPT code 22558 (Lumbar spine
                fusion) and CPT code 23472 (reconstruct shoulder joint), show
                increasing outpatient claims data, but have high length of stay times
                and extensive post-operative care needs that indicate these services
                may not be appropriate for the Medicare population in the hospital
                outpatient setting. Other services, such as CPT code 22846 (Anterior
                instrumentation; 4 to 7 vertebral segments), lack medical literature or
                case studies, lack supportive claims data, and have conflicting
                stakeholder feedback for the safety of the service in the hospital
                outpatient setting. We were unable to find literature and data for
                services that included outcomes specific to the Medicare population,
                particularly in the hospital outpatient setting.
                 We stated in the CY 2022 OPPS/ASC proposed rule that given that our
                initial review of each of the services removed from the list in CY 2021
                using the five criteria mentioned in section IX.A. of this final rule
                with comment period did not find sufficient evidence that any of these
                services would be safe to perform on the Medicare population in the
                hospital outpatient setting, we did not believe it would be appropriate
                for Medicare to pay for these services when performed in a hospital
                outpatient setting. In particular, we found that the simplest
                procedures described by the codes for these services cannot be
                furnished safely in most outpatient departments, most outpatient
                departments are not equipped to provide these services to the Medicare
                population, and the procedures were not being performed in numerous
                hospitals on an outpatient basis. We also did not believe the services
                could be appropriately and safely furnished in an ASC. As a result of
                this review, we proposed to return all of the procedures removed in the
                CY 2021 OPPS/ASC final rule with comment period to the IPO list for CY
                2022 because we did not believe they met the previously established
                criteria for removal from the IPO list. Therefore, after further
                clinical review and additional consideration of safety and quality of
                care concerns for the group of services removed from the IPO list in
                the CY 2021 final rule, for CY 2022 we proposed to return these 298
                services to the IPO list, as shown in Table 45 below.
                 We solicited public comment on whether there are services that were
                removed from the IPO list in CY 2021 that stakeholders believe do meet
                the longstanding criteria for removing services from the IPO list and
                should continue to be payable in the hospital outpatient setting in CY
                2022. If so, we requested that commenters submit corresponding
                evidence--including, but not limited to, case reports, operative
                reports of actual cases, peer-reviewed medical literature, medical
                professional analysis, clinical criteria sets, and patient selection
                protocols--that the service meets the longstanding criteria for removal
                from the IPO list and is safe to perform on the typical Medicare
                population in the hospital outpatient setting.
                 As mentioned above, the services that we proposed to add back to
                the IPO list reflect those services that we believe may pose increased
                safety risk to the typical Medicare beneficiary. However, we recognized
                that there may be a subset of Medicare beneficiaries who, on a case-by
                case-basis, may nonetheless be appropriate to treat in the hospital
                outpatient setting and we sought comment below on whether any services
                that were removed in CY 2021, but were proposed to be added back to the
                IPO for CY 2022, should in fact, remain off the IPO list. Table 45
                below contains the proposed additions to the IPO list for CY 2022.
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                 Comment: Most comments supported returning all 298 services back to
                the IPO list for 2022. Of those commenters that supplied a rationale
                for their support for returning all 298 services to the IPO list, the
                most frequently cited reasons were the commenters' concerns with the
                pace that this shift would take place; the lack of data and evidence
                available to support furnishing these services in the hospital
                outpatient setting for the typical Medicare beneficiary; CMS' inability
                to monitor the impact of such a large migration of services from the
                inpatient setting to the hospital outpatient setting; CMS' inability to
                monitor patient safety outcomes for the services if furnished in the
                hospital outpatient setting; and that the PHE has impacted the
                commenters' ability to prepare for this shift. Commenters also
                expressed concerns regarding how quickly a large number of services
                were removed from the IPO list. Emphasizing the financial and clinical
                resources needed to prepare clear criteria for surgical site selection;
                develop criteria for patient selection; update their billing systems;
                and gain experience with furnishing newly removed services, commenters
                requested that CMS provide additional time in between removing services
                from the IPO list.
                 Response: We thank commenters for their support for our proposal to
                return 298 services to the IPO list, and their detailed feedback
                regarding their concerns about patient safety and the timeline for
                transitioning services off of the IPO list.
                 Comment: Some commenters opposed returning all 298 services to the
                IPO list and believed that if all 298 services are moved back on the
                IPO list in CY 2022, beneficiaries would receive care in an
                unnecessarily high-cost inpatient setting and experience higher out-of-
                pocket costs for services. In addition, they argued that higher costs
                coupled with potential delays in returning home will cause beneficiary
                dissatisfaction and increase overall cost to the healthcare system. One
                commenter stated that policy changes over the past 2 years have
                burdened facilities and clinicians. The commenter noted that many
                inpatient procedures are canceled due to the PHE, adding additional
                delays and negatively affecting patient experience and health. For
                these reasons the commenter suggested CMS reassess returning all 298
                procedures to the IPO list.
                 Some commenters expressed concerns regarding outpatient surgeries
                for procedures we are returning to the IPO list that were scheduled
                prior to the publication of the final rule and the subsequent impact on
                beneficiaries when these surgeries are cancelled or payment is not
                available for them under the OPPS. Commenters requested that in the
                event the policy is finalized as proposed, CMS allow services scheduled
                as outpatient prior to the final rule's implementation date to be
                payable as they believe this would decrease provider burden and
                minimize impact on patients expecting outpatient care. The commenters
                stated that it is difficult for facilities and clinicians to invest in
                new equipment and develop protocols to move new procedures to the
                outpatient department if they are unsure how long services will remain
                payable in the hospital outpatient setting.
                 Response: We thank commenters for their support and for detailing
                their experiences. We recognize that there may be operational changes
                (including scheduling and other administrative changes) that may be
                necessary to adjust to our final policy to return services to the IPO
                list. We also recognize that the PHE has broadly impacted access to
                hospital services and note that we have taken several steps to broaden
                access to care during the PHE through rulemaking and through waivers
                issued using our authority in section 1135 of the Act. For additional
                information about the actions taken to expand access to care and
                otherwise address the PHE for COVID-19, please visit: https://www.cms.gov/about-cms/emergency-preparedness-response-operations/current-emergencies/coronavirus-waivers. However, we continue to share
                concerns expressed by other commenters regarding the speed at which we
                implemented this policy change. We believe that we need to reinstate a
                more measured process of evaluating individual services for removal
                from the IPO list against the five longstanding criteria, and to
                prioritize the potential impacts on the quality and safety of care for
                services when they are removed from the IPO list.
                 Comment: Certain commenters (mainly specialists and medical
                associations) requested specific services (roughly 120 services in
                total, ranging in complexity) not be placed back on the IPO list. Those
                services are listed in Table 46 below. These commenters indicated that
                they were currently performing some of these procedures on an
                outpatient basis in both the HOPD and ASC setting on non-Medicare
                patients.
                 Of those approximately 120 services requested to remain off of the
                IPO list, two stakeholders included supportive information for CPT
                22630 (Arthrodesis, posterior interbody technique, including
                laminectomy and/or discectomy to prepare interspace (other than for
                decompression), single interspace; lumbar); CPT 23472 (Arthroplasty,
                glenohumeral joint; total shoulder (glenoid and proximal humeral
                replacement (for example, total shoulder))); and CPT 27702
                (Arthroplasty, ankle; with implant (total ankle). Several commenters,
                including medical associations, specialty groups, and surgeons
                suggested that shoulder and ankle replacement surgeries performed in
                HOPDs and ASCs demonstrated optimal clinical outcomes. Commenters
                submitted several peer-reviewed studies
                [[Page 63702]]
                comparing outcomes for CPT 23472 and CPT 27702 performed in the
                inpatient versus the hospital outpatient setting. As a result, they
                believed performing CPT 23472 and CPT 27702 in a hospital outpatient
                setting is appropriate as determined by the treating health care
                provider. Some commenters cited all payer claims data and stated that,
                following the removal of services from the IPO list, nearly half of
                shoulder replacement surgeries were performed in the hospital
                outpatient setting in the first few months of 2021. Commenters that
                supported leaving CPT 23472 and CPT 27702 off the IPO list and payable
                under the OPPS highlighted that other procedures that were removed from
                the IPO list in CY 2021 did not demonstrate similar utilization in the
                hospital outpatient setting. The commenters stated that low utilization
                of the majority of services removed from the IPO in CY 2021 confirms
                physicians are using clinical judgment to determine when the hospital
                outpatient setting is clinically appropriate.
                 In regards to CPT 22630, a commenter noted that CPT codes 22633
                (Arthrodesis, combined posterior or posterolateral technique with
                posterior interbody technique including laminectomy and/or discectomy
                sufficient to prepare interspace (other than for decompression), single
                interspace and segment; lumbar) and 22612 (Arthrodesis, posterior or
                posterolateral technique, single level; lumbar (with lateral transverse
                technique, when performed), which are not on the IPO list, are
                performed with CPT code 22630 when a posterior approach 360-degree
                spinal fusion is performed. The commenter noted that while CPT code
                22633 was removed from the IPO list in 2020 (84 FR 61355 through
                61357), the service described by CPT code 22630, if added to the IPO
                list, will in effect make the combined procedure, described by CPT
                codes 22630 and 22633, unable to be performed in the outpatient
                hospital setting because both procedures need to be payable under the
                OPPS to be performed there. The commenter recommended keeping CPT code
                22630 off the IPO list for CY 2022 so that the individual procedures,
                along with the combined procedure, are eligible for Medicare payment
                when furnished in the hospital outpatient setting for appropriate
                Medicare beneficiaries. A different commenter provided an unpublished
                study that they believe demonstrates that safety, efficacy, and patient
                satisfaction for lumbar inter-body fusion surgery furnished in the ASC
                setting are comparable to or better than in the hospital setting for
                Medicare beneficiaries.
                 The services that commenters believed should remain off the IPO
                list in CY 2022 and continue to be paid under the OPPS when furnished
                in the hospital outpatient setting are included in Table 46.
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                 Response: We conducted an additional clinical review and
                reevaluation using the five longstanding criteria for removing services
                from the IPO list discussed earlier in section IX.A of this final rule
                with comment period for the services we proposed to return to the IPO
                list to determine whether any of the procedures should remain off of
                the list and be paid for under the OPPS when furnished in the HOPD
                setting. We considered all the evidence that commenters submitted to
                demonstrate that a procedure was performed on an outpatient basis in a
                safe and appropriate manner--including but not limited to--operative
                reports of actual cases, peer-reviewed medical literature, community
                medical standards and practice, physician comments, outcome data, and
                post-procedure care data, and our medical advisors thoroughly reviewed
                all information submitted to determine whether the procedures meet the
                evaluation criteria we are reinstating.
                 We also conducted an additional review of 2021 OPPS claims data
                through September 2021. Our review indicated that hospitals have
                significantly increased the numbers of services described by CPT codes
                22630 (Lumbar spine fusion), 23472 (Reconstruct shoulder joint), and
                27702 (Reconstruct ankle joint) furnished in the hospital outpatient
                setting in the roughly nine months since the services were removed from
                the IPO list. While at this time we cannot determine from the claims
                data whether this increase in volume is a result of fundamental changes
                to clinical practice; the impact of the PHE on inpatient operating room
                availability; or other reasons, the data do indicate that these
                services are being furnished frequently in the hospital outpatient
                setting, and furnished at a substantial number of different outpatient
                departments. Given the studies submitted and the updated analyses of
                OPPS claims data, we believe that CPT codes 22630 (Lumbar spine
                fusion), 23472 (Reconstruct shoulder joint), and 27702 (Reconstruct
                ankle joint) meet several of the longstanding criteria for removing
                services from the IPO list: Most outpatient departments are equipped to
                provide the services to the Medicare population; the simplest procedure
                described by the codes may be furnished in most outpatient departments;
                the procedures are being furnished in numerous hospitals on an
                outpatient basis; and the procedures are related to codes that we have
                already removed from the IPO list. Therefore, at this time we agree
                that it is appropriate for CPT codes 22630 (Lumbar spine fusion), 23472
                (Reconstruct shoulder joint), and 27702 (Reconstruct ankle joint) and
                their corresponding anesthesia codes, CPT code 01638 (Anesthesia for
                open or surgical arthroscopic procedures on humeral head and neck,
                sternoclavicular joint, acromioclavicular joint, and shoulder joint;
                total shoulder replacement), and CPT 01486 (Anesthesia for open
                procedures on bones of lower leg, ankle, and foot; total ankle
                replacement) to remain off the IPO list and payable under the OPPS when
                furnished in the HOPD setting. We will continue to monitor and evaluate
                the impact our decision to pay for these services when furnished in the
                HOPD setting has on beneficiary outcomes, access to care, and hospital
                payments.
                 As noted above, we also received comments requesting that
                approximately 115 other services remain off the IPO list in CY 2022.
                Based on our evaluation, we do not believe that there is sufficient
                evidence or data to support that these services can be safely furnished
                to the typical Medicare beneficiary in the hospital outpatient setting,
                and to support stakeholder assertions that these procedures meet one of
                the five longstanding criteria. We note that for many services
                stakeholders continued to provide conflicting feedback regarding the
                ability of providers to safely furnish them in the hospital outpatient
                setting. At this time, we do not believe it would be appropriate to
                keep these services off of the IPO list and therefore we are
                reclassifying these codes as inpatient only procedures for CY 2022. We
                acknowledge the unique circumstances for this CY2022 rulemaking cycle:
                These approximately 115 services were on the IPO list prior to CY 2021,
                they were removed from the IPO list for CY 2021 as part of the first
                phase of the elimination of the IPO list, and are now being added back
                to the list in CY 2022. It is not our intention to cause any
                disruptions or barriers to access care for these services, and we will
                prioritize the review of these services for potential removal from the
                IPO list in future rulemaking. We emphasize that the assignment of a
                service to the IPO list does not prohibit the service from being
                offered in the hospital outpatient setting and the assignment in this
                final rule should not be considered as a permanent or irrevocable
                designation (65 FR 18456). Furthermore, we continue to encourage
                stakeholders to provide supportive evidence to aid in the evaluations
                of procedures' assignment to the IPO list, and where appropriate the
                APC assignment and corresponding payment for any codes as well,
                including but not limited to case reports, operative reports of actual
                cases, peer-reviewed medical literature, medical professional analysis,
                clinical criteria sets, and patient selection protocols for future
                rulemaking considerations.
                [[Page 63709]]
                4. Topics and Questions Posed for Public Comments
                 In addition to our proposal to halt the elimination of the IPO list
                and return services summarily removed from the IPO list in CY 2021 that
                our clinicians have determined do not meet the criteria for removal
                from the IPO list, we also sought feedback from stakeholders on whether
                CMS should maintain the longer-term objective of eliminating the IPO
                list or if CMS should maintain the IPO list but continue to
                systematically scale the list back to so that inpatient only
                designations are consistent with current standards of practice.
                Specifically, we requested comments on the following:
                 Should CMS maintain the longer-term objective of
                eliminating the IPO list? If so, what is a reasonable timeline for
                eliminating the list? What method do stakeholders suggest CMS use to
                approach removing codes from the list?
                 Should CMS maintain the IPO list but continue to
                streamline the list of services included on the list and, if so,
                suggestions for ways to systematically scale the list back to allow for
                the removal of codes, or groups of codes, that can safely and
                effectively be performed on a typical Medicare beneficiary in the
                hospital outpatient setting so that inpatient only designations are
                consistent with current standards of practice?
                 What effect do commenters believe the elimination or
                scaling back of the IPO list would have on safety and quality of care
                for Medicare beneficiaries?
                 What effect do commenters believe elimination or the
                scaling back of the IPO list would have on provider behavior,
                incentives, or innovation?
                 What information or support would be helpful for providers
                and physicians in their considerations of site of service selections?
                 Should CMS' clinical evaluation of the safety of a service
                in the hospital outpatient setting consider the safety and quality of
                care for the typical Medicare beneficiary or a smaller subset of
                Medicare beneficiaries for whom the outpatient provision of a service
                may have fewer risk factors?
                 Are there services that were removed from the IPO list in
                CY 2021 that stakeholders believe meet the longstanding criteria for
                removal from the IPO list and should continue to be payable in the
                hospital outpatient setting in CY 2022? If so, what evidence supports
                the conclusion that the service meets the longstanding criteria for
                removal from the IPO list and is safe to perform on the Medicare
                population in the hospital outpatient setting?
                 Comment: Numerous commenters responded to CMS' comment solicitation
                on whether CMS should continue the longer-term objective of eliminating
                the IPO list or if CMS should maintain the IPO list but continue to
                systematically scale the list back to ensure that inpatient only
                designations are consistent with current standards of practice. The
                overwhelming majority of the commenters, including professional
                associations, hospital associations, hospitals, and many providers,
                supported maintaining the IPO list.
                 We received many of the same types of comments we received in
                response to our CY 2018 OPPS/ASC proposed rule comment solicitation for
                removing THA and in subsequent rulemaking. Supporters of maintaining
                the IPO list also acknowledged the possibility that in the future
                many--but not all--of the services on the IPO could potentially be
                safely performed on an outpatient basis. Commenters provided feedback
                on improvements to the IPO list maintenance process, as well as the
                criteria, evidence and data that should be required to support removing
                a procedure from the IPO list. Commenters also suggested alternatives
                to the IPO list, including different coding mechanisms and alternative
                approaches to APC assignment for services transitioning off of the IPO
                list, including changes to the ``CA'' modifier, which identifies a
                procedure payable only in the inpatient setting when performed
                emergently on an outpatient who expires prior to admission. Commenters
                also recommended ways for CMS to monitor patient outcomes and the
                impact of services migrating from the IPO list to ensure that there are
                not unintended consequences of removing procedures from the IPO list.
                Several commenters shared concerns regarding the unintended impact that
                large-scale changes to the IPO list may have on hospital finances,
                particularly rural hospitals, safety net hospitals, and SNFs.
                 Response: We thank the commenters for their detailed feedback on
                this topic. We will consider all of these comments for future
                rulemaking.
                 Comment: Several commenters recommended that CPT codes 19306
                (Mastectomy, radical, including pectoral muscles, axillary and internal
                mammary lymph nodes); 32853 (Lung transplant, double (bilateral
                sequential or en bloc); without cardiopulmonary bypass); 33523
                ((Coronary artery bypass, using venous graft(s) and arterial graft(s),
                six or more); and 33935 (Heart-lung transplant with recipient
                cardiectomy-pneumonectomy), never come off of the IPO list due to their
                clinical intensity and nature of the services.
                 Response: We thank commenters for their recommendations.
                 Comment: Additionally, CMS received comments recommending the
                removal of two services not originally proposed for removal from the
                IPO list for CY 2022. The commenters contended that CPT codes 43775
                (Laparoscopy, surgical, gastric restrictive procedure; longitudinal
                gastrectomy (i.e., sleeve gastrectomy)) and 47550 (Biliary endoscopy,
                intraoperative (choledochoscopy) (list separately in addition to code
                for primary procedure)) should be removed from the IPO list because the
                commenters believed they meet the removal criteria that we are
                reinstating beginning CY 2022.
                 Response: We thank commenters for their feedback regarding these
                services. We note CPT codes 43775 and 47550 were not included in the
                298 codes that were removed from the IPO list for CY 2021 and then
                proposed to be added back to the IPO list in the CY 2022 OPPS/ASC
                proposed rule. Rather, these codes were added to the IPO list prior to
                2021. As discussed above, we received many comments from stakeholders
                regarding the speed at which the 298 services were removed from the IPO
                list for CY 2021, and the need for CMS to reinstate a more measured
                process that includes additional opportunities for public input and
                transparency when evaluating codes for removal. In light of these
                comments, we believe it is appropriate to consider the removal of these
                services from the IPO list in future rulemaking in order to allow
                further discussion and evaluation. We also continue to encourage
                stakeholders to provide supportive evidence to aid in the evaluations
                of these procedures' assignment to the IPO list, including but not
                limited to case reports, operative reports of actual cases, peer-
                reviewed medical literature, medical professional analysis, clinical
                criteria sets, and patient selection protocols for future rulemaking
                considerations.
                 Comment: One commenter, a medical device company, requested a
                reassignment of the OPPS status indicator for CPT code 0643T
                (Transcatheter left ventricular restoration device implantation
                including right and left heart catheterization and left
                ventriculography when performed, arterial approach) from ``E1'' (not
                covered by Medicare) to ``C'' (inpatient only) status due to the
                complex patient population, the need for intra- and post-
                [[Page 63710]]
                operative monitoring and their experience with clinical trials.
                 Response: We thank the commenter for bringing this CPT code to our
                attention. CPT code 0643T became effective on July 1, 2021 and for CY
                2022, we proposed to assign the code to OPPS status indicator ``E1''
                (Items, codes, and services not covered by any Medicare outpatient
                benefit category; statutorily excluded; not reasonable and necessary)
                to indicate that the service was not covered by Medicare. We note that
                the clinical study associated with CPT code 0643T was approved as a
                Medicare-approved IDE study \190\ with a Category B designation \191\
                for the device effective November 12, 2020. We agree with commenters
                that given the invasive nature of the procedures, the clinical
                intensity of the services provided, and the underlying physical
                condition of the patient who would require surgery, CPT code 0643T
                should be classified as an inpatient only procedure.
                ---------------------------------------------------------------------------
                 \190\ Clinical evaluation of the ACCUCINCH[supreg] ventricular
                restoration system in patients who present with symptomatic heart
                failure with reduced ejection fraction (hfref): The corcinch-HF
                study--full text view. Full Text View--ClinicalTrials.gov. (n.d.).
                Retrieved October 22, 2021, from https://clinicaltrials.gov/ct2/show/NCT04331769.
                 \191\ G150249-NCT04331769. CMS Approved IDE Studies. (n.d.).
                Retrieved October 22, 2021, from https://www.cms.gov/medicarecoverageideapproved-ide-studies/g150249-nct04331769.
                ---------------------------------------------------------------------------
                 We refer readers to sections III.D. ``OPPS APC-Specific Policies''
                of this final rule with comment period for additional discussion
                regarding CY 2022 status indicators and APC assignments.
                 Comment: Other commenters requested we keep services off the IPO
                list that were not included in the proposed CY 2022 IPO list.
                 Response: We thank commenters for their recommendations. We do
                agree that it is appropriate for these services to remain payable in
                the OPPS for CY2022. We reiterate that assignment in this final rule
                should not be considered as a permanent or irrevocable designation (65
                FR 18456). Table 47 lists the CPT codes that were not included in the
                proposed CY 2022 IPO list and were affirmed by commenters.
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                C. Summary of Final Policy and Changes to the IPO List for CY 2022
                 As explained above, for CY 2022, we are finalizing our proposal to
                halt the elimination of the IPO list; to codify in regulation text in a
                new Sec. 419.22 our five longstanding criteria for determining whether
                a service or procedure should be removed from the IPO list; and to
                pause the elimination of the IPO list and add back to the IPO list the
                services removed in CY 2021, except CPT code 22630 (Arthrodesis,
                posterior interbody technique, including laminectomy and/or discectomy
                to prepare interspace (other than for decompression), single
                interspace; lumbar); CPT code 23472 (Arthroplasty, glenohumeral joint;
                total shoulder (glenoid and proximal humeral replacement (for example,
                total shoulder))); CPT code 27702 (Arthroplasty, ankle; with implant
                (total ankle) and their corresponding anesthesia codes: CPT code 01638
                (Anesthesia for open or surgical arthroscopic procedures on humeral
                head and neck, sternoclavicular joint, acromioclavicular joint, and
                shoulder joint; total shoulder replacement), and CPT 01486 (Anesthesia
                for open procedures on bones of lower leg, ankle, and foot; total ankle
                replacement). We are also classifying CPT code 0643T (Transcatheter
                left ventricular restoration device implantation including right and
                left heart catheterization and left ventriculography when performed,
                arterial approach) as an inpatient only procedure. Finally, we are also
                finalizing our proposal to amend the regulation at Sec. 419.22(n) to
                remove the reference to the elimination of the list of services and
                procedures designated as requiring inpatient care through a 3-year
                transition and to codify our five longstanding criteria for determining
                whether a service or procedure should be removed from the IPO list in
                the regulation in a new Sec. 419.23.
                 The complete list of codes describing services that are designated
                as inpatient only services beginning in CY 2022 is also included as
                Addendum E to this final rule with comment period, which is available
                via the internet on the CMS website.
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                X. Nonrecurring Policy Changes
                A. Medical Review of Certain Inpatient Hospital Admissions Under
                Medicare Part A for CY 2022 and Subsequent Years
                1. Background on the 2-Midnight Rule
                 In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50913 through
                50954), we clarified our policy regarding when an inpatient admission
                is considered reasonable and necessary for purposes of Medicare Part A
                payment. Under this policy, we established a benchmark providing that
                surgical procedures, diagnostic tests, and other treatments would be
                generally considered appropriate for inpatient hospital admission and
                payment under Medicare Part A when the physician expects the patient to
                require a stay that crosses at least 2 midnights and admits the patient
                to the hospital based upon that expectation. Conversely, when a
                beneficiary enters a hospital for a surgical procedure not designated
                as an inpatient-only (IPO) procedure as described in 42 CFR 419.22(n),
                a diagnostic test, or any other treatment, and the physician expects to
                keep the beneficiary in the hospital for only a limited period of time
                that does not cross 2 midnights, the services would be generally
                inappropriate for payment under Medicare Part A, regardless of the hour
                that the beneficiary came to the hospital or whether the beneficiary
                used a bed. With respect to services designated under the OPPS as IPO
                list procedures, we explained that because of the intrinsic risks,
                recovery impacts, or complexities associated with such services, these
                procedures would continue to be appropriate for inpatient hospital
                admission and payment under Medicare Part A regardless of the expected
                length of stay. We also indicated that there might be further ``rare
                and unusual'' exceptions to the application of the benchmark, which
                would be detailed in subregulatory guidance.
                 In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50913 through
                50954), we also finalized the 2-Midnight presumption, which is related
                to the 2-Midnight benchmark but is a separate medical review policy.
                The 2-Midnight benchmark represents guidance to reviewers to identify
                when an inpatient admission is generally reasonable and necessary for
                purposes of Medicare Part A payment, while the 2-Midnight presumption
                relates to instructions to medical reviewers regarding the selection of
                claims for medical review. Specifically, under the 2-Midnight
                presumption, inpatient hospital claims with lengths of stay greater
                than 2 midnights after the formal admission following the order are
                presumed to be appropriate for Medicare Part A payment and are not the
                focus of medical review efforts, absent evidence of systematic gaming,
                abuse, or delays in the provision of care in an attempt to qualify for
                the 2-Midnight presumption.
                 In the CY 2016 OPPS/ASC final rule with comment period (80 FR 70538
                through 70549), we revisited the previous rare and unusual exceptions
                policy and finalized a proposal to allow for case-by-case exceptions to
                the 2-Midnight benchmark, whereby Medicare Part A payment may be made
                for inpatient admissions where the admitting physician does not expect
                the patient to require hospital care spanning 2 midnights, if the
                documentation in the medical record supports the physician's
                determination that the patient nonetheless requires inpatient hospital
                care.
                 In the CY 2016 OPPS/ASC final rule with comment period, we
                reiterated our position that the 2-Midnight benchmark provides clear
                guidance on when a hospital inpatient admission is appropriate for
                Medicare Part A payment, while respecting the role of physician
                judgment. We stated that the following criteria will be relevant to
                determining whether an inpatient admission with an expected length of
                stay of less than 2 midnights is nonetheless appropriate for Medicare
                Part A payment:
                 Complex medical factors such as history and comorbidities;
                [[Page 63737]]
                 The severity of signs and symptoms;
                 Current medical needs; and
                 The risk of an adverse event.
                 The exceptions for procedures on the IPO list and for ``rare and
                unusual'' circumstances designated by CMS as national exceptions were
                unchanged by the CY 2016 OPPS/ASC final rule with comment period.
                 As we stated in the CY 2016 OPPS/ASC final rule with comment
                period, the decision to formally admit a patient to the hospital is
                subject to medical review. Specifically, for inpatient admissions not
                related to a surgical procedure specified by Medicare as an IPO
                procedure under 42 CFR 419.22(n) and for which there is not a national
                exception, payment of the claim under Medicare Part A is subject to the
                clinical judgment of the medical reviewer to determine whether the
                medical record supports a reasonable expectation of the need for
                hospital care crossing at least 2 midnights or otherwise supports a
                need for inpatient care. The medical reviewer's clinical judgment
                involves the synthesis of all submitted medical record information (for
                example, progress notes, diagnostic findings, medications, nursing
                notes, and other supporting documentation) to make a medical review
                determination on whether the clinical requirements in the relevant
                policy have been met. In addition, Medicare review contractors must
                abide by CMS' policies in conducting payment determinations, but are
                permitted to take into account evidence-based guidelines or commercial
                utilization tools that may aid such a decision. While Medicare review
                contractors may continue to use commercial screening tools to help
                evaluate the inpatient admission decision for purposes of payment under
                Medicare Part A, such tools are not binding on the hospital, CMS, or
                its review contractors. This type of information also may be
                appropriately considered by the physician as part of the complex
                medical judgment that guides their decision to keep a beneficiary in
                the hospital and formulation of the expected length of stay.
                2. Current Policy for Medical Review of Inpatient Hospital Admissions
                for Procedures Removed From the Inpatient Only List
                 In the CY 2020 OPPS/ASC final rule with comment period we finalized
                a policy to exempt procedures that have been removed from the IPO list
                from certain medical review activities to assess compliance with the 2-
                Midnight rule within the 2 calendar years following their removal from
                the IPO list. We stated that these procedures will not be considered by
                the Beneficiary and Family-Centered Care Quality Improvement
                Organizations (BFCC-QIOs) in determining whether a provider exhibits
                persistent noncompliance with the 2-Midnight rule for purposes of
                referral to the RAC nor will these procedures be reviewed by RACs for
                ``patient status.'' We explained that during this 2-year period, BFCC-
                QIOs will have the opportunity to review such claims in order to
                provide education for practitioners and providers regarding compliance
                with the 2-Midnight rule, but claims identified as noncompliant will
                not be denied with respect to the site-of-service under Medicare Part
                A.
                 For CY 2021 we proposed to continue the 2-year exemption from site-
                of-service claim denials, BFCC-QIO referrals to RACs, and RAC reviews
                for ``patient status'' (that is, site-of-service) for procedures that
                are removed from the IPO list under the OPPS beginning on January 1,
                2021. However, we finalized our proposal with modifications in the CY
                2021 OPPS/ASC final rule with comment period. Instead of the 2-year
                exemption, procedures removed from the IPO list after January 1, 2021
                were indefinitely exempted from site-of-service claim denials under
                Medicare Part A, eligibility for BFCC-QIO referrals to RACs for
                noncompliance with the 2-Midnight rule, and RAC reviews for ``patient
                status'' (that is, site-of-service). We stated that this exemption
                would last until we have Medicare claims data indicating that the
                procedure is more commonly performed in the outpatient setting than the
                inpatient setting. Thus, for the exemption to end for a specific
                procedure, in a single calendar year we would need to have Medicare
                claims data indicating that the procedure was performed more than 50
                percent of the time in the outpatient setting. We stated that we would
                revisit in rulemaking whether an exemption for a procedure should be
                ended or whether we may consider additional metrics in the future that
                could assist us in determining when the exemption period should end for
                a procedure. Even during this exemption period, the BFCC-QIOs retain
                the authority to review such claims in order to provide education for
                practitioners and providers regarding compliance with the 2-Midnight
                rule, but claims identified as noncompliant will not be denied with
                respect to the site-of-service under Medicare Part A. Additionally, we
                stated that we may still conduct medical review in cases in which we
                believe there is potential fraud or abuse occurring. We explained that
                the elimination of the IPO list was a large scale change that created
                brand new considerations for providers regarding site-of-service
                determinations. At the time, we believed a change of this significance
                required us to reevaluate our stance on the exemption period for
                procedures removed from the IPO list, resulting in our decision to
                finalize an indefinite exemption period rather than continuing the
                previous 2 year exemption period.
                 Finally, in the CY 2021 OPPS/ASC final rule with comment period we
                amended 42 CFR 412.3 to clarify when a procedure removed from the IPO
                is exempt from certain medical review activities. We stated that for
                those services and procedures removed between January 1 and December
                31, 2020, this exemption will last for 2 years from the date of such
                removal. For those services and procedures removed on or after January
                1, 2021, this exemption will last until the Secretary determines that
                the service or procedure is more commonly performed in the outpatient
                setting.
                3. Medical Review of Inpatient Hospital Admissions for Procedures
                Removed From the Inpatient Only List for CY 2022 and Subsequent Years
                 As stated earlier in this section, services on the IPO list are not
                subject to the 2-Midnight rule for purposes of determining whether
                payment is appropriate under Medicare Part A. However, the 2-Midnight
                rule is applicable once services have been removed from the IPO list.
                Outside of the exemption periods discussed above, services that have
                been removed from the IPO list are subject to initial medical reviews
                of claims for short-stay inpatient admissions conducted by BFCC-QIOs,
                and are subject to denial for non-compliance with the 2-midnight rule.
                 BFCC-QIOs may also refer providers to the RACs for further medical
                review due to exhibiting persistent noncompliance with Medicare payment
                policies, including, but not limited to:
                 Having high denial rates;
                 Consistently failing to adhere to the 2-Midnight rule; or
                 Failing to improve their performance after QIO educational
                intervention.
                 As stated in section IX. of the CY 2022 OPPS/ASC proposed rule (86
                FR 42155 through 42176), CMS proposed to halt the elimination of the
                IPO list. In accordance with this proposal, we proposed to amend 42 CFR
                419.22(n) to remove the reference to the elimination
                [[Page 63738]]
                of the list of services and procedures designated as requiring
                inpatient care through a 3-year transition. We also proposed to return
                298 procedures removed from the IPO list in CY 2021 to the IPO list for
                CY 2022.
                 Regardless of the status of the IPO list, we believe that the 2-
                Midnight benchmark remains an important metric to help guide when Part
                A payment for inpatient hospital admissions is appropriate. As
                technology advances and more services may be safely performed in the
                hospital outpatient setting and paid under the OPPS, it is increasingly
                important for physicians to exercise their clinical judgment in
                determining the generally appropriate clinical setting for their
                patient to receive a procedure, whether that be as an inpatient or on
                an outpatient basis. Importantly, removal of a service from the IPO
                list has never meant that a beneficiary cannot receive the service as a
                hospital inpatient--as always, the physician should use his or her
                complex medical judgment to determine the appropriate setting on a case
                by case basis.
                 As stated previously, our current policy regarding IPO list
                procedures is that they are appropriate for inpatient hospital
                admission and payment under Medicare Part A regardless of the expected
                length of stay. Halting the elimination of the IPO list would mean that
                this will remain true for all services that are still on the list. As
                in previous years, any services that are removed from the list in the
                future will be subject to the 2-Midnight benchmark and 2-Midnight
                presumption. This means that for services removed from the IPO list,
                under the 2-Midnight presumption, inpatient hospital claims with
                lengths of stay greater than 2 midnights after admission will be
                presumed to be appropriate for Medicare Part A payment and will not be
                the focus of medical review efforts, absent evidence of systematic
                gaming, abuse, or delays in the provision of care in an attempt to
                qualify for the 2-Midnight presumption. Additionally, under the 2-
                Midnight benchmark, services formerly on the IPO list will be generally
                considered appropriate for inpatient hospital admission and payment
                under Medicare Part A when the medical record supports either the
                admitting physician's reasonable expectation that the patient will
                require a stay that crosses at least 2 midnights, or the physician's
                determination that the patient required inpatient hospital care despite
                an expectation of a shorter length of stay.
                 Because we proposed to halt the elimination of the IPO list and add
                298 services that were removed back to the IPO list, we believed this
                proposed change required us to reexamine the applicable exemption
                period. We noted in the CY 2021 OPPS/ASC final rule with comment period
                that we may shorten the exemption period for a procedure if necessary.
                We heard from many commenters last year that the 2-year exemption was
                appropriate when CMS was removing a smaller volume of procedures from
                the IPO list. However, commenters believed that the unprecedented
                volume of procedures becoming subject to the 2-Midnight rule with the
                phased elimination of the IPO list would necessitate a longer exemption
                period. While these commenters expressed their support for continuing
                the 2-year exemption, they further stated that a longer exemption
                period may be more appropriate. Some commenters suggested that anywhere
                between 3 to 6 years or indefinitely would be appropriate. Commenters
                expressed their belief that increasing the length of the exemption
                would be necessary to allow hospitals and practitioners sufficient time
                to adjust their billing and clinical systems, as well as processes used
                to determine the appropriate setting of care. For a full description of
                the comments received please refer to the CY 2021 OPPS/ASC final rule
                with comment period (85 FR 86115).
                 We noted in the CY 2022 OPPS/ASC proposed rule that we believed
                that the indefinite exemption was appropriate when the agency was
                eliminating the IPO list and removing an unprecedented volume of
                procedures from the list in a short period of time. That would have
                resulted in a large number of procedures becoming subject to the 2-
                Midnight rule in a 3-year span. However, we explained in the CY 2022
                OPPS/ASC proposed rule that should we finalize our CY 2022 proposal to
                halt the elimination of the IPO list, there would no longer be an
                unprecedented volume of procedures removed from the IPO list at once,
                and thus the indefinite exemption may no longer be appropriate. As we
                explained in the CY 2021 OPPS/ASC final rule with comment period, the
                indefinite exemption was necessary given the magnitude of the change
                for providers. We explained in the CY 2022 OPPS/ASC proposed rule that
                because we were now proposing to move toward a much smaller volume of
                procedures becoming subject to the 2-Midnight rule at one time, we
                believed that in the event we finalized the proposed halt in the
                elimination of the IPO list, an indefinite exemption from medical
                review activities related to the 2-Midnight rule would no longer be
                warranted.
                 We also explained in the CY 2022 OPPS/ASC proposed rule that we
                continued to believe that, in order to facilitate compliance with our
                payment policy for inpatient admissions, some exemption from certain
                medical review activities for services removed from the IPO list under
                the OPPS is appropriate. Accordingly, we proposed to rescind the
                indefinite exemption and instead apply a 2-year exemption from two
                midnight medical review activities for services removed from the IPO
                list on or after January 1, 2021. As finalized in the CY 2020 OPPS/ASC
                final rule with comment period, and unchanged by the CY 2021
                rulemaking, services removed from the IPO list between January 1 and
                December 30, 2020, are currently subject to a 2-year exemption.
                Accordingly, we stated that under our proposal, the same 2-year
                exemption would apply to all service removed from the IPO list on or
                after January 1, 2020. As we explained in the CY 2020 OPPS/ASC final
                rule with comment period, we believe that a 2-year exemption from
                certain medical review activities for procedures removed from the IPO
                list would allow sufficient time for providers to become more familiar
                with how to comply with the 2-Midnight rule and for hospitals and
                clinicians to become used to the availability of payment under both the
                hospital inpatient and outpatient setting for procedures removed from
                the IPO list. As we indicated in the CY 2022 OPPS/ASC proposed rule, if
                we finalized our proposal to halt the elimination of the IPO list, we
                believed that this rationale would apply equally to the smaller number
                of services that may be removed from the list at any one time in the
                future, and thus that the same 2-year exemption period is appropriate.
                 We also noted in the CY 2022 OPPS/ASC proposed rule that, as with
                the previous 2-year exemption period for services removed from the IPO
                list between January 1 and December 30, 2020, applying a 2-year
                exemption period to services removed from the IPO list on or after
                January 1, 2021, would allow providers time to gather information on
                procedures newly removed from the IPO list to help inform education and
                guidance for the broader provider community, develop patient selection
                criteria to identify which patients are, and are not, appropriate
                candidates for outpatient procedures, and to develop related policy
                protocols. We also said that we believed that this exemption period
                would aid in compliance with our
                [[Page 63739]]
                payment policy for inpatient admissions.
                 It is important to note that whether there is a limited timeframe
                or an indefinite exemption from the specified medical review
                activities, providers are still expected to comply with the 2-Midnight
                rule. It is also important to note that the 2-Midnight rule does not
                prohibit procedures from being performed or billed on an inpatient
                basis. Whether a procedure has an exemption or not does not change what
                site of service is medically necessary or appropriate for an individual
                beneficiary. Providers are still expected to use their complex medical
                judgment to determine the appropriate site of service for each patient
                and to bill in compliance with the 2-Midnight rule. The exemption is
                not from the 2-Midnight rule but from certain medical review procedures
                and site-of-service claim denials.
                 Absent the removal of an unprecedented number of services at once
                from the IPO list, we explained in the proposed rule that we continue
                to believe that a 2-year exemption from BFCC-QIO referral to RACs and
                RAC ``patient status'' review of the setting for procedures removed
                from the IPO list under the OPPS and performed in the inpatient setting
                would be an adequate amount of time to allow providers to gain
                experience with application of the 2-Midnight rule to these procedures
                and the documentation necessary for Part A payment for those patients
                for which the admitting physician determines that the procedures should
                be furnished in an inpatient setting. Furthermore, we explained that it
                was our belief that the 2-year exemption from referrals to RACs, RAC
                patient status review, and claims denials would be sufficient to allow
                providers time to update their billing systems and gain experience with
                respect to newly removed procedures eligible to be paid under either
                the IPPS or the OPPS, while avoiding potential adverse site-of-service
                determinations. We solicited public comments regarding the appropriate
                period of time for this exemption. Commenters indicated whether and why
                they believed the 2-year period is appropriate, or whether they
                believed a longer or shorter exemption period would be more
                appropriate.
                 In summary, for CY 2021 and subsequent years, we proposed to return
                to the 2-year exemption from site-of-service claim denials, BFCC-QIO
                referrals to RACs, and RAC reviews for ``patient status'' (that is,
                site-of-service) for procedures that are removed from the IPO list
                under the OPPS on January 1, 2021 or later. Under this proposal,
                services removed beginning on January 1, 2021 would receive the same 2-
                year exemption from 2-Midnight medical review activities as currently
                applies to services removed between January 1 and December 30, 2020,
                and not the indefinite exemption finalized in the CY 2021 OPPS/ASC
                final rule with comment period. We encouraged BFCC-QIOs to review these
                cases for medical necessity in order to educate themselves and the
                provider community on appropriate documentation for Part A payment when
                the admitting physician determines that it is medically reasonable and
                necessary to conduct these procedures on an inpatient basis. We noted
                that we will monitor changes in site-of-service to determine whether
                changes may be necessary to certain CMS Innovation Center models. While
                we proposed to halt the elimination of the IPO list, we sought comment
                on whether a 2-year time period is appropriate, or if a longer or
                shorter period may be more warranted. We also explained in the CY 2022
                OPPS/ASC proposed rule, that if we did not finalize our proposal to
                halt the elimination of the IPO list we might continue with the
                indefinite exemptions. Finally, we proposed to amend 42 CFR 412.3 to
                clarify when a procedure removed from the IPO list is exempt from
                certain medical review activities. We proposed that for all services
                and procedures removed after January 1, 2020, this exemption would last
                for 2 years from the date of such removal. This would include those
                services and procedures removed on or after January 1, 2021, for which
                this exemption would also be for 2 years from the date of such removal.
                 Comment: Many commenters, including organizations representing
                health insurance plans, physician associations, and specialty medical
                associations supported an indefinite exemption from site-of-service
                claim denials under Medicare Part A, eligibility for BFCC-QIO referrals
                to RACs for noncompliance with the 2-Midnight rule, and RAC reviews for
                site-of-service for procedures that are removed from the IPO list under
                the OPPS beginning on January 1, 2021. Some of these commenters
                recommended exemption from site of service reviews until the procedure
                is performed in the outpatient setting more than 50 percent of the
                time, or until clinical evidence supports the safety of procedures
                performed in an outpatient setting. Additional commenters believed CMS
                should defer to the physician's judgment on the appropriate site of
                care and exempt providers from site-of-service claims denials beyond
                the proposed 2-year exemption period. Commenters stated 2 years does
                not provide enough time for adequate evidence and research to be
                conducted to demonstrate that procedures removed from the IPO list can
                be performed safely for Medicare beneficiaries in hospital outpatient
                settings. According to the commenters, a longer or indefinite exemption
                period would extend additional protection to beneficiaries and
                hospitals providing care in outpatient settings.
                 Other commenters recommended extending site of service review to 3
                or 4 years to allow for quality and safety analysis.
                 Response: We thank the commenters for their recommendations. As we
                explained in the CY 2021 OPPS/ASC final rule with comment period, we
                believed that the prior 2-year exemption might not be sufficient given
                the magnitude of the change for providers due to the elimination of the
                IPO list. We agreed at the time that due to the unprecedented number of
                services removed from the IPO list as part of the phased elimination of
                that list, additional time (beyond 2 years) would be more appropriate
                for hospitals and practitioners to adjust their billing and clinical
                systems, as well as develop their own internal processes to determine
                the appropriate setting of care for their patients, and review for
                quality and safety. We acknowledged that providers may not be
                experienced with assessing procedures on the IPO list against the 2-
                Midnight benchmark and that a longer exemption would allow them ample
                time to update their processes to make appropriate decisions about
                whether to admit patients for the large numbers of procedures being
                removed from the IPO list at the time (85 FR 86116). We also heard from
                commenters that the 2-year exemption was appropriate when CMS was
                removing a smaller volume of procedures from the IPO list. We agreed
                then and still believe now that the 2-year exemption was appropriate
                when CMS was removing a smaller, more targeted population of procedures
                from the IPO list. Accordingly, because we are finalizing our proposal
                to halt the elimination of the IPO list and return most of the removed
                services back to the list, we are finalizing our proposal without
                modification to resume the 2-year exemption period for procedures
                removed from the IPO list for services removed from the IPO list on
                January 1, 2020 or later.
                 Comment: Some commenters supported a two-year exemption from 2-
                midnight medical reviews. They
                [[Page 63740]]
                believed a 2-year exemption will provide sufficient time for physicians
                to become more familiar with appropriate coding, billing, and
                documentation requirements for procedures removed from the IPO list.
                Commenters also noted that the 2-year exemption time period would help
                facilitate the transition of services off the IPO list and allow for
                the development of patient selection criteria to identify which
                patients are appropriate candidates for outpatient procedures. One
                commenter in support of the 2-year exemption time period also stressed
                the importance of CMS and BFCC-QIOs providing education to providers
                when services are removed from the IPO list.
                 Response: We thank the commenters for their support. The BFCC-QIOs
                will continue to review claims even while procedures are exempt from
                denial based on site-of-service in order to provide education for
                practitioners and providers regarding compliance with the 2-Midnight
                rule (85 FR 86119). Additionally, in the future, we may provide
                additional educational material regarding considerations for the
                selection of site-of-service for a procedure to support physicians'
                decision-making. We note that this additional information will be for
                informational or educational purposes only and will not be intended to
                prohibit payment of procedures that were previously included on the IPO
                list in the outpatient setting.
                 We appreciate the stakeholders' feedback regarding the appropriate
                period of time for exemptions from site-of-service claim denials under
                Medicare Part A, eligibility for BFCC-QIO referrals to RACs for
                noncompliance with the 2-Midnight rule, and RAC reviews for site-of-
                service for services removed from the IPO list on January 1, 2021, and
                later. Given our decision to halt the elimination of the IPO list, and
                the fact that we are accordingly no longer removing an unprecedented
                number of procedures from the list at one time, we believe that a 2-
                year exemption time period is adequate to let providers gain experience
                with the application of the 2-Midnight rule to those procedures that
                have been newly removed from the IPO list. We also believe that a 2-
                year exemption from the medical review activities discussed above for
                procedures removed from the IPO list will be sufficient time for
                providers and BFCC-QIOs to understand the documentation necessary to
                support Part A payment for those patients for which the admitting
                physician determines that the procedures should be furnished in an
                inpatient setting. Therefore, we are finalizing our proposed policy
                without modifications. We are also finalizing our proposal to amend
                Sec. 412.3 of our regulations to clarify when a procedure removed from
                the IPO list is exempt from certain medical review activities.
                B. Changes to Beneficiary Coinsurance for Additional Procedures
                Furnished During the Same Clinical Encounter as Certain Colorectal
                Cancer Screening Tests
                 Section 122 of Division CC of the Consolidated Appropriations Act
                (CAA) of 2021 (Pub. L. 116-260), Waiving Medicare Coinsurance for
                Certain Colorectal Cancer Screening Tests, amends section 1833(a) of
                the Act to offer a special coinsurance rule for screening flexible
                sigmoidoscopies and screening colonoscopies, regardless of the code
                that is billed for the establishment of a diagnosis as a result of the
                test, or for the removal of tissue or other matter or other procedure,
                that is furnished in connection with, as a result of, and in the same
                clinical encounter as the colorectal cancer screening test. The reduced
                coinsurance will be phased in beginning January 1, 2022. Currently, the
                addition of any procedure beyond a planned colorectal cancer screening
                test (for which there is no coinsurance), results in the beneficiary
                having to pay coinsurance.
                 Section 1861(pp) of the Act defines ``colorectal cancer screening
                tests'' and, under sections 1861(pp)(1)(B) and (C) of the Act,
                identifies ``screening flexible sigmoidoscopy'' and ``screening
                colonoscopy'' as two of the recognized procedures. During the course of
                either one of these two procedures, removal of tissue or other matter
                may become necessary for diagnostic purposes. Among other things,
                section 1861(pp)(1)(D) of the Act authorizes the Secretary to include
                in the definition, other tests or procedures and modifications to the
                tests and procedures described under this subsection, with such
                frequency and payment limits as the Secretary determines appropriate,
                in consultation with appropriate organizations. Section 1861(s)(2)(R)
                of the Act includes colorectal cancer screening tests in the definition
                of the medical and other health services that fall within the scope of
                Medicare Part B benefits described in section 1832(a)(1) of the Act.
                Section 1861(ddd)(3) of the Act includes colorectal cancer screening
                tests within the definition of ``preventive services.'' In addition,
                section 1833(a)(1)(Y) of the Act provides for payment for a preventive
                service under the PFS at 100 percent of the lesser of the actual charge
                or the fee schedule amount for these colorectal cancer screening tests,
                and under the OPPS at 100 percent of the OPPS payment amount, when the
                preventive service is recommended by the United States Preventive
                Services Task Force (USPSTF) with a grade of A or B. As such, there is
                no beneficiary coinsurance for recommended colorectal cancer screening
                tests as defined in section 1861(pp)(1) of the Act.
                 Under these statutory provisions, we have issued regulations
                governing payment for colorectal cancer screening tests at Sec.
                410.152(l)(5). We pay 100 percent of the Medicare payment amount
                established under the applicable payment methodology for the setting
                for providers and suppliers, and beneficiaries are not required to pay
                Part B coinsurance for colorectal cancer screening tests (except for
                barium enemas, which are not recommended by the USPSTF with a grade of
                A or B).
                 In addition to colorectal cancer screening tests, which typically
                are furnished to patients in the absence of signs or symptoms of
                illness or injury, Medicare also covers various diagnostic tests (see
                Sec. 410.32). In general, diagnostic tests must be ordered by the
                physician or practitioner who is treating the beneficiary and who uses
                the results of the diagnostic test in the management of the patient's
                specific medical condition. Under Part B, Medicare may cover flexible
                sigmoidoscopies and colonoscopies as diagnostic tests when those tests
                are reasonable and necessary as specified in section 1862(a)(1)(A) of
                the Act. When these services are furnished as diagnostic tests rather
                than as screening tests, patients are responsible for the Part B
                coinsurance (20 or 25 percent depending upon the setting) associated
                with these services.
                 We define colorectal cancer screening tests in our regulation at
                Sec. 410.37(a)(1) to include ``flexible screening sigmoidoscopies''
                and ``screening colonoscopies, including anesthesia furnished in
                conjunction with the service.'' Under our current regulations, we
                exclude from the definition of colorectal screening services,
                colonoscopies and sigmoidoscopies that begin as screening services, but
                where a polyp or other growth is found and removed as part of the
                procedure. The exclusion of these services from the definition of
                colorectal cancer screening services is based upon longstanding
                provisions of the statute under section 1834(d)(2)(D) of the Act
                dealing with the detection of lesions or growths during procedures (See
                CY 1998 PFS final rule at 62 FR 59048, 59082).
                 Prior to the enactment of section 122 of the CAA, section
                1834(d)(2)(D) of the
                [[Page 63741]]
                Act provided that if, during the course of a screening flexible
                sigmoidoscopy, a lesion or growth is detected which results in a biopsy
                or removal of the lesion or growth, payment under Medicare Part B shall
                not be made for the screening flexible sigmoidoscopy, but shall be made
                for the procedure classified as a flexible sigmoidoscopy with such
                biopsy or removal. Similarly, prior to the recent legislative change,
                section 1834(d)(3)(D) of the Act provided that if, during the course of
                a screening colonoscopy, a lesion or growth is detected that results in
                a biopsy or removal of the lesion or growth, payment under Medicare
                Part B shall not be made for the screening colonoscopy but shall be
                made for the procedure classified as a colonoscopy with such biopsy or
                removal. In these situations, Medicare pays for the flexible
                sigmoidoscopy and colonoscopy tests as diagnostic tests rather than as
                screening tests and the 100 percent payment rate for recommended
                preventive services under section 1833(a)(1)(Y) of the Act, as codified
                in our regulation at Sec. 410.152(l)(5), has not applied. As such,
                beneficiaries currently are responsible for the usual coinsurance that
                applies to the services (20 or 25 percent of the cost of the services
                depending upon the setting).
                 Under section 1833(b) of the Act, before making payment under
                Medicare Part B for expenses incurred by a beneficiary for covered Part
                B services, beneficiaries must first meet the applicable deductible for
                the year. Section 4104 of the Affordable Care Act (that is, the Patient
                Protection and Affordable Care Act (Pub L. 111-148, March 23, 2010),
                and the Health Care and Education Reconciliation Act of 2010 (Pub. L.
                111-152, March 30, 2010), collectively referred to as the ``Affordable
                Care Act'') amended section 1833(b)(1) of the Act to make the
                deductible inapplicable to expenses incurred for certain preventive
                services that are recommended with a grade of A or B by the USPSTF,
                including colorectal cancer screening tests as defined in section
                1861(pp) of the Act. Section 4104 of the Affordable Care Act also added
                a sentence at the end of section 1833(b)(1) of the Act specifying that
                the exception to the deductible shall apply with respect to a
                colorectal cancer screening test regardless of the code that is billed
                for the establishment of a diagnosis as a result of the test, or for
                the removal of tissue or other matter or other procedure that is
                furnished in connection with, as a result of, and in the same clinical
                encounter as the screening test. Although amendments made by the
                Affordable Care Act addressed the applicability of the deductible in
                the case of a colorectal cancer screening test that involves biopsy or
                tissue removal, they did not alter the coinsurance provision in section
                1833(a) of the Act for such procedures. Although public commenters
                encouraged the agency to eliminate the coinsurance in these
                circumstances, the agency found that statute did not provide for
                elimination of the coinsurance (75 FR 73170 at 73431).
                 Beneficiaries have continued to contact us noting their concern
                that a coinsurance percentage applies (20 or 25 percent depending upon
                the setting) under circumstances where they expected to receive only a
                colorectal screening test to which coinsurance does not apply. Instead,
                these beneficiaries received what Medicare considers to be a diagnostic
                procedure because, for example, polyps were discovered and removed
                during the procedure. Similarly, physicians have expressed concern
                about the reactions of beneficiaries when they are informed that they
                will be responsible for coinsurance if polyps are discovered and
                removed during a procedure that they had expected to be a screening
                procedure to which coinsurance does not apply.
                 Section 122 of the CAA addresses this coinsurance issue by
                successively reducing, over a period of years, the percentage amount of
                coinsurance for which the beneficiary is responsible. Ultimately, for
                services furnished on or after January 1, 2030, the coinsurance will be
                zero.
                 To implement the amendments made by section 122 of the CAA, we
                proposed in the CY 2022 PFS proposed rule to modify our regulations to
                reflect the changes to Medicare statute. As amended, the statute
                effectively provides that, for services furnished on or after January
                1, 2022, a flexible sigmoidoscopy or a colonoscopy can be considered a
                screening flexible sigmoidoscopy or a screening colonoscopy test even
                if an additional procedure is furnished to remove tissue or other
                matter during the screening test. Specifically, section 122(a)(3) of
                the CAA added a sentence to the end of section 1833(a) of the Act to
                include as colorectal screening tests described in section
                1833(a)(1)(Y) of the Act, a colorectal cancer screening test,
                regardless of the code that is billed for the establishment of a
                diagnosis as a result of the test, or for the removal of tissue or
                other matter or other procedure that is furnished in connection with,
                as a result of, and in the same clinical encounter as the screening
                test. We note that only flexible screening sigmoidoscopies and
                screening colonoscopies are recognized currently as colorectal cancer
                screening tests that might involve removal of tissue or other matter.
                This new sentence added under section 1833(a) uses the same language
                that was used to amend the statute at section 1833(b)(1) of the Act to
                broaden the scope of colorectal cancer screening tests to which a
                deductible does not apply. Section 122(b)(1) of the CAA then limits
                application of the 100 percent Medicare payment rate (that is, no
                beneficiary coinsurance) under section 1833(a)(1)(Y) of the Act for the
                additional colorectal cancer screening tests (those that are not
                screening tests ``but for'' the new sentence at the end of section
                1833(a) of the Act) by making payment for them subject to a new section
                1833(dd) of the Act. Section 1833(dd) of the Act provides for a series
                of increases in the Medicare payment rate percentage for those services
                over successive periods of years through CY 2029. Thereafter, section
                1833(dd) of the Act has no effect, so payment for all colorectal cancer
                screening tests would be made at 100 percent under section
                1833(a)(1)(Y) of the Act.
                 To codify the amendments made by section 122 of the CAA in our
                regulations, we proposed in the CY 2022 PFS proposed rule to make two
                modifications to current regulations.
                 At Sec. 410.37, we proposed in the CY 2022 PFS proposed rule to
                modify our regulation where we define conditions for and limitations on
                coverage for colorectal cancer screening tests by adding a new
                paragraph (j). That paragraph would provide that, effective January 1,
                2022, when a planned colorectal cancer screening test, that is,
                screening flexible sigmoidoscopy or colonoscopy screening test,
                requires a related procedure, including removal of tissue or other
                matter, furnished in connection with, as a result of, and in the same
                clinical encounter as the screening test, it is considered to be a
                colorectal cancer screening test.
                 At Sec. 410.152(l)(5), we also proposed in the CY 2022 PFS
                proposed rule to modify our regulation. There we describe payment for
                colorectal cancer screening tests. Effective January 1, 2022, we
                proposed in the CY 2022 PFS proposed rule to provide for an increase in
                the Medicare payment percentage that is phased in over time. As the
                Medicare payment percentage increases, the beneficiary coinsurance
                percentage decreases. We proposed to revise Sec. 410.152(l)(5) to
                provide that Medicare payment in a specified year is equal to a
                specified percent of the lesser of the
                [[Page 63742]]
                actual charge for the service or the amount determined under the fee
                schedule that applies to the test. The phased in Medicare payment
                percentages for colorectal cancer screening services described in the
                amendments we proposed in the CY 2022 PFS proposed rule to our
                regulation at Sec. 410.37(j) (and the corresponding reduction in
                coinsurance) are as follows:
                 80 percent payment for services furnished during CY 2022
                (with coinsurance equal to 20 percent);
                 85 percent payment for services furnished during CY 2023
                through CY 2026 (with coinsurance equal to 15 percent);
                 90 percent payment for services furnished during CY 2027
                through CY 2029 (with coinsurance equal to 10 percent); and
                 100 percent payment for services furnished from CY 2030
                onward (with coinsurance equal to zero percent).
                 Thus, between CYs 2022 and 2030, the coinsurance required of
                Medicare beneficiaries for planned colorectal cancer screening tests
                that result in additional procedures furnished in the same clinical
                encounter will be reduced over time from the current 20 or 25 percent
                to zero percent beginning CY 2030 and will remain at zero percent
                thereafter. We refer readers to the CY 2022 PFS proposed rule for the
                discussion of these changes to the regulations at Sec. Sec. 410.37 and
                410.152(l)(5) to implement section 122 of the CAA.
                 In the CY 2011 OPPS/ASC final rule with comment period (75 FR 72019
                through 72020), we adopted a policy that all surgical services
                furnished on the same date as a planned screening colonoscopy, planned
                flexible sigmoidoscopy, or barium enema be viewed as being furnished in
                connection with, as a result of, and in the same clinical encounter as
                the screening test for purposes of implementing section 4104(c)(2) of
                the Affordable Care Act. We created the HCPCS modifier ``PT'' for
                providers to append to the diagnostic procedure code that is reported
                instead of the screening colonoscopy, screening flexible sigmoidoscopy
                HCPCS code, or as a result of the barium enema when the screening test
                becomes a diagnostic service. Where the modifier appears on a claim,
                the claims processing system does not apply the Part B deductible for
                all surgical services on the same date as the diagnostic test. We
                stated that we believed this interpretation was appropriate because we
                believe that it would be very rare for an unrelated surgery to occur on
                the same date as one of these scheduled screening tests (75 FR 72019).
                We also stated that we would reassess the appropriateness of the
                proposed definition of services that are furnished in connection with,
                as a result of, and in the same clinical encounter as the colorectal
                cancer screening test that becomes diagnostic in the event of a
                legislative change to this policy (for example, a statutory change that
                would remove the coinsurance for these related services in addition to
                the deductible).
                 As we did for purposes of implementing section 4104(c)(2) of the
                Affordable Care Act, to implement the amendments made by section 122 of
                the CAA, in the CY 2022 OPPS/ASC proposed rule we proposed that all
                surgical services furnished on the same date as a planned screening
                colonoscopy or planned flexible sigmoidoscopy would be viewed as being
                furnished in connection with, as a result of, and in the same clinical
                encounter as the screening test for purposes of determining the
                coinsurance required of Medicare beneficiaries for planned colorectal
                cancer screening tests that result in additional procedures furnished
                in the same clinical encounter. We explained that we believe this
                interpretation is appropriate because we continue to believe that it is
                very rare for an unrelated surgery to occur on the same date as a
                scheduled colorectal cancer screening. We stated that providers must
                continue to report HCPCS modifier ``PT'' to indicate that a planned
                colorectal cancer screening service converted to a diagnostic service.
                We also noted that, if our proposal was finalized, we would examine the
                claims data, monitor for any increases in surgical services unrelated
                to the colorectal cancer screening test performed on the same date as
                the screening test, and consider revising our policy through rulemaking
                if there is a notable increase.
                 Comment: Overall, commenters expressed support for our proposal
                that all surgical services furnished on the same date as a planned
                screening colonoscopy or planned flexible sigmoidoscopy would be viewed
                as being furnished in connection with, as a result of, and in the same
                clinical encounter as the screening test for purposes of determining
                the coinsurance required of Medicare beneficiaries for planned
                colorectal cancer screening tests that result in additional procedures
                furnished in the same clinical encounter.
                 Response: We thank commenters for their support.
                 Comment: Several commenters requested that CMS allow providers to
                waive coinsurance even earlier than 2030 or accelerate the reduction in
                the coinsurance amounts if they elect to do so without fear of
                violating any CMS rules. A commenter stated the gradual reduction in
                coinsurance amounts will lead to patient confusion and administration
                challenges. Other commenters stated that if providers are not permitted
                to accelerate the reductions in the coinsurance amounts, hospitals
                should be able to voluntarily waive the co-insurance prior to January
                1, 2030. The commenters believed this process could be similar to CMS
                allowing hospitals to reduce the beneficiary copayment for APC payable
                services below 20 percent. In addition, one commenter requested that
                CMS allow hospitals the option to waive the co-payment amounts as long
                as the hospitals electing this option consider it a contractual
                allowance not counted as bad debt.
                 Response: Through this rulemaking, we are adopting Medicare
                regulations regarding beneficiary coinsurance that reflect the
                decreasing beneficiary financial obligations over time as established
                by statute. Prior to the complete phaseout of Medicare coinsurance
                amounts for colorectal cancer screening tests in CY 2030, suppliers may
                waive coinsurance amounts only if they comply with applicable law,
                including the Federal Anti[hyphen]Kickback Statute and the civil
                monetary penalty provision prohibiting inducements to beneficiaries. We
                also note that the election to offer reduced copayment amounts provided
                for in section 1833(t)(8)(B) of the Act provides copayments can be
                reduced to amounts not less than 20 percent of the OPD fee schedule
                amount. The coinsurance amount for colorectal cancer screening services
                in CY 2022 is 20 percent and therefore could not be further reduced
                under this provision.
                 We received several comments that were outside the scope of the
                proposals made in the CY 2022 OPPS/ASC proposed rule. These comments
                included questions about coverage of bowel preparation products,
                coverage of non-invasive screening tests that require a follow-up
                colonoscopy, and cost-sharing for new colorectal screening
                technologies. Although we are not summarizing and responding to these
                comments in this final rule, we will take them into consideration for
                possible future healthcare provider education or rulemaking.
                 After considering public comments, we are finalizing as proposed
                the proposals made in the CY 2022 OPPS/
                [[Page 63743]]
                ASC proposed rule to implement section 122 of the CAA. Specifically, we
                are finalizing that all surgical services furnished on the same date as
                a planned screening colonoscopy or planned flexible sigmoidoscopy would
                be viewed as being furnished in connection with, as a result of, and in
                the same clinical encounter as the screening test for purposes of
                determining the coinsurance required of Medicare beneficiaries for
                planned colorectal cancer screening tests that result in additional
                procedures furnished in the same clinical encounter. Providers must
                continue to report HCPCS modifier ``PT'' to indicate that a planned
                colorectal cancer screening service converted to a diagnostic service.
                We will examine the claims data, monitor for any increases in surgical
                services unrelated to the colorectal cancer screening test performed on
                the same date as the screening test, and consider revising our policy
                through rulemaking if there is a notable increase or abuse of this
                policy.
                C. Low Volume Policy for Clinical and Brachytherapy APCs
                 Historically, we have used our equitable adjustment authority at
                section 1833(t)(2)(E) of the Act on a case-by-case basis to adjust how
                we determine the costs for certain low volume services. In the CY 2016
                OPPS/ASC final rule with comment period, we acknowledged that for low
                volume procedures with significant device costs, the median cost would
                be a more appropriate measure of the central tendency for purposes of
                calculating the cost and the payment rate for low volume procedures (80
                FR 70388 through 70389). We explained that the median cost is impacted
                to a lesser degree than the geometric mean cost by more extreme
                observations. Therefore, in the CY 2016 OPPS/ASC final rule with
                comment period, we used our equitable adjustment authority under
                section 1833(t)(2)(E) of the Act to use the median cost, rather than
                the geometric mean, to calculate the payment rate for the procedure
                described by CPT code 0308T (Insertion of ocular telescope prosthesis
                including removal of crystalline lens or intraocular lens prosthesis)
                for CY 2016.
                 In the CY 2017 OPPS/ASC final rule with comment period, we adopted
                a payment policy for low-volume device-intensive procedures similar to
                the policy we applied to the procedure described by CPT code 0308T.
                Under this policy, we calculate the payment rate for any device-
                intensive procedure that is assigned to an APC with fewer than 100
                single claims for all procedures in the APC using the median cost
                instead of the geometric mean cost (81 FR 79660 through 79661). We
                explained that we believed this policy would help mitigate to some
                extent the significant year-to-year payment rate fluctuations while
                preserving accurate claims data-based payment rates for these
                procedures.
                 In the CY 2019 OPPS/ASC final rule with comment period, we
                developed a policy for establishing payment rates for low-volume
                procedures assigned to New Technology APCs (83 FR 58892 through 58893).
                In that rule, we explained that procedures assigned to New Technology
                APCs are typically new procedures that do not have sufficient claims
                history to establish an accurate payment for them (83 FR 58892). One of
                the objectives of establishing New Technology APCs is to generate
                sufficient claims data for a new procedure so that it can be assigned
                to an appropriate clinical APC. We stated that some procedures that are
                assigned to New Technology APCs have very low annual volume, which we
                consider to be fewer than 100 claims. There is a higher probability
                that payment data for a procedure with fewer than 100 claims per year
                may not have a normal statistical distribution, which we were concerned
                could affect the quality of our standard cost methodology for assigning
                services to clinical APCs. We also noted that services with fewer than
                100 claims per year are not generally considered to be significant
                contributors to the APC ratesetting calculations, and therefore, are
                not included in the assessment of the 2 times rule. For these low-
                volume procedures, we were concerned that the methodology we use to
                estimate the cost of a procedure under the OPPS--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 these procedures.
                 We noted that low utilization of services can lead to wide
                variation in payment rates from year to year. This volatility in
                payment rates from year to year can result in even lower utilization
                and potential barriers to access for these new technologies, which in
                turn limits our ability to assign the service to an appropriate
                clinical APC. To mitigate these issues, we believed that it was
                appropriate to utilize our equitable adjustment authority at section
                1833(t)(2)(E) of the Act to adjust how we determine the costs for low-
                volume services assigned to New Technology APCs. We finalized a policy
                to calculate payment rates for low-volume procedures with fewer than
                100 claims per year that are assigned to a New Technology APC by using
                up to four years of claims data to calculate the geometric mean, the
                median, and the arithmetic mean, to include the result of each
                statistical methodology in annual rulemaking, and to solicit comment on
                which methodology should be used to establish the payment rate. We
                explained that once we identify a payment rate for a low-volume
                service, we would assign the service to the New Technology APC with the
                cost band that includes its payment rate (83 FR 58893).
                 While we believe that the policies we have adopted to calculate
                payment rates for low-volume procedures have mitigated concerns
                regarding payment rates for new technologies and device-intensive
                procedures, we also believe that additional items and services may
                benefit from a policy that applies to clinical APCs with significantly
                low claims volume available for ratesetting purposes. In particular, we
                believe that where there are fewer than 100 single claims from the most
                recent year available for ratesetting for an APC, there is often
                significant volatility in the payment rate for those APCs that could be
                addressed with a low-volume adjustment policy similar to our low-volume
                policies for device-intensive procedures and New Technology APCs. For
                example, for CY 2022 ratesetting purposes, there are only 42 single
                claims from CY 2019 available for determining the geometric mean cost
                for APC 5244 (Level 4 Blood Product Exchange and Related Services) and
                the payment rate for this APC has fluctuated significantly from year to
                year. The geometric mean cost of APC 5244 was $30,424.15 in CY 2018
                (based on CY 2016 claims), increased by 25.6 percent to $38,220.27 in
                CY 2019 (based on CY 2017 claims), and decreased by 18.9 percent to
                $31,015.17 in CY 2021 (based on CY 2019 claims).
                 Additionally, for CY 2022 ratesetting purposes, there are only 22
                single claims from CY 2019 available for determining the geometric mean
                cost of APC 2632 (Iodine i-125 sodium iodide). The payment rates for
                this APC have also fluctuated significantly, with a geometric mean cost
                of $26.63 in CY 2018 (based on CY 2016 claims), which increased by 43.4
                percent to $38.20 in CY 2019 (based on CY 2017 claims), and decreased
                by 31.8 percent to $26.04 in CY 2021 (based on CY 2019 claims).
                 As we stated in the CY 2022 OPPS/ASC proposed rule (86 FR 42181
                through 42185), we believe that APCs with low claims volume available
                for ratesetting could also benefit from a low-volume adjustment policy
                similar to the one we currently utilize to set payment rates for
                device-intensive
                [[Page 63744]]
                procedures and procedures assigned to New Technology APCs.
                Specifically, we proposed to expand the existing low volume adjustment
                policy applied to procedures assigned to New Technology APCs and
                designate clinical APCs and brachytherapy APCs with fewer than 100
                single claims that can be used for ratesetting purposes in the claims
                year used for ratesetting for the prospective year (for example, the CY
                2019 claims year for this CY 2022 OPPS/ASC proposed rule) as low volume
                APCs. For clinical and brachytherapy APCs designated as Low Volume, the
                number of claims available for ratesetting would include claims for all
                procedures assigned to such APC. Whereas, the existing low volume
                adjustment policy is applied to procedures assigned to New Technology
                APCs with fewer than 100 single claims. For APCs designated as low
                volume and for procedures assigned to New Technology APCs, we proposed
                to determine a low volume APC's cost and a low volume procedure
                assigned to a New Technology APC's cost, choosing the ``greatest of''
                the median, arithmetic mean, or geometric mean.
                 We proposed that the threshold for the low volume APC designation
                would be fewer than 100 single claims per year for the APC that can be
                used for ratesetting purposes, as this is how we have traditionally
                defined low volume under our existing policies. We have defined low
                volume as fewer than 100 single claims under our existing policies as
                there is a higher probability that payment data for a procedure with
                fewer than 100 claims per year may not have a normal statistical
                distribution, which we were concerned could affect how we set payment
                rates for low volume APCs and procedures assigned to New Technology
                APCs. For items and services assigned to clinical and brachytherapy
                APCs we proposed to designate as low volume APCs, we proposed to use up
                to 4 years of claims data to establish an APC payment rate as we
                currently do for low volume services assigned to New Technology APCs.
                The availability of multiple years of claims data will allow for more
                claims to be used for ratesetting purposes and create a more
                statistically reliable payment rate for these APCs than setting rates
                for APCs with low claims volume based on one year of data alone.
                Further, using multiple years of claims data, we proposed to use the
                greatest of the median, arithmetic mean, or geometric mean cost to
                approximate the cost of items and services assigned to a low volume
                APC. In previous years, we have received few to no public comments on
                which statistical methodology to use and have usually chosen the
                methodology that yields the highest rate to set the payment rate for
                procedures assigned to New Technology APCs. Going forward, we proposed
                to formalize this approach for low volume procedures assigned to New
                Technology APCs as well as clinical and brachytherapy APCs. We believe
                using the greatest of these three methodologies provides a simple and
                consistent approach to determining the cost metric to be used for
                ratesetting for these APCs and avoids uncertainty where multiple cost
                metrics could be used to set the APC's cost. Additionally, due to the
                payment volatility and low volume nature of these procedures, we
                believe that choosing the methodology that yields the highest rate will
                ensure that these procedures receive sufficient payment and that
                payment is not a barrier to access for these procedures.
                 Given the different nature of policies that affect the partial
                hospitalization program (PHP), we did not propose to apply this low
                volume APC policy to APC 5853 Partial Hospitalization for CMHCs or APC
                5863 Partial Hospitalization for Hospital-based PHPs. We are also not
                proposing to apply this low volume APC policy to APC 2698 (Brachytx,
                stranded, nos) or APC 2699 (Brachytx, non-stranded, nos), as we believe
                our current methodology for determining payment rates for non-specified
                brachytherapy sources, as discussed in section II.A.2.a.(2). of the CY
                2022 OPPS/ASC proposed rule (86 FR 42028 through 42029), is
                appropriate. Further, as discussed in section IV.B.5. of the CY 2022
                OPPS/ASC proposed rule (86 FR 42116), we proposed to eliminate our low
                volume Device-Intensive Procedure policy, as HCPCS code 0308T has been
                the only procedure subject to this policy, and subsume the ratesetting
                for HCPCS code 0308T within our broader low volume APC proposal.
                 For information on our proposed low volume APC designations, see
                Table 36 of the CY 2022 OPPS/ASC proposed rule (86 FR 42184).
                 Comment: Many commenters supported our proposal. Commenters stated
                that the policy would provide a more accurate calculation of cost, help
                mitigate year-to-year payment fluctuations, and create better
                predictability in Medicare revenue for hospitals providing these low-
                volume procedures. One commenter recommended that New Technology C-
                codes with fewer than 100 claims be eligible for such adjustment.
                Another commenter recommended that the threshold for Brachytherapy APCs
                be increased to fewer than 500 claims.
                 Response: We thank the commenters for their support of our
                proposal. We are not accepting the recommendation to apply our low-
                volume adjustment to New Technology C-codes with fewer than 100 claims
                that are not assigned to New Technology APCs. New Technology C-codes
                are established to describe procedures that utilize emerging
                technologies that cannot be adequately described by existing CPT/HCPCS
                codes. We have routinely assigned such procedures to clinical APCs due
                to resource and clinical similarity of existing technologies described
                by other CPT/HCPCS codes and we are not convinced that we should
                utilize a unique ratesetting process for New Technology C-codes with
                fewer than 100 claims assigned to clinical APCs. We note that we assign
                new codes to New Technology APCs only if the service cannot be placed
                in any of the existing clinical APCs based on clinical similarity and
                resource homogeneity. Further, we believe our policy of addressing
                payment fluctuations for clinical and brachytherapy APCs due to limited
                claims data at the APC level rather than the CPT/HCPCS code level would
                more appropriately address stakeholder concerns and is more consistent
                with how our low volume policies have previously addressed limited
                claims data.
                 Additionally, we are not accepting the recommendation to modify our
                criteria and apply a low volume adjustment to brachytherapy APCs with
                fewer than 500 claims that can be used for ratesetting. As discussed
                previously, under our existing policies, we believe that our definition
                of low volume as fewer than 100 single claims per year increases the
                probability that payment data for a procedure may not have a normal
                statistical distribution. Further, we believe that applying the same
                per-year limit of fewer than 100 single claims to all brachytherapy
                APCs, clinical APCs, and procedures assigned to New Technology APCs to
                determine whether they should qualify as low volume APCs or low volume
                procedures is the most consistent and equitable approach.
                 After considering the public comments we received, we are
                finalizing our proposal without modification to designate clinical and
                brachytherapy APCs as low volume APCs if the APC has fewer than 100
                claims that can be used for ratesetting. We also are finalizing our
                proposal to designate procedures assigned to New Technology APCs as low
                volume
                [[Page 63745]]
                procedures if there are fewer than 100 claims for the procedure that
                can be used for ratesetting for the year. We are also finalizing our
                low volume APC payment adjustment to determine the APC cost (or
                procedure cost in the case of a low volume procedure assigned to a New
                Technology APC) as the greater of the geometric mean cost, arithmetic
                mean cost, or median cost based on up to 4 years of claims data. For a
                discussion of the low volume adjustment as it applies to certain
                procedures assigned to New Technology APCs, see section III.C. of this
                final rule with comment period.
                 In the CY 2022 OPPS/ASC proposed rule (86 FR 42181 through 42185),
                we proposed to designate three clinical APCs and five brachytherapy
                APCs as low volume APCs. After reviewing updated CY 2019 claims data
                available for this final rule, APC 5881 (Ancillary Outpatient Services
                When Patient Dies) had 99 single claims available for CY 2022
                ratesetting purposes. Therefore, with the addition of APC 5881, we are
                finalizing our proposal, with modification, to designate four clinical
                APCs and five brachytherapy APCs as low volume APCs under the OPPS. The
                four clinical APCs and five brachytherapy APCs meet our criteria of
                having fewer than 100 single claims in the claims year (CY 2019 for the
                CY 2022 OPPS/ASC final rule with comment period) and therefore, we are
                finalizing our proposal, with modification, to designate these APCs as
                low volume APCs. Table 49 illustrates the APC geometric mean cost
                without the low volume APC designation, the median, arithmetic mean,
                and geometric mean cost using up to four years of claims data, as well
                as the statistical methodology we are finalizing to use as the APC's
                cost for ratesetting purposes for CY 2022. As discussed in section X.E
                of this final rule with comment period, given our concerns with CY 2020
                claims data as a result of the PHE, the 4 years of claims data are
                based on CY 2016 claims through CY 2019 claims.
                BILLING CODE 4120-01-P
                [[Page 63746]]
                [GRAPHIC] [TIFF OMITTED] TR16NO21.129
                 Additionally, for this final rule, based on the number of CY 2019
                available claims from the standard ratesetting methodology used for ASC
                ratesetting purposes in this final rule, for CY 2022, under the ASC
                payment system, we are also finalizing our proposal to designate the
                APCs in Table 50 as low volume APCs that meet our criteria of having
                fewer than 100 single claims in the claims year (CY 2019 for the CY
                2022 OPPS/ASC proposed rule) and are subject to our new low volume APC
                payment adjustment under the ASC payment system. Specifically, we are
                designating five brachytherapy APCs and four clinical APCs as low
                volume APCs for CY 2022. These are the same brachytherapy APCs we are
                finalizing as low volume APCs under the OPPS. We are also designating
                APC 5244, APC 5494, and APC 5495, which are finalizing as low volume
                under the OPPS, as low volume under the ASC payment system.
                Additionally, APC 5493--Level 3 Intraocular Procedures meets our
                criteria to be designated a low volume APC under the ASC payment system
                for CY 2022. The payment rates for these APCs are established at the
                highest amount among the geometric mean, median, or arithmetic mean,
                calculated using up to four years of data, which, in the case of these
                APCs, are claims data from 2016 through 2019, based on the standard
                ratesetting methodology. However, as discussed in section XIII.D.1.d of
                this final rule with comment period, we are finalizing our proposal to
                limit the ASC payment rate for procedures assigned to low volume APCs
                at an amount no greater than the procedure's OPPS payment rate.
                [[Page 63747]]
                [GRAPHIC] [TIFF OMITTED] TR16NO21.130
                BILLING CODE 4120-01-C
                D. Comment Solicitation on Temporary Policies To Address the COVID-19
                PHE
                 In response to the COVID-19 pandemic, CMS issued waivers and
                undertook emergency rulemaking to implement a number of temporary
                policies to address the pandemic, including policies to prevent spread
                of the infection and support diagnosis of COVID-19. Many of these
                flexibilities were available because certain statutory or regulatory
                provisions were waived. These waivers will expire at the conclusion of
                the PHE. In the CY 2022 OPPS/ASC proposed rule (86 FR 42185) we sought
                comment on the extent to which stakeholders utilized the flexibilities
                available under these waivers, as well as whether stakeholders believe
                certain of these temporary policies should be made permanent to the
                extent possible within our existing authority. Specifically, we sought
                comment on stakeholders' experience with hospital staff furnishing
                services remotely to beneficiaries in their homes through use of
                communications technology; providers furnishing services in which the
                direct supervision
                [[Page 63748]]
                for cardiac rehabilitation, intensive cardiac rehabilitation, and
                pulmonary rehabilitation services requirement was met by the
                supervising practitioner being available through audio/video real-time
                communications technology; and the need for specific coding and payment
                to remain available under the OPPS for specimen collection for COVID-
                19.
                1. Mental Health Services Furnished Remotely by Hospital Staff To
                Beneficiaries in Their Homes
                 Under the Physician Fee Schedule (PFS), Medicare makes payment to
                professionals and other suppliers for physicians' services, including
                certain diagnostic tests and preventive services. Section 1834(m) of
                the Act specifies the payment amounts and circumstances under which
                Medicare makes payment for a discrete set of Medicare telehealth
                services, all of which must ordinarily be furnished in-person, when
                they are instead furnished using interactive, real-time
                telecommunications technology. When furnished as Medicare telehealth
                services under section 1834(m) of the Act, many of these services are
                still reported using codes that describe ``face-to-face'' services even
                though they are furnished using audio/video, real-time communications
                technology instead of in-person (82 FR 53006). Section 1834(m) of the
                Act specifies the types of health care professionals that can furnish
                and be paid by Medicare for telehealth services (referred to as distant
                site practitioners) and the types and locations of settings where a
                beneficiary can be located when receiving telehealth services (referred
                to as originating sites). In the CY 2003 PFS final rule with comment
                period (67 FR 79988), we established a regulatory process for adding
                services to or deleting services from the Medicare telehealth services
                list in accordance with section 1834(m)(4)(F)(ii) of the Act (42 CFR
                410.78(f)). This process provides the public with an ongoing
                opportunity to submit requests for adding services, which we consider
                and review through the annual PFS rulemaking process. The regulation at
                Sec. 410.78(a)(3) also defines the requirements for the interactive
                telecommunications systems that may be used to furnish Medicare
                telehealth services.
                 Due to the circumstances of the COVID-19 pandemic, particularly the
                need to maintain physical distance to avoid exposure to the virus, we
                anticipated that health care practitioners would develop new approaches
                to providing care using various forms of technology when they are not
                physically present with the patient. We have established several
                flexibilities to accommodate these changes in the delivery of care. For
                Medicare telehealth services, using waiver authority under section
                1135(b)(8) of the Act in response to the PHE for the COVID-19 pandemic,
                we have removed the geographic and site of service originating site
                restrictions in section 1834(m)(4)(C) of the Act, as well as the
                restrictions in section 1834(m)(4)(E) of the Act on the types of
                practitioners who may furnish telehealth services, for the duration of
                the PHE for the COVID-19 pandemic. We also used waiver authority to
                allow certain telehealth services to be furnished via audio-only
                communication technology during the PHE.
                 According to MedPAC's report, Telehealth in Medicare after the
                Coronavirus Public Health Emergency,\192\ there were 8.4 million
                telehealth services paid under the PFS in April 2020, compared with
                102,000 in February 2020. MedPAC also reported that during focus groups
                held in the summer of 2020, clinicians and beneficiaries supported
                continued access to telehealth visits with some combination of in-
                person visits. They cited benefits of telehealth, including improved
                access to care for those with physical impairments, increased
                convenience from not traveling to an office, and increased access to
                specialists outside of a local area. In their annual beneficiary
                survey, over 90 percent of respondents who had a telehealth visit
                reported being ``somewhat'' or ``very satisfied'' with their video or
                audio visit, and nearly two-thirds reported being ``very satisfied.''
                ---------------------------------------------------------------------------
                 \192\ http://medpac.gov/docs/default-source/reports/mar21_medpac_report_ch14_sec.pdf?sfvrsn=0.
                ---------------------------------------------------------------------------
                 Division CC, section 123 of the CAA modified the circumstances
                under which Medicare makes payment for mental health services furnished
                via telehealth technology under the PFS following the PHE.
                Specifically, this legislation removed the geographic originating site
                restrictions and added the home of the individual as a permissible
                originating site for Medicare telehealth services when furnished for
                the purposes of diagnosis, evaluation, or treatment of a mental health
                disorder.\193\ This change correlates with a growing acceptance of the
                use of technology in the provision of mental health care. According to
                the Commonwealth Fund,\194\ the provision of mental and behavioral
                health services via communications technology, in particular, has a
                robust evidence base and numerous studies have demonstrated its
                effectiveness across a range of modalities and mental health diagnoses
                (for example, depression, substance use disorders). Clinicians
                furnishing tele-psychiatry services at Massachusetts General Hospital
                Department of Psychiatry during the PHE observed several advantages of
                the virtual format for furnishing psychiatric services, noting that
                patients with psychiatric pathologies that interfere with their ability
                to leave home (for example, immobilizing depression, anxiety,
                agoraphobia, and/or time-consuming obsessive-compulsive rituals) were
                able to access care more consistently since eliminating the need to
                travel to a psychiatry clinic can increase privacy and therefore
                decrease stigma-related barriers to treatment, potentially bringing
                care to many more patients in need, as well as enhanced ease of
                scheduling, decreased rate of no-shows, increased understanding of
                family and home dynamics, and protection for patients and practitioners
                with underlying health conditions.\195\
                ---------------------------------------------------------------------------
                 \193\ There is a longstanding statutory payment exclusion that
                prohibits Medicare payment for services that are not furnished
                within the United States (see section 1862(a)(4) of the Act). This
                payment exclusion was not changed by the CAA.
                 \194\ https://www.commonwealthfund.org/blog/2020/using-telehealth-meet-mental-health-needs-during-covid-19-crisis.
                 \195\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7347331/.
                ---------------------------------------------------------------------------
                 These findings are consistent with our analysis of Medicare claims
                data that indicate that interactive communications technology for
                mental health care is likely to continue to be in broad use beyond the
                circumstances of the pandemic. According to our analysis of Medicare
                Part B claims data for services furnished via Medicare telehealth
                during the PHE, use of telehealth for many professional services spiked
                in utilization around April 2020 and diminished over time. In contrast,
                Medicare claims data suggest that for mental health services added to
                the Medicare Telehealth list both permanently and temporarily,
                subsequent to April 2020, the trend is toward maintaining a steady
                state of usage over time. Given this information, broad acceptance in
                the public and medical community, and the relatively stable Medicare
                utilization of mental health services during the COVID-19 pandemic, we
                believe use of interactive communication technology in furnishing
                mental health care is becoming an established part of medical practice,
                very likely to persist after the COVID-19 pandemic, and available
                [[Page 63749]]
                across the country under the Medicare statute for the range of
                professionals furnishing mental health care and paid under the PFS.
                 In many cases, hospitals provide hospital outpatient mental health
                services (including behavioral health), education, and training
                services that are furnished by hospital-employed counselors or other
                licensed professionals. Examples of these services include
                psychoanalysis, psychotherapy, diabetes self-management training, and
                medical nutrition therapy. With few exceptions, the Medicare statute
                does not have a benefit category that would allow these types of
                professionals (for example, mental health counselors and registered
                nurses) to bill Medicare directly for their services. These services
                can, in many cases, be billed by providers such as hospitals under the
                OPPS or by physicians and other practitioners as services incident to
                their professional services under the PFS. We also note that while
                partial hospitalization services are paid under the OPPS, section
                1861(ff)(3)(A) of the Act explicitly prohibits partial hospitalization
                services from being furnished in an individual's home or residential
                setting.
                 As we explained in the interim final rule with comment period
                published on May 8, 2020 in the Federal Register titled ``Additional
                Policy and Regulatory Revisions in Response to the COVID-19 Public
                Health Emergency and Delay of Certain Reporting Requirements for the
                Skilled Nursing Facility Quality Reporting Program'' (the May 8th
                COVID-19 IFC) (85 FR 27550, 27563), outpatient mental health services,
                education, and training services require communication and interaction.
                We stated that facility staff can effectively furnish these services
                using telecommunication technology and, unlike many hospital services,
                the clinical staff and patient are not required to be in the same
                location to furnish them. We further explained that blanket waivers in
                effect during the COVID-19 PHE allow the hospital to consider the
                beneficiary's home, and any other temporary expansion location operated
                by the hospital during the COVID-19 PHE, to be a provider-based
                department (PBD) of the hospital, so long as the hospital can ensure
                the locations meet all of the conditions of participation, to the
                extent not waived. In light of the need for infection control and a
                desire for continuity of behavioral health care and treatment services,
                we recognized the ability of the hospital's clinical staff to continue
                to deliver these services even when they are not physically located in
                the hospital. Therefore, in the May 8th COVID-19 IFC (85 FR 27564), we
                made clear that when a hospital's clinical staff are furnishing
                hospital outpatient mental health services, education, and training
                services to a patient in the hospital (which can include the patient's
                home so long as it is provider-based to the hospital), and the patient
                is registered as an outpatient of the hospital, we will consider the
                requirements of the regulations at Sec. 410.27(a)(1) to be met. We
                reminded readers that the physician supervision level for the vast
                majority of hospital outpatient therapeutic services is currently
                general supervision under Sec. 410.27. This means a service must be
                furnished under the physician's overall direction and control, but the
                physician's presence is not required during the performance of the
                service.
                 In the May 8th COVID-19 IFC, we emphasized that all services
                furnished by the hospital still require an order by a physician or
                qualified NPP and must be supervised by a physician or other NPP
                appropriate for supervising the service given their hospital admitting
                privileges, state licensing, and scope of practice, consistent with the
                requirements in Sec. 410.27 (85 FR 27563). We noted that hospitals may
                bill for these services as if they were furnished in the hospital and
                consistent with any specific requirements for billing Medicare in
                general, including any relevant modifications in effect during the
                COVID-19 PHE. We also noted that when these services are provided by
                clinical staff of the physician or other practitioner and furnished
                incident to their professional services, and are not provided by staff
                of the hospital, the hospital would not bill for the services. We
                stated that in those circumstances, the physician or other practitioner
                should bill for such services incident to their own services and would
                be paid under the PFS.
                 Given that the widespread use of communications technology to
                furnish services during the PHE has illustrated acceptance within the
                medical community and among Medicare beneficiaries of the possibility
                of furnishing and receiving care through the use of that technology, we
                stated that we were interested in information on the role of hospital
                staff in providing care to beneficiaries remotely in their homes.
                During the PHE, hospital staff have had the flexibility to provide
                these kinds of services to beneficiaries in their homes through
                communications technology; however, this flexibility is tied to waivers
                and other temporary policies that expire at the end of the PHE. In
                instances where a beneficiary may be receiving mental health services
                from a hospital clinical staff member who cannot bill Medicare
                independently for their professional service, the beneficiary would
                then need to physically travel to the hospital to continue receiving
                the services post-PHE. We stated that we were concerned that this could
                have a negative impact on access to care in areas where beneficiaries
                may only be able to access mental health services provided by hospital
                staff and, during the PHE, have become accustomed to receiving these
                services in their homes. We also noted that the ability to receive
                mental health services in their homes may help expand access to care
                for beneficiaries who prefer additional privacy for the treatment of
                their condition.
                 We stated that we were concerned that, during the PHE, practice
                patterns may have shifted to support expanded virtual services. During
                the PHE, we have not required any claims-based modifier identifying
                specifically when a service is furnished by clinical staff of the
                hospital to a beneficiary in their home through communications
                technology, and therefore we are not able to gauge the magnitude of
                these practice pattern shifts. Therefore, we sought comment on the
                extent to which hospitals have been billing for mental health services
                provided to beneficiaries in their homes through communications
                technology during the PHE, and whether they would anticipate continuing
                demand for this model of care following the conclusion of the PHE. As
                described in preceding paragraphs, billing for Medicare telehealth
                services has increased dramatically during the PHE, particularly for
                mental health services. We sought comment on whether hospitals have
                experienced a similar increase during the PHE in utilization of mental
                health services provided by hospital staff to beneficiaries in their
                homes through communications technology. We also sought comment on
                whether there are changes commenters believe CMS should make to account
                for shifting patterns of practice that rely on communication technology
                to provide mental health services to beneficiaries in their homes.
                 Comment: Commenters expressed support for continuing OPPS payment
                for mental health services furnished to beneficiaries in their homes by
                clinical staff of the hospital through the use of communication
                technology as a permanent policy post-PHE, stating that the expansion
                of virtual care broadly during the PHE has been instrumental in
                maintaining and expanding access to mental health services during the
                PHE
                [[Page 63750]]
                while keeping beneficiaries in their homes and reducing exposure to
                COVID. A few commenters requested that CMS continue to allow for the
                beneficiary's home to be reclassified as a PBD post-PHE, while other
                commenters stated that CMS should ensure that facility-based providers
                are adequately reimbursed for their services when furnished remotely. A
                few commenters encouraged CMS to ensure that there are relevant quality
                and safety measures for services furnished by hospital staff through
                communication technology.
                 Additionally, several commenters expressed support for the
                flexibilities allowing PHP services to be furnished to beneficiaries in
                their homes via telecommunication technology during the COVID-19 PHE,
                and encouraged CMS to maintain these flexibilities beyond the PHE or
                consider making these temporary policies permanent. Commenters
                expressed that these flexibilities, especially those allowing the use
                of audio-only telecommunication technology, increase access to vital
                mental health services amidst a persistent shortage of health care
                professionals and allow much greater and timelier access to mental
                health services, especially in rural areas and for vulnerable
                populations, while also helping drive reductions in the rates at which
                patients missed appointments. Commenters also shared research and
                analysis supporting the effectiveness of providing PHP services using
                telecommunication technology. One academic health center discussed
                outcomes analysis it conducted of its PHP services and noted that its
                analysis did not show a decrement in clinical care for patients who
                received only virtual PHP services. A national association of
                behavioral healthcare systems shared research showing that the main
                differences between patients who participated in PHPs via
                telecommunication technology and those who attended in-person was that
                those who participated via telecommunication technology had greater
                lengths of stay and were more likely to stay in treatment until
                completed.\196\
                ---------------------------------------------------------------------------
                 \196\ https://www.psychiatrist.com/jcp/covid-19/telehealth-treatment-patients-intensive-acute-care-psychiatric-setting-during-covid-19/.
                ---------------------------------------------------------------------------
                 Response: We thank commenters for their support. We will consider
                these comments for future rulemaking and, in addition, will continue to
                explore how hospital payment for virtual services could support access
                to care in underserved and/or rural areas.
                2. Direct Supervision by Interactive Communications Technology
                 In the interim final rule with comment period titled ``Policy and
                Regulatory Provisions in Response to the COVID-19 Public Health
                Emergency'' published on April 6, 2020 (the April 6th COVID-19 IFC) (85
                FR 19230, 19246, 19286), we changed the regulation at 42 CFR
                410.27(a)(1)(iv)(D) to provide that, during a Public Health Emergency
                as defined in Sec. 400.200, the presence of the physician for purposes
                of the direct supervision requirement for pulmonary rehabilitation,
                cardiac rehabilitation, and intensive cardiac rehabilitation services
                includes virtual presence through audio/video real-time communications
                technology when use of such technology is indicated to reduce exposure
                risks for the beneficiary or practitioner. Specifically, the required
                direct physician supervision can be provided through virtual presence
                using audio/video real-time communications technology (excluding audio-
                only) subject to the clinical judgment of the supervising practitioner.
                We further amended Sec. 410.27(a)(1)(iv)(D) in the CY 2021 OPPS/ASC
                final rule with comment period to provide that this flexibility
                continues until the end of the PHE as defined in Sec. 400.200 or
                December 31, 2021, whichever is later (85 FR 86113). We noted that the
                public comments we received, along with feedback we have received since
                the implementation of the policy in the April 6th COVID-19 IFC allowing
                for direct supervision through virtual presence (85 FR 19246) have
                convinced us that we need more information on the issues involved with
                direct supervision through virtual presence before implementing this
                policy permanently. We acknowledged that the additional time between
                the issuance of the CY 2021 OPPS/ASC final rule with comment period and
                the issuance of the CY 2022 OPPS/ASC proposed rule may have allowed
                providers to collect more information that could inform CMS' decision
                making and therefore sought additional comment on whether this policy
                should be adopted on a permanent basis. While we did not propose to
                maintain this flexibility after the later of the end of the PHE or
                December 31, 2021, we did seek comment on whether and to what extent
                hospitals have relied upon this flexibility during the PHE and whether
                providers expect this flexibility would be beneficial outside of the
                PHE. We sought comment on whether we should continue to allow direct
                supervision for these services to include presence of the supervising
                practitioner via two-way, audio/video communication technology
                permanently, or for some period of time after the conclusion of the PHE
                or beyond December 31, 2021, to facilitate a gradual sunset of the
                policy. We also sought comment on whether there are safety and/or
                quality of care concerns regarding adopting this policy beyond the PHE
                and what policies CMS could adopt to address those concerns if the
                policy were extended post-PHE. Finally, if this policy were made
                permanent, we sought comment on whether a service-level modifier should
                be required to identify when the requirements for direct supervision
                for pulmonary rehabilitation, cardiac rehabilitation, and intensive
                cardiac rehabilitation services were met using audio/video real-time
                communications technology.
                 Comment: Commenters supported the adoption of the definition of
                direct supervision for cardiac rehabilitation and pulmonary
                rehabilitation, and intensive cardiac rehabilitation services to
                include presence of the supervising practitioner via two-way, audio/
                video communication technology on a permanent basis, or, if CMS did not
                wish to adopt this policy permanently, commenters encouraged CMS to
                maintain it for a period of time following the conclusion of the PHE,
                such as until the end of 2022. Most commenters supported development of
                a service-level modifier, stating that this requirement will allow CMS
                to track and collect data, although a few commenters stated that
                requiring a service-level modifier would be unnecessary and create
                additional burden on providers.
                 Response: We appreciate commenters' input on this policy and will
                consider these comments for future rulemaking.
                3. Payment for COVID-19 Specimen Collection in Hospital Outpatient
                Departments
                 Also in the May 8th COVID-19 IFC, we created a new E/M code to
                support COVID-19 testing during the PHE: HCPCS code C9803 (Hospital
                outpatient clinic visit specimen collection for severe acute
                respiratory syndrome coronavirus 2 (sars-cov-2) (coronavirus disease
                [covid-19]), any specimen source) (85 FR 27604). In our review of
                available HCPCS and CPT codes for the May 8th COVID-19 IFC, we did not
                identify a code that explicitly described the exact services of symptom
                assessment and specimen collection that HOPDs were undertaking to
                facilitate widespread testing for COVID-19. As stated in the May 8th
                COVID-19 IFC, we believed that HCPCS code C9803 was necessary to meet
                the resource requirements for HOPDs to provide
                [[Page 63751]]
                extensive testing for the duration of the COVID-19 PHE. This code was
                created only to meet the need of the COVID-19 PHE and we stated that we
                expected to retire this code at the conclusion of the COVID-19 PHE (85
                FR 27605).
                 We assigned HCPCS code C9803 to APC 5731--Level 1 Minor Procedures
                effective March 1, 2020 for the duration of the COVID-19 PHE in
                accordance with section 1833(t)(2)(B) of the Act, which requires
                services classified in an APC to be comparable clinically and in terms
                of resource use. APC 5731--Level 1 Minor Procedures contains services
                similar to HCPCS code C9803 and has a payment rate of $24.67 for CY
                2021. HCPCS code C9803 was also assigned a status indicator of ``Q1.''
                The Q1 status indicator indicates that the OPPS will package services
                billed under HCPCS code C9803 when billed with a separately payable
                primary service in the same encounter. When HCPCS code C9803 is billed
                without another separately payable primary service, we will make
                separate payment for the service under the OPPS. The OPPS also makes
                separate payment for HCPCS code C9803 when it is billed with a clinical
                diagnostic laboratory test with a status indicator of ``A'' in OPPS
                Addendum B.
                 In the CY 2022 OPPS/ASC proposed rule we solicited public comments
                on whether we should keep HCPCS code C9803 active beyond the conclusion
                of the COVID-19 PHE and whether we should extend or make permanent the
                OPPS payment associated with specimen collection for COVID-19 tests
                after the COVID-19 PHE ends, including why commenters believe it would
                be necessary to continue to provide OPPS payment for this service, as
                well as how long commenters believe payment should be extended for this
                code.
                 Comment: Commenters expressed appreciation for CMS' response to the
                pandemic, including the creation of HCPCS code C9803. One commenter
                noted that this code has had a positive impact on the delivery of care
                during the COVID-19 PHE. We received several comments in support of
                maintaining OPPS payment for HCPCS code C9803 beyond the conclusion of
                the COVID-19 PHE, with many commenters in support of making payment for
                this code permanent. Commenters cited concerns regarding the
                continuation of COVID-19 cases after the conclusion of the COVID-19 PHE
                and stressed the importance of continued testing in order to track and
                control COVID-19 cases. Multiple commenters also requested that CMS
                continue to pay for HCPCS code C9803 due to concerns regarding the
                unknown future role COVID-19 will play in our lives and potential
                increases in cases and new mutations of the virus. One commenter also
                requested that CMS continue payment for HCPCS code C9803 and reevaluate
                retiring this code when claims volume becomes low.
                 One commenter also requested that if CMS were to retire HCPCS code
                C9803, that we provide significant notice and resources to healthcare
                providers to prevent disruptions in the delivery of care.
                 Response: We appreciate the comments regarding payment for COVID-19
                specimen collection in hospital-based outpatient departments (HOPDs).
                We plan to take this feedback into consideration for possible future
                rulemaking.
                E. Use of CY 2019 Claims Data for CY 2022 OPPS and ASC Payment System
                Ratesetting Due to the PHE
                 As described in section I.A. of the CY 2022 OPPS/ASC proposed rule
                (86 FR 42020), section 1833(t) of the Act requires the Secretary to
                annually review and update the payment rates for services payable under
                the Hospital OPPS. Specifically, section 1833(t)(9)(A) of the Act
                requires the Secretary to review not less often than annually and to
                revise the groups, the relative payment weights, and the wage and other
                adjustments described in paragraph (2) of the Act to take into account
                changes in medical practice, changes in technology, the addition of new
                services, new cost data, and other relevant information and factors.
                 In updating the OPPS payment rates and system for each rulemaking
                cycle we primarily use two sources of information: The outpatient
                Medicare claims data and HCRIS cost report data. The claims data source
                is the Outpatient Standard Analytic File, which includes final action
                Medicare outpatient claims for services furnished in a given calendar
                year. For the OPPS ratesetting process, our goal is to use the best
                available data for ratesetting so that we can accurately estimate the
                costs associated with furnishing outpatient services, and thus set
                appropriate payment rates. Ordinarily, the best available claims data
                is the set of data from 2 years prior to the calendar year that is the
                subject of rulemaking. For the CY 2022 OPPS/ASC proposed rule
                ratesetting, this typically would have been the set of CY 2020 calendar
                year outpatient claims data processed through December 31, 2020. The
                cost report data source is typically the Medicare hospital cost report
                data files from the most recently available quarterly HCRIS file as we
                begin the ratesetting process. For example, ordinarily, the best
                available cost report data used in developing the OPPS relative weights
                would be from cost reports beginning 3-fiscal years prior to the year
                that is the subject of the rulemaking. For CY 2022 OPPS ratesetting,
                under ordinary circumstances, that would be cost report data from HCRIS
                extracted in December 2020, which would contain many cost reports
                ending in FY 2020 based on each hospital's cost reporting period.
                 As discussed in section I.F. of the FY 2022 IPPS/LTCH proposed rule
                and in the CY 2022 OPPS proposed rule, there are a number of issues
                related to the use of the standard hospital data we would otherwise use
                for purposes of CY 2022 ratesetting because data from the applicable
                time period would include the effects of the COVID-19 PHE (86 FR 25086
                through 25090). Even though the specific data elements might be
                slightly different between the inpatient and outpatient hospital
                settings, the same questions and challenges exist for hospital data
                from CY/FY 2020. Some of the issues are focused on the source data and
                the degree to which the utilization of services and cost patterns found
                in them are affected by the PHE. Other issues are more prospective in
                nature and concern whether hospital claims data from this time period
                might be consistent with our expectations for the prospective year,
                particularly in a changing environment with regards to COVID-19
                vaccinations and treatment.
                 In the FY 2022 IPPS proposed rule, we proposed to use FY 2019 data
                for FY 2022 IPPS ratesetting based on our determination that the FY
                2019 data would be more representative of FY 2022 inpatient hospital
                experience than the FY 2020 data (86 FR 25089). In section X.E. of the
                CY 2022 OPPS/ASC proposed rule (86 FR 42188 through 42190) we noted
                that there are a number of policies that apply and interact across the
                IPPS and OPPS, in part because they both concern services furnished in
                the hospital setting. We also discussed how we have previously noted in
                annual rulemaking, in regards to adopting the fiscal year IPPS wage
                index into the OPPS, the ``inseparable, subordinate status of the HOPD
                within the hospital overall'' (85 FR 85908). It is in this context
                where inpatient and outpatient hospital departments are inherently
                connected to each other, as parts of the broader hospital setting
                overall, we identified many of the same reasons to propose to use 2019
                data for 2022 ratesetting as discussed in the FY 2022 IPPS proposed
                rule.
                 In section X.E. of the CY 2022 OPPS/ASC proposed rule (86 FR 42188
                through 42190) we also noted that we
                [[Page 63752]]
                observed a number of changes, likely as a result of the PHE, in the CY
                2020 OPPS claims data that we would ordinarily use for ratesetting. The
                most significant difference compared to prior years is the decrease in
                the overall volume of outpatient hospital claims--with approximately 20
                percent fewer claims usable for ratesetting purposes when compared to
                the prior year. In addition, this decrease in outpatient claims volume
                applied to a majority of the clinical APCs in the OPPS.
                 In some cases, we saw broad changes as a result of the PHE,
                including in the APCs for hospital emergency department and clinic
                visits. Among those APCs, the decrease in volume was approximately 30
                percent--some of which may be related to changing practice patterns
                during the PHE. For example, we saw a significant increase in the use
                of the HCPCS code Q3014 (Telehealth originating site facility fee) in
                the hospital outpatient claims, with the approximately 35,000 services
                billed in the CY 2019 OPPS claims increasing to 1.8 million services in
                the CY 2020 OPPS claims. This example highlights two types of
                differences we see in the CY 2020 set of claims when comparing it to
                more typical claims data. One difference is likely due to the degree to
                which elective procedures/services were not performed as often during
                the PHE. The other difference is the result of site of service changes
                due to flexibilities available during the PHE.
                 In other cases, we saw changes in the claims data that were
                associated with specific services that were furnished more frequently
                during the PHE. For example, two notable exceptions to this decrease in
                claims volume between CY 2019 and CY 2020 are for APC 5731 (Level 1
                Minor Procedures) and APC 5801 (Ventilation Initiation and Management).
                In the case of APC 5731, HCPCS code C9803 was made effective for
                services furnished on or after March 1, 2020 through the interim final
                rule with comment period titled ``Additional Policy and Regulatory
                Revisions in Response to the COVID-19 Public Health Emergency and Delay
                of Certain Reporting Requirements for the Skilled Nursing Facility
                Quality Reporting Program'' (85 FR 27602 through 27605) to describe
                COVID-19 specimen collection. In the CY 2020 claims, HCPCS C9803 has
                1,023,957 single claims available for cost modeling, representing
                approximately 93 percent of claims used to model the APC cost. While in
                some cases this would be appropriate in establishing the APC cost, we
                generally would not expect the same volume of the procedure in the CY
                2022 OPPS because we anticipate that specimen collection for COVID-19
                testing may be significantly lower than it was in CY 2020. Similarly,
                the estimated increase in the geometric mean cost of APC 5801 based on
                the CY 2020 claims data may not be predictive of CY 2022 costs for APC
                5801 if there is less use of this service in CY 2022 than in CY 2020.
                 As a result of a number of COVID-19 PHE-related factors, including
                the changes in services potentially related to the COVID-19 PHE, the
                significant decrease in volume suggesting that patients may have been
                deferring elective care during CY 2020, the changes in APC relative
                weights for services, and the increasing number of Medicare
                beneficiaries vaccinated against COVID-19, we believed that CY 2020
                data were not the best overall approximation of expected outpatient
                hospital services in CY 2022. Instead we believed that CY 2019 data, as
                the most recent complete calendar year of data prior to the COVID-19
                PHE, were a better approximation of expected CY 2022 hospital
                outpatient services.
                 In the CY 2022 OPPS/ASC proposed rule, we also analyzed the extent
                to which the decision to use CY 2019 or CY 2020 claims data as the
                basis for ratesetting differentially impacts the CY 2022 OPPS rates. To
                do this, we estimated the difference in case-mix under the CY 2019-
                based weights and the CY 2020-based weights if the CY 2022 outpatient
                experience ended up being the reverse of the assumption made when
                calculating that set of relative weights. In other words, we compared
                estimated case-mix calculated under four different scenarios. For the
                CY 2019-based weights, we calculated the case-mix using claims from the
                CY 2019-based claims extract as an approximation of the actual CY 2022
                experience (Scenario A), and using claims from the CY 2020 based claims
                extract as an approximation of the actual CY 2022 experience (Scenario
                B). For the CY 2020-based weights, we calculated the case-mix using
                claims from the CY 2020 claims based extract as an approximation of the
                actual CY 2022 outpatient experience (Scenario C), and using claims
                from the CY 2019 claims based extract as an approximation of the actual
                CY 2022 experience (Scenario D). The results are shown in the following
                Table 51.
                [GRAPHIC] [TIFF OMITTED] TR16NO21.131
                 In Scenario A and Scenario C, there is no differential impact as a
                result of a less accurate assumption made when the OPPS relative
                weights were calculated: The CY 2022 outpatient experience matches the
                assumption made when the OPPS relative weights were calculated. In
                Scenario B and Scenario D, the actual experience is the reverse of the
                assumption used when the OPPS relative weights were calculated.
                 In Scenario B, when the CY 2019-based weights were used, but the CY
                2022 outpatient experience turns out to be more similar to CY 2020
                claims data, the less accurate assumption slightly affects the
                calculated case-mix, by 0.1 percent. This can be seen by comparing the
                modeled case mix under Scenario B (5.056) with the modeled case-mix
                under Scenario C (5.051). In other words, if we use the CY 2019-based
                weights and CY 2022 outpatient
                [[Page 63753]]
                experience turns out to be more similar to the CY 2020 data, then the
                modeled case-mix is slightly lower than if we had accurately used the
                CY 2020-based weights. This suggests that, while there is some impact
                from using the CY 2019 data if CY 2022 outpatient service utilization
                ends up being more similar to CY 2020 utilization, that impact would be
                limited.
                 In Scenario D, where the CY 2020-based weights were used, but the
                CY 2022 outpatient experience turns out to be more similar to CY 2019
                claims data, this inaccurate assumption has a somewhat more significant
                effect. In this case, the modeled case-mix is -0.44 percent lower than
                it would be if we had correctly assumed that CY 2022 outpatient
                services utilization would be more like CY 2019 than CY 2020. This can
                be seen by comparing the modeled case-mix under Scenario D (4.600) to
                the modeled case-mix under Scenario A (4.620). In other words, if we
                use the CY 2020-based weights and the CY 2022 outpatient experience
                turns out to be more similar to CY 2019 data, the modeled case-mix is -
                0.44 percent lower than if we had used the CY 2019-based weights.
                 In addition to our expectation that CY 2019 is a more likely
                approximation of the CY 2022 outpatient experience for the reasons
                discussed earlier, the previous analysis indicates that the
                differential effect of making an incorrect assumption about which
                year's data to use to set the CY 2022 OPPS relative weights is more
                limited if the CY 2019-based weights are used than it is if the CY
                2020-based weights are used. While CY 2022 outpatient hospital services
                data is unlikely to look exactly like either CY 2019 data or CY 2020
                data, we believe that it will be more similar to a standard year (not
                having the effects of the PHE) as pandemic-related issues decline and
                more of the U.S. population is vaccinated against COVID-19.
                 Consistent with the proposal to use CY 2019 claims data in
                establishing the CY 2022 OPPS rates, we also proposed to use cost
                report data from the same set of cost reports we originally used in
                final rule 2021 OPPS ratesetting, where we ordinarily would have used
                the most updated available cost reports available in HCRIS in
                determining the proposed CY 2022 OPPS APC relative weights (as
                discussed in greater detail in section II.E. of the CY 2022 OPPS/ASC
                proposed rule (86 FR 42053)). As discussed previously, if we were to
                proceed with the standard ratesetting process of using updated cost
                reports, we would have used approximately 1,000 cost reports with the
                fiscal year ending in CY 2020 based on each hospital's cost reporting
                period. We note that Medicare outpatient claims data and cost report
                data from the HCRIS file are examples of data sources for which we
                discussed the proposed use of CY 2019 data for CY 2022 OPPS
                ratesetting. While we are generally using CY 2019 claims data and the
                data components related to it in establishing the CY 2022 OPPS, we
                noted in the CY 2022 OPPS/ASC proposed rule the specific cases where we
                used updated information, such as the ASP data used in determining drug
                packaging status discussed in section V. of the CY 2022 OPPS/ASC
                proposed rule (86 FR 42116).
                 We also considered the alternative of continuing with our standard
                process of using the most updated claims and cost report data
                available. To facilitate comment on the alternative proposal for CY
                2022, we made available the cost statistics and addenda utilizing the
                CY 2020 data we would ordinarily have provided in conjunction with the
                CY 2022 OPPS/ASC proposed rule. We provided a file comparing the budget
                neutrality and certain other ratesetting adjustments calculated under
                our proposal with those adjustments calculated under this alternative
                approach. Finally, we made available other proposed rule supporting
                data files based on the use of the CY 2020 data that we ordinarily
                would have provided, including: The OPPS Impact File, cost statistics
                files, addenda, and budget neutrality factors. We refer the reader to
                the CMS website for the CY 2022 OPPS/ASC proposed rule for more
                information on where these supplemental files may be found.
                 We note that the CY 2022 OPPS/ASC proposed rule appeared in the
                Federal Register on August 4, 2021. In the FY 2022 IPPS/LTCH PPS final
                rule, which appeared in the August 13, 2021 issue of the Federal
                Register, CMS finalized a policy to use FY 2019 MedPAR data in FY 2022
                IPPS ratesetting (rather than FY 2020 MedPAR data) after consideration
                of public comments, the vast majority of which supported CMS's proposal
                to use the FY 2019 data for FY 2022 ratesetting for circumstances where
                the FY 2020 data is significantly impacted by the COVID-19 PHE. Similar
                to the comments received on the FY 2022 IPPS proposed rule, we received
                broad support from commenters with many agreeing that CY 2019 claims
                data would likely be more similar to the CY 2022 outpatient experience.
                 Comment: Commenters supported the use of CY 2019 claims in CY 2022
                OPPS ratesetting, agreeing that the billing patterns found in the CY
                2019 claims data would better approximate the outpatient utilization
                and costs in the CY 2022 OPPS, due to the effect of the PHE on the CY
                2020 claims. A commenter noted challenges during the PHE such as
                increasing labor costs and suggested that an interim wage index
                adjustment factor be applied. Several stakeholders agreed with using CY
                2019 claims for CY 2022 OPPS ratesetting, but noted that their support
                applied specifically for the CY 2022 OPPS, as similar policies for
                future years would need to be evaluated separately.
                 Response: We appreciate the commenters' support for our proposal to
                use CY 2019 claims in CY 2022 OPPS ratesetting as a result of the
                impact of the PHE on CY 2020 claims data. We note that we are
                finalizing the use of CY 2019 claims data in CY 2022 OPPS ratesetting.
                 With regards to the request for an interim wage index adjustment
                factor, we currently do not believe an interim wage index adjustment
                factor is necessary. The wage index that we would apply in the CY 2022
                OPPS is not affected in the same way as claims and cost report data due
                to the PHE, as a result of being on a longer data delay. As cost report
                information becomes available that reflects changes in labor costs and
                wage index inputs, we will continue to review and include as
                appropriate in the OPPS. For more detail regarding the OPPS wage index
                policy, please see section II.C. of this final rule with comment
                period. We note that the final policy to use CY 2019 claims data for
                OPPS ratesetting specifically applies to the CY 2022 OPPS, and we will
                continue to monitor the claims and cost report data available and their
                appropriateness for future OPPS ratesetting, as the PHE continues.
                 Comment: Certain commenters supported the use of CY 2019 claims
                data for broader OPPS ratesetting but requested specific exceptions
                that would allow for the use of CY 2020 claims. These suggested
                exceptions included requests to use:
                 CY 2020 claims data for ratesetting purposes for certain
                HCPCS codes that only have volume or significant volume in the CY 2020
                claims but not in the 2019 claims data;
                 CY 2020 claims data for establishing the CY 2022 OPPS
                relative weights for specific APC series;
                 CY 2020 claims data for contextual purposes where CY 2019
                claims are unavailable to make APC assignments, but to continue to use
                CY 2019 claims data for broader ratesetting; and
                 Either CY 2019 or CY 2020 claims data in identifying which
                procedures receive device intensive status and to
                [[Page 63754]]
                use the higher of the device offsets between the 2 years of claims
                data.
                 Response: We appreciate the commenters' input in determining what
                data is most appropriate for developing the CY 2022 OPPS relative
                payment weights. We recognize that there are two important distinct
                issues raised by these unique requests: (1) The integrity of the OPPS
                relative payments weights based on the data used, and (2) data
                availability for ratesetting, particularly as there is different
                information available in each of the claims and cost report datasets
                based on the time frame of data they include.
                 In reviewing the CY 2019 and CY 2020 claims data available for
                developing the CY 2022 OPPS rates, we noted that we believed the CY
                2019 claims would be more reflective of our expectation of the CY 2022
                outpatient experience. We do not believe it is appropriate to
                selectively choose which claims year's data are included or not in
                establishing the CY 2022 relative payment weights. We note that the
                relative cost of services used in developing the OPPS relative payment
                weights is a fundamental part of the OPPS and choosing which claims to
                use when both CY 2019 and CY 2020 claims are broadly available may
                inappropriately distort certain components of the OPPS. Further, the
                choice of different time frames when establishing the claims dataset
                would raise additional concerns around data consistency and how to
                mitigate their effects, which may be outsized as a result of the COVID-
                19 PHE. Potential additional adjustment factors would need to be
                applied for aspects such as charge inflation, volume adjustments, and
                CCR adjustments similar to how they are applied for other components of
                the OPPS, for example, outlier payments. The OPPS relative payment
                weights affect the budget neutrality calculations because the volume
                and estimated relative costs of services comprise the budget neutral
                model. If actual CY 2019 claims were used in some cases and CY 2020
                claims in others, we might then inadvertently over or underweight
                volume or estimated cost, both of which distort not just the specific
                OPPS payment rates for which they are used but also those of all other
                services within the budget neutrality model. Based on these data
                integrity concerns, we continue to believe using CY 2019 claims data--
                and CY 2019 claims data alone--in establishing the CY 2022 OPPS
                relative payment weights to the extent possible is the best and most
                effective policy. We do not believe that it is appropriate to blend use
                of CY 2020 claims in this process.
                 In the CY 2022 OPPS/ASC proposed rule, we recognized that there
                were certain cases in which the CY 2020 claims data may provide
                additional information around service costs than are available in the
                CY 2019 claims data, and therefore, may be the best data available for
                ratesetting. For example, we proposed to make an exception for 11
                specific device intensive procedures as described in section IV.B.2. of
                the CY 2022 OPPS/ASC proposed rule (86 FR 42114) in establishing the
                procedures' device offsets. In these instances, procedures were
                previously assigned a default device offset percentage of 31 percent or
                a device offset percentage based on claims from a clinically similar
                code, and focusing solely on CY 2019 claims data would yield no
                changes. However, we recognized that if CY 2020 claims information were
                available and provided more specific context around device offsets,
                this updated data would yield better and potentially more specific
                device offset assignments than the default or clinically similar codes.
                For more detailed discussion around device intensive status and device
                offsets, please see section IV.B. of this final rule with comment
                period.
                 Along those lines, while we do not believe that it is generally
                appropriate to include actual CY 2020 OPPS claims data in the process
                of calculating the OPPS relative weights, we believe that in certain
                cases it is appropriate to use that cost information as contextual
                information for APC and device offset assignments in the CY 2022 OPPS.
                That is, while CY 2019 claims data are more representative of our
                expectation of the CY 2022 outpatient experience, in cases where there
                are no CY 2019 claims data available, the CY 2020 claims data may
                provide additional updated information around the estimated costs for
                specific services. Therefore, we are establishing an additional limited
                exception in this final rule with comment period where we will review
                CY 2020 claims data based on commenter requests and identification of
                areas where they believe the CY 2020 claims justify alternative
                placement, if no significant CY2019 claims data is available, as part
                of our review process for determining CY 2022 APC assignment. It has
                been our policy for updating OPPS rates annually to use the best
                available data for ratesetting, and we believe in certain limited,
                specific circumstances the CY 2020 claims data are the best available
                for setting CY 2022 rates. We note that throughout this rule, and
                particularly in section III.C. of this final rule with comment period,
                where we review the APC-specific policies, we discuss where we have
                reviewed the CY 2020 claims as part of our evaluation of data for the
                CY 2022 APC assignments.
                 With regards to the request that we apply the device intensive
                policy and device offset calculation based on the higher calculation
                between that determined by the CY 2019 or CY 2020 claims data, we
                believe that in cases where claims are available from both years that
                the CY 2019 claims remain more reflective of actual expected outpatient
                experience. Based on the issues discussed earlier in this section we
                believe it is appropriate to use the CY 2019 claims data for
                establishing the device intensive policy, with the exception of device
                intensive procedures for which CY 2020 claims remain the only data
                source. For a more detailed discussion of the CY 2022 device intensive
                policy and the limited exceptions in which CY 2020 claims data will be
                used for those purposes, please see section IV.B. of this final rule
                with comment period.
                 After consideration of the public comments received, we are
                finalizing the proposal to use CY 2019 claims data in CY 2022 OPPS
                ratesetting with modification to allow for review of the CY 2020 claims
                in determining CY 2022 APC placements based on commenter request and
                where CY 2019 claims data are unavailable. In addition, we note that we
                are finalizing the exception to allow for CY 2020 claims data for
                device offset assignments for the 11 codes for which we proposed
                exceptions, as discussed in more detail in section IV.B. of this final
                rule with comment period.
                [[Page 63755]]
                F. Separate Payment in CY 2022 for the Device Category, Drugs, and
                Biologicals With Transitional Pass-Through Payment Status Expiring
                Between December 31, 2021 and September 30, 2022
                 In the CY 2021 OPPS/ASC final rule (85 FR 86012 through 86013), we
                discussed the public comments we received in response to the comment
                solicitation we included in the CY 2021 OPPS/ASC proposed rule
                regarding whether we should utilize our equitable adjustment authority
                under section 1833(t)(2)(E) of the Act to provide separate payment for
                some period of time after pass-through status ends for devices with
                expiring pass-through status in order to account for the period of time
                that utilization for the devices was reduced due to the PHE.\197\
                Although we only solicited comments on use of our equitable adjustment
                authority to pay separately for devices with pass-through status during
                the PHE, we received public comments both suggesting that drugs,
                biologicals, and biosimilar biological products with pass-through
                status during the same time period should also be subject to an
                adjustment to extend the pass-through period for those products and
                pointing out that most of these products continue to be separately paid
                after their pass-through status expires, and therefore, it would be
                unnecessary to utilize the equitable adjustment authority to ``extend''
                pass-through status for these products.
                ---------------------------------------------------------------------------
                 \197\ On January 31, 2020, HHS Secretary Azar determined that a
                PHE exists retroactive to January 27, 2020, 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. On March 13, 2020, the President of the United States
                declared that the COVID-19 outbreak in the U.S. constitutes a
                national emergency, retroactive to March 1, 2020.
                ---------------------------------------------------------------------------
                 As discussed elsewhere in section X.E. of the CY 2022 OPPS/ASC
                proposed rule (86 FR 42188 through 42190) and section I.F. of the FY
                2022 IPPS/LTCH proposed rule (86 FR 25211 through 25212), our goal is
                to use the best available data for ratesetting. Ordinarily, the best
                available claims data is the set of data from 2 years prior to the
                calendar year that is the subject of rulemaking, and accordingly, we
                would have used claims data from CY 2020 for calculating proposed rates
                for the CY 2022 OPPS/ASC proposed rule. As noted in section X.E.,
                however, we proposed to use CY 2019 claims data in establishing the CY
                2022 OPPS rates and to use cost report data from the same set of cost
                reports originally used in the final rule for 2021 OPPS ratesetting. We
                recognize that due to the effects of the PHE, the CY 2020 claims data
                may not be the best available data for ratesetting, including for
                purposes of ratesetting for devices, drugs, and biologicals for which
                pass-through status expires between December 31, 2021 and September 30,
                2022.
                 For this reason, and after consideration of the public comments we
                received in response to the comment solicitation included in the CY
                2021 OPPS/ASC proposed rule (85 FR 48862), we proposed a one-time
                equitable adjustment under section 1833(t)(2)(E) of the Act to continue
                separate payment for the remainder of CY 2022 for devices, drugs, and
                biologicals with pass-through status that expires between December 31,
                2021 and September 30, 2022. We have consistently explained that
                transitional pass-through payment for drugs, biologicals, and devices
                is intended as an interim measure to allow for adequate payment of
                certain new technology while we collect the necessary data to
                incorporate the costs for these items into the procedure APC rate (66
                FR 55861). We believe an equitable adjustment to continue separate
                payment for devices, drugs, and biologicals with pass-through status
                that expires between December 31, 2021 and September 30, 2022 is
                necessary to ensure that we have full claims data from CY 2021 with
                which to set payment rates beginning in CY 2023. We also believe it is
                necessary to pay separately for these products in CY 2022 in a manner
                that mimics continued pass-through status, rather than having to set
                rates and make APC assignments and packaging decisions for these
                products for CY 2022 based on data from CY 2020, which we do not
                believe is the best available data for this purpose.
                 For those drugs, biologicals and the device for which payment would
                be packaged following expiration of their pass-through status, we
                believe providing separate payment for up to a full year in CY 2022 is
                warranted to ensure there is a full year of data for ratesetting,
                including to ensure appropriate APC assignments for the services with
                which these products are billed. For drugs and biologicals that would
                generally remain separately payable after their pass-through status
                expires, we believe providing separate payment for up to a full year in
                CY 2022 is necessary to ensure that these drugs and biologicals would,
                in fact, be separately payable when their pass-through status expires
                or that their payment should be packaged if we determine that the
                drug's cost is below the per-day packaging threshold. Specifically, for
                threshold-packaged drugs and biologicals, CMS requires current,
                appropriate data to determine whether the drug should be packaged and
                then to determine the impact of that packaging on the associated
                service rates. We also believe separate payment in CY 2022 is necessary
                to ensure we have sufficient data in the event payment for the drug is
                packaged with payment for a primary C-APC service. Finally, consistent
                with our goal of ensuring that the equitable adjustment provides
                separate payment for drugs and biologicals with pass-through status
                that expires between December 31, 2021 and September 30, 2022 to mimic
                pass-through payment to the extent possible, we proposed that
                separately payable drugs and biologicals that are eligible for this
                adjustment would not be paid the proposed reduced amount of ASP minus
                22.5 percent when they are acquired under the 340B program, and would
                generally continue to be paid ASP+6 percent for the duration of the
                time period during which the adjustment applies.
                 We explained that under our proposal, the device category, drugs,
                and biologicals that would be affected were as follows. One device
                category, HCPCS code C1823 (Generator, neurostimulator (implantable),
                nonrechargeable, with transvenous sensing and stimulation leads), would
                receive adjusted payment equivalent to an additional four quarters of
                device pass-through status. There are 27 drugs and biologicals whose
                pass-through payment status expires between December 31, 2021 and
                September 30, 2022. Based on CY 2020 data, payment for three of the 27
                drugs and biologicals would otherwise be packaged after the expiration
                of their pass-through status. The remaining 24 drugs and biologicals
                would be paid separately and would otherwise receive reduced payment at
                the proposed rate of ASP minus 22.5 percent when they are acquired
                under the 340B program.
                 We explained that there are currently six drugs and one device
                category whose pass-through payment status will expire on December 31,
                2021, nine drugs and three biologicals whose pass-through status will
                expire on March 31, 2022, seven drugs whose pass-through status will
                expire on June 30, 2022, and two drugs whose pass-through payment
                status will expire on September 30, 2022. Because pass-through status
                can expire at the end of a quarter, we proposed that the adjusted
                payment would be made for between one and four quarters, depending on
                when the pass-through period expires for the
                [[Page 63756]]
                device category, drug, or biological. In particular, we proposed that
                separate payment would be made a full year for the device category and
                six drugs for which pass-through status will expire on December 31,
                2021, three quarters for the twelve drugs and biologicals for which
                pass-through status will expire on March 31, 2022, two quarters for the
                seven drugs for which pass-through status will expire on June 30, 2022,
                and one quarter for the two drugs for which pass-through status will
                expire on September 30, 2022.
                 Table 52 lists pass-through drugs, biologicals and the device
                category that we proposed would receive adjusted separate payment,
                their pass-through payment period effective dates and end dates, as
                well as the number of quarters of separate payment equivalent to an
                extension of pass-through status that we proposed each drug or device
                category would receive.
                BILLING CODE 4120-01-P
                [[Page 63757]]
                [GRAPHIC] [TIFF OMITTED] TR16NO21.132
                [[Page 63758]]
                [GRAPHIC] [TIFF OMITTED] TR16NO21.133
                BILLING CODE 4120-01-C
                 In the CY 2022 OPPS/ASC proposed rule we solicited comments on our
                proposal to utilize our equitable adjustment authority to pay
                separately for the remainder of CY 2022 for the device category, drugs,
                and biologicals with pass-through status that expires between December
                31, 2021 and September 30, 2022.
                 Comment: The overwhelming majority commenters generally supported
                our proposal to utilize our equitable adjustment authority to pay
                separately for between one and four
                [[Page 63759]]
                quarters for certain devices, drugs, and biologicals whose pass-through
                status will expire between December 31, 2021 and September 30, 2022.
                One commenter stated their support for CMS' proposal and added that
                separate payment for items that will soon lose pass-through status will
                help ensure beneficiary access to innovative therapies. The commenter
                added that the COVID-19 pandemic has severely skewed hospital
                utilization data that is necessary to establish payment rates under the
                OPPS.
                 Response: We thank the commenters for their support for our
                proposal.
                 Comment: Multiple commenters requested changes to our proposed
                equitable payment adjustment to either expand or limit its scope. One
                commenter strongly supported CMS's policy that makes
                radiopharmaceuticals eligible for pass-through status and added that
                CMS should apply this pass-through period extension to all
                radiopharmaceuticals with pass-through status during the COVID-19 PHE.
                Several other commenters asked that the proposed pass-through extension
                be expanded to include all pass-through devices, drugs, and biologicals
                that currently have pass-through status. One commenter acknowledged the
                requirement in section 1833(t)(2)(E) that equitable adjustments be
                budget neutral, but nonetheless suggested that to the extent possible,
                CMS should consider whether the adjustment to continue separate payment
                could be made in a non-budget neutral manner to minimize the impact of
                this policy on payment for other items and services under the OPPS.
                 Another commenter stated that if CMS finalizes use of its equitable
                adjustment authority to continue separate payment for certain pass-
                through products, it should not do so for products that have already
                had more than 3 years of pass-through status. One commenter stated that
                CMS should not use its equitable adjustment authority to provide
                separate payments for pass-through drugs, biologicals, and biosimilar
                biological products after pass-through status expires for these
                products where the products would continue to receive separate payment
                under our existing policy. Multiple commenters asked for our proposal
                to be applied to specific products or HCPCS codes; in some cases the
                commenters asserted that products on pass-through status experienced
                claims processing challenges that impacted data collection,
                ratesetting, and beneficiary access because of the effects of the PHE.
                 Response: We thank the commenters for the information provided in
                response to our proposal to utilize our equitable adjustment authority
                to pay separately for the remainder of CY 2022 for the device category,
                drugs, and biologicals with pass-through status that expires between
                December 31, 2021 and September 30, 2022. We note that our proposal was
                limited to an extension for those drugs, biologicals, and devices for
                which pass-through status is ending between December 31, 2021 and
                September 30, 2022 and for which we would otherwise use data from CY
                2020 for ratesetting for these products in CY 2022. We agree that this
                proposal should not be applied to pass-through products that have
                previously received more than three years of pass-through status,
                however, to our knowledge no such product for which we proposed to
                provide continued separate payment has already had more than three
                years of pass-through status. In response to commenters' request that
                we implement the proposed adjustment in a non-budget neutral manner, we
                note that the equitable adjustment authority at section 1833(t)(2)(E)
                requires that any adjustments made under it be budget neutral.
                 Furthermore, we note that some commenters alleged that CMS is
                effectively removing 1 year of pass-through data with their decision to
                use CY 2019 as opposed to CY 2020 data for ratesetting. We note that
                CMS is required to provide between 2 and 3 years of pass-through
                payment status and that each drug, device and biological will have had
                at least 3 years of pass-through status under our proposal. We will
                continue to assess this issue as it relates to pass-through status and
                ratesetting in future years.
                 After considering the public comments, we are finalizing our
                proposal to utilize our equitable adjustment authority to pay
                separately for the remainder of CY 2022 for the device category, drugs,
                and biologicals with pass-through status that expires between December
                31, 2021 and September 30, 2022.
                XI. CY 2022 OPPS Payment Status and Comment Indicators
                A. CY 2022 OPPS Payment Status Indicator Definitions
                 Payment status indicators (SIs) that we assign to HCPCS codes and
                APCs serve an important role in determining payment for services under
                the OPPS. They indicate whether a service represented by a HCPCS code
                is payable under the OPPS or another payment system, and also whether
                particular OPPS policies apply to the code.
                 For CY 2022, we did not propose to make any changes to the existing
                definitions of status indicators that were listed in Addendum D1 to the
                CY 2021 OPPS/ASC final rule with comment period available on the CMS
                website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.
                 We did not receive any comments on the proposed definitions of the
                OPPS payment status indicators or their definitions for 2022. We
                believe that the existing definitions of the OPPS status indicators
                will continue to be appropriate for CY 2022. Therefore, we are
                finalizing those definitions without modification for CY 2022.
                 The complete list of payment status indicators and their
                definitions that would apply for CY 2022 is displayed in Addendum D1 to
                the CY 2022 OPPS/ASC final rule with comment period, which is available
                on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
                 CY 2022 payment status indicator assignments for APCs and HCPCS
                codes are shown in Addendum A and Addendum B, respectively, to the CY
                2022 OPPS/ASC final rule with comment period, which are available on
                the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
                B. CY 2022 Comment Indicator Definitions
                 In the CY 2022 OPPS/ASC proposed rule, we proposed to use four
                comment indicators for the CY 2022 OPPS. These comment indicators,
                ``CH'', ``NC'', ``NI'', and ``NP'', are in effect for CY 2021 and we
                proposed to continue their use in CY 2022. The proposed CY 2022 OPPS
                comment indicators are as follows:
                 ``CH''--Active HCPCS code in current and next calendar
                year, status indicator and/or APC assignment has changed; or active
                HCPCS code that will be discontinued at the end of the current calendar
                year.
                 ``NC''--New code for the next calendar year or existing
                code with substantial revision to its code descriptor in the next
                calendar year, as compared to current calendar year for which we
                requested comments in the proposed rule, final APC assignment; comments
                will not be accepted on the final APC assignment for the new code.
                 ``NI''--New code for the next calendar year or existing
                code with substantial revision to its code descriptor in the next
                calendar year, as compared to current calendar year,
                [[Page 63760]]
                interim APC assignment; comments will be accepted on the interim APC
                assignment for the new code.
                 ``NP''--New code for the next calendar year or existing
                code with substantial revision to its code descriptor in the next
                calendar year, as compared to current calendar year, proposed APC
                assignment; comments will be accepted on the proposed APC assignment
                for the new code.
                 The definitions of the OPPS comment indicators for CY 2022 are
                listed in Addendum D2 to the CY 2022 OPPS/ASC final rule with comment
                period, which is available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
                 We did not receive any comments on the proposed definitions of the
                OPPS comment indicators for 2022.
                 We believe that the existing CY 2021 definitions of the OPPS
                comment indicators continue to be appropriate for CY 2022. Therefore,
                we are finalizing those definitions without modification for CY 2022.
                XII. MedPAC Recommendations
                 The Medicare Payment Advisory Commission (MedPAC) was established
                under section 1805 of the Act in large part to advise the U.S. Congress
                on issues affecting the Medicare program. As required under the
                statute, MedPAC submits reports to the Congress no later than March and
                June of each year that present its Medicare payment policy
                recommendations. The March report typically provides discussion of
                Medicare payment policy across different payment systems and the June
                report typically discusses selected Medicare issues. We are including
                this section to make stakeholders aware of certain MedPAC
                recommendations for the OPPS and ASC payment systems as discussed in
                its March 2021 report.
                A. OPPS Payment Rates Update
                 The March 2021 MedPAC ``Report to the Congress: Medicare Payment
                Policy,'' recommended that Congress update Medicare OPPS payment rates
                by 2 percent, with the difference between this and the update amount
                specified in current law to be used to increase payments in a new
                suggested Medicare quality program, the ``Hospital Value Incentive
                Program (HVIP).'' We refer readers to the March 2021 report for a
                complete discussion of these recommendations.\198\ We appreciate
                MedPAC's recommendations, but as MedPAC acknowledged in its March 2021
                report, the Congress would need to change current law to enable us to
                implement its recommendations. Comments received from MedPAC for other
                OPPS policies are discussed in the applicable sections of this final
                rule with comment period.
                ---------------------------------------------------------------------------
                 \198\ Medicare Payment Advisory Committee. March 2021 Report to
                the Congress. Chapter 3: Hospital Inpatient and outpatient services,
                pp.81-82. Available at: http://medpac.gov/docs/default-source/reports/mar21_medpac_report_to_the_congress_sec.pdf?sfvrsn=0.
                ---------------------------------------------------------------------------
                B. ASC Conversion Factor Update
                 In the March 2021 MedPAC ``Report to the Congress: Medicare Payment
                Policy,'' MedPAC found that, based on its analysis of indicators of
                payment adequacy, the number of ASCs had increased, beneficiaries' use
                of ASCs had increased, and ASC access to capital has been
                adequate.\199\ As a result, for CY 2022, MedPAC stated that payments to
                ASCs are adequate and recommended that, in the absence of cost report
                data, no payment update should be given for CY 2022 (that is, the
                update factor would be zero percent).
                ---------------------------------------------------------------------------
                 \199\ Medicare Payment Advisory Committee. March 2020 Report to
                the Congress. Chapter 5: Ambulatory surgical center services, p.147.
                Available at: http://www.medpac.gov/docs/default-source/reports/mar20_entirereport_sec.pdf?sfvrsn=0.
                ---------------------------------------------------------------------------
                 In the CY 2019 OPPS/ASC final rule with comment period (83 FR
                59079), we adopted a policy, which we codified at 42 CFR 416.171(a)(2),
                to apply the productivity-adjusted hospital market basket update to ASC
                payment system rates for an interim period of 5 years. We refer readers
                to the CY 2019 OPPS/ASC final rule with comment period for complete
                details regarding our policy to use the productivity-adjusted hospital
                market basket update for the ASC payment system for CY 2019 through CY
                2023. Therefore, consistent with our policy for the ASC payment system,
                as discussed in section XIII.G. of the CY 2022 OPPS/ASC proposed rule,
                we proposed to apply a 2.3 percent productivity-adjusted hospital
                market basket update factor to the CY 2021 ASC conversion factor for
                ASCs meeting the quality reporting requirements to determine the CY
                2022 ASC payment amounts. The final CY 2022 ASC conversion factor for
                ASCs meeting quality reporting requirements and the final hospital
                market basket update factor are discussed in section XIII. of this
                final rule with comment period.
                C. ASC Cost Data
                 In the March 2021 MedPAC ``Report to the Congress: Medicare Payment
                Policy,'' MedPAC recommended that Congress require ASCs to report cost
                data to enable the Commission to examine the growth of ASCs' costs over
                time and analyze Medicare payments relative to the costs of efficient
                providers, and that CMS could use ASC cost data to examine whether an
                existing Medicare price index is an appropriate proxy for ASC costs or
                whether an ASC-specific market basket should be developed. Further,
                MedPAC suggested that CMS could limit the scope of the cost reporting
                system to minimize administrative burden on ASCs and the program but
                should make cost reporting a condition of ASC participation in the
                Medicare program.\200\
                ---------------------------------------------------------------------------
                 \200\ Medicare Payment Advisory Committee. March 2021 Report to
                the Congress. Chapter 5: Ambulatory surgical center services, p.157.
                Available at: http://medpac.gov/docs/default-source/reports/mar21_medpac_report_to_the_congress_sec.pdf?sfvrsn=0.
                ---------------------------------------------------------------------------
                 While we recognize that the submission of cost data could place
                additional administrative burden on most ASCs, and we did not propose
                any cost reporting requirements for ASCs in the CY 2022 OPPS/ASC
                proposed rule, we are interested in public comment on methods that
                would mitigate the burden of reporting costs on ASCs while also
                collecting enough data to reliably use such data in the determination
                of ASC costs. Such cost data would be beneficial in establishing an
                ASC-specific market basket index for updating payment rates under the
                ASC payment system.
                 Comment: MedPAC reiterated its previous recommendation and
                suggested that CMS should collect cost data from ASCs to set ASC
                payment rates that accurately reflect the costs of efficient providers
                and eliminate payment misalignments that exist as well as inform
                decisions about annual payment rate updates to the ASC payment system.
                MedPAC stated that it is feasible for ASCs to provide cost information
                and that smaller providers, such as hospices, currently provide such
                information to CMS. MedPAC suggested CMS could create a streamlined
                process of limited cost data with limited cost variables rather than a
                formal, and more time-consuming, cost report.
                 Other commenters suggested that CMS work closely with industry
                associations in developing the methodology for cost reporting. An ASC
                industry association suggested that CMS recognize that cost experience
                can differ greatly depending on factors such as the size of the
                facility, location, and the specialties served. Further, the ASC
                association suggested that if CMS were to collect ASC cost reports that
                we consider developing a single market
                [[Page 63761]]
                basket update that could be applied to both ASCs as well as HOPDs.
                 Response: We appreciate MedPAC's comment regarding cost submission
                and feedback submitted by other commenters and will take them into
                consideration in future rulemaking. While we did not propose any cost
                reporting requirements for CY 2022, the comments we did receive are
                helpful as we continue to explore methods for obtaining cost
                information in a manner that does not place undue burden on ASCs.
                 Comments received from MedPAC for other ASC payment system policies
                are discussed in the applicable sections of this final rule with
                comment period. The full March 2021 MedPAC Report to Congress can be
                downloaded from MedPAC's website at: http://www.medpac.gov.
                XIII. Updates to the Ambulatory Surgical Center (ASC) Payment System
                A. Background
                1. Legislative History, Statutory Authority, and Prior Rulemaking for
                the ASC Payment System
                 For a detailed discussion of the legislative history and statutory
                authority related to payments to ASCs under Medicare, we refer readers
                to the CY 2012 OPPS/ASC final rule with comment period (76 FR 74377
                through 74378) and the June 12, 1998 proposed rule (63 FR 32291 through
                32292). For a discussion of prior rulemaking on the ASC payment system,
                we refer readers to the CYs 2012, 2013, 2014, 2015, 2016, 2017, 2018,
                2019, 2020, and 2021 OPPS/ASC final rules with comment period (76 FR
                74378 through 74379; 77 FR 68434 through 68467; 78 FR 75064 through
                75090; 79 FR 66915 through 66940; 80 FR 70474 through 70502; 81 FR
                79732 through 79753; 82 FR 59401 through 59424; 83 FR 59028 through
                59080; 84 FR 61370 through 61410, and 85 FR 86121 through 86179,
                respectively).
                2. Policies Governing Changes to the Lists of Codes and Payment Rates
                for ASC Covered Surgical Procedures and Covered Ancillary Services
                 Under Sec. Sec. 416.2 and 416.166 of the Medicare regulations,
                subject to certain exclusions, covered surgical procedures in an ASC
                are surgical procedures that are separately paid under the OPPS, are
                not designated as requiring inpatient care under Sec. 419.22(n) as of
                December 31, 2020, are not only able to be reported using a CPT
                unlisted surgical procedure code, and are not otherwise excluded under
                Sec. 411.15.
                 In previous years, we identified surgical procedures as those
                described by Category I CPT codes in the surgical range from 10000
                through 69999 as well as those Category III CPT codes and Level II
                HCPCS codes that directly crosswalk or are clinically similar to
                procedures in the CPT surgical range that we have determined do not
                pose a significant safety risk, that we would not expect to require an
                overnight stay when performed in ASCs, and that are separately paid
                under the OPPS (72 FR 42478).
                 Covered ancillary services are specified in Sec. 416.164(b) and,
                as stated previously, are eligible for separate ASC payment. As
                provided at Sec. 416.164(b), we make separate ASC payments for the
                following ancillary items and services when they are provided integral
                to ASC covered surgical procedures: (1) Brachytherapy sources; (2)
                certain implantable items that have pass-through payment status under
                the OPPS; (3) certain items and services that we designate as
                contractor-priced, including, but not limited to, procurement of
                corneal tissue; (4) certain drugs and biologicals for which separate
                payment is allowed under the OPPS; (5) certain radiology services for
                which separate payment is allowed under the OPPS; and (6) non-opioid
                pain management drugs that function as a supply when used in a surgical
                procedure. Payment for ancillary items and services that are not paid
                separately under the ASC payment system is packaged into the ASC
                payment for the covered surgical procedure.
                 We update the lists of, and payment rates for, covered surgical
                procedures and covered ancillary services in ASCs in conjunction with
                the annual proposed and final rulemaking process to update the OPPS and
                the ASC payment system (Sec. 416.173; 72 FR 42535). We base ASC
                payment and policies for most covered surgical procedures, drugs,
                biologicals, and certain other covered ancillary services on the OPPS
                payment policies, and we use quarterly change requests (CRs) to update
                services paid for under the OPPS. We also provide quarterly update CRs
                for ASC covered surgical procedures and covered ancillary services
                throughout the year (January, April, July, and October). We release new
                and revised Level II HCPCS codes and recognize the release of new and
                revised CPT codes by the American Medical Association (AMA) and make
                these codes effective (that is, the codes are recognized on Medicare
                claims) via these ASC quarterly update CRs. We recognize the release of
                new and revised Category III CPT codes in the July and January CRs.
                These updates implement newly created and revised Level II HCPCS and
                Category III CPT codes for ASC payments and update the payment rates
                for separately paid drugs and biologicals based on the most recently
                submitted ASP data. New and revised Category I CPT codes, except
                vaccine codes, are released only once a year, and are implemented only
                through the January quarterly CR update. New and revised Category I CPT
                vaccine codes are released twice a year and are implemented through the
                January and July quarterly CR updates. We refer readers to Table 41 in
                the CY 2012 OPPS/ASC proposed rule for an example of how this process
                is used to update HCPCS and CPT codes, which we finalized in the CY
                2012 OPPS/ASC final rule with comment period (76 FR 42291; 76 FR 74380
                through 74384).
                 In our annual updates to the ASC list of, and payment rates for,
                covered surgical procedures and covered ancillary services, we
                undertake a review of excluded surgical procedures, new codes, and
                codes with revised descriptors, to identify any that we believe meet
                the criteria for designation as ASC covered surgical procedures or
                covered ancillary services. Updating the lists of ASC covered surgical
                procedures and covered ancillary services, as well as their payment
                rates, in association with the annual OPPS rulemaking cycle is
                particularly important because the OPPS relative payment weights and,
                in some cases, payment rates, are used as the basis for the payment of
                many covered surgical procedures and covered ancillary services under
                the revised ASC payment system. This joint update process ensures that
                the ASC updates occur in a regular, predictable, and timely manner.
                3. Definition of ASC Covered Surgical Procedures
                 Since the implementation of the ASC prospective payment system, we
                have historically defined a ``surgical'' procedure under the payment
                system as any procedure described within the range of Category I CPT
                codes that the CPT Editorial Panel of the AMA defines as ``surgery''
                (CPT codes 10000 through 69999) (72 FR 42478). We also have included as
                ``surgical,'' procedures that are described by Level II HCPCS codes or
                by Category III CPT codes that directly crosswalk or are clinically
                similar to procedures in the CPT surgical range.
                 As we noted in the August 7, 2007 final rule that implemented the
                revised ASC payment system, using this definition of surgery would
                exclude from ASC payment certain invasive,
                [[Page 63762]]
                ``surgery-like'' procedures, such as cardiac catheterization or certain
                radiation treatment services that are assigned codes outside the CPT
                surgical range (72 FR 42477). We stated in that final rule that we
                believed continuing to rely on the CPT definition of surgery is
                administratively straightforward, is logically related to the
                categorization of services by physician experts who both establish the
                codes and perform the procedures, and is consistent with a policy to
                allow ASC payment for all outpatient surgical procedures.
                 However, in the CY 2019 OPPS/ASC final rule with comment period (83
                FR 59029 through 59030), after consideration of public comments
                received in response to the CY 2019 OPPS/ASC proposed rule and earlier
                OPPS/ASC rulemaking cycles, we revised our definition of a surgical
                procedure under the ASC payment system. In that final rule, we defined
                a surgical procedure under the ASC payment system as any procedure
                described within the range of Category I CPT codes that the CPT
                Editorial Panel of the AMA defines as ``surgery'' (CPT codes 10000
                through 69999) (72 FR 42476), as well as procedures that are described
                by Level II HCPCS codes or by Category I CPT codes or by Category III
                CPT codes that directly crosswalk or are clinically similar to
                procedures in the CPT surgical range that we determined met the general
                standards established in previous years for addition to the ASC CPL.
                These criteria included that a procedure is not expected to pose a
                significant risk to beneficiary safety when performed in an ASC, that
                standard medical practice dictates that the beneficiary would not
                typically be expected to require an overnight stay following the
                procedure, and that the procedure is separately paid under the OPPS. In
                CY 2021, we revised the definition of covered surgical procedures to
                surgical procedures specified by the Secretary that are separately paid
                under the OPPS, are not designated as requiring inpatient care under
                Sec. 419.22(n) as of December 31, 2020, are not only able to be
                reported using a CPT unlisted surgical procedure code, and are not
                otherwise excluded under Sec. 411.15 (85 FR 86153). As discussed in
                section XIII.C.1.d. of this final rule with comment period (below), we
                are finalizing our proposal for CY 2022 to revise the language in the
                regulation text at Sec. 416.166 and reinstate the general standards
                and exclusion criteria in place prior to CY 2021.
                B. ASC Treatment of New and Revised Codes
                 1. Background on Current Process for Recognizing New and Revised
                HCPCS Codes Payment for ASC procedures, services, and items are
                generally based on medical billing codes, specifically, HCPCS codes,
                that are reported on ASC claims. HCPCS codes are used to report
                procedures, services, items, and supplies under the ASC payment system.
                Specifically, we recognize the following codes on ASC claims:
                 Category I CPT codes, which describe surgical procedures,
                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 alpha-numeric codes),
                which are used primarily to identify drugs, devices, supplies,
                temporary procedures, and services not described by CPT codes.
                 We finalized a policy in the August 2, 2007 ASC final rule (72 FR
                42533 through 42535) to evaluate each year all new and revised Category
                I and Category III CPT codes and Level II HCPCS codes that describe
                surgical procedures, and to make preliminary determinations during the
                annual OPPS/ASC rulemaking process regarding whether or not they meet
                the criteria for payment in the ASC setting as covered surgical
                procedures and, if so, whether or not they are office-based procedures.
                In addition, we identify new and revised codes as ASC covered ancillary
                services based upon the final payment policies of the revised ASC
                payment system. In prior rulemakings, we refer to this process as
                recognizing new codes. However, this process has always involved the
                recognition of new and revised codes. We consider revised codes to be
                new when they have substantial revision to their code descriptors that
                necessitate a change in the current ASC payment indicator. We refer to
                these codes as new and revised in the CY 2022 OPPS/ASC proposed rule.
                 We have separated our discussion below based on when the codes are
                released and whether we proposed to solicit public comments in the CY
                2022 OPPS/ASC proposed rule (and respond to those comments in the CY
                2022 OPPS/ASC final rule with comment period) or whether we will be
                soliciting public comments in the CY 2022 OPPS/ASC final rule with
                comment period (and responding to those comments in the CY 2023 OPPS/
                ASC final rule with comment period).
                 We note that we sought public comments in the CY 2021 OPPS/ASC
                final rule with comment period (85 FR 85866) on the new and revised
                Level II HCPCS codes effective October 1, 2020 or January 1, 2021.
                These new and revised codes were flagged with comment indicator ``NI''
                in Addenda AA and BB to the CY 2021 OPPS/ASC final rule with comment
                period to indicate that we were assigning them an interim payment
                status and payment rate, if applicable, which were subject to public
                comment following publication of the CY 2021 OPPS/ASC final rule with
                comment period. In the CY 2022 OPPS/ASC proposed rule, we stated that
                we will finalize the treatment of these codes under the ASC payment
                system in this CY 2022 OPPS/ASC final rule with comment period.
                 2. April 2021 HCPCS Codes for Which We Solicited Public Comments in
                the Proposed Rule
                 For the April 2021 update, there was one new CPT code and there
                were 11 new Level II HCPCS codes. In the April 2021 ASC quarterly
                update (Transmittal 10702, CR 12183, dated April 1, 2021), we added 11
                new Level II HCPCS codes to the list of ASC covered surgical procedures
                and the list of covered ancillary services. Table 39 of the CY 2022
                OPPS/ASC proposed rule displayed the new Level II HCPCS codes that were
                implemented April 1, 2021, along with their final payment indicators
                for CY 2022.
                 We invited public comments on the proposed payment indicators and
                payment rates for the new HCPCS codes that were recognized as ASC
                covered surgical procedures and ancillary services in April 2021
                through the quarterly update CRs, as listed in Table 53. We proposed to
                finalize their payment indicators in this CY 2022 OPPS/ASC final rule
                with comment period.
                 We did not receive any comments on the proposed ASC payment
                indicator assignments for the new Level II HCPCS codes implemented in
                April 2021 and we are finalizing the proposed ASC payment indicator
                assignments for these codes, as indicated in Table 53. We note that
                several of the temporary drug HCPCS C-codes have been replaced with
                permanent drug HCPCS J-codes, effective January 1, 2022. Their
                replacement codes are also listed in Table 53.
                 The final comment indicators, payment indicators and payment rates,
                where applicable, for these April 2021 codes can be found in Addendum
                BB to this CY 2022 OPPS/ASC final rule with
                [[Page 63763]]
                comment period rule (which is available via the internet on the CMS
                website). The list of final ASC payment indicators and corresponding
                definitions can be found in Addendum DD1 to the CY 2022 OPPS/ASC final
                rule. These new codes that were effective April 1, 2021, were assigned
                to comment indicator ``NP'' in Addendum BB to the CY 2022 OPPS/ASC
                proposed rule to indicate that the codes were assigned to an interim
                APC assignment and that comments would be accepted on their interim APC
                assignments. Also, the list of final comment indicators and definitions
                used under the ASC payment system can be found in Addendum DD2 in this
                final rule with comment period. We note that ASC Addenda AA, BB, DD1,
                and DD2 are available via the internet on the CMS website.
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                3. July 2021 HCPCS Codes for Which We Solicited Public Comments in the
                Proposed Rule
                 In the July 2021 ASC quarterly update (Transmittal 10858, Change
                Request 12341, dated June 25, 2021), we added several separately
                payable CPT and Level II HCPCS codes to the list of covered surgical
                procedures and ancillary services. Table 40 of the CY 2022 OPPS/ASC
                proposed rule displayed the new HCPCS codes that were effective July 1,
                2021. In addition, through the July 2021 quarterly update CR, we added
                11 new Category III CPT codes to the list of ASC covered ancillary
                services, effective July 1, 2021. These codes were listed in Table 41
                of the CY 2021 OPPS/ASC proposed rule, along with the proposed comment
                indicators and payment indicators.
                 We invited public comments on the proposed comment indicators and
                payment indicators for the new Level II HCPCS codes newly recognized as
                ASC covered surgical procedures and covered ancillary services and the
                new Category III CPT codes for covered ancillary services beginning in
                July 2021 through the quarterly update CRs, as
                [[Page 63764]]
                listed in Tables 40 and 41 of the CY 2022 OPPS/ASC proposed rule. We
                proposed to finalize the proposed payment indicators in this final rule
                with comment period.
                 We did not receive any public comments on the proposed ASC payment
                indicator assignments for the new Category III CPT codes or Level II
                HCPCS codes implemented in July 2021 and are finalizing the proposed
                ASC payment indicator assignments for these codes, as indicated in
                Tables 54 and 55. We note that several of the HCPCS C-codes have been
                replaced with HCPCS J-codes, effective January 1, 2022. Their
                replacement codes are listed in Table 54. The final CY 2022 payment
                rates for these new codes can be found in Addenda AA and BB to this
                final rule with comment period.
                 The list of final ASC payment indicators and corresponding
                definitions can be found in Addendum DD1 to this final rule with
                comment period (which is available via the internet on the CMS
                website). These new codes that were effective July 1, 2021, were
                assigned comment indicator ``NP'' in Addendum BB to the CY 2022 OPPS/
                ASC proposed rule to indicate that the codes were assigned to an
                interim APC assignment and that comments would be accepted on those
                assignments. The list of final comment indicators and definitions used
                under the ASC payment system can be found in Addendum DD2 to the CY
                2022 OPPS/ASC final rule. We note that ASC Addenda AA, BB, DD1, and DD2
                are available via the internet on the CMS website.
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                [[Page 63766]]
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                [[Page 63767]]
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                4. October 2021 HCPCS Codes for Which We Are Soliciting Public Comments
                in This CY 2022 OPPS/ASC Final Rule With Comment Period
                 In the past, we released new and revised HCPCS codes that are
                effective October 1 through the October OPPS quarterly update CRs and
                incorporated these new codes in the final rule with comment period.
                 For CY 2022, consistent with our established policy, we proposed
                that the Level II HCPCS codes that will be effective October 1, 2021,
                would be flagged with comment indicator ``NI'' in Addendum B to this
                final rule with comment period to indicate that we have assigned the
                codes an interim OPPS payment status for CY 2022. We did not receive
                any public comments regarding this proposed process; and, for CY 2022,
                we are finalizing our proposal, without modification, to continue our
                established process for recognizing and soliciting public comments on
                new Level II HCPCS codes that become effective on October 1, 2021. We
                note all codes flagged with comment indicator ``NI'' in ASC Addenda.
                 AA and BB to this final rule with comment period, including the
                codes effective October 1, 2021, will be assigned an interim payment
                status to indicate that they are subject to public comment.
                 In the October 2021 ASC quarterly update (Transmittal 11004, Change
                Request 12451, dated September 17, 2021), we added several separately
                payable Level II HCPCS codes to the list of covered surgical procedures
                and ancillary services. We note that because many of the new drug HCPCS
                J codes effective October 1 have predecessor HCPCS C-codes, they are
                not completely new to the ASC payment system, and have been paid
                separately under their predecessor codes. Table 56 shows the interim
                ASC payment indicators for the new codes effective October 1, 2021,
                with no predecessor codes. The final comment indicators, payment
                indicators, and payment rates, where applicable, for these October 2021
                codes can be found in Addendum AA and Addendum BB to this CY 2022 OPPS/
                ASC final rule with comment period rule (which is available via the
                internet on the CMS website). Because these codes were effective
                October 1, 2021, we were not able to include them in the CY 2022 OPPS/
                ASC proposed rule that appeared in the Federal Register on August 4,
                2021. We note that the definitions for the ASC payment indicators can
                be found in Addendum DD1 to this final rule with comment period. In
                addition, the definitions for the ASC comment indicators can be found
                in Addendum DD2 to this final rule with comment period. We are inviting
                public comments in this final rule with comment period for the codes
                listed in Table 56 on the interim payment indicators, which would then
                be finalized in the CY 2023 OPPS/ASC final rule with comment period.
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                [[Page 63768]]
                5. January 2022 HCPCS Codes
                a. Level II HCPCS Codes for Which We Are Soliciting Public Comments in
                This CY 2022 OPPS/ASC Final Rule With Comment Period
                 As has been our practice in the past, we incorporate those new
                Level II HCPCS codes that are effective January 1 in the final rule
                with comment period, thereby updating the ASC payment system for the
                calendar year. We note that unlike the CPT codes that are effective
                January 1 and are included in the OPPS/ASC proposed rules, and except
                for the G-codes listed in Addendum O to the CY 2022 OPPS/ASC proposed
                rule, 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, however, the codes are flagged with comment indicator
                ``NI'' in ASC Addenda AA and BB to this final rule with comment period
                to indicate that we are assigning them an interim payment status, which
                is subject to public comment. Therefore, as we stated in the CY 2022
                OPPS/ASC proposed rule, these Level II HCPCS codes that will be
                effective January 1, 2022 will be released to the public through the
                January 2022 ASC Update CR and included on the CMS HCPCS website and in
                this final rule with comment period.
                 In addition, for CY 2022, we proposed to continue our established
                policy of assigning comment indicator ``NI'' in Addendum AA and
                Addendum BB to the OPPS/ASC final rule with comment period to the new
                Level II HCPCS codes that will be effective January 1, 2022, to
                indicate that we are assigning them an interim payment indicator, which
                is subject to public comment. We are inviting public comments in this
                final rule with comment period on the payment indicator assignments,
                which would then be finalized in the CY 2023 OPPS/ASC final rule with
                comment period.
                b. CPT Codes for Which We Solicited Public Comments in the CY 2022
                OPPS/ASC Proposed Rule
                 For new and revised CPT codes effective January 1, 2022, that were
                received in time to be included in the CY 2022 OPPS/ASC proposed rule,
                we proposed the appropriate payment indicator assignments, and
                solicited public comments on those assignments. We stated we would
                accept comments and finalize the payment indicators in this final rule
                with comment period. For those new/revised CPT codes that were received
                too late for inclusion of the CY 2022 OPPS/ASC proposed rule, we stated
                that we may either make interim final assignments in this final rule
                with comment period or use HCPCS G codes that mirror the predecessor
                CPT codes and retain the current APC and status indicator assignments
                for a year until we can propose APC and status indicator assignments in
                the following year's rulemaking cycle.
                 For the CY 2022 ASC update, the new and revised Category I and III
                CPT codes that will be effective on January 1, 2022, can be found in
                ASC Addendum AA and Addendum BB to this final rule with comment period
                (which are available via the internet on the CMS website). The CPT
                codes are assigned to comment indicator ``NP'' to indicate that the
                code is new for the next calendar year or the code is an existing code
                with substantial revision to its code descriptor in the next calendar
                year as compared to the current calendar year and that comments will be
                accepted on the proposed payment indicator. Further, we remind readers
                that the CPT code descriptors that appear in Addendum AA and Addendum
                BB are short descriptors and do not 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 2022 CPT codes in Addendum O to the CY 2022 OPPS/ASC
                proposed rule (which is available via the internet on the CMS website)
                so that the public could adequately comment on our proposed payment
                indicator assignments. The 5-digit placeholder codes were in Addendum O
                to the CY 2022 OPPS/ASC proposed rule, specifically under the column
                labeled ``CY 2021 OPPS/ASC Proposed Rule 5-Digit Placeholder Code.''
                The final CPT code numbers are included in this final rule with comment
                period, and can be found in Addendum AA, Addendum BB, and Addendum O.
                 In summary, we solicited public comments on the proposed CY 2022
                payment indicators for the new and revised Category I and III CPT codes
                that will be effective January 1, 2022. Because these codes are listed
                in Addenda AA and Addendum BB with short descriptors only, we listed
                them again in Addendum O with the long descriptors. We also proposed to
                finalize the payment indicator for these codes (with their final CPT
                code numbers) in this final rule with comment period. The final payment
                indicator and comment indicator for these codes can be found in
                Addendum AA and BB to this final rule with comment period. The list of
                ASC payment indicators and corresponding definitions can be found in
                Addendum DD1 to this final rule with comment period. These new CPT
                codes that will be effective January 1, 2022, were assigned to comment
                indicator ``NP'' in Addendum AA and BB to the CY 2022 OPPS/ASC proposed
                rule to indicate that the codes were assigned to an interim payment
                indicator and that comments would be accepted on their interim ASC
                payment assignments. Also, the list of comment indicators and
                definitions used under the ASC can be found in Addendum DD2 of this
                final rule with comment period. We note that ASC Addenda AA, BB, DD1,
                and DD2 are available via the internet on the CMS website.
                 Finally, in Table 57 below, we summarize our process for updating
                codes through our ASC quarterly update CRs, seeking public comments,
                and finalizing the treatment of these new codes under the ASC payment
                system.
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                [[Page 63769]]
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                C. Update to the List of ASC Covered Surgical Procedures and Covered
                Ancillary Services
                1. Covered Surgical Procedures
                a. Covered Surgical Procedures Designated as Office-Based
                (1) Background
                 In the August 2, 2007 ASC final rule, we finalized our policy to
                designate as ``office-based'' those procedures that are added to the
                ASC Covered Procedures List (CPL) in CY 2008 or later years that we
                determine are furnished predominantly (more than 50 percent of the
                time) in physicians' offices based on consideration of the most recent
                available volume and utilization data for each individual procedure
                code and/or, if appropriate, the clinical characteristics, utilization,
                and volume of related codes. In that rule, we also finalized our policy
                to exempt all procedures on the CY 2007 ASC list from application of
                the office-based classification (72 FR 42512). The procedures that were
                added to the ASC CPL beginning in CY 2008 that we determined were
                office-based were identified in Addendum AA to that rule with payment
                indicator ``P2'' (Office-based surgical procedure added to ASC list in
                CY 2008 or later with MPFS nonfacility PE RVUs; payment based on OPPS
                relative payment weight); ``P3'' (Office-based surgical procedures
                added to ASC list in CY 2008 or later with MPFS nonfacility PE RVUs;
                payment based on MPFS nonfacility PE RVUs); or ``R2'' (Office-based
                surgical procedure added to ASC list in CY 2008 or later without MPFS
                nonfacility PE RVUs; payment based on OPPS relative payment weight),
                depending on whether we estimated the procedure would be paid according
                to the ASC standard ratesetting methodology based on its OPPS relative
                payment weight or at the MPFS nonfacility PE RVU-based amount.
                 Consistent with our final policy to annually review and update the
                ASC CPL to include all covered surgical procedures eligible for payment
                in ASCs, each year we identify covered surgical procedures as either
                temporarily office-based (these are new procedure codes with little or
                no utilization data that we have determined are clinically similar to
                other procedures that are permanently office-based), permanently
                office-based, or nonoffice-based, after taking into account updated
                volume and utilization data.
                 Comment: A number of commenters requested that we modify our
                approach to incorporate PFS nonfacility PE RVUs in response to our
                proposal to update clinical labor pricing data in the CY 2022 PFS
                proposed rule. These commenters contended that our proposal to update
                clinical labor pricing data would cause significant declines in ASC
                payment for certain office-based services. The commenters recommended
                we delay or transition the proposed changes in nonfacility PE RVUs
                under the ASC payment system.
                 Response: We are not accepting this recommendation. While we
                acknowledge that certain proposals under the PFS may have a downstream
                impact on ASC payment rates for office-based procedures, our office-
                based policy is meant to achieve payment parity between the ASC and
                physician office settings. Therefore, we believe ASC payment rates for
                office-based procedures should be consistent with the PFS payment rates
                where nonfacility PE RVU data is available. Additionally,
                [[Page 63770]]
                under the PFS, we are finalizing a policy to update clinical labor
                pricing over a four-year transition. For more information on the
                proposed clinical labor pricing update under the PFS, see 86 FR 39118
                through 39123.
                (2) Changes for CY 2022 to Covered Surgical Procedures Designated as
                Office-Based
                 In developing the CY 2022 OPPS/ASC proposed rule, we followed our
                policy to annually review and update the covered surgical procedures
                for which ASC payment is made and to identify new procedures that may
                be appropriate for ASC payment (described in detail in section
                XIII.C.1.d. of this final rule with comment period), including their
                potential designation as office-based. Historically, we would also
                review the most recent claims volume and utilization data (CY 2020
                claims) and the clinical characteristics for all covered surgical
                procedures that are currently assigned a payment indicator in CY 2020
                of ``G2'' (Non office-based surgical procedure added in CY 2008 or
                later; payment based on OPPS relative payment weight), as well as for
                those procedures assigned one of the temporary office-based payment
                indicators, specifically ``P2'', ``P3'', or ``R2'' in the CY 2021 OPPS/
                ASC final rule with comment period (85 FR 86131 through 86139).
                However, as discussed in section X.E of the CY 2022 OPPS/ASC proposed
                rule (86 FR 42188 through 42190), given our concerns with CY 2020
                claims data as a result of the PHE, we did not propose to review the
                most recent claims volume and utilization data from CY 2020 claims and
                instead we proposed not to assign permanent office-based designations
                for CY 2022 to any covered surgical procedure currently assigned a
                payment indicator of ``G2'' (Non office-based surgical procedure added
                in CY 2008 or later; payment based on OPPS relative payment weight).
                 Similarly, we also proposed not to use the most recent claims
                volume and utilization data and other information for procedures
                designated as temporarily office-based and temporarily assigned one of
                the office-based payment indicators, specifically ``P2,'' ``P3'' or
                ``R2''. Instead, we proposed to continue to designate these procedures,
                shown in Table 58 below, as temporarily office-based for CY 2022. CPT
                code 0551T (Transperineal periurethral balloon continence device;
                adjustment of balloon(s) fluid volume) is removed from Table 58 below
                as this code is being deleted effective January 1, 2022. The procedures
                we proposed to designate as temporarily office-based for CY 2022 are
                identified with an asterisk in Addendum AA to this final rule with
                comment period (which is available via the internet on the CMS
                website).
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                [[Page 63771]]
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                BILLING CODE 4120-01-C
                 As discussed in the August 2, 2007 ASC final rule revised ASC
                payment system final rule (72 FR 42533 through 42535), we finalized our
                policy to designate certain new surgical procedures as temporarily
                office-based until adequate claims data are available to assess their
                predominant sites of service, whereupon if we confirm their office-
                based nature, the procedures would be permanently assigned to the list
                of office-based procedures. In the absence of claims data, we stated we
                would use other available information, including our clinical advisors'
                judgment, predecessor CPT and Level II HCPCS codes, information
                submitted by representatives of specialty societies and professional
                associations, and information submitted by commenters during the public
                comment period.
                 For CY 2022, we proposed to designate two new CY 2022 CPT codes for
                ASC covered surgical procedures as temporarily office-based. After
                reviewing the clinical characteristics, utilization, and volume of
                related procedure codes, we determined that the procedures listed in
                Table 59 would be predominantly performed in physicians' offices. We
                believe the procedure described by CPT code 42975
                [[Page 63772]]
                (Drug-induced sleep endoscopy, with dynamic evaluation of velum,
                pharynx, tongue base, and larynx for evaluation of sleep-disordered
                breathing, flexible, diagnostic) is similar to CPT code 31505
                (Laryngoscopy, indirect; diagnostic (separate procedure)) which is
                currently on the list of ASC covered surgical procedures and was
                assigned a final payment indicator of ``P3''--Office-based surgical
                procedure added to ASC list in CY 2008 or later with MPFS nonfacility
                PE RVUs; payment based on MPFS nonfacility PE RVUs--in CY 2021.
                Additionally, we believe the procedure described by CPT code 53454
                (Periurethral transperineal adjustable balloon continence device;
                percutaneous adjustment of balloon(s) fluid volume) is similar to CPT
                code 0551T (Transperineal periurethral balloon continence device;
                adjustment of balloon(s) fluid volume), which is currently on the list
                of ASC covered surgical procedures and was assigned a final payment
                indicator of ``R2''--Office-based surgical procedure added to ASC list
                in CY 2008 or later without MPFS nonfacility PE RVUs; payment based on
                OPPS relative payment weight--for CY 2021. As such, we proposed to add
                CPT codes 42975 (CMS placeholder code 42XXX) and 53454 (CMS placeholder
                code 53XX4) in Table 59 to the list of ASC covered surgical procedures
                designated as temporarily office-based for CY 2022.
                [GRAPHIC] [TIFF OMITTED] TR16NO21.142
                 Comment: One commenter recommended that we not assign office-based
                payment indicator ``P3'' to CPT code 64640 (Destruction by neurolytic
                agent; other peripheral nerve or branch) and suggested this procedure
                is not predominantly performed in the office setting.
                 Response: CPT code 64640 has been assigned permanent office-based
                status since CY 2008. With the exceptions of procedures assigned
                temporary office-based status and calendar years for which office-based
                procedures meet the criteria to be assigned device-intensive status,
                office-based procedures are not eligible to remove their office-based
                designation. As discussed previously, these are permanent assignments.
                While we acknowledge that certain office-based procedures can become
                more predominantly performed in higher cost settings, such as a
                hospital outpatient department, we do not believe this suggests that
                our office-based payment policy is hindering access to care for these
                procedures in an ASC setting.
                 Comment: One commenter recommended we reevaluate the permanent
                office-based designation for CPT code 42975. The commenter suggested
                that this procedure is more similar to CPT code 31546 (Laryngoscopy,
                direct, operative, with operating microscope or telescope, with
                submucosal removal of non-neoplastic lesion(s) of vocal cord;
                reconstruction with graft(s) (includes obtaining autograft))--a
                procedure that is not predominantly performed in a physician office
                setting.
                 Response: We are not accepting this recommendation. As discussed
                previously, we believe the procedure described by CPT code 42975 is
                similar to CPT code 31505 (Laryngoscopy, indirect; diagnostic (separate
                procedure)), which is predominantly performed in the physician office
                setting and is currently on the list of ASC covered surgical procedures
                and was assigned a final payment indicator of ``P3''--Office-based
                surgical procedure added to ASC list in CY 2008 or later with MPFS
                nonfacility PE RVUs; payment based on MPFS nonfacility PE RVUs--in CY
                2021.
                 After reviewing the public comments we received, we are finalizing
                our proposal, without modification, to designate the procedures shown
                in Tables 58 and 59 above as temporarily office-based. The procedures
                for which the office-based designation for CY 2022 is temporary are
                indicated by an asterisk in Addendum AA to this final rule with
                [[Page 63773]]
                comment period (which is available via the internet on the CMS
                website).
                b. Device-Intensive ASC Covered Surgical Procedures
                (1) Background
                 We refer readers to the CY 2019 OPPS/ASC final rule with comment
                period (83 FR 59040 through 59041), for a summary of our existing
                policies regarding ASC covered surgical procedures that are designated
                as device-intensive.
                (2) Changes to List of ASC Covered Surgical Procedures Designated as
                Device-Intensive for CY 2022
                 In the CY 2019 OPPS/ASC final rule with comment period (83 FR
                590401 through 59043), for CY 2019, we modified our criteria for
                device-intensive procedures to better capture costs for procedures with
                significant device costs. We adopted a policy to allow procedures that
                involve surgically inserted or implanted, high-cost, single-use devices
                to qualify as device-intensive procedures. In addition, we modified our
                criteria to lower the device offset percentage threshold from 40
                percent to 30 percent. Specifically, for CY 2019 and subsequent years,
                we adopted a policy that device-intensive procedures would be subject
                to the following criteria:
                 All procedures must involve implantable devices assigned a
                CPT or HCPCS code;
                 The required devices (including single-use devices) must
                be surgically inserted or implanted; and
                 The device offset amount must be significant, which is
                defined as exceeding 30 percent of the procedure's mean cost.
                Corresponding to this change in the cost criterion we adopted a policy
                that the default device offset for new codes that describe procedures
                that involve the implantation of medical devices will be 31 percent
                beginning in CY 2019. For new codes describing procedures that are
                payable when furnished in an ASC and involve the implantation of a
                medical device, we adopted a policy that the default device offset
                would be applied in the same manner as the policy we adopted in section
                IV.B.2. of the CY 2019 OPPS/ASC final rule with comment period (83 FR
                58944 through 58948). We amended Sec. 416.171(b)(2) of the regulations
                to reflect these new device criteria.
                 In addition, as also adopted in section IV.B.2. of CY 2019 OPPS/ASC
                final rule with comment period, to further align the device-intensive
                policy with the criteria used for device pass-through status, we
                specified, for CY 2019 and subsequent years, that for purposes of
                satisfying the device-intensive criteria, a device-intensive procedure
                must involve a device that:
                 Has received FDA marketing authorization, has received an
                FDA investigational device exemption (IDE) and has been classified as a
                Category B device by FDA in accordance with 42 CFR 405.203 through
                405.207 and 405.211 through 405.215, or meets another appropriate FDA
                exemption from premarket review;
                 Is an integral part of the service furnished;
                 Is used for one patient only;
                 Comes in contact with human tissue;
                 Is surgically implanted or inserted (either permanently or
                temporarily); and
                 Is not any of the following:
                 ++ Equipment, an instrument, apparatus, implement, or item of this
                type for which depreciation and financing expenses are recovered as
                depreciable assets as defined in Chapter 1 of the Medicare Provider
                Reimbursement Manual (CMS Pub. 15-1); or
                 ++ A material or supply furnished incident to a service (for
                example, a suture, customized surgical kit, scalpel, or clip, other
                than a radiological site marker).
                 Based on these criteria, for 2022, we proposed to update the ASC
                CPL to indicate procedures that are eligible for payment according to
                our device-intensive procedure payment methodology, based on the
                proposed individual HCPCS code device-offset percentages using the CY
                2019 OPPS claims and cost report data available for the CY 2022 OPPS/
                ASC proposed rule.
                 The ASC covered surgical procedures that we proposed to designate
                as device-intensive, and therefore subject to the device-intensive
                procedure payment methodology for CY 2022, are assigned payment
                indicator ``J8'' and are included in ASC Addendum AA to the CY 2022
                OPPS/ASC proposed rule (which is available via the internet on the CMS
                website). The CPT code, the CPT code short descriptor, the proposed CY
                2022 ASC payment indicator, and an indication of whether the full
                credit/partial credit (FB/FC) device adjustment policy would apply
                because the procedure is designated as device-intensive are also
                included in Addendum AA to the proposed rule (which is available via
                the internet on the CMS website).
                 Under current policy, the payment rate under the ASC payment system
                for device-intensive procedures furnished with an implantable or
                inserted medical device are calculated by applying the device offset
                percentage based on the ASC standard ratesetting methodology to the
                OPPS national unadjusted payment based on the ASC standard ratesetting
                methodology to determine the device cost included in the OPPS payment
                rate for a device-intensive ASC covered surgical procedure, which we
                then set as equal to the device portion of the national unadjusted ASC
                payment rate for the procedure. We calculate the service portion of the
                ASC payment for device intensive procedures by applying the uniform ASC
                conversion factor to the service (non-device) portion of the OPPS
                relative payment weight for the device-intensive procedure. Finally, we
                sum the ASC device portion and ASC service portion to establish the
                full payment for the device-intensive procedure under the ASC payment
                system (82 FR 59409).
                 In past rulemaking (79 FR 66924), we have stated that the device-
                intensive methodology for ASCs should align with the device-intensive
                policies under the OPPS. Further, we have stated that we do not believe
                that procedures are device-intensive in one setting and not in another
                setting. We have heard concerns from stakeholders that our methodology
                does not provide device-intensive status to certain procedures even
                though the procedures' device offset percentages are greater than our
                30 percent threshold when calculated under the standard ASC ratesetting
                methodology. We have also heard concerns from stakeholders that
                procedures designated as device-intensive under the OPPS are not
                assigned device-intensive status under the ASC payment system even
                though the procedure has significant device costs.
                 The different ratesetting methodologies used under the OPPS and ASC
                payment system can create conflicts when determining device-intensive
                status. For example, procedures with device offset percentages greater
                than 30 percent under the OPPS may not have device offset percentages
                greater than 30 percent when calculated under the standard ASC
                ratesetting methodology. Under current policy, procedures must be
                device-intensive in the OPPS setting to be eligible for device-
                intensive status under the ASC payment system. However, this
                methodology has caused confusion among stakeholders and has denied
                device-intensive status to procedures with significant device costs.
                While we believe that device-intensive policies under the ASC payment
                system should align with device-intensive policies under the OPPS, we
                believe device-intensive
                [[Page 63774]]
                status under the ASC payment system should, at a minimum, reflect a
                procedure's estimated device costs under the ASC standard ratesetting
                methodology. Therefore, for CY 2022 and subsequent years, we proposed
                to assign device-intensive status to procedures that involve surgically
                inserted or implanted, high-cost, single-use devices to qualify as
                device-intensive procedures if their device offset percentage exceeds
                30 percent under the ASC standard ratesetting methodology, even if the
                procedure is not designated as device-intensive under the OPPS.
                 Further, in situations where a procedure is designated as device-
                intensive under the OPPS but the procedure's device offset percentage
                is below the device-intensive threshold under the standard ASC
                ratesetting methodology, we believe that deference should be given to
                the OPPS designation to address this conflict in status. Since the
                comprehensive ratesetting methodology under the OPPS packages a greater
                amount of non-device costs into the primary procedure and is typically
                able to use a greater number of claims in its ratesetting methodology,
                we believe that if a device receives OPPS device-intensive status, the
                device should also be device-intensive in the ASC setting, given that
                fewer non-device costs are generally packaged into a procedure's cost
                under the ASC methodology compared to the OPPS methodology. Therefore,
                for CY 2022 and subsequent years, we proposed that if a procedure is
                assigned device-intensive status under the OPPS, but has a device
                offset percentage below the device-intensive threshold under the
                standard ASC ratesetting methodology, the procedure will be assigned
                device-intensive status under the ASC payment system with a default
                device offset percentage of 31 percent.
                 We solicited comments on our proposed changes related to
                designating surgical procedures as device-intensive under the ASC
                payment system.
                 Comment: Many commenters supported our proposed changes related to
                designating surgical procedures as device-intensive under the ASC
                payment system. One commenter requested that we allow for the
                continuation of the default device offset percentage of 31 percent for
                procedures with fewer than 100 claims if the device offset percentage
                under the comprehensive and standard ratesetting methodology is less
                than 30 percent.
                 Response: We thank the commenters for their support of our
                proposal. We do not believe it would be appropriate to eliminate our
                device offset calculation for procedures with fewer than 100 claims
                because it is not our general policy to judge the accuracy of hospital
                charging and hospital cost reporting practices for purposes of
                ratesetting. Therefore, we will continue to rely on available claims
                data for determining device offset percentages for procedures with
                fewer than 100 claims.
                 Comment: Many commenters requested that we apply the device offset
                percentage for several new procedures with the predecessor code's
                device offset percentage based on CY 2019 claims data. These procedures
                include:
                 The predecessor CPT code 0191T in assigning the device
                offset percentage for CPT code 66989 (Extracapsular cataract removal
                with insertion of intraocular lens prosthesis (1-stage procedure),
                manual or mechanical technique (e.g., irrigation and aspiration or
                phacoemulsification), complex, requiring devices or techniques not
                generally used in routine cataract surgery (e.g., iris expansion
                device, suture support for intraocular lens, or primary posterior
                capsulorrhexis) or performed on patients in the amblyogenic
                developmental stage; with insertion of intraocular (e.g., trabecular
                meshwork, supraciliary, suprachoroidal) anterior segment aqueous
                drainage device, without extraocular reservoir, internal approach, one
                or more);
                 The predecessor CPT code 0191T in assigning the device
                offset percentage for CPT code 66991 (Extracapsular cataract removal
                with insertion of intraocular lens prosthesis (1 stage procedure),
                manual or mechanical technique (e.g., irrigation and aspiration or
                phacoemulsification); with insertion of intraocular (e.g., trabecular
                meshwork, supraciliary, suprachoroidal) anterior segment aqueous
                drainage device, without extraocular reservoir, internal approach, one
                or more);
                 The predecessor CPT code 0191T in assigning the device
                offset percentage for CPT code 0671T (Insertion of anterior segment
                aqueous drainage device into the trabecular meshwork, without external
                reservoir, and without concomitant cataract removal, one or more);
                 The predecessor CPT code 0548T in assigning the device
                offset percentage for CPT code 53451 (Periurethral transperineal
                adjustable balloon continence device; bilateral insertion, including
                cystourethroscopy and imaging guidance);
                 The predecessor CPT code 0549T in assigning the device
                offset percentage for CPT code 53452 (Periurethral transperineal
                adjustable balloon continence device; unilateral insertion, including
                cystourethroscopy and imaging guidance); and
                 The predecessor HCPCS code C9752 in assigning the device
                offset percentage for CPT code 64628 (Thermal destruction of
                intraosseous basivertebral nerve, including all imaging guidance; first
                2 vertebral bodies, lumbar or sacral).
                 Additionally, at the August 18, 2021 HOP Panel Meeting, a presenter
                requested that we use the predecessor CPT code 64568 (Incision for
                implantation of cranial nerve (e.g., vagus nerve) neurostimulator
                electrode array and pulse generator) in assigning the device offset
                percentage for CPT code 64582 (Open implantation of hypoglossal nerve
                neurostimulator array, pulse generator, and distal respiratory sensor
                electrode or electrode array). Based on the information presented at
                the meeting, the HOP Panel recommended we use CPT code 64568 to assign
                the device offset percentage for CPT code 64582.
                 Response: We agree with the commenters and the HOP Panel's
                recommendation. We note that we inadvertently did not apply device
                offset percentages to the new HCPCS codes mentioned by commenters and
                recommended by the HOP Panel where claims data of a predecessor code
                was available. Therefore, we are revising the device offset percentages
                for these procedures for this final rule to use CY 2019 claims data
                from these procedures' predecessor codes.
                 Comment: One commenter requested that we assign HCPCS code C9778
                (Colpopexy, vaginal; minimally invasive extra-peritoneal approach
                (sacrospinous)) device-intensive status as this procedure meets our
                device-intensive criteria.
                 Response: After further review, we agree with the commenter that
                HCPCS code C9778 meets our criteria for device-intensive status. We are
                accepting the commenter's recommendation and assigning a default device
                offset percentage of 31 percent to HCPCS code C9778 under the ASC
                payment system for CY 2022.
                 Comment: Commenters requested that we assign device-intensive
                status to:
                 CPT code 0499T (Cystourethroscopy, with mechanical
                dilation and urethral therapeutic drug delivery for urethral stricture
                or stenosis, including fluoroscopy, when performed);
                 CPT code 58674 (Laparoscopy, surgical, ablation of uterine
                fibroid(s) including intraoperative ultrasound guidance and monitoring,
                radiofrequency);
                [[Page 63775]]
                 CPT code 50590 (Lithotripsy, extracorporeal shock wave);
                 CPT code 59200 (Insertion of cervical dilator (e.g.,
                laminaria, prostaglandin) (separate procedure));
                 CPT code 66174 (Transluminal dilation of aqueous outflow
                canal; without retention of device or stent);
                 CPT code 66175 (Transluminal dilation of aqueous outflow
                canal; with retention of device or stent);
                 CPT code 93571 (Intravascular doppler velocity and/or
                pressure derived coronary flow reserve measurement (coronary vessel or
                graft) during coronary angiography including pharmacologically induced
                stress; initial vessel (list separately in addition to code for primary
                procedure); and
                 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).
                 Response: Based on CY 2019 claims data available for this final
                rule, the procedures requested by commenters do not have device offset
                percentages that exceed the 30-percent threshold required for device-
                intensive status under the OPPS or ASC payment system and, therefore,
                are not eligible to be assigned device-intensive status.
                 Comment: Some commenters recommended that the 30 percent device-
                intensive threshold be based on the final ASC payment rate and not OPPS
                costs. Additionally, one commenter requested that we lower the device-
                intensive threshold to 25 percent.
                 Response: We do not believe device offset percentages should be
                determined by dividing the OPPS-derived device offset portion by the
                final ASC payment rate as this would, in effect, be substantially
                reducing the device-intensive threshold under the ASC payment system.
                As we stated in the CY 2021 OPPS/ASC final rule with comment period (85
                FR 86015), lowering the device-intensive threshold assigns a greater
                amount of device costs, which are held constant between the OPPS and
                ASC payment system, into the prospective year. Lowering the device-
                intensive threshold, even to 25 percent, would put additional downward
                pressure on the ASC weight scalar and reduce the nondevice portion of
                ASC payment rates for surgical procedures. Therefore, for these reasons
                we are not accepting these recommendations.
                 Comment: One commenter suggested that we modify the device-
                intensive criteria to allow packaged procedures that trigger a
                complexity adjustment under OPPS to be eligible for device-intensive
                status under the ASC payment system.
                 Response: We do not believe any changes are warranted to our
                packaging policies under the ASC payment system at this time.
                Therefore, we are not accepting this comment but may consider it in
                future rulemaking.
                 Comment: One commenter recommended we publish an Addendum to our
                proposed and final rules that displays the device offset percentages
                for both device-intensive and nondevice-intensive procedures under the
                ASC payment system similar to Addendum P for the OPPS.
                 Response: We are accepting this recommendation. We are creating an
                Addendum FF for this final rule with comment period and subsequent
                proposed and final rules that will display the device offset
                percentages calculated under the standard ASC ratesetting methodology
                for covered surgical procedures.
                 After review of the public comments we received, we are finalizing
                our proposed methodology, without modification, to designate surgical
                procedures as device-intensive under the ASC payment system.
                Specifically, for CY 2022 and subsequent years, we are finalizing our
                proposal to designate procedures as device-intensive procedures if
                their device offset percentage exceeds 30 percent under the ASC
                standard ratesetting methodology, even if the procedure is not
                designated as device-intensive under the OPPS. Additionally, for CY
                2022 and subsequent years, we are finalizing our proposal that if a
                procedure is assigned device-intensive status under the OPPS, but has a
                device offset percentage below the device-intensive threshold under the
                standard ASC ratesetting methodology, the procedure will be assigned
                device-intensive status under the ASC payment system with a default
                device offset percentage of 31 percent.
                 Additionally, after reviewing the public comments we received, we
                are designating the ASC covered surgical procedures displayed in
                Addendum AA with payment indicator ``J8'' as device-intensive and
                subject to the device-intensive procedure payment methodology for CY
                2022. The full listing of the final CY 2022 device offset percentages
                under the ASC payment system for covered surgical procedures can be
                found in Addendum FF to the CY 2022 OPPS/ASC final rule with comment
                period (which is available via the internet on the CMS website).
                c. Adjustment to ASC Payments for No Cost/Full Credit and Partial
                Credit Devices
                 Our ASC payment policy for costly devices implanted or inserted in
                ASCs at no cost/full credit or partial credit is set forth in Sec.
                416.179 of our regulations, and is consistent with the OPPS policy that
                was in effect until CY 2014. We refer readers to the CY 2008 OPPS/ASC
                final rule with comment period (72 FR 66845 through 66848) for a full
                discussion of the ASC payment adjustment policy for no cost/full credit
                and partial credit devices. ASC payment is reduced by 100 percent of
                the device offset amount when a hospital furnishes a specified device
                without cost or with a full credit and by 50 percent of the device
                offset amount when the hospital receives partial credit in the amount
                of 50 percent or more of the cost for the specified device.
                 Effective CY 2014, under the OPPS, we finalized our proposal to
                reduce OPPS payment for applicable APCs by the full or partial credit a
                provider receives for a device, capped at the device offset amount.
                Although we finalized our proposal to modify the policy of reducing
                payments when a hospital furnishes a specified device without cost or
                with full or partial credit under the OPPS, in the CY 2014 OPPS/ASC
                final rule with comment period (78 FR 75076 through 75080), we
                finalized our proposal to maintain our ASC policy for reducing payments
                to ASCs for specified device-intensive procedures when the ASC
                furnishes a device without cost or with full or partial credit. Unlike
                the OPPS, there is currently no mechanism within the ASC claims
                processing system for ASCs to submit to CMS the amount of the actual
                credit received when furnishing a specified device at full or partial
                credit. Therefore, under the ASC payment system, we finalized our
                proposal for CY 2014 to continue to reduce ASC payments by 100 percent
                or 50 percent of the device offset amount when an ASC furnishes a
                device without cost or with full or partial credit, respectively.
                 Under current ASC policy, all ASC device-intensive covered surgical
                procedures are subject to the no cost/full credit and partial credit
                device adjustment policy. Specifically, when a device-intensive
                procedure is performed to implant or insert a device that is furnished
                at no cost or with full credit from the manufacturer, the ASC would
                append the HCPCS ``FB'' modifier on the line in the claim with the
                procedure
                [[Page 63776]]
                to implant or insert the device. The contractor would reduce payment to
                the ASC by the device offset amount that we estimate represents the
                cost of the device when the necessary device is furnished without cost
                or with full credit to the ASC. We continue to believe that the
                reduction of ASC payment in these circumstances is necessary to pay
                appropriately for the covered surgical procedure furnished by the ASC.
                 Effective in CY 2019 (83 FR 59043 through 59044), for partial
                credit, we adopted a policy to reduce the payment for a device-
                intensive procedure for which the ASC receives partial credit by one-
                half of the device offset amount that would be applied if a device was
                provided at no cost or with full credit, if the credit to the ASC is 50
                percent or more (but less than 100 percent) of the cost of the new
                device. The ASC will append the HCPCS ``FC'' modifier to the HCPCS code
                for the device-intensive surgical procedure when the facility receives
                a partial credit of 50 percent or more (but less than 100 percent) of
                the cost of a device. To report that the ASC received a partial credit
                of 50 percent or more (but less than 100 percent) of the cost of a new
                device, ASCs have the option of either: (1) Submitting the claim for
                the device-intensive procedure to their Medicare contractor after the
                procedure's performance, but prior to manufacturer acknowledgment of
                credit for the device, and subsequently contacting the contractor
                regarding a claim adjustment, once the credit determination is made; or
                (2) holding the claim for the device implantation or insertion
                procedure until a determination is made by the manufacturer on the
                partial credit and submitting the claim with the ``FC'' modifier
                appended to the implantation procedure HCPCS code if the partial credit
                is 50 percent or more (but less than 100 percent) of the cost of the
                device. Beneficiary coinsurance would be based on the reduced payment
                amount. As finalized in the CY 2015 OPPS/ASC final rule with comment
                period (79 FR 66926), to ensure our policy covers any situation
                involving a device-intensive procedure where an ASC may receive a
                device at no cost or receive full credit or partial credit for the
                device, we apply our ``FB''/''FC'' modifier policy to all device-
                intensive procedures.
                 In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59043
                through 59044) we stated we would reduce the payment for a device-
                intensive procedure for which the ASC receives partial credit by one-
                half of the device offset amount that would be applied if a device was
                provided at no cost or with full credit, if the credit to the ASC is 50
                percent or more (but less than 100 percent) of the cost of the device.
                In the CY 2020 OPPS/ASC final rule with comment period, we finalized
                continuing our existing policies for CY 2020. We note that we
                inadvertently omitted language that this policy would apply not just in
                CY 2019 but also in subsequent calendar years. We intended to apply
                this policy in CY 2019 and subsequent calendar years.
                 Therefore, we proposed to apply our policy for partial credits
                specified in the CY 2019 OPPS/ASC final rule with comment period (83 FR
                59043 through 59044) in CY 2022 and subsequent calendar years.
                Specifically, for CY 2022 and subsequent calendar years, we would
                reduce the payment for a device-intensive procedure for which the ASC
                receives partial credit by one-half of the device offset amount that
                would be applied if a device was provided at no cost or with full
                credit, if the credit to the ASC is 50 percent or more (but less than
                100 percent) of the cost of the device. To report that the ASC received
                a partial credit of 50 percent or more (but less than 100 percent) of
                the cost of a device, ASCs have the option of either: (1) Submitting
                the claim for the device intensive procedure to their Medicare
                contractor after the procedure's performance, but prior to manufacturer
                acknowledgment of credit for the device, and subsequently contacting
                the contractor regarding a claim adjustment, once the credit
                determination is made; or (2) holding the claim for the device
                implantation or insertion procedure until a determination is made by
                the manufacturer on the partial credit and submitting the claim with
                the ``FC'' modifier appended to the implantation procedure HCPCS code
                if the partial credit is 50 percent or more (but less than 100 percent)
                of the cost of the device. Beneficiary coinsurance would be based on
                the reduced payment amount.
                 We did not receive any comments on our policies related to no/cost
                full credit or partial credit devices, and we are continuing our
                existing policies for CY 2022 and subsequent years.
                d. Additions to the List of ASC Covered Surgical Procedures
                 Section 1833(i)(1) of the Act requires us, in part, to specify, in
                consultation with appropriate medical organizations, surgical
                procedures that are appropriately performed on an inpatient basis in a
                hospital but that can also be safely performed in an ASC, a CAH, or an
                HOPD, and to review and update the list of ASC procedures at least
                every 2 years. We evaluate the ASC covered procedures list (ASC CPL)
                each year to determine whether procedures should be added to or removed
                from the list, and changes to the list are often made in response to
                specific concerns raised by stakeholders.
                 From CY 2008 through CY 2020, under our regulations at Sec. Sec.
                416.2 and 416.166, covered surgical procedures furnished on or after
                January 1, 2008, were surgical procedures that met the general
                standards specified in Sec. 416.166(b) and were not excluded under the
                general exclusion criteria specified in Sec. 416.166(c). Specifically,
                under Sec. 416.166(b), the general standards provided that covered
                surgical procedures were surgical procedures specified by the Secretary
                and published in the Federal Register and/or via the internet on the
                CMS website that were separately paid under the OPPS, that would not be
                expected to pose a significant safety risk to a Medicare beneficiary
                when performed in an ASC, and for which standard medical practice
                dictated that the beneficiary would not typically be expected to
                require active medical monitoring and care at midnight following the
                procedure. Section 416.166(c) set out the general exclusion criteria
                used under the ASC payment system to evaluate the safety of procedures
                for performance in an ASC. The general exclusion criteria provided that
                covered surgical procedures do not include those surgical procedures
                that: (1) Generally result in extensive blood loss; (2) require major
                or prolonged invasion of body cavities; (3) directly involve major
                blood vessels; (4) are generally emergent or life threatening in
                nature; (5) commonly require systemic thrombolytic therapy; (6) are
                designated as requiring inpatient care under Sec. 419.22(n); (7) can
                only be reported using a CPT unlisted surgical procedure code; or (8)
                are otherwise excluded under Sec. 411.15. For a discussion of the
                history of our policies for adding surgical procedures to the ASC CPL,
                we refer readers to the CY 2021 OPPS/ASC final rule with comment period
                (85 FR 86143 through 86145).
                 In the CY 2021 OPPS/ASC final rule with comment period, we
                significantly revised our policy for adding surgical procedures to the
                ASC CPL. We revised the definition of covered surgical procedures at 42
                CFR 416.166(a) and (b) to add new subparagraphs to provide that, for
                services furnished on or after January 1, 2021, covered surgical
                procedures for purposes of the ASC CPL are surgical procedures
                specified by the Secretary and published in the Federal Register and/or
                via the internet on the
                [[Page 63777]]
                CMS website that: Are separately paid under the OPPS; and are not:
                Designated as requiring inpatient care as of December 31, 2020; only
                able to be reported using a CPT unlisted surgical procedure code; or
                otherwise excluded under Sec. 411.15.
                 We added a new paragraph (d) to Sec. 416.166 to provide that the
                general exclusion and general standard criteria that we used to
                identify covered surgical procedures furnished between January 1, 2008
                and December 31, 2020, would, beginning January 1, 2021, be safety
                factors that physicians consider as to a specific beneficiary when
                determining whether to perform a covered surgical procedure. We also
                added a new paragraph (e) to Sec. 416.166 to provide that, on or after
                January 1, 2021, we add surgical procedures to the list of ASC covered
                surgical procedures either when we identify a surgical procedure that
                meets the requirements of paragraph (b)(2) or we are notified of a
                surgical procedure that could meet the requirements of paragraph (b)(2)
                and we confirm that such procedure meets those requirements. We added
                267 surgical procedures to the ASC CPL that met the revised criteria
                for covered surgical procedures beginning in CY 2021.
                 As we explained in the CY 2021 OPPS/ASC final rule with comment
                period, there were a number of reasons that we made changes to our ASC
                CPL policy, including that ASCs are increasingly able to safely provide
                services that meet some of the general exclusion criteria. We explained
                that we believed it was important that we adapt the ASC CPL in light of
                significant advances in medical practice, surgical techniques, and ASC
                capabilities (85 FR 86150). We stated that, while many of the
                procedures we were adding to the ASC CPL were performed on non-Medicare
                patients who tend to be younger and have fewer comorbidities than the
                Medicare population, we believed careful patient selection could
                identify Medicare beneficiaries who are suitable candidates to receive
                these services in the ASC setting. We also emphasized the importance of
                ensuring that the healthcare system has as many access points and
                patient choices for Medicare beneficiaries as possible, which includes
                enabling physicians and patients to choose the ASC as the site of care
                when appropriate. Finally, we reiterated the critical role that
                physicians play in determining the appropriate site of care for their
                patients, including whether a surgical procedure can be safely
                performed in the ASC setting for an individual patient.
                1. Proposed Changes to the List of ASC Covered Surgical Procedures for
                CY 2022
                 Since the CY 2021 OPPS/ASC final rule was published, we have
                reexamined our ASC CPL policy and the public comments we received in
                response to the CY 2021 OPPS/ASC proposed rule, considered the concerns
                we received from stakeholders since the final rule was published, and
                conducted an internal clinical review of the 267 procedures we added to
                the ASC CPL under our revised policy beginning in CY 2021. After
                examining our revised policy and the feedback we have received, and
                reviewing the procedures we added to the ASC CPL under our revised
                policy, we have reconsidered our policy and believe that the policy may
                not appropriately assess the safety of performing surgical procedures
                on a typical Medicare beneficiary in an ASC, and that 258 of the 267
                surgical procedures we added to the ASC CPL beginning in CY 2021 under
                our revised policy may not be appropriate to be performed on a typical
                beneficiary in the ASC setting.
                 We believe that our current policy--to shift consideration of the
                general standards and exclusion criteria we have historically used to
                determine whether a surgical procedure should be added to the ASC CPL
                from CMS to physicians--needs to be modified to better ensure that
                surgical procedures added to the ASC CPL under the revised criteria can
                be performed safely in the ASC setting on the typical Medicare
                beneficiary. We recognize that appropriate patient selection and
                physicians' complex medical judgment could help mitigate risks for
                patient safety. But while we are always striving to balance the goals
                of increasing physician and patient choice, and expanding site neutral
                options with patient safety considerations, we nonetheless believe the
                current policy could be improved with additional patient safety
                considerations in determining whether a surgical procedure should be
                added to the ASC CPL.
                 One issue we identified with our revised policy is that many of the
                procedures added in CY 2021 would only be appropriate for Medicare
                beneficiaries who are healthier and have less complex medical
                conditions than the typical beneficiary. Upon further review, we
                believe the subset of Medicare beneficiaries who may be suitable
                candidates to receive these procedures in an ASC setting do not
                necessarily represent the typical Medicare beneficiary. After
                evaluating the 267 surgery or surgery-like codes that were added last
                year, CMS clinicians determined that 258 of these surgical procedures
                may pose a significant safety risk to a typical Medicare beneficiary
                when performed in an ASC, including that nearly all would likely
                require active medical monitoring and care at midnight following the
                procedure. In the CY 2021 OPPS/ASC final rule with comment period, we
                established that physicians would consider certain safety factors as to
                a specific beneficiary when determining whether to perform a covered
                surgical procedure in an ASC. However, while a physician can make
                safety determinations for a specific beneficiary, CMS is in the
                position to make safety determinations for the broader population of
                Medicare beneficiaries.
                 While there could be some appropriately selected patient
                populations for which some of these procedures could be safely
                performed in the ASC setting, that may not be the case for the typical
                Medicare beneficiary, due to comorbidities and other health risks that
                may require more intensive care and monitoring than provided in an ASC
                setting among this population. We believe it is appropriate to assess
                the safety of these procedures in the context of the typical Medicare
                beneficiary, whose health status is representative of the broader
                Medicare population. Thus, we believe evaluating procedures for their
                potential to require additional care and monitoring for the typical
                beneficiary is an appropriate consideration for CMS to make in
                determining which procedures can safely be performed in an ASC.
                 We are concerned that, under our current policy, we do not make an
                active enough determination about whether a procedure is suitable to
                perform on a typical Medicare beneficiary in an ASC setting. The policy
                finalized last year allows individual physicians discretion to perform
                a number of procedures in the ASC setting that would not necessarily be
                appropriate for the typical Medicare beneficiary in that setting.
                Clinicians apply appropriate screening criteria to determine either
                that the procedure should not be performed in the ASC setting because
                of the risks to the specific beneficiary, or that the specific
                beneficiary presents a low enough risk profile that the procedure could
                be safely performed in the ASC setting.
                 However, we want to reiterate that, in accordance with section
                1833(i)(1)(A) of the Act, the Secretary shall specify those surgical
                procedures that are appropriately (when considered in
                [[Page 63778]]
                terms of the proper utilization of hospital inpatient facilities)
                performed on an inpatient basis in a hospital but that also can be
                performed safely on an ambulatory basis in an ambulatory surgical
                center. That is, if Medicare allows payment for these services in the
                ASC setting, it means that Medicare has determined that the procedure
                is safe to perform on the typical Medicare beneficiary.
                 Accordingly, the addition of a procedure to the ASC CPL can signal
                to physicians that the procedure is safe to perform on the typical
                Medicare beneficiary in the ASC setting, even though the current
                criteria, adopted in CY 2021, for adding procedures to the ASC CPL do
                not include safety criteria other than ensuring that the procedure was
                not on the IPO list as of CY 2020. We recognize that, while there are
                similarities between the ASC and HOPD settings, there are also
                significant differences between the two care settings. The HOPD setting
                has additional capabilities, resources, and certifications that are not
                required for the ASC setting. For example, hospitals operate 24/7 and
                are subject to EMTALA requirements, while ASCs are not. Therefore, a
                procedure that can be furnished in the HOPD setting is not necessarily
                safe and appropriate to perform in an ASC setting simply because we
                make payment for the procedure when it is furnished in the HOPD
                setting.
                 In light of these concerns, in the CY 2022 OPPS/ASC proposed rule,
                we proposed to revise the criteria and process for adding procedures to
                the ASC CPL by reinstating the ASC CPL policy and regulation text that
                were in place in CY 2020. While this approach is a departure from the
                revised policy we adopted for CY 2021, it is consistent with our policy
                from CY 2008 through CY 2020 where we gradually expanded the ASC CPL
                while giving careful consideration to safety concerns and risks to the
                typical beneficiary. This approach would also continue to support our
                efforts to maximize patient access to care by, when appropriate, adding
                procedures to the ASC CPL to further increase the availability of ASCs
                as an alternative, lower cost site of care. While expanding the ASC CPL
                offers benefits like preserving the capacity of hospitals to treat more
                acute patients and promoting site neutrality, it is also essential that
                any expansion of the ASC CPL be done in a carefully calibrated fashion
                to ensure that Medicare is appropriately signaling that a procedure is
                safe to be performed in the ASC setting for a typical Medicare
                beneficiary.
                 Accordingly, for CY 2022, we proposed to revise the requirements
                for covered surgical procedures in the regulation at Sec. 416.166 to
                reinstate the specifications we had established prior to CY 2021.
                Specifically, we proposed that, effective for services furnished on or
                after January 1, 2022, covered surgical procedures are those procedures
                that meet the general standards and do not meet the general exclusions.
                We proposed to again provide in paragraph (b) of Sec. 416.166 that,
                subject to the exclusions we proposed to again include in paragraph
                (c), covered surgical procedures are surgical procedures specified by
                the Secretary and published in the Federal Register and/or via the
                internet on the CMS website that are separately paid under the OPPS,
                that would not be expected to pose a significant safety risk to a
                Medicare beneficiary when performed in an ASC, and for which standard
                medical practice dictates that the beneficiary would not typically be
                expected to require active medical monitoring and care at midnight
                following the procedure. We proposed to revise paragraph (c) to again
                include the five criteria currently included in paragraph (d) of the
                regulation as safety factors physicians consider. We proposed that
                revised paragraph (c) would provide that, notwithstanding paragraph
                (b), covered surgical procedures do not include those surgical
                procedures that: (1) Generally result in extensive blood loss; (2)
                require major or prolonged invasion of body cavities; (3) directly
                involve major blood vessels; (4) are generally emergent or life-
                threatening in nature; (5) commonly require systemic thrombolytic
                therapy; (6) are designated as requiring inpatient care under Sec.
                419.22(n); (7) can only be reported using a CPT unlisted surgical
                procedure code; or (8) are otherwise excluded under Sec. 411.15. We
                proposed to remove the physician considerations at Sec. 416.166(d) and
                change the notification process at Sec. 416.166(e) to a nomination
                process, which is discussed further in section (d)(2) below.
                 We stated that we expect that we would continue to expand the ASC
                CPL in future years under our proposed revised criteria as the practice
                of medicine and medical technology continue to evolve. We believe that
                adding appropriate procedures to the ASC CPL that meet the safety
                criteria that we proposed to reinstate would have beneficial effects
                for Medicare beneficiaries and healthcare professionals, including
                increased access, better utilization of existing healthcare resources,
                and expansion of the capacity of the healthcare system.
                 Comment: Commenters were largely split on the issue of reinstating
                the general standards and exclusion criteria at Sec. 416.166 that were
                in place prior to CY 2021. Many commenters opposed this proposal and
                recommended that CMS not re-adopt these criteria. These commenters
                expressed concern at the complete reversal to reinstate the
                longstanding criteria. Commenters contended that this proposal may
                substitute administrative criteria for physician clinical judgment,
                reduce beneficiary choice, and increase costs since the lack of payment
                for the ASC setting would push these procedures into the higher-cost
                hospital setting.
                 However, numerous other commenters supported our proposal to
                reinstate the general standards and exclusion criteria at Sec. 416.166
                that were in place prior to CY 2021 due to patient safety and quality
                of care concerns. Several commenters urged caution in how CMS modifies
                criteria and adds procedures to the ASC CPL, as they believe there is
                not enough information about which procedures are clinically
                appropriate for the ASC setting. One commenter noted that the general
                standards and exclusion criteria that were in effect in CY 2020 allowed
                the ASC CPL to evolve and expand with surgical advancements, while
                ensuring that procedures that continue to pose significant patient
                safety risks would only be payable when furnished in the hospital
                setting.
                 Several commenters, including providers and professional medical
                societies, expressed their belief that physicians are best equipped to
                conduct the clinical evaluation of the safety of procedures and decide
                whether to perform them on a particular beneficiary in a particular
                setting.
                 Response: We thank commenters for their feedback and suggestions.
                After reviewing the public comments provided, we believe that
                reinstating the longstanding general standards and exclusion criteria
                that were in place prior to CY 2021 is the most appropriate way to
                ensure that procedures that cannot be safely performed on an ambulatory
                basis for the typical Medicare beneficiary are not added to the ASC CPL
                and payable under the ASC payment system. The general standards and
                exclusion criteria identify procedures that typically require overnight
                stays or require post-operative active medical monitoring and care at
                midnight following the procedure. When used in conjunction with
                information from public comments, data from inpatient, outpatient, and
                [[Page 63779]]
                ambulatory sites of service, and medical review, we believe these
                criteria enable us to make an accurate assessment of whether a
                procedure can be safely performed in an ASC on the typical Medicare
                beneficiary. As a result, we are finalizing our proposal to revise the
                regulatory language at Sec. 416.166 and reinstate the general
                standards and exclusion criteria in place prior to CY 2021. We will
                take the additional recommendations suggested by commenters into
                consideration for future rulemaking.
                (1) Comment Solicitation on Procedures That Were Added to the ASC CPL
                in CY 2021 and Would Not Meet the Proposed Revised CY 2022 Criteria
                 As stated above, we proposed to remove 258 procedures from the ASC
                CPL for CY 2022 that were added to the ASC CPL in CY 2021 that we
                believe do not meet the proposed revised CY 2022 ASC CPL criteria.
                These procedures were listed in Table 45 of CY 2022 OPPS/ASC proposed
                rule (86 FR 42210). Based on our internal review of preliminary claims
                submitted to Medicare, we stated in the proposed rule that we do not
                believe that ASCs have been furnishing the majority of the 267
                procedures finalized in 2021. Because of this, we explained that we
                believed it is unlikely that ASCs have made practice changes in
                reliance on the policy we adopted in CY 2021. Therefore, we stated that
                we do not anticipate that ASCs would be significantly affected by the
                removal of these 258 procedures from the ASC CPL. We sought input from
                commenters who believe any of the 258 procedures added to the ASC CPL
                in CY 2021 meet the proposed revised CY 2022 criteria and, if those
                revised criteria are finalized, should remain on the ASC CPL for CY
                2022. We requested any clinical evidence or literature to support
                commenters' views that any of these procedures meet the proposed
                revised CY 2022 criteria and should remain on the ASC CPL for CY 2022.
                 Comment: Numerous commenters did not support our proposal to remove
                258 surgical procedures from the ASC CPL beginning in CY 2022 that had
                been added to the ASC CPL in CY 2021, but that we proposed would not
                meet the reinstated general standards and exclusion criteria. These
                commenters, including several ambulatory surgical center associations,
                providers, and professional associations, supported retaining all 258
                procedures on the ASC CPL and requested that CMS reconsider this
                proposal. Commenters stated that these procedures are being safely and
                effectively performed on Medicare beneficiaries in the ASC setting with
                high levels of patient satisfaction, improved efficiency, and lower
                cost to both the insurer and the patient. Many noted that CMS's
                decision to add and then remove hundreds of procedures from the ASC CPL
                was jarring, as well as lacking in transparency and support from data
                to justify the decision. Several commenters also noted that access to
                additional surgical procedures in ASCs during the PHE may be an
                important and viable option for beneficiaries.
                 However, many other commenters supported our proposal to remove 258
                surgical procedures from the ASC CPL, including hospital associations,
                professional associations, and device manufacturers. These commenters
                believed that our proposal, if finalized, would lead to improved
                patient outcomes and safety with fewer complex procedures being done in
                the ASC setting. Commenters noted that they believe procedures that
                would pose a high risk of complications that ASCs are not equipped to
                handle should remain off the ASC CPL until there is careful
                consideration of the potential safety risks for beneficiaries and the
                procedures are determined appropriate to be performed in the ASC
                setting.
                 Numerous commenters suggested specific codes or code ranges that
                they believed should be added to or remain on the ASC CPL. We received
                140 surgical procedure recommendations in total, listed in Table 61
                below. The majority of these recommendations were not accompanied by
                any supporting literature or evidence, with some providing only
                experiential data and simply stating support for CMS paying for the
                surgical procedures when they are furnished in the ASC setting.
                 Response: We thank commenters for their input. We assessed the
                commenters' recommendations to keep 140 surgical procedures on the ASC
                CPL. The recommendations included 123 codes that were part of the 258
                codes proposed for removal, 14 codes that were not on the ASC CPL due
                to being on the Inpatient Only list or not being surgery-like codes,
                and 3 codes that have been on the ASC CPL and that we did not propose
                to remove in CY 2022. We individually assessed each of these 140
                procedures, evaluating clinical data on these procedures from multiple
                sites of services, using literature and experiential data provided in
                public comments, and ASC claims volume from CY 2021 to determine
                whether these procedures meet each of the proposed regulatory criteria.
                 Based on our review of the clinical characteristics of the
                procedures, claims volume in the ASC setting for CY 2021, and their
                similarity to other procedures that are currently on the ASC CPL, we
                believe that six procedures (CPT codes 0499T, 54650, 60512, 69660,
                28005, and 27412) out of the 140 procedure recommendations we received
                can be safely performed for the typical beneficiary in the ASC setting
                and meet the general standards and exclusion criteria for the ASC CPL
                that we are reinstating. These codes have few to no inpatient
                admissions and are largely performed in outpatient settings. We agree
                with commenters who stated that advancements in clinical practice, less
                invasive techniques, and patient selection have contributed to allowing
                these procedures to be safely performed in an ASC setting. Therefore,
                in this final rule with comment period, we are finalizing keeping each
                of these six procedures on the ASC CPL. These procedures, listed in
                Table 60 below, are:
                 CPT 0499T (Cystourethroscopy, with mechanical dilation and
                urethral therapeutic drug delivery for urethral stricture or stenosis,
                including fluoroscopy, when performed);
                 CPT 54650 (Orchiopexy, abdominal approach, for intra-
                abdominal testis (e.g., fowler-stephens));
                 CPT 60512 (Parathyroid autotransplantation (list
                separately in addition to code for primary procedure));
                 CPT 69660 (Stapedectomy or stapedotomy with
                reestablishment of ossicular continuity, with or without use of foreign
                material);
                 CPT 28005 (Incision, bone cortex (e.g., osteomyelitis or
                bone abscess), foot), and
                 CPT 27412 (Autologous chondrocyte implantation, knee).
                 Of these six procedures, two of the codes (CPT 69660 and CPT 28005)
                were already on the ASC CPL prior to CY 2020. One of the codes (CPT
                27412) was added in CY 2020, and was determined to meet the general
                standards and exclusion criteria and was not proposed for removal this
                year. Three codes (CPT 0499T, CPT 54650, CPT 60512) were added to the
                ASC CPL under the revised criteria in CY 2021 and proposed for removal
                this year.
                 Due to patient safety concerns, for the remaining procedures that
                we proposed to remove from the ASC CPL but that commenters recommended
                that we retain on the list, we believe that 255 of 258 codes proposed
                for removal this year should be removed from the ASC CPL and that the
                14 procedures not currently on the ASC CPL not be added because they
                are on the IPO list or are not surgery-like. In the CY 2022 OPPS/ASC
                proposed rule, we assessed all 258
                [[Page 63780]]
                codes against the revised criteria and proposed to remove them based
                upon our determination that they did not meet the criteria we proposed
                to reinstate. Therefore, for this final rule with comment period, we
                solely re-reviewed the 140 codes that commenters specifically
                recommended for review, 123 of which were among the 258 codes proposed
                for removal from the ASC CPL beginning in CY 2022, one code of which
                was added in CY 2021 that was not proposed for removal, and 16 of which
                are new codes, in order to consider the additional information received
                from public comments to determine whether these codes should remain on
                or be added to the ASC CPL. We explain below for each anatomical
                category of the 135 recommended procedures our rationale for not
                including them on the ASC CPL beginning in CY 2022.
                 35 genitourinary codes, including laparoscopic
                ureterolithotomy, nephrectomy, and renal ablation, penis and urethra
                revision procedures, vaginal repair and removal procedures, and
                hysterectomy procedures. Many of these procedures have associated
                inpatient admissions, where the beneficiary requires active medical
                monitoring and care at midnight following the procedure. Additionally,
                a number of these procedures would pose a significant safety risk to
                beneficiaries without post-operative inpatient care.
                 31 musculoskeletal codes, including total shoulder
                arthroplasty procedures, incision of hip tendons, amputation through
                metatarsal, reconstruction of mandibular rami procedures, open
                treatment of orbital floor blowout fracture procedures, knee
                arthroscopy meniscal transplantation, and lumbar spine fusion
                procedures. Although a few of these procedures have some claims volume
                in the outpatient setting, many of them are also complex procedures
                with inpatient admissions and multiple post-operative inpatient days,
                where infections and need for intravenous antibiotics are not uncommon
                events, indicating that the beneficiary would require active monitoring
                and care past midnight following the procedure.
                 24 cardiovascular codes, including procedures like blood
                vessel lesion repair, implantable defibrillator electrode removal,
                infected graft excision, arm artery repair, insertion and removal of
                intravascular vena cava filter, or wireless cardiac stimulator
                insertion. These procedures are largely performed in inpatient settings
                and require multiple post-operative inpatient days, indicating that the
                beneficiary would require active monitoring and care past midnight
                following the procedure. These procedures also involve major blood
                vessels, are emergent or life threatening in nature, and require
                systemic thrombolytic therapy in some cases.
                 10 respiratory codes, including nasal or sinus
                endoscopies, laryngoplasties, and windpipe incision. While several of
                these codes have some outpatient volume, these procedures are largely
                performed in an inpatient setting. Many of these procedures have
                associated inpatient admissions and multiple post-operative days,
                indicating the beneficiary would require active monitoring and care
                past midnight following the procedure. Additionally, some of these
                procedures could be emergent or life-threatening in nature.
                 12 gastrointestinal codes, including paraesophageal hernia
                repairs, laparoscopic esophagogastric fundoplasty, appendectomy,
                laparoscopic gastric restrictive procedures, and laparoscopic revision
                or removal of gastric neurostimulator electrodes. While some of these
                procedures have outpatient volume, many have inpatient admissions and
                potential procedure risks (e.g. perforation), indicating that the
                beneficiary would require active monitoring and care past midnight
                following the procedure. Additionally, these procedures can involve
                prolonged invasion of body cavities, and be life-threatening or
                emergent in nature. Additionally, several of these procedures are less
                commonly done in Medicare patients and more frequently performed in a
                younger population.
                 13 nervous system codes, including neck spine disk
                surgery, laminectomy and laminotomy procedures, spinal cord
                decompression, spinal lamina removal, spinal disk surgery, and spinal
                canal catheter implant. These codes have associated inpatient
                admissions and post-operative days, indicating that the beneficiary
                would require active monitoring and care past midnight following the
                procedure. Many of these procedures also pose a significant safety risk
                to the beneficiary when close post-operative neurosurgical surveillance
                is not frequently provided.
                 4 endocrine codes including thyroidectomy and
                parathyroidectomy procedures. While these procedures have outpatient
                volume, there are inpatient admissions associated with these
                procedures, indicating the beneficiary would be expected to stay past
                midnight following the procedure. Additionally, the intraservice time
                for these procedures can vary greatly, often becoming a prolonged
                invasion of body cavities.
                 2 chest and lymphatic codes, including biopsy or excision
                of lymph nodes and mediastinoscopy with lymph node biopsy. There are
                inpatient admissions associated with these procedures, indicating the
                beneficiary would be expected to stay past midnight following the
                procedure.
                 1 ear code, decompression of the internal auditory canal.
                This procedure is largely performed in the inpatient setting and has
                associated ICU admissions, indicating the beneficiary would be expected
                to stay past midnight following the procedure. Additionally, patients
                often require frequent neurosurgical checks in the post-operative
                period.
                 1 mastectomy code, modified radical mastectomy. There are
                inpatient admissions associated with this procedure, indicating the
                beneficiary would be expected to stay past midnight following the
                procedure. Additionally, performing this procedure in an ASC can pose
                safety risks to the typical beneficiary.
                 2 imaging/study codes, including esophagus motility study
                and liver elastography. These codes are not surgical or surgery-like
                procedures and would not be covered when furnished in an ASC.
                 Given these considerations, we believe that these 135 codes do not
                meet the proposed criteria to be included on the ASC CPL due to
                inpatient admissions, multiple-day stays past midnight, safety risks to
                the typical beneficiary without active post-operative monitoring,
                involvement of major blood vessels, or prolonged invasion of a body
                cavity. We also note that there is insufficient volume data to fully
                assess concerns about patient safety risks when these procedures are
                performed in the ASC, with fewer than 25 procedures proposed for
                removal from ASC CPL having more than 10 claims in the ASC setting
                during CY 2021.
                 However, as medical practice continues to evolve, we recognize that
                there will be additional advancements and improvements that allow these
                procedures to be safely offered in the ASC setting for the typical
                Medicare beneficiary. We believe that there is potential for some of
                the procedures removed this year to be added back to the ASC CPL if
                there is adequate evidence that these procedures meet our criteria and
                can be safely performed on the typical Medicare beneficiary in the ASC
                setting. We encourage stakeholders to continue to submit this
                information in future rulemaking.
                 In summary, we added 267 procedures to the ASC CPL in the CY
                [[Page 63781]]
                2021 OPPS/ASC final rule with comment period, based on the revised
                criteria for the ASC CPL. In the CY 2022 OPPS/ASC proposed rule, we
                proposed to remove 258 of the 267 procedures, based on our proposed
                reinstatement of the CY 2020 criteria. We requested comment on whether
                we should keep any of these procedures on the ASC CPL. During the
                public comment period, commenters recommended that 140 surgical
                procedures either remain on or be added to the ASC CPL, including 3
                codes that have been on the ASC CPL that we did not propose to remove
                in CY 2022, 123 codes that were among the 258 we proposed for removal
                from ASC CPL, and 14 codes that were not on the ASC CPL due to being on
                the IPO list or not surgery-like.
                 Therefore, in this CY 2022 OPPS/ASC final rule with comment period,
                after reviewing those 140 procedure recommendations, we are finalizing
                retaining six codes that commenters recommended we retain on the ASC
                CPL, specifically the 3 codes that have been on the ASC CPL that we did
                not proposed to remove in CY 2022, as well as 3 codes of the 258 codes
                proposed for removal. Thus, we are removing the remaining 255 of 258
                codes proposed for removal. These procedures are listed below in Tables
                60, 61, and 62 of this CY 2022 OPPS/ASC final rule with comment period.
                Nomination Process Proposal
                 For CY 2022, we proposed to change the current notification process
                for adding surgical procedures to the ASC CPL to a nomination process.
                We proposed that external parties, for example, medical specialty
                societies or other members of the public, could nominate procedures to
                be added to the ASC CPL. CMS anticipates that stakeholders, such as
                specialty societies that specialize in and have a deep understanding of
                the complexities involved in providing certain procedures, would be
                able to provide valuable suggestions as to which additional procedures
                may reasonably and safely be performed in an ASC. While members of the
                public may already suggest procedures to be added to the ASC CPL
                through meetings with CMS or through public comments on the proposed
                rule, we believe it may be beneficial to enable the public,
                particularly specialty societies who are very familiar with procedures
                in their specialty, to formally nominate procedures based on the latest
                evidence available as well as input from their memberships. We proposed
                to include the nomination process in a new subparagraph (d)(1) of Sec.
                416.166. We proposed that the regulation at Sec. 416.166(d)(2) would
                provide that, if we identify a surgical procedure that meets the
                requirements at paragraph (a) of this section, including a surgical
                procedure nominated by an external party under paragraph (d)(1), we
                will propose to add the surgical procedure to the list of ASC covered
                surgical procedures in the next available annual rulemaking. Under this
                proposal, we would propose to add a nominated procedure to the ASC CPL
                if it meets the proposed general standards for covered surgical
                procedures at proposed Sec. 416.166(b), and does not meet the general
                exclusions in proposed Sec. 416.166(c).
                 Specifically, for the OPPS/ASC rulemaking for a calendar year, we
                proposed to request stakeholder nominations by March 1 of the year
                prior to the calendar year for the next applicable rulemaking cycle in
                order to be included in that rulemaking cycle. For example,
                stakeholders would need to send in nominations by March 1, 2022, to be
                considered for the CY 2023 rulemaking cycle and potentially have their
                nominated procedures added to the ASC CPL effective January 1, 2023. We
                proposed that we would evaluate procedures nominated by stakeholders
                based on the applicable statutory and regulatory requirements for ASC
                covered surgical procedures. We proposed to address nominated
                procedures beginning in the CY 2023 rulemaking cycle. We proposed to
                address in rulemaking nominated procedures for which stakeholders have
                provided sufficient information for us to evaluate the procedure. We
                proposed to include in the applicable proposed rule, a summary of the
                justification for proposing to add or not add each nominated procedure,
                which would allow members of the public to assess and comment on
                nominated procedures during the public comment period. We proposed
                that, after reviewing comments provided during the public comment
                period, we would indicate whether or not we are adding the procedures
                to ASC CPL in this final rule with comment period. In the event that
                CMS determines that a nominated procedure does not meet the criteria to
                be added to the ASC CPL, we would provide our rationale in the
                rulemaking. We indicated that in certain cases we may need to defer a
                proposal regarding a nominated procedure to the next regulatory cycle
                or future rulemaking in order to have sufficient time to evaluate and
                make an appropriate proposal about the nominated procedure.
                 We also sought comment on how we might prioritize our review of
                nominated procedures, in the event we receive an unexpectedly or
                extraordinarily large volume of nominations for which CMS has
                insufficient resources to address in the annual rulemaking. For
                example, if we could not address every nomination in a rulemaking cycle
                due to a large volume, we may need to prioritize our review such that
                we would only address in rulemaking those nominations that merit
                priority. Therefore, we sought comments as to how CMS should prioritize
                nominations. For example, whether we would prioritize the nominations
                that have codes nominated by multiple organizations or individuals,
                codes recently removed from the IPO list, codes accompanied by evidence
                that other payers are paying for the service on an outpatient basis or
                in an ASC setting, or a variety of other factors. We stated that, if we
                were to finalize a prioritization hierarchy for CMS' review of
                nominated procedures to the ASC CPL, we would indicate in regulation
                text, likely in proposed Sec. 416.166(d)(2) Inclusion in Rulemaking:
                (1) That CMS would apply a prioritization hierarchy for reviewing
                nominated procedures if necessary because of an unexpectedly or
                extraordinarily large volume of nominations; and (2) specify CMS'
                prioritization hierarchy.
                 We stated that we believe this nominations proposal allows for the
                expansion of the ASC CPL in a more gradual fashion, which would better
                balance the goals of increasing patient choice and expanding site
                neutral options with patient safety considerations. We stated that we
                believe a nomination process will take time to develop because we want
                to incorporate stakeholder input on the most effective way to structure
                this process. We also acknowledged that stakeholders will need time to
                consider and evaluate potential surgical procedures to nominate. We
                proposed to accept nominations for surgical procedures to be added to
                the ASC CPL beginning in CY 2023.
                 Comment: The majority of commenters, which included device
                manufacturers, hospital associations, and ambulatory surgery
                associations, supported the proposal to establish a process for the
                public to nominate procedures for addition to the ASC CPL. Stakeholders
                believed this process would provide more transparency and engagement on
                procedures earlier in the process, formalize the review process, and
                allow for more gradual expansion of the ASC CPL. One commenter
                suggested CMS publish nominations publicly before the proposed rule
                each year to
                [[Page 63782]]
                allow more opportunity for input, while another requested more
                information on the data needs related to the nomination process. Two
                commenters did not support the nomination process as they believe it
                would cause additional bureaucracy and delay the ASC CPL additions
                process.
                 Commenters offered suggestions on different approaches for CMS to
                consider when approaching criteria including prioritizing procedures
                endorsed by physician specialty societies, ASC specialty societies,
                and/or multi-specialty physician organizations that can directly attest
                to the safety profile of procedures furnished in ASCs; consider real-
                world evidence when evaluating a procedure for addition to the ASC CPL;
                consider evidence that commercial payers are paying for a service in
                the ASC setting for private and/or Medicare Advantage patients;
                consider procedures that have been successfully performed for Medicare
                FFS patients during the COVID-19 PHE under the ``Hospital without
                Walls'' initiative; convene a panel of medical experts to assess the
                ASC CPL criteria to ensure they reflect contemporary thinking and
                current medical practice; take into account current length of stay
                (LOS) requirements of a procedure; determine how procedures promote
                access for beneficiaries and providing deference to the patient-
                clinician decision-making process; and develop a framework that
                combines aspects of cost savings based on site of service, patient
                safety considerations, and volume of procedures that can and have been
                performed in an ASC setting.
                 Response: We thank the commenters for their input on the nomination
                process. We agree with commenters that a formalized process whereby the
                public notifies CMS of procedures to be added to the ASC CPL would
                provide more transparency and increase opportunities for CMS to engage
                with providers and external stakeholders in adding procedures to the
                ASC CPL. We intend to provide details on how procedures can be
                nominated early next year, in order for commenters to be able to send
                their nominations on March 1, 2022. After consideration of the public
                comments we received, we are finalizing our proposal to add a
                nomination process under our current regulations at Sec.
                416.166(d)(1), which describes how an external party may nominate a
                surgical procedure by March 1 of a calendar year for the ASC CPL for
                the following year. We are also finalizing the regulation text we
                proposed to add at Sec. 416.166(d)(2), which provides that if CMS
                identifies a surgical procedure that meets the requirements at Sec.
                416.166(a), including a surgical procedure nominated under paragraph
                (d)(1), it will propose to add the surgical procedure to the ASC CPL in
                the next available rulemaking.
                BILLING CODE 4120-01-P
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                BILLING CODE 4120-01-C
                2. Covered Ancillary Services
                 In the CY 2019 OPPS/ASC final rule (83 FR 59062 through 59063),
                consistent with the established ASC payment system policy (72 FR
                42497), we finalized the policy to update the ASC list of covered
                ancillary services to reflect the payment status for the services under
                the CY 2019 OPPS/ASC final rule with comment period. As discussed in
                prior rulemaking, maintaining consistency with the OPPS may result in
                changes to ASC payment indicators for some covered ancillary services
                because of changes that are being finalized under the OPPS for CY 2022.
                For example, if a covered ancillary service was separately paid under
                the ASC payment system in CY 2021, but will be packaged under the CY
                2022 OPPS, to maintain consistency with the OPPS, we would also package
                the ancillary service under the ASC payment system for CY 2022. In the
                CY 2019 OPPS/ASC final rule, we finalized the policy to continue this
                reconciliation of packaged status for subsequent calendar years.
                Comment indicator ``CH'', which was discussed in section XIII.F. of the
                CY 2022 OPPS/ASC proposed rule, is used in Addendum BB to this CY 2022
                OPPS/ASC final rule (which is available via the internet on the CMS
                website) to indicate covered ancillary services for which we are
                finalizing a change in the ASC payment indicator to reflect a finalized
                change in the OPPS treatment of the service for CY 2022.
                 For CY 2022, as discussed in section II.A.3.b. of this final rule
                with comment period, we are finalizing our proposal to revise 42 CFR
                416.164(b)(6) to include, as ancillary items that are integral to a
                covered surgical procedure and for which separate payment is allowed,
                non-opioid pain management drugs and biologicals that function as a
                supply when used in a surgical procedure as determined by CMS in
                proposed new Sec. 416.174.
                 New CPT and HCPCS codes for covered ancillary services and their
                final payment indicators for CY 2022 can be found in section XIII.B of
                this final rule with comment period. All ASC covered ancillary services
                and their final payment indicators for CY 2022 are also included in
                Addendum BB to the CY 2022 OPPS/ASC proposed rule (which is available
                via the internet on the CMS website).
                D. Update and Payment for ASC Covered Surgical Procedures and Covered
                Ancillary Services
                1. ASC Payment for Covered Surgical Procedures
                a. Background
                 Our ASC payment policies for covered surgical procedures under the
                revised ASC payment system are described in the CY 2008 OPPS/ASC final
                rule with comment period (72 FR 66828 through 66831). Under our
                established policy, we use the ASC standard ratesetting methodology of
                multiplying the ASC relative payment weight for the procedure by the
                ASC conversion factor for that same year to calculate the national
                unadjusted payment rates for procedures with payment indicators ``G2''
                and ``A2''. Payment indicator ``A2'' was developed to identify
                procedures that were included on the list of ASC covered surgical
                procedures in CY 2007 and, therefore, were subject to transitional
                payment prior to CY 2011. Although the 4-year transitional period has
                ended and payment indicator ``A2'' is no longer required to identify
                surgical procedures subject to transitional payment, we retained
                payment indicator ``A2'' because it is used to identify procedures that
                are exempted from the application of the office-based designation.
                 The rate calculation established for device-intensive procedures
                (payment indicator ``J8'') is structured so only the service portion of
                the rate is subject to the ASC conversion factor. In the CY 2021 OPPS/
                ASC final rule with comment period (85 FR 86122 through 86179), we
                updated the CY 2020 ASC payment rates for ASC covered surgical
                procedures with payment indicators of ``A2'', ``G2'', and ``J8'' using
                CY 2019
                [[Page 63806]]
                data, consistent with the CY 2021 OPPS update. We also updated payment
                rates for device-intensive procedures to incorporate the CY 2021 OPPS
                device offset percentages calculated under the standard APC ratesetting
                methodology, as discussed earlier in this section.
                 Payment rates for office-based procedures (payment indicators
                ``P2'', ``P3'', and ``R2'') are the lower of the PFS nonfacility PE
                RVU-based amount or the amount calculated using the ASC standard rate
                setting methodology for the procedure. In the CY 2021 OPPS/ASC final
                rule with comment period, we updated the payment amounts for office-
                based procedures (payment indicators ``P2'', ``P3'', and ``R2'') using
                the most recent available MPFS and OPPS data. We compared the estimated
                CY 2021 rate for each of the office-based procedures, calculated
                according to the ASC standard rate setting methodology, to the PFS
                nonfacility PE RVU-based amount to determine which was lower and,
                therefore, would be the CY 2021 payment rate for the procedure under
                our final policy for the revised ASC payment system (Sec. 416.171(d)).
                 In the CY 2014 OPPS/ASC final rule with comment period (78 FR
                75081), we finalized our proposal to calculate the CY 2014 payment
                rates for ASC covered surgical procedures according to our established
                methodologies, with the exception of device removal procedures. For CY
                2014, we finalized a policy to conditionally package payment for device
                removal procedures under the OPPS. Under the OPPS, a conditionally
                packaged procedure (status indicators ``Q1'' and ``Q2'') describes a
                HCPCS code where the payment is packaged when it is provided with a
                significant procedure but is separately paid when the service appears
                on the claim without a significant procedure. Because ASC services
                always include a covered surgical procedure, HCPCS codes that are
                conditionally packaged under the OPPS are always packaged (payment
                indicator ``N1'') under the ASC payment system. Under the OPPS, device
                removal procedures are conditionally packaged and, therefore, would be
                packaged under the ASC payment system. There would be no Medicare
                payment made when a device removal procedure is performed in an ASC
                without another surgical procedure included on the claim; therefore, no
                Medicare payment would be made if a device was removed but not
                replaced. To ensure that the ASC payment system provides separate
                payment for surgical procedures that only involve device removal--
                conditionally packaged in the OPPS (status indicator ``Q2'')--we
                continued to provide separate payment since CY 2014 and assigned the
                current ASC payment indicators associated with these procedures.
                b. Update to ASC Covered Surgical Procedure Payment Rates for CY 2022
                 We proposed to update ASC payment rates for CY 2022 and subsequent
                years using the established rate calculation methodologies under Sec.
                416.171 and using our definition of device-intensive procedures, as
                discussed in section XII.C.1.b. of the CY 2022 OPPS/ASC proposed rule.
                Because the proposed OPPS relative payment weights are generally based
                on geometric mean costs, we proposed that the ASC payment system would
                generally use the geometric mean cost to determine proposed relative
                payment weights under the ASC standard methodology. We proposed to
                continue to use the amount calculated under the ASC standard
                ratesetting methodology for procedures assigned payment indicators
                ``A2'' and ``G2''.
                 We proposed to calculate payment rates for office-based procedures
                (payment indicators ``P2'', ``P3'', and ``R2'') and device-intensive
                procedures (payment indicator ``J8'') according to our established
                policies and to use our proposed modified definition to identify
                device-intensive procedures, as discussed in section XII.C.1.b. of the
                CY 2022 OPPS/ASC proposed rule. Therefore, we proposed to update the
                payment amount for the service portion of the device-intensive
                procedures using the standard ASC ratesetting methodology and the
                payment amount for the device portion based on the proposed CY 2022
                device offset percentages that have been calculated using the standard
                OPPS APC ratesetting methodology. We proposed that payment for office-
                based procedures would be at the lesser of the proposed CY 2022 MPFS
                nonfacility PE RVU-based amount or the proposed CY 2022 ASC payment
                amount calculated according to the ASC standard ratesetting
                methodology.
                 As we did for CYs 2014 through 2021, for CY 2022 we proposed to
                continue our policy for device removal procedures, such that device
                removal procedures that are conditionally packaged in the OPPS (status
                indicators ``Q1'' and ``Q2'') would be assigned the current ASC payment
                indicators associated with those procedures and would continue to be
                paid separately under the ASC payment system.
                 Comment: Several commenters recommended that Medicare allow ASCs to
                bill procedures with an unlisted code, particularly new technologies
                and innovative techniques in the ASC setting. They noted that many new
                procedures are performed in the ASC setting before procedure-specific
                CPT codes are established. These commenters also mentioned that codes
                include the narrowly defined anatomic region of the service, which
                could provide the basis for a safety determination, and noted there is
                not a clear safety rationale for the policy on unlisted codes in the
                ASC setting. Another commenter requested that MACs be able to price
                unlisted codes. Commenters requested that CMS eliminate the restriction
                on billing with unlisted codes in the ASC setting.
                 Response: Under Sec. 416.166(c)(7), covered surgical procedures do
                not include procedures that can only be reported using a CPT unlisted
                surgical procedure code. As discussed in the August 2, 2007 ASC final
                rule (72 FR 42485), it is not possible to know what specific procedure
                would be represented by an unlisted code. Additionally, although the
                code may include the narrowly defined anatomic region of the service,
                this information is not sufficient to fully assess the procedure
                against the applicable regulatory criteria at Sec. 416.166. Therefore,
                as it is not possible to appropriately evaluate procedures reported by
                unlisted CPT codes, we are not accepting this recommendation.
                 We are finalizing our proposed policies without modification to
                calculate the CY 2022 payment rates for ASC covered surgical procedures
                according to our established rate calculation methodologies under Sec.
                416.171 and using the modified definition of device-intensive
                procedures as discussed in section XIII.C.1.b. of this CY 2022 OPPS/ASC
                final rule with comment period. For covered office-based surgical
                procedures, the payment rate is the lower of the final CY 2022 MPFS
                nonfacility PE RVU-based amount or the final CY 2022 ASC payment amount
                calculated according to the ASC standard ratesetting methodology. The
                final payment indicators and rates set forth in this final rule with
                comment period are based on a comparison using the PFS PE RVUs and the
                conversion factor effective January 1, 2022. For a discussion of the
                PFS rates, we refer readers to the CY 2022 PFS final rule with comment
                period, which is available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
                [[Page 63807]]
                c. Limit on ASC Payment Rates for Procedures Assigned to Low Volume
                APCs
                 As stated in section XIII.D.1.b. of the CY 2022 OPPS/ASC proposed
                rule, the ASC payment system generally uses OPPS geometric mean costs
                under the standard methodology to determine proposed relative payment
                weights under the standard ASC ratesetting methodology. However, for
                low-volume device-intensive procedures, the proposed relative payment
                weights are based on median costs, rather than geometric mean costs, as
                discussed in section IV.B.5. of the CY 2022 OPPS/ASC proposed rule.
                 In the CY 2020 OPPS/ASC final rule with comment period (84 FR
                61400), we finalized our policy to limit the ASC payment rate for low-
                volume device-intensive procedures to a payment rate equal to the OPPS
                payment rate for that procedure. Under this policy, where the ASC
                payment rate based on the standard ASC ratesetting methodology for low
                volume device-intensive procedures would exceed the rate paid under the
                OPPS for the same procedure, we establish an ASC payment rate for such
                procedures equal to the OPPS payment rate for the same procedure.
                 As discussed in section X.C of the CY 2022 OPPS/ASC proposed rule
                (86 FR 42181 through 42185), we proposed a low volume APC policy for CY
                2022 and subsequent calendar years. Under our proposal, we expanded the
                low volume adjustment policy that is applied to procedures assigned to
                New Technology APCs and applied such policy to clinical and
                brachytherapy APCs. Specifically, a clinical APC or brachytherapy APC
                with fewer than 100 claims per year would be designated as a low volume
                APC. For items and services assigned to APCs we proposed to designate
                as low volume APCs as well as procedures assigned to New Technology
                APCs with fewer than 100 claims, we proposed to use up to four years of
                claims data to establish a payment rate for each item or service as we
                currently do for low volume services assigned to New Technology APCs.
                The payment rate for a low volume APC or a low volume New Technology
                procedure would be based on the highest of the median cost, arithmetic
                mean cost, or geometric mean cost calculated using multiple years of
                claims data. Because we proposed to adopt a low volume APC policy, we
                also proposed to eliminate our low volume device-intensive procedure
                policy and address ratesetting for HCPCS code 0308T--the only code
                designated as a low volume device-intensive procedure--within our
                broader low volume APC proposal. Consequently, we proposed to modify
                our existing regulations at Sec. 416.171(b)(4) to apply our ASC
                payment rate limitation to services assigned to low volume APCs rather
                than low volume device-intensive procedures.
                 We sought comments on our proposal to modify our existing
                regulations at Sec. 416.171(b)(4) and limit the ASC payment rate for
                services assigned to low volume APCs to the payment rate for the OPPS.
                 Comment: One commenter recommended that we not finalize our
                proposal to apply a limit to the ASC payment rate for services assigned
                to low volume APCs to the payment rate for the OPPS. The commenter
                argued that only comprehensive APCs would be affected by our proposal
                and that the comprehensive ratesetting methodology generally is able to
                utilize a greater number of claims than under the ASC standard
                ratesetting methodology. The commenter stated that such additional
                claims may include claims that are inaccurately coded for other
                services and thus produce less accurate payment rates.
                 Response: We disagree. We do not believe ASCs incur greater costs
                than hospitals and that the ASC payment rate should be greater than the
                payment rate under the OPPS. We believe such situations represent a
                data anomaly and that the ASC payment rate should be limited to the
                OPPS payment rate for procedures assigned to low volume APCs.
                 After reviewing the public comment we received, we are finalizing
                our proposal, without modification, to modify our existing regulations
                at Sec. 416.171(b)(4) and limit the ASC payment rate for services
                assigned to low volume APCs to the payment rate for the OPPS.
                d. Changes to Beneficiary Coinsurance for Certain Colorectal Cancer
                Screening Tests
                 Section 122 of the Consolidated Appropriations Act (CAA) of 2021
                (Pub. L. 116-260), Waiving Medicare Coinsurance for Certain Colorectal
                Cancer Screening Tests, amends section 1833(a) of the Act to offer a
                special coinsurance rule for screening flexible sigmoidoscopies and
                screening colonoscopies, regardless of the code that is billed for the
                establishment of a diagnosis as a result of the test, or for the
                removal of tissue or other matter or other procedure, that is furnished
                in connection with, as a result of, and in the same clinical encounter
                as the colorectal cancer screening test. The reduced coinsurance will
                be phased-in beginning January 1, 2022. Detailed discussions on
                implementing this legislation are included in the CY 2022 PFS final
                rule and section X.B., ``Changes to Beneficiary Coinsurance for Certain
                Colorectal Cancer Screening Tests'' of this final rule with comment
                period.
                 After considering public comments, we are finalizing the proposals
                made in the CY 2022 OPPS/ASC proposed rule to implement section 122 of
                the CAA without modification. Specifically, we are finalizing that all
                surgical services furnished on the same date as a planned screening
                colonoscopy or planned flexible sigmoidoscopy would be viewed as being
                furnished in connection with, as a result of, and in the same clinical
                encounter as the screening test for purposes of determining the
                coinsurance required of Medicare beneficiaries for planned colorectal
                cancer screening tests that result in additional procedures furnished
                in the same clinical encounter. Providers must continue to report HCPCS
                modifier ``PT'' to indicate that a planned colorectal cancer screening
                service converted to a diagnostic service. We will examine the claims
                data, monitor for any increases in surgical services unrelated to the
                colorectal cancer screening test performed on the same date as the
                screening test, and consider revising our policy through rulemaking if
                there is a notable increase or abuse of this policy.
                2. Payment for Covered Ancillary Services
                a. Background
                 Our payment policies under the ASC payment system for covered
                ancillary services generally vary according to the particular type of
                service and its payment policy under the OPPS. Our overall policy
                provides separate ASC payment for certain ancillary items and services
                integrally related to the provision of ASC covered surgical procedures
                that are paid separately under the OPPS and provides packaged ASC
                payment for other ancillary items and services that are packaged or
                conditionally packaged (status indicators ``N'', ``Q1'', and ``Q2'')
                under the OPPS. In the CY 2013 OPPS/ASC rulemaking (77 FR 45169 and 77
                FR 68457 through 68458), we further clarified our policy regarding the
                payment indicator assignment for procedures that are conditionally
                packaged in the OPPS (status indicators ``Q1'' and ``Q2''). Under the
                OPPS, a conditionally packaged procedure describes a HCPCS code where
                the
                [[Page 63808]]
                payment is packaged when it is provided with a significant procedure
                but is separately paid when the service appears on the claim without a
                significant procedure. Because ASC services always include a surgical
                procedure, HCPCS codes that are conditionally packaged under the OPPS
                are generally packaged (payment indictor ``N1'') under the ASC payment
                system (except for device removal procedures, as discussed in section
                IV. of the CY 2022 OPPS/ASC proposed rule). Thus, our policy generally
                aligns ASC payment bundles with those under the OPPS (72 FR 42495). In
                all cases, in order for ancillary items and services also to be paid,
                the ancillary items and services must be provided integral to the
                performance of ASC covered surgical procedures for which the ASC bills
                Medicare.
                 Our ASC payment policies generally provide separate payment for
                drugs and biologicals that are separately paid under the OPPS at the
                OPPS rates and package payment for drugs and biologicals for which
                payment is packaged under the OPPS. However, as discussed in section
                XIII.D.3. of the CY 2022 OPPS/ASC proposed rule, for CY 2022, we
                proposed a policy to unpackage and pay separately at ASP plus 6 percent
                for the cost of non-opioid pain management drugs and biologicals that
                function as a supply when used in a surgical procedure as determined by
                CMS under proposed new Sec. 416.174. We generally pay for separately
                payable radiology services at the lower of the PFS nonfacility PE RVU-
                based (or technical component) amount or the rate calculated according
                to the ASC standard ratesetting methodology (72 FR 42497). However, as
                finalized in the CY 2011 OPPS/ASC final rule with comment period (75 FR
                72050), payment indicators for all nuclear medicine procedures (defined
                as CPT codes in the range of 78000 through 78999) that are designated
                as radiology services that are paid separately when provided integral
                to a surgical procedure on the ASC list are set to ``Z2'' so that
                payment is made based on the ASC standard ratesetting methodology
                rather than the MPFS nonfacility PE RVU amount (``Z3''), regardless of
                which is lower (Sec. 416.171(d)(1)).
                 Similarly, we also finalized our policy to set the payment
                indicator to ``Z2'' for radiology services that use contrast agents so
                that payment for these procedures will be based on the OPPS relative
                payment weight using the ASC standard ratesetting methodology and,
                therefore, will include the cost for the contrast agent (Sec.
                416.171(d)(2)).
                 ASC payment policy for brachytherapy sources mirrors the payment
                policy under the OPPS. ASCs are paid for brachytherapy sources provided
                integral to ASC covered surgical procedures at prospective rates
                adopted under the OPPS or, if OPPS rates are unavailable, at
                contractor-priced rates (72 FR 42499). Since December 31, 2009, ASCs
                have been paid for brachytherapy sources provided integral to ASC
                covered surgical procedures at prospective rates adopted under the
                OPPS.
                 Our ASC policies also provide separate payment for: (1) Certain
                items and services that CMS designates as contractor-priced, including,
                but not limited to, the procurement of corneal tissue; and (2) certain
                implantable items that have pass-through payment status under the OPPS.
                These categories do not have prospectively established ASC payment
                rates according to ASC payment system policies (72 FR 42502 and 42508
                through 42509; Sec. 416.164(b)). Under the ASC payment system, we have
                designated corneal tissue acquisition and hepatitis B vaccines as
                contractor-priced. Corneal tissue acquisition is contractor-priced
                based on the invoiced costs for acquiring the corneal tissue for
                transplantation. Hepatitis B vaccines are contractor-priced based on
                invoiced costs for the vaccine.
                 Devices that are eligible for pass-through payment under the OPPS
                are separately paid under the ASC payment system and are contractor-
                priced. Under the revised ASC payment system (72 FR 42502), payment for
                the surgical procedure associated with the pass-through device is made
                according to our standard methodology for the ASC payment system, based
                on only the service (non-device) portion of the procedure's OPPS
                relative payment weight if the APC weight for the procedure includes
                other packaged device costs. We also refer to this methodology as
                applying a ``device offset'' to the ASC payment for the associated
                surgical procedure. This ensures that duplicate payment is not provided
                for any portion of an implanted device with OPPS pass-through payment
                status.
                 In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66933
                through 66934), we finalized that, beginning in CY 2015, certain
                diagnostic tests within the medicine range of CPT codes for which
                separate payment is allowed under the OPPS are covered ancillary
                services when they are integral to an ASC covered surgical procedure.
                We finalized that diagnostic tests within the medicine range of CPT
                codes include all Category I CPT codes in the medicine range
                established by CPT, from 90000 to 99999, and Category III CPT codes and
                Level II HCPCS codes that describe diagnostic tests that crosswalk or
                are clinically similar to procedures in the medicine range established
                by CPT. In the CY 2015 OPPS/ASC final rule with comment period, we also
                finalized our policy to pay for these tests at the lower of the PFS
                nonfacility PE RVU-based (or technical component) amount or the rate
                calculated according to the ASC standard ratesetting methodology (79 FR
                66933 through 66934). We finalized that the diagnostic tests for which
                the payment is based on the ASC standard ratesetting methodology be
                assigned to payment indicator ``Z2'' and revised the definition of
                payment indicator ``Z2'' to include a reference to diagnostic services
                and those for which the payment is based on the PFS nonfacility PE RVU-
                based amount be assigned payment indicator ``Z3,'' and revised the
                definition of payment indicator ``Z3'' to include a reference to
                diagnostic services.
                 Comment: One commenter recommended that we publish guidance on how
                MACs are to calculate transitional pass-through payments under the ASC
                payment system for devices that are eligible for pass-through payment
                under the OPPS similar to how such guidance is provided under the OPPS.
                 Response: As previously discussed, devices that are eligible for
                pass-through payment under the OPPS are separately paid under the ASC
                payment system and are contractor-priced. Transitional pass-through
                payments under the OPPS utilize hospital cost-to-charge ratios to
                reduce the pass-through device to cost and provide the hospital an
                additional payment of the amount by which the cost of the pass-through
                device exceeds the applicable device offset amount. ASCs do not submit
                cost reports and, as such, we are unable to replicate the transitional
                pass-through payment under the ASC payment system. Currently, MACs have
                been instructed to pay for such devices in the ASC setting based on
                invoice or cost. We are unaware of a compelling reason, at this time,
                to provide additional guidance or clarification on this process, beyond
                that provided in Section 40, Chapter 14 of the Medicare Claims
                Processing Manual.
                b. Final Payment for Covered Ancillary Services for CY 2022
                 We are finalizing our proposal to update the ASC payment rates and
                to make changes to ASC payment
                [[Page 63809]]
                indicators, as necessary, to maintain consistency between the OPPS and
                ASC payment system regarding the packaged or separately payable status
                of services and the final CY 2022 OPPS and ASC payment rates and
                subsequent year's payment rates. We are also finalizing our proposal to
                continue to set the CY 2022 ASC payment rates and subsequent year's
                payment rates for brachytherapy sources and separately payable drugs
                and biologicals equal to the OPPS payment rates for CY 2022 and
                subsequent year's payment rates.
                 Covered ancillary services and their final payment indicators for
                CY 2022 are listed in Addendum BB of this final rule with comment
                period (which is available via the internet on the CMS website). For
                those covered ancillary services where the payment rate is the lower of
                the rate under the ASC standard rate setting methodology and the PFS
                final rates (similar to our office-based payment policy), the final
                payment indicators and rates set forth in the final rule are based on a
                comparison using the proposed PFS rates effective January 1, 2022. For
                a discussion of the PFS rates, we refer readers to the CY 2022 PFS
                final rule, which is available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
                3. CY 2022 ASC Packaging Policy for Non-Opioid Pain Management Drugs
                and Biologicals
                 Please refer to Section II.A.3.b for a discussion of the final CY
                2022 OPPS/ASC for payment for non-opioid pain management drugs and
                biologicals.
                E. New Technology Intraocular Lenses (NTIOLs)
                 New Technology Intraocular Lenses (NTIOLs) are intraocular lenses
                that replace a patient's natural lens that has been removed in cataract
                surgery and that also meet the requirements listed in Sec. 416.195.
                1. NTIOL Application Cycle
                 Our process for reviewing applications to establish new classes of
                NTIOLs is as follows:
                 Applicants submit their NTIOL requests for review to CMS
                by the annual deadline. For a request to be considered complete, we
                require submission of the information requested in the guidance
                document titled ``Application Process and Information Requirements for
                Requests for a New Class of New Technology Intraocular Lenses (NTIOLs)
                or Inclusion of an IOL in an Existing NTIOL Class'' posted on the CMS
                website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/NTIOLs.html.
                 We announce annually, in the proposed rule updating the
                ASC and OPPS payment rates for the following calendar year, a list of
                all requests to establish new NTIOL classes accepted for review during
                the calendar year in which the proposal is published. In accordance
                with section 141(b)(3) of Public Law 103-432 and our regulations at
                Sec. 416.185(b), the deadline for receipt of public comments is 30
                days following publication of the list of requests in the proposed
                rule.
                 In the final rule updating the ASC and OPPS payment rates
                for the following calendar year, we--
                 ++ Provide a list of determinations made as a result of our review
                of all new NTIOL class requests and public comments.
                 ++ When a new NTIOL class is created, identify the predominant
                characteristic of NTIOLs in that class that sets them apart from other
                IOLs (including those previously approved as members of other expired
                or active NTIOL classes) and that is associated with an improved
                clinical outcome.
                 ++ Set the date of implementation of a payment adjustment in the
                case of approval of an IOL as a member of a new NTIOL class
                prospectively as of 30 days after publication of the ASC payment update
                final rule, consistent with the statutory requirement.
                 ++ Announce the deadline for submitting requests for review of an
                application for a new NTIOL class for the following calendar year.
                2. Requests To Establish New NTIOL Classes for CY 2022
                 We did not receive any requests for review to establish a new NTIOL
                class for CY 2022 by March 1, 2021, the due date published in the CY
                2021 OPPS/ASC final rule with comment period (85 FR 86173).
                3. Payment Adjustment
                 The current payment adjustment for a 5-year period from the
                implementation date of a new NTIOL class is $50 per lens. Since
                implementation of the process for adjustment of payment amounts for
                NTIOLs in 1999, we have not revised the payment adjustment amount, and
                we did not propose to revise the payment adjustment amount for CY 2022.
                 The comments and our responses to the comments are set forth below.
                 Comment: Some commenters requested that we re-evaluate our payment
                adjustment for a new NTIOL class. Commenters noted that our $50 payment
                adjustment has not been adjusted since CY 1999 and that the stagnant
                payment adjustment has been a barrier to intraocular lens innovation.
                One commenter requested that the $50 be inflated to 2022 dollars and
                updated by inflation in subsequent years. Another commenter requested
                that the $50 payment adjustment be increased to $100.
                 Response: We thank the commenter for their recommendations. We did
                not propose revising the payment adjustment amount for CY 2022.
                However, we will take the commenters' recommendations into
                consideration in future rulemaking.
                4. Announcement of CY 2022 Deadline for Submitting Requests for CMS
                Review of Applications for a New Class of NTIOLS
                 In accordance with Sec. 416.185(a) of our regulations, CMS
                announces that in order to be considered for payment effective
                beginning in CY 2023, requests for review of applications for a new
                class of new technology IOLs must be received by 5:00 p.m. EST, on
                March 1, 2022. Send requests via email to [email protected] or
                by mail to ASC/NTIOL, Division of Outpatient Care, Mailstop C4-05-17,
                Centers for Medicare and Medicaid Services, 7500 Security Boulevard,
                Baltimore, MD 21244-1850. To be considered, requests for NTIOL reviews
                must include the information requested on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/NTIOLs.
                F. ASC Payment and Comment Indicators
                1. Background
                 In addition to the payment indicators that we introduced in the
                August 2, 2007 ASC final rule, we created final comment indicators for
                the ASC payment system in the CY 2008 OPPS/ASC final rule with comment
                period (72 FR 66855). We created Addendum DD1 to define ASC payment
                indicators that we use in Addenda AA and BB to provide payment
                information regarding covered surgical procedures and covered ancillary
                services, respectively, under the revised ASC payment system. The ASC
                payment indicators in Addendum DD1 are intended to capture policy-
                relevant characteristics of HCPCS codes that may receive packaged or
                separate payment in ASCs, such as whether they were on the ASC CPL
                prior to CY 2008; payment designation, such as device-intensive or
                office-based, and the corresponding ASC payment
                [[Page 63810]]
                methodology; and their classification as separately payable ancillary
                services, including radiology services, brachytherapy sources, OPPS
                pass-through devices, corneal tissue acquisition services, drugs or
                biologicals, or NTIOLs.
                 We also created Addendum DD2 that lists the ASC comment indicators.
                The ASC comment indicators included in Addenda AA and BB to the
                proposed rules and final rules with comment period serve to identify,
                for the revised ASC payment system, the status of a specific HCPCS code
                and its payment indicator with respect to the timeframe when comments
                will be accepted. The comment indicator ``NI'' is used in the OPPS/ASC
                final rule to indicate new codes for the next calendar year for which
                the interim payment indicator assigned is subject to comment. The
                comment indicator ``NI'' also is assigned to existing codes with
                substantial revisions to their descriptors such that we consider them
                to be describing new services, and the interim payment indicator
                assigned is subject to comment, as discussed in the CY 2010 OPPS/ASC
                final rule with comment period (74 FR 60622).
                 The comment indicator ``NP'' is used in the OPPS/ASC proposed rule
                to indicate new codes for the next calendar year for which the proposed
                payment indicator assigned is subject to comment. The comment indicator
                ``NP'' also is assigned to existing codes with substantial revisions to
                their descriptors, such that we consider them to be describing new
                services, and the proposed payment indicator assigned is subject to
                comment, as discussed in the CY 2016 OPPS/ASC final rule with comment
                period (80 FR 70497).
                 The ``CH'' comment indicator is used in Addenda AA and BB to the
                proposed rule (these addenda are available via the internet on the CMS
                website) to indicate that the payment indicator assignment has changed
                for an active HCPCS code in the current year and the next calendar
                year, for example if an active HCPCS code is newly recognized as
                payable in ASCs; or an active HCPCS code is discontinued at the end of
                the current calendar year. The ``CH'' comment indicators that are
                published in this final rule with comment period are provided to alert
                readers that a change has been made from one calendar year to the next,
                but do not indicate that the change is subject to comment.
                 In the CY 2021 OPPS/ASC final rule with comment period, we
                finalized the addition of ASC payment indicator ``K5''--Items, Codes,
                and Services for which pricing information and claims data are not
                available. No payment made.--to ASC Addendum DD1 (which is available
                via the internet on the CMS website) to indicate those services and
                procedures that CMS anticipates will become payable when claims data or
                payment information becomes available.
                2. ASC Payment and Comment Indicators for CY 2022
                 For 2022, we proposed new and revised Category I and III CPT codes
                as well as new and revised Level II HCPCS codes. Therefore, proposed
                Category I and III CPT codes that are new and revised for CY 2022 and
                any new and existing Level II HCPCS codes with substantial revisions to
                the code descriptors for CY 2022, compared to the CY 2021 descriptors,
                are included in ASC Addenda AA and BB to the CY 2022 OPPS/ASC proposed
                rule and labeled with proposed comment indicator ``NP'' to indicate
                that these CPT and Level II HCPCS codes are open for comment as part of
                the CY 2022 OPPS/ASC proposed rule. Proposed comment indicator ``NP''
                meant a new code for the next calendar year or an existing code with
                substantial revision to its code descriptor in the next calendar year,
                as compared to the current calendar year; and denoted that comments
                would be accepted on the proposed ASC payment indicator for the new
                code.
                 We noted in the CY 2022 OPPS/ASC proposed rule that we would
                respond to public comments on ASC payment and comment indicators and
                finalize them in this CY 2022 OPPS/ASC final rule with comment period.
                We refer readers to Addenda DD1 and DD2 of the CY 2022 OPPS/ASC
                proposed rule (these addenda are available via the internet on the CMS
                website) for the complete list of ASC payment and comment indicators
                proposed for the CY 2022 update. Addenda DD1 and DD2 to this final rule
                with comment period (these addenda are available via the internet on
                the CMS website) contain the complete list of ASC payment and comment
                indicators for CY 2022.
                 We did not receive any public comments on the proposed ASC payment
                and comment indicators and we are finalizing their use as proposed
                without modification. Addenda DD1 and DD2 to this CY 2022 OPPS/ASC
                final rule (theses addenda are available via the internet on the CMS
                website) contain the complete list of ASC payment and comment
                indicators for CY 2022.
                G. Calculation of the ASC Payment Rates and the ASC Conversion Factor
                1. Background
                 In the August 2, 2007 ASC final rule (72 FR 42493), we established
                our policy to base ASC relative payment weights and payment rates under
                the revised ASC payment system on APC groups and the OPPS relative
                payment weights. Consistent with that policy and the requirement at
                section 1833(i)(2)(D)(ii) of the Act that the revised payment system be
                implemented so that it would be budget neutral, the initial ASC
                conversion factor (CY 2008) was calculated so that estimated total
                Medicare payments under the revised ASC payment system in the first
                year would be budget neutral to estimated total Medicare payments under
                the prior (CY 2007) ASC payment system (the ASC conversion factor is
                multiplied by the relative payment weights calculated for many ASC
                services in order to establish payment rates). That is, application of
                the ASC conversion factor was designed to result in aggregate Medicare
                expenditures under the revised ASC payment system in CY 2008 being
                equal to aggregate Medicare expenditures that would have occurred in CY
                2008 in the absence of the revised system, taking into consideration
                the cap on ASC payments in CY 2007, as required under section
                1833(i)(2)(E) of the Act (72 FR 42522). We adopted a policy to make the
                system budget neutral in subsequent calendar years (72 FR 42532 through
                42533; Sec. 416.171(e)).
                 We note that we consider the term ``expenditures'' in the context
                of the budget neutrality requirement under section 1833(i)(2)(D)(ii) of
                the Act to mean expenditures from the Medicare Part B Trust Fund. We do
                not consider expenditures to include beneficiary coinsurance and
                copayments. This distinction was important for the CY 2008 ASC budget
                neutrality model that considered payments across the OPPS, ASC, and
                MPFS payment systems. However, because coinsurance is almost always 20
                percent for ASC services, this interpretation of expenditures has
                minimal impact for subsequent budget neutrality adjustments calculated
                within the revised ASC payment system.
                 In the CY 2008 OPPS/ASC final rule with comment period (72 FR 66857
                through 66858), we set out a step-by-step illustration of the final
                budget neutrality adjustment calculation based on the methodology
                finalized in the August 2, 2007 ASC final rule (72 FR 42521 through
                42531) and as applied to updated data available for the CY 2008 OPPS/
                ASC final rule with comment
                [[Page 63811]]
                period. The application of that methodology to the data available for
                the CY 2008 OPPS/ASC final rule with comment period resulted in a
                budget neutrality adjustment of 0.65.
                 For CY 2008, we adopted the OPPS relative payment weights as the
                ASC relative payment weights for most services and, consistent with the
                final policy, we calculated the CY 2008 ASC payment rates by
                multiplying the ASC relative payment weights by the final CY 2008 ASC
                conversion factor of $41.401. For covered office-based surgical
                procedures, covered ancillary radiology services (excluding covered
                ancillary radiology services involving certain nuclear medicine
                procedures or involving the use of contrast agents, as discussed in
                section XII.D.2. of the CY 2022 OPPS/ASC proposed rule), and certain
                diagnostic tests within the medicine range that are covered ancillary
                services, the established policy is to set the payment rate at the
                lower of the MPFS unadjusted nonfacility PE RVU-based amount or the
                amount calculated using the ASC standard ratesetting methodology.
                Further, as discussed in the CY 2008 OPPS/ASC final rule with comment
                period (72 FR 66841 through 66843), we also adopted alternative
                ratesetting methodologies for specific types of services (for example,
                device-intensive procedures).
                 As discussed in the August 2, 2007 ASC final rule (72 FR 42517
                through 42518) and as codified at Sec. 416.172(c) of the regulations,
                the revised ASC payment system accounts for geographic wage variation
                when calculating individual ASC payments by applying the pre-floor and
                pre-reclassified IPPS hospital wage indexes to the labor-related share,
                which is 50 percent of the ASC payment amount based on a GAO report of
                ASC costs using 2004 survey data. Beginning in CY 2008, CMS accounted
                for geographic wage variation in labor costs when calculating
                individual ASC payments by applying the pre-floor and pre-reclassified
                hospital wage index values that CMS calculates for payment under the
                IPPS, using updated Core Based Statistical Areas (CBSAs) issued by OMB
                in June 2003.
                 The reclassification provision in section 1886(d)(10) of the Act is
                specific to hospitals. We believe that using the most recently
                available pre-floor and pre-reclassified IPPS hospital wage indexes
                results in the most appropriate adjustment to the labor portion of ASC
                costs. We continue to believe that the unadjusted hospital wage
                indexes, which are updated yearly and are used by many other Medicare
                payment systems, appropriately account for geographic variation in
                labor costs for ASCs. Therefore, the wage index for an ASC is the pre-
                floor and pre-reclassified hospital wage index under the IPPS of the
                CBSA that maps to the CBSA where the ASC is located.
                 Generally, OMB issues major revisions to statistical areas every 10
                years, based on the results of the decennial census. On February 28,
                2013, OMB issued OMB Bulletin No. 13-01, which provides the
                delineations of all Metropolitan Statistical Areas, Metropolitan
                Divisions, Micropolitan Statistical Areas, Combined Statistical Areas,
                and New England City and Town Areas in the United States and Puerto
                Rico based on the standards published on June 28, 2010 in the Federal
                Register (75 FR 37246 through 37252) and 2010 Census Bureau data. (A
                copy of this bulletin may be obtained at: https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/bulletins/2013/b13-01.pdf). In the FY
                2015 IPPS/LTCH PPS final rule (79 FR 49951 through 49963), we
                implemented the use of the CBSA delineations issued by OMB in OMB
                Bulletin 13-01 for the IPPS hospital wage index beginning in FY 2015.
                 OMB occasionally issues minor updates and revisions to statistical
                areas in the years between the decennial censuses. On July 15, 2015,
                OMB issued OMB Bulletin No. 15-01, which provides updates to and
                supersedes OMB Bulletin No. 13-01 that was issued on February 28, 2013.
                OMB Bulletin No. 15-01 made changes that are relevant to the IPPS and
                ASC wage index. We refer readers to the CY 2017 OPPS/ASC final rule
                with comment period (81 FR 79750) for a discussion of these changes and
                our implementation of these revisions. (A copy of this bulletin may be
                obtained at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/bulletins/2015/15-01.pdf).
                 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. We refer readers to the CY 2019 OPPS/ASC final
                rule with comment period (83 FR 58864 through 58865) for a discussion
                of these changes and our implementation of these revisions. (A copy of
                this bulletin may be obtained at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/bulletins/2017/b-17-01.pdf).
                 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 18-04 which superseded the April 10, 2018
                OMB Bulletin No. 18-03. A copy of OMB Bulletin No. 18-04 may be
                obtained at https://www.whitehouse.gov/wpcontent/uploads/2018/90/Bulletin-18-04.pdf. We are utilizing the revised delineations as set
                forth in the April 10, 2018 OMB Bulletin No. 18-03 and the September
                14, 2018 OMB Bulletin No. 18-04 to calculate the CY 2021 ASC wage index
                effective beginning January 1, 2021.
                 On March 6, 2020, OMB issued Bulletin No. 20-01, which provided
                updates to and superseded OMB Bulletin No. 18-04 that was issued on
                September 14, 2018. The attachments to OMB Bulletin No. 20-01 provided
                detailed information on the updates to statistical areas since
                September 14, 2018, 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, 2017, and July
                1, 2018. (For a copy of this bulletin, we refer readers to the
                following website: https://www.whitehouse.gov/wp-content/uploads/2020/03/Bulletin-20-01.pdf). In OMB Bulletin No. 20-01, OMB announced one
                new Micropolitan Statistical Area, one new component of an existing
                Combined Statistical Area and changes to New England City and Town Area
                (NECTA) delineations. In the CY 2022 OPPS/ASC proposed rule (86 FR
                42228 through 42229), we inadvertently failed to note that OMB Bulletin
                No. 20-01 had revised certain statistical area delineation; however,
                after reviewing OMB Bulletin No. 20-01, we have determined that the
                changes in Bulletin 20-01 encompassed delineation changes that had no
                effect on the ASC wage index for CY 2022. Specifically, the updates
                consisted of changes to NECTA delineations and the redesignation of a
                single rural county into a newly created Micropolitan Statistical Area.
                The ASC wage indexes do not utilize NECTA definitions, and we include
                hospitals located in Micropolitan Statistical Areas in each state's
                rural wage index. Therefore, we note that these OMB updates would not
                affect any geographic areas for purposes of the ASC wage index
                calculation for CY 2022.
                 The final CY 2022 ASC wage indexes fully reflects the OMB labor
                market area delineations (including the revisions to the OMB labor
                market delineations discussed above, as set forth in OMB Bulletin Nos.
                15-01, 17-01, 18-03, 18-04, and 20-01). We note that, in certain
                instances, there might be urban or rural areas for which there is no
                IPPS hospital that has wage index data that could be used to set the
                wage index for that area.
                [[Page 63812]]
                For these areas, our policy has been to use the average of the wage
                indexes for CBSAs (or metropolitan divisions as applicable) that are
                contiguous to the area that has no wage index (where ``contiguous'' is
                defined as sharing a border). For example, for CY 2022, we are applying
                a proxy wage index based on this methodology to ASCs located in CBSA
                25980 (Hinesville-Fort Stewart, GA).
                 When all of the areas contiguous to the urban CBSA of interest are
                rural and there is no IPPS hospital that has wage index data that could
                be used to set the wage index for that area, we determine the ASC wage
                index by calculating the average of all wage indexes for urban areas in
                the state (75 FR 72058 through 72059). In other situations, where there
                are no IPPS hospitals located in a relevant labor market area, we have
                continued our current policy of calculating an urban or rural area's
                wage index by calculating the average of the wage indexes for CBSAs (or
                metropolitan divisions where applicable) that are contiguous to the
                area with no wage index.
                 Comment: Several commenters recommended that we refrain from wage-
                adjusting the device portion of device-intensive procedures by the wage
                index for that particular area and only wage-adjust non device portions
                of the ASC payment rate. The commenters contend that wage-adjusting 50
                percent of the ASC payment rate by the wage index for a particular area
                can reduce ASC payment rates below the cost of certain devices.
                 Response: We appreciate the commenters recommendation. We did not
                propose such a change to our application of the ASC wage index but, as
                we stated in the CY 2019 OPPS/ASC final rule with comment period (83 FR
                59042), we will consider the feasibility of this change and take this
                comment into consideration for future rulemaking.
                2. Calculation of the ASC Payment Rates
                a. Updating the ASC Relative Payment Weights for CY 2022 and Future
                Years
                 We update the ASC relative payment weights each year using the
                national OPPS relative payment weights (and PFS nonfacility PE RVU-
                based amounts, as applicable) for that same calendar year and uniformly
                scale the ASC relative payment weights for each update year to make
                them budget neutral (72 FR 42533). The OPPS relative payment weights
                are scaled to maintain budget neutrality for the OPPS. We then scale
                the OPPS relative payment weights again to establish the ASC relative
                payment weights. To accomplish this, we hold estimated total ASC
                payment levels constant between calendar years for purposes of
                maintaining budget neutrality in the ASC payment system. That is, we
                apply the weight scalar to ensure that projected expenditures from the
                updated ASC payment weights in the ASC payment system are equal to what
                would be the current expenditures based on the scaled ASC payment
                weights. In this way we ensure budget neutrality and that the only
                changes to total payments to ASCs result from increases or decreases in
                the ASC payment update factor.
                 Where the estimated ASC expenditures for an upcoming year are
                higher than the estimated ASC expenditures for the current year, the
                ASC weight scalar is reduced, in order to bring the estimated ASC
                expenditures in line with the expenditures for the baseline year. This
                frequently results in ASC relative payment weights for surgical
                procedures that are lower than the OPPS relative payment weights for
                the same procedures for the upcoming year. Therefore, over time, even
                if procedures performed in the HOPD and ASC receive the same update
                factor under the OPPS and ASC payment system, payment rates under the
                ASC payment system would increase at a lower rate than payment for the
                same procedures performed in the HOPD as a result of applying the ASC
                weight scalar to ensure budget neutrality.
                 As discussed in section II.A.1.a of the CY 2022 OPPS/ASC proposed
                rule, given our concerns with CY 2020 claims data as a result of the
                PHE, we are using the CY 2019 claims data to be consistent with the
                OPPS claims data for the CY 2022 OPPS/ASC proposed rule. Consistent
                with our established policy, we proposed to scale the CY 2022 relative
                payment weights for ASCs according to the following method. Holding ASC
                utilization, the ASC conversion factor, and the mix of services
                constant from CY 2019, we proposed to compare the total payment using
                the CY 2021 ASC relative payment weights with the total payment using
                the CY 2022 ASC relative payment weights to take into account the
                changes in the OPPS relative payment weights between CY 2021 and CY
                2022. We proposed to use the ratio of CY 2021 to CY 2022 total payments
                (the weight scalar) to scale the ASC relative payment weights for CY
                2022. The proposed CY 2022 ASC weight scalar is 0.8591. Based on
                updated data for this final rule with comment period, the final CY 2022
                ASC weight scalar is 0.8552. Consistent with historical practice, we
                would scale the ASC relative payment weights of covered surgical
                procedures, covered ancillary radiology services, and certain
                diagnostic tests within the medicine range of CPT codes, which are
                covered ancillary services for which the ASC payment rates are based on
                OPPS relative payment weights.
                 Scaling would not apply in the case of ASC payment for separately
                payable covered ancillary services that have a predetermined national
                payment amount (that is, their national ASC payment amounts are not
                based on OPPS relative payment weights), such as drugs and biologicals
                that are separately paid or services that are contractor-priced or paid
                at reasonable cost in ASCs. Any service with a predetermined national
                payment amount would be included in the ASC budget neutrality
                comparison, but scaling of the ASC relative payment weights would not
                apply to those services. The ASC payment weights for those services
                without predetermined national payment amounts (that is, those services
                with national payment amounts that would be based on OPPS relative
                payment weights) would be scaled to eliminate any difference in the
                total payment between the current year and the update year.
                 For any given year's ratesetting, we typically use the most recent
                full calendar year of claims data to model budget neutrality
                adjustments. While we would ordinarily use CY 2020 claims data to model
                the budget neutrality adjustment for the CY 2022 OPPS/ASC final rule,
                as discussed in Section X.E. of this final rule, we are finalizing our
                proposal to use, in general, CY 2019 claims data to model our budget
                neutrality adjustment. At the time of the CY 2022 OPPS/ASC proposed
                rule, we had available 100 percent of CY 2019 ASC claims data.
                b. Updating the ASC Conversion Factor
                 Under the OPPS, we typically apply a budget neutrality adjustment
                for provider-level changes, most notably a change in the wage index
                values for the upcoming year, to the conversion factor. Consistent with
                our final ASC payment policy, for the CY 2017 ASC payment system and
                subsequent years, in the CY 2017 OPPS/ASC final rule with comment
                period (81 FR 79751 through 79753), we finalized our policy to
                calculate and apply a budget neutrality adjustment to the ASC
                conversion factor for supplier-level changes in wage index values for
                the upcoming year, just as the OPPS wage index budget neutrality
                adjustment is calculated and applied to the OPPS conversion factor. For
                CY
                [[Page 63813]]
                2022, we calculated the proposed adjustment for the ASC payment system
                by using the most recent CY 2019 claims data available and estimating
                the difference in total payment that would be created by introducing
                the proposed CY 2022 ASC wage indexes. Specifically, holding CY 2019
                ASC utilization, service-mix, and the proposed CY 2022 national payment
                rates after application of the weight scalar constant, we calculated
                the total adjusted payment using the CY 2021 ASC wage indexes and the
                total adjusted payment using the proposed CY 2022 ASC wage indexes. We
                used the 50-percent labor-related share for both total adjusted payment
                calculations. We then compared the total adjusted payment calculated
                with the CY 2021 ASC wage indexes to the total adjusted payment
                calculated with the proposed CY 2022 ASC wage indexes and applied the
                resulting ratio of 0.9999 (the proposed CY 2022 ASC wage index budget
                neutrality adjustment) to the CY 2021 ASC conversion factor to
                calculate the proposed CY 2022 ASC conversion factor.
                 Section 1833(i)(2)(C)(i) of the Act requires that, if the Secretary
                has not updated amounts established under the revised ASC payment
                system in a calendar year, the payment amounts shall be increased by
                the percentage increase in the Consumer Price Index for all urban
                consumers (CPI-U), U.S. city average, as estimated by the Secretary for
                the 12-month period ending with the midpoint of the year involved. The
                statute does not mandate the adoption of any particular update
                mechanism, but it requires the payment amounts to be increased by the
                CPI-U in the absence of any update. Because the Secretary updates the
                ASC payment amounts annually, we adopted a policy, which we codified at
                Sec. 416.171(a)(2)(ii)), to update the ASC conversion factor using the
                CPI-U for CY 2010 and subsequent calendar years.
                 In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59075
                through 59080), we finalized our proposal to apply the productivity-
                adjusted hospital market basket update to ASC payment system rates for
                an interim period of 5 years (CY 2019 through CY 2023), during which we
                will assess whether there is a migration of the performance of
                procedures from the hospital setting to the ASC setting as a result of
                the use of a productivity-adjusted hospital market basket update, as
                well as whether there are any unintended consequences, such as less
                than expected migration of the performance of procedures from the
                hospital setting to the ASC setting. In addition, we finalized our
                proposal to revise our regulations under Sec. 416.171(a)(2), which
                address the annual update to the ASC conversion factor. During this 5-
                year period, we intend to assess the feasibility of collaborating with
                stakeholders to collect ASC cost data in a minimally burdensome manner
                and could propose a plan to collect such information. We refer readers
                to that final rule for a detailed discussion of the rationale for these
                policies.
                 The proposed hospital market basket update for CY 2022 was
                projected to be 2.5 percent, as published in the FY 2022 IPPS/LTCH PPS
                proposed rule (86 FR 25435), based on IHS Global Inc.'s (IGI's) 2020
                fourth quarter forecast with historical data through the third quarter
                of 2020.
                 Section 1886(b)(3)(B)(xi)(II) of the Act, defines the productivity
                adjustment to be equal to the 10-year moving average of changes in
                annual economy-wide private nonfarm business multifactor productivity
                (MFP). We finalized the methodology for calculating the productivity
                adjustment in the CY 2011 PFS final rule with comment period (75 FR
                73394 through 73396) and revised it in the CY 2012 PFS final rule with
                comment period (76 FR 73300 through 73301) and the CY 2016 OPPS/ASC
                final rule with comment period (80 FR 70500 through 70501). The
                proposed productivity adjustment for CY 2022 was projected to be 0.2
                percentage point, as published in the FY 2022 IPPS/LTCH PPS proposed
                rule (86 FR 25435) based on IGI's 2020 fourth quarter forecast.
                 For 2022, we proposed to utilize the hospital market basket update
                of 2.5 percent reduced by the productivity adjustment of 0.2 percentage
                point, resulting in a productivity-adjusted hospital market basket
                update factor of 2.3 percent for ASCs meeting the quality reporting
                requirements. Therefore, we proposed to apply a 2.3 percent
                productivity-adjusted hospital market basket update factor to the CY
                2021 ASC conversion factor for ASCs meeting the quality reporting
                requirements to determine the CY 2022 ASC payment amounts. The ASCQR
                Program affected payment rates beginning in CY 2014 and, under this
                program, there is a 2.0 percentage point reduction to the update factor
                for ASCs that fail to meet the ASCQR Program requirements. We refer
                readers to section XIV.E. of the CY 2019 OPPS/ASC final rule with
                comment period (83 FR 59138 through 59139) and section XIV.E. of the CY
                2022 OPPS/ASC proposed rule for a detailed discussion of our policies
                regarding payment reduction for ASCs that fail to meet ASCQR Program
                requirements. We proposed to utilize the hospital market basket update
                of 2.5 percent reduced by 2.0 percentage points for ASCs that do not
                meet the quality reporting requirements and then reduced by the 0.2
                percentage point productivity adjustment. Therefore, we proposed to
                apply a 0.3 percent productivity-adjusted hospital market basket update
                factor to the CY 2021 ASC conversion factor for ASCs not meeting the
                quality reporting requirements. We also proposed that if more recent
                data are subsequently available (for example, a more recent estimate of
                the hospital market basket update or productivity adjustment), we would
                use such data, if appropriate, to determine the CY 2022 ASC update for
                this final rule with comment period.
                 For 2022, we proposed to adjust the CY 2021 ASC conversion factor
                ($48.952) by the proposed wage index budget neutrality factor of 0.9993
                in addition to the productivity-adjusted hospital market basket update
                of 2.3 percent discussed above, which results in a proposed CY 2022 ASC
                conversion factor of $50.043 for ASCs meeting the quality reporting
                requirements. For ASCs not meeting the quality reporting requirements,
                we proposed to adjust the CY 2021 ASC conversion factor ($48.952) by
                the proposed wage index budget neutrality factor of 0.9993 in addition
                to the quality reporting/productivity-adjusted hospital market basket
                update of 0.3 percent discussed above, which results in a proposed CY
                2022 ASC conversion factor of $49.064.
                 The comments we received on our proposals for updating the CY 2022
                ASC conversion factor and our responses are set forth below.
                 Comment: Commenters supported continued use of the hospital market
                basket for updating ASC payments on an annual basis and suggested that
                using the hospital market basket better aligns the OPPS and ASC payment
                system. One commenter requested that we permanently use the hospital
                market basket to update ASC payment rates rather than limiting such
                update factor through CY 2023.
                 Response: We thank the commenters for their support of our
                proposal. We believe using the same update factor to calculate payments
                to ASC and hospital outpatient departments encourages the migration of
                services from the hospital setting to the ASC setting, and could
                potentially increase the presence of ASCs in health care markets or
                geographic areas where previously there were none or few. The migration
                of services from the higher cost hospital
                [[Page 63814]]
                outpatient setting to the ASC setting is likely to result in savings to
                beneficiaries and the Medicare program. This policy will also further
                our goal of giving both physicians and beneficiaries a greater choice
                in selecting the care setting that best suits their needs.
                 As we discussed in the CY 2019 OPPS/ASC final rule with comment
                period (83 FR 59075 through 59080), we finalized our policy to apply
                the hospital market basket update to ASC payment system rates for an
                interim period of 5 years (CY 2019 through CY 2023), during which we
                will assess whether there is a migration of the performance of
                procedures from the hospital setting to the ASC setting as a result of
                the use of a hospital market basket update, as well as whether there
                are any unintended consequences, such as less than expected migration
                of the performance of procedures from the hospital setting to the ASC
                setting. We intend to publish our assessment of service migration and
                other factors as a result of the hospital market basket update and any
                proposals related to our results in the CY 2023 OPPS/ASC proposed rule.
                 After consideration of the public comments we received, consistent
                with our proposal that if more recent data are subsequently available
                (for example, a more recent estimate of the hospital market basket
                update and productivity adjustment), we would use such data, if
                appropriate, to determine the CY 2022 ASC update for the CY 2022 OPPS/
                ASC final rule with comment period, we are incorporating more recent
                data to determine the final CY 2022 ASC update. Therefore, for this
                final rule with comment period, the hospital market basket update for
                CY 2022 is 2.7 percent, as published in the FY 2022 IPPS/LTCH PPS final
                rule (86 FR 42343), based on IGI's 2021 second quarter forecast with
                historical data through the first quarter of 2021. The productivity
                adjustment for this CY 2022 OPPS/ASC final rule with comment period is
                0.7 percentage point, as published in the FY 2022 IPPS/LTCH PPS final
                rule (84 FR 42343) based on IGI's 2021 second quarter forecast.
                 For CY 2022, we are finalizing the hospital market basket update of
                2.7 percent minus the productivity adjustment of 0.7 percentage point,
                resulting in a productivity-adjusted hospital market basket update
                factor of 2.0 percent for ASCs meeting the quality reporting
                requirements. Therefore, we apply a 2.0 percent productivity-adjusted
                hospital market basket update factor to the CY 2021 ASC conversion
                factor for ASCs meeting the quality reporting requirements to determine
                the CY 2022 ASC payment rates. We are finalizing the hospital market
                basket update of 2.7 percent reduced by 2.0 percentage points for ASCs
                that do not meet the quality reporting requirements and then subtract
                the 0.7 percentage point productivity adjustment. Therefore, we apply a
                0.0 percent productivity -adjusted hospital market basket update factor
                to the CY 2021 ASC conversion factor for ASCs not meeting the quality
                reporting requirements.
                 For CY 2022, we are adjusting the CY 2021 ASC conversion factor
                ($48.952) by a wage index budget neutrality factor of 0.9997 in
                addition to the productivity-adjusted hospital market basket update of
                2.0 percent, discussed above, which results in a final CY 2022 ASC
                conversion factor of $49.916 for ASCs meeting the quality reporting
                requirements. For ASCs not meeting the quality reporting requirements,
                we are adjusting the CY 2021 ASC conversion factor ($48.952) by the
                wage index budget neutrality factor of 0.9997 in addition to the
                quality reporting/productivity-adjusted hospital market basket update
                of 0.0 percent discussed above, which results in a final CY 2022 ASC
                conversion factor of $48.937.
                3. Display of CY 2022 ASC Payment Rates
                 Addenda AA and BB to this final rule with comment period (which are
                available on the CMS website) display the final ASC payment rates for
                CY 2022 for covered surgical procedures and covered ancillary services,
                respectively. Historically, for those covered surgical procedures and
                covered ancillary services where the payment rate is the lower of the
                final rates under the ASC standard ratesetting methodology and the MPFS
                final rates, the final payment indicators and rates set forth in this
                final rule with comment period are based on a comparison using the PFS
                rates that would be effective January 1, 2022. For a discussion of the
                PFS rates, we refer readers to the CY 2022 PFS final rule that is
                available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
                 The final payment rates included in addenda AA and BB to this final
                rule with comment period reflect the full ASC payment update and not
                the reduced payment update used to calculate payment rates for ASCs not
                meeting the quality reporting requirements under the ASCQR Program.
                These addenda contain several types of information related to the final
                CY 2022 payment rates. Specifically, in Addendum AA, a ``Y'' in the
                column titled ``To be Subject to Multiple Procedure Discounting''
                indicates that the surgical procedure would be subject to the multiple
                procedure payment reduction policy. As discussed in the CY 2008 OPPS/
                ASC final rule with comment period (72 FR 66829 through 66830), most
                covered surgical procedures are subject to a 50-percent reduction in
                the ASC payment for the lower-paying procedure when more than one
                procedure is performed in a single operative session.
                 Comment: One commenter recommended that we remove the ``Y''
                indicator for CPT code 64582 and not apply the multiple procedure
                discount as the predecessor code, CPT code 64568, was not subject to
                the multiple procedure discounting policy.
                 Response: We agree with the commenter that the predecessor code CPT
                code 64568 was not subject to multiple procedure discounting and that
                applying our discounting policy to this procedure would be
                inappropriate due to its high device costs. Therefore, we are removing
                the ``Y'' indicator for CPT code 64582 for CY 2022.
                 Display of the comment indicator ``CH'' in the column titled
                ``Comment Indicator'' indicates a change in payment policy for the item
                or service, including identifying discontinued HCPCS codes, designating
                items or services newly payable under the ASC payment system, and
                identifying items or services with changes in the ASC payment indicator
                for CY 2022. Display of the comment indicator ``NI'' in the column
                titled ``Comment Indicator'' indicates that the code is new (or
                substantially revised) and that comments will be accepted on the
                interim payment indicator for the new code. Display of the comment
                indicator ``NP'' in the column titled ``Comment Indicator'' indicates
                that the code is new (or substantially revised) and that comments will
                be accepted on the ASC payment indicator for the new code.
                 In Addendum BB, the column titled ``Drug Pass-Through Expiration
                during Calendar Year'' flags, through the use of an asterisk, each drug
                for which pass-through payment is expiring during the calendar year
                (that is, on a date other than December 31st).
                 The values displayed in the column titled ``Final CY 2022 Payment
                Weight'' are the final relative payment weights for each of the listed
                services for CY 2022. The final relative payment weights for all
                covered surgical procedures and covered ancillary services where the
                ASC payment rates are based on OPPS relative payment weights were
                scaled for budget neutrality. Therefore, scaling was not
                [[Page 63815]]
                applied to the device portion of the device-intensive procedures,
                services that are paid at the MPFS nonfacility PE RVU-based amount,
                separately payable covered ancillary services that have a predetermined
                national payment amount, such as drugs and biologicals and
                brachytherapy sources that are separately paid under the OPPS, or
                services that are contractor-priced or paid at reasonable cost in ASCs.
                This includes separate payment for non-opioid pain management drugs.
                 To derive the final CY 2022 payment rate displayed in the ``Final
                CY 2022 Payment Rate'' column, each ASC payment weight in the ``Final
                CY 2022 Payment Weight'' column was multiplied by the final CY 2022
                conversion factor of $49.916. The conversion factor includes a budget
                neutrality adjustment for changes in the wage index values and the
                annual update factor as reduced by the productivity adjustment. The
                final CY 2022 ASC conversion factor uses the CY 2022 productivity-
                adjusted hospital market basket update factor of 2.0 percent (which is
                equal to the projected hospital market basket update of 2.7 percent
                reduced by a projected productivity adjustment of 0.7 percentage
                point).
                 In Addendum BB, there are no relative payment weights displayed in
                the ``Final CY 2022 Payment Weight'' column for items and services with
                predetermined national payment amounts, such as separately payable
                drugs and biologicals. The ``Final CY 2022 Payment'' column displays
                the final CY 2022 national unadjusted ASC payment rates for all items
                and services. The final CY 2022 ASC payment rates listed in Addendum BB
                for separately payable drugs and biologicals are based on ASP data used
                for payment in physicians' offices in 2020.
                 Addendum EE provides the HCPCS codes and short descriptors for
                surgical procedures that are proposed to be excluded from payment in
                ASCs for CY 2022.
                 In response to public comments we received, we are finalizing an
                Addendum FF to this final rule with comment period as well as
                subsequent OPPS/ASC proposed and final rules. Addenda FF to this final
                rule with comment period displays the OPPS payment rate (based on the
                standard ratesetting methodology), the device offset percentage, and
                the device portion of the ASC payment rate for CY 2022 for covered
                surgical procedures.
                XIV. Advancing to Digital Quality Measurement and the Use of Fast
                Healthcare Interoperability Resources (FHIR) in Outpatient Quality
                Programs--Request for Information
                 We aim to move fully to digital quality measurement in the Centers
                for Medicare & Medicaid Services (CMS) quality reporting and value-
                based purchasing (VBP) programs by 2025. As part of this modernization
                of our quality measurement enterprise, in the CY 2022 OPPS/ASC proposed
                rule (86 FR 42234) we issued a request for information (RFI). The
                purpose of this RFI was to gather broad public input solely for
                planning purposes for our transition to digital quality measurement.
                Any updates to specific program requirements related to providing data
                for quality measurement and reporting provisions would be addressed
                through future rulemaking, as necessary. This RFI contains five parts:
                 Background. This part provides information on our quality
                measurement programs and our goal to move fully to digital quality
                measurement by 2025. This part also provides a summary of recent HHS
                policy developments that are advancing interoperability and could
                support our move towards full digital quality measurement.
                 Definition of Digital Quality Measures (dQMs). This part
                provides a potential definition for dQMs. Specific requests for input
                are included in the section.
                 Use of Fast Healthcare Interoperability Resources
                (FHIR[supreg]) for Current Electronic Clinical Quality Measures
                (eCQMs). This part provides information on current activities underway
                to align CMS eCQMs with the FHIR standard and support quality
                measurement via application programming interfaces (APIs), and
                contrasts this approach to current eCQM standards and practice.
                 Changes Under Consideration to Advance Digital Quality
                Measurement: Potential Actions in Four Areas to Transition to dQMs by
                2025. This part introduces four possible steps that would enable
                transformation of CMS' quality measurement enterprise to be fully
                digital by 2025. Specific requests for input are included in the
                section.
                 Solicitation of Comments. This part lists all requests for
                input we had included in the sections of this RFI.
                A. Background
                 As required by law, we implement quality measurement and VBP
                programs across a broad range of inpatient acute care, outpatient, and
                post-acute care (PAC) settings consistent with our mission to improve
                the quality of health care for Americans through measurement,
                transparency, and increasingly, value-based purchasing. These quality
                programs are foundational for incentivizing value-based care,
                contributing to improvements in health care, enhancing patient
                outcomes, and informing consumer choice. In October 2017, we launched
                the Meaningful Measures Framework. This framework for quality
                measurement captures our vision to better address health care quality
                priorities and gaps, including emphasizing digital quality measurement,
                reducing measurement burden, and promoting patient perspectives, while
                also focusing on modernization and innovation. The scope of the
                Meaningful Measures Framework evolves as the health care environment
                continues to change.\201\ Consistent with the Meaningful Measures
                Framework, we aim to move fully to digital quality measurement by 2025.
                We acknowledge facilities within the various care and practice settings
                covered by our quality programs may be at different stages of readiness
                and, therefore, the timeline for achieving full digital quality
                measurement across our quality reporting programs may vary.
                ---------------------------------------------------------------------------
                 \201\ Meaningful Measures 2.0: Moving from Measure Reduction to
                Modernization. Available at: https://www.cms.gov/meaningful-measures-20-moving-measure-reduction-modernization.
                ---------------------------------------------------------------------------
                [[Page 63816]]
                 We also continue to evolve the Medicare Promoting Interoperability
                Program's focus on the use of certified electronic health record (EHR)
                technology, from an initial focus on electronic data capture to
                enhancing information exchange and expanding quality measurement (83 FR
                41634). However, reporting data for quality measurement via EHRs
                remains burdensome, and our current approach to quality measurement
                does not readily incorporate emerging data sources such as patient-
                reported outcomes (PRO) and patient-generated health data (PGHD).\202\
                There is a need to streamline our approach to data collection,
                calculation, and reporting to fully leverage clinical and patient-
                centered information for measurement, improvement, and learning.
                ---------------------------------------------------------------------------
                 \202\ What are patient generated health data: https://www.healthit.gov/topic/otherhot-topics/what-are-patient-generated-health-data.
                ---------------------------------------------------------------------------
                 Additionally, advancements in technical standards and associated
                regulatory initiatives to improve interoperability of healthcare data
                are creating an opportunity to significantly improve our quality
                measurement systems. In May 2020, we finalized interoperability
                requirements in the CMS Interoperability and Patient Access final rule
                (85 FR 25510) to support beneficiary access to data held by certain
                payers. At the same time, the Office of the National Coordinator for
                Health Information Technology (ONC) finalized policies in the ONC 21st
                Century Cures Act final rule (85 FR 25642) to advance the
                interoperability of health information technology (IT) as defined in
                section 4003 of the 21st Century Cures Act, including the ``complete
                access, exchange, and use of all electronically accessible health
                information.'' Closely working with ONC, we collaboratively identified
                Health Level 7 (HL7[supreg]) FHIR Release 4.0.1 as the standard to
                support API policies in both rules. ONC, on behalf of HHS, adopted the
                HL7 FHIR Release 4.0.1 for APIs and related implementation
                specifications at 45 CFR 170.215. We believe the FHIR standard has the
                potential to be a more efficient and modular standard to enable APIs.
                We also believe this standard enables collaboration and information
                sharing, which is essential for delivering high-quality care and better
                outcomes at a lower cost. By aligning technology requirements for
                payers, health care facilities, and health IT developers HHS can
                advance an interoperable health IT infrastructure that ensures
                healthcare facilities and patients have access to health data when and
                where it is needed.
                 In the ONC 21st Century Cures Act final rule, ONC adopted a
                ``Standardized API for Patient and Population Services'' certification
                criterion for health IT that requires the use of FHIR Release 4 and
                several implementation specifications. Health IT certified to this
                criterion will offer single patient and multiple patient services that
                can be accessed by third party applications (85 FR 25742).\203\ The ONC
                21st Century Cures Act final rule also requires health IT developers to
                update their certified health IT to support the United States Core Data
                for Interoperability (USCDI) standard.\204\ The scope of patient data
                identified in the USCDI and the data standards that support this data
                set are expected to evolve over time, starting with data specified in
                Version 1 of the USCDI. In November 2020, ONC issued an interim final
                rule with comment period extending the date when health IT developers
                must make technology meeting updated certification criteria available
                under the ONC Health IT Certification Program until December 31, 2022
                (85 FR 70064).\205\
                ---------------------------------------------------------------------------
                 \203\ Application Programming Interfaces (API) Resource Guide,
                Version 1.0. Available at: https://www.healthit.gov/sites/default/files/page/2020-11/API-Resource-Guide_v1_0.pdf.
                 \204\ https://www.healthit.gov/isa/united-states-core-data-interoperability-uscdi.
                 \205\ Information Blocking and the ONC Health IT Certification
                Program: Extension of Compliance Dates and Timeframes in Response to
                the Covid-19 Public Health Emergency. Available at: https://www.govinfo.gov/content/pkg/FR-2020-11-04/pdf/2020-24376.pdf.
                ---------------------------------------------------------------------------
                 The CMS Interoperability and Patient Access final rule (85 FR
                25510) and program policies build on the ONC 21st Century Cures Act
                final rule (85 FR 25642). The CMS Interoperability and Patient Access
                final rule and policies require certain payers (for example, Medicare
                Advantage organizations, Medicaid and Child Health Insurance Program
                (CHIP) Fee-for-Service (FFS) programs, Medicaid managed care plans,
                CHIP managed care entities, and issuers of certain Qualified Health
                Plan (QHP) on the Federally-facilitated Exchanges (FFEs)) to implement
                and maintain a standards-based Patient Access API using HL7 FHIR
                Release 4.0.1 to make available claims and encounter data to their
                enrollees and beneficiaries (called ``patients'' in the CMS
                interoperability rule) with the intent of ensuring enrollees and
                beneficiaries have access to their own health care information through
                third-party software applications.
                 The CMS Interoperability and Patient Access final rule also
                established new conditions of participation for Medicare and Medicaid
                participating hospitals and critical access hospitals (CAHs), requiring
                them to send electronic notifications to another healthcare facility or
                community provider or practitioner when a patient is admitted,
                discharged, or transferred (85 FR 25603).
                 In the calendar year (CY) 2021 Physician Fee Schedule (PFS) final
                rule (85 FR 84472), we finalized a policy to align the certified EHR
                technology required for use in the Promoting Interoperability Programs
                and the Merit-based Incentive Payment System (MIPS) Promoting
                Interoperability performance category with the updates to health IT
                certification criteria finalized in the ONC 21st Century Cures Act
                final rule. Under this policy, MIPS eligible clinicians, and eligible
                hospitals and CAHs participating in the Promoting Interoperability
                Programs, must use technology meeting the updated certification
                criteria for performance and reporting periods beginning in 2023 (85 FR
                84825).
                 The use of APIs can also reduce long-standing barriers to quality
                measurement. Currently, health IT developers are required to implement
                individual measure specifications within their health IT products. The
                health IT developer must also accommodate how that product connects
                with the unique variety of systems within a specific care setting.\206\
                This may be further complicated by systems that integrate a wide range
                of data schemas. This process is burdensome and costly, and it is
                difficult to reliably obtain high quality data across systems. As
                health IT developers map their health IT data to the FHIR standard and
                related implementation specifications, APIs can enable these structured
                data to be easily accessible for quality measurement or other use
                cases, such as care coordination, clinical decision support, and
                supporting patient access.
                ---------------------------------------------------------------------------
                 \206\ The Office of the National Coordinator for Health
                Information Technology, Strategy on Reducing Regulatory and
                Administrative Burden Relating to the Use of Health IT and EHRs,
                Final Report (Feb. 2020). Available at: https://www.healthit.gov/sites/default/files/page/2020-02/BurdenReport_0.pdf.
                ---------------------------------------------------------------------------
                 We believe the emerging data standardization and interoperability
                enabled by APIs will support the transition to full digital quality
                measurement by 2025, and are committed to exploring and seeking input
                on potential solutions for the transition to digital quality
                measurement as described in this RFI.
                [[Page 63817]]
                B. Definition of Digital Quality Measures
                 In the proposed rule, we sought to refine the definition of digital
                quality measures (dQMs) to further operationalize our objective of
                fully transitioning to dQMs by 2025. We previously noted dQMs use
                ``sources of health information that are captured and can be
                transmitted electronically and via interoperable systems'' (85 FR
                84845). In the RFI, we sought input on future elaboration that would
                define a dQM as a software that processes digital data to produce a
                measure score or measure scores. Data sources for dQMs may include
                administrative systems, electronically submitted clinical assessment
                data, case management systems, EHRs, instruments (for example, medical
                devices and wearable devices), patient portals or applications (for
                example, for collection of patient-generated health data), health
                information exchanges (HIEs) or registries, and other sources. We also
                note that dQMs are intended to improve the patient experience including
                quality of care, improve the health of populations, and/or reduce
                costs.
                 We discussed one potential approach to developing dQM software in
                section XIV.D.2. of the preamble of the CY 2022 OPPS/ASC proposed rule
                (86 FR 42235) and in this final rule with comment period. In that
                section, we sought comment on the potential definition of dQMs in this
                RFI.
                 We also sought feedback on how leveraging advances in technology
                (for example, FHIR-based APIs) to access and electronically transmit
                interoperable data for dQMs could reinforce other activities to support
                quality measurement and improvement (for example, the aggregation of
                data across multiple data sources, rapid-cycle feedback, and alignment
                of programmatic requirements).
                 The transition to dQMs relies on advances in data standardization
                and interoperability. As providers and payers work to implement the
                required advances in interoperability over the next several years, we
                will continue to support reporting of eCQMs through CMS quality
                reporting programs and through the Promoting Interoperability
                Programs.\207\ These fully digital measures continue to be important
                drivers of interoperability advancement and learning. As discussed in
                the CY 2022 OPPS/ASC proposed rule and the next section of this final
                rule with comment period, we are currently re-specifying and testing
                these measures to use FHIR rather than the currently adopted Quality
                Data Model (QDM) in anticipation of the wider use of FHIR standards. We
                intend to apply significant components of the output of this work, such
                as the re-specified measure logic and the learning done through measure
                testing with FHIR-based APIs, to define and build future dQMs that take
                advantage of the expansion of standardized, interoperable data.
                ---------------------------------------------------------------------------
                 \207\ eCQI Resource Center. Available at: https://ecqi.healthit.gov/.
                ---------------------------------------------------------------------------
                C. Use of FHIR for Current eCQMs
                 Since we adopted eCQMs in our hospital and clinician quality
                programs, we have heard from stakeholders about the technological
                challenges, burden, and related costs of reporting eCQM data. The CMS
                eCQM Strategy Project engaged with stakeholders through site visits and
                listening sessions with health systems and provider organizations to
                learn about their experiences. This stakeholder feedback identified
                recommendations to improve processes related to alignment; development;
                implementation and reporting; certification; and communication,
                education, and outreach. Over the past 2 years, we have focused on
                opportunities to streamline and modernize quality data collection and
                reporting processes, such as exploring FHIR (http://hl7.org/fhir) as a
                framework for measure structure and data submission for quality
                reporting programs, specifically for eCQMs. FHIR is a free and open
                source standards framework (in both commercial and government settings)
                created by HL7 International that establishes a common language and
                process for all health information technology. FHIR allows systems to
                communicate and information to be shared seamlessly, with a lower
                burden for hospitals, providers, clinicians, vendors, and quality
                measurement stakeholders. Specifically, for quality reporting, FHIR
                enables representing the data in eCQMs as well as provides a structure
                for eCQMs and reporting, using FHIR as the standard for all. Whereas
                today, multiple standards being used to report eCQMs is challenging and
                burdensome.
                 We are working to convert current eCQMs to the FHIR standard. We
                are currently testing the exchange of data elements represented in FHIR
                to CMS through ongoing HL7 Connectathons and integrated system testing
                by using and refining implementation guides (IGs). Submitting data
                through FHIR-based APIs has the potential to improve data exchange by
                providing consistent security, performance, scalability, and structure
                to all users. In addition, development of FHIR-based APIs could
                decrease provider burden by automating more of the measure data
                collection process. We continue to explore and expand potential
                applications of the FHIR standard and testing with eCQM use cases, and
                we are strongly considering a transition to FHIR-based quality
                reporting with the use of the FHIR standard for eCQMs in quality and
                value-based reporting programs. As we move to an all-dQM format for
                quality programs, we are depending on testing results and community
                readiness to improve interoperability, reduce burden, and facilitate
                better patient care. We will continue to consider how to leverage the
                interoperability advantages offered by the FHIR standards and API-based
                data submission, including digital quality measurement.
                D. Changes Under Consideration To Advance Digital Quality Measurement:
                Potential Actions in Four Areas To Transition to Digital Quality
                Measures by 2025
                 Building on the advances in interoperability and learning from
                testing of FHIR-converted eCQMs, we aim to move fully to dQMs,
                originating from sources of health information that are captured and
                can be transmitted electronically via interoperable systems, by 2025.
                 To enable this transformation, we are considering further
                modernization of the quality measurement enterprise in four major ways:
                (1) Leverage and advance standards for digital data and obtain all EHR
                data required for quality measures via provider FHIR-based APIs; (2)
                redesign our quality measures to be self-contained tools; (3) better
                support data aggregation; and (4) work to align measure requirements
                across our reporting programs, other Federal programs and agencies, and
                the private sector where appropriate.
                 These changes would enable us to collect and utilize more timely,
                actionable, and standardized data from diverse sources and care
                settings to improve the scope and quality of data used in quality
                reporting and payment programs, reduce quality reporting burden, and
                make results available to stakeholders in a rapid-cycle fashion. Data
                collection and reporting efforts would become more efficient, supported
                by advances in interoperability and data standardization. Aggregation
                of data from multiple sources would allow assessments of costs and
                outcomes to be measured across multiple care settings for an individual
                patient or clinical conditions. We believe that aggregating data for
                measurement can incorporate a more holistic assessment of an
                individual's health and health care and produce the rich set of data
                needed to
                [[Page 63818]]
                enable patients and caregivers to make informed decisions by combining
                data from multiple sources (for example, patient reported data, EHR
                data, and claims data) for measurement.
                 Perhaps most importantly, these steps would help us deliver on the
                full promise of quality measurement and drive us toward a learning
                health system that transforms healthcare quality, safety, and
                coordination and effectively measures and achieves value-based care.
                The shift from a static to a learning health system hinges on the
                interoperability of healthcare data, and the use of standardized data.
                The dQMs would leverage this interoperability to deliver on the promise
                of a learning health system wherein standards-based data sharing and
                analysis, rapid-cycle feedback, and quality measurement and incentives
                are aligned for continuous improvement in patient-centered care.
                Similarly, standardized, interoperable data used for measurement can
                also be used for other use cases, such as clinical decision support,
                care coordination and care decision support, which impacts health care
                and care quality.
                 We requested comments on four potential future actions that would
                enable transformation to a fully digital quality measurement enterprise
                by 2025.
                1. Leveraging and Advancing Standards for Digital Data and Obtaining
                All EHR Data Required for Quality Measures via Provider FHIR-Based APIs
                 We are considering targeting the data required for our quality
                measures that utilize EHR data to be data retrieved via FHIR-based APIs
                based on standardized, interoperable data. Utilizing standardized data
                for EHR-based measurement (based on FHIR and associated IGs) and
                aligning where possible with interoperability requirements can
                eliminate the data collection burden providers currently experience
                with required chart-abstracted quality measures and reduce the burden
                of reporting digital quality measure results. We can fully leverage
                this advance to adapt eCQMs and expand to other dQMs through the
                adoption of interoperable standards across other digital data sources.
                We are considering methods and approaches to leverage the
                interoperability data requirements for APIs in certified health IT set
                by the ONC 21st Century Cures Act final rule to support modernization
                of CMS quality measure reporting. As discussed previously, these
                requirements will be included in certified technology in future years
                (85 FR 84825) including availability of data included in the USCDI via
                standards-based APIs, and we will require clinicians and hospitals
                participating in MIPS and the Promoting Interoperability Programs,
                respectively, to transition to use of certified technology updated
                consistent with the 2015 Cures Edition Update (85 FR 84825).
                 Digital data used for measurement could also expand beyond data
                captured in traditional clinical settings, administrative claims data,
                and EHRs. Many important data sources are not currently captured
                digitally, such as survey and PGHD. We intend to work to innovate and
                broaden the digital data used across the quality measurement enterprise
                beyond the clinical EHR and administrative claims. Agreed upon
                standards for these data, and associated implementation guides will be
                important for interoperability and quality measurement. We will
                consider developing clear guidelines and requirements for these digital
                data that align with interoperability requirements, for example,
                requirements for expressing data in standards, exposing data via
                standards-based APIs, and incentivizing technologies that innovate data
                capture and interoperability.
                 High quality data are also essential for reliable and valid
                measurement. Hence, in implementing the shift to collect all clinical
                EHR data via FHIR-based APIs, we would support efforts to strengthen
                and test the quality of the data obtained through FHIR-based APIs for
                quality measurement. We currently conduct audits of eCQM data submitted
                under our quality programs, including the Hospital Inpatient Quality
                Reporting (IQR) Program, with functions including checks for data
                completeness and data accuracy, confirmation of proper data formatting,
                alignment with standards, and appropriate data cleaning (82 FR 38398
                through 38402). These functions would continue and be applied to dQMs
                and further expanded to automate the manual validation of the data
                compared to the original data source (for example, the medical record)
                where possible. Analytic advancements such as natural language
                processing, big data analytics, and artificial intelligence, can
                support this evolution. These techniques can be applied to validating
                observed patterns in data and inferences or conclusions drawn from
                associations, as data are received, to ensure high quality data are
                used for measurement.
                 We sought feedback on the goal of aligning data needed for quality
                measurement with interoperability requirements and the strengths and
                limitations of this approach. We also sought feedback on the importance
                of and approaches to supporting inclusion of PGHD and other currently
                non-standardized data. We also welcomed comment on approaches for
                testing data quality and validity.
                2. Redesigning Quality Measures To Be Self-Contained Tools
                 We are considering approaches for including quality measures that
                take advantage of standardized data and interoperability requirements
                that have expanded flexibility and functionality compared to CMS'
                current eCQMs. We are considering defining and developing dQM software
                as end-to-end measure calculation solutions that retrieve data from
                primarily FHIR-based resources maintained by providers, payers, CMS,
                and others; calculate measure score(s); and produce reports. In
                general, we believe to optimize the use of standardized and
                interoperable data, the software solution for dQMs should do the
                following:
                 Have the flexibility to support calculation of single or
                multiple quality measure(s).
                 Perform three functions--
                 ++ Obtain data via automated queries from a broad set of digital
                data sources (initially from EHRs, and in the future from claims, PRO,
                and PGHD);
                 ++ Calculate the measure score according to measure logic; and
                 ++ Generate measure score report(s).
                 Be compatible with any data source systems that implement
                standard interoperability requirements.
                 Exist separately from digital data source(s) and respect
                the limitations of the functionality of those data sources.
                 Be tested and updated independently of the data source
                systems.
                 Operate in accordance with health information protection
                requirements under applicable laws and comply with governance functions
                for health information exchange.
                 Have the flexibility to be deployed by individual health
                systems, health IT vendors, data aggregators, and health plans; and/or
                run by CMS depending on the program and measure needs and
                specifications.
                 Be designed to enable easy installation for supplemental
                uses by medical professionals and other non-technical end-users, such
                as local calculation of quality measure scores or quality improvement.
                 Have the flexibility to employ current and evolving
                advanced analytic approaches such as natural language processing.
                 Be designed to support pro-competitive practices for
                development, maintenance, and implementation as
                [[Page 63819]]
                well as diffusion of quality measurement and related quality
                improvement and clinical tools through, for example, the use of open-
                source core architecture.
                 We sought comment on these suggested functionalities and other
                additional functionalities that quality measure tools should ideally
                have particularly in the context of the possible expanding availability
                of standardized and interoperable data (for example, standardized EHR
                data available via FHIR-based APIs).
                 We were also interested whether and how this more open, agile
                strategy may facilitate broader engagement in quality measure
                development, the use of tools developed for measurement for local
                quality improvement, and/or the application of quality tools for
                related purposes such as public health or research.
                3. Building a Pathway to Data Aggregation in Support of Quality
                Measurement
                 Using multiple sources of collected data to inform measurement
                would reduce data fragmentation (or, different pieces of data regarding
                a single patient stored in many different places). Additionally, we are
                considering expanding and establishing policies and processes for data
                aggregation and measure calculation by third-party aggregators that
                include, but are not limited to, HIEs and clinical registries.
                Qualified Clinical Data Registries and Qualified Registries that report
                quality measures for eligible clinicians in the MIPS program are
                potential examples \208\ at 42 CFR 414.1440(b)(2)(iv) and (v) and
                (c)(2)(iii) and (iv) and can also support measure reporting. We are
                considering establishing similar policies for third-party aggregators
                to maintain the integrity of our measure reporting process and to
                encourage market innovation.
                ---------------------------------------------------------------------------
                 \208\ CY 2021 Physician Fee Schedule Final Rule: Finalized (New
                and Updated) Qualified Clinical Data Registry (QCDR) and Qualified
                Registry Policies, https://qpp-cm-prod-content.s3.amazonaws.com/uploads/1362/QCDR%20and%20QR%20Updates%202021%20Final%20Rule%20Fact%20Sheet.pdf.
                ---------------------------------------------------------------------------
                 We sought feedback on aggregation of data from multiple sources to
                inform measurement and potential policy considerations. We also sought
                feedback on the role data aggregators can and should play in CMS
                quality measure reporting in collaboration with providers, and how we
                can best facilitate and enable aggregation.
                4. Potential Future Alignment of Measures Across Reporting Programs,
                Federal and State Agencies, and the Private Sector
                 We are committed to using policy levers and working with
                stakeholders to solve the issue of interoperable data exchange and to
                transition to full digital quality measurement. We are considering the
                future potential development and multi-staged implementation of a
                common portfolio of dQMs across our regulated programs, agencies, and
                private payers. This common portfolio would require alignment of: (1)
                Measure concepts and specifications including narrative statements,
                measure logic, and value sets; and (2) the individual data elements
                used to build these measure specifications and calculate the measure
                logic. Further, the required data elements would be limited to
                standardized, interoperable data elements to the fullest extent
                possible; hence, part of the alignment strategy will be the
                consideration and advancement of data standards and IGs for key data
                elements. We would coordinate closely with quality measure developers,
                Federal and state agencies, and private payers to develop and to
                maintain a cohesive dQM portfolio that meets our programmatic
                requirements and that fully aligns across Federal and state agencies
                and payers to the extent possible.
                 We intend for this coordination to be ongoing and allow for
                continuous refinement to ensure quality measures remain aligned with
                evolving healthcare practices and priorities (for example, PROs,
                disparities, and care coordination), and track with the transformation
                of data collection, alignment with health IT module updates including
                capabilities and standards adopted by ONC (for example, standards to
                enable APIs). This coordination would build on the principles outlined
                in HHS' National Health Quality Roadmap.\209\ It would focus on the
                quality domains of safety, timeliness, efficiency, effectiveness,
                equitability, and patient-centeredness. It would leverage several
                existing Federal and public-private efforts including our Meaningful
                Measures 2.0 Framework; the Federal Electronic Health Record
                Modernization (Department of Defense and Veterans Affairs (DoD/VA));
                the Agency for Healthcare Research and Quality's (AHRQ) Clinical
                Decision Support Initiative; the Centers for Disease Control and
                Prevention's (CDC) Adapting Clinical Guidelines for the Digital Age
                initiative; Core Quality Measure Collaborative, which convenes
                stakeholders from America's Health Insurance Plans (AHIP), CMS,
                National Quality Forum (NQF), provider organizations, private payers,
                and consumers and develops consensus on quality measures for provider
                specialties; and the NQF-convened Measure Applications Partnership
                (MAP), which recommends measures for use in public payment and
                reporting programs. We would coordinate with HL7's ongoing work to
                advance FHIR resources in critical areas to support patient care and
                measurement such as social determinants of health. Through this
                coordination, we would identify which existing measures could be used
                or evolved to be used as dQMs, in recognition of current healthcare
                practice and priorities.
                ---------------------------------------------------------------------------
                 \209\ Department of Health and Human Services, National Health
                Quality Roadmap (May 2020). Available at: https://www.hhs.gov/sites/default/files/national-health-quality-roadmap.pdf.
                ---------------------------------------------------------------------------
                 This multi-stakeholder, joint Federal, state, and industry effort,
                made possible and enabled by the pending advances towards true
                interoperability, would yield a significantly improved quality
                measurement enterprise. The success of the dQM portfolio would be
                enhanced by the degree to which the measures achieve our programmatic
                requirements for measures as well as the requirements of other agencies
                and payers.
                 We sought feedback on initial priority areas for the dQM portfolio
                given evolving interoperability requirements (for example, measurement
                areas, measure requirements, tools, and data standards). We also sought
                to identify opportunities to collaborate with other Federal agencies,
                states, and the private sector to adopt standards and technology-driven
                solutions to address our quality measurement priorities across sectors.
                E. Solicitation of Comments
                 As noted previously, we sought input on the future development of
                the following in the CY 2022 OPPS/ASC proposed rule (86 FR 42232):
                 Definition of Digital Quality Measures. We sought feedback
                on the following as described in section XIV.2. of the CY 2022 OPPS/ASC
                proposed rule:
                 ++ Do you have feedback on the potential future dQM definition?
                 ++ Does this approach to defining and deploying dQMs to interface
                with FHIR-based APIs seem promising? We also welcomed more specific
                comments on the attributes or functions to support such an approach of
                deploying dQMs.
                 Use of FHIR for Current eCQMs. We sought feedback on the
                following as described in section XIV.3. of the
                [[Page 63820]]
                preamble of the CY 2022 OPPS/ASC proposed rule:
                 ++ Would a transition to FHIR-based quality reporting reduce burden
                on health IT vendors and providers? Please explain.
                 ++ Would access to near real-time quality measure scores benefit
                your practice? How so?
                 ++ What parts of the current CMS Quality Reporting Data
                Architecture (QRDA) IGs cause the most burden (please explain the
                primary drivers of burden)?
                 ++ In what ways could CMS FHIR Reporting IG be modified to reduce
                burden on providers and vendors?
                 Changes Under Consideration to Advance Digital Quality
                Measurement: Actions in Four Areas to Transition to Digital Quality
                Measures by 2025.
                 ++ We sought feedback on the following as described in section
                XIV.4.a. of the preamble of the CY 2022 OPPS/ASC proposed rule:
                --Do you agree with the goal of aligning data needed for quality
                measurement with interoperability requirements? What are the strengths
                and limitations of this approach? Are there specific FHIR IGs suggested
                for consideration?
                --How important is a data standardization approach that also supports
                inclusion of PGHD and other currently non-standardized data?
                --What are possible approaches for testing data quality and validity?
                 ++ We sought feedback on the following as described in section
                XIV.4.b. of the preamble of the CY 2022 OPPS/ASC proposed rule:
                --What functionalities, described in section (4)(b) or others, should
                quality measure tools ideally have in the context of the pending
                availability of standardized and interoperable data (for example,
                standardized EHR data available via FHIR-based APIs)?
                --How would this more open, agile strategy for end-to-end measure
                calculation facilitate broader engagement in quality measure
                development, the use of tools developed for measurement for local
                quality improvement, and/or the application of quality tools for
                related purposes such as public health or research?
                 ++ We sought feedback on the following as described in section
                XIV.4.c. of the preamble of the CY 2022 OPPS/ASC proposed rule:
                --What are key policy considerations for aggregation of data from
                multiple sources being used to inform measurement?
                --What role can or should data aggregators play in CMS quality measure
                reporting in collaboration with providers? How can CMS best facilitate
                and enable aggregation?
                 ++ We sought feedback on the following as described in section
                XIV.4.d. of the preamble of the CY 2022 OPPS/ASC proposed rule:
                --What are initial priority areas for the dQM portfolio given evolving
                interoperability requirements (for example, measurement areas, measure
                requirements, tools)?
                --We also sought to identify opportunities to collaborate with other
                Federal agencies, states, and the private sector to adopt standards and
                technology-driven solutions to address our quality measurement
                priorities and across sectors.
                 We requested commenters to consider provisions in the CMS
                Interoperability and Patient Access final rule (85 FR 25510), CMS CY
                2021 PFS final rule (85 FR 84472), and the ONC 21st Century Cures Act
                final rule (85 FR 25642).
                 We plan to continue working with other agencies and stakeholders to
                coordinate and to inform any potential transition to dQMs by 2025.
                While we will not be responding to specific comments submitted in
                response to this Request for Information in this final rule with
                comment period, we will actively consider all input as we develop
                future regulatory proposals or future subregulatory policy guidance.
                Any updates to specific program requirements related to quality
                measurement and reporting provisions would be addressed through
                separate and future notice-and-comment rulemaking, as necessary.
                 We received comments on these topics:
                 Comment: There was widespread support among commenters for digital
                quality measurement in general. Many commenters specifically expressed
                support for CMS' transition to digital quality measurement. Some
                commenters noted digital quality measurement holds promise to improve
                the quality measurement enterprise, and patient outcomes and
                experience; reduce administrative burden; and make meaningful data more
                readily available for quality improvement. Commenters encouraged CMS to
                set up incentives for those who participate in digital measurement to
                help prepare their facilities' technology for the change, as well as
                incentives for reporting their quality data. Commenters noted CMS must
                plan for and design digital quality measure requirements while
                considering the availability of data standards, data security, and
                technical infrastructure and capabilities.
                 However, a few commenters did not fully support CMS' transition to
                digital measurement, for example, due to lack of readiness, technical
                capabilities, or specificity from CMS about the transition plan. The
                commenters expressed concerns with the readiness of ASCs and their
                informational technology capabilities. Another commenter strongly
                opposed CMS' access to a facility's EHR for measurement. The commenter
                noted technological challenges in the outpatient setting and
                administrative burdens as made evident and exacerbated by the COVID-19
                public health emergency.
                 Regarding the timeline for the transition to digital quality
                measurement, while some commenters agreed the 2025 timeline is
                feasible, some questioned the feasibility of the full transition by
                2025. Commenters who were hesitant about the 2025 timeline noted the
                timeline is ambitious or aggressive. Some noted the timeline is
                ambitious due to the burden facilities have incurred through the COVID-
                19 public health emergency. Others noted the timeline is impractical
                for ASCs since ASCs were not included in the provisions of the American
                Recovery and Reinvestment Act of 2009, which established provisions to
                encourage adoption of EHRs, and ASCs' current use of EHRs is limited.
                Some commenters suggested delaying the transition until after the
                COVID-19 Public Health Emergency (for example, 2 years after its end),
                while others suggested CMS revert back to the 2030 goal or delay
                transition until CMS can provide further guidance to stakeholders on
                their plans for the transition to digital measurement. Other commenters
                noted CMS' transition will need to account for real-world testing to
                ensure the availability of data, technical infrastructure, and
                alignment with other requirements such as ONC's CEHRT. The commenters
                noted CMS will need to plan for this, coordinate efforts, and encourage
                adoption by stakeholders particularly in underserved communities.
                 Response: We appreciate all of the comments on this topic. We
                believe that this input is very valuable in the continuing development
                of our transition to digital quality measurement in CMS quality
                reporting and value-based purchasing programs by 2025. We will continue
                to take all comments into account as we develop future regulatory
                proposals or other guidance for our digital quality measurement
                efforts.
                 In the CY 2022 OPPS/ASC proposed rule (86 FR 42232), we clarified a
                [[Page 63821]]
                potential future definition of dQMs as a software that processes
                digital data to produce a measure score or measure scores.
                 Comment: Several commenters noted appreciation for CMS'
                clarifications of the potential dQM definition. While some commenters
                supported the broad definition of dQMs and the ability of dQMs to
                promote rapid-cycle feedback for quality reporting, some commenters
                found the definition to still be too broad. A few commenters
                appreciated the broad range of digital data sources included in the
                definition and noted the definition captures the evolving availability
                of digital data. A few commenters who also supported the broad
                definition noted dQMs should and could capture data from across the
                continuum of care.
                 Some commenters who did not support the broad definition noted not
                all of the digital data sources in the definition have been adequately
                vetted or tested. The commenters noted not all of the digital data
                sources are currently ready to be used as reliable and valid sources
                for digital measurement (for example, data from wearable devices,
                patient-generated health data), although they hold promise for the
                future. Another commenter who also opposed CMS' transition to digital
                measurement did not support the use of emerging digital data sources,
                such as patient-generated health data, without specific details about
                CMS' plans to incorporate digital data sources in dQMs and ensuring the
                data would be understandable to beneficiaries.
                 Several commenters sought additional information and clarification
                regarding the definition. Specifically, several stakeholders requested
                further clarification on the potential definition of dQMs, how CMS
                envisions the future of dQMs, and how the future use of dQMs would
                differ from the current state. Some stakeholders requested
                clarification about the use of the term ``software'' in the potential
                dQM definition and suggested refinements to the definition. For
                example, one commenter who noted software development does not align
                with the current specification or structure of quality measures,
                suggested using alternative terms in the dQM definition such as
                ``computer readable'' or ``computer executable.'' Some commenters
                suggested CMS better define goals and expectations for dQM use. Some
                commenters requested a specific roadmap of implementation for providers
                to better understand how to prepare for dQMs.
                 Response: We appreciate all of the comments on and interest in this
                topic. We believe that this input is very valuable in the continuing
                development of our transition to digital quality measurement in CMS
                quality reporting and value-based purchasing programs by 2025. We will
                continue to take all comments into account as we develop future
                regulatory proposals or other guidance for our digital quality
                measurement efforts.
                 As noted above, we requested input on the use of FHIR for eCQMs and
                actions in four areas to transition to dQMs by 2025 including:
                 (1) Leveraging and advancing standards for digital data and
                obtaining all EHR data required for quality measures via provider FHIR-
                based APIs.
                 (2) Redesigning quality measures to be self-contained tools.
                 (3) Building a pathway to data aggregation in support of quality
                measurement.
                 (4) Potential future alignment of measures across reporting
                programs, Federal and state agencies, and the private sector.
                 Comment: Some commenters agreed FHIR-based quality reporting would
                reduce burden on providers. Commenters acknowledged FHIR provides a
                standardized way of sharing information and agreed the use of FHIR
                would increase interoperability and harmonization of data standards
                across providers and care settings. However, some commenters noted not
                all EHR or health IT vendors have adopted FHIR. Commenters encouraged
                CMS to evaluate the adoption of FHIR standard as well as understand the
                potential burden and costs associated with its adoption before
                requiring its use for digital measurement. Some commenters also
                requested CMS provide guidance to measure developers, vendors, and
                other stakeholders on the transition to FHIR-based eCQMs (for example,
                which version of FHIR to implement and which implementation guides will
                be used) and ensure sufficient testing prior to widespread adoption.
                One commenter agreed with incentivizing the use of FHIR but not
                requiring it as to not place undue burden on hospital or other
                providers who are not yet ready to adopt FHIR. Another commenter who
                did not agree with using the FHIR standard cautioned relying on any
                single approach or standard (for example, FHIR) until successful model
                elements can be identified.
                 Some commenters agreed with the goal of aligning data needed for
                quality measurement with interoperability requirements, and those data
                necessary for clinical care. For example, one commenter suggested using
                data elements in quality measures that conform to the data elements and
                classes in the United States Core Data for Interoperability (USCDI),
                where possible, to reduce measure complexity and improve data quality.
                A few commenters noted challenges with managing health information from
                unstructured data fields for digital measurement in the outpatient
                setting. The commenters noted some health information in the outpatient
                setting (for example, for anesthesia and imaging) is contained in
                unstructured data fields, and this would pose a challenge for FHIR-
                based quality measurement. Some commenters also expressed concerns
                about inclusion of data from sources outside of the EHR in measurement
                due to privacy and validity concerns. Other commenters noted that
                broader data sources used in measurement will improve measurement but
                may need to be phased in.
                 Regarding building a pathway to data aggregation, some commenters
                agreed that data aggregation will become easier with more aligned and
                interoperable data, and aggregation of data will strengthen measurement
                and provide a better understanding of population health. Other
                commenters requested more clarity on how third-party aggregators will
                be incorporated into the quality measurement ecosystem. A commenter
                also noted the need for a national strategy to improve patient
                identification and matching to facilitate more accurate data
                aggregation. One commenter identified the potential measure development
                and testing burden when combining data from multiple sources.
                Commenters also noted the need for increased data security as data
                sharing and aggregation is broadly implemented; one commenter
                recommended the Trusted Exchange Framework and Common Agreement (TEFCA)
                as a framework to support secure data sharing.
                 Some commenters supported using provider FHIR-based APIs for
                quality measurement and agreed with obtaining all EHR data captured for
                quality measure via provider FHIR-based APIs as a stride towards
                interoperability. Some commenters also requested CMS provide
                expectations and clarifications to ensure privacy and data security
                (for example, security transfer guidelines and security procedures).
                 However, some commenters expressed concerns about the use of FHIR-
                based APIs such as the technical infrastructure and financial
                readiness, and providers' unfamiliarity with or varied uptake of FHIR.
                For example, as noted above, some commenters pointed out the limited
                use of EHRs by ASCs. They noted that the technological
                [[Page 63822]]
                hurdles created by FHIR may prove problematic for some ASCs. Because
                ASCs are not required to use EHRs, stakeholders voiced that many do not
                use EHRs or they use EHRs that are certified. The commenters encouraged
                any regulations of applications be backwards compatible so as to allow
                more ASCs to participate. Commenters also identified the need for
                significant support for small ASCs or ASCS in rural or underserved
                areas that do not have the resource to have dedicated health IT staff.
                For support, commenters requested CMS provide technical assistance,
                advanced notice of requirements, and adequate time for rollout. A few
                commenters encouraged CMS to rigorously test any programs they
                implement to ensure patient safety and security as well as checking
                that systems do not cause accidental bias.
                 Some commenters agreed with redesigning quality measures as self-
                contained tools and agreed with their functionalities necessary to
                achieve digital quality measurement. The recommended CMS work with
                stakeholders to identify how and when the functionalities of the self-
                contained tools could be sequenced (for example, which could be
                achievable by 2025) and scaled. Further, commenters noted the tools
                should be tested and validated.
                 Many commenters expressed support for alignment of measurement
                areas, specifications, data elements used to build the specifications,
                and tools across reporting programs and payers. Several commenters
                noted alignment will require input from stakeholders and leadership
                across federal agencies. Some commenters recommended CMS work with
                other federal agencies and stakeholders such as patients to understand
                their role as an active EHR end-user, the National Quality Forum (NQF),
                the health IT community, the Core Quality Measures Collaborative
                (CQMC), and others. Some commenters encouraged CMS to partner with ONC
                on data standards and interoperability requirements (for example,
                health IT certification requirements) to plan for validating dQMs and
                ensure alignment across agencies.
                 Several commenters supported the development of a common dQM
                portfolio. Some commenters suggested initial priority areas for the
                common dQM portfolio. For example, some commenters noted the importance
                of standardizing social risk factor data collection and use of social
                risk factor data in measurement. Some commenters suggested CMS
                prioritize dQMs with clinical relevance, dQMs focusing on
                immunizations, and dQMs for anesthesia care as well as ensure dQMs
                would be available to cover all medical specialties and practitioners.
                Some commenters encouraged CMS to identify which existing measures
                could be used as dQMs while concurrently identifying future priority
                areas. Commenters also noted alignment could leverage data routinely
                captured during and across the continuum of clinical care, simplify
                quality reporting, and help address challenges associated with managing
                various standards and formats.
                 Several commenters supported a phased approach to dQM
                implementation. Several commenters requested CMS allow adequate time
                for setting up capabilities for implementation, testing, and validation
                to ensure successful transition to and use of dQMs. Several commenters
                requested CMS provide a plan for transition to digital quality
                measurement and consider program incentives, flexibilities in
                reporting, and technical assistance for providers. One commenter
                suggested CMS incorporate this plan as part of their creation of the
                common dQM portfolio. Another commenter recommended CMS develop a
                staged long-term plan on digital measurement in conjunction with a
                long-term plan on equity. One commenter, however, expressed concern
                about the phased approach and noted alignment should be a priority
                alongside interoperability.
                 Many commenters expressed they are committed to working with CMS in
                supporting the transition to digital quality measurement.
                 Response: We appreciate all of the comments on this topic. We
                believe that this input is very valuable in the continuing development
                of our transition to digital quality measurement in CMS quality
                reporting and value-based purchasing programs by 2025. We will continue
                to take all comments into account as we develop future regulatory
                proposals or other guidance for our digital quality measurement
                efforts.
                XV. Requirements for the Hospital Outpatient Quality Reporting (OQR)
                Program
                A. Background
                1. Overview
                 CMS seeks to promote higher quality and more efficient healthcare
                for Medicare beneficiaries. Consistent with these goals, CMS has
                implemented quality reporting programs for multiple care settings
                including the quality reporting program for hospital outpatient care,
                known as the Hospital Outpatient Quality Reporting (OQR) Program.
                2. Statutory History of the Hospital OQR Program
                 We refer readers to the CY 2011 OPPS/ASC final rule with comment
                period (75 FR 72064 through 72065) for a detailed discussion of the
                statutory history of the Hospital OQR Program. The Hospital OQR Program
                regulations are codified at 42 CFR 419.46. In the CY 2021 OPPS/ASC
                final rule (85 FR 86179), we finalized updates to the regulations to
                include a reference to the statutory authority for the Hospital OQR
                Program. Section 1833(t)(17)(A) of the Social Security Act (the Act)
                states that subsection (d) hospitals (as defined under section
                1886(d)(1)(B) of the Act) that do not submit data required for measures
                selected with respect to such a year, in the form and manner required
                by the Secretary, will incur a 2.0 percentage point reduction to their
                annual Outpatient Department (OPD) fee schedule increase factor. In the
                CY 2021 OPPS/ASC final rule (85 FR 86179) we codified the Hospital OQR
                Program's statutory authority at Sec. 419.46(a).
                3. Regulatory History of the Hospital OQR Program
                 We refer readers to the CY 2008 through 2021 OPPS/ASC final rules
                with comment period for detailed discussions of the regulatory history
                of the Hospital OQR Program:
                 The CY 2008 OPPS/ASC final rule (72 FR 66860 through
                66875);
                 The CY 2009 OPPS/ASC final rule (73 FR 68758 through
                68779);
                 The CY 2010 OPPS/ASC final rule (74 FR 60629 through
                60656);
                 The CY 2011 OPPS/ASC final rule (75 FR 72064 through
                72110);
                 The CY 2012 OPPS/ASC final rule (76 FR 74451 through
                74492);
                 The CY 2013 OPPS/ASC final rule (77 FR 68467 through
                68492);
                 The CY 2014 OPPS/ASC final rule (78 FR 75090 through
                75120);
                 The CY 2015 OPPS/ASC final rule (79 FR 66940 through
                66966);
                 The CY 2016 OPPS/ASC final rule (80 FR 70502 through
                70526);
                 The CY 2017 OPPS/ASC final rule (81 FR 79753 through
                79797);
                 The CY 2018 OPPS/ASC final rule (82 FR 59424 through
                59445);
                 The CY 2019 OPPS/ASC final rule (83 FR 59080 through
                59110);
                 The CY 2020 OPPS/ASC final rule (84 FR 61410 through
                61420); and
                 The CY 2021 OPPS/ASC final rule (85 FR 86179 through
                86187).
                 We have codified certain requirements under the Hospital OQR
                [[Page 63823]]
                Program at 42 CFR[thinsp]419.46. We refer readers to section XV.E. of
                this final rule with comment period for a detailed discussion of the
                payment reduction for hospitals that fail to meet Hospital OQR Program
                requirements for the CY 2024 payment determination.
                B. Hospital OQR Program Quality Measures
                1. Considerations in Selecting Hospital OQR Program Quality Measures
                 We refer readers to the CY 2012 OPPS/ASC final rule with comment
                period (76 FR 74458 through 74460) for a detailed discussion of the
                priorities we consider for the Hospital OQR Program quality measure
                selection. We did not propose any changes to these policies in the
                proposed rule.
                2. Retention of Hospital OQR Program Measures Adopted in Previous
                Payment Determinations
                 We previously finalized and codified at Sec. 419.46(h)(1) a policy
                to retain measures from a previous year's Hospital OQR Program measure
                set for subsequent years' measure sets, unless removed (77 FR 68471 and
                83 FR 59082). We did not propose any changes to these policies in the
                proposed rule.
                3. Removal of Quality Measures From the Hospital OQR Program Measure
                Set
                a. Immediate Removal
                 We previously finalized and codified at Sec. 419.46(i)(2) and (3)
                a process for removal and suspension of Hospital OQR Program measures,
                based on evidence that the continued use of the measure as specified
                raises patient safety concerns (74 FR 60634 through 60635, 77 FR 68472,
                and 83 FR 59082).\210\ We did not propose any changes to these policies
                in the proposed rule.
                ---------------------------------------------------------------------------
                 \210\ We refer readers to the CY 2013 OPPS/ASC final rule with
                comment period (77 FR 68472 through 68473) for a discussion of our
                reasons for changing the term ``retirement'' to ``removal'' in the
                Hospital OQR Program.
                ---------------------------------------------------------------------------
                b. Consideration Factors for Removing Measures
                 We previously finalized and codified at Sec. 419.46(i)(3) policies
                to use the regular rulemaking process to remove a measure for
                circumstances for which we do not believe that continued use of a
                measure raises specific patient safety concerns (74 FR 60635 and 83 FR
                59082).\211\ We did not propose any changes to these policies in the
                proposed rule.
                ---------------------------------------------------------------------------
                 \211\ We initially referred to this process as ``retirement'' of
                a measure in the 2010 OPPS/ASC proposed rule, but later changed it
                to ``removal'' during final rulemaking.
                ---------------------------------------------------------------------------
                c. Measure Removals Beginning With the CY 2023 Reporting Period/CY 2025
                Payment Determination: OP-02 (Fibrinolytic Therapy Received Within 30
                Minutes of ED Arrival) and OP-03 (Median Time To Transfer to Another
                Facility for Acute Coronary Intervention)
                 In CY 2022 OPPS/ASC proposed rule (86 FR 42237), we proposed to
                remove two chart-abstracted measures under removal Factor 4--the
                availability of a more broadly applicable (across settings,
                populations, or conditions) measure for the particular topic:
                 Fibrinolytic Therapy Received Within 30 Minutes of
                Emergency Department (ED) Arrival (OP-2); and
                 Median Time to Transfer to Another Facility for Acute
                Coronary Intervention (OP-3).
                 The OP-2 measure assesses the number of acute myocardial infarction
                (AMI) patients with: (a) ST-segment elevation on the electrocardiogram
                closest to arrival time receiving fibrinolytic therapy during the ED
                visit; and (b) a time from hospital arrival to fibrinolysis of 30
                minutes or less. For more details on this measure, we refer readers to
                the CY 2008 OPPS/ASC final rule with comment period (72 FR 66865),
                where this measure was designated as ED-AMI-3, and the CY 2009 OPPS/ASC
                final rule with comment period (73 FR 68761), where this measure was
                relabeled as OP-2 (for the CY 2010 payment determination and subsequent
                years). The OP-3 measure assesses the median number of minutes before
                outpatients with chest pain or possible heart attack who needed
                specialized care were transferred to another hospital capable of
                offering such specialized care. For more details on this measure, we
                refer readers to the CY 2008 OPPS/ASC final rule with comment period
                (72 FR 66865), where this measure was designated as ED-AMI-5, and the
                CY 2009 OPPS/ASC final rule with comment period (73 FR 68761), where
                this measure was relabeled as OP-3 (for the CY 2010 payment
                determination and subsequent years).
                 In the CY 2022 OPPS/ASC proposed rule (86 FR 42237), we proposed to
                remove these two measures (Fibrinolytic Therapy Received Within 30
                Minutes of Emergency Department (ED) Arrival (OP-2) and Median Time to
                Transfer to Another Facility for Acute Coronary Intervention (OP-3))
                beginning with the CY 2023 reporting period/CY 2025 payment
                determination due to the availability of a more broadly applicable
                measure. Specifically, in the CY 2022 OPPS/ASC proposed rule (86 FR
                42237), we proposed to adopt the ST-Segment Elevation Myocardial
                Infarction (STEMI) electronic clinical quality measure (eCQM) into the
                Hospital OQR Program measure set, which would serve as a replacement
                for these two measures. We refer readers to section XV.B.4.c. of the CY
                2022 OPPS/ASC proposed rule (86 FR 42244) and section XV.B.4.c. of this
                final rule with comment period for further discussion of the STEMI
                eCQM, including the measure overview, data sources, and measure
                calculation.
                 OP-2 and OP-3 measure the proportion of eligible STEMI patients who
                receive timely fibrinolytic therapy and timely transfer from an ED to
                another facility to receive appropriate care, respectively. The STEMI
                eCQM is an electronic process measure that includes both the
                populations of OP-2 and OP-3. It measures the percentage of ED patients
                diagnosed with STEMI that received timely fibrinolytic therapy (within
                30 minutes) or timely transfer to a percutaneous coronary intervention
                (PCI)-capable facility (within 45 minutes). Additionally, the STEMI
                eCQM (OP-40) captures transfer and non-transfer patients at a PCI-
                capable facility who receive PCI (within 90 minutes). Pursuant to
                removal Factor 4, we believe that the adoption of the STEMI eCQM would
                capture the OP-2 and OP-3 measure populations and expand beyond these
                populations to comprehensively measure the timeliness and
                appropriateness of STEMI care.
                 Furthermore, the OP-2 and OP-3 measures are chart-abstracted
                measures, which result in greater provider burden due to manual
                abstraction. The STEMI eCQM (OP-40) allows for the retrieval of data
                directly from the electronic health record (EHR) using patient-level
                data. As a result, in the proposed rule we stated our belief that the
                STEMI eCQM (OP-40) is a more broadly applicable measure and transitions
                the Hospital OQR Program toward the use of EHR data for quality
                measurement. We noted in the CY 2022 OPPS/ASC proposed rule (86 FR
                42237) that removal of these measures was contingent on the
                finalization of the STEMI eCQM. We invited public comment on our
                proposals to remove these measures.
                 The following is a summary of the comments we received on these
                proposals and our responses.
                 Comment: Many commenters supported the proposal to remove the two
                chart-abstracted measures, Fibrinolytic Therapy Received Within
                [[Page 63824]]
                30 Minutes of ED Arrival (OP-2) and Median Time To Transfer to Another
                Facility for Acute Coronary Intervention (OP-3), and they were favor of
                adopting the ST-Segment Elevation Myocardial Infarction (STEMI) eCQM.
                These commenters also believed that the STEMI eCQM would reduce data
                collection burden and be more useful than OP-2 and OP-3.
                 Response: We thank the commenters for their support of our proposal
                to remove OP-2 and OP-3. We agree that adopting the STEMI eCQM would
                reduce data collection burden and would be a more broadly applicable
                measure that transitions the Hospital OQR Program toward the use of EHR
                data for quality measurement.
                 Comment: A few commenters supported removing OP-2 and OP-3 in favor
                of introducing the ST-Segment Elevation Myocardial Infarction (STEMI)
                eCQM, but expressed concerns about the transition to the STEMI eCQM.
                One commenter noted that the STEMI eCQM had not yet been endorsed by
                the NQF and recommended delaying the proposed removal of OP-2 and OP-3
                and the addition of the STEMI eCQM until 2024 to allow for completion
                of NQF review. Another commenter suggested that CMS delay removing OP-2
                and OP-3 so that hospitals have time to implement the new STEMI eCQM
                for an additional year.
                 Response: We thank the commenters for their support and acknowledge
                their concerns. We note that, in regard to the endorsement status of
                the STEMI eCQM, the MAP voted to conditionally support the measure,
                pending NQF endorsement.\212\ CMS is in the process of seeking NQF
                endorsement for the STEMI eCQM. We refer the reader to section
                XV.B.4.c. of this final rule with comment period for additional
                information on the adoption of the STEMI eCQM, including our rationale
                for adopting the measure when it has not yet been endorsed by the NQF.
                In response to the suggestion that removing OP-2 and OP-3 should be
                delayed to allow additional time for transitioning to eCQM reporting,
                we believe that, as we proposed the reporting of this measure to be
                voluntary for the CY 2023, hospitals would have sufficient time to
                practice and operationalize reporting in order to transition from OP-2
                and OP-3 to the STEMI eCQM.
                ---------------------------------------------------------------------------
                 \212\ The National Quality Forum. (2021). Measure Applications
                Partnership 2020-2021. Considerations for Implementing Measures in
                Federal Programs: Clinician, Hospital & PAC/LTC. Accessed on May 17,
                2021 at: https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=94893.
                ---------------------------------------------------------------------------
                 Comment: One commenter did not support removing OP-2 and OP-3 from
                the measure set and believed that it would increase burden for
                hospitals that are not equipped for electronic reporting, especially
                smaller and more rural facilities. The commenter stated that reporting
                requirements for eCQMs exceed those for chart-abstracted measures and
                that introducing an eCQM will require training or hiring new staff.
                 Response: We thank the commenter for their input. While we
                acknowledge that removing two chart-abstracted measures and
                transitioning to an eCQM may pose certain short-term challenges for
                hospitals, we reiterate the value of transitioning to an eCQM. That is,
                we believe that this transition aligns with our overall efforts to
                reduce regulatory burden on hospitals, lower health care costs, and
                enhance patient care by streamlining the quality reporting and value-
                based purchasing programs as stated in the Meaningful Measures
                Framework. We note, OP-2 and OP-3 measures are chart-abstracted
                measures, which generally places greater burden on the provider due to
                the labor and cost of manual abstraction. In contrast, the STEMI eCQM
                would allow for the retrieval of data directly from the electronic
                health record (EHR) using patient-level data, thus reducing provider
                burden.
                 We believe adoption of this proposal would place limited burden on
                smaller and more rural facilities. Small hospitals and facilities that
                do not have the volume of data required for reporting of the eCQMs will
                be exempt from reporting of those measures based on the case threshold
                exemptions outlined in section XV.D.6.d.(3) of this final rule with
                comment period. Additionally, the Medicare and Medicaid EHR Incentive
                Programs, established by the Health Information Technology for Economic
                and Clinical Health Act of 2009 (HITECH), authorized HHS to provide
                financial incentives to hospitals and eligible professionals for the
                ``meaningful use'' of certified EHR technology to improve patient
                care.\213\ These financial incentives assisted hospitals in
                transitioning to the use of EHR technology.\214\ Successful
                demonstration of meaningful use included, among other requirements,
                using certified EHR technology to meet specified thresholds for a
                number of objectives and measures and reporting clinical quality
                measures (CQMs). Given the exemption for facilities that do not meet
                case thresholds and past efforts to assist with the transition to EHR,
                we believe that the value added by streamlining the quality reporting
                and value-based purchasing programs justifies the burden these
                standards may place on facilities. We refer readers to section XXII.B.
                of this final rule with comment period for additional information on
                the burden calculations for removing OP-2 and OP-3 and adopting the
                STEMI eCQM.
                ---------------------------------------------------------------------------
                 \213\ Ibid.
                 \214\ American Hospital Association. A Study of The Impact of
                Meaningful Use Clinical Quality Measures. Available at: https://www.aha.org/sites/default/files/hospitals-face-challenges-using-electronic-health-records-to-generate-clinical-quality-measures.pdf.
                ---------------------------------------------------------------------------
                 After consideration of the public comments we received, we are
                finalizing this provision as proposed.
                4. Adoption of New Measures for the Hospital OQR Program Measure Set
                 In the CY 2022 OPPS/ASC proposed rule (86 FR 42238), we proposed to
                adopt three new measures: (1) COVID-19 Vaccination Coverage Among
                Health Care Personnel (HCP) measure, beginning with the CY 2022
                reporting period; (2) Breast Cancer Screening Recall Rates measure,
                beginning with the CY 2022 reporting period; and (3) STEMI eCQM,
                beginning as a voluntary measure for the CY 2023 reporting period, and
                then as a mandatory measure beginning with the CY 2024 reporting
                period.
                a. Adoption of the COVID-19 Vaccination Coverage Among Health Care
                Personnel (HCP) Measure Beginning With the CY 2022 Reporting Period/CY
                2024 Payment Determination
                (1) Background
                 On January 31, 2020, the Secretary declared a public health
                emergency (PHE) for the United States (U.S.) in response to the global
                outbreak of SARS-CoV-2, a novel (new) coronavirus that causes a disease
                named ``coronavirus disease 2019'' (COVID-19).\215\ COVID-19 is a
                contagious respiratory infection \216\ that can cause serious illness
                and death. Older individuals, some racial and ethnic minorities, and
                those with underlying medical conditions are considered to be at higher
                risk for more serious
                [[Page 63825]]
                complications from COVID-19.217 218 As of July 2, 2021, the
                U.S. reported over 33 million cases of COVID-19 and over 600,000 COVID-
                19 deaths.\219\ As of October 14, 2021, the U.S. reported over 44
                million cases and over 718,000 COVID-19 deaths.\220\ Hospitals and
                health systems saw significant surges of COVID-19 patients as community
                infection levels increased.\221\ Between December 2, 2020 and January
                30, 2021, more than 100,000 Americans with COVID-19 were hospitalized
                at the same time.\222\
                ---------------------------------------------------------------------------
                 \215\ U.S. Dept of Health and Human Services, Office of the
                Assistant Secretary for Preparedness and Response. (2020).
                Determination that a Public Health Emergency Exists. Available at:
                https://www.phe.gov/emergency/news/healthactions/phe/Pages/2019-nCoV.aspx.
                 \216\ Centers for Disease Control and Prevention. (2020). Your
                Health: Symptoms of Coronavirus. Available at: https://www.cdc.gov/coronavirus/2019-ncov/symptoms-testing/symptoms.html.
                 \217\ Centers for Disease Control and Prevention. (2020). Your
                Health: Symptoms of Coronavirus. Available at https://www.cdc.gov/coronavirus/2019-ncov/symptoms-testing/symptoms.html.
                 \218\ Centers for Disease Control and Prevention. (2020). Health
                Equity Considerations and Racial and Ethnic Minority Groups.
                Available at: https://www.cdc.gov/coronavirus/2019-ncov/community/health-equity/race-ethnicity.html.
                 \219\ This information has been updated from the proposed rule
                to reflect current data from the Centers for Disease Control and
                Prevention. (2021). CDC COVID Data Tracker. Available at: https://covid.cdc.gov/covid-data-tracker/#cases_casesper100klast7days.
                 \220\ This information has been updated from the proposed rule
                to reflect current data from the Centers for Disease Control and
                Prevention. (2021). CDC COVID Data Tracker. Available at: https://covid.cdc.gov/covid-data-tracker/#cases_casesper100klast7days.
                 \221\ Associated Press. Tired to the Bone. Hospitals Overwhelmed
                with Virus Cases. November 18, 2020. Accessed on December 16, 2020,
                at https://apnews.com/article/hospitals-overwhelmed-coronavirus-cases-74a1f0dc3634917a5dc13408455cd895. Also see: New York Times.
                Just how full are U.S. intensive care units? New data paints an
                alarming picture. November 18, 2020. Accessed on December 16, 2020,
                at: https://www.nytimes.com/2020/12/09/world/just-how-full-are-us-intensive-care-units-new-data-paints-an-alarming-picture.html.
                 \222\ US Currently Hospitalized [verbar] The COVID Tracking
                Project. Accessed January 31, 2021 at: https://covidtracking.com/data/charts/us-currently-hospitalized.
                ---------------------------------------------------------------------------
                 Evidence indicates that COVID-19 primarily spreads when individuals
                are in close contact with one another.\223\ Ongoing research indicates
                that fully vaccinated people without immunocompromising conditions are
                able to engage in most activities with very low risk of acquiring or
                transmitting SARS-CoV-2, and the Centers for Disease Control and
                Prevention (CDC) issued new guidance for fully vaccinated individuals
                on May 28, 2021.\224\ The virus is typically transmitted through
                respiratory droplets or small particles created when someone who is
                infected with the virus coughs, sneezes, sings, talks or breathes.\225\
                Thus, the CDC advises that infections mainly occur through exposure to
                respiratory droplets when a person is in close contact with someone who
                has COVID-19.\226\ Experts believe that COVID-19 spreads less commonly
                through contact with a contaminated surface \227\ and that in certain
                circumstances, infection can occur through airborne transmission.\228\
                According to the CDC, those at greatest risk of infection are persons
                who have had prolonged, unprotected close contact (that is, within 6
                feet for 15 minutes or longer) with an individual with confirmed COVID-
                19 infection, regardless of whether the individual has symptoms.\229\
                Although personal protective equipment (PPE) and other infection
                control- precautions can reduce the likelihood of transmission in
                health care settings, COVID-19 can spread between HCP and patients or
                from patient to patient given the close contact that may occur during
                the provision of care.\230\ The CDC has emphasized that health care
                settings, including long-term care (LTC) settings, can be high-risk
                places for COVID-19 exposure and transmission.\231\
                ---------------------------------------------------------------------------
                 \223\ Centers for Disease Control and Prevention. (2021). How
                COVID-19 Spreads. Accessed on April 3, 2021 at: https://www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/how-covid-spreads.html.
                 \224\ Centers for Disease Control and Prevention. (2021).
                Interim Public Health Recommendations for Fully Vaccinated People.
                Accessed on June 2, 2021 at: https://www.cdc.gov/coronavirus/2019-ncov/vaccines/fully-vaccinated-guidance.html.
                 \225\ Ibid.
                 \226\ Ibid.
                 \227\ Ibid.
                 \228\ Centers for Disease Control and Prevention. (2020). How
                COVID-19 Spreads. Accessed on April 3, 2021 at: https://www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/how-covid-spreads.html.
                 \229\ Centers for Disease Control and Prevention. (2021). When
                to Quarantine. Accessed on April 2, 2021 at: https://www.cdc.gov/coronavirus/2019-ncov/if-you-are-sick/quarantine.html.
                 \230\ Centers for Disease Control and Prevention. 2021. Interim
                U.S. Guidance for Risk Assessment and Work Restrictions for
                Healthcare Personnel with Potential Exposure to COVID-19. Accessed
                at: https://www.cdc.gov/coronavirus/2019-ncov/hcp/faq.html#Transmission.
                 \231\ Dooling, K, McClung, M, et al. ``The Advisory Committee on
                Immunization Practices' Interim Recommendations for Allocating
                Initial Supplies of COVID-19 Vaccine--United States, 2020.'' Morb
                Mortal Wkly Rep. 2020; 69(49): 1857-1859.
                ---------------------------------------------------------------------------
                 Vaccination is a critical part of the nation's strategy to
                effectively counter the spread of COVID-19 and ultimately help restore
                societal functioning.\232\ On December 11, 2020, the Food and Drug
                Administration (FDA) issued the first Emergency Use Authorization (EUA)
                for a COVID-19 vaccine in the U.S.\233\ Subsequently, FDA issued EUAs
                for additional COVID-19 vaccines.234 235 Following the
                publication of the proposed rule, FDA granted full approval to
                Comirnaty, the Pfizer-BioNTech COVID-19 vaccine on August 23, 2021 for
                individuals 16 years of age and older.\236\
                ---------------------------------------------------------------------------
                 \232\ Centers for Disease Control and Prevention. (2020). COVID-
                19 Vaccination Program Interim Playbook for Jurisdiction Operations.
                Accessed on December 18 at: https://www.cdc.gov/vaccines/imz-managers/downloads/COVID-19-Vaccination-Program-Interim_Playbook.pdf.
                 \233\ U.S. Food and Drug Administration. (2020). Pfizer-BioNTech
                COVID-19 Vaccine EUA Letter of Authorization. Available at https://www.fda.gov/media/144412/download.
                 \234\ U.S. Food and Drug Administration. (2021). Moderna COVID-
                19 Vaccine EUA Letter of Authorization. Available at https://www.fda.gov/media/144636/download.
                 \235\ U.S. Food and Drug Administration. (2021). Janssen COVID-
                19 Vaccine EUA Letter of Authorization. Available at https://www.fda.gov/media/146303/download.
                 \236\ U.S. Food and Drug Administration. (2021). Comirnaty and
                Pfizer-BioNTech COVID-19 Vaccine. Available at: https://www.fda.gov/emergency-preparedness-and-response/coronavirus-disease-2019-covid-19/comirnaty-and-pfizer-biontech-covid-19-vaccine.
                ---------------------------------------------------------------------------
                 As part of its national strategy to address COVID-19, the White
                House stated on March 25, 2021 that it would work with states and the
                private sector to execute an aggressive vaccination strategy and has
                outlined a goal of administering 200 million shots in 100 days.\237\ On
                April 21, 2021, it was announced that this goal had been achieved.\238\
                Although the goal of the U.S. Government is to ensure that every
                American who wants to receive a COVID-19 vaccine can receive one, the
                Department of Health and Human Services (HHS), the Department of
                Defense (DoD), and the CDC, recommended that early vaccination efforts
                focus on those critical to the PHE response, including HCP, and
                individuals at highest risk for developing severe illness from COVID-
                19.\239\ For example, the CDC's Advisory Committee on Immunization
                Practices (ACIP) recommended that HCP should be among those individuals
                prioritized to receive the initial, limited supply of the COVID-19
                vaccination, given the potential for transmission in health care
                [[Page 63826]]
                settings and the need to preserve health care system capacity.\240\
                Research suggests most states followed this recommendation,\241\ and
                HCP began receiving the vaccine in mid-December of 2020.\242\
                ---------------------------------------------------------------------------
                 \237\ The White House. Remarks by President Biden on the COVID-
                19 Response and the State of Vaccinations. Accessed on April 3, 2021
                at: https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/03/29/remarks-by-president-biden-on-the-covid-19-response-and-the-state-of-vaccinations/.
                 \238\ The White House. Remarks by President Biden on the COVID-
                19 Response and the State of Vaccinations. Accessed on June 2, 2021
                at: https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/04/21/remarks-by-president-biden-on-the-covid-19-response-and-the-state-of-vaccinations-2/.
                 \239\ Health and Human Warp Speed Strategy for Distributing a
                COVID-19 Vaccine. Accessed December 18 at: https://www.hhs.gov/sites/default/files/strategy-for-distributing-covid-19-vaccine.pdf;
                Centers for Disease Control (2020). COVID-19 Vaccination Program
                Interim Playbook for Jurisdiction Operations. Accessed December 18
                at: https://www.cdc.gov/vaccines/imz-managers/downloads/COVID-19-Vaccination-Program-Interim_Playbook.pdf. Services, Department of
                Defense. (2020) From the Factory to the Frontlines: The Operation.
                 \240\ Dooling, K, McClung, M, et al. ``The Advisory Committee on
                Immunization Practices' Interim Recommendations for Allocating
                Initial Supplies of COVID-19 Vaccine--United States, 2020.'' Morb.
                Mortal Wkly Rep. 2020; 69(49): 1857-1859. ACIP also recommended that
                long-term care residents be prioritized to receive the vaccine,
                given their age, high levels of underlying medical conditions, and
                congregate living situations make them high risk for severe illness
                from COVID-19.
                 \241\ Kates, J, Michaud, J, Tolbert, J. ``How Are States
                Prioritizing Who Will Get the COVID-19 Vaccine First?'' Kaiser
                Family Foundation. December 14, 2020. Accessed on December 16 at
                https://www.kff.org/policy-watch/how-are-states-prioritizing-who-will-get-the-covid-19-vaccine-first/.
                 \242\ Associated Press. `Healing is Coming:' US Health Workers
                Start Getting Vaccine. December 15, 2020. Accessed on December 16
                at: https://apnews.com/article/us-health-workers-coronavirus-vaccine-56df745388a9fc12ae93c6f9a0d0e81f.
                ---------------------------------------------------------------------------
                 Frontline healthcare workers, such as those employed in hospitals,
                have been prioritized for vaccination in most locations. There are
                approximately 18 million healthcare workers in the U.S.\243\ A survey
                of HCP found that 66 percent of hospital HCP and 64 percent of
                outpatient clinic HCP reported receiving at least one dose of the
                vaccine.\244\ As of July 2, 2021, the CDC reported that over 328
                million doses of COVID-19 vaccine have been administered and
                approximately 155.9 million people were fully vaccinated.\245\
                Subsequently, the CDC reported that as of October 14, 2021, over 405
                million doses of COVID-19 vaccine have been administered and
                approximately 188.3 million people had received full doses.\246\ The
                White House indicated on April 6, 2021, that the U.S. retains
                sufficient vaccine supply, and every adult became eligible to receive
                the vaccine beginning April 19, 2021.\247\ Finally, as part of the
                Biden Administration's efforts to vaccinate those who are still
                unvaccinated through increasing the number of Americans covered by
                vaccination requirements,\248\ on September 9, 2021, the Biden
                Administration announced that COVID-19 vaccination will be required of
                all staff within Medicare and Medicaid-certified facilities to protect
                both patients and HCP against COVID-19.\249\
                ---------------------------------------------------------------------------
                 \243\ Centers for Disease Control and Prevention. Healthcare
                Workers. (2017) Accessed February 18, 2021 at: https://www.cdc.gov/niosh/topics/healthcare/default.html.
                 \244\ KFF/The Washington Post Frontline Health Care Workers
                Survey. (2021). Accessed June 2, 2021 at: https://www.kff.org/coronavirus-covid-19/poll-finding/kff-washington-post-health-care-workers/.
                 \245\ This information has been updated from the proposed rule
                to reflect current data from the Centers for Disease Control and
                Prevention. COVID Data Tracker. COVID-19 Vaccinations in the United
                States. (2021). Available at: https://covid.cdc.gov/covid-data-tracker/#vaccinations.
                 \246\ This information has been updated from the proposed rule
                to reflect current data from the Centers for Disease Control and
                Prevention. (2021). COVID Data Tracker. COVID-19 Vaccinations in the
                United States. Available at: https://covid.cdc.gov/covid-data-tracker/#vaccinations.
                 \247\ The White House. Remarks by President Biden Marking the
                150 Millionth COVID-19 Vaccine Shot. Accessed April 8, 2021 at:
                https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/04/06/remarks-by-president-biden-marking-the-150-millionth-covid-19-vaccine-shot/.
                 \248\ The White House. Path Out of the Pandemic: President
                Biden's COVID-19 Action Plan. Accessed on October 14, 2021.
                Available at: https://www.whitehouse.gov/covidplan/#vaccinate.
                 \249\ CMS. Press Release: Biden-Harris Administration to Expand
                Vaccination Requirements for Health Care Settings. September 9,
                2021. Available at: https://www.cms.gov/newsroom/press-releases/biden-harris-administration-expand-vaccination-requirements-health-care-settings. In order to implement this plan, CMS is working with
                the CDC to develop an Interim Final Rule with Comment Period that
                will extend emergency regulations to require vaccination among staff
                in a wide range of healthcare settings including dialysis
                facilities. This action will create a consistent standard across the
                country, while giving patients assurance of the vaccination status
                of those delivering care.
                ---------------------------------------------------------------------------
                 We believe it is important to require that hospital outpatient
                departments (HOPDs) report HCP vaccination information for health care
                facilities to assess whether these facilities are taking steps to limit
                the spread of COVID-19 among their health care workers and to help
                sustain the ability of HOPDs to continue serving their communities
                throughout the PHE and beyond. Therefore, we proposed to adopt a new
                measure, COVID-19 Vaccination Coverage Among HCP beginning with the CY
                2024 payment determination. For that payment year, hospitals would be
                required to report data quarterly on the measure for the January 2022
                through December 2022 reporting period. The measure would assess the
                proportion of a hospital's health care workforce that has been
                vaccinated against COVID-19.
                 HCP are at risk of transmitting COVID-19 infection to patients,
                experiencing illness or death as a result of COVID-19 themselves, and
                transmitting it to their families, friends, and the general public. We
                believe HOPDs should report the level of vaccination among their HCP as
                part of their efforts to assess and reduce the risk of transmission of
                COVID-19 within their facilities. HCP vaccination can reduce illness
                that leads to work absence and limit disruptions to providing care
                \250\ with major reductions in SARS-CoV-2 infections among those
                receiving two dose COVID-19 vaccine despite a high community infection
                rate.\251\ Data from influenza vaccination demonstrates that provider
                vaccination is associated with that provider recommending vaccination
                to patients,\252\ and we believe HCP COVID-19 vaccination in HOPDs
                could similarly increase uptake among that patient population. We also
                believe that publicly reporting the HCP vaccination rates would be
                helpful to many patients, including those who are at high risk-for
                developing serious complications from COVID-19, as they choose HOPDs
                for treatment. Under CMS' Meaningful Measures Framework, the COVID-19
                measure addresses the quality priority of ``Promote Effective
                Prevention and Treatment of Chronic Disease'' through the Meaningful
                Measures Area of ``Preventive Care.''
                ---------------------------------------------------------------------------
                 \250\ Centers for Disease Control and Prevention. Overview of
                Influenza Vaccination among Health Care Personnel. October 2020.
                (2020) Accessed March 16, 2021 at: https://www.cdc.gov/flu/toolkit/long-term-care/why.htm.
                 \251\ Benenson S, Oster Y, Cohen MJ, Nir-Paz R. BNT162b2 mRNA
                Covid-19 Vaccine Effectiveness among Health Care Workers. N Engl J
                Med. 2021. See also: Keehner J, Horton LE, Pfeffer MA, Longhurst CA,
                Schooley RT, Currier JS, et al. SARS-CoV-2 Infection after
                Vaccination in Health Care Workers in California. N Engl J Med.
                2021.
                 \252\ Measure Application Committee Coordinating Committee
                Meeting Presentation. March 15, 2021. (2021) Accessed March 16, 2021
                at: http://www.qualityforum.org/Project_Pages/MAP_Coordinating_Committee.aspx.
                ---------------------------------------------------------------------------
                (2) Overview of Measure
                 The COVID-19 Vaccination Coverage Among HCP measure (``COVID-19 HCP
                vaccination measure'') is a process measure developed by the CDC to
                track COVID-19 vaccination coverage among HCP in non-LTC facilities
                including outpatient hospitals.
                (a) Measure Specifications
                 The denominator for the HCP measure is the number of HCP eligible
                to work in the hospital for at least 1 day during the self-selected
                week, excluding persons with contraindications to COVID-19 vaccination
                that are described by the CDC.\253\
                ---------------------------------------------------------------------------
                 \253\ Centers for Disease Control and Prevention.
                Contraindications and precautions. (2021) Accessed March 15, 2021
                at: https://www.cdc.gov/vaccines/covid-19/info-by-product/clinical-considerations.html#Contraindications.
                ---------------------------------------------------------------------------
                [[Page 63827]]
                 The numerator for the HCP measure is the cumulative number of HCP
                eligible to work in at the hospital for at least 1 day during the self-
                selected week and who received a complete vaccination course against
                COVID-19.254 255 256 257 258 A complete vaccination course
                is defined under the specific manufacturer and may require multiple
                doses or regular revaccination.\259\ Vaccination coverage for purposes
                of this measure is defined as the estimated percentage (given the
                potential for week-to-week variation) of HCP eligible to work at the
                hospital for at least 1 day who received a COVID-19 vaccine. Acute care
                facilities would count HCP working in all inpatient or outpatient units
                that are physically attached to the inpatient acute care facility site
                and share the same CMS certification number (CCN), regardless of the
                size or type of unit. Facilities would also count HCP working in
                inpatient and outpatient departments that are affiliated with the
                specific acute care facility (such as sharing medical privileges or
                patients), regardless of distance from the acute care facility and also
                share the same CCN. The decision to include or exclude HCP from the
                acute care facility's HCP vaccination counts would be based on whether
                individuals meet the specified National Healthcare Safety Network
                (NHSN) criteria and are physically working in a location that is
                considered any part of the on-site acute care facility that is being
                monitored.\260\ The proposed specifications for the COVID-19
                vaccination coverage among HCP measure are available on the NQF website
                at: https://www.cdc.gov/nhsn/nqf/index.html.
                ---------------------------------------------------------------------------
                 \254\ Measure Application Partnership Coordinating Committee
                Meeting Presentation. March 15, 2021. (2021) Accessed March 16, 2021
                at: http://www.qualityforum.org/Project_Pages/MAP_Coordinating_Committee.aspx.
                 \255\ Measure Application Partnership Coordinating Committee
                Meeting Presentation. March 15, 2021. (2021) Accessed March 16, 2021
                at: http://www.qualityforum.org/Project_Pages/MAP_Coordinating_Committee.aspx.
                 \256\ Centers for Disease Control and Prevention. Measure
                Specification: NHSN COVID-19 Vaccination Coverage Updated August
                2021. Available at: https://www.cdc.gov/nhsn/pdfs/nqf/covid-vax-hcpcoverage-508.pdf.
                 \257\ National Health Safety Network. Healthcare Personnel
                COVID-19 Vaccination Cumulative Summary (CDC 57.219, Rev 5). Updated
                September 2021. Available at: https://www.cdc.gov/nhsn/forms/57.219-p.pdf.
                 \258\ https://www.cdc.gov/coronavirus/2019-ncov/vaccines/
                faq.html#:~:text=If%20you%20have%20received%20all,to%20be%20fully%20v
                accinated.
                 \259\ Measure Application Partnership Coordinating Committee
                Meeting Presentation. March 15, 2021. (2021) Accessed March 16, 2021
                at: http://www.qualityforum.org/Project_Pages/MAP_Coordinating_Committee.aspx.
                 \260\ Centers for Disease Control and Prevention. CMS Reporting
                Requirements FAQs. Accessed June 2, 2021 at: https://www.cdc.gov/nhsn/PDFs/CMS/faq/FAQs-CMS-Reporting-Requirements.pdf.
                ---------------------------------------------------------------------------
                (b) Review by the Measure Applications Partnership
                 The COVID-19 HCP vaccination measure was included on the publicly
                available ``List of Measures Under Consideration for December 21,
                2020,'' \261\ a list of measures under consideration for use in various
                Medicare programs. The Measure Applications Partnership (MAP) hospital
                workgroup convened on January 11, 2021, and it reviewed the list of
                Measures Under Consideration (MUC) including the COVID-19 HCP
                vaccination measure. The MAP hospital workgroup agreed that the
                proposed measure represents a promising effort to advance measurement
                for an evolving national pandemic and that it could bring value to the
                Hospital OQR Program measure set by providing transparency about an
                important COVID-19 intervention to help prevent infections in HCP and
                patients.\262\ The MAP hospital workgroup also stated in its
                preliminary recommendations that collecting information on COVID-19
                vaccination coverage among HCP and providing feedback to hospitals
                would allow hospitals to benchmark coverage rates and improve coverage
                in their facility, and that reducing COVID-19 infection rates in HCP
                may reduce transmission among patients and reduce instances of staff
                shortages due to illness.\263\
                ---------------------------------------------------------------------------
                 \261\ The National Quality Forum. (2021) Accessed March 14, 2021
                at: https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=94212.
                 \262\ Measure Applications Partnership. MAP Preliminary
                Recommendations 2020-2021. Accessed on January 24, 2021 at: http://www.qualityforum.org/Project_Pages/MAP_Hospital_Workgroup.aspx.
                 \263\ Ibid.
                ---------------------------------------------------------------------------
                 In its preliminary recommendations, the MAP hospital workgroup did
                not support this measure for rulemaking, subject to the potential for
                mitigation.\264\ To mitigate its concerns, the MAP hospital workgroup
                believed that the measure needed well-documented evidence, finalized
                specifications, testing, and National Quality Forum (NQF) endorsement
                prior to implementation.\265\ Subsequently, the MAP Coordinating
                Committee met on January 25, 2021, and reviewed the COVID-19 HCP
                vaccination measure. In its 2020-2021 MAP Final Recommendations, the
                MAP offered conditional support for rulemaking contingent on CMS
                bringing the measure back to the MAP once the specifications were
                further refined. The MAP specifically stated, ``the incomplete
                specifications require immediate mitigation and further development
                should continue.'' \266\ In its final report, the MAP noted that the
                measure would add value by providing visibility into an important
                intervention to limit COVID-19 infections in HCP and the patients for
                whom they provide care.\267\ The spreadsheet of final recommendations
                no longer cited concerns regarding evidence, testing, or NQF
                endorsement.\268\ In response to the MAP final recommendation request
                that CMS bring the measure back to the MAP once the specifications are
                further refined, CMS and the CDC met with the MAP Coordinating
                Committee on March 15, 2021. Additional information was provided to
                address vaccine availability, alignment of the COVID-19 HCP vaccination
                measure as closely as possible with the data collection for the
                Influenza HCP vaccination measure (NQF #0431), and clarification
                related to how HCP are defined. CMS and the CDC also presented
                preliminary findings from the testing of the numerator of the COVID-19
                HCP vaccination measure, which was in process. These preliminary
                findings showed numerator data should be feasible to collect and
                reliable. Testing of the measure numerator (the number of HCP
                vaccinated) involved a comparison of the data collected through the
                NHSN and independently reported through the Federal pharmacy
                partnership program for delivering vaccination to LTC facilities. These
                are two completely independent data collection systems. In initial
                analyses of the first month of vaccination, the number of healthcare
                workers vaccinated in approximately 1,200 facilities for which data
                from both systems was available, the number of healthcare personnel
                vaccinated was highly correlated between the two systems with a
                correlation coefficient of nearly 90 percent in the second two weeks of
                reporting.\269\ Because of the high correlation across a large number
                of facilities and high number of HCP within those facilities receiving
                at least one dose of the COVID-19 vaccine, we believe the measure is
                feasible and
                [[Page 63828]]
                reliable for use in HOPDs. After reviewing this additional information,
                the MAP retained its final recommendation of conditional support, and
                expressed support for CMS' efforts to use the measure as part of the
                solution for the COVID-19 public health crisis.\270\
                ---------------------------------------------------------------------------
                 \264\ Ibid.
                 \265\ Ibid.
                 \266\ Measure Applications Partnership. 2020-2021 MAP Final
                Recommendations. Accessed on February 23, 2021 at: http://www.qualityforum.org/Project_Pages/MAP_Hospital_Workgroup.aspx.
                 \267\ Ibid.
                 \268\ Ibid.
                 \269\ For more information on testing results and other measure
                updates, please see the Meeting Materials (including Agenda,
                Recording, Presentation Slides, Summary, and Transcript) of the
                March 15, 2021 meeting available at https://www.qualityforum.org/ProjectMaterials.aspx?projectID=75367.
                 \270\ Ibid.
                ---------------------------------------------------------------------------
                 Section 1890A(a)(4) of the Act, as added by section 3014(b) of the
                Affordable Care Act, requires the Secretary to take into consideration
                input from multi-stakeholder groups in selecting certain quality and
                efficiency measures. While we value input from the MAP, we believe it
                is important to propose the measure as quickly as possible to address
                the urgency of the COVID-19 PHE and its impact on high risk
                populations, including hospitals. CMS continues to engage with the MAP
                to mitigate concerns and appreciates the MAP's conditional support for
                the measure.
                (c) Measure Endorsement
                 Under section 1833(t)(17)(C)(i) of the Act, unless the exception of
                subclause (ii) applies, measures selected for the Hospital OQR Program
                must have been set forth by the entity with a contract under section
                1890(a) of the Act. The NQF currently holds this contract. Under
                section 1833(t)(17)(C)(ii) of the Act, the Secretary shall develop
                measures that the Secretary determines to be appropriate for the
                measurement of the quality of care furnished by hospitals in outpatient
                settings and that reflect consensus among affected parties and, to the
                extent feasible and practicable, shall include measures set forth by
                one or more national consensus building entities.
                 In general, we prefer to adopt measures that have been endorsed by
                the NQF because it is a national multi-stakeholder organization with a
                well-documented and rigorous approach to consensus development.
                However, as we have noted in previous rulemaking (for example, 75 FR
                72065 and 76 FR 74494 for the Hospital OQR and ASCQR Programs,
                respectively), the requirement that measures reflect consensus among
                affected parties can be achieved in other ways, including through the
                measure development process, through broad acceptance, use of the
                measure(s), and through public comment.
                 The COVID-19 HCP vaccination measure is not NQF-endorsed; however,
                the CDC submitted the measure for consideration in the NQF Fall 2021
                measure cycle.
                 Because this measure is not NQF-endorsed, we considered whether
                there are other available measures that assess COVID-19 vaccination
                rates among HCP. We found no other feasible and practical measures on
                the topic of COVID-19 vaccination among HCP.
                (d) Data Collection, Submission, and Reporting
                 Given the time sensitive nature of this measure considering the
                current PHE, we proposed that hospitals would be required to begin
                reporting data on the COVID-19 HCP vaccination measure (OP-38)
                beginning January 1, 2022, for the CY 2024 payment determination for
                the Hospital OQR Program. Thereafter, we proposed quarterly reporting
                periods. While we considered annual reporting periods for the Hospital
                OQR Program, we proposed quarterly reporting periods given the
                immediacy of the PHE and the importance of alignment across quality
                payment programs that have since finalized this measure.
                 In the CY 2022 OPPS/ASC proposed rule (86 FR 42241), we stated that
                if our proposal to adopt this measure is finalized, hospitals would
                report the measure through the CDC's NHSN web-based surveillance
                system.\271\ While the Hospital OQR Program does not currently require
                use of the NHSN web-based surveillance system, we have previously
                required use of this system for submitting data. We refer readers to
                the CY 2014 OPPS/ASC final rule with comment period in which we adopted
                the Influenza Vaccination Coverage Among Health Care Personnel (NQF
                #0431) measure (OP-38) (78 FR 75096 through 75099), section
                XV.D.5.b.(1) of the CY 2022 OPPS/ASC proposed rule (86 FR 42259), and
                this final rule for additional information on reporting through the
                NHSN web-based surveillance system under the Hospital OQR Program.
                Hospitals also have experience reporting acute care hospital measures
                to the CDC's NHSN under the Hospital IQR Program.
                ---------------------------------------------------------------------------
                 \271\ Centers for Disease Control and Prevention. Surveillance
                for Weekly HCP COVID-19 Vaccination. Accessed at: https://www.cdc.gov/nhsn/hps/weekly-covid-vac/index.html on February 10,
                2021.
                ---------------------------------------------------------------------------
                 To report this measure, we proposed that hospitals would collect
                the numerator and denominator for the COVID-19 HCP vaccination measure
                for at least one, self-selected week during each month of the reporting
                quarter and submit the data to the NHSN Healthcare Personal Safety
                (HPS) Component before the quarterly deadline to meet Hospital OQR
                Program requirements. While we believe that it would be ideal to have
                HCP vaccination data for every week of each month, we are mindful of
                the time and resources that hospitals would need to report the data.
                Thus, in collaboration with the CDC, we determined that data from at
                least one week of each month would be sufficient to obtain a reliable
                snapshot of vaccination levels among a hospital's HCP while balancing
                the costs of reporting. If a hospital submits more than one week of
                data in a month, the most recent week's data would be used to calculate
                the measure. For example, if first and third week data are submitted,
                the third week data would be used. If first, second, and fourth week
                data are submitted, fourth week data would be used. For each quarter,
                we proposed that the CDC would calculate a single quarterly COVID-19
                HCP vaccination coverage rate for each hospital, which would be
                calculated by taking the average of the data from the three submission
                periods submitted by the hospital for that quarter. If finalized, CMS
                would publicly report each quarterly COVID-19 HCP vaccination coverage
                rate as calculated by the CDC.
                 Hospitals would submit the number of HCP eligible to have worked at
                the facility during the self-selected week that the hospital reports
                data in NHSN (denominator) and the number of those HCP who have
                received a complete course of a COVID-19 vaccination (numerator) during
                the same self-selected week. As previously stated, acute care
                facilities would count HCP working in all inpatient or outpatient units
                that share the same CCN, regardless of the size or type of unit.\272\
                ---------------------------------------------------------------------------
                 \272\ Ibid.
                ---------------------------------------------------------------------------
                 We received comments on these topics.
                 Comment: Many commenters supported our proposal to adopt the
                COVID19 Vaccination Coverage Among HCP Measure and expressed the
                importance of vaccination in the fight against COVID-19. Several
                commenters noted that their facilities have already implemented COVID-
                19 vaccination requirements and that the measure bolsters their efforts
                to promote vaccination among HCP. Some commenters stated that, given
                the surge of the Delta variant, the implementation of this measure
                should not be delayed as widespread vaccination is critical to prevent
                the spread and further variants of COVID-19. Other commenters noted
                that the measure has already been approved in other Medicare quality
                reporting programs and its inclusion in outpatient programs is
                appropriate and consistent. Some commenters also stated that reporting
                the measure will ensure transparency and accountability in infection
                prevention and control for
                [[Page 63829]]
                vulnerable populations and communities. Still other commenters
                appreciated that the measure would make COVID-19 vaccination
                information available to the public to make informed health care
                decisions.
                 Response: We thank commenters for their support of the measure and
                agree that the measure is critically important in the ongoing fight
                against COVID-19.
                 Comment: Several commenters expressed concern that COVID-19
                vaccines are authorized under EUA and the measure should not be adopted
                until such time that a vaccine has received full FDA approval. One
                commenter stated that all three currently available vaccinations should
                be fully approved by FDA prior to adoption of this measure because the
                commenter believes that this will reduce vaccine hesitancy.
                 Response: On August 23, 2021, subsequent to the publication of the
                CY 2022 OPPS/ASC proposed rule (86 FR 42240), FDA granted full approval
                to Comirnaty, formerly known as the Pfizer-BioNTech COVID-19
                vaccine.\273\ While we recognize that there are differences between EUA
                authorization and full FDA approval, we note that the process for each
                is scientifically rigorous. We refer readers to information related to
                FDA's process for evaluating an Emergency Use Authorization (EUA)
                request at https://www.fda.gov/vaccines-blood-biologics/vaccines/emergency-use-authorization-vaccines-explained.\274\ Each vaccine
                manufacturer that received EUA authorization enrolled tens of thousands
                of participants in randomized clinical trials, which is similar to what
                is required for full FDA approval.\275\ Manufacturers submit robust and
                rigorous data for both an EUA authorization and full FDA approval, and
                more than 380 million doses of COVID-19 vaccines have been
                administered.\276\ We believe all COVID-19 vaccines with either full
                approval or EUA authorization to be proven safe and effective. Thus, we
                believe it is appropriate to include the measure in the Hospital OQR
                Program.
                ---------------------------------------------------------------------------
                 \273\ U.S. Food and Drug Administration. Comirnaty and Pfizer-
                BioNTech COVID-19 Vaccine. August 30, 2021. Available at: https://www.fda.gov/emergency-preparedness-and-response/coronavirus-disease-2019-covid-19/comirnaty-and-pfizer-biontech-covid-19-vaccine.
                 \274\ At https://www.fda.gov/vaccines-blood-biologics/vaccines/emergency-use-authorization-vaccines-explained.
                 \275\ Harvard Law Petrie-Flom Center. ``What's the Difference
                Between Vaccine Approval (BLA) and Authorization (EUA)?'' June 15,
                2021. Available at: https://blog.petrieflom.law.harvard.edu/2021/06/15/whats-the-difference-between-vaccine-approval-bla-and-authorization-eua/.
                 \276\ Centers for Disease Control and Prevention. (2021). CDC
                COVID Data Tracker: COVID-19 Vaccinations in the United States.
                Available at: https://covid.cdc.gov/covid-data-tracker/#vaccinations.
                ---------------------------------------------------------------------------
                 We further note that the COVID-19 Vaccination Coverage Among HCP
                measure does not itself require HCP to receive the vaccination, nor
                does this measure reward or penalize HOPDs for the rate of HCP who have
                received a COVID-19 vaccine. The COVID-19 Vaccination Coverage Among
                HCP measure requires HOPDs to collect and report COVID-19 vaccination
                data that would support public health tracking and provide
                beneficiaries and their caregivers information to support informed
                decision making.
                 Comment: Several commenters expressed concern that this measure
                should not be adopted until there is clarity around the impact of
                future booster recommendations. One commenter stated that the numerator
                requirement of a completed vaccination course may change over time and
                recommended that CMS establish a definition of completed vaccination
                course using the national guidelines as of the date the OPPS Final Rule
                is published each year. Some commenters noted that supply disruptions
                could have an impact on vaccination coverage among HCP. Some commenters
                observed that tracking whether HCP have received a complete vaccination
                course when there are individual differences regarding what is
                considered a complete vaccination course increases reporting burden.
                Another commenter questioned how COVID-19 vaccinations will be financed
                in the future, and whether HCP will be required to pay out of pocket
                for vaccines and boosters which could impact the numerator requirement
                for the measure and lead HCP to decline future required doses of the
                vaccine. Other commenters recommended that reporting for the measure
                should be optional or delayed until a completed vaccination course can
                be more clearly and specifically defined. Several commenters
                recommended that CMS issue guidance on how the measure addresses
                boosters after booster recommendations have been issued by FDA and the
                CDC.
                 Response: The COVID-19 Vaccination Coverage Among HCP measure is a
                measure of a completed vaccination course (as defined in section
                XV.B.4.a.2. of the CY 2022 OPPS/ASC proposed rule (86 FR 42240)) and
                does not address booster shots. On August 12, 2021, FDA amended the
                emergency use authorizations (EUAs) for both the Pfizer-BioNTech COVID-
                19 Vaccine and the Moderna COVID-19 Vaccine to allow for the use of an
                additional dose in certain immunocompromised individuals, specifically,
                solid organ transplant recipients or those who are diagnosed with
                conditions that are considered to have an equivalent level of
                immunocompromise.\277\ The Centers for Disease Control on September 27,
                2021 further recommended Pfizer-BioNTech boosters for individuals who
                completed their initial series at least six months ago and are 65 years
                of age or older; 18 years of age or older with underlying medical
                conditions; and 18 years of age or older living and working in high-
                risk settings, which includes healthcare workers.\278\ We acknowledge
                commenter concerns that hospitals may be required to collect additional
                information from HCP on booster doses. However, we believe that the
                numerator is sufficiently broad to include future boosters as part of a
                ``complete vaccination course''.
                ---------------------------------------------------------------------------
                 \277\ U.S. Food and Drug Administration. Coronavirus (COVID-19)
                Update: FDA Authorizes Additional Vaccine Dose for Certain
                Immunocompromised Individuals. August 12, 2021. Available at:
                https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-authorizes-additional-vaccine-dose-certain-immunocompromised.
                 \278\ Ibid.
                ---------------------------------------------------------------------------
                 Comment: A few commenters expressed concern about the burden of
                accurately capturing the number of eligible HCP in the facility for the
                measure specifications and believed that the total population intended
                to be captured in the denominator is unclear. Some of these commenters
                further noted that capturing data such as contraindications would
                further increase the burden. Commenters further requested CMS clarify
                the measure specifications of the denominator.
                 One commenter discussed the challenge for systems or facilities
                with multiple locations that share the same CCN, facilities located on
                the same physical site that do not share the same CCN, or systems with
                many HCP that provide care in more than one setting during a calendar
                year including physicians who provide most of their services at an
                outpatient hospital or facility but also provide inpatient care for a
                few days per year. The commenter stated that in the example of a HCP
                who primarily practices at an outpatient hospital, but sometimes
                provides inpatient care, a review of charge-level details for each
                provider would be necessary to determine if the physicians provided
                services at the hospital during a specific reporting period, which
                would be burdensome. The commenter further discussed their system's
                policy to require vaccination of all HCP as a
                [[Page 63830]]
                condition of employment and noted that this alternative approach was
                more administratively feasible than the proposed measure
                specifications. To alleviate the challenge of collecting the
                denominator of eligible HCP working in the facility during the
                reporting period, the commenter requested CMS define ``eligible'' HCP
                and further recommended that CMS offer an attestation alternative for
                reporting by which an institution would receive 100 percent compliance
                for the measure if the institution attests that there is a COVID-19
                Vaccine Policy which requires that all current employees, students,
                residents, volunteers, and contractors be fully vaccinated on or before
                December 31, 2021, and furthermore requires that all new employees
                receive their first COVID-19 vaccination before starting work and the
                new employee must be fully vaccinated within 60 days of the hire date.
                If an institution does not have a policy that meets these criteria, the
                commenter suggested the institution would be required to report the
                numerator and denominator as specified in the proposed measure. One
                commenter requested clarification of whether reporting data for IQR
                meets the requirements to report for the OQR program.
                 Response: We recognize commenters' concerns regarding reporting
                burden associated with the specifications of this measure specifically
                around the definition of HCP. We note that given the highly infectious
                nature of the COVID-19 virus, we believe it is important to encourage
                all personnel within the hospital, regardless of patient contact, role,
                or employment type, to receive the COVID-19 vaccination to prevent
                outbreaks within the hospital which may affect resource availability
                and have a negative impact on patient access to care.
                 We also note that the measure specifications define ``eligible''
                HCP as all persons receiving a direct paycheck from the reporting
                facility (that is, on the facility's payroll), regardless of clinical
                responsibility or patient contact, licensed independent practitioners,
                and adult students, trainees and volunteers.\279\ CDC's guidance for
                entering data requires submission of HCP count at the facility
                level,\280\ and the measure requires reporting consistent with that
                guidance. Hospitals should count HCP working in all inpatient or
                outpatient units that are physically attached to the inpatient site and
                share the same CCN, regardless of the size or type of unit.\281\
                Hospitals should also count HCP working in inpatient and outpatient
                departments that are affiliated with the specific hospital (such as
                sharing medical privileges or patients), regardless of distance from
                the hospital and also share the same CCN.\282\ The decision to include
                or exclude HCP from the hospital's HCP vaccination counts should be
                based on whether individuals meet the specified NHSN criteria and are
                physically working in a location that is considered any part of the on-
                site hospital that is being monitored.\283\
                ---------------------------------------------------------------------------
                 \279\ Centers for Disease Control and Prevention. Measure
                Specification: NHSN COVID-19 Vaccination Coverage Updated August
                2021. Available at: COVID-19 Vaccination of Healthcare Personnel
                Measure Specifications (cdc.gov).
                 \280\ COVID-19 Vaccination Non-LTC Healthcare Personnel TOI
                (cdc.gov).
                 \281\ Centers for Disease Control and Prevention. Measure
                Specification: NHSN COVID-19 Vaccination Coverage. Available at:
                https://www.cdc.gov/nhsn/pdfs/nqf/covid-vaxhcpcoverage-508.pdf.
                 \282\ Ibid.
                 \283\ Centers for Disease Control and Prevention. CMS Reporting
                Requirements FAQs. Available at: https://www.cdc.gov/nhsn/PDFs/CMS/faq/FAQs-CMS-Reporting-Requirements.pdf.
                ---------------------------------------------------------------------------
                 The CDC has provided a number of resources including a tool called
                the Data Tracking Worksheet for COVID-19 Vaccination among Healthcare
                Personnel to help hospitals log and track the number of HCP who are
                vaccinated for COVID-19. Hospitals would enter COVID-19 vaccination
                data for each HCP in the tracking worksheet, and select a reporting
                week, and the data to be entered into the NHSN will automatically be
                calculated on the Reporting Summary.\284\ Using the CDC Data Tracking
                Worksheet and Reporting Summary, hospitals would only be required to
                report information once to capture inpatient and outpatient HCP as long
                as the HCP included in the report work at facilities that share the
                same CCN. Therefore, hospitals would be required to submit once for
                both the Hospital IQR and Hospital OQR Programs so long as the HCP
                included in the report work at facilities that share the same CCN. If
                HCP work at multiple facilities that do not share the same CCN, those
                individuals must be counted under each facility's CCN where they work
                during the week of data collection.\285\
                ---------------------------------------------------------------------------
                 \284\ Data Tracking Worksheet for COVID-19 Vaccination among
                Healthcare Personnel at https://www.cdc.gov/nhsn/hps/weekly-covid-vac/index.html.
                 \285\ Centers for Disease Control and Prevention. FAQs on
                Reporting COVID-19 Vaccination Data. August 2021. Available at:
                https://www.cdc.gov/nhsn/hps/weekly-covid-vac/faqs.html.
                ---------------------------------------------------------------------------
                 Comment: A few commenters noted that, while vaccination plays an
                important role in ending the COVID-19 pandemic, the measure is not
                currently endorsed by the National Quality Forum and they believed it
                should not be adopted until it receives such an endorsement. One
                commenter observed that NQF endorsement improves credibility and
                affords patients certainty that the measure data is reliable. One
                commenter recommended that CMS clarify that the adoption of a measure
                prior to NQF endorsement is only due to the exigency of the current
                circumstances.
                 Response: We believe that in the context of the current COVID-19
                PHE and continued monitoring and surveillance following the PHE, it is
                important to adopt this measure as quickly as possible to allow
                tracking and reporting of COVID-19 Vaccination Coverage Among HCP. This
                tracking would allow hospitals to identify the appropriateness and
                effectiveness of their initiatives to improve vaccination coverage and
                would provide patients and consumers with important information. We
                therefore believe it is appropriate to use our authority pursuant to
                section 1833(t)(17)(C)(i) of the Act to develop this measure. That
                provision permits the Secretary to develop measures that the Secretary
                determines to be appropriate for the measurement of the quality of care
                furnished by hospitals in outpatient settings and that reflect
                consensus among affected parties and, to the extent feasible and
                practicable, shall include measure set forth by one or more national
                consensus building entities. As described above, we believe that
                consensus among affected parties regarding a measure can be achieved
                through the measure development process, through broad acceptance, use
                of the measure(s), and through public comment.
                 Here, we note our efforts to build consensus regarding this measure
                through our coordination with the CDC, the use of this measure across
                quality programs, and the pressing need to better track and report
                COVID-19 vaccination coverage among HCP. There is no National Quality
                Forum endorsed measure on the topic of COVID-19 vaccination coverage
                among healthcare personnel, let alone any such measure that is feasible
                or practical for CMS to implement. We also note that the CDC has
                submitted this measure for consideration in the NQF Fall 2021 measure
                cycle.
                 Separately, we believe that the Secretary's selection of this
                measure is additionally supported by section 1833(t)(17)(C)(ii) of the
                Act, which permits the Secretary to select measures that are the same
                as (or a subset of) the measure for which data are required to
                [[Page 63831]]
                be submitted under the Hospital Inpatient Quality Reporting (IQR)
                Program. The Hospital IQR Program recently adopted the COVID-19
                Vaccination Coverage Among HCP measure (86 FR 45382).
                 Comment: One commenter recommended that CMS monitor for unintended
                consequences associated with the COVID-19 Vaccination Coverage Among
                HCP measure due to its short development and adoption timeline.
                 Response: We appreciate the commenter's suggestion. As previously
                stated, the COVID-19 vaccines have received rigorous scientific review
                and FDA has determined that the known and potential benefits outweigh
                the known and potential risks. Additionally, as the measure steward,
                the CDC continuously monitors reporting of COVID-19 vaccination data
                via the NHSN to improve infection control and help target facility-
                level improvement efforts.\286\
                ---------------------------------------------------------------------------
                 \286\ Ibid.
                ---------------------------------------------------------------------------
                 We acknowledge the commenter's concern regarding the development
                timeline of COVID-19 vaccines. However, as stated previously, we
                believe all authorized COVID-19 vaccines to be proven safe and
                effective and believe it is appropriate to include the measure in the
                Hospital OQR Program.
                 Comment: A few commenters supported the use of NHSN to report
                measure data and noted that reporting via NHSN is likely to reduce
                burden for hospitals.
                 Response: We thank the commenters for their support.
                 Comment: Several commenters cited Equal Employment Opportunity
                Commission (EEOC) guidelines, which state that employers must provide a
                reasonable accommodation if an employee's sincerely held religious
                belief, practice, or observance prevents them from receiving the
                vaccination. The commenters requested CMS and the CDC to revise the
                measure exclusions to align with EEOC guidance.
                 Response: We recognize that there are reasons, including religious
                objections or concerns regarding an individual provider's specific
                health status, that may lead an individual HCP to decline vaccination.
                We emphasize that this measure does not mandate vaccines; it only
                requires reporting of vaccination rates for successful program
                participation. However, we believe that accurate vaccination rates of
                HCP are meaningful data for patients and beneficiaries to use when
                choosing a hospital. The CDC, the measure's steward, offers guidance to
                hospitals that may decide to report HCP who decline vaccination due to
                religious reasons.\287\ Those HCP, however, would be included in the
                measure denominator along with other HCP who have not received a
                completed vaccination course.\288\ We further note that the Equal
                Employment Opportunity Commission (EEOC) released updated and expanded
                technical assistance on May 28, 2021, stating that Federal equal
                employment opportunity (EEO) laws do not prevent an employer from
                requiring all employees physically entering the workplace to be
                vaccinated for COVID-19, so long as the employer complies with the
                reasonable accommodation provisions of the Americans with Disabilities
                Act (ADA) and Title VII of the Civil Rights Act of 1964 and other EEOC
                considerations.\289\ In summary, we do not believe that this measure
                conflicts with any EEOC guidance and believe that it is appropriate to
                require hospitals to report these data.
                ---------------------------------------------------------------------------
                 \287\ Centers for Disease Control and Prevention. Reporting
                Weekly COVID-19 Vaccination Data for Healthcare Personnel Using the
                National Healthcare Safety Network (NHSN). September 2021. Available
                at: https://www.cdc.gov/nhsn/pdfs/hps/covidvax/weekly-covid-reporting-508.pdf.
                 \288\ Centers for Disease Control and Prevention. Reporting
                Weekly COVID-19 Vaccination Data for Healthcare Personnel Using the
                National Healthcare Safety Network (NHSN). September 2021. Available
                at: https://www.cdc.gov/nhsn/pdfs/hps/covidvax/weekly-covid-reporting-508.pdf.
                 \289\ U.S. Equal Employment Opportunity Commission. What You
                Should Know About COVID-19 and the ADA, the Rehabilitation Act, and
                Other EEO Laws. May 28, 2021. Available at: https://www.eeoc.gov/wysk/what-you-should-know-about-covid-19-and-ada-rehabilitation-act-and-other-eeo-laws.
                ---------------------------------------------------------------------------
                 Comment: A few commenters stated that they do not believe the
                measure is appropriate for quality reporting programs at this time. One
                commenter stated that the COVID-19 Vaccination Coverage Among HCP
                measure is dissimilar to the Influenza Vaccination Coverage Among HCP
                (NQF #0431) measure and the discrepancy between time and resources
                required for reporting renders the proposed COVID-19 Vaccination
                Coverage Among HCP measure inappropriate for hospitals at this time.
                Another commenter stated that the COVID-19 pandemic is ongoing, and the
                evolving nature of the vaccination effort indicates the measure is not
                yet mature enough for inclusion in the program. Another commenter
                observed that it is inappropriate to base this measure on the influenza
                vaccination measure due to the lack of evidence that COVID vaccines and
                influenza vaccines are clinically similar.
                 Response: We thank the commenters for their feedback. We
                acknowledge that while the CDC, the measure's steward, has sought to
                align this measure with the Influenza Vaccination Coverage Among HCP
                measure (NQF #0431), these are different public health initiatives, and
                different vaccines, and therefore the measure specifications are not in
                complete alignment. For example, influenza is seasonal while SARS-CoV-2
                has circulated continuously since the first cases were reported in the
                U.S. in January 2020.
                 With regard to commenters stating that it is premature to adopt the
                measure, we believe that COVID-19 vaccines are a crucial tool for
                slowing the spread of disease and death among patients, hospital staff,
                and the general public. Based on FDA's review, evaluation of the data,
                and its decision to authorize three vaccines for emergency use and to
                provide full approval to one vaccine, these vaccines meet FDA's
                applicable standards for safety and effectiveness to prevent COVID-19,
                including hospitalization and death.\290\ The combination of
                vaccination, universal source control (that is, wearing masks), social
                distancing, and handwashing offers further protection from COVID-
                19.\291\ Since the publication of the proposed rule, the emergence of
                coronavirus variants have resulted in 8.9 million new virus cases.\292\
                Given the EUA and full approval decisions by FDA and the continued PHE,
                we do not believe that adoption of the measure is premature. We believe
                our proposal to adopt the COVID-19 Vaccination Coverage among HCP
                measure to the Hospital OQR Program is appropriate and necessary for
                patient safety and to better inform patient decision-making.
                ---------------------------------------------------------------------------
                 \290\ U.S. Food and Drug Administration. COVID-19 Vaccines.
                (2021). Available at: https://www.fda.gov/emergency-preparedness-and-response/coronavirus-disease-2019-covid-19/covid-19-vaccines.
                 \291\ Centers for Disease Control and Prevention. How to Protect
                Yourself & Others. August 13, 2021. Available at https://www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/prevention.html.
                 \292\ Centers for Disease Control and Prevention. Trends in
                Number of COVID-19 Cases and Deaths in the US Reported to CDC.
                Accessed September 22, 2021. Available at: https://covid.cdc.gov/covid-data-tracker/#trends_totalcases.
                ---------------------------------------------------------------------------
                 Comment: Some commenters stated that it is inappropriate to use
                payment policies to drive vaccination coverage among HCP. Some
                commenters expressed concern that this measure could lead facilities to
                mandate vaccines for staff, with potential unintended consequences
                (specifically, staff quitting or legal risk for facilities for staff
                experiencing adverse events).
                 Response: We thank commenters for their feedback and. understand
                their
                [[Page 63832]]
                concerns. We emphasize that this measure does not require a hospitals
                to enforce staff vaccination in order for the hospital to successfully
                participate in the Hospital OQR Program; instead, the hospital must
                report the rate of its staff that have completed a complete vaccination
                course.
                 We noted in the CY 2022 OPPS/ASC proposed rule (86 FR 42239) that a
                survey of HCP from April 2021 found that 66 percent of hospital HCP and
                64 percent of outpatient department HCP reported receiving at least one
                dose of the vaccine.\293\ Subsequent to the publication of the CY 2022
                OPPS/ASC proposed rule, research from August 2021 suggests that nearly
                73 percent of HCP across all health care facilities have received at
                least one dose of the vaccine.\294\ Based on the findings, we
                understand that HCP have been receiving the COVID-19 vaccine prior to
                the adoption of this measure and we do not believe that there is a
                negative relationship between vaccine uptake among HCP and vaccine
                requirements. We further emphasize the importance of HCP vaccination to
                reduce transmission of COVID-19 among hospital staff and patients, and
                we believe the measure is appropriate for inclusion in the Hospital OQR
                program.
                ---------------------------------------------------------------------------
                 \293\ KFF/The Washington Post Frontline Health Care Workers
                Survey. (2021). Available at: https://www.kff.org/coronavirus-covid-19/pollfinding/kff-washington-post-health-care-workers/.
                 \294\ Lazer, D. et al. The Covic States Project: A 50-State
                Covid-19 Survey Report #62: Covid-19 Vaccine Attitudes Among
                Healthcare Workers. Northeastern University, Harvard University,
                Rutgers University, and Northwestern University. August 16, 2021.
                Available at: http://news.northeastern.edu/uploads/COVID19%20CONSORTIUM%20REPORT%2062%20HCW%20August%202021.pdf.
                ---------------------------------------------------------------------------
                 Comment: Many commenters expressed concern that the measure
                reporting requirements are duplicative of other state and federal
                COVID-19 vaccination reporting requirements and that inclusion of the
                measure in quality reporting programs is unnecessarily burdensome for
                hospitals. Some commenters questioned the purpose of the measure given
                the CMS announcement on September 9, 2021 that the agency will require
                COVID-19 vaccination of staff within all Medicare and Medicaid-
                certified facilities.\295\ Other commenters noted that they are
                currently required to report COVID-19 vaccination information to HHS
                and requested that such reporting might be considered a substitute to
                reporting proposed for the measure. A few commenters recommended a
                change to attestation-based reporting to reduce resources and burden
                required for reporting based on the proposed measure specifications.
                One commenter observed that time spent on multiple reporting
                requirements would take away from time available for efforts to improve
                vaccination coverage. Another commenter requested an analysis of burden
                and feasibility of data collection prior to adoption of the measure.
                ---------------------------------------------------------------------------
                 \295\ Centers for Medicare & Medicaid Services. Biden-Harris
                Administration to Expand Vaccination Requirements for Health Care
                Settings. September 9, 2021. Available at: https://www.cms.gov/newsroom/press-releases/biden-harris-administration-expand-vaccination-requirements-health-care-settings.
                ---------------------------------------------------------------------------
                 Response: We appreciate commenters' feedback. We note that most
                Immunization Information Systems do not include the information needed
                to determine if an immunized person is a resident of a nursing home, a
                dialysis patient, or a healthcare worker. Using the NHSN COVID-19
                Vaccination Modules allows tracking vaccination coverage among the
                residents, patients, or healthcare personnel in your facilities.\296\
                We do recognize that this measure may lead to duplicative reporting if
                hospitals voluntarily report COVID-19 HCP vaccination information to
                other data reporting systems in addition to this measure requirement
                via the NHSN, and we are collaborating with other HHS agencies,
                including the CDC to minimize reporting burden to the extent feasible.
                We believe that the COVID-19 vaccination of HCP information submitted
                for this measure is important as it will be made publicly available for
                use by Medicare beneficiaries and others in making informed decisions
                regarding their care including facility choice.
                ---------------------------------------------------------------------------
                 \296\ Centers for Disease Control and Prevention. FAQs on
                Reporting COVID-19 Vaccination Data. August 2021. Available at:
                https://www.cdc.gov/nhsn/hps/weekly-covid-vac/faqs.html.
                ---------------------------------------------------------------------------
                 With regard to measure burden analysis, we refer the commenter to
                section XXII.B.3.a. of this final rule with comment period, where we
                discuss the burden associated with the measure. We thank the commenters
                for the suggestion that the measure be attestation-based and note that
                any changes to the measure specifications would be proposed through
                future rulemaking.
                 Comment: A few commenters recommended that CMS reduce reporting
                frequency from quarterly to twice-yearly or annually to limit reporting
                burden. One characterized the reporting requirements to be weekly and
                recommended less frequent reporting requirements. Another commenter
                stated that the measure is duplicative with other requirements from the
                CDC and recommended that CMS not adopt the measure but instead collect
                the information directly from the CDC. Another commenter observed that
                there are not likely to be large changes in performance at quarterly
                intervals and recommended less frequent reporting.
                 Response: As stated in the CY 2022 OPPS/ASC proposed rule (86 FR
                42270), we believe that it would be ideal to have HCP vaccination data
                for every week of each month, we are mindful of the time and resources
                that some facilities would need to report the data. Thus, in
                collaboration with the CDC, we determined that data from at least one
                week of each month would be sufficient to obtain a reliable estimate of
                vaccination levels among an ASC's HCP while balancing the costs of
                reporting. We believe that reporting at a lower frequency may result in
                data that is less meaningful and timely to consumers who want to
                consider HCP vaccination rates as part of their health care decision-
                making process. As stated previously, we are collaborating with other
                HHS agencies, including the CDC to minimize reporting duplication to
                the extent feasible.
                 Comment: One commenter recommended development of a validation
                process for the COVID-19 Vaccination Coverage Among HCP measure.
                 Response: We thank the commenter for the suggestion and note that,
                as stated in the CY 2022 OPPS/ASC proposed rule (86 FR 42241), the
                measure has been tested and shown to be feasible and reliable.
                 Comment: One commenter supported public reporting of this measure,
                and specifically noted support for early publication through the
                initial shortened reporting period.
                 Response: We thank the commenter for its support.
                 Comment: A few commenters did not support publicly reporting the
                measure data. One commenter stated that, all HCP should be vaccinated;
                however, reporting this information for payment purposes could create
                incentives for hospital employers to coerce and intimidate HCP who
                decline the vaccine. Some commenters recommended providing confidential
                feedback reports to hospitals instead of publicly reporting the data.
                One commenter recommended delaying public reporting until the
                underlying evidence is stable and hospitals have had opportunity to
                report data for several years.
                 Response: We thank commenters for their feedback. We believe that
                HCP vaccination is important to prevent the spread of COVID-19 and
                encourage HCP to disclose their vaccination status to facilitate
                reporting of the measure. We
                [[Page 63833]]
                do not believe public reporting of vaccination data will incentivize
                coercion or intimidation on the part of hospitals. We noted previously
                in this section as well as in the CY 2022 OPPS/ASC proposed rule (86 FR
                42239), a survey of HCP from April 2021 found that 66 percent of
                hospital HCP and 64 percent of outpatient department HCP reported
                receiving at least one dose of the vaccine. Subsequent to the
                publication of the CY 2022 OPPS/ASC proposed rule, research from August
                2021 suggests that nearly 73 percent of HCP across all health care
                facilities have received at least one dose of the vaccine.\297\ Based
                on this data, we understand that HCP have been receiving the COVID-19
                vaccine prior to the adoption of this measure and do not believe that
                this represents performance that suggests negative relationship between
                vaccine uptake among HCP and employer vaccination requirements. We
                believe that publicly reporting the data will be useful to consumers in
                choosing healthcare providers, including by making comparisons between
                hospitals.
                ---------------------------------------------------------------------------
                 \297\ Lazer, D. et al. The COVID States Project: A 50-state
                COVID-19 Survey Report #62: COVID-19 Vaccine Attitudes Among
                Healthcare Workers. Northeastern University, Harvard University,
                Rutgers University and Northwestern University. August 16, 2021.
                Available at: http://news.northeastern.edu/uploads/COVID19%20CONSORTIUM%20REPORT%2062%20HCW%20August%202021.pdf.
                ---------------------------------------------------------------------------
                 Comment: One commenter recommended aligning with the policy
                finalized in the FY 2022 IPPS/LTCH PPS final rule in which only the
                most recent quarter of data will be used for public reporting (as
                opposed to a rolling 12-month report).
                 Response: We agree with the commenter and note that, in alignment
                with the FY 2022 IPPS/LTCH PPS final rule (86 FR 45382), we will not
                finalize our plan to add one additional quarter of data during each
                advancing refresh, until the point that four full quarters of data is
                reached and then report the measure using four rolling quarters of
                data. Instead, we will only report the most recent quarter of data.
                This would result in more meaningful information that is up to date and
                not diluted with older data. We emphasize that this modification of our
                proposal does not affect the data collection schedule established for
                submitting data to NHSN for the COVID-19 vaccination measure. This
                would simply update the data that are displayed for the public
                reporting purposes.
                 After consideration of the public comments we received, we are
                finalizing our proposal to adopt the COVID-19 Vaccination Coverage
                Among HCP measure (Newly designated as OP-38) with modification to the
                quarterly reporting deadlines beginning with the CY 2022 reporting
                period/CY 2024 payment determination and subsequent years. Based on the
                comments we have received, it is our belief that reporting a single HCP
                count for each healthcare facility enrolled in NHSN would reduce
                burden. Therefore, in collaboration with the CDC, facilities will
                report data to NHSN by enrolled facility (also known as OrgID). Similar
                to the data submission process used previously for the Influenza
                Vaccination Coverage Among Healthcare Personnel (OP-27) (79 FR 66945),
                the CDC will then translate and submit the data to CMS on behalf of the
                facilities by CCN.
                 Additionally, in order to reduce reporting burden, we are
                finalizing our proposal that facilities must count HCP working in all
                inpatient or outpatient units that are physically attached to the
                inpatient site and share the same CCN, regardless of the size or type
                of unit.\298\ Facilities must also count HCP working in inpatient and
                outpatient departments that are affiliated with the specific hospital
                (such as sharing medical privileges or patients), regardless of
                distance from the hospital and also share the same CCN. Reporting data
                in this way will allow healthcare facilities with multiple care
                settings to simplify data collection and submit a single count
                applicable across the inpatient and outpatient settings. We will then
                publicly report the percentage of HCP who received a complete course of
                the COVID-19 vaccination per CCN. This single HCP count per CCN will
                inform the public of the percentage of vaccinated HCP at a particular
                healthcare facility, which will provide meaningful data and help to
                improve the quality of care while reducing the burden of reporting.
                ---------------------------------------------------------------------------
                 \298\ Centers for Disease Control and Prevention. Measure
                Specification: NHSN COVID-19 Vaccination Coverage. Available at:
                https://www.cdc.gov/nhsn/pdfs/nqf/covid-vax-hcpcoverage-508.pdf.
                ---------------------------------------------------------------------------
                 We are also finalizing our proposal to publicly report the measure,
                which will begin with the October 2022 Care Compare refresh, or as soon
                as technically feasible, using data collected from Q1 2022 (January 1,
                2022 through March 31, 2022). However, based on public comment, we are
                finalizing a modification to our proposal. We will not finalize our
                plan to add one additional quarter of data during each advancing
                refresh, until the point that four full quarters of data is reached and
                then report the measure using four rolling quarters of data. Instead,
                we will only report the most recent quarter of data. This would result
                in more meaningful information that is up to date and not diluted with
                older data.
                b. Adoption of the Breast Cancer Screening Recall Rates Measure
                Beginning With the CY 2023 Payment Determination
                (1) Background
                 Performing breast imaging in the outpatient setting facilitates
                early detection of malignancies.\299\ However, performing diagnostic
                mammography or digital breast tomosynthesis (DBT) as a result of a
                false-positive screening study or other errant data has the potential
                to expose women to unnecessary follow-up.\300\ This could result in
                increased prevalence of radiation-induced cancers in younger
                individuals including those carrying related gene mutations, such as
                BRCA-1 and BRCA-2 301 302 or additional imaging and
                biopsies, which could lead to unnecessary procedures for individuals
                who do not have breast cancer.303 304 In contrast, recalling
                too few women for follow-up imaging may lead to delayed diagnoses,
                higher stages at diagnosis, and/or undetected cases of breast
                cancer.\305\ Given the potential
                [[Page 63834]]
                negative consequences associated with too many or too few diagnostic
                mammography and DBT studies performed within the population, evidence
                from the clinical literature suggests appropriate recall rates should
                fall between five to 12 percent.306 307
                ---------------------------------------------------------------------------
                 \299\ Coleman, C. (2017). Early detection and screening for
                breast cancer. Seminars in Oncology Nursing, 33(2), 141-155. http://dx.doi.org/10.1016/j.soncn.2017.02.009.
                 \300\ Bernardi D., Li T., Pellegrini M., Macaskill, P.,
                Valentini, M., Fanto, C., Ostillo, L., & Houssami, N. (2018). Effect
                of integrating digital breast tomosynthesis (3D-mammography) with
                acquired or synthetic 2D-mammography on radiologists' true positive
                and false-positive detection in a population screening trial: A
                descriptive study. European Journal of Radiology, 106, 26-31.
                 \301\ Berrington de Gonzalez, A., Berg, C.D., Visvanathan, K., &
                Robson, M. (2009). Estimated risk of radiation-induced breast cancer
                from mammographic screening for young BRCA mutation carriers.
                Journal of the National Cancer Institute, 101(3), 205-209. https://doi.org/10.1093/jnci/djn440.
                 \302\ Miglioretti, D.L., Lange, J., van den Broek, J.J., Lee,
                C.I., van Ravesteyn, N.T., Ritley, D., Kerlikowske, K., Fenton,
                J.J., Melnikow, J., de Koning, H.J., & Hubbard, R.A. (2016).
                Radiation-induced breast cancer incidence and mortality from digital
                mammography screening: A modeling study. Annals of internal
                medicine, 164(4), 205-214. https://doi.org/10.7326/M15-1241.
                 \303\ Long, H., Brooks, J.M., Harvie, M., Maxwell, A., & French,
                D.P. (2019). How do women experience a false-positive test result
                from breast screening? A systematic review and thematic synthesis of
                qualitative studies. British journal of cancer, 121(4), 351-358.
                https://doi.org/10.1038/s41416-019-0524-4.
                 \304\ Nelson, H.D., Pappas, M., Cantor, A., Griffin, J., Daeges,
                M., & Humphrey, L. (2016). Harms of breast cancer screening:
                systematic review to update the 2009 U.S. preventive services task
                force recommendation. Annals of internal medicine, 164(4), 256-267.
                https://doi.org/10.7326/M15-0970.
                 \305\ Nelson, H.D., Tyne, K., Naik, A., Bougatsos, C., Chan,
                B.K., & Humphrey, L. (2009). Screening for breast cancer: Systematic
                evidence review update for the U.S. Preventive Services Task Force.
                Ann Intern Med, 151(10):727-W242.
                 \306\ Carney, P.A., Sickles, E.A., Monsees, B.S., Bassett, L.W.,
                Brenner, R.J., Feig, S.A., Smith, R.A., Rosenberg, R.D., Bogart,
                T.A., Browning, S., Barry, J.W., Kelly, M.M., Tran, K.A., &
                Miglioretti, D.L. (2010). Identifying minimally acceptable
                interpretive performance criteria for screening mammography.
                Radiology, 255(2), 354-361. https://pubmed.ncbi.nlm.nih.gov/20413750/.
                 \307\ D'Orsi, C.J., Sickles, E.A., Mendelson, E.B., Morris EA,
                et al. (2013). ACR BI-RADS[supreg] atlas, breast imaging reporting
                and data system. Reston, VA: American College of Radiology.
                ---------------------------------------------------------------------------
                 To address the health and clinical risks associated with too many
                or too few breast cancer screening recalls, in the CY 2022 OPPS/ASC
                proposed rule (86 FR 42242), we proposed to adopt the Breast Cancer
                Screening Recall Rates measure beginning with the CY 2023 payment
                determination using a data collection period of July 1, 2020, to June
                30, 2021, and then data collection periods from July 1 through June 30
                of the following year starting 3 years before the applicable payment
                calendar year for subsequent years. We intend for this measure to move
                facilities toward the 5 to 12 percent range of recall rates. Facilities
                that are above or below the range should consider implementation of
                internal quality-improvement procedures to ensure they are not missing
                cases or recalling individuals unnecessarily. This measure would fill
                the gap in women's health and oncology care that was left in the
                Hospital OQR Program portfolio following the removal of the Mammography
                Follow Up Rates measure (OP-9).\308\ More specifically, this measure
                would directly address the reason OP-9 was removed from the Hospital
                OQR Program by bringing the measure into alignment with current
                clinical practice and emerging scientific evidence through the addition
                of screening and diagnostic DBT (83 FR
                59096).309 310 311 312 313 314 315 316 The Breast Cancer
                Screening Recall Rates measure would be added to a measure set focused
                on imaging efficiency. While this measure, as currently specified,
                would not provide data on outcomes (that is, the number of patients who
                were recalled and subsequently diagnosed with cancer), it would give
                facilities information to use in examining their own imaging practices.
                Results from the measure could be used to identify opportunities for
                improving the efficiency and quality of care provided and would be
                added to a measure set focused on imaging efficiency.
                ---------------------------------------------------------------------------
                 \308\ CMS finalized OP-9 for removal from the Hospital OQR
                Program in the CY 2019 Outpatient Payment Prospective System and
                Ambulatory Surgical Center Payment System final rule (CMS-1695-FC)
                (83 FR 58818).
                 \309\ Aase, H.S., Holen, A.S., Pedersen, K., Houssami, N.,
                Haldorsen, I.S., Sebuodegard, S., & Hofvind, S. (2019). A randomized
                controlled trial of digital breast tomosynthesis versus digital
                mammography in population-based screening in Bergen: Interim
                analysis of performance indicators from the To-Be trial. 29(3),
                1175-1186. doi: 10.1007/s00330-018-5690-x.
                 \310\ Aujero, M.P., Gavenonis, S.C., Benjamin, R., Zhang, Z., &
                Holt, J.S. (2017). Clinical performance of synthesized two-
                dimensional mammography combined with tomosynthesis in a large
                screening population. Radiology, 283(1), 70-76. doi: 10.1148/
                radiol.2017162674.
                 \311\ Bian, T., Lin, Q., Cui, C., Li, L., Qi, C., Fei, J., & Su,
                X. (2016). Digital breast tomosynthesis: A new diagnostic method for
                mass-like lesions in dense breasts. Breast J, 22(5), 535-540. doi:
                10.1111/tbj.12622.
                 \312\ Caumo, F., Zorzi, M., Brunelli, S., Romanucci, G., Rella,
                R., Cugola, L., Bricolo, P., Fedato, C., Montemezzi, S., & Houssami,
                N. (2018). Digital breast tomosynthesis with synthesized two-
                dimensional images versus full-field digital mammography for
                population screening: Outcomes from the Verona screening program.
                Radiology, 287(1), 37-46. https://doi.org/10.1148/radiol.2017170745.
                 \313\ Conant, E.F., Beaber, E.F., Sprague, B.L., Herschorn,
                S.D., Weaver, D.L., Onega, T., . . . Barlow, W.E. (2016). Breast
                cancer screening using tomosynthesis in combination with digital
                mammography compared to digital mammography alone: A cohort study
                within the PROSPR consortium. Breast Cancer Res Treat, 156(1), 109-
                116. doi: 10.1007/s10549-016-3695-1.
                 \314\ Pattacini, P., Nitrosi, A., & Giorgi Rossi, P. (2018).
                Digital mammography versus digital mammography plus tomosynthesis
                for breast cancer screening: The Reggio Emilia tomosynthesis
                randomized trial. 288(2), 375-385. doi: 10.1148/radiol.2018172119.
                 \315\ Pozz, A., Corte, A.D., Lakis, M.A., & Jeong, H. (2016).
                Digital breast tomosynthesis in addition to conventional 2D
                mammography reduces recall rates and is cost effective. Asian Pac J
                Cancer Prev, 17(7), 3521-3526.
                 \316\ Skaane, P. (2017). Breast cancer screening with digital
                breast tomosynthesis. Breast Cancer, 24(1), 32-41. doi: 10.1007/
                s12282-016-0699-y.
                ---------------------------------------------------------------------------
                (2) Overview of Measure
                 This claims-based process measure documents breast cancer screening
                recall rates at the facility level. The Breast Cancer Screening Recall
                Rates measure would calculate the percentage of Medicare fee-for-
                service (FFS) beneficiaries for whom a traditional mammography or DBT
                screening study was performed that was then followed by a diagnostic
                mammography, DBT, ultrasound of the breast, or magnetic resonance
                imaging (MRI) of the breast in an outpatient or office setting on the
                same day or within 45-calendar days of the index image. In assessing
                this measure based on clinical quality and efficiency, there are
                potential negative consequences of high and low mammography and DBT
                recall rates. A middle-range number is the ideal value for this
                measure. A high cumulative dose of low-energy radiation can be a
                consequence of too many false-positive mammography and DBT recall
                studies. Alternatively, inappropriately low recall rates may lead to
                delayed diagnoses or undetected cases of breast cancer. The inclusion
                of DBT in evaluating recall care may improve recall rates and positive
                predictive values compared to metrics that focus solely on mammography.
                 Although this measure is not based on a specific clinical
                guidelines, expert clinical consensus and support from publications in
                the peer-reviewed literature emphasize the importance of appropriate
                recall rates.317 318 The adoption of this measure could
                potentially fill a gap in breast cancer screening measures for the
                Hospital OQR Program. This measure would address the Meaningful Measure
                priority area of ``Making Care Safer.'' The measure addresses this
                Meaningful Measure area by: (1) Promoting appropriate use of breast
                cancer screening and diagnostic imaging by encouraging facilities to
                aim for a performance score within the target recall range; (2)
                reducing the harms associated with too many recalls, which can lead to
                unnecessary radiation exposure, anxiety and distress, and increased
                costs or resource utilization; 319 320 and (3) addressing
                the issue of inappropriately low recall rates, which may lead to
                delayed diagnoses, diagnoses at a later stage, or undetected cases of
                breast cancer.\321\
                ---------------------------------------------------------------------------
                 \317\ Nelson, H.D., Tyne, K., Naik, A., Bougatsos, C., Chan,
                B.K., & Humphrey, L. (2009). Screening for breast cancer: Systematic
                evidence review update for the U.S. Preventive Services Task Force.
                Ann Intern Med, 151(10):727-W242.
                 \318\ D'Orsi, C.J., Sickles, E.A., Mendelson, E.B., Morris EA,
                et al. (2013). ACR BI-RADS[supreg] atlas, breast imaging reporting
                and data system. Reston, VA: American College of Radiology.
                 \319\ Long, H., Brooks, J.M., Harvie, M., Maxwell, A., & French,
                D.P. (2019). How do women experience a false-positive test result
                from breast screening? A systematic review and thematic synthesis of
                qualitative studies. British journal of cancer, 121(4), 351-358.
                https://doi.org/10.1038/s41416-019-0524-4.
                 \320\ Nelson, H.D., Pappas, M., Cantor, A., Griffin, J., Daeges,
                M., & Humphrey, L. (2016). Harms of breast cancer screening:
                systematic review to update the 2009 U.S. preventive services task
                force recommendation. Annals of internal medicine, 164(4), 256-267.
                https://doi.org/10.7326/M15-0970.
                 \321\ Nelson, H.D., Tyne, K., Naik, A., Bougatsos, C., Chan,
                B.K., & Humphrey, L. (2009). Screening for breast cancer: Systematic
                evidence review update for the U.S. Preventive Services Task Force.
                Ann Intern Med, 151(10):727-W242.
                ---------------------------------------------------------------------------
                 The measure was included on the publicly available ``List of
                Measures Under Consideration for December 21, 2020,'' a list of
                measures under consideration for use in various
                [[Page 63835]]
                Medicare programs.\322\ In January 2021, the Breast Cancer Screening
                Recall Rates measure was reviewed by both the MAP's rural health
                workgroup and hospital workgroup, overseen by the Coordinating
                Committee (MUC20-0005).\323\ Both groups and the Coordinating Committee
                voted to conditionally support the measure, pending NQF
                endorsement.\324\ Concerns cited during the January 2021 MAP review
                included: (1) The proposed recall range is not based on clinical
                practice guidelines, but rather expert consensus and synthesis of
                findings from the scientific literature; (2) use of a range (as opposed
                to a targeted high or low value) may be difficult for clinicians,
                patients, and other stakeholders to interpret; (3) the measure does not
                address social determinants of health, which may impact the rate of
                recall at some facilities; and (4) the measure does not provide
                complementary information about patient outcomes (for example, breast
                cancer detection rate), which could aid in the interpretation and
                usefulness of the measure's data.\325\ Despite these concerns, some
                members of the rural health workgroup, hospital workgroup, and
                Coordinating Committee expressed support of the Breast Cancer Screening
                Recall Rates measure and noted that feedback provided by the MAP did
                not preclude measure implementation, given its importance to the
                clinical community and the public.\326\ As a part of measure
                implementation, we noted that we would develop a suite of education and
                outreach materials to aid stakeholders in the interpretation of measure
                performance data (86 FR 42243). These materials would explain the
                measure structure (including use of a range representing ideal
                performance) to ensure stakeholders understand values within and
                outside of the target range. Once implemented, the measure would be re-
                evaluated annually, which would include a consideration of changes to
                the evidence base and potential integration of social determinants of
                health (that is, stratification); updates to the measure specifications
                would be made iteratively, as appropriate, on an annual basis.
                ---------------------------------------------------------------------------
                 \322\ The National Quality Forum. ``List of Measures Under
                Consideration for December 21, 2020''. (2020) Accessed May 14, 2021.
                Available at https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=94212.
                 \323\ The National Quality Forum. ``List of Measures Under
                Consideration for December 21, 2020''. (2020) Accessed May 14, 2021
                at: https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=94212.
                 \324\ Measure Applications Partnership. 2020-2021 Measure
                Applications Partnership. 2020-2021 Considerations for Implementing
                Measures Final Report--Clinicians, Hospitals, and PAC-LTC. Accessed
                on May 14, 2021 at: https://www.qualityforum.org/Publications/2021/03/MAP_2020-2021_Considerations_for_Implementing_Measures_Final_Report_-_Clinicians,_Hospitals,_and_PAC-LTC.aspx.
                 \325\ Measure Application Partnership Coordinating Committee
                Meeting Presentation. March 15, 2021. (2021) Accessed March 16, 2021
                at: http://www.qualityforum.org/Project_Pages/MAP_Coordinating_Committee.aspx.
                 \326\ Measure Applications Partnership. 2020-2021 Measure
                Applications Partnership. 2020-2021 Considerations for Implementing
                Measures Final Report--Clinicians, Hospitals, and PAC-LTC. Accessed
                on May 14, 2021 at: https://www.qualityforum.org/Publications/2021/03/MAP_2020-2021_Considerations_for_Implementing_Measures_Final_Report_-_Clinicians,_Hospitals,_and_PAC-LTC.aspx.
                ---------------------------------------------------------------------------
                 Section 1833(t)(17)(C)(i) of the Act directs the Secretary to
                develop measures that the Secretary determines to be appropriate for
                the measurement of the quality of care (including medication errors)
                furnished by hospitals in outpatient settings and that reflect
                consensus among affected parties and, to the extent feasible and
                practicable, shall include measures set forth by one or more national
                consensus building entities.
                 In general, we prefer to adopt measures that have been endorsed by
                the NQF because it is a national multi-stakeholder organization with a
                well-documented and rigorous approach to consensus development.
                However, as we have noted in previous rulemaking (for example, 75 FR
                72065 and 76 FR 74494 for the Hospital OQR and ASCQR Programs,
                respectively), the requirement that measures reflect consensus among
                affected parties can be achieved in other ways, including through the
                measure development process, through broad acceptance, use of the
                measure(s), and through public comment.
                 We have reviewed those NQF-endorsed measures that are related to
                breast imaging and have not identified any that are appropriate for the
                measurement of mammography or DBT recall rates specifically. As such,
                we proposed to adopt this measure for use in the Hospital OQR Program
                because of its importance to women's health and its ability to fill a
                gap in CMS' Meaningful Measure portfolio even though it has not yet
                been reviewed by NQF. Submission for NQF endorsement would be
                considered for this measure in the future.
                (3) Measure Calculation
                 This claims-based process measure documents breast cancer screening
                recall rates at the facility level. The Breast Cancer Screening Recall
                Rates measure would calculate the percentage of Medicare FFS
                beneficiaries for whom a traditional mammography or DBT screening study
                was performed that was then followed by a diagnostic mammography, DBT,
                ultrasound of the breast, or MRI of the breast in an outpatient or
                office setting on the same day or within 45 days of the index image.
                Specifically, the measure denominator includes Medicare FFS
                beneficiaries who received a screening mammography or DBT study at a
                facility paid under the OPPS. The numerator consists of individuals
                from the denominator who had a diagnostic mammography study, DBT,
                ultrasound of the breast, or MRI of the breast following a screening
                mammography or DBT study on the same day or within 45 days of the
                screening study. The Breast Cancer Screening Recall Rates measure does
                not have any exclusions. This measure is not risk adjusted. As a
                process-of-care measure, the decision to image a beneficiary should not
                be influenced by sociodemographic status factors; rather, risk
                adjustment for such sociodemographic factors could potentially mask
                important inequities in care delivery for beneficiaries seen at
                facilities providing data for this measure. If performance scores for
                this measure vary across populations, this may be reflective of
                differences in the quality of care provided to the diverse populations
                included in the measure's denominator.
                 Although this measure is not based on a specific clinical
                guideline, expert clinical consensus and support from the peer-reviewed
                literature emphasize the importance of appropriate recall rates.\327\
                We refer readers to the QualityNet website at https://qualitynet.cms.gov for the full measure specifications.
                ---------------------------------------------------------------------------
                 \327\ Nelson, H.D., Tyne, K., Naik, A., Bougatsos, C., Chan,
                B.K., & Humphrey, L. (2009). Screening for breast cancer: Systematic
                evidence review update for the U.S. Preventive Services Task Force.
                Ann Intern Med, 151(10):727-W242.
                ---------------------------------------------------------------------------
                (4) Data Sources
                 The Breast Cancer Screening Recall Rates measure would be
                calculated using data from final claims that facilities submit for
                Medicare beneficiaries enrolled in Medicare FFS. As such, facilities
                would not have to submit any additional data for this measure. The
                measurement period for the Breast Cancer Screening Recall Rates measure
                is 12 months. As noted previously, we would use final claims data from
                July 1, 2020 to June 30, 2021 to calculate the measure for the CY 2023
                payment determination and then data collection periods from July 1
                through June 30 of the following year starting 3 years before the
                applicable payment calendar year for subsequent years.
                [[Page 63836]]
                Please note that claims for the initial patient population would be
                identified from July 1 through May 17 of each year, with numerator
                cases occurring from July 1 through June 30 annually. The data would be
                calculated only for facilities paid under the OPPS for mammography and
                DBT screening in the hospital outpatient setting. Data from the
                hospital outpatient and carrier files would be used to determine
                beneficiary inclusion (for example, a mammography follow-up study can
                occur in any location and be eligible for inclusion in the measure's
                numerator).
                 The following is a summary of the comments we received on this
                proposal and our responses.
                 Comment: One commenter supported implementation of the Breast
                Cancer Screening Recall Rates measure into the Hospital OQR Program but
                encouraged CMS to rename the metric to Breast Cancer Screening Recall
                Rates.
                 Response: We thank the commenter for their suggestion. We are
                refining the name of the measure to the Breast Cancer Screening Recall
                Rates measure, as this name more accurately describes what this measure
                assesses.
                 Comment: Many commenters supported the addition of Breast Cancer
                Screening Recall Rates measure to the Hospital OQR Program as proposed.
                A few commenters believe the Breast Cancer Screening Recall Rates
                measure fills a measurement gap left in the Hospital OQR Program by the
                removal of Mammography Follow-Up Rates (OP-9) in the CY 2019 OPPS/ASC
                PPS final rule with comment period (83 FR 59096 through 59097). One
                commenter acknowledged the low level of burden associated with
                reporting of claims-based measures.
                 Response: We thank the commenters for their support.
                 Comment: A few commenters did not support the addition of Breast
                Cancer Screening Recall Rates measure to the Hospital OQR Program based
                on the removal of the Mammography Follow-Up Rates measure (OP-9) in the
                CY 2019 OPPS/ASC PPS final rule (83 FR 59096 through 59097). The
                commenters highlight that the measure would not be useful to patients,
                as it is not based on a clinical practice guideline, systematic review,
                meta-analysis, or other experimental form of evidence to demonstrate a
                connection between public reporting of the measure score and its impact
                on patient outcomes, which is similar to the reason why the OP-9
                measure was removed from the Hospital OQR program.
                 Many commenters provided input on the usability of the Breast
                Cancer Screening Recall Rates measure's performance scores, suggesting
                that patients may not be able to fully interpret a facility's
                performance score presented in comparison to a target range. Commenters
                also expressed concern about the evidence-base for the measure's 5
                percent to 12 percent target range.
                 Response: We appreciate the commenters' input on the removal of OP-
                9 from the Hospital OQR Program. We elected to remove OP-9 as it did
                not align with current clinical practice. The Breast Cancer Screening
                Recall Rates measure improves upon the OP-9 technical specifications,
                which had been in use for nearly 10 years, incorporating digital breast
                tomosynthesis (DBT) as a screening and diagnostic imaging modality to
                the measure's denominator and numerator, respectively, and refining
                guidance for interpretation the measure score by presenting a target
                performance range. OP-9 provided a ceiling for appropriate rates of
                recall at 14 percent, but did not present a lower bound (due to a lack
                of evidence at the time of specification). Thus, we believe that the 5
                percent to 12 percent range is more interpretable and useful for
                patients and other consumers than the previously used metric. We will
                continue to monitor and evaluate the usefulness and usability of the
                Breast Cancer Screening Recall Rates measure specifications, and
                specifically the range, during routine measure reevaluation.
                Additionally, we will ensure education and outreach materials provide
                meaningful information on data interpretation for our stakeholders.
                 We acknowledge commenters' concern about the evidence base on which
                the Breast Cancer Screening Recall Rates measure is based. We convened
                a technical expert panel (TEP) to gather input from a breadth of
                stakeholders while specifying this measure; we also collected feedback
                from additional members of the clinical community through a listening
                session during which the measure's draft technical specifications were
                discussed. Based on these qualitative data, we defined the range for
                appropriate imaging based on the 2013 Breast Imaging Reporting and Data
                System (BIRADS) Atlas.\328\
                ---------------------------------------------------------------------------
                 \328\ D'Orsi, C.J., Sickles, E.A., Mendelson, E.B., Morris EA,
                et al. (2013). ACR BI-RADS[supreg] atlas, breast imaging reporting
                and data system. Reston, VA: American College of Radiology.
                ---------------------------------------------------------------------------
                 Comment: Several commenters provided feedback on the Breast Cancer
                Screening Recall Rate measure's technical specifications. One commenter
                questioned why a benchmark value for the measure's range was not
                provided. Several commenters disagreed with use of the five percent to
                12 percent range for appropriate imaging. A few commenters encouraged
                CMS to consider exclusion of individuals for whom patient or clinical
                factors necessitate more frequent recall following screening for breast
                cancer. A few commenters asked why CMS did not include the Breast
                Cancer Screening Recall Rates measure in a composite of breast cancer
                measures. A few commenters encouraged CMS to risk adjust the measure to
                account for potential inequities in care among racial and ethnic
                minorities. A commenter suggested the incorporation of additional
                imaging modalities into the measure's technical specifications.
                 Response: We appreciate the commenters' recommendations on ways to
                improve the Breast Cancer Screening Recall Rates measure technical
                specifications. Rather than providing a single benchmark, we used
                guidance from the American College of Radiology's 2013 BIRADS Manual to
                define appropriate recall as between five percent and 12 percent of
                patients for whom follow-up imaging was performed. If, in the future, a
                single benchmark value is more appropriate for use in public reporting
                than a range (based on the release of guidance that appears in a
                clinical practice guideline or other documentation), we will consider
                revisions to the measure's specifications accordingly.
                 With respect to the comments that encourage we risk-adjust the
                measure to account for potential inequities in care around racial and
                ethnic minorities, we believe risk adjustment for the Breast Cancer
                Screening Recall Rates measure could have the effect of masking true
                differences in care provided to patients of different races,
                ethnicities, and genders. We will continue to monitor and evaluate
                results for the Breast Cancer Screening Recall Rates measure to ensure
                high-quality care is provided to all Medicare fee-for-service patients,
                regardless of their racial, ethnic or gender identities.
                 We appreciate input on the structure of the Breast Cancer Screening
                Recall Rates measure and the composition of its data elements. We will
                continue to monitor the peer-reviewed evidence and feedback from
                stakeholders to identify future changes to the technical
                specifications, including the potential need to exclude individuals
                with certain clinical or patient-focused characteristics. We will also
                review the additional imaging modalities suggested by commenters to
                identify if they are appropriate to include in either the
                [[Page 63837]]
                measure's denominator or numerator or both. We will consider ways to
                maximize the value of the Breast Cancer Screening Recall Rates measure
                including incorporation of facility performance scores into a composite
                evaluating other types of breast-cancer care.
                 Comment: One commenter encouraged CMS to engage the clinical
                community and medical societies in the creation of documentation for
                implementation of the Breast Cancer Screening Recall Rates measure,
                including files for education and outreach to its members.
                 Response: We thank the commenter for their support and welcome
                feedback from the clinical community and medical societies on the
                creation of education and outreach resources that would be beneficial
                for measure implementation.
                 Comment: One commenter encouraged CMS to perform a dry run of
                facility performance data prior to implementation of the Breast Cancer
                Screening Recall Rates measure into the Hospital OQR Program. Another
                commenter asked CMS to make public reporting of the Breast Cancer
                Screening Recall Rates measure optional. A third commenter asked CMS to
                delay implementation of the Breast Cancer Screening Recall Rates
                measure into the Hospital OQR Program until CY 2025.
                 Response: We appreciate the feedback received on timing for
                implementation of the Breast Cancer Screening Recall Rates measure.
                Because this measure builds upon results presented for OP-9 (prior to
                its retirement from the Hospital OQR Program in CY 2019), we do not
                believe a dry run is needed prior to implementation As the Breast
                Cancer Screening Recall Rates measure closely mirrors the OP-9
                technical specifications that were in use within the Hospital OQR
                Program from 2010 to 2018 and as the measure was publicly reported
                through April 2020, stakeholders are anticipated to have some
                familiarity with the measure, Thus, we do not believe data for public
                reporting of the measure need to be delayed to future years. Further,
                facilities will receive their claims data, to be used in calculation of
                the Breast Cancer Screening Recall Rates measure, through a claims
                detail report (CDR) in 2022, which will allow facilities to identify
                any errors in processed claims and/or plan for future quality-
                improvement efforts following implementation of the measure into
                Hospital OQR.
                 Comment: A few commenters expressed concern about using data in
                calculation of the Breast Cancer Screening Recall Rates measure that
                were processed during the COVID-19 pandemic and encouraged CMS to
                monitor trends in imaging use during this time.
                 Response: We appreciate commenters' concern about the impact of
                COVID-19 pandemic, including delays in care resulting from availability
                of imaging services and changes in the ways patients accessed care
                since March 2020. In response to the COVID-19 pandemic, we will not use
                data from January 1, 2020, through June 30, 2020, for performance
                calculation.\329\ We will continue to monitor trends in utilization and
                impacts of the COVID-19 pandemic as we implement the Breast Cancer
                Screening Recall Rates measure.
                ---------------------------------------------------------------------------
                 \329\ https://www.cms.gov/newsroom/press-releases/cms-announces-relief-clinicians-providers-hospitals-and-facilities-participating-quality-reporting.
                ---------------------------------------------------------------------------
                 Comment: Many commenters encouraged CMS to seek National Quality
                Forum (NQF) endorsement prior to implementation of the Breast Cancer
                Screening Recall Rates measure into the Hospital OQR Program.
                 Response: We appreciate commenters' input on the need for NQF
                endorsement of Breast Cancer Screening Recall Rates measure and will
                consider how best to leverage NQF endorsement review of the measure
                following its implementation. We believe the Breast Cancer Screening
                Recall Rates measure addresses a gap area within the Hospital OQR
                Program for both cancer care and women's health, and think that
                addition of this measure to the Program before pursuing NQF endorsement
                will ensure that the quality of services provided is monitored by CMS.
                 After consideration of the public comments we received, we are
                finalizing the adoption Breast Cancer Screening Recall Rates measure
                (newly designated as OP-39) as proposed.
                c. Adoption of the ST-Segment Elevation Myocardial Infarction (STEMI)
                eCQM Beginning With Voluntary Reporting for the CY 2023 Reporting
                Period and Mandatory for the CY 2024 Reporting Period/CY 2026 Payment
                Determination and Subsequent Years
                (1) Background
                 An ST-segment elevation myocardial infarction (STEMI) is a form of
                heart attack in which there is a complete occlusion of one of the heart
                arteries.\330\ Each year over 250,000 Americans experience a STEMI,
                approximately 50 percent of whom are Medicare
                beneficiaries.331 332 This is represented on the
                electrocardiogram as an elevation of the ST segment--the interval
                between ventricular depolarization and repolarization (which represents
                the duration of an average ventricular contraction).\333\ Time is of
                the essence in STEMI treatment, and the prompt identification of STEMI
                and restoration of blood flow to the heart (reperfusion therapy) is a
                key determinant of health outcomes.334 335 336 Primary
                percutaneous coronary intervention (PCI), which is the use of balloons
                and stents to restore blood flow, is the preferred reperfusion
                modality.\337\ The 2013 American College of Cardiology Foundation
                (ACCF)/American Heart Association (AHA) guidelines recommend the
                initiation of PCI within 120 minutes from first medical contact
                (FMC).\338\ Specifically, if a patient presents to a PCI-capable
                facility, primary PCI is recommended within 90 minutes of FMC.\339\ If
                a patient presents to a non-PCI-capable facility, the patient should be
                expeditiously transported to a PCI-capable facility and receive PCI
                [[Page 63838]]
                within a total of 120 minutes.\340\ However, in care settings where it
                is not possible for a patient to receive PCI or be transferred and
                receive primary PCI within the 120-minute timeframe, fibrinolytic
                therapy (medications to dissolve blood clots and restore flow) should
                be administered rapidly for reperfusion in the absence of
                contraindications.\341\ The guidelines recommend that eligible patients
                should receive fibrinolytic therapy within 30 minutes of hospital
                arrival.
                ---------------------------------------------------------------------------
                 \330\ Anderson JL, Morrow DA. Acute Myocardial Infarction. New
                England Journal of Medicine. 2017;376(21):2053-2064.
                 \331\ Ward et al. Incidence of Emergency Department Visits for
                ST-Elevation Myocardial Infarction in a Recent 6-Year Period in the
                United States. Am J Cardiol. 2015 Jan 15; 115(2): 167-170.
                 \332\ Vallabhajosyula S, Kumar V, Sundaragiri PR, et al.
                Influence of primary payer status on the management and outcomes of
                ST-segment elevation myocardial infarction in the United States.
                PLoS One. 2020;15(12):e0243810.
                 \333\ Vogel B, Claessen BE, Arnold SV, Chan D, Cohen DJ,
                Giannitsis E, Gibson CM, Goto S, Katus HA, Kerneis M, Kimura T,
                Kunadian V, Pinto DS, Shiomi H, Spertus JA, Steg PG, Mehran R. ST-
                segment elevation myocardial infarction. (2019). Nature Reviews
                Disease Primers, 5(39). Available at https://doi.org/10.1038/s41572-019-0090-3.
                 \334\ Boersma E, Maas AC, Deckers JW, Simoons ML. Early
                thrombolytic treatment in acute myocardial infarction: reappraisal
                of the golden hour. Lancet. 1996;348(9030):771-775.
                 \335\ Cannon CP, Gibson CM, Lambrew CT, et al. Relationship of
                symptom-onset-to-balloon time and door-to-balloon time with
                mortality in patients undergoing angioplasty for acute myocardial
                infarction. Jama. 2000;283(22):2941-2947.
                 \336\ McNamara RL, Wang Y, Herrin J, et al. Effect of door-to-
                balloon time on mortality in patients with ST-segment elevation
                myocardial infarction. J Am Coll Cardiol. 2006;47(11):2180-2186.
                 \337\ Anderson JL, Morrow DA. Acute Myocardial Infarction. New
                England Journal of Medicine. 2017;376(21):2053-2064.
                 \338\ O'Gara P, Kushner F, Ascheim D, Casey D, Chung M, de Lemos
                J, Ettinger S, Fang J, Fesmire F, Franklin B, Granger C, Krumholz H,
                Linderbaum J, Morrow D, Newby L, Ornato J, Ou N, Radford M, Tamis-
                Holland J, Tommaso C, Tracy C, Woo Y, Zhao D, Anderson J, Jacobs A,
                Halperin J, Albert N, Brindis R, Creager M, DeMets D, Guyton R,
                Hochman J, Kovacs R, Kushner F, Ohman E, Stevenson W, Yancy C.
                (2013). 2013 ACCF/AHA guideline for the management of ST-elevation
                myocardial infarction: A report of the American College of
                Cardiology Foundation/American Heart Association Task Force on
                Practice Guidelines. Circulation, 127(4): e362-425. Available at
                https://www.ncbi.nlm.nih.gov/pubmed/23247304.
                 \339\ Ibid.
                 \340\ Ibid.
                 \341\ Ibid.
                ---------------------------------------------------------------------------
                (2) Overview of Measure
                 The STEMI eCQM measures the percentage of ED patients with a
                diagnosis of STEMI who received timely delivery of guideline-based
                reperfusion therapies appropriate for the care setting and delivered in
                the absence of contraindications. The Meaningful Measures Framework
                aims to address issues that are most vital to delivering quality,
                value-based care to improve patient outcomes.\342\ In alignment with
                the Meaningful Measures quality priority of promoting effective
                prevention and treatment of chronic disease, we believe this STEMI eCQM
                encourages timely, effective and appropriate treatment using clinical
                data available in certified electronic health record technology (CEHRT)
                and that this measure has the potential to reduce adverse health
                outcomes.
                ---------------------------------------------------------------------------
                 \342\ Meaningful Measures 2.0: Moving from Measure Reduction to
                Modernization. Available at: https://www.cms.gov/meaningful-measures-20-moving-measure-reduction-modernization.
                ---------------------------------------------------------------------------
                 The measure was included on the publicly available ``List of
                Measures Under Consideration for December 21, 2020,'' a list of
                measures under consideration for use in various Medicare programs.\343\
                In January 2021, the STEMI eCQM was reviewed by the MAP's rural health
                workgroup, hospital workgroup, and Coordinating Committee (MUC20-0004)
                \344\ The MAP rural health workgroup conducted discussions regarding
                the appropriate treatment time for STEMI and how this may be impacted
                in rural settings due to proximity and transportation issues,
                especially with getting someone to a PCI-capable facility, and
                supported the STEMI eCQM (OP-40) \345\ for rural providers in the
                Hospital OQR Program.\346\ The MAP voted to conditionally support the
                measure, pending NQF endorsement. We note that on-site facilities can
                perform a PCI (if they have the capability to do so), use fibrinolysis,
                or they can transfer a patient to a facility that provides PCI. These
                three treatment scenarios are all captured by the measure, including
                relative treatment times (non-transfer patients receiving PCI at a PCI
                capable facility within 90 minutes of arrival and patients transferred
                from a non-PCI-capable to a PCI-capable facility within 45 minutes).
                ---------------------------------------------------------------------------
                 \343\ The National Quality Forum. (2021). List of Measures under
                Consideration for December 21, 2020. Accessed March 14, 2021 at:
                https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=94212.
                 \344\ The National Quality Forum. (2021). Meeting Summary
                Measure Applications Partnership Rural Health Workgroup Virtual
                Review Meeting. Accessed on May 17, 2021 at: https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=94656.
                 \345\ The National Quality Forum. (2021). Measure Applications
                Partnership 2020-2021. Considerations for Implementing Measures in
                Federal Programs: Clinician, Hospital & PAC/LTC. Accessed on May 17,
                2021 at: https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=94893.
                 \346\ Ibid. Considerations for Implementing Measures in Federal
                Programs: Clinician, Hospital & PAC/LTC. Accessed on May 17, 2021
                at: https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=94893.
                ---------------------------------------------------------------------------
                 Section 1833(t)(17)(C)(i) of the Act requires the Secretary to
                develop measures that the Secretary determines to be appropriate for
                the measurement of the quality of care (including medication errors)
                furnished by hospitals in outpatient settings and that reflect
                consensus among affected parties and, to the extent feasible and
                practicable, shall include measures set forth by one or more national
                consensus building entities (for example, NQF). We note that section
                1833(t)(17) of the Act does not require that each measure we adopt for
                the Hospital OQR Program be endorsed by a national consensus building
                entity. We have reviewed and identified two related NQF-endorsed chart-
                abstracted measures--OP-2 (Fibrinolytic Therapy Received within 30
                Minutes of ED Arrival) and OP-3 (Median Time to Transfer to Another
                Facility for Acute Coronary Intervention).
                 In section XV.B.3.c. of the CY 2022 OPPS/ASC proposed rule (86 FR
                42237), we proposed to remove these two related chart abstracted
                measures--OP-2 (Fibrinolytic Therapy Received within 30 Minutes of ED
                Arrival) and OP-3 (Median Time to Transfer to Another Facility for
                Acute Coronary Intervention)--and replace them with this eCQM. The use
                of the STEMI eCQM measure, in lieu of the OP-2 and OP-3 measures, would
                eliminate the need for manual chart-abstraction. It would also broaden
                the group of measured STEMI patients included in the measure to include
                patients who present to and receive primary PCI at a PCI-capable
                facility, which is the vast majority of STEMI patients. The OP-2 and
                OP-3 measures only include patients presenting to non-PCI-capable
                facilities who either receive fibrinolytics or are transferred to a
                PCI-capable facility. The STEMI eCQM better supports compliance with
                the full group of STEMI patients covered in the 2013 ACCF and AHA
                guidelines for the management of STEMI by measuring timeliness and
                appropriateness of care for STEMI.\347\ We believe that the STEMI eCQM
                (OP-40) would efficiently and comprehensively measure timeliness of
                STEMI care by reducing the burden on facilities currently reporting
                these two chart-abstracted measures, broadening the STEMI population
                for which performance scores could be publicly reported, and
                incorporating contraindications to enhance the clinical applicability
                of the measure. We refer readers to section XV.B.3.c. of the CY 2022
                OPPS/ASC proposed rule (86 FR 42237) and section XV.B.3.c. of this
                final rule with comment period for further discussion on our proposal
                to remove the OP-2 and OP-3 measures from the Hospital OQR Program.
                ---------------------------------------------------------------------------
                 \347\ O'Gara P, Kushner F, Ascheim D, Casey D, Chung M, de Lemos
                J, Ettinger S, Fang J, Fesmire F, Franklin B, Granger C, Krumholz H,
                Linderbaum J, Morrow D, Newby L, Ornato J, Ou N, Radford M, Tamis-
                Holland J, Tommaso C, Tracy C, Woo Y, Zhao D, Anderson J, Jacobs A,
                Halperin J, Albert N, Brindis R, Creager M, DeMets D, Guyton R,
                Hochman J, Kovacs R, Kushner F, Ohman E, Stevenson W, Yancy C.
                (2013). 2013 ACCF/AHA guideline for the management of ST-elevation
                myocardial infarction: a report of the American College of
                Cardiology Foundation/American Heart Association Task Force on
                Practice Guidelines. Circulation, 127(4): e362-425. Available at
                https://www.ncbi.nlm.nih.gov/pubmed/23247304.
                ---------------------------------------------------------------------------
                 As such, in the CY 2022 OPPS/ASC proposed rule (86 FR 42244), we
                proposed to adopt the STEMI eCQM for use in the Hospital OQR Program
                because of its importance in measuring timely delivery of guideline-
                based reperfusion therapies appropriate for the care of ED patients
                with a diagnosis of STEMI and its ability to fill a gap in CMS'
                Meaningful Measure portfolio. The measure was submitted to NQF in
                January 2021 and is under review.
                (3) Measure Calculation
                 The STEMI eCQM is a process measure that assesses the percentage of
                ED patients aged 18 years or older with a diagnosis of STEMI who
                received appropriate treatment. The denominator includes all ED
                patients 18 years or older diagnosed with STEMI who do not have
                contraindications to fibrinolytic, antithrombotic, and anticoagulation
                therapies.
                 The numerator includes:
                [[Page 63839]]
                 ED-based STEMI patients whose time from ED arrival to
                fibrinolytic therapy is 30 minutes or fewer; or
                 Non-transfer ED-based STEMI patients who received PCI at a
                PCI-capable hospital within 90 minutes of arrival; or
                 ED-based STEMI patients who were transferred to a PCI-
                capable hospital within 45 minutes of ED arrival at a non-PCI-capable
                hospital.
                 For more information on the STEMI eCQM, we refer readers to the
                full measure specifications available on the Electronic Clinical
                Quality Improvement (eCQI) Resource Center website, available at:
                https://ecqi.healthit.gov/pre-rulemaking-eh-oqr-ecqms.
                (4) Data Sources
                 This measure is an eCQM that uses data routinely collected through
                the EHR and is designed to be calculated by the hospitals' CEHRT using
                patient-level data and submitted to CMS. In 2020, using data from 2018,
                the STEMI eCQM was tested at two hospital systems (20 EDs in total)
                with two different EHR platforms for feasibility, validity, and
                reliability testing, based on the endorsement criteria outlined by
                NQF.\348\ The feasibility testing showed that the measure is feasible
                and the key features of the eCQM, such as the code sets and measure
                logic, were readily interpreted by both sites as assessed by the
                feasibility scorecard and exit interviews conducted at the two sites.
                The validity testing results showed a wide range of agreement among
                data elements between the electronic and manual data extracts. Some
                data elements were collected but not fully interoperable within
                providers' EHRs. However, as hospitals and EHR vendors meet ONC
                requirements for interoperability under the ONC 21st Century Cures Act
                final rule (85 FR 25642 through 25961) and map data elements for
                interoperability via the FHIR-based API required by December 31, 2022
                (85 FR 70075), these data elements would be accessible without special
                effort.
                ---------------------------------------------------------------------------
                 \348\ National Quality Forum. What NQF Endorsement Means.
                Available at: https://www.qualityforum.org/Measuring_Performance/ABCs/What_NQF_Endorsement_Means.aspx.
                ---------------------------------------------------------------------------
                (5) Implementation
                 In the CY 2022 OPPS/ASC proposed rule (86 FR 42246), we proposed to
                start with voluntary reporting beginning with the CY 2023 reporting
                period and then with mandatory reporting beginning with the CY 2024
                reporting period/CY 2026 payment determination and for subsequent
                years. We believe that taking an incremental approach to implementing
                this measure would allow hospitals time to implement workflow changes
                as necessary to better prepare for submitting data and to increase
                familiarity with data submission with the introduction of an eCQM into
                the Hospital OQR Program. We refer readers to section XV.D.6. of the CY
                2022 OPPS/ASC proposed rule (86 FR 42259) and section XV.D.6. of this
                final rule with comment period for additional information related to
                eCQM data submission and reporting requirements under the Hospital OQR
                Program.
                 The following is a summary of the comments we received on this
                proposal and our responses.
                 Comment: Many commenters supported the addition of the STEMI eCQM
                to the Hospital OQR Program as proposed. Two commenters appreciated the
                phased implementation approach, which would allow facilities the
                ability to make the necessary adjustments for data submission over
                time. A commenter specifically cited the transition from voluntary to
                mandatory reporting of the STEMI eCQM as a preferred strategy for
                implementation. Another commenter suggested phasing the STEMI eCQM (OP-
                40) into Hospital OQR concurrent to the OP-2 and OP-3 removal would
                give facilities sufficient time to adjust workflows in how care is
                provided and documented within sites' EHRs. An additional commenter
                pointed out the importance of ensuring the STEMI eCQM is implemented
                concurrent to the removal of OP-2 and OP-3, ensuring the transition is
                seamless. Commenters noted the adoption of the STEMI eCQM is consistent
                with CMS' move to modernization and use of meaningful measures.
                 Many commenters expressed support for CMS' plan to remove
                Fibrinolytic Therapy Received within 30 Minutes of Emergency Department
                (ED) Arrival (OP-2) and Median Time to Transfer to Another Facility for
                Acute Coronary Intervention (OP-3), replacing them with the STEMI eCQM
                as proposed. Several commenters asserted that the STEMI eCQM is less
                burdensome for collection and reporting. They noted the replacement of
                OP-2 and OP-3 with the STEMI eCQM would reduce burden on facilities to
                abstract information about a sample of cases for each measure quarterly
                and would provide more precise, evidence-based guidance for how to
                interpret the STEMI eCQM's quality actions in the numerator.
                 Response: We thank the commenters for their support.
                 Comment: One commenter encouraged CMS to delay removal of OP-2 and
                OP-3 from the Hospital OQR Program until the STEMI eCQM is implemented
                and data are available for public reporting. Another commenter
                recommended CMS retain OP-2 and OP-3 in the Hospital OQR Program as
                optional measures for facilities with limited resources for eCQM
                reporting.
                 Response: We appreciate commenters' position on retention of OP-2
                and OP-3 as optional measures or for additional years. However, we
                believe the incremental approach we proposed for implementation of the
                STEMI eCQM will give facilities sufficient time to meet requirements
                under the ONC's requirements for interoperability through the ONC 21st
                Century Cures Act final rule (85 FR 25642 through 25961) and to map
                data elements for interoperability via the FHIR based API (85 FR
                70075). Additionally, to delay removal of OP-2 and OP-3 or to retain
                them as optional measures would undermine the incremental nature of our
                implementation. Retaining these measures may cause hospitals to delay
                their implementation of the STEMI eCQM until the last minute. Thus, we
                believe that the delayed implementation or retention of OP-2 and OP-3
                is not necessary.
                 Comment: Several commenters encouraged CMS to delay implementation
                of the STEMI eCQM until the measure obtains endorsement by the NQF.
                 Response: We appreciate commenters' concern about delaying
                implementation of this measure into the Hospital OQR program until they
                are endorsed by NQF. We submitted the STEMI eCQM for endorsement review
                through NQF's Cardiovascular Project in spring 2021. The NQF
                Cardiovascular Standing Committee passed the measure on all criteria
                and on overall suitability for endorsement.\349\ At the close of
                comment period for the CY 2022 OPPS/ASC PPS proposed rule, the STEMI
                eCQM was undergoing public comment through NQF and would receive review
                by NQF's Consensus Standards Advisory Committee (CSAC) in fall 2021.
                Should it be approved by the CSAC, the STEMI eCQM will be endorsed by
                NQF as #3613e.
                ---------------------------------------------------------------------------
                 \349\ National Quality Forum. (2021). Cardiovascular Spring 2021
                Cycle: CDP Report: Draft Report for Comment. Accessed on September
                21, 2021, at: https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=96018.
                ---------------------------------------------------------------------------
                 As noted in section XV.D.4.a.(2)(c). of this final rule with
                comment period, CMS is not limited by section 1833(t)(17) of the Act to
                select measures for the Hospital OQR Program that have been approved by
                a consensus base
                [[Page 63840]]
                entity such as NQF. Given the broad support for the measure obtained
                during development, including support from the TEP, during measure
                development public comment, and by the MAP's Rural Health Advisory
                group, Hospital Workgroup, Coordinating Committee, and MAP public
                comment, as well as the benefits of the STEMI eCQM over the OP-2 and
                OP-3 measures, we believe it is critical to implement this measure on
                the timeline discussed above even if the measure does not obtain NQF
                endorsement in fall 2021.
                 Comment: Several commenters recommended CMS support facilities,
                vendors, and other stakeholders during the implementation of the STEMI
                eCQM into the Hospital OQR program, as it would be the first eCQM added
                to the program. Specifically, a few commenters expressed concern about
                the costs associated with initial implementation of eCQMs (for example,
                building eCQM logic, validation, certification, etc.) and the timing by
                which EHR standards must be in place to meet the deadline for voluntary
                reporting.
                 Response: We appreciate commenters' concern regarding the start-up
                costs and requirements for eCQM reporting. However, data elements for
                the STEMI eCQM are all readily available in structured fields (or will
                be, based on the FHIR-based API, which is required for implementation
                by December 31, 2022 (85 FR 70075)). The proposed measure also aligns
                with interoperability guidance from the ONC 21st Century Cures Act
                final rule (85 FR 25642 through 25961) published May 1, 2020, therefore
                facilities and vendors have received advanced notice and guidance on
                FHIR API standardization that will support the transition to eCQMs. We
                also note that many facilities have operationalized and gained
                experience in reporting eCQM for the Hospital IQR Program. Thus, we
                believe that many facilities have demonstrated readiness in reporting
                eCQM and the implementation burden will not exceed requirements from
                other federal regulation already in place.
                 Additionally, we will provide assistance to facilities, vendors,
                and other stakeholders through the release of education and outreach
                materials following adoption of the measure in the program.
                 Comment: One commenter expressed concern about external factors
                (such as delays in resuscitation or a family's decision to not pursue
                aggressive care) that could affect facility performance through no
                fault of the clinician. This commenter encouraged CMS to exclude these
                cases to avoid penalization of the facility for care that does not meet
                the numerator's quality action.
                 Response: We appreciate the commenter's feedback on measure
                exclusions and considered these issues during measure development.
                Certain delays in resuscitation, such as cardiopulmonary arrest, are
                contraindicated and therefore excluded from the measure. We found that
                family refusal is not consistently captured in a structured data field.
                For this reason, we believe that family refusal cannot be reliably used
                an exclusion criterion at this time.
                 Comment: One commenter questioned how patients for whom a
                contraindication to fibrinolytic therapy would be excluded from the
                STEMI eCQM's initial patient population.
                 Response: We thank the commenter for their question. To clarify, we
                specified the measure's exclusions to remove a patient if the patient
                presents with any of a breadth of clinical diagnoses that reflect a
                contraindication to fibrinolytic therapy (such as suspected aortic
                dissection, ischemic stroke, intracranial or intraspinal surgery,
                etc.); a full list of exclusions for the STEMI eCQM is available on
                HealthIT.gov (https://ecqi.healthit.gov/ecqm/eh/pre-rulemaking/1/cms996v2).
                 We will monitor and evaluate additional clinical reasons for not
                using fibrinolytics to treat a myocardial infarction as this
                information becomes available.
                 Comment: One commenter asked how CMS would use data from third-
                party electrocardiograms (ECGs) in identifying patients for inclusion
                in the measure's initial population.
                 Response: We thank the commenter for their feedback. At this time,
                data from ECGs are not used to identify the STEMI eCQM's initial
                patient population. Rather, individuals are identified for inclusion in
                the measure if they were diagnosed with a myocardial infarction and did
                not have documentation of one or more excluded condition. The full
                technical specifications for the measure are available on
                HealthIT.gov.\350\
                ---------------------------------------------------------------------------
                 \350\ (https://ecqi.healthit.gov/ecqm/eh/pre-rulemaking/1/cms996v2).
                ---------------------------------------------------------------------------
                 Comment: A commenter encouraged CMS to perform larger-scale testing
                and a feasibility assessment for implementation, expanding upon the two
                sites at which electronic health record (EHR) testing occurred
                previously, to ensure the measure is truly reliable and valid.
                 Response: We appreciate the commenter's concern about measure
                testing. With regards to measure reliability and validity, the NQF
                Cardiovascular Project's Standing Committee performed an evaluation of
                the measure's reliability and validity. They concluded that the results
                represented a moderate level of scientific acceptability. The measure
                was tested using data from two large hospital systems (with 20 EDs),
                whereby one system treated a large number, and the second system
                treated a smaller number of STEMI patients during the data period used
                for testing. As noted in section XV.B.4.c.(4) of this final rule with
                comment period, the feasibility testing showed that the measure is
                feasible and the key features of the eCQM, such as the code sets and
                measure logic, were readily interpreted by both sites as assessed by
                the feasibility scorecard and exit interviews conducted at two systems.
                The validity testing results showed a wide range of agreement among
                data elements between the electronic and manual data extracts.
                Statistical methods indicate equivalent agreement that the denominator
                value is expected by chance in the first system and slight agreement in
                the second system, with a moderate indication of denominator exclusion
                values in both EHR systems.\351\ With regards to the test sites and EHR
                systems tested, the two EHR vendors utilized by the two hospital
                systems tested constitute the vast majority of EHRs.
                ---------------------------------------------------------------------------
                 \351\ National Quality Forum. (2021). Cardiovascular Spring 2021
                Cycle: CDP Report: Draft Report for Comment. Accessed on September
                21, 2021, at: https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=96018.
                ---------------------------------------------------------------------------
                 After consideration of the public comments we received, we are
                finalizing the adoption of STEMI eCQM (Newly designated as OP-40) as
                proposed.
                5. Modifications to Previously Adopted Measures
                a. Requiring OP-37a-e: Outpatient and Ambulatory Surgery Consumer
                Assessment of Healthcare Providers and Systems (OAS CAHPS) Survey-Based
                Measures Beginning With Voluntary Reporting for the CY 2023 Reporting
                Period and Mandatory Reporting Beginning With the CY 2024 Reporting
                Period/CY 2026 Payment Determination and for Subsequent Years
                 We previously adopted the OP-37a-e: Outpatient and Ambulatory
                Surgery Consumer Assessment of Healthcare Providers and Systems (OAS
                CAHPS) measures to assess patient experience with care following a
                procedure or surgery in a HOPD. These survey-based
                [[Page 63841]]
                measures rate patient experience as a means for empowering patients and
                improving the quality of their care (82 FR 59432). For further details
                on these measures, we refer readers to the CY 2017 OPPS/ASC final rule
                with comment period (81 FR 79771 through 79784), in which we adopted
                these measures beginning with the CY 2020 payment determination.
                 Subsequently, in the CY 2018 OPPS/ASC final rule with comment
                period (82 FR 59432 through 59433), we delayed implementation of OP-
                37a-e for the Hospital OQR Program beginning with the CY 2020 payment
                determination due to lack of sufficient operational and implementation
                data. At that time, we believed that our ongoing National OAS CAHPS
                voluntary reporting program for the survey measures, which began in
                January 2016 \352\ and is unrelated to either the Hospital OQR Program
                or ASCQR Program, would provide valuable information moving forward.
                Specifically, we wanted to use the information from the National OAS
                CAHPS voluntary reporting program to: (1) Ensure that the survey
                measures appropriately account for patient response rates, both
                aggregate and by survey administration method; (2) reaffirm the
                reliability of national implementation of OAS CAHPS Survey data; and
                (3) appropriately account for the burden associated with administering
                the survey in the outpatient setting of care.
                ---------------------------------------------------------------------------
                 \352\ Participation in the program is open to any interested
                Medicare-certified Hospital Outpatient Departments (HOPDs) and free-
                standing ambulatory surgery centers (ASCs). More information on the
                National OAS CAHPS voluntary reporting program is available at:
                https://oascahps.org/General-Information/National-Implementation and
                https://www.cms.gov/Research-Statistics-Data-and-Systems/Research/CAHPS/OAS-CAHPS.
                ---------------------------------------------------------------------------
                 In the CY 2022 OPPS/ASC proposed rule (86 FR 42246), we proposed to
                restart the OP-37a-e measure by requiring the measure in the Hospital
                OQR Program beginning with the CY 2024 reporting period/CY 2026 payment
                determination. Specifically, for the Hospital OQR Program, we proposed
                voluntary data collection and reporting beginning with the CY 2023
                reporting period, followed by mandatory data collection and reporting
                beginning with the CY 2024 reporting period/CY 2026 payment
                determination. As noted previously, the National OAS CAHPS voluntary
                reporting program is independent of the Hospital OQR Program and the
                ASCQR Program. As proposed in the CY 2022 OPPS/ASC proposed rule (86 FR
                42246), our intent is to make the distinction that HOPDs that
                voluntarily report the OAS CAHPS Survey-based measures during the CY
                2023 reporting period would do so as part of the Hospital OQR Program
                until mandatory reporting begins. The reporting process for HOPDs to
                submit OAS CAHPS Survey data would remain unchanged. That is, HOPDs
                would submit OAS CAHPS Survey data through their vendors, who would
                submit these data to CMS as appropriate. We refer readers to section
                XV.D.4.b. of the preamble of the CY 2022 OPPS/ASC proposed rule (86 FR
                42258) and of this final rule with comment period for our related
                proposals regarding the form, manner, and timing for reporting the OP-
                37a-e Survey-based measures.
                 Having had the opportunity during the delayed implementation to
                investigate the concerns about patient response rates and data
                reliability, we believe that patients are able to respond to OAS CAHPS
                Survey questions, and that those responses are reliable based on our
                prior experiences collecting voluntary data for public reporting since
                CY 2016 (available at https://data.cms.gov/provider-data/). We reaffirm
                that the OAS CAHPS Survey-based measures assess important aspects of
                care where the patient is the best or only source of information (81 FR
                79771). Furthermore, in section XV.D.4.b.(1). of the CY 2022 OPPS/ASC
                proposed rule (86 FR 42258), we proposed additional collection modes
                using a web-based module (web with mail follow-up of non-respondents
                and web with telephone follow-up of non-respondents) for administering
                the survey, which would be available beginning in CY 2023 under the
                Hospital OQR Program and for subsequent years.\353\ We believe this
                would address some burden concerns raised during the CY 2017 OPPS/ASC
                final rule with comment period (81 FR 79777) because the web-based
                modules would produce similar results but at lower costs of
                collection.\354\ We also continue to believe that the benefits of this
                measure, such as giving patients the opportunity to compare and assess
                quality of care in the outpatient setting in a standardized and
                comparable manner, outweigh the burdens (81 FR 79778). As we stated in
                the CY 2018 OPPS/ASC final rule with comment period, we continue to
                believe that implementation of these measures will enable objective and
                meaningful comparisons between hospital outpatient departments (82 FR
                59432) and rating patient experience still provides important
                information to hospital outpatient departments and patients and enables
                objective and meaningful comparisons between hospital outpatient
                departments (82 FR 59432).
                ---------------------------------------------------------------------------
                 \353\ We note that the mixed modes will be available as part of
                the National OAS CAHPS voluntary reporting program beginning in CY
                2022.
                 \354\ Bergeson SC, Gray J, Ehrmantraut LA, Laibson T, Hays RD.
                Comparing Web-based with Mail Survey Administration of the Consumer
                Assessment of Healthcare Providers and Systems (CAHPS[supreg])
                Clinician and Group Survey. Prim Health Care. 2013;3:1000132.
                doi:10.4172/2167-1079.1000132.
                ---------------------------------------------------------------------------
                 We refer readers to section XV.D.4.b. of the CY 2022 OPPS/ASC
                proposed rule (86 FR 42258) and of this final rule with comment period
                for our related proposals regarding form, manner, and timing for
                reporting the OP-37a-e Survey-based measures.
                 We received comments on these topics.
                 Comment: A few commenters supported the voluntary collection of OAS
                CAHPS Survey in the Hospital OQR Program beginning in CY 2023 reporting
                period.
                 Response: We thank the commenters for their support.
                 Comment: A few commenters supported voluntary collection of the OAS
                CAHPS Survey and recommended releasing additional information regarding
                operational or technical knowledge learned during the voluntary period
                prior to the start of mandatory reporting.
                 Response: We agree that information learned during the OAS CAHPS
                Survey voluntary reporting period and the National OAS CAHPS Survey
                voluntary reporting program should be disseminated to HOPDs to help
                improve their performance and patient safety. For information about the
                National OAS CAHPS Survey voluntary reporting, we encourage hospitals
                to visit: https://oascahps.org/General-Information/National-Implementation. We believe the information learned through this prior
                voluntary reporting timeframe can inform practice during the voluntary
                reporting period and eventually mandatory reporting as part of the
                Hospital OQR Program. Specifically, as part of the National OAS CAHPS
                Survey voluntary reporting, a summary report that includes information
                about patient-mix adjustments for each quarter is updated and posted
                before each quarterly data submission period. Preview reports for each
                facility participating voluntarily is posted on the OAS CAHPS website
                two weeks prior to public reporting. The Protocols and Guidelines
                Manual is updated annually with any necessary clarifications about
                participation requirements and protocols. Training has been provided
                annually to approved
                [[Page 63842]]
                vendors to clarify administration protocols. We refer reader to https://oascahps.org/Training/Training-Materials for more information.
                 Comment: Several commenters supported the mandatory collection of
                the OAS CAHPS Survey in the Hospital OQR Program. One commenter stated
                that the OAS CAHPS Survey will help HOPDs strategically identify
                strengths, weaknesses, and areas for improvement related for patient
                experience.
                 Response: We appreciate the support of mandatory reporting of OAS
                CAHPS Survey as part of the Hospital OQR program. We believe that these
                survey-based measures will be useful to assess aspects of care where
                the patient is the best or only source of information, and to enable
                objective and meaningful comparisons between HOPDs. We also believe
                this feedback will help HOPDs identify and improve patient related
                experiences.
                 Comment: A few commenters expressed concern with the OAS CAHPS
                Survey use of CPT codes. These commenters also expressed concern that
                these codes were not consistent with certain IT vendor support. Another
                recommended that OAS CAHPS Survey patient eligibility should not rely
                on CPT codes. A commenter expressed concern surrounding the timeframe
                around submission of claims and coding information simply does not
                match--meaning that coding may not be completed to accommodate the 21-
                to 60-day survey timeframe and recommended that CMS to eliminate the
                use of CPT codes to trigger survey distribution.
                 Response: We appreciate this feedback. We interpret the commenters'
                concern to be that there may be confusion over which patients would be
                eligible to be surveyed as part of the OAS CAHPS Survey reporting. We
                note that the OAS CAHPS Survey is administered to all eligible
                patients, or a random sample thereof, who had at least one outpatient
                surgery/procedure during the applicable month. Many CPT codes have been
                excluded from inclusion in the OAS CAHPS Survey, including services
                like application of a cast or splint, in order to ensure that only
                patients receiving applicable procedures are surveyed.\355\
                ---------------------------------------------------------------------------
                 \355\ Updates on OAS CAHPS Survey specifications and guidelines
                are available at https://oascahps.org/General-Information/Announcements.
                ---------------------------------------------------------------------------
                 With regard to the timing of the availability of CPT codes for
                sample selection, we recognize in some cases there could be delays in
                getting the CPT codes updated in the patient record and transmitted to
                the survey vendor in a timely manner. Under the current protocol for
                survey administration, we allow survey vendors to work with HOPD and
                ASC facilities to identify alternative ways to identify the patient
                records for outpatient surgery or diagnostic procedures that were
                performed in eligible HOPDs or ASCs (as identified by the facility-
                level eligibility criteria). Vendors can submit exception requests to
                request alternative methods for identifying the eligible population. We
                also note that the current protocol for survey administration allows
                for late start requests for situations in which the complete patient
                records are not available within the target window of time for survey
                administration. Vendors can submit late start requests when the patient
                data file is received more than 26 days after the sample month. This
                allows for flexibility in situations when the CPT codes are not
                available initially but can be updated. Further, sampling is allowed to
                proceed if 90 percent of the patient records have CPT codes. Updates to
                the Survey Specifications and Guidelines will be available on the OAS
                CAHPS Survey website.\356\ We will take all comments under
                consideration as we consider future refinements for the OAS CAHPS
                Survey.
                ---------------------------------------------------------------------------
                 \356\ https://oascahps.org/.
                ---------------------------------------------------------------------------
                 Comment: A few commenters expressed concern that there is little
                variation in performance scores for this measure.
                 Response: We thank the commenters for their feedback. Performance
                scores are measured and reported publicly at the facility, state, and
                national levels through the Provider Data Catalog (PDC) datasets
                (https://data.cms.gov/provider-data/). OAS CAHPS Survey results are
                publicly reported as ``top-box'', ``bottom-box'', ``middle-box'', and
                ``linear scaled scores''. The scores are adjusted for patient mix
                within each quarter to account for facility differences in patient mix.
                During voluntary participation, facilities may choose to have their
                survey results published or only reported privately through preview
                reports. Variation in performance scores is expected to increase as
                more facilities participate. We believe that the OAS CAHPS Survey-based
                measures will be useful to assess aspects of care where the patient is
                the best or only source of information, and to enable objective and
                meaningful comparisons between HOPDs.
                 Comment: A commenter opposed mandatory reporting for OAS CAHPS
                Survey, expressing concern regarding its reliability. This commenter
                also expressed the belief that many of the issues from when the measure
                was originally delayed have not yet been resolved, namely the potential
                for low patient response rate, administration burden on providers and
                lack of reliable national OAS CAHPS Survey data.
                 Response: We thank the commenter for their feedback and acknowledge
                their concern. We believe that OAS CAHPS Survey is reliable and that
                our prior concerns that resulted in the delay of the OAS CAHPS Survey
                implementation have been resolved. HOPDs have been able to report OAS
                CAHPS Survey data as part of the National OAS CAHPS Survey since 2016.
                Based on our experience through this reporting, we are able to: (1)
                Ensure that the survey measures appropriately account for patient
                response rates, both aggregate and by survey administration method; (2)
                reaffirm the reliability of national implementation of OAS CAHPS Survey
                data; and (3) appropriately account for the burden associated with
                administering the survey in the outpatient setting of care. We also
                note that, unit-level reliability analysis of the publicly reported
                composites for OAS CAHPS are well above the .70 cut-off typically used
                to assess reliability of a measure.
                 Comment: A few commenters opposed mandatory reporting and expressed
                concern regarding the financial burden of OAS CAHPS Survey vendors, and
                IT resource strain. Several commenters opposed mandatory reporting due
                to the operational burden on patients and facilities, as well as the
                repetitive nature of this extensive and complex outpatient survey.
                 Response: We thank these commenters for their feedback and
                acknowledge their concerns. While there are administrative and
                financial burdens associated with implementing the OAS CAHPS Survey and
                OAS CAHPS Survey-based measures in the Hospital OQR Program, we believe
                the benefits of capturing patient experience of care data in the HOPD
                setting outweigh the burdens. In selecting measures for the Hospital
                OQR Program, we weigh the relevance and utility of measures against the
                potential burden to HOPDs resulting from the measure's adoption, and we
                believe the OAS CAHPS Survey is a vital source of information in
                assessing the quality of care provided at an HOPD.
                 We post the list of the approved OAS CAHPS Survey vendors on
                https://oascahps.org and we encourage HOPDs to contact vendors for cost
                and service information pertaining to OAS CAHPS Survey as there may be
                differences among vendors and multiple modes of
                [[Page 63843]]
                conducting the survey provide greater economical choice.
                 In addition, we address additional modes to collect OAS CAHPS
                Survey data in section XVI.D.4.b.(1) of the CY 2022 ASC/OPPS proposed
                rule (86 FR 42258) which we expect to reduce the future cost of
                administration. We refer readers to the Protocols and Guidelines Manual
                for the OAS CAHPS Survey (https://oascahps.org/Survey-Materials) for
                materials for each mode of survey administration.
                 With respect to the burden on patients, we believe that patients
                appreciate the opportunity to provide feedback to their providers and
                that the information learned from their responses has the potential to
                improve communication and care that HOPDs provide and can simply opt
                not to respond to the survey if so inclined.
                 Further, while we did not propose a solely digital mode of
                conducting the OAS CAHPS Survey, we will continue to analyze whether a
                web-only or digital-only format would be appropriate for the OAS CAHPS
                Survey, which could potentially further reduce the costs of
                administering the survey.
                 Comment: A few commenters opposed mandatory reporting and cited
                staffing shortages and the ongoing COVID-19 crisis as reasons for
                opposing the mandatory adoption of OAS CAHPS Survey at this time.
                 Response: We understand the commenters' concerns and the aim to
                accommodate HOPDs while our nation works through the unprecedented
                COVID-19 pandemic. However, we believe the OAS CAHPS Survey is a
                critical measure of patient experience at this time. We also note that,
                since many hospitals already have vendors in place and are successfully
                reporting the HCAHPS Survey in the IQR program, the burden of finding a
                vendor and operationalizing the OAS CAHPS is minimal.
                 Comment: A commenter expressed concern that there is overlap
                between CAHPS Surveys that would be administered by Clinician Groups,
                Outpatient/ASCs, as well as from Surgical Care teams and that there is
                potential for patients to receive multiple requests to complete CAHPS
                Surveys in connection with a single episode of care, causing confusion
                and survey fatigue.
                 Response: While we understand the commenter's concerns regarding
                resources needed to collect the survey, and survey administration
                burden for hospitals, the OAS CAHPS Survey was developed for use in
                assessing patient experience of care for select outpatient surgical
                procedures. We are dedicated to improving the quality of care provided
                to patients, and believe patients are a vital source of information in
                assessing the quality of care provided at a hospital outpatient
                department. We believe that the benefits of this measure, such as
                giving patients the opportunity to compare and assess quality of care
                in the outpatient setting in a standardized and comparable manner,
                outweigh the burdens.
                 Regarding confusion among patients and multiple overlapping survey
                tools, we note that other CAHPS Surveys, such as the HCAHPS Survey, are
                tailored to different aspects of care provided by hospitals, such as
                inpatient care. In addition, the survey introduction (and letter)
                provided to patients includes the date and location of the surgery or
                procedure that the patient received at the facility. Furthermore,
                patients will also be reminded of the date and location of the surgery
                or procedure they received during the telephone interviews. For these
                reasons, we do not believe there will be issues associated with overlap
                or confusion for these surveys.
                 Comment: A commenter expressed concern that departments may have
                multiple sets of patient experience results and recommended applying
                the OAS CAHPS Survey for only people who have a day surgery where
                anesthesia is used.
                 Response: We thank the commenter for their suggestion; however, we
                believe that the OAS CAHPS Survey is appropriately scoped to provide
                patients and facilities meaningful data on the services provided by
                HOPDs and not just those that require anesthesia.
                 Comment: A few commenters opposed the OAS CAHPS Survey measures
                because the OAS CAHPS is not endorsed by the NQF. The commenters
                encouraged CMS to pursue NQF endorsement of these measures before the
                OAS CAHPS Survey is required in order to ensure all stakeholders are
                given insight into the measure and to ensure it is fair and accurate.
                 Response: We thank commenters for their feedback. We note, section
                1833(t)(17) of the Act does not require that each measure we select for
                the Hospital OQR Program be endorsed by a national consensus building
                entity, or the NQF specifically. Under this paragraph, the Secretary
                has the authority to select non-endorsed measures. While we strive to
                develop NQF-endorsed measures, including when feasible and practicable,
                we believe the requirement that measures developed by the Secretary for
                use in the Hospital OQR Program reflect consensus among affected
                parties can be achieved in other ways, including through the measure
                development process, which often includes stakeholder input via a
                Technical Expert Panel (TEP), review by the MAP, broad acceptance and
                use of the measure, and public comments.
                 We also believe that lack of NQF endorsement does not limit insight
                into whether the measures portray hospital performance in a fair and
                accurate manner. The survey was tested in both the outpatient and ASC
                settings in 2014 (field testing) and 2015 and 2019 (mode testing) was
                found to be reliable. We refer readers to https://oascahps.org/ for
                more information about field and mode testing for these measures. The
                OAS CAHPS Survey development process followed the principles and
                guidelines outlined by AHRQ and its CAHPS Consortium.\357\ This process
                included: (1) Reviewing existing literature; (2) reviewing surveys
                submitted under a public call for measures; (3) conducting focus groups
                with patients who had recent outpatient surgery; (4) conducting
                cognitive interviews with patients to assess their understanding and
                ability to answer survey questions; (5) obtaining stakeholder input on
                the draft survey and other issues that may affect implementation;
                conducting a field test; and (6) conducting a test of the various data
                collection mode effects on survey responses.
                ---------------------------------------------------------------------------
                 \357\ Agency for Healthcare Research and Quality. ``The CAHPS
                Program.'' Available at: https://ahrq.gov/cahps/index.html.
                ---------------------------------------------------------------------------
                 Comment: One commenter strongly recommended that CMS reconsider its
                position on respondent confidentiality and remove the requirement to
                include the question on consent to share identifying information from
                the OAS CAHPS Survey if the facility is interested in receiving
                patient-level response data connected to the patient's identifying
                data. Another commenter explained that if facilities understood the
                patient, they could more easily provide their employees immediate, and
                targeted improvement training. One commenter recommended that CMS align
                the OAS CAHPS patient confidentiality rules with HCAHPS, which allows
                for the release of patient-level data for quality improvement purposes
                with the stipulation that the patient identity should not be shared
                with direct care staff. Another commenter expressed concern about a
                question on the OAS CAHPS Survey that seeks information on ``Consent to
                Share Identifying Information'', believing that the question limits the
                [[Page 63844]]
                ability to identify trends and thereby limits opportunities.
                 Response: We thank these commenters for their feedback. While the
                desire to have patient identifying information to develop responsive
                training and remediation steps is admirable, we believe that patient
                confidentiality is an important aspect of the OAS CAHPS Survey to help
                encourage accurate reporting. The administration protocols for the OAS
                CAHPS Survey follow protocols for CAHPS[supreg] Surveys, restricting
                the release of patient-level data if the patient has not consented. We
                note that for the Hospital IQR Program, we do not state that patients'
                responses and identifying information will not be shared with the
                hospital because hospitals can self-administer the HCAHPS Survey.
                However, for surveys administered via a third-party vendor, the survey
                is not linked to a sample patient's name unless the patient gives his
                or her consent. We note that facilities may choose to add the ``Consent
                to Share'' question to the OAS CAHPS Survey, which asks whether a
                patient gives permission for their name to be linked to their survey
                responses. However, we note that each facility should consult with its
                own counsel to ensure compliance with applicable privacy and security
                laws.
                 Comment: A requester sought clarification on whether the OAS CAHPS
                Survey will be mandated in CY 2024 if outpatient surgery is included in
                their HCAHPS submission.
                 Response: The Hospital OQR Program is an independent quality
                reporting program, and as part of its requirements, HOPDs will be
                required to meet the reporting requirement for the OAS CAHPS Survey
                once the OAS CAHPS Survey begins mandatory reporting in CY 2024
                reporting period/CY 2026 payment determination.
                 Comment: A commenter requested that CMS do more to ensure correct
                attribution of experience and requested CMS provide evidence of the
                survey's reliability before it requires survey administration, which
                the commenter believes could reduce the reliability of the results and
                negatively impact data-driven decision making.
                 Response: We thank the commenter for their feedback. The purpose of
                the OAS CAHPS Survey is to obtain data on a patient's experience of
                care received from a hospital/facility, specifically from an HOPD.
                While there is always potential that a patient gets confused, we
                believe that the OAS CAHPS Survey is focused on patients' experience of
                care received for their ambulatory surgery or procedure. A physician/
                surgeon who performs surgeries/procedures at a facility is a member of
                that facility with both rights and responsibilities. We believe it is
                the facility's responsibility to ensure that someone--whether the
                doctor, nurse, or other facility staff member--provide patients with
                information about preparing for their procedure, about the procedure
                itself, as well as what to expect following the procedure/surgery.
                Therefore, we believe it is appropriate to include these important
                communications with patients in the OAS CAHPS Survey and believe
                experience with the provider attributed to the facility is appropriate.
                 Further, we believe that the information provided in the OAS CAHPS
                Survey ``Instructions'' is sufficient to inform the patient regarding
                the purpose of the OAS CAHPS Survey and provides sufficient instruction
                and details for the patient to correctly identify and relate the survey
                to the facility and procedure that patient received. We began
                developing the Outpatient and Ambulatory Surgery Survey in 2012 using
                the principles and guidelines established by the Agency for Healthcare
                Research and Quality's (AHRQ) CAHPS program and AHRQ approved this
                instrument as a CAHPS Survey in February 2015.\358\
                ---------------------------------------------------------------------------
                 \358\ See https://www.ahrq.gov/cahps/surveys-guidance/oas/index.html.
                ---------------------------------------------------------------------------
                 We reiterate that based on our experience through the National OAS
                CAHPS voluntary reporting program, we can confirm the OAS CAHPS Survey
                reliability and (1) ensure that the survey measures appropriately
                account for patient response rates, both aggregate and by survey
                administration method; (2) reaffirm the reliability of national
                implementation of OAS CAHPS Survey data; and (3) appropriately account
                for the burden associated with administering the survey in the
                outpatient setting of care. We also note that, unit-level reliability
                analysis of the publicly reported composites for OAS CAHPS are well
                above the .70 cut-off typically used to assess reliability of a
                measure. Based on this reliability, we believe that the information
                learned from the survey data will allow hospitals to make more informed
                decisions to improve care.
                 Comment: Many commenters expressed concern regarding the length of
                the survey and recommended that the survey should be significantly
                shortened to focus on actionable aspects of the patient experience and
                to encourage higher response rates amongst patients. Specifically, some
                commenters recommended that a revised OAS CAHPS Survey should include
                five to ten questions.
                 Response: The OAS CAHPS Survey is comparable in length and survey
                response rate to other patient experience of care surveys. The survey
                instrument was developed in order to provide a more complete picture of
                patients' experience of care in the HOPD setting. We believe allowing
                facilities to administer a selection of the survey items, or greatly
                reducing the questions to patients would impair the assessment of a
                facility's quality of care and would also inhibit the comparison of
                performance across facilities and the reliability of a facility's
                scores. In addition, the 24 core questions of the OAS CAHPS Survey are
                either directly actionable (that is, give feedback to hospitals) or
                inform the need for patients to answer subsequent questions that are
                actionable. We note that the survey results to date do not show that
                respondents are terminating the interview before the last question,
                which would be an indication of respondent fatigue for a survey that is
                too long. Based on the most recently received national implementation
                data for voluntary reporting, the nonresponse due to terminated
                interviews is less than one percent.
                 Implementing the OAS CAHPS Survey in the Hospital OQR Program will
                enable patients to compare patient experience of care data across
                multiple HOPDs as part of their healthcare decision-making. In
                addition, we believe implementing the OAS CAHPS Survey in the Hospital
                OQR Program will incentivize HOPDs to factor patient experience of care
                into their quality improvement efforts more proactively. Implementing a
                shorter ``sample survey'' would not enable the same type of comparison
                as a fully tested survey.
                 However, we also acknowledge these commenters' concerns about the
                length of the OAS CAHPS Survey and will continue to consider whether
                refinement would be appropriate.
                 Comment: A commenter sought more information regarding the future
                of the ``Preparations for Discharge and Recovery'' domain of the OAS
                CAHPS Survey and whether CMS will publicly report data collected from
                the domain.
                 Response: We plan to report information from ``Preparations for
                Discharge and Recovery'' beginning with the data collected in 2022 as
                part of National OAS CAHPS voluntary reporting and address public
                reporting OAS CAHPS data as part of the Hospital OQR Program in future
                rulemaking.
                 After consideration of the public comments we received, we are
                finalizing this proposal as proposed.
                [[Page 63845]]
                 We also refer readers to section XVI.B.4.c. of this final rule with
                comment period where we are also finalizing this measure in the ASCQR
                program with modification.
                b. OP-31: Cataracts: Improvement in Patient's Visual Function Within 90
                Days Following Cataract Surgery (NQF #1536) Beginning With the CY 2023
                Reporting Period/CY 2025 Payment Determination
                (1) Background
                 In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75102
                through 75104) we finalized the adoption of the OP-31: Cataracts:
                Improvement in Patient's Visual Function with 90 Days Following
                Cataract Surgery \359\ measure beginning with the CY 2016 payment
                determination. This measure assesses the percentage of patients aged 18
                years and older who had cataract surgery and had improvement in visual
                function achieved within 90 days following the cataract surgery (78 FR
                75102) via the administration of pre-operative and post-operative
                visual function surveys.
                ---------------------------------------------------------------------------
                 \359\ We note that this measure was endorsed by the NQF under
                NQF #1536 at the time of adoption but has subsequently had its
                endorsement removed.
                ---------------------------------------------------------------------------
                 During the CY 2014 OPPS/ASC proposed rule, some commenters
                expressed concern about the burden of collecting pre-operative and
                post-operative visual function surveys (78 FR 75103). In response to
                those comments, we modified and finalized our implementation strategy
                in a manner that we believed would significantly minimize collection
                and reporting burden (78 FR 75103). Specifically, we applied a sampling
                scheme and a low case threshold exemption to address commenters'
                concerns regarding burden (78 FR 75114). With those changes, we
                intended to decrease burden and facilitate data reporting by allowing
                random sampling of cases when volume is high, instead of collecting
                information for all eligible patients (78 FR 75114). For further
                details, we refer readers to the CY 2014 OPPS/ASC final rule with
                comment period (78 FR 75102 through 75104).
                 Shortly thereafter, we became concerned about the use of
                inconsistent surveys to assess visual function. The measure
                specifications allowed for the use of any validated survey and we were
                not positive about the impact the use of varying surveys might have.
                Therefore, we issued guidance stating that we would delay the
                implementation of OP-31.\360\ Subsequently, in the CY 2015 OPPS/ASC
                final rule with comment period (79 FR 66947 through 66948), we
                finalized our proposal to exclude OP-31 from the CY 2016 payment
                determination measure set, and for subsequent years. In addition, we
                finalized allowing hospitals to voluntarily report OP-31 data for the
                CY 2015 reporting period/CY 2017 payment determination and subsequent
                years (79 FR 66948).
                ---------------------------------------------------------------------------
                 \360\ The implementation was first delayed by 3 months--from
                January 1, 2014 to April 1, 2014, for the CY 2016 payment
                determination, via guidance issued December 31, 2013. Available at:
                https://qualitynet.cms.gov/files/5d3792e74b6d1a256059d87d?filename=2013-40-OP.pdf. Because of
                continuing concerns, on April 2, 2014, we issued additional guidance
                stating that we would further delay the implementation of the
                measure from April 1, 2014 to January 1, 2015 for the CY 2016
                payment determination. Available at: https://qualitynet.cms.gov/files/5d3793174b6d1a256059d8e3?filename=2014-14-OP,0.pdf.
                ---------------------------------------------------------------------------
                (2) OP-31 Measure Beginning With the CY 2025 Reporting Period/CY 2027
                Payment Determination and for Subsequent Years
                 In the CY 2022 OPPS/ASC proposed rule (86 FR 42247), we stated that
                we believed it would be appropriate to require hospitals to report on
                OP-31. We stated that hospitals have had the opportunity for several
                years to familiarize themselves with OP-31, prepare to operationalize
                it, and opportunity to practice reporting the measure since the CY 2015
                reporting period/CY 2017 payment determination. We noted that a small
                number of facilities have consistently reported data for this measure
                and these data have been made publicly available. While we previously
                had concerns regarding the use of different surveys to assess visual
                function (79 FR 66947), we believe that using different surveys will
                not result in inconsistencies, as the allowable surveys are
                scientifically validated and provide comparable results.\361\ Research
                has demonstrated that of 16 different cataract surgery outcome
                questionnaires, it has been demonstrated that all were able to detect
                clinically important change.\362\
                ---------------------------------------------------------------------------
                 \361\ McAlinden C, Gothwal VK, Khadka J, Wright TA, Lamoureux
                EL, Pesudovs K. A head-to-head comparison of 16 cataract surgery
                outcome questionnaires. Ophthalmology. 2011 Dec;118(12):2374-81.
                doi: 10.1016/j.ophtha.2011.06.008. Epub 2011 Sep 25. PMID: 21945088.
                 \362\ McAlinden C, Gothwal VK, Khadka J, Wright TA, Lamoureux
                EL, Pesudovs K. A head-to-head comparison of 16 cataract surgery
                outcome questionnaires. Ophthalmology. 2011 Dec;118(12):2374-81.
                doi: 10.1016/j.ophtha.2011.06.008. Epub 2011 Sep 25. PMID: 21945088.
                ---------------------------------------------------------------------------
                 In the CY 2022 OPPS/ASC proposed rule (86 FR 42247), we proposed to
                require reporting of the OP-31 measure beginning with the CY 2023
                reporting period/CY 2025 payment determination and for subsequent
                years. As we stated in the CY 2014 OPPS/ASC final rule with comment
                period, as well as the CY 2015 OPPS/ASC final rule with comment period,
                and consistent with the MAP recommendation, we continue to maintain
                that this measure ``addresses a high-impact condition'' that is not
                otherwise adequately addressed in our current measure set (78 FR 75103
                and 79 FR 66947, respectively). Moreover, OP-31 serves to improve
                patient-centered care by representing an important patient reported
                outcome (78 FR 75103). This measure provides opportunities for care
                coordination as well as direct patient feedback.
                 We refer readers to section XV.D.5.a. of the CY 2022 OPPS/ASC
                proposed rule (86 FR 42259) and section XV.D.5.a.(1). of this final
                rule with comment period for information about submitting data via a
                CMS web-based tool.
                 We received comments on these topics.
                 Comment: Several commenters expressed support for mandatory
                reporting of OP-31: Cataracts: Improvement in Patient's Visual Function
                within 90 Days Following Cataract Surgery.
                 Response: We thank the commenters for their support. The
                implementation of this measure underwent a number of changes aimed to
                address previous concerns regarding burden and the usage of various
                surveys to assess visual function. However, after review of public
                comments, which are discussed in this section, we are finalizing to
                require the OP-31 measure beginning with the CY 2025 reporting period/
                CY 2027 payment determination, instead of our originally proposed data
                collection beginning with the CY 2023 reporting period.
                 Comment: A few commenters expressed concern about making this
                measure mandatory, stating that because the OP-31: Cataracts:
                Improvement in Patient's Visual Function within 90 Days Following
                Cataract Surgery measure is not currently mandatory, many facilities
                have not been ``practicing'' reporting it even though it is voluntary
                in the Hospital OQR Program measure set.
                 Response: We thank the commenters for their feedback. We note that
                even though a small number of facilities have reported data for this
                measure, those that have reported on this measure have done so
                successfully and consistently. We believe the 2-year extension from our
                originally proposed timeline of the CY 2023 reporting period/CY 2025
                [[Page 63846]]
                payment determination will provide facilities with sufficient time to
                provide staff training and operationalize the measure for successful
                reporting in the Hospital OQR program.
                 Comment: Many commenters did not support the requirement for
                mandatory reporting of OP-31: Cataracts: Improvement in Patient's
                Visual Function within 90 Days Following Cataract Surgery and cited
                concerns about the operational complexity of collection and sharing
                data for the measure across physicians and outpatient settings. Many
                commenters believed administering surveys and tracking responses for
                the OP-31 measure would be burdensome. Specifically, many commenters
                were concerned that EHR systems were not compatible across physicians
                and outpatient settings, and were concerned by the potential burden
                their clinics and staff might face in extracting and sharing patient
                data. Several commenters were also concerned that requiring OP-31 would
                increase reporting burden during the ongoing COVID-19 pandemic and
                asked CMS to delay implementation.
                 Response: We thank the commenters for their input, and we
                acknowledge their concerns. We highly encourage hospitals,
                ophthalmologists, and other clinicians to actively and routinely engage
                in exchanging information to better communicate and coordinate the care
                of patients to promote quality of care. However, we acknowledge the
                complexity of administering and sharing data for OP-31 across different
                settings. In response to these concerns, we are finalizing the
                requirement to report the OP-31 measure beginning with the CY 2025
                reporting period/CY 2027 payment determination instead of our
                originally proposed data collection beginning with the CY 2023
                reporting period. We believe the 2-year extension will provide
                facilities with sufficient time for clinics and staff to address
                potential issues with extracting and sharing patient data. The 2-year
                extension will also allow facilities to prepare and update systems and
                technology, and prevent additional reporting burden during the COVID-19
                pandemic.
                 Comment: A few commenters raised concerns with measure
                specifications, especially the lack of specificity around
                administration of the survey to ensure consistency between the pre- and
                post-operative surveys as well as comparability of the measure across
                hospitals. Several commenters requested additional guidance and
                education from CMS regarding measure specifications and survey
                instruments. Several commenters expressed their belief that this
                measure would be better suited to the Physician Quality Reporting
                System as it was developed as a physician-level measure. A few
                commenters expressed concern and confusion about administering a 90-day
                post-op examination. One of the commenters disagreed with the use of
                the study cited, noting that it reviewed responsiveness of different
                questionnaires and not comparison of agreement across different
                questionnaires. One commenter believed that surveys would have a low
                response rate and that results would not be reliable.
                 Response: We thank commenters for their feedback. We recognize
                commenters' concerns related to the measure specifications. However, we
                continue to believe the assessment of the McAlinden et al. study
                demonstrated that the use of different surveys did not result in
                inconsistencies \363\ and we maintain that it is appropriate for
                inclusion in the Hospital OQR Program measure set. We also acknowledge
                that this measure has been tested at the physician-level and not the
                facility-level. We would like to clarify, in response to concerns about
                the administering a 90-day post-op examination, OP-31 is based on a
                patient survey to assess visual function and not a post-op examination,
                which tests for visual acuity. We reiterate our belief that OP-31
                provides a valuable opportunity for patient feedback on visual function
                outside of the clinical setting.
                ---------------------------------------------------------------------------
                 \363\ McAlinden C, Gothwal VK, Khadka J, Wright TA, Lamoureux
                EL, Pesudovs K. A head-to-head comparison of 16 cataract surgery
                outcome questionnaires. Ophthalmology. 2011 Dec;118(12):2374-81.
                doi: 10.1016/j.ophtha.2011.06.008. Epub 2011 Sep 25. PMID: 21945088.
                ---------------------------------------------------------------------------
                 Comment: Several commenters believed OP-31 has a limited use in
                evaluating patient improvement. A few commenters noted that cataract
                operations already have high rates of success. A few commenters noted
                that cataract surgeries are performed for other medical reasons beyond
                improving visual function. One commenter noted its belief that there is
                not just one measure that can be used to assess improved visual
                function.
                 Response: We thank commenters for their input. However, even if
                cataract procedures have high rates of success, this does not preclude
                facilities from reporting on OP-31 or continuously working to improve
                patient outcomes. We agree with the commenters that there is no one
                measure that can assess all possible medical needs and possible visual
                function outcomes; however, we continue to believe that OP-31 is a
                valuable and appropriate measure to close the gap for a high impact,
                frequently performed procedure.
                 After consideration of the public comments we received, we are
                finalizing the proposal to require OP-31: Cataracts: Improvement in
                Patient's Visual Function within 90 Days Following Cataract Surgery
                with modification. To address commenters' concerns, we are finalizing
                to require OP-31: Cataracts: Improvement in Patient's Visual Function
                within 90 Days Following Cataract Surgery beginning with the CY 2025
                reporting period/CY 2027 payment determination, instead of our
                originally proposed data collection beginning with the CY 2023
                reporting period. We believe the 2-year extension from our originally
                proposed timeline of the CY 2023 reporting period/CY 2025 payment
                determination will provide facilities with additional time to implement
                coordination strategies between the surgeon and the ophthalmologist, to
                provide staff training, and operationalize the measure for successful
                reporting in the Hospital OQR Program.
                6. Summary of Previously and Newly Finalized Hospital OQR Program
                Measure Sets
                a. Summary of Previously and Newly Finalized Hospital OQR Program
                Measure Set for the CY 2023 Payment Determination
                 We refer readers to the CY 2021 OPPS/ASC final rule with comment
                period (85 FR 86180 through 86181) for a summary of the previously
                adopted Hospital OQR Program measure set for the CY 2023 payment
                determination and subsequent years. As discussed previously, we are
                finalizing adoption of the Breast Cancer Screening Recall Rates measure
                in this final rule for the CY 2023 payment determination and subsequent
                years (OP-39). Table 63 summarizes the previously and newly finalized
                Hospital OQR Program measure set for the CY 2023 payment determination:
                BILLING CODE 4120-01-P
                [[Page 63847]]
                [GRAPHIC] [TIFF OMITTED] TR16NO21.166
                b. Summary of Previously and Newly Finalized Hospital OQR Program
                Measure Set for the CY 2024 Payment Determination
                [[Page 63848]]
                 Table 64 summarizes the previously and newly finalized Hospital OQR
                Program measure set for the CY 2024 payment determination, which
                includes the COVID-19 Vaccination Coverage Among HCP measure (OP-38):
                [GRAPHIC] [TIFF OMITTED] TR16NO21.167
                c. Summary of Previously and Newly Finalized Hospital OQR Program
                Measure Set for the CY 2025 Payment Determination
                [[Page 63849]]
                 Table 65 summarizes the previously and newly finalized Hospital OQR
                Program measure set for the CY 2025 payment determination, which
                includes the ST-Segment Elevation Myocardial Infarction (STEMI) eCQM
                (OP-40) and removal of the OP-2 and OP-3 measures, and voluntary
                reporting of OAS CAHPS measures (OP-37a-e):
                [GRAPHIC] [TIFF OMITTED] TR16NO21.168
                d. Summary of Previously and Newly Finalized Hospital OQR Program
                Measure Set for the CY 2026 Payment Determination and Subsequent Years
                [[Page 63850]]
                 Table 66 summarizes the previously and newly finalized Hospital OQR
                Program measure set for the CY 2026 payment determination and
                subsequent years, which includes the mandatory reporting of the ST-
                Segment Elevation Myocardial Infarction (STEMI) eCQM (OP-40) and the
                requirement of the OAS CAHPS measures (OP-37a-e):
                [GRAPHIC] [TIFF OMITTED] TR16NO21.169
                BILLING CODE 4120-01-C
                7. Hospital OQR Program Measures and Topics for Future Considerations
                a. Request for Comment on Potential Adoption of Future Measures for the
                Hospital OQR Program
                 We seek to adopt a comprehensive set of quality measures for
                widespread use to inform decision-making regarding care and for quality
                improvement efforts in the hospital outpatient setting. In the CY 2021
                OPPS/ASC final rule with comment period (85 FR 86083 through 86110),
                under the OPPS we finalized the elimination of the Inpatient Only (IPO)
                list over a 3-year transitional period, beginning with the removal of
                approximately 300 primarily musculoskeletal-related services, with the
                list to be completely phased out by CY 2024.\364\ As discussed in
                section IX. of the CY 2022 OPPS/ASC proposed rule (86 FR 42155) and
                section IX. of this final rule with comment period, we have continued
                to receive stakeholder requests to reconsider the elimination of the
                IPO list, to reevaluate services removed from the IPO list due to
                safety and quality concerns, and to, at a minimum, extend the timeframe
                for eliminating the list. After further consideration and review of the
                additional feedback from stakeholders, we believe that the timeframe we
                adopted for removing services from the IPO list does not give us a
                sufficient
                [[Page 63851]]
                opportunity to carefully assess whether a procedure can be removed from
                the IPO list while still ensuring beneficiary safety. In the CY 2022
                OPPS/ASC proposed rule (86 FR 42155), for CY 2022, we proposed to halt
                the elimination of the IPO list and, after clinical review of the
                services removed from the IPO list in CY 2021, we proposed to add the
                298 services removed from the IPO list in CY 2021 back to the IPO list
                beginning in CY 2022.
                ---------------------------------------------------------------------------
                 \364\ Centers for Medicare & Medicaid Services. (2020, December
                2). CY 2021 Medicare Hospital Outpatient Prospective Payment System
                and Ambulatory Surgical Center Payment System Final Rule (CMS-1736-
                FC). Retrieved from www.cms.gov/newsroom: https://www.cms.gov/newsroom/fact-sheets/cy-2021-medicare-hospital-outpatient-prospective-payment-system-and-ambulatory-surgical-center-0.
                ---------------------------------------------------------------------------
                 However, as technology and surgical techniques advance, services
                will continue to transition off of the IPO list, becoming payable in
                the outpatient setting. We recognize that there may be a need for more
                measures that inform decision-making regarding care and for quality
                improvement efforts, particularly focused on the behaviors of services
                that become newly eligible for payment in the outpatient setting. In
                light of this, in the CY 2022 OPPS/ASC proposed rule (86 FR 42251), we
                sought comment on potential future adoption of measures that would
                allow better tracking of the quality of care for services that
                transition from the IPO list and become eligible for payment in the
                outpatient setting.
                 Therefore, we invited public comment on the potential future
                adoption of measures for our consideration that address care quality in
                the hospital outpatient setting given the transition of procedures from
                inpatient settings to outpatient settings of care.
                 We received comments on these topics and provide a summary of these
                comments below.
                 Comment: Many commenters offered suggestions in response to the
                Request for Comment on potential adoption of future measures in the
                Hospital OQR program. Several commenters encouraged CMS to work with
                stakeholders to identify a balanced set of high-quality, safe, and
                patient-centered measures that would be appropriate and useful across
                care settings particularly as procedures transition from the inpatient
                only list to outpatient settings. The commenters recommended that the
                measures should also address reporting challenges before proposing to
                adopt new measures into the OQR program. Several commenters believed
                CMS should explore additional measures addressing nutrition, breast
                cancer screening and diagnostic exams, structural equity related to
                disparity impact and the development of service-specific quality
                measures. One commenter also strongly recommended that CMS align with
                Leapfrog and its purchaser constituency by publicly reporting data in a
                way that puts the needs of consumers first.
                 Response: We thank commenters for their feedback. We will continue
                to work with stakeholders and take recommendations into consideration
                as we determine future updates to the Hospital OQR measure set. We will
                also explore the program need and feasibility of the commenters'
                measure recommendations as we consider measures for inclusion in future
                rulemaking.
                 Comment: A few commenters recommended that CMS should focus on
                developing Patient Reported Outcome (PROs) and patient experience
                measures to gather feedback directly from the patient without
                interpretation from a third-party source. Commenters stated that these
                measures can be broadly applied across the surgical domain and other
                procedures. Furthermore, they believed that prioritizing measures that
                focus on patients' feeling of inclusivity and developing patient
                reported metrics of inclusion in the care process is also an important
                step in addressing systemic bias in health care delivery.
                 Response: We appreciate the commenters' recommendations. We believe
                in the importance of patients having a greater role in their healthcare
                decision making. Accordingly, placing an emphasis on PRO measures
                directly aligns with our goals to modernize and drive value-based care.
                We will consider commenters' recommendations as we gather information
                for future rulemaking efforts.
                 Comment: Many commenters recommended that CMS consider adopting
                measures that are currently in the ASCQR Program measure set into the
                Hospital OQR Program's measure set. The measures commenters recommended
                for inclusion were: ASC-1, ASC-2, ASC-3, ASC-4, ASC-13, and ASC-14.
                Commenters noted that moving to adopt measures similar to these in the
                Hospital OQR Program would increase the alignment of measures between
                the Hospital OQR and ASCQR Programs and would allow consumers more
                opportunities to compare quality and safety across settings of care.
                 Additionally, a few commenters suggested that CMS should consider
                adopting the Toxic Anterior Segment Syndrome (TASS) measure and the
                Ambulatory Breast Procedure Surgical Site Infection Outcome Measure in
                the Hospital OQR Program.
                 Lastly, one commenter suggested that CMS should consider measures
                that focus on access to surgical care. The commenter suggests that
                these measures can provide information on whether patients gained
                timely access to a surgeon when/if they needed surgery.
                 Response: We thank the commenters for this valuable feedback. We
                recognize the need to consider measures that enhance quality
                improvement efforts moving forward. We also continue to explore ways to
                address measure gaps, reduce burden and increase efficiency through
                alignment and streamlining our programs. The information provided in
                response to this request for comment may inform future Hospital OQR
                Program rulemaking.
                b. Request for Comment on Potential Future Adoption and Inclusion of a
                Hospital-Level, Risk-Standardized Patient Reported Outcomes Measure
                Following Elective Primary Total Hip and/or Total Knee Arthroplasty
                (THA/TKA)
                 As described in section XV.B.7.a. of the CY 2022 OPPS/ASC proposed
                rule (86 FR 42251), we sought comment on priorities for quality
                measurement in outpatient settings due to changes to the IPO procedure
                list (82 FR 59385 and 84 FR 61355) and the ASC covered procedures list
                (CPL) (84 FR 61388 and 85 FR 86146) announced in the CY 2021 OPPS/ASC
                final rule with comment period.
                 We also requested comment on the potential future adoption of a
                respecified version of a patient-reported outcome-based performance
                measure (PRO-PM) for two such procedures--elective primary total hip
                arthroplasty (THA) and total knee arthroplasty (TKA), which were
                removed from the IPO list effective with CY 2020 and CY 2018,
                respectively. We recently solicited public comment on the potential
                future inclusion of a Hospital-Level Risk-Standardized Patient-Reported
                Outcomes Measure Following Elective Primary Total Hip and/or Total Knee
                Arthroplasty (Hospital-Level THA/TKA PRO-PM (NQF #3559)) in the FY 2022
                IPPS/LTCH PPS proposed rule for the inpatient hospital setting (86 FR
                25589). We refer readers to the FY 2022 IPPS/LTCH PPS final rule for a
                summary of public comments (86 FR 45408). This measure reports the
                hospital-level risk-standardized improvement rate (RSIR) in patient-
                reported outcomes (PROs) following elective primary THA/TKA for
                Medicare FFS beneficiaries aged 65 years and older. Substantial
                clinical improvement is measured by achieving a pre-defined improvement
                in score on one of the two validated joint-specific PRO instruments
                measuring hip or knee pain and functioning: (1) The Hip dysfunction and
                Osteoarthritis Outcome Score for Joint Replacement (HOOS, JR)
                [[Page 63852]]
                for completion by THA recipients; and (2) the Knee injury and
                Osteoarthritis Outcome Score for Joint Replacement (KOOS, JR) for
                completion by TKA recipients. Improvement is measured from the
                preoperative assessment (data collected 90 to 0 days before surgery) to
                the postoperative assessment (data collected 300 to 425 days following
                surgery). Improvement scores are risk adjusted to account for
                differences in patient case mix. Potential non-response bias in measure
                scores due to the voluntary nature of PROs is incorporated in the
                measure calculation with stabilized inverse probability weighting based
                on likelihood of response.
                 Currently, the volume of THA and TKA procedures performed is lower
                among HOPDs than in the inpatient setting. Given the relatively recent
                removal of TKA and THA from the IPO list, we expect that the volume of
                THA and TKA procedures will continue to increase in HOPDs, and that
                significant numbers of Medicare beneficiaries 65 and older will
                potentially undergo these procedures in the outpatient setting in
                future years.
                 We recognize that potential future adoption and implementation of a
                respecified version of the THA/TKA PRO-PM in the Hospital OQR Program
                would require sufficient numbers of procedures for each measured HOPD
                to ensure a reliable measure score. Additionally, implementing a THA/
                TKA PRO-PM would require providers to successfully collect pre- and
                post-operative PRO data for each procedure. Specifically, the inpatient
                THA/TKA PRO-PM discussed in the FY 2022 IPPS/LTCH PPS proposed rule
                would require a minimum of 25 cases with completed pre- and post-
                operative PRO data per hospital to ensure a reliable measure score. For
                more details on the inpatient THA/TKA PRO-PM, we refer readers to the
                FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25589) and the PROs
                Following Elective Primary Total Hip and/or Total Knee Arthroplasty:
                Hospital-Level Performance Measure--Measure Methodology Report,
                available on the CMS website at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.
                 We will continue to monitor the number of THA and TKA procedures in
                the outpatient setting and when we believe there is a sufficient number
                of such procedures performed in these settings to reliably measure a
                meaningful number of facilities, we may consider expanding the PRO-PM
                to these settings. We also note that, as finalized in the CY 2017 OPPS/
                ASC final rule with comment period (81 FR 79764 through 79771), the
                Hospital OQR Program currently includes a Hospital Visits after
                Hospital Outpatient Surgery (OP-36) measure using claims data, which
                provides facilities with important information on patient outcomes for
                Medicare FFS beneficiaries following surgery at HOPDs and is publicly
                reported on CMS' Care Compare website (https://www.medicare.gov/care-compare/). The measure calculates a facility-specific risk-standardized
                hospital visit ratio within 7 days of hospital outpatient surgery, and
                has as outcomes of interest unplanned hospital admissions, ED visits,
                and observation stays thereby providing valuable quality information as
                these procedures are increasingly conducted as outpatient surgeries.
                 As described in our Meaningful Measures 2.0 Framework, we aim to
                promote better collection and integration of patients' voices by
                developing PRO measures as an additional tool for measuring and
                improving quality. Given the unique challenges and opportunities for
                PRO-PMs for THA and TKA procedures in the outpatient setting, we
                invited public comment on the potential future adoption of a
                respecified version of PRO measures for elective THA/TKA PRO-PM for the
                Hospital OQR Program in the CY 2022 OPPS/ASC proposed rule (86 FR
                42252). Specifically, we invited public comment on the following:
                 Input on the mechanism of PRO data collection and
                submission, including anticipated barriers and solutions to data
                collection and submission.
                 Usefulness of having an aligned set of PRO-PMs across
                settings where elective THA/TKA are performed, that is, hospital
                inpatient setting, hospital outpatient departments, and ASCs for
                patients, providers, and other stakeholders. Specifically, usefulness
                and considerations for a hospital that performs both inpatient and
                outpatient elective THA/TKAs.
                 Considerations unique to THA/TKAs performed in the
                hospital outpatient setting such as the volume of procedures performed
                or the measure cohort, outcome, or risk adjustment approach.
                 We received comments on these topics.
                 Comment: Many commenters supported inclusion of a Risk-Standardized
                Patient Reported Outcomes Measure Following Elective Primary Total Hip
                and/or Total Knee Arthroplasty (THA/TKA) measure in the OQR program. As
                these procedures move from inpatient to outpatient settings, commenters
                noted it was important to monitor quality outcomes and publicly report
                results. Additionally, commenters stated that the proposed measure is
                aligned with patient values, being presented in a manner that is easy
                to understand. Commenters supported use of the HOOS, JR and the KOOS,
                JR as they are a widely used and less burdensome subset of the HOOS and
                KOOS surveys.
                 Response: We thank the commenters for their support of the
                potential future adoption of a respecified version of PRO measures for
                elective THA/TKA PRO-PM for the Hospital OQR Program.
                 Comment: Several commenters expressed concern regarding data
                collection burden. Commenters noted the increasing reporting threshold
                for hospitals voluntary participating in PRO collection in the
                Comprehensive Care for Joint Replacement (CJR) Model made it difficult
                for participants to meet the threshold. These commenters encouraged CMS
                to consider whether a lower rate of response is sufficient for
                measuring performance and asked that CMS cite specific reasons for the
                thresholds. A few commenters also raised concerns about patient burden,
                noting that completing patient-reported outcome surveys is burdensome
                for patients and may compete with other surveys, such as the OAS CAHPS
                Survey. Although commenters felt it was beneficial to have multiple
                options for collecting patient data, one commenter shared that their
                facility still struggled to collect patient-reported outcomes data
                despite using different modes that best fit their patient population.
                 Response: We thank the commenters for their feedback and would like
                to clarify the reporting thresholds. Through the CJR final rules (80 FR
                73273 and 86 FR 23496), we finalized a data submission requirement that
                strategically increased with each performance year. To be successful, a
                hospital needed to submit PRO data for 50 percent or 50 eligible
                procedures in the first year of the Model. By performance year 8,
                hospitals will need to submit PRO data for 90 percent or 500 eligible
                procedures to be successful. The incremental increase over time allows
                hospitals to gradually build up their infrastructure and processes for
                collecting and storing data. While patient-reported outcome-based
                performance measures require providers to integrate data collection
                into clinical workflows, this integration provides opportunity for PROs
                to inform clinical decision making and benefit patients by
                [[Page 63853]]
                engaging them in discussions about potential outcomes.
                 We do not expect this PRO-PM to contribute to survey fatigue or to
                negatively impact other PRO-PMs. The Patient-Reported Outcome Measure
                (PROM) instruments used to calculate pre- and postoperative scores for
                this THA/TKA PRO-PM were carefully selected, with extensive stakeholder
                input, to be low burden for patients. We appreciate the feedback
                regarding challenges experienced in collecting PRO data; we encourage
                providers to incorporate data collection approaches that make PRO
                survey responses available to patients and providers for clinical
                decision making, for increased patient investment in PRO response.
                 Comment: A few commenters recommended using the American Joint
                Replacement Registry (AJRR) for implementation, citing that
                participation in the AJRR is a requirement for certification as a
                center of excellence by The Joint Commission. The commenters felt that
                using the AJRR would allow facilities to pool their resources for
                lowest costs. They also noted that as the AJRR incorporates Medicare
                Administrative Data for populating the database, its use would allow
                for robust risk adjustment, improved research, and independent
                reporting for participating facilities to normalize quality. Commenters
                noted that implementation through the AJRR infrastructure would be
                efficient for providers while minimizing duplication of reporting.
                 Response: We appreciate commenters' recommendations regarding the
                AJRR and we will consider the feasibility and appropriateness of using
                this registry for future implementation if we proceed with development
                of an HOPD THA/TKA PRO-PM. We agree that leveraging existing resources,
                such as registries, will help decrease data collection burden.
                 Comment: A few commenters provided feedback on differences related
                to having a joint replacement in the inpatient versus the outpatient
                setting. Specifically, these commenters noted that patients who undergo
                joint replacement in the inpatient setting tend to be sicker and more
                complex, which could result in an inappropriate comparison of quality
                amongst inpatient settings and outpatient settings. Commenters
                encouraged CMS to take this into consideration when developing a risk-
                adjustment strategy. Commenters also noted that caregiver support plays
                an important role in patient outcomes for procedures performed in the
                outpatient setting. Commenters also noted that it may be challenging
                for outpatient facilities to meet the minimum reporting threshold. To
                alleviate cohort concerns, one commenter encouraged CMS to consider
                implementing this measure with a three-year measurement period and to
                include all patients ages 18 and older.
                 Response: We thank commenters for their insights on the differences
                between inpatient and outpatient settings. With regards to facilities'
                ability to meet the reporting threshold, we agree that there must be a
                sufficient number of procedures in these settings to reliably measure a
                meaningful number of facilities, and we anticipate an increase in the
                number of THA/TKA procedures performed in the outpatient setting in
                future years. We will continue to monitor the cohort specification
                (including age) and the number of procedures captured during the
                specified measurement period to ensure meaningful measure results can
                be calculated. We appreciate the commenters' insight on the differences
                in patient complexity across different care settings, the need for
                having support at home, and the impact it may have on risk adjustment.
                We will continue to take this into consideration if we move forward
                with respecifying the measure for use in the HOPD setting. Any
                proposals to implement the measure will be announced through future
                rulemaking.
                 Comment: A few commenters expressed concern about the risk
                adjustment strategy for the measure. Commenters noted the risk
                adjustment model does not include a variable for Medicare dual
                eligibility status, nor does it take into consideration a patient's
                spoken language and other social risk factors that could impact survey
                completion. Commenters noted that PRO-PMs have the potential to provide
                valuable insights into health care disparities related to lower
                extremity arthroplasty and encouraged CMS to further stratify the
                results by additional social risk factors.
                 Response: We thank the commenters for their concern and would like
                to clarify the risk adjustment approach. For the development of the
                hospital measure, we assessed the impact of Medicare dual eligibility,
                the Agency for Health Research and Quality (AHRQ) socioeconomic status
                (SES) Index (socioeconomic status), and non-white race. The addition of
                each of these three social risk variables provided no statistically
                significant change to the risk model performance, variable
                coefficients, or the model outcome. As such, these variables were not
                included in the hospital risk model. These social risk variables were,
                however, statistically significantly associated with response to PRO
                surveys--whether patient-reported outcomes were obtained for patients
                undergoing primary elective THA/TKA--and so were included in the
                calculation of stabilized inverse probability weights used to account
                for potential response-bias. These variables, along with other social
                risk variables that may become available over time, will be reassessed
                as part of the respecification process if we proceed with developing an
                HOPD version of the measure as part of CMS' commitment to improving
                health equity.
                 Comment: A few commenters provided feedback for developing and
                implementing patient-reported outcomes. One commenter encouraged CMS to
                collect multi-stakeholder input throughout the development process. In
                addition to the KOOS, one commenter recommended the visual analog scale
                (VAS), and mobility, self-care, usual activities, pain/discomfort, and
                anxiety/depression (EQ-5D-3L) scales. Lastly, a commenter recommended
                incentivized, phased implementation as hospitals who were not part of
                the CJR Model will need to build up infrastructure to support patient-
                reported outcome measures.
                 Response: We thank commenters for their feedback. As part of the
                inpatient hospital measure development process, the measure developer
                engaged extensively with technical expert panels and patient working
                groups to obtain feedback on key measure decisions. We thank the
                commenter for their suggestion to utilize an incentivized, phased
                implementation approach. We will continue to engage with stakeholders
                around these issues of additional survey instruments, phased
                implementation, and infrastructure improvements during any future
                development or implementation of an outpatient version of this measure,
                which would also be announced through notice and comment rulemaking.
                 Comment: A few commenters recommended measuring patient-reported
                outcomes at the provider-level as the provider has a strong influence
                on outcomes and a more direct relationship with the patient.
                 Response: We thank commenters for their recommendation to measure
                patient-reported outcomes at the clinician-level. Any future proposals
                to implement such a measure will be announced through notice and
                comment rulemaking.
                 Comment: A few commenters did not support the inclusion of a Risk-
                Standardized Patient Reported Outcomes Measure Following Elective
                [[Page 63854]]
                Primary THA/TKA measure in the OQR program. They cited the burden of
                collecting patient-reported outcomes data as the reason for not
                supporting this measure. Another commenter noted that although the
                procedures were removed from the IPO List, they did not agree that
                there will be a shift to the HOPD setting. The commenter questioned the
                validity of patient-reported outcomes data, noting that because a
                patient did not improve as he/she expected after surgery does not mean
                the patient did not receive quality care from the hospital. The
                commenter stated that determining clinical improvement after joint
                replacement is best determined by the orthopedist who is caring for the
                patient both pre- and post-procedure.
                 Response: We reiterate that the PROM instruments that are used to
                calculate pre- and postoperative scores for this THA/TKA PRO-PM were
                carefully selected, with extensive stakeholder input, to be low burden
                for patients and to capture information clinicians deemed essential to
                understanding response to THA/TKA. We believe that patient-reported
                outcome-based performance measures provide critical quality information
                and reflect outcomes that are meaningful to patients. Between January
                1, 2018 and September 30, 2020, 264,997 total hip and/or total knee
                arthroplasties were performed in the outpatient setting. Developing a
                patient-reported outcomes measure for the Hospital OQR program would
                ensure these procedures benefit patients undergoing surgery by
                achieving meaningful improvement. The hospital-level measure was
                developed with considerable input from stakeholders including patients
                and orthopedic surgeons. In addition to the patient-reported outcome-
                based performance measure, CMS publicly reports results related to
                hospital readmission and complications following these procedures in
                the inpatient setting and the Hospital Visits after Hospital Outpatient
                Surgery (OP-36) measure covers these procedures in the outpatient
                setting.
                 Comment: One commenter recommended CMS consider measures that
                evaluate patient and caregiver engagement in decision-making, outcome
                measures that assess pain and functional status 3, 6, and 9-months
                post-procedure, and timely public reporting of comparative quality
                information about surgeons, surgical facilities, rehabilitation
                services, and home health services.
                 Response: We appreciate the commenter's recommendations regarding
                patient engagement, follow-up period, and public reporting. We engaged
                patients and patient advocates throughout the development of the
                Hospital-Level THA/TKA PRO-PM (NQF #3559). We will continue to engage
                patients and patient advocates, as appropriate, if this measure is
                respecified for the HOPD setting. We agree that timely public reporting
                of quality information is important for informed patient decision-
                making.
                 We appreciate all of the comments submitted in response to this
                request for comment. These comments may inform future policy
                development.
                c. Request for Comment on Potential Future Efforts To Address Health
                Equity in the Hospital OQR Program
                (1) Introduction and Expansion of the CMS Disparity Methods to Hospital
                OQR Program Setting
                 Significant and persistent inequities in health care outcomes exist
                in the U.S.\365\ Belonging to a racial or ethnic minority group; living
                with a disability; being a member of the lesbian, gay, bisexual,
                transgender, and queer (LGBTQ+) community; living in a rural area; and
                being near or below the poverty level, are often associated with worse
                health outcomes.366 367 368 369 370 371 372 373 Such
                disparities in health outcomes are the result of number of factors,
                including social, economic, and environmental factors, but importantly
                for CMS programs, although not the sole determinant, negative
                experiences, poor access, and provision of lower quality health care
                can contribute to health inequities. For instance, numerous studies
                have shown that among Medicare beneficiaries, racial and ethnic
                minority individuals often receive lower quality of care, report lower
                experiences of care, and experience more frequent hospital readmissions
                and procedural complications.374 375 376 377 378 379
                Readmission rates for common conditions in the Hospital Readmissions
                Reduction Program (HRRP) are higher for Black Medicare beneficiaries
                and higher for Hispanic Medicare beneficiaries with congestive heart
                failure and acute myocardial infarction.380 381 382 383 384
                Studies have also shown that African Americans are significantly more
                likely than White Americans to die prematurely from heart disease and
                stroke.\385\ The COVID-19 pandemic has further highlighted
                [[Page 63855]]
                many of these longstanding health inequities with higher rates of
                infection, hospitalization, and mortality among Black, Latino, and
                Indigenous and Native American persons relative to White
                persons.386 387 As noted by the CDC, ``long-standing
                systemic health and social inequities have put many people from racial
                and ethnic minority groups at increased risk of getting sick and dying
                from COVID-19.'' \388\ One important strategy for addressing these
                important inequities is by improving data collection to allow for
                better measurement and reporting on equity across our programs and
                policies.
                ---------------------------------------------------------------------------
                 \365\ United States Department of Health and Human Services.
                ``Healthy People 2020: Disparities. 2014.'' Available at: https://www.healthypeople.gov/2020/about/foundation-health-measures/Disparities.
                 \366\ Joynt KE, Orav E, Jha AK. Thirty-Day Readmission Rates for
                Medicare Beneficiaries by Race and Site of Care. JAMA.
                2011;305(7):675-681.
                 \367\ Lindenauer PK, Lagu T, Rothberg MB, et al. Income
                Inequality and 30 Day Outcomes After Acute Myocardial Infarction,
                Heart Failure, and Pneumonia: Retrospective Cohort Study. British
                Medical Journal. 2013;346.
                 \368\ Trivedi AN, Nsa W, Hausmann LRM, et al. Quality and Equity
                of Care in U.S. Hospitals. New England Journal of Medicine.
                2014;371(24):2298-2308.
                 \369\ Polyakova, M., et al. Racial Disparities In Excess All-
                Cause Mortality During The Early COVID-19 Pandemic Varied
                Substantially Across States. Health Affairs. 2021; 40(2): 307-316.
                 \370\ Rural Health Research Gateway. Rural Communities: Age,
                Income, and Health Status. Rural Health Research Recap. November
                2018. Available at: https://www.ruralhealthresearch.org/assets/2200-8536/rural-communities-age-income-health-status-recap.pdf.
                 \371\ https://www.minorityhealth.hhs.gov/assets/PDF/Update_HHS_Disparities_Dept-FY2020.pdf.
                 \372\ www.cdc.gov/mmwr/volumes/70/wr/mm7005a1.htm.
                 \373\ Poteat TC, Reisner SL, Miller M, Wirtz AL. COVID-19
                Vulnerability of Transgender Women With and Without HIV Infection in
                the Eastern and Southern U.S. Preprint. medRxiv.
                2020;2020.07.21.20159327. Published 2020 Jul 24. doi:10.1101/
                2020.07.21.20159327.
                 \374\ Martino, SC, Elliott, MN, Dembosky, JW, Hambarsoomian, K,
                Burkhart, Q, Klein, DJ, Gildner, J, and Haviland, AM. Racial,
                Ethnic, and Gender Disparities in Health Care in Medicare Advantage.
                Baltimore, MD: CMS Office of Minority Health. 2020.
                 \375\ Guide to Reducing Disparities in Readmissions. CMS Office
                of Minority Health. Revised August 2018. Available at: https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/OMH_Readmissions_Guide.pdf.
                 \376\ Singh JA, Lu X, Rosenthal GE, Ibrahim S, Cram P. Racial
                disparities in knee and hip total joint arthroplasty: An 18-year
                analysis of national Medicare data. Ann Rheum Dis. 2014
                Dec;73(12):2107-15.
                 \377\ Rivera-Hernandez M, Rahman M, Mor V, Trivedi AN. Racial
                Disparities in Readmission Rates among Patients Discharged to
                Skilled Nursing Facilities. J Am Geriatr Soc. 2019 Aug;67(8):1672-
                1679.
                 \378\ Joynt KE, Orav E, Jha AK. Thirty-Day Readmission Rates for
                Medicare Beneficiaries by Race and Site of Care. JAMA.
                2011;305(7):675-681.
                 \379\ Tsai TC, Orav EJ, Joynt KE. Disparities in surgical 30-day
                readmission rates for Medicare beneficiaries by race and site of
                care. Ann Surg. Jun 2014;259(6):1086-1090.
                 \380\ Rodriguez F, Joynt KE, Lopez L, Saldana F, Jha AK.
                Readmission rates for Hispanic Medicare beneficiaries with heart
                failure and acute myocardial infarction. Am Heart J. Aug
                2011;162(2):254-261 e253.
                 \381\ Centers for Medicare and Medicaid Services. Medicare
                Hospital Quality Chartbook: Performance Report on Outcome Measures;
                2014.
                 \382\ Guide to Reducing Disparities in Readmissions. CMS Office
                of Minority Health. Revised August 2018. Available at: https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/OMH_Readmissions_Guide.pdf.
                 \383\ Prieto-Centurion V, Gussin HA, Rolle AJ, Krishnan JA.
                Chronic obstructive pulmonary disease readmissions at minority-
                serving institutions. Ann Am Thorac Soc. Dec 2013;10(6):680-684.
                 \384\ Joynt KE, Orav E, Jha AK. Thirty-Day Readmission Rates for
                Medicare Beneficiaries by Race and Site of Care. JAMA.
                2011;305(7):675-681.
                 \385\ HHS. Heart disease and African Americans. (March 29,
                2021). https://www.minorityhealth.hhs.gov/omh/browse.aspx?lvl=4&lvlid=19.
                 \386\ https://www.cms.gov/files/document/medicare-covid-19-data-snapshot-fact-sheet.pdf.
                 \387\ Ochieng N, Cubanski J, Neuman T, Artiga S, and Damico A.
                Racial and Ethnic Health Inequities and Medicare. Kaiser Family
                Foundation. February 2021. Available at: https://www.kff.org/medicare/report/racial-and-ethnic-health-inequities-and-medicare/.
                 \388\ https://www.cdc.gov/coronavirus/2019-ncov/community/health-equity/race-ethnicity.html.
                ---------------------------------------------------------------------------
                 We are committed to achieving equity in health care outcomes for
                our beneficiaries by supporting providers in quality improvement
                activities to reduce health inequities, enabling them to make more
                informed decisions, and promoting provider accountability for health
                care inequities.\389\ For the purposes of the RFI in the CY 2022 OPPS/
                ASC PPS proposed rule (86 FR 42232), we used a definition of equity
                established in Executive Order 13985, issued on January 25, 2021, as
                ``the consistent and systematic fair, just, and impartial treatment of
                all individuals, including individuals who belong to underserved
                communities that have been denied such treatment, such as Black,
                Latino, and Indigenous and Native American persons, Asian Americans and
                Pacific Islanders and other persons of color; members of religious
                minorities; LGBTQ+ persons; persons with disabilities; persons who live
                in rural areas; and persons otherwise adversely affected by persistent
                poverty or inequality.'' \390\ We noted that this definition was
                recently established and provides a useful, common definition for
                equity across different areas of government, although numerous other
                definitions of equity exist.
                ---------------------------------------------------------------------------
                 \389\ https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/Downloads/CMS-Quality-Strategy.pdf.
                 \390\ https://www.federalregister.gov/documents/2021/01/25/2021-01753/advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government.
                ---------------------------------------------------------------------------
                 Our ongoing commitment to closing the equity gap in CMS quality
                programs is demonstrated by a portfolio of programs aimed at making
                information on the quality of health care providers and services,
                including disparities, more transparent to consumers and providers. The
                CMS Equity Plan for Improving Quality in Medicare outlines a path to
                equity which aims to support Quality Improvement Network Quality
                Improvement Organizations (QIN-QIOs); Federal, state, local, and tribal
                organizations; providers; researchers; policymakers; beneficiaries and
                their families; and other stakeholders in activities to achieve health
                equity.\391\
                ---------------------------------------------------------------------------
                 \391\ Centers for Medicare & Medicaid Services Office of
                Minority Health. The CMS Equity Plan for Improving Quality in
                Medicare. 2015-2021. Available at: https://www.cms.gov/About-CMS/Agency-Information/OMH/OMH_Dwnld-CMS_EquityPlanforMedicare_090615.pdf.
                ---------------------------------------------------------------------------
                 We refer readers to the FY 2022 IPPS/LTCH PPS proposed rule (86 FR
                25070) and the FY 2022 IPPS/LTCH PPS final rule (86 FR 42252) which
                summarizes our existing initiatives aimed at closing the equity gap in
                outcomes for Medicare beneficiaries, including the CMS Disparity
                Methods. The methods were finalized in the FY 2018 IPPS/LTCH PPS final
                rule (82 FR 38405 through 38407) and the FY 2020 IPPS/LTCH PPS final
                rule (84 FR 42496 through 42500), and results are currently reported
                confidentially across six quality measures in the HRRP stratified by
                dual eligibility status. As described in the FY 2022 IPPS/LTCH PPS
                proposed rule (86 FR 25070) and the FY 2022 IPPS/LTCH PPS final rule
                (86 FR 42252), we are considering further expanding the confidential
                reporting to include measurement of racial and ethnic disparities for
                one measure in the Hospital IQR Program, the Hospital-Wide All-Cause
                Unplanned Readmission Measure (NQF #1789).
                 We have developed two complementary disparity methods to report
                stratified measure results for outcome measures. The first method (the
                Within-Hospital Disparity Method) promotes quality improvement by
                calculating differences in outcome rates among patient groups within a
                hospital while accounting for their clinical risk factors. This method
                also allows for a comparison of the magnitude of disparity across
                hospitals at a given point in time, so hospitals could assess how well
                they are closing disparity gaps compared to other hospitals. The second
                methodological approach (the Across-Hospital Disparity Method) is
                complementary to the first method and assesses hospitals' outcome rates
                for patients with a given risk factor, across facilities, allowing for
                a comparison among hospitals on their performance caring for their
                patients with social risk factors. These methods were first
                confidentially reported for the inpatient setting in 2019 for the
                Pneumonia Readmission (NQF #0506) and Pneumonia Mortality (NQF #0468)
                measures, stratified dual eligibility for Medicare and Medicaid, and
                confidential reporting for hospitals has since expanded to include
                additional measures. For additional information on the two disparity
                methods, we refer readers to the FY 2018 IPPS/LTCH PPS final rule (82
                FR 38405 through 38407) and the 2020 Disparity Methods Updates and
                Specifications Report.\392\ As discussed in the FY 2019 IPPS/LTCH PPS
                final rule (83 FR 41599) and the FY 2022 IPPS/LTCH PPS proposed rule
                (86 FR 25070), the two disparity methods do not place any additional
                collection or reporting burden on hospitals because social risk factor
                data are readily available in claims data.
                ---------------------------------------------------------------------------
                 \392\ https://qualitynet.cms.gov/inpatient/measures/disparity-methods/methodology.
                ---------------------------------------------------------------------------
                 We received high-level comments on CMS' larger aforementioned plans
                to address health equity in quality reporting programs.
                 Comment: Many comments provided general support for efforts to
                improve equity through quality improvement programs and payment
                policies but not specific to the measurement considerations in the OQR
                and ASCQR RFIs. Commenters had varied recommendations for advancing
                equity through measurement and payment programs. Comments included
                statements that while there are numerous social risk factors, it is
                critical to prioritize equity as an emergent issue for Black, Hispanic/
                Latino, Indigenous and Asian communities and noted that systemic
                racism, not race, is a social risk factor.
                 Commenters recommended expanding the portfolio of programs and
                resources to support the related work of health care providers
                including data analyses and quality improvement activities to bridge
                hospital-level efforts with post-acute and community-based programs and
                models to close health equity gaps. A commenter noted that there are
                inadequate healthcare-based solutions for addressing social
                determinants of health. Another stated that working to solve the
                problems requires federal leadership, and a major aspect of that
                leadership needs to be addressing the inequities in resources these
                hospitals experience that have helped lead to the health care
                disparities in the communities in question. One commenter recommended
                that CMS build programs for addressing inequities from existing efforts
                from the public and private sector.
                [[Page 63856]]
                 A number of commenters recommended that CMS engage in a robust
                stakeholder engagement process to discuss the input that was received.
                 Finally, on the broader use of measures to address health equity,
                one commenter stated CMS should not use equity health care quality
                metrics to rank hospitals on health equity because it could create
                competition rather than collaboration, while another stated that it
                would be helpful to see the disparities reported at the national level.
                 Response: We appreciate the feedback provided by the commenters
                regarding additional approaches to improving health equity outside of
                the specific topics covered in our OQR and ASCQR health equity RFIs. We
                will take commenters' feedback into consideration in future policy
                development.
                 In the CY 2022 OPPS/ASC proposed rule (86 FR 42252), we sought
                comment on expanding our efforts to provide results of the disparity
                methods to promote health equity and improve healthcare quality.
                Specifically, we sought comment on the idea of stratifying the
                performance results in the hospital outpatient setting. We have
                identified six priority measures included in the Hospital OQR Program
                as candidate measures for disparities reporting stratified by dual
                eligibility:
                 MRI Lumbar Spine for Low Back Pain (OP-8);
                 Abdomen CT--Use of Contract Material (OP-10);
                 Cardiac Imaging for Preoperative Risk Assessment for Non-
                Cardiac Low Risk Surgery (OP-13);
                 Facility 7-Day Risk-Standardized Hospital Visit Rate after
                Outpatient Colonoscopy (OP-32);
                 Admissions and ED Visits for Patients Receiving Outpatient
                Chemotherapy (OP-35); and
                 Hospital Visits after Hospital Outpatient Surgery (OP-36).
                 To identify these measures, we considered evidence of existing
                disparities, procedure volume, and statistical reliability. For more
                information about these measures, we refer readers to the Hospital
                Outpatient Quality Reporting Specifications Manual available on the
                QualityNet website.\393\ We sought public comment on potential future
                confidential reporting of the six aforementioned measures, as well as
                other potential measures described in section XV.B.4. of the CY 2022
                OPPS/ASC proposed rule (86 FR 42238) and of this final rule with
                comment period, stratified by dual eligibility status, if technically
                feasible, adequately representative, and statistically reliable.
                ---------------------------------------------------------------------------
                 \393\ https://qualitynet.cms.gov/outpatient/specifications-manuals.
                ---------------------------------------------------------------------------
                 The Within- and Across-Facility Disparity Methods would be applied
                to the selected measures. The methods offer two different, but
                complementary metrics of a facility's disparity. The Within-Facility
                method reports a difference in performance for patient populations at a
                specific facility (where a score of zero indicates equal outcomes),
                while the Across-Facility method reports a risk-standardized rate for
                the measure for only the target population, which shows facilities how
                they compare to the national average.
                (2) Additional Social Risk Factors
                 We are committed to advancing health equity by improving data
                collection to better measure and analyze disparities across programs
                and policies.\394\ As we described earlier, we have been considering,
                among other things, expanding our efforts to stratify data by
                additional social risk factors and demographic variables, optimizing
                the ease-of-use of the results, enhancing public transparency of equity
                results, and building towards provider accountability for health
                equity. Following potential confidential reporting using dual
                eligibility as an indicator of social risk, we are exploring the
                possibility of further expanding stratified reporting to include race
                and ethnicity.
                ---------------------------------------------------------------------------
                 \394\ Centers for Medicare & Medicaid Services. CMS Quality
                Strategy. 2016. Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/Downloads/CMS-Quality-Strategy.pdf.
                ---------------------------------------------------------------------------
                 We refer readers to the ``Closing the Health Equity Gap in CMS
                Hospital Quality Programs'' section of the FY 2022 IPPS/LTCH PPS
                proposed rule which summarizes the existing challenges in accurately
                determining race and ethnicity in our administrative data, and the need
                for using advanced statistical methods for enhancing the accuracy of
                race and ethnicity disparity estimates (86 FR 25554). We also refer
                readers to the FY 2022 IPPS/LTCH PPS final rule for a summary of public
                comments (86 FR 45349).
                 As we stated in the ``Closing the Health Equity Gap in CMS Hospital
                Quality Programs'' section of the FY 2022 IPPS/LTCH PPS proposed rule
                (86 FR 25554), because development of sustainable and consistent
                programs to collect demographic information related to health
                disparities, such as race and ethnicity, can be considerable
                undertakings, we recognize that another method to identify more
                accurate race and ethnicity disparities is needed in the short term. In
                working with our contractors, two algorithms have been developed to
                indirectly estimate the race and ethnicity of Medicare beneficiaries
                (as described further in the next section). We believe that using
                indirect estimation can help to overcome some of the current
                limitations of demographic information and enable timelier reporting of
                equity results until longer term collaborations to improve demographic
                data quality across the health care sector materialize. The use of
                indirectly estimated race and ethnicity for conducting stratified
                reporting does not place any additional collection or reporting burdens
                on facilities as these data are derived using existing administrative
                and census-linked data.
                 Indirect estimation relies on a statistical imputation method for
                inferring a missing variable or improving an imperfect administrative
                variable using a related set of information that is more readily
                available.\395\ Indirectly estimated data are most commonly used at the
                population level (such as the hospital or health plan-level) where
                aggregated results form a more accurate description of the population
                than existing, imperfect data sets. For missing race and ethnicity
                information, these methods use a combination of other data sources
                which estimate self-identified race and ethnicity, such as language
                preference, information about race and ethnicity in our administrative
                records, first and last names matched to validated lists of names
                correlated to specific national origin groups, and the racial and
                ethnic composition of the surrounding neighborhood. Indirect estimation
                has been used in other settings to support population-based equity
                measurement when self-identified data are not available.\396\
                ---------------------------------------------------------------------------
                 \395\ 2020 Disparity Methods Updates and Specifications Report.
                Available at: https://qualitynet.cms.gov/inpatient/measures/disparity-methods/methodology.
                 \396\ Institute of Medicine. 2009. Race, Ethnicity, and Language
                Data: Standardization for Health Care Quality Improvement.
                Washington, DC: The National Academies Press. Available at: https://www.ahrq.gov/sites/default/files/publications/files/iomracereport.pdf.
                ---------------------------------------------------------------------------
                 As described previously, we have previously supported the
                development of two such methods of indirect estimation of race and
                ethnicity of Medicare beneficiaries. One indirect estimation approach
                developed by our contractor uses Medicare administrative data, first
                name and surname matching, derived from the U.S. Census and other
                sources, with beneficiary language preference, state of residence, and
                the
                [[Page 63857]]
                source of the race and ethnicity code in Medicare administrative data
                to reclassify some beneficiaries as Hispanic or Asian/Pacific Islander
                (API).\397\ In recent years, we have also worked with another
                contractor to develop a new approach, the Medicare Bayesian Improved
                Surname Geocoding (MBISG), which combines Medicare administrative data,
                first and surname matching, geocoded residential address linked to the
                2010 U.S. Census data, applying both Bayesian updating and multinomial
                logistic regression to estimate the probability of belonging to each of
                the six racial/ethnic groups.\398\
                ---------------------------------------------------------------------------
                 \397\ Bonito AJ, Bann C, Eicheldinger C, Carpenter L. Creation
                of New Race-Ethnicity Codes and Socioeconomic Status (SES)
                Indicators for Medicare Beneficiaries. Final Report, Sub-Task 2.
                (Prepared by RTI International for the Centers for Medicare and
                Medicaid Services through an interagency agreement with the Agency
                for Healthcare Research and Policy, under Contract No. 500-00-0024,
                Task No. 21) AHRQ Publication No. 08-0029-EF. Rockville, MD, Agency
                for Healthcare Research and Quality. January 2008.
                 \398\ Haas, A, Elliott, MN, Dembosky, JW, et al. Imputation of
                race/ethnicity to enable measurement of HEDIS performance by race/
                ethnicity. Health Serv Res. 2019; 54: 13-23. https://doi.org/10.1111/1475-6773.13099.
                ---------------------------------------------------------------------------
                 The MBISG model is currently used to conduct the national,
                contract-level, stratified reporting of Medicare Part C & D performance
                data for Medicare Advantage Plans by race and ethnicity.\399\
                Validation testing reveals concordances between 0.88-0.95 between
                indirectly estimated and self-reported race and ethnicity among those
                who identify as White, Black, Hispanic, and API for the MBISG version
                2.0 and concordances with self-reported race and ethnicity of 0.96-0.99
                for these same groups for MBISG version 2.1.400 401 402 The
                algorithms under consideration are considerably less accurate for
                individuals who self-identify as American Indian/Alaskan Native or
                multiracial.\403\ Indirect estimation is a statistically reliable
                approach for calculating aggregate results for groups of individuals
                (such as the facility-level) and is not intended, nor being considered,
                as an approach for predicting the race and ethnicity of individuals.
                ---------------------------------------------------------------------------
                 \399\ https://www.cms.gov/About-CMS/Agency-Information/OMH/research-and-data/statistics-and-data/stratified-reporting.
                 \400\ The Office of Minority Health (2020). Racial, Ethnic, and
                Gender Disparities in Health Care in Medicare Advantage, The Centers
                for Medicare and Medicaid Services, (pg vii). https://www.cms.gov/About-CMS/Agency-Information/OMH/research-and-data/statistics-and-data/stratified-reporting.
                 \401\ https://www.cms.gov/About-CMS/Agency-Information/OMH/research-and-data/statistics-and-data/stratified-reporting.
                 \402\ We note for readers that the statistics reported for the
                MBISG 2.0 model in the CY 2020 OPPS/ASC proposed rule were
                incorrectly described and should be disregarded. In this final rule
                with comment period we correct this sentence to read as follows:
                ``With respect to Asian and Pacific Islander, Black, Hispanic, and
                White Medicare beneficiaries, the MBISG 2.1 has 96-99 percent
                concordance with what Medicare beneficiaries themselves report when
                allowed a full set of response options.'' Source: MBISG 2.1
                validation results performed under contract #GS-10F-0012Y/HHSM-500-
                2016-00097G. Pending public release of the 2021 Part C and D
                Performance Data Stratified by Race, Ethnicity, and Gender Report,
                available at: https://www.cms.gov/About-CMS/Agency-Information/OMH/research-and-data/statistics-and-data/stratified-reporting.
                 \403\ Haas, A, Elliott, MN, Dembosky, JW, et al. Imputation of
                race/ethnicity to enable measurement of HEDIS performance by race/
                ethnicity. Health Serv Res. 2019; 54: 13-23. https://doi.org/10.1111/1475-6773.13099.
                ---------------------------------------------------------------------------
                 Despite the high degree of accuracy of the indirect estimation
                algorithms under consideration there remains the small risk of
                introducing measurement bias. For example, if the indirect estimation
                is not as accurate in correctly estimating race and ethnicity in
                certain geographies or populations it could lead to some bias in the
                method results. Such bias might result in slight overestimation or
                underestimation of the quality of care received by a given group. We
                believe this risk of bias is considerably less than would be expected
                if stratified reporting were conducted using the race and ethnicity
                currently contained in our administrative data. Indirect estimation of
                race and ethnicity is envisioned as an intermediate step, filling the
                pressing need for more accurate demographic information for the
                purposes of exploring inequities in service delivery, while allowing
                newer approaches, as described in the next section, for improving
                demographic data collection to progress. We are interested in learning
                more about, and soliciting comments about, the potential benefits and
                challenges associated with measuring facility equity using indirect
                estimation to enhance existing administrative data quality for race and
                ethnicity until self-reported information is sufficiently available.
                (a) Improving Demographic Data Collection
                 Stratified facility-level reporting using indirectly estimated race
                and ethnicity would represent an important advance in our ability to
                provide accurate equity reports to facilities. However, self-reported
                race and ethnicity data remain the gold standard for classifying an
                individual according to race or ethnicity. The CMS Quality Strategy
                outlines our commitment to strengthening infrastructure and data
                systems by ensuring that standardized demographic information is
                collected to identify disparities in health care delivery
                outcomes.\404\ Collection and sharing of a standardized set of social,
                psychological, and behavioral data by hospitals, including race and
                ethnicity, using electronic data definitions which permit nationwide,
                interoperable health information exchange, can significantly enhance
                the accuracy and robustness of our equity reporting.\405\ This could
                potentially include expansion of stratified reporting to additional
                social risk factors, such as language preference and disability status,
                where accuracy of administrative data is currently limited. We are
                mindful that additional resources, including data collection and staff
                training may be necessary to ensure that conditions are created whereby
                all patients are comfortable answering demographic questions, and that
                individual preferences for non-response are maintained.
                ---------------------------------------------------------------------------
                 \404\ Centers for Medicare & Medicaid Services. CMS Quality
                Strategy. 2016. Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/Downloads/CMS-Quality-Strategy.pdf.
                 \405\ The Office of the National Coordinator for Health
                Information Technology. United State Core Data for Interoperability
                Draft Version 2. 2021. Available at: https://www.healthit.gov/isa/sites/isa/files/2021-01/Draft-USCDI-Version-2-January-2021-Final.pdf.
                ---------------------------------------------------------------------------
                 We note that facilities participating in the Medicare Promoting
                Interoperability Program must use CEHRT that has been certified to the
                2015 Edition of health IT certification criteria as defined at 45 CFR
                170.102. As noted earlier, the certification criterion for Demographics
                under the 2015 Edition (45 CFR 170.315(a)(5)) supports collection of
                data using both the OMB standards for collecting data on race and
                ethnicity as well as the more granular ``Race & Ethnicity--CDC''
                standard. In the 2020 ONC 21st Century Cures Act final rule, ONC also
                adopted a new framework for the core data set which certified health IT
                products must exchange, called the USCDI (85 FR 25669). The USCDI
                incorporates the demographic data and associated code sets finalized
                for the 2015 Edition certification criteria.
                 As noted previously, ONC also finalized a certification criterion
                in the 2015 Edition which supports a certified health IT product's
                ability to collect social, psychological, and behavioral data (45 FR
                170.315(a)(15)). However, this functionality is not included as part of
                the CEHRT required by the Medicare Promoting Interoperability Program.
                While the technical functionality exists to achieve the gold standard
                of data collection, we understand challenges and barriers exist in
                using the technologies with these capabilities.
                 We solicited comment on current data collection practices by
                facilities to
                [[Page 63858]]
                capture demographic data elements (such as race, ethnicity, sex, sexual
                orientation and gender identity (SOGI), primary language, and
                disability status). Further, we are interested in potential challenges
                facing facility collection, on the day of service, of a minimum set of
                demographic data elements in alignment with national data collection
                standards (such as the standards finalized by the Affordable Care Act)
                \406\ and standards for interoperable exchange (such as the USCDI
                incorporated into certified health IT products as part of the 2015
                Edition of health IT certification criteria).\407\ Advancing data
                interoperability through collection of a minimum set of demographic
                data collection, and incorporation into quality measure specifications,
                has the potential for improving the robustness of the disparity method
                results, potentially permitting reporting using more accurate, self-
                reported information, such as race and ethnicity, and expanding
                reporting to additional dimensions of equity, including stratified
                reporting by disability status.
                ---------------------------------------------------------------------------
                 \406\ https://minorityhealth.hhs.gov/assets/pdf/checked/1/Fact_Sheet_Section_4302.pdf.
                 \407\ https://www.healthit.gov/sites/default/files/2020-08/2015EdCures_Update_CCG_USCDI.pdf.
                ---------------------------------------------------------------------------
                (b) Solicitation of Public Comments
                 In the CY 2022 OPPS/ASC proposed rule (86 FR 42252), we sought
                comment on the possibility of expanding our current disparities methods
                to include reporting by race and ethnicity using indirect estimation.
                We also sought comment on the possibility of facility collection of
                standardized demographic information for the purposes of potential
                future quality reporting and measure stratification to permit more
                robust equity measurement. Additionally, we sought comment on the
                design of a Facility Equity Score for presenting combined results
                across multiple social risk factors and measures, including race/
                ethnicity and disability. Any data pertaining to these areas that are
                recommended for collection for measure reporting for a CMS program and
                potential public disclosure on Care Compare or successor website would
                be addressed through a separate and future notice-and-comment
                rulemaking. We plan to continue working with the Office of the
                Assistant Secretary for Planning and Evaluation, facilities, the
                public, and other key stakeholders on this important issue to identify
                policy solutions that achieve the goals of attaining health equity for
                all beneficiaries and minimizing unintended consequences.
                 Specifically, we invited public comment on the following:
                 The potential future application to the Hospital OQR
                Program measures of the two disparity methods currently used to
                confidentially report stratified measures in HRRP.
                 The possibility of reporting stratified results
                confidentially in Facility-Specific Reports (FSRs) using dual
                eligibility as a proxy for social risk.
                 The possibility of reporting stratified results using dual
                eligibility as the proxy for social risk publicly on Care Compare in
                future years.
                 The potential future application of an algorithm to
                indirectly estimate race and ethnicity to permit stratification of
                measures (in addition to dual-eligibility) for facility-level disparity
                reporting until more accurate forms of self-identified demographic
                information are available.
                 The possibility of facility collection, on the day of
                service, of a minimum set of demographic data using standardized and
                interoperable electronic health record standards.
                 We received comments on these program-specific topics to address
                health equity.
                 Comment: Many commenters expressed support for the potential future
                application of the two disparity methods to the Hospital OQR Program,
                noting appreciation for CMS' recognition of the importance of closing
                the health equity gap. Commenters noted the importance of addressing
                health equity gaps in the outpatient settings and of providing
                hospitals with detailed data on their patient's dual eligibility status
                to enable tracking as procedures shift from acute care to outpatient. A
                few commenters expressed support for confidential reporting of
                stratified results in facility specific reports as it would result in
                actionable data for quality improvement. Several commenters stressed
                the importance of continued stakeholder engagement in projects designed
                to address structural and socioeconomic barriers to health,
                particularly to help policymakers understanding current practice trends
                and data collection challenges. Other commenters also recommended
                engagement through advisory groups and subject matter experts to test
                and pilot the application of the disparity methods to the Hospital OQR
                program to thoughtfully scale initiatives and promote nationwide
                standardization. One commenter requested CMS communicate their goals
                for future application of the disparity methods and inquired whether
                the goals are for accountability or resource assessment.
                 Some commenters expressed concern with any potential administrative
                burden placed onto providers and requested time to implement data
                collection efforts. A few commenters noted that many contributors to
                health inequities and related disparities are outside of the control of
                the health care system. Two commenters urged CMS to invest resources
                for data collection and in software upgrading.
                 While several commenters supported the proposed six measures as
                high-priority for stratified reporting, several commenters recommended
                thoughtful consideration of measurement gaps in identifying measures to
                be stratified, in addition to quality outcome benchmarks being
                developed prior to stratifying overused measure to avoid unintended
                consequences. Several commenters also recommended additional measure
                types for future stratification from additional data sources, such as
                experience surveys, or measurement domains, such as resource
                utilization/cost, access to surgical care, time of diagnosis or those
                that consider referrals to specialty care from a primary care setting.
                One commenter requested procedure-specific disparity reporting related
                to endoscopy, chemotherapy, or outpatient surgeries. One commenter
                recommended considering reinstating some quality measures where
                performance is felt to already be high, and to stratify these by social
                risk factors to assess additional room for improvement.
                 Response: We appreciate the feedback provided by the commenters
                regarding the potential future application of the two disparity methods
                in the Hospital OQR Program. We continue to prioritize minimizing
                provider burdened in efforts to improve equity, and to ensure
                stakeholder involvement in all initiatives. Confidential reporting of
                the disparity methods for the proposed six measures would use existing
                administrative records to calculate facility-level results, and as
                such, the provider burden would be minimal. In the upcoming year, we
                intend to begin confidential reporting for a number of the
                aforementioned measures stratified by dual eligibility status, if
                technically feasible, adequately representative, and statistically
                reliable.
                 Comment: Many commenters were generally supportive of our health
                equity initiatives and provided helpful recommendations on improving
                disparity measurement. Two commenters recommended structural and
                process measures to drive health equity improvement. One commenter
                recommended stratification methodologies compare safety net
                [[Page 63859]]
                systems solely with other safety net systems to allow for a fairer
                comparison between hospitals treating similar patients and that are
                subject to similar levels of available resources. One commenter noted
                that current hospital-specific reports are based on outdated data and
                suggested data should be timely.
                 One commenter recommended leveraging technology, such as machine
                learning and artificial intelligence (AI), to analyze quality-of-care
                and outcomes using both patient demographics and clinical data to
                identify and address disparities. One commenter, however, disagreed
                noting that bias can manifest in machine learning and artificial
                learning if the AI algorithm is trained with incomplete data, and
                recommended a framework to guide the development and validation of
                algorithms to reduce bias. One commenter provided examples of how their
                organization has developed a social determinants of health framework to
                facilitate implementation of robust interventions through multi-
                stakeholder engagement. Another commenter discussed a local program
                that leverages data-driven approaches to confront and overcome health
                disparities.
                 Response: We appreciate the feedback provided by the commenters
                regarding future potential approaches to investigate disparities in our
                quality programs, and analyze outcomes data, and agree that adequate
                attention must be paid to limit the potential for unintended
                consequences. We will take commenters' feedback into consideration in
                future policy development.
                 Comment: Several commenters supported the expansion of the CMS
                Disparity Methods beyond dual eligibility for the potential future
                application of an algorithm to indirectly estimate race and ethnicity
                in the Hospital OQR Program. A few commenters requested that
                stratification by race and ethnicity begin with confidential reporting,
                as it would allow healthcare organizations an opportunity to improve
                planning for needed services; understand patterns in access and
                outcomes for different patients; and engage in quality improvement for
                new policies to reduce disparities. Two commenters preferred any
                stratified data be publicly available to allow stakeholders to assess
                the diverse needs of different patient populations.
                 While some commenters acknowledged that it is important to
                understand disparity by race and ethnicity, several commenters noted
                concern with the validity of using race and ethnicity data identified
                through indirect estimation, adding that it could lead to misleading
                results and introduce measurement bias. Three commenters noted concern
                with the use of first and last names to impute data as the results may
                be unreliable due to the various naming conventions commonly, noting
                that some beneficiaries, women or children in particular, may take the
                name of their husband or father, or an adopted individual may take
                their adoptive family's surname. Another commenter raised concerns with
                the use of the proposed indirect estimation MBISG approach, sharing an
                opinion that this method may raise questions about informed consent and
                that if the approach were to measure smaller racial/ethnic groups it
                may lose accuracy. Another commenter suggested that the existing
                limitations in using race-estimation algorithms outweigh the potential
                benefit of their use. Another commenter noted concern with the
                application of the indirect estimation of race and ethnicity data to
                MIPS measures due to the different levels of measurement, adding that
                imputed data can only be attributed to groups, while measures are often
                at the patient- or encounter-level. Several commenters did not support
                the confidential reporting of measure results by race and ethnicity as
                there was concern with the accuracy and actionability of the data.
                Three commenters did not support the use of indirect estimation of
                ethnicity and race in public reporting, however two commenters
                supported use in confidential reporting.
                 A few commenters recommended that CMS pursue standardized
                collection of race and ethnicity since there variation exists in the
                race and ethnicity categories collected by institutions and suggested
                advisory stakeholder engagement to inform a unified approach. Some
                commenters recommended that standards include more granular information
                about race and ethnicity. Several commenters requested CMS indicate
                short-term and long-term objectives for stratification by race and
                ethnicity to reduce inequities through heath care payment and delivery.
                One commenter suggested that the use of place-based risk factors may be
                a better approach. Another stated it was important that hospitals have
                the opportunity to address self-identified inaccuracies and a process
                to appeal data and outcomes.
                 Response: We appreciate the feedback provided by the commenters
                regarding stratification by race and ethnicity, the use of a model to
                estimate patient race and ethnicity and expanded disparity
                stratification. We will take commenters' feedback into consideration in
                future policy development.
                 We are sensitive to the concerns raised by stakeholders about
                indirect estimation. As referenced in the CY 2022 OPPS/ASC proposed
                rule (86 FR 42018) and summarized in the FY 2022 IPPS final rule (86 FR
                25070), the Medicare program does not directly collect information from
                beneficiaries on race and ethnicity, instead relying on data collected
                by the Social Security Administration. A number of barriers contribute
                to this information being insufficiently accurate to examine hospital-
                level disparities. For example, prior to 1980, only three categories
                (White, Black, and Other) were available for individuals to self-report
                race, and respondents were not able to indicate other identities such
                as Asian, American Indian/Alaska Native, Hispanic, or Pacific Islander.
                As a result of these constrained response options, many current
                beneficiaries may not have had the opportunity to accurately self-
                report their race and ethnicity. Although we have undertaken
                significant efforts to update incorrect race and ethnicity information
                many inaccuracies remain limiting our ability to measure disparities.
                 In recent years we have sponsored the development of two indirect
                estimation algorithms, both intended to correct and improve
                administrative information on race and ethnicity. Indirect estimation
                methods such as these can generally be used in two different ways: (a)
                To estimate race/ethnicity in the absence of self-reported data; or (b)
                to improve administrative data in which beneficiaries provided a self-
                report of race/ethnicity but were not permitted a full set of response
                options (post-1980). While there is evidence supporting the validity of
                both approaches, accuracy and performance is particularly high in
                situation (b), where indirect estimation allows the administrative
                variables to better match the responses people would give when
                permitted a full set of response options. The approach for indirect
                estimation we intend to apply is situation (b), which uses an algorithm
                to augment existing data to allow a constrained administrative self-
                reported variable to better match what Medicare beneficiaries
                themselves may have chosen when given a comprehensive set of response
                options on race and ethnicity.
                 The Medicare Bayesian Improved Surname Geocoding Version 2.1 (MBISG
                2.1) uses the original beneficiary self-report, but uses additional
                information supplied by Medicare beneficiaries and information about
                neighborhood composition, to make this variable
                [[Page 63860]]
                better match what Medicare beneficiaries themselves self-report when
                given a full set of response options. With respect to Asian and Pacific
                Islander, Black, Hispanic, and White Medicare beneficiaries, the
                improved version of the administrative variable has 96-99 percent
                concordance with what Medicare beneficiaries themselves report when
                allowed a full set of response options, matching much better than the
                original self-reported variable in which most Medicare beneficiaries
                were not allowed to indicate Asian, American Indian/Alaska Native,
                Hispanic, or Pacific Islander identities. The MBISG 2.1 also offers
                distinct advantages because it generates probabilities of
                identification in each racial and ethnic group for each beneficiary,
                rather than assigning a single identification.
                 The MBISG 2.1 incorporates multiple sources of information to
                develop racial and ethnic probabilities. In addition to the information
                on race and ethnicity which that person reported to the SSA, the model
                also considers the person's first and last name, the composition of the
                census block group where they live, and other demographic information
                that Medicare beneficiary shared. Through such a holistic approach, the
                MBISG 2.1 can make accurate comparisons between groups of Medicare
                beneficiaries regarding the quality of care received, including people
                whose surnames are common among several racial and ethnic groups, and
                people who changed their surnames upon marriage. The MBISG 2.1 is also
                designed to consider those who identify as Multiracial and allows
                measurement in Census categories that distinguish those who chose
                single or multiple racial identity, as well as considering endorsement
                of Hispanic ethnicity separately. Notably, we only intend to use the
                MBISG 2.1 to make inferences about aggregated groups at the hospital
                level, and do not intend to use it to make inferences about any single
                individual, validation studies indicate that these aggregate estimates
                further improve upon the higher predictive accuracy of the model.
                 We believe that use of statistical imputation models, such as the
                MBISG 2.1 will permit us to provide more accurate, less biased
                information on disparities in hospital outcomes when reported
                confidentially. We plan to report results confidentially to facilities
                in Spring 2022 where results are technically feasible, meaningful, and
                statistically reliable. Any potential future proposal to publicly
                display the disparity results on Care Compare would be made through
                future rulemaking. We are sensitive to the concerns raised by
                stakeholders and will continue to evaluate the validity of the
                readmission measures when stratified by indirect estimation during the
                confidential reporting period.
                 We appreciate the feedback provided by the commenters regarding
                measuring health equity in our hospital outpatient and ambulatory
                surgical center quality measurement programs. We will continue to take
                all concerns, comments, and suggestions into account in our future
                policies.
                 Comment: Several commenters supported the facility collection of
                patient demographics. Many commenters recommended healthcare workforce
                education regarding data collection to ensure accurate and culturally
                sensitive collection of patients' demographic information. Other
                commenters urged education to beneficiaries on the need to share
                sensitive and personal information and the use of such data. Three
                commenters recommended use of EHR capabilities to facilitate data
                collection and routinely collect race, ethnicity, and language
                preference data, noting that the use of these capabilities can reduce
                administrative burden on healthcare facilities. One commenter
                recommended CMS engage nurses to identify and capture demographics for
                data collection to address health equity. A few commenters encouraged
                alternative collection methods such as updating the common working file
                (CWF) or utilizing HIPAA transaction sets to capture race and
                ethnicity. Other commenters recommended development of additional
                billing codes for social needs and evaluation of existing social
                determinants of health (SDOH) billing codes and International
                Classification of Diseases, Tenth Revision (ICD-10) Z codes, which
                identify non-medical factors that may influence a patients' health
                status. Further, commenters recommended using screening tools such as
                the Protocol for Responding to and Assessing Patients' Assets, Risks,
                and Experiences (PRAPARE) tool or the Accountable Health Communities
                Health-Related Social Needs Screening Tool developed by CMS.
                 Commenters urged CMS to expand data collection to include factors
                such as sexual orientation, gender identity, language preference,
                tribal membership, disability status, socioeconomic status (SES),
                education, social support, food security, transportation access, and
                housing stability to provide a more comprehensive assessment of health
                equity. A few commenters included the need for information on language
                spoken, health literacy, incarceration status and veteran status. Other
                commenters expressed support for expanding stratification to additional
                social risk factors and demographic variables, such as primary
                language, geographic location, socioeconomic status, gender identity,
                sexual orientation, age, and ability status. Additionally, a few
                commenters recommended CMS require data collection methods that rely
                only on self-reported data. Another commenter asserted that emerging
                evidence suggests that healthcare disparities may be rooted in lived
                experiences and recommended CMS include questions specific to
                experiences of certain racial or ethnic groups within the healthcare
                system, such as mistrust of the healthcare system and providers,
                experiences of microaggression and perceived discrimination or
                injustices. Additionally, a few commenters encouraged improvement of
                hospital data collection by mandating a minimum data collection
                threshold. Similarly, one suggested limiting the number of social risk
                factors collected to ensure consistent reliable data prior to expanding
                the number of factors. Others recommended CMS set reasonable goals and
                timelines for the collection of self-reported demographic data.
                Finally, a commenter suggested that CMS work with state Medicaid
                agencies to improve the consistency of data collection at the time of
                Medicaid enrollment and another noted unique challenges to collecting
                data from certain sub-populations of beneficiaries such as homeless
                patients.
                 Two commenters did not support an expanded data collection, noting
                concern with the burden and costs that would impact hospitals, or
                providers in QPP. Three commenters urged for alternative methods of
                capturing patient demographics via facility collection to reduce
                administrative burden on providers and encouraged leveraging of data in
                certified electronic medical records, adding that physicians should not
                have to invest resources for any modifications. A few commenters
                encouraged investment in interoperable and secure data infrastructure.
                One commenter suggested rather than health systems, payers such as CMS
                take the lead in collecting demographic data as a more efficient
                approach.
                 Several commenters urged CMS to develop information technology
                standards and consistent guidance across programs for the capture, use,
                and exchange of relevant data such as the use of electronic health
                records and FHIR standards. Three commenters recommended CMS adopt the
                Office of the National Coordinator for Health Information Technology's
                (ONC) 2015
                [[Page 63861]]
                Edition Health Information Technology Certification standards across
                all CMS quality programs including the Promoting Interoperability
                Program, to leverage existing infrastructures for data collection.
                 While supportive of collecting and utilizing demographic and SDOH
                data to measure and improve health equity, several commenters expressed
                concerns about protecting patient privacy. One of these commenters
                recommended CMS increase beneficiary education on the sharing of their
                sensitive health information with their providers. Another of these
                commenters asked that CMS address privacy considerations related to
                privacy, confidentiality and alignment with other federal standards
                related to data sharing and interoperability.
                 Response: We appreciate the feedback provided by the commenters
                regarding expanded demographic and social risk factor data collection.
                We will take commenters' feedback into consideration in future policy
                development.
                 Comment: We received mixed feedback from commenters about a
                potential facility equity score. A few commenters supported a facility
                equity score, noting a composite score is helpful to gauge disparities
                in large populations. One commenter noted that the composite equity
                score, however, depends on the comprehensiveness of the data and
                requires a broad spectrum of factors to avoid inaccuracies and
                undermining of the scoring methodology. One commenter recommended a
                patient-level equity score to identify patient populations that require
                additional services such as nutritional counseling, access to healthy
                foods, or transportation. Additional commenters suggested using tools
                such as the Health Equity Report Card or developing an SDOH report
                based on U.S Department of Health and Human Services (HHS') Health
                People 2030 framework. One commenter also suggested CMS consider the
                recommendations that identified by the American Hospital Association
                for improving care for vulnerable communities, such as including
                screening patients for social needs, offering navigation services to
                help patients access community services, and partnering with community
                stakeholders to align with local needs.
                 A majority of commenters did not believe a facility equity score
                would provide actionable information to the patients or hospitals and
                encouraged other mechanisms for health equity advancement be developed,
                such as further stratification of quality measures by race, ethnicity,
                and dual eligibility. Several commenters noted concern that a facility
                equity score may inadvertently obscure lower performances on quality
                measures or impact reimbursements of facilities with greater
                proportions of vulnerable populations. Other commenters were concerned
                with the accuracy of facility scores that use data which may not be
                uniformly collected across hospitals. One commenter requested local
                customization of the hospital health equity score that would allow an
                accurate reflection of hospital's commitment to its community, and a
                hospital-specific methodology, versus the application of the Medicare
                Advantage hospital health equity score.
                 Response: We appreciate the feedback provided by the commenters
                regarding the potential creation of a facility equity score. We will
                take commenters' feedback into consideration in future policy
                development.
                 Comment: Commenters also provided broad feedback to us around other
                approaches, beyond quality measurement, that we may undertake to ensure
                more equitable care for Medicare beneficiaries in the hospital
                outpatient setting. One commenter suggested CMS consider developing and
                implementing measures that are stratified by access to healthcare,
                access to primary care, and quality of care. Three commenters noted
                that many safety net systems operate with limited resources that can
                impact patient access to care, forcing patients to wait months for
                screening and prevention or advanced imaging, adding that to improve
                the care of this population both acute and primary care must improve
                care coordination and CMS must provide necessary resources.
                 Response: We appreciate the feedback provided by the commenters
                regarding equitable access to care in the outpatient setting. We will
                take commenters' feedback into consideration in future policy
                development.
                8. Maintenance of Technical Specifications for Quality Measures
                 CMS maintains technical specifications for previously adopted
                Hospital OQR Program measures. These specifications are updated as we
                modify the Hospital OQR Program measure set. The manuals that contain
                specifications for the previously adopted measures can be found on the
                QualityNet website at: https://qualitynet.cms.gov/outpatient/specifications-manuals. We refer readers to the CY 2019 OPPS/ASC final
                rule with comment period (83 FR 59104 through 59105), where we changed
                the frequency of the Hospital OQR Program Specifications Manual release
                beginning with CY 2019 and subsequent years, such that we will release
                a manual once every 12 months and release addenda as necessary. We did
                not propose any changes to these policies in the CY 2022 OPPS/ASC
                proposed rule.
                 In section XV.B.4. of the CY 2022 OPPS/ASC proposed rule (86 FR
                42244), we proposed the adoption of eCQMs into the Hospital OQR Program
                measure set beginning with the CY 2023 reporting period. Therefore, we
                also proposed the manner to update the technical specifications for
                eCQMs. We proposed that the technical specifications for eCQMs used in
                the Hospital OQR Program would be contained in the CMS Annual Update
                for the Hospital Quality Reporting Programs (Annual Update). The Annual
                Update and implementation guidance documents are available on the eCQI
                Resource Center website at: https://ecqi.healthit.gov/. For eCQMs, we
                would generally update the measure specifications on an annual basis
                through the Annual Update which includes code updates, logic
                corrections, alignment with current clinical guidelines, and additional
                guidance for hospitals and EHR vendors to use in order to collect and
                submit data on eCQMs from hospital EHRs.
                 Hospitals would be required to register and submit quality data
                through the Hospital Quality Reporting (HQR) System (formerly referred
                to as the QualityNet Secure Portal). The HQR System is safeguarded in
                accordance with the HIPAA Privacy and Security Rules to protect
                submitted patient information. See 45 CFR parts 160 and 164, subparts
                A, C, and E, for more information.
                 We received comments on these topics.
                 Comment: A few commenters supported our proposal, expressing
                agreement with the alignment of the Hospital OQR Program's eCQM
                technical specification updates with other quality reporting programs,
                specifically, the Hospital IQR Program.
                 Response: We thank the commenters for their support.
                 After consideration of the public comments we received, we are
                finalizing this proposal as proposed.
                 We also refer readers to section XIV. of the CY 2022 OPPS/ASC
                proposed rule (86 FR 42232) where we requested information on potential
                actions and priority areas that would enable the continued
                transformation of our quality measurement enterprise toward greater
                digital capture of data and use of the FHIR standard (as described in
                that section).
                [[Page 63862]]
                9. Public Display of Quality Measures
                a. Background
                 We refer readers to the CY 2009, CY 2014, and CY 2017 OPPS/ASC
                final rules with comment period (73 FR 68777 through 68779, 78 FR
                75092, and 81 FR 79791, respectively) for our previously finalized
                policies regarding public display of quality measures. We did not
                propose any changes to these policies in the proposed rule.
                b. Overall Hospital Quality Star Rating
                 In the CY 2021 OPPS/ASC final rule (85 FR 86182), we finalized a
                methodology to calculate the Overall Hospital Quality Star Rating
                (Overall Star Rating). We refer readers to section XVI. (``Overall
                Hospital Quality Star Rating Methodology for Public Release in CY 2021
                and Subsequent Years'') of the CY 2021 OPPS/ASC final rule with comment
                period for details. We did not propose any changes to this policy in
                the proposed rule.
                C. Administrative Requirements
                1. QualityNet Account and Security Administrator/Security Official
                a. Background
                 The previously finalized QualityNet security administrator
                requirements, including setting up a QualityNet account and the
                associated timelines, are described in the CY 2014 OPPS/ASC final rule
                with comment period (78 FR 75108 through 75109). We codified these
                procedural requirements at Sec. 419.46(b) in that final rule with
                comment period. In the CY 2021 OPPS/ASC final rule with comment period
                (85 FR 86182), we finalized to use the term ``security official''
                instead of ``security administrator'' to denote the exercise of
                authority invested in the role. The term ``security official'' would
                refer to ``the individual(s)'' who have responsibilities for security
                and account management requirements for a hospital's QualityNet
                account. This update in terminology did not change the individual's
                responsibilities or add burden. We did not propose any changes to this
                policy in the CY 2022 OPPS/ASC proposed rule.
                b. Active Security Official Account and Maintenance Requirements for
                Data Submission
                 The previously finalized QualityNet security administrator (now
                referred to as a security official) requirements, including those for
                setting up a QualityNet account and the associated timelines, are
                described in the CY 2014 OPPS/ASC final rule with comment period (78 FR
                75108 through 75109).
                 In the CY 2011 OPPS/ASC final rule with comment period (75 FR
                72099) and the CY 2012 OPPS/ASC final rule with comment period (76 FR
                74479), we indicated that hospitals would be required to maintain a
                current QualityNet security administrator (now referred to as a
                security official) for as long as the hospital participates in the
                Program. In the CY 2022 OPPS/ASC proposed rule (86 FR 42257), we
                clarified that failing to maintain an active QualityNet security
                official once a hospital has successfully registered to participate in
                the Hospital OQR Program will not result in a finding that the hospital
                did not successfully participate in the Hospital OQR Program. Again, we
                refer readers to requirements at Sec. 419.46(b).
                2. Requirements Regarding Participation Status
                 We refer readers to the CY 2014 OPPS/ASC final rule with comment
                period (78 FR 75108 through 75109), the CY 2016 OPPS/ASC final rule
                with comment period (80 FR 70519), and the CY 2019 OPPS/ASC final rule
                with comment period (83 FR 59103 through 59104) for requirements for
                participation and withdrawal from the Hospital OQR Program. We codified
                these requirements at Sec. 419.46(b) and (c). We did not propose any
                changes to these policies in the proposed rule.
                D. Form, Manner, and Timing of Data Submitted for the Hospital OQR
                Program
                1. Hospital OQR Program Annual Submission Deadlines
                 We refer readers to the CYs 2014, 2016, and 2018 OPPS/ASC final
                rules with comment period (78 FR 75110 through 75111; 80 FR 70519
                through 70520; and 82 FR 59439, respectively) where we finalized our
                policies for clinical data submission deadlines. We codified these
                submission requirements at Sec. 419.46(d). The clinical data
                submission deadlines for the CY 2024 payment determination are
                illustrated in Table 67.
                [GRAPHIC] [TIFF OMITTED] TR16NO21.170
                 We did not propose any changes to these policies in the proposed
                rule.
                2. Requirements for Chart-Abstracted Measures Where Patient-Level Data
                Are Submitted Directly to CMS for the CY 2024 Payment Determination and
                Subsequent Years
                 We refer readers to the CY 2013 OPPS/ASC final rule with comment
                period (77 FR 68481 through 68484) for a discussion of the form,
                manner, and timing for data submission requirements of chart-abstracted
                measures for the CY 2014 payment determination and subsequent years. We
                did not propose any changes to these policies in the proposed rule.
                 The following previously finalized Hospital OQR Program chart-
                abstracted measures will require patient-level data to be submitted for
                the CY 2023 payment determination and subsequent years:
                 OP-2: Median Time from ED Arrival to ED Departure for
                Discharged ED Patients (NQF #0496); \408\
                ---------------------------------------------------------------------------
                 \408\ In the CY 2022 OPPS/ASC proposed rule (86 FR 42237) we
                proposed to remove OP-2 beginning with the CY 2023 reporting period/
                CY 2025 payment determination. We are finalizing this proposal in
                this final rule with comment period.
                ---------------------------------------------------------------------------
                [[Page 63863]]
                 OP-3: Median Time from ED Arrival to ED Departure for
                Discharged ED Patients (NQF #0496); \409\
                ---------------------------------------------------------------------------
                 \409\ In CY 2022 OPPS/ASC proposed rule (86 FR 42237), we
                proposed to remove OP-3 beginning with the CY 2023 reporting period/
                CY 2025 payment determination. We are finalizing this proposal in
                this final rule with comment period.
                ---------------------------------------------------------------------------
                 OP-18: Median Time from ED Arrival to ED Departure for
                Discharged ED Patients (NQF #0496); and
                 OP-23: Head CT Scan Results for Acute Ischemic Stroke or
                Hemorrhagic Stroke Patients who Received Head CT Scan Interpretation
                Within 45 Minutes of ED Arrival (NQF #0661).
                3. Claims-Based Measure Data Requirements for the CY 2024 Payment
                Determination and Subsequent Years
                 Currently, in addition to the proposed Breast Cancer Screening
                Recall Rates measure (OP-39), the following previously finalized
                Hospital OQR Program claims-based measures are required for the CY 2023
                payment determination and subsequent years:
                 OP-8: MRI Lumbar Spine for Low Back Pain (NQF #0514);
                 OP-10: Abdomen CT--Use of Contrast Material;
                 OP-13: Cardiac Imaging for Preoperative Risk Assessment
                for Non-Cardiac, Low Risk Surgery (NQF #0669);
                 OP-32: Facility 7-Day Risk-Standardized Hospital Visit
                Rate after Outpatient Colonoscopy (NQF #2539);
                 OP-35: Admissions and Emergency Department Visits for
                Patients Receiving Outpatient Chemotherapy;
                 OP-36: Hospital Visits after Hospital Outpatient Surgery
                (NQF #2687); and
                 OP-39: Breast Cancer Screening Recall Rates.\410\
                ---------------------------------------------------------------------------
                 \410\ We note that that we are finalizing our proposal as
                proposed for the inclusion of OP-39: Breast Cancer Screening Recall
                Rates into the Hospital OQR Program measure set.
                ---------------------------------------------------------------------------
                 We refer readers to the CY 2019 OPPS/ASC final rule with comment
                period (83 FR 59106 through 59107), where we established a 3-year
                reporting period for OP-32: Facility 7-Day Risk-Standardized Hospital
                Visit Rate after Outpatient Colonoscopy beginning with the CY 2020
                payment determination and for subsequent years. In that final rule with
                comment period (83 FR 59136 through 59138), we established a similar
                policy under the ASCQR Program. We did not propose any changes to these
                policies in the proposed rule. We refer readers to section XV.B.4.b. of
                this final rule with comment period where we are finalizing a 3-year
                reporting period for the Breast Cancer Screening Recall Rates measure
                (OP-39).
                4. Data Submission Requirements for the OP-37a-e: Outpatient and
                Ambulatory Surgery Consumer Assessment of Healthcare Providers and
                Systems (OAS CAHPS) Survey-Based Measures for the CY 2024 Reporting
                Period/CY 2026 Payment Determination and Subsequent Years
                a. Background
                 We refer readers to the CY 2017 OPPS/ASC final rule with comment
                period (81 FR 79792 through 79794) for a discussion of the previously
                finalized requirements related to survey administration and vendors for
                the OAS CAHPS Survey-based measures. In addition, we refer readers to
                the CY 2018 OPPS/ASC final rule with comment period (82 FR 59432
                through 59433), where we finalized a policy to delay implementation of
                the OP-37a-e OAS CAHPS Survey-based measures beginning with the CY 2020
                payment determination (2018 reporting period) until further action in
                future rulemaking.
                b. Form, Manner, and Timing for OP-37a-e: Outpatient and Ambulatory
                Surgery Consumer Assessment of Healthcare Providers and Systems (OAS
                CAHPS) Survey-Based Measures Beginning With the CY 2024 Reporting
                Period/CY 2026 Payment Determination
                 As discussed in section XV.B.5.a. of this final rule with comment
                period, we are finalizing to begin data collection of five survey-based
                measures derived from the OAS CAHPS Survey beginning with voluntary
                data collection and reporting for the CY 2023 reporting period/CY 2025
                payment determination,\411\ followed by mandatory reporting beginning
                with the CY 2024 reporting period/CY 2026 payment determination and for
                subsequent years. The OAS CAHPS Survey contains three OAS CAHPS
                composite survey-based measures and two global survey-based measures.
                In this section, we proposed requirements related to survey
                administration, vendors, and oversight activities.
                ---------------------------------------------------------------------------
                 \411\ As stated in section XV.B.5.a. of this final rule with
                comment period, we note that National OAS CAHPS voluntary reporting
                program is independent of the Hospital OQR Program, but the
                submission process will otherwise remain unchanged. This proposal is
                intended to clarify that voluntary reporting of OAS CAHPS would
                begin as part of the Hospital OQR Program in the CY 2023 reporting
                period until mandatory reporting would begin in the CY 2024
                reporting period/CY 2026 payment determination and for subsequent
                years, if both proposals are finalized.
                ---------------------------------------------------------------------------
                 In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79792
                through 79794), we previously discussed the form, manner, and timing of
                this survey. In the CY 2022 OPPS/ASC proposed rule (86 FR 42258), we
                reaffirmed our approach to the form, manner, and timing which OAS CAHPS
                information will be submitted and proposed to add two additional data
                collection modes (web with mail follow-up of non-respondents and web
                with telephone follow-up of non-respondents),\412\ beginning with
                voluntary data collection for the CY 2023 reporting period/CY 2025
                payment determination and continuing for mandatory reporting for
                subsequent years. For more information about the modes of
                administration, we refer readers to the OAS CAHPS Survey website:
                https://oascahps.org. We reiterated our clarification from when we
                adopted these measures in the CY 2017 OPPS/ASC final rule with comment
                period (81 FR 79773) that, when implemented, hospital outpatient
                departments that anticipate receiving more than 300 surveys would be
                required to either: (1) Randomly sample their eligible patient
                population; or (2) survey their entire OAS CAHPS eligible patient
                population. We also refer readers to section XVI.D.1.d. of this final
                rule with comment period where we are finalizing similar policies for
                the ASCQR Program.
                ---------------------------------------------------------------------------
                 \412\ The two additional modes will be available as part of
                National OAS CAHPS voluntary reporting program in 2022.
                ---------------------------------------------------------------------------
                (1) Survey Requirements
                 The data collection modes as currently specified for the survey
                include three administration modes: (1) Mail-only; (2) telephone-only;
                and (3) mixed mode (mail with telephone follow-up of non-respondents).
                We refer readers to the Protocols and Guidelines Manual for the OAS
                CAHPS Survey (https://oascahps.org/Survey-Materials) for materials for
                each mode of survey administration. In the CY 2018 OPPS/ASC final rule
                with comment period (82 FR 59433), we expressed interest in
                investigating the feasibility of offering the OAS CAHPS Survey using a
                web-based format. As a result, we designed a mode experiment to assess
                the impact of adding web-based survey administration. This mode
                experiment tested five administration modes with patients who receive
                outpatient surgical care: (1) Mail-only; (2) telephone-only; (3) web-
                only; (4) web with mail follow-up; and (5) web with a telephone follow-
                up. Data collection was completed in the fall of 2019. Response rates
                by mode in the experiment were: 35 percent (mail-only); 19 percent
                (telephone-only); 29 percent (web-only); 39 percent (web with mail
                follow-up);
                [[Page 63864]]
                and 35 percent (web with telephone follow-up).
                 Based on these results, in addition to the three previously
                established modes, in the CY 2022 OPPS/ASC proposed rule (86 FR 42258),
                we proposed to incorporate two more administration methods: (1) Mixed
                mode web with mail follow-up of non-respondents, and (2) mixed mode web
                with telephone follow-up of non-respondents. This would allow a total
                of five methods of survey administration for reporting beginning with
                voluntary data collection and reporting as part of the Hospital OQR
                Program for the CY 2023 reporting period/CY 2025 payment determination
                \413\ and mandatory reporting for the CY 2024 reporting period/CY 2026
                payment determination--the first year the survey would be required. We
                did not propose a purely web-based format at this time because the use
                of a web-based mode is included in the two mixed modes options being
                proposed and the purely web-based format would create response bias
                since not all patients have the ability to respond by web.
                ---------------------------------------------------------------------------
                 \413\ As stated in section XV.B.5.a. of the CY 2020 OPPS/ASC
                proposed rule, we note that the two modes (web with mail follow-up
                of non-respondents; and web with telephone follow-up of non-
                respondents) will be available beginning in CY 2022 for National OAS
                CAHPS voluntary reporting, and then if finalized, available as part
                of OQR Program's reporting beginning in the CY 2023 reporting period
                and subsequent years (86 FR 42258).
                ---------------------------------------------------------------------------
                 For all five proposed modes of administration as part of the
                Hospital OQR Program, we proposed that data collection must be
                initiated no later than 21-calendar days after the month in which a
                patient has a surgery or procedure at a hospital and completed within 6
                weeks (42 days) after initial contact of eligible patient begins,
                beginning with voluntary reporting in the CY 2023 reporting period/CY
                2025 payment determination and subsequent years. Under this proposal,
                hospitals, via their CMS-approved vendors (discussed in section
                XV.D.4.b.(2). of the CY 2022 OPPS/ASC proposed rule (86 FR 42259)),
                must make multiple attempts to contact eligible patients unless the
                patient refuses or the vendor learns that the patient is ineligible to
                participate in the survey. In addition, we proposed that hospitals, via
                their CMS-approved survey vendor, collect survey data for eligible
                patients using the established quarterly deadlines to report data to
                CMS for each data collection period unless the hospital has been
                exempted from the OAS CAHPS Survey requirements under the low volume
                exemption. We refer readers to the CY 2017 OPPS/ASC final rule with
                comment period (81 FR 79774) where we previously established the low
                volume exemption, which exempts hospital outpatient departments with
                fewer than 60 survey-eligible patients during the ``eligibility
                period,'' (which is the calendar year before the data collection
                period), that submit the participation exemption request form, which
                would be made available on the OAS CAHPS Survey website (https://oascahps.org) on or before May 15 of the data collection year. As
                finalized previously, all exemption requests would be reviewed and
                evaluated by CMS (81 FR 79774). For hospitals that do not have an
                exemption, the submission deadlines would be posted on the OAS CAHPS
                Survey website (https://oascahps.org). Late submissions would not be
                accepted.
                 As discussed in more detail in this section, compliance with the
                OAS CAHPS Survey protocols and guidelines, including this monthly data
                collection requirement as part of each quarterly data submission, would
                be overseen by CMS or its contractor who would receive approved
                vendors' monthly submissions, review the data, and analyze the results.
                We previously finalized in the CY 2017 OPPS/ASC final rule with comment
                period (81 FR 79774) all data collection and submission for the OAS
                CAHPS Survey measures would be reported at the Medicare participating
                hospital level, as identified by its CCN. Once data collection and
                reporting become mandatory beginning with the CY 2024 reporting period
                as finalized in section XV.B.5.a of this final rule with comment
                period, all locations that offer outpatient services of each eligible
                Medicare participating hospital would be required to participate in the
                OAS CAHPS Survey finalized in the CY 2017 OPPS/ASC final rule with
                comment period (81 FR 79793) except for those that meet and receive an
                exception for having fewer than 60 survey-eligible patients during the
                year preceding the data collection period as finalized in the CY 2017
                OPPS/ASC final rule with comment period (81 FR 79773). Therefore, the
                survey data reported using a Medicare participating hospital's CCN must
                include all eligible patients from all outpatient locations (whether
                the hospital outpatient department is on campus or off campus) of an
                eligible Medicare participating hospital; or if more than 300 completed
                surveys are anticipated, a hospital can choose to randomly sample their
                eligible patient population as finalized in the CY 2017 OPPS/ASC final
                rule with comment period (81 FR 79784).
                 In the CY 2022 OPPS/ASC proposed rule (86 FR 42259), we also
                proposed that survey vendors acting on behalf of hospitals must submit
                data by the specified data submission deadlines, which generally would
                be posted on the OAS CAHPS Survey website located at https://oascahps.org/Data-Submission/Data-Submission-Deadlines. If a hospital's
                data are submitted after the data submission deadline, it would not
                fulfill the OAS CAHPS Survey quality reporting requirements. Therefore,
                in regard to any OAS CAHPS Survey reporting, we would strongly
                encourage hospitals to be fully apprised of the methods and actions of
                their survey vendors--especially the vendors' full compliance with OAS
                CAHPS Survey administration protocols--and to carefully inspect all
                data warehouse reports in a timely manner.
                 We reiterate that the use of predictive or auto dialers in
                telephonic survey administration is governed by the Telephone Consumer
                Protection Act (TCPA) (47 U.S.C. 227) and subsequent regulations
                promulgated by the Federal Communications Commission (FCC) (47 CFR
                64.1200) and the Federal Trade Commission. We refer readers to the
                FCC's declaratory ruling released on July 10, 2015 further clarifying
                the definition of an auto dialer, available at: https://apps.fcc.gov/edocs_public/attachmatch/FCC-15-72A1.pdf. In the telephone-only and
                mixed mode survey administration methods involving telephone, hospitals
                and vendors must comply with the regulations and any other applicable
                regulations. To the extent that any existing CMS technical guidance
                conflicts with the TCPA or its implementing regulations regarding the
                use of predictive or auto dialers, or any other applicable law, CMS
                would expect vendors to comply with applicable law.
                 We received comments on these topics.
                 Comment: A commenter supported the proposal that the CAHPS data
                collection must be ``initiated no later than 21-calendar days after the
                month in which a patient has a surgery or procedure at a hospital and
                completed within 6 weeks (42 days) after initial contact of eligible
                patient begins, beginning with voluntary reporting in the CY 2023
                reporting period/CY 2025 payment determination and subsequent years.''
                 Response: We thank the commenter for its support.
                 Comment: A commenter recommended that CMS consider adopting ``real
                time surveys'' or surveys performed within 48 hours as a survey option
                for OAS CAHPS Survey.
                [[Page 63865]]
                 Response: Under the current guidelines, HOPDs can request to do
                continuous sampling to receive more ``real time'' feedback, which could
                include initiating their own surveys within 48 hours.
                 Comment: Many commenters supported the two additional survey
                administration modes taking advantage of web-based technology: Web with
                mail follow-up of non-respondents and web with telephone follow-up of
                non-respondents. Among the reasons for support were the belief that
                these additional modes will enable providers to reach a larger patient
                population, to receive more and timelier information to improve patient
                experience, to reduce burden associated with this measure, and to
                provide greater flexibility for providers to collect data and patients
                to respond. A few commenters encouraged CMS to monitor the data and
                patient response rates, particularly of the two additional web-based
                survey modes, and data.
                 Response: We thank the commenters for their support. We agree that
                as we expand the use of additional OAS CAHPS Survey modes, it will be
                important to monitor data, patient responses and ensure that the OAS
                CAHPS Survey is refined as appropriate. We will continue to monitor and
                evaluate methods available to assess and collect patient experience
                feedback in a reliable manner.
                 Comment: Many commenters appreciated the proposal for the
                additional two new mixed mode options that include web-based
                collection, but expressed the belief that there needs to be a web-only
                or additional digital modes to reduce financial burden of the survey
                and make the survey easier for patients to complete. Several commenters
                recommended that CMS should permit a web-only survey administration
                mode and noted that web-only would likely be popular form of
                administration, has a better response rate and could achieve minimum
                surveys more efficiently than telephone only and would also reduce the
                financial burden of administration. One commenter specifically noted
                that these modes of survey distribution could help reach younger and
                minority populations.
                 Response: We agree that the web-based mode interactions with smart
                phones, email, texting and other electronic distribution create the
                potential for new and engaging ways to connect with patients,
                especially to traditionally underserved communities. We believe that
                the potential to expand and increase access to patient feedback is of
                the utmost importance and will continue to evaluate the potential
                refinement to methods of contact for the OAS CAHPS Survey. However, as
                we stated in the CY 2022 OPPS/ASC proposed rule (86 FR 42258), we did
                not propose a purely web-based format at this time because the purely
                web-based format would create response bias since not all patients have
                access and the ability to respond via website. Additionally, the use of
                a web-based mode is included in the two mixed modes options being
                proposed and we believe that providing the additional follow-up
                provides patients with a greater opportunity to respond to the OAS
                CAHPS Survey, if they so choose.
                 Comment: A few commenters expressed concern that patients may be
                confused by web-based surveys and CMS should ensure that patients
                understand the survey.
                 Response: We note that an objective of the OAS CAHPS Survey is to
                obtain data on a patient's experience of care received from a facility,
                specifically from an HOPD. While there is always potential that a
                patient gets confused, we believe that the OAS CAHPS Survey is focused
                on patients' experience of care received for their ambulatory surgery
                or procedure. A physician/surgeon who performs surgeries/procedures at
                a facility is a member of that facility with both rights and
                responsibilities. We believe it is the facility's responsibility to
                ensure that someone--whether the doctor, nurse, or other facility staff
                member--provide patients with information about preparing for their
                procedure, about the procedure itself, as well as what to expect
                following the procedure/surgery. Therefore, we believe it is
                appropriate to include these important communications with patients in
                the OAS CAHPS Survey and believe experience with the provider
                attributed to the facility is appropriate.
                 Further, we believe that the information provided in the OAS CAHPS
                Survey ``Instructions'' is sufficient to inform the patient regarding
                the purpose of the OAS CAHPS Survey and provides sufficient instruction
                and details for the patient to correctly identify and relate the survey
                to the facility and procedure that patient received. CMS began
                developing the Outpatient and Ambulatory Surgery Survey in 2012 using
                the principles and guidelines established by the Agency for Healthcare
                Research and Quality's (AHRQ) CAHPS program and AHRQ approved this
                instrument as a CAHPS Survey in February 2015.\414\
                ---------------------------------------------------------------------------
                 \414\ Agency for Healthcare Research and Quality. ``The CAHPS
                Program.'' Available at: https://ahrq.gov/cahps/index.html.
                ---------------------------------------------------------------------------
                 After consideration of the public comments we received, we are
                finalizing this proposal as proposed.
                (2) Vendor Requirements
                 We did not propose any new vendor requirements in the CY 2022 OPPS/
                ASC proposed rule (86 FR 42018), but reiterate the vendor requirements
                finalized in the CY 2017 OPPS/ASC final rule with comment period (81 FR
                79793 through 79794) to ensure that patients respond to the survey in a
                way that reflects their actual experiences with outpatient care, and is
                not influenced by the hospital. We finalized that hospitals must
                contract with a CMS-approved OAS CAHPS Survey vendor to conduct or
                administer the survey. We believe that a neutral third-party should
                administer the survey for hospitals, and it is our belief that an
                experienced survey vendor would be best able to ensure reliable
                results. CAHPS Survey-approved vendors are also already used or
                required in the following CMS quality programs: The Hospital IQR
                Program (71 FR 68203 through 68204); the Hospital VBP Program (76 FR
                26497, 26502 through 26503, and 26510); the End Stage Renal Disease
                Quality Improvement Program (76 FR 70269 through 70270); the Home
                Health QRP (80 FR 68709 through 68710); and the Hospice QRP (80 FR
                47141 through 47207).
                 Information about the list of approved survey vendors and how to
                authorize a vendor to collect data on a hospital's behalf is available
                through the OAS CAHPS Survey website at: https://oascahps.org. The web
                portal has both public and secure (restricted access) sections to
                ensure the security and privacy of selected interactions. As mentioned
                previously, requirements for survey vendors were previously finalized
                in the CY 2017 OPPS/ASC final rule with comment period (81 FR 79793
                through 79794) and codified at Sec. 419.46(h)(2). Hospitals will need
                to register on the OAS CAHPS Survey website (https://oascahps.org) in
                order to authorize the CMS-approved vendor to administer the survey and
                submit data on their behalf. Each hospital must then administer (via
                its vendor) the survey to all eligible patients (or for those
                anticipating more than 300 completed surveys, randomly sample their
                eligible patient population) treated during the data collection period
                on a monthly basis according to the
                [[Page 63866]]
                guidelines in the Protocols and Guidelines Manual (https://oascahps.org) and report the survey data to CMS on a quarterly basis by
                the deadlines posted on the OAS CAHPS Survey website.
                 Comment: A few commenters opposed the use of third-party survey
                vendors to administer OAS CAHPS data and stated the belief that many
                organizations have the capacity to build more secure, more patient-
                friendly, more community focused surveying platforms and questions, and
                that the financial expense of third-party vendors is not needed as
                evidenced by HCAHPS.
                 Response: In order to meet the survey administration requirements
                for these measures, the HOPD must administer the OAS CAHPS Survey in
                accordance with the requirements listed in the OAS CAHPS Survey
                Protocols and Guidelines Manual.\415\
                ---------------------------------------------------------------------------
                 \415\ https://oascahps.org/Survey-Materials Current Survey
                Materials (oascahps.org).
                ---------------------------------------------------------------------------
                 OAS CAHPS Survey requires that the survey be administered by an
                approved survey vendor to ensure that patients respond to the survey in
                a way that reflects their actual experiences with outpatient surgical
                care and is not influenced by the facility. If vendors were removed as
                neutral third parties, there could be concerns of objectivity and bias.
                 We believe that OAS CAHPS Survey vendors have gained experience
                during the voluntary reporting as part of the voluntary National OAS
                CAHPS program, and approved vendors will be able to support HOPDs. We
                post the list of the approved OAS CAHPS vendors on https://oascahps.org, and we encourage HOPDs to contact vendors for cost and
                service information pertaining to OAS CAHPS as there may be differences
                among vendors and multiple modes of conducting the survey provide
                greater economical choice.
                 Comment: A commenter requested clarification on the ramifications
                if a HOPD does not receive enough completed surveys despite vendor
                attempts to collect information from eligible patients.
                 Response: We agree with commenters that patient response is largely
                out of the control of the facility. We clarify we did not propose to
                penalize HOPDs for patients' decision not to complete the survey. An
                HOPD will not receive a payment reduction as long as it participates in
                the survey, its vendor administers the survey according to the OAS
                CAHPS Survey Protocol and Guidelines Manual, and submits that data to
                CMS by the data submission deadline.
                5. Data Submission Requirements for Measures Submitted via a Web-Based
                Tool for the CY 2023 Payment Determination and Subsequent Years
                a. Data Submission Requirements for Measures Submitted via a CMS Web-
                Based Tool
                 We refer readers to the CY 2014 OPPS/ASC final rule with comment
                period (78 FR 75112 through 75115), the CY 2016 OPPS/ASC final rule
                with comment period (80 FR 70521), and the QualityNet website available
                at: https://qualitynet.cms.gov for a discussion of the requirements for
                measure data submitted via the HQR System (formerly referred to as the
                QualityNet Secure Portal) for the CY 2017 payment determination and
                subsequent years. We did not propose any changes to these policies in
                the proposed rule.
                 The following previously adopted quality measures require data to
                be submitted via a CMS web-based tool for the CY 2022 reporting period/
                CY 2024 payment determination and subsequent years:
                 OP-22: Left Without Being Seen (NQF #0499); and
                 OP-29: Endoscopy/Polyp Surveillance: Appropriate Follow-up
                Interval for Normal Colonoscopy in Average Risk Patients (NQF #0658).
                (1) Form, Manner, and Timing for Reporting OP-31: Cataracts:
                Improvement in Patient's Visual Function Within 90 Days Following
                Cataract Surgery (NQF #1536)
                 In the CY 2022 OPPS/ASC Proposed rule (86 FR 42259) we proposed
                that this measure be submitted according to our existing policies for
                data submitted via the HQR System (formerly referred to as the
                QualityNet Secure Portal). As noted earlier, we did not propose changes
                to those policies in the proposed rule.
                 We received no comments on this proposal regarding the form,
                manner, and timing for the OP-31: Cataracts: Improvement in Patient's
                Visual Function within 90 Days Following Cataract Surgery measure be
                submitted through the HQR System. As discussed in section XV.B.5.b. of
                this final rule with comment period, we are finalizing our proposal to
                require the reporting of the OP-31 measure with modification.
                b. Data Submission Requirements for Measures Submitted via the CDC NHSN
                Website
                 We refer readers to the CY 2014 OPPS/ASC final rule with comment
                period (78 FR 75097 through 75100) for a discussion of the previously
                finalized requirements for measure data submitted via the CDC NHSN
                website. While we did not propose any changes to those policies in the
                CY 2022 OPPS/ASC proposed rule (86 FR 42018), we did propose policies
                specific to the proposed COVID-19 Vaccination Coverage Among HCP
                measure (OP-38), which will be submitted via the CDC NHSN website.
                (1) Form, Manner, and Timing for the COVID-19 Vaccination Coverage
                Among HCP Measure (OP-38) Beginning With the CY 2022 Reporting Period/
                CY 2024 Payment Determination and Subsequent Years
                 For the COVID-19 Vaccination Coverage Among HCP measure (OP-38), in
                the CY 2022 OPPS/ASC proposed rule (86 FR 86 FR 42260), we proposed to
                require reporting data on the number of HCP who have received the
                completed vaccination course of a COVID-19 vaccine by each individual
                facility's CCN.
                 For the COVID-19 Vaccination Coverage Among HCP measure (OP-38), we
                proposed that facilities would report COVID-19 vaccination data to the
                NHSN for at least one week each month, beginning with the January 1,
                2022 through December 31, 2022 reporting period affecting the CY 2024
                payment determination and continuing with quarterly reporting deadlines
                for subsequent years. If facilities report more than one week of data
                in a month, the most recent week's data would be used for measure
                calculation purposes. We proposed that hospitals would report the
                measure through the NHSN web-based surveillance system.\416\
                Specifically, hospitals would use the COVID-19 vaccination data
                reporting modules in the NHSN Healthcare Personnel Safety (HPS)
                Component to report the number of HCP eligible to have worked at the
                facility that week (denominator) and the number of those HCP who have
                received COVID-19 vaccination (numerator). Specific details on data
                submission for this measure can be found in the CDC's Overview of the
                Healthcare Safety Component, available at https://www.cdc.gov/nhsn/PDFs/slides/NHSN-Overview-HPS_Aug2012.pdf. We refer readers to the CY
                2014 OPPS/ASC final rule (78 FR 75097 through 75100) for details about
                requirements for measure data submitted via the NHSN. In the CY 2022
                OPPS/ASC proposed rule (86 FR 42260), we contemplated each quarter, the
                CDC would calculate a summary measure of
                [[Page 63867]]
                COVID-19 vaccination coverage from the reporting periods for the
                quarter in four-quarter increments, when four quarters of data are
                available.
                ---------------------------------------------------------------------------
                 \416\ Centers for Disease Control and Prevention. Surveillance
                for Weekly HCP COVID-19 Vaccination. Accessed at: https://www.cdc.gov/nhsn/hps/weekly-covid-vac/index.html on February 10,
                2021.
                ---------------------------------------------------------------------------
                 We refer readers to section XV.B.4.a.2. of this final rule with
                comment period received on the COVID-19 Vaccination Coverage Among HCP
                Measure (OP-38). We did not receive public comments on the form,
                manner, and timing for the COVID-19 Vaccination Coverage Among HCP
                Measure (OP-38); as such, we are finalizing our proposal to adopt the
                COVID-19 Vaccination Coverage Among HCP measure (OP-38) beginning with
                the CY 2022 reporting period/FY 2024 payment determination and
                subsequent years with the modifications described in section XV.B.4.a.
                of this final rule with comment period.
                6. eCQM Reporting and Submission Requirements
                a. Background
                 We believe that collection and reporting of data through health
                information technology would greatly simplify and streamline reporting
                for many CMS quality reporting programs. Through electronic reporting,
                hospitals will be able to leverage EHRs to capture, calculate, and
                electronically submit quality data to CMS for the Hospital OQR Program.
                 We believe that automated electronic extraction and reporting of
                clinical quality data would significantly reduce the administrative
                burden on hospitals for the Hospital OQR Program. We believe that the
                use of CEHRT can effectively and efficiently help providers improve
                internal care delivery practices, support management of patient care
                across the continuum, and support the reporting of eCQMs. In previous
                rules, we stated our intent and assessment of the inclusion of eCQMs
                into the Hospital OQR Program, and we have sought public comment on the
                addition of such measures into the measure set. We refer readers to the
                CY 2014 OPPS/ASC final rule with comment period (78 FR 75106 through
                75107), the CY 2015 OPPS/ASC final rule with comment period (79 FR
                66956 through 66961), the CY 2016 OPPS/ASC final rule with comment
                period (80 FR 70516 through 70518), the CY 2017 OPPS/ASC final rule
                with comment period (81 FR 79785 through 79790), and the CY 2018 OPPS/
                ASC final rule with comment period (82 FR 59435 through 59438) for more
                details on previous discussion regarding future measure concepts
                related to eCQMs and electronic reporting of data for the Hospital OQR
                Program, including stakeholder support for the introduction of eCQMs
                into the Program. Measure stewards and developers have worked to
                advance eCQMs that would be reported in the outpatient setting and we
                believe the introduction of eCQMs in the Hospital OQR Program is
                timely. We also believe this is important in aligning the Hospital OQR
                Program with the Medicare Promoting Interoperability Program and the
                Hospital IQR Program.
                b. eCQM Reporting and Data Submission Requirements Beginning With the
                CY 2023 Reporting Period/CY 2025 Payment Determination
                 In section XV.B.4.c. of the CY 2022 OPPS/ASC proposed rule (86 FR
                42244) and in section XV.B.4.c. of this final rule with comment period,
                we discuss adoption of the STEMI eCQM (OP-40). In the CY 2022 OPPS/ASC
                proposed rule (86 FR 42260), we proposed a progressive increase in the
                number of quarters for which hospitals report eCQM data. Increasing the
                number of reported quarters to be reported has several benefits.
                Primarily, a single quarter of data is not enough to capture trends in
                performance over time. Evaluating multiple quarters of data would
                provide a more reliable and accurate picture of overall performance.
                Further, reporting multiple quarters of data would provide hospitals
                with a more continuous information stream to monitor their levels of
                performance. Ongoing, timely data analysis can better identify a change
                in performance that may necessitate investigation and potentially
                corrective action.
                 However, we believe that starting with limited voluntary reporting
                would give hospitals more time to gain experience with reporting data
                (including time to implement the eCQM and provide training to support
                eCQM reporting, if necessary). Similar to what was established for the
                Hospital IQR Program (82 FR 38355), we believe that increasing the
                number of quarters for which hospitals report eCQM data would produce
                more comprehensive and reliable quality measure data for patients and
                providers. In section XV.B.4.c. of this final rule with comment period,
                we are finalizing the adoption of the STEMI eCQM (OP-40) with voluntary
                reporting beginning with the CY 2023 reporting period. For the CY 2023
                reporting period, we proposed that hospitals submit STEMI eCQM (OP-40)
                data during this reporting period voluntarily for any quarter.
                Hospitals that chose to submit data voluntarily must submit in
                compliance with the eCQM certification requirements in sections
                XV.D.6.c., XV.D.6.d, and XV.D.6.e. of this final rule with comment
                period.
                 For the CY 2024 reporting period/CY 2026 payment determination, we
                proposed that hospitals report one self-selected calendar quarter of
                data for the STEMI eCQM (OP-40). We note that in section XV.B.4.c. of
                this final rule with comment period, we are finalizing that the STEMI
                eCQM (OP-40) is required beginning with the CY 2024 reporting period/CY
                2026 payment determination.
                 For the CY 2025 reporting period/CY 2027 payment determination, we
                proposed to increase the amount of data required. We proposed that
                hospitals report two self-selected calendar quarters of data for the
                required STEMI eCQM (OP-40).
                 For the CY 2026 reporting period/CY 2028 payment determination, we
                proposed to further increase the amount of data required for the STEMI
                eCQM (OP-40). Specifically, we proposed to require that hospitals
                report three self-selected calendar quarters of data for the CY 2026
                reporting period/CY 2028 payment determination for the required STEMI
                eCQM (OP-40). Beginning with the CY 2027 reporting period/CY 2029
                payment determination, we proposed to require that hospitals report all
                four calendar quarters (one calendar year) of data for the required
                STEMI eCQM (OP-40).
                 We also refer readers to Table 68 for a summary of the finalized
                quarterly data increase in eCQM reporting beginning with the CY 2023
                reporting period.
                [[Page 63868]]
                [GRAPHIC] [TIFF OMITTED] TR16NO21.171
                 We received comments on these topics.
                 Comment: One commenter suggested that we require hospitals submit
                one year of data instead of the incremental approach of increasing the
                number of quarters of data yearly.
                 Response: We thank the commenter for its feedback. We interpret the
                commenter's suggestion to mean that we should require hospitals to
                begin the initial data submission with one calendar year (four
                quarters) of eCQM data instead of the initial requirement to submit one
                quarter of data beginning with the CY 2024 reporting period/CY 2026
                payment determination. While we appreciate the suggestion, we
                respectfully note that we proposed an incremental increase of data
                submission requirements to provide hospitals with a phased approach
                that would reduce reporting burden as eCQMs are new to the Hospital OQR
                Program.
                 We believe that hospitals should be given an opportunity to gain
                experience with reporting data (including time to implement the eCQM
                and provide training to support eCQM reporting, if necessary).
                Additionally, we aligned our approach with that of the Hospital IQR
                Program (82 FR 38355). In the FY 2018 IPPS/LTCH PPS final rule, we
                received public comment that resulted in the modification of the
                Hospital IQR Program's requirements to this incremental increase to
                alleviate stakeholder concerns and challenges with eCQM reporting (82
                FR 38356). We believe it is important to learn from our approach and
                the public comments received regarding eCQMs in previous rulemaking for
                the Hospital IQR Program when proposing and finalizing equivalent
                requirements for the Hospital OQR Program. We believe our finalized
                policy to progressively increase the number of quarters of data
                collected over three years balances the benefit of additional eCQM data
                reported and allow adequate time for successful reporting experience.
                Any changes to eCQM reporting and submission requirements will be
                addressed in future notice and comment rulemaking.
                 Comment: One commenter recommended that we identify the time period
                of data submission instead of allowing hospitals to self-select which
                quarters of data to submit (prior to the requirement of one calendar
                year of data submission beginning with the CY 2027 reporting period/CY
                2029 payment determination).
                 Response: We thank the commenter for the recommendation. We believe
                that allowing the flexibility to self-select quarter(s) of eCQM data to
                report, beginning with the CY 2024 reporting period/CY 2026 payment
                determination, will allow hospitals to gradually transition toward more
                robust electronic quality measure reporting. We believe that the
                ability to self-select quarters of data will provide the necessary time
                for quality, health IT, and clinical teams to gain experience and
                operationalize integration of eCQMs in the Hospital OQR Program.
                Additionally, we believe that smaller hospitals may require more time
                to become proficient in all the parameters (mapping, new workflows,
                education, etc.) associated with eCQM reporting. Therefore, we believe
                that following this same incremental approach for the Hospital OQR
                Program allows us to remain consistent across hospital quality
                reporting programs and reduce provider burden.
                 After consideration of the public comments we received, we are
                finalizing this proposal as proposed.
                c. Electronic Quality Measure Certification Requirements for eCQM
                Reporting
                (1) Requiring Use of 2015 Edition Cures Update Certified Technology
                Beginning With the CY 2023 Reporting Period/CY 2025 Payment
                Determination
                 In May 2020, the ONC 21st Century Cures Act final rule (85 FR 25642
                through 25961) finalized updates to the 2015 Edition of health IT
                certification criteria (hereto referred to as the ``2015 Edition Cures
                Update''). These updates included revisions to the clinical quality
                measurement certification criterion at 45 CFR 170.315(c)(3) to refer to
                CMS Quality Reporting Data Architecture (QRDA) IGs and remove the
                Health Level 7 (HL7[supreg]) QRDA standard from the relevant health IT
                certification criteria (85 FR 25645). The ONC 21st Century Cures Act
                final rule provided health IT developers up to 24 months from May 1,
                2020 to make technology certified to the updated and/or new criteria
                available to their customers (85 FR 25670). In November 2020, ONC
                issued an interim final rule with comment (85 FR 70064) which extended
                the compliance deadline for the update to the Clinical Quality
                Measures-Report criterion until December 31, 2022 (85 FR 70075). These
                updates were finalized to reduce burden on health IT developers under
                the ONC Health IT certification program (85 FR 25686) and have no
                impact on providers' existing reporting practices for CMS programs.
                 For the Hospital OQR Program, in the CY 2022 OPPS/ASC proposed rule
                (86 FR 42261), we proposed to require hospitals to utilize certified
                technology updated consistent with the 2015 Edition Cures Update for
                the CY 2023 reporting period/CY 2025 payment determination and
                subsequent years, which includes both the voluntary period and required
                submissions. We noted that this proposal is in alignment
                [[Page 63869]]
                with the Hospital IQR Program proposal in the FY 2022 IPPS/LTCH PPS
                proposed rule that requires use of technology updated consistent with
                2015 Edition Cures Update beginning with the CY 2023 reporting period/
                FY 2025 payment determination (86 FR 25595), and which has since been
                finalized in the FY 2022 IPPS/LTCH PPS final rule (86 FR 45418).
                 We received no comments on this proposal. Therefore, we are
                finalizing this proposal as proposed.
                d. File Format for EHR Data, Zero Denominator Declarations, and Case
                Threshold Exemptions
                (1) File Format for EHR Data
                 Data can be collected in EHRs and health information technology
                systems using standardized formats to promote consistent representation
                and interpretation, as well as to allow for systems to compute data
                without needing human interpretation. As described in the FY 2016 IPPS/
                LTCH PPS final rule (80 FR 49701), these standards are referred to as
                content exchange standards because the standard details how data should
                be represented and the relationships between data elements. This allows
                the data to be exchanged across EHRs and health IT systems while
                retaining their meaning. Commonly used content exchange standards
                include the QRDA. The QRDA standard provides a document format and
                standard structure to electronically report quality measure data. We
                believe electronically reporting data elements formatted according to
                the QRDA standard would promote consistent representation and more
                efficient calculation of eCQM measure results.
                 Therefore, in alignment with the Hospital IQR Program file format
                requirements (85 FR 58940), in the CY 2022 OPPS/ASC proposed rule (86
                FR 42262), we proposed that, beginning with the CY 2023 reporting
                period/CY 2025 payment determination, hospitals: (1) Must submit eCQM
                data via the QRDA Category I (QRDA I) file format; \417\ (2) may use
                third parties to submit QRDA I files on their behalf; and (3) may
                either use abstraction or pull the data from non-certified sources in
                order to then input these data into CEHRT for capture and reporting
                QRDA I. Hospitals could meet the reporting requirements by submitting
                data via QRDA I files, zero denominator declaration, or case threshold
                exemptions. We discuss the zero denominator declaration and case
                threshold exemptions in the subsequent sections. We also refer readers
                to section XV.B.8. of the CY 2022 OPPS/ASC proposed rule (86 FR 42256)
                and in this section of this final rule with comment period where we
                outline the maintenance of technical specifications including those for
                eCQMs.
                ---------------------------------------------------------------------------
                 \417\ QRDA I is an individual patient-level quality report that
                contains quality data for one patient for one or more eCQMs. QRDA
                creates a standard method to report quality measure results in a
                structured, consistent format and can be used to exchange eCQM data
                between systems. For further detail on QRDA I, the most recently
                available QRDA I specifications and Implementation Guides (IGs) can
                be found at: https://ecqi.healthit.gov/qrda.
                ---------------------------------------------------------------------------
                 Under this proposal, we expect QRDA I files to reflect data for one
                patient per file per quarter with five key elements necessary to
                identify the file:
                 CMS Certification Number (CCN);
                 CMS Program Name;
                 EHR Patient ID;
                 Reporting period specified in the Reporting Parameters
                Section; and
                 EHR Submitter ID.
                 We received comments on these topics.
                 Comment: One commenter supported our alignment of these
                requirements with other quality reporting programs, particularly the
                Hospital IQR Program.
                 Response: We thank the commenter for their support.
                 After consideration of the public comments we received, we are
                finalizing this proposal as proposed.
                (2) Zero Denominator Declarations
                 We understand there may be situations in which a hospital does not
                have data to report on a particular eCQM. Therefore, in the CY 2022
                OPPS/ASC proposed rule (86 FR 42262), we proposed if the hospital's EHR
                is certified to an eCQM, but the hospital does not have patients that
                meet the denominator criteria of that eCQM, the hospital can submit a
                zero in the denominator for that eCQM. Submission of a zero in the
                denominator for an eCQM counts as a successful submission for that eCQM
                for the Hospital OQR Program. For example, if the hospital within the
                previously mentioned health system does not provide fibrinolytic
                therapy, but one of the eCQMs the health system's EHR is certified to
                is a fibrinolytic therapy measure, that hospital's EHR may render a
                zero in the denominator for that eCQM. The hospital will therefore
                report a zero denominator for that fibrinolytic therapy eCQM, and this
                will count toward the required eCQMs for the Hospital OQR Program.
                Hospitals within that health system for which that fibrinolytic therapy
                eCQM does apply will provide data on that measure.
                 We received one comment on these topics.
                 Comment: One commenter supported our alignment of these
                requirements with other quality reporting programs, particularly the
                Hospital IQR Program.
                 Response: We thank the commenter for its support.
                 After consideration of the public comments we received, we are
                finalizing this proposal as proposed.
                (3) Case Threshold Exemptions
                 We understand that in some cases, a hospital may not meet the case
                threshold of discharges for a particular eCQM. In the CY 2022 OPPS/ASC
                proposed rule (86 FR 42262), we proposed to align with the case
                threshold exemption from the Medicare Promoting Interoperability
                Program (77 FR 54080) and the Hospital IQR Program (79 FR 50324). As
                stated for the Hospital IQR Program, the case threshold exemption means
                that for each quality measure for which hospitals do not have a minimum
                number of patients that meet the patient population denominator
                criteria for the relevant reporting period, hospitals would have the
                ability to declare a ``case threshold exemption'' if they have five or
                fewer applicable discharges. Specifically, for the Hospital OQR Program
                we propose that beginning with the CY 2023 reporting period/CY 2025
                payment determination, if a hospital's EHR system is certified to
                report an eCQM and the hospital experiences 5 or fewer outpatient
                discharges per quarter or 20 or fewer outpatient discharges per year
                (Medicare and non-Medicare combined), as defined by an electronic
                clinical quality measure's denominator population, that hospital could
                be exempt from reporting on that electronic clinical quality measure.
                Case threshold exemptions are entered on the Denominator Declaration
                screen within the HQR System (formerly referred to as the QualityNet
                Secure Portal) available during the submission period.\418\ The
                exemption would not have to be used; hospitals could report those
                individual cases if they would like to.
                ---------------------------------------------------------------------------
                 \418\ CMS Adds New Features to Denominator Declaration Screen
                for eCQM Reporting, available at: https://qualitynet.cms.gov/news/5fa161829314190021d3c262.
                ---------------------------------------------------------------------------
                 We received one comment on these topics.
                 Comment: One commenter supported our alignment of these
                requirements with other quality reporting programs, particularly the
                Hospital IQR Program.
                 Response: We thank the commenter for its support.
                 After consideration of the public comments we received, we are
                finalizing this proposal as proposed.
                [[Page 63870]]
                e. Submission Deadlines for eCQM Data
                 In the FY 2017 IPPS/LTCH PPS final rule (81 FR 57172), the Hospital
                IQR Program aligned their eCQM submission deadline with that of the
                Medicare Promoting Interoperability Program. The eCQM submission
                deadline for those two programs is the end of two months following the
                close of the CY (beginning with the CY 2017 reporting period/FY 2019
                payment determination and for subsequent years).
                 In the CY 2022 OPPS/ASC proposed rule (86 FR 42262), for the
                Hospital OQR Program, we proposed to require eCQM data submission by
                the end of 2 months following the close of the calendar year for the CY
                2023 reporting period/CY 2025 payment determination and for subsequent
                years. We believe that by aligning with the Hospital IQR and Promoting
                Interoperability Programs' deadlines, we would not add unnecessary
                burden. For example, for the CY 2023 reporting period/CY 2025 payment
                determination, hospitals that choose to voluntarily report that
                calendar year would be required to submit eCQM data by February 29,
                2024, which is the end of 2 months following the close of the calendar
                year (December 31, 2023).
                 In developing this policy, we also considered proposing a
                submission deadline of May 15 to align with the submission deadline for
                Hospital OQR web-based measures. Under the Hospital OQR Program, the
                data submission period for web-based measures (for example, OP-29 and
                OP-31) extends through May 15 (we note the submission deadline may be
                moved to the next business day if it falls on a weekend or Federal
                holiday). However, we ultimately proposed instead to align eCQM data
                submission deadlines across quality reporting programs, because we
                believe that it would be less burdensome for hospitals.
                 We received comments on these topics.
                 Comment: One commenter supported our alignment of the submission
                deadline requirements across quality reporting programs.
                 Response: We thank the commenter for their support.
                 In the CY 2022 OPPS/ASC proposed rule (86 FR 42262), we indicated
                that we considered a deadline of May 15. To allow more time for data
                submission and for hospitals to review their data, we believe that a
                May 15 deadline is more appropriate. Additionally, this is consistent
                with the Hospital OQR Program data submission deadline for web-based
                measures which provides inter-program alignment. Therefore, after
                consideration of public comments, we are finalizing this proposal with
                modification, establishing May 15 as the data submission deadline for
                eCQMs for the CY 2023 reporting period/CY 2025 payment determination
                and for subsequent years. We note the submission deadline may be moved
                to the next business day if it falls on a weekend or Federal holiday.
                7. Population and Sampling Data Requirements for the CY 2022 Payment
                Determination and Subsequent Years
                 We refer readers to the CY 2011 OPPS/ASC final rule with comment
                period (75 FR 72100 through 72103) and the CY 2012 OPPS/ASC final rule
                with comment period (76 FR 74482 through 74483) for discussions of our
                population and sampling requirements. We did not propose any changes to
                these policies in the proposed rule. We note that we did not propose
                any population and sampling data policies related to eCQM reporting,
                because we would expect data for all patients who meet the patient
                population denominator criteria to be reported.
                8. Review and Corrections Period for Measure Data Submitted to the
                Hospital OQR Program
                a. Chart-Abstracted Measures
                 We refer readers to the CY 2015 OPPS/ASC final rule with comment
                period (79 FR 66964 and 67014) where we formalized a review and
                corrections period for chart-abstracted measures in the Hospital OQR
                Program. We did not propose any changes to these policies in the
                proposed rule.
                b. Web-Based Measures
                 In the CY 2021 OPPS/ASC final rule (85 FR 86184), we finalized and
                codified to expand our review and corrections policy to apply to
                measure data submitted via the CMS web-based tool beginning with data
                submitted for the CY 2023 payment determination and subsequent years.
                We did not propose any changes to these policies in the proposed rule.
                c. Electronic Clinical Quality Measures (eCQMs)
                 In the CY 2022 OPPS/ASC proposed rule (86 FR 42263), we proposed
                that hospitals would have a review and corrections period for eCQM data
                submitted to the Hospital OQR Program. We proposed a review and
                corrections period for eCQM data which would run concurrently with the
                data submission period. The review and corrections period is from the
                time the submission period opens to the submission deadline. In the HQR
                System (formerly referred to as the QualityNet Secure Portal),
                providers can submit QRDA Category I test and production data files and
                can correct QRDA Category I test and production data files before
                production data is submitted for final reporting. We encourage early
                testing and the use of pre-submission testing tools to reduce errors
                and inaccurate data submissions in eCQM reporting. The HQR System does
                not allow data to be submitted or corrected after the annual deadline.
                We refer readers to the HQR System website (available at: https://hqr.cms.gov/hqrng/login) and the eCQI Resource Center (available at:
                https://ecqi.healthit.gov/) for more resources on eCQM reporting.
                 We received no comments on this proposal. Therefore, we are
                finalizing this proposal as proposed.
                d. OAS CAHPS Measures
                 Each hospital administers (via its vendor) the survey for all
                eligible patients treated during the data collection period on a
                monthly basis according to the guidelines in the Protocols and
                Guidelines Manual (https://oascahps.org) and report the survey data to
                CMS on a quarterly basis by the deadlines posted on the OAS CAHPS
                Survey website as stated in section XV.D.4.b.(2). of the CY 2022 OPPS/
                ASC proposed rule (86 FR 42259) and this final rule. As finalized in
                the CY 2017 OPPS/ASC final rule with comment period, data cannot be
                altered after the data submission deadline but can be reviewed prior to
                the submission deadline (81 FR 79793).
                9. Hospital OQR Program Validation Requirements
                a. Background
                 We refer readers to the CY 2011 OPPS/ASC final rule with comment
                period (75 FR 72105 through 72106), the CY 2013 OPPS/ASC final rule
                with comment period (77 FR 68484 through 68487), the CY 2015 OPPS/ASC
                final rule with comment period (79 FR 66964 through 66965), the CY 2016
                OPPS/ASC final rule with comment period (80 FR 70524), the CY 2018
                OPPS/ASC final rule with comment period (82 FR 59441 through 59443),
                and 42 CFR[thinsp]419.46(f) for our policies regarding validation.
                b. Use of Electronic File Submissions for Chart-Abstracted Measure
                Medical Records Requests Beginning With the CY 2022 Reporting Period/CY
                2024 Payment Determination and Subsequent Years
                 Currently, hospitals may choose to submit paper copies of medical
                records for chart-abstracted measure validation, or they may submit
                copies of medical
                [[Page 63871]]
                records for validation by securely transmitting electronic versions of
                medical information (79 FR 66965 through 66966). Submission of
                electronic versions can either entail downloading or copying the
                digital image of the medical record onto Compact Disc (CD), Digital
                Video Disc (DVD), or flash drive, or submission of Portable Document
                Format (PDF) using a secure file transmission process after logging
                into the HQR System (formerly referred to as the QualityNet Secure
                Portal) (79 FR 66966). We reimburse hospitals at $3.00 per chart (FY
                2016 IPPS/LTCH PPS final rule (80 FR 49763)).
                 We strive to provide the public with accurate quality data while
                maintaining alignment with hospital recordkeeping practices. We
                appreciate that hospitals have rapidly adopted EHR systems as their
                primary source of information about patient care, which can facilitate
                the process of producing electronic copies of medical records.
                Additionally, we monitor the medical records submissions to the CMS
                Clinical Data Abstraction Center (CDAC) contractor and have found that
                almost two-thirds of hospitals already use the option to submit PDF
                copies of medical records as electronic files. In our assessment based
                on this monitoring, we believe requiring electronic file submissions
                can be a more effective and efficient process for hospitals selected
                for validation.
                 Therefore, in the CY 2022 OPPS/ASC proposed rule (86 FR 42263), we
                proposed to discontinue the option for hospitals to send paper copies
                of, or CDs, DVDs, or flash drives containing medical records for
                validation affecting the CY 2024 payment determination (that is,
                beginning with data submission for Q1 of CY 2022). We proposed to
                require hospitals to instead submit only electronic files when
                submitting copies of medical records for validation of chart-abstracted
                measures, beginning with validation affecting the CY 2024 payment
                determination (that is, Q1 of CY 2022) and for subsequent years. Under
                this proposal, hospitals would be required to submit PDF copies of
                medical records using direct electronic file submission via a CMS-
                approved secure file transmission process as directed by CDAC. We would
                continue to reimburse hospitals at $3.00 per chart, consistent with the
                current reimbursement amount for electronic submissions of charts. We
                note that this process would align with that for the Hospital IQR
                Program (FY 2016 IPPS/LTCH PPS final rule (85 FR 58949)).
                 Requiring electronic file submissions reduces the burden of not
                only coordinating numerous paper-based pages of medical records, but
                also of having to then ship the papers or physical digital media
                storage to the CDAC. Therefore, we believe it is appropriate to require
                that hospitals use electronic file submissions via a CMS-approved
                secure file transmission process.
                 We received comments on these topics.
                 Comment: Several commenters supported the proposed changes to
                require the use of electronic file submissions and remove the paper
                submission option beginning with the CY 2022 reporting period/CY2024
                payment determination and for subsequent years because this change will
                align the data validation process for chart abstracted measures with
                the Hospital IQR Program.
                 Response: We thank the commenters for their support.
                 After consideration of the public comments we received, we are
                finalizing this proposal as proposed.
                c. Time Period for Chart-Abstracted Measure Data Validation for
                Validations Affecting the CY 2024 Payment Determination and Subsequent
                Years
                 We refer readers to the chart-abstracted validation requirements
                and methods we adopted in the CY 2014 OPPS/ASC final rule with comment
                period (78 FR 75117 through 75118) and codified at 42 CFR 419.46(f)(1)
                for the CY 2024 payment determination and subsequent years. In previous
                years, charts were requested by the CMS CDAC contractor and hospitals
                were given 45-calendar days from the date of the request to submit the
                requested records. If any record(s) were not received by the 45-day
                requirement, the CMS CDAC contractor assigned a ``zero'' validation
                score to each measure in a missing record. Using data from the CDAC, we
                have found that a large majority of hospitals that have participated in
                Hospital OQR Program data validation efforts have submitted their
                records prior to 30 calendar days in the current process. Furthermore,
                outpatient records typically contain significantly fewer pages than the
                inpatient records that hospitals have been submitting to the Hospital
                IQR Program for several years, which suggests that outpatient records
                could be gathered in less time and use less resources.
                 Therefore, in the CY 2022 OPPS/ASC proposed rule (86 FR 42263), we
                proposed to revise Sec. 419.46(f)(1) to change the time period given
                to hospitals to submit medical records to the CDAC contractor from 45-
                calendar days to 30-calendar days, beginning with medical record
                submissions for encounters in Q1 of CY 2022/validations affecting the
                CY 2024 payment determination and for subsequent years. We proposed
                this deadline modification to reduce the time needed to complete
                validation, provide hospitals with feedback on their abstraction
                accuracy in a timelier manner, and to further align with the Hospital
                IQR Program's validation policy (76 FR 51645).
                 We received comments on these topics.
                 Comment: Several commenters supported this change to the time
                period given to hospitals to submit medical records to the CDAC
                contractor from 45-calendar days to 30-calendar days, beginning with
                medical record submissions for encounters in Q1 of CY 2022/validations
                affecting the CY 2024 payment determination and for subsequent years.
                 Response: We thank the commenters for their support.
                 Comment: Several commenters expressed concern with the proposal to
                reduce the submission time for validation from 45 to 30-calendar days.
                A few commenters noted that it takes time to review copied charts and
                recompile them for CDAC review. Commenters also noted that the time
                allotted for preparation of files will be even more important as
                measures move to eCQMs. A few other commenters mentioned that they do
                not support reducing hospital response times to validation requests
                without assurances from CMS that hospitals will receive timely feedback
                as a result. One commenter had concerns that given the scarce resources
                in health care currently, this proposal will present increased hardship
                to many facilities. The commenters requested that CMS continue to allow
                45 days for submission of medical records to CDAC.
                 Response: As previously noted, the majority of participating
                hospitals in the Hospital OQR program have submitted their records
                prior to 30 calendar days in the current process according to the CDAC
                data. Given this, we believe that this adjusted timeline will not
                impose hardship on those hospitals. Additionally, our findings show
                that outpatient records contain less pages than inpatient records
                therefore, we do not anticipate that HOPDs will require additional
                time, resources, or administrative burden compared to inpatient
                hospitals, which already complete this process within the 30-day
                timeframe. We acknowledge that the reduction in time may require some
                hospitals to adjust their procedures to meet the new deadline, but this
                [[Page 63872]]
                proposal does not change the number of records requested, and we
                believe that a majority of hospitals have already shown the 30-day
                timeframe is feasible. Furthermore, as stated in the CY 2022 OPPS/ASC
                proposed rule (86 FR 42263 through 42264), this proposal would allow us
                to reduce the time needed to complete validation and provide hospitals
                with valuable and timely feedback of their results.
                 We also thank the commenters for their concern about the timing of
                this proposal as CMS shifts focus to eCQMs. As we gain more experience
                with eCQMs we will continue to monitor any potential challenges and
                adjust our validation requirements in future rulemaking if necessary.
                 After consideration of the public comments we received, we are
                finalizing this proposal as proposed.
                d. Targeting Criteria
                (1) Background
                 In the CY 2012 OPPS/ASC final rule with comment period (76 FR
                74485), we finalized a validation selection process in which we select
                a random sample of 450 hospitals for validation purposes and select an
                additional 50 hospitals based on specific criteria. We finalized a
                policy in the CY 2013 OPPS/ASC final rule with comment period (77 FR
                68485 through 68486), that for the CY 2014 payment determination and
                subsequent years, a hospital will be preliminarily selected for
                validation based on targeting criteria if it fails the validation
                requirement that applies to the previous year's payment determination.
                We also refer readers to the CY 2013 OPPS/ASC final rule with comment
                period (77 FR 68486 through 68487) for a discussion of finalized
                policies regarding our medical record validation procedure
                requirements. We codified at Sec. 419.46(f)(3) that we select a random
                sample of 450 hospitals for validation purposes, and select an
                additional 50 hospitals for validation purposes based on the following
                criteria:
                 The hospital fails the validation requirement that applies
                to the previous year's payment determination; or
                 The hospital has an outlier value for a measure based on
                the data it submits. An ``outlier value'' is a measure value that is
                greater than 5 standard deviations from the mean of the measure values
                for other hospitals and indicates a poor score.
                 In the CY 2018 OPPS/ASC final rule with comment period (82 FR
                59441), we clarified that an ``outlier value'' for purposes of this
                targeting is defined as a measure value that appears to deviate
                markedly from the measure values for other hospitals.
                (2) Addition of Targeting Criteria
                 Beginning with validations affecting the CY 2022 reporting period/
                CY 2024 payment determination and subsequent years, in the CY 2022
                OPPS/ASC proposed rule (86 FR 42264), we proposed to add to the two
                established targeting criteria used to select the 50 additional
                hospitals. Specifically, we proposed to revise Sec. 419.46(f)(3) to
                add the following criteria for targeting the additional 50 hospitals:
                 Any hospital that has not been randomly selected for
                validation in any of the previous 3 years.
                 Any hospital that passed validation in the previous year,
                but had a two-tailed confidence interval that included 75 percent.
                 We stated in the proposed rule our belief that these proposals
                would allow more hospitals the opportunity for validation. First, by
                adding targeting criteria for any hospital that has not been randomly
                selected for validation in any of the previous 3 years, we can ensure
                that hospitals are eligible to be validated on a regular basis even if
                they are not selected under the randomly selected sample. Second, the
                option to selectively review hospitals that have a confidence interval
                that includes 75 percent is important because hospitals whose
                confidence interval includes 75 percent indicates a higher level of
                uncertainty as to the reliability of data for that particular hospital.
                By adding the targeting criteria for hospitals with two-tailed
                confidence interval that includes 75 percent, we can target those
                hospitals that are in the statistical margin of error for their
                accuracy (which includes hospitals that both pass and fail on this
                level). These proposals also align Hospital OQR Program validation with
                additional aspects of Hospital IQR Program validation (77 FR 53553). We
                believe that these proposed additional criteria would improve data
                quality by increased targeting of hospitals with possible or confirmed
                past data quality issues. Additionally, the proposal would respond to
                concerns that CMS does not have a methodology to address hospitals for
                which both passing and falling levels of accuracy were included for the
                statistical margin of error.\419\
                ---------------------------------------------------------------------------
                 \419\ Government Accountability Office. ``Hospital Quality Data.
                CMS needs more rigorous methods to ensure reliability of publicly
                released data''. GAO-06-54, January 2006.
                ---------------------------------------------------------------------------
                 We received comments on these topics.
                 Comment: A few commenters supported the proposed changes to the
                targeting criteria used in the data validation process beginning with
                the CY 2022 reporting period/CY 2024 payment determination and
                subsequent years.
                 Response: We thank the commenters for their support.
                 Comment: One commenter did not support targeting a hospital that
                passed validation in the previous year with a two-tailed confidence
                interval that includes 75 percent.
                 Response: We appreciate the commenters feedback and reiterate that
                validation continues to be an integral part of maintaining data
                integrity. We believe that finalizing these additional targeting
                criteria will provide more hospitals the opportunity to be selected for
                validation and ensure data integrity.
                 Comment: A few commenters provided recommendations to CMS regarding
                the targeting criteria for validation policies. One commenter urged CMS
                to coordinate validation requirements between the Hospital OQR and
                Hospital IQR programs to ensure that hospitals that are selected for
                validation are only required to validate data for the Hospital OQR or
                Hospital IQR program, instead of both programs. Another commenter noted
                that validation is an intense year long process for facilities and
                recommended that the administration should not repeatedly require
                administrative processes for validation efforts in order to create
                additional availability for important quality improvement initiatives.
                 Response: We appreciate the commenters' feedback and reiterate that
                validation is an important part of ensuring data integrity and that the
                finalization of these policies will help ensure data integrity and
                align validation policies across quality reporting programs. Each year
                there are only 10-15 hospitals that overlap in selection for
                validation. We closely review the selected hospitals to ensure there is
                no overlap in the record requests between the Hospital OQR and Hospital
                IQR programs. This review also allows us to ensure that hospitals have
                sufficient time to fulfill one request at a time. These policies are
                intended to align the Hospital OQR Program validation process with the
                Hospital IQR Program, which furthers overall cross-program alignment
                goals.
                 After consideration of the public comments we received, we are
                finalizing this proposal as proposed.
                e. Educational Review Process and Score Review and Correction Period
                for Chart-Abstracted Measures
                 We refer readers to the CY 2018 OPPS/ASC final rule with comment
                period (82 FR 59441 through 59443) and
                [[Page 63873]]
                the CY 2021 OPPS/ASC final rule with comment period (85 FR 86185),
                where we finalized and codified a policy to formalize the Educational
                Review Process for Chart-Abstracted Measures, including Validation
                Score Review and Correction.
                 We did not propose any changes to these policies in the proposed
                rule.
                10. Extraordinary Circumstances Exception (ECE) Process for the CY 2022
                Payment Determination and Subsequent Years
                a. Background
                 We refer readers to the CY 2013 OPPS/ASC final rule with comment
                period (77 FR 68489), the CY 2014 OPPS/ASC final rule with comment
                period (78 FR 75119 through 75120), the CY 2015 OPPS/ASC final rule
                with comment period (79 FR 66966), the CY 2016 OPPS/ASC final rule with
                comment period (80 FR 70524), the CY 2017 OPPS/ASC final rule with
                comment period (81 FR 79795), the CY 2018 OPPS/ASC final rule with
                comment period (82 FR 59444), and 42 CFR 419.46(e) for a complete
                discussion of our extraordinary circumstances exception (ECE) process
                under the Hospital OQR Program.
                b. Expanding the Extraordinary Circumstances Exemption to eCQMs
                 As part of our proposed policies in support of the introduction of
                eCQMs into the Hospital OQR Program, beginning with the CY 2024
                reporting period/CY 2026 payment determination and for subsequent
                years, in the CY 2022 OPPS/ASC proposed rule (86 FR 42264), we proposed
                to expand our established Extraordinary Circumstances Exceptions policy
                to allow hospitals to request an exception from the Hospital OQR
                Program's eCQM reporting requirements based on hardships preventing
                hospitals from electronically reporting. We note that our proposal
                aligns with the Hospital IQR Program's Extraordinary Circumstances
                Exceptions policy for eCQMs (80 FR 49695, 42 CFR 412.140(c)(2)).
                 Under this proposal, applicable hardships could include, but are
                not limited to, infrastructure challenges (hospitals must demonstrate
                that they are in an area without sufficient internet access or face
                insurmountable barriers to obtaining infrastructure) or unforeseen
                circumstances, such as vendor issues outside of the hospital's control
                (including a vendor product losing certification). In addition, under
                the Hospital OQR Program, we may consider being a newly participating
                hospital as undergoing hardship such that newly participating hospitals
                can apply for an exemption for the applicable program year. Newly
                participating hospitals are required to begin data submission under the
                Hospital OQR Program procedural requirements at Sec. 419.46(d)(1),
                which describes submission and validation of Hospital OQR Program data.
                 We also proposed that a hospital participating in the Hospital OQR
                Program that wishes to request an exception must submit its request to
                CMS by April 1 following the end of the reporting calendar year in
                which the extraordinary circumstances occurred. For example, if an
                extraordinary circumstance occurred on or by December 31, 2024, the ECE
                request must be submitted by April 1, 2025. Specific requirements for
                submission of a request for an exception would be available on the
                QualityNet website available at: https://qualitynet.cms.gov/. We
                received comments on these topics.
                 Comment: A few commenters expressed support for the expansion of
                the ECE policy to cover eCQMs under the Hospital OQR Program.
                 Response: We thank the commenters for their support.
                 After consideration of the public comments we received, we are
                finalizing this proposal as proposed.
                11. Hospital OQR Program Reconsideration and Appeals Procedures for the
                CY 2022 Payment Determination and Subsequent Years
                 We refer readers to the CY 2013 OPPS/ASC final rule with comment
                period (77 FR 68487 through 68489), the CY 2014 OPPS/ASC final rule
                with comment period (78 FR 75118 through 75119), the CY 2016 OPPS/ASC
                final rule with comment period (80 FR 70524), the CY 2017 OPPS/ASC
                final rule with comment period (81 FR 79795), the CY 2021 OPPS/ASC
                final rule with comment period (85 FR 68185), and 42 CFR 419.46(g) for
                our reconsideration and appeals procedures. We did not propose any
                changes to these policies in the proposed rule.
                E. Payment Reduction for Hospitals That Fail To Meet the Hospital OQR
                Program Requirements for the CY 2022 Payment Determination
                1. Background
                 Section 1833(t)(17) of the Act, which applies to subsection (d)
                hospitals (as defined under section 1886(d)(1)(B) of the Act), states
                that hospitals that fail to report data required to be submitted on
                measures selected by the Secretary, in the form and manner, and at a
                time, specified by the Secretary will incur a 2.0 percentage point
                reduction to their Outpatient Department (OPD) fee schedule increase
                factor; that is, the annual payment update factor. Section
                1833(t)(17)(A)(ii) of the Act specifies that any reduction applies only
                to the payment year involved and will not be taken into account in
                computing the applicable OPD fee schedule increase factor for a
                subsequent year.
                 The application of a reduced OPD fee schedule increase factor
                results in reduced national unadjusted payment rates that apply to
                certain outpatient items and services provided by hospitals that are
                required to report outpatient quality data in order to receive the full
                payment update factor and that fail to meet the Hospital OQR Program
                requirements. Hospitals that meet the reporting requirements receive
                the full OPPS payment update without the reduction. For a more detailed
                discussion of how this payment reduction was initially implemented, we
                refer readers to the CY 2009 OPPS/ASC final rule with comment period
                (73 FR 68769 through 68772).
                 The national unadjusted payment rates for many services paid under
                the OPPS equal the product of the OPPS conversion factor and the scaled
                relative payment weight for the APC to which the service is assigned.
                The OPPS conversion factor, which is updated annually by the OPD fee
                schedule increase factor, is used to calculate the OPPS payment rate
                for services with the following status indicators (listed in Addendum B
                to the proposed rule, which is available via the internet on the CMS
                website): ``J1'', ``J2'', ``P'', ``Q1'', ``Q2'', ``Q3'', ``R'', ``S'',
                ``T'', ``V'', or ``U''. In the CY 2017 OPPS/ASC final rule with comment
                period (81 FR 79796), we clarified that the reporting ratio does not
                apply to codes with status indicator ``Q4'' because services and
                procedures coded with status indicator ``Q4'' are either packaged or
                paid through the Clinical Laboratory Fee Schedule and are never paid
                separately through the OPPS. Payment for all services assigned to these
                status indicators will be subject to the reduction of the national
                unadjusted payment rates for hospitals that fail to meet Hospital OQR
                Program requirements, with the exception of services assigned to New
                Technology APCs with assigned status indicator ``S'' or ``T''. We refer
                readers to the CY 2009 OPPS/ASC final rule with comment period (73 FR
                68770 through 68771) for a discussion of this policy.
                 The OPD fee schedule increase factor is an input into the OPPS
                conversion factor, which is used to calculate OPPS
                [[Page 63874]]
                payment rates. To reduce the OPD fee schedule increase factor for
                hospitals that fail to meet reporting requirements, we calculate two
                conversion factors--a full market basket conversion factor (that is,
                the full conversion factor), and a reduced market basket conversion
                factor (that is, the reduced conversion factor). We then calculate a
                reduction ratio by dividing the reduced conversion factor by the full
                conversion factor. We refer to this reduction ratio as the ``reporting
                ratio'' to indicate that it applies to payment for hospitals that fail
                to meet their reporting requirements. Applying this reporting ratio to
                the OPPS payment amounts results in reduced national unadjusted payment
                rates that are mathematically equivalent to the reduced national
                unadjusted payment rates that would result if we multiplied the scaled
                OPPS relative payment weights by the reduced conversion factor. For
                example, to determine the reduced national unadjusted payment rates
                that applied to hospitals that failed to meet their quality reporting
                requirements for the CY 2010 OPPS, we multiplied the final full
                national unadjusted payment rate found in Addendum B of the CY 2010
                OPPS/ASC final rule with comment period by the CY 2010 OPPS final
                reporting ratio of 0.980 (74 FR 60642).
                 We note that the only difference in the calculation for the full
                conversion factor and the calculation for the reduced conversion factor
                is that the full conversion factor uses the full OPD update and the
                reduced conversion factor uses the reduced OPD update. The baseline
                OPPS conversion factor calculation is the same since all other
                adjustments would be applied to both conversion factor calculations.
                Therefore, our standard approach of calculating the reporting ratio as
                described earlier in this section is equivalent to dividing the reduced
                OPD update factor by that of the full OPD update factor. In other
                words:
                Full Conversion Factor = Baseline OPPS conversion factor * (1 + OPD
                update factor)
                Reduced Conversion Factor = Baseline OPPS conversion factor * (1 + OPD
                update factor-0.02)
                Reporting Ratio = Reduced Conversion Factor/Full Conversion Factor
                 Which is equivalent to:
                Reporting Ratio = (1 + OPD Update factor-0.02)/(1 + OPD update factor)
                 In the CY 2009 OPPS/ASC final rule with comment period (73 FR 68771
                through 68772), we established a policy that the Medicare beneficiary's
                minimum unadjusted copayment and national unadjusted copayment for a
                service to which a reduced national unadjusted payment rate applies
                would each equal the product of the reporting ratio and the national
                unadjusted copayment or the minimum unadjusted copayment, as
                applicable, for the service. Under this policy, we apply the reporting
                ratio to both the minimum unadjusted copayment and national unadjusted
                copayment for services provided by hospitals that receive the payment
                reduction for failure to meet the Hospital OQR Program reporting
                requirements. This application of the reporting ratio to the national
                unadjusted and minimum unadjusted copayments is calculated according to
                Sec. 419.41 of our regulations, prior to any adjustment for a
                hospital's failure to meet the quality reporting standards according to
                Sec. 419.43(h). Beneficiaries and secondary payers thereby share in
                the reduction of payments to these hospitals.
                 In the CY 2009 OPPS/ASC final rule with comment period (73 FR
                68772), we established the policy that all other applicable adjustments
                to the OPPS national unadjusted payment rates apply when the OPD fee
                schedule increase factor is reduced for hospitals that fail to meet the
                requirements of the Hospital OQR Program. For example, the following
                standard adjustments apply to the reduced national unadjusted payment
                rates: The wage index adjustment, the multiple procedure adjustment,
                the interrupted procedure adjustment, the rural sole community hospital
                adjustment, and the adjustment for devices furnished with full or
                partial credit or without cost. Similarly, OPPS outlier payments made
                for high cost and complex procedures will continue to be made when
                outlier criteria are met. For hospitals that fail to meet the quality
                data reporting requirements, the hospitals' costs are compared to the
                reduced payments for purposes of outlier eligibility and payment
                calculation. We established this policy in the OPPS beginning in the CY
                2010 OPPS/ASC final rule with comment period (74 FR 60642). For a
                complete discussion of the OPPS outlier calculation and eligibility
                criteria, we refer readers to section II.G. of this final rule with
                comment period.
                2. Reporting Ratio Application and Associated Adjustment Policy for CY
                2022
                 We proposed to continue our established policy of applying the
                reduction of the OPD fee schedule increase factor through the use of a
                reporting ratio for those hospitals that fail to meet the Hospital OQR
                Program requirements for the full CY 2022 annual payment update factor.
                For the CY 2022 OPPS/ASC proposed rule, the proposed reporting ratio is
                0.9805, which, when multiplied by the proposed full conversion factor
                of $84.457, equals a proposed conversion factor for hospitals that fail
                to meet the requirements of the Hospital OQR Program (that is, the
                reduced conversion factor) of $82.810. We proposed to continue to apply
                the reporting ratio to all services calculated using the OPPS
                conversion factor. We proposed to continue to apply the reporting
                ratio, when applicable, to all HCPCS codes to which we have proposed
                status indicator assignments of ``J1'', ``J2'', ``P'', ``Q1'', ``Q2'',
                ``Q3'', ``R'', ``S'', ``T'', ``V'', and ``U'' (other than new
                technology APCs to which we have proposed status indicator assignment
                of ``S'' and ``T''). We proposed to continue to exclude services paid
                under New Technology APCs. We proposed to continue to apply the
                reporting ratio to the national unadjusted payment rates and the
                minimum unadjusted and national unadjusted copayment rates of all
                applicable services for those hospitals that fail to meet the Hospital
                OQR Program reporting requirements. We also proposed to continue to
                apply all other applicable standard adjustments to the OPPS national
                unadjusted payment rates for hospitals that fail to meet the
                requirements of the Hospital OQR Program. Similarly, we proposed to
                continue to calculate OPPS outlier eligibility and outlier payment
                based on the reduced payment rates for those hospitals that fail to
                meet the reporting requirements. In addition to our proposal to
                implement the policy through the use of a reporting ratio, we also
                proposed to calculate the reporting ratio to four decimals (rather than
                the previously used three decimals) to more precisely calculate the
                reduced adjusted payment and copayment rates.
                 For CY 2022, the proposed reporting ratio is 0.9805, which, when
                multiplied by the final full conversion factor of 84.457, equals a
                proposed conversion factor for hospitals that fail to meet the
                requirements of the Hospital OQR Program (that is, the reduced
                conversion factor) of 82.810.
                 Comment: Two commenters asserted that the proposed reduced
                conversion factor of $82.810 and the proposed reporting ratio of 0.9805
                are incorrect. Both commenters claim the proposed reduced conversion
                factor should be $83.227 and the proposed reporting ratio should be
                0.9854. The commenters did not provide detailed calculations to support
                these assertions.
                [[Page 63875]]
                 Response: We reviewed our calculations from the proposed rule after
                receiving these comments, and we were able to reconfirm our findings
                from the proposed rule that the reduced conversion factor was correctly
                calculated at $82.810 and the reporting ratio was correctly calculated
                at 0.9805. We would refer the commenters to the earlier text in this
                section (section XV.E.1. of this final rule with comment period) that
                provides a detailed description of the calculations we perform to
                generate the reduced conversion factor and the reporting ratio. In
                addition, we refer readers to the Conversion Factor calculation
                described in Part 2 of the OPPS Claims Accounting narrative, included
                with each proposed and final OPPS rule, available on the CMS website
                at: https://www.cms.gov/.
                 For this final rule with comment period, the final reporting ratio
                is 0.9804, which, when multiplied by the final full conversion factor
                of 84.177, equals a final conversion factor for hospitals that fail to
                meet the requirements of the Hospital OQR Program (that is, the reduced
                conversion factor) of 82.526. We are finalizing our proposal to
                continue to calculate OPPS outlier eligibility and outlier payment
                based on the reduced payment rates for those hospitals that fail to
                meet the reporting requirements. We are also finalizing our proposals
                to implement the policy through the use of a reporting ratio, and to
                calculate the reporting ratio to four decimals (rather than the
                previously used three decimals) to more precisely calculate the reduced
                adjusted payment and copayment rates for hospitals that fail to meet
                the Hospital OQR Program requirements for CY 2022 payment.
                XVI. Requirements for the Ambulatory Surgical Center Quality Reporting
                (ASCQR) Program
                A. Background
                1. Overview
                 We refer readers to section XIV.A.1. of this final rule with
                comment period (84 FR 61410) for a general overview of our quality
                reporting programs and to the CY 2019 OPPS/ASC final rule with comment
                period (83 FR 58820 through 58822) where we previously discussed our
                Meaningful Measures Framework.
                2. Statutory History of the ASCQR Program
                 We refer readers to the CY 2012 OPPS/ASC final rule with comment
                period (76 FR 74492 through 74494) for a detailed discussion of the
                statutory history of the ASCQR Program.
                3. Regulatory History of the ASCQR Program
                 We refer readers to the CY 2014 through 2021 OPPS/ASC final rules
                with comment period for an overview of the regulatory history of the
                ASCQR Program:
                 CY 2014 OPPS/ASC final rule (78 FR 75122);
                 CY 2015 OPPS/ASC final rule (79 FR 66966 through 66987);
                 CY 2016 OPPS/ASC final rule (80 FR 70526 through 70538);
                 CY 2017 OPPS/ASC final rule (81 FR 79797 through 79826);
                 CY 2018 OPPS/ASC final rule (82 FR 59445 through 59476);
                 CY 2019 OPPS/ASC final rule (83 FR 59110 through 59139);
                 CY 2020 OPPS/ASC final rule (84 FR 61420 through 61434);
                and
                 CY 2021 OPPS/ASC final rule (85 FR 86187 through 86193).
                 We have codified requirements under the ASCQR Program at 42 CFR,
                part 16, subpart H (42 CFR 416.300 through 416.330).
                B. ASCQR Program Quality Measures
                1. Considerations in the Selection of ASCQR Program Quality Measures
                 We refer readers to the CY 2013 OPPS/ASC final rule with comment
                period (77 FR 68493 through 68494) for a detailed discussion of the
                priorities we consider for the ASCQR Program quality measure selection.
                We did not propose any changes to these policies in the proposed rule.
                2. Retention and Removal of Quality Measures From the ASCQR Program
                a. Retention of Previously Adopted ASCQR Program Measures
                 We previously finalized a policy that quality measures adopted for
                an ASCQR Program measure set for a previous payment determination year
                be retained in the ASCQR Program for measure sets for subsequent
                payment determination years, except when such measures are removed,
                suspended, or replaced as indicated (76 FR 74494 and 74504; 77 FR 68494
                through 68495; 78 FR 75122; and 79 FR 66967 through 66969). We did not
                propose any changes to this policy in the proposed rule.
                b. Removal Factors for ASCQR Program Measures
                 In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59111
                through 59115), we clarified, finalized, and codified at Sec. 416.320
                an updated set of factors \420\ and the process for removing measures
                from the ASCQR Program. We did not propose any changes to the measure
                removal factors in the proposed rule.
                ---------------------------------------------------------------------------
                 \420\ We note that we previously referred to these factors as
                ``criteria'' (for example, 79 FR 66967 through 66969); we now use
                the term ``factors'' to align the ASCQR Program terminology with the
                terminology we use in other CMS quality reporting and pay-for-
                performance (value-based purchasing) programs.
                ---------------------------------------------------------------------------
                3. Proposal To Adopt a New Measure for the ASCQR Program Measure Set
                 In the CY 2022 OPPS/ASC proposed rule (86 FR 42267), we proposed to
                adopt one new measure: COVID-19 Vaccination Coverage Among Health Care
                Personnel (HCP) measure (to be designated ASC-20) beginning with the CY
                2022 reporting period/2024 payment determination.
                a. Adoption of the COVID-19 Vaccination Coverage Among Health Care
                Personnel (HCP) Measure (ASC-20) Beginning With the CY 2022 Reporting
                Period/CY 2024 Payment Determination
                (1) Background
                 On January 31, 2020, the Secretary declared a public health
                emergency (PHE) for the United States (U.S.) in response to the global
                outbreak of SARS-CoV-2, a novel coronavirus that causes a disease named
                ``coronavirus disease 2019'' (COVID-19).\421\ COVID-19 is a contagious
                respiratory infection \422\ that can cause serious illness and death.
                Older individuals, some racial and ethnic minorities, and those with
                underlying medical conditions are considered to be at higher risk for
                more serious complications from COVID-19.423 424 As of July
                2, 2021, the U.S. reported over 33 million cases of COVID-19- and over
                600,000 COVID-19 deaths.\425\ As of October 14, 2021, the U.S. reported
                over 44 million cases and over 718,000
                [[Page 63876]]
                COVID-19 deaths.\426\ Hospitals and health systems have seen
                significant surges of COVID-19 patients as community infection levels
                increased.\427\ From December 2, 2020 through January 30, 2021, more
                than 100,000 Americans with COVID-19- were hospitalized at the same
                time.\428\
                ---------------------------------------------------------------------------
                 \421\ U.S. Dept of Health and Human Services, Office of the
                Assistant Secretary for Preparedness and Response. (2020).
                Determination that a Public Health Emergency Exists. Available at:
                https://www.phe.gov/emergency/news/healthactions/phe/Pages/2019-nCoV.aspx.
                 \422\ Centers for Disease Control and Prevention. (2020). Your
                Health: Symptoms of Coronavirus. Available at: https://www.cdc.gov/coronavirus/2019-ncov/symptoms-testing/symptoms.html.
                 \423\ Centers for Disease Control and Prevention. (2020). Your
                Health: Symptoms of Coronavirus. Available at https://www.cdc.gov/coronavirus/2019-ncov/symptoms-testing/symptoms.html.
                 \424\ Centers for Disease Control and Prevention. (2020). Health
                Equity Considerations and Racial and Ethnic Minority Groups.
                Available at: https://www.cdc.gov/coronavirus/2019-ncov/community/health-equity/race-ethnicity.html.
                 \425\ Centers for Disease Control and Prevention. (2021). CDC
                COVID Data Tracker. Available at: https://covid.cdc.gov/covid-data-tracker/#cases_casesper100klast7days.
                 \426\ This information has been updated from the proposed rule
                to reflect current data from the Centers for Disease Control and
                Prevention. (2021). CDC COVID Data Tracker. Available at: https://covid.cdc.gov/covid-data-tracker/#cases_casesper100klast7days.
                 \427\ Associated Press. Tired to the Bone. Hospitals Overwhelmed
                with Virus Cases. November 18, 2020. Accessed on December 16, 2020,
                at https://apnews.com/article/hospitals-overwhelmed-coronavirus-cases-74a1f0dc3634917a5dc13408455cd895. Also see: New York Times.
                Just how full are U.S. intensive care units? New data paints an
                alarming picture. November 18, 2020. Accessed on December 16, 2020,
                at: https://www.nytimes.com/2020/12/09/world/just-how-full-are-us-intensive-care-units-new-data-paints-an-alarming-picture.html.
                 \428\ US Currently Hospitalized [verbar] The COVID Tracking
                Project. Accessed January 31, 2021 at: https://covidtracking.com/data/charts/us-currently-hospitalized.
                ---------------------------------------------------------------------------
                 Evidence indicates that COVID-19 primarily spreads when individuals
                are in close contact with one another.\429\ Ongoing research indicates
                that fully vaccinated people without immunocompromising conditions are
                able to engage in most activities with very low risk of acquiring or
                transmitting SARS-CoV-2, and the Centers for Disease Control and
                Prevention (CDC) issued new guidance for fully vaccinated individuals
                on May 28, 2021.\430\ The virus is typically transmitted through
                respiratory droplets or small particles created when someone who is
                infected with the virus coughs, sneezes, sings, talks or breathes.\431\
                Thus, the CDC advises that infections mainly occur through exposure to
                respiratory droplets when a person is in close contact with someone who
                has COVID-19.\432\ Experts believe that COVID-19 spreads less commonly
                through contact with a contaminated surface \433\ and that in certain
                circumstances, infection can occur through airborne transmission.\434\
                According to the CDC, those at greatest risk of infection are persons
                who have had prolonged, unprotected close contact (that is, within 6
                feet for 15 minutes or longer) with an individual with confirmed COVID-
                19 infection, regardless of whether the individual has symptoms.\435\
                Although personal protective equipment (PPE) and other infection-
                control precautions can reduce the likelihood of transmission in health
                care settings, COVID-19 can spread between HCP and patients or from
                patient to patient given the close contact that may occur during the
                provision of care.\436\ The CDC has emphasized that health care
                settings can be high-risk places for COVID-19 exposure and
                transmission.\437\
                ---------------------------------------------------------------------------
                 \429\ Centers for Disease Control and Prevention. (2021). How
                COVID-19 Spreads. Accessed on April 3, 2021 at: https://www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/how-covid-spreads.html.
                 \430\ Centers for Disease Control and Prevention. (2021).
                Interim Public Health Recommendations for Fully Vaccinated People.
                Accessed on June 2, 2021 at: https://www.cdc.gov/coronavirus/2019-ncov/vaccines/fully-vaccinated-guidance.html.
                 \431\ Centers for Disease Control and Prevention (2021). How
                COVID-19 Spreads. Accessed on April 3, 2021 at: https://www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/how-covid-spreads.html.
                 \432\ Centers for Disease Control and Prevention (2021). How
                COVID-19 Spreads. Accessed on April 3, 2021 at: https://www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/how-covid-spreads.html.
                 \433\ Centers for Disease Control and Prevention (2021). How
                COVID-19 Spreads. Accessed on April 3, 2021 at: https://www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/how-covid-spreads.html.
                 \434\ Centers for Disease Control and Prevention. (2021). How
                COVID-19 Spreads. Accessed on April 3, 2021 at: https://www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/how-covid-spreads.html.
                 \435\ Centers for Disease Control and Prevention. (2021). When
                to Quarantine. Accessed on April 2, 2021 at: https://www.cdc.gov/coronavirus/2019-ncov/if-you-are-sick/quarantine.html.
                 \436\ Centers for Disease Control and Prevention. (2021).
                Interim U.S. Guidance for Risk Assessment and Work Restrictions for
                Healthcare Personnel with Potential Exposure to COVID-19. Accessed
                on April 2 at: https://www.cdc.gov/coronavirus/2019-ncov/hcp/faq.html#Transmission.
                 \437\ Dooling, K, McClung, M, et al. ``The Advisory Committee on
                Immunization Practices' Interim Recommendations for Allocating
                Initial Supplies of COVID-19 Vaccine--United States, 2020.'' Morb
                Mortal Wkly Rep. 2020; 69(49): 1857-1859.
                ---------------------------------------------------------------------------
                 Vaccination is a critical part of the nation's strategy to
                effectively counter the spread of COVID-19 and ultimately help restore
                societal functioning.\438\ On December 11, 2020, the Food and Drug
                Administration (FDA) issued the first Emergency Use Authorization (EUA)
                for a COVID-19 vaccine in the U.S.\439\ Subsequently, FDA issued EUAs
                for additional COVID-19 vaccines.440 441 Following the
                publication of the proposed rule, FDA granted full approval to
                Comirnaty[supreg], the Pfizer-BioNTech COVID-19 vaccine, on August 23,
                2021.\442\
                ---------------------------------------------------------------------------
                 \438\ Centers for Disease Control and Prevention. (2020). COVID-
                19 Vaccination Program Interim Playbook for Jurisdiction Operations.
                Accessed on December 18 at: https://www.cdc.gov/vaccines/imz-managers/downloads/COVID-19-Vaccination-Program-Interim_Playbook.pdf.
                 \439\ U.S. Food and Drug Administration. (2020). Pfizer-BioNTech
                COVID-19 Vaccine EUA Letter of Authorization. Available at https://www.fda.gov/media/144412/download.
                 \440\ U.S. Food and Drug Administration. (2021). Moderna COVID-
                19 Vaccine EUA Letter of Authorization. Available at https://www.fda.gov/media/144636/download.
                 \441\ U.S. Food and Drug Administration. (2021). Janssen COVID-
                19 Vaccine EUA Letter of Authorization. Available at https://www.fda.gov/media/146303/download.
                 \442\ U.S. Food and Drug Administration. (2021). Comirnaty and
                Pfizer-BioNTech COVID-19 Vaccine. Available at: https://www.fda.gov/emergency-preparedness-and-response/coronavirus-disease-2019-covid-19/comirnaty-and-pfizer-biontech-covid-19-vaccine
                ---------------------------------------------------------------------------
                 As part of its national strategy to address COVID-19, the White
                House stated on March 25, 2021 that it would work with states and the
                private sector to execute an aggressive vaccination strategy and
                outlined a goal of administering 200 million shots in 100 days.\443\ On
                April 21, 2021, it was announced that this goal had been achieved.\444\
                Although the goal of the U.S. Government is to ensure that every
                American who wants to receive a COVID-19 vaccine can receive one, the
                Department of Health and Human Services, the Department of Defense, and
                the CDC, recommended that early vaccination efforts focus on those
                critical to the PHE response, including HCP, and individuals at highest
                risk for developing severe illness from COVID-19.\445\ The CDC's
                Advisory Committee on Immunization Practices (ACIP) recommended that
                HCP should be among those individuals prioritized to receive the
                initial, limited supply of the COVID-19 vaccination, given the
                potential for transmission in health care settings and the need to
                preserve health care system capacity.\446\ Reportedly most states
                followed this recommendation,\447\ and HCP began
                [[Page 63877]]
                receiving the vaccine in mid-December of 2020.\448\
                ---------------------------------------------------------------------------
                 \443\ The White House. Remarks by President Biden on the COVID-
                19 Response and the State of Vaccinations. Accessed on April 3, 2021
                at: https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/03/29/remarks-by-president-biden-on-the-covid-19-response-and-the-state-of-vaccinations/.
                 \444\ The White House. Remarks by President Biden on the COVID-
                19 Response and the State of Vaccinations. Accessed on June 2, 2021
                at: https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/04/21/remarks-by-president-biden-on-the-covid-19-response-and-the-state-of-vaccinations-2/.
                 \445\ Health and Human Services, Department of Defense. (2020)
                From the Factory to the Frontlines: The Operation Warp Speed
                Strategy for Distributing a COVID-19 Vaccine. Accessed December 18
                at: https://www.hhs.gov/sites/default/files/strategy-for-distributing-covid-19-vaccine.pdf; Centers for Disease Control
                (2020). COVID-19 Vaccination Program Interim Playbook for
                Jurisdiction Operations. Accessed December 18 at: https://www.cdc.gov/vaccines/imz-managers/downloads/COVID-19-Vaccination-Program-Interim_Playbook.pdf.
                 \446\ Dooling, K, McClung, M, et al. ``The Advisory Committee on
                Immunization Practices' Interim Recommendations for Allocating
                Initial Supplies of COVID-19 Vaccine--United States, 2020.'' Morb.
                Mortal Wkly Rep. 2020; 69(49): 1857-1859. ACIP also recommended that
                long-term care residents be prioritized to receive the vaccine,
                given their age, high levels of underlying medical conditions, and
                congregate living situations make them high risk for severe illness
                from COVID-19.
                 \447\ Kates, J, Michaud, J, Tolbert, J. ``How Are States
                Prioritizing Who Will Get the COVID-19 Vaccine First?'' Kaiser
                Family Foundation. December 14, 2020. Accessed on December 16 at
                https://www.kff.org/policy-watch/how-are-states-prioritizing-who-will-get-the-covid-19-vaccine-first/.
                 \448\ Associated Press. `Healing is Coming:' US Health Workers
                Start Getting Vaccine. December 15, 2020. Accessed on December 16
                at: https://apnews.com/article/us-health-workers-coronavirus-vaccine-56df745388a9fc12ae93c6f9a0d0e81f.
                ---------------------------------------------------------------------------
                 Frontline healthcare workers, such as those employed in ASCs, have
                been prioritized for vaccination in most locations. There are
                approximately 18 million healthcare workers in the U.S.\449\ A survey
                of HCP found that 66 percent of hospital HCP and 64 percent of
                outpatient clinic HCP reported receiving at least one dose of the
                vaccine.\450\ As of July 2, 2021, the CDC reported that over 328
                million doses of COVID-19 vaccine have been administered and
                approximately 155.9 million people had received full doses.\451\
                Subsequently, the CDC reported that as of October 14, 2021, over 405
                million doses of COVID-19 vaccine have been administered and
                approximately 188.3 million people had received full doses.\452\ The
                White House indicated on April 6, 2021 that the U.S. retains sufficient
                vaccine supply, and every adult became eligible to receive the vaccine
                beginning April 19, 2021.\453\ Finally, as part of the efforts to
                vaccinate those who are still unvaccinated through increasing the
                number of Americans covered by vaccination requirements,\454\ on
                September 9, 2021, the Biden Administration announced that COVID-19
                vaccination will be required of all staff within Medicare and Medicaid-
                certified facilities to protect both patients and HCP against COVID-
                19.\455\
                ---------------------------------------------------------------------------
                 \449\ Centers for Disease Control and Prevention. Healthcare
                Workers. (2017) Accessed February 18, 2021 at: https://www.cdc.gov/niosh/topics/healthcare/default.html.
                 \450\ KFF/The Washington Post Frontline Health Care Workers
                Survey. (2021). Accessed June 2, 2021 at: https://www.kff.org/coronavirus-covid-19/poll-finding/kff-washington-post-health-care-workers/.
                 \451\ Centers for Disease Control and Prevention. (2021), COVID
                Data Tracker. COVID-19 Vaccinations in the United States. Available
                at: https://covid.cdc.gov/covid-data-tracker/#vaccinations.
                 \452\ This information has been updated from the proposed rule
                to reflect current data from the Centers for Disease Control and
                Prevention. (2021). COVID Data Tracker. COVID-19 Vaccinations in the
                United States. Available at: https://covid.cdc.gov/covid-data-tracker/#vaccinations.
                 \453\ The White House. Remarks by President Biden Marking the
                150 Millionth COVID-19 Vaccine Shot. Accessed April 8, 2021 at:
                https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/04/06/remarks-by-president-biden-marking-the-150-millionth-covid-19-vaccine-shot/.
                 \454\ The White House. Path Out of the Pandemic: President
                Biden's COVID-19 Action Plan. Accessed on October 14, 2021.
                Available at: https://www.whitehouse.gov/covidplan/#vaccinate.
                 \455\ CMS. Press Release: Biden-Harris Administration to Expand
                Vaccination Requirements for Health Care Settings. September 9,
                2021. Available at: https://www.cms.gov/newsroom/press-releases/biden-harris-administration-expand-vaccination-requirements-health-care-settings. In order to implement this plan, CMS is working with
                the CDC to develop an Interim Final Rule with Comment Period that
                will extend emergency regulations to require vaccination among staff
                in a wide range of healthcare settings including dialysis
                facilities. This action will create a consistent standard across the
                country, while giving patients assurance of the vaccination status
                of those delivering care.
                ---------------------------------------------------------------------------
                 We believe it is important to require that ASCs report HCP
                vaccination information for health care facilities to assess whether
                these facilities are taking this step to limit the spread of COVID-19
                among their health care workers and to help sustain the ability of ASCs
                to continue serving their communities throughout the PHE and beyond.
                Therefore, we proposed adoption of a new measure, COVID-19 Vaccination
                Coverage Among HCP (ASC-20), beginning with the CY 2024 payment
                determination. For that payment year, ASCs would be required to report
                data quarterly on the measure for the January 2022 through December
                2022 reporting period. The measure would assess the proportion of an
                ASC's health care workforce that has been vaccinated against COVID-19.
                 HCP are at risk of transmitting COVID-19 infection to patients,
                experiencing illness or death as a result of COVID-19 infection
                themselves, and transmitting it to their families, friends, and the
                general public. We believe ASCs should report the level of vaccination
                among their HCP as part of their efforts to assess and reduce the risk
                of transmission of COVID-19 within their facilities. HCP vaccination
                can reduce illness that leads to work absence and limit disruptions to
                providing care \456\ with major reductions in SARS-CoV-2 infections
                among those receiving a two dose COVID-19 vaccine despite a high
                community infection rate.\457\ Data from influenza vaccination
                demonstrate that provider vaccination is associated with that provider
                recommending vaccination to patients \458\ and we believe HCP COVID-19
                vaccination in ASCs could similarly increase vaccination among that
                patient population. We also believe that publishing the HCP vaccination
                rates will be helpful to many patients, particularly those who are at
                high-risk for developing serious complications from COVID-19, as they
                choose among ASCs for treatment. Under CMS' Meaningful Measures
                Framework, the COVID-19 measure addresses the quality priority of
                ``Promote Effective Prevention and Treatment of Chronic Disease''
                through the Meaningful Measures Area of ``Preventive Care.''
                ---------------------------------------------------------------------------
                 \456\ Centers for Disease Control and Prevention. Overview of
                Influenza Vaccination among Health Care Personnel. October 2020.
                (2020) Accessed March 16, 2021 at: https://www.cdc.gov/flu/toolkit/long-term-care/why.htm.
                 \457\ Benenson S, Oster Y, Cohen MJ, Nir-Paz R. BNT162b2 mRNA
                Covid-19 Vaccine Effectiveness among Health Care Workers. N Engl J
                Med. 2021. See also: Keehner J, Horton LE, Pfeffer MA, Longhurst CA,
                Schooley RT, Currier JS, et al. SARS-CoV-2 Infection after
                Vaccination in Health Care Workers in California. N Engl J Med.
                2021.
                 \458\ Measure Application Committee Coordinating Committee
                Meeting Presentation. March 15, 2021. (2021) Accessed March 16, 2021
                at: http://www.qualityforum.org/Project_Pages/MAP_Coordinating_Committee.aspx.
                ---------------------------------------------------------------------------
                (2) Overview of Measure
                 The COVID-19 Vaccination Coverage Among HCP measure (``COVID-19 HCP
                vaccination measure'') (ASC-20) is a process measure developed by the
                CDC to track COVID-19 vaccination coverage among HCP in non-LTC
                facilities including ASCs.
                (a) Measure Specifications
                 The denominator for the HCP measure is the number of HCP eligible
                to work in the ASC for at least 1 day during the reporting period,
                excluding persons with contraindications to COVID-19 vaccination that
                are described by the CDC.\459\
                ---------------------------------------------------------------------------
                 \459\ Centers for Disease Control and Prevention.
                Contraindications and precautions. (2021) Accessed March 15, 2021
                at: https://www.cdc.gov/vaccines/covid-19/info-by-product/clinical-considerations.html#Contraindications.
                ---------------------------------------------------------------------------
                 The numerator for the HCP measure is the cumulative number of HCP
                eligible to work in at the ASC for at least 1 day during the reporting
                period and who received a complete vaccination course against COVID-
                19.460 461 462 463 A complete vaccination course may require
                multiple doses or regular revaccination.\464\ Vaccination coverage for
                purposes of this measure is defined
                [[Page 63878]]
                as the estimated percentage (given the potential for week-to-week
                variation) of HCP eligible to work at the ASC for at least 1 day who
                received a COVID-19 vaccine. For reporting, facilities would count HCP
                working in all facilities that share the same CMS certification number
                (CCN).\465\ The specifications for the COVID-19 HCP vaccination measure
                (ASC-20) are available on the NQF website at: https://www.cdc.gov/nhsn/nqf/index.html.\466\
                ---------------------------------------------------------------------------
                 \460\ Measure Application Partnership Coordinating Committee
                Meeting Presentation. March 15, 2021. (2021) Accessed March 16, 2021
                at: http://www.qualityforum.org/Project_Pages/MAP_Coordinating_Committee.aspx.
                 \461\ Centers for Disease Control and Prevention. Measure
                Specification: NHSN COVID-19 Vaccination Coverage Updated August
                2021. Available at: https://www.cdc.gov/nhsn/pdfs/nqf/covid-vax-hcpcoverage-508.pdf.
                 \462\ National Health Safety Network. Healthcare Personnel
                COVID-19 Vaccination Cumulative Summary (CDC 57.219, Rev 5). Updated
                September 2021. Available at: https://www.cdc.gov/nhsn/forms/57.219-p.pdf.
                 \463\ Centers for Disease Control and Prevention. Frequently
                Asked Questions about COVID-19 Vaccination. How do I know if I have
                been fully vaccinated if I was vaccinated in another country?
                https://www.cdc.gov/coronavirus/2019-ncov/vaccines/faq.html (updated
                October 21, 2021).
                 \464\ Measure Application Partnership Coordinating Committee
                Meeting Presentation. March 15, 2021. (2021) Accessed March 16, 2021
                at: http://www.qualityforum.org/Project_Pages/MAP_Coordinating_Committee.aspx.
                 \465\ Centers for Disease Control and Prevention. CMS Reporting
                Requirements FAQs. Accessed June 2, 2021 at: https://www.cdc.gov/nhsn/PDFs/CMS/faq/FAQs-CMS-Reporting-Requirements.pdf.
                 \466\ https://www.cdc.gov/nhsn/nqf/index.html.
                ---------------------------------------------------------------------------
                (b) Review by the Measure Applications Partnership
                 The COVID-19 HCP vaccination measure (ASC-20) was included on the
                publicly available ``List of Measures Under Consideration for December
                21, 2020,'' \467\ a list of measures under consideration for use in
                various Medicare programs. The Measure Applications Partnership (MAP)
                hospital workgroup convened on January 11, 2021 and reviewed the
                Measures Under Consideration (MUC) List including the COVID-19 HCP
                vaccination measure (ASC-20). The MAP hospital workgroup agreed that
                the proposed measure represents a promising effort to advance
                measurement for an evolving national pandemic and that it could bring
                value to the ASCQR Program measure set by providing transparency about
                an important COVID-19 intervention to help prevent infections in HCP
                and patients.\468\ The MAP hospital workgroup also stated in its
                recommendations that collecting information on COVID-19 vaccination
                coverage among HCP and providing feedback to facilities will allow
                facilities to benchmark coverage rates and improve coverage in their
                facility, and that reducing COVID-19 infection rates in HCP may reduce
                transmission among patients and reduce instances of staff shortages due
                to illness.\469\
                ---------------------------------------------------------------------------
                 \467\ https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=94212.
                 \468\ Measure Applications Partnership. MAP Preliminary
                Recommendations 2020-2021. Accessed on January 24, 2021 at: http://www.qualityforum.org/Project_Pages/MAP_Hospital_Workgroup.aspx.
                 \469\ Ibid.
                ---------------------------------------------------------------------------
                 In its preliminary recommendations, the MAP hospital workgroup did
                not support this measure for rulemaking, subject to potential for
                mitigation.\470\ To mitigate its concerns, the MAP hospital workgroup
                believed that the measure needed well-documented evidence, finalized
                specifications, testing, and National Quality Forum (NQF) endorsement
                prior to implementation.\471\ Subsequently, the MAP Coordinating
                Committee met on January 25, 2021 and reviewed the COVID-19 HCP
                vaccination measure (ASC-20). In the 2020 and 2021 MAP Final
                Recommendations, the MAP offered conditional support for rulemaking
                contingent on CMS bringing the measures back to MAP once the
                specifications are further refined.\472\ The MAP stated, ``the
                incomplete specifications require immediate mitigation and further
                development should continue.'' \473\ In its final report, the MAP noted
                that the measure would add value by providing visibility into an
                important intervention to limit COVID-19 infections in HCP and the
                patients for whom they provide care.\474\ The spreadsheet of final
                recommendations no longer cited concerns regarding evidence, testing,
                or NQF endorsement.\475\ In response to the MAP final recommendation
                request that CMS bring the measure back to the MAP once the
                specifications are further refined, CMS and the CDC met with the MAP
                Coordinating Committee on March 15, 2021. CMS and CDC provided
                additional information to address vaccine availability, alignment of
                the COVID-19 HCP vaccination measure (ASC-20) as being as closely as
                possible with the data collection for the Influenza HCP vaccination
                measure (NQF #0431), and provided clarification on how HCP are defined.
                CMS and the CDC also presented preliminary findings from the testing of
                the numerator of the COVID-19 HCP vaccination measure, which is
                currently in process. These preliminary findings show numerator data
                should be feasible to collect and reliable. Testing of the measure
                numerator (the number of HCP vaccinated) involves a comparison of the
                data collected through the National Healthcare Safety Network (NHSN)
                and independently reported through the Federal pharmacy partnership
                program for delivering vaccination to LTC facilities. These are two
                independent data collection systems. In initial analyses of the first
                month of vaccination, the number of healthcare workers vaccinated in
                approximately 1,200 facilities for which data from both systems were
                available, the number of healthcare personnel vaccinated was highly
                correlated between the two systems with a correlation coefficient of
                nearly 90 percent in the second 2 weeks of reporting.\476\ Because of
                the high correlation across a large number of facilities and high
                number of HCP within those facilities receiving at least one dose of
                the COVID-19 vaccine, we believe the measure is feasible and reliable
                for use in ASCs. After reviewing this additional information, the MAP
                retained its final recommendation of conditional support, and expressed
                support for CMS' efforts to use the measure as part of the solution for
                the COVID-19 public health crisis.\477\
                ---------------------------------------------------------------------------
                 \470\ Ibid.
                 \471\ Ibid.
                 \472\ Measure Applications Partnership. 2020-2021 MAP Final
                Recommendations. Accessed on February 3, 2021 at: http://www.qualityforum.org/Setting_Priorities/Partnership/Measure_Applications_Partnership.aspx.
                 \473\ Measure Applications Partnership. 2020-2021 MAP Final
                Recommendations. Accessed on February 23, 2021 at: http://www.qualityforum.org/Project_Pages/MAP_Hospital_Workgroup.aspx.
                 \474\ Ibid.
                 \475\ Ibid.
                 \476\ For more information on testing results and other measure
                updates, please see the Meeting Materials (including Agenda,
                Recording, Presentation Slides, Summary, and Transcript) of the
                March 15, 2021 meeting available at https://www.qualityforum.org/ProjectMaterials.aspx?projectID=75367.
                 \477\ Ibid.
                ---------------------------------------------------------------------------
                 Section 1890A(a)(4) of the Act, as added by section 3014(b) of the
                Affordable Care Act, requires the Secretary to take into consideration
                input from multi-stakeholder groups in selecting certain quality and
                efficiency measures. While we value input from the MAP, we believe it
                is important to propose the measure as quickly as possible to address
                the urgency of the COVID-19 PHE and its impact on vulnerable
                populations. CMS continues to engage with the MAP to mitigate concerns
                and appreciates the MAP's conditional support for the measure.
                (c) Measure Endorsement
                 Section 1833(i)(7)(B) of the Act states that section 1833(t)(17) of
                the Act shall apply with respect to ASC services in a similar manner in
                which it applies to hospitals for the Hospital OQR Program, except as
                the Secretary may otherwise provide. The requirements at section
                1833(t)(17)(C)(i) of the Act state that measures developed shall ``be
                appropriate for the measurement of the quality of care (including
                medication errors) furnished by hospitals in outpatient settings and
                that reflect consensus among affected parties and, to the extent
                feasible and practicable, shall include measures set forth by one or
                more national consensus building entities.''
                 In general, we prefer to adopt measures that have been endorsed by
                the NQF because it is a national multi-stakeholder organization with a
                well-documented and rigorous approach to
                [[Page 63879]]
                consensus development. However, as we have noted in previous rulemaking
                (for example, 75 FR 72065 and 76 FR 74494 for the Hospital OQR and
                ASCQR Programs, respectively), the requirement that measures reflect
                consensus among affected parties can be achieved in other ways,
                including through the measure development process, through broad
                acceptance, use of the measure(s), and through public comment.
                 The COVID-19 HCP vaccination measure (ASC-20) is not NQF-endorsed
                and has not been submitted to NQF for endorsement consideration. The
                CDC, in collaboration with CMS, is planning to submit the measure for
                consideration in the NQF Fall 2021 measure cycle. However, we found no
                other feasible and practicable measures on the topic of COVID-19
                vaccination among HCP.
                 Section 1886(b)(3)(B)(viii)(IX)(bb) of the Act states that in the
                case of a specified area or medical topic determined appropriate by the
                Secretary for which a feasible and practicable measure has not been
                endorsed by the entity with a contract under section 1890(a) (currently
                the NQF), the Secretary may specify a measure that is not so endorsed
                as long as due consideration is given to measures that have been
                endorsed or adopted by a consensus organization identified by the
                Secretary. Therefore, with the above considerations, we believe there
                is sufficient basis to propose the adoption of this measure at this
                time.
                (d) Data Collection, Submission, and Reporting
                 Given the time sensitive nature of this measure considering the
                current PHE, we proposed that ASCs would be required to begin reporting
                data on the COVID-19 HCP vaccination measure (ASC-20) beginning January
                1, 2022, for the CY 2024 payment determination for the ASCQR Program.
                Thereafter, we proposed quarterly reporting periods. While we
                considered annual reporting periods for the ASCQR Program, we proposed
                quarterly reporting periods given the immediacy of the PHE and the
                importance of alignment across quality payment programs that proposed
                this measure.
                 In the CY 2022 OPPS/ASC proposed rule (86 FR 42270), we stated that
                ASCs would report the measure through the CDC NHSN web-based
                surveillance system.\478\ While the ASCQR Program does not currently
                require use of the NHSN web-based surveillance system, we previously
                required use of this system for submitting program data. We refer
                readers to the CY 2014 OPPS/ASC final rule with comment period in which
                we adopted the Influenza Vaccination Coverage Among HCP (NQF #0431)
                measure (78 FR 75110 through 75117) and section XVI.D.1.c.(2). of the
                CY 2022 OPPS/ASC proposed rule (86 FR 42282) for additional information
                on reporting through the NHSN web-based surveillance system under the
                ASCQR Program. The Influenza Vaccination Coverage Among HCP (NQF #0431)
                measure was removed from the ASCQR Program in the CY 2019 OPPS/ASC
                final rule with comment period as CMS observed that reporting measure
                data through the NHSN could be more burdensome for ASCs compared to the
                relative burden for hospitals participating in the Hospital IQR Program
                and the HAC Reduction Program and especially for freestanding ASCs (83
                FR 59115 through 59117). However, the COVID-19 pandemic and associated
                PHE have had a more significant effect on more aspects of society than
                influenza, including availability of the healthcare system. With
                respect to reporting for the COVID-19 HCP vaccination measure (ASC-20),
                CDC guidance for entering data requires submission of HCP count at the
                facility level \479\ and the measure requires reporting consistent with
                that guidance. We believe that the public health benefits to having
                these data available outweigh the burden of reporting for systems with
                multiple facilities or locations. While we recognize that there may be
                some elements of the measure specifications that increase burden for
                some ASCs, given the impact that the COVID-19 PHE has had on society
                and the healthcare system, we believe that the benefits outweigh this
                reporting burden. For more information on the associated burden of this
                measure, we refer readers to XXV.C.5.b. of the CY 2022 OPPS/ASC
                proposed rule.
                ---------------------------------------------------------------------------
                 \478\ Centers for Disease Control and Prevention. Surveillance
                for Weekly HCP COVID-19 Vaccination. Accessed at: https://www.cdc.gov/nhsn/hps/weekly-covid-vac/index.html on February 10,
                2021.
                 \479\ Centers for Disease Control and Prevention. COVID-19
                Vaccination Non-LTC Healthcare Personnel TOI https://www.cdc.gov/nhsn/index.html.
                ---------------------------------------------------------------------------
                 To report this measure, we proposed that ASCs would collect the
                numerator and denominator for the COVID-19 HCP vaccination measure
                (ASC-20) for at least one, self-selected week during each month of the
                reporting quarter and submit the data to the NHSN Healthcare Personal
                Safety (HPS) Component before the quarterly deadline to meet ASCQR
                Program requirements. While we believe that it would be ideal to have
                HCP vaccination data for every week of each month, we are mindful of
                the time and resources that ASCs would need to report the data. Thus,
                in collaboration with the CDC, we determined that data from at least 1
                week of each month would be sufficient to obtain a reliable estimate of
                vaccination levels among an ASC's HCP while balancing the costs of
                reporting. If an ASC submits more than 1 week of data in a month, the
                most recent week's data would be used to calculate the measure. For
                example, if first and third week data are submitted, third week data
                would be used. If first, second, and fourth week data are submitted,
                fourth week data would be used. Each quarter, we proposed that the CDC
                would calculate a single quarterly COVID-19 HCP vaccination coverage
                rate for each ASC, which would be calculated by taking the average of
                the data from the three submission periods submitted by the ASC for
                that quarter. CMS would publicly report each quarterly COVID-19 HCP
                vaccination coverage rate as calculated by the CDC.
                 ASCs would submit the number of HCP eligible to have worked at the
                facility during the self-selected week that the ASC reports data in
                NHSN (denominator) and the number of those HCP who have received a
                complete course of a COVID-19 vaccination (numerator) during the same
                self-selected week. As previously stated, facilities would count HCP
                working in all facilities that share the same CCN.\480\
                ---------------------------------------------------------------------------
                 \480\ Ibid.
                ---------------------------------------------------------------------------
                 We received comments on these topics. We note that this measure was
                also proposed for the Hospital Outpatient Quality Reporting Program;
                comments specific to hospitals and this program are discussed in
                section XV.B.4.a. of this final rule with comment period.
                 Comment: Many commenters supported our proposal to adopt the COVID-
                19 Vaccination Coverage Among HCP measure (ASC-20) and expressed the
                importance of vaccination in the fight against COVID-19. Some
                commenters stated that reporting the measure will ensure transparency
                and accountability in infection prevention and control for vulnerable
                populations and communities. Other commenters appreciated that the
                measure would make COVID-19 vaccination information available to the
                public in health care decisions.
                 Response: We thank commenters for their support of the measure and
                agree that the measure is critically important in the ongoing fight
                against COVID-19. Additionally, we agree with the commenter that
                reporting and
                [[Page 63880]]
                publication of this measure would assist the public in making more
                informed health care decisions.
                 Comment: A few commenters expressed concern that COVID-19 vaccines
                are authorized under EUA, and the measure should not be adopted until
                such time that a vaccine has received full FDA approval. One commenter
                observed that all three currently available vaccines should be fully
                approved by FDA prior to adoption of this measure to reduce vaccine
                hesitancy.
                 Response: On August 23, 2021, subsequent to the publication of the
                CY 2022 OPPS/ASC proposed rule (86 FR 42267), FDA granted full approval
                to Comirnaty[supreg], which has been known as the Pfizer-BioNTech
                COVID-19 vaccine.\481\ While we recognize there are differences between
                EUA authorization and full FDA approval, we note that the process for
                each is scientifically rigorous and we refer readers to information
                related to FDA's process for evaluating an Emergency Use Authorization
                (EUA) request at https://www.fda.gov/vaccines-blood-biologics/vaccines/emergency-use-authorizationvaccines-explained. Each vaccine
                manufacturer that received EUA authorization enrolled tens of thousands
                of participants in randomized clinical trials, which is similar to what
                is required for full FDA approval.\482\ Manufacturers submit robust and
                rigorous data for both an EUA authorization and full FDA approval, and
                more than 404 million doses of COVID-19 vaccines have been
                administered.\483\ We believe all COVID-19 vaccines granted full
                approval and EUA authorization to be proven safe and effective and we
                believe it is appropriate to include the measure in the ASCQR Program.
                ---------------------------------------------------------------------------
                 \481\ U.S. Food and Drug Administration. Comirnaty and Pfizer-
                BioNTech COVID-19 Vaccine. August 30, 2021. Available at: https://www.fda.gov/emergency-preparedness-and-response/coronavirus-disease-2019-covid-19/comirnaty-and-pfizer-biontech-covid-19-vaccine.
                 \482\ Harvard Law Petrie-Flom Center. ``What's the Difference
                Between Vaccine Approval (BLA) and Authorization (EUA)?'' June 15,
                2021. Available at: https://blog.petrieflom.law.harvard.edu/2021/06/15/whats-the-difference-between-vaccine-approval-bla-and-authorization-eua/.
                 \483\ Centers for Disease Control and Prevention. (2021). CDC
                COVID Data Tracker: COVID-19 Vaccinations in the United States.
                Available at: https://covid.cdc.gov/covid-data-tracker/#vaccinations.
                ---------------------------------------------------------------------------
                 We further note that the COVID-19 Vaccination Coverage Among HCP
                measure does not itself require HCP to receive the vaccination, nor
                does this measure reward or penalize HOPDs for the rate of HCP who have
                received a COVID-19 vaccine. The COVID-19 Vaccination Coverage Among
                HCP measure requires HOPDs to collect and report COVID-19 vaccination
                data that would support public health tracking and provide
                beneficiaries and their caregivers information to support informed
                decision making.
                 Comment: Several commenters opposed adoption of the COVID-19
                Vaccination Coverage Among HCP measure (ASC-20) due to a lack of
                evidence that ASCs contribute to the spread of COVID-19. These
                commenters cited a survey that found that, despite ASCs performing
                essential outpatient surgeries during March and April 2020, patients
                faced virtually no increase to the risk of contracting COVID-19.\484\
                ---------------------------------------------------------------------------
                 \484\ Mukerji, S. ASC QC COVID-19 Survey Confirms Continued
                safety in ASCs. ASC Focus. December 2020. Available at: https://www.ascfocus.org/ascfocus/content/articles-content/articles/2020/digital-debut/asc-qc-covid-19-survey-confirms-continued-safety-in-ascs.
                ---------------------------------------------------------------------------
                 Response: We appreciate the commenters' feedback. Patient safety is
                a top priority of the ASCQR Program, and we believe that the COVID-19
                Vaccination Coverage Among HCP measure (ASC-20) will promote infection
                prevention and control for patients as well as HCP and other staff
                working in ASCs. We acknowledge that there is evidence that ASCs
                previously experienced low rates of COVID-19 among patients. The survey
                cited by the commenter and conducted by the ASC Quality Collaboration
                surveyed 709 ASCs in eight states about outpatient surgical procedures
                performed on 84,446 patients in March and April 2020; only 16 patients
                tested positive for COVID-19 within 14 days after the procedure.\485\
                We note that incidence of new cases and the nation's capacity to test
                for new cases during the March and April 2020 time frame cited in the
                survey shared by the commenters is not representative of current
                conditions. At the time, new cases per day did not exceed 35,000. More
                recently, COVID-19 cases and deaths nationally have continued to rise.
                Comparatively in recent months, new cases per day have reached more
                than 189,000 with seven-day average case rates exceeding 100,000 during
                most of August and September 2021.\486\ Since the publication of the
                proposed rule, the emergence of coronavirus variants have resulted in
                8.9 million new virus cases.\487\ Thus, we believe it is appropriate to
                adopt the COVID-19 Vaccination Coverage Among HCP measure in the ASCQR
                Program as soon as possible to further infection control efforts and to
                increase transparency regarding vaccination status of HCP.
                ---------------------------------------------------------------------------
                 \485\ Mukerji, S. ASC QC COVID-19 Survey Confirms Continued
                safety in ASCs. ASC Focus. December 2020. Available at: https://www.ascfocus.org/ascfocus/content/articles-content/articles/2020/digital-debut/asc-qc-covid-19-survey-confirms-continued-safety-in-ascs.
                 \486\ Centers for Disease Control and Prevention. Trends in
                Number of COVID-19 Cases and Deaths in the U.S. Reported to CDC for
                March 1-April 30, 2020 and August 1-September 20, 2021. Available
                at: https://covid.cdc.gov/covid-data-tracker/#trends_dailycases.
                 \487\ Centers for Disease Control and Prevention. Trends in
                Number of COVID-19 Cases and Deaths in the U.S. Reported to CDC.
                Accessed September 22, 2021. Available at: https://covid.cdc.gov/covid-data-tracker/#trends_totalcases.
                ---------------------------------------------------------------------------
                 Comment: Some commenters stated that it is inappropriate to use
                payment policies to drive vaccination coverage among HCP. Some
                commenters expressed concern that this measure could lead facilities to
                mandate vaccines for staff, with potential unintended consequences
                (specifically, staff quitting or legal risk for facilities for staff
                experiencing adverse events).
                 Response: We note that this measure does not financially reward or
                punish ASCs for their vaccine coverage rate. As part of the ASCQR
                Program, an ASC's payment is affected only if it fails to report the
                requisite measures, not by the rate it reports. As such, we do not
                believe that the adoption of this measure uses Medicare payment
                policies to drive vaccination coverage among HCP. Additionally, we
                believe that publicly reporting the data will be useful to consumers in
                choosing healthcare providers, including by making comparisons between
                ASCs. We noted in the CY 2022 OPPS/ASC proposed rule (86 FR 42239), a
                survey of HCP from April 2021 found that 66 percent of hospital HCP and
                64 percent of outpatient clinic HCP reported receiving at least one
                dose of the vaccine.\488\ Subsequent to the publication of the CY 2022
                OPPS/ASC proposed rule, research from August 2021 suggests that nearly
                73 percent of HCP across all health care facilities have received at
                least one dose of the vaccine.\489\ Based on these findings, we
                understand that HCP have been receiving the COVID-19 vaccine prior to
                the adoption and we believe that this measure encourages continued
                vaccination within ASCs.
                ---------------------------------------------------------------------------
                 \488\ KFF/The Washington Post Frontline Health Care Workers
                Survey. (2021). Available at: https://www.kff.org/coronavirus-covid-19/pollfinding/kff-washington-post-health-care-workers/.
                 \489\ Lazer, D. et al. THE COVID STATES PROJECT: A 50-STATE
                COVID-19 SURVEY REPORT #62: COVID-19 VACCINE ATTITUDES AMONG
                HEALTHCARE WORKERS. Northeastern University, Harvard University,
                Rutgers University, and Northwestern University. August 16, 2021.
                Available at: http://news.northeastern.edu/uploads/COVID19%20CONSORTIUM%20REPORT%2062%20HCW%20August%202021.pdf.
                ---------------------------------------------------------------------------
                [[Page 63881]]
                 Comment: One commenter requested clarification on the definition of
                ``health care personnel.'' Several commenters expressed a preference
                for data collection at the NPI level instead of by CCN.
                 Response: We recognize commenters' concerns regarding the reporting
                burden associated with the specifications of this measure, specifically
                around the definition of HCP. We note that given the highly infectious
                nature of the COVID-19 virus, we believe it is important to encourage
                all personnel within the hospital, regardless of patient contact, role,
                or employment type, to receive the COVID-19 vaccination to prevent
                outbreaks within the hospital which may affect resource availability
                and have a negative impact on patient access to care. We also note that
                the measure specifications define ``eligible'' HCP as all persons
                receiving a direct paycheck from the reporting facility (that is, on
                the facility's payroll), regardless of clinical responsibility or
                patient contact, licensed independent practitioners, and adult
                students/trainees and volunteers.\490\ We recognize that ASCs utilize
                their NPIs for billing and are more familiar with this identifier;
                whereas, the NHSN system has been constructed to use the CCN as the
                facility identifier. A look-up tool mapping NPI to CCN is available for
                ASCs at https://www.qualityreportingcenter.com/en/ascqr-program/data-dashboard/ccn/.
                ---------------------------------------------------------------------------
                 \490\ Centers for Disease Control and Prevention. Measure
                Specification: NHSN COVID-19 Vaccination Coverage Updated August
                2021. Available at: https://www.cdc.gov/nhsn/pdfs/nqf/covid-vax-hcpcoverage-508.pdf.
                ---------------------------------------------------------------------------
                 Comment: Several commenters expressed concern that this measure
                should not be adopted until there is clarity around the impact of
                future booster recommendations. One commenter stated that the numerator
                requirement of a completed vaccination course may change over time and
                recommended that CMS establish a definition of completed vaccination
                course using the national guidelines as of the date the OPPS final rule
                is published each year. Other commenters recommended that reporting for
                the measure should be optional or delayed until a completed vaccination
                course can be more clearly and specifically defined.
                 Response: The COVID-19 Vaccination Coverage Among HCP measure (ASC-
                20) is a measure of a completed vaccination course (as defined in
                section XVI.B.3.a.2. of the CY 2022 OPPS/ASC proposed rule (86 FR
                42268)) and does not address booster shots. On August 12, 2021, FDA
                amended the EUAs for both the Pfizer-BioNTech COVID-19 Vaccine and the
                Moderna COVID-19 Vaccine to allow for the use of an additional dose in
                certain immunocompromised individuals, specifically, solid organ
                transplant recipients or those who are diagnosed with conditions that
                are considered to have an equivalent level of immunocompromise.\491\
                The Centers for Disease Control on September 27, 2021 further
                recommended Pfizer-BioNTech boosters for individuals who completed
                their initial series at least six months ago and are 65 years of age or
                older; 18 years of age or older with underlying medical conditions; and
                18 years of age or older living and working in high-risk settings,
                which includes healthcare workers.\492\ We acknowledge commenter
                concerns that ASCs will be required to collect additional information
                from HCP on booster doses. However, we believe that the numerator is
                sufficiently broad to include future boosters as part of a ``complete
                vaccination course.''
                ---------------------------------------------------------------------------
                 \491\ U.S. Food and Drug Administration. Coronavirus (COVID-19)
                Update: FDA Authorizes Additional Vaccine Dose for Certain
                Immunocompromised Individuals. August 12, 2021. Available at:
                https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-authorizes-additional-vaccine-dose-certain-immunocompromised.
                 \492\ Ibid.
                ---------------------------------------------------------------------------
                 Comment: Several commenters cited Equal Employment Opportunity
                Commission (EEOC) guidelines, which state that employers must provide a
                reasonable accommodation if an employee's sincerely held religious
                belief, practice, or observance prevents them from receiving the
                vaccination. The commenters requested that CMS and the CDC revise the
                measure exclusions to align with EEOC guidance. One commenter expressed
                concern that the measure may lead to violation of individual employee's
                rights to choose whether to receive the vaccine.
                 Response: We recognize that there are reasons, including religious
                objections or concerns regarding an individual's specific health
                status, that may lead individual HCP to decline vaccination. We
                emphasize that this measure does not mandate vaccines, it only requires
                reporting of vaccination rates for successful program participation.
                However, we believe that accurate vaccination rates of HCP are
                meaningful data for patients and beneficiaries to use when choosing an
                ASC. The CDC, the measure's steward, offers guidance regarding the
                reporting on HCP who decline vaccination due to religious reasons.
                Those HCP, however, would be included in the measure denominator along
                with other HCP who have not received a completed vaccination
                course.\493\
                ---------------------------------------------------------------------------
                 \493\ Centers for Disease Control and Prevention. Reporting
                Weekly COVID-19 Vaccination Data for Healthcare Personnel Using the
                National Healthcare Safety Network (NHSN). September 2021. Available
                at: https://www.cdc.gov/nhsn/pdfs/hps/covidvax/weekly-covid-reporting-508.pdf.
                ---------------------------------------------------------------------------
                 We further note that the EEOC released updated and expanded
                technical assistance on May 28, 2021, stating that Federal equal
                employment opportunity (EEO) laws do not prevent an employer from
                requiring all employees physically entering the workplace to be
                vaccinated for COVID-19, so long as the employer complies with the
                reasonable accommodation provisions of the Americans with Disabilities
                Act (ADA) and Title VII of the Civil Rights Act of 1964 and other EEOC
                considerations.\494\ Thus, we do not believe that this measure
                conflicts with any EEOC guidance and believe it is appropriate to
                require facilities to report these data.
                ---------------------------------------------------------------------------
                 \494\ U.S. Equal Employment Opportunity Commission. What You
                Should Know About COVID-19 and the ADA, the Rehabilitation Act, and
                Other EEO Laws. May 28, 2021. Available at: https://www.eeoc.gov/wysk/what-you-should-know-about-covid-19-and-ada-rehabilitation-act-and-other-eeo-laws.
                ---------------------------------------------------------------------------
                 Comment: A few commenters noted that, while vaccination plays an
                important role in ending the COVID-19 pandemic, the measure is not
                currently endorsed by the National Quality Forum and these commenters
                believed it should not be adopted until it receives such an
                endorsement. One commenter observed that NQF endorsement improves
                credibility and affords patients certainty that the measure data is
                reliable. One commenter recommended that CMS clarify that the adoption
                of a measure prior to NQF endorsement is only due to the exigency of
                the current circumstances. One commenter expressed a preference for
                measures that have been thoroughly tested and reviewed.
                 Response: We acknowledge that the COVID vaccination of HCP measure
                is not NQF endorsed. However, as discussed in section
                XVI.B.3.a.(2).(c). of this final rule with comment period and below, we
                believe it is appropriate to develop and select this measure and that
                such development and selection is consistent with section 1833(i)(7)(B)
                of the Act. While we prefer to develop measures endorsed by a consensus
                building entity such as the NQF, we note that sections 1833(i)(7)(B)
                and 1833(t)(17)(C) of the Act do not limit CMS to developing and
                selecting such measures.
                [[Page 63882]]
                 At this time, there is no NQF endorsed measure addressing the
                COVID-19 vaccination rate of HCP. Further, we believe that in the
                context of the current COVID-19 PHE and continued monitoring and
                surveillance following the PHE, it is important to adopt this measure
                as quickly as possible to allow tracking and reporting of COVID-19
                Vaccination Coverage Among HCP. This tracking would allow facilities to
                identify the appropriateness and effectiveness of their infection
                control efforts, their initiatives to improve vaccination coverage, and
                would provide patients and consumers with important information for
                them to make more informed health care decisions. As such, it is
                neither feasible nor practical for CMS to delay the adoption of this
                measure until the NQF has endorsed it. We do note, nonetheless, that
                the CDC recently submitted the quarterly reported HCP COVID-19
                vaccination measure for the NQF Fall 2021 measure cycle and intends to
                submit a biannual reporting version of the COVID-19 vaccination measure
                for HCP in January 2022.
                 In addition to the above, we note that the adoption of this measure
                is consistent with sections 1833(t)(17)(C)(ii) and 1886(b)(3)(B)(viii)
                of the Act, as incorporated into section 1833(i)(7)(B) of the Act.
                Pursuant to this authority, the ASCQR Program may select measures that
                are the same as (or a subset of) the measures for which data are
                required to be submitted under the Hospital IQR Program. We note that
                the Hospital IQR Program recently adopted a COVID-19 HCP Vaccination
                measure for which this data is required to be submitted (86 FR 45374
                through 45382).
                 Comment: One commenter recommended development of a validation
                process for the COVID-19 Vaccination Coverage Among HCP measure (ASC-
                20).
                 Response: We appreciate the commenter's suggestion; we interpret
                the comment's referral to ``validation'' as what is done under our
                quality reporting programs where data reported is verified against data
                contained in original documentation, usually medical records. As
                discussed in section XVI.3.a.(2).(b). of the CY 2022 OPPS/ASC proposed
                rule (86 FR 42269), a comparison of two independent databases indicate
                that the measure is highly reliable and feasible. We agree that it
                would be preferable to validate COVD-19 vaccination data and will
                investigate how this could be done in balance with potential burden on
                ASCs and other facility types for any such process.
                 Comment: One commenter supported public reporting of this measure
                and specifically noted support for early publication through the
                initial shortened reporting period.
                 Response: We thank the commenter for the support.
                 Comment: A few commenters expressed concern about reporting
                frequency. One commenter recommended that CMS reduce reporting
                frequency from quarterly to twice-yearly or annually to limit reporting
                burden. Another commenter stated that the reporting frequency would be
                time-intensive for ASCs with more than one location as those ASCs would
                need to collect information for staff across multiple facilities.
                 Response: As stated in the CY 2022 OPPS/ASC proposed rule (86 FR
                42270), we believe that it would be ideal to have HCP vaccination data
                for every week of each month, and we are mindful of the time and
                resources that ASCs would need to report the data. Thus, in
                collaboration with the CDC, we determined that data from at least 1
                week of each month would be sufficient to obtain a reliable estimate of
                vaccination levels among an ASC's HCP while balancing the costs of
                reporting. We believe that reporting at a lower frequency may result in
                data that is less meaningful and timely to consumers who want to
                consider HCP vaccination rates as part of their health care decision-
                making process. Additionally, the CDC has provided a number of
                resources including a tool called the Data Tracking Worksheet for
                COVID-19 Vaccination among Healthcare Personnel to help facilities log
                and track the number of HCP who are vaccinated for COVID-19, which may
                reduce burden for ASCs. COVID vaccination data would be entered for
                each HCP in the tracking worksheet, and select a reporting week, and
                the data to be entered into the NHSN will automatically be calculated
                on the Reporting Summary.
                 Comment: One commenter observed that it is difficult for consumers
                to locate ASC quality data through CMS websites and recommended that
                CMS prioritize simplifying access to data on this measure due to the
                ongoing PHE.
                 Response: We acknowledge the commenters concern regarding
                availability of ASCQR Program data located currently on the CMS
                Provider Data Catalog rather than on the Care Compare site and intend
                to investigate alternate sites for making these data publicly available
                on a more expedient basis.
                 Comment: Many commenters expressed concern that the measure
                reporting requirements are duplicative of other state and federal
                COVID-19 vaccination reporting requirements and that inclusion of the
                measure in quality reporting programs is unnecessarily burdensome for
                ASCs. Some commenters questioned the purpose of the measure given the
                CMS announcement on September 9, 2021 that the agency will require
                COVID-19 vaccination of staff within all Medicare and Medicaid-
                certified facilities.\495\ Other commenters noted that they are
                currently required to report COVID-19 vaccination information to HHS
                and requested that such reporting might be considered a substitute to
                reporting proposed for the measure. A few commenters recommended a
                change to attestation-based reporting to reduce resources and burden
                required for reporting based on the proposed measure specifications.
                One commenter observed that time spent on multiple reporting
                requirements would take away from time available for efforts to improve
                vaccination coverage. Another commenter requested an analysis of burden
                and feasibility of data collection prior to adoption of the measure.
                One commenter recommended re-evaluating the burden of data collection
                after measure data has been collected for one year.
                ---------------------------------------------------------------------------
                 \495\ Centers for Medicare & Medicaid Services. Biden-Harris
                Administration to Expand Vaccination Requirements for Health Care
                Settings. September 9, 2021. Available at: https://www.cms.gov/newsroom/press-releases/biden-harris-administration-expand-vaccination-requirements-health-care-settings.
                ---------------------------------------------------------------------------
                 Response: We appreciate commenters' feedback. We believe that the
                COVID-19 vaccination of HCP information submitted for this measure will
                be important as it will be made publicly available for use by Medicare
                beneficiaries and others in making informed decisions regarding their
                care including facility choice. We note that most Immunization
                Information Systems through which commenters may already be required to
                report vaccination information to HHS do not include the information
                needed to determine if an immunized person is a healthcare worker.
                Using the NHSN COVID-19 Vaccination Modules allows tracking vaccination
                coverage among the patients or HCP in ASCs.\496\ We do recognize that
                this measure may lead to duplicative reporting if ASCs voluntarily
                report COVID-19 HCP vaccination information to other data reporting
                systems in addition to this measure requirement via the NHSN, and
                [[Page 63883]]
                we are collaborating with other HHS agencies, including the CDC to
                minimize reporting burden to the extent feasible.
                ---------------------------------------------------------------------------
                 \496\ Centers for Disease Control and Prevention. FAQs on
                Reporting COVID-19 Vaccination Data. August 2021. Available at:
                https://www.cdc.gov/nhsn/hps/weekly-covid-vac/faqs.html.
                ---------------------------------------------------------------------------
                 With regard to measure burden analysis, we refer the commenter to
                section XXIII.C. of this final rule with comment period, where we
                discuss the burden associated with the measure. We thank the commenters
                for the suggestion that the measure be attestation-based and note that
                any changes to the measure specifications would be proposed through
                future rulemaking.
                 Comment: Several commenters observed that there are no currently
                required measures in the ASCQR Program measure set that require use of
                NHSN. These commenters observed that this significantly increases
                reporting burden for this measure because ASCs will be required to
                enroll in NHSN to submit data for this measure, and NHSN enrollment and
                account maintenance is a burdensome process. Some of these commenters
                recommended postponing implementation of the COVID-19 Vaccination
                Coverage Among HCP measure (ASC-20) to provide more time for ASCs to
                enroll in NHSN.
                 Response: We recognize commenters' concerns about operational
                requirements of reporting and reiterate the availability of resources
                from the CDC.\497\ We believe that given the current COVID-19 PHE as
                well as the need for continued monitoring and surveillance, it is
                important to adopt this measure as quickly as possible to allow
                tracking and reporting of COVID-19 Vaccination Coverage Among HCP
                measure (ASC-20). As we stated in the CY 2022 OPPS/ASC proposed rule
                (86 FR 42270) and initially discussed in the CY 2019 OPPS/ASC final
                rule (83 FR 59115 through 59117), we further recognize that reporting
                measure data through the NHSN could be more burdensome for ASCs
                compared to the relative burden for hospitals participating in the
                Hospital IQR Program and the HAC Reduction Program and especially for
                freestanding ASCs. We believe, nonetheless, that the public health
                benefits to having these data available justify the burden of reporting
                for systems with multiple facilities or locations. While we recognize
                that there may be some elements of the measure specifications that
                increase burden for some ASCs, given the impact that the COVID-19 PHE
                has had on society and the healthcare system, we believe that the
                benefits, including equity, justify this reporting burden.
                ---------------------------------------------------------------------------
                 \497\ Centers for Disease Control and Prevention. Reporting
                Weekly COVID-19 Vaccination Data for Healthcare Personnel Using the
                National Healthcare Safety Network (NHSN). September 2021. Available
                at: https://www.cdc.gov/nhsn/pdfs/hps/covidvax/weekly-covid-reporting-508.pdf.
                ---------------------------------------------------------------------------
                 Comment: One commenter observed that requiring collection of data
                at least once monthly is burdensome for ASCs, many of which are small
                businesses. This commenter further observed that this frequency of data
                collection does not support the goal of providing patient information
                because the data will only be publicly reported on a quarterly basis.
                This commenter recommended aligning data requirements with public
                reporting frequency.
                 Response: As stated previously and in the CY 2022 OPPS/ASC proposed
                rule (86 FR 42270), we believe that it would be ideal to have HCP
                vaccination data for every week of each month, but are mindful of the
                time and resources that ASCs would need to report the data. Some COVID-
                19 vaccines require multiple doses over a period of weeks or months,
                and we believe that a lower frequency of reporting as recommended by
                the commenter would likely undercount fully vaccinated HCP within the
                ASC. Thus, in collaboration with the CDC, we determined that data from
                at least one week of each month would be sufficient to obtain a
                reliable estimate of vaccination levels among an ASC's HCP while
                balancing the costs of reporting.
                 Comment: One commenter recommended aligning with the policy
                finalized in the FY 2022 IPPS/LTCH PPS final rule in which only the
                most recent quarter of data will be used for public reporting (as
                opposed to a rolling 12-month report). Another commenter recommended
                against averaging monthly data points and suggested only reporting the
                most recent month's vaccination data to provide the most up-to-date
                information for patient decision making.
                 Response: We agree with the commenters; in alignment with the FY
                2022 IPPS/LTCH PPS final rule (86 FR 45382) we will not finalize our
                plan to add one additional quarter of data during each advancing
                refresh until the point that four full quarters of data is reached and
                then report the measure using four rolling quarters of data. Instead,
                we will only report the most recent quarter of data. This would result
                in more meaningful information that is up to date and not diluted with
                older data. We emphasize that this modification of our proposal does
                not affect the data collection schedule established for submitting data
                to NHSN for the COVID-19 vaccination measure. This would simply update
                the data that are displayed for the public reporting purposes.
                 After consideration of the public comments we received, we are
                finalizing our proposal to adopt the COVID-19 Vaccination Coverage
                Among HCP measure (ASC-20) with a modification to publicly report only
                the most recent quarter of data. Additionally, data will also be
                available for preview by ASCs for 30 days prior to being made publicly
                available. This will result in more meaningful information that is up
                to date and not diluted with older data.
                4. Changes to Previously Adopted Measures in the ASCQR Program Measure
                Set
                 We previously adopted the following measures into the ASCQR measure
                set: ASC-1: Patient Burn; ASC-2: Patient Fall; ASC-3: Wrong Site, Wrong
                Side, Wrong Patient, Wrong Procedure, Wrong Implant; ASC-4: All-Cause
                Hospital Transfer/Admission; ASC-11: Cataracts--Improvement in
                Patient's Visual Function with 90 Days Following Cataract Surgery; and
                ASC-15a-e: Outpatient and Ambulatory Surgery Consumer Assessment of
                Healthcare Providers and Systems. For various reasons discussed in
                sections XVI.B.4.a., XVI.B.4.b., and XVI.B.4.c. of this final rule with
                comment period, these measures were either paused or suspended from the
                ASCQR Program.
                a. Requirement of Previously Suspended ASC-1, ASC-2, ASC-3, and ASC-4
                Measures Beginning With the CY 2023 Reporting Period/CY 2025 Payment
                Determination and Subsequent Years
                (1) Background
                 We refer readers to the CY 2012 OPPS/ASC final rule with comment
                period (76 FR 74497 through 74498) where we adopted ASC-1: Patient Burn
                beginning with the CY 2014 payment determination. This outcome measure
                assesses the percentage of ASC admissions experiencing a burn prior to
                discharge. We refer readers to the CY 2012 OPPS/ASC final rule with
                comment period (76 FR 74498) where we adopted ASC-2: Patient Fall
                beginning with the CY 2014 payment determination (NQF #0266). This
                measure assesses the percentage of ASC admissions experiencing a fall
                at the ASC. We refer readers to the CY 2012 OPPS/ASC final rule with
                comment period (76 FR 74498 through 74499) where we adopted ASC-3:
                Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure, Wrong Implant
                beginning with the CY 2014 payment determination (NQF #0267). This
                outcome measure assesses the percentage of ASC admissions
                [[Page 63884]]
                experiencing a wrong site, wrong side, wrong patient, wrong procedure,
                or wrong implant. We refer readers to the CY 2012 OPPS/ASC final rule
                with comment period (76 FR 74499) where we adopted ASC-4: All-Cause
                Hospital Transfer/Admission beginning with the CY 2014 payment
                determination (NQF #0265). This outcome measure assesses the rate of
                ASC admissions requiring a hospital transfer or hospital admission upon
                discharge from the ASC.
                 In the CY 2019 OPPS/ASC proposed rule, we proposed to remove ASC-1,
                ASC-2, ASC-3, and ASC-4 under measure removal Factor 1--measure
                performance among ASCs is so high and unvarying that meaningful
                distinctions and improvements in performance can no longer be made--for
                the CY 2021 payment determination and subsequent years (83 FR 37198
                through 37199). We noted that the ASCQR Program had previously
                finalized two criteria for determining when a measure is ``topped-
                out,'' including: (1) When there is statistically indistinguishable
                performance at the 75th and 90th percentiles of national facility
                performance; and (2) when the measure's truncated coefficient of
                variation (TCOV) is less than or equal to 0.10.\498\ We presented data
                demonstrating that each of these four measures met the criteria for
                topped-out status and stated that we believed their removal from the
                ASCQR Program measure set was appropriate as there was little room for
                improvement. In addition, we stated that removal would alleviate the
                maintenance costs and administrative burden to ASCs associated with
                retaining the measures. As such, we believed the burden associated with
                reporting these measures outweighed the benefits of keeping them in the
                program (83 FR 37198 through 37199).
                ---------------------------------------------------------------------------
                 \498\ In the CY 2019 OPPS/ASC proposed rule, we also clarified
                how we calculated the TCOV for ASC-1, ASC-2, ASC-3, and ASC-4, which
                assess the rate of rare, undesired events for which a lower rate is
                preferred. Typically, for measures for which a higher rate is
                preferred, we determine the TCOV by calculating the truncated
                standard deviation (SD) in performance divided by the truncated mean
                of performance (the mean of positive events). For these four
                measures, we employed an alternate methodology utilizing the mean of
                non-adverse events in our calculation of the TCOV. This substitution
                resulted in a TCOV that was comparable to that calculated for other
                measures and allowed us to assess rare event measures by still
                generally using our previously finalized topped-out criteria. For
                more information, see 83 FR 37196 through 37197.
                ---------------------------------------------------------------------------
                 However, in the CY 2019 OPPS/ASC final rule with comment period, we
                stated that we had re-evaluated the data due to public comments and
                reviewed many studies demonstrating the importance of measuring and
                reporting the data for these measures (83 FR 59118). It became clear to
                us that these measures are more valuable to stakeholders than we had
                initially perceived. We agreed that it was important to continue to
                monitor these types of events, considering the potential negative
                impacts to patients' morbidity and mortality, to continue to prevent
                their occurrence and ensure that they remain rare. We acknowledged that
                these measures provided critical data to beneficiaries and were
                valuable to the ASC community. We also acknowledged that having
                measures that apply to all ASCs provides beneficiaries with the most
                comprehensive patient safety data to use when making decisions about a
                site of care. Therefore, in the CY 2019 OPPS/ASC final rule with
                comment period, we did not finalize our proposals to remove ASC-1, ASC-
                2, ASC-3, and ASC-4 (83 FR 59118). We believed it was more prudent to
                keep them in the measure set.
                 However, we also stated in the CY 2019 OPPS/ASC final rule with
                comment period that we were concerned about some of the data submitted
                for these measures (83 FR 59119). We explained that the data submission
                method for these measures, which involved adding specific QDCs onto
                eligible claims, may impact the completeness and accuracy of the data.
                Specifically, we were concerned that ASCs lacked the ability to correct
                the QDC codes that are used to calculate these measures from Medicare
                FFS claims (83 FR 59119) if the claim had been submitted and processed
                for payment. We stated that we believed that revising the data
                submission method for the measures, such as via QualityNet, would
                address this issue and allow facilities to correct any data submissions
                errors, resulting in more complete and accurate data (83 FR 59119).
                 Therefore, we suspended the data collection of ASC-1, ASC-2, ASC-3,
                and ASC-4 beginning with the CY 2019 reporting period/CY 2021 payment
                determination (83 FR 59119), but retained these measures in the measure
                set. Starting with the CY 2021 payment determination, facilities were
                not required to submit data for these four measures as part of ASCQR
                Program requirements, even though the measures remained in the ASCQR
                Program measure set. We stated that as we developed future revisions
                for the data collected for these measures, we would take into
                consideration other data submission methods that may allow for the
                reporting of adverse events across payers and would consider
                commenters' feedback toward the future updates to the measures (83 FR
                59119).
                (2) Requirement of ASC-1, ASC-2, ASC-3, and ASC-4 Measures Beginning
                With the CY 2023 Reporting Period/CY 2025 Payment Determination and
                Subsequent Years
                 In the CY 2022 OPPS/ASC proposed rule (86 FR 42271 through 42272),
                we proposed to again require and resume data collection for ASC-1,
                ASC2, ASC-3, and ASC-4 beginning with the CY 2023 reporting period/CY
                2025 payment determination and subsequent years. We proposed that
                providers would submit data via the HQR System (formerly referred to as
                the QualityNet Secure Portal). We believe that web-based submission
                will make reporting easier and more efficient for facilities and will
                allow facilities to review and correct submitted data until the data
                submission deadline; our review and corrections policy is discussed in
                more detail at section XVI.D.2.f. of this final rule with comment
                period.
                 We stated that we believed that revising the data submission method
                for the measures, such as via QualityNet (now known as the HQR System)
                would address this issue and allow facilities to correct any data
                submissions errors, resulting in more complete and accurate data (83 FR
                59119). Facilities would be able to review and correct their data
                submissions up to the data submission deadline. As we stated above, we
                also believe that while these measures have been ``topped-out'', the
                public continues to believe that it is important to monitor these types
                of events, considering the potential negative impacts to patients'
                morbidity and mortality, to continue to prevent their occurrence and
                ensure that they remain rare.
                 We refer readers to section XVI.D.1.c.(1). of the CY 2022 OPPS/ASC
                proposed rule (86 FR 42281), where we discussed the data submission
                process for web-based measures, for more detail on how ASCs would be
                expected to submit data.
                 We received comments on these topics.
                 Comment: Many commenters supported resuming ASC-1, ASC-2, ASC-3,
                and ASC-4. Commenters noted that the measures will help improve care
                and patient experience while minimizing unnecessary burden. Commenters
                further stated that the measures focus on areas of critical importance
                for the safety of patients treated in ASCs. One commenter specifically
                stated the importance of ASC-2 as virtually all patients having
                outpatient procedures or surgery receive sedatives, anesthetics and/or
                pain
                [[Page 63885]]
                medications as a routine part of their care, which in turn increases
                the likelihood of a fall. This commenter also expressed the importance
                of ASC-4 and agreed that the rate of such transfers and admissions
                should be monitored to flag where improvements in practices or patient
                selection criteria are needed, given that ASCs can take steps to reduce
                the incidence of such events. One commenter supported the measures and
                recommended that physical therapists be consulted for falls as part of
                ASC-2.
                 Response: We thank the commenters for their support and agree that
                resuming ASC-1, ASC-2, ASC-3, and ASC-4 so that collecting information
                on the incidence of these patient safety events and making the
                information publicly available is important.
                 Comment: A few commenters did not support resuming reporting of the
                measures. Some commenters noted that the measures no longer maintain
                NQF endorsement and recommended that NQF endorsement be restored before
                reporting resumes. A few commenters stated that the measures were no
                longer required for reporting because they were topped out and rare,
                and their reintroduction into the program is unlikely to offer
                meaningful or actionable data for ASCs.
                 Response: While it is true that these measures are no longer NQF
                endorsed, endorsement was not removed, but instead lapsed as the
                measure steward made the decision not to submit the measures for
                reconsideration of endorsement. Data for these measures continues to be
                collected and reported under the Ambulatory Surgical Center Association
                (ASCA)'s benchmarking effort for their members. Thus, we believe that
                these measures continue to meet the statutory requirement of consensus.
                 With regard to the measures being topped out, as we stated in the
                CY 2022 OPPS/ASC proposed rule (86 FR 42271) and initially discussed in
                the CY 2019 OPPS/ASC final rule with comment period (83 FR 59118), we
                re-evaluated the measure data and reviewed many studies demonstrating
                the importance of measuring and reporting the data for these measures.
                ASC-1, ASC-2, ASC-3, and ASC-4 are measures that provide information to
                consumers about overall quality and safety within an ASC compared to
                other measures in the ASCQR Program measure set that focus on the
                quality and safety of specific procedures or events that may take place
                in an ASC setting. Therefore, we believe these measures are valuable
                and that it is important to continue to monitor these types of events,
                given the potential negative impacts to patients' morbidity and
                mortality, in order to continue to prevent their occurrence and ensure
                that they remain rare.
                 Comment: Some commenters requested clarification on the reporting
                population and noted that previously, these claims-based measures were
                reported only for Medicare FFS patients, but could be expanded to all
                patients. A few of these commenters recommended expanding reporting to
                all patients to increase transparency and accountability of the
                measures. One commenter stated that there have been problems with the
                batch submission function for reporting the measure data in the HQR
                platform and requested an update from CMS on how this issue has been
                addressed. One commenter requested clarification on what is meant by CY
                2023 reporting period/CY 2025 payment determination. The commenter
                noted that it understood the first year of reporting was data
                collection, the second year was data reporting, and the third year was
                payment impact. If data collection is required to resume in January
                2022, the commenter notes this would be challenging to implement. One
                commenter expressed a preference for reporting the measures via
                QualityNet instead of HQR.
                 Response: We appreciate commenter questions regarding the reporting
                population. As commenters noted, these measures were previously claims-
                based measures and applied to Medicare FFS patients. However, we would
                like to clarify that because the measures have been reintroduced as
                web-based, they will apply to all ASC patients in accordance with the
                measure developer's specifications, which define the denominator as all
                ASC admissions.\499\ As stated in the CY 2022 OPPS/ASC proposed rule
                (86 FR 42281), ASC-1, ASC-2, ASC-3, and ASC-4 were proposed for
                reintroduction as measures submitted via an online data submission
                tool. In the CY 2014 OPPS/ASC final rule (78 FR 75113), we discussed
                data submission for measures submitted via web-based reporting tools
                and stated that hospitals and ASCs would submit aggregate-level data
                through the CMS web-based tools for measures with such specifications.
                We agree with the commenters that reporting for all ASC patients will
                promote transparency and accountability for the measure data. With
                regard to batch submission issues, we appreciate the comment and note
                that systems changes are in progress for restoring the batch submission
                functionality that was compromised with the implementation of new
                infrastructure. We acknowledge the commenter's concern about reporting
                beginning in January 2022 and note that data collection will resume
                beginning CY 2023 with reporting in CY 2024 and payment in CY 2025.
                Many ASCs are familiar with reporting for these measures and we believe
                it is appropriate to finalize the measures for inclusion in the ASCQR
                Program beginning CY 2023. We clarify that for reporting purposes,
                reporting via the HQR System and QualityNet are equivalent. Reporting
                via HQR allows ASCs to make corrections during the data submission
                period which was not possible in the past if an ASC identified an
                erroneous or missing QDC on a claim that had already been submitted and
                processed, reduces the amount of time and resources required to submit
                measure data, and simplifies the requirements of the ASCQR Program by
                streamlining the number of methods required for quality measure data
                submission.
                ---------------------------------------------------------------------------
                 \499\ Ambulatory Surgical Center Quality Collaboration. Quality
                measures developed and tested by the ASC Quality Collaboration (ASC
                QC). Accessed at: https://higherlogicdownload.s3.amazonaws.com/ASCACONNECT/1b34f1a1-0180-4005-9507-902fdf8f242e/UploadedImages/ASC_Quality_Collaboration/Documents/2019-Summary-ASC-QC-Measures.pdf.
                ---------------------------------------------------------------------------
                 After consideration of the public comments we received, we are
                finalizing this proposal as proposed with the clarification regarding
                the population for which data will be collected.
                b. ASC-11: Cataracts--Improvement in Patient's Visual Function Within
                90 Days Following Cataract Surgery (NQF #1536) Beginning With the CY
                2023 Reporting Period/CY 2025 Payment Determination
                (1) Background
                 In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75124
                through 75129) we finalized the adoption of the ASC-11: Cataracts--
                Improvement in Patient's Visual Function within 90 Days Following
                Cataract Surgery measure.\500\ This measure assesses the percentage of
                patients aged 18 years and older who had cataract surgery and had
                improvement in visual function achieved within 90 days following the
                cataract surgery (78 FR 75129) via the administration of pre-operative
                and post-operative visual function surveys.
                ---------------------------------------------------------------------------
                 \500\ We note that this measure was endorsed by the NQF under
                NQF #1536 at the time of adoption but has subsequently had its
                endorsement removed.
                ---------------------------------------------------------------------------
                 During the CY 2014 OPPS/ASC rule cycle, some commenters expressed
                concern about the burden of collecting pre-operative and post-operative
                visual
                [[Page 63886]]
                function surveys (78 FR 75129 and 75138). In response to those
                comments, we modified our implementation strategy in a manner that we
                believed would significantly minimize collection and reporting burden
                (78 FR 75129). Specifically, we applied a sampling scheme and a low
                case threshold exemption to address commenters' concerns regarding
                burden (78 FR 75138 through 75139). With those changes, we intended to
                decrease burden and facilitate data reporting by allowing random
                sampling of cases when volume is high, instead of collecting
                information for all eligible patients (78 FR 75138 through 75139). For
                further details, we refer readers to the CY 2014 OPPS/ASC final rule
                with comment period (78 FR 75129; 75138 through 75139).
                 Shortly thereafter, we became concerned about the use of what we
                believed at the time were inconsistent surveys to assess visual
                function. The measure specifications allowed for the use of any
                validated survey and we were unclear about the impact the use of
                varying surveys might have. Therefore, we issued guidance stating that
                we would delay the implementation of ASC-11.\501\
                ---------------------------------------------------------------------------
                 \501\ The implementation was first delayed by 3 months--from
                January 1, 2014 to April 1, 2014, for the CY 2016 payment
                determination, via guidance issued December 31, 2013. Available at:
                https://qualitynet.cms.gov/asc/notifications. Because of continuing
                concerns, on April 2, 2014, we issued additional guidance stating
                that we would further delay the implementation of the measure from
                April 1, 2014 to January 1, 2015 for the CY 2016 payment
                determination. Available at: https://qualitynet.cms.gov/asc/notifications.
                ---------------------------------------------------------------------------
                 Subsequently, in the CY 2015 OPPS/ASC final rule with comment
                period (79 FR 66984 through 66985), we finalized our proposal to
                exclude ASC-11 from the CY 2016 payment determination measure set, and
                for subsequent years (79 FR 66984). In addition, we finalized allowing
                ASCs to voluntarily report ASC-11 data for the CY 2015 reporting
                period/CY 2017 payment determination and subsequent years (79 FR
                66984).
                (2) ASC-11 Measure Beginning With the CY 2023 Reporting Period/CY 2025
                Payment Determination and for Subsequent Years
                 In the CY 2022 OPPS/ASC proposed rule (86 FR 42272 through 42273),
                we stated that we believed it would be appropriate to require that ASCs
                report on ASC-11. We stated that ASCs have had the opportunity for
                several years to familiarize themselves with ASC-11, prepare to
                operationalize it, and opportunity to practice reporting the measure
                since the CY 2015 reporting period/CY 2017 payment determination. We
                noted that a small number of facilities have consistently reported data
                for this measure and these data have been made publicly available.
                While we previously had concerns regarding the use of different surveys
                to assess visual function (79 FR 66984), using different surveys has
                been found to not result in inconsistencies; the allowable surveys are
                scientifically validated and provide comparable results.\502\ Of 16
                different cataract surgery outcome questionnaires it has been
                demonstrated that all were able to detect clinically important
                change.\503\
                ---------------------------------------------------------------------------
                 \502\ McAlinden C, Gothwal VK, Khadka J, Wright TA, Lamoureux
                EL, Pesudovs K. A head-to-head comparison of 16 cataract surgery
                outcome questionnaires. Ophthalmology. 2011 Dec;118(12):2374-81.
                doi: 10.1016/j.ophtha.2011.06.008. Epub 2011 Sep 25. PMID: 21945088.
                 \503\ McAlinden C, Gothwal VK, Khadka J, Wright TA, Lamoureux
                EL, Pesudovs K. A head-to-head comparison of 16 cataract surgery
                outcome questionnaires. Ophthalmology. 2011 Dec;118(12):2374-81.
                doi: 10.1016/j.ophtha.2011.06.008. Epub 2011 Sep 25. PMID: 21945088.
                ---------------------------------------------------------------------------
                 In the CY 2022 OPPS/ASC proposed rule (86 FR 42272 through 42273),
                we proposed to require reporting for the NQF-endorsed ASC-11 measure
                beginning with the CY 2023 reporting period/CY 2025 payment
                determination and subsequent years. As we stated in the CY 2014 OPPS/
                ASC final rule with comment period, as well as the CY 2015 OPPS/ASC
                final rule with comment period and consistent with the MAP
                recommendation, we continue to believe that this measure ``addresses a
                high-impact condition'' that is not otherwise adequately addressed in
                our current measure set (78 FR 75129 and 79 FR 66984, respectively).
                Moreover, ASC-11 serves to drive coordination of care (78 FR 75129 and
                79 FR 66984) in multiple ways, including the operational requisites for
                conducting and sharing the results of the surveys as well as providing
                opportunities for care coordination as well as direct patient feedback.
                 We refer readers to section XVI.D.1.c.(1). of this final rule with
                comment period for information about submitting data via a CMS web-
                based tool.
                 We received comments on these topics.
                 Comment: A few commenters supported our proposal to require the
                reporting of the ASC-11: Cataracts: Improvement in Patient's Visual
                Function within 90 Days Following Cataract Surgery measure.
                 Response: We thank the commenters for their support. We agree that
                this measure has considerable merit as a patient-reported outcome
                measure for a large volume procedure for the ASC setting. We emphasize
                the value of this measure and continue to believe that ASC-11 addresses
                a high-impact condition and that it provides opportunities for care
                coordination and direct patient feedback.
                 Comment: Many commenters expressed concern about making this
                measure mandatory, stating that because the ASC-11: Cataracts:
                Improvement in Patient's Visual Function within 90 Days Following
                Cataract Surgery measure is not currently mandatory, many facilities
                have not been ``practicing'' reporting it. One commenter additionally
                noted that this measure would be difficult to coordinate between
                physicians and ASCs.
                 Response: We thank the commenters for their feedback. We recognize
                from the challenges shared in the public comments, and discussed
                herein, that while the measure has been voluntary and available for
                reporting since the CY 2015 reporting period, a number of facilities
                have reported data for this measure and those that have reported it
                have done so consistently. To address commenters' concerns, we are
                finalizing to require ASC-11: Cataracts: Improvement in Patient's
                Visual Function within 90 Days Following Cataract Surgery beginning
                with the CY 2025 reporting period/CY 2027 payment determination,
                instead of our originally proposed data collection beginning with the
                CY 2023 reporting period. We believe the 2-year extension from our
                originally proposed timeline of the CY 2023 reporting period/CY 2025
                payment determination, will provide facilities with sufficient time to
                provide staff training and operationalize the measure for successful
                reporting in the ASCQR Program.
                 Comment: Many commenters did not support the requirement for
                mandatory reporting of the ASC-11: Cataracts: Improvement in Patient's
                Visual Function within 90 Days Following Cataract Surgery measure,
                citing concerns about the operational complexity of collection and
                sharing data for the measure across physician and ASC settings. Many
                commenters believed administering surveys and tracking responses for
                the ASC-11 measure would be burdensome. Specifically, many commenters
                were concerned that this measure was developed as a physician-level
                measure, and related data would be generated and obtained in a
                physician's medical record and/or EHR that is not necessarily
                accessible by ASCs. One commenter expressed concern about being able to
                [[Page 63887]]
                share data between facilities and clinicians within the bounds of
                HIPAA.
                 Response: We thank the commenters for their input, and we
                acknowledge their concerns. Our overarching goal for proposing the
                adoption of the ASC-11 measure is to encourage the coordination of care
                across health care settings, providers, and suppliers as frequently as
                possible (78 FR 75126). We aim to see ASCs, ophthalmologists, and other
                clinicians such as optometrists, actively and routinely engaged in
                exchanging information to better communicate and coordinate the care of
                patients. We understand, however, that it may be difficult and complex
                to share data generated in different settings. We believe the 2-year
                extension from our originally proposed timeline of the CY 2023
                reporting period/CY 2025 payment determination will provide ASCs with
                sufficient time for clinics and staff to address potential issues
                regarding extracting and sharing patient data. The 2-year extension
                will also allow facilities to prepare and update systems and
                technology, and prevent additional reporting burden during the COVID-19
                pandemic. Additionally, we recognize that the ASC-11 measure is
                currently tested at the clinician-level and not at the facility-level.
                We will continue to monitor this measure and will address potential
                updates, as appropriate.
                 We note that the HIPAA Privacy Rule permits a covered entity to
                disclose PHI to another covered entity for certain health care
                operations of the recipient covered entity. Additionally, a covered
                entity may disclose PHI to a business associate and to allow a business
                associate to create, receive, maintain, or transmit PHI on its behalf,
                provided that the parties have a Business Associate Agreement (BAA)
                that meets the requirements of 45 CFR 164.504(e) and permits the
                business associate to use or disclose PHI only as permitted or required
                by its BAA or as required by law. The BAA must, among other things,
                establish the permitted and required uses and disclosures of PHI by the
                business associate.
                 Comment: A few commenters requested the measure remain voluntary
                because they believe that obtaining the data 90 days after outpatient
                surgery would be difficult. Commenters raised concerns that surveying
                patients and getting appropriate responses in this timeline may result
                in a resource burden for ASCs.
                 Response: We thank the commenters for their feedback and
                acknowledge their concerns. We highly encourage hospitals,
                ophthalmologists, and other clinicians to actively and routinely engage
                in exchanging information to better communicate and coordinate the care
                of patients to promote quality of care. We acknowledge complexity of
                administering and sharing data for ASC-11 across different settings;
                however, we emphasize the value of this measure and continue to believe
                that ASC-31 addresses a high-impact condition and provides
                opportunities for care coordination and direct patient feedback. We
                believe the 2-year extension from our originally proposed timeline of
                the CY 2023 reporting period/CY 2025 payment determination, will
                provide facilities with sufficient amount of time to provide staff
                training and operationalize the measure for successful reporting in the
                ASCQR Program, including implementing methods to procure appropriate
                data 90 days after outpatient surgery.
                 Comment: A few commenters raised concerns with measure
                specifications, especially the lack of specificity around
                administration of the survey to ensure consistency between the pre- and
                post-operative surveys as well as comparability of the measure across
                ASCs. One of these commenters disagreed with the use of the study
                cited, noting that it reviewed responsiveness of different
                questionnaires and not comparison of agreement across different
                questionnaires.
                 Response: We thank commenters for their feedback. We recognize
                commenter concerns related to the measure specifications. However, we
                respectfully disagree with the assessment of the McAlinden et al. study
                cited.\504\ While that study indicated that the use of one survey is
                ideal for measuring visual function outcomes, we reiterate that their
                findings showed that the use of different surveys did not result in
                inconsistencies and we maintain that it is appropriate for inclusion in
                the ASCQR Program measure set. We reiterate our belief that ASC-11
                provides a valuable opportunity to hear patient feedback on visual
                function outside of the clinical setting. After consideration of the
                public comments we received, we are finalizing the proposal to require
                ASC-11: Cataracts: Improvement in Patient's Visual Function within 90
                Days Following Cataract Surgery with modification. To address
                commenters' concerns, we are finalizing to require ASC-11: Cataracts:
                Improvement in Patient's Visual Function within 90 Days Following
                Cataract Surgery beginning with the CY 2025 reporting period/CY 2027
                payment determination, instead of our originally proposed data
                collection beginning with the CY 2023. We believe the two-year
                extension from our originally proposed timeline of the CY 2023
                reporting period/CY2025 payment determination, will provide ASCs with
                sufficient amount of time to implement coordination strategies between
                the surgeon and the ophthalmologist, provide staff training, and
                operationalize the measure for successful reporting in the ASCQR
                Program.
                ---------------------------------------------------------------------------
                 \504\ McAlinden C, Gothwal VK, Khadka J, Wright TA, Lamoureux
                EL, Pesudovs K. A head-to-head comparison of 16 cataract surgery
                outcome questionnaires. Ophthalmology. 2011 Dec;118(12):2374-81.
                doi: 10.1016/j.ophtha.2011.06.008. Epub 2011 Sep 25. PMID: 21945088.
                ---------------------------------------------------------------------------
                c. Requirement of ASC-15a-e: Outpatient and Ambulatory Surgery Consumer
                Assessment of Healthcare Providers and Systems (OAS CAHPS) Survey-Based
                Measures Beginning With Voluntary Reporting in CY 2023 Reporting Period
                and Mandatory Reporting Beginning With the CY 2024 Reporting Period/CY
                2026 Payment Determination and for Subsequent Years
                (1) Background
                 We previously adopted the ASC-15a-e: Outpatient and Ambulatory
                Surgery Consumer Assessment of Healthcare Providers and Systems (OAS
                CAHPS) Survey-based measures to assess patient experience with care
                following a procedure or surgery in an ASC. These survey-based measures
                rate patient experience as a means for empowering patients and
                improving the quality of their care (82 FR 59450). For further details
                on this measure, we refer readers to the CY 2017 OPPS/ASC final rule
                with comment period (81 FR 79803 through 79817), in which we adopted
                these measures beginning with the CY 2020 payment determination.
                 Subsequently, in the CY 2018 OPPS/ASC final rule with comment
                period (82 FR 49450 through 49451), we delayed implementation of ASC-
                15a-e for the ASCQR Program beginning with the CY 2020 payment
                determination due to lack of sufficient operational and implementation
                data. At that time, we believed that our ongoing National OAS CAHPS
                Survey voluntary reporting program for the survey, which began in
                January 2016 \505\ and is unrelated to
                [[Page 63888]]
                either the Hospital OQR Program or ASCQR Program, would provide
                valuable information moving forward. Specifically, we wanted to use the
                information from the National OAS CAHPS Survey voluntary reporting
                program to: (1) Ensure that the survey measures appropriately account
                for patient response rates, both aggregate and by survey administration
                method; (2) reaffirm the reliability of national implementation of OAS
                CAHPS Survey data; and (3) appropriately account for the burden
                associated with administering the survey in the outpatient care
                setting.
                ---------------------------------------------------------------------------
                 \505\ Participation in the program is open to any interested
                Medicare-certified Hospital Outpatient Departments (HOPDs) and free-
                standing ambulatory surgery centers (ASCs). More information on the
                National OAS CAHPS Survey voluntary reporting program is available
                at: https://oascahps.org/General-Information/National-Implementation
                and https://www.cms.gov/Research-Statistics-Data-and-Systems/Research/CAHPS/OAS-CAHPS.
                ---------------------------------------------------------------------------
                 Having had the opportunity during the delayed implementation to
                investigate the concerns about patient response rates and data
                reliability, we believe that patients are able to respond to OAS CAHPS
                Survey questions, and that those responses are reliable based on
                experience collecting voluntary data for public reporting since CY 2016
                (available at https://www.medicare.gov/care-compare/). We reaffirm that
                the OAS CAHPS Survey-based measures assess important aspects of care
                where the patient is the best or only source of information (81 FR
                79803). Regarding the burden associated with the survey, we believe
                that measuring patient experience provides important information to
                ASCs and patients, especially for assessing the quality of care
                provided at an ASC (82 FR 59450). Furthermore, in section
                XVI.D.1.d.(2). of the CY 2022 OPPS/ASC proposed rule (86 FR 42282
                through 42284), we proposed additional collection modes using a web-
                based module (web with mail follow-up of non-respondents and web with
                telephone follow-up of non-respondents) for administering the survey,
                which would be available beginning in CY 2023 under the ASCQR Program
                and for subsequent years.\506\ We believe these additional collection
                modes would further address some burden concerns raised during the CY
                2017 OPPS/ASC final rule with comment period (81 FR 59450) because the
                web-based modules may produce similar results, but at lower costs of
                collection.\507\ As we stated in the CY 2018 OPPS/ASC final rule with
                comment period, we continue to believe that implementation of these
                measures will enable objective and meaningful comparisons between ASCs
                (82 FR 59450) and that patient experience of care data are valuable in
                assessing the quality of care provided at an ASC and assisting patients
                in selecting a provider for their care (82 FR 59450).
                ---------------------------------------------------------------------------
                 \506\ We note that the mixed modes will be available as part of
                the National OAS CAHPS voluntary reporting program beginning in CY
                2022.
                 \507\ Bergeson SC, Gray J, Ehrmantraut LA, Hays RD. Comparing
                Web-based with Mail Survey Administration of the Consumer Assessment
                of Healthcare Providers and Systems (CAHPS[supreg]) Clinician and
                Group Survey. Prim Health Care. 2013 Sept; doi: 10.4172/2167-
                1079.1000132. Available at: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3783026/.
                ---------------------------------------------------------------------------
                 In the CY 2022 OPPS/ASC proposed rule (86 FR 42273), we proposed to
                restart the ASC-15a-e measures by proposing to link reporting of
                measure data with payment determinations as part of the ASCQR Program
                beginning with the CY 2024 reporting period/CY 2026 payment
                determination. Specifically, for the ASCQR Program, we proposed
                voluntary data collection and reporting beginning with the CY 2023
                reporting period, followed by mandatory data collection and reporting
                beginning with the CY 2024 reporting period/CY 2026 payment
                determination. As noted above, the National OAS CAHPS Survey voluntary
                reporting program is independent of the ASCQR Program and the Hospital
                OQR Program. ASCs that voluntarily report the OAS CAHPS Survey-based
                measures during the CY 2023 reporting period would do so as part of the
                ASCQR Program until mandatory reporting begins. The reporting process
                for ASCs to submit OAS CAHPS Survey data would remain unchanged, that
                is, ASCs would submit OAS CAHPS Survey data through their vendors who
                would submit these data to CMS as appropriate. We refer readers to
                section XVI.D.1.d. of this final rule with comment period for
                additional information regarding the form, manner, and timing for
                reporting the ASC-15a-e survey-based measures.
                 We initially considered a 2-year voluntary period, that is, the CY
                2023 and CY 2024 reporting periods, because we believed that ASCs may
                require additional preparation time for OAS CAHPS Survey implementation
                including contracting with OAS CAHPS vendors. We also considered the
                challenges that many ASCs may have experienced during the COVID-19
                pandemic and the additional operational constraints that they may still
                be experiencing. However, since voluntary reporting, including the two
                new modes of data collection we proposed in section XVI.D.1.d.(2) of
                the CY 2022 OPPS/ASC proposed rule (86 FR 42282 through 42284), will be
                available in 2022 as part of the National OAS CAHPS voluntary reporting
                program, we proposed 1 year of voluntary reporting as part of the ASCQR
                Program for the CY 2023 reporting period. As described in the NPRM, we
                believed that ASCs would have sufficient time to familiarize themselves
                with OAS CAHPS measures and OAS CAHPS vendors prior to mandatory
                reporting in the CY 2024 reporting period/CY 2026 payment determination
                and for subsequent years.
                 We refer readers to section XVI.D.1.d. of the CY 2022 OPPS/ASC
                proposed rule (86 FR 42282) for our related proposals regarding the
                form, manner, and timing for reporting the ASC-15a-e Survey-based
                measures.
                 We also refer readers to section XV.B.5.a. of the CY 2022 OPPS/ASC
                proposed rule (86 FR 42246 through 42247) where we proposed to restart
                this measure in the Hospital OQR Program. We received comments on these
                topics.
                 Comment: A few of commenters supported voluntary reporting of the
                ASC-15a-e: OAS CAHPS Survey-based measures for the CY 2023 reporting
                period/CY 2025 payment determination for the ASCQR Program. One
                commenter expressed support for CMS' efforts to develop the OAS CAHPS
                Survey-based measures and is pleased the OAS CAHPS Survey addresses the
                experience of surgical care received at both HOPDs and ASCs, which the
                commenter believes will support consumers' ability to compare
                facilities.
                 Response: We thank the commenters for their support for the
                voluntary reporting of the OAS CAHPS Survey-based measures as part of
                the ASCQR Program. We believe that these survey-based measures will be
                useful to assess aspects of care where the patient is the best or only
                source of information, and to enable objective and meaningful
                comparisons between ASCs. We believe reporting for these measures as
                part of the ASCQR Program would provide meaningful information to
                patients and provide ASCs the opportunity to experience reporting as
                part of the ASCQR Program. As the OAS CAHPS Survey results are
                available, they will be made publicly available along with other ASCQR
                measure data (currently on the CMS Provider Data Catalog), which is
                made available to inform consumers and encourage healthcare facilities
                to make continued improvements in care quality.
                 Comment: One commenter did not support the 1-year voluntary
                reporting period, but generally supported the inclusion of the OAS
                CAHPS Survey and recommended the 2-year period that CMS had initially
                considered. Another commenter urged CMS to delay voluntary
                implementation under the ASCQR Program until CY 2024. These commenters
                expressed concerns about staffing shortages and the cost and time to
                update systems to accommodate the measure during the unprecedented
                challenges posed by the COVID-19
                [[Page 63889]]
                pandemic, and the requirements imposed by other federal regulations,
                which they believe warrant extended preparation time for OAS CAHPS
                Survey implementation.
                 Response: We thank the commenters for their general support for
                inclusion of the OAS CAHPS Survey-based measures in the ASCQR Program
                and understand preference to delay the start of voluntary reporting
                based on concerns about COVID-19 and the need to accommodate ASCs while
                our nation works through the unprecedented COVID-19 pandemic. We also
                understand how delaying the implementation of the OAS CAHPS Survey-
                based measures as part of the ASCQR Program will afford ASCs additional
                time to address staffing shortages, prepare for additional federal
                regulations, and respond to the public health emergency caused by
                COVID-19. Due to the impact of the ongoing PHE for COVID-19 on ASC
                facilities, we are delaying the start of mandatory reporting by one
                year, to begin with the CY 2025 reporting period/CY 2027 payment
                determination under the ASCQR Program. Voluntary reporting will still
                be available as part of the ongoing program for voluntarily reporting
                the National OAS CAHPS Survey.
                 Comment: A couple commenters supported CMS' proposal to require
                mandatory reporting of the OAS CAHPS Survey-based measures within the
                ASCQR Program beginning with the CY 2024 reporting period/CY 2026
                payment determination. One commenter noted the belief that the OAS
                CAHPS Survey-based measures will help facilities identify areas of
                strengths and areas of improvement for patient experience, while
                another believed the OAS CAHPS Survey-based measures would provide more
                real time quality data to inform ASCs' decision-making.
                 Response: We thank the commenters for their support for mandatory
                reporting of the OAS CAHPS Survey-based measures. We believe the
                measures will provide facilities with important feedback and support
                their ability to improve patient experience.
                 Comment: A few commenters recommended delaying mandatory
                implementation of the survey-based measures. Among commenters concerns
                were the ongoing COVID-19 pandemic and current staffing shortages.
                 Response: We thank the commenters for their feedback. We understand
                the commenters' requests to delay the mandatory implementation of the
                OAS CAHPS Survey-based measures and their concerns regarding the on-
                going public health emergency and staffing. We agree that delaying
                mandatory reporting of the OAS CAHPS Survey-based measures while ASCs
                respond to the COVID-19 pandemic and related staffing shortages is
                appropriate. As a result, we are delaying the start of mandatory
                reporting as part of the ASCQR Program until the CY 2025 reporting
                period/CY 2027 payment determination. Voluntary reporting will still be
                available as part of voluntary National OAS CAHPS Survey reporting.
                 Comment: A few commenters opposed mandatory reporting of the OAS
                CAHPS Survey-based measures and expressed concern regarding the
                financial and administrative burden of OAS CAHPS on ASCs. One commenter
                expressed concern that the cost of implementing the survey-based
                measures could exceed the 2 percent penalty for failing to meet the
                ASCQR Program requirements. Another commenter believed that ASCs may
                decide to stop providing services due to the cost of survey
                implementation. Other commenters opposed the OAS CAHPS Survey-based
                measure because they believe that ASCs are inadequately compensated by
                CMS to support the additional cost of the administration of the survey
                and OAS CAHPS Survey could force ASCs to reconsider remaining open or
                closing. Another commenter suggested that mandatory reporting of OAS
                CAHPS Survey may cause some small ASCs to stop reporting.
                 Response: We thank the commenters for their feedback. While there
                are administrative and financial burdens associated with implementing
                the OAS CAHPS Survey-based measures in the ASCQR Program, we believe
                the benefits of capturing patient experience of care data in the ASC
                setting outweigh the burdens. In selecting measures for the ASCQR
                Program, we weigh the relevance and utility of measures against the
                potential burden to ASCs resulting from the measure's adoption, and we
                believe the OAS CAHPS Survey-based measures are a vital source of
                information in assessing the quality of care provided at ASCs.
                 We post the list of the approved OAS CAHPS Survey vendors on
                https://oascahps.org, and we encourage ASCs to contact vendors for cost
                and service information pertaining to survey administration as there
                may be differences among vendors and multiple modes of conducting the
                survey provide greater economic choice.
                 In addition, we proposed additional modes to collect the OAS CAHPS
                Survey-based measures, which we expect to reduce the future cost of
                administration. We refer readers to the Protocols and Guidelines Manual
                for the OAS CAHPS Survey (https://oascahps.org/Survey-Materials) for
                materials for each mode of survey administration.
                 While we did not propose solely digital modes of conducting the OAS
                CAHPS Survey in the CY 2022 OPPS/ASC proposed rule, we are analyzing
                whether a web-only or digital-only format would be appropriate for the
                OAS CAHPS Survey-based measures, which could potentially further reduce
                the costs of administering the survey. We also refer to readers to
                section XVI.D.1.d.(2).(a) of this final rule with comment period and
                below where we finalize a reduced number of required surveys to meet
                the time, form and manner requirements, which should further reduce the
                expected burden on ASCs.
                 Comment: A few commenters requested we delay mandatory reporting of
                the OAS CAHPS Survey-based measures because of perceived issues with
                the CPT coding consistency across vendors and the IT requirements to
                maintain CPT and DRG code lists.
                 Response: We thank the commenters for their feedback. We interpret
                the commenters' concern to mean that there may be confusion over which
                patients would be eligible to be surveyed as part of the OAS CAHPS
                Survey reporting. The OAS CAHPS Survey is administered to all eligible
                patients--or a random sample thereof--who had at least one outpatient
                surgery/procedure during the applicable month. We acknowledge the
                concern about the use of CPT codes, including those for procedures that
                patients may not perceive as surgery. However, we note that many CPT
                codes have been excluded from inclusion in the OAS CAHPS Survey,
                including services like application of a cast or splint, in order to
                ensure that only patients receiving applicable procedures are
                surveyed.\508\
                ---------------------------------------------------------------------------
                 \508\ See Announcements (oascahps.org) where updates on Survey
                specifications and guidelines are available.
                ---------------------------------------------------------------------------
                 CMS recognizes in some cases there could be delays in getting the
                CPT codes updated in the patient record and transmitted to the survey
                vendor in a timely manner. Under the current protocol for survey
                administration, CMS allows survey vendors to work with HOPD and ASC
                facilities to identify alternatives ways to identify the patient
                records for outpatient surgery or diagnostic procedures that were
                performed in eligible HOPDs or ASCs (as identified by the facility-
                level eligibility criteria). Vendors can submit exception requests to
                request alternative
                [[Page 63890]]
                methods for identifying the eligible population. We also note that the
                current protocol for survey administration allows for late start
                requests for situations in which the complete patient records are not
                available within the target window of time for survey administration.
                Vendors can submit late start requests when the patient data file is
                received more than 26 days after the sample month. This allows for
                flexibility in situations when the CPT codes are not available
                initially but can be updated. Further, sampling is allowed to proceed
                if 90 percent of the patient records have CPT codes.
                 Any updates to the Survey Specifications and Guidelines will be
                available on the OAS CAHPS Survey website (https://oascahps.org/).
                 Comment: Many commenters expressed concern regarding the length of
                the survey, recommending that the survey should be significantly
                shortened to focus on actionable aspects of the patient experience and
                to encourage higher response rates amongst patients. Specifically, some
                commenters recommended that a revised survey should include 5-10
                questions.
                 Response: The OAS CAHPS Survey is comparable in length and survey
                response rate to other patient experience of care surveys. The survey
                instrument was developed to provide a more complete picture of the
                patients' experience of care in the ASC setting. The 24 core questions
                of the OAS CAHPS Survey are either directly actionable (that is, give
                feedback to ASCs/hospitals) or inform the need for patients to answer
                subsequent questions that are actionable. We note that the survey
                results to date do not show that respondents are terminating the
                interview before the last question, which would be an indication of
                respondent fatigue for a survey that is too long. Based on the most
                recently received national implementation data for voluntary reporting,
                the nonresponse due to terminated interviews is less than 1 percent.
                 Implementing the OAS CAHPS Survey-based measures in the ASCQR
                Program will enable patients to compare patient experience of care data
                across multiple ASCs as part of their healthcare decision-making. In
                addition, we believe implementing these measures in the ASCQR Program
                will incentivize ASCs to factor patient experience of care into their
                quality improvement efforts more proactively. However, we also
                acknowledge these commenters' concerns about the length of the OAS
                CAHPS Survey and will continue to consider whether refinement would be
                appropriate.
                 Comment: A commenter opposed mandatory reporting and expressed
                concern about the national data reliability of the OAS CAHPS Survey.
                 Response: We thank the commenter for its comments. We disagree that
                OAS CAHPS Survey does not have national data reliability. OAS CAHPS
                Survey data has been collected as part of the voluntary National OAS
                CAHPS Survey since 2016. Based on our experience through this
                reporting, we are able to: (1) Ensure that the survey measures
                appropriately account for patient response rates, both aggregate and by
                survey administration method; (2) reaffirm the reliability of national
                implementation of OAS CAHPS Survey data; and (3) appropriately account
                for the burden associated with administering the survey in the
                outpatient setting. Unit-level reliability analysis of the publicly
                reported composites for OAS CAHPS are well above the .70 cut-off
                typically used to assess reliability of a measure.
                 Comment: One commenter expressed concern that the OAS CAHPS Survey
                uses the Top-Box methodology rather than the net promoter score (NPS)
                to measure patient satisfaction, which the commenter believes provides
                less meaningful data on measuring patient satisfaction. Another
                commenter noted that the response scale and compact scoring
                distribution may limit the ability for consumers to differentiate high
                and low quality providers.
                 Response: We thank the commenters for their feedback. In 2014,
                field-tested data were evaluated and analyzed to identify item-level
                refinements necessary for the survey instrument. The field test
                psychometric analysis included evaluations of individual items and
                composite item sets. Individual items were analyzed to report item-
                level missing data and item response distributions (including ceiling
                and floor effects), which included response variance. Composite item
                sets were analyzed using factor analysis and item response theory (IRT)
                analysis to assess dimensionality, discriminability, dimensional
                coverage, and subgroup response differences. Internal consistency
                statistics (reliability) and correlational checks for composite
                validity were performed to evaluate the final composite item sets. The
                item-level recommendations for the field test were based on the
                findings from the factor analyses, the internal consistency checks, and
                the IRT analysis. As a result, 10 questions were recommended for
                deletion. Reliability of the remaining measures was assessed using the
                Cronbach's alpha coefficient, with an estimate range from zero to one.
                An estimate of zero indicated no measurement consistency and one
                indicates perfect consistency. The cutoff criterion for the examination
                was 0.70, which indicated adequate consistency.\509\ The composites
                analytically derived maintained adequate internal consistency even when
                reduced to Top-Box scoring and across the facility types and modes of
                administration. Based on the rigorous testing that was undertaken
                during the development process, we believe the OAS CAHPS Survey, and
                measure scores derived therefrom, are both reliable and valid.
                Therefore, we believe that the scoring used in the OAS CAHPS Survey
                measures is appropriate. Updated unit-level reliability analysis of the
                publicly reported composites during voluntary national implementation
                continues to be well above the .70 cut-off for reliability.
                ---------------------------------------------------------------------------
                 \509\ Dillman, D. A. 1978. Mail and Telephone Surveys: The Total
                Design Method. New York: Wiley & Sons.
                ---------------------------------------------------------------------------
                 Comment: A couple of commenters opposed the OAS CAHPS Survey-based
                measures due to the lack of NQF endorsement. The commenters encouraged
                CMS to pursue NQF endorsement of these measures before the OAS CAHPS
                Survey is required in order to ensure all stakeholders are given
                insight into the measure and to guarantee that it is fair and accurate.
                 Response: We thank the commenters for their comments. As we have
                stated in prior rules (81 FR 79808 and 82 FR 59433), section
                1833(t)(17)(C)(i) of the Act does not require that each measure we
                adopt for the ASCQR Program be endorsed by a national consensus
                building entity, or the NQF specifically. Further, under section
                1833(i)(7)(B) of the Act, section 1833(t)(17)(C)(i) of the Act applies
                to the ASCQR Program, except as the Secretary may otherwise provide.
                Under this provision, the Secretary has further authority to adopt non-
                endorsed measures. While we strive to adopt NQF-endorsed measures when
                feasible and practicable, we believe the requirement that measures
                reflect consensus among affected parties can be achieved in other ways,
                including through the measure development process, stakeholder input
                via a Technical Expert Panel (TEP), review by the MAP, broad acceptance
                and use of the measure, and public comments.
                 We refer readers to the CY 2017 OPPS/ASC final rule with comment
                period (81 FR 79803 through 79824) for a fuller discussion of the
                rigorous testing applied to the OAS CAHPS Survey and our belief that it
                is appropriate for the ASCQR Program.
                [[Page 63891]]
                 Comment: A commenter expressed concern regarding the ophthalmology-
                specific ASCs and the number of OAS CAHPS Survey questions regarding
                ophthalmology as many ophthalmology patients are unable to regularly
                check their email due to their limited vision.
                 Response: We appreciate the commenters concern regarding the well-
                being of patients who undergo eye procedures. However, we do not
                believe completing the survey poses an additional hardship on
                ophthalmology patients. After a patient has a surgery or procedure, the
                survey can be completed up to 6 weeks (42 days) following the
                invitation to complete the survey. Additionally, we provide different
                modes of survey administration that would allow for greater
                accessibility by patients completing the survey, including telephonic
                surveying, which may provide greater accessibility to individuals with
                limited vision. We believe that the OAS CAHPS Survey assesses patient
                experience of care for outpatient surgical procedures, and therefore,
                takes the outpatient/ambulatory setting into account and captures
                information about the appropriate experiences of care for this setting,
                including ophthalmology patients. Based on the results of the 2019 OAS
                CAHPS mode experiment, the response rates for ophthalmology patients
                were not significantly different from other types of outpatients.
                However, we will monitor this issue to ensure that the response data
                does not indicate that ophthalmology patients are not outliers to the
                rest of patients surveyed.
                 Comment: A few commenters opposed mandatory reporting of the OAS
                CAHPS Survey because of concerns regarding the patient response rate.
                 Response: We thank the commenters for their feedback. We agree with
                commenters that patient response is largely out of the control of the
                facility. However, we note that we did not propose to penalize ASCs for
                patients' decision not to complete the survey. Payment implications
                under the ASCQR Program are tied to the successful and timely reporting
                of required quality measure data. An ASC will not receive a payment
                reduction based on performance under the OAS CAHPS Survey-based
                measures if the ASC administers the survey according to the OAS CAHPS
                Survey Protocol and Guidelines Manual \510\ and submits that data to
                CMS by the data submission deadline, regardless of the number of
                completed surveys the facility receives. Results will be used for
                public reporting only.
                ---------------------------------------------------------------------------
                 \510\ https://oascahps.org/Survey-Materials.
                ---------------------------------------------------------------------------
                 Comment: A commenter expressed concern for ASC departments that
                will incur multiple sets of patient experience results and recommended
                that the OAS CAHPS Survey only apply to services where anesthesia is
                used.
                 Response: We thank the commenter for its suggestion; however, we
                believe that the OAS CAHPS Survey is appropriately scoped to provide
                patients and facilities meaningful data on the services provided by
                ASCs and not just those that require anesthesia.
                 Comment: A commenter requested that we do more to ensure correct
                attribution of the patient experience and requested we provide evidence
                of the OAS CAHPS Survey's reliability before it requires survey
                administration, which could reduce the reliability of the results and
                negatively impact data-driven decision making.
                 Response: We thank the commenter for its feedback. The OAS CAHPS
                Survey is used to obtain data on a patient's experience of care
                received from a facility. While there is always potential that a
                patient gets confused, we believe that the OAS CAHPS Survey is focused
                on patients' experience of care received for their ambulatory surgery
                or procedure. A physician/surgeon who performs surgeries/procedures at
                a facility is a member of that facility with both rights and
                responsibilities. We believe it is the facility's responsibility to
                ensure that someone whether the doctor, nurse, or other facility staff
                member, provide patients with information about preparing for their
                procedure, about the procedure itself, as well as what to expect
                following the procedure/surgery. Therefore, we believe it is
                appropriate to include these important communications with patients in
                the OAS CAHPS Survey and believe experience with the provider
                attributed to the facility is appropriate.
                 Further, we believe that the information provided in the OAS CAHPS
                Survey ``Instructions'' is sufficient to inform the patient regarding
                the purpose of the OAS CAHPS Survey and provides sufficient instruction
                and details for the patient to correctly identify and relate the survey
                to the facility and from which that patient received the procedure. CMS
                began developing the OAS CAHPS Survey in 2012 using the principles and
                guidelines established by the Agency for Healthcare Research and
                Quality's (AHRQ) CAHPS program and AHRQ approved this instrument as a
                CAHPS survey in February 2015.\511\
                ---------------------------------------------------------------------------
                 \511\ See CAHPS Outpatient and Ambulatory Surgery Survey.
                Content last reviewed July 2019. Agency for Healthcare Research and
                Quality, Rockville, MD.
                 https://www.ahrq.gov/cahps/surveys-guidance/oas/index.html.
                ---------------------------------------------------------------------------
                 Comment: A commenter sought information on whether the OAS CAHPS
                Survey may have a positive, indirect effect on the way physicians
                communicate with patients and recommended an on-going evaluation of the
                effectiveness of the survey to understand the benefit and whether the
                survey data is informing improvements in care delivery. The commenter
                also requested additional information on patient experience of care in
                the HOPD and ASC settings, and we believe patient experience the effect
                the OAS CAHPS Survey has on care delivery and quality improvement.
                Another commenter stated that the money spent on OAS CAHPS Survey would
                be less effective than spending money directly on patient care.
                 Response: We thank the commenters for their comments. Studies show
                a relationship between the clinical quality of care provided at a
                facility and patients' experience of care.512 513 The OAS CAHPS Survey
                is specifically designed to measure of care is an important indicator
                of the quality of care provided at a facility. As noted above, patients
                are the best source for certain information about the quality of care.
                Additionally, we believe that the insights provided by the OAS CAHPS
                Survey enable objective and meaningful information to ASCs about
                patient experience, which will help facilities identify areas to
                improve patient experience and to increase communication with patients.
                ---------------------------------------------------------------------------
                 \512\ Isaac, T., Zaslavsky, A.M., Cleary, P.D., and Landon, B.E.
                The Relationship Between Patients' Perception of Care and Measures
                of Hospital Quality and Safety. Health Services Research.
                2010;45:1024-1040.
                 \513\ Anhang, P. et al. Examining the Role of Patient Experience
                Surveys in Measuring Health Care Quality. Med Care Res Rev.
                2014;71(5):552-554.
                ---------------------------------------------------------------------------
                 Comment: A commenter recommended that for the most meaningful and
                user-centric approach to public reporting, we should not use CCN-level
                reporting and instead use NPI-based reporting method because it would
                allow the public to directly correlate quality measure data with an
                individual facility.
                 Response: We thank the commenter for the feedback. The OAS CAHPS
                Survey results are collected and reported at the CCN level. However, we
                thank the commenter for its recommendation to report OAS CAHPS
                [[Page 63892]]
                Survey-based measures data at the NPI level for patient ease and
                individual facility performance improvement purposes. We will consider
                the feasibility of requiring ASCs to collect and report OAS CAHPS
                Survey data at the NPI level and will put forward any proposals in
                future notice and comment rulemaking, but note that CCN level reporting
                can reduce burden for ASCs with multiple facilities under a single CCN.
                 After consideration of the public comments we received, we are
                finalizing this proposal with modification. We are finalizing voluntary
                reporting as part of the ASCQR Program, modified to begin in CY 2024
                reporting period/CY 2026 payment determination period and mandatory
                reporting of the OAS CAHPS Survey-based measures, modified to begin in
                the CY 2025 reporting period/CY 2027 payment determination.
                5. Summary of Previously and Newly Finalized ASCQR Program Quality
                Measure Set
                a. Summary of Previously and Newly Finalized ASCQR Program Quality
                Measure Set for the CY 2022 Reporting Period/CY 2024 Payment
                Determination
                 Table 69 summarizes the previously and newly finalized ASCQR
                Program measure set for the CY 2022 reporting period/CY 2024 payment
                determination.
                BILLING CODE 4120-01-P
                [GRAPHIC] [TIFF OMITTED] TR16NO21.172
                b. Summary of Previously and Newly Finalized ASCQR Program Quality
                Measure Set for the CY 2023 Reporting Period/CY 2025 Payment
                Determination
                 Table 70 summarizes the previously and newly finalized ASCQR
                Program measure set for the CY 2023 reporting period/CY 2025 payment
                determination.
                [[Page 63893]]
                [GRAPHIC] [TIFF OMITTED] TR16NO21.173
                c. Summary of Previously and Newly Finalized ASCQR Program Quality
                Measure Set for the CY 2024 Reporting Period/CY 2026 Payment
                Determination and Subsequent Years
                [[Page 63894]]
                 Table 71 summarizes the previously and newly finalized ASCQR
                Program measure set for the CY 2024 reporting period/CY 2026 payment
                determination and subsequent years.
                [GRAPHIC] [TIFF OMITTED] TR16NO21.174
                d. Summary of Previously and Newly Finalized ASCQR Program Quality
                Measure Set for the CY 2025 Reporting Period/CY 2027 Payment
                Determination and Subsequent Years
                 Table 72 summarizes the previously and newly finalized ASCQR
                Program measure set for the CY 2025 reporting period/CY 2027 payment
                determination and subsequent years.
                [[Page 63895]]
                [GRAPHIC] [TIFF OMITTED] TR16NO21.175
                BILLING CODE 4120-01-C
                6. ASCQR Program Measures and Topics for Future Consideration
                a. Potential Adoption of Future Measures for the ASCQR Program
                 We continue to seek to adopt a comprehensive set of quality
                measures for widespread use to inform decision-making regarding care
                and for quality improvement efforts in the ASC setting. In the CY 2021
                OPPS/ASC final rule with comment period (85 FR 86083 through 86110),
                under the OPPS we finalized the elimination of the Inpatient Only (IPO)
                list over a 3-year transitional period, beginning with the removal of
                approximately 300 primarily musculoskeletal-related services, with the
                list to be completely phased out by CY 2024.\514\ As discussed in
                section IX of the CY 2022 OPPS/ASC proposed rule (86 FR 42155), we have
                continued to receive stakeholder requests to reconsider the elimination
                of the IPO list, to reevaluate services removed from the IPO list due
                to safety and quality concerns, and to, at a minimum, extend the
                timeframe for eliminating the list. After further consideration and
                review of the additional feedback from stakeholders, we believe that
                the timeframe we adopted for removing services from the IPO list does
                not give us a sufficient opportunity to carefully assess whether a
                procedure can be removed from the IPO list while still ensuring
                beneficiary safety. For CY 2022, we proposed to halt the elimination of
                the IPO list and, after clinical review of the services removed from
                the IPO list in CY 2021, we proposed to add the 298 services removed
                from the IPO list in CY 2021 back to the IPO list beginning in CY 2022.
                ---------------------------------------------------------------------------
                 \514\ Centers for Medicare & Medicaid Services. (2020, December
                2). CY 2021 Medicare Hospital Outpatient Prospective Payment System
                and Ambulatory Surgical Center Payment System final rule (CMS-1736-
                FC). Retrieved from: https://www.cms.gov/newsroom/fact-sheets/cy-2021-medicare-hospital-outpatient-prospective-payment-system-and-ambulatory-surgical-center.
                ---------------------------------------------------------------------------
                 We also proposed to reinstate the CY 2020 criteria used to add
                procedures to the ASC Covered Procedures List (CPL) and remove 258 of
                the additional 267 surgical procedures that were added to the ASC CPL
                beginning in CY 2021, under the CY 2021 revised criteria\515\ with
                additional procedures being proposed for addition for CY 2022.
                 However, as technology and surgical techniques advance, services
                will continue to transition off of the IPO list, becoming payable in
                the outpatient hospital setting and being eligible for addition to the
                ASC covered procedures list in subsequent years. We recognize that
                there may be a need for more measures that inform decision-making
                regarding care and for quality improvement efforts, particularly
                focused on the behaviors of services that become newly eligible for
                payment in the ASC setting. In light of this, we sought comment on
                potential future adoption of measures that would allow better tracking
                of the quality of care for services that transition from the IPO list
                and may subsequently become eligible for addition to the ASC CPL.
                 Therefore, we invited public comment on the potential future
                adoption of measures for our consideration that address care quality in
                the ASC setting given the transition of procedures from inpatient
                settings to outpatient settings of care.
                 We received comments on these topics.
                 Comment: Many commenters supported the future development of
                measures that would allow for a comparison of outcomes across care
                settings, particularly as procedures transition from the inpatient only
                list to the outpatient and ASC settings. The commenters encouraged CMS
                to work with stakeholders to improve measure alignment and reporting
                between hospital outpatient surgery centers and ambulatory surgery
                centers and also identify new measures that address
                [[Page 63896]]
                reporting challenges in the ASCQR Program.
                 A few commenters recommended that CMS require all accredited ASCs
                to submit comprehensive safety and quality data to a nonprofit
                organization with extensive experience in collecting and reporting ASC
                quality data on a public website to ensure the data is trusted and
                useful for purchasers and consumers. Commenters also suggested the
                reporting should utilize consensus-based nationally endorsed standards.
                The commenters stated their belief that patients and purchasers do not
                have access to enough information to be able to make an informed
                decision on care.
                 Response: We thank commenters for their feedback. As mentioned in
                section XVI.B.6.a. of the final rule with comment period, we seek to
                adopt a comprehensive set of quality measures for widespread use to
                inform decision-making regarding care and for quality improvement
                efforts. We will continue to work with stakeholders as we consider
                measures for inclusion in future rulemaking. Additionally, we agree on
                the importance of measure alignment. It is our goal to continue to
                explore ways to address measurement gaps, reduce burden and increase
                efficiency through measure alignment.
                 We also agree with commenters on the importance of submitting
                safety and quality data publicly to promote transparency,
                accountability as well as providing a means of delivering important
                healthcare information to consumers. Our public websites, including the
                Provider Data Catalog, were launched with the purpose of providing
                public facing quality data to help inform consumer care and to
                encourage healthcare facilities to make continued improvements to the
                quality of care provided. We will consider the feasibility of the
                commenters' recommendations and take them into consideration in future
                rulemaking.
                 Comment: Commenters encouraged CMS to work with stakeholders to
                identify measures that would be appropriate and useful across programs
                and to address reporting challenges before proposing to adopt new
                measures into the program. Several commenters suggested that CMS re-
                introduce measures previously proposed in the CY 2018 OPPS/ASC proposed
                rule including the Toxic Anterior Segment Syndrome (TASS), Endoscopy/
                Polyp Surveillance: Colonoscopy Interval for Patients with a History of
                Adenomatous Polyps and the Ambulatory Breast Procedure Surgical Site
                Infection Outcome measure. Commenters stated that these measures fill
                an important gap in the ASCQR Program related to addressing HAIs,
                colonoscopy services, and Ophthalmic devices. Commenters also noted
                that these measures would be appropriate for the Hospital OQR Program
                which would expand alignment between the Hospital OQR and ASCQR
                Programs and would allow consumers more opportunities to compare
                quality and safety across settings of care.
                 Additionally, one commenter recommended that CMS should improve
                mechanisms for comparison between hospital outpatient surgery centers
                and ASCs. The commenter stated that surgical procedures should produce
                ratings that allow for comparisons of the same procedure regardless of
                setting.
                 Response: We thank the commenters for their recommendations. We are
                committed to working with stakeholders to identify appropriate and
                useful measures across our programs and address any measurement gaps to
                reduce burden. Concerning the creation of ratings that would allow for
                comparisons of the same procedure regardless of setting, we are
                committed to looking for more effective ways to align our programs and
                will monitor this concern for future rulemaking. We thank commenters
                for their input on additional ASCQR Program measures and topics for
                future consideration and will take this feedback into account for
                future measure development in the ASCQR Program.
                b. Potential Future Adoption and Inclusion of an ASC-Level, Risk-
                Standardized Patient Reported Outcomes Measure Following Elective
                Primary Total Hip and/or Total Knee Arthroplasty (THA/TKA)
                 As described in section XVI.B.6.a. of this final rule with comment
                period and above, we sought comment on priorities for quality
                measurement in outpatient settings due to changes to the IPO procedure
                list (82 FR 59385 and 84 FR 61355) and the ASC CPL (84 FR 61388 and 85
                FR 86146).
                 In the CY 2022 OPPS/ASC proposed rule (86 FR 42276 through 42277),
                we also requested comment on the potential future adoption of a re-
                specified version of a patient-reported outcome-based performance
                measure (PRO-PM) for two such procedures, elective primary total hip
                arthroplasty (THA) and total knee arthroplasty (TKA), which were
                removed from the IPO list effective for CY 2020 and CY 2018,
                respectively, and added to the ASC CPL effective for CY 2021 and CY
                2020, respectively. We recently solicited public comment on the
                potential future inclusion of a Hospital-level THA/TKA PRO-PM (NQF
                #3559) in the FY 2022 IPPS/LTCH PPS proposed rule for the inpatient
                hospital setting (86 FR 25589) and responded to public comments
                received in the FY 2022 IPPS/LTCH PPS final rule (86 FR 45408). This
                measure reports the hospital-level risk-standardized improvement rate
                (RSIR) in patient-reported outcomes (PROs) following elective primary
                THA/TKA for Medicare fee-for-service (FFS) beneficiaries aged 65 years
                and older. Substantial clinical improvement is measured by achieving a
                pre-defined improvement in score on one of the two validated joint-
                specific PRO instruments measuring hip or knee pain and functioning:
                (1) The Hip dysfunction and Osteoarthritis Outcome Score for Joint
                Replacement (HOOS, JR) for completion by THA recipients; and (2) the
                Knee Injury and Osteoarthritis Outcome Score for Joint Replacement
                (KOOS, JR) for completion by TKA recipients. Improvement is measured
                from the preoperative assessment (data collected 90 to 0 days before
                surgery) to the postoperative assessment (data collected 300 to 425
                days following surgery). Improvement scores are risk adjusted to
                account for differences in patient case mix. Potential non-response
                bias in measure scores due to the voluntary nature of PROs is
                incorporated in the measure calculation with stabilized inverse
                probability weighting based on likelihood of response.
                 Given the recent changes in the ASC CPL, we expect that THA and TKA
                procedures will increasingly be performed in ASCs and that the volume
                of these procedures on Medicare beneficiaries 65 and older will also
                increase in ASCs in future years.
                 We recognize that potential future adoption and implementation of a
                re-specified version of the THA/TKA PRO-PM in the ASCQR Program would
                require sufficient numbers of procedures for each measured ASC to
                ensure a reliable measure score. As only a subset of ASCs performs
                orthopedic procedures, the measure would likely apply to a minority of
                ASCs. Additionally, implementing a THA/TKA PRO-PM would require
                providers to successfully collect pre- and post-operative PRO data for
                each procedure. Specifically, the inpatient THA/TKA PRO-PM discussed in
                the FY 2022 IPPS/LTCH PPS proposed rule requires a minimum of 25 cases
                with completed pre- and post-operative PRO data per hospital to ensure
                a reliable facility-level score. For more details on the inpatient THA/
                TKA PRO-PM, we refer readers to the FY 2022 IPPS/LTCH PPS proposed rule
                (86 FR 25589), the FY 2022 IPPS/LTCH PPS final rule (86 FR
                [[Page 63897]]
                45408) and the PROs Following Elective Primary Total Hip and/or Total
                Knee Arthroplasty: Hospital-Level Performance Measure--Measure
                Methodology Report, available on the CMS website at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.
                 We will continue to monitor the number of THA and TKA procedures in
                ASCs and when we believe there is a sufficient number of such
                procedures performed in ASCs to reliably measure a meaningful number of
                facilities, we may consider expanding the PRO-PM to this setting. We
                also note that, as finalized in the CY 2018 OPPS/ASC final rule with
                comment period (82 FR 59455 through 59463), the ASCQR Program currently
                includes a Hospital Visits After Orthopedic Ambulatory Surgical Center
                Procedures (ASC-17) measure using claims data which provides facilities
                with important information on patient outcomes for Medicare FFS
                beneficiaries following orthopedic surgery at ASCs and this measure
                includes THA and TKA procedures. The ASC-17 measure calculates a
                facility-specific risk-standardized hospital visit ratio within 7 days
                of an orthopedic procedure performed at an ASC and has as outcomes of
                interest unplanned hospital admissions, emergency department (ED)
                visits, and observation stays, thereby, providing valuable quality
                information for these procedures as they expand into the ASC setting.
                 As described in our Meaningful Measures 2.0 Framework, we aim to
                promote better collection and integration of patients' voices by
                developing PRO measures as an additional tool for measuring and
                improving quality. Given the unique challenges and opportunities for
                PRO-PMs for THA and TKA procedures in the ASC setting, we invited
                public comment on the potential future adoption of a respecified
                version of PRO measures for elective THA/TKA PRO-PM for the ASCQR
                Program. Specifically, we invited public comment on the following:
                 Input on the mechanism of PRO data collection and
                submission, including anticipated barriers and solutions to data
                collection and submission.
                 Usefulness of having an aligned set of PRO-PMs across
                settings where elective THA/TKAs are performed, that is, hospital
                inpatient setting, hospital outpatient departments, and ASCs for
                patients, providers, and other stakeholders. Specifically, usefulness
                and considerations for a healthcare system that performs inpatient and/
                or outpatient and ASC elective THA/TKAs.
                 Considerations unique to THA/TKAs performed in the ASC
                setting such as the volume of procedures performed or the measure
                cohort, outcome, or risk adjustment approach.
                 We received comments on these topics.
                 Comment: Several commenters expressed support for the potential
                future adoption and inclusion of an ASC-Level, Risk-Standardized
                Patient Reported Outcomes Measure Following Elective Primary Total Hip
                and/or Total Knee Arthroplasty (THA/TKA). Commenters noted that as
                procedures shift to the outpatient setting, it is important for quality
                programs to reflect the settings in which beneficiaries receive
                surgical care and agreed that PROs are the best available means for a
                patient-centered measurement of functional status improvement.
                Commenters expressed support for this measure across multiple settings,
                including hospitals, outpatient departments, and ambulatory surgical
                centers. Additionally, a few commenters expressed support for the
                patient-reported outcome surveys used to collect preoperative and
                postoperative data. The Hip dysfunction and Osteoarthritis Outcome
                Score for Joint Replacement (HOOS, JR) and the Knee injury and
                Osteoarthritis Outcome Score for Joint Replacement (KOOS, JR) are
                widely used across the country and are lower burden compared to the
                HOOS and KOOS. Commenters also supported use of either the Patient-
                Reported Outcomes Measurement Information System (PROMIS)-Global or the
                Veterans RAND 12-Item Health Survey (VR-12) for risk adjustment and
                felt that measure development was responsive to stakeholder feedback.
                 Response: We thank the commenters for their support and will
                consider these comments for future policy development.
                 Comment: A few commenters expressed concern about data collection
                and reporting thresholds. Commenters encouraged CMS to explore ways to
                reduce the burden of collecting patient-reported outcomes data and
                support hospitals in their efforts to increase responsiveness. Some
                commenters expressed concern over the increasing threshold for
                submitting data, noting that the threshold within the Comprehensive
                Care for Joint Replacement (CJR) model incrementally increased over
                time and fewer hospitals have been able to meet the thresholds.
                Commenters asked CMS to explain the rationale behind the chosen
                thresholds and consider whether a lower rate of response is sufficient
                for measuring performance. One commenter recommended phased
                implementation of the measure to allow facilities time to coordinate
                collection and reporting of PRO data. They recommended a two-year
                voluntary reporting period to allow facilities who were not part of the
                CJR model to build up infrastructure to collect data and further
                research to determine exemption criteria for low volume facilities. One
                commenter also expressed concern about patient burden, noting that
                patient response rates to various surveys across the continuum of care
                are dropping, and increasing the number of surveys may result in fewer
                completed surveys overall.
                 Response: We thank the commenters for their feedback and would like
                to provide more explanation regarding the reporting thresholds as
                described in prior rules. Through the CJR final rules, we finalized a
                data submission requirement that strategically increased with each
                performance year. To be successful, a hospital needed to submit PRO
                data for 50 percent or 50 eligible procedures in the first year of the
                model. By performance year 8, hospitals will need to submit PRO data
                for 90 percent or 500 eligible procedures to be successful. The
                incremental increase over a set period of time allows hospitals to
                gradually build up their infrastructure and processes for collecting
                and storing data. Future proposals for implementation and reporting of
                this measure will be announced through notice and comment rulemaking.
                While patient-reported outcome-based performance measures require
                providers to integrate data collection into clinical workflows, this
                integration provides opportunity for PROs to inform clinical decision
                making and benefit patients by engaging them in discussions about
                potential outcomes. We do not expect this PRO-PM to contribute to
                survey fatigue or to negatively impact other PRO-PMs. The Patient-
                Reported Outcome Measure (PROM) instruments that are used to calculate
                preoperative and postoperative data scores for this THA/TKA PRO-PM were
                carefully selected, with extensive stakeholder input, to be low burden
                for patients and to capture information clinicians deemed essential to
                understanding response to THA/TKA.
                 Comment: A few commenters called for robust risk adjustment for
                this measure. They noted patients who receive these procedures in the
                inpatient setting will tend to be sicker and more complex compared to
                patients who receive these procedures in the outpatient or ASC setting.
                Commenters encouraged CMS to take the differences
                [[Page 63898]]
                in patient complexity into account when developing a risk adjustment
                strategy and to do so in a way that minimizes lag between the procedure
                and reporting. Commenters also encouraged CMS to consider incorporating
                sociodemographic factors, such as dual eligibility status and preferred
                language, and stratifying results by proportions of dual-eligible
                patients similar to the approach now used by the CMS Hospital
                Readmission Reduction Program.
                 Response: We thank the commenters for their insights on the
                differences in patient complexity across different care settings and
                the impact it may have on risk adjustment. We will continue to take
                this into consideration if we move forward with re-specifying this
                measure for use in ASCs. With respect to sociodemographic factors, we
                would like to clarify the risk adjustment approach. For the development
                of the hospital-level measure, we assessed the impact of dual
                eligibility, the Agency for Health Research and Quality (AHRQ)
                socioeconomic status (SES) Index (socioeconomic status), and non-white
                race. The addition of each of these three social risk variables
                provided no statistically significant change to the risk model
                performance, variable coefficients, or the model outcome. As such,
                these variables were not included in the hospital risk model. These
                social risk variables were, however, statistically significantly
                associated with response to PRO surveys--whether patient-reported
                outcomes were obtained for patients undergoing primary elective THA/
                TKA--and so were included in the calculation of stabilized inverse
                probability weights used to account for potential response-bias. These
                variables, along with other sociodemographic variables that may become
                available over time, will be reassessed as part of the respecification
                process if CMS proceeds with developing a version of the measure for
                the ASC setting as part of CMS' commitment to addressing improving
                health equity.
                 Comment: A few commenters recommended use of the American Joint
                Replacement Registry (AJRR) for future implementation of this measure
                citing that participation in the AJRR is a requirement for
                certification as a center of excellence by The Joint Commission. The
                commenters felt that using the AJRR would allow facilities to pool
                their resources for lowest costs. They also noted that as the AJRR
                incorporates Medicare Administrative Data for populating the database,
                its use would allow for robust risk adjustment, improved research, and
                independent reporting for participating facilities to normalize
                quality. The AJRR is widely used by providers in the United States and
                implementing the measure through the AJRR will minimize duplication of
                reporting efforts. Commenters felt this approach would be faster, more
                efficient, and would incentivize use of Qualified Clinical Data
                Registries (QCDRs).
                 Response: We appreciate commenters' recommendations regarding the
                AJRR and we will consider the feasibility and appropriateness of using
                this registry for future implementation, if we proceed with development
                of a THA/TKA PRO-PM in ASCs. We agree that leveraging existing
                resources, such as registries, will help decrease patient and provider
                data collection burden.
                 Comment: A few commenters provided feedback on future
                implementation of this measure. One commenter recommended a benchmark
                approach to facility measure scores, where CMS would evaluate success
                by establishing a benchmark percentage of THA/TKA procedures reaching a
                significant clinical improvement, rather than requiring providers to
                compete for percentile rankings of success rates across tightly bunched
                score rates. Another commenter recommended that CMS consider
                incentivized, phased implementation that would allow facilities to
                build up their processes and infrastructure to collect and report on
                patient-reported outcomes data. They also encouraged CMS to reevaluate
                the minimum number of cases that would trigger reporting as low volume
                can lead to wider variances in outcomes for smaller volume hospitals.
                 Response: We appreciate commenters' recommendations regarding
                future implementation of the measure. With regards to facilities'
                ability to meet the reporting threshold, we agree that there must be a
                sufficient number of procedures in these settings to reliably measure a
                meaningful number of facilities, and we anticipate an increase in the
                number of THA/TKA procedures performed in ASCs in future years. We will
                continue to take this into consideration if we move forward with
                respecifying the measure for use in ASCs. Any future proposals to
                implement the measure will be announced through notice and comment
                rulemaking.
                 Comment: A few commenters did not support potential future adoption
                and inclusion of an ASC-Level, Risk-Standardized Patient Reported
                Outcomes Measure Following Elective Primary THA/TKA. Commenters noted
                that ASC regulations limit the scope of ASC services and the timeframe
                during which ASCs are permitted to be involved in patient care. As
                such, ASCs are limited in their preoperative, intraoperative, and
                postoperative services.
                 Response: We acknowledge the commenter's concern and will consider
                the impact of regulatory requirements on any future measurement, but we
                believe it is important to monitor quality in all settings where these
                procedures are performed. As performance of THAs and TKAs shift into
                the outpatient and ASC settings, it is important for quality
                measurement programs to adapt to the changing care settings.
                 Comment: One commenter recommended development of a surgical site
                infection measure following THA and TKA.
                 Response: We thank the commenter for their suggestion. Surgical
                site bleeding and surgical site complications during the index
                admission or a subsequent inpatient admission within 30 days from the
                start of the index admission are captured in the hospital-level risk-
                standardized complication rates (RSCRs) following an elective primary
                THA and/or TKA measure in the Hospital Value-Based Purchasing Program.
                Hospital admissions within seven days of the surgery are captured in
                the Hospital Visits after Hospital Outpatient Surgery (OP-36) measure
                for procedures performed in the outpatient setting. Any future measure
                development or respecification proposals for ASCs will be announced
                through notice and comment rulemaking. We thank commenters for their
                input on the potential future adoption of an ASC-Level, Risk-
                Standardized Patient Reported Outcomes Measure Following Elective
                Primary Total Hip and/or Total Knee Arthroplasty (THA/TKA) and will
                take this input into account for future measure development in the
                ASCQR Program.
                c. Potential Future Efforts To Address Health Equity in the ASCQR
                Program
                (1) Background
                 Significant and persistent inequities in health care outcomes exist
                in the U.S. Belonging to racial or ethnic minority group; living with a
                disability; being a member of the lesbian, gay, bisexual, transgender,
                and queer (LGBTQ+) community; living in a rural area; and being near or
                below the poverty level, are often associated with worse health
                [[Page 63899]]
                outcomes.516 517 518 519 520 521 522 523 Such disparities in
                health outcomes are the result of number of factors, but importantly
                for CMS programs, although not the sole determinant, negative
                experiences, poor access, and provision of lower quality health care
                contribute to health disparities. For instance, numerous studies have
                shown that among Medicare beneficiaries, racial and ethnic minority
                individuals often receive lower quality of care, report lower
                experiences of care, and experience more frequent hospital readmissions
                and procedural complications.524 525 526 527 528 529
                Readmission rates for common conditions in the Hospital Readmissions
                Reduction Program (HRRP) are higher for Black Medicare beneficiaries
                and higher for Hispanic Medicare beneficiaries with Congestive Heart
                Failure and Acute Myocardial Infarction.530 531 532 533 534
                Studies have also shown that African Americans are significantly more
                likely than White Americans to die prematurely from heart disease and
                stroke.\535\ The COVID-19 pandemic has further highlighted many of
                these longstanding health inequities with higher rates of infection,
                hospitalization, and mortality among Black, Latino, and Indigenous and
                Native American persons relative to White persons.536 537 As
                noted by the CDC, ``long-standing systemic health and social inequities
                have put many people from racial and ethnic minority groups at
                increased risk of getting sick and dying from COVID-19.'' \538\ One
                important strategy for addressing these important inequities is by
                improving data collection to allow for better measurement and reporting
                on equity across our programs and policies.
                ---------------------------------------------------------------------------
                 \516\ Joynt KE, Orav E, Jha AK. Thirty-Day Readmission Rates for
                Medicare Beneficiaries by Race and Site of Care. JAMA.
                2011;305(7):675-681.
                 \517\ Lindenauer PK, Lagu T, Rothberg MB, et al. Income
                Inequality and 30 Day Outcomes After Acute Myocardial Infarction,
                Heart Failure, and Pneumonia: Retrospective Cohort Study. British
                Medical Journal. 2013;346.
                 \518\ Trivedi AN, Nsa W, Hausmann LRM, et al. Quality and Equity
                of Care in U.S. Hospitals. New England Journal of Medicine.
                2014;371(24):2298-2308.
                 \519\ Polyakova, M., et al. Racial Disparities In Excess All-
                Cause Mortality During The Early COVID-19 Pandemic Varied
                Substantially Across States. Health Affairs. 2021; 40(2): 307-316.
                 \520\ Rural Health Research Gateway. Rural Communities: Age,
                Income, and Health Status. Rural Health Research Recap. November
                2018. Available at: https://www.ruralhealthresearch.org/assets/2200-8536/rural-communities-age-income-health-status-recap.pdf.
                 \521\ U.S. Department of Health and Human Services Office of
                Minority Health. 2020 Update on the Action Plan to Reduce Racial and
                Ethnic Health Disparities, FY 2020. Available at: https://www.minorityhealth.hhs.gov/assets/PDF/Update_HHS_Disparities_Dept-FY2020.pdf.
                 \522\ Heslin KC, Hall JE. Sexual Orientation Disparities in Risk
                Factors for Adverse COVID-19-Related Outcomes, by Race/Ethnicity --
                Behavioral Risk Factor Surveillance System, United States, 2017-
                2019. MMWR Morb Mortal Wkly Rep 2021;70:149-154. DOI: http://dx.doi.org/10.15585/mmwr.mm7005a1. Available at: www.cdc.gov/mmwr/volumes/70/wr/mm7005a1.htm.
                 \523\ Poteat TC, Reisner SL, Miller M, Wirtz AL. COVID-19
                Vulnerability of Transgender Women With and Without HIV Infection in
                the Eastern and Southern U.S. Preprint. medRxiv.
                2020;2020.07.21.20159327. Published 2020 Jul 24. doi:10.1101/
                2020.07.21.20159327.
                 \524\ Martino, SC, Elliott, MN, Dembosky, JW, Hambarsoomian, K,
                Burkhart, Q, Klein, DJ, Gildner, J, and Haviland, AM. Racial,
                Ethnic, and Gender Disparities in Health Care in Medicare Advantage.
                Baltimore, MD: CMS Office of Minority Health. 2020.
                 \525\ Guide to Reducing Disparities in Readmissions. CMS Office
                of Minority Health. Revised August 2018. Available at: https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/OMH_Readmissions_Guide.pdf.
                 \526\ Singh JA, Lu X, Rosenthal GE, Ibrahim S, Cram P. Racial
                disparities in knee and hip total joint arthroplasty: An 18-year
                analysis of national Medicare data. Ann Rheum Dis. 2014
                Dec;73(12):2107-15.
                 \527\ Rivera-Hernandez M, Rahman M, Mor V, Trivedi AN. Racial
                Disparities in Readmission Rates among Patients Discharged to
                Skilled Nursing Facilities. J Am Geriatr Soc. 2019 Aug;67(8):1672-
                1679.
                 \528\ Joynt KE, Orav E, Jha AK. Thirty-Day Readmission Rates for
                Medicare Beneficiaries by Race and Site of Care. JAMA.
                2011;305(7):675-681.
                 \529\ Tsai TC, Orav EJ, Joynt KE. Disparities in surgical 30-day
                readmission rates for Medicare beneficiaries by race and site of
                care. Ann Surg. Jun 2014;259(6):1086-1090.
                 \530\ Rodriguez F, Joynt KE, Lopez L, Saldana F, Jha AK.
                Readmission rates for Hispanic Medicare beneficiaries with heart
                failure and acute myocardial infarction. Am Heart J. Aug
                2011;162(2):254-261 e253.
                 \531\ Centers for Medicare and Medicaid Services. Medicare
                Hospital Quality Chartbook: Performance Report on Outcome Measures;
                2014.
                 \532\ Guide to Reducing Disparities in Readmissions. CMS Office
                of Minority Health. Revised August 2018. Available at: https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/OMH_Readmissions_Guide.pdf.
                 \533\ Prieto-Centurion V, Gussin HA, Rolle AJ, Krishnan JA.
                Chronic obstructive pulmonary disease readmissions at minority-
                serving institutions. Ann Am Thorac Soc. Dec 2013;10(6):680-684.
                 \534\ Joynt KE, Orav E, Jha AK. Thirty-Day Readmission Rates for
                Medicare Beneficiaries by Race and Site of Care. JAMA.
                2011;305(7):675-681.
                 \535\ HHS. Heart disease and African Americans. (March 29,
                2021). https://www.minorityhealth.hhs.gov/omh/browse.aspx?lvl=4&lvlid=19.
                 \536\ CMS. Preliminary Medicare COVID-19 Data Snapshot. (April
                16, 2021). Available at: https://www.cms.gov/files/document/medicare-covid-19-data-snapshot-fact-sheet.pdf.
                 \537\ Ochieng N, Cubanski J, Neuman T, Artiga S, and Damico A.
                Racial and Ethnic Health Inequities and Medicare. Kaiser Family
                Foundation. February 2021. Available at: https://www.kff.org/medicare/report/racial-and-ethnic-health-inequities-and-medicare/.
                 \538\ CDC. Health Equity Considerations & Racial & Ethnic
                Minority Groups. (April 19, 2021). Available at: https://www.cdc.gov/coronavirus/2019-ncov/community/health-equity/race-ethnicity.html.
                ---------------------------------------------------------------------------
                 We are committed to achieving equity in health care outcomes for
                our beneficiaries by supporting providers in quality improvement
                activities to reduce health inequities, enabling them to make more
                informed decisions, and promoting provider accountability for health
                care disparities.\539\ In the CY 2022 OPPS/ASC proposed rule (86 FR
                42277 through 42279), we used a definition of equity established in
                Executive Order 13985, issued on January 25, 2021, as ``the consistent
                and systematic fair, just, and impartial treatment of all individuals,
                including individuals who belong to underserved communities that have
                been denied such treatment, such as Black, Latino, and Indigenous and
                Native American persons, Asian Americans and Pacific Islanders and
                other persons of color; members of religious minorities; LGBTQ+
                persons; persons with disabilities; persons who live in rural areas;
                and persons otherwise adversely affected by persistent poverty or
                inequality.'' \540\ We noted that this definition was recently
                established and provides a useful, common definition for equity across
                different areas of government, though numerous other definitions of
                equity exist.
                ---------------------------------------------------------------------------
                 \539\ CMS. CMS Quality Strategy. (2016). Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/Downloads/CMS-Quality-Strategy.pdf.
                 \540\ Executive Order 13985. Advancing Racial Equity and Support
                for Underserved Communities Through the Federal Government. 86 FR
                7009 (Jan. 20, 2021). Available at: https://www.federalregister.gov/documents/2021/01/25/2021-01753/advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government.
                ---------------------------------------------------------------------------
                 Our ongoing commitment to closing the equity gap in CMS quality
                programs is demonstrated by a portfolio of programs aimed at making
                information on the quality of health care providers and services,
                including disparities, more transparent to consumers and providers. The
                CMS Equity Plan for Improving Quality in Medicare outlines a path to
                equity which aims to support Quality Innovation Network-Quality
                Improvement Organizations (QIN-QIOs); Federal, state, local, and tribal
                organizations; providers; researchers; policymakers; beneficiaries and
                their families; and other stakeholders in activities to achieve health
                equity.\541\
                ---------------------------------------------------------------------------
                 \541\ Centers for Medicare & Medicaid Services Office of
                Minority Health. The CMS Equity Plan for Improving Quality in
                Medicare. 2015-2021. https://www.cms.gov/About-CMS/Agency-Information/OMH/OMH_Dwnld-CMS_EquityPlanforMedicare_090615.pdf.
                ---------------------------------------------------------------------------
                 We refer readers to the FY 2022 IPPS/LTCH PPS final rule (86 FR
                45349) which summarizes our existing initiatives aimed at closing the
                equity gap in outcomes for Medicare beneficiaries. We also refer
                readers to section XV.B.7.c.(1). of the CY 2022
                [[Page 63900]]
                OPPS/ASC proposed rule (86 FR 42253) which describes the policy and
                statute which have informed the creation of the CMS Disparity Methods
                to provide confidential stratified results for measures in the hospital
                inpatient setting using dual eligibility as a proxy for social risk.
                Our efforts to stratify outcome measures by dual eligibility are
                supported by national recommendations from the Assistant Secretary for
                Planning and Evaluation (ASPE) and the National Academies of Sciences,
                Engineering, and Medicine, which identified dual eligibility, an
                indicator of social risk, as a powerful predictor of poor health
                outcomes among the social risk factors that were
                tested.542 543
                ---------------------------------------------------------------------------
                 \542\ Office of the Assistant Secretary for Planning and
                Evaluation. Report to Congress: Social Risk Factors and Performance
                Under Medicare's Value-Based Purchasing Programs. Available at:
                https://aspe.hhs.gov/reports/report-congress-social-risk-factors-performance-under-medicares-value-based-purchasing-programs.
                 \543\ National Academies of Sciences, Engineering, and Medicine.
                2017. Accounting for social risk factors in Medicare payment.
                Washington, DC: The National Academies Press.
                ---------------------------------------------------------------------------
                 To date, we have not expanded disparities reporting to the ASC
                setting. Internally testing the two disparities methods (Within- and
                Across-Hospital Disparity Methods) on ASCQR Program quality measures
                calculated using Medicare FFS claims revealed several unique challenges
                to measuring disparities for dually eligible individuals in the ASC
                setting, principally, relatively low volumes of dual eligible patients
                in many facilities, and large diversity in the types and patient mix
                between ASCs as these facilities tend to specialize. In our initial
                analysis, few facilities met the minimum sample size required to yield
                technically feasible, adequately representative, and statistically
                reliable disparity results. We are considering social risk factors,
                including neighborhood-level social determinants of health, such as the
                poverty, education, and housing quality, which can adversely influence
                health outcomes, contributing to health inequities, in order to report
                more information regarding equity gaps in the care provided in the ASC
                setting. There are several different approaches for quantifying the
                health impacts of adverse neighborhood level socioeconomic factors. One
                approach is the Agency for Healthcare Research and Quality (AHRQ)
                neighborhood Socioeconomic Status (SES) Index, which uses information
                from the U.S. Census at the census block-group level to estimate the
                range of socioeconomic status in the beneficiary's neighborhood.\544\
                In the CY 2022 OPPS/ASC proposed rule (86 FR 42279), we sought comment
                on and were interested in learning more about the potential for
                measuring disparities in care provided in this setting.
                ---------------------------------------------------------------------------
                 \544\ Bonito AJ, Bann C, Eicheldinger C, Carpenter L. Creation
                of New Race-Ethnicity Codes and Socioeconomic Status (SES)
                Indicators for Medicare Beneficiaries. Final Report, Sub-Task 2.
                (Prepared by RTI International for the Centers for Medicare and
                Medicaid Services through an interagency agreement with the Agency
                for Healthcare Research and Policy, under Contract No. 500-00-0024,
                Task No. 21) AHRQ Publication No. 08-0029-EF. Rockville, MD, Agency
                for Healthcare Research and Quality. January 2008.
                ---------------------------------------------------------------------------
                (2) Solicitation of Public Comments
                 In the CY 2022 OPPS/ASC proposed rule (86 FR 42279), we sought
                comment on the possibility of providing equity reporting in the ASCQR
                Program in a way that maximally supports facilities in improving the
                quality of care for all Medicare beneficiaries, regardless of their
                socioeconomic status or other risk factors. We were particularly
                interested in learning about measurement approaches or social risk
                factors which may permit illuminating social-based disparities in
                facilities which have relatively few individuals who possess social
                risk factors. Specifically, we invited public comment on the following:
                 Ways to address the unique challenges of measuring
                disparities in the ASC setting, such as small sample sizes, ASC
                specialization, and the relatively smaller proportion of patients with
                social risk factors.
                 The utility of neighborhood-level socioeconomic factors
                toward measuring disparities in quality-of-care outcomes for ASCs.
                 Ways social risk factors influence the access to care,
                quality of care and outcomes for ASC patients in general or for
                specific ASC services.
                 We received comments on these topics.
                 Comment: Many commenters expressed support for CMS' commitment to
                address health disparities and closing the health equity gap. Some
                commenters specifically supported collection and reporting of
                stratified disparities information in the ASC setting and recommended
                specific data that CMS should collect. One commenter expressed strong
                support for data collection and measurement by characteristics
                including race, ethnicity, sex, sexual orientation, gender identity,
                language preference, tribal membership, and disability status. This
                commenter urged CMS to avoid using indirect estimation methods for race
                and ethnicity data, and instead establish a timeframe for meeting
                specific direct data collection goals, including data completeness and
                accuracy requirements.
                 Another commenter asserted that emerging evidence suggests that
                healthcare disparities may be rooted in lived experiences, and
                recommended CMS include questions that specifically address the
                experiences of racialized minorities within the healthcare system, such
                as trust of the healthcare system and providers, experiences of
                microaggression, and perceived discrimination or injustices. The
                commenter also recommended CMS accommodate the literacy needs and
                linguistic barriers of patients during these data collection efforts.
                Another commenter recommended CMS and providers collect data on
                nutritional status and specifically malnutrition to understand and
                improve health equity, since malnutrition is a risk factor for worse
                outcomes after surgery or trauma. An additional commenter supported
                stratification initially by race and ethnicity, but suggested future
                expansion to primary language, geographic location, socioeconomic
                status, gender identity, sexual orientation, age, and ability status.
                 An additional commenter described working on a Health Equity Report
                Card tool to reduce racial disparities in other care settings. Another
                commenter described developing a social determinants of health (SDOH)
                report based on the U.S. Department of Health and Human Services (HHS)
                Health People 2030 framework that recommends developing a standard set
                of SDOH definitions, utilizing community-based organizations, and
                building a national clearinghouse of program information and best
                practices, all aimed at reducing health disparities. This commenter
                also recommended CMS consider the three general paths that have been
                identified by the American Hospital Association in vulnerable
                communities including screening patients for social needs, offering
                navigation services to help patients access community services, and
                partnering with community stakeholders to align with local needs.
                 Response: We appreciate the feedback provided by the commenters
                regarding approaches for incorporating other demographic
                characteristics and social risk factors into analyses that address and
                advance health equity. We will continue to take all concerns, comments,
                and suggestions into account in our future policies.
                 We are also sensitive to the concerns raised by stakeholders about
                indirect estimation. As referenced in the
                [[Page 63901]]
                proposed rule (86 FR 42018) and summarized in the 2022 IPPS final rule
                (86 FR 25070), the Medicare program does not directly collect
                information from beneficiaries on race and ethnicity, instead relying
                on data collected by the Social Security Administration. A number of
                barriers contribute to this information being insufficiently accurate
                to examine hospital-level disparities. For example, prior to 1980, only
                three categories (White, Black, and Other) were available for
                individuals to self-report race, and respondents were not able to
                indicate Asian, American Indian/Alaska Native, Hispanic, or Pacific
                Islander identities. As a result of these constrained response options,
                many current beneficiaries may not have had the opportunity to
                accurately self-report their race and ethnicity. Although we have
                undertaken significant efforts to update incorrect race and ethnicity
                information many inaccuracies remain limiting our ability to measure
                disparities.
                 In recent years we have sponsored the development of two indirect
                estimation algorithms, both intended to correct and improve
                administrative information on race and ethnicity. Indirect estimation
                methods such as these can generally be used in two different ways: (a)
                To estimate race/ethnicity in the absence of self-reported data; or (b)
                to improve administrative data in which beneficiaries provided a self-
                report of race/ethnicity but were not permitted a full set of response
                options (post-1980). While there is evidence supporting the validity of
                both approaches, accuracy and performance is particularly high in
                situation (b), where indirect estimation allows the administrative
                variables to better match the responses people would give when
                permitted a full set of response options. The approach for indirect
                estimation we intend to apply is situation (b), which uses an algorithm
                to augment existing data to allow a constrained administrative self-
                reported variable to better match what Medicare beneficiaries
                themselves may have chosen when given a comprehensive set of response
                options on race and ethnicity.
                 The Medicare Bayesian Improved Surname Geocoding Version 2.1 (MBISG
                2.1) uses the original beneficiary self-report, but uses additional
                information supplied by Medicare beneficiaries and information about
                neighborhood composition, to make this variable better match what
                Medicare beneficiaries themselves self-report when given a full set of
                response options. With respect to Asian and Pacific Islander, Black,
                Hispanic, and White Medicare beneficiaries, the improved version of the
                administrative variable has 96-99% concordance with what Medicare
                beneficiaries themselves report when allowed a full set of response
                options, matching much better than the original self-reported variable
                in which most Medicare beneficiaries were not allowed to indicate
                Asian, American Indian/Alaska Native, Hispanic, or Pacific Islander
                identities. The MBISG 2.1 also offers distinct advantages because it
                generates probabilities of identification in each racial and ethnic
                group for each beneficiary, rather than assigning a single
                identification.
                 The MBISG 2.1 incorporates multiple sources of information to
                develop racial and ethnic probabilities. In addition to the information
                on race and ethnicity which that person reported to the SSA, the model
                also considers the person's first and last name, the composition of the
                census block group where they live, and other demographic information
                that Medicare beneficiary shared. Through such a holistic approach, the
                MBISG 2.1 can make accurate comparisons between groups of Medicare
                beneficiaries regarding the quality of care received, including people
                whose surnames are common among several racial and ethnic groups, and
                people who changed their surnames upon marriage. The MBISG 2.1 is also
                designed to consider those who identify as Multiracial and allows
                measurement in Census categories that distinguish those who chose
                single or multiple racial identity, as well as considering endorsement
                of Hispanic ethnicity separately. Notably, we only intend to use the
                MBISG 2.1 to make inferences about aggregated groups at the hospital
                level, and do not intend to use it to make inferences about any single
                individual, validation studies indicate that these aggregate estimates
                further improve upon the higher predictive accuracy of the model.
                 We believe that use of statistical imputation models, such as the
                MBISG 2.1 would permit us to provide more accurate, less biased
                information on disparities in hospital outcomes when reported
                confidentially. We plan to report results confidentially to facilities
                in Spring 2022 where results are technically feasible, meaningful, and
                statistically reliable. Any potential future proposal to publicly
                display the disparity results would be made through future rulemaking.
                We are sensitive to the concerns raised by stakeholders and will
                continue to evaluate the validity of the readmission measures when
                stratified by indirect estimation during the confidential reporting
                period.
                 Comment: Several commenters noted the difficulty of collecting data
                related to health disparities and reliable patient demographic
                information and recommended CMS support facilities with data collection
                efforts. One commenter noted provider time constraints as an impediment
                to collecting demographic and social risk factor data and recommended
                CMS considering developing and reimbursing for billable encounters
                related to social determinants of health screening. A few commenters
                also recommended CMS standardize collection and reporting of social
                risk factor data. Commenters recommended using screening tools such as
                the Protocol for Responding to and Assessing Patients' Assets, Risks,
                and Experiences (PRAPARE) tool or the Accountable Health Communities
                Health-Related Social Needs Screening Tool developed by CMS. Another
                commenter asserted that without standardized tools, providers lack the
                necessary information to uniformly assess and identify potential social
                risk factors among patients. Several commenters urged CMS to develop
                information technology standards and consistent guidance across
                programs for the capture, use, and exchange of relevant data such as
                the use of electronic health records and FHIR standards. One commenter
                noted that facilities have had difficulty collecting demographic
                information for other quality measurement programs and should not be
                penalized for submission of data that is inaccurate or incomplete for
                reasons beyond their control.
                 Response: We appreciate the feedback provided by the commenters
                regarding standardization of demographic data collection to additional
                social risk factors for the purposes of illuminating health inequities.
                We will continue to take all concerns, comments, and suggestions into
                account in our future policies.
                 Comment: Several commenters provided helpful insights into the
                unique challenges of measuring disparities in ASCs and potential ways
                to address these challenges. With regards to small sample size, several
                commenters recommended facility-level instead of measure-specific
                equity measurement, such as utilizing outcome measures that are
                applicable across multiple procedures with adjustment by procedure type
                or aggregating the ASCQR measures for each facility. A commenter also
                recommended addressing upstream access challenges that can lead to the
                smaller proportion of patients with social risk factors receiving care
                in ASCs, such as by developing and utilizing access measures. The
                commenter also suggested CMS consider developing and
                [[Page 63902]]
                implementing measures that directly assess health equity, such as
                structural measures that assess an organization's commitment to equity,
                collecting demographic data, and ensuring training on best practices;
                and measuring areas such as access, community partnerships, and patient
                experiences centered on identifying discrimination and structural
                racism. A commenter requested CMS support facilities in accessing and
                collecting socioeconomic data in the future.
                 Response: We appreciate the feedback provided by the commenters
                regarding the unique challenges of measuring disparities in ASCs. We
                will take commenters' feedback into consideration in future policy
                development.
                 Comment: A few commenters expressed support for incorporating
                neighborhood-level socioeconomic factors into methods for measuring
                disparities, especially when there are limitations in sample size or
                availability of more granular data. One commenter asserted that
                neighborhood-level socioeconomic factors can tell important information
                about the conditions in which people live, work, and play, and
                understanding them is vital to improving health outcomes. The commenter
                noted that since such data is less accurate than patient-level data,
                they recommended that CMS initially use results stratified by
                neighborhood-level factors for confidential reporting. If CMS chooses
                to publicly report results stratified by neighborhood-level factors,
                the commenter recommended we demonstrate the statistical soundness of
                the results prior to public reporting. Similarly, another commenter
                expressed concern that the approach of using neighborhood-level
                socioeconomic factors is susceptible to an ecologic fallacy which could
                vary greatly across different regions. One commenter recommended that
                standardizing CMS' SDOH data collection and measurement initiatives
                will not be enough--they must also incorporate tools that help
                clinicians connect patients with the community resources they need in
                order to improve outcomes.
                 Response: We appreciate the feedback provided by the commenters
                regarding the potential incorporation of neighborhood-level
                socioeconomic factors into methods for measuring disparities in ASCs,
                and for additional measures of equity in this setting. We will take
                commenters' feedback into consideration in future policy development.
                 Comment: Several commenters discussed the incorporation of existing
                codes into risk adjustment. One commenter recommended CMS evaluate the
                use of existing SDOH billing codes and the International Classification
                of Diseases, 10th Revision (ICD-10) Z codes which identify non-medical
                factors that may influence a patient's health status and recommended
                CMS consider developing additional codes for social needs care across
                payers to promote screening and referrals for social services. Another
                commenter recommended incorporating social risk adjustment into
                traditional hierarchical condition categories (HCCs)/clinical risk
                adjustment models. However, another commenter provided an example of
                how incorporating social risk factors such as dual eligibility, the
                AHRQ SES index, or non-white race into a hospital measure risk model
                didn't provide evidence of significant differences in outcomes and
                encouraged CMS to test such factors in current or future ASCQR Program
                measures.
                 Response: We appreciate the feedback provided by the commenters
                regarding risk adjustment for social risk and demographic variables in
                ASC quality measurement. We will take commenters' feedback into
                consideration in future policy development.
                 Comment: While supportive of collecting and utilizing demographic
                and SDOH data to measure and improve health equity, several commenters
                expressed concerns about protecting patient privacy. One of these
                commenters recommended CMS increase beneficiary education on the
                sharing of their sensitive health information with their providers.
                Another of these commenters asked that CMS answer privacy questions
                such as where the data will be kept, what happens if a patient declines
                to answer these questions for providers and/or do not wish to share the
                data with CMS? This commenter also questioned whether utilizing EHRs to
                data-mine patient data would comply with HIPPA and the OIG's provisions
                regarding interoperability and information blocking.
                 Response: We are very sensitive to data privacy, and of patient
                education and empowerment. We appreciate the feedback provided by the
                commenters on these topics, and we will take commenters' feedback into
                consideration in future policy development.
                 Comment: Several commenters noted that social factors broadly
                influence access to care at ASCs, including for example, reimbursement
                differences between Medicaid and other forms of insurance, federal and
                state policies regarding ASCs, access to specialty care, and
                transportation barriers. One commenter encouraged measurement of access
                to care barriers, community factors, and patient experiences centered
                on identifying discrimination and structural racism could help address
                barriers to receiving care in an ASC.
                 Response: We appreciate the feedback provided by the commenters on
                the unique challenges of providing care to patients with social risk
                factors at ASCs. We will take commenters' feedback into consideration
                in future policy development.
                 We thank commenters for their input on the potential future efforts
                to address health equity in the ASCQR Program and will take this input
                into account for future measure development in the ASCQR Program.
                d. Future Development and Inclusion of a Pain Management Measure
                 Chronic pain is linked to a number of adverse physical and mental
                conditions 545 546 547 548 and contributes to increased
                health care costs.\549\ An estimated 20.4 percent (50 million) of U.S.
                adults have chronic pain.\550\ As patients with acute and chronic pain
                continue to face challenges in obtaining adequate care,\551\ Congress
                has advanced policies to improve the treatment of pain and substance
                use disorders. The Comprehensive Addiction and Recovery Act of 2016
                [[Page 63903]]
                (CARA) (Pub. L. 114-198), the 21st Century Cures Act (Pub. L. 114-225),
                and the Substance Use-Disorder Prevention that Promotes Opioid Recovery
                and Treatment for Patients and Communities Act (SUPPORT Act) (Pub. L.
                115-271) outline evidence-based national strategies and prevention
                toward reducing opioid dependence. In conjunction with the opioid
                epidemic efforts, the SUPPORT Act also provides guidelines for
                providers to be prepared to discuss pain management risks and options
                with patients, including providing referrals to a pain management
                specialist.\552\ As a result of the opioid epidemic and as pain
                management procedures become more advanced, pain management practices
                and surgery centers have become increasingly viewed as feasible for the
                initial treatment of pain as well as for the expansion of non-opioid
                treatments for pain management.\553\ Based on a growing body of
                evidence on the risks of opioid misuse, we have developed a strategy to
                impact the national opioid misuse epidemic by combating nonmedical use
                of prescription opioids, opioid use disorder, and overdose through the
                promotion of safe and appropriate opioid utilization, improved access
                to treatment for opioid use disorders, and evidence-based practices for
                acute and chronic pain management.\554\
                ---------------------------------------------------------------------------
                 \545\ Institute of Medicine (US) Committee on Pain, Disability,
                and Chronic Illness Behavior; Osterweis M, Kleinman A, Mechanic D,
                editors. Washington (DC): National Academies Press (US); 1987.
                Available at: https://www.ncbi.nlm.nih.gov/books/NBK219250/.
                 \546\ Hooten WM. Chronic Pain and mental Health Disorders:
                Shared Neural Mechanisms, Epidemiology, and Treatment. (2016). May
                Clinic Proceedings. Available at: https://www.mayoclinicproceedings.org/article/S0025-6196(16)30182-3/
                fulltext.
                 \547\ De Heer EW, Gerrits MMJG, Beekman ATF, Dekker J, van
                Marwijk HWJ, de Waal MWM, Spinhoven P, Penninx BWJH, van der Feltz-
                Cornelis CM. (2014). The Association of Depression and Anxiety with
                Pain: A Study for NESDA. PLOS ONE 9(12): e115077. https://doi.org/10.1371/journal.pone.0115077.
                 \548\ Rayner L, Hotopf M, Petkova H, Matcham F, Simpson A, and
                McCracken LM. (2016). Depression in patients with chronic pain
                attending a specialized pain treatment centre: prevalence and impact
                on health care costs. Pain; 157(7): 1472-1479. doi: 10.1097/
                j.pain.0000000000000542.
                 \549\ Gaskin DJ and Richard P. (2012). The Economic Costs of
                Pain in the United States. The Journal of Pain; 13(8): 715-724.
                Available at: https://www.jpain.org/article/S1526-5900(12)00559-7/
                pdf#:~:text=The%20additional%20health%20care%20costs,from%20%24299%20
                to%20%24335%20billion.
                 \550\ Dahlhamer J, Lucas J, Zelaya, C, et al. Prevalence of
                Chronic Pain and High-Impact Chronic Pain Among Adults -- United
                States, 2016. MMWR Morb Mortal Wkly Rep 2018;67:1001-1006. DOI:
                http://dx.doi.org/10.15585/mmwr.mm6736a2.
                 \551\ https://www.hhs.gov/sites/default/files/pmtf-final-report-2019-05-23.pdf.
                 \552\ H.R.6--SUPPORT for Patients and Communities Act. Available
                at: https://www.congress.gov/bill/115th-congress/house-bill/6/text.
                 \553\ MedPac. Report to the Congress: Medicare Payment Policy,
                Chapter 16: Opioids and alternatives in hospital settings--Payments,
                incentives, and Medicare data. Available at: http://www.medpac.gov/docs/default-source/reports/mar19_medpac_ch16_sec.pdf?sfvrsn=0.
                 \554\ CMS Opioid Misuse Strategy 2016. Available at: https://www.cms.gov/outreach-and-education/outreach/partnerships/downloads/cms-opioid-misuse-strategy-2016.pdf.
                ---------------------------------------------------------------------------
                 With advances in techniques and growing recognition by providers
                that pain is a treatable condition, pain management services have seen
                rapid growth as a form of early intervention \555\ and more such
                procedures are being performed in ASCs.\556\ ASCs specializing in pain
                management services are also growing as a share of overall ASCs.\557\
                The most common multispecialty ASCs that focused on two specialties in
                2017 were those specializing in pain management and either neurology or
                orthopedic services.\558\
                ---------------------------------------------------------------------------
                 \555\ Manchikanti, L, Parr A, Singh V, Fellows B. Ambulatory
                Surgery Centers and Interventional Techniques: A Look at Long-Term
                Survival. Pain Physician 2011; 14: E177-215. Available at: https://www.painphysicianjournal.com/current/pdf?article=MTQ1MQ%3D%3D&journal=60.
                 \556\ Manchikanti, L, Parr A, Singh V, Fellows B. Ambulatory
                Surgery Centers and Interventional Techniques: A Look at Long-Term
                Survival. Pain Physician 2011; 14: E177-215. Available at: https://www.painphysicianjournal.com/current/pdf?article=MTQ1MQ%3D%3D&journal=60.
                 \557\ MedPac. Report to the Congress: Medicare Payment Policy,
                Chapter 5: Ambulatory Surgical Center Services. Available at: http://www.medpac.gov/docs/default-source/reports/mar19_medpac_ch5_sec.pdf?sfvrsn=0.
                 \558\ Report to the Congress: Medicare Payment Policy,
                Ambulatory Surgical Center Services. March 2019. Available at:
                http://www.medpac.gov/docs/default-source/reports/mar19_medpac_ch5_sec.pdf?sfvrsn=0.
                ---------------------------------------------------------------------------
                 We internally analyzed CY 2019 and CY 2020 Medicare FFS claims data
                using the methodology previously adopted for the ASC-7: ASC Facility
                Volume Data on Selected ASC Surgical Procedures measure (76 FR 74507
                through 74509), which identifies procedure categories for the top 100
                current procedural terminology (CPT[supreg]) codes reimbursed (we refer
                readers to Table 73). In our analyses of the Medicare FFS claims data
                from CY 2019 and CY 2020, we found that overall, the number of
                procedures declined 22 percent, likely reflecting conditions imposed by
                the COVID-19 PHE. The rank ordering of the types of procedures
                performed remained constant for the most part with pain management
                procedures (contained in the Nervous System category) being the third
                most commonly performed procedure category with 22.3 percent and 22.6
                percent in CY 2019 and CY 2020, respectively.
                [GRAPHIC] [TIFF OMITTED] TR16NO21.176
                 Thus, we see pain management surgical procedures as a significant
                portion of procedures performed in the ASC setting and that an
                applicable measure would provide important quality of care information
                for a specialty not included in the current ASCQR Program measure set.
                 We received comments on these topics.
                 Comment: Many commenters supported this request for comment to
                [[Page 63904]]
                assess the future inclusion of a pain management surgical procedures
                measure. The commenters encouraged CMS to continue to implement
                policies that will incentivize and promote nonopioid,
                nonpharmacological treatment of pain and innovative pain management
                therapies. They also encouraged CMS to work with pain specialty
                societies, CRNAs and ASC industry representatives on the development of
                future pain management specialty measures.
                 A few commenters offered additional pain management measurement
                recommendations including: tracking health equity issues in pain
                management, and adding patient reported outcome performance measures
                (PRO-PM) to include service delivery. One commenter also recommend that
                PRO-PM measures are the best measurement type to gauge a patient's
                status prior to health service intervention. Lastly, one commenter
                recommended that CMS facilitate an open forum to discuss ASCQR
                measures.
                 Response: We thank the commenters for their suggestions. As
                discussed in the RFC on THA/TKA PRO-PM measure, we are considering the
                future implementation of PRO-PM measures across the quality reporting
                programs. We thank commenters for their input on the potential future
                development and adoption of a pain management measure and will take the
                feedback received into account for future measure development in the
                ASCQR Program.
                7. Maintenance of Technical Specifications for Quality Measures
                 We refer readers to the CYs 2012, 2013, 2014, 2015, and 2016 OPPS/
                ASC final rules with comment period (76 FR 74513 through 74514; 77 FR
                68496 through 68497; 78 FR 75131; 79 FR 66981; and 80 FR 70531,
                respectively) for detailed discussion of our policies regarding the
                maintenance of technical specifications for the ASCQR Program which are
                codified at 42 CFR 416.325. We did not propose any changes to these
                policies in the proposed rule.
                 We also refer readers to section XIV. of the CY 2022 OPPS/ASC
                proposed rule (86 FR 42232 through 42237) where we requested
                information on potential actions and priority areas that would enable
                the continued transformation of our quality measurement enterprise
                toward greater digital capture of data and use of the Fast Healthcare
                Interoperability Resources (FHIR) standard (as described in that
                section).
                8. Public Reporting of ASCQR Program Data
                 We refer readers to the CYs 2012, 2016, 2017, and 2018 OPPS/ASC
                final rules with comment period (76 FR 74514 through 74515; 80 FR 70531
                through 70533; 81 FR 79819 through 79820; and 82 FR 59455 through
                59470, respectively) for detailed discussion of our policies regarding
                the public reporting of ASCQR Program data, which are codified at 42
                CFR 416.315 (80 FR 70533). We did not propose any changes to these
                policies in the proposed rule.
                C. Administrative Requirements
                1. Requirements Regarding QualityNet Account and Security Administrator
                 We refer readers to the CY 2014 OPPS/ASC final rule with comment
                period (78 FR 75132 through 75133) for a detailed discussion of the
                QualityNet security administrator requirements, including setting up a
                QualityNet account and the associated timelines for the CY 2014 payment
                determination and subsequent years. In the CY 2016 OPPS/ASC final rule
                with comment period (80 FR 70533), we codified the administrative
                requirements regarding the maintenance of a QualityNet account (now
                referred to as the HQR system HCQIS Access Roles and Profiles (HARP)
                ID) and security administrator for the ASCQR Program at Sec.
                416.310(c)(1)(i). In the CY 2021 OPPS/ASC final rule with comment
                period (85 FR 86189), we finalized the use of the term ``security
                official'' instead of ``security administrator'' to denote the exercise
                of authority invested in the role. The term ``security official''
                refers to ``the individual(s)'' who have responsibilities for security
                and account management requirements for a facility's QualityNet
                account. We did not propose any changes to this policy in the proposed
                rule.
                2. Requirements Regarding Participation Status
                 We refer readers to the CY 2014 OPPS/ASC final rule with comment
                period (78 FR 75133 through 75135) for a complete discussion of the
                participation status requirements for the CY 2014 payment determination
                and subsequent years. In the CY 2016 OPPS/ASC final rule with comment
                period (80 FR 70533 through 70534), we codified these requirements
                regarding participation status for the ASCQR Program at Sec. 416.305.
                We did not propose any changes to these policies in the proposed rule.
                D. Form, Manner, and Timing of Data Submitted for the ASCQR Program
                1. Data Collection and Submission
                a. Background
                 We previously codified our existing policies regarding data
                collection and submission under the ASCQR Program at Sec. 416.310.
                b. Requirements for Claims-Based Measures
                (1) Requirements Regarding Data Processing and Collection Periods for
                Claims-Based Measures Using Quality Data Codes (QDCs)
                 We refer readers to the CY 2014 OPPS/ASC final rule with comment
                period (78 FR 75135) for a complete summary of the data processing and
                collection periods for the claims-based measures using QDCs for the CY
                2014 payment determination and subsequent years. In the CY 2016 OPPS/
                ASC final rule with comment period (80 FR 70534), we codified the
                requirements regarding data processing and collection periods for
                claims-based measures using QDCs for the ASCQR Program at Sec.
                416.310(a)(1) and (2). We note that the previously finalized data
                processing and collection period requirements will apply to any future
                claims-based-measures using QDCs adopted in the ASCQR Program. We did
                not propose any changes to these requirements in the CY 2022 OPPS/ASC
                proposed rule.
                (2) Minimum Threshold, Minimum Case Volume, and Data Completeness for
                Claims-Based Measures Using QDCs
                 We refer readers to the CY 2018 OPPS/ASC final rule with comment
                period (82 FR 59472) (and the previous rulemakings cited therein), as
                well as 42 CFR 416.310(a)(3) and 42 CFR 416.305(c) for our policies
                about minimum threshold, minimum case volume, and data completeness for
                claims-based measures using QDCs. As noted in section XVI.D.1.b. of
                this final rule with comment period, our policies for minimum
                threshold, minimum case volume, and data completeness requirements will
                apply to any future claims-based-measures using QDCs adopted in the
                ASCQR Program. We did not propose any changes to these policies in the
                proposed rule.
                (3) Requirements Regarding Data Processing and Collection Periods for
                Non-QDC Based, Claims-Based Measure Data
                 We refer readers to the CY 2019 OPPS/ASC final rule with comment
                period (83 FR 59136 through 59138) for a complete summary of the data
                [[Page 63905]]
                processing and collection requirements for the non-QDC based, claims-
                based measures. We codified the requirements regarding data processing
                and collection periods for non-QDC, claims-based measures for the ASCQR
                Program at Sec. 416.310(b). We note that these requirements for non-
                QDC based, claims-based- measures apply to the following previously
                adopted measures:
                 ASC-12: Facility 7-Day Risk-Standardized Hospital Visit
                Rate after Outpatient Colonoscopy; and
                 ASC-19: Facility-Level 7-Day Hospital Visits after General
                Surgery Procedures Performed at Ambulatory Surgical Centers (NQF
                #3357).
                 We did not propose any changes to these requirements in the
                proposed rule.
                c. Requirements for Data Submitted via an Online Data Submission Tool
                (1) Requirements for Data Submitted via a CMS Online Data Submission
                Tool
                 We refer readers to the CY 2018 OPPS/ASC final rule with comment
                period (82 FR 59473) (and the previous rulemakings cited therein) and
                42 CFR 416.310(c)(1) for our requirements regarding data submitted via
                a CMS online data submission tool. We are currently using the HQR
                System (formerly referred to as the QualityNet Secure Portal) to host
                our CMS online data submission tool, available at: https://qualitynet.cms.gov/. We note that in the CY 2018 OPPS/ASC final rule
                with comment period (82 FR 59473), we finalized expanded submission via
                the CMS online tool to also allow for batch data submission and made
                corresponding changes at Sec. 416.310(c)(1)(i). We did not propose any
                changes to these policies for data submitted via a CMS online data
                submission tool in the proposed rule.
                 The following previously finalized measures require data to be
                submitted via a CMS online data submission tool for the CY 2021 payment
                determination and subsequent years:
                 ASC-9: Endoscopy/Polyp Surveillance: Appropriate Follow-Up
                Interval for Normal Colonoscopy in Average Risk Patients;
                 ASC-11: Cataracts: Improvement in Patients' Visual
                Function within 90 Days Following Cataract Surgery;
                 ASC-13: Normothermia Outcome; and
                 ASC-14: Unplanned Anterior Vitrectomy.
                 As discussed in section XVI.B.4.a.(2). of the CY 2022 OPPS/ASC
                proposed rule (86 FR 42271 through 42272), we proposed to require and
                resume data collection beginning with the CY 2023 reporting period/CY
                2025 payment determination and subsequent years for the following four
                measures:
                 ASC-1: Patient Burn;
                 ASC-2: Patient Fall;
                 ASC-3: Wrong Site, Wrong Side, Wrong Patient, Wrong
                Procedure, Wrong Implant; and
                 ASC-4: All-Cause Hospital Transfer/Admission.
                Measure data for these measures would be submitted via the HQR System
                (formerly referred to as the QualityNet Secure Portal).
                (2) Requirements for Data Submitted via a Non-CMS Online Data
                Submission Tool
                 We refer readers to the CY 2014 OPPS/ASC final rule with comment
                period (78 FR 75139 through 75140) and the CY 2015 OPPS/ASC final rule
                with comment period (79 FR 66985 through 66986) for our requirements
                regarding data submitted via a non-CMS- online data submission tool
                (specifically, the CDC NHSN website). We codified our existing policies
                regarding the data collection periods for measures involving online
                data submission and the deadline for data submission via a non-CMS
                online data submission tool at Sec. 416.310(c)(2). While we did not
                propose any changes to those policies in the CY 2022 OPPS/ASC proposed
                rule, we did propose policies specific to the proposed COVID-19
                Vaccination Coverage Among HCP measure (ASC-20), for which data would
                be submitted via the CDC NHSN website.
                (a) Form, Manner, and Timing for the COVID-19 Vaccination Coverage
                Among HCP Measure (ASC-20) Beginning With the CY 2022 Reporting Period/
                CY 2024 Payment Determination and Subsequent Years
                 For the COVID-19 Vaccination Coverage Among HCP measure (ASC-20),
                we proposed to require reporting data on the number of HCP who have
                received the completed vaccination course of a COVID-19 vaccine by each
                individual facility's CMS CCN.
                 We proposed that ASCs would report the measure through the NHSN
                web-based surveillance system.\559\ Specifically, ASCs would use the
                COVID-19 vaccination data reporting modules in the NHSN HPS Component
                to report the number of HCP eligible to have worked at the ASC that
                week (denominator) and the number of those HCP who have received COVID-
                19 vaccination (numerator). Specific details on data submission for
                this measure can be found in the CDC's Overview of the Healthcare
                Safety Component, available at: https://www.cdc.gov/nhsn/PDFs/slides/NHSN-Overview-HPS_Aug2012.pdf.
                ---------------------------------------------------------------------------
                 \559\ Centers for Disease Control and Prevention. Surveillance
                for Weekly HCP COVID-19 Vaccination. Accessed at: https://www.cdc.gov/nhsn/hps/weekly-covid-vac/index.html on February 10,
                2021.
                ---------------------------------------------------------------------------
                 For the COVID-19 Vaccination Among HCP measure (ASC-20), we
                proposed that ASCs would report the measure to the NHSN for at least
                one week each month, beginning with the January 1, 2022 through
                December 31, 2022, reporting period affecting CY 2024 payment
                determination and continuing with quarterly reporting deadlines for
                subsequent years. If ASCs report more than one week of data in a month,
                the most recent week's data would be used for measure calculation
                purposes. Each quarter, the CDC would calculate a summary measure of
                COVID-19 vaccination coverage from the reporting periods for the
                quarter.
                 With respect to public reporting, this quarterly average COVID-19
                vaccination coverage would be publicly reported in four-quarter
                increments, when four quarters of data are available. Once four
                quarters are available, data will be refreshed on a quarterly basis
                with the most recent four quarters publicly displayed. For each CMS
                CCN, a percentage of the HCP who received a complete course of the
                COVID-19 vaccine would be calculated and publicly reported.
                 We did not receive comments on the form, manner, and timing for the
                COVID-19 Vaccination Coverage Among HCP Measure (ASC-20). We refer
                readers to section XVI.B.3.a.2. of this final rule with comment period
                for public comments received on the COVID-19 Vaccination Coverage Among
                HCP Measure (ASC-20).
                 After consideration of the public comments, we are finalizing our
                proposal to adopt the COVID-19 Vaccination Coverage Among HCP measure
                (ASC-20) with a modification to only publicly report the most recent
                quarter of data. Additionally, data will also be available for preview
                by ASCs for 30 days prior to being made publicly available. This would
                result in more meaningful information that is up to date and not
                diluted with older data.
                d. Form, Manner, and Timing for Reporting the ASC-15a-e: Outpatient and
                Ambulatory Surgery Consumer Assessment of Healthcare Providers and
                Systems (OAS CAHPS) Survey-Based Measures
                (1) Background
                 We refer readers to the CY 2017 OPPS/ASC final rule with comment
                period (81 FR 79822 through 79824) for
                [[Page 63906]]
                a discussion of the previously finalized requirements related to survey
                administration and vendors for the OAS CAHPS Survey-based measures. In
                addition, we refer readers to the CY 2018 OPPS/ASC final rule with
                comment period (82 FR 59450 through 59451), where we finalized a policy
                to delay implementation of the ASC-15a-e OAS CAHPS Survey-based
                measures beginning with the CY 2020 payment determination (2018
                reporting period) until further action in future rulemaking.
                (2) Addition of Data Collection Survey Modes of OAS CAHPS Measures
                Collection to Existing Three Modes
                 As discussed in section XVI.B.4.c. of the CY 2022 OPPS/ASC proposed
                rule (86 FR 42273), we proposed to begin data collection of five
                survey-based measures derived from the OAS CAHPS Survey for the ASCQR
                Program beginning with voluntary reporting for the CY 2023 reporting
                periods/CY 2025 payment determination,\560\ followed by mandatory data
                collection and reporting beginning with the CY 2024 reporting period/CY
                2026 payment determination and for subsequent years. The OAS CAHPS
                Survey contains three OAS CAHPS composite survey-based measures and two
                global survey-based measures. We proposed requirements related to
                survey administration, vendors, and oversight activities.
                ---------------------------------------------------------------------------
                 \560\ As stated in section XVI.B.4.c. of the CY 2022 OPPS/ASC
                proposed rule, ``we note that National OAS CAHPS voluntary reporting
                is independent of the ASCQR Program, but the submission process will
                otherwise remain unchanged. This proposal is intended to clarify
                that voluntary reporting of OAS CAHPS would begin as part of the
                ASCQR program in the CY 2023 reporting period until mandatory
                reporting would begin in the CY 2024 reporting period, if both
                proposals are finalized''.
                ---------------------------------------------------------------------------
                 In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79822
                through 79825), we previously discussed the time, form, and manner in
                which OAS CAHPS information will be submitted. In the CY 2022 OPPS/ASC
                proposed rule (86 FR 42282 through 42284) we proposed two additional
                data collection modes (web with mail follow-up of non-respondents and
                web with telephone follow-up of non-respondents) \561\ beginning with
                voluntary data collection and reporting for the CY 2023 reporting/CY
                2025 payment determination and continuing for mandatory reporting
                beginning with the CY 2024 reporting period/CY 2026 payment
                determination and for subsequent years. For more information about the
                modes of administration, we refer readers to the OAS CAHPS website:
                https://oascahps.org. We reiterate our clarification from when we
                adopted these measures in the CY 2017 OPPS/ASC final rule that, when
                implemented, ASCs that anticipate receiving more than 300 surveys would
                be required to either: (1) Randomly sample their eligible patient
                population; or (2) survey their entire OAS CAHPS eligible patient
                population (81 FR 79809). We also refer readers to section XV.D.4.b of
                this CY 2022 OPPS/ASC proposed rule where we describe our similar
                policy for the Hospital OQR Program.
                ---------------------------------------------------------------------------
                 \561\ The two additional modes will be available as part of
                National OAS CAHPS voluntary reporting in 2022.
                ---------------------------------------------------------------------------
                (a) Survey Requirements
                 The data collection for the survey currently has three
                administration methods: (1) Mail-only; (2) telephone-only; and (3)
                mixed mode (mail with telephone follow-up of nonrespondents). We refer
                readers to the Protocols and Guidelines Manual for the OAS CAHPS Survey
                (https://oascahps.org/Survey-Materials) for materials for each mode of
                survey administration. In the CY 2018 OPPS/ASC final rule with comment
                period, we expressed interest in investigating the feasibility of
                offering the OAS CAHPS Survey using a web-based format (82 FR 59451).
                As a result, we designed a mode experiment to assess the impact of
                adding web-based survey administration. This mode experiment tested
                five administration modes with patients who receive outpatient surgical
                care: (1) Mail-only; (2) telephone-only; (3) web-only; (4) web with
                mail follow-up; and (5) web with a telephone follow-up. Data collection
                was completed in the fall of 2019. Response rates by mode in the
                experiment were: 35 percent (mail-only); 19 percent (telephone-only);
                29 percent (web-only); 39 percent (web with mail follow-up); and 35
                percent (web with telephone follow-up).
                 Based on these results, in addition to the three previously
                established modes, in the CY 2022 OPPS/ASC proposed rule (86 FR 42282
                through 42283) we proposed to incorporate two additional administration
                methods: (1) Web with mail follow-up of non-respondents; and (2) web
                with telephone follow-up of non-respondents. This would allow a total
                of five modes of survey administration for reporting beginning with
                voluntary data collection and reporting as part of the ASCQR Program
                for the CY 2023 reporting period \562\ and continuing for mandatory
                data collection and reporting for the CY 2024 reporting period/CY 2026
                payment determination--the first year the survey would be required--and
                thereafter. We did not propose a purely web-based format at this time
                because the use of a web-based mode is included in the two mixed modes
                options being proposed and the purely web-based format would create
                response bias since not all patients have the ability to respond by
                web.
                ---------------------------------------------------------------------------
                 \562\ As stated in section XVI.B.4.c. of the CY 2022 OPPS/ASC
                proposed rule, ``we note that the two modes (web with mail follow-up
                of non-respondents; and web with telephone follow-up of non-
                respondents) will be available beginning in CY 2022 for National OAS
                CAHPS voluntary reporting, and then if finalized, available as part
                of ASCQR Program beginning in the CY 2023 reporting period and
                subsequent years''.
                ---------------------------------------------------------------------------
                 For all five proposed modes of administration as part of the ASCQR
                Program, we proposed that data collection must be initiated no later
                than 21-calendar days after the month in which a patient has a surgery
                or procedure at an ASC and completed within 6 weeks (42 days) after
                initial contact of eligible patients begins, beginning with voluntary
                data collection and reporting in the CY 2023 reporting period/CY 2025
                payment determination and subsequent years. Under this policy, ASCs,
                via their CMS-approved survey vendors, must make multiple attempts to
                contact eligible patients unless the patient refuses or the ASC/vendor
                learns that the patient is ineligible to participate in the survey. In
                addition, we proposed that ASCs, via their CMS-approved- survey vendor,
                collect survey data for eligible patients using the established
                quarterly deadlines to report data to CMS for each data collection
                period, unless the ASC has been exempted from the OAS CAHPS Survey
                requirements under our minimum case volume for program participation
                \563\ or our OAS CAHPS low-volume exemption policy, which exempts ACS
                that treat fewer than 60 survey-eligible patients during the
                ``eligibility period,'' (which is the calendar year before the data
                collection period (81 FR 79806)), that submit the participation
                exemption request form, which will be made available on the OAS CAHPS
                Survey website (https://oascahps.org) on or before May 15 of the data
                collection year. As finalized previously, all exemption requests would
                be reviewed and evaluated by CMS (81 FR 79806). For ASCs with minimum
                case volumes, but without a low-volume exemption, these
                [[Page 63907]]
                submission deadlines would be posted on the OAS CAHPS Survey website
                (https://oascahps.org). Late submissions would not be accepted.
                ---------------------------------------------------------------------------
                 \563\ ASCs with fewer than 240 Medicare claims (Medicare primary
                and secondary payer) per year during an annual reporting period for
                a payment determination year are not required to participate in the
                ASCQR Program for the subsequent annual reporting period for that
                subsequent payment determination year. See 42 CFR 416.305.
                ---------------------------------------------------------------------------
                 As discussed in more detail below, compliance with the OAS CAHPS
                Survey protocols and guidelines, including this monthly data collection
                requirement as part of each quarterly data submission, would be
                overseen by CMS or its contractor who would receive approved vendors'
                monthly submissions, review the data, and analyze the results. As
                stated previously (81 FR 79805), all data collection and submission for
                the OAS CAHPS Survey measures would be reported at the CCN level, and
                if data collection and reporting becomes mandatory in CY 2024 reporting
                period/CY 2026 payment determination as proposed, under this proposal,
                all eligible ASCs in a CCN would be required to participate in the OAS
                CAHPS Survey, except for those that meet and receive an exception for
                having fewer than 60 survey-eligible- patients during the year
                preceding the data collection period (81 FR 79806). Therefore, we
                previously finalized the survey data reported for a CCN must include
                eligible patients from all eligible ASCs covered by the CCN; or if more
                than 300 completed surveys are anticipated, an ASC can choose to
                randomly sample their eligible patient population (81 FR 79817).
                 In the CY 2022 OPPS/ASC proposed rule (86 FR 42283 through 42284),
                we also proposed that survey vendors acting on behalf of ASCs must
                submit data by the specified data submission deadlines, which generally
                would be posted on the Outpatient and Ambulatory Surgery CAHPS Survey
                website located at https://oascahps.org/Data-Submission/Data-Submission-Deadlines. If an ASC's data are submitted after the data
                submission deadline, it would not fulfill the OAS CAHPS quality
                reporting requirements. Therefore, in regard to any OAS CAHPS
                reporting, we would strongly encourage ASCs to be fully appraised of
                the methods and actions of their survey vendors, especially the
                vendors' full compliance with OAS CAHPS Survey administration
                protocols, and to carefully inspect all data warehouse reports in a
                timely manner.
                 We reiterate that the use of predictive or auto dialers in
                telephonic survey administration is governed by the Telephone Consumer
                Protection Act (TCPA) (47 U.S.C. 227) and subsequent regulations
                promulgated by the Federal Communications Commission (FCC) (47 CFR
                64.1200) and Federal Trade Commission. We refer readers to the FCC's
                declaratory ruling released on July 10, 2015 further clarifying the
                definition of an auto dialer, available at: https://apps.fcc.gov/edocs_public/attachmatch/FCC-15-72A1.pdf. In the telephone-only and
                mixed mode survey administration methods involving telephone, ASCs and
                vendors must comply with the regulations discussed above, and any other
                applicable regulations. To the extent that any existing CMS technical
                guidance conflicts with the TCPA or its implementing regulations
                regarding the use of predictive or auto dialers, or any other
                applicable law, CMS would expect vendors to comply with applicable law.
                 We received comments on these topics.
                 Comment: A commenter supported the proposal that the OAS CAHPS
                Survey data collection must be initiated no later than 21-calendar days
                after the month in which a patient has a surgery or procedure at a
                hospital/facility and completed within 6 weeks (42 days) after initial
                contact of eligible patient begins, beginning with voluntary reporting
                in the CY 2023 reporting period/CY 2025 payment determination and for
                subsequent years.
                 Response: We thank the commenter for its support.
                 Comment: Many commenters supported the two additional survey
                administration modes taking advantage of web-based technology: Web with
                mail follow-up of non-respondents and web with telephone follow-up of
                non-respondents. Among the reasons for support were the belief that
                these additional modes will enable providers to reach a larger patient
                population, to receive more and timelier information to improve patient
                experience, to reduce burden associated with this measure, and to
                provide greater flexibility for providers to collect data and patients
                to respond. A few commenters encouraged CMS to monitor the data and
                patient response rates, particularly of the two additional web-based
                survey modes, and data.
                 Response: We thank the commenters for their support. We agree that
                as we expand the use of additional OAS CAHPS Survey modes, it will be
                important to monitor data, patient responses, and ensure that the OAS
                CAHPS Survey is refined as appropriate.
                 Comment: A few commenters recommended clarifying how CMS could
                distribute the web-based mode and suggested addressing how smart
                phones, email and texting could promote distribution of the survey.
                 Response: We thank the commenters for their feedback. Information
                regarding how OAS CAHPS Survey vendors may utilize the two web-based
                modes with telephone or mail follow-up, respectively, will be available
                on the OAS CAHPS website (https://oascahps.org/).
                 Comment: Many commenters appreciated the proposal for the
                additional two new mixed mode options that include web-based
                collection, but believe that there needs to be a web-only or additional
                digital modes to reduce financial burden of the survey and make the
                survey easier for patients to complete. Several commenters recommended
                that CMS should permit a web-only survey administration mode and noted
                that web-only would likely be popular form of administration, has a
                better response rate, could achieve minimum surveys more efficiently
                than telephone only, and would also reduce the financial burden of
                administration. One commenter specifically noted that these modes of
                survey distribution could help reach younger and minority populations.
                 Response: We thank the commenters for their feedback. We agree that
                the web-based mode interactions with smart phones, email, texting, and
                other electronic distribution create the potential for new and engaging
                ways to connect with patients, especially to traditionally underserved
                communities. We believe that the potential to expand and increase
                access to patient feedback is of the utmost importance and will
                continue to study potential refinement to methods of contact for the
                OAS CAHPS Survey.
                 Comment: A few commenters supported a web-only administration and
                noted that access to the internet should not limit the adoption of a
                web-only mode because neither telephone nor physical mail are available
                to everyone, and there is increasing access to technological resources.
                 Response: We thank the commenters for their feedback. We agree that
                no one mode of administration will work for every patient, which is why
                we are going to include five modes of survey administration. As we
                stated in the CY 2022 OPPS/ASC proposed rule (86 FR 42283), we did not
                propose a purely web-based format at this time because the use of a
                web-based mode is included in the two mixed modes options being
                proposed and the purely web-based format would create response bias
                since not all patients have access and the ability to respond via
                website. These two modes offer respondents the opportunity to respond
                via web-modes, but we believe that providing the additional follow-up
                provides patients with a greater opportunity to respond to the OAS
                CAHPS Survey, if they so choose. We will continue to review
                [[Page 63908]]
                digital-only modes of administration and seek to propose additional
                modes that are supported by research.
                 Comment: A commenter supported the use of web-based survey modes as
                an important survey option, but recommended that CMS ensure that
                patients are clear what information the OAS CAHPS Survey is seeking.
                 Response: We appreciate the commenters support for the web-based
                survey modes. We believe that patients will understand the web-based
                modes and be able to respond to the OAS CAHPS Survey. We also think
                patients will be able to associate the OAS CAHPS Survey with the
                appropriate facility and service that they received. As we stated in
                response to commenters who opposed mandatory reporting of the OAS CAHPS
                Survey in section XVI.B.4.c.(1) of this final rule with comment period,
                we believe that the information provided in the OAS CAHPS Survey
                ``Instructions'' is sufficient to inform the patient regarding the
                purpose of the OAS CAHPS Survey and provides sufficient instruction and
                details for the patient to correctly identify and relate the survey to
                the facility and procedure that patient received. CMS began developing
                the Outpatient and Ambulatory Surgery Survey in 2012 using the
                principles and guidelines established by the Agency for Healthcare
                Research and Quality's (AHRQ) CAHPS program and AHRQ approved this
                instrument as a CAHPS survey in February 2015.\564\
                ---------------------------------------------------------------------------
                 \564\ See CAHPS Outpatient and Ambulatory Surgery Survey.
                Content last reviewed July 2019. Agency for Healthcare Research and
                Quality, Rockville, MD. https://www.ahrq.gov/cahps/surveys-guidance/oas/index.html.
                ---------------------------------------------------------------------------
                 Comment: Many commenters opposed the requirement of 300 completed
                surveys as burdensome and requested that CMS set the initial
                requirement at 100 surveys.
                 Response: We are committed to ensuring high reliability in publicly
                reported OAS CAHPS Survey results. Acceptable methods of sampling
                survey-eligible patients can be found in Chapter IV-Sampling Procedures
                of the Protocols and Guidelines Manual at https://oascahps.org/Survey-Materials. We refer readers to our discussion on the reliability
                criterion that resulted in the 300 completed survey and 60-patient
                eligible threshold in the CY 2017 OPPS/ASC final rule (81 FR 79809
                through 79810).
                 Currently, the target number of completed interviews for ASCs is
                300 annually, or 25 per month. The target of 300 completed surveys for
                analysis is derived from the formula for the precision of a proportion
                with the estimate at 0.5, the confidence interval of about 0.05, and a confidence level of 95 percent. If a facility's
                patient volume is too small to yield 300 completed surveys per year, a
                census of patients is surveyed and participation in public reporting is
                possible. If participation drops below 100 completed surveys, a
                footnote is applied to the publicly reported data indicating that the
                scores should be used with caution as the number of surveys may be too
                low to accurately reflect the facility's performance.
                 If the target number of completed interviews for ASCs were reduced
                to 200 completes annually, or about 17 per month, the precision of the
                estimate would be lower. The confidence interval would be 7
                percent. Given the smaller size of ASCs and specialization of services,
                we are finalizing a revised target number of completes, reducing it to
                200 completes annually. We now believe that the 200 surveys will
                provide the appropriate balance of ensuring sufficient confidence in
                the results of the OAS CAHPS Survey, such that facilities will receive
                important patient feedback, while still reducing the overall burden of
                the OAS CAHPS Survey. We believe that this burden reduction is
                important as ASCs continue to respond to COVID-19. While we expect this
                reduction from 300 to 200 completed to be permanent, we will continue
                to assess whether the 200 completed surveys amount ensures appropriate
                levels of confidence in the OAS CAHPS Survey results and propose
                additional further modifications in future rulemaking.
                 As a reminder, under the current protocol, Medicare-certified HOPDs
                and ASCs that treat fewer than 60 survey-eligible patients during the
                same 12-month eligibility period have the option to submit a request
                for exemption from participating in the OAS CAHPS Survey. Also, ASCs
                that qualifies for an exemption from the ASCQR Program because they had
                fewer than 240 Medicare claims (Medicare primary and secondary payer)
                in the year prior to the data collection year for the applicable
                payment determination would also qualify for the exemption from the OAS
                CAHPS Survey for the same time period. These ASCs are not required to
                submit a participation exemption request form for the OAS CAHPS Survey
                for the same time period.
                 Comment: A commenter requested additional information on whether
                ASCs will be penalized for failure to reach the minimum number of
                required surveys because patients simply choose not to respond to OAS
                CAHPS.
                 Response: We agree with commenters that patient response is largely
                out of the control of the facility. We note that we did not propose to
                penalize ASCs for patients' decision not to complete the survey. An ASC
                will not receive a payment reduction as long as it participates in the
                survey, its vendor administers the survey according to the OAS CAHPS
                Survey Protocol and Guidelines Manual and submits that data to CMS by
                the data submission deadline.
                 Comment: A commenter strongly recommended that CMS reconsider their
                position on respondent confidentiality and remove the requirement to
                include the question on consent to share identifying information from
                the OAS CAHPS Survey if the facility is interested in receiving
                patient-level response data connected to the patient's identifying
                data. Another commenter explained that if facilities understood the
                patient, they could more easily provide their employees immediate, and
                targeted improvement training. The commenter recommended that CMS align
                the OAS CAHPS patient confidentiality rules with HCAHPS, which allows
                for the release of patient-level data for quality improvement purposes
                with the stipulation that the patient identity should not be shared
                with direct care staff. A commenter expressed concern about a question
                on the OAS CAHPS Survey that seeks information on ``Consent to Share
                Identifying Information'' because they believe it limits the ability to
                identify trends and thereby limits opportunities.
                 Response: While the desire to have patient identifying information
                to develop responsive training and remediation steps is admirable, we
                believe that patient confidentiality is an important aspect to the OAS
                CAHPS Survey. The administration protocols for OAS CAHPS follow
                protocols for CAHPS[supreg] Surveys, restricting the release of
                patient-level data if the patient has not consented. We note that, for
                the Hospital IQR Program, because hospitals can self-administer the
                HCAHPS Survey, we do not state that patients' responses and identifying
                information will not be shared with the hospital. However, for surveys
                administered via a third-party vendor, the survey is not linked to a
                sample patient's name unless the patient gives his or her consent. We
                note that facilities may choose to add the ``Consent to Share''
                question to the OAS CAHPS Survey. This question asks whether a patient
                gives permission for their name to be linked to their survey responses.
                However, we note that each facility should consult with its own
                [[Page 63909]]
                counsel to ensure compliance with applicable privacy and security laws.
                 Comment: A commenter recommended that CMS revise the OAS CAHPS
                patient eligibility definition such that it is based on a set of
                consistently knowable criteria and does not rely on Current Procedural
                Terminology (CPT) codes as the primary method to determine eligibility.
                 Response: The OAS CAHPS Survey is administered to all eligible
                patients or a random sample thereof who had at least one outpatient
                surgery/procedure during the applicable month. We acknowledge the
                concern about the use of CPT codes, including those for procedures that
                patients may not perceive as surgery, and note that we will consider
                this issue. We note that many CPT codes have been excluded from
                inclusion in the OAS CAHPS Survey, including services like application
                of a cast or splint, in order to ensure that only patients receiving
                applicable procedures are surveyed.\565\ We thank the commenters and
                will take all comments under consideration as we craft future policy
                for the OAS CAHPS Survey. As materials are updated, they will be posted
                here: https://oascahps.org/General-Information/Announcements.
                ---------------------------------------------------------------------------
                 \565\ https://oascahps.org/General-Information/Announcements.
                ---------------------------------------------------------------------------
                 After consideration of the public comments we received, we are
                finalizing this proposal with modification. The annual required number
                of surveys that must be reported for an ASC to successfully complete
                the measure is reduced from 300 to 200, and if more than 200 completed
                surveys are anticipated, an ASC can choose to randomly sample their
                eligible patient population.
                (b) Vendor Requirements
                 We did not propose new vendor requirements, but reiterate the
                vendor requirements finalized in the CY 2017 OPPS/ASC final rule with
                comment period (81 FR 79823 through 79824) to ensure that patients
                respond to the survey in a way that reflects their actual experiences
                with outpatient care, and is not influenced by the ASC. We finalized
                that ASCs must contract with a CMS-approved OAS CAHPS Survey vendor to
                conduct or administer the survey. We believe that a neutral third-party
                should administer the survey for ASCs, and it is our belief that an
                experienced survey vendor will be best able to ensure reliable results.
                CAHPS Survey-approved vendors are also already used or required in the
                following CMS quality programs: The Hospital Inpatient Quality
                Reporting Program (71 FR 68203 through 68204); the Hospital Value-Based
                Purchasing (VBP) Program (76 FR 26497, 26502 through 26503, and 26510);
                the End Stage Renal Disease Quality Improvement Program (76 FR 70269
                through 70270); the Home Health QRP (80 FR 68709 through 68710); and
                the Hospice QRP (80 FR 47141 through 47207).
                 Information about the list of approved survey vendors and how to
                authorize a vendor to collect data on an ASC's behalf is available
                through the OAS CAHPS Survey website, available at: https://oascahps.org. The web portal has both public and secure (restricted
                access) sections to ensure the security and privacy of selected
                interactions. As mentioned earlier, requirements for survey vendors
                were previously finalized in the CY 2017 OPPS/ASC final rule with
                comment period (81 FR 79793 through 79794) and codified at Sec.
                416.310(e)(2). ASCs will need to register on the OAS CAHPS Survey
                website (https://oascahps.org) in order to authorize the CMS-approved
                vendor to administer the survey and submit data on their behalf. Each
                ASC must then administer (via its vendor) the survey to eligible
                patients treated during the data collection period on a monthly basis
                according to the guidelines in the Protocols and Guidelines Manual
                (https://oascahps.org) and report the survey data to CMS on a quarterly
                basis by the deadlines posted on the OAS CAHPS Survey website.
                 Comment: Several commenters opposed the requirement that OAS CAHPS
                Survey be administered by third party vendors. Reasons given included
                that requiring third-party vendors increases the expense of the survey,
                vendors may not be fiduciaries for ASCs, the use of vendors adds
                unnecessary bureaucracy, vendor errors could negatively impact ASCs
                results and that ASCs are capable of collecting information and
                reporting data. Another commenter stated that of the number of approved
                vendors may not be prepared to accept the additional volume of work
                from the nation's ASCs. Another commenter stated its belief that the
                False Claims Act is sufficient to ensure compliance.
                 Response: In order to meet the survey administration requirements
                for these measures, the ASC must administer the OAS CAHPS Survey in
                accordance with the requirements listed in the OAS CAHPS Survey
                Protocols and Guidelines Manual.\566\
                ---------------------------------------------------------------------------
                 \566\ Current Survey Materials (oascahps.org).
                ---------------------------------------------------------------------------
                 OAS CAHPS Survey requires that the survey be administered by an
                approved survey vendor to ensure that patients respond to the survey in
                a way that reflects their actual experiences with outpatient surgical
                care and is not influenced by the facility. If vendors were removed as
                neutral third parties, there could be concerns of objectivity and bias.
                 We believe that OAS CAHPS Survey vendors have gained experience
                during the voluntary reporting as part of the voluntary National OAS
                CAHPS program, and approved vendors will be able to support ASCs. We
                post the list of the approved OAS CAHPS Survey vendors on https://oascahps.org, and we encourage ASCs to contact vendors for cost and
                service information pertaining to OAS CAHPS Survey as there may be
                differences among vendors and multiple modes of conducting the survey
                provide greater economical choice.
                 We acknowledge that it is possible an ASC could fail to meet the
                requirements under the ASC-15a-e Survey-based measures if its vendor
                fails to administer the survey properly or submit the required data to
                CMS by the data submission deadline. However, we continue to believe
                that a neutral third party should administer the survey for ASCs, and
                it is our belief that an experienced survey vendor will be best able to
                ensure reliable results. We encourage all ASCs to be fully apprised of
                the methods and actions of their survey vendors--especially the
                vendors' full compliance with the OAS CAHPS Survey Administration
                protocols--and to carefully inspect all data warehouse reports in a
                timely manner. After the survey vendor submits the data to the OAS
                CAHPS Data Center, we strongly recommend that ASCs promptly review
                their two OAS CAHPS feedback reports and submit corrections under the
                process outlined in the OAS CAHPS Protocol and Guidelines Manual.\567\
                These reports enable an ASC to ensure that its survey vendor has
                submitted the data on time, the data has been accepted into the OAS
                CAHPS Data Center, and the data accepted into the OAS CAHPS Data Center
                are complete and accurate. Finally, we note that submission of
                complete, accurate, and timely data is the responsibility of the ASC.
                ASCs should check-in regularly with survey vendors to ensure that
                vendors are properly submitting timely survey data.
                ---------------------------------------------------------------------------
                 \567\ OAS CAHPS Survey Materials, including the OAS CAHPS
                Protocol and Guidelines Manual are available at Current Survey
                Materials (oascahps.org).
                ---------------------------------------------------------------------------
                [[Page 63910]]
                e. ASCQR Program Data Submission Deadlines
                 In the CY 2021 OPPS/ASC final rule with comment period (85 FR
                86191) we finalized that all program deadlines falling on a nonwork day
                be moved forward consistent with section 216(j) of the Act, 42 U.S.C.
                416(j), ``Periods of Limitation Ending on Nonwork Days.'' Specifically,
                the Act indicates that all deadlines occurring on a Saturday, Sunday,
                or legal holiday, or on any other day, all or part of which is declared
                to be a nonwork day for Federal employees by statute or Executive
                order, shall be extended to the first day thereafter which is not a
                Saturday, Sunday or legal holiday or any other day all or part of which
                is declared to be a nonwork day for Federal employees by statute or
                Executive order (42 U.S.C. 416(j)). We codified this policy at Sec.
                416.310(f). We did not propose any changes to this policy in the
                proposed rule.
                f. Review and Corrections Period for Measure Data Submitted to the
                ASCQR Program
                (1) Review and Corrections Period for Data Submitted via a CMS Online
                Data Submission Tool
                 Under the ASCQR Program, for measures submitted via a CMS online
                data submission tool, ASCs submit measure data to CMS from January 1
                through May 15 during the calendar year subsequent to the current data
                collection period (84 FR 61432).\568\ For example, ASCs collect measure
                data from January 1, 2020 through December 31, 2020 and submit these
                data to CMS from January 1, 2021 through May 15, 2021. ASCs may begin
                submitting data to CMS as early as January 1. ASCs are encouraged, but
                not required, to submit data early in the submission period so that
                they can identify errors and resubmit data before the established
                submission deadline.
                ---------------------------------------------------------------------------
                 \568\ ASCQR Program Data Submission Deadlines. Available at:
                https://qualitynet.cms.gov/asc/data-submission#tab2.
                ---------------------------------------------------------------------------
                 In the CY 2021 OPPS/ASC final rule with comment period (85 FR 86191
                through 86192), we finalized the formalization of that process and
                established a review and corrections period similar to what was
                finalized for the Hospital OQR Program in the CY 2021 OPPS/ASC final
                rule with comment period (85 FR 86184) for data submitted via the CMS
                web-based tool. For the ASCQR Program, we finalized the implementation
                of a review and corrections period which runs concurrently with the
                data submission period beginning with the effective date of this rule.
                During this review and corrections period, ASCs may enter, review, and
                correct data submitted directly to CMS. However, after the submission
                deadline, ASCs are not allowed to change these data. We codified this
                review and corrections period at Sec. 416.310(c)(1)(iii). We did not
                propose any changes to this policy in the proposed rule.
                (2) Review and Corrections Period for the OAS CAHPS Measures
                 Each ASC administers (via its vendor) the survey to all eligible
                patients treated during the data collection period on a monthly basis
                according to the guidelines in the Protocols and Guidelines Manual
                (available at: https://oascahps.org) and report the survey data to CMS
                on a quarterly basis by the deadlines posted on the OAS CAHPS Survey
                website as stated above in section XVI.D.1.d.(2).(b). of this final
                rule with comment period. Data cannot be altered after the data
                submission deadline but can be reviewed prior to the submission
                deadline (81 FR 79822 through 79823).
                g. ASCQR Program Reconsideration Procedures
                 We refer readers to the CY 2016 OPPS/ASC final rule with comment
                period (82 FR 59475) (and the previous rulemakings cited therein) and
                42 CFR 416.330 for the ASCQR Program's reconsideration policy. We did
                not propose any changes to this policy in the proposed rule.
                h. Extraordinary Circumstances Exception (ECE) Process for the CY 2021
                Payment Determination and Subsequent Years
                 We refer readers to the CY 2018 OPPS/ASC final rule with comment
                period (82 FR 59474 through 59475) (and the previous rulemakings cited
                therein) and 42 CFR 416.310(d) for the ASCQR Program's policies for
                extraordinary circumstance exceptions (ECE) requests. In the CY 2018
                OPPS/ASC final rule with comment period (82 FR 59474 through 59475),
                we: (1) Changed the name of this policy from ``extraordinary
                circumstances extensions or exemption'' to ``extraordinary
                circumstances exceptions'' for the ASCQR Program, beginning January 1,
                2018; and (2) revised Sec. 416.310(d) of our regulations to reflect
                this change. We will strive to complete our review of each request
                within 90 days of receipt. We did not propose any changes to this
                policy in the proposed rule.
                E. Payment Reduction for ASCs That Fail To Meet the ASCQR Program
                Requirements
                1. Statutory Background
                 We refer readers to the CY 2012 OPPS/ASC final rule with comment
                period (76 FR 74492 through 74493) for a detailed discussion of the
                statutory background regarding payment reductions for ASCs that fail to
                meet the ASCQR Program requirements.
                2. Policy Regarding Reduction to the ASC Payment Rates for ASCs That
                Fail To Meet the ASCQR Program Requirements for a Payment Determination
                Year
                 The national unadjusted payment rates for many services paid under
                the ASC payment system are equal to the product of the ASC conversion
                factor and the scaled relative payment weight for the APC to which the
                service is assigned. For CY 2022, the ASC conversion factor is equal to
                the conversion factor calculated for the previous year updated by the
                productivity-adjusted hospital market basket update factor. The
                productivity adjustment is set forth in section 1833(i)(2)(D)(v) of the
                Act. The productivity-adjusted hospital market basket update is the
                annual update for the ASC payment system for a 5-year period (CY 2019
                through CY 2023). Under the ASCQR Program, in accordance with section
                1833(i)(7)(A) of the Act and as discussed in the CY 2013 OPPS/ASC final
                rule with comment period (77 FR 68499), any annual increase in certain
                payment rates under the ASC payment system shall be reduced by 2.0
                percentage points for ASCs that fail to meet the reporting requirements
                of the ASCQR Program. This reduction applied beginning with the CY 2014
                payment rates (77 FR 68500). For a complete discussion of the
                calculation of the ASC conversion factor and our finalized proposal to
                update the ASC payment rates using the inpatient hospital market basket
                update for CYs 2019 through 2023, we refer readers to the CY 2019 OPPS/
                ASC final rule with comment period (83 FR 59073 through 59080).
                 In the CY 2013 OPPS/ASC final rule with comment period (77 FR 68499
                through 68500), in order to implement the requirement to reduce the
                annual update for ASCs that fail to meet the ASCQR Program
                requirements, we finalized our proposal that we would calculate two
                conversion factors: A full update conversion factor and an ASCQR
                Program reduced update conversion factor. We finalized our proposal to
                calculate the reduced national
                [[Page 63911]]
                unadjusted payment rates using the ASCQR Program reduced update
                conversion factor that would apply to ASCs that fail to meet their
                quality reporting requirements for that calendar year payment
                determination. We finalized our proposal that application of the 2.0
                percentage point reduction to the annual update may result in the
                update to the ASC payment system being less than zero prior to the
                application of the productivity adjustment.
                 The ASC conversion factor is used to calculate the ASC payment rate
                for services with the following payment indicators (listed in Addenda
                AA and BB to the proposed rule, which are available via the internet on
                the CMS website): ``A2'', ``G2'', ``P2'', ``R2'' and ``Z2'', as well as
                the service portion of device-intensive procedures identified by ``J8''
                (77 FR 68500). We finalized our proposal that payment for all services
                assigned the payment indicators listed above would be subject to the
                reduction of the national unadjusted payment rates for applicable ASCs
                using the ASCQR Program reduced update conversion factor (77 FR 68500).
                 The conversion factor is not used to calculate the ASC payment
                rates for separately payable services that are assigned status
                indicators other than payment indicators ``A2'', ``G2'', ``J8'',
                ``P2'', ``R2'' and ``Z2.'' These services include separately payable
                drugs and biologicals, pass-through devices that are contractor-priced,
                brachytherapy sources that are paid based on the OPPS payment rates,
                and certain office-based procedures, radiology services and diagnostic
                tests where payment is based on the PFS nonfacility PE RVU-based
                amount, and a few other specific services that receive cost-based
                payment (77 FR 68500). As a result, we also finalized our proposal that
                the ASC payment rates for these services would not be reduced for
                failure to meet the ASCQR Program requirements because the payment
                rates for these services are not calculated using the ASC conversion
                factor and, therefore, not affected by reductions to the annual update
                (77 FR 68500).
                 Office-based surgical procedures (generally those performed more
                than 50 percent of the time in physicians' offices) and separately paid
                radiology services (excluding covered ancillary radiology services
                involving certain nuclear medicine procedures or involving the use of
                contrast agents) are paid at the lesser of the PFS nonfacility PE RVU-
                based amounts or the amount calculated under the standard ASC
                ratesetting methodology. Similarly, in the CY 2015 OPPS/ASC final rule
                with comment period (79 FR 66933 through 66934), we finalized our
                proposal that payment for certain diagnostic test codes within the
                medical range of CPT codes for which separate payment is allowed under
                the OPPS will be at the lower of the PFS nonfacility PE RVU-based (or
                technical component) amount or the rate calculated according to the
                standard ASC ratesetting methodology when provided integral to covered
                ASC surgical procedures. In the CY2013 OPPS/ASC final rule with comment
                period (77 FR 68500), we finalized our proposal that the standard ASC
                ratesetting methodology for this type of comparison would use the ASC
                conversion factor that has been calculated using the full ASC update
                adjusted for productivity. This is necessary so that the resulting ASC
                payment indicator, based on the comparison, assigned to these
                procedures or services is consistent for each HCPCS code, regardless of
                whether payment is based on the full update conversion factor or the
                reduced update conversion factor.
                 For ASCs that receive the reduced ASC payment for failure to meet
                the ASCQR Program requirements, we have noted our belief that it is
                both equitable and appropriate that a reduction in the payment for a
                service should result in proportionately reduced coinsurance liability
                for beneficiaries (77 FR 68500). Therefore, in the CY 2013 OPPS/ASC
                final rule with comment period (77 FR 68500), we finalized our proposal
                that the Medicare beneficiary's national unadjusted coinsurance for a
                service to which a reduced national unadjusted payment rate applies
                will be based on the reduced national unadjusted payment rate.
                 In that final rule with comment period, we finalized our proposal
                that all other applicable adjustments to the ASC national unadjusted
                payment rates would apply in those cases when the annual update is
                reduced for ASCs that fail to meet the requirements of the ASCQR
                Program (77 FR 68500). For example, the following standard adjustments
                would apply to the reduced national unadjusted payment rates: The wage
                index adjustment; the multiple procedure adjustment; the interrupted
                procedure adjustment; and the adjustment for devices furnished with
                full or partial credit or without cost (77 FR 68500). We believe that
                these adjustments continue to be equally applicable to payment for ASCs
                that do not meet the ASCQR Program requirements (77 FR 68500).
                 In the CY 2015 through CY 2021 OPPS/ASC final rules with comment
                period we did not make any other changes to these policies. We proposed
                the continuation of these policies for CY 2022 in the CY 2022 OPPS/ASC
                proposed rule (86 FR 42284 through 42285), did not receive any public
                comments on these policies, and are finalizing the continuation of
                these policies for CY 2022.
                XVII. Radiation Oncology Model
                A. Introduction
                 The purpose of this final rule with comment period is to finalize
                provisions related to the delay of the Radiation Oncology (RO) Model
                and finalize modifications to certain policies proposed in the CY 2022
                OPPS/ASC proposed rule.
                 Section 1115A of the Act authorizes the Center for Medicare and
                Medicaid Innovation (Innovation Center) to test innovative payment and
                service delivery models expected to reduce Medicare, Medicaid, and
                Children's Health Insurance Program (CHIP) expenditures while
                preserving or enhancing the quality of care furnished to the
                beneficiaries of such programs. Under the Medicare fee-for-service
                (FFS) program, Medicare generally makes a separate payment to providers
                and suppliers for each item or service furnished to a beneficiary
                during the course of treatment. Because the amount of payments received
                by a provider or supplier for such items and services varies with the
                volume of items and services furnished to a beneficiary, some providers
                and suppliers may be financially incentivized to inappropriately
                increase the volume of items and services furnished to receive higher
                payments. Medicare FFS may also detract from a provider's or supplier's
                incentive to invest in quality improvement and care coordination
                activities if it means those activities will result in payment for
                fewer items and services. As a result, care may be fragmented,
                unnecessary, or duplicative.
                 The RO Model is designed to test whether prospective episode-based
                payments for radiotherapy (RT) services (also referred to as radiation
                therapy services) will reduce Medicare program expenditures and
                preserve or enhance quality of care for beneficiaries. As radiation
                oncology is highly technical and furnished in well-defined episodes,
                and because patient comorbidities generally do not influence treatment
                delivery decisions, we believe that radiation oncology is well-suited
                for testing a prospective episode payment model. Under the RO Model,
                Medicare will pay participating providers and suppliers a site-neutral,
                episode-based payment for specified professional and
                [[Page 63912]]
                technical RT services furnished during a 90-day episode to Medicare FFS
                beneficiaries diagnosed with certain cancer types. The RO Model will
                include approximately 30 percent of all eligible RO episodes
                nationally. Under the RO Model, the episode payment amounts for
                included cancer types that are treated with RT services included in the
                RO Model will be the same for hospital outpatient departments (HOPDs)
                and freestanding radiation therapy centers.
                 The RO Model will offer RO participants the opportunity to examine
                and better understand their own care processes and patterns with regard
                to RO beneficiaries receiving included RT services for included cancer
                types. We believe that RO participants in the RO Model will have a
                significant opportunity to redesign care and improve the quality of
                care furnished to RO beneficiaries receiving these services. We believe
                the RO Model will further the agency's goal of increasing the extent to
                which CMS initiatives pay for value and outcomes, rather than for
                volume of services alone, by promoting the alignment of financial and
                other incentives for health care providers caring for beneficiaries
                receiving treatment for cancer. Payments that are made to health care
                providers for assuming financial accountability for the cost and
                quality of care create incentives for the implementation of care
                redesign among model participants and other providers and suppliers.
                B. Background
                 CMS is committed to promoting higher quality of care and improving
                outcomes for Medicare beneficiaries while reducing costs. Accordingly,
                as part of that effort, we have in recent years undertaken a number of
                initiatives to improve the care of cancer patients, most notably with
                our Oncology Care Model. We believe that a model in radiation oncology
                will further these efforts to improve cancer care for Medicare
                beneficiaries and reduce Medicare expenditures. RT is a common
                treatment, received by nearly two thirds of all patients undergoing
                cancer treatment, and it is typically furnished by a radiation
                oncologist. As described in the 2017 Report to Congress: ``Episodic
                Alternative Payment Model for Radiation Therapy Services'', and also in
                the ``Specialty Care Models to Improve Quality of Care and Reduce
                Expenditures'' (84 FR 34490) (hereinafter referred to as the
                ``Specialty Care Models proposed rule''), because there are differences
                in the underlying methodologies used for rate setting in the OPPS and
                Physician Fee Schedule (PFS), there often are differences in the
                payment rate for the same RT service depending on whether the service
                is furnished in a freestanding radiation therapy center paid under the
                PFS, or an HOPD paid under the OPPS. This is called the site-of-service
                payment differential, and stakeholders from freestanding radiation
                therapy centers have asserted that such differentials between HOPDs and
                freestanding radiation therapy centers are unwarranted because the
                actual treatment and care received by patients for a given modality is
                the same in each setting. For these reasons, the RO Model is designed
                to test whether making site-neutral, prospective, episode-based
                payments to HOPDs, physician group practices (PGPs), and freestanding
                radiation therapy centers for RT episodes of care preserves or enhances
                the quality of care furnished to Medicare beneficiaries while reducing
                or maintaining Medicare program spending.
                 On September 29, 2020, we published in the Federal Register the
                final rule titled ``Specialty Care Models to Improve Quality of Care
                and Reduce Expenditures'' (85 FR 61114) (hereinafter referred to as the
                ``Specialty Care Models final rule'') and codified policies at 42 CFR
                part 512. Due to the state of the public health emergency (PHE) for the
                Coronavirus disease 2019 (COVID-19) pandemic in Fall 2020, CMS revised
                the RO Model's model performance period to begin on July 1, 2021, and
                to end December 31, 2025, in the CY 2021 Hospital Outpatient
                Prospective Payment (OPPS) and Ambulatory Surgical Center (ASC) Payment
                Systems and Quality Reporting Programs final rule with comment period
                (85 FR 85866) (hereinafter referred to as ``CY 2021 OPPS/ASC final
                rule''), giving RO participants an additional 6 months to prepare for
                the RO Model. As we stated at 85 FR 86261, the delay was intended to
                give RO participants additional time to learn the RO billing
                requirements and train staff on new procedures. It was also intended to
                give more time to RO participants to understand their participant-
                specific case mix and historical experience adjustments and the payment
                they expect to receive under the RO Model. It was not CMS' intention to
                delay the RO Model until the COVID-19 PHE ended. In the CY 2021 OPPS/
                ASC final rule, we changed the duration of the model performance period
                from 5 years to 4.5 years, changed the timelines for the submission of
                clinical data elements (CDEs), quality measures and Certified
                Electronic Health Record Technology (CEHRT) requirements, and modified
                the eligibility dates of the RO Model as an Advanced Alternative
                Payment Model (APM) and Merit-based Incentive Payment System (MIPS) APM
                (85 FR 85866).
                 Section 133 of the Consolidated Appropriations Act (CAA), 2021
                (Pub. L. 116-260) (hereinafter referred to as ``CAA, 2021''), enacted
                on December 27, 2020, includes a provision that prohibits
                implementation of the RO Model before January 1, 2022. This
                Congressional action supersedes the RO Model delayed model performance
                period established in the CY 2021 OPPS/ASC final rule with comment
                period. To respond to the congressionally mandate delay, we proposed
                provisions related to the additional delayed implementation of the RO
                Model due to the CAA, 2021, including a proposed model performance
                period starting on January 1, 2022, with a 5-year model performance
                period, as well as modifications to certain RO Model policies not
                related to the delay, in the CY 2022 OPPS/ASC proposed rule.
                 We proposed to modify Sec. Sec. 512.205, 512.210, 512.217,
                512.220, 512.230, 512.240, 512.245, 512.250, 512.255, 512.275, 512.280,
                and 512.285 and add Sec. Sec. 512.292 and 512.294. We received
                approximately 554 timely pieces of correspondence in response to our
                solicitation of public comments on the proposed rule from 143
                commenters. We are finalizing the majority of the proposals without
                modification, and there are two proposals that we are finalizing with
                modification. These include the definitions for RO Track One and RO
                Track Two, as well as the extreme and uncontrollable circumstances
                (EUC) policy. There were a few sections where we asked for comments but
                noted we would not respond to those comments in the rule. There were
                also points of clarification that we did not ask for comments on. We
                will not be responding to comments in either of those cases in this
                rule. We also note that some of the public comments were outside of the
                scope of the proposed rule. These out-of-scope public comments are not
                addressed in this final rule with comment period. Many were previously
                addressed in the Specialty Care Models final rule (85 FR 61114) and/or
                a set of Frequently Asked Questions on the RO Model website. Summaries
                of the public comments that are within the scope of the proposed rule
                and our responses to those public comments are set forth in the various
                sections of this final rule with comment period under the appropriate
                heading.
                [[Page 63913]]
                C. RO Model Regulations
                1. Model Performance Period
                 In the Specialty Care Models final rule, we specified at Sec.
                512.205 that the model performance period would last five performance
                years, beginning January 1, 2021, and ending December 31, 2025 (85 FR
                61367). We finalized that each PY is the 12-month period beginning on
                January 1 and ending on December 31 of each CY during the model
                performance period, and no new RO episodes may begin after October 3,
                2025, in order for all RO episodes to end by December 31, 2025.
                 In the CY 2021 OPPS/ASC final rule, we amended the definition of
                model performance period, specifying that it would begin July 1, 2021
                and end on December 31, 2025, and we amended the definition of PY to
                mean the 6-month period beginning on July 1, 2021 and ending on
                December 31, 2021, and the 12-month period beginning on January 1 and
                ending on December 31 of each subsequent year (2022 through 2025)
                during the model performance period (85 FR 86261).
                 The CAA, 2021, enacted on December 27, 2020, includes a provision
                that prohibits implementation of the RO Model prior to January 1, 2022.
                In the CY 2022 OPPS/ASC proposed rule, CMS proposed to begin the RO
                Model as soon as we are permitted to do so by law, on January 1, 2022,
                as we continue to believe that a prospective episode payment model is
                needed and well suited to be tested in the radiation oncology space.
                CMS also proposed to modify the model performance period to begin on
                January 1, 2022, and end December 31, 2026, as described in the
                proposed definitions in section XVIII.C.2 of the CY 2022 OPPS/ASC
                proposed rule (86 FR 42290). If finalized as proposed, no new RO
                episodes would begin after October 3, 2026, in order for all RO
                episodes to end by December 31, 2026. We also proposed that each PY
                would be a 12-month period beginning on January 1 and ending on
                December 31 of each year during the model performance period, unless
                the initial model performance period starts mid-year, in which case PY1
                would begin on that date and end on December 31 of that year (86 FR
                42290).
                 We solicited public comments on our proposal in section XVIII.C.1
                of the CY 2022 OPPS/ASC proposed rule (86 FR 42290).
                 The following is a summary of the public comments received on this
                proposal and our responses:
                 Comment: A few commenters supported the model performance period
                beginning on January 1, 2022. One of these commenters stated that the
                extra 12-month delay from the original implementation date of January
                1, 2021 has provided sufficient time for RO Model participants to
                prepare and be able to meet the requirements for participation in the
                RO Model. Another commenter noted that the agency has been working on
                proposals for the RO Model for a number of years, stakeholders have
                provided comprehensive feedback, and they urged CMS to proceed with
                implementation on January 1, 2022. A commenter supported CMS' proposal
                to align each 12-month performance year with the calendar year,
                starting in 2022, as that will simplify the RO Model for RO
                participants.
                 Response: We thank these commenters for their support.
                 Comment: Many commenters commented that the model performance
                period should be further delayed. Of the commenters who suggested an
                alternative model performance period for the RO Model, a few commenters
                recommended delaying until mid-2022, some commenters recommended
                delaying until 2023, a couple commenters recommended delaying until the
                COVID-19 PHE has ended, and a few commenters suggested delaying until
                the calendar year after the PHE has ended. Many commenters noted that
                the extension of the COVID-19 PHE and the financial and operational
                challenges brought on by the COVID-19 PHE warrant an additional delay.
                 Response: We thank commenters for their comments on the model
                performance period for the RO Model. CMS proposed the earliest model
                performance period permitted under the CAA, 2021 because we believe in
                prioritizing a prospective episode payment model in the radiation
                oncology space in order to provide payment stability and promote high
                quality care for Medicare beneficiaries. Further, we do not find that
                it is appropriate to further delay the model performance period due to
                the COVID-19 PHE because it will be nearly 2 years into the COVID-19
                PHE by January 1, 2022, when the RO Model is slated to begin. RO
                participants have been aware that they have been selected for
                participation in the RO Model since September 2020. Therefore, we
                believe that RO participants have had sufficient time to prepare for
                the RO Model and to adjust their workflows in light of the COVID-19
                PHE. We also believe that delaying the model performance period further
                would penalize those RO participants who have been preparing to
                implement the RO Model, would further postpone RO participants' ability
                to participate in an Advanced APM and MIPS APM, and has the potential
                to generate confusion.
                 To address concerns related to the start of the model and the
                effects of the COVID-19 PHE, we are finalizing in section XVII.C.10. of
                this final rule with comment period an Extreme and Uncontrollable
                Circumstances (EUC) policy, codified at Sec. 512.294, that would allow
                CMS flexibility in responding to national, regional, or local
                circumstances that adversely impact RO participants' ability to deliver
                care in accordance with the RO Model's requirements, including the
                COVID-19 PHE. As we proposed in section XVIII.C.10 of the CY 2022 OPPS/
                ASC proposed rule, in a national, regional, or local event, we would
                apply EUC policy only if the magnitude of the event calls for the use
                of special authority to help providers respond to the emergency and
                continue providing care. We stated that we would not use a bright-line
                test to assess all types of public health emergencies, disasters, or
                other extraordinary circumstances; application of the policy would be
                tailored to the specific circumstance and to the affected geographic
                areas. CMS will continue to monitor the impact of the COVID-19 PHE on
                RO participants. As proposed, if CMS invokes any of the EUC policies,
                related to the COVID-19 PHE or otherwise, we will communicate this
                decision via the RO Model website and written correspondence to RO
                participants.
                 Comment: Many commenters stated that they would not have sufficient
                time to prepare for the implementation of the RO Model, as there will
                be approximately two months between the publication of the CY 2021
                OPPS/ASC final rule and the beginning of the proposed model performance
                period. A commenter noted that January 1, 2022 is fewer than 4 months
                away, and physician practices and their medical center administrations
                should have at least 12 months of notification of the final model
                requirements and definitions to prepare for their clinical
                implementation and related billing changes.
                 Response: We will have already delayed the model performance period
                twice: From January 1, 2021 to July 1, 2021, in the CY 2021 OPPS/ASC
                final rule (85 FR 85866); and from July 1, 2021 to January 1, 2022, in
                this final rule. CMS posted the RO Model's participating ZIP Code list
                in September of 2020 and noted in a subsequent rule (85 FR 85866) that
                the CBSAs selected for participation in the RO Model would not change
                due to the revised model performance periods. We also reiterated
                [[Page 63914]]
                our intent that the CBSAs selected for participation in the RO Model
                would not change due to the revised model performance period in the CY
                2022 OPPS/ASC proposed rule (86 FR 42290). We believe that RO
                participants have had sufficient time to prepare for the implementation
                of the RO Model, as they have known that they would be required to be
                in the RO Model since the publication of the Specialty Care Model final
                rule in September of 2020 (85 FR 61149 through 61151). We also note
                that none of the modifications to the RO Model finalized in this final
                rule will change how the RO Model is operationalized. RO participants
                have therefore had over a year to prepare for the implementation of the
                RO Model, which we believe is sufficient.
                 Comment: A commenter noted that it may be challenging for some
                hospitals to prepare for a model performance period beginning January
                1, 2022, particularly given the impact of the COVID-19 PHE, and
                encouraged CMS to be mindful of this strain and to monitor its impacts
                on model participants.
                 Response: We appreciate this commenter's concern regarding the
                COVID-19 PHE. We will have already delayed the model performance period
                twice, from January 1, 2021 to July 1, 2021 due to the COVID-19 PHE in
                the CY 2021 OPPS/ASC final rule (85 FR 85866), and subsequently to
                January 1, 2022 in this final rule, as required by the CAA, 2021. We
                will continue to monitor the RO Model's impacts on RO participants, as
                finalized in 85 FR 61257 through 61258.
                 Comment: A few commenters requested a delay to the model
                performance period to allow more time for radiation oncology Electronic
                Health Records (EHR) vendors to comply with the RO Model requirements
                and to test the functionality of these new software systems. These
                commenters stated that nearly all radiation oncology practices have
                separate management systems in addition to their practice's EHR; there
                are only two vendors nationwide that provide these EHR systems for
                radiation oncology; a new software build to capture the relevant fields
                can take between 12 and 18 months; and there are a limited number of
                vendor IT support staff whose services are necessary to facilitate
                these upgrades.
                 Response: As we discussed in the Specialty Care Models final rule
                (85 FR 61136), we agree with commenters' concerns that EHR vendors will
                need time to design, develop, build, test, validate, and implement the
                software to allow RO participants to fulfill the requirements of the RO
                Model in a streamlined manner through their EHR platforms. We
                understand that successful implementation of the RO Model may require
                many RO participants as well as software vendors to change EHR
                configurations, organizational policies, and end user workflows.
                However, we believe that we have provided sufficient time, since the
                publication of the Specialty Care Models final rule in September 2020,
                for RO participants and their EHR vendors to implement the software
                that RO participants may need to adhere to the RO Model requirements.
                We also note that although an RO participant may document these
                requirements using their EHR system if they wish, no changes to EHR
                systems are required for tracking compliance with RO Model
                requirements.
                 Comment: Many commenters requested delaying the model performance
                period to have more time to meet quality and CDE requirements. Many
                commenters stated that RO Model participants are only now learning
                additional details on quality and CDE requirements, which may require
                significant practice changes in order to ensure compliance. A couple
                commenters also asked that if the model performance period were to
                begin January 1, 2022, we delay some of the requirements, including
                quality measure and CDE reporting, and implement them after PY1.
                 Response: We thank commenters for their comments around delaying
                some of the requirements of the RO Model. RO participants were notified
                of their inclusion in the RO Model upon publication of the Specialty
                Care Models final rule in September 2020. RO participants have had more
                than a year to prepare for their participation in the RO Model, which
                we believe is sufficient.
                 In July 2021, CMS released the Quality Measure and Clinical Data
                Elements Guide on the RO Model website, along with the associated CDE
                templates. We have provided education and outreach support to encourage
                the efficient collection and submission of this data, including a
                webinar related to Model requirements in September 2021 to help
                participants prepare for the various requirements, and we have
                additional webinars planned specifically on the Quality Payment Program
                (QPP) and quality measures and CDEs. We believe we have provided RO
                participants with this information in sufficient time for them to
                prepare for the quality and reporting requirements.
                 Comment: Many commenters requested a delay to the model performance
                period in order to have more time to implement the billing processes
                required for the Model, which may require significant practice changes.
                Many commenters stated that RO Model participants are only now learning
                additional details on the billing requirements under the RO Model. A
                couple commenters recommended postponing the model performance period
                because providers need additional clarification around appropriate
                billing, which they believe CMS has not yet provided. One of these
                commenters maintained that the education seminars and tools CMS has
                provided to date were insufficient to prepare RO participants to
                execute the billing process under the RO Model.
                 Response: We believe that we have created a billing process that
                will be easily implemented within current systems because it is based
                on how FFS claims are currently submitted, which all RO participants
                should have experience submitting. We provided information on billing
                and coding changes under the RO Model in the Specialty Care Models
                final rule (85 FR 61205 through 61211). The RO Model-specific HCPCS
                codes were made public July 19, 2021. And the three modifiers and one
                condition code used for billing previously existed in the current PFS
                and OPPS claims systems and have addressed related questions in FAQs.
                We also hosted a RO Model Billing webinar on August 24, 2021, of which
                the slides and recording can be found on the RO Model website, https://innovation.cms.gov/innovation-models/radiation-oncology-model, and we
                hosted RO Model Billing Office Hours on August 31, 2021. Finally, we
                would encourage RO participants to access a billing guide document that
                restates the information provided in the aforementioned webinar
                available on the RO Model website in mid-November. We believe these
                resources provide sufficient guidance on implementing the billing
                process to RO participants, as we endeavored to explain the process in
                detail and answer RO participants' billing questions through these
                resources. We will continue to answer any billing questions RO
                participants may have, which can be submitted to
                [email protected]. Further, we believe that RO participants
                have had adequate time to operationalize the Model's billing
                requirements, which are based on the current FFS claims systems, as RO
                participants have known they would be required to participate in the RO
                Model since the publication of the Specialty Care Models final rule in
                September of 2020 (85 FR 61149 through 61151).
                 Comment: A couple commenters offered an alternative proposal that
                the
                [[Page 63915]]
                RO Model should establish an implementation year, or ``PY0'', before
                the actual start of the model performance period to allow CMS to
                address complexities in the billing design, and allow participants to
                change workflows to align with the RO Model, utilize performance data
                from CMS to identify areas for transformation, receive additional
                education from CMS on RO Model parameters and meeting objectives, and
                allow providers and vendors additional time to operationalize data
                collection and reporting requirements.
                 Response: We appreciate the commenters' suggestions but, as
                discussed above, we will have already revised the model performance
                period twice. RO participants have known they would be required to
                participate in the RO Model since the publication of the Specialty Care
                Models final rule in September of 2020 (85 FR 61149 through 61151), so
                we believe that RO participants have had adequate time to prepare for
                the Model. We believe that a PY0 is unnecessary because RT providers
                and RT suppliers have had more than a year to prepare for the RO Model
                and its requirements and a PY0 would only further delay the model.
                 After considering public comments, we are finalizing as proposed
                that the model performance period will begin January 1, 2022 and end
                December 31, 2026. We are also finalizing as proposed that no new RO
                episodes may begin after October 3, 2026, in order for all RO episodes
                to end by December 31, 2026. We are also finalizing as proposed that
                each PY will be a 12-month period beginning on January 1 and ending on
                December 31 of each year during the model performance period, unless
                the initial model performance period starts mid-year, in which case PY1
                will begin on that date and end on December 31 of that year.
                 We are also finalizing our proposed definition that the model
                performance period means the five PYs during which RO episodes must
                initiate and terminate. The model performance period begins on January
                1, 2022 and ends on December 31, 2026, unless the RO Model is
                prohibited by law from starting on January 1, 2022, in which case the
                model performance period begins on the earliest date permitted by law
                that is January 1, April 1, or July 1.
                 Finally, we received no comments on our proposed definition for PY
                (performance year) to be each 12-month period beginning on January 1
                and ending on December 31 during the model performance period, unless
                the model performance period begins on a date other than January 1, in
                which case PY1 will begin on that date and end on December 31 of that
                year. We are finalizing as proposed to codify this definition at Sec.
                512.205.
                2. Definitions
                 Definitions for the RO Model are codified at Sec. 512.205. We
                proposed to modify some of these definitions and add several new terms
                and definitions as described in section XVIII. of the CY 2022 OPPS/ACS
                proposed rule.
                 We proposed to modify the definition of the ``model performance
                period'' to mean the five PYs during which RO episodes must initiate
                and terminate. The model performance period would begin on January 1,
                2022 and end on December 31, 2026, unless the RO Model is prohibited by
                law from starting on January 1, 2022, in which case the model
                performance period would begin on the earliest date permitted by law
                that is January 1, April 1, or July 1.
                 We proposed to modify the definition of ``PY'' (performance year)
                to mean each 12-month period beginning on January 1 and ending on
                December 31 during the model performance period, unless the model
                performance period begins on a date other than January 1, in which
                case, the first performance year (PY1) would begin on that date and end
                on December 31 of the same year.
                 We proposed to modify the definition of ``stop-loss reconciliation
                amount'' to mean the amount set forth in Sec. 512.285(f) owed by CMS
                for the loss incurred under the Model to RO participants that have
                fewer than 60 episodes during the baseline period and were furnishing
                included RT services any time before the start of the model performance
                period in the CBSAs selected for participation.
                 We proposed to add a definition for ``EUC'' (extreme and
                uncontrollable circumstances) to correspond with the proposed EUC
                policy described in section XVIII.C.10 of the CY 2022 OPPS/ACS proposed
                rule. To describe how changes in CMS Certification Numbers (CCNs) and
                Tax Identification Numbers (TINs) are treated under the RO Model, which
                was described in section XVIII.C.5.g. of the CY 2022 OPPS/ACS proposed
                rule, we also proposed to add definitions for ``legacy CCN'' and
                ``legacy TIN''. And, to clarify how RO Model requirements align with
                the Quality Payment Program (QPP), we proposed to add definitions for
                ``Track One'' and ``Track Two'' as described in section XVIII.C.7. of
                the CY 2022 OPPS/ACS proposed rule.
                 We proposed to add a definition for ``baseline period'', specifying
                which episodes (dependent on the model performance period) are used in
                the pricing methodology. We proposed to define ``baseline period'' to
                mean the three calendar year (CY) period that begins on January 1 no
                fewer than 5 years but no more than 6 years prior to the start of the
                model performance period during which episodes must initiate in order
                to be used in the calculation of the national base rates, participant-
                specific professional and technical historical experience adjustments
                for the model performance period, and the participant-specific
                professional and technical case mix adjustments for PY1. The baseline
                period would be January 1, 2017 through December 31, 2019, unless the
                RO Model is prohibited by law from starting in CY 2022, in which case
                the baseline period would be adjusted according to the new model
                performance period (that is, if the model performance period starts any
                time in CY 2023, then the baseline period would be CY 2018 through CY
                2020).
                 In the CY 2022 OPPS/ASC proposed rule, we solicited public comments
                on our proposed definitions. To the extent we have received comments
                relating to the definitions that we had proposed, we have responded to
                those comments in context throughout section XVII.C. of this final rule
                with comment period.
                3. RO Model Participant Exclusions
                 At Sec. 512.210(b), we exclude from the RO Model any PGP,
                freestanding radiation therapy center, or HOPD that furnishes RT only
                in Maryland; furnishes RT only in Vermont; furnishes RT only in United
                States (U.S.) Territories; is classified as an ambulatory surgical
                center (ASC), critical access hospital (CAH), or Prospective Payment
                System (PPS)-exempt cancer hospital; or participates in or is
                identified by CMS as eligible to participate in the Pennsylvania Rural
                Health Model (PARHM).
                a. Pennsylvania Rural Health Model (PARHM)
                 We proposed in the CY 2022 OPPS/ASC proposed rule (86 FR 42290
                through 42291) to modify Sec. 512.210(b)(5) to exclude from the RO
                Model only the HOPDs that are participating in PARHM, rather than
                excluding both HOPDs that are participating in PARHM and those that
                have been identified by CMS as eligible to participate in PARHM. As we
                stated in the proposed rule, we continue to believe that HOPDs that are
                participating in PARHM should be excluded from the RO Model because
                these hospitals receive global budgets, and these global budgets would
                include payments for RT services and as such
                [[Page 63916]]
                would overlap with the RO Model payment. In the Specialty Care Models
                final rule, we also excluded HOPDs that are eligible to participate in
                the PARHM from the RO Model on the grounds that additional hospitals
                and CAHs may join PARHM in the future or may be included in the
                evaluation comparison group for that model (see 85 FR 61144).
                 However, as we stated in the CY 2022 OPPS/ACS proposed rule, after
                further consideration, we believe that including in the RO Model those
                HOPDs that have been identified as eligible to participate in PARHM,
                but that are not actually participating in PARHM because they are not
                currently a party to a PARHM participation agreement with CMS, would
                not affect the PARHM evaluation. First, such HOPDs do not receive
                global budgets under PARHM, so including these hospitals in the RO
                Model would not result in an overlap between PARHM payments and RO
                Model payments. Second, while we initially explored the potential for
                HOPDs that are eligible to participate in PARHM being included in that
                model's evaluation comparison group, we now expect that the PARHM
                comparison group will consist only of hospitals located outside of
                Pennsylvania because of selection constraints. Thus, we stated in the
                CY 2022 OPPS/ACS proposed rule that it is now our expectation that
                HOPDs that have been identified as eligible to participate in PARHM--
                all of which are located within the Commonwealth of Pennsylvania--would
                not be selected for the comparison group for the PARHM evaluation.
                Accordingly, we do not expect that including in the RO Model those
                HOPDs that have been identified as eligible to participate, but not
                actually participating in PARHM would affect the ability to detect the
                impact of PARHM on the cost and quality of care.
                 In addition, while it remains the case that hospitals and CAHs may
                join PARHM on an ongoing basis, hospitals and CAHs generally join PARHM
                at the start of a given CY. As described in the CY 2022 OPPS/ASC
                proposed rule, because the RO Model's PYs would align with CYs, we
                concluded in the CY 2022 OPPS/ACS proposed rule that it would be
                possible to update the RO Model exclusions for a given PY if an HOPD
                leaves or joins PARHM. For instance, we stated in the CY 2022 OPPS/ACS
                proposed rule that if a rural hospital identified as eligible to
                participate in PARHM later initiates its participation in PARHM by
                signing a PARHM participation agreement with CMS, then the HOPDs
                participating in PARHM as part of that participating rural hospital
                would be excluded from participation in the RO Model as of the start of
                the next CY quarter that follows the date that the HOPD begins
                participating in PARHM. (As we discuss further in response to comments
                in this section, we are clarifying in this final rule that the HOPDs
                participating in PARHM as part of that participating rural hospital
                would be excluded from participation in the RO Model as of the start of
                the CY quarter that includes the HOPD's start date in PARHM.)
                Similarly, we stated that if an HOPD no longer participates in PARHM as
                part of a participating rural hospital, and the HOPD otherwise meets
                the definition of an RO participant, then the HOPD would be required to
                participate in the RO Model as of the start of the next CY quarter.
                 We stated in the CY 2022 OPPS/ACS proposed rule that we would
                continue to use the list on the PARHM website at https://innovation.cms.gov/initiatives/pa-rural-health-model/, which is updated
                quarterly, to identify the hospitals that are participating in PARHM,
                and therefore identify the specific HOPDs excluded from participation
                in the RO Model. We therefore proposed that HOPDs that are identified
                as eligible to participate in PARHM, but that are not current PARHM
                participants, should be included in the RO Model if they are located in
                a CBSA selected for participation in the RO Model and that this
                exclusion of HOPDs associated with hospitals that participate in PARHM
                from the RO Model would apply only during the period of such
                participation.
                 We solicited public comments on our proposal to include HOPDs
                eligible to participate in PARHM, but that are not current PARHM
                participants in the RO Model (86 FR 42291).
                 The following is a summary of the public comments received on this
                proposal and our responses:
                 Comment: A few commenters supported our proposal to exclude from
                the RO Model only the HOPDs that are participating in PARHM, rather
                than excluding both HOPDs that are participating in PARHM and those
                that have been identified by CMS as eligible to participate in PARHM.
                 Response: We thank commenters for their support.
                 Comment: Some commenters opposed the inclusion in the RO Model of
                only HOPDs participating in PARHM, stating that they believe that
                participation in the RO Model should be voluntary, and thus no new PGPs
                or HOPDs, including HOPDs identified as eligible to participate in
                PARHM, should be required to participate in the RO Model.
                 Response: We did not solicit comments on mandatory participation
                under the RO Model in the CY 2022 OPPS/ASC proposed rule. We did,
                however, respond to comments requesting voluntary participation in the
                RO Model in the Specialty Care Models final rule. As discussed in the
                Specialty Care Models final rule, mandatory participation avoids the
                selection bias inherent to any model in which providers and suppliers
                may choose whether or not to participate (85 FR 61141). Such a design
                ensures sufficient proportional participation of both HOPDs and
                freestanding radiation therapy centers, which is necessary to obtain a
                diverse, representative sample of RT providers and RT suppliers that
                will allow a statistically robust test of the prospective episode
                payments made under the RO Model (85 FR 61141). Mandatory participation
                also facilitates a comparable evaluation comparison group (85 FR
                61138). We therefore maintain, as we did in the Specialty Care Models
                final rule, that the mandatory design for the RO Model is necessary to
                enable CMS to detect change reliably in a generalizable sample of RT
                providers and RT suppliers to support a potential model expansion (85
                FR 61138).
                 In terms of our proposal to include HOPDs that have been identified
                as eligible to participate in PARHM, but that are not actually
                participating in PARHM, in the RO Model, as we noted in the CY 2022
                OPPS/ASC proposed rule, we no longer believe that including these
                hospitals in the RO Model will impact the PARHM evaluation because such
                HOPDs do not receive global budgets under PARHM, so including these
                hospitals in the RO Model would not result in an overlap between PARHM
                payments and RO Model payments. In addition, as described above, we now
                expect that the PARHM evaluation's comparison group will consist only
                of hospitals located outside of Pennsylvania. Thus, it is now our
                expectation that HOPDs that have been identified as eligible to
                participate in PARHM--all of which are located within the Commonwealth
                of Pennsylvania--would not be selected for the comparison group for the
                PARHM evaluation. Accordingly, we do not expect that including in the
                RO Model those HOPDs that have been identified as eligible to
                participate, but not actually participating in, PARHM would affect the
                ability to detect the impact of PARHM on the cost and quality of care.
                 In addition, as we stated in the proposed rule, while it remains
                the case that hospitals and CAHs may join
                [[Page 63917]]
                PARHM on an ongoing basis, hospitals and CAHs generally join PARHM at
                the start of a given CY. Because the RO Model's PYs would align with
                CYs, we stated in the CY 2022 OPPS/ACS proposed rule that we concluded
                it would be possible to update the RO Model exclusions for a given PY
                if an HOPD leaves or joins PARHM. In the CY 2022 OPPS/ACS proposed
                rule, we provided an example of a rural hospital identified as eligible
                to participate in PARHM that later initiates its participation in PARHM
                by signing a PARHM participation agreement with CMS (86 FR 42291). In
                the CY 2022 OPPS/ACS proposed rule, we inadvertently stated that the
                HOPDs participating in PARHM as part of that participating rural
                hospital would be excluded from participation in the RO Model as of the
                start of the next CY quarter that follows the date that the HOPD begins
                participating in PARHM. This statement was inaccurate. Rather,
                consistent with the exclusion from the RO Model of hospitals
                participating in PARHM, because these hospitals receive global budgets
                that would include payments for RT services and as such would overlap
                with the RO Model, we are clarifying that the HOPDs participating in
                PARHM as part of that participating rural hospital would be excluded
                from participation in the RO Model as of the start of the CY quarter
                that includes the HOPD's start date in PARHM. Specifically, to avoid
                overlapping participation between the RO Model and PARHM, in the rare
                circumstance that an HOPD begins its participation in PARHM on a date
                other than the first day of a CY quarter, that HOPD would be excluded
                from participation in the RO Model as of the start of the CY quarter
                when the HOPD joins PARHM--rather than as of the start of the following
                CY quarter. We similarly stated that, if an HOPD no longer participates
                in PARHM as part of a participating rural hospital, and the HOPD
                otherwise meets the definition of an RO participant, then the HOPD
                would be required to participate in the RO Model as of the start of the
                next CY quarter; we further clarify that, to avoid any overlap between
                the global budget payments and the RO Model payment, the HOPD would be
                required to participate in the RO Model as of the start of the CY
                quarter following the former PARHM participant's final global budget
                payment.
                 After considering public comments, we are finalizing the proposal
                to exclude only those HOPDs that are participating in the PARHM from
                the RO Model as opposed to all HOPDs that are eligible to participate
                in the PARHM. We are codifying this policy at our regulation at Sec.
                512.210(b)(5). As stated in the proposed rule (86 FR 42291), we will
                continue to use the list on the PARHM website at https://innovation.cms.gov/initiatives/pa-ruralhealth-model/, which is updated
                quarterly, to identify the hospitals that are participating in PARHM,
                and therefore identify the specific HOPDs excluded from participation
                in the RO Model.
                 We are further finalizing that HOPDs that are identified as
                eligible to participate in PARHM, but that are not current PARHM
                participants, will included in the RO Model if they are located in a
                CBSA selected for participation in the RO Model and that this exclusion
                of HOPDs associated with hospitals that participate in PARHM from the
                RO Model would apply only during the period of such participation. As
                previously described, if an HOPD begins its participation in PARHM on a
                date other than the first day of a CY quarter, that HOPD would be
                excluded from participation in the RO Model as of the start of the CY
                quarter when the HOPD joins PARHM, not of the start of the following CY
                quarter.
                b. Community Health Access and Rural Transformation (CHART)
                 We also proposed to modify the exclusions from the RO Model at
                Sec. 512.210(b)(6) so that the HOPD of any participating hospital in
                the Community Transformation Track of the Community Health Access and
                Rural Transformation (CHART) Model would be excluded from the RO Model.
                Specifically, for any CHART Community Transformation Track performance
                period during which a hospital is participating in the CHART Model, the
                HOPD would be excluded from the RO Model. We proposed to exclude these
                ``CHART HOPDs'' because these hospitals will receive prospective
                capitated payments, including HOPD-based RT services, that are not
                retrospectively reconciled based on experience during the CHART
                performance year, rather future payments are adjusted based on changes
                in population and proportion of services that participating HOPDs
                provide. We proposed to exclude CHART HOPDs to avoid double payment for
                the same services. The participating hospitals will be listed and
                updated on the CHART Model website at https://innovation.cms.gov/innovation-models/chart-model. For the CHART ACO Transformation Track,
                we proposed that we would follow the same policy for overlap between
                the RO Model and the Medicare Shared Savings Program ACOs, which was
                finalized at 85 FR 61260.
                 We solicited public comments on our proposal in section
                XVIII.C.3.B. of the CY 2022 OPPP/ASC proposed rule (86 FR 42291).
                 The following is a summary of the public comments received on this
                proposal and our responses:
                 Comment: We received some comments about the exclusion of HOPDs of
                any participating hospital in the Community Transformation Track of the
                CHART Model from the RO Model. All of these commenters supported this
                exclusion. A commenter also supported that for the CHART ACO
                Transformation Track we will follow the same policy for overlap between
                the RO Model and the Medicare Shared Savings Program ACOs, which is
                described at 85 FR 61260. A couple of commenters commented that
                exclusion from the RO Model of an HOPD of any participating hospital in
                the Community Transformation track of the CHART Model will have minimal
                impact, as 15 lead organizations will be selected for participation in
                the Community track CHART out of all specialties and it is unlikely
                that a radiation oncology practice would be selected to participate in
                CHART.
                 Response: We thank commenters for their support. We agree that the
                overlap between RO Model participants and participating hospitals in
                the Community Track of the CHART Model will be minimal. However, we
                need to account for any overlap that could potentially exist between
                the RO Model and CHART. We believe the best way to account for this
                overlap is to exclude HOPDs participating in the CHART Community
                Transformation track and for the CHART ACO Transformation track to
                follow the same policy that applies for overlap between the RO Model
                and the Medicare Shared Savings Program ACOs.
                 After considering public comments, we are finalizing as proposed to
                exclude HOPDs participating in the CHART Community Transformation track
                from the RO Model. We are codifying this policy at Sec. 512.210(b)(6).
                We are clarifying in this final rule that HOPDs furnishing included RT
                services selected for participation in the CHART Community
                Transformation track will be RO participants in PY1 of the RO Model and
                are only excluded once the CHART Community Transformation track model
                performance period begins.
                 And, for the CHART ACO Transformation track, we are finalizing as
                proposed that we will follow the same policy for overlap as exists for
                overlap between the RO Model and the
                [[Page 63918]]
                Medicare Shared Savings Program ACOs.
                c. Low Volume Opt-Out
                 We codified under Sec. 512.210(c) that a PGP, freestanding
                radiation therapy center, or HOPD, which would otherwise be required to
                participate in the RO Model may choose to opt out of the RO Model for a
                given PY if it has fewer than 20 episodes of RT services across all
                CBSAs selected for participation in the most recent year with claims
                data available prior to the applicable PY. In the CY 2021 OPPS/ASC
                final rule (85 FR 86261), we amended this policy at Sec. 512.210(c) to
                clarify the type of episodes used to determine eligibility for the low
                volume opt-out in each performance year, where episodes, as defined at
                Sec. 512.205, are used to determine eligibility in PY1 and PY2 and RO
                episodes, as defined at Sec. 512.205 and described at Sec.
                512.245(a), are used to determine eligibility in PY4 and PY5, and both
                episodes and RO episodes are used to determine eligibility in PY3.
                Specifically, for PY3, eligibility for the low volume opt-out is
                determined by counting episodes from January 1, 2021 through June 30,
                2021 and RO episodes from July 1, 2021 through December 31, 2021. We
                codified at Sec. 512.210(c)(6) that at least 30 days prior to the
                start of each PY, CMS will notify RO participants eligible for the low
                volume opt-out for the upcoming PY. If the eligible RO participant
                wishes to opt out, it must attest that it intends to do so prior to the
                start of the upcoming PY.
                 Because section 133 of the CAA, 2021 prohibits implementation of
                the RO Model prior to January 1, 2022, we proposed to modify the dates
                of the data used to determine eligibility for the low volume opt-out in
                the CY 2022 OPPS/ASC proposed rule to align with the requirements of
                the CAA, 2021. We proposed that a PGP, freestanding radiation therapy
                center, or HOPD, which would otherwise be required to participate in
                the RO Model may choose to opt out of the RO Model for a given PY if it
                has fewer than 20 episodes or RO episodes, as applicable, depending on
                the PY, across all CBSAs selected for participation in the most recent
                year with claims data available, which is 2 years prior to the
                applicable PY. We further proposed that episodes furnished prior to the
                start of the model performance period in CBSAs selected for
                participation will be used to determine the eligibility of the low
                volume opt-out for PY1 and PY2. If PY1 begins on January 1, RO episodes
                will be used to determine the eligibility of the low volume opt-out for
                PY3. If PY1 begins on any date other than January 1, both RO episodes
                of PY1 and episodes occurring in the CY of PY1 (but occurring prior to
                the start of PY1 in that year) in CBSAs selected for participation will
                be used to determine the eligibility of the low volume opt-out for PY3.
                RO episodes of PY2 and PY3 will be used to determine the eligibility of
                the low volume opt-out for PY4 through PY5, respectively.
                 We proposed definitions for legacy CCN and legacy TIN as follows. A
                legacy CCN means a CCN that an RO participant that is a hospital
                outpatient department, or its predecessor(s), previously used to bill
                Medicare for included RT services but no longer uses to bill Medicare
                for included RT services. We proposed that a legacy TIN means a TIN
                that an RO participant that is a PGP, or a freestanding radiation
                therapy center, or its predecessor(s), previously used to bill Medicare
                for included RT services but no longer uses to bill Medicare for
                included RT services.
                 We proposed to add at Sec. 512.210(c)(7) that during the model
                performance period, an entity would not be eligible for the low volume
                opt-out if its legacy TIN or legacy CCN was used to bill Medicare for
                20 or more episodes or RO episodes, as applicable, of RT services in
                the 2 years prior to the applicable PY across all CBSAs selected for
                participation.
                 We solicited public comments on the proposed definitions of legacy
                TIN and legacy CCN, as well as the proposal for how to address low
                volume opt-out eligibility in the case of an entity that has a change
                in TIN or CCN (86 FR 42291).
                 The following is a summary of the public comments received on these
                proposals and our responses:
                 Comment: One commenter requested clarification on how the low
                volume opt-out policy will be applied to completely new entities or for
                existing CCNs or TINs that add a radiation therapy service line. This
                commenter stated that CMS indicated in prior communications that such
                entities would not be eligible for the opt-out policy since they would
                have no historical claims to determine if they are eligible for the
                policy. This commenter asked CMS to establish a process by which new
                entities or entities adding a new service line that anticipate having
                low volume in the performance year could apply for the low volume opt-
                out.
                 A couple of the commenters noted that the low volume opt-out will
                not protect all small and rural facilities as many will not be eligible
                to opt out under this policy. These commenters stated that the RO
                Model's provisions may prove to be unexpectedly burdensome or
                financially infeasible for these RO participants. One commenter
                specifically disagreed with the threshold of fewer than 20 episodes or
                RO episodes, claiming that the threshold is exceedingly low and does
                not exempt radiation oncologists working less than half-time. This
                commenter explained that in small and rural counties, older adults
                (65+) make up a larger share of the population compared to urban and
                suburban areas, resulting in a large Medicare population to serve, thus
                making the 20-episode threshold impractical. This commenter suggested
                that a more realistic approach would be to use the low-volume threshold
                used in MIPS of 200 or fewer Medicare fee-for-service encounters.
                 One commenter recommended CMS allow RO participants to
                retrospectively request to opt out of a PY if it furnished fewer than
                20 episodes in that PY. In this instance, an RO participant that
                retrospectively opts out would have its payments adjusted based on the
                FFS amount the RO participant would have been paid had it not been
                included in the RO Model.
                 Response: We thank these commenters for their comments. We
                finalized in the Specialty Care Models final rule (85 FR 61188) that a
                PGP, freestanding radiation therapy center, or HOPD which would
                otherwise be required to participate in the RO Model under Sec.
                512.210(c) may choose to opt-out of the RO Model on an annual basis if
                the PGP, freestanding radiation therapy center, or HOPD furnishes fewer
                than 20 episodes across all CBSAs selected for participation in the
                most recent calendar year with available claims data. We codified this
                policy at Sec. 512.210(c) of that final rule.
                 As discussed in the Specialty Care Models final rule (85 FR 61188),
                the low volume opt-out option is intended to allow RO participants
                furnishing a small volume of RT services in the CBSAs selected for
                participation in the Model to opt out if they so choose, given the
                investment required to implement the RO Model versus the benefit of
                participating in the RO Model for a limited frequency of RT services.
                We note that prospective payments in general, including episode-based
                payment rates of the RO Model, are not designed to reflect specific
                investment decisions of individual RT providers and RT suppliers, such
                as practice-specific technology acquisition of new service lines.
                 We believe that requiring those RO participants eligible to opt-out
                of the RO Model to attest to the intention of opting
                [[Page 63919]]
                out of the RO Model prior to the start of the applicable PY (that is,
                on or before December 31 of the prior PY in which the opt-out would
                occur), and to do so before every PY for which the RO participant is
                eligible to opt out, is less disruptive to these RO participants than
                allowing them to opt out of the RO Model retrospectively. They can
                continue to bill and operate as they do under FFS without needing to
                meet additional RO Model requirements. Allowing RO participants to opt
                out of the RO Model retrospectively would be operationally complex. We
                also believe that it would not make sense to allow for RO participants
                to opt out retrospectively, since these RO participants would have
                prepared for the RO Model, billed RO episodes and carried out their
                requirements only to be paid under FFS for the few RO episodes they
                furnished.
                 In response to concerns from commenters concerning rural RT
                providers and RT suppliers, we did further analysis concerning the
                rural and urban landscape of the ZIP Codes linked to CBSAs selected for
                participation in the Model. We used the U.S. Department of
                Agriculture's Economic Research Service's ``2010 Rural-Urban Commuting
                Area (RUCA) Code, ZIP Code file'' last updated in August 2020 (https://www.ers.usda.gov/data-products/rural-urban-commuting-area-codes.aspx)
                to analyze the population density, urbanization, and daily commuting
                patterns of the RO Model's participating ZIP Codes that are linked to
                CBSAs selected to participate in the RO Model. The Primary RUCA
                classification contains whole numbers (1-10) to delineate metropolitan,
                micropolitan, small town, and rural commuting areas based on the size
                and direction of the primary (largest) commuting flows, where RUCA
                category 1 is highly urban and RUCA category 10 is highly rural. RUCA
                category 1 is described in the ZIP Code file as having a metropolitan
                area core with primary flow within an urbanized area. RUCA category 10
                is described in the code file as having a primary flow to a tract
                outside an urbanized area or urban cluster. RUCA category 4 is defined
                as having a micropolitan area core with primary flow within a large
                urban cluster of 10,000 to 49,999.
                 Among RT providers and RT suppliers eligible to participate in the
                RO Model, we found that approximately 98 percent of their 2020 episodes
                furnished in participating ZIP Codes were furnished in RUCA categories
                classified as 1 and 4, with approximately 85 percent in RUCA category 1
                and 13 percent in RUCA category 4. We found that approximately less
                than 2 percent of 2020 episodes furnished in participating ZIP Codes
                were furnished by those RT providers or RT suppliers billing in RUCA
                category classified as 2. No 2020 episodes were furnished in
                participating ZIP Codes by those RT providers or RT suppliers in RUCA
                category classified as 3. Less than 1 percent of 2020 episodes
                furnished in participating ZIP Codes were furnished by RT providers or
                RT suppliers billing in RUCA categories classified as 5 through 10.
                 We then examined the range of the combined adjustments, reflecting
                the RO participant's historical experience and case mix values, for
                both the PC and TC based on our proposed policies where the historical
                experience and case mix adjustments for PY1 would be based on 2017-2019
                episodes. We found similar patterns of adjustment values across those
                RT providers and RT suppliers in RUCA category 1 and 4. Although we
                also found similar patterns of adjustment values across RT providers
                and RT suppliers furnishing episodes in the remaining RUCA categories,
                the number of those RT providers and RT suppliers and their
                corresponding episodes in the other RUCA categories are too small to
                draw reliable conclusions. We uncovered no evidence that rural
                providers have sufficiently different patterns of adjustment values
                than non-rural providers to indicate participation in the RO Model may
                be burdensome or financially infeasible for RO participants that
                furnish RT care in rural areas such that a change in our low volume
                opt-out policy specific to rural areas is warranted. We also note that
                any RO participant, regardless of the RUCA category within which they
                are furnishing RO episodes, can opt out of the RO Model if they are so
                eligible due to low volume.
                 As we stated in the Specialty Care Models final rule (85 FR 61147),
                we believe that allowing entities with fewer than 20 episodes to opt-
                out achieves the right balance of allowing very small entities to opt-
                out if they believe the burden from participation in the RO Model would
                outweigh the possibility of benefits from model participation (for
                example, potential for care improvements or increased payments), while
                also maintaining a variety of RO participant types in the RO Model to
                promote generalizability (to the extent possible) of any impact
                results. We do not believe it is necessary to allow RO participants
                adding new service lines to choose to opt out of the RO Model for a
                given PY if it has fewer than 20 episodes of RT services across all
                CBSAs selected for participation in the most recent year with claims
                data available prior to the applicable PY. The trend factor will
                reflect updates to input prices as reflected in updated PFS and OPPS
                rates. As we stated in the Specialty Care Models final rule (85 FR
                61188), prospective payments in general, including episode-based
                payment rates of the RO Model, are not designed to reflect specific
                investment decisions of individual providers and suppliers. We do not
                currently classify episodes based on whether they are related to an
                existing service line or a service line that was not furnished and
                billed by the RO participant historically, and therefore, whether an RO
                participant has added a new service line or not is not relevant to our
                payment methodology or low volume opt-out policy. We did note in the
                Specialty Care Models final rule (85 FR 61188) that we may consider
                revising this policy in the future.
                 Please note that any new TIN or new CCN, regardless of whether it
                is result of a merger, acquisition, or other business relationship,
                must opt out of a PY prior to the start of that PY, if it is so
                eligible. If a PGP, freestanding radiation therapy center, or HOPD
                begins furnishing included RT services in a CBSA selected for
                participation in the RO Model during a PY, that entity would be unable
                to opt out of the PY that is currently underway.
                 After considering public comments, we are finalizing as proposed
                that a PGP, freestanding radiation therapy center, or HOPD, which would
                otherwise be required to participate in the RO Model may choose to opt
                out of the RO Model for a given PY if it has fewer than 20 episodes or
                RO episodes, as applicable, depending on the PY, across all CBSAs
                selected for participation in the most recent year with claims data
                available, which is 2 years prior to the applicable PY. We are
                finalizing that episodes furnished prior to the start of the model
                performance period in CBSAs selected for participation will be used to
                determine the eligibility of the low volume opt-out for PY1 and PY2. If
                PY1 begins on January 1, RO episodes will be used to determine the
                eligibility of the low volume opt-out for PY3. If PY1 begins on any
                date other than January 1, both RO episodes of PY1 and episodes
                occurring in the CY of PY1 (but occurring prior to the start of PY1 in
                that year) in CBSAs selected for participation will be used to
                determine the eligibility of the low volume opt-out for PY3. RO
                episodes of PY2 and PY3 will be used to determine the eligibility of
                the low volume opt-out for PY4 and
                [[Page 63920]]
                PY5, respectively. We are codifying this policy at our regulation at
                Sec. 512.210(c).
                 We received no comments on the definitions of legacy TIN and legacy
                CCN, and therefore we are finalizing these definitions at Sec. 512.205
                with one technical change to the proposed definition of legacy CCN. We
                are changing ``radiotherapy services'' to ``RT services'' because that
                is the defined term in the regulations. After considering public
                comments, we are also finalizing the policy that CMS will include
                episodes and RO episodes, as applicable, associated with the RO
                participant's current CCN or TIN and episodes and RO episodes, as
                applicable, attributed to the RO participant's legacy CCN(s) or legacy
                TIN(s), in determining whether the participant is eligible for the low
                volume opt out. We are finalizing as proposed that an entity will not
                be eligible for the low volume opt-out if its legacy TIN or legacy CCN
                was used to bill Medicare for 20 or more episodes or RO episodes, as
                applicable, of RT services in the 2 years prior to the applicable PY
                across all CBSAs selected for participation. We are codifying these
                definitions and this policy at our regulation at Sec. 512.205 and
                Sec. 512.210(c)(7) respectively.
                4. Certain Changes to RO Model Episodes
                a. Criteria for Determining Included Cancer Types
                 The criteria for cancer types to be included in the RO Model are
                set forth at Sec. 512.230(a). CMS proposed to reorganize Sec.
                512.230(a) and (b) to improve the clarity and internal consistency of
                the regulatory text. We proposed to amend Sec. 512.230(a) and (b) such
                that to be included in the RO Model, a cancer type must be commonly
                treated with radiation per nationally recognized, evidence-based
                clinical treatment guidelines; associated with current ICD-10 codes
                that have demonstrated pricing stability, which is determined by
                analyzing the interquartile ranges of the episode prices across cancer
                types as described in the Specialty Care Models final rule at 85 FR
                61155; and the Secretary must not have determined that the cancer type
                is not suitable for inclusion in the RO Model. We proposed that CMS
                would remove from the RO Model a cancer type that does not meet all
                three of these criteria or for which CMS discovers a greater than 10
                percent error in the established national base rates.
                 Comment: We received a few comments in support of the RO Model's
                current policy, including support for including radiation therapy
                treatments that are commonly used for multiple cancer types. A few
                commenters noted that the list of included cancer types is still too
                broad and CMS should limit the number of cancers to those cancers where
                there is strong clinical evidence for a range of treatment
                alternatives, such as prostate cancer, breast cancer, and lung cancer.
                We received a comment expressing support for including only cancer
                types with evidence of effective use of hypofractionation to ensure
                delivery of clinically appropriate care and value. A separate commenter
                asked that CMS reduce the 15 cancer types to a smaller number for the
                initial rollout of the RO Model.
                 Response: We appreciate the comments. We note that we did not
                propose any substantive changes to our policy that determines what
                cancer types are included in the RO Model, but instead simply
                reorganized the content in Sec. 512.230(a) and (b). The included
                cancer types are determined by the following criteria as stated in the
                proposed reorganization for Sec. 512.230(a): All are commonly treated
                with radiation per nationally recognized, evidence-based clinical
                treatment guidelines; all cancer types have one or more associated
                current ICD-10 codes that have demonstrated pricing stability; and the
                Secretary has not determined that the cancer type is not suitable for
                inclusion.
                 As we noted at 85 FR 61157, the cancer types that are included in
                the RO Model are cancers commonly treated with RT, and we exclude those
                cancers that are rarely treated with radiation. CMS believes that
                limiting or phasing in the number of included cancer types would be
                more burdensome for most RO participants. For most RO participants,
                limiting or phasing in cancer types would mean that the RO Model
                requirements and billing guidance would apply to a subset of their RT
                services rather than to than to the majority of their RT services for a
                significant portion of the model performance period (or if cancer types
                were further limited, for the entire model performance period).
                 Further, as we stated in the Specialty Care Models final rule at 85
                FR 61157, CMS believes that phasing in the included cancer types would
                prevent a robust evaluation because doing so would reduce the amount of
                available data for any cancer types phased in at a later time. We
                believe that a model performance period of at least 5 years is
                sufficient to obtain data to compute a reliable impact estimate.
                 As we stated in the Specialty Care Models final rule at 85 FR
                61156, the RO Model is designed to be disease-specific and agnostic to
                treatment and modality type. That is, we do not require that multiple
                treatment alternatives exist for a given cancer type, or that
                hypofractionation be an option for treating the cancer type, to be
                included in the RO Model because the purpose of the RO Model is to test
                an episode-based payment that is not specific to how many treatments or
                which modalities are furnished, which would retain FFS incentives.
                Rather than these types of requirements, our criteria for the included
                cancer types includes the requirement that each cancer type demonstrate
                pricing stability. As we described in the Specialty Care Models final
                rule at 85 FR 61157, although individual episodes may deviate from the
                average number of fractions for the cancer type (depending on the
                clinical profile of the individual patient), we have determined that
                all of the included cancer types have pricing stability, which allows
                them to be accurately priced to support the RO Model test.
                 We will continue to review whether the included cancer types meet
                the criteria at Sec. 512.230. As we recently did with liver cancer, we
                will update the included cancer types as is detailed in Sec. 512.230
                when a cancer type needs to be added to the RO Model or excluded from
                the RO Model.
                 Comment: We received one comment in which the commenter expressed
                concern about the inclusion of bone and brain metastases because the
                treatments of both cancers can vary widely in the approach and
                technology used depending on the specific patient and disease
                progression.
                 Response: We appreciate this comment. CMS has determined that brain
                and bone metastases meet all three criteria for inclusion. As we stated
                in the Specialty Care Models final rule (85 FR 61188), we believe that
                treatment patterns as reflected in the episode file represent the
                variation in care patterns currently delivered nationally for all
                included cancer types. The case mix model incorporates cancer type and
                so the participant-specific case mix adjustment for the PC and/or the
                TC of the RO Models reflects the case mix of the RO participant's
                population, including those with bone and brain metastases. The same is
                true for the approach taken for the historical experience adjustment.
                 We are finalizing our proposal to reorganize our regulations at
                Sec. 512.230(a) and (b) without modification.
                [[Page 63921]]
                b. Removal of Liver Cancer From Included Cancer Types
                 In section XVIII.C.4.b. of the CY 2022 OPPS/ASC proposed rule we
                stated that liver cancer met the criteria for exclusion set forth in
                regulatory language in Sec. 512.230(a) and (b), regulatory text that
                we also proposed to reorganize as described above. While we did not
                request comment on removing liver cancer from the RO Model, we received
                supportive comments related to removing liver cancer from the list of
                included cancer types. See Table 74 below, for the current list of
                included cancer types.
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                c. Removal of Brachytherapy From Included RT Services
                 We codified at Sec. 512.240 the modalities that are included under
                the RO Model: 3-dimensional conformal radiotherapy (3DCRT), intensity-
                modulated radiotherapy (IMRT), stereotactic radiosurgery (SRS),
                stereotactic body radiotherapy (SBRT), proton beam therapy (PBT),
                image-guided radiation therapy (IGRT), and brachytherapy. We proposed
                to amend Sec. 512.240 to remove brachytherapy as an included modality
                in the RO Model.
                 We finalized a waiver of section 1833(t)(2)(H) of the Act under the
                authority of section 1115A(d)(1) of the Act, because it was necessary
                for the purposes of testing the RO Model when we were including
                brachytherapy as part of the RO Model, as discussed in the Specialty
                Care Models final rule at 85 FR 61242 and codified at Sec.
                512.280(f)(4). Given that our proposal to remove brachytherapy from the
                RO Model, if finalized, would render our waiver of section
                1833(t)(2)(H) of the Act moot, we proposed to withdraw this waiver if
                our proposal to remove brachytherapy is finalized as proposed, because
                it would no longer be necessary solely for the purposes of testing the
                RO Model.
                 We solicited public comments on our proposal in section
                XVIII.C.4.c. of the CY 2022 OPPS/ASC proposed rule (86 FR 42293).
                [[Page 63922]]
                 The following is a summary of the public comments received on this
                proposal and our responses:
                 Comment: CMS received many comments in support of the proposed
                policy to remove brachytherapy from the RO Model's list of included
                modalities; no commenters opposed removing brachytherapy. One commenter
                noted that the removal of brachytherapy will significantly lessen the
                number of RO Model claims that will be incorrectly paid. Another
                commenter supported removal because of the frequency in which
                brachytherapy is being furnished at PPS-exempt hospitals. One commenter
                noted that historically, brachytherapy has been under-reimbursed
                compared to other forms of radiotherapy, and its utilization in the
                United States has declined in recent years, and that this trend has not
                been observed in other countries. This commenter supported the
                potential for including brachytherapy services in future iterations of
                the RO Model. A couple commenters asked that CMS work with stakeholders
                to find a way to include brachytherapy in later model performance
                periods.
                 A few commenters stated that they did not support including
                brachytherapy within the RO Model's bundled payment in the future. One
                commenter did not support including brachytherapy during the model
                performance period given the commenter's perception that the RO Model's
                pricing and payment mechanism are complex. This commenter opposed
                inclusion because it would increase the Model's complexity.
                 One commenter stated that brachytherapy sources are vastly
                different than other included modalities. This commenter stated that
                brachytherapy sources are more similar to drugs and
                radiopharmaceuticals that are also excluded from the bundled payments
                under the RO Model. This commenter also stated that external beam
                radiation often requires less variation in resource use among patients
                with similar types of cancer who are treated by the same radiation
                oncology provider than do those who receive brachytherapy treatment. A
                couple commenters supported the removal of brachytherapy because they
                did not believe the episode payments adequately covered brachytherapy
                sources, pointing to low dose rate brachytherapy sources such as
                Cesium-131 as an example.
                 Some commenters supporting the brachytherapy exclusion stated their
                belief that the RO pricing methodology is insufficient for
                multimodality episodes, such as those that include brachytherapy. Many
                of these commenters noted that although they are supportive of the
                proposal to remove brachytherapy, it does not address what commenters
                perceived to be the inadequate payment for brachytherapy services under
                FFS Medicare, which they argued has created access to care issues for
                this particular modality for years.
                 Response: We appreciate the feedback. CMS seeks to neither
                incentivize nor discourage the use of one modality over another, but
                rather to encourage RT providers and RT suppliers to choose RT services
                that are the most clinically appropriate for RO beneficiaries under
                their care. The exclusion of a modality from the RO Model is not meant
                to imply anything about the value of such modality. Published clinical
                evidence suggests brachytherapy is a high-value RT service, which could
                warrant its inclusion in the RO Model. However, we acknowledge the
                concerns stakeholders have about possible unintended consequences for
                beneficiaries' access to care were brachytherapy to remain in the RO
                Model under the existing pricing methodology.
                 We note that we are not responding at this time to comments related
                to how we might include brachytherapy as a single modality or as
                multimodality episodes in the future. We are also not addressing
                comments about the perceived inadequate payment for brachytherapy
                services under FFS Medicare. We appreciate these comments and will
                consider them in future rulemaking.
                 Comment: Many commenters noted that if CMS finalizes the removal of
                brachytherapy, we should consider removing the incorrect payment
                withhold from the RO Model's pricing methodology. These commenters
                argued that without brachytherapy in the RO Model, this withhold is
                unnecessary.
                 Response: There are additional payment scenarios (such as
                incomplete episodes and duplicate services) beyond a multimodality
                episode with brachytherapy that require reconciliation and payment from
                the incorrect payment withhold. Therefore, we are not removing the
                incorrect payment withhold from the RO Model's pricing methodology.
                 Comment: We received a few comments in support of withdrawing our
                waiver of section 1833(t)(2)(H) of the Act in Sec. 512.280(f)(4). A
                few commenters urged CMS to continue to uphold the safeguards that
                Congress established for paying for brachytherapy sources under the
                hospital OPPS under section 1833(t)(2)(H) of the Act and refrain from
                waiving the safeguards in the future.
                 Response: We thank commenters for their support.
                 We are finalizing the removal of brachytherapy from the list of
                included modalities in the RO Model codified at Sec. 512.240 and are
                amending Sec. 512.280(f)(4) to remove 1833(t)(2)(H).
                d. Exclusion of IORT
                 We finalized in the Specialty Care Models final rule (85 FR 61114)
                that IORT would not be included as a modality in the RO Model. We asked
                for comments on how we might include IORT in future years at
                XVIII.C.4.d. of the CY 2022 OPPS/ASC proposed rule and we noted at 86
                FR 42296 that we did not intend to respond to these comments in this
                final rule. We received some comments related to this issue and
                appreciate these comments. We will consider these comments in future
                rulemaking.
                5. Pricing Methodology
                a. Assignment of Cancer Types to an Episode
                 We finalized at 85 FR 61179 our process for assigning a cancer type
                to an episode as follows: First, we identify ICD-10 diagnosis codes
                during an episode from: (1) Medicare PFS claims for evaluation and
                management (E&M) services with an included cancer diagnosis code with a
                date of service during the 30 days before the episode start date, on
                the episode start date, or during the 29 days after the episode start
                date; and (2) Medicare PFS claims for treatment planning and delivery
                services with an included cancer diagnosis code (See Table 57), or
                Medicare OPPS claims for treatment delivery services with an included
                cancer diagnosis code on the claim header, with a date of service on
                the episode start date or during the 29 days after the episode start
                date. The cancer diagnosis code from OPPS claims must be the principal
                diagnosis to count toward cancer type assignment, and treatment
                delivery services that concern image guidance do not count toward
                cancer type assignment as we determined that image guidance was not an
                important indicator of cancer type. Then, we analyze and count these
                ICD- 10 diagnosis codes across the claim lines to determine the
                episode's cancer type assignment according to the algorithm described
                in (1) through (3):
                 (1) If two or more claim lines fall within brain metastases or bone
                [[Page 63923]]
                metastases or secondary malignancies (per the mapping of ICD-10
                diagnosis code to cancer type described in Table 57 of Identified
                Cancer Types and Corresponding ICD-10 Codes), we set the episode cancer
                type to the type (either brain metastases or bone metastases) with the
                highest count. If the count is tied, we assign the episode in the
                following order of precedence: Brain metastases; bone metastases; other
                secondary malignancies.
                 (2) If there are fewer than two claim lines for brain metastases,
                bone metastases or other secondary malignancies, we assign the episode
                the cancer type with the highest claim line count among all other
                cancer types. We exclude the episode if the cancer type with the
                highest claims line count among other cancer types is not an included
                cancer type.
                 (3) If there are no claim lines with a cancer diagnosis meeting the
                previously discussed criteria, then no cancer type is assigned to that
                episode and therefore, that episode is excluded from the national base
                rate calculations.
                 Since the publication of the Specialty Care Models final rule, a
                stakeholder has asked for clarification on how to identify when there
                are fewer than two claim lines for brain metastases, bone metastases or
                other secondary malignancies. In response to the stakeholder's request,
                in the proposed rule, we clarified paragraph (2) at 86 FR 42296.
                Specifically, if there are not at least two claim lines for brain
                metastases or at least two claim lines for bone metastases or at least
                two claim lines for any other secondary malignancy, then we assign the
                episode the cancer type with the highest line count among all other
                cancer types. For example, one bone metastases claim line and one
                secondary metastasis claim line will not qualify as two or more claim
                lines that fall within brain metastases or bone metastases or secondary
                malignancies. Instead, the episode will be assigned whatever cancer
                type had the highest line count among all other cancers.
                 We clarified in the CY 2022 OPPS/ASC proposed rule that we use a
                broad list of cancer diagnoses (those included in the RO Model and
                those not included) to assign cancer type to episodes in the baseline
                period. This broad list of cancer diagnoses is posted on the RO Model
                website at https://innovation.cms.gov/innovationmodels/radiation-oncology-model. We identify ICD-10 diagnosis codes for cancer during an
                episode from E&M services, and treatment planning and delivery services
                that have a cancer diagnosis code from that broad cancer diagnosis
                list. We assign a cancer type to the episode as described in this
                proposed rule. We then exclude those episodes that are not assigned an
                included cancer type. We do not exclude claims of excluded cancer types
                prior to episode construction, as this could lead to an episode being
                included in the RO Model where most of the RT services were related to
                treating an excluded cancer type.
                 We did not solicit public comments on this clarification in section
                XVIII.C.5.a. of the CY 2022 OPPS/ASC proposed rule (86 FR 42296).
                b. Constructing Episodes Using Medicare FFS Claims and Calculation of
                Episode Payment
                 We proposed to update how we describe our pricing methodology. We
                proposed to remove references to specific CYs from the definition of
                baseline period, but we would still construct episodes based on dates
                of service for Medicare FFS claims paid during the baseline period as
                well as claims that are included under an episode where the initial
                treatment planning service occurred during the baseline period.
                Furthermore, although we proposed to remove references to specific CYs,
                we would continue to weigh the most recent observations more heavily
                than those that occurred in earlier years, as previously finalized. We
                would continue to weigh episodes that initiated in the first year of
                the baseline period at 20 percent, episodes that initiated in second
                year of the baseline period at 30 percent, and episodes that initiated
                in the third year of the baseline period at 50 percent. We invited
                comment on the proposal to weigh the most recent episodes more heavily
                than those that occurred in earlier years in the baseline period. We
                solicited public comments on our proposal in section XVIII.C.5.b. of
                the CY 2022 OPPS/ASC proposed rule (86 FR 42297).
                 The following is a summary of the public comments received on this
                proposal and our responses:
                 Comment: A couple of commenters agreed with CMS's proposed policy
                to weigh the most recent episodes more heavily than those that occurred
                in earlier years in the baseline. One of those commenters added that
                this weighting scheme is appropriately balanced giving more weight to
                the most recent data while using multiple years in the baseline period
                provides year-to-year stability.
                 Response: We thank these commenters for their support.
                 After considering public comments, we are finalizing as proposed to
                weigh the most recent episodes more heavily than those that occurred in
                earlier years in the baseline period. We received no comments on our
                proposed modification to the definition of baseline period, and
                therefore, we are also finalizing as the definition of baseline period
                without modification and codifying the definition at Sec. 512.205.
                 We codified at Sec. 512.255(c)(13) that for sequestration, we
                deduct 2 percent from each episode payment after applying the trend
                factor, geographic adjustment, case mix and historical experience
                adjustments, discount, withholds, and coinsurance to the national base
                rate. At times, the requirements for sequestrations are modified by
                legislation or regulation. For example, section 3709(a) of division A
                of the Coronavirus Aid, Relief and Economic Security (CARES) Act (Pub.
                L. 116-136) included a temporary moratorium on sequestration for all
                Medicare programs beginning on May 1, 2020 and ending on December 31,
                2020, while section 102(a) of division N of the CAA, 2021 (Pub. L. 116-
                260), extended the suspension period to March 31, 2021. An Act to
                Prevent Across-the-Board Direct Spending Cuts, and for Other Purposes
                (Pub. L. 117-7), signed into law on April 14, 2021, extends the
                suspension period to December 31, 2021. Thus, we proposed to amend
                Sec. 512.255(c)(13) by removing the percentage amount and indicating
                that sequestration will be applied in accordance with applicable law.
                 We solicited public comments on our proposal in section XVIII.C.5.b
                of the CY 2022 OPPS/ASC proposed rule (86 FR 42298).
                 The following is a summary of the public comments received on this
                proposal and our responses:
                 Comment: A couple of commenters all supported removing the specific
                reference to the sequestration percentage amount and changing text
                language to indicate that the exact amount will be determined in
                accordance with the applicable current law.
                 Response: We thank these commenters for their support.
                 After considering public comments, we are finalizing our proposal
                to amend Sec. 512.255(c)(13) by removing the percentage amount and
                indicating that sequestration will be applied in accordance with
                applicable law. We are also codifying these policies at Sec.
                512.255(c)(13).
                c. National Base Rates
                 We codified at Sec. 512.250(b) the criteria for excluding
                episodes, as more fully described in 85 FR 61183 through
                [[Page 63924]]
                61184. We finalized that we would exclude episodes in the baseline
                (finalized in this rule to be formally defined as ``baseline period'')
                that are not attributed to an RT provider or RT supplier. These
                episodes are exceedingly rare. There were fewer than 15 episodes out of
                more than 518,000 episodes in the 2016 to 2018 period where the only RT
                delivery services in the episode were classified as professional
                services. There are a few brachytherapy surgery services that are
                categorized as professional services. We also finalized that episodes
                would be excluded if either the PC or TC is attributed to an RT
                provider or RT supplier with a U.S. Territory service location or to a
                PPS-exempt entity, but that services within an episode provided in a
                U.S. Territory or provided by a PPS-exempt entity would be included in
                the episode pricing. We finalized that episodes would be excluded if
                they include any RT service furnished by a CAH. Finally, we finalized
                that we would exclude all Maryland and Vermont claims before episodes
                are constructed and attributed to an RT provider or RT supplier, and we
                would similarly exclude inpatient and ASC claims from episode
                construction and attribution. We finalized a policy that excluded
                claims before episodes were constructed in certain cases, while in
                other cases, we excluded entire episodes after construction if they
                included claims that were to be excluded.
                 To simplify episode construction, attribution, and pricing, we
                proposed to exclude all Maryland, Vermont, and U.S. Territory claims
                and all CAH, inpatient, ASC, and PPS-exempt claims in the same manner:
                before episodes are constructed and attributed to an RT provider or RT
                supplier. Furthermore, to mirror the participant exclusion policy
                proposed in section XVIII.C.3. of the CY 2022 OPPS/ASC proposed rule,
                we proposed to exclude all claims of an HOPD participating in PARHM
                (during the time period of their participation in PARHM) before
                episodes are constructed and attributed to an RT provider or RT
                supplier. We also clarified that we will exclude episodes from the RO
                Model's pricing methodology that are attributed to an RT provider or RT
                supplier that is located in a ZIP Code not assigned to a CBSA, not
                assigned an included cancer type, or that do not have more than $0 in
                total allowed amount for professional or technical services from Model
                pricing. We proposed to amend Sec. 512.250(b) accordingly.We solicited
                public comments on our proposal in section XVIII.C.5.c. of the CY 2022
                OPPS/ASC proposed rule (86 FR 42298).
                 The following is a summary of the public comments received on this
                proposal and our response:
                 Comment: We received no comments on the proposal to exclude all
                Maryland, Vermont, and U.S. Territory claims and all CAH, inpatient,
                ASC, and PPS-exempt claims in the same manner: before episodes are
                constructed and attributed to an RT provider or RT supplier. We
                received comments concerning the inclusion of HOPDs identified as
                eligible to participate in PARHM, which we summarized and responded to
                in section XVII.C.3.a of this final rule with comment period, but we
                received no comments specifically related to PARHM considerations in
                episode construction.
                 Response: After considering public comments, we are finalizing our
                proposal to exclude all Maryland, Vermont, and U.S. Territory claims
                and all CAH, inpatient, ASC, and PPS-exempt claims before episodes are
                constructed and attributed to an RT provider or RT supplier. We are
                also finalizing the proposal to exclude all claims of an HOPD
                participating in PARHM (during the time period of their participation
                in PARHM) before episodes are constructed and attributed to an RT
                provider or RT supplier.
                 We proposed to define the baseline period as the 3-year period
                within which episodes must initiate in order to be used in the
                calculation of the national base rates, participant-specific
                professional and technical historical experience adjustments, and
                participant-specific professional and technical case mix adjustments
                for PY1. We proposed that the baseline period would be January 1, 2017
                through December 31, 2019, unless the RO Model is prohibited by law
                from starting in CY 2022, in which case the baseline period will would
                be adjusted according to the new model performance period (that is, if
                the model performance period starts any time in CY 2023, then the
                baseline period would be CY 2018 through CY 2020).
                 Comment: A couple commenters expressed concern about how we will
                handle episode data from CYs 2020 and 2021 in the RO Model given the
                COVID-19 PHE. One commenter noted that because we proposed that the
                historical experience adjustment be based on 2017-2019 data which would
                stay constant throughout the duration of the model performance period,
                the additional cost associated with delivering more expensive treatment
                for advanced disease due to the COVID-19 PHE would not be captured in
                that component of the pricing methodology. One commenter supported this
                2017-2019 baseline period, specifically because it does not include
                2020. The commenter argued that the pandemic depressed healthcare
                utilization including essential treatment for conditions such as cancer
                in ways that are not representative of best practices outside of a
                pandemic.
                 Response: We thank these commenters for stating their concerns.
                Please reference the RO Model's EUC policy in section XVII.C.10. of
                this final rule with comment period for discussion about the pricing
                methodology and how specific episode data may be handled should an EUC
                policy be invoked. We are finalizing our policy that the baseline
                period will be defined as the three calendar year period that begins on
                January 1 no fewer than five years but no more than six years prior to
                the start of the model performance period during which episodes must
                initiate in order to be used in the calculation of the national base
                rates, each RO participant's historical experience adjustment for the
                PC or TC or both for the model performance period, and the RO
                participant's case mix adjustment for the PC or TC or both for PY1. We
                are finalizing that the baseline period is January 1, 2017 through
                December 31, 2019, unless the RO Model is prohibited by law from
                starting in CY 2022. Our finalized national base rates for the model
                performance period are based on the criteria set forth for cancer type
                inclusion and are summarized in Table 75 of this final rule with
                comment period.
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                d. Trend Factors
                 We codified our policy at Sec. 512.255(c)(1) to apply a trend
                factor (an adjustment applied to the national base rates that updates
                those rates to reflect current trends in the OPPS and PFS rates for RT
                services) to each of the national base rates. In the Specialty Care
                Models final rule at 85 FR 61186, we stated that for each PY, we will
                calculate separate trend factors for the PC and TC of each cancer type
                using data from HOPDs and freestanding radiation therapy centers not
                participating in the RO Model. Each of the separate trend factors will
                be updated and applied to the national base rates prior to the start of
                each PY (for which they would apply) so as to account for trends in
                payment rates and volume for RT services outside of the RO Model under
                OPPS and PFS. We clarified in the CY 2022 OPPS/ASC proposed rule at 86
                FR 42299 through 42300, that the number of separate trend factors will
                vary depending on the number of cancer types included in the RO Model.
                 Given the multiple delays in the model performance period and our
                proposal to update the baseline period, we proposed that the numerator
                of the trend factor would be the product of (a) the average number of
                times each
                [[Page 63926]]
                HCPCS code (relevant to the component and the cancer type for which the
                trend factor will be applied) was furnished 3 years prior to the CY
                used to determine the FFS payment rates and (b) the component's FFS
                payment rate (as paid under OPPS or PFS) for the CY of the upcoming PY.
                We proposed that the denominator of the trend factor would be the
                product of (a) the average number of times each HCPCS code (relevant to
                the component and the cancer type for which the trend factor will be
                applied) was furnished in the most recent year of the baseline period
                and (b) the corresponding FFS payment rate for the most recent year of
                the baseline period. We also clarified that the trended national base
                rates will be made available on the RO Model website prior to the start
                of the applicable PY, along with this final rule.
                 We solicited public comments on our proposals in section
                XVIII.C.5.d. of the CY 2022 OPPS/ASC proposed rule (86 FR 42300).
                 The following is a summary of the public comments received on the
                proposal to base the denominator of the trend factor on the third year
                of the proposed baseline period, and the numerator of the trend factor
                on FFS payment rates for the same CY as the upcoming PY combined with
                utilization from the third year of the baseline period for PY1, the
                first CY after the baseline period for PY2, the second CY after the
                baseline period for PY3, and so on, and our response:
                 Comment: Many commenters disagreed with the proposed modification
                of the trend factor, because it did not include guardrails to prevent
                significant shifts in payment rates under the RO Model's trend factors,
                since the trend factor methodology incorporates the MPFS and OPPS rates
                as part of an annual update for the PC and TC of each disease site.
                These commenters argued that without the guardrails, the proposed trend
                factor methodology limits rate stability if MPFS and OPPS experience
                significant payment shifts from year-to-year. Many of these commenters
                recommended a guardrail of +/-2 percent to help establish rate
                stability. One commenter argued that it was inappropriate to apply, in
                part, the rate of growth in physician payments to payments for RT
                services furnished in HOPDs, as CMS intends to do under the RO Model.
                This commenter argued that when Congress passed MACRA, it did not
                intend to apply the annual PFS update factor of 0 percent to payments
                made under OPPS for the years 2020 through 2025. This commenter
                recommended that CMS calculate one trend factor for the technical
                component of RT services furnished in the freestanding radiation
                therapy center setting using the change in PFS payments and one for the
                technical component of RT services furnished in an HOPD setting using
                the change in OPPS payments.
                 Another commenter argued it will likely take several years before
                new technology or treatments are reflected in sufficient volume to
                impact and be reflected in the FFS rates, and, as a result, CMS should
                establish an add-on payment to account for new technologies.
                 Many commenters stated that not having access to trend factor
                values coupled with not having access to participant-specific case mix
                and historical experience adjustment values until two months prior to
                the start of the model performance period prevented them from having
                the critical data they needed to assess the financial implications of
                the RO Model.
                 Response: We thank these commenters for their comments. We note
                that modifications in this section involve the removal of references to
                specific years, and, instead, add references to specific periods of
                time relative to the baseline period or upcoming PY. For example,
                instead of stating a specific year like ``2019,'' we now state ``3
                years prior to the CY used to determine the FFS payment rates.'' This
                allows the text to remain current even if there is a change in baseline
                period or model performance period.
                 As we stated in the Specialty Care Models final rule (85 FR 61188),
                we believe the best way to calculate the trend factors such that
                spending under the RO Model does not diverge too far from spending
                under FFS Medicare that non-participants will receive for the
                underlying bundle of included RT services had they been in the RO
                Model, is to base the trend factors on service volumes from episodes
                attributed to both HOPDs and freestanding radiation therapy centers,
                and on updated PFS and OPPS rates. Calculating unique trend factors for
                the PC and TC for each cancer type and separately for those furnished
                in the HOPD setting from those furnished in the freestanding radiation
                therapy center setting works against the RO Model's goal of site
                neutrality. As we stated in the Specialty Care Models final rule (85 FR
                61188), the trend factors will only generate significant swings if
                there are large swings in payment rates for RT services that are
                frequently used during episodes. CMS believes that setting up
                guardrails risks paying significantly more under the Model than to non-
                participants. Moreover, to the extent that new technologies and new
                equipment are billed under new HCPCS codes, we would go through
                rulemaking to add those new codes to the list of included RT services
                as we stated at 85 FR 61165.
                 Since the numerator of the trend factor is based, in part, on each
                component's (PC or TC) FFS payment rate (as paid under OPPS or PFS) for
                the CY of the upcoming PY, it is not possible to post trended national
                base rates prior to when those FFS payment rates are finalized in
                November prior to the upcoming PY. Please note that we will monitor the
                adequacy of payments over time, including the trend factor, and
                consider re-baselining in a later PY if our analysis indicates it is
                appropriate. Although it may be inferred from the description of the
                trend factor calculation, we would also like to clearly state that the
                accounting of ``the average number of times each HCPCS code (relevant
                to the component and the cancer type for which the trend factor will be
                applied) was furnished'' as described in the numerator and denominator,
                is by episode.
                 We are finalizing our policies as proposed, that is, we will base
                the denominator of the trend factor on the third year of the baseline
                period and the numerator of the trend factor on FFS payment rates for
                the same CY as the upcoming PY combined with utilization from the third
                year of the baseline period for PY1, the first CY after the baseline
                period for PY2, the second CY after the baseline period for PY3, and so
                on.
                e. Applying the Adjustments
                 We finalized our policy at 85 FR 61194 that the combined
                adjustment, that is the adjustment that results when the corresponding
                participant-specific historical experience and case mix adjustments,
                and blend are combined, will be multiplied by the corresponding trended
                national base rate from Step 2 for each included cancer type. We will
                repeat this calculation for the corresponding case mix adjustment,
                historical experience adjustment, and blend for the TC, yielding a
                total of 32 RO participant-specific episode payments for Dual
                participants and a total of 16 RO participant-specific episode payments
                for Professional participants and Technical participants. In the CY
                2022 OPPS/ASC proposed rule, we clarified that the total number of RO
                participant-specific episode payments for Dual participants and the
                total number of RO participant-specific episode payments for
                Professional participants and Technical participants will vary
                depending on the number of
                [[Page 63927]]
                included cancer types. For example, with the removal of liver cancer
                there are 15 included cancer types that yields a total of 30 RO
                participant-specific episode payment amounts for Dual participants and
                a total of 15 RO participant-specific episode payment amounts for
                Professional participants and Technical participants.
                 We did not solicit public comments on this clarification.
                f. HOPD or Freestanding Radiation Therapy Center With Fewer Than Sixty
                Episodes During the Baseline Period
                 We codified at Sec. 512.255(c)(7)(iv) a stop-loss limit of 20
                percent for the RO participants that have fewer than 60 episodes from
                2016 through 2018 and were furnishing included RT services in the CBSAs
                selected for participation at the time of the effective date of
                Specialty Care Models final rule (85 FR 61114). Under this stop-loss
                limit, CMS uses no-pay claims to determine what these RO participants
                would have been paid under FFS as compared to the payments they
                received under the RO Model and CMS pays these RO participants
                retrospectively for losses in excess of 20 percent of what they would
                have been paid under FFS. Payments under the stop-loss policy are
                determined at the time of reconciliation. We proposed to modify this
                stop-loss limit policy such that it applies to RO participants that
                have fewer than 60 episodes during the baseline period, as we proposed
                to define at Sec. 512.205, and that were furnishing included RT
                services before the start of the model performance period in the CBSAs
                selected for participation and amend Sec. 512.255(c)(7)(iv)
                accordingly.
                 We solicited public comments on our proposal in section
                XVIII.C.5.f. of the CY 2022 OPPS/ASC proposed rule (86 FR 42301).
                 The following is a summary of the public comments received on this
                proposal and our response:
                 Comment: Some commenters disagreed with the stop-loss policy. A few
                commenters stated that the stop-loss policy should apply to all RO
                participants, not just to RO participants that have fewer than 60
                episodes during the proposed baseline period. Another commenter
                requested clarification as to why the stop-loss policy is limited in
                this way, because the number of episodes an RO participant furnishes is
                unrelated to case complexity, which the commenter believed is the
                reason for stop-loss policies in general. They cited the modeling of
                one entity's 2019 bone metastases episodes, which they believe
                demonstrates that under the Model, this entity would see a 66 percent
                rate reduction for that cancer type. Another commenter argued that
                limiting the stop-loss policy to entities with fewer than 60 episodes
                during the baseline period ignores the larger impact of financial loss
                that would be experienced by higher-volume entities serving large,
                vulnerable Medicare populations.
                 One commenter recommended that the stop-loss policy be applied to
                entities with gradually fewer episodes after PY1. A couple of
                commenters recommended a 20 percent stop-loss policy for rate variance
                per tumor site.
                 Response: We thank these commenters for their comments. We proposed
                to modify the stop-loss policy in only one respect, expanding one
                criterium of eligibility in that RO participants had to be furnishing
                included RT services ``before the start of the model performance period
                in the CBSAs selected for participation,'' instead of ``furnishing
                included RT services in the CBSAs selected for participation at the
                time of the effective date of the Specialty Care Models final rule'' as
                stated in that rule at 85 FR 61114. We received no comments on this
                specific proposal.
                 We refer to the Specialty Care Models final rule (85 FR 61177
                through 61178) where we summarize and respond to comments on the stop-
                loss policy similar to those we received here. We would like to point
                out that those RO participants that have fewer than 60 episodes in the
                baseline period would not receive an historical experience adjustment.
                The heavy weight of the RO participants' historical experience in their
                participant-specific RO payment amount would prevent most if not all of
                RO participants from qualifying for the stop-loss policy if an
                historical experience adjustment were applied, particularly in the
                early PYs of the Model.
                 We are finalizing the policy as proposed such that those RO
                participants that had begun furnishing included RT services any time
                before the start of the model performance period in the CBSAs selected
                for participation are eligible for such a stop-loss limit and amend
                Sec. 512.255(c)(7)(iv) accordingly.
                g. Apply Adjustments for HOPD or Freestanding Radiation Therapy Center
                With a Merger, Acquisition, or Other New Business Relationship, With a
                CCN or TIN Change
                 We codified at Sec. 512.210(a) those entities that must
                participate in the RO Model, and as more fully described at 85 FR
                61195, an entity must participate in the RO Model if it has a new TIN
                or CCN that results from a merger, acquisition, or other new clinical
                or business relationship that occurs prior to October 3, 2025, begins
                to furnish RT services within a CBSA selected for participation, and
                meets the RO Model's eligibility requirements. We finalized a
                requirement for advance notification regarding a new merger,
                acquisition, or other new clinical or business relationships so that
                the appropriate adjustments would be made to the new or existing RO
                participant's participant-specific professional episode payment and
                participant-specific technical episode payment amounts. We finalized
                that RO participants must also provide a notification regarding a new
                clinical relationship that may or may not constitute a change in
                control, and if there were sufficient historical data from the entities
                merged, absorbed, or otherwise changed as a result of this new clinical
                or business relationship, then this data would be used to determine
                adjustments for the new or existing TIN or CCN. We also note that RO
                participants are required to report a change in control under Sec.
                512.180(c).
                 We proposed to add Sec. 512.255(c)(14) to establish that we would
                calculate in accordance with Sec. 512.255(c)(3) the RO participant's
                case mix adjustments based on all episodes and RO episodes, as
                applicable, attributed to the RO participant's legacy TIN(s) or legacy
                CCN(s) during the 3-year period that determines the case mix adjustment
                for each PY and all episodes and RO episodes, as applicable, attributed
                to the RO participant's current TIN or CCN during the 3-year period
                that determines the case mix adjustment for each PY. We also proposed
                that we would calculate the RO participant's historical experience
                adjustments in accordance with Sec. 512.255(c)(4) based on all
                episodes attributed to the RO participant's legacy TIN(s) or legacy
                CCN(s) during the baseline period and all episodes attributed to the RO
                participant's current TIN or CCN during the baseline period. We
                proposed to eliminate the requirement that RO participants provide a
                notification regarding all new clinical or business relationships that
                may or may not constitute a change in control. We proposed to add Sec.
                512.210(e) requiring an RO participant to furnish to CMS written notice
                of a change in TIN or CCN in a form and manner specified by CMS at
                least 90 days before the effective date of any change in TIN or CCN
                that is used to bill Medicare.
                 We solicited public comments on our proposal in section
                XVIII.C.5.g. of the CY 2022 OPPS/ASC proposed rule (86 FR 42301).
                [[Page 63928]]
                 The following is a summary of the public comments received on this
                proposal and our responses:
                 Comment: One commenter supported the policy to consider the legacy
                CCN(s) or TIN(s) for the purposes of risk adjustment, as this process
                is both straightforward and fair to the RO participant.
                 Response: We thank this commenter for their support.
                 We continue to believe that some new or altered clinical or
                business relationships may still pose risks of gaming in the RO Model,
                regardless of whether a change in control results. However, we believe
                that requiring RO participants to report changes to TINs or CCNs will
                capture the types of changes that pose these risks. This would also
                avoid any ambiguity as to what types of changes RO participants would
                need to report. After consideration of the comment we received, we are
                finalizing our policies as proposed with one technical change. We are
                adding subparagraphs to Sec. 512.255(c)(14).
                h. Discount Factor
                 We codified at both Sec. Sec. 512.205 and 512.255(c)(8) that the
                discount factor for the PC would be 3.75 percent and the discount
                factor for the TC would be 4.75 percent. We proposed at 86 FR 42301 to
                lower the discount factor for the PC to 3.5 percent and the discount
                factor for the TC to 4.5 percent. Given our other proposed
                modifications to the RO Model, including removing brachytherapy and
                liver cancer, modifying the baseline period, and the current size of
                the RO Model (approximately 30 percent of eligible episodes), in the CY
                2022 OPPS/ASC proposed rule at 86 FR 42301 we described that these
                modifications would enable us to lower these discounts without
                increasing the size of the RO Model due to a reduction in pricing
                variability and expecting to be able to detect a savings of 3.2 percent
                or greater at a significance level of 0.05 and with a power of 0.8. The
                definition of discount factor codified at Sec. 512.205 also included
                the proposed percentages. To simplify the regulation text, we proposed
                to include the discount percentages at Sec. 512.205 and remove the
                percentages from Sec. 512.255(c)(8).
                 We solicited public comments on our proposal in section
                XVIII.C.5.h. of the CY 2022 OPPS/ASC proposed rule (86 FR 42301).
                 The following is a summary of the public comments received on this
                proposal and our response:
                 Comment: No commenters agreed with the proposed discounts, and many
                commenters proposed that discounts be set to 3 percent or less. Some
                commenters stated that they believe the RO pricing methodology fails to
                recognize that radiation oncology services rely heavily on the use of
                advanced technology and equipment that requires a significant financial
                investment. One of those commenters estimated that 85 percent of costs
                are equipment and technology related, and that beyond upfront capital
                investment in equipment, hospitals incur significant on-going costs
                related to software upgrades and equipment calibration. Furthermore,
                this commenter argued that the high-upfront investment costs and the
                proprietary nature of the equipment pose a barrier to switching
                vendors. Given this, the commenter stated that there are limited
                opportunities for RT providers and RT suppliers that are already
                adhering to evidence-based treatment guidelines to generate additional
                savings through internal cost reduction efforts.
                 One commenter noted that the proposed discounts, along with other
                aspects of the RO Model's pricing methodology, do not recognize the
                ongoing support of skilled staff necessary to operate a clinic. Many
                commenters specifically referenced the proposed discounts in
                combination with continued declines in MPFS payment rates as the source
                of their concern. They believe the combination will result in payment
                cuts that will put many RO participants in financial jeopardy.
                 One commenter stated the impact of the discount factor will be
                particularly acute for clinics in communities that serve patients who
                are more likely to be covered by Medicare or Medicaid programs, rather
                than privately funded employer-based health plans. According to the
                commenter, due to this payer mix, this group of physicians typically
                has more limited financial resources than their peers in other areas,
                making it difficult to invest in the resources necessary to participate
                in value-based payment programs. This commenter argued that as a result
                of this, the RO Model will exacerbate health disparities.
                 One commenter recommended that if CMS implements the RO Model
                during the COVID-19 PHE, that CMS gradually phase in the discount
                factor to allow time for RO participants to implement the systems
                necessary to succeed under the RO Model, retain the resources necessary
                to respond quickly to the ever-evolving PHE, and reinvest in a capital-
                intensive service line to ensure that access to care is maintained. One
                commenter stated its belief that in the event of a resurgence of the
                COVID-19 PHE or another nationwide emergency that leads to large
                disruptions in medical care, CMS should eliminate all downside risk for
                all participants as was done across models during the COVID-19 PHE in
                2020.
                 Many commenters, recommending a discount factor of 3 percent or
                less, argued that this would be more in line with other payment models
                and ensure that radiation oncology providers have sufficient capital to
                remain operational and invest in the necessary resources (human and
                equipment) to increase efficiency and enhance beneficiary care. A few
                commenters recommended a discount of less than 3 percent to align with
                the discounts CMS applied to Oncology Care Model participants in a two-
                sided risk arrangement. A few commenters called attention to the
                discounts in both the Bundled Payment for Care Improvement-Advanced and
                Comprehensive Care for Joint Replacement (CJR) models. One commenter
                noted that the discounts in both models are no more than 3 percent, and
                that in CJR, hospitals that exhibit superior quality outcomes will have
                their discount factor reduced to as low as to 1.5 percent. Another
                commenter recommended CMS set lower discount rates for high performers,
                citing the CJR model as an example where CMS allows participants to
                earn back a percentage of the discount applied to the episodes based on
                quality performance. This commenter noted the recent finalized changes
                to the CJR model, which essentially eliminate the discount applied
                under the CJR model for the highest performing hospitals. One commenter
                recommended that CMS eliminate the discount factors altogether.
                 Response: We thank these commenters for expressing their concerns
                and for their suggestions. We designed the RO Model to test whether
                prospective episode payments in lieu of traditional FFS payments for RT
                services will reduce Medicare expenditures while preserving or
                enhancing quality. CJR finalized the elimination of the discount for
                high performers in PY6-8 so as to increase the accuracy of target
                prices compared to actual performance period spending. We would like to
                note that the RO Model's discount factors do not inform the accuracy of
                its episode pricing in the way that discounts do for CJR's pricing. We
                have made every effort to be responsive to stakeholder requests to
                lower the discount from what was finalized. In order to be able to
                detect an impact of the Model, we cannot further reduce the discounts
                beyond 3.5 percent and 4.5 percent for the PC and TC, respectively,
                without changing
                [[Page 63929]]
                other aspects of the Model, such as increasing the size of the Model.
                There has been no interest from stakeholders in increasing the number
                of CBSAs selected for participation in the Model.
                 As for the concern that the RO Model will exacerbate health
                disparities, we have no data or evidence to suggest that this will be
                the case. We believe that the RO Model presents a number of
                opportunities to minimize health disparities that currently exist.
                First, under the RO Model, RO participants will also have the
                opportunity to work collaboratively on performance improvement. The RO
                Model will offer shared communication platforms and educational
                webinars on specific topics of interest. These opportunities will
                enable RO participants to learn from their peer network and share best
                practices. CMS will also provide quarterly feedback reports to RO
                participants so they can better understand their individual patterns of
                care delivery, compare their data to other similar RO participants in
                the RO Model, and identify opportunities for quality improvement. In
                addition, RO participants can submit a DRA, requesting beneficiary
                line-level claims data, episode-level data, and participant-level data
                from CMS to help improve their patient care and care coordination.
                 At the beneficiary-level, we believe the RO Model has the potential
                to minimize health disparities in care. The potential for fewer
                treatments under the episode-based payment approach may lead to reduced
                side effects from treatment, reduced travel time required for
                treatment, less time spent in a doctor's office or waiting room, and
                more free time to engage in other activities that can help improve
                their overall quality of life. Furthermore, RO participants will be
                required to document an RO beneficiary's performance status to help
                inform the treatment plan and assess the effects of treatment on that
                individual and their quality of life. Every RO participant will be
                required to send a treatment summary to each RO beneficiary's referring
                physician to facilitate communication and coordination of care. Prior
                to the start of treatment, RO participants are also required to discuss
                with RO beneficiaries whether the goal of treatment is curative or
                palliative and the associated costs including cost-sharing
                responsibilities to facilitate shared decision-making. As we stated in
                the Specialty Care Models final rule (85 FR 61171), we plan to
                carefully monitor the RO Model for unintended consequences as finalized
                in sections III.C.14 (85 FR 61252) and III.C.16 (85 FR 61257). If our
                monitoring reveals that the Model reduces patient access to care, we
                would consider making changes to the Model via future rulemaking.
                Moreover, our evaluation will consider longer-term impacts on health
                outcomes associated with the Model.
                 We are finalizing as proposed the discount factor for the PC at 3.5
                percent and the discount factor for the TC at 4.5 percent. We received
                no comments specifically on the proposed definition of discount factor,
                and therefore, we are finalizing as proposed to codify this definition
                at Sec. 512.205, removing the percentages from Sec. 512.255(c)(8). If
                the RO Model's scope were to increase at some point in the future via
                rulemaking, we could explore lowering the discount.
                i. Withholds
                 We codified at Sec. 512.255(c)(10) that we would apply a 2 percent
                quality withhold from each professional episode payment after applying
                the trend factor, geographic adjustment, case mix and historical
                experience adjustments, and discount factor to the national base rate.
                In the CY 2021 OPPS/ASC final rule (85 FR 85866), we delayed RO Model
                quality measures requirements to what would have been PY2 (January 1,
                2022 through December 31, 2022) under the model performance period
                described in that final rule with comment and thus delayed the
                application of the quality withhold to that PY2. In the CY 2022 OPPS/
                ASC proposed rule, we proposed that RO participants submit quality
                measure data starting in PY1 (when the model performance period begins)
                as described in section XVIII.C.6. of the CY 2022 OPPS/ASC proposed
                rule, and that beginning in PY1, a 2 percent quality withhold for the
                PC would be applied to the applicable trended national base rates after
                the case mix and historical experience adjustments.
                 We solicited public comments on our proposal in section
                XVIII.C.5.i. of the CY 2022 OPPS/ASC proposed rule (86 FR 42301).
                 The following is a summary of the public comments received on this
                proposal and our response:
                 Comment: Some commenters disagreed with this proposal. A few
                commenters expressed concern, because they believe RO participants will
                not be able to earn back the full amount withheld, no matter how good
                the performance. One commenter recommended that the 2 percent quality
                withhold should not occur until PY2, as was originally proposed.
                Another commenter recommended that CMS allow RO participants the
                opportunity to earn back above their quality withhold based on quality
                performance just as CMS allows participants in the Direct Contracting
                model to qualify for a bonus above the participant's quality withhold
                from a High Performers Pool.
                 Response: We thank these commenters for expressing their concerns
                and for their suggestions. We believe that the upfront quality withhold
                will provide the incentive for RO participants to provide high-quality
                care. Further, we believe that the predetermined withholds help support
                the Model goal of providing RO participants with prospective,
                predictable payments. The quality withhold allows the Model to link
                quality to payment, which is a key requirement of QPP. Please note that
                Professional participants and Dual participants could earn up to the
                full amount of the quality withhold (2 percent of the professional
                episode payment amounts) for a given PY based on their performance on
                the AQS. Since we are collecting quality measures in PY1, it is
                necessary to have a quality withhold in PY1. Please note that we did
                not propose to change the amount of the quality withhold.
                 After consideration of the public comments, we are finalizing as
                proposed that RO participants submit quality measure data starting in
                PY1 (when the model performance period begins) as described in section
                XVIII.C.6. of the CY 2022 OPPS/ASC proposed rule, and that beginning in
                PY1, a 2 percent quality withhold for the PC will be applied to the
                applicable trended national base rates after the case mix and
                historical experience adjustments. We are codifying this policy at
                Sec. 512.255(c)(10).
                j. Adjustment for Geography
                 We described in the Specialty Care Models final rule (85 FR 61198)
                that the geographic adjustment whereby the RO Model-specific relative
                value unit (RVU) values would be derived from the national base rates
                which are based on 2016 to 2018 episodes that had the majority of
                radiation treatment services furnished at an HOPD and that were
                attributed to an HOPD. We finalized that we would use only 2018
                episodes to calculate the implied RVU shares. We proposed in the CY
                2022 OPPS/ASC proposed rule to modify this provision to align with the
                proposed model performance period so that the final year of the
                baseline period would be used to calculate the implied RVU shares. For
                example, for a baseline period of 2017-2019, 2019 would be used to
                calculate the implied RVU shares.
                [[Page 63930]]
                 We solicited public comments on our proposal to use the final year
                of the baseline period to calculate the implied RVU shares in the CY
                2022 OPPS/ASC proposed rule (86 FR 42302).
                 We received no comments and therefore, we are finalizing our
                proposal without modification to use the final year of the baseline
                period to calculate the implied RVU shares.
                k. Example of Participant-Specific Professional Episode Payment and
                Participant-Specific Technical Episode Payment for an Episode Involving
                Lung Cancer in PY1
                 In section XVIII.C.5.k of the CY 2022 OPPS/ASC proposed rule (86 FR
                42304), we noted that we are analyzing whether the COVID-19 PHE
                resulted in a decrease in Medicare FFS claims submissions for RT
                services during 2020 relative to historical levels. For this reason,
                under the extreme and uncontrollable policy proposed in section
                XVIII.C.10. of the CY 2022 OPPS/ASC proposed rule, pending 12-months of
                claims run-out for RT services furnished in 2020, we described that we
                would consider the removal of 2020 data from the calculation of any
                applicable baseline period or trend factor. We also noted that we are
                not considering the exclusion of 2020 from the case mix adjustment at
                this time, because the case mix episodes are weighted equally (unlike
                the baseline period, where more recent episodes are given more weight
                than earlier episodes), and the case mix adjustment does not rely on
                the volume of RT services furnished.
                 We solicited public comments on our EUC policy as it concerns
                pricing methodology and the use of certain episode data (86 FR 42311
                through 42312). We have summarized and responded to comments in that
                section.
                6. Quality-Form, Manner, and Timing for Quality Reporting
                 In the Specialty Care Models final rule (85 FR 61220 through
                61223), we finalized that the RO Model quality measure reporting will
                be based on a CY. We also stated in that final rule at 85 FR 61222,
                that in selecting measures for the RO Model, we sought to include a set
                of meaningful, parsimonious measures, reflective of the CMS Meaningful
                Measures framework that balances the need for data about participant
                performance without creating undue burden on participants. One set of
                measures used by all RO participants will provide insight for CMS and
                the radiation oncology field as a whole into how care quality compares
                across multiple markets. Selective or limited reporting of measures
                would hinder the ability of CMS to measure or analyze the impact of the
                Model on quality. In the CY 2021 OPPS/ASC final rule, we delayed RO
                Model quality measures requirements to PY2 (January 1, 2022 through
                December 31, 2022). We proposed in in section XVIII.C.6. of the CY 2022
                OPPS/ASC proposed rule that Professional participants and Dual
                participants submit quality measure data starting in PY1 during the
                proposed model performance period (86 FR 42306 through 42307). Under
                this proposal, if the proposed model performance period starts mid-
                year, the CY collection period would remain the same as if the model
                performance period began on January 1. For example, if the model
                performance period starts in July, RO participants would collect
                quality measure data for that CY starting in January, allowing RO
                participants to use their MIPS data submission to meet the RO Model
                requirements.
                 We solicited public comments on our proposal in section XVIII.C.6
                of the CY 2022 OPPS/ASC proposed rule (86 FR 42306 through 42307).
                 The following is a summary of the public comments received on this
                proposal and our response:
                 Comment: We received many comments from RO participants stating
                that they will not be ready to start gathering quality measure data on
                January 1, 2022, in order to report for PY1. Commenters stated that the
                requirements were extensive and additional time would be required to
                develop new processes and procedures.
                 Response: We thank commenters for their comments. The RO Model was
                finalized to start January 1, 2021, in the Specialty Care Model final
                rule (85 FR 61135 through 61137) and RO participants were notified at
                that time of their inclusion in the RO Model when that final rule was
                published in September 2020. RO participants have had over a year to
                prepare for their participation in the RO Model. When the CY 2022 OPPS/
                ASC proposed rule was published, CMS released the Quality Measure and
                Clinical Data Elements Guide on the RO Model website, along with the
                associated CDE templates for each of the five cancer types. We have
                provided education and outreach support to encourage the efficient
                collection and submission of this data, including a webinar related to
                Model requirements in September 2021 to help RO participants prepare
                for the various requirements. We have additional webinars planned
                specifically on the QPP, and quality measures and CDEs. Therefore, we
                believe that RO participants have had adequate time to prepare.
                 We direct readers to section XVII.C.10 of this final rule with
                comment period, which discusses our proposal and decision to finalize
                an EUC policy that would allow CMS flexibility in responding to
                national, regional, or local circumstances that adversely impact RO
                participants' ability to deliver care in accordance with the RO Model's
                requirements, including the COVID-19 PHE. The EUC policy will give CMS
                the ability to delay some of these quality measure and CDE reporting
                requirements, as needed.
                 Comment: Many commenters recommended changes to the quality measure
                process. Many commenters asked for a voluntary phase-in period to
                collect quality measure data, which they believe would allow RO
                participants to become operational within the RO Model and provide
                better data. We received many comments asking CMS to delay the
                implementation of data collection for 2 years, while one commenter
                requested an 18-month delay.
                 Response: We proposed that RO participants' first submission for
                the set of quality measures for PY1 (beginning on January 1, 2022) in
                section XVIII.C.8.b. of the CY 2022 OPPS/ASC proposed rule, would occur
                in March 2023, based on the timeline finalized in the Specialty Care
                Models final rule at 85 FR 61211 (footnote 44). We believe beginning
                the model performance period on January 1, 2022 will allow RO
                participants to review and to develop best practices to facilitate
                their data collection and to work with EHR vendors to seek additional
                EHR support as necessary. We have also done outreach to vendors since
                the Specialty Care Models final rule published in 2020 to help prepare
                them for the start of the RO Model.
                 Comment: A couple of commenters urged CMS to provide additional
                details on quality measure and CDE collection and submission processes
                to give RO participants additional time to prepare their systems and
                comply with these requirements. One commented asked for additional
                tools and supportive resources up front to aid in implementation. The
                same commenter asked for an expansion of collection types and reporting
                mechanisms for the quality measures in order to align with quality
                reporting programs in other models.
                 Response: When the CY 2022 OPPS/ASC proposed rule was published,
                CMS released the Quality Measure and Clinical Data Elements Guide on
                the RO Model website, along with the
                [[Page 63931]]
                associated CDE templates for each of the five cancer types \569\. This
                guide may be updated in the future to include additional details on
                implementation. We have provided education and outreach support to
                encourage the efficient collection and submission of this data,
                including a webinar related to Model requirements in September 2021 to
                help RO participants prepare for the various requirements, and we have
                additional webinars planned specifically on the QPP program and quality
                measures and CDEs.
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                 \569\ These documents are currently located at https://innovation.cms.gov/innovation-models/radiation-oncology-model. If
                newer versions are posted, these documents will be moved to https://innovation.cms.gov/innovation-models/radiation-oncology-archived-materials.
                ---------------------------------------------------------------------------
                 Comment: A few commenters opposed the implementation of quality
                measures in the RO Model, stating that the measures would not yield
                information reflective of quality in a radiation oncology practice and
                would do little to encourage actual improvement in the quality of
                patient care.
                 Response: We disagree with commenters' assertions regarding the
                impact of quality measurement in the RO Model. As we discussed in the
                Specialty Care Models final rule (85 FR 61214), we believe that the
                measures we are adopting are appropriate for inclusion in the RO Model.
                We selected all measures based on clinical appropriateness for RT
                services spanning a 90-day episode period. We believe that radiation
                oncologists have an important role to play in ensuring that their
                patients have a plan to address pain, that they communicate treatment
                with other providers and suppliers to ensure the RO beneficiaries are
                receiving coordinated care, and that they have been screened for
                depression and have an advance care plan. By encouraging radiation
                oncologists to provide guidance and care coordination as well as engage
                with patients throughout their treatments, we believe these measures
                will improve both patients' outcomes and their experience of care. We
                believe both depression screening and advance care planning help RO
                beneficiaries ensure they are engaged and pursuing the best course of
                treatment for them. We believe that including appropriate quality
                measures in the RO Model--as in other Innovation Center Alternative
                Payment Models (APMs)--is critical to ensuring that quality of care is
                preserved or enhanced within an episode payment model testing whether
                CMS expenditures are reduced. Furthermore, if we did not finalize
                quality measures for the RO Model, it would not satisfy the criteria to
                be an Advanced APM or a MIPS APM.
                 Comment: One commenter asked that CMS retain two of the finalized
                quality measures but consider revising the full list to focus on the
                work of radiation oncologists with Medicare patients. The same
                commenter asked that we revise the specifications for all quality
                measures in the RO Model to only include Medicare patients in the
                denominator.
                 Response: As stated in the Specialty Care Models final rule (85 FR
                61220) we believe collecting data for all patients who meet the
                denominator specifications for each measure from a Professional
                participant or Dual participant, and not just Medicare beneficiaries,
                is appropriate because it is consistent with the applicable measure
                specifications, and any segmentation to solely the Medicare populations
                would be inconsistent with the measure and add substantial reporting
                burden to RO participants. We continue to believe that reporting on
                all-payer data is important to improve and drive the quality of care
                furnished to all patients, including Medicare beneficiaries.
                 Comment: Many commenters expressed concern that EHR vendors will
                use the new requirements to generate additional fees for their
                products, thereby placing RO participants, especially those that are
                small and rural, at greater financial risk.
                 Response: We understand the commenters' concern about the cost of
                these requirements, but we note that three of the four proposed quality
                measures are already included in the MIPS program, so we expect that
                some of these measures may already be familiar to EHR vendors. We
                believe that the quality measures and CDEs can be collected manually if
                desired, which would not require payment of additional fees to EHR
                vendors.
                 After consideration of the comments received, we are finalizing as
                proposed that Professional participants and Dual participants submit
                quality measure data starting in PY1 of the model performance period.
                 We also proposed that for PY1, Professional participants and Dual
                participants would be required to submit data for three pay-for-
                performance measures: (1) Plan of Care for Pain; (2) Screening for
                Depression and Follow-Up Plan; and (3) Advance Care Plan. Professional
                participants and Dual participants would be required to submit data on
                a fourth measure, Treatment Summary Communication--Radiation Oncology,
                as a pay-for-reporting measure. All quality measure data will be
                reported using the RO Model secure data portal in the manner consistent
                with that submission portal and the measures' specifications. We intend
                to use data submitted by Professional participants and Dual
                participants for the Treatment Summary Communication--Radiation
                Oncology measure in PY 1 and PY2 to propose a benchmark to re-specify
                it as a pay-for-performance measure, for PY3.
                 We proposed that we may update the specifications for the Treatment
                Summary Communication--Radiation Oncology measure, should new
                specifications from the measure's steward meet the RO Model's needs.
                Any non-substantive updates to the specifications for this measure
                would be communicated in a form and manner specified by CMS. Any
                substantive changes to measure specifications would be addressed
                through notice and comment rulemaking.
                 We solicited public comments on our proposal in section XVIII.C.6.
                of the CY 2022 OPPS/ASC proposed rule (86 FR 42307).
                 The following is a summary of the public comments received on this
                proposal and our response:
                 Comment: One commenter agreed with the proposal.
                 Response: We thank the commenter.
                 Comment: We received some comments disagreeing with the proposal
                because the Treatment Summary Communication--Radiation Oncology measure
                is not NQF-endorsed, is not an outcome measure, is burdensome, and is
                not used in other CMS programs.
                 Response: We believe that updated specifications for the Treatment
                Summary Communication--Radiation Oncology measure may allow for easier
                implementation of the quality measure and reduced burden. While NQF
                endorsement and status as an outcome measure are important criteria to
                consider in the selection of quality measures, we continue to believe
                that the information captured by this measure is relevant to the RO
                Model and critical to patients' care continuity and coordination.
                 After consideration of the comments received, we are finalizing as
                proposed that we may update the specifications for the Treatment
                Summary Communication--Radiation Oncology measure, should new
                specifications from the measure's steward meet the RO Model's needs.
                Any non-substantive updates to the specifications for this measure will
                be communicated in a form and manner specified by CMS. Any substantive
                changes to measure specifications will be addressed through notice and
                comment rulemaking.
                [[Page 63932]]
                 We finalized that we would have a CMS-approved contractor
                administer the Consumer Assessment of Healthcare Providers and Systems
                (CAHPS[supreg]) Cancer Care Survey for Radiation Therapy, beginning in
                April 2021 (85 FR 61220). In the CY 2021 OPPS/ASC final rule, we
                revised this policy so that a CMS-approved contractor would administer
                the CAHPS[supreg] Cancer Care Survey for Radiation Therapy beginning in
                October 2021. Given the change in model performance period due to the
                delay under section 133 of the CAA 2021, we proposed in section
                XVIII.C.6 of the CY 2022 OPPS/ASC proposed rule (86 FR 42307) that we
                would amend existing policy such that the CMS-approved contractor will
                begin administering the CAHPS[supreg] Cancer Care Survey for Radiation
                Therapy on behalf of the RO participants and CMS as soon as there are
                completed RO episodes, no earlier than the fourth month of the model
                performance period.
                 We solicited public comments on our proposal in section XVIII.C.6
                of the CY 2022 OPPS/ASC proposed rule (86 FR 42307).
                 The following is a summary of the public comments received on this
                proposal and our response:
                 Comment: One commenter supported our proposal.
                 Response: We thank the commenter.
                 Comment: Some commenters requested additional clarification on
                future pay-for-performance use of the CAHPS[supreg] Cancer Care Survey
                for Radiation Therapy, requested clarification of sampling of the
                CAHPS[supreg] Cancer Care Survey for Radiation Therapy, suggested use
                of a web-based data collection mode, requested clarification on overlap
                with non-RO Model uses of CAHPS[supreg] surveys, or requested
                modifications to account for low patient survey response rates.
                 Response: We appreciate these comments; however, they are not
                related to our proposal. Please refer to our policies related to the
                CAHPS[supreg] Cancer Care Survey for Radiation Therapy in the Specialty
                Care Models final rule (85 61219-61220). We may consider other comments
                on the CAHPS[supreg] Cancer Care Survey for Radiation Therapy in future
                notice and comment rulemaking.
                 After consideration of the comments received, we are finalizing
                without modification our proposal that the CMS-approved contractor will
                begin administering the Consumer Assessment of Healthcare Providers and
                Systems (CAHPS[supreg]) Cancer Care Survey for Radiation Therapy as
                soon as there are completed RO episodes, no earlier than the fourth
                month of the model performance period.
                 In the Specialty Care Models final rule at 85 FR 61223 we discussed
                that in selecting CDEs for the RO Model, we sought to balance the need
                for data about participant performance without creating undue burden on
                participants. In that same final rule (85 FR 61223 through 61226), we
                finalized under the RO Model's clinical data collection policy that
                Professional participants and Dual participants must collect certain
                clinical information not available in claims or quality measures, with
                data collection starting in PY1. In the CY 2021 OPPS/ASC final rule (85
                FR 86262), we revised this policy so that the collection period for
                CDEs would begin on January 1, 2022. We proposed in section XVIII.C.6
                of the CY 2022 OPPS/ASC proposed rule (86 FR 42307) that Professional
                participants and Dual participants submit CDEs starting in PY1.
                 We solicited public comments on our proposal in section XVIII.C.6
                of the CY 2022 OPPS/ASC proposed rule (86 FR 42307).
                 The following is a summary of the public comments received on this
                proposal and our response:
                 Comment: We received a few comments asking for changes to the
                reporting timeline for the CDEs. A few commenters asked that the
                reporting period for the CDEs align with the quality measures so there
                is one reporting period every year in March. Many commenters expressed
                concern that the CDEs would need to be manually reported, which would
                take time and resources. One commenter asked that the CDE reporting
                requirement under the RO Model be delayed for two years to allow time
                for RO participants to develop work flows and work with EHR vendors.
                Many commenters asked that we select CDEs that can be extracted from
                EHRs and linear accelerators.
                 Response: While we appreciate that commenters may prefer
                streamlined reporting periods, we believe that it is important to
                capture the CDEs twice per year to allow for appropriate monitoring of
                the RO Model and support early work on the development of outcomes-
                based quality measures. In contrast, we do not believe that twice per
                year quality measure data reporting is necessary as it is not used in
                the development of new outcomes-based quality measures. CMS has shared
                the CDEs and templates with vendors to facilitate the work needed to
                extract the CDEs from their EHR systems.
                 Comment: We received a few comments asking that we reduce the CDE
                reporting threshold lower than 95 percent.
                 Response: We believe that the 95 percent threshold is important to
                ensure the quality and usability of the CDEs received by CMS. By
                maintaining the 95 percent threshold, CMS will maximize its ability to
                support monitoring and evaluation of the Model and begin developing new
                outcome-based quality measures. A reduction in this threshold may
                jeopardize the ability to draw conclusions from data received from RO
                participants, thus defeating the purpose of the CDEs.
                 Comment: We received a comment stating that CDEs should not be
                captured unless they will be used to risk adjust quality performance or
                to set payment rates.
                 Response: As we described in the Specialty Care Models final rule
                at 85 FR 61223, these data may be used to inform future refinements to
                the RO Model.
                 After consideration of comments received, we are finalizing as
                proposed that Professional participants and Dual participants submit
                CDE data starting in PY1 of the model performance period.
                7. RO Model as an Advanced Alternative Payment Model (Advanced APM) and
                a Merit Based Incentive Payment System APM (MIPS APM)
                 At the time of the publication of the Specialty Care Models final
                rule, the model performance period began on January 1, 2021 and ended
                December 31, 2025 (42 CFR 512.205). We finalized in the Specialty Care
                Models final rule the policy that we expected the RO Model to meet the
                criteria to be an Advanced APM and a MIPS APM under the Quality Payment
                Program beginning in PY1 of the RO Model.
                 In the CY 2021 OPPS/ASC final rule (85 FR 86262), we finalized our
                proposal to amend this policy to reflect that we anticipated that the
                RO Model will meet the criteria to be both an Advanced APM and a MIPS
                APM under the Quality Payment Program starting in PY2 which would begin
                on January 1, 2022. Despite the delay required by the CAA, 2021, we
                expect the RO Model to meet the criteria to be an Advanced APM and a
                MIPS APM beginning in PY1, beginning January 1, 2022. Final CMS
                determinations of Advanced APM status and a list of MIPS APMs for the
                2022 performance period will be announced via the Quality Payment
                Program website at https://qpp.cms. gov/. We anticipate that the RO
                Model will meet the Advanced APM criteria, reflected in our regulation
                at Sec. 414.1415 in PY1 and all subsequent PYs.
                 As stated in the CY 2022 OPPS/ASC proposed rule, the first
                criterion to be an Advanced APM is set forth at
                [[Page 63933]]
                Sec. 414.1415(a), CEHRT use. For the RO Model, this criterion is
                satisfied by the requirements of Sec. 512.220(b), that RO participants
                must use CEHRT; that the RO participant must annually certify its use
                of CEHRT during the model performance period; and that the RO
                participant will be required to certify its use of CEHRT within 30 days
                of the start of each PY (86 FR 42307).
                 As stated in the CY 2022 OPPS/ASC proposed rule, the second
                criterion to be an Advanced APM is at Sec. 414.1415(b), Payment based
                on quality measures. This criterion is satisfied because payment under
                the RO Model is based on MIPS-comparable quality measures, as specified
                in regulation at Sec. 414.1415(b). Specifically, the RO participant
                will have their payment amount adjusted by the 2 percent quality
                withhold with the chance of earning back some or all of that amount
                based on their AQS, as codified at Sec. 512.255(c)(10). For further
                discussion of these requirements, please see the Specialty Care Models
                final rule at 85 FR 61211 through 61231.
                 As stated in the CY 2022 OPPS/ASC proposed rule, the third
                criterion to be an Advanced APM is set forth at Sec. 414.1415(c),
                Financial Risk. This criterion is satisfied by the application of the
                discount factor to RO Model payments, codified at Sec. 512.255(c)(8);
                the application of the quality withhold to the RO Model payments,
                codified at Sec. 512.255(c)(10); and the fact that RO participants are
                responsible for 100 percent of all expenditures in excess of the
                expected amount of expenditures beyond those covered by the
                participant-specific professional episode payment or the participant-
                specific technical episode payment as codified at Sec. 512.265, with
                the exception of those RO participants that qualify for the stop-loss
                policy as codified at Sec. 512.285(f). The finalized changes to the
                stop-loss policy described in section XVII.C.5.f. and the discount
                amounts described in section XVII.C.5.h. of this final rule with
                comment period do not affect the satisfaction of the Financial Risk
                criterion.
                 As finalized in the CY 2021 OPPS/ASC final rule at 85 FR 61237, and
                reiterated in the CY 2022 OPPS/ASC proposed rule, for the subset of RO
                participants that are limited to the total amount of losses they may
                incur because they are eligible for the stop-loss policy, that limit is
                set to 20 percent of expected expenditures for which the RO
                participants are responsible for under the RO Model. Therefore, even
                when the RO Model stop-loss policy is applicable, the RO Model still
                meets the Financial Risk criterion to be an Advanced APM, which is 3
                percent of the expected expenditures for which an APM Entity is
                responsible under the APM, at Sec. 414.1415(c)(3)(i)(B).
                 As stated in the CY 2022 OPPS/ASC proposed rule, the MIPS APM
                criteria at Sec. 414.1367(b) specify that APM entities in a MIPS APM
                must participate in the APM under an agreement with CMS or through a
                law or regulation, and the APM must base payment on quality measures
                and cost/utilization. Professional participants and Dual participants
                are required to report quality measures, as codified at Sec.
                512.275(c), and the RO Model meets the quality measure and cost/
                utilization requirement through the application of the quality
                withhold, codified at Sec. 512.255(c)(10), and the use of the
                Aggregate Quality Score (AQS) and its application to the quality
                withhold, as finalized at 85 FR 61226 through 61231. Pursuant to
                Sec. Sec. 414.1317 and 414.1367, MIPS eligible clinicians who are
                identified on a participation list of an APM Entity participating in a
                MIPS APM during the performance period have unique reporting options
                under MIPS.
                 We clarified in the CY 2022 OPPS/ASC proposed rule (86 FR 42308)
                that Professional participants and Dual participants who meet the RO
                Model requirements codified at Sec. 512.220, including use of CEHRT,
                and who are eligible clinicians on a Participation List as those terms
                are defined at Sec. 414.1305, would fall into a category called
                ``Track One'' of the RO Model. We noted that RO Model participants in
                Track One would be considered to be participating in the Advanced APM
                track of the RO Model, and we would make Qualifying APM Participant
                (QP) determinations for the eligible clinicians on the RO Model
                Participation List for Track One as provided in Sec. 414.1425. In the
                CY 2022 OPPS/ASC proposed rule, we stated that we anticipated that
                Track One of the RO Model would also meet the criteria to be a MIPS APM
                under the definition at Sec. 414.1305 starting January 1, 2022 (86 FR
                42307). If eligible clinicians who are Track One RO Participants do not
                meet the thresholds to become QPs, they can report to MIPS using
                reporting options applicable to MIPS APM participants as specified at
                Sec. 414.1367.
                 We also proposed in the CY 2022 OPPS/ASC proposed rule that, at the
                start of a PY, if Professional participants or Dual participants failed
                to meet any of the RO Model requirements codified at Sec. 512.220,
                which includes use of CEHRT, they would be moved into a separate
                category called ``Track Two'' of the RO Model for that PY (86 FR
                42308). We proposed to define ``Track Two'' to mean an APM for Dual
                participants and Professional participants who do not meet the RO Model
                requirements set forth at Sec. 512.220 and for all Technical
                participants. RO participants that fall into Track Two would not be
                participating in an Advanced APM or MIPS APM for the RO Model. As such,
                we would not make QP determinations for the eligible clinicians on the
                RO Model Participation List for Track Two. We proposed to codify
                definitions for ``Track One'' and ``Track Two'' at Sec. 512.205. If an
                RO participant meets the CEHRT use requirements pursuant to Sec.
                414.1415(a)(1)(i) by the last QP determination snapshot date specified
                at Sec. 414.1325, they would be moved to Track One of the RO Model and
                would be considered at that point to be participating in an Advanced
                APM, provided the RO participant meets all other RO Model requirements
                set forth at Sec. 512.220.
                 In the CY 2022 OPPS/ASC proposed rule, we stated that we recognized
                that any failure, however minor, to comply with the RO Model
                requirements set forth at Sec. 512.220(a)(2) would have an impact on
                whether an RO Model participant is in Track One versus Track Two.
                Section 512.220(a)(2) contains a number of requirements, including
                requirements to discuss goals of care and RO Model cost-sharing
                responsibilities with each RO beneficiary; adhere to nationally
                recognized, evidence-based clinical treatment guidelines when
                appropriate; assess each RO beneficiary's tumor, note, and metastasis
                cancer stage; and send a treatment summary to each RO beneficiary's
                referring physician within 3 months of the end of the treatment. Under
                our proposal, any failure to comply with the requirements of Sec.
                512.220(a)(2) would have resulted in Track Two status for the RO
                participant and would be subject to remedial action under Sec.
                512.160. However, we recognized that an RO participant's noncompliance
                with the terms of Sec. 512.220(a)(2) might not be discovered until
                after CMS has treated the RO participant as if they were in Track One,
                including potentially making QP determinations for an RO participant's
                eligible clinicians and making APM Incentive Payments (or, in years
                beginning with CY 2026, applying a differentially higher update under
                the Physician Fee Schedule) (86 FR 42308). In that event, the payments
                we would make based on the QP status of the RO participant's eligible
                clinicians pursuant to its Track One status would constitute
                overpayments. We are concerned that,
                [[Page 63934]]
                in the case of minor noncompliance with the requirements of Sec.
                512.220(a)(2), such overpayment liability may be too harsh. We
                considered removing the requirement that RO Model participants must
                meet all of the requirements codified in Sec. 512.220(a)(2) to remain
                in Track One, but feel that these requirements are important to quality
                improvement in radiation oncology. We noted in the CY 2022 OPPS/ASC
                proposed rule that we were considering whether the final rule should
                modify some of the requirements in Sec. 512.220(a)(2). For example,
                instead of requiring certain actions for ``each RO beneficiary,'' we
                were considering whether to require those actions for a majority of RO
                beneficiaries or substantially all RO beneficiaries. In addition, we
                noted that we were considering whether to modify certain requirements
                to permit payment of some or all of the payments made based on the QP
                status the RO participant's eligible clinicians pursuant to its Track
                One participation, depending on the severity of noncompliance and other
                factors (86 FR 42308).
                 We solicited public comments on these proposals, including whether
                the RO Model can meaningfully improve the quality of care if any of the
                requirements specified in Sec. 512.220(a)(2) are modified, which
                requirements would be appropriate for modification, the impact of
                recoupment, and if there are more effective ways to encourage quality
                improvement and Track One participation in section XVIII.C.7 of the CY
                2022 OPPS/ASC proposed rule (86 FR 42308).
                 The following is a summary of the public comments received on this
                proposal and our response:
                 Comment: A few commenters agreed with our proposal as a whole. Many
                commenters asked that CMS remove the Track One and Track Two policy as
                it makes it more difficult for RO participants to achieve QP status or
                was otherwise unfair to some RO participants.
                 Response: We appreciate the commenters' concerns. We would like to
                note that the definitions of Track One and Track Two were only added as
                a clarification for RO participants. Removing Track One and Track Two
                would not, in fact, make it easier for an RO participant to meet QP
                status as it might disqualify the entire RO Model from being an
                Advanced APM and a MIPS APM.
                 Further, in order to better align the RO Model with the QPP, and in
                response to these comments, we are creating three categories for RO
                participants, ``Track One'', ``Track Two'', and ``Track Three''
                codified at Sec. 512.205. Structurally, Track One as proposed will now
                be divided into two tracks and Track Two as proposed will become Track
                Three. Track One will be for RO participants who comply with all RO
                requirements, including CEHRT, and we anticipate that Track One will be
                both an Advanced APM and MIPS APM. Track Two will be for those RO
                participants who comply with all RO requirements except for CEHRT, and
                we anticipate that Track Two will be a MIPS APM, but would not meet the
                CEHRT use criterion to be an Advanced APM. Track Three will be for all
                other RO participants, and we anticipate that Track Three will not be
                an Advanced APM or MIPS APM. We believe that identifying these three
                tracks is responsive to some of the concerns raised by these
                commenters. This change would create an incentive for RO participants
                that are not able to implement CEHRT to be compliant with other aspects
                of the RO Model in order to participate in a MIPS APM. This also avoids
                misalignment of RO Model tracks with the MIPS APM criteria, which do
                not require CEHRT.
                 After considering public comments, we are finalizing with
                modification the definitions of Track One, and Track Two, and adding a
                definition for Track Three. We are finalizing the definition of Track
                One to mean a track for Professional participants and Dual participants
                that meet all RO Model requirements set forth at Sec. 512.220,
                including use of CEHRT. Consistent with this definition, we anticipate
                that RO Model participants in Track One will be considered to be
                participating in an Advanced APM and MIPS APM under the RO Model, and
                we will make Qualifying APM Participant (QP) determinations for the
                eligible clinicians on the RO Model Participation List for Track One as
                provided in Sec. 414.1425. We anticipated that Track One of the RO
                Model would also meet the criteria to be a MIPS APM under the
                definition at Sec. 414.1305 starting January 1, 2022. If eligible
                clinicians who are Track One RO Participants do not meet the thresholds
                to become QPs, can report to MIPS using reporting options applicable to
                MIPS APM participants as specified at Sec. 414.1367.
                 We are finalizing the definition of Track Two to mean a track for
                Professional participants and Dual participants that meet all RO Model
                requirements set forth at Sec. 512.220, except for use of CEHRT. That
                is, a Dual participant or Professional participant who does not use
                CEHRT but meets all other RO Model requirements set forth at Sec.
                512.220 would be in Track Two. We anticipate that RO participants in
                Track Two will be considered to be participating in a MIPS APM under
                the RO Model.
                 We are finalizing the definition of Track Three to mean a track for
                Professional participants and Dual participants who do not meet one or
                more of the RO Model requirements set forth at Sec. 512.220(a); and
                for all Technical participants. For example, a Professional participant
                or Dual participant that does not adhere to nationally recognized,
                evidence-based clinical treatment guidelines when appropriate would be
                in Track Three. We anticipate that RO participants that fall into Track
                Three will be considered to be participating in an APM, but not in an
                Advanced APM or MIPS APM, under the RO Model. As such, we will not make
                QP determinations for the eligible clinicians on the RO Model
                Participation List for Tracks Two and Three. And eligible clinicians on
                the RO Model Participation List for Track Three will not have the
                unique MIPS reporting options available to participants in a MIPS APM
                (though they will receive MIPS Improvement Activity scoring credit for
                participation in an APM). We are codifying these definitions at Sec.
                512.205.
                 We would also like to note that we are not modifying any
                requirements to permit payment of some or all of the payments made
                based on the QP status of the RO participant's eligible clinicians
                pursuant to its Track One participation, depending on the severity of
                noncompliance and other factors.
                a. Technical Participants and the Quality Payment Program
                 In the CY 2022 OPPS/ASC proposed rule, we proposed that Technical
                participants that are freestanding radiation therapy centers (as
                identified by a TIN) that only provide the technical component (TC),
                are not required to report quality measures under the RO Model, and
                fall into Track Two of the RO Model. We proposed that Technical
                participants would not be considered to be participating in Advanced
                APMs or MIPS APMs under the RO Model. However, Technical participants
                that are freestanding radiation therapy centers would be able to attest
                to their participation in an APM for purposes of MIPS, and may be
                eligible to receive Improvement Activity credit as specified at Sec.
                414.1317(b)(3).
                 In the CY 2022 OPPS/ASC proposed rule, we also proposed that if the
                Technical participants that are freestanding radiation therapy centers
                (as identified by a TIN) begin providing the PC at any point during the
                model
                [[Page 63935]]
                performance period, then they must notify CMS within 30 days, in a form
                and manner specified by CMS. We proposed that they would also be
                required under the RO Model to report quality measures by the next
                reporting period, which would be March following a PY for quality
                measures and July of a PY or January following a PY for the CDEs, as
                finalized at 85 FR 61211 through 61231. If they meet the requirements
                to be a Track One RO participant at one of the QP determination dates
                specified in Sec. 414.1425(b), they would be considered to be
                participating in an Advanced APM and a MIPS APM. Once a Technical
                participant that is a freestanding radiation therapy center begins
                providing the professional component, the freestanding radiation
                therapy center becomes a Dual participant as defined in Sec. 512.205.
                We noted that we would monitor these RO participants for compliance
                with the requirement to report quality measures if they begin providing
                the professional component. We proposed to codify this policy at Sec.
                512.275(d).
                 We solicited public comments on our proposal in section
                XVIII.C.7.a. of the CY 2022 OPPS/ASC proposed rule (86 FR 42308 through
                42309). The following is a summary of the public comments received on
                this proposal and our response:
                 Comment: CMS received many comments asking that Technical
                participants be eligible for QP determination. Some commenters noted
                that the APM Incentive Payment is not only an incentive to participate
                in the Model, but these commenters believe that it is also designed to
                support practice transformation essential for meaningful APM
                participation. According to the commenters, the RO Model participation
                requirements establish new, unreimbursed practice expenses that would
                normally be paid from technical fee revenue. Unless the APM Incentive
                Payment is applied to both the professional and technical charges, the
                commenter stated that those RO participants will be at a distinct
                disadvantage and unable to achieve true practice transformation.
                 Response: We appreciate the commenters' concerns regarding
                Technical participant eligibility for QP determination. We understand
                that the APM Incentive Payment can support practice transformation, but
                we do not agree with the commenter that purpose of the APM Incentive
                Payment is to support practice transformation for meaningful APM
                participation. Please refer to Sec. 414.1450 for more information on
                the APM Incentive Payment. We disagree with the commenters that
                Technical participants should be eligible for QP determinations under
                the RO Model. We continue to believe that eligibility for QP
                determination should be limited to Professional participants and Dual
                participants. This model is intended to be site neutral, meaning that
                Technical participants that are freestanding radiation therapy centers
                paid under the PFS and Technical participants that are HOPDs paid under
                the OPPS should be treated equally. The majority of Technical
                participants are HOPDs and are not subject to QPP and there are only a
                few freestanding radiation therapy centers that furnish only the TC. We
                would also note that Technical participants are not required to report
                quality measures or clinical data, or to have CEHRT, under the RO
                Model.
                 After considering public comments, we are finalizing as proposed
                our proposals related to Technical participants that are freestanding
                radiation therapy centers. We would like to add one non-substantive
                change to the text of the CY 2022 OPPS/ASC proposed rule. We proposed
                that Technical participants would not be considered to be participating
                in Advanced APMs or MIPS APMs under the RO Model. We would like to
                clarify this text to state that we proposed that Technical participants
                will not be participating in Track One or Track Two of the RO Model,
                and are therefore would not be participants in an Advanced or MIPS APM
                under the RO Model.
                 We have also removed the regulation at Sec. 512.217(c)(3)(iii)
                that Technical participants that are freestanding radiation therapy
                centers would be able to attest to their participation in an APM for
                purposes of MIPS, and may be eligible to receive Improvement Activity
                credit as specified at Sec. 414.1317(b)(3), as this language was
                unnecessary. All participants in APMs are evaluated for Improvement
                Activity credits under MIPS (Sec. 414.1355).
                 We are codifying these policies related to Technical participants
                that are freestanding radiation therapy centers at Sec. 512.275(d). We
                are also revising for clarification the notice requirement language at
                Sec. 512.275(d)(1) to remove the duplicative use of the term
                ``certify.''
                b. Individual Practitioner List
                 In the Specialty Care Models final rule, we finalized our proposal
                to codify the requirements concerning the review and certification of
                the individual practitioner list at Sec. 512.217. In the CY 2021 OPPS/
                ASC final rule (85 FR 86262), we amended this regulation so that the
                individual practitioner list was not to be used for QP determinations
                or for determining participants in a MIPS APM for purposes of MIPS
                reporting and scoring rules in PY1, and the individual practitioner
                list was to only be used for the QPP in PY1 to assign an automatic 50
                percent score for the Improvement Activity performance category in MIPS
                for RO participants. This amendment stated that starting in PY2
                (January 1, 2022), the individual practitioner list was to be used to
                identify the relevant eligible clinicians for the purpose of making QP
                determinations and for certain aspects of MIPS under the Quality
                Payment Program. The CAA, 2021 prohibits implementation of the RO Model
                prior to January 1, 2022. We clarified in section XVIII.C.7.b of the CY
                2022 OPP/ASC proposed rule that all requirements concerning the review
                and certification of the individual practitioner list finalized and
                codified at Sec. 512.217 will remain in effect starting on the first
                day of the model performance period (86 FR 42309).
                 In the Specialty Care Models final rule, we codified at Sec.
                512.217(a) that upon the start of each PY, CMS creates and provides to
                each Dual participant and Professional participant an individual
                practitioner list which identifies by NPI each individual practitioner
                associated with the RO participant.
                 We proposed in section XVIII.C.7.b of the CY 2022 ASC/OPPS proposed
                rule to modify this policy to include that Technical participants that
                are freestanding radiation therapy centers would also be provided an
                individual practitioner list (86 FR 42309). We also proposed to add to
                the regulation at Sec. 512.217(b) that in the case of a Dual
                participant, Professional participant, or Technical participant that is
                a freestanding radiation therapy center, which begins participation in
                the RO Model after the start of a given PY, but at least 30 days prior
                to the last QP determination snapshot date specified at Sec. 414.1325,
                of that PY, CMS would create and provide the new Dual participant,
                Professional participant, or Technical participant that is a
                freestanding radiation therapy center with an individual practitioner
                list. Any new Dual participant, Professional participant, or Technical
                participant that is a freestanding radiation therapy center that begins
                participation in the RO Model after the start of the PY must review and
                certify their individual practitioner list by the last QP determination
                snapshot date specified at Sec. 414.1325.
                [[Page 63936]]
                 In the CY 2022 ASC/OPPS proposed rule we proposed to change this
                policy to be inclusive of new RT providers and RT suppliers that would
                be required to participate in the RO Model after the start of a PY; we
                believe this proposal would give all RO participants, including those
                that begin participation in the RO Model after the start of a PY, more
                time to review and certify their individual practitioner lists.
                 We solicited public comments on reviewing and certifying individual
                practitioner lists. The following is a summary of the public comments
                received on this proposal and our response:
                 Comment: We received one comment in support of the proposal to
                review and certify individual practitioner lists.
                 Response: We thank this commenter for their support.
                 We are finalizing as proposed to codify this policy to review and
                certify individual practitioner lists at our regulation at Sec.
                512.217(b).
                 In the Specialty Care Models final rule, we codified at Sec.
                512.217(b) and (c)(1) that the RO participant must review and certify
                the individual practitioner list within 30 days of receipt of the
                individual practitioner list. We also codified at Sec.
                512.217(d)(1)(i) and (d)(2)(i) that the RO participant must notify CMS
                within 30 days when there are any additions or removals of eligible
                clinicians to the individual practitioner list.
                 In section XVIII.C.7.b of the CY 2022 ASC/OPPS proposed rule, we
                proposed to modify these policies so that RO participants will have the
                ability to review their individual practitioner list and add or drop
                the necessary NPIs from the list up until the last QP determination
                snapshot date specified at Sec. 414.1325. We proposed to change this
                policy to give RO participants more time to review and certify their
                individual practitioner lists by requiring this by the last QP
                determination snapshot date specified at Sec. 414.1325, instead of
                within 30 days of receipt of the individual practitioner list (86 FR
                42309).
                 We invited public comments on this proposal to modify the timeframe
                for which individual practitioner lists shall be certified in the
                proposed rule.
                 We received no comments on this proposal (86 FR 42309) and
                therefore we are finalizing as proposed to codify this policy at our
                regulation at Sec. 512.217(c)(1) and at Sec. 512.217(d)(1)(i) and
                (d)(2)(i), and we are finalizing our policy at Sec. 512.217(b) with a
                non-substantive modification for clarity. We are revising Sec.
                512.217(b) for clarity to remove the duplicate use of the term
                ``certify'' regarding an RO participant's requirement to certify the
                individual practitioner list.
                 In the Specialty Care Models final rule, we codified at Sec.
                512.217(c)(3) that if Dual participant or Professional participant does
                not verify and certify the individual practitioner list by the deadline
                specified by CMS, RO participants on the unverified list are not
                recognized as participants on a participation list of either a MIPS APM
                or Advanced APM.
                 In section XVIII.C.7.b. of the CY 2022 ASC/OPPS proposed rule, we
                proposed to add at Sec. 512.217(c)(3)(iii) that if individual
                practitioners who participate in the RO Model with Technical
                participants that are freestanding radiation therapy centers are not
                included on a verified list, they would not be eligible to receive
                Improvement Activity credit under MIPS.
                 We solicited public comments on this proposal to add Sec.
                512.217(c)(3)(iii) in section XVIII.C.7.b of the CY 2022 OPPS/ASC OPPS
                proposed rule (86 FR 42309).
                 We received no comments on this proposal and therefore we are
                finalizing as proposed to codify this policy at our regulation at Sec.
                512.217(c)(3)(iii).
                c. RO Model Requirements
                 In the Specialty Care Models final rule, we codified at Sec.
                512.220(b) that RO participants must use CEHRT, that the RO participant
                must annually certify its use of CEHRT during the model performance
                period, and that the RO participant will be required to certify its use
                of CEHRT within 30 days of the start of each PY. In CY 2021 OPPS/ASC
                final rule (85 FR 86262), we amended the CEHRT requirement beginning in
                PY2, on January 1, 2022, and to be required for PY2 through PY5.
                However, section 133 of the CAA 2021 prohibits implementation of the RO
                Model prior to January 1, 2022.
                 In section XVIII.C.7.c. of the CY 2022 OPPS/ASC OPPS proposed rule,
                we proposed that the CEHRT requirement would begin in PY1 of the model
                performance period and that RO participants must certify their use of
                CEHRT at the start of PY1 and each subsequent PY, as codified at Sec.
                512.220(b)(1) and (2). We also proposed to codify at Sec.
                512.220(b)(3) that if an RO participant begins participation in the RO
                Model at any time during an ongoing PY, they would have to certify
                their use of CEHRT by the last QP determination snapshot date specified
                at Sec. 414.1325.
                 In the Specialty Care Models final rule, we codified at Sec.
                512.220(a)(1) that RO participants must satisfy the requirements set
                forth at Sec. 512.220 to qualify for the APM Incentive Payment. In
                section XVIII.C.7.c. of the CY 2022 OPPS/ASC OPPS proposed rule, we
                proposed to amend Sec. [thinsp]512.220(a)(1) to state that RO
                participants must satisfy the requirements set forth at Sec.
                [thinsp]512.220 to be included in Track One of the RO Model. If RO
                participants do not meet those requirements in a PY, the RO participant
                would be in Track Two for the applicable PY.
                 We invited public comments on these proposals related to compliance
                with the CEHRT requirements and the other requirements as conditions to
                be included in Track One of the RO Model. The following is a summary of
                the public comments received on this proposal and our response:
                 Comment: Many commenters disagreed with the proposal, stating that
                there is added expense and time required to implement CEHRT. Some
                commenters recommended that we implement rural or low-volume exemptions
                to the CEHRT requirement.
                 Response: We appreciate the commenters' concerns. While we
                understand the expense and time required to implement CEHRT, we believe
                that CEHRT is an important element of high-quality care delivery and
                provides the foundation for improved communication and review of
                clinical data. We believe that the low-volume opt-out included in the
                RO Model eliminates the need for an additional low-volume or rural
                exemption to the CEHRT requirement, and we believe that use of CEHRT is
                still important in rural areas.
                 As discussed in section XVII.C.7.a of this final rule with comment
                period, we are finalizing with modification our proposal to categorize
                RO participants into three tracks. We believe that the finalized
                ``Track Two'' RO participant category allows RO participants who do not
                wish to certify their use of CEHRT to be eligible for MIPS APM
                reporting and scoring pathways. We believe that this modified policy
                may lessen the burden of the CEHRT requirement by allowing participants
                who do not wish or are not able to meet the CEHRT requirement to be
                eligible for MIPS APM scoring pathways.
                 Comment: We received many comments noting that the requirements at
                Sec. 512.220 are burdensome and should be modified or removed because
                EHR vendors may require additional time to develop fields necessary to
                capture adherence to the requirements.
                 Response: We appreciate that the requirements at Sec. 512.220 may
                require additional effort by RO participants. However, we disagree with
                the
                [[Page 63937]]
                commenters and do not believe that the requirements will add
                significant administrative burden as CMS will not require RO
                participants to report to CMS on these actions with the exception of
                attesting to the use of CEHRT, the accuracy of their IPL, and
                participation in a PSO. Rather, compliance with these requirements will
                be confirmed during virtual and in-person site visits, as described in
                the Specialty Care Models final rule and codified at Sec. Sec. 512.130
                and 512.150 where CMS may ask for evidence that these requirements are
                being met. CMS has taken meaningful action to prepare RO participants
                for the requirements listed at Sec. 512.220. For example, CMS has
                hosted a webinar on RO Model requirements. Further, as stated in
                section XII.C.1 of this final rule, we believe that we have provided
                sufficient time, since the publication of the Specialty Care Models
                final rule in September 2020, for RO participants and their EHR vendors
                to implement the software that RO participants may need to adhere to
                the RO Model requirements. We also note that although an RO participant
                may document these requirements using their EHR system if they wish, no
                changes to EHR systems are required for tracking compliance with RO
                Model requirements. We would also note that how an RO participant
                tracks their compliance is at their discretion, as long as the RO
                participant can substantiate their compliance with documentation during
                a CMS site visit or audit. We are finalizing as proposed to maintain
                the requirements at Sec. 512.220.
                 After considering public comments, we are finalizing with
                modification that RO participants must satisfy the requirements set
                forth at Sec. [thinsp]512.220 to be included in Track One of the RO
                Model. RO participants that meet all of these RO Model requirements in
                a PY, except for use of CEHRT, will be in Track Two for the applicable
                PY. RO participants that do not meet one or more of the RO Model
                requirements in paragraph (a) of this section will be in Track Three
                for the applicable PY. This policy is codified at Sec. 512.220(a)(1).
                We are also finalizing as proposed to that the CEHRT requirement would
                begin in PY1 of the proposed model performance period and that RO
                participants must certify their use of CEHRT at the start of PY1 and
                each subsequent PY. This policy is codified at Sec. 512.220(b)(1) and
                (2). Finally, we are finalizing as proposed that RO if an RO
                participant begins participation in the RO Model at any time during an
                ongoing PY, they must certify their use of CEHRT by the last QP
                determination snapshot date specified at Sec. 414.1325. This policy is
                codified at Sec. 512.220(c).
                8. Reconciliation Process
                a. Initial Reconciliation
                 Reconciliation is the process to calculate reconciliation payments
                or repayment amounts for incomplete episodes and duplicate RT services.
                We stated in the Specialty Care Models final rule at 85 FR 61243 that
                we would conduct the initial reconciliation for PY1 as early as August
                2022, and the PY2 initial reconciliation as early as August 2023, and
                so forth. Given our proposed changes in section XVIII.C.1. of the CY
                2022 OPPS/ASC proposed rule to the model performance period (86 FR
                42290) which we made in response to the delay under section 133 of the
                CAA 2021, and our decision to finalize that proposal in section
                XVII.C.1. of this final rule with comment period, we expect to conduct
                the initial reconciliation each August for the preceding PY. For
                example, for PY1, we would conduct the initial reconciliation as early
                as August of PY2.
                 In the CY 2021 OPPS/ASC final rule with comment period, we
                finalized our proposal to amend our regulations at Sec. 512.285(d)
                such that the quality reconciliation payment amount would not be
                applicable for PY1, because there would not be a quality withhold in
                PY1. Proposing to change the model performance period and the
                application of a quality withhold to begin in PY1 as described in
                section XVIII.C.5.i. of the CY 2022 OPPS/ASC proposed rule required
                proposing an amendment to our regulations at Sec. 512.285(d) such that
                the quality reconciliation payment amount will apply to all PYs.
                 We solicited public comments on our proposal in section
                XVIII.C.8.a. of the CY 2022 OPPS/ASC proposed rule (86 FR 42310).
                 The following is a summary of the public comments received on this
                proposal and our response:
                 Comment: Some commenters disagreed with the proposal for the
                quality withhold to begin in PY1as described and summarized in section
                XVIII.C.5.i. of this final rule with comment period.
                 Response: Because we are finalizing our proposals at section
                XVII.C.6. of this final rule with comment period that quality measures
                and CDEs will be reported in PY1, we cannot delay the application of
                the quality withhold in PY1, making the quality reconciliation payment
                amount applicable to all PYs. The quality withhold allows the RO Model
                to include quality measure results as a factor when determining payment
                to RO participants, which is one of the Advanced APM criteria as
                codified in 42 CFR 414.1415(b)(1).
                 We are finalizing as proposed that beginning in PY1, a 2 percent
                quality withhold for the PC will be applied to the applicable trended
                national base rates after the case mix and historical experience
                adjustments, and we will codify this policy at Sec. 512.255(c)(10). We
                are finalizing as proposed that the application of a quality withhold
                will begin in PY1. Finally, we are amending our regulations at Sec.
                512.285(d) such that the quality reconciliation payment amount will
                apply to all PYs.
                b. True-Up Reconciliation
                 The true-up reconciliation is the process used to calculate
                additional reconciliation payments or repayment amounts for incomplete
                episodes and duplicate RT services that are identified after the
                initial reconciliation and after a 12-month claims run-out for all RO
                episodes initiated in the applicable PY. We stated in the Specialty
                Care Models final rule that we would conduct the PY1 true-up
                reconciliation as early as August 2023, and the PY2 true-up
                reconciliation as early as August 2024, and so forth (85 FR 61244). We
                note that this section only involves the removal of the reference to
                specific years, and, instead, references the specific period of time of
                ``August of the CY following an initial reconciliation for a PY.'' This
                allows the text to remain current even if there is a change in baseline
                period or model performance period. We expect to conduct the true-up
                reconciliation as early as August of the CY following an initial
                reconciliation for a PY. For example, for PY1, we would conduct the
                true-up reconciliation as early as August of PY3.
                c. Reconciliation Amount Calculation
                 We codified at Sec. 512.285(c)(3) that a subset of incomplete
                episodes in which: (1) The TC is not initiated within 28 days following
                the PC; (2) the RO beneficiary ceases to have traditional FFS Medicare
                prior to the date upon which a TC is initiated, even if that date is
                within 28 days following the PC; or (3) the RO beneficiary switches RT
                provider or RT supplier before all RT services in the RO episode have
                been furnished, the RO participant would be owed only what it would
                have received under FFS for the RT services furnished to that RO
                beneficiary. CMS will reconcile the episode payment for the PC and TC
                that was paid to the RO participant with what the FFS payments would
                have been for those RT services using no-pay claims. Furthermore, we
                finalized in the case that traditional
                [[Page 63938]]
                Medicare ceases to be the primary payer for an RO beneficiary after the
                TC of the RO episode has been initiated but before all included RT
                services in the RO episode have been furnished, each RO participant
                would be paid only the first installment of the episode payment. The RO
                participant would not be paid the EOE PC or TC for these RO episodes.
                 We proposed in section XVIII.C.8.c. of the CY 2022 OPPS/ASC
                proposed rule to modify this policy such that for all incomplete
                episodes as defined at Sec. [thinsp]512.205, including when the RO
                beneficiary ceases to have traditional FFS Medicare before all included
                RT services in the RO episode have been furnished, CMS would reconcile
                the episode payment for the PC and TC that was paid to the RO
                participant(s) with what the FFS payments would have been for those RT
                services using no-pay claims. After further reviewing data for
                incomplete episodes, including incomplete episodes where an RO
                beneficiary ceases to have traditional FFS Medicare before the end of
                an episode, we determined that the data did not support paying RO
                participants only the first installment of an episode for this type of
                incomplete episode. Upon further review of this data and stakeholder
                comments on this policy, we proposed in section XVIII.C.8.c. of the CY
                2022 OPPS/ASC proposed rule to amend Sec. 512.285(c)(3) and (4)
                accordingly.
                 In light of the proposal to modify payment for incomplete episodes,
                we also proposed conforming changes to Sec. 512.255(c)(12)(iv)
                regarding beneficiary coinsurance for incomplete episodes.
                Specifically, we proposed to modify Sec. 512.255(c)(12)(iv) to specify
                that the coinsurance for all incomplete episodes is 20 percent of the
                FFS amount applicable to the RT services that were furnished.
                 We codified at Sec. 512.205 a definition for ``stop-loss
                reconciliation amount'' to mean the amount owed to RO participants that
                have fewer than 60 episodes during 2016 through 2018 and were
                furnishing included RT services in the CBSAs selected for participation
                at the time of the effective date of the Specialty Care Models final
                rule for the loss incurred under the RO Model as described in Sec.
                512.285(f). We proposed to modify the definition for ``stop-loss
                reconciliation amount'' to mean the amount owed to RO participants that
                have fewer than 60 episodes during the baseline period and were
                furnishing included RT services before the start of the model
                performance period in the CBSAs selected for participation for the loss
                incurred under the RO Model as described in Sec. 512.285(f), in order
                to make this definition consistent with the proposed model performance
                period.
                 We solicited public comments on our proposals in section
                XVIII.C.8.c. of the CY 2022 OPPS/ASC proposed rule (86 FR 42310). The
                following is a summary of the public comments received on these
                proposals and our response:
                 We solicited public comments on our proposal to modify Sec.
                512.255(c)(12)(iv) such that for all incomplete episodes as defined at
                Sec. 512.205, including when the RO beneficiary ceases to have
                traditional FFS Medicare before all included RT services in the RO
                episode have been furnished, CMS would reconcile the episode payment
                for the PC and TC that was paid to the RO participant(s) with what the
                FFS payments would have been for those RT services using no-pay claims.
                We received no comments on this proposal.
                 We solicited public comments on our proposal to specify that the
                coinsurance for all incomplete episodes is 20 percent of the FFS amount
                applicable to the RT services that were furnished and to make
                conforming changes to Sec. 512.255(c)(12)(iv) regarding beneficiary
                coinsurance for incomplete episodes.
                 Comment: We received one comment requesting additional information
                on how RO participants should reconcile beneficiary coinsurance for
                incomplete episodes in a way that is least burdensome to RO
                participants and their RO beneficiaries.
                 Response: We finalized in the Specialty Care Models final rule our
                proposal to codify at Sec. 512.255(c)(12) a policy that: (1) Permits
                RO participants to collect beneficiary coinsurance payments for
                services furnished under the RO Model in multiple installments via a
                payment plan, (2) prohibits RO participants from using the availability
                of payment plans as a marketing tool to influence beneficiary choice of
                health care provider; and (3) provides that an RO participant offering
                such a payment plan may inform the beneficiary of the availability of
                the payment plan prior to or during the initial treatment planning
                session and as necessary thereafter. We believe that this policy places
                a low burden on RO participants and their RO beneficiaries. We also
                noted in the Specialty Care Models final rule (85 FR 61199) that RO
                participants that set up coinsurance payment plans may be able to
                charge and adjust coinsurance more timely and accurately for incomplete
                episodes, but in some circumstances the true amount owed by the
                beneficiary may not be determined until the reconciliation process has
                occurred.
                 We are finalizing as proposed to reconcile the episode payment for
                the PC and TC that was paid to the RO participant(s) with what the FFS
                payments would have been for those included RT services using no-pay
                claims and codifying this policy at our regulation at Sec.
                512.255(c)(12)(iv).
                 We solicited comments in section XVIII.C.2. of the CY 2022 OPPS/ASC
                proposed rule on the definition for ``stop-loss reconciliation amount''
                to mean the amount owed to RO participants that have fewer than 60
                episodes during the baseline period and were furnishing included RT
                services before the start of the model performance period in the CBSAs
                selected for participation for the loss incurred under the RO Model as
                described in Sec. [thinsp]512.285(f).
                 Comment: Some commenters disagreed with the proposed stop-loss
                policy as described and summarized in section XVIII.C.5.f of this final
                rule with comment period.
                 Response: We responded to these comments in section XVII.C.5.f of
                this final rule with comment period. As noted in that section, we are
                finalizing our proposal to modify the stop-loss policy such that those
                RO participants that had begun furnishing included RT services any time
                before the start of the model performance period in the CBSAs selected
                for participation are eligible for such a stop-loss limit. Accordingly,
                as noted in that section, we are finalizing Sec.
                [thinsp]512.255(c)(7)(iv) and Sec. 512.205 as proposed. We are also
                finalizing our proposal to revise the introductory text for Sec.
                512.285(f) with one modification, the removal of the word ``any time''
                for consistency with Sec. 512.255(c)(7)(iv).
                9. Potential Overlap With Other Models Tested Under Section 1115A of
                the Act and CMS Programs
                 In the Specialty Care Models final rule (85 FR 61258), we stated
                that we did not envision that the prospective episode payments made
                under the RO Model would need to be adjusted to reflect payments made
                under any of the existing models being tested under section 1115A of
                the Act or the Medicare Shared Savings Program (Shared Savings Program)
                under section 1899 of the Act. We also stated that if, in the future,
                we determined that such adjustments are necessary, we would propose
                overlap policies for the RO Model through notice and comment
                rulemaking. However, we did not codify this policy in the regulations
                for the RO Model at that time. The RO Model is not a total cost of care
                model, and includes only RT services in the episode payment. The RO
                Model's payments are narrow in scope because they are limited to RT
                services furnished during
                [[Page 63939]]
                a distinct period of time. Because the RO Model makes prospective
                payments for only RT services provided during an episode, a practice
                participating in the RO Model would receive the same prospective
                episode payment for RT services regardless of its participation in
                other CMS models or programs.
                 Thus, as we noted in in section XVIII.C.9. of the CY 2022 OPPS/ASC
                proposed rule (86 FR 42310), we continue to see no need to adjust the
                prospective episode payments made under the RO Model to reflect
                payments made under the Shared Savings Program or under any other
                models tested under section 1115A of the Act. We proposed to codify
                this policy on overlaps at Sec. 512.292. The financial methodology and
                accounting policies under the applicable model tested under section
                1115A of the Act or under the Shared Savings Program will continue to
                govern the way in which RO Model payments are factored into
                reconciliation calculations for that initiative. We believe that other
                initiatives that use a total cost of care approach could consider
                taking the necessary steps to update their financial methodologies to
                adjust for the RO Model payments, but we note that the RO Model
                payments may only be a small portion of the population's overall
                payments.
                 We solicited public comments on our proposal to codify our overlap
                policy in section XVIII.C.9 of the CY 2022 OPPS/ASC proposed rule (86
                FR 42310).
                 We received no comments on this proposal and therefore we are
                finalizing the proposed new regulation at Sec. 512.292 without
                modification.
                10. Extreme and Uncontrollable Circumstances Policy
                 The nation, its communities, and its health care providers, on
                certain occasions, are forced to confront extreme and uncontrollable
                circumstances (EUC) outside of their control that impact their ability
                to operate in the ordinary course of business for short-term or
                sometimes even extended periods. For example, the U.S. has been
                responding to an the ongoing COVID-19 PHE, which has impacted the U.S.
                health care system, presenting challenges for stakeholders across the
                health care delivery system and supply chain. Other extraordinary
                events that have a disruptive impact may also occur in the future.
                These events may include other public health emergencies, large-scale
                natural disasters (such as, but not limited to, hurricanes, tornadoes,
                and wildfires), or other types of disasters. Such events may strain
                health care resources, and CMS understands that RT providers and RT
                suppliers may have limited capacity to continue normal operations and
                fulfill RO Model participation requirements under such circumstances.
                Therefore, we proposed to adopt an EUC policy for the RO Model which
                would allow CMS to revise the model performance period; grant certain
                exceptions to RO Model requirements to ensure the delivery of safe and
                efficient health care; and revise the RO Model's pricing methodology.
                a. Extreme and Uncontrollable Circumstance Affects the Nation, Region,
                or a Locale
                 We proposed in section XVIII.C.10. of the CY 2022 OPPS/ASC proposed
                rule (86 FR 42311) to define an EUC as a circumstance that is beyond
                the control of one or more RO participants, adversely impacts such RO
                participants' ability to deliver care in accordance with the RO Model's
                requirements, and affects an entire region or locale. We proposed that
                if CMS determines that there has been an EUC for a geographic region,
                CMS may: (1) Amend the model performance period; (2) eliminate or delay
                certain reporting requirements for RO participants; and (3) amend the
                RO Model's pricing methodology. Application of the modifications would
                be based on the severity and types challenges that the circumstance
                imposes on RO participants. In every circumstance, CMS would seek to
                minimize impact on the RO participants not affected by the EUC, while
                supporting those that are affected.
                 In a national, regional, or local event, we proposed to apply the
                EUC policy only if the magnitude of the event calls for the use of
                special authority to help providers respond to the emergency and
                continue providing care. We would not use a bright-line test to assess
                all types of public health emergencies, disasters, or other
                extraordinary circumstances; application of the policy would be
                tailored to the specific circumstance, and to the affected geographic
                areas. To help identify RO participants that are experiencing an
                extreme and uncontrollable circumstance, CMS would consider the
                following factors:
                 Whether the RO participants are furnishing services within
                a geographic area considered to be within an ``emergency area'' during
                an ``emergency period'' as defined in section 1135(g) of the Social
                Security Act.
                 Whether the geographic area within a county, parish, U.S.
                territory, or tribal government designated under the Stafford Act
                served as a condition precedent for the Secretary's exercise of the
                1135 waiver authority, or the National Emergencies Act.
                 Whether a state of emergency has been declared in the
                relevant geographic area.
                 In the event that one or more of these conditions are present, CMS
                would announce that the EUC policy applies to one or more RO
                participants within an affected geographic area. CMS would communicate
                this decision via the RO Model website and written correspondence to RO
                participants.
                 We solicited public comments on our proposal in section XVIII.C.10
                of the CY 2022 OPPS/ASC proposed rule (86 FR 42311). The following is a
                summary of the public comments received on this proposal and our
                response:
                 Comment: We received many comments on the proposed policy. All
                commenters expressed support for adopting an EUC policy to the RO
                Model.
                 Response: We thank commenters for their support.
                 Comment: Many commenters asked for clarity on how CMS will
                determine a geographic region or geographic area when determining an
                EUC. One commenter asked that CMS maintain ample flexibility in
                defining ``geographic region or geographic area'' and ``state of
                emergency.'' Many commenters encouraged CMS to maintain ample
                flexibility regarding how the Agency will define a ``geographic region
                or geographic area'' and ``state of emergency'' declaration under this
                proposal in order to address participant-level COVID-19 infection
                trends, hospitalizations and staffing shortages irrespective of the
                status of a state or geographic region, as a whole.
                 Response: We are clarifying that the affected geographic region(s)
                or geographic area(s) is/are generally identified by state, county, or
                ZIP Code within the emergency declaration. CMS will identify affected
                RO participants by ZIP Code just as we did for participation in the
                Model. ``State of emergency'' is equivalent to the situation described
                in the emergency declaration including the emergency area and emergency
                period. If RO participants are concerned that CMS may be unaware of a
                situation that they believe should qualify for modification under the
                EUC policy, RO participants could contact the RO Model Help Desk at
                [email protected] with the RO Participant's RO Model ID, a
                description of the emergency, the affected areas, and the duration of
                the emergency period included in the declaration. If an emergency
                exists only in specific geographic areas, the EUC policy would allow
                CMS to invoke the provisions
                [[Page 63940]]
                related to reporting requirements and other RO Model requirements, and
                adjust the quality withhold portion of the pricing methodology, for
                only the affected geographic areas, as described below and finalized at
                Sec. 512.249.
                 After consideration of comments received, we are finalizing as
                proposed our definition that EUC stands for ``extreme and
                uncontrollable circumstance'' and means a circumstance that is beyond
                the control of one or more RO participants, adversely impacts such RO
                participants' ability to deliver care in accordance with the RO Model's
                requirements, and affects an entire region or locale. We are also
                finalizing as proposed to codify this definition at Sec. 512.205.
                b. Model Performance Period
                 In instances where an EUC is nation-wide and impacts RO
                participants' ability to implement the requirements of the RO Model at
                the start of the model performance period, we proposed that CMS may
                delay the start date of the model performance period by up to one CY.
                RO participants would be notified of any changes to the model
                performance period on the RO Model website no later than 30 days prior
                to the original start date. In the case where a delay to the model
                performance period is required because of an EUC, various other aspects
                of the RO Model may be impacted, including its status as an Advanced
                APM and the years that would be included in the baseline period. The
                implications of a model performance period delay on other aspects of
                the RO Model would also be included in the RO Model website
                notification no later than 30 days prior to the original start date. In
                the case of a regional EUC, we did not propose to modify the model
                performance period, but proposed instead to either delay or exempt RO
                Model requirements, as discussed in section XVIII.C.10.c. of the CY
                2022 OPPS/ASC proposed rule for the RO participants in the impacted
                region.
                 We solicited public comments on our proposal in section XVIII.C.10.
                of the CY 2022 OPPS/ASC proposed rule (86 FR 42311). The following is a
                summary of the public comments received on this proposal and our
                response:
                 Comment: A few commenters asked whether, if we were still in a PHE
                on January 1, 2022, CMS would use this authority to change any RO Model
                requirements. Many commenters stated their belief that the current PHE
                warrants a delay in the start of the model performance period. Many
                cited the continued rise in Delta variant cases causing delays in
                cancer surgeries, staffing shortages, and decreased RT services in
                their comments. One commenter stated their assumption that by including
                this provision of the EUC policy that CMS would be delaying the start
                of the model performance period.
                 Response: We appreciate commenters' feedback on the impact of the
                COVID-19 PHE on them, and we will consider this feedback in any
                decisions related to potential EUC flexibilities. We note that there
                has been another 90-day extension of the current PHE declaration such
                that the current PHE will overlap with the start of the model
                performance period, unless the Secretary terminates the PHE before the
                latest 90-day extension expires CMS will continue to monitor the
                impacts of COVID-19 on radiation oncology to determine whether the EUC
                policy may need to be invoked, and if so, which flexibilities to
                invoke. If and when CMS invokes any of the flexibilities due to an EUC,
                related to the COVID-19 PHE or otherwise, we will communicate this
                decision via the RO Model website and written correspondence to RO
                participants.
                 Comment: One commenter encouraged CMS to identify in the final rule
                regions that it intends to declare as EUC regions for the 2022 calendar
                year, and to develop and conduct monthly reviews of a ``EUC map'' and
                add new EUC regions should the COVID-19 PHE continue to surge into
                2022.
                 Response: We thank the commenter for the feedback We will take this
                comment into consideration in the future.
                 After consideration of the comments received, we are finalizing our
                proposal that, in instances where an EUC is nation-wide and impacts RO
                participants' ability to implement the requirements of the RO Model at
                the start of the model performance period, CMS may delay the start date
                of the model performance period by up to one CY.
                c. Reporting Requirements
                 Quality Measures and Clinical Data Elements: If an EUC impacts RO
                participants' ability to comply with the RO Model's quality measure or
                CDE reporting requirements, we proposed that CMS may delay or exempt
                the affected RO participants from the reporting requirements, make the
                requirements optional, extend the time for RO participants to report
                data to CMS, as applicable, or both. CMS would modify or grant
                exceptions to the RO Model's reporting requirements if, for example,
                affected RO participants could not submit their quality and clinical
                data reporting due to electricity or internet outages caused by an EUC.
                 Other Model Requirements: Because RO participants must focus on
                direct care, we proposed that CMS may waive compliance with or adjust
                the requirement that RO participants actively engage with an AHRQ-
                listed patient safety organization (PSO) and provide Peer Review (audit
                and feedback) on treatment plans.
                 We solicited public comments on our proposal in section XVIII.C.10.
                of the CY 2022 OPPS/ASC proposed rule (86 FR 42311). The following is a
                summary of the public comments received on this proposal and our
                response:
                 Comment: One commenter encouraged CMS to deploy the EUC policy
                options related to quality measure and clinical data reporting whenever
                a given state or region faces a relevant emergency that impacts their
                patients and staff.
                 Response: The EUC regulations allow CMS to determine the impact of
                the EUC on RO participants' ability to comply with the RO Model's
                quality measure or CDE reporting requirements. CMS may delay or exempt
                the affected RO participants from the reporting requirements, make the
                requirements optional, extend the time for RO participants to report
                data to CMS, as applicable, or both. CMS may modify or grant exceptions
                to the RO Model's reporting requirements if, for example, affected RO
                participants could not submit their quality and clinical data reporting
                due to electricity or internet outages caused by an EUC. If RO
                participants are concerned that CMS may be unaware of a situation that
                they believe should qualify for modification under the EUC policy, RO
                participants could contact the RO Model Help Desk at
                [email protected] with the RO Participant's RO Model ID, a
                description of the emergency, the affected areas, and the duration of
                the emergency period included in the declaration.
                 After consideration of comments we received, we are finalizing as
                proposed that CMS may delay or exempt the affected RO participants from
                quality measure and CDE reporting requirements, make the requirements
                optional, extend the time for RO participants to report data to CMS, as
                applicable, or both.
                 We are also finalizing as proposed that CMS may waive compliance
                with or adjust the requirement that RO participants actively engage
                with an AHRQ-listed patient safety organization (PSO) and provide Peer
                Review (audit and feedback) on treatment plans.
                [[Page 63941]]
                d. Pricing Methodology
                 Adjusting the Quality Withhold: If CMS were to remove (not merely
                extend) quality and clinical data submission requirements for affected
                RO participants due to a national, regional, or local event, we
                proposed that CMS could choose to repay the quality withhold during the
                next reconciliation, and award all possible points in the subsequent
                AQS calculation for affected RO participants, which would potentially
                increase episode payments during this time.
                 Trend Factor Adjustments: In situations where RO participants
                nation-wide experience significant, aggregate-level disruptions to
                their service utilization, in that the trend factor (specific to a
                cancer type and component) for the upcoming PY has increased or
                decreased by more than 10 percent compared to the corresponding trend
                factor of the previous CY when FFS payment rates are held constant with
                the previous CY, we proposed that CMS may modify the trend factor
                calculation for the PC and/or TC of an included cancer type.
                 For example, for PY2, a change in the trend factor calculation for
                the PC and/or TC of an included cancer type could be warranted if
                [(2020 volume * 2022 rates)/(2019 volume * 2019 rates)] is more than 10
                percent change from [(2019 volume *2022 rates)/(2019 volume * 2019
                rates)]. The 10 percent change threshold aligns with the 10 percent
                criterion for removing an included cancer type, whereby if CMS
                discovers a >=10 percent (>=10%) error in established national base
                rates, the cancer type will be removed from the RO Model. If CMS were
                to implement this modification, CMS would ensure that the trend factor
                calculation is most consistent with the average utilization from the
                previous CY. We proposed to codify the EUC policies at Sec. 512.294.
                 We solicited public comments on our proposal in section XVIII.C.10.
                of the CY 2022 OPPS/ASC proposed rule (86 FR 42311). The following is a
                summary of the public comments received on this proposal and our
                response:
                 Comment: Many commenters agreed with the proposal to revise the
                volume component associated with the trend factor during an EUC to
                address fluctuations in utilization due to national disruptions in
                care, such as those caused by COVID-19. Some commenters did not agree
                with the application of a 10 percent threshold. Instead, these
                commenters argued that CMS should simply not use the affected year's
                data and apply the most recent unaffected year's data to the volume
                component when calculating the trend factor. One commenter noted that
                during the COVID-19 PHE, treatments have been interrupted or truncated
                prior to the treatment's completion due to COVID-19 infection.
                Furthermore, according to the commenter, local quarantine requirements
                with unknown impacts on patient care could underestimate the true cost
                of care and true patient volume. Many commenters supported removal of
                2020 data from the calculation of any applicable baseline period or
                trend factor. Some commenters noted that they have experienced a
                reduction in beneficiaries and a reduction in income in 2020. One
                commenter noted that businesses on average lost 8 percent of their
                revenue. A few commenters stated that they are still seeing the impacts
                of the COVID-19 PHE on their businesses in 2021.
                 Response: We continue to analyze whether the COVID-19 PHE has
                significantly changed the utilization and cost patterns within episodes
                of RT services. We will utilize Medicare claims data to validate
                concerns about costs and volumes raised by commenters. If this data
                show that modifications to this policy will be needed due to the
                ongoing COVID-19 PHE, we will address those modification through future
                rulemaking.
                 We believe that so long as there is sufficient evidence, removal of
                a year's worth of episode data from the trend factor calculation may be
                warranted. In this case, we believe sufficient evidence constitutes the
                trend factor (specific to a cancer type and component) for the upcoming
                PY has increased or decreased by more than 10 percent compared to the
                corresponding trend factor of the previous CY when FFS payment rates
                are held constant with the previous CY. An increase or decrease at a
                lower threshold, such as 5 percent, for example, may remove data that
                is appropriately reflecting changes in treatment patterns and payment
                rates that have occurred under OPPS and PFS. We believe that removal of
                data without sufficient evidence will introduce bias into the Model's
                pricing methodology.
                 After consideration of the comments received, we are finalizing as
                proposed that in situations where RO participants nation-wide
                experience significant, aggregate-level disruptions to their service
                utilization, in that the trend factor (specific to a cancer type and
                component) for the upcoming PY has increased or decreased by more than
                10 percent compared to the corresponding trend factor of the previous
                CY when FFS payment rates are held constant with the previous CY, CMS
                may modify the trend factor calculation for the PC and/or TC of an
                included cancer type.
                 Upon recognition of an omitted phrase in the proposed rule (86 FR
                42311), we are finalizing with modification that if CMS were to remove
                (not merely extend the submission window) quality and clinical data
                submission requirements for affected RO participants due to a national,
                regional, or local event, we could choose to repay the quality withhold
                during the next reconciliation, and award all possible points in the
                subsequent AQS calculation for affected RO participants, or not apply
                the quality withhold to RO Model payments during the EUC, which would
                potentially increase episode payments during this time.
                 We are finalizing the proposed new regulation at Sec. 512.294 with
                modification to address the aforementioned omitted phrase and for
                precision. We are also modifying cross-references at Sec. 512.294(a)
                for accuracy and precision.
                XVIII. Updates to Requirements for Hospitals To Make Public a List of
                Their Standard Charges
                A. Introduction and Overview
                1. Statutory Basis and Background
                 Section 1001 of the Patient Protection and Affordable Care Act
                (Pub. L. 111-148), as amended by section 10101 of the Health Care and
                Education Reconciliation Act of 2010 (Pub. L. 111-152), amended Title
                XXVII of the Public Health Service Act (the PHS Act), in part, by
                adding a new section 2718(e). Section 2718 of the PHS Act, entitled
                ``Bringing Down the Cost of Health Care Coverage,'' requires each
                hospital operating within the United States (U.S.) for each year to
                establish (and update) and make public a list of the hospital's
                standard charges for items and services provided by the hospital,
                including for diagnosis-related groups established under section
                1886(d)(4) of the Social Security Act (the Act). Section 2718(b)(3) of
                the PHS Act requires the Secretary of the Department of Health and
                Human Services (Secretary) to promulgate regulations to enforce the
                provisions of section 2718 of the PHS Act, and, in so doing, the
                Secretary may provide for appropriate penalties.
                 As published in the Federal Register, in the final rule entitled
                ``CY 2020 Hospital Outpatient PPS Policy Changes and Payment Rates and
                Ambulatory Surgical Center Payment System Policy Changes and Payment
                Rates. Price Transparency Requirements for Hospitals to Make Standard
                Charges
                [[Page 63942]]
                Public'' (84 FR 65524, November 27, 2019\570\, herein referred to as
                the CY 2020 Hospital Price Transparency final rule, we implemented
                these sections by adopting requirements for hospitals to make public
                their standard charges in two ways: (1) As a comprehensive machine-
                readable file; and (2) in a consumer-friendly format. We codified these
                requirements at new 45 CFR part 180.
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                 In the CY 2020 Hospital Price Transparency final rule, we indicated
                that we believe our policies requiring public release of hospital
                standard charge information are a necessary and important first step in
                ensuring transparency in health care prices for consumers, although we
                also recognized that the release of hospital standard charge
                information would not be sufficient by itself to achieve the ultimate
                goals for price transparency. The final regulations were designed to
                begin to address some of the barriers that limit price transparency
                with a goal of increasing competition among healthcare providers to
                bring down costs. In particular, the regulations sought to address the
                barriers related to lack of hospital standard charge data by requiring
                some uniformity in the release of hospital standard charge information.
                We also noted that more work would need to be done to ensure consumers
                have access to the information they need to make healthcare decisions,
                and therefore encouraged hospitals and other health care providers to
                go further in addressing barriers to price transparency.
                 We received many comments expressing support for or objecting to
                the policies established and finalized in the CY 2020 Hospital Price
                Transparency final rule. Issues ranged from CMS's authority to enforce
                the regulations and assess CMPs, the requirement disclosure of standard
                charges in a machine-readable format, establishment of payer-specific
                negotiated charges as a type of standard charge, the burden imposed by
                the regulation, and other issues unrelated to the policies proposed in
                the CY 2022 OPPS/ASC proposed rule. We addressed comments on these
                issues in the CY 2020 Hospital Price Transparency final rule (84 FR
                65588) and did not propose in the CY 2022 OPPS/ASC proposed rule to
                change any of the policies previously established. Accordingly, we
                consider these comments out of scope.
                2. Summary of Final Policies
                 We are finalizing the following policies in this final rule with
                comment period: (1) Increasing the dollar amount of penalties for
                noncompliance through the use of a scaling factor based on hospital bed
                count; (2) deeming state forensic hospitals that meet certain
                requirements to be in compliance with the requirements of 45 CFR part
                180, and (3) requiring that the machine-readable file be accessible to
                automated searches and direct downloads. As indicated in the CY 2022
                OPPS/ASC proposed rule, we believe these modifications to the hospital
                price transparency regulations (at 45 CFR part 180) are responsive to
                stakeholders and are necessary to ensure compliance with the hospital
                price transparency disclosure requirements. We are also clarifying the
                expected output of hospital online price estimator tools, where there
                may be issues with respect to a hospital that chooses to use an online
                price estimator tool in lieu of posting its standard charges for the
                required shoppable services in a consumer-friendly format. Finally, we
                appreciate the thoughtful comments submitted in response to our request
                for input on a variety of issues that we may consider in future
                rulemaking to improve standardization of the data disclosed by
                hospitals.
                 Comment: While many hospital and hospital associations expressed
                general support for helping patients know their costs of care,
                particularly their out-of-pocket costs, such commenters expressed
                strong concerns that patients will be confused over all the `tools'
                available for price transparency, in light of the forthcoming
                implementation of the No Surprises Act and Transparency in Coverage
                regulations. These commenters urged CMS to: Ensure alignment across
                federal transparency initiatives and policies; convene a multi-
                stakeholder group prior to implementation to ensure alignment across
                initiatives; and seek input from the public on the information that
                would be useful for consumers.
                 Response: We appreciate the commitment expressed by hospitals and
                hospital associations to improve patient access to and knowledge of
                their potential out-of-pocket costs and look forward to continued
                engagement as additional federal price transparency initiatives are
                implemented. In particular, we appreciate the comments requesting
                alignment across such initiatives, including those that occur through
                implementation of the Transparency in Coverage regulations (the TiC
                Final Rules) and title I (the No Surprises Act) and title II
                (Transparency) of Division BB of the Consolidated Appropriations Act,
                2021 (the CAA).
                 As the federal government undertakes to implement these new laws
                and regulations over the next several years, we will continue to
                monitor and align the Hospital Price Transparency regulations, as
                necessary. In particular, we note that in the recently published
                Requirements Related to Surprise Billing; Part II,\571\ HHS is seeking
                comment on how the Hospital Price Transparency requirements for
                hospitals to display standard charges in a consumer-friendly manner (45
                CFR 180.60), and, specifically, the voluntary use of online price
                estimator tools (45 CFR 180.60(a)(2)), may be leveraged to provide a
                good faith estimate under the CAA. HHS is also seeking comments on
                whether there are other opportunities to use the Hospital Price
                Transparency machine-readable file requirements (45 CFR 180.50) to
                inform good faith estimates with expected charges, whether or not the
                comprehensive machine-readable files can assist uninsured (or self-pay)
                individuals in determining if the good faith estimate charges are
                reasonable and/or accurate, and what limitations exist in using the
                comprehensive machine-readable files for purposes of meeting the
                requirements for provision of the good faith estimates to uninsured (or
                self-pay) individuals. We encourage the public's continued
                participation in providing feedback necessary to ensure alignment by
                responding to the request for comment.
                ---------------------------------------------------------------------------
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                ---------------------------------------------------------------------------
                 Comment: Many commenters generally welcomed the proposed updates to
                the Hospital Price Transparency policies and urged CMS to ``make the
                guidelines for hospitals even stronger.'' Other commenters, hospitals
                in particular, objected to any modifications for any reason at this
                time, citing burden imposed by the ongoing COVID-19 PHE.
                 Response: We appreciate both the general support for the proposals
                as well as the concerns raised by some commenters. We believe that the
                proposed modifications are both limited in scope and necessary to
                ensure compliance with the Hospital Price Transparency final rule and
                we are therefore finalizing the policies as proposed. Overall, we have
                also determined that the policies finalized in this rule will result in
                a burden reduction for hospitals (see Economic
                [[Page 63943]]
                Analysis at XXIV.C.7 of this final rule with comment period).
                B. Increasing the Civil Monetary Penalty (CMP) Amounts Using a Scaling
                Factor
                 Section 2718(b)(3) of the PHS Act requires the Secretary to
                promulgate regulations to enforce the provisions of section 2718 of the
                PHS Act, and, in so doing, the Secretary may provide for appropriate
                penalties. In the CY 2020 Hospital Price Transparency final rule (84 FR
                65581 through 65590), we established monitoring and enforcement
                policies at new 45 CFR part 180, subpart C. Specifically, we finalized
                a process for monitoring hospital compliance with section 2718(e) of
                the PHS Act, by evaluating complaints made by individuals or entities
                to the Centers for Medicare & Medicaid Services' (CMS), reviewing
                individuals' or entities' analysis of noncompliance, and auditing
                hospitals' websites. Should CMS conclude that a hospital is
                noncompliant with one or more of the requirements to make public
                standard charges, CMS may take any of the following actions, which
                generally, but not necessarily, will occur in the following order:
                 Provide a written warning notice to the hospital of the
                specific violation(s).
                 Request a corrective action plan from the hospital if its
                noncompliance constitutes a material violation of one or more
                requirements.
                 Impose a CMP not in excess of $300 per day, on the
                hospital and publicize the penalty on a CMS website if the hospital
                fails to respond to CMS' request to submit a corrective action plan or
                comply with the requirements of a corrective action plan.
                 As described in the CY 2020 Hospital Price Transparency final rule
                (84 FR 65588 and 65589), we noted that commenters tended to be divided
                between those in favor of lower and higher CMP amounts, which indicated
                to us that the proposed (and subsequently finalized) $300 per day
                amount struck an appropriate balance between commenter concerns. We
                also noted that this $300 maximum daily dollar CMP amount is lower than
                CMPs imposed under certain other authorities administered by HHS
                agencies, where an entity's noncompliance poses immediate jeopardy,
                results in actual harm, or both, and stated our belief that the
                relatively lower amount for a CMP associated with a hospital's
                noncompliance with requirements to make public standard charges was
                reasonable since such noncompliance is less serious than noncompliance
                that poses or results in harm to the public.
                 As discussed in the CY 2020 Hospital Price Transparency final rule
                (84 FR 65589), we considered commenters' concerns that some hospitals
                may prefer to forgo meeting the requirements of 45 CFR part 180 (for
                example, to not expend resources on reporting or to protect pricing
                information they consider sensitive), and, instead, face compliance
                actions including a $300 maximum daily CMP amount. Although we declined
                at the time to increase the amount of the CMP based on this concern
                alone, we indicated that as we gained experience with implementing the
                policy we intended to monitor for such occurrences, and may revisit the
                need to adjust the amount of the CMP in future rulemaking.
                 We also considered the feasibility of implementing a sliding scale
                CMP approach across institutions that meet the definition of hospital
                according to Sec. 180.20 (84 FR 65588 and 65589). However, at the
                time, we believed it would be challenging to find a reliable source of
                data that provides for a scalable factor across all institutions that
                meet the definition of hospital. Therefore, we declined the commenters'
                suggestions to scale the CMP amount based on such factors as hospital
                bed size, location or patient volume. However, we indicated that we
                would continue to consider this issue and might revisit use of a CMP
                scaling methodology in future rulemaking.
                 In the CY 2022 OPPS/ASC proposed rule, based on our initial months
                of experience with enforcing the hospital price transparency
                requirements in 45 CFR part 180, we expressed our concern by what
                appears to be a trend towards a high rate of hospital noncompliance
                identified by CMS through sampling and reviews to date, and the
                reported initial high rate of hospital noncompliance with 45 CFR part
                180 reflected in early studies cited in the proposed rule. One approach
                we considered to address this trend was to amend the regulations to
                impose potentially higher CMPs for noncompliance with the hospital
                price transparency requirements, and to scale the CMP to ensure the
                penalty amount would be more relevant to the characteristics of the
                noncompliant hospital. We indicated that we believe that CMPs are an
                important component in holding hospitals accountable for their
                noncompliance with hospital price transparency requirements, and would
                signal the Secretary's continued support for public access to pricing
                information and enforcement.
                 Therefore, we considered two general approaches for increasing the
                CMP amount: (1) A flat increase in the amount that would be applied
                uniformly across all hospitals, for example, increasing the maximum CMP
                amount from $300 per day per hospital to $1000 per day per hospital, or
                (2) a minimum penalty amount and apply a scaling factor (such as bed
                count or hospital revenue) to increase the penalty in a manner uniquely
                tailored to the noncompliant hospital. After considering these two
                general approaches, we proposed to use a scaling factor to establish
                the CMP amount for a noncompliant hospital.
                 Several factors informed our proposal to use a scaling factor to
                determine the CMP amount for noncompliance with hospital price
                transparency requirements. First, we indicated that this would allow us
                to penalize a hospital on a sliding scale in a manner that generally
                correlates to the hospital's characteristics, such as using the
                hospital's number of beds as a proxy for the size of the patient
                population it serves. Second, in prior rulemaking, commenters suggested
                using a scaling factor as an alternative to a uniform CMP amount so as
                to not overly penalize smaller hospitals, while also providing a
                sufficient incentive for hospitals to comply. Third, other Federal
                programs use scaling factors in determining a CMP amount, in particular
                by taking into consideration the size of the entity subject to the
                penalty, or calculating the penalty based on the number of enrollees
                affected.\572\ Fourth, since finalization of the CY 2020 Hospital Price
                Transparency final rule, we have had the opportunity to evaluate and
                determine a reliable source of data that could be used to establish a
                CMP amount across most institutions that meet the definition of
                `hospital' as defined at Sec. 180.20.
                ---------------------------------------------------------------------------
                 \572\ See for example: 42 CFR 3.408(e), specifying factors
                considered in determining the amount of a civil money penalty
                include the financial condition of the respondent, including the
                size of the respondent (among other factors).
                 45 CFR 160.408(d), specifying factors considered in determining
                the amount of a civil money penalty include the financial condition
                of the covered entity or business associate, consideration of which
                may include but is not limited to the size of the covered entity or
                business associate (among other factors).
                 CMS, Civil Money Penalty Calculation Methodology, Revised, June
                21, 2019. Available at: https://www.cms.gov/Medicare/Compliance-and-Audits/Part-C-and-Part-D-Compliance-and-Audits/Downloads/2019CMPMethodology06212019.pdf (Pursuant to 42 CFR 422.760(b)(1) and
                (2), 423.760(b)(1) and (2), 417.500(c), and 460.46, CMS determines
                if the penalty for a deficiency should be calculated on a per
                enrollee or per determination basis.).
                 42 CFR 1003.510 and 45 CFR 102.3, specifying penalty amounts
                that vary based on number of beds of the hospital; imposing higher
                penalties for a hospital that has 100 beds or more compared to a
                hospital that has less than 100 beds.
                ---------------------------------------------------------------------------
                [[Page 63944]]
                 We also considered the potential specific scaling factor or factors
                that could be used, and an appropriate data source. We considered two
                options for a scaling factor: Hospital bed count and hospital revenue.
                We proposed to use the noncompliant hospital's number of beds, as
                specified in hospital cost report data submitted to CMS, as the scaling
                factor to establish CMP amounts. We noted that for purposes of this
                discussion, we consider ``number of beds'' to be synonymous with ``bed
                count,'' and that we would use the terms interchangeably.
                 We indicated we believed the hospital cost report data would be an
                appropriate data source for a scaling factor for the CMP amount because
                it is routinely submitted by Medicare-enrolled hospitals, is certified
                by a hospital official, and is reviewed by a Medicare Administrative
                Contractor (MAC) to determine acceptability. As explained on the
                CMS.gov website, Cost Reports web page, Medicare-certified
                institutional providers are required to submit an annual cost report to
                a MAC. The cost report contains provider information such as facility
                characteristics and financial statement data. CMS maintains the cost
                report data in the Healthcare Provider Cost Reporting Information
                System (HCRIS). HCRIS includes subsystems for the Hospital Cost Report
                (CMS-2552-96 and CMS-2552-10), among others.\573\ Cost Report form CMS-
                2552-10 and related instructions are effective for hospitals and
                hospital health care complexes with cost reporting periods beginning on
                or after May 1, 2010.\574\
                ---------------------------------------------------------------------------
                 \573\ CMS.gov, Cost Reports. Available at https://www.cms.gov/Research-Statistics-Data-and-Systems/Downloadable-Public-Use-Files/Cost-Reports.
                 \574\ CMS, The Provider Reimbursement Manual--Part 2,
                publication # 15-2. Chapter 40, Hospital and Hospital Health Care
                Complex Cost Report Form CMS-2552-10. Available at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals-Items/CMS021935, Chapter 40--(T16)--Hospital & Hospital
                Health Care (Form CMS-2552-10) (ZIP), file ``R16P240.pdf'' (herein
                The Provider Reimbursement Manual--Part 2, Chapter 40). Refer to
                section 4000, General, 40-7.
                ---------------------------------------------------------------------------
                 For cost reporting purposes, Medicare requires submission of annual
                reports covering a 12-month period of operations based upon the
                provider's accounting year. There are also circumstances under which a
                provider may file a short period cost report for part of a year.\575\
                Further, there are several exceptions to full cost reporting,
                including: If a provider does not furnish any covered services to
                Medicare beneficiaries during a cost reporting period (42 CFR
                413.24(g)); or if the provider has had low utilization of covered
                services by Medicare beneficiaries (as determined by the MAC) and has
                received correspondingly low interim payments for the cost reporting
                period (42 CFR 413.24(h)). If the provider fails to submit the cost
                report, the MAC imposes a penalty by suspending claims payments until
                the hospital submits the cost report.\576\
                ---------------------------------------------------------------------------
                 \575\ CMS, The Provider Reimbursement Manual--Part 2,
                publication # 15-2. Chapter 1, Cost Reporting--General. Available
                at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals-Items/CMS021935, Chapter 1--Cost Reporting
                General (ZIP), file ``pr2_100_to_140.doc''. Refer to section 102,
                Cost Reporting Period, 1-3.
                 \576\ 42 CFR 413.20(e). See also, CMS, Hospital and Hospital
                Health Care Complex Cost Report, CMS Form CMS-2552-10, dated 2020-
                11-10. Available at: https://www.cms.gov/regulations-and-guidancelegislationpaperworkreductionactof1995pra-listing/cms-2552-10, CMS-2552-10.zip (ZIP), file ``CMS-2552-
                10_Supporting_Statement_Part_A.pdf'' (Payment/Gifts to Respondents).
                ---------------------------------------------------------------------------
                 The chief financial officer or administrator of the provider
                certifies the content of the submitted cost report are true, correct,
                complete and prepared from the books and records of the provider in
                accordance with applicable instructions.\577\ The MAC reviews the cost
                report within 30 days of receipt of the provider's cost report to
                determine acceptability. If the cost report is considered unacceptable,
                the MAC returns the cost report with a letter explaining the reasons
                for the rejection. When a cost report is rejected, it is deemed an
                unacceptable submission and treated as if a report had never been
                filed.\578\ Further, the MAC enters certain data on the hospital cost
                report into HCRIS, including the cost report status as either: As
                submitted; Settled without audit; Settled with audit; Reopened; or
                Amended.\579\
                ---------------------------------------------------------------------------
                 \577\ 42 CFR 413.24(f)(4)(iv). See also, Form CMS-2552-10.
                Available at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals-Items/CMS021935, Chapter 40--(T16)--
                Hospital & Hospital Health Care (Form CMS-2552-10) (ZIP), file
                ``R16P240f.pdf'', Part II--Certification.
                 \578\ 42 CFR 413.24(f)(5)(iii).
                 \579\ The Provider Reimbursement Manual--Part 2, Chapter 40.
                Refer to Worksheet S--HOSPITAL AND HOSPITAL HEALTH CARE COMPLEX COST
                REPORT CERTIFICATION AND SETTLEMENT SUMMARY, section 4003.1, Part
                I--Cost Report Status, Line 5, column 1.
                ---------------------------------------------------------------------------
                 As explained in the CY 2022 OPPS/ASC proposed rule, one of the
                facility characteristics contained in the cost report is ``number of
                beds,'' which is the number of beds available for use by patients at
                the end of the cost reporting period. Specifically, ``[a] bed means an
                adult bed, pediatric bed, portion of inpatient labor/delivery/
                postpartum (LDP) room (also referred to as birthing room) bed when used
                for services other than labor and delivery, or newborn ICU bed
                (excluding newborn bassinets) maintained in a patient care area for
                lodging patients in acute, long term, or domiciliary areas of the
                hospital. Beds in post-anesthesia, post-operative recovery rooms,
                outpatient areas, emergency rooms, ancillary departments (however, see
                exception for labor and delivery department), nurses' and other staff
                residences, and other such areas which are regularly maintained and
                utilized for only a portion of the stay of patients (primarily for
                special procedures or not for inpatient lodging) are not termed a bed
                for these purposes.'' \580\
                ---------------------------------------------------------------------------
                 \580\ The Provider Reimbursement Manual--Part 2, Chapter 40.
                Refer to Worksheet S-3--HOSPITAL AND HOSPITAL HEALTH CARE COMPLEX
                STATISTICAL DATA AND HOSPITAL WAGE INDEX INFORMATION, section
                4005.1, Part 1--Hospital and Hospital Health Care Complex
                Statistical Data, Column 2.
                ---------------------------------------------------------------------------
                 For Medicare-enrolled hospitals, we proposed to determine the CMP
                amount using the number of beds for the noncompliant hospital, as
                specified on the most recently available, finalized cost report data.
                We anticipate this would be the number of beds for the hospital as
                indicated in HCRIS as either Settled without audit, Settled with audit,
                Reopened, or Amended.
                 We proposed the following approach to scaling the CMP amount based
                on the hospital's number of beds, and as summarized in Table 76 of this
                final rule with comment period:
                 For a noncompliant hospital with a number of beds equal to
                or less than 30, the maximum daily dollar CMP amount would be $300,
                even if the hospital is in violation of multiple discrete requirements
                of 45 CFR part 180.
                 For a noncompliant hospital with a number of beds between
                31 and 550, the maximum daily dollar CMP amount would be the number of
                beds times $10, even if the hospital is in violation of multiple
                discrete requirements of 45 CFR part 180.
                 For a noncompliant hospital with a number of beds greater
                than 550, the maximum daily dollar CMP amount would be $5,500, even if
                the hospital is in violation of multiple discrete requirements of 45
                CFR part 180.
                 Therefore, for hospitals with 30 or fewer beds, the CMP amount
                under the proposed approach would be unchanged compared to the existing
                policy under Sec. 180.90(c)(2). The proposed use of bed count as a
                scaling factor would increase the penalty, in some cases significantly,
                for larger hospitals. The following examples illustrate the proposed
                approach. A small noncompliant hospital with a bed count of fewer than
                30 would be subject to the current CMP amount of $300/day
                [[Page 63945]]
                or $109,500/year (that is, 365 days or a full CY of noncompliance). A
                noncompliant hospital with a bed count of 200 would be assessed a
                penalty of $2,000/day ($10 * 200/day) or $730,000/year. A noncompliant
                hospital with a bed count of 550 beds or more would be assessed a
                maximum penalty of $5,500/day ($10*550/day) or $2,007,500/year.
                [GRAPHIC] [TIFF OMITTED] TR16NO21.179
                 We reviewed CMP amounts for other HHS programs that require
                reporting information and we believe our proposed maximum daily dollar
                penalty amount on a sliding scale between $300 and $5,500 per day per
                hospital is commensurate with the level of severity of the potential
                violation, taking into consideration that nondisclosure of standard
                charges does not rise to the level of harm to the public as other
                violations (such as safety and quality issues) for which HHS imposes
                CMPs and, therefore, should remain at a relatively lower level. For
                instance, the proposed maximum amount of $5,500/day, totaling
                $2,007,500/year would generally align with amounts used by other HHS
                initiatives that impose CMPs, such as HIPAA-related CMPs that, pursuant
                to statute, cap penalties at $1.5 million annually.\581\
                ---------------------------------------------------------------------------
                 \581\ See section 1176(a)(3) of the Social Security Act; 45 CFR
                160.404.
                ---------------------------------------------------------------------------
                 We proposed that if the number of beds for the hospital cannot be
                determined according to the most recently available, finalized Medicare
                cost report data in HCRIS, CMS would use documentation provided by the
                hospital to determine the number of beds for purposes of calculating
                the CMP. This approach would be needed to determine the number of beds
                for a hospital that is not Medicare-enrolled and therefore does not
                submit to CMS a hospital cost report. Further, we believe there could
                be circumstances under which there may be an apparent discrepancy, or
                obvious error, in the most recently available, finalized cost report
                data for a hospital within HCRIS, and additional documentation from the
                hospital would be needed to accurately determine the CMP amount.
                 In the event that CMS requires additional documentation to
                determine the CMP amount, we proposed to require that the hospital
                provide CMS with documentation of its number of beds, in a form and
                manner and by the deadline prescribed by CMS in a written notice
                provided to the hospital. Should a hospital fail to provide CMS with
                this documentation, in the prescribed form and manner and by the
                specified deadline, we proposed that we would impose a CMP on the
                hospital at the highest, maximum daily dollar amount within the
                proposed sliding scale. For example, under the proposed approach, if
                CMS cannot determine a noncompliant hospital's number of beds using
                hospital cost report data in HCRIS, and if the noncompliant hospital
                fails to provide CMS with documentation of its number of beds, in the
                form and manner and by the deadline specified by CMS, we would impose a
                CMP calculated based on a number of beds greater than 550, and
                therefore we would impose the maximum penalty of $5,500/day ($10 * 550/
                day) or $2,007,500/year.
                 Additionally, we proposed that the approach for scaling the CMP
                amount based on the hospital's number of beds would apply to days the
                hospital is out of compliance with hospital price transparency
                requirements beginning with the effective date of the final rule,
                assuming the rule is finalized as proposed, and which we anticipate
                would be January 1, 2022. Further, according to Sec. 180.90(c)(3), the
                amount of the CMP will be adjusted annually using the multiplier
                determined by OMB for annually adjusting CMP amounts under 45 CFR part
                102. As described in the CY 2020 Hospital Price Transparency final rule
                (84 FR 65586), this multiplier is based on the Consumer Price Index for
                All Urban Consumers (CPI-U), not seasonally adjusted. Given that the
                requirements in 45 CFR part 180, as established by the CY 2020 Hospital
                Price Transparency final rule, were effective January 1, 2021, and
                because of the proposed effective date of January 1, 2022, for the
                modifications to the CMP amounts in the CY 2022 OPPS/ASC proposed rule,
                we would apply the cost-of-living adjustment multiplier determined by
                OMB, in calculating CMP amounts for hospital noncompliance with the
                requirements in 45 CFR part 180, beginning in CY 2023 and subsequent
                years.
                 To assist the public in considering the proposals to determine the
                CMP amount based on the most recently available, finalized number of
                beds for a hospital indicated in HCRIS, we noted that CMS makes public
                hospital cost report data in several resources. Data files by fiscal
                year are accessible through the Cost Reports by Fiscal Year web page,
                available at https://www.cms.gov/Research-Statistics-Data-and-Systems/Downloadable-Public-Use-Files/Cost-Reports/Cost-Reports-by-Fiscal-Year.
                Specifically, we referred readers to data files by fiscal year (through
                FY 2020, at the time of the CY 2022 OPPS/ASC proposed rule) for
                facility type ``HOSPITAL-2010.'' Further, a subset of hospital cost
                report data for 2014 through 2017 is also made public through the
                Hospital Cost Report Public Use File web page, available at https://
                [[Page 63946]]
                www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-
                Reports/Medicare-Provider-Cost-Report/HospitalCostPUF (providing access
                to data as either an Interactive Dataset or a Downloadable Excel file).
                 We sought comment on the proposal to use a sliding scale approach,
                based on the hospital's number of beds, to determine the CMP amount. In
                particular, we sought comment on specifying a minimum penalty amount of
                $300, consistent with the existing CMP amount, for hospitals with 30
                beds or fewer, and whether 30 beds is an appropriate number to
                delineate for this part of the scale. We sought comment on the proposal
                to impose a CMP of $10/bed/day on hospitals with 31 beds up to 550
                beds, including whether we should specify a higher amount to ensure
                hospitals' compliance with the requirements to make public standard
                charges. We sought comment on establishing a maximum daily penalty
                amount of $5,500 for hospitals with more than 550 beds. We also sought
                comment on our proposal to use hospital cost report data, as specified
                in HCRIS, to determine bed count, or if we should consider using other
                validated data sources or files. In particular, we expressed interest
                in commenters' input on whether there are any available data sources
                that would encompass relevant scaling data for all hospitals that are
                subject to the regulations at 45 CFR part 180, including hospitals that
                are not Medicare-enrolled.
                 As an alternative approach, we considered using hospital revenue as
                a scaling factor, instead of or in addition to hospital bed count, as
                it could more directly take into account the financial burden that a
                CMP might impose on a noncompliant hospital. For example, we considered
                using hospital cost report data to determine the noncompliant
                hospital's annual ``net patient revenues,'' \582\ and to calculate a
                CMP amount as 0.1 percent of hospital revenue, prorated based on the
                number of days the hospital is out of compliance. That is, we would
                multiply the revenue amount by 0.001, and then divide the resulting
                product by 365 to determine the daily CMP amount. Under this
                alternative approach to scaling the CMP amount based on hospital
                revenue the minimum penalty applied would remain $300 per day up to a
                maximum penalty of approximately $5,480 per day, which would continue
                to generally align with CMPs for issues unrelated to harm to the
                public. We indicated that if we were we to adopt an approach for using
                hospital revenue to scale the CMP amount, we would need to address with
                greater specificity additional factors, including the amount of
                precision used in the calculations, such as whole dollar amounts, or
                two decimal place precision. Further, we expressed concern that an
                approach that uses hospital revenue as a scaling factor for determining
                the CMP amount may not be as effective as a scaling factor based on bed
                count in targeting penalties to the size of the hospital, and we noted
                evidence that suggests that noncompliance is fairly high among larger
                hospitals.\583\ Additionally, we explained that by failing to post the
                standard charge data, hospitals are directly hindering consumers'
                decision-making ability, and our belief that the larger the hospital
                size (as determined by bed count), the more potential patients are
                impacted, and, thus, our belief that hospital bed count can serve as a
                more reliable proxy for the number of potential patients that the
                hospital serves than using net patient revenues. Conversely,
                application of a penalty based on net patient revenues would increase
                the penalty for better resourced hospitals compared to those that might
                have fewer resources. Such an approach may be more effective at
                deterring noncompliance among better resourced hospitals which may
                choose not to comply with the hospital price transparency requirements
                when the financial benefit of noncompliance outweighs a relatively low
                CMP amount.
                ---------------------------------------------------------------------------
                 \582\ The Provider Reimbursement Manual--Part 2, Chapter 40.
                Refer to section 4040.4, Worksheet G-3--Statement of Revenues and
                Expenses, describing calculation of Net Patient Revenues (subtract
                Less: Allowance and Discounts on Patient's Accounts from Total
                Patient Revenue).
                 \583\ Henderson M & Mouslim MC. Low Compliance From Big
                Hospitals On CMS's Hospital Price Transparency Rule. Health Affairs.
                March 16, 2021. Available at: https://www.healthaffairs.org/do/10.1377/hblog20210311.899634/full/.
                ---------------------------------------------------------------------------
                 In addition to bed size and hospital revenue, we also considered
                whether and how we could use additional scaling factors for assessing
                CMPs such as:
                 Other financial metrics for scaling the CMP amount, such
                as using gross revenue, inpatient, or outpatient revenue to establish a
                penalty amount.
                 The nature, scope, severity, and duration of the
                noncompliance. For example, taking into account the nature and number
                of deficiencies found upon review, in addition to applying penalties
                based on the number of days out of compliance.
                 The hospital's reason for noncompliance. For example,
                applying a greater penalty for intentional noncompliance, such as if a
                hospital states its willful noncompliance on its website or in response
                to a compliance action from CMS, or application of a lesser penalty
                that takes into account extreme and uncontrollable circumstances.
                 We explained in the CY 2022 OPPS/ASC proposed rule that while using
                multiple scaling factors might have advantages, such as being able to
                tailor the amount of the CMP to account for unique hospital
                circumstances and the potential to assess a greater CMP for egregious
                noncompliance, we did not propose it because we believed we would need
                additional time and input to ensure that such scaling factors could be
                applied in a consistent manner across all hospitals that are subject to
                these regulations. However, we believe such refinements could improve
                our application of CMPs to promote hospital compliance and therefore
                sought comment on the following:
                 What additional factors would be feasible for scaling a
                CMP amount?
                 What data sources for the criteria could be used to ensure
                consistency in application of the criteria across all hospitals subject
                to these regulations? For example, if hospital revenue was used to
                scale penalties, what data source to determine revenue should be used?
                For example, are gross income, net income, net patient revenues, or
                some other metric appropriate for determining burden imposed by a CMP?
                 How should nature, scope, and severity of noncompliance be
                determined and applied for purposes of assessing CMPs?
                 How should a hospital's reason for noncompliance be
                determined? What factors should be considered when evaluating reason
                for noncompliance? Are there bases for imposing lower CMPs, such as
                resource limitations or extreme or unusual circumstances? If yes, how
                could resource limitations or circumstances contributing to
                noncompliance be demonstrated and should that be treated differently
                than documented statements of intent to not comply with the
                requirements?
                 If multiple factors are used to scale the CMP amount,
                should there be a priority applied to specific factors? Should some
                factors be weighted more when determining the CMP amount? If yes, which
                one(s)?
                 We proposed to revise the regulations at 45 CFR 180.90(c)(2) to
                specify an amended approach for determining the daily dollar amount for
                a CMP CMS may impose upon a hospital for noncompliance with the
                requirements in 45 CFR part 180. As conforming changes, we proposed to
                specify in the regulations at Sec. 180.90(c)(2)(i), the existing
                approach to determining the CMP amount, as not to exceed $300 per
                [[Page 63947]]
                day, with introductory text specifying the provision is applicable for
                CY 2021. We proposed to specify in the regulations at Sec.
                180.90(c)(2)(ii), provisions for determining the CMP amount for each
                day a hospital is determined by CMS to be out of compliance beginning
                January 1, 2022. The CMP amount would be based on the hospitals' number
                of beds: (A) A maximum daily dollar CMP amount of $300 for hospitals
                with a number of beds equal to or less than 30; (B) a maximum daily
                dollar CMP amount calculated as number of beds times $10 for hospitals
                with a number of beds between 31 and 550; and (C) a maximum daily
                dollar CMP amount of $5,500 for hospitals with a number of beds greater
                than 550. We also proposed to specify within Sec.
                180.90(c)(2)(ii)(D)(1) that CMS would determine the number of beds for
                a Medicare-enrolled hospital using the most recently available,
                finalized Medicare hospital cost report. We also proposed to specify
                within Sec. 180.90(c)(2)(ii)(D)(2) the process by which CMS would
                determine the hospital's number of beds if such information could not
                be determined using Medicare hospital cost report data. We specify the
                conditions for CMS' receipt of documentation from the hospital to
                determine its number of beds, and specify that if the hospital does not
                provide CMS with such documentation (in the prescribed form and manner,
                and by the specified deadline), CMS would impose a CMP on the hospital
                at the highest, maximum daily dollar amount ($5,500 per day). We
                welcomed comments on these proposals, and the alternatives we
                considered.
                 Comment: Many commenters expressed strong support for the proposal
                to increase civil monetary penalties for noncompliance. Such commenters
                explained their belief that increased penalties are necessary to ensure
                hospital compliance so consumers can have access to standard charge
                information. Many commenters urged CMS to not delay the proposed
                increase in penalties past the proposed effective date of January 1,
                2022, indicating their belief that any delay in enforcement will cause
                harm to patients, and that compliance is particularly necessary for
                patients during the COVID-19 PHE.
                 By contrast, many commenters strongly opposed any proposed methods
                that would increase penalties for noncompliance. Some commenters
                indicated their belief that the proposed increase in penalties is
                misplaced and ``heavy-handed'', given that hospitals may have valid
                reasons for noncompliance, for example, due to the ongoing COVID-19 PHE
                or confusion over what is required by the Hospital Price Transparency
                regulations. Several commenters indicated their belief that it is too
                early for CMS to conclude there is widespread noncompliance or to
                determine what effect CMS enforcement has had on improving compliance;
                at least one commenter asserted that the industry receipt of warning
                notices from CMS has served to improve compliance and should therefore
                be viewed as sufficient. Another commenter indicated their belief that
                the proposal to increase penalties is premature because the regulations
                and audit process are new to both hospitals and CMS.
                 These commenters suggested that CMS should, rather than proposing
                increases to penalties, do the following: Improve the specificity of
                the requirements; seek to provide technical assistance and guidance;
                clarify and provide sufficient detail about the enforcement process;
                clarify how compliance is defined, assessed, and evaluated; publicize
                results of audits to allow others to learn from the findings; seek to
                better understand and take into account the reasons for noncompliance;
                provide ``clearly defined measures that can be obtained and reported
                across the board by all providers''; and work with hospitals and other
                stakeholders in an iterative way to improve compliance.
                 Other commenters made recommendations for delaying enforcement and
                for delaying the implementation of the new penalties, if finalized.
                Specifically, commenters recommended enforcement delays: Indefinitely;
                until enforcement of the No Surprises Act and Transparency in Coverage
                commences or until the No Surprises Act and Transparency in Coverage
                policies are aligned with the Hospital Price Transparency rule; or, if
                proposed increases are finalized, until one full calendar year after
                the end of the PHE.
                 Response: We appreciate commenters' support for increasing the
                civil monetary penalty amounts and for application of a January 1, 2022
                effective date as proposed. As indicated in the CY 2022 OPPS/ASC
                proposed rule, based on CMS' internal analysis of noncompliance, we
                determined it was necessary to propose an increase in the penalty
                amount to ensure hospital compliance with the Hospital Price
                Transparency regulations. Additionally, the CY 2020 Hospital Price
                Transparency final rule was published in November 2019 and the
                effective date for compliance was delayed, in response to comments,
                until January 1, 2021, providing hospitals additional time to prepare
                for compliance. We believe this delay provided hospitals with
                sufficient time to collect and display the standard charge information
                required under this rule. Further, after the Departments finalized the
                TiC Final Rules (which were finalized a year after the Hospital Price
                Transparency final rule), Congress enacted title I (the No Surprises
                Act) and title II (Transparency) of Division BB of the CAA, which
                impose important new transparency requirements on plans and issuers. As
                indicated in FAQs About Affordable Care Act And Consolidated
                Appropriations Act, 2021 Implementation Part 49,\584\ the Departments
                recognize the number of CAA provisions plans and issuers are required
                to implement by January 1, 2022 and the considerable time and effort
                required to make the machine-readable files available in the form and
                manner required in the TiC Final Rules at the same time. Therefore, the
                Departments are deferring enforcement of some of the TiC Final Rules'
                requirements. In particular, the Departments are deferring enforcement
                of the machine-readable file requirements which are more extensive and
                overlapping with the CAA requirements than the Hospital Price
                Transparency machine-readable file requirement. We believe that the
                circumstances surrounding the delay of the TiC Final Rules are not
                analogous to, and therefore do not warrant, a further delay in the case
                of the Hospital Price Transparency requirements or its enforcement. As
                a result, we are finalizing the increased penalties as proposed and
                decline to delay our enforcement activities or the effective date of
                the increase in civil monetary penalties for the reasons raised by
                commenters.
                ---------------------------------------------------------------------------
                 \584\ https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/FAQs-Part-49.pdf.
                ---------------------------------------------------------------------------
                 We appreciate the suggestions related to additional actions CMS may
                take to improve compliance and will consider them for future
                rulemaking. Commenters seeking clarity related to CMS' assessment can
                review the regulations at 45 CFR 180.40, 180.50, and 180.60. Commenters
                seeking clarity related to the enforcement process can review the
                enforcement process outlined in the regulations at 45 CFR 180 Subpart
                C--Monitoring and Penalties for Noncompliance. Additional detail for
                both can be found in the preamble of the Hospital Price Transparency
                final rule (84 FR 65524). In response to comments related to the need
                for additional guidance and adequately preparing hospitals, we note
                [[Page 63948]]
                that CMS has engaged in a number of education and outreach activities
                related to the Hospital Price Transparency regulations, including
                several Open Door Forums. We continue to encourage hospitals to review
                the guidance found our dedicated hospital price transparency website
                (https://www.cms.gov/hospital-price-transparency).
                 We continue to welcome and encourage hospitals and other
                stakeholders to submit specific questions and concerns to us directly
                at [email protected].
                 Comment: Regarding the proposed use of bed count to scale civil
                monetary penalties, many commenters including consumers, consumer
                advocates, and clinician associations expressed support for increasing
                CMPs, while several supported specifically the use of bed count as a
                scaling factor, indicating their belief that such an approach would
                serve as an effective enforcement measure and ensure consistency and
                fairness across noncompliant hospitals. One commenter stated their view
                that the use of bed count would be more meaningful than using a percent
                of net patient revenue. Two commenters supported use of bed count but
                recommended that CMS using a ``tiering'' approach rather than a sliding
                scale approach. Several commenters opposed the proposal to cap the bed
                count at 550, indicating their belief that the cap should be higher
                (such as 1000) or uncapped.
                 One commenter questioned the appropriateness of using bed count as
                a method of determining a penalty amount because `most shoppable
                services . . . have little or no relation to the number of beds in a
                hospital.' One commenter opposed the 30 bed count minimum, stating that
                the minimum should be lowered to 25 for consistency with CAH
                designation.
                 Many other commenters offered suggestions for alternative
                approaches or factors that should be used to assess penalties or scale
                the penalty amount, rather than use of bed count, including: Assessing
                penalties based on unique hospital characteristics (such as geographic
                location, rural or critical access designation, nonprofit status, or
                availability of financial resources) or on a case-by-case basis;
                phasing in penalties over time; penalties that are based on the scope,
                nature, or severity of noncompliance, similar to other federal
                initiatives; refining penalty formulas to ensure ``fairness'' across
                hospitals; assessment of penalties that take into consideration whether
                the hospital is demonstrating a good faith effort to comply, has taken
                actions to address deficiencies, or has communicated with CMS regarding
                identified issues; penalties that take into account the reason for
                hospital noncompliance, including any extreme and unusual
                circumstances, such as the impact of the COVID-19 PHE; and penalties
                that take into account other hospital price transparency efforts and
                investments and the burden imposed by the Hospital Price Transparency
                regulations.
                 Additionally, many commenters suggested that CMS prioritize certain
                requirements over others and apply or scale penalties only in cases
                where hospitals are noncompliant with ``priority'' or ``major''
                requirements, and not for ``minor'' infractions or deficiencies.
                Commenters recommended the following requirements be viewed as
                priorities: Making public a consumer-friendly display; making public a
                machine-readable file; making public all five types of standard
                charges; presence of payer-specific negotiated charges in the machine-
                readable file; display of all payers and plans with which the hospital
                contracts; and whether the machine-readable file and consumer display
                are ``generally complete.''
                 By contrast, several commenters disagreed with alternative methods
                for scaling penalties based on factors such as scope, nature, or
                severity of deficiencies because, as one commenter noted, variability
                in providers would not permit CMS to scale such penalties equitably. A
                few recommended CMS consider additional types of penalties such as
                putting Medicare enrollment status or Medicare reimbursement at risk
                for noncompliance, or withholding ``federal infrastructure research''
                until hospitals become compliant.
                 Response: We agree with commenters that application of a scaling
                approach using bed count would be an effective way to ensure
                compliance, consistency and fairness in application of penalties across
                noncompliant hospitals. Additionally, as explained in the proposed
                rule, we believe that use of bed count would allow us to penalize a
                hospital on a sliding scale in a manner that generally correlates to
                the hospital's characteristics, and is an appropriate proxy for
                hospital size and the relative impact a hospital's noncompliance may
                have on the population, although we acknowledge that this proxy would
                not necessarily take into account the total number of patients
                (including outpatients) served by the hospital. However, not all
                hospitals offer outpatient services, so we believe that use of bed
                count is an appropriate and consistent factor that could be used across
                all hospitals subject to the regulation. Moreover, we believe using bed
                count as a scaling factor takes into consideration the size of the
                hospital which can help avoid overly penalizing smaller hospitals, such
                as CAHs.
                 We appreciate the comments related to the many other factors that
                could be taken into account to determine the amount of a penalty for
                noncompliance, including use of alternative penalties. As we explained
                in the CY 2022 OPPS/ASC proposed rule, use of other or multiple scaling
                factors might have advantages, such as being able to tailor the amount
                of the CMP to account for unique hospital circumstances and the
                potential to assess a greater CMP for egregious noncompliance, however,
                we continue to decline to include additional factors at this time
                because we do not believe we have a method to ensure such factors could
                be applied in a consistent manner across all hospitals that are subject
                to these regulations. However, we will continue to consider the use of
                alternative factors and, should we find it necessary to refine the
                determination of the penalty amount, we will revisit this issue in
                future rulemaking.
                 We appreciate the other suggestions made by commenters, including
                the use of a ``tiering'' approach, but we continue to believe that the
                scaled approach avoids the cliff effect. We further believe that
                setting a minimum of 30 beds and maximum of 550 beds is appropriate
                because the calculated CMP for a hospital with 30 beds or fewer is
                consistent with the current CMP amount of $300 per day or $109,500 per
                year (84 FR 65589). Given our experience with compliance, we do not
                think it is appropriate to lower the CMP amount, and the CMP for a
                hospital with the 550 or more beds would be approximately $2 million
                which we believe will provide sufficient incentive for large hospitals
                to comply with the requirements. However, we will continue to monitor
                and assess the impact of the minimum and maximum number of beds and may
                revisit in future rulemaking.
                 Comment: Several commenters expressed various concerns related to
                the proposed method for determining the number of hospital beds, and
                whether the use of Cost Report bed count would be accurate or
                sufficient for purposes of assessing penalties for noncompliance with
                45 CFR 180. A few commenters objected to the use of the Cost Report to
                identify bed size because the date of submission of the cost report
                varies and may not reflect an `official count.' A few commenters
                requested clarification about what field in the cost
                [[Page 63949]]
                report file would be used to determine bed count. Another commenter
                suggested that the ``OPPS Hospital Impact File'' would be more user-
                friendly and requested alignment of the two files such that the bed
                count used from the Cost Report would be reflected in the OPPS Hospital
                Impact File, if not already reflected in the ``Number of Beds'' column.
                 Commenters requested that CMS publish a list of bed sizes annually
                that would be solely used for CMP assessment for noncompliance with 45
                CFR part 180, and provide a mechanism for hospitals to submit
                corrections within 30 days of the publication of such a list. One
                commenter suggested using the ``number of licensed beds'' for those
                that are not Medicare-enrolled and asserted that such an approach would
                be more equitable and would enable CMS to utilize each state's
                facilities division information on licensed beds.
                 Response: We appreciate the comments related to the proposed method
                for determining hospital bed count via use of the most recently
                available, finalized hospital cost report. As explained in the proposed
                rule, we believe the hospital cost report data would be an appropriate
                data source for a scaling factor for the CMP amount because it is
                routinely submitted by Medicare-enrolled hospitals, is certified by a
                hospital official, and is reviewed by a Medicare Administrative
                Contractor (MAC) to determine acceptability. We therefore believe that
                use of the hospital cost report is both accurate, official, and
                sufficient for purposes of assessing penalties for noncompliance with
                45 CFR 180 for most hospitals.
                 As we stated in the CY 2022 OPPS/ASC proposed rule, the field in
                the hospital cost report we proposed to use to determine bed count is
                designated as ``number of beds,'' which is the number of beds available
                for use by patients at the end of the cost reporting period.
                Specifically, ``[a] bed means an adult bed, pediatric bed, portion of
                inpatient labor/delivery/postpartum (LDP) room (also referred to as
                birthing room) bed when used for services other than labor and
                delivery, or newborn ICU bed (excluding newborn bassinets) maintained
                in a patient care area for lodging patients in acute, long term, or
                domiciliary areas of the hospital. Beds in post-anesthesia, post-
                operative recovery rooms, outpatient areas, emergency rooms, ancillary
                departments (however, see exception for labor and delivery department),
                nurses' and other staff residences, and other such areas which are
                regularly maintained and utilized for only a portion of the stay of
                patients (primarily for special procedures or not for inpatient
                lodging) are not termed a bed for these purposes.'' \585\ Moreover,
                because the hospital cost report is readily available to the public, we
                do not believe it would be necessary to publish a separate list for
                purposes of assessing penalties for noncompliance with 45 CFR part 180.
                ---------------------------------------------------------------------------
                 \585\ The Provider Reimbursement Manual--Part 2, Chapter 40.
                Refer to Worksheet S-3--HOSPITAL AND HOSPITAL HEALTH CARE COMPLEX
                STATISTICAL DATA AND HOSPITAL WAGE INDEX INFORMATION, section
                4005.1, Part 1--Hospital and Hospital Health Care Complex
                Statistical Data, Column 2.
                ---------------------------------------------------------------------------
                 We appreciate the suggestion to use and/or modify the ``OPPS
                Hospital Impact File'' to determine or reflect the number of hospital
                beds used to assess a penalty amount, however, the OPPS Hospital Impact
                File \586\ gathers and presents bed count data from multiple years of
                HCRIS data primarily for the purpose of analyzing the impact of the
                OPPS payment system on hospitals that are paid under that system. While
                it may draw from the same data set we proposed to use for purposes of
                determining hospital bed count, we believe using the primary source for
                such information will be more accurate, complete, and timely than
                relying on similar data from a secondary analysis. For example, unlike
                the OPPS Hospital Impact File, the HCRIS primary data set includes the
                status of the reported information (for example, Settled without audit,
                Settled with audit, Reopened, or Amended) which we proposed to use to
                determine the CMP amount using the number of beds for the noncompliant
                hospital, as specified on the most recently available, finalized cost
                report data. Additionally, the HCRIS primary data set includes cost
                reports from all Medicare-enrolled hospitals, unlike the OPPS Hospital
                Impact File which contains data from only those hospitals paid under
                the OPPS payment system. We therefore believe that using the primary
                source (HCRIS) is more accurate, complete, and timely.
                ---------------------------------------------------------------------------
                 \586\ https://www.cms.gov/medicaremedicare-fee-service-paymenthospitaloutpatientppshospital-outpatient-regulations-and-notices/cms-1717-cn.
                ---------------------------------------------------------------------------
                 Finally, regarding the proposal to use documentation provided by
                non-Medicare enrolled hospitals for determining the number of beds to
                be used to assess the CMP amount, we agree with the commenters that
                each state's facilities division documentation of number of licensed
                beds could be appropriate for this purpose. As such, if such
                information is necessary and requested for purposes of assessing a CMP,
                we would accept documentation of number of licensed beds from a state's
                facilities division that is provided by non-Medicare enrolled hospitals
                in the form and manner and by the specified deadline. However, should a
                hospital fail to provide CMS with this documentation, in the prescribed
                form and manner and by the specified deadline, we would impose a CMP on
                the hospital at the highest, maximum daily dollar amount.
                 Comment: Regarding the proposed $10/bed/day penalty amount, not to
                exceed $5,500/day, many commenters urged CMS to consider even greater
                penalty amounts including: increasing the penalty amount to $70/bed/
                day, $100/bed/day, $300/bed/day or even $1000/bed/day; or increasing
                the penalty amount to achieve a total penalty of $5 million per year.
                Such commenters indicated their belief that the proposed increase would
                remain insufficient to drive hospital compliance and asserted that lack
                of pricing data amounts to a patient harm issue due to the threat of
                financial ruin from medical debt. Commenters requested that CMS
                continue to monitor compliance carefully and signal an intent to
                increase penalties again in the future should hospital noncompliance
                persist.
                 By contrast, others suggested that the penalty should be lower than
                proposed because they disagreed that noncompliance should be viewed as
                a patient safety issue, or that it rises to the level of a Health
                Insurance Portability and Accountability Act of 1996 (HIPAA)-related
                violation. A few commenters, including rural and critical access
                hospital advocates, requested that CMS retain the current maximum
                penalty amount of $300/day instead of proposing $300/day as a minimum
                penalty amount.
                 Response: Given the comments, we believe our proposed maximum daily
                dollar penalty amount on a sliding scale between $300 and $5,500 per
                day per hospital strikes a good balance and is commensurate with the
                level of severity of the potential violation. However, we will continue
                to monitor and assess the impact of this penalty and may revisit in
                future rulemaking.
                 Final Policy: We are finalizing, as proposed, a revision to the
                regulations at 45 CFR 180.90(c)(2) to specify an amended approach for
                determining the daily dollar amount for a CMP CMS may impose upon a
                hospital for noncompliance with the requirements in 45 CFR part 180. As
                conforming changes, we are finalizing, as proposed, to specify in the
                regulations at Sec. 180.90(c)(2)(i), the existing approach to
                determining the CMP amount, as not to exceed $300 per day, with
                [[Page 63950]]
                introductory text specifying the provision is applicable for CY 2021.
                We are also finalizing, as proposed, with a technical modification to
                Sec. 180.90(c)(2)(ii)(B) for clarity, that we will specify in the
                regulations at Sec. 180.90(c)(2)(ii), provisions for determining the
                CMP amount for each day a hospital is determined by CMS to be out of
                compliance beginning January 1, 2022. The CMP amount would be based on
                the hospital's number of beds: (A) a maximum daily dollar CMP amount of
                $300 for hospitals with a number of beds equal to or less than 30; (B)
                a maximum daily dollar CMP amount calculated as number of beds times
                $10 for hospitals with at least 31 beds up to and including 550 beds;
                and (C) a maximum daily dollar CMP amount of $5,500 for hospitals with
                a number of beds greater than 550. We also finalize, as proposed, to
                specify in Sec. 180.90(c)(2)(ii)(D)(1) that CMS will determine the
                number of beds for a Medicare-enrolled hospital using the most recently
                available, finalized Medicare hospital cost report. We also finalize,
                as proposed, to specify in Sec. 180.90(c)(2)(ii)(D)(2) the process by
                which CMS will determine the hospital's number of beds if such
                information cannot be determined using Medicare hospital cost report
                data. Specifically, we will specify the conditions for CMS' receipt of
                documentation from the hospital to determine its number of beds, and
                specify that if the hospital does not provide CMS with such
                documentation (in the prescribed form and manner, and by the specified
                deadline), CMS will impose a CMP on the hospital at the highest,
                maximum daily dollar amount ($5,500 per day).
                C. Deeming of Certain State Forensic Hospitals as Having Met
                Requirements
                 Section 180.30(b) of our regulations states that the hospital price
                transparency requirements at 45 CFR part 180 are not applicable to
                federally-owned or operated hospitals, including hospitals operated by
                an Indian Health Program as defined in section 4(12) of the Indian
                Health Care Improvement Act, and federally owned hospital facilities
                such as facilities operated by the U.S. Department of Veterans Affairs
                and Military Treatment Facilities (MTFs) operated by the U.S.
                Department of Defense. As we explained in the CY 2020 Hospital Price
                Transparency final rule, we concluded that these exceptions were
                appropriate because, with the exception of some emergency services,
                these facilities do not provide services to the general public and
                their established payment rates for services are not subject to
                negotiation. Instead, each of these facility types is authorized to
                provide services to specific populations that meet specific eligibility
                criteria (84 FR 65532). In addition, federally-owned or operated
                hospitals such as Indian Health Service and Tribal facilities\587\
                impose no cost-sharing, or, in the case of VA hospitals\588\ and
                Department of Defense MTFs,\589\ little cost-sharing. With respect to
                such facilities where there is cost-sharing, the charges are publicized
                through the Federal Register, Federal websites, or direct
                communication, and are therefore known to the populations served by
                such facilities in advance of receiving health care services. Only
                emergency services, which would not be shoppable services under our
                definition because they cannot be scheduled in advance, are available
                to otherwise non-eligible individuals at federally-owned or operated
                facilities. Because these hospitals do not treat the general public and
                their rates are not subject to negotiation, we concluded that it was
                appropriate to establish different requirements that apply to these
                hospitals.
                ---------------------------------------------------------------------------
                 \587\ Section 1680r(b) of the Indian Health Care Improvement Act
                (25 U.S.C. 1680r).
                 \588\ VA cost-sharing information available at: https://www.va.gov/HEALTHBENEFITS/cost/copays.asp.
                 \589\ MTF cost-sharing information available at: https://tricare.mil/Costs/Compare and https://comptroller.defense.gov/Portals/45/documents/rates/fy2019/2019_ia.pdf.
                ---------------------------------------------------------------------------
                 In the CY 2022 OPPS/ASC proposed rule, we indicated that we had
                become aware that some state psychiatric facilities, specifically,
                state forensic hospitals, may be similarly situated to the types of
                facilities to which the exception in Sec. 180.30(b) applies and should
                therefore also be deemed to be in compliance with 45 CFR part 180. Some
                state forensic facilities are public psychiatric hospitals that
                exclusively treat patients who are in the custody of penal authorities
                and who are not responsible for payment for the cost of their care in
                such facilities which are wholly funded through state general
                funds.\590\ We stated we believed it is reasonable to consider deeming
                such hospitals as having met the requirements of 45 CFR part 180 for
                similar reasons that we articulated in the CY 2020 Hospital Price
                Transparency final rule for deeming federally owned or operated
                facilities as having met these requirements. Specifically, such state
                forensic hospitals have specialized patient populations, are not open
                to the general public, and the rates for such hospital services are not
                negotiated. Therefore, we proposed to adopt this exception by modifying
                the introductory language in Sec. 180.30(b) and adding new Sec.
                180.30(b)(3) to include state forensic hospitals. For purposes of
                application of this exception, we proposed to add a definition to Sec.
                180.20 to define a ``state forensic hospital'' as a public psychiatric
                hospital that provides treatment for individuals who are in the custody
                of penal authorities.\591\ Such forensic patients typically include:
                (1) Offenders incompetent to stand trial, (2) offenders with mental
                health disorders, (3) mentally ill prisoners transferred from prison,
                (4) offenders found not guilty by reason of insanity, or (5) post
                incarcerated civilly committed individuals.\592\ In order to be deemed
                as having met requirements, the state forensic hospital must provide
                treatment exclusively for individuals who are in the custody of penal
                authorities (for example, a state psychiatric hospital with a forensic
                wing would not meet criteria necessary to be deemed to be in
                compliance). We estimated there are approximately 111 such institutions
                that could meet the definition of hospital at Sec. 180.20.\593\ We
                proposed to add this exception to Sec. 180.30(b). We welcomed comments
                on this proposal.
                ---------------------------------------------------------------------------
                 \590\ Substance Abuse and Mental Health Services Administration,
                Controlled Expenditures and Revenues for Mental Health Services,
                State Fiscal Year 2009. Available at: https://store.samhsa.gov/
                sites/default/files/d7/priv/sma14[ne]4843.pdf.
                 \591\ CMS.gov, Psychiatric Hospitals, available at: https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/CertificationandComplianc/PsychHospitals.
                 \592\ National Association of State Mental Health Program
                Directors. Forensic Patients in State Psychiatric Hospitals: 1999-
                2016. August 2017. Available at: https://nasmhpd.org/sites/default/files/TACPaper.10.Forensic-Patients-in-State-Hospitals_508C_v2.pdf.
                 \593\ National Mental Health Services Survey (N-MHSS): 2019,
                Data On Mental Health Treatment Facilities. Substance Abuse and
                Mental Health Services Administration. 2020. Available at: https://www.samhsa.gov/data/report/national-mental-health-services-survey-n-mhss-2019-data-mental-health-treatment-facilities. See Table 3.6.a.
                ---------------------------------------------------------------------------
                 Comment: All commenters that submitted comments on this proposal to
                deem state forensic hospitals as having met requirements expressed
                general support. We did not receive any comments opposing the proposal.
                 Response: We appreciate the support for the proposal to deem state
                forensic hospitals as having met requirements and are finalizing as
                proposed.
                 Comment: One commenter requested that CMS publish a list of all
                hospitals subject to this deeming requirement.
                 Response: Many states, which license such institutions as
                hospitals, maintain this information on publicly available websites,
                therefore we decline to
                [[Page 63951]]
                maintain a separate public list of state forensic hospitals deemed
                compliant with the hospital price transparency regulations.
                 Final Policy: We are finalizing, as proposed, the policy to deem
                state forensic hospitals as having met the requirements of 45 CFR part
                180. Specifically, we are finalizing this policy by modifying the
                introductory language in Sec. 180.30(b) and adding new Sec.
                180.30(b)(3) to include state forensic hospitals. For purposes of
                application of this exception, we are adding a definition to Sec.
                180.20 to define a ``state forensic hospital'' as a public psychiatric
                hospital that provides treatment for individuals who are in the custody
                of penal authorities.\594\ In order to be deemed as having met
                requirements, the state forensic hospital must provide treatment
                exclusively for individuals who are in the custody of penal authorities
                (for example, a state psychiatric hospital with a forensic wing would
                not meet criteria necessary to be deemed to be in compliance).
                ---------------------------------------------------------------------------
                 \594\ CMS.gov, Psychiatric Hospitals, available at: https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/CertificationandComplianc/PsychHospitals.
                ---------------------------------------------------------------------------
                D. Improving Access to the Machine-Readable File
                 Section 2718(e) of the PHS Act requires hospitals to ``make public
                (in accordance with guidelines developed by the Secretary) a list of
                the hospital's standard charges for items and services.''
                 As explained in the CY 2022 OPPS/ASC proposed rule, 45 CFR 180.50
                requires a hospital to make public its standard charges in a single
                machine-readable file. Section 180.50(d)(1) of our regulations gives a
                hospital discretion to choose a website for purposes of making its
                standard charge information available to the public in the machine-
                readable file. Section 180.50(d)(2) through (5) set forth our
                accessibility requirements for this information, including that the
                standard charge information must be displayed prominently and clearly
                identify the hospital location with which it is associated; easily
                accessible, without barriers, including but not limited to being free
                of charge, without having to establish a user account or password, and
                without having to submit personal identifying information (PII); and
                contained in a digital file, within which the standard charge
                information is digitally searchable.
                 As discussed in the CY 2020 Hospital Price Transparency final rule,
                we believe there is a direct connection between transparency in
                hospital standard charge information and having more affordable
                healthcare and lower healthcare coverage costs (84 FR 65526). For
                purposes of displaying all standard charges for all items and services
                in a comprehensive machine-readable file, we proposed and finalized
                requirements for the file format, the content of the data in the file,
                and how to ensure the public could easily access and find the file. We
                acknowledged that the machine-readable file would contain a large
                amount of data; however, we indicated that we believe that a single
                data file would be highly useable by the public because all the data
                would be in one place. By ensuring accessibility to all hospital
                standard charge data for all items and services, we stated these data
                would be available for use by the public in price transparency tools,
                to be integrated into EHRs for purposes of clinical decision-making and
                referrals, or to be used by researchers and policy officials to help
                bring more value to healthcare.
                 As explained in the CY 2022 OPPS/ASC proposed rule, in our
                experience, many publicly available web pages that are selected by
                hospitals to host the machine-readable file (or a link to the machine-
                readable file) are discoverable using simple internet searches (using
                key words such as the hospital name plus `standard charges,' `price,'
                or `machine-readable file') or, for example, by navigating to the
                hospital's home page and clicking and searching through pages related
                to patient billing and financing. We noted that because of the
                flexibility we allowed to hospitals to choose the internet location, we
                recognized and expected that there would be some variability in how
                hospitals choose to publicly display their machine-readable file and
                how quickly the file can be found by the public. However, we indicated
                our belief that this flexibility is afforded under the regulation so
                long as the hospital ensures that the machine-readable file is
                accessible ``without barriers,'' including that the file and its
                contents would be digitally searchable (84 FR 65561 through 65562).
                 In the CY 2022 OPPS/ASC proposed rule, we expressed our concern
                that, in some cases, it appears that hospitals have made standard
                charge data available online but embedded it in websites without any
                ability for users to easily or directly download a ``single machine-
                readable file.'' In other cases, hospitals have posted a link to a
                single machine-readable file but have, either intentionally or
                unintentionally, placed barriers that make it more challenging for the
                public find and access the file and its contents. We cited examples of
                such activities and practices including:
                 Employing common methods that hinder the findability \595\
                of a web page that contains a link to the machine-readable file, such
                as through the use anti-automation tools such as form submission, or
                other technological devices that place a ``locked door'' in front of
                the content thereby making it difficult or impossible for search
                engines to identify the data. There have also been reports of hospitals
                using ``blocking codes'' such as use of NOINDEX and ``rel canonical''
                tagging or disallow statements or removing the URL from the search
                index through the use of the webmaster tools URL removal service. These
                techniques prevent commonly used web search engines from caching web
                pages on which the link to machine-readable files reside.\596\ These
                examples of tools and codes present barriers because they limit the
                public's ability to easily search for and find the web page that hosts
                a link to the machine-readable file.
                ---------------------------------------------------------------------------
                 \595\ Fishkin R. 12 Ways to Keep Your Content Hidden from the
                Search Engines. Moz. January 15, 2008. Available at: https://moz.com/blog/12-ways-to-keep-your-content-hidden-from-the-search-engines.
                 \596\ McGinty T, et al. Hospitals Hide Pricing Data from Search
                Results. The Wall Street Journal. March 22, 2021. Available at:
                https://www.wsj.com/articles/hospitals-hide-pricing-data-from-search-results-11616405402.
                ---------------------------------------------------------------------------
                 Employing common methods that prevent direct access to the
                file and its contents. For example, some hospitals implement anti-
                automation tools such as requiring users to pass tests proving they are
                human users prior to accessing the file, for example, the
                implementation of CAPTCHA and reCAPTCHA in web applications. CAPTCHA
                stands for ``Completely Automated Public Turing test to Tell Computers
                and Humans Apart.'' Common CAPTCHA and reCAPTCHA mechanisms may include
                distorted text inside images, where the user has to type the text or
                nine or sixteen square images, where the user has to identify the
                images that contain certain objects, such as vehicles, trees, or street
                signs. In other instances, some hospitals require the user to take
                additional actions upon clicking the link to the machine-readable file,
                prior to download. For example, pop-up windows that require the user to
                agree all terms and conditions in a legal disclaimer prior to
                permitting the machine-readable file and its contents to be downloaded.
                Such pop-up windows do not permit direct access to the file and its
                contents, and present a barrier.
                 Developing file constructs and web forms that obscure
                access to the data in
                [[Page 63952]]
                a single machine-readable file through the use of Application
                Programming Interfaces (APIs). For example, we have found APIs that use
                calls for data that will not return a complete data file, that do not
                provide supporting documentation on the use of the API to retrieve the
                file, and that do not allow a single query to return all data in a
                single machine-readable file. These APIs control access to the data in
                a way that prevents or conceals access to the entire data file. As
                such, these types of APIs present barriers to direct access to a
                `single machine-readable file' and are therefore not permissible forms
                of APIs for use by a hospital.
                 Given this additional experience, we proposed to amend the
                regulations by adding paragraph (d)(3)(iv) to Sec. 180.50 to specify
                that the hospital must ensure that the standard charge information is
                easily accessible, without barriers, including, but not limited to,
                ensuring the information is accessible to automated searches and direct
                file downloads through a link posted on a publicly available website.
                We indicated our belief that this additional requirement would ensure
                greater accessibility to the machine-readable file and its contents and
                would prohibit practices we have encountered in our compliance reviews,
                such as lack of a link for downloading a single machine-readable file,
                using ``blocking codes'' or CAPTCHA, and requiring the user to
                agreement to terms and conditions or submit other information prior to
                access.
                 We sought comment on whether stakeholders have identified
                additional barriers that we should prohibit. We noted that the list of
                examples of barriers we have encountered in our reviews of hospital
                websites is not intended to be exhaustive, and that should we identify
                additional barriers that prevent automated searches or direct download
                of the machine-readable file, we may prohibit them via, as appropriate,
                guidance or future rulemaking.
                 Finally, we sought comment on whether there are specific criteria
                we should consider when evaluating whether a hospital has displayed the
                machine-readable file in a ``prominent manner.'' We explained our
                belief that files that are posted in a prominent manner can reduce
                public burden for searching and finding the files, and can ensure the
                public can easily find the machine-readable file and the information
                contained within it. When files are posted prominently, we noted, we
                would be able to more easily monitor and assess hospital compliance
                with the CY 2020 Hospital Price Transparency final rule. For example,
                we indicated we were considering establishing a more standardized
                approach for how hospitals would be required to make public the
                machine-readable file, in order to relieve the burden on the public and
                ensure files are found easily. One such method could be to require
                hospitals to post their machine-readable files using a CMS-specified
                URL, in addition to the CMS-specified naming convention. Another
                approach could be to require a standardized location for hospitals to
                post a link to the file from the hospital's homepage, thus limiting the
                public's search for such files to the homepage of the hospital and
                relieving burden on the public to spend time searching for the file. We
                sought comment on these methods for ensuring that the machine-readable
                files posted are prominently displayed and easily accessible.
                 Comment: Many commenters expressed general support for removal of
                any and all barriers to access. Commenters strongly supported the
                current accessibility requirements (specifically, that the information
                be accessible free of charge, without having to establish a user
                account or password, and without having to submit personal identifying
                information) and urged CMS to finalize the additional proposed
                requirement that the machine-readable file be accessible ``to automated
                searches and direct file downloads through a link posted on a publicly
                available website.'' Commenters stated that the proposed rule's
                examples of activities that present barriers to access are accurate and
                expressed their belief that such a policy is ``necessary, important,
                and worthwhile'' to improve public access to machine-readable files.
                Commenters noted that by employing such strategies, hospitals are
                engaging in additional and unnecessary work, and suggested that the
                self-imposed additional burden reflects an active intent on the part of
                a hospital to obfuscate the data and new regulations. Additionally,
                some commenters expressed appreciation for the specific examples cited
                by CMS in the proposed rule and urged CMS to continue to provide this
                type of guidance to help hospitals comply with the new rules.
                 By contrast, many commenters requested that CMS not impose any
                additional requirements on hospitals at this time. Instead, commenters
                recommended that CMS: Identify practices that support access and allow
                hospitals flexibility to tailor different strategies to their own
                organizational goals; improve education and outreach; and not impose
                requirements that would increase hospital administrative costs to
                comply and `redevelop' their price transparency solutions.
                 Several commenters objected to the proposal because ensuring the
                machine-readable file is accessible to direct downloads from a link
                posted on a web page would prohibit the use of certain activities and
                methods such as the use of pop-up disclaimers and agreements as a
                prerequisite to accessing the machine-readable file. Commenters
                asserted that pop-up disclaimers are necessary because the information
                in the machine-readable files could be confusing or even misleading to
                consumers if presented without context or explanation, and that pop-up
                disclaimers ``are the only protection hospitals have to avoid negative
                consequences of misinterpreting information.'' Additionally, commenters
                argued that CMS itself encouraged use of disclaimers, citing the
                Hospital Price Transparency final rule in which CMS encouraged
                hospitals to include ``appropriate disclaimers in their price estimator
                tools'' (84 FR 65579). Commenters indicated their belief that hospitals
                can properly require that a consumer acknowledge the hospital's
                disclaimers through pop-ups without compromising the accessibility of
                the machine-readable file.
                 A few commenters objected to the requirement to ensure direct
                download of the machine-readable file because it would prevent using
                methods such as CAPTCHA which, commenters asserted, is necessary for
                hospitals to safeguard the overall web-based hosting environment.
                Commenters explained that due to the size of some of the files,
                repeated automated attempts by external sources could place stress on
                the bandwidth of hospital networks and could present as a ``denial of
                service'' attack. Denial of service attacks, in turn, could result in
                the shutdown of the website and interrupt patient access to the
                website. Commenters recognized there are mitigation strategies
                available to hospitals, but that some such strategies may represent an
                additional cost to the facility to implement. Additionally, commenters
                pointed out that the federal government uses CAPTCHA on some websites
                for certain purposes, such as the submission of public comment to
                proposed rules on the Federal Register site.
                 One commenter objected to requiring direct access to the machine-
                readable file through a link posted on the web page because such a
                requirement would prohibit the ability to use other methods for
                displaying standard charge information, such as the use of APIs.
                Commenters asserted that use of APIs should be permitted because
                machine-
                [[Page 63953]]
                readable file information that is searchable through an API is
                beneficial to the end-user. This commenter asserted that finalizing the
                proposal would increase burden because hospitals using APIs in lieu of
                providing the public with access to a single machine-readable file may
                require some hospitals to redevelop their price transparency solutions.
                 Response: We appreciate and agree with commenters that additional
                criteria are necessary at this time to ensure public access to the
                information in the machine-readable file. We believe that prohibiting
                practices that prevent automated access and direct downloads permits
                greater flexibility than prescribing the way a hospital must support
                access. Although we recognize, as articulated by commenters, that there
                may be legitimate reasons why a hospital may have chosen to display its
                data the way it currently does, we nonetheless believe the employment
                of such practices articulated in the proposed rule present barriers to
                access to the information in the machine-readable file and are thus
                finalizing the policy as proposed. Any such practice that prevents
                accessibility of the machine-readable file via automated searches and
                direct file downloads would be prohibited under this final rule.
                 We continue to believe that pop-ups (including pop-up disclaimers)
                present a barrier to both automated and manual access to the machine-
                readable file by preventing direct download of the file via a link on
                the hospital's web page. We do not believe, as suggested by some
                commenters, that such pop-up disclaimers are the only protection
                afforded to hospitals to avoid negative consequences of misinterpreting
                the information contained in the machine-readable file. Even so, we
                note that this prohibition would not prevent a hospital from providing
                any additional information or relevant disclaimers in the machine-
                readable file itself or on the web page containing the link to the
                machine-readable file. However, under the new requirements, such
                disclaimers or explanatory information may not be used as a barrier to
                direct downloads of the file from a link on the hospital's web page.
                Additionally, we do not believe that the policy to require direct
                downloads is inconsistent with our encouragement of the use of
                disclaimers in price estimator tools because such tools are designed
                specifically for manual use by an individual, in contrast to a display
                of data that is intended to be widely accessible, including accessible
                by machines. Moreover, we have not received complaints that pop-ups
                (including pop-up disclaimers) are creating a barrier to access to
                price estimator tools. However, we will monitor this issue and, to the
                extent that CAPTCHA or pop-ups (including pop-up disclaimers) present a
                barrier to access to price estimator tools, we may address it in future
                rulemaking.
                 We agree with commenters who indicated that prohibiting use of
                CAPTCHA (and other similar barriers to directly downloading the
                machine-readable file) will increase the usability of the machine-
                readable file for the public, including for researchers and others who
                seek to update their data sources as part of an automated process. We
                acknowledge that some commenters may have concerns related to bandwidth
                considerations and server security. We note, however, that access to
                machine-readable files from websites is not unusual, nor are direct
                downloads. Moreover, accounting for bandwidth considerations and
                preventing attempted denial of service attacks is within the scope of
                routine server administration. Server administrators therefore have
                mitigation strategies to address both issues. For example, in our
                compliance reviews, we have noticed that some hospitals have employed
                alternative hosting or caching of the machine-readable file. We note
                that the regulations related to location and accessibility of the
                machine-readable file require hospitals to ``select a publicly
                available website for purposes of making public the standard charge
                information'' (45 CFR 180.50(d)). Thus, hospitals have flexibility to
                determine the most appropriate public website for posting that permits
                the public access to the machine-readable file in accordance with the
                requirements of the final rule. We believe that hospitals can carefully
                consider how to display the link to the machine-readable file such that
                all requirements for posting may be met.
                 We disagree with commenters that suggest that we should not
                finalize the policy as proposed because some federal websites, such as
                the Federal Register, use CAPTCHA for submission of comments. Use of
                CAPTCHA for purposes of comment submission to the Federal Register is a
                fundamentally different process than the process for downloading a
                static file. In the comment response process, the CAPTCHA helps to
                prevent automated data submission, thereby protecting the value of the
                comments received by the federal government by ensuring the content
                submitted is user-created. When downloading a static file, no user-
                created content is submitted to a web server and therefore there is no
                data to protect. A more appropriate comparison than the comment
                submission process to the Federal Register would be public access to
                information that can be downloaded from Data.gov which allows the
                public to directly download data files; Data.gov does not have CAPTCHA
                requirements or other impediments for accessing direct data downloads.
                 In the CY 2020 OPPS/ASC proposed rule (84 FR 39582 through 39583),
                we specifically sought comment on adopting a requirement that hospitals
                use an open standards-based API through which they would disclose their
                standard charges and associated data elements. Ultimately, we finalized
                a policy for hospitals to make public their standard charges by posting
                a single machine-readable file online as a good initial step, while
                indicating that as hospital disclosure of standard charges matures, we
                intended to revisit the issue. Thus, while hospitals are not prohibited
                under the final rule from making public standard charges via API
                technology, or using such technology for a consumer-friendly display of
                standard charges, hospitals must still make public their standard
                charges in a single machine-readable file. Under this finalized
                accessibility policy, such single machine-readable files must
                additionally be accessible to automated searches and direct file
                downloads through a link on the hospital website.
                 Comment: Some commenters noted that the most pressing barrier to
                access is the lack of hospital compliance with the Hospital Price
                Transparency regulations. Others outlined various technical challenges
                in identifying and searching for the location of the file related to
                website domain names, hospitals that don't maintain websites, and
                search results that include links to third party aggregators of the
                files. Several commenters requested more guidance related to what is
                acceptable to meet the current `prominently displayed' requirement.
                Others provided detailed suggestions for improving future requirements
                related to file `findability,' including: Consideration for developing
                a centralized location for hospitals to either make public the machine-
                readable file or to submit a link to the machine-readable file's
                location; requiring use of certain searchable words or terms on the web
                page that contains the link to the machine-readable file; requiring
                hospitals to place a link to the file (or its web page) on the
                hospital's homepage; requiring the file to be on a web page that is no
                more than two clicks from the hospital's homepage; requiring hospitals
                to locate the file on a dedicated price
                [[Page 63954]]
                transparency web page on the hospital's own website. Several commenters
                supported the establishment of a CMS-specified URL, although one
                commenter noted that this would not be necessary if CMS chose instead
                to establish and enforce a specific location for the link to the
                machine-readable file.
                 By contrast, other commenters supported the current flexible
                approach and objected to more specificity in file location
                requirements, other than ensuring the file is `not blocked from public
                view.' One commenter noted that hospitals have frequently chosen to
                post the link to the machine-readable file on the hospital billing web
                page.
                 Response: We appreciate the feedback and acknowledge that hospitals
                may be experiencing technical challenges as they implement the hospital
                price transparency requirements. As noted above, we will continue to
                educate hospitals about the requirements, including the requirement to
                use the CMS-specified naming convention. Regarding the request for
                additional guidance related to how a hospital should ensure that the
                machine-readable file is displayed `prominently,' we refer hospitals to
                the detailed discussion in the CY 2020 Hospital Price Transparency
                final rule (84 FR 65561) (84 FR 65561). In response to commenters
                requesting additional guidance for how to ensure their machine-readable
                files are `prominently displayed', we recommend hospitals do the
                following:
                 Review and use, as applicable, the HHS Web Standards and
                Usability Guidelines (available at: https://webstandards.hhs.gov/),
                which are research-based and are intended to provide best practices
                over a broad range of web design and digital communications issues.
                 Post a link to machine-readable file on a website where
                the value and purpose of the web page and its content is clearly
                communicated, for example, a dedicated price transparency web page or a
                web page devoted to patient billing or financing healthcare services.
                 While ``breadcrumbs'' (for example, secondary navigation
                aids) can be useful for navigating a website, they should not be relied
                upon in order for consumers to find the link to the machine-readable
                file. Instead, facilitate user navigation by including searchable terms
                on the web page such as ``price transparency,'' ``standard charges,''
                or ``machine-readable file.''
                 Ensure that the link to the machine-readable file is
                visually distinguished on the web page, and that its purpose is to open
                the single machine-readable file for a clearly indicated hospital
                location.
                 Additionally, we appreciate the detailed comments related to
                challenges in locating files, and will continue to consider these
                suggestions for future rulemaking.
                 Final Policy: We are finalizing, as proposed, an amendment to the
                regulations by adding paragraph (d)(3)(iv) to Sec. 180.50 to specify
                that the hospital must ensure that the standard charge information is
                easily accessible, without barriers, including, but not limited to,
                ensuring the information is accessible to automated searches and direct
                file downloads through a link posted on a publicly available website.
                We believe that this additional requirement will serve to ensure
                greater accessibility to the machine-readable file and its contents and
                would prohibit practices we have encountered in our compliance reviews,
                such as lack of a link for downloading a single machine-readable file,
                using ``blocking codes'' or CAPTCHA, and requiring the user to
                agreement to terms and conditions or submit other information prior to
                access.
                E. Clarification and Requests for Comment
                1. Clarification of the Price Estimator Tool Option
                 In the CY 2022 OPPS/ASC Proposed Rule, we indicated that we had
                previously finalized a requirement that hospitals make public certain
                standard charges for 300 ``shoppable'' services in a consumer-friendly
                manner. We very briefly summarized the rationale and policy finalized
                in the CY 2020 Hospital Price Transparency final rule at Sec.
                180.60(a)(2) that a hospital may voluntarily offer an internet-based
                price estimator tool and thereby be deemed to have met our requirements
                to make public its standard charges for selected shoppable services in
                a consumer-friendly manner, so long as such a price estimator tool:
                 Provides estimates for as many of the 70 CMS-specified
                shoppable services that are provided by the hospital, and as many
                additional hospital-selected shoppable services as is necessary for a
                combined total of at least 300 shoppable services.
                 Allows healthcare consumers to, at the time they use the
                tool, obtain an estimate of the amount they will be obligated to pay
                the hospital for the shoppable service.
                 Is prominently displayed on the hospital's website and be
                accessible without charge and without having to register or establish a
                user account or password.
                 In the CY 2022 OPPS/ASC proposed rule, we clarified that to satisfy
                our requirement at Sec. 180.60(a)(2)(ii), a price estimator tool
                ``[a]llows healthcare consumers to, at the time they use the tool,
                obtain an estimate of the amount they will be obligated to pay the
                hospital for the shoppable service''. Moreover, such a price estimator
                tool must be ``tailored to individuals' circumstances (whether an
                individual is paying out of pocket or using insurance) and provide
                real-time individualized out of pocket estimates that combines hospital
                standard charge information with the individual's benefit information
                directly from the insurer, or provide the self-pay amount.'' (84 FR
                65578) \597\ We went on to note our concern that our reviews of
                hospital compliance have identified that some hospital price estimator
                tools do not tailor a single estimated amount based on the individual's
                circumstance, but, instead, provide estimated average amounts or ranges
                for the price of a shoppable service that appear to be generated based
                on a broad population of patients, including outliers. Others do not
                appear to combine hospital standard charges with the individual's
                benefit information directly from the insurer to create the estimate,
                but instead, appear to use information from prior reimbursements or
                require the user to input benefit information. Still others appear
                tailored to the individual, but indicate that the price is not what the
                hospital anticipates that the individual would be obligated to pay,
                even in the absence of unusual or unforeseeable circumstances. We
                stated in the proposed rule that such price estimator tools would
                therefore fail to satisfy our requirements at Sec. 180.60(a)(2).
                ---------------------------------------------------------------------------
                 \597\ There were several typographical errors in the
                clarification published in the proposed rule. The sentence should
                read as follows: Moreover, such price estimator tools must be
                tailored to individuals' circumstances (whether an individual is
                paying out-of-pocket or using insurance) and provide ``real-time
                individualized out-of-pocket estimates'' that ``[combines] hospital
                standard charge information with the individual's benefit
                information directly from the insurer'', or provide the self-pay
                amount. (84 FR 65578)
                ---------------------------------------------------------------------------
                 We noted that under the CY 2020 Hospital Price Transparency final
                rule, hospitals are not required to offer online price estimator tools.
                However, we emphasized that when a hospital chooses to offer an online
                price estimator tool as an alternative to presenting its standard
                charge information in a consumer-friendly format, we believe it is
                important for the hospital to select and offer a price estimator tool
                that provides a single dollar amount that is tailored to the individual
                seeking the estimate, taking
                [[Page 63955]]
                the individual's circumstances into consideration when developing the
                estimate. Moreover, we stated that the estimate must reflect the amount
                the hospital anticipates will be paid by the individual for the
                shoppable service, absent unusual or unforeseeable circumstances. We
                also emphasized that nothing in the Hospital Price Transparency
                regulations would preclude a hospital from providing additional
                information that may be helpful to the consumer, such as a range of
                prices paid by a defined population of consumers for the item or
                service in the past, or informing the inquirer what circumstances could
                change the personalized estimate.
                 Finally, we indicated that we were considering whether we should
                add requirements for the use of an online price estimator tool as an
                alternative to making public the standard charges for shoppable
                services in a consumer-friendly format. We sought stakeholder input for
                future consideration related to the price estimator tool policies,
                including identifying best practices, common features, and solutions to
                overcoming common technical barriers, and specifically, sought input
                on:
                 What best practices should online price estimator tools be
                expected to incorporate?
                 Are there common data elements that should be included in
                the online price estimator tool to improve functionality and consumer-
                friendliness?
                 What technical barriers exist to providing patients with
                accurate real-time out-of-pocket estimates using an online price
                estimator tool? How could such technical barriers be addressed?
                 Comment: Many commenters supported the policy finalized in the
                Hospital Price Transparency final rule to permit use of price estimator
                tools that ``[a]llows healthcare consumers to, at the time they use the
                tool, obtain an estimate of the amount they will be obligated to pay
                the hospital for the shoppable service,'' in lieu of making public
                standard charges in a consumer-friendly manner at 45 CFR 180.60. A few
                commenters urged CMS to go further and permit such tools to satisfy the
                requirements for all hospital price transparency rules, including the
                machine-readable file requirements at 45 CFR 180.50. By contrast, many
                commenters expressed concerns with permitting hospital use of price
                estimator tools for any purpose, including meeting the consumer-
                friendly display requirements at 45 CFR 180.60, because they believe
                that hospitals are using such tools to continue to obfuscate and avoid
                making public their standard charges, as required by the law and in
                accordance with the Hospital Price Transparency final rule. Such
                commenters explained that consumers want knowledge of `real' prices,
                including standard charges, and not just their final out-of-pocket
                obligations. Commenters asserted that full disclosure of the inputs to
                determine the out-of-pocket costs are necessary for consumers to
                validate the final bill. A few commenters therefore urged CMS to
                rescind the flexibility afforded in the rule that allows hospitals to
                voluntarily offer price estimator tools that offer only out-of-pocket
                estimates instead of making public their standard charges for shoppable
                services in a consumer-friendly manner.
                 Many commenters, including several providers and provider
                organizations, expressed strong support and agreement with the
                clarification that price estimator tools must take into consideration
                the individual's insurance information when providing an out-of-pocket
                estimate. Commenters stated that such tools are routinely in use in
                hospital systems around the country and provide meaningful and accurate
                estimates to consumers of their out-of-pocket obligations. Others noted
                that since finalization of the Hospital Price Transparency final rule,
                the adoption of such real-time tools has increased, along with vendor
                support for price estimator tools that take individuals' payer
                information into account. One commenter noted that regular
                communication channels between both payers and their estimation tool
                vendor had proven to be a valuable best practice to address estimation
                accuracy issues.
                 A few commenters strongly disagreed with the clarification. One
                commenter objected to requiring that, in order to qualify for an
                exception to 45 CFR 180.60(b) through (e), a price estimator tool must
                use a `standard-charges-based' methodology to provide an estimate of a
                patient's expected cost sharing obligation. This commenter stated that
                such a requirement would unduly limit a hospital's flexibility without
                benefitting consumers. Two commenters pointed out that a statement
                attributed as a quote from the Hospital Price Transparency final rule
                (specifically the quote attributed to 84 FR 65578) could not be found
                and therefore invalidates the clarification. One of the commenters
                noted that the sections of the quote are contained in separate sections
                of the Hospital Price Transparency final rule but that the combined
                quote does not exist. Both commenters suggested that the clarification
                is contradictory because the Hospital Price Transparency final rule
                indicates that hospitals should advise user to ``consult, as
                applicable, with his or her health insurer to confirm individual
                payment responsibilities and remaining deductible balances.''
                 Several commenters disagreed that the examples we provided in the
                proposed rule of price estimator tools would be considered
                noncompliant, including the following that would be considered out of
                compliance:
                 Tools that provide estimated amounts or ranges, instead of
                a single dollar out-of-pocket amount. Commenters asserted that ranges
                are useful to consumers.
                 Tools that use prior claims to estimate the potential
                total standard charges. A commenter asserted that past claims, properly
                used, can provide a more accurate basis for establishing a reasonable
                estimate than the use of standard charges. Another indicated that it is
                impractical to load the information from all payers and all plans and
                therefore some amount of averaging is necessary.
                 Tools that do not combine hospital standard charges with
                benefit information directly from the insurer, requiring the user to
                input their own benefit information. Some commenters indicated that
                some tools request benefit information to be submitted by the consumer,
                explaining not all payer information is available electronically or
                updated frequently enough. One commenter noted that, in order to
                provide more meaningful and accurate estimates, some hospitals have
                developed an option for patients to manually input or override certain
                information, such as their progress toward meeting a deductible. Some
                commenters noted that each electronic transaction with the payer may
                result in a transaction fee borne by the hospital. Another indicated
                that electronic requests do not consistently return necessary
                information from the payer.
                 Tools that indicate the price is not what the hospital
                anticipates the individual would be obligated to pay, even in the
                absence of unusual or unforeseeable circumstances. One commenter
                requested that CMS clarify that `unusual and unforeseen circumstances'
                are not the only reasons that a final cost could deviate from an
                estimate because some patient needs are unknowable but not unforeseen;
                for example, having to order lab tests may not be unusual or
                unforeseen, but it may not be known in advance which exact labs will be
                needed. Others requested that CMS enforce the requirement that the
                price estimator tool reflect the amount that the individual would be
                ``obligated'' to pay as a binding and
                [[Page 63956]]
                guaranteed estimate and not permit any disclaimers to the contrary. A
                few commenters expressed understanding that some hospital costs are
                challenging to predict with certainty but asserted that in such cases,
                rather than a disclaimer, it would be useful to be offered a reasonable
                `bundled' price for a procedure, along with prices for potential `a la
                carte' items and services that could be included in the final bill.
                 A few commenters requested that CMS delay finalizing any additional
                criteria for the use of hospital price estimator tools. Commenters
                noted that both the Transparency in Coverage rule as well as the No
                Surprises Act have requirements for payers to establish price
                comparison tools.\598\ Additionally, the No Surprises Act includes
                requirements for providers to communicate ``good faith estimates'' to
                uninsured (including self-pay) patients as well as communication of
                estimated charges to payers so that payers can, in turn, provide a
                ``good faith estimate'' to people using insurance. Commenters suggest
                that the estimates provided by hospital price estimator tools could be
                related to the ``good faith estimates'' that hospitals will be required
                to provide under the No Surprises Act. As such, commenters requested
                that CMS consider and ensure alignment of requirements across these
                initiatives.
                ---------------------------------------------------------------------------
                 \598\ https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-49.pdf
                ---------------------------------------------------------------------------
                 Response: We appreciate commenter support for our Hospital Price
                Transparency final rule policies related to voluntary use of price
                estimator tools to satisfy the consumer-friendly display requirements
                at 45 CFR 180.60. We do not believe the clarification we provided in
                the proposed rule presents a change to the existing price estimator
                tool requirements that we previously finalized. However, we appreciate
                comments related to changes that we may consider in future rulemaking
                (such as expanding the policy to permit such tools to satisfy other
                requirements or rescinding the policy to permit hospitals to meet
                requirements for a consumer-friendly display via use of price estimator
                tools).
                 We appreciate commenter support for the clarification of the
                requirement that voluntary price estimator tools take into account
                patient insurance information when presenting out-of-pocket estimates.
                We agree that such tools are routinely used in hospital systems and can
                be used to provide meaningful and accurate estimates to consumers about
                their out-of-pocket obligations. We also noted in the Hospital Price
                Transparency final rule ``that price estimator tools pick up where our
                rule ends and take the additional steps that would otherwise be
                required by the consumer to determine their individualized out-of-
                pocket by combining hospital standard charge information with the
                individual's benefit information directly from the insurer [italics
                added for emphasis].'' (84 FR 65578).
                 Thus, the estimate from a price estimator tool, voluntarily used by
                the hospital in lieu of making public a consumer-friendly list of
                standard charges, must be tailored to individuals' circumstances and
                represent a real-time individualized out-of-pocket estimate of the
                amount they would have to pay the hospital that takes into account any
                applicable benefit information.
                 However, although we would expect a personalized out-of-pocket
                estimate to use hospital standard charges and to take insurer
                information directly into account, we did not specify the method by
                which a price estimator tool would do so. As suggested by commenters,
                we recognize that a population-based analysis of prior reimbursements
                for hospital services (particularly for complex procedures that have
                many possible combinations of items and services and corresponding
                payer-specific negotiated charges, or for procedures that have payer-
                specific negotiated charges for a service package based on complex
                contracting arrangements) could help inform the inputs (for example,
                items and services and total expected payer-specific negotiated
                charges) that are likely to be encountered by the individual.
                Additionally, we agree with commenters that there may be existing
                challenges for electronically accessing some payer information that is
                necessary to determine an accurate out-of-pocket cost estimate for all
                individuals seeking to use insurance, and that such challenges may
                require an individual to input data that comes directly from the payer.
                Further, we recognize that there may be an opportunity in the future to
                align requirements for a consumer-friendly display of standard charges
                with the requirements of the Transparency in Coverage regulations and
                the implementation of the No Surprises Act.
                 Accordingly, if a hospital chooses to offer a price estimator tool
                in lieu of displaying standard charges in a consumer-friendly manner,
                the hospital must ensure (among the other requirements at 45 CFR
                180.60(a)(2)) that the tool allows healthcare consumers to, at the time
                they use the tool, obtain an estimate of the amount that the hospital
                anticipates the individual would be obligated to pay. This means that
                the estimated amount is personalized and represented as a single out-
                of-pocket dollar amount that takes into account the individual's
                insurance status. However, the Hospital Price Transparency final rule
                is not prescriptive regarding the method by which a hospital's price
                estimator tool estimates the individual's single out-of-pocket dollar
                amount. Specifically, we note that nothing in the rule prevents a
                hospital from developing an accurate and reliable cost estimate using
                prior claims information or from providing additional information that
                may be useful to the end-user, such as the range of out-of-pocket costs
                for the population to which the individual belongs. However, the
                estimate of ``the amount'' the individual would be obligated to pay
                must be displayed as a single dollar out-of-pocket amount within the
                tool. Similarly, the Hospital Price Transparency final rule is not
                prescriptive regarding the method by which the tool accesses the
                individual's insurance information ``directly from the insurer.'' We
                therefore agree with commenters that the tool could require the
                consumer to manually submit such information in order to generate the
                estimated out-of-pocket amount.
                 Finally, the Hospital Price Transparency final rule requires price
                estimator tools to allow consumers to obtain an estimate of the amount
                ``they will be obligated to pay'' the hospital for the shoppable
                service and we encouraged hospitals to take note of best practices for
                developing accurate and reliable cost estimates and seek to ensure the
                price estimator tools they offer are maximally consumer-friendly.
                Additionally, as noted by commenters, we encouraged, but did not
                require, that hospitals ``provide appropriate disclaimers in their
                price estimator tools, including acknowledging the limitation of the
                estimation and advising the user to consult, as applicable, with his or
                her health insurer to confirm individual payment responsibilities and
                remaining deductible balances.'' As such, we believe such disclaimers
                should serve to educate the public regarding the estimate and should
                not be used to avoid making every attempt to ensure the estimate is
                accurate. We agree that the `absence of unusual or unforeseeable
                circumstances' are not the only reasons why a price estimate may change
                and we encourage hospitals to use the disclaimer as an opportunity to
                identify, explain, and document any limitations of the analysis,
                including but not
                [[Page 63957]]
                limited to any assumptions and exclusions that were made when
                developing the estimate.
                2. Responses To Request for Comment
                 In the CY 2022 OPPS/ASC proposed rule (86 FR 42312 through 42321),
                we sought comment on a number of issues including: (1) Input for future
                consideration related to the price estimator tool policies, including
                identifying best practices, common features, and solutions to
                overcoming common technical barriers; (2) whether we should require
                specific plain language standards, and, if so, what those plain
                language standards should be; (3) potential ways that we could
                highlight exemplar hospital price transparency practices; and (4)
                recommendations for improving standardization of the machine-readable
                file. We received approximately 396 timely comments on this RFI. We
                appreciate the detailed input provided by commenters on these topics.
                XIX. Additional Hospital Inpatient Quality Reporting (IQR) Program
                Policies
                A. Safe Use of Opioids--Concurrent Prescribing eCQM (NQF #3316e) and
                eCQM Reporting Requirements in the Hospital IQR Program--Request for
                Information
                1. Hospital IQR Program Background
                 We refer readers to the following final rules for detailed
                discussions of the history of the Hospital IQR Program, including
                statutory history, and for the measures we have previously adopted for
                the Hospital IQR Program measure set:
                 The FY 2010 IPPS/LTCH PPS final rule (74 FR 43860 through
                43861);
                 The FY 2011 IPPS/LTCH PPS final rule (75 FR 50180 through
                50181);
                 The FY 2012 IPPS/LTCH PPS final rule (76 FR 51605 through
                61653);
                 The FY 2013 IPPS/LTCH PPS final rule (77 FR 53503 through
                53555);
                 The FY 2014 IPPS/LTCH PPS final rule (78 FR 50775 through
                50837);
                 The FY 2015 IPPS/LTCH PPS final rule (79 FR 50217 through
                50249);
                 The FY 2016 IPPS/LTCH PPS final rule (80 FR 49660 through
                49692);
                 The FY 2017 IPPS/LTCH PPS final rule (81 FR 57148 through
                57150);
                 The FY 2018 IPPS/LTCH PPS final rule (82 FR 38326 through
                38328, 38348);
                 The FY 2019 IPPS/LTCH PPS final rule (83 FR 41538 through
                41609);
                 The FY 2020 IPPS/LTCH PPS final rule (84 FR 42448 through
                42509);
                 The FY 2021 IPPS/LTCH PPS final rule (85 FR 58926 through
                58959); and
                 The FY 2022 IPPS/LTCH PPS final rule (86 FR 45360 through
                45426);
                 We note this is not an exhaustive list of all prior rulemaking for
                the Hospital IQR Program. We also refer readers to 42 CFR 412.140 for
                Hospital IQR Program regulations.
                 In the CY 2022 OPPS/ASC proposed rule (86 FR 42321), we sought
                input through a request for information (RFI) regarding the Safe Use of
                Opioids--Concurrent Prescribing electronic clinical quality measure
                (eCQM) (NQF #3316e) (hereinafter referred to as the ``Safe Use of
                Opioids eCQM'') as well as our previously finalized policy of requiring
                hospitals to report on the Safe Use of Opioids eCQM beginning with the
                CY 2022 reporting period/FY 2024 payment determination (84 FR 42503
                through 42505). We refer readers to the FY 2020 IPPS/LTCH PPS final
                rule (84 FR 42448 through 42459) where we adopted the Safe Use of
                Opioids eCQM into the Hospital IQR Program beginning with the CY 2021
                reporting period/FY 2023 payment determination. We refer readers to the
                FY 2020 IPPS/LTCH PPS final rule (84 FR 42503 through 42505) in which
                we finalized our policy requiring hospitals to report on the Safe Use
                of Opioids eCQM beginning in the CY 2022 reporting period. We also
                refer readers to the FY 2021 IPPS/LTCH PPS final rule in which we
                finalized reporting of the Safe Use of Opioids eCQM as one of the four
                required eCQMs beginning with the CY 2022 reporting period/FY 2024
                payment determination (85 FR 58933 through 58939). Specifically, for
                the CY 2022 reporting period/FY 2024 payment determination, hospitals
                will be required to report three self-selected calendar quarters of
                data for each required eCQM: (a) Three self-selected eCQMs; and (b) the
                Safe Use of Opioids eCQM. For the CY 2023 reporting period/FY 2025
                payment determination and subsequent years hospitals will be required
                to report four calendar quarters of data for each required eCQM: (a)
                Three self-selected eCQMs; and (b) the Safe Use of Opioids eCQM. The
                Safe Use of Opioids eCQM is scheduled to be submitted to the National
                Quality Forum (NQF) in 2022 for re-endorsement consideration as part of
                the measure maintenance process. The purpose of the RFI was to gather
                public input for potential measure updates as we prepare for NQF re-
                endorsement of the endorsed Safe Use of Opioids--Concurrent Prescribing
                eCQM and to potentially inform any future rulemaking regarding this
                measure. We provide more detail on both the Safe Use of Opioids eCQM
                and the eCQM reporting requirements below.
                2. Safe Use of Opioids--Concurrent Prescribing eCQM (NQF #3316e)
                a. Overview
                 The Safe Use of Opioids eCQM seeks to reduce preventable mortality
                and the costs of adverse events associated with opioid use by
                encouraging providers to identify patients who have concurrent
                prescriptions for opioids, or opioids and benzodiazepines, and
                discouraging providers from prescribing these drugs concurrently,
                unless medically necessary or appropriate. This measure is intended to
                support a patient-centric approach to help identify and monitor
                patients at risk, and ultimately reduce the risk of harm to patients
                across the continuum of care. Specifically, the measure encourages
                providers to identify patients on medication combinations that could
                lead to adverse drug events at discharge and motivates providers to
                consider whether reevaluation of the current medication regimen is
                warranted. This measure ultimately seeks to help combat the opioid
                crisis, which has been declared a public health emergency and is
                recognized as a priority focus area for measurement by CMS and HHS. We
                refer readers to the FY 2020 IPPS/LTCH PPS final rule (84 FR 42448
                through 42459) where we adopted the Safe Use of Opioids eCQM into the
                Hospital IQR Program beginning with the CY 2021 reporting period/FY
                2023 payment determination.
                 The Safe Use of Opioids eCQM assesses the proportion of inpatient
                hospitalizations for patients 18 years of age and older prescribed, or
                continued on, two or more opioids or an opioid and benzodiazepine
                concurrently at discharge. The numerator is comprised of patients whose
                discharge medications include two or more active opioids or an active
                opioid and benzodiazepine resulting in concurrent therapy at discharge
                from the hospital-based encounter (84 FR 42452). The denominator
                consists of patients who have inpatient hospitalizations (inpatient
                stay less than or equal to 120 days) that end during the measurement
                period, where the patient is 18 years of age and older at the start of
                the encounter, and is prescribed a new or continuing opioid or
                benzodiazepine at discharge (84 FR 42452). Patients who have cancer or
                are receiving palliative care would be excluded from the denominator
                (84 FR 42452).
                 A lower percentage for the measure indicates fewer concurrent
                prescriptions written. We emphasize that the Safe Use of Opioids eCQM
                is not expected to have a measure rate of zero (84 FR 42456). Clinician
                judgment, clinical
                [[Page 63958]]
                appropriateness, or both may indicate that concurrent prescribing of
                two unique opioids, or an opioid and a benzodiazepine is medically
                necessary. For example, patients who are on medication for opioid use
                disorder (OUD) would be included in the measure denominator if they
                continue that active prescription at discharge and would be counted in
                the numerator if they receive another prescription for an opioid or
                benzodiazepine (84 FR 42452). We also refer readers to the FY 2020
                IPPS/LTCH PPS final rule (84 FR 42448 through 42459) and the FY 2021
                IPPS/LTCH PPS final rule (85 FR 58932 through 58939) for more details
                on the Safe Use of Opioids eCQM.
                b. Prior Stakeholder Feedback
                 We noted in the CY 2022 OPPS/ASC proposed rule (86 FR 42322) that
                we monitor and evaluate quality measures after they are adopted and
                implemented into the Hospital IQR Program measure set. We also engage
                with stakeholders through education and outreach opportunities, which
                include webinars and help desk questions submitted through the Office
                of the National Coordinator for Health Information Technology (ONC)
                Project Tracking System (JIRA) eCQM issue tracker for eCQM
                implementation and maintenance (84 FR 42454).
                 Since adopting the Safe Use of Opioids eCQM in the FY 2020 IPPS/
                LTCH PPS final rule (84 FR 42448 through 42459), stakeholders had
                expressed concern about potential unintended consequences associated
                with requiring reporting on the measure. Specifically, these
                stakeholders had noted their concern that requiring reporting on the
                Safe Use of Opioids eCQM could disincentivize clinicians from
                appropriately concurrently prescribing buprenorphine for the treatment
                of OUD. They believed that if hospitals are required to report on this
                measure, clinicians might alter their prescribing practices, making it
                more difficult for patients to access appropriate treatment for OUD,
                and ultimately leading to patient harm in a vulnerable population.
                 We noted that during measure development, clinicians from the
                expert panel convened by the measure developer on behalf of CMS
                considered single-condition exclusions such as OUD. After reviewing
                test results, they recommended continuing to include patients for whom
                concurrent prescribing is medically necessary, because they stated that
                those populations: (1) Have the highest risk of receiving concurrent
                prescriptions; (2) can experience a lag in adverse events; and (3) can
                experience adverse drug events if an overlap with benzodiazepines
                occurs (84 FR 42450 through 42451). As we previously noted in the FY
                2020 IPPS/LTCH PPS final rule (84 FR 42456), the Safe Use of Opioids
                eCQM is not expected to have a measure rate of zero; however, this is
                an important topic and a particular focus area of our monitoring
                efforts as the eCQM data start to be submitted and on which we sought
                comment, as further discussed below.
                c. National Quality Forum Re-Endorsement
                 The Safe Use of Opioids eCQM is scheduled to be submitted to the
                NQF in 2022 for re-endorsement. In support of that effort, we noted
                that our measure development contractor plans to conduct additional
                testing, which will include substance use disorder treatment and sickle
                cell disease. Testing will include discussions with the technical
                expert panel to identify any potential updates to test as well as
                testing the rate of concurrent morphine/buprenorphine prescribing
                alongside opioids and benzodiazepines. Testing work will also include
                recruiting test sites, receiving test site data, reassessing validity,
                reliability, performance scores, exclusions, and performance gaps. This
                testing could be used to inform possible future measure updates or
                exclusions.
                3. Current eCQM Reporting and Submission Requirements for the Hospital
                IQR Program
                 Beginning with the CY 2021 reporting period/FY 2023 payment
                determination, the Safe Use of Opioids eCQM was added as part of the
                eCQM measure set as one of the eCQMs that eligible hospitals can choose
                from to meet the eCQM reporting requirements for the Hospital IQR and
                Medicare Promoting Interoperability Programs (84 FR 42449 through 42459
                and 84 FR 42598 through 42599, respectively). Beginning with the CY
                2022 reporting period/FY 2024 payment determination, hospitals are
                required to report data for each required eCQM: (a) Three self-selected
                eCQMs from the set of available eCQMs for CY 2022, and (b) the Safe Use
                of Opioids eCQM (85 FR 58933 through 58939). We refer readers to the FY
                2021 IPPS/LTCH PPS final rule (85 FR 58932 through 58939) and the FY
                2020 IPPS/LTCH PPS final rule (84 FR 42501 through 42506) for more
                detailed discussions of the current eCQM reporting and submission
                requirements for the Hospital IQR Program.
                4. Solicitation of Comments
                 In the RFI, we sought public input on the following:
                 Potential future measure updates of the Safe Use of
                Opioids eCQM. We sought additional information or considerations to
                inform future measure updates to the Safe Use of Opioids eCQM.
                 Required Reporting and Submission Requirement for the Safe
                Use of Opioids eCQM. Currently, hospitals are required to report: (a)
                Three self-selected eCQMs from the set of available eCQMs, and (b) the
                Safe Use of Opioid eCQM for the CY 2022 reporting period/FY 2024 and
                subsequent years. As we consider future reporting on the Safe Use of
                Opioids eCQM, we sought comments on the appropriateness of maintaining
                this previously finalized policy or allowing hospitals to self-select
                the Safe Use of Opioids eCQM from our finalized set of eCQMs.
                 We received comments on these topics.
                 Comment: Several commenters suggested that CMS should not mandate
                reporting of the Safe Use of Opioids eCQM, and instead retain the
                measure as an option to self-select to fulfill the eCQM requirement.
                Several commenters also requested that CMS delay mandatory reporting
                until NQF re-endorsement or until the concern about unintended
                consequences has been addressed.
                 Response: We thank the commenters for their inputs and interest in
                this measure. We believe that these comments are very valuable to both
                the continued development of the Safe Use of Opioids eCQM and also the
                Hospital IQR Program's reporting policies. We will continue to take
                these comments into account as we develop future regulatory proposals
                or other guidance for the Safe Use of Opioids eCQM.
                 Comment: Several commenters recommended refinements to the measure
                specifications for the Safe Use of Opioids eCQM. Several commenters
                urged us to consider incorporating more exclusions, such as for single-
                condition exclusions (opioid use disorder), appropriate concurrent
                prescribing, HIV, ESRD, opioid prescriptions from outside facilities,
                or long encounters (such as those 120 days or longer). Some commenters
                suggested revising the measure to report on the prevalence of addiction
                specialists and formal addiction medicine programs. Some commenters
                requested that the measure be revised to allow for appropriate
                concurrent prescribing and prevent unintended consequences. One
                commenter requested that the measure
                [[Page 63959]]
                specifications be clarified so that one prescription for differing
                dosage of a medication would not be interpreted as two prescriptions
                for purposes of the Safe Use of Opioids eCQM. One commenter requested
                that CMS focus on co-prescriptions of opioids and specific
                benzodiazepines because concurrent prescription of these medications
                carry a higher risk of accidental overdose and mortality.
                 Response: We thank the commenters for their suggestions and
                interest in refinements to this measure. We believe that these comments
                are very valuable in the continuing development of the Safe Use of
                Opioids eCQM and will inform the NQF re-endorsement process. We will
                continue to take these comments into account as we develop future
                regulatory proposals or other guidance for the Safe Use of Opioids
                eCQM.
                 Comment: One commenter encouraged CMS to retain the required
                reporting of the Safe Use of Opioids eCQM, but also suggested that CMS
                identify and require reporting of other eCQMs to remove hospital
                choice.
                 Response: We thank the commenter for their suggestions and will
                consider them for future rulemaking.
                 Comment: One commenter suggested that we share information from the
                years in which the Safe Use of Opioids eCQM was voluntarily submitted
                via hospital selection.
                 Response: We thank the commenters for their input and interest in
                this measure. We will take this suggestion into consideration.
                XX. Additional Medicare Promoting Interoperability Program Policies
                A. Safe Use of Opioids--Concurrent Prescribing eCQM (NQF #3316e) and
                eCQM Reporting Requirements in the Medicare Promoting Interoperability
                Program--Request for Information
                1. Medicare Promoting Interoperability Program Background
                 We refer readers to the following final rules for detailed
                discussions regarding the history of the Medicare Promoting
                Interoperability Program (previously known as part of the Medicare and
                Medicaid Electronic Health Record Incentive Programs):
                 The Electronic Health Record Incentive Program Stage 1
                final rule (75 FR 44314);
                 The Electronic Health Record Incentive Program Stage 2
                final rule (77 FR 53968);
                 The Electronic Health Record Incentive Program Stage 3
                final rule (80 FR 62762);
                 The FY 2017 IPPS/LTCH PPS final rule (81 FR 25245 through
                25247);
                 The FY 2018 IPPS/LTCH PPS final rule (82 FR 38487 through
                38493);
                 The FY 2019 IPPS/LTCH PPS final rule (83 FR 41634 through
                41677);
                 The FY 2020 IPPS/LTCH PPS final rule (84 FR 42591 through
                42602);
                 The FY 2021 IPPS/LTCH PPS final rule (85 FR 58966 through
                58977); and
                 The FY 2022 IPPS/LTCH PPS final rule (86 FR 45460 through
                45498).
                 We note this is not an exhaustive list of all prior rulemaking for
                the Medicare Promoting Interoperability Program. We also refer readers
                to 42 CFR part 495 for the Medicare Promoting Interoperability Program
                regulations.
                 In the CY 2022 OPPS/ASC proposed rule (86 FR 42323 through 42324),
                we sought input in a request for information (RFI), in alignment with
                the Hospital Inpatient Quality Reporting Program, regarding the Safe
                Use of Opioids--Concurrent Prescribing electronic clinical quality
                measure (eCQM) (NQF #3316e) (hereinafter referred to as the ``Safe Use
                of Opioids eCQM''), as well as our previously finalized policy of
                requiring hospitals to report on the Safe Use of Opioids eCQM beginning
                with the CY 2022 reporting period (84 FR 42598 through 42600 and 85 FR
                58970 through 58975). We refer readers to the FY 2020 IPPS/LTCH PPS
                final rule (84 FR 42598 through 42599) where we adopted the Safe Use of
                Opioids eCQM under the Medicare Promoting Interoperability Program
                beginning with the CY 2021 EHR reporting period, as we continued to
                align with the Hospital IQR Program. We also refer readers to the FY
                2020 and FY 2021 IPPS/LTCH PPS final rules (84 FR 42597 through 42600
                and 85 FR 58970 through 58975, respectively) where we finalized our
                policy requiring hospitals to report on the Safe Use of Opioids eCQM
                beginning with CY 2022 reporting period. The Safe Use of Opioids eCQM
                is scheduled to be submitted to the National Quality Forum (NQF) in
                2022 for re-endorsement consideration as part of the measure
                maintenance process. The purpose of this RFI was to gather public input
                for potential measure updates as we prepare for NQF re-endorsement of
                the endorsed Safe Use of Opioids--Concurrent Prescribing eCQM and to
                potentially inform any future rulemaking regarding this measure. We
                provide more detail on both the Safe Use of Opioids eCQM and the eCQM
                reporting requirements in section [XX.A.3] of the CY 2022 OPPS/ASC
                proposed rule (section [XIX.A.3] of this final rule).
                2. Safe Use of Opioids--Concurrent Prescribing eCQM (NQF #3316e)
                a. Overview
                 The Safe Use of Opioids eCQM seeks to reduce preventable mortality,
                and the costs of adverse events associated with opioid use by
                encouraging providers to identify patients who have concurrent
                prescriptions for two or more opioids, or a combination of opioids and
                benzodiazepines, and discouraging providers from prescribing these
                drugs concurrently, unless medically necessary or appropriate. This
                measure is intended to support a patient-centric approach to help
                identify and monitor patients at risk, and ultimately reduce the risk
                of harm to patients across the continuum of care. Specifically, the
                measure encourages providers to identify patients receiving
                combinations of medications that could lead to adverse drug reactions
                at discharge, and motivates providers to consider whether a re-
                evaluation of the patient's current medication regimen is warranted.
                This measure ultimately seeks to help combat the opioid crisis, which
                has been declared a public health emergency and is recognized as a
                priority focus area for measurement by CMS and HHS.
                 The Safe Use of Opioids eCQM assesses the proportion of inpatient
                hospitalizations for patients 18 years of age and older who are
                prescribed, or continued on, two or more opioids or an opioid and
                benzodiazepine concurrently at discharge. The numerator is comprised of
                patients whose discharge medications include two or more active
                opioids, or an active opioid and benzodiazepine, resulting in
                concurrent therapy at discharge from the hospital-based encounter. The
                denominator consists of patients who have inpatient hospitalizations
                (inpatient stay less than or equal to 120 days) that end during the
                measurement period, where the patient is 18 years of age and older at
                the start of the encounter, and is prescribed a new or continuing
                opioid or benzodiazepine at discharge. Patients who have cancer or who
                are receiving palliative care would be excluded from the denominator
                (84 FR 42452).
                 A lower percentage for the measure indicates fewer concurrent
                prescriptions written. We emphasize that the Safe Use of Opioids eCQM
                is not expected to have a measure rate of zero (84 FR 42456). Clinician
                judgment, clinical appropriateness, or both, may indicate that
                concurrent prescribing of two unique opioids, or an opioid and a
                benzodiazepine is deemed medically necessary. Patients who are
                receiving medication for an opioid use disorder (OUD) would be included
                in the
                [[Page 63960]]
                measure denominator if they continue with their active prescription
                upon discharge, and would be counted in the numerator if they receive
                an additional prescription for an opioid or benzodiazepine (84 FR
                42452). We also refer readers to the FY 2020 IPPS/LTCH PPS final rule
                (84 FR 42598 through 42599) and the FY 2021 IPPS/LTCH PPS final rule
                (85 FR 58932 through 58939) for more details on the Safe Use of Opioids
                eCQM.
                b. Prior Stakeholder Feedback
                 We noted in the proposed rule (86 FR 42323 through 42324) that we
                monitor and evaluate quality measures after they are adopted and
                implemented under the Medicare Promoting Interoperability Program
                measure set. In collaboration with the Hospital IQR Program, we engage
                with stakeholders through education and outreach opportunities, which
                include webinars and help desk questions submitted through the Office
                of the National Coordinator for Health Information Technology (ONC)
                Project Tracking System (JIRA) eCQM issue tracker for eCQM
                implementation and maintenance (84 FR 42454).
                 Since adopting the Safe Use of Opioids eCQM in the FY 2020 IPPS/
                LTCH PPS final rule (84 FR 42598 through 42599), stakeholders have
                expressed concern about the potential for unintended consequences
                associated with requiring reporting on this measure. Specifically,
                stakeholders had noted that in requiring reporting on the Safe Use of
                Opioids eCQM, this could disincentivize clinicians from appropriately
                prescribing buprenorphine for the treatment of OUD. They believe that
                if hospitals are required to report on this measure, clinicians might
                alter their prescribing practices, making it more difficult for
                patients to access appropriate treatment for OUD, and ultimately,
                leading to potential patient harm in a vulnerable population.
                 We noted that during measure development, clinicians from the
                expert panel convened by the measure developer on behalf of CMS
                considered single-condition exclusions, such as OUD. After reviewing
                test results, they recommended continuing to include patients for whom
                concurrent prescribing is medically necessary, because they stated that
                those populations: (1) Have the highest risk of receiving concurrent
                prescriptions; (2) can experience a lag in adverse events; and (3) can
                experience adverse drug events if an overlap with benzodiazepines
                occurs (84 FR 42450 through 42451). As was explained by the Hospital
                IQR Program in the FY 2020 IPPS/LTCH PPS final rule (84 FR 42456), the
                Safe Use of Opioids eCQM is not expected to have a measure rate of
                zero, however, this remains an important topic and a particular focus
                area of our monitoring efforts. For further discussion, we refer
                readers to section XX.A.4 of the CY 2022 OPPS/ASC proposed rule
                (section XIX.A.4 of this final rule with comment period).
                c. National Quality Forum Re-Endorsement
                 The Safe Use of Opioids eCQM is scheduled to be submitted to the
                NQF in 2022 for re-endorsement. In support of that effort, we noted
                that our measure development contractor plans to conduct additional
                testing, which will include substance use disorder treatment and sickle
                cell disease. Testing will include discussions with the technical
                expert panel to inform potential updates to test, as well as testing
                the rate of concurrent morphine/buprenorphine prescribing alongside
                opioids and benzodiazepines. Testing work will also include recruiting
                test sites, receiving test site data, reassessing validity,
                reliability, performance scores, exclusions, and performance gaps. This
                testing could be used to inform possible future measure updates or
                exclusions.
                3. Current eCQM Reporting and Submission Requirements for the Medicare
                Promoting Interoperability Program
                 The Medicare Promoting Interoperability Program previously
                finalized policy for the CY 2022 reporting period requiring that
                eligible hospitals and CAHs report on three self-selected calendar
                quarters of data for each required eCQM: (a) Three self- selected eCQMs
                from the set of available eCQMs for CY 2022, and (b) the Safe Use of
                Opioids eCQM, for a total of four eCQMs (85 FR 58970 through 58975). We
                finalized the requirement that hospitals report on the Safe Use of
                Opioids eCQM in the FY 2020 IPPS/LTCH PPS final rule (84 FR 42598
                through 42600), such that the Medicare Promoting Interoperability
                Program maintained alignment with proposals finalized under the
                Hospital IQR Program.
                 Beginning with the CY 2021 reporting period, the Safe Use of
                Opioids eCQM was added to the eCQM measure set as one of the eCQMs that
                eligible hospitals and CAHs can choose from to meet the eCQM reporting
                requirements for the Hospital Inpatient Quality Reporting Program and
                the Medicare Promoting Interoperability Program (84 FR 42449 through
                42459 and 84 FR 42598 through 42599, respectively). We refer readers to
                the FY 2021 IPPS/LTCH PPS final rule (85 FR 58970 through 58975) and
                the FY 2020 IPPS/LTCH PPS final rule (84 FR 42598 through 42600) for
                more detailed discussions of the current eCQM reporting and submission
                requirements for the Medicare Promoting Interoperability Program.
                4. Solicitation of Comments
                 In the RFI, in alignment with a similar RFI pertaining to the
                Hospital IQR Program, we sought public comment on the following:
                 Potential future measure updates of the Safe Use of
                Opioids eCQM. We sought additional information or considerations to
                inform future measure updates of the Safe Use of Opioids eCQM;
                 Required Reporting and Submission Requirement for the Safe
                Use of Opioids eCQM. Currently eligible hospitals and CAHs are required
                to report (a) Three self-selected eCQMs from the set of available
                eCQMs, and (b) the Safe Use of Opioid eCQM for the CY 2022 reporting
                period and subsequent years. As we consider future reporting on the
                Safe Use of Opioids eCQM, we sought comment on the appropriateness of
                maintaining this previously finalized policy, or, allowing hospitals to
                self-select the Safe Use of Opioids eCQM from a finalized set of eCQMs
                (which includes the Safe Use of Opioids eCQM) for the CY 2022 EHR
                reporting period and subsequent years.
                 We received comments on these topics, and that feedback is
                summarized below.
                 Comment: Several commenters suggested that CMS not mandate the
                reporting of the Safe Use of Opioids eCQM, and instead retain the
                measure as optional, to fulfill the eCQM requirement. Several
                commenters also requested that CMS delay mandatory reporting until
                after NQF re-endorsement, or until the concern about unintended
                consequences has been addressed.
                 Response: We thank the commenters for their input and suggestions.
                We believe that these comments are valuable to both the continued
                development of the Safe Use of Opioids eCQM, and also the Medicare
                Promoting Interoperability Program's reporting policies. Alongside the
                Hospital IQR Program, we may take these comments under consideration as
                we develop future policy, or other guidance for the Safe Use of Opioids
                eCQM.
                 Comment: One commenter encouraged CMS to retain the required
                reporting of the Safe Use of Opioids eCQM, but also suggested that CMS
                [[Page 63961]]
                identify and require reporting of other eCQMs to remove, per hospital
                choice.
                 Response: We thank the commenter for their suggestions and may
                consider this for future rulemaking.
                XXI. Files Available to the Public via the Internet
                 The Addenda to the OPPS/ASC proposed rules and the final rules with
                comment period are published and available via the internet on the CMS
                website. In the CY 2019 OPPS/ASC final rule with comment period (83 FR
                59154), for CY 2019, we changed the format of the OPPS Addenda A, B,
                and C, by adding a column titled ``Copayment Capped at the Inpatient
                Deductible of $1,364.00'' where we flag, through use of an asterisk,
                those items and services with a copayment that is equal to or greater
                than the inpatient hospital deductible amount for any given year (the
                copayment amount for a procedure performed in a year cannot exceed the
                amount of the inpatient hospital deductible established under section
                1813(b) of the Act for that year). For CY 2022, we proposed to retain
                these columns, updated to reflect the amount of the 2022 inpatient
                deductible. In the CY 2021 OPPS/ASC final rule with comment period (85
                FR 86266), we updated the format of the OPPS Addenda A, B, and C by
                adding a new column titled ``Drug Pass-Through Expiration during
                Calendar Year'' where we flagged through the use of an asterisk, each
                drug for which pass-through payment was expiring during the calendar
                year on a date other than December 31. For CY 2022, we did not receive
                any public comments and are, therefore, finalizing our proposal to
                retain these columns that are updated to reflect the drug codes for
                which pass-through payment is expiring in CY 2022.
                 To view the Addenda to the CY 2022 OPPS/ASC final rule with comment
                period pertaining to final CY 2022 payments under the OPPS, we refer
                readers to the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html; select ``CMS-1753-FC'' from the list of
                regulations. All OPPS Addenda to the CY 2022 OPPS/ASC final rule with
                comment period are contained in the zipped folder titled ``2022 NFRM
                OPPS Addenda'' in the related links section at the bottom of the page.
                To view the Addenda to the CY 2022 OPPS/ASC final rule with comment
                period pertaining to CY 2022 payments under the ASC payment system, we
                refer readers to the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/ASC-Regulations-and-Notices.html; select ``CMS-1753-FC'' from the list of regulations. The
                ASC Addenda to the CY 2022 OPPS/ASC final rule with comment period are
                contained in a zipped folder titled ``Addendum AA, BB, DD1, DD2, and
                EE.'' in the related links section at the bottom of the page.
                XXII. Collection of Information Requirements
                A. Statutory Requirement for Solicitation of Comments
                 Under the Paperwork Reduction Act of 1995 (PRA), we are required to
                provide 60-day notice in the Federal Register and solicit public
                comment before a collection of information requirement is submitted to
                the Office of Management and Budget (OMB) for review and approval. In
                order to fairly evaluate whether an information collection should be
                approved by OMB, section 3506(c)(2)(A) of title 44 of the U.S. Code, as
                added by section 2 of the Paperwork Reduction Act of 1995, requires
                that we solicit comment on the following issues:
                 The need for the information collection and its usefulness
                in carrying out the proper functions of our agency.
                 The accuracy of our estimate of the information collection
                burden.
                 The quality, utility, and clarity of the information to be
                collected.
                 Recommendations to minimize the information collection
                burden on the affected public, including automated collection
                techniques.
                 We solicited public comment on each of these issues for the
                following sections of this final rule with comment period that contain
                information collection requirements (ICRs):
                B. ICRs for the Hospital OQR Program
                1. Background
                 The Hospital Outpatient Quality Reporting (OQR) Program is
                generally aligned with the CMS quality reporting program for hospital
                inpatient services known as the Hospital Inpatient Quality Reporting
                (IQR) Program. We refer readers to the CY 2011 through CY 2021 OPPS/ASC
                final rules (75 FR 72111 through 72114; 76 FR 74549 through 74554; 77
                FR 68527 through 68532; 78 FR 75170 through 75172; 79 FR 67012 through
                67015; 80 FR 70580 through 70582; 81 FR 79862 through 79863; 82 FR
                59476 through 59479; 83 FR 59155 through 59156; 84 FR 61468 through
                61469; and 85 FR 86266 through 86267, respectively) for detailed
                discussions of the previously finalized Hospital OQR Program ICRs. The
                ICRs associated with the Hospital OQR Program are currently approved
                under OMB control number 0938-1109, which expires on March 31, 2023. We
                continue to estimate a total of 3,300 hospitals will submit required
                measure data for the Hospital OQR Program, unless otherwise noted.
                While the exact number of hospitals required to submit data annually
                may vary, we use this estimate to be consistent with previous rules and
                for ease of calculation across reporting periods.
                 In the CY 2018 OPPS/ASC final rule (82 FR 52617), we finalized a
                proposal to utilize the median hourly wage rate for Medical Records and
                Health Information Technicians, in accordance with the Bureau of Labor
                Statistics (BLS), to calculate our burden estimates for the Hospital
                OQR Program. The BLS describes Medical Records and Health Information
                Technicians as those responsible for organizing and managing health
                information data; therefore, we believe it is reasonable to assume that
                these individuals will be tasked with abstracting clinical data for
                submission to the Hospital OQR Program. The latest data from the BLS'
                May 2020 Occupational Employment and Wages data reflects a median
                hourly wage of $21.20 per hour for a Medical Records and Health
                Information Technician professional.\599\ We have finalized a policy to
                calculate the cost of overhead, including fringe benefits, at 100
                percent of the mean hourly wage (82 FR 52617). This is necessarily a
                rough adjustment, both because fringe benefits and overhead costs can
                vary significantly from employer-to-employer and because methods of
                estimating these costs vary widely from study-to-study. Nonetheless, we
                believe that doubling the hourly wage rate ($21.20 x 2 = $42.40) to
                estimate the total cost is a reasonably accurate estimation method and
                allows for a conservative estimate of hourly costs.
                ---------------------------------------------------------------------------
                 \599\ https://www.bls.gov/oes/current/oes292098.htm (Accessed
                April 13, 2021). The hourly rate of $42.40 includes an adjustment of
                100 percent of the median hourly wage to account for the cost of
                overhead, including fringe benefits.
                ---------------------------------------------------------------------------
                2. Summary
                 In section XV.B.4. of this final rule with comment period, we are
                finalizing our proposals to: (1) Adopt the COVID-19 Vaccination
                Coverage Among Health Care Personnel (HCP) measure (OP-38), beginning
                with the CY 2022 reporting period; (2) adopt the Breast Cancer
                Screening Recall Rates measure (OP-39), beginning with the CY 2022
                reporting period; (3) adopt the ST-Segment Elevation Myocardial
                Infarction (STEMI) eCQM (OP-40), beginning as a voluntary measure with
                [[Page 63962]]
                the CY 2023 reporting period, and then as a mandatory measure beginning
                with the CY 2024 reporting period; (4) require the Outpatient and
                Ambulatory Surgery Consumer Assessment of Healthcare Providers and
                Systems (OAS CAHPS) Survey measures (OP-37 a-e), with voluntary
                reporting beginning with the CY 2023 reporting period and mandatory
                reporting beginning with CY 2024 reporting period/CY 2026 payment
                determination; (5) remove the Fibrinolytic Therapy Received Within 30
                Minutes measure (OP-2), effective with the CY 2023 reporting period;
                (6) remove the Median Time to Transfer to Another Facility for Acute
                Coronary Intervention measure (OP-3), effective with the CY 2023
                reporting period; (7) remove the option for hospitals to send medical
                records to the CMS Data Abstraction Center (CDAC) via paper and
                removable media and require electronic submission for validation; (8)
                reduce the number of days hospitals have to submit medical records to
                the CDAC from 45 days to 30 days for validation; (9) enhance the
                targeting criteria used for hospital selection for validation by
                adopting criteria currently used in inpatient data validation by adding
                the following criteria: (a) Having a lower bound confidence interval
                score of 75 percent or less; and (b) having not been selected in the
                previous 3 years; (10) expand our Extraordinary Circumstances Exception
                (ECE) policy to apply to electronic clinical quality measures (eCQMs),
                to further align with the Hospital IQR Program; (11) require use of
                technology updated consistent with 2015 Edition Cures Update criteria
                beginning with the CY 2023 reporting period/CY 2025 payment
                determination; and (12) provide a review and corrections period for
                eCQM data submitted to the Hospital OQR Program. We are also finalizing
                our proposal with modification to require the Cataracts: Improvement in
                Patient's Visual Function within 90 Days Following Cataract Surgery
                measure (OP-31) beginning with the CY 2025 reporting period/CY 2027
                payment determination instead of the CY 2023 reporting period/CY 2025
                payment determination.
                3. Estimated Burden of Hospital OQR Program Requirements for the CY
                2024 Payment Determination and Subsequent Years
                a. Information Collection Burden Estimate for the COVID-19 Vaccination
                Coverage Among Health Care Personnel (HCP) Measure (OP-38)
                 In section XV.B.4 of this final rule with comment period, we are
                finalizing our proposal to adopt the COVID-19 Vaccination Coverage
                Among HCP measure (OP-38), beginning with the CY 2022 reporting period/
                CY 2024 payment determination. Hospitals will submit data through the
                Centers for Disease Control and Prevention (CDC) National Healthcare
                Safety Network (NHSN). The NHSN is a secure, internet-based
                surveillance system maintained and provided free by the CDC. Currently,
                the CDC does not estimate burden for COVID-19 vaccination reporting
                under the CDC PRA (OMB control number 0920-1317, which expires on
                January 31, 2024) because the agency has been granted a waiver under
                section 321 of the National Childhood Vaccine Injury Act (NCVIA).\600\
                As such, the finalized adoption of this measure will not impose any
                additional information collection under the Paperwork Reduction Act for
                hospitals for the duration of the public health emergency (PHE), but
                will impose information collection burden for any reporting of this
                measure taking place after conclusion of the PHE. Although the burden
                associated with the COVID-19 Vaccination Coverage Among HCP measure
                (OP-38) is not accounted for under the CDC PRA 0920-1317 or 0920-0666
                (which expires on December 31, 2023) due to the NCVIA waiver, the cost
                and burden information is included in the Regulatory Impact Analysis
                section. We will work with CDC to ensure that this burden is accounted
                for in an updated PRA under OMB control number 0920-1317.
                ---------------------------------------------------------------------------
                 \600\ Section 321 of the National Childhood Vaccine Injury Act
                (NCVIA) provides the PRA waiver for activities that come under the
                NCVIA, including those in the NCVIA at section 2102 of the Public
                Health Service Act (42 U.S.C. 300aa-2). Section 321 is not codified
                in the U.S. Code, but can be found in a note at 42 U.S.C. 300aa-1.
                ---------------------------------------------------------------------------
                b. Information Collection Burden Estimate for the Breast Cancer
                Screening Recall Rates Measure (OP-39)
                 In section XV.B.4.b of this final rule with comment period, we are
                finalizing our proposal to adopt the Breast Cancer Screening Recall
                Rates measure (OP-39), beginning with the CY 2023 payment determination
                using a data collection period of July 1, 2020, to June 30, 2021; for
                subsequent years, we will use data collection periods from July 1
                through June 30 for the 3 years prior to the applicable payment
                calendar year (for example, for the CY 2024 payment determination, we
                will use data from July 1, 2021, through June 30, 2022). Because the
                measure is calculated using claims data that are already submitted to
                the Medicare program for payment purposes, we do not anticipate that
                adopting this measure will result in any increase in information
                collection burden.
                c. Information Collection Burden Estimate for the ST-Segment Elevation
                Myocardial Infarction (STEMI) Measure (OP-40)
                 In section XV.B.4.c. of this final rule with comment period, we are
                finalizing our proposal to adopt the STEMI eCQM (OP-40), with voluntary
                reporting beginning with the CY 2023 reporting period and mandatory
                reporting beginning with CY 2024 reporting period/CY 2026 payment
                determination. For the CY 2023 voluntary reporting period, hospitals
                will be able to voluntarily report the measure for one or more quarters
                during the year. For subsequent years, we are finalizing our proposal
                to gradually increase the number of quarters of data hospitals will be
                required to report on the measure starting with one self-selected
                quarter for the CY 2024 reporting period/CY 2026 payment determination,
                two self-selected quarters for the CY 2025 reporting period/CY 2027
                payment determination, three self-selected quarters for the CY 2026
                reporting period/CY 2028 payment determination, and four quarters for
                the CY 2027 reporting period/CY 2029 payment determination and for
                subsequent years.
                 For the voluntary reporting period in CY 2023, we estimate 20
                percent of hospitals will voluntarily report at least one quarter of
                data for the measure with 100 percent of hospitals reporting the
                measure as required in subsequent years. Based on experience with
                reporting of eCQMs on the Hospital IQR program, we are aligning our
                estimate of the time required for a Medical Records and Health
                Information Technician professional to submit the data required for the
                measure to be 10 minutes per quarter for each hospital. For the CY 2023
                voluntary reporting period, we estimate an annual burden for all
                participating hospitals of 110 hours (3,300 hospitals x 20 percent x
                .1667 hours x 1 quarter) at a cost of $4,664 (110 hours x $42.40). For
                the CY 2024 reporting period/CY 2026 payment determination, we estimate
                the annual burden for all participating hospitals to be 550 hours
                (3,300 hospitals x .1667 hours x 1 quarters) at a cost of $23,320 (550
                hours x $42.40). For the CY 2025 reporting period/CY 2027 payment
                determination, we estimate the annual burden for all participating
                hospitals to be 1,100 hours (3,300 hospitals x .1667 hours x 2
                quarters) at a cost of $46,640 (1,100 hours x $42.40). For the CY 2026
                reporting period/CY 2028 payment determination, we estimate the annual
                [[Page 63963]]
                burden for all participating hospitals to be 1,650 hours (3,300
                hospitals x .1667 hours x 3 quarters) at a cost of $69,960 (1,650 hours
                x $42.40). For the CY 2027 reporting period/CY 2029 payment
                determination and subsequent years, we estimate the annual burden for
                all participating hospitals to be 2,200 hours (3,300 hospitals x .1667
                hours x 4 quarters) at a cost of $93,280 (2,200 hours x $42.40).
                 The information collection requirement and the associated burden
                will be submitted as part of a revision of the information collection
                request currently approved under OMB control number 0938-1109, which
                expires on March 31, 2023.
                d. Information Collection Burden Estimate for OP-31: Cataracts--
                Improvement in Patient's Visual Function Within 90 Days Following
                Cataract Surgery Measure
                 As discussed in section XV.B.5.b. of this final rule with comment
                period, we are finalizing our proposal with modification to require the
                Cataracts: Improvement in Patient's Visual Function within 90 Days
                Following Cataract Surgery measure (OP-31), beginning with the CY 2025
                reporting period/CY 2027 payment determination instead of the proposed
                CY 2023 reporting period/CY 2025 payment determination. We previously
                finalized voluntary reporting of this measure in the CY 2015 OPPS/ASC
                final rule (79 FR 66947 through 66948) and estimated that 20 percent of
                hospitals would elect to report it annually (79 FR 67014). We continue
                to estimate it will require hospitals 10 minutes once annually to
                report this measure using a CMS web-based tool. As a result of this
                policy, we estimate a total annual burden estimate for all
                participating hospitals of 550 hours (3,300 hospitals x 0.1667 hours)
                at a cost of $23,320 (550 hours x $42.40). In addition to reporting the
                measure, we also require hospitals to perform chart abstraction and
                estimate that each hospital would spend 25 minutes (0.417 hours) per
                case to perform this activity. The currently approved burden estimate
                assumes 384 cases requiring chart abstraction per measure. We are
                updating this assumption to 242 cases per measure based on data from
                the CY 2019 reporting period. Updating this assumption results in an
                annual burden of 101 hours (0.417 hours x 242 cases) at a cost of
                $4,282 (101 hours x $42.40/hour) per hospital and a total annual burden
                of 333,300 hours (3,300 hospitals x 101 hours) at a cost of $14,131,920
                (333,300 hours x $42.40/hour) for all participating hospitals. In
                aggregate, we estimate a total annual burden of 333,850 hours (550
                hours + 333,300 hours) at a cost of $14,155,240 ($23,320 + $14,131,920)
                for all hospitals. This is an increase of 267,080 hours and $11,324,192
                per year from the currently approved estimate due to the additional 80
                percent of hospitals that will be required to report this measure.
                 The information collection requirement and the associated burden
                will be submitted as part of a revision of the information collection
                request currently approved under OMB control number 0938-1109, which
                expires on March 31, 2023.
                e. Information Collection Burden Estimate for the Requirement of OP-
                37a-e: Outpatient and Ambulatory Surgery Consumer Assessment of
                Healthcare Providers and Systems (OAS CAHPS) Survey Measures and Add
                Administration Methods
                 The information collection requirements associated with the five
                OAS CAHPS survey-based measures (OP-37a, OP-37b, OP-37c, OP-37d, and
                OP-37e) are currently approved under OMB control number 0938-1240 which
                expires December 31, 2021. In section XV.B.5.a. of this final rule with
                comment period, we are finalizing our proposal to require data
                collection for five OAS CAHPS survey-based measures with voluntary
                reporting beginning with the CY 2023 reporting period and mandatory
                reporting beginning with CY 2024 reporting period/CY 2026 payment
                determination and subsequent years: (1) OAS CAHPS--About Facilities and
                Staff (OP-37a); (2) OAS CAHPS--Communication About Procedure (OP-37b);
                (3) OAS CAHPS--Preparation for Discharge and Recovery (OP-37c); (4) OAS
                CAHPS--Overall Rating of Facility (OP-37d); and (5) OAS CAHPS--
                Recommendation of Facility (OP-37e). Finalizing this proposal will
                neither require additional questions to be added to the survey nor any
                other changes which will affect the time required for respondents to
                complete the survey. Therefore, we are not making any changes to the
                currently approved burden estimate of 8 minutes per respondent.
                 In addition, in section XV.D.4.b of this final rule with comment
                period, we are finalizing our proposal to incorporate two additional
                administration methods for the OAS CAHPS Survey: (1) Mixed mode web
                with mail follow-up of non-respondents, and (2) mixed mode web with
                telephone follow-up of non-respondents. This will allow a total of five
                methods of survey administration for reporting beginning with voluntary
                reporting for the CY 2023 reporting period/CY 2025 payment
                determination and mandatory reporting for the CY 2025 reporting period/
                CY 2027 payment determination. We currently assume that completion of
                the OAS CAHPS survey requires approximately 8 minutes per respondent
                using one of the three current administration methods (mail-only,
                telephone-only, and mixed-mode (mail with telephone follow-up of non-
                respondents)). The two additional administration methods will be
                utilized to increase the response rate of patients to achieve the same
                required number of 300 patients surveyed per practice; therefore, we
                are not changing the number of respondents. We also believe that the
                two administration methods will require approximately the same time to
                conduct; therefore, we are not changing the currently approved
                estimate.
                f. Information Collection Burden Change for the Removal of Measures OP-
                2: The Fibrinolytic Therapy Received Within 30 Minutes and OP-3: Median
                Time To Transfer to Another Facility for Acute Coronary Intervention
                 In section XV.B.3.c. of this final rule with comment period, we are
                finalizing our proposal to remove the Fibrinolytic Therapy Received
                Within 30 Minutes (OP-2) and Median Time to Transfer to Another
                Facility for Acute Coronary Intervention (OP-3) measures effective with
                the CY 2023 reporting period. The currently approved burden estimate
                under OMB control number 0938-1109 (which expires on March 31, 2023)
                for all participating hospitals is 151,800 hours at a cost of
                $6,436,320 (151,800 hours x $42.40) for each measure per year. We
                estimate a total burden decrease of 303,600 hours (151,800 hours x 2
                measures) at a cost of $12,872,640 (303,600 hours x $42.40). The
                information collection under OMB Control number 0938-1109 will be
                revised and submitted to OMB for approval.
                g. Information Collection Burden Estimate for the Removal of the Option
                for Hospitals to Send Medical Records to the Validation Contractor via
                Paper and Removable Media and Require Electronic Submission
                 In section XV. D.9.b. of this final rule with comment period, we
                are finalizing our proposal to remove the option for hospitals to send
                medical records to the validation contractor via paper and removable
                media and are requiring electronic submission. As noted in the CY 2015
                OPPS/ASC final rule (79 FR 67015), we have been reimbursing hospitals
                directly for expenses
                [[Page 63964]]
                associated with submission of medical records for data validation.
                Specifically, we reimbursed hospitals at 12 cents per photocopied page;
                for hospitals providing medical records digitally via a rewritable
                disc, such as encrypted Compact Disc--Read Only Memory, Digital Video
                Discs, or flash drives, we reimbursed hospitals at a rate of 40 cents
                per disc, along with $3.00 per record; and for hospitals providing
                medical records as electronic files submitted via secure file
                transmission, we reimburse hospitals at $3.00 per record. Because we
                directly reimburse, we do not anticipate any net change in information
                collection burden associated with our finalized proposal to require
                electronic file submissions of medical records via secure file
                transmission for hospitals selected for chart-abstracted measures
                validation. Hospitals will continue to be reimbursed at $3.00 per
                record for electronic files submitted via secure file transmission.
                h. Information Collection Burden Estimate for the Reduction in the
                Number of Days Hospitals Have To Submit Medical Records to the CDAC
                From 45 Days to 30 Days
                 In section XV.D.9.b. of this final rule with comment period, we are
                finalizing our proposal to reduce the number of days hospitals would
                have to submit medical records to the CDAC from 45 days to 30 days. We
                expect that this will not yield a change in burden as it does not
                affect the amount of data required for hospitals to submit. We discuss
                administrative burdens regarding this change in section XXV.C.4.b. of
                this final rule with comment period. The existing information
                collection requirement and the associated burden are currently approved
                under OMB control number 0938-1109, which expires on March 31, 2023.
                i. Information Collection Burden Estimate for the Addition of Targeting
                Criteria Used for Hospital Selection by Adopting Criteria Currently
                Used in Inpatient Data Validation
                 In section XV.D.9.d.(2). of this final rule with comment period, we
                are finalizing our proposal to add to the targeting criteria used for
                hospital selection for validation by adopting criteria currently used
                in inpatient data validation by adding the following criteria: (a)
                Having a lower bound confidence interval score of 75 percent or less;
                and (b) having not been selected in the previous 3 years. We expect
                that this will not yield a change in burden as it does not affect the
                total number of hospitals selected for data validation nor the data
                submission requirements for the hospitals selected. The existing
                information collection requirement and the associated burden are
                currently approved under OMB control number 0938-1109, which expires on
                March 31, 2023.
                j. Information Collection Burden Estimate for Expanding our Existing
                ECE Policy To Apply to Electronic Clinical Quality Measures (eCQMs).
                 In section XV.D.10.b. of this final rule with comment period, we
                are finalizing our proposal to expand our existing ECE policy to apply
                to eCQMs, to further align with the Hospital IQR Program. The burden
                associated with submission of the ECE request form is included under
                OMB control number 0938-1022 which expires on December 31, 2022. As
                noted in 0938-1022, the total estimated burden for all hospitals
                participating in the CMS Quality Reporting Programs for completing
                forms including the ECE request form is 1,100 hours. In CY 2017, 166
                ECE requests were submitted by hospitals for an exception from
                reporting requirements in the Hospital IQR Program. Based on the
                estimate of 15 minutes per record to submit the ECE request form, the
                total burden calculation for the submission of 166 ECE requests was
                2,490 minutes (or 41.5 hours) across 3,300 hospitals. We are unable to
                forecast the number of additional ECE requests which may be submitted
                as a result of this change; however, we continue to estimate that each
                submission will continue to require approximately 15 minutes to
                complete. Using this estimate of 15 minutes per submission, our
                estimate of 1,100 hours would be adequate to account for a maximum of
                4,400 submissions (1,100 hours / 0.25 hours/submission), or 4,234 more
                than what was received in CY 2017. Therefore, we believe the estimate
                of 1,100 hours across all hospitals is conservative enough to account
                for any increase in burden that may be associated with this finalized
                change in ECE policy.
                k. Information Collection Burden Estimate for the Required Use of 2015
                Edition Cures Update Certified Technology
                 In section XV.D.6.c.(1). of this final rule with comment period, we
                are finalizing our proposal that hospitals use certified technology
                updated consistent with the 2015 Edition Cures Update beginning with
                the CY 2023 reporting period/CY 2025 payment determination and
                subsequent years, which includes both the voluntary period and required
                submissions of eCQMs. We do not expect that this would affect our
                information collection burden estimates currently approved under OMB
                control number 0938-1109 (which expires on March 31, 2023) because this
                policy does not require hospitals to submit additional data to CMS.
                With respect to any costs unrelated to data submission, we refer
                readers to section XXV.C.4.b. of this final rule with comment period.
                l. Information Collection Burden Estimate for the Review and
                Corrections Period for eCQM Data Submitted to the Hospital OQR Program
                 In section XV.D.8 of this final rule with comment period, we are
                finalizing our proposal that hospitals would have a review and
                corrections period for eCQM data submitted to the Hospital OQR Program.
                Early testing and the use of pre-submission testing tools to reduce
                errors and inaccurate data submissions in eCQM reporting is encouraged
                but not required; therefore, we are unable to estimate the number of
                hospitals that may elect to submit test data files. We account for the
                burden of submission of production data files in section XXIII.B.3.C.
                of this final rule with comment period. Similar to our previously
                finalized burden assumptions regarding a review and corrections period
                for chart-abstracted measures (79 FR 66964 and 67014) and web-based
                measures (85 FR 86184 and 86267), this finalized period does not
                require hospitals to submit additional data and therefore we do not
                believe it will increase burden for these hospitals.
                4. Summary of Information Collection Burden Estimates for the Hospital
                OQR Program
                 In summary, under OMB control number 0938-1109 which expires on
                March 31, 2023, we estimate that the updated assumptions and policies
                promulgated in this final rule with comment period will result in a
                decrease of 73,344 hours annually for 3,300 OPPS hospitals across a 5-
                year period from the CY 2022 reporting period/CY 2024 payment
                determination through the CY 2027 reporting period/CY 2029 payment
                determination. The total cost decrease related to this information
                collection is approximately -$3,109,786 (-73,344 hours x $42.40/hour)
                (which also reflects use of an updated hourly wage rate as previously
                discussed). Tables 77, 78, 79, 80, and 81 summarize the total burden
                changes for each respective CY payment determination compared to our
                currently approved information collection burden estimates (the table
                for the CY 2029 payment determination
                [[Page 63965]]
                reflects the cumulative burden changes). We note that for the STEMI
                eCQM (OP-40), the tables do not reflect the maximum burden for the CY
                2025 payment determination, because we estimate only 20 percent of
                hospitals will voluntarily report the measure during the CY 2023
                reporting period. While it is possible that more than 20 percent of
                hospitals may voluntarilyreport the measure during the CY 2023
                reporting period, this percentage is consistent with our experience
                implementing eCQM measures with voluntary reporting periods under the
                Hospital IQR Program. We will submit the revised information collection
                estimates to OMB for approval under OMB control number 0938-1109.\601\
                ---------------------------------------------------------------------------
                 \601\ CY 2020 Final Rule Hospital OQR Program ``Supporting
                Statement--A''. Available at: https://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=201911-0938-015.
                ---------------------------------------------------------------------------
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                BILLING CODE 4120-01-C
                C. ICRs for the ASCQR Program
                1. Background
                 We refer readers to the CY 2012 OPPS/ASC final rule (76 FR 74554),
                the FY 2013 IPPS/LTCH PPS final rule (77 FR 53672), and the CY 2013, CY
                2014, CY 2015, CY 2016, CY 2017, CY 2018, CY 2019, CY 2020, and CY 2021
                OPPS/ASC final rules (77 FR 68532 through 68533; 78 FR 75172 through
                75174; 79 FR 67015 through 67016; 80 FR 70582 through 70584; 81 FR
                79863 through 79865; 82 FR 59479 through 59481; 83 FR 59156 through
                59157; 84 FR 61469; and 85 FR 86267, respectively) for detailed
                discussions of the Ambulatory Surgical Center Quality Reporting (ASCQR)
                Program ICRs we have previously finalized. The ICRs associated with the
                ASCQR Program for the CY 2014 through CY 2023 payment determinations
                are currently approved under OMB control number 0938-1270, which
                expires on December 31, 2022.
                 In the CY 2018 OPPS/ASC final rule (82 FR 52619 through 52620), we
                finalized a proposal to utilize the median hourly wage rate for Medical
                Records and Health Information Technicians, in accordance with the BLS,
                to calculate our burden estimates for the ASCQR Program. The BLS
                describes Medical Records and Health Information Technicians as those
                responsible for organizing and managing health information data;
                therefore, we believe it is reasonable to assume that these individuals
                will be tasked with abstracting clinical data for submission to the
                ASCQR Program. The latest data from the BLS' May 2020 Occupational
                Employment and Wages data reflects a median hourly wage of $21.20 per
                hour for a Medical Records and Health Information Technician
                professional.\602\ We have finalized a policy to calculate the cost of
                overhead, including fringe benefits, at 100 percent of the mean hourly
                wage (82 FR 52619 through 52620). This by necessity is a rough
                adjustment, both because fringe benefits and overhead costs can vary
                significantly from employer-to-employer and because methods of
                estimating these costs vary widely from study-to-study. Nonetheless, we
                believe that doubling the hourly wage rate ($21.20 x 2 = $42.40) to
                estimate the total cost is a reasonably accurate estimation method and
                allows for a conservative estimate of hourly costs.
                ---------------------------------------------------------------------------
                 \602\ https://www.bls.gov/oes/current/oes292098.htm (Accessed
                April 13, 2021). The hourly rate of $42.40 includes an adjustment of
                100 percent of the median hourly wage to account for the cost of
                overhead, including fringe benefits.
                ---------------------------------------------------------------------------
                 Based on an analysis of the CY 2020 payment determination data, we
                found that of the 6,651 ASCs that met eligibility requirements for the
                ASCQR Program, 3,494 were required to participate in the Program and
                did so. In addition, 689 ASCs that were not required to participate,
                did so, for a total of 4,183 participating facilities. As noted in
                section XXV.C.5.a. of the Regulatory Impact Analysis, for the CY 2021
                payment determination, all 6,811 ASCs that met eligibility requirements
                for the ASCQR Program received the annual payment update due to data
                submission requirements being excepted under the ASCQR Program's ECE
                policy in consideration of the COVID-19 PHE; 3,957 of these ASCs would
                have been required to participate without the PHE exception. Therefore,
                we estimate that 3,957 plus 689, or 4,646, ASCs will submit data for
                the ASCQR Program for the CY 2022 payment determination unless
                otherwise noted.
                2. Summary
                 In section XVI. B.3.a. and XVI. B.4. of this final rule with
                comment period, we are finalizing our proposals to: (1) Adopt the
                COVID-19 Vaccination Coverage Among HCP measure, beginning with the CY
                2022 reporting period/CY 2024 payment determination (ASC-20); (2)
                require four patient safety outcome measures beginning with the CY 2023
                reporting period/CY 2025 payment determination: (a) Patient Burn (ASC-
                1); (b) Patient Fall (ASC-2); (c) Wrong Site, Wrong Side, Wrong
                Patient, Wrong Procedure, Wrong Implant (ASC-3); and (d) All-Cause
                Hospital Transfer/Admission (ASC-4); and (3) add two additional data
                collection survey modes of OAS CAHPS measures collection to the
                existing three modes of collection and provide survey administration
                requirements. We are finalizing with modification our proposals to: (1)
                Require the Cataracts: Improvement in Patient's Visual
                [[Page 63969]]
                Function within 90 days Following Cataract Surgery (ASC-11) measure
                beginning with the CY 2025 reporting period/CY 2027 payment
                determination instead of the CY 2023 reporting period/CY 2025 payment
                determination; and (2) require the Outpatient and Ambulatory Surgery
                Consumer Assessment of Healthcare Providers and Systems (OAS CAHPS)
                Survey measures (ASC-15 a-e) with voluntary reporting beginning with
                the CY 2023 reporting period and mandatory reporting beginning with CY
                2025 reporting period/CY 2027 payment determination instead of the CY
                2024 reporting period/CY 2026 payment determination.
                3. Estimated Burden of ASCQR Program Proposals for the CY 2024 Payment
                Determination and Subsequent Years
                a. Information Collection Burden Estimate for the COVID-19 Vaccination
                Coverage Among Health Care Personnel (HCP) Measure (ASC-20)
                 In section XVI.B.3.a. of this final rule with comment period, we
                are finalizing our proposal to adopt the COVID-19 Vaccination Coverage
                Among HCP measure (ASC-20), beginning with the CY 2022 reporting
                period/CY 2024 payment determination. ASCs will submit data through the
                NHSN, a secure, internet-based surveillance system maintained and
                provided free by the CDC. Currently the CDC does not estimate burden
                for COVID-19 vaccination reporting under the CDC PRA (OMB control
                number 0920-1317, which expires on January 31, 2024) because the agency
                has been granted a waiver under section 321 of the NCVIA.\603\ As such,
                the burden associated with the COVID-19 Vaccination Coverage Among HCP
                measure (ASC-20) has not been accounted for under the CDC PRA 0920-1317
                or 0920-0666 (which expires on December 31, 2023) due to the NCVIA
                waiver, however the cost and burden information is included in the
                Regulatory Impact Analysis section. We will work with CDC to ensure
                that the burden is accounted for in an updated PRA under OMB control
                number 0920-1317.
                ---------------------------------------------------------------------------
                 \603\ Section 321 of the National Childhood Vaccine Injury Act
                (NCVIA) provides the PRA waiver for activities that come under the
                NCVIA, including those in the NCVIA at section 2102 of the Public
                Health Service Act (42 U.S.C. 300aa-2). Section 321 is not codified
                in the U.S. Code, but can be found in a note at 42 U.S.C. 300aa-1.
                ---------------------------------------------------------------------------
                b. Information Collection Burden Estimate for the Requirement of Four
                Patient Safety Outcome Measures: Patient Burn (ASC-1); Patient Fall
                (ASC-2); Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure, Wrong
                Implant (ASC-3); and All-Cause Hospital Transfer/Admission (ASC-4)
                 In section XVI.B.4.a of this final rule with comment period, we are
                finalizing our proposal to resume and require four patient safety
                outcome measures beginning with the CY 2023 reporting period/CY 2025
                payment determination: (1) Patient Burn (ASC-1); (2) Patient Fall (ASC-
                2); (3) Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure, Wrong
                Implant (ASC-3); and (4) All-Cause Hospital Transfer/Admission (ASC-4).
                Measure data for these measures will be submitted via the CMS Hospital
                Quality Reporting (HQR) system secure portal (also known as the CMS
                QualityNet Secure Portal). Consistent with prior years (78 FR 75171
                through 75172), we estimate that each participating facility will spend
                10 minutes per measure per year to collect and submit the data via a
                CMS web-based tool (OMB control number 0938--1270, which expires on
                December 31, 2022). As a result of finalizing this requirement, we
                estimate a resulting total annual burden estimate for all ASCs of 3,098
                hours (0.1667 hours/measure x 4 measures x 4,646 ASCs) at a cost of
                $131,355 (3,098 hours x $42.40). The information collection under OMB
                Control number 0938--1270 will be revised and submitted to OMB for
                approval.
                c. Information Collection Burden Estimate for the ASC-11, Cataracts:
                Improvement in Patient's Visual Function Within 90 Days Following
                Cataract Surgery Measure
                 As discussed in section XVI.B.4.b. of this final rule with comment
                period, we are finalizing with modification our proposal to require the
                Cataracts: Improvement in Patient's Visual Function within 90 Days
                Following Cataract Surgery (ASC-11) measure beginning with the CY 2025
                reporting period/CY 2027 payment determination instead of the CY 2023
                reporting period/CY 2025 payment determination. We previously finalized
                voluntary reporting of this measure in the CY 2015 OPPS/ASC final rule
                (79 FR 66985) and estimated that 20 percent of ASCs would elect to
                report it annually (79 FR 67016). We continue to estimate it will
                require ASCs 10 minutes once annually to report this measure. As a
                result of this policy, we estimate a total annual burden estimate for
                all ASCs to report the measure of 774 hours (4,646 ASCs x 0.1667 hours)
                at a cost of $32,818 (774 hours x $42.40). In addition to reporting the
                measure, we also require ASCs to perform chart abstraction for a
                minimum required yearly sample size of 63 cases. We estimate that each
                ASC would spend 15 minutes per case to perform this activity. As a
                result of this policy, we estimate an annual burden of 16 hours (0.25
                hours x 63 measures) at a cost of $678 (16 hours x $42.40) per ASC and
                a total annual burden of 74,336 hours (4,646 ASCs x 16 hours) at a cost
                of $3,151,846 (74,336 hours x $42.40). In aggregate, we estimate a
                total annual burden of 75,110 hours (774 + 74,336) at a cost of
                $3,184,664 (75,110 hours x $42.40) for all ASCs. Considering the
                increase in the number of ASCs submitting data, there is an increase of
                60,088 hours (75,110 hours x 80 percent) and $2,547,731 ($3,184,664 x
                80 percent) per year from the currently approved estimate (OMB control
                number 0938-1270, which expires on December 31, 2022) due to the
                additional 80 percent of ASCs that would be reporting this measure. The
                information collection under OMB Control number 0938-1270 will be
                revised and submitted to OMB for approval.
                d. Information Collection Burden Estimate for the Requirement of ASC-15
                a-e: The Outpatient and Ambulatory Surgery Consumer Assessment of
                Healthcare Providers and Systems (OAS CAHPS) Survey Measures and
                Incorporation of Additional Administration Methods
                 The information collection requirements associated with the five
                OAS CAHPS Survey-based measures (proposed ASC-15a, ASC-15b, ASC-15c,
                ASC-15d, and ASC-15e) are currently approved under OMB control number
                0938-1240 which expires December 31, 2021.In section XVI.B.4.c. of this
                final rule with comment period, we are finalizing our proposal with
                modification to require five OAS CAHPS Survey-based measures with
                voluntary reporting beginning with the CY 2023 reporting period/CY 2025
                payment determination and mandatory reporting beginning with CY 2025
                reporting period/CY 2027 payment determination and subsequent years:
                (1) ASC-15a: OAS CAHPS--About Facilities and Staff; (2) ASC-15b: OAS
                CAHPS--Communication About Procedure; (3) ASC-15c: OAS CAHPS--
                Preparation for Discharge and Recovery; (4) ASC-15d: OAS CAHPS--Overall
                Rating of Facility; and (5) ASC-15e: OAS CAHPS--Recommendation of
                Facility. Finalizing this change will
                [[Page 63970]]
                neither require additional questions to be added to the survey nor any
                other changes which will affect the time required for respondents to
                complete the survey. Therefore, we are not making any changes to the
                currently approved burden estimate of 8 minutes per respondent.
                 In addition, in section XVI.D.1.d.(2). of this final rule with
                comment period, we finalized our proposal to incorporate two additional
                administration methods for the OAS CAHPS Survey: (1) Mixed mode web
                with mail follow-up of non-respondents, and (2) mixed mode web with
                telephone follow-up of non-respondents. The addition of these two
                survey administration methods will provide a total of five methods of
                survey administration for reporting beginning with voluntary reporting
                for the CY 2023 reporting period/CY 2025 payment determination and
                mandatory reporting for the CY 2025 reporting period/CY 2027 payment
                determination. We currently assume that completion of the OAS CAHPS
                survey requires approximately 8 minutes per respondent using one of the
                three current administration methods (mail-only, telephone-only, and
                mixed-mode (mail with telephone follow-up of nonrespondents)). We
                believe that the two administration methods will require approximately
                the same time to conduct, therefore, we are not changing the currently
                approved estimate. In addition, the two administration methods will be
                utilized to increase the response rate of patients to achieve the same
                required number of 200 patients surveyed per practice, therefore we are
                not changing the number of respondents.
                e. Summary of Information Collection Burden Estimates for the ASCQR
                Program
                 In summary, under OMB control number 0938-1270 which expires on
                December 31, 2022, we estimate that the policies promulgated in this
                final rule with comment period will result in an increase of 67,085
                hours annually for 4,646 ASCs across a 4-year period from the CY 2023
                reporting period/CY 2025 payment determination through the CY 2026
                reporting period/CY 2028 payment determination. The total cost increase
                related to this information collection is approximately $2,844,404
                (67,085 hours x $42.40). Tables 82 and 83 summarize the total burden
                changes for each respective CY payment determination compared to our
                currently approved information collection burden estimates. We will
                submit the revised information collection estimates to OMB for approval
                under OMB control number 0938-1270.\604\
                ---------------------------------------------------------------------------
                 \604\ CY 2021 Final Rule ASCQR Program ``Supporting Statement-
                A''. Available at: https://www.reginfo.gov/public/do/DownloadDocument?objectID=108544300.
                ---------------------------------------------------------------------------
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                BILLING CODE 4120-01-C
                 All comments on the CY 2022 OPPS/ASC proposed rule were received on
                or by September 17, 2021.
                XXIII. Response to Comments
                 Because of the large number of public comments we normally receive
                on Federal Register documents, we are not able to acknowledge or
                respond to them individually. We considered all comments we received by
                the date and time specified in the DATES section of this preamble and
                responded to the comments in the preamble of this final rule with
                comment period.
                XXIV. Economic Analyses
                A. Statement of Need
                 This final rule with comment period is necessary to make updates to
                the Medicare hospital OPPS rates. It is necessary to make changes to
                the payment policies and rates for outpatient services furnished by
                hospitals and CMHCs in CY 2022. We are required under section
                1833(t)(3)(C)(ii) of the Act to update annually the OPPS conversion
                factor used to determine the payment rates for APCs. We also are
                required under section 1833(t)(9)(A) of the Act to review, not less
                often than annually, and revise the groups, the relative payment
                weights, and the wage and other adjustments described in section
                1833(t)(2) of the Act. We must review the clinical integrity of payment
                groups and relative payment weights at least annually. We are revising
                the APC relative payment weights using claims data for services
                furnished on and after January 1, 2019, through and including December
                31, 2019, and processed through June 30, 2020, and prior cost report
                information, consistent with our final policy of using data prior to
                the start of the PHE.
                 This final rule with comment period also is necessary to make
                updates to the ASC payment rates for CY 2022, enabling CMS to make
                changes to payment policies and payment rates for covered surgical
                procedures and covered ancillary services that are performed in ASCs in
                CY 2022. Because ASC payment rates are based on the OPPS relative
                payment weights for most of the procedures performed in ASCs, the ASC
                payment rates are updated annually to reflect annual changes to the
                OPPS relative payment weights. In addition, we are required under
                section 1833(i)(1) of the Act to review and update the list of surgical
                procedures that can be performed in an ASC, not less frequently than
                every 2 years.
                 In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59075
                through 59079), we finalized a policy to update the ASC payment system
                rates using the hospital market basket update instead of the CPI-U for
                CY 2019 through 2023. We believe that this policy will help stabilize
                the differential between OPPS payments and ASC payments, given that the
                CPI-U has been generally lower than the hospital market basket, and
                encourage the migration of services to lower cost settings as
                clinically appropriate.
                B. Overall Impact of Provisions of This Final Rule With Comment Period
                 We have examined the impacts of this final rule with comment
                period, as required by Executive Order 12866 on Regulatory Planning and
                Review (September 30, 1993), Executive Order 13563 on Improving
                Regulation and Regulatory Review (January 18, 2011), the Regulatory
                Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354), section
                1102(b) of the Social Security Act, section 202 of the Unfunded
                Mandates Reform Act of 1995 (March 22, 1995, Pub. L. 104-4), Executive
                Order 13132 on Federalism (August 4,
                [[Page 63972]]
                1999), and the Congressional Review Act (5 U.S.C. 804(2)). This section
                of this final rule with comment period contains the impact and other
                economic analyses for the provisions we are finalizing for CY 2022.
                 Executive Orders 12866 and 13563 direct agencies to assess all
                costs and benefits of available regulatory alternatives and, if
                regulation is necessary, to select regulatory approaches that maximize
                net benefits (including potential economic, environmental, public
                health and safety effects, distributive impacts, and equity). Executive
                Order 13563 emphasizes the importance of quantifying both costs and
                benefits, of reducing costs, of harmonizing rules, and of promoting
                flexibility. This final rule with comment period has been designated as
                an economically significant rule under section 3(f)(1) of Executive
                Order 12866 and hence also a major rule under Subtitle E of the Small
                Business Regulatory Enforcement Fairness Act of 1996 (also known as the
                Congressional Review Act).'' Accordingly, this final rule with comment
                period has been reviewed by the Office of Management and Budget. We
                have prepared a regulatory impact analysis that, to the best of our
                ability, presents the costs and benefits of the provisions of this
                final rule with comment period. We solicited public comments on the
                regulatory impact analysis in the CY 2022 OPPS/ASC proposed rule, and
                we address any public comments we received in this CY 2022 OPPS/ASC
                final rule with comment period, as appropriate.
                 We estimate that the total increase in Federal Government
                expenditures under the OPPS for CY 2022, compared to CY 2021, due only
                to the changes to the OPPS in this final rule with comment period,
                would be approximately $1.27 billion. Taking into account our estimated
                changes in enrollment, utilization, and case-mix for CY 2022, we
                estimate that the OPPS expenditures, including beneficiary cost-
                sharing, for CY 2022 would be approximately $82.1 billion, which is
                approximately $5.9 billion higher than estimated OPPS expenditures in
                CY 2021. Because the provisions of the OPPS are part of a final rule
                that is economically significant, as measured by the threshold of an
                additional $100 million in expenditures in 1 year, we have prepared
                this regulatory impact analysis that, to the best of our ability,
                presents its costs and benefits. Table 84 of this final rule with
                comment period displays the distributional impact of the CY 2022
                changes in OPPS payment to various groups of hospitals and for CMHCs.
                 We note that under our final CY 2022 policy, drugs and biologicals
                that are acquired under the 340B Program are paid at ASP minus 22.5
                percent, WAC minus 22.5 percent, or 69.46 percent of AWP, as
                applicable.
                 Our final policy for the CY 2022 OPPS pauses the elimination of the
                IPO list and adds services removed in 2021 back to the IPO list, with
                several codes remaining off the IPO list for CY 2022. We note that CY
                2019 OPPS claims are being used in the CY 2022 OPPS ratesetting process
                and because the initial policy to remove codes from the IPO list was
                originally established in CY 2021, the effects of such policy would not
                be observed in our data or in the impact table. Based on our initial
                review of the CY 2021 claims data, we observe that most of the changes
                resulting from that policy have been more code-specific in nature and
                have had a limited broader impact. As more CY 2021 claims become
                available, we will continue to review that data. For a more detailed
                discussion of the IPO list changes, please see section IX. of this
                final rule with comment period.
                 We also note that there are changes to the ASC CPL for the CY 2022
                ASC payment system. Based on initial review of the available CY 2021
                claims data for ASCs, we observe that there is limited aggregate impact
                for codes initially added to the ASC CPL list in the CY 2021 ASC
                payment. In addition, we note that because CY 2019 claims data are
                being used in developing the impact analysis and the initial changes to
                the list were implemented in CY 2021, the effect of changes related to
                those services would not appear in this impact analysis. For a more
                detailed discussion of changes to the ASC CPL, please see section XIII
                of this final rule with comment period.
                 We estimate that the final update to the conversion factor and
                other budget neutrality adjustments would increase total OPPS payments
                by 2.1 percent in CY 2022. The changes to the APC relative payment
                weights, the changes to the wage indexes, the continuation of a payment
                adjustment for rural SCHs, including EACHs, the continuation of payment
                policy for separately payable drugs acquired under the 340B program,
                and the payment adjustment for cancer hospitals would not increase OPPS
                payments because these changes to the OPPS are budget neutral. However,
                these updates would change the distribution of payments within the
                budget neutral system. We estimate that the total change in payments
                between CY 2021 and CY 2022, considering all budget-neutral payment
                adjustments, changes in estimated total outlier payments, pass-through
                payments and the adjustment to provide separate payment for a device
                category, drugs, and biologicals with pass-through status expiring
                between December 31, 2021, and September 30, 2022, and the application
                of the frontier State wage adjustment, in addition to the application
                of the OPD fee schedule increase factor after all adjustments required
                by sections 1833(t)(3)(F), 1833(t)(3)(G), and 1833(t)(17) of the Act,
                would increase total estimated OPPS payments by 1.6 percent.
                 We estimate the total increase (from changes to the ASC provisions
                in this final rule with comment period as well as from enrollment,
                utilization, and case-mix changes) in Medicare expenditures (not
                including beneficiary cost-sharing) under the ASC payment system for CY
                2022 compared to CY 2021, to be approximately $40 million. Because the
                provisions for the ASC payment system are part of a final rule that is
                economically significant, as measured by the $100 million threshold, we
                have prepared a regulatory impact analysis of the changes to the ASC
                payment system that, to the best of our ability, presents the costs and
                benefits of this portion of this final rule with comment period. Tables
                85 and 86 of this final rule with comment period display the
                redistributive impact of the CY 2022 changes regarding ASC payments,
                grouped by specialty area and then grouped by procedures with the
                greatest ASC expenditures, respectively.
                C. Detailed Economic Analyses
                1. Estimated Effects of OPPS Changes in This Final Rule With Comment
                Period
                a. Limitations of Our Analysis
                 The distributional impacts presented here are the projected effects
                of the CY 2022 policy changes on various hospital groups. We post on
                the CMS website our hospital-specific estimated payments for CY 2022
                with the other supporting documentation for this final rule with
                comment period. To view the hospital-specific estimates, we refer
                readers to the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html. At the
                website, select ``regulations and notices'' from the left side of the
                page and then select ``CMS-1753-FC'' from the list of regulations and
                notices. The hospital-specific file layout and the hospital-specific
                file are listed with the other supporting documentation for this final
                rule with comment period. We show hospital-specific data only for
                hospitals whose claims were used for
                [[Page 63973]]
                modeling the impacts shown in Table 84. We do not show hospital-
                specific impacts for hospitals whose claims we were unable to use. We
                refer readers to section II.A. of this final rule with comment period
                for a discussion of the hospitals whose claims we do not use for
                ratesetting or impact purposes.
                 We estimate the effects of the individual policy changes by
                estimating payments per service, while holding all other payment
                policies constant. We use the best data available, but do not attempt
                to predict behavioral responses to our policy changes in order to
                isolate the effects associated with specific policies or updates, but
                any policy that changes payment could have a behavioral response. In
                addition, we have not made adjustments for future changes in variables,
                such as service volume, service-mix, or number of encounters.
                b. Estimated Effects of the Payment Policy for Drugs and Biologicals
                Obtained Under the 340B Program
                 In section V.B. of this final rule with comment period with comment
                period, we discuss our policy of adjusting the payment amount for
                nonpass-through, separately payable drugs acquired by certain 340B
                participating hospitals through the 340B Program. Rural SCHs,
                children's hospitals, and PPS-exempt cancer hospitals continue to be
                excepted from this payment policy in CY 2022. Specifically, in this
                final rule with comment period for CY 2022, for hospitals paid under
                the OPPS (other than those that are excepted for CY 2022), we are
                paying for separately payable drugs and biologicals that are obtained
                with a 340B discount, excluding those on pass-through payment status
                and vaccines, at ASP minus 22.5 percent. Because we are continuing
                current Medicare payment policy for CY 2022, there is no change to the
                budget neutrality adjustment as a result of the 340B drug payment
                policy.
                c. Estimated Effects of OPPS Changes on Hospitals
                 Table 84 shows the estimated impact of this final rule with comment
                period on hospitals. Historically, the first line of the impact table,
                which estimates the change in payments to all facilities, has always
                included cancer and children's hospitals, which are held harmless to
                their pre-BBA amount. We also include CMHCs in the first line that
                includes all providers. We include a second line for all hospitals,
                excluding permanently held harmless hospitals and CMHCs.
                 We present separate impacts for CMHCs in Table 84, and we discuss
                them separately below, because CMHCs are paid only for partial
                hospitalization services under the OPPS and are a different provider
                type from hospitals. In CY 2022, we are continuing to pay CMHCs for
                partial hospitalization services under APC 5853 (Partial
                Hospitalization for CMHCs) and to pay hospitals for partial
                hospitalization services under APC 5863 (Partial Hospitalization for
                Hospital-Based PHPs).
                 The estimated increase in the total payments made under the OPPS is
                determined largely by the increase to the conversion factor under the
                statutory methodology. The distributional impacts presented do not
                include assumptions about changes in volume and service-mix. The
                conversion factor is updated annually by the OPD fee schedule increase
                factor, as discussed in detail in section II.B. of this final rule with
                comment period.
                 Section 1833(t)(3)(C)(iv) of the Act provides that the OPD fee
                schedule increase factor is equal to the market basket percentage
                increase applicable under section 1886(b)(3)(B)(iii) of the Act, which
                we refer to as the IPPS market basket percentage increase. The IPPS
                market basket percentage increase applicable to the OPD fee schedule
                for CY 2022 is 2.7 percent. Section 1833(t)(3)(F)(i) of the Act reduces
                that 2.7 percent by the productivity adjustment described in section
                1886(b)(3)(B)(xi)(II) of the Act, which is 0.7 percentage point for CY
                2022 (which is also the productivity adjustment for FY 2022 in the FY
                2022 IPPS/LTCH PPS final rule (86 FR 45214)), resulting in the CY 2022
                OPD fee schedule increase factor of 2.0 percent. We are using the OPD
                fee schedule increase factor of 2.0 percent in the calculation of the
                CY 2022 OPPS conversion factor. Section 10324 of the Affordable Care
                Act, as amended by HCERA, further authorized additional expenditures
                outside budget neutrality for hospitals in certain frontier States that
                have a wage index less than 1.0000. The amounts attributable to this
                frontier State wage index adjustment are incorporated in the estimates
                in Table 84 of this final rule with comment period.
                 To illustrate the impact of the CY 2022 changes, our analysis
                begins with a baseline simulation model that uses the CY 2021 relative
                payment weights, the FY 2021 final IPPS wage indexes that include
                reclassifications, and the final CY 2021 conversion factor. Table 84
                shows the estimated redistribution of the increase or decrease in
                payments for CY 2022 over CY 2021 payments to hospitals and CMHCs as a
                result of the following factors: The impact of the APC reconfiguration
                and recalibration changes between CY 2021 and CY 2022 (Column 2); the
                wage indexes and the provider adjustments (Column 3); the combined
                impact of all of the changes described in the preceding columns plus
                the 2.0 percent OPD fee schedule increase factor update to the
                conversion factor (Column 4); the estimated impact taking into account
                all payments for CY 2022 relative to all payments for CY 2021,
                including the impact of changes in estimated outlier payments, and
                changes to the pass-through payment estimate and adjustment to provide
                separate payment for a device category, drugs, and biologicals with
                pass-through status expiring between December 31, 2021, and September
                30, 2022 (Column 5).
                 We did not model an explicit budget neutrality adjustment for the
                rural adjustment for SCHs because we are maintaining the current
                adjustment percentage for CY 2022. Because the updates to the
                conversion factor (including the update of the OPD fee schedule
                increase factor), the estimated cost of the rural adjustment, and the
                estimated cost of projected pass-through payment for CY 2022 are
                applied uniformly across services, observed redistributions of payments
                in the impact table for hospitals largely depend on the mix of services
                furnished by a hospital (for example, how the APCs for the hospital's
                most frequently furnished services will change), and the impact of the
                wage index changes on the hospital. However, total payments made under
                this system and the extent to which this final rule with comment period
                will redistribute money during implementation also will depend on
                changes in volume, practice patterns, and the mix of services billed
                between CY 2021 and CY 2022 by various groups of hospitals, which CMS
                cannot forecast.
                 Overall, we estimate that the rates for CY 2022 will increase
                Medicare OPPS payments by an estimated 1.6 percent. Removing payments
                to cancer and children's hospitals because their payments are held
                harmless to the pre-OPPS ratio between payment and cost and removing
                payments to CMHCs results in an estimated 1.6 percent increase in
                Medicare payments to all other hospitals. These estimated payments will
                not significantly impact other providers.
                Column 1: Total Number of Hospitals
                 The first line in Column 1 in Table 84 shows the total number of
                facilities (3,659), including designated cancer and children's
                hospitals and CMHCs, for which we were able to use CY 2019 hospital
                outpatient and CMHC claims
                [[Page 63974]]
                data to model CY 2021 and CY 2022 payments, by classes of hospitals,
                for CMHCs and for dedicated cancer hospitals. We excluded all hospitals
                and CMHCs for which we could not plausibly estimate CY 2021 or CY 2022
                payment and entities that are not paid under the OPPS. The latter
                entities include CAHs, all-inclusive hospitals, and hospitals located
                in Guam, the U.S. Virgin Islands, Northern Mariana Islands, American
                Samoa, and the State of Maryland. This process is discussed in greater
                detail in section II.A. of this final rule with comment period. At this
                time, we are unable to calculate a DSH variable for hospitals that are
                not also paid under the IPPS because DSH payments are only made to
                hospitals paid under the IPPS. Hospitals for which we do not have a DSH
                variable are grouped separately and generally include freestanding
                psychiatric hospitals, rehabilitation hospitals, and long-term care
                hospitals. We show the total number of OPPS hospitals (3,552),
                excluding the hold-harmless cancer and children's hospitals and CMHCs,
                on the second line of the table. We excluded cancer and children's
                hospitals because section 1833(t)(7)(D) of the Act permanently holds
                harmless cancer hospitals and children's hospitals to their ``pre-BBA
                amount'' as specified under the terms of the statute, and therefore, we
                removed them from our impact analyses. We show the isolated impact on
                the 39 CMHCs at the bottom of the impact table (Table 84) and discuss
                that impact separately below.
                Column 2: APC Recalibration--All Changes
                 Column 2 shows the estimated effect of APC recalibration. Column 2
                also reflects any changes in multiple procedure discount patterns or
                conditional packaging that occur as a result of the changes in the
                relative magnitude of payment weights. As a result of APC
                recalibration, we estimate that urban hospitals will experience no
                change, with the impact ranging from a decrease of 0.1 percent to an
                increase of 0.1, depending on the number of beds. Rural hospitals will
                experience no change overall. Major teaching hospitals will experience
                an estimated decrease of 0.1 percent.
                Column 3: Wage Indexes and the Effect of the Provider Adjustments
                 Column 3 demonstrates the combined budget neutral impact of the APC
                recalibration; the updates for the wage indexes with the FY 2022 IPPS
                post-reclassification wage indexes; the rural adjustment; the frontier
                adjustment, and the cancer hospital payment adjustment. We modeled the
                independent effect of the budget neutrality adjustments and the OPD fee
                schedule increase factor by using the relative payment weights and wage
                indexes for each year, and using a CY 2021 conversion factor that
                included the OPD fee schedule increase and a budget neutrality
                adjustment for differences in wage indexes.
                 Column 3 reflects the independent effects of the updated wage
                indexes, including the application of budget neutrality for the rural
                floor policy on a nationwide basis, as well as the CY 2022 changes in
                wage index policy discussed in section II.C. this final rule with
                comment period. We did not model a budget neutrality adjustment for the
                rural adjustment for SCHs because we are continuing the rural payment
                adjustment of 7.1 percent to rural SCHs for CY 2022, as described in
                section II.E. of this final rule with comment period. We also did not
                model a budget neutrality adjustment for the cancer hospital payment
                adjustment because the payment-to-cost ratio target for the cancer
                hospital payment adjustment in CY 2022 is 0.89, the same as the ratio
                that was reported for the CY 2021 OPPS/ASC final rule with comment
                period (85 FR 85914). We note that, in accordance with section 16002 of
                the 21st Century Cures Act, we are applying a budget neutrality factor
                calculated as if the cancer hospital adjustment target payment-to-cost
                ratio was 0.90, not the 0.89 target payment-to-cost ratio we are
                applying in section II.F. of this final rule with comment period.
                 We modeled the independent effect of updating the wage indexes by
                varying only the wage indexes, holding APC relative payment weights,
                service-mix, and the rural adjustment constant and using the CY 2022
                scaled weights and a CY 2021 conversion factor that included a budget
                neutrality adjustment for the effect of the changes to the wage indexes
                between CY 2021 and CY 2022.
                Column 4: All Budget Neutrality Changes Combined With the Market Basket
                Update
                 Column 4 demonstrates the combined impact of all of the changes
                previously described and the update to the conversion factor of 2.0
                percent. Overall, these changes will increase payments to urban
                hospitals by 2.1 percent and to rural hospitals by 2.3 percent. Both
                sole community hospitals and other rural hospitals receive an estimated
                increase of 2.3 percent.
                Column 5: All Changes for CY 2022
                 Column 5 depicts the full impact of the final CY 2022 policies on
                each hospital group by including the effect of all changes for CY 2022
                and comparing them to all estimated payments in CY 2021. Column 5 shows
                the combined budget neutral effects of Columns 2 and 3; the OPD fee
                schedule increase; the impact of estimated OPPS outlier payments, as
                discussed in section II.G. of this final rule with comment period; the
                change in the Hospital OQR Program payment reduction for the small
                number of hospitals in our impact model that failed to meet the
                reporting requirements (discussed in section XIV. of this final rule
                with comment period); and the difference in total OPPS payments
                dedicated to transitional pass-through payments and the proposed
                adjustment to provide separate payment for the device category, drugs,
                and biologicals with pass-through status expiring between December 31,
                2021, and September 30, 2022.
                 Of those hospitals that failed to meet the Hospital OQR Program
                reporting requirements for the full CY 2021 update (and assumed, for
                modeling purposes, to be the same number for CY 2022), we included 17
                hospitals in our model because they had both CY 2019 claims data and
                recent cost report data. We estimate that the cumulative effect of all
                changes for CY 2022 will increase payments to all facilities by 1.6
                percent for CY 2022. We modeled the independent effect of all changes
                in Column 5 using the final relative payment weights for CY 2021 and
                the final relative payment weights for CY 2022. We used the final
                conversion factor for CY 2021 of $82.797 and the final CY 2022
                conversion factor of $84.177 discussed in section II.B. of this final
                rule with comment period.
                 Column 5 contains simulated outlier payments for each year. We used
                the 2-year charge inflation factor used in the FY 2021 IPPS/LTCH PPS
                final rule (85 FR 59039) of 13.2 percent (1.13218) to increase
                individual costs on the CY 2019 claims, and we used the overall CCR in
                the April 2020 Outpatient Provider-Specific File (OPSF) with a 1-year
                CCR adjustment factor of 0.974495 (85 FR 59040) to estimate outlier
                payments for CY 2021. Using the CY 2019 claims and a 13.2 percent
                charge inflation factor, we currently estimate that outlier payments
                for CY 2021, using a multiple threshold of 1.75 and a fixed-dollar
                threshold of $5,300, will be approximately 1.07 percent of total
                payments. The estimated current outlier payments of 1.07 percent are
                incorporated in the comparison in Column 5. We used the same set of
                claims and a charge inflation factor of 20.4 percent (1.20469) and the
                CCRs in the April 2020 OPSF, with an adjustment of 0.974495 multiplied
                by
                [[Page 63975]]
                0.974495 (86 FR 25718), to reflect relative changes in cost and charge
                inflation between CY 2019 and CY 2022, to model the final CY 2022
                outliers at 1.0 percent of estimated total payments using a multiple
                threshold of 1.75 and a fixed-dollar threshold of $6,175. The charge
                inflation and CCR inflation factors are discussed in detail in the FY
                2021 IPPS/LTCH PPS final rule (84 FR 45542).
                 Overall, we estimate that facilities will experience an increase of
                1.6 percent under this final rule with comment period in CY 2022
                relative to total spending in CY 2021. This projected increase (shown
                in Column 5) of Table 84 reflects the 2.0 percent OPD fee schedule
                increase factor, minus 0.32 percent for the change in the pass-through
                payment estimate between CY 2021 and CY 2022 and the adjustment to
                provide separate payment for the device category, drugs, and
                biologicals with pass-through status expiring between December 31,
                2021, and September 30, 2022, minus the difference in estimated outlier
                payments between CY 2021 (1.07 percent) and CY 2022 (1.0 percent). We
                estimate that the combined effect of all proposed changes for CY 2022
                will increase payments to urban hospitals by 1.6 percent. Overall, we
                estimate that rural hospitals will experience a 1.6 percent increase as
                a result of the combined effects of all the proposed changes for CY
                2022.
                 Among hospitals, by teaching status, we estimate that the impacts
                resulting from the combined effects of all changes will include an
                increase of 1.4 percent for major teaching hospitals and an increase of
                1.7 percent for nonteaching hospitals. Minor teaching hospitals will
                experience an estimated increase of 1.6 percent.
                 In our analysis, we also have categorized hospitals by type of
                ownership. Based on this analysis, we estimate that voluntary hospitals
                will experience an increase of 1.6 percent, proprietary hospitals will
                experience an increase of 1.7 percent, and governmental hospitals will
                experience an increase of 1.7 percent.
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                d. Estimated Effects of OPPS Changes on CMHCs
                 The last line of Table 84 demonstrates the isolated impact on
                CMHCs, which furnish only partial hospitalization services under the
                OPPS. In CY 2021, CMHCs are paid under APC 5853 (Partial
                Hospitalization (3 or more services) for CMHCs). We modeled the impact
                of this APC policy assuming CMHCs will continue to provide the same
                number of days of PHP care as seen in the CY 2019 claims used for rate
                setting in the final rule. We excluded days with 1 or 2 services
                because our policy only pays a per diem rate for partial
                hospitalization when 3 or more qualifying services are provided to the
                beneficiary. We estimate that CMHCs will experience an overall 1.1
                percent increase in payments from CY 2021 (shown in Column 5). We note
                that this includes the trimming methodology as well as the proposed CY
                2022 geometric mean costs used for developing the PHP payment rates
                described in section VIII.B. of this final rule with comment period.
                 Column 3 shows the estimated impact of adopting the final FY 2022
                wage index values will result in a decrease of 1.0 percent to CMHCs.
                Column 4 shows that combining the OPD fee schedule increase factor,
                along with final changes in APC policy for CY 2022 and the final FY
                2022 wage index updates, will result in an estimated increase of 1.4
                percent. Column 5 shows that adding the changes in outlier and pass-
                through payments will result in a total 1.1 percent increase in payment
                for CMHCs. This reflects all final changes for CMHCs for CY 2022.
                e. Estimated Effect of OPPS Changes on Beneficiaries
                 For services for which the beneficiary pays a copayment of 20
                percent of the payment rate, the beneficiary's payment would increase
                for services for which the OPPS payments will rise and will decrease
                for services for which the OPPS payments will fall. For further
                discussion of the calculation of the national unadjusted copayments and
                minimum unadjusted copayments, we refer readers to section II.I. of
                this final rule with comment period. In all cases, section
                1833(t)(8)(C)(i) of the Act limits beneficiary liability for copayment
                for a procedure performed in a year to the hospital inpatient
                deductible for the applicable year.
                 We estimate that the aggregate beneficiary coinsurance percentage
                would be 18.2 percent for all services paid under the OPPS in CY 2022.
                The estimated aggregate beneficiary coinsurance reflects general system
                adjustments, including the final CY 2022 comprehensive APC payment
                policy discussed in section II.A.2.b. of this final rule. We note that
                the individual payments, and therefore copayments, associated with
                services may differ based on the setting in which they are furnished.
                However, at the aggregate system level, because site of service changes
                related to the IPO list and ASC CPL for certain procedures are more
                service specific and because the overall impact has been limited in
                nature, we do not currently observe significant impact on beneficiary
                coinsurance as a result of those policies.
                f. Estimated Effects of OPPS Changes on Other Providers
                 The relative payment weights and payment amounts established under
                the OPPS affect the payments made to ASCs, as discussed in section XIII
                of the final rule. No types of providers or suppliers other than
                hospitals, CMHCs, and ASCs will be affected by the changes in the final
                rule.
                g. Estimated Effects of OPPS Changes on the Medicare and Medicaid
                Programs
                 The effect on the Medicare program is expected to be an increase of
                $1.27 billion in program payments for OPPS services furnished in CY
                2022. The effect on the Medicaid program is expected to be limited to
                copayments that Medicaid may make on behalf of Medicaid recipients who
                are also Medicare beneficiaries. We estimate that the changes in the
                final rule would increase these Medicaid beneficiary payments by
                approximately $80 million in CY 2022. Currently, there are
                approximately 10 million dual-eligible beneficiaries, which represent
                approximately thirty percent of Medicare Part B fee-for-service
                beneficiaries. The impact on Medicaid was determined by taking 30
                percent of the beneficiary cost-sharing impact. The national average
                split of Medicaid payments is 57 percent Federal payments and 43
                percent state payments. Therefore, for the estimated $80 million
                Medicaid increase, approximately $45 million will be from the Federal
                Government and $35 million would be from state governments.
                h. Alternative OPPS Policies Considered
                 Alternatives to the OPPS changes we proposed and the reasons for
                our selected alternatives are discussed throughout the final rule.
                 Alternatives Considered for the Claims Data used in OPPS
                and ASC Ratesetting due to the PHE.
                 We refer readers to section X.E. of the CY 2022 OPPS/ASC proposed
                rule with comment period for a discussion of our proposed policy of
                generally using claims, cost report, and other data prior to the PHE.
                We note that in that section we discuss the alternative proposal we
                considered regarding applying the standard ratesetting process, in
                particular the selection of data used, which would include claims and
                cost report data including the timeframe of the PHE. We note that there
                are potential issues related to that data, including the effect of the
                PHE on the OPPS relative payment weights and the service mix applied in
                the budget neutrality process; and, therefore, our primary proposal was
                to use CY 2019 claims and cost report data generally in CY 2022 OPPS
                ratesetting. In this final rule, as discussed in section X.E., we are
                finalizing a policy of using the CY 2019 claims data in CY 2022 OPPS
                ratesetting, while allowing for certain exceptions in which we would
                use CY 2020 claims in consideration of factors such as APC placement.
                 We note that these policy considerations also have ASC implications
                since the relative weights for certain surgical procedures
                [[Page 63980]]
                performed in the ASC setting are developed based on the OPPS relative
                weights and claims data.
                2. Estimated Effects of CY 2022 ASC Payment System Changes
                 Most ASC payment rates are calculated by multiplying the ASC
                conversion factor by the ASC relative payment weight. As discussed
                fully in section XIII. of this final rule with comment period, we are
                setting the CY 2022 ASC relative payment weights by scaling the final
                CY 2022 OPPS relative payment weights by the final ASC scalar of
                0.8552. The estimated effects of the final updated relative payment
                weights on payment rates are varied and are reflected in the estimated
                payments displayed in Tables 85 and 86.
                 Beginning in CY 2011, section 3401 of the Affordable Care Act
                requires that the annual update to the ASC payment system (which, in CY
                2019, we adopted a policy to be the hospital market basket for CY 2019
                through CY 2023) after application of any quality reporting reduction
                be reduced by a productivity adjustment. Section 1886(b)(3)(B)(xi)(II)
                of the Act defines the productivity adjustment to be equal to the 10-
                year moving average of changes in annual economy-wide private nonfarm
                business multifactor productivity (MFP) (as projected by the Secretary
                for the 10-year period, ending with the applicable fiscal year, year,
                cost reporting period, or other annual period). For ASCs that fail to
                meet their quality reporting requirements, the CY 2022 payment
                determinations will be based on the application of a 2.0 percentage
                point reduction to the annual update factor, which will be the hospital
                market basket for CY 2022. We calculated the CY 2022 ASC conversion
                factor by adjusting the CY 2021 ASC conversion factor by 0.9997 to
                account for changes in the pre-floor and pre-reclassified hospital wage
                indexes between CY 2021 and CY 2022 and by applying the CY 2022
                productivity-adjusted hospital market basket update factor of 2.0
                percent (which is equal to the projected hospital market basket update
                of 2.7 percent reduced by a productivity adjustment of 0.7 percentage
                point). The CY 2022 ASC conversion factor is $49.916 for ASCs that
                successfully meet the quality reporting requirements.
                a. Limitations of Our Analysis
                 Presented here are the projected effects of the final changes for
                CY 2022 on Medicare payment to ASCs. A key limitation of our analysis
                is our inability to predict changes in ASC service-mix between CY 2019
                and CY 2022 with precision. We believe the net effect on Medicare
                expenditures resulting from the final CY 2022 changes will be small in
                the aggregate for all ASCs. However, such changes may have differential
                effects across surgical specialty groups, as ASCs continue to adjust to
                the payment rates based on the policies of the revised ASC payment
                system. We are unable to accurately project such changes at a
                disaggregated level. Clearly, individual ASCs will experience changes
                in payment that differ from the aggregated estimated impacts presented
                below.
                b. Estimated Effects of ASC Payment System Policies on ASCs
                 Some ASCs are multispecialty facilities that perform a wide range
                of surgical procedures from excision of lesions to hernia repair to
                cataract extraction; others focus on a single specialty and perform
                only a limited range of surgical procedures, such as eye, digestive
                system, or orthopedic procedures. The combined effect on an individual
                ASC of the final update to the CY 2022 payments will depend on a number
                of factors, including, but not limited to, the mix of services the ASC
                provides, the volume of specific services provided by the ASC, the
                percentage of its patients who are Medicare beneficiaries, and the
                extent to which an ASC provides different services in the coming year.
                The following discussion includes tables that display estimates of the
                impact of the final CY 2022 updates to the ASC payment system on
                Medicare payments to ASCs, assuming the same mix of services, as
                reflected in our CY 2019 claims data. Table 85 depicts the estimated
                aggregate percent change in payment by surgical specialty or ancillary
                items and services group by comparing estimated CY 2021 payments to
                estimated CY 2022 payments, and Table 86 shows a comparison of
                estimated CY 2021 payments to estimated CY 2022 payments for procedures
                that we estimate will receive the most Medicare payment in CY 2021.
                 In Table 85, we have aggregated the surgical HCPCS codes by
                specialty group, grouped all HCPCS codes for covered ancillary items
                and services into a single group, and then estimated the effect on
                aggregated payment for surgical specialty and ancillary items and
                services groups. The groups are sorted for display in descending order
                by estimated Medicare program payment to ASCs. The following is an
                explanation of the information presented in Table 85.
                 Column 1--Surgical Specialty or Ancillary Items and
                Services Group indicates the surgical specialty into which ASC
                procedures are grouped and the ancillary items and services group which
                includes all HCPCS codes for covered ancillary items and services. To
                group surgical procedures by surgical specialty, we used the CPT code
                range definitions and Level II HCPCS codes and Category III CPT codes,
                as appropriate, to account for all surgical procedures to which the
                Medicare program payments are attributed.
                 Column 2--Estimated CY 2021 ASC Payments were calculated
                using CY 2019 ASC utilization data (the most recent full year of ASC
                utilization) and CY 2021 ASC payment rates. The surgical specialty and
                ancillary items and services groups are displayed in descending order
                based on estimated CY 2021 ASC payments.
                 Column 3--Estimated CY 2022 Percent Change is the
                aggregate percentage increase or decrease in Medicare program payment
                to ASCs for each surgical specialty or ancillary items and services
                group that is attributable to final updates to ASC payment rates for CY
                2022 compared to CY 2021.
                 As shown in Table 85, for the six specialty groups that account for
                the most ASC utilization and spending, we estimate that the proposed
                update to ASC payment rates for CY 2022 will result in a 1-percent
                decrease in aggregate payment amounts for eye and ocular adnexa
                procedures, a 2-percent increase in aggregate payment amounts for
                nervous system procedures, 2-percent increase in aggregate payment
                amounts for digestive system procedures, a 3-percent increase in
                aggregate payment amounts for musculoskeletal system procedures, a 6-
                percent increase in aggregate payment amounts for cardiovascular system
                procedures, and a 3-percent increase in aggregate payment amounts for
                genitourinary system procedures. We note that these changes can be a
                result of different factors, including updated data, payment weight
                changes, and proposed changes in policy. In general, spending in each
                of these categories of services is increasing due to the 2.0 percent
                proposed payment rate update. After the payment rate update is
                accounted for, aggregate payment increases or decreases for a category
                of services can be higher or lower than a 2.0 percent increase,
                depending on if payment weights in the OPPS APCs that correspond to the
                applicable services increased or decreased or if the most recent data
                show an increase or a decrease in the volume of services performed in
                an ASC for a category. For example, we estimate a 6-percent increase in
                proposed aggregate cardiovascular procedure payments.
                [[Page 63981]]
                The increase in payment rates for cardiovascular procedures as a result
                of increased device-intensive designations is further increased by the
                final 2.0 percent ASC rate update for these procedures. Conversely, we
                estimate a 1-percent decrease in proposed aggregate eye and ocular
                adnexa procedures related to certain high-volume procedures no longer
                being assigned device-intensive status as well as estimates in
                utilization for certain new cataract removal and device insertion
                procedures. For estimated changes for selected procedures, we refer
                readers to Table 85 provided later in this section.
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                 Table 85 shows the estimated impact of the updates to the revised
                ASC payment system on aggregate ASC payments for selected surgical
                procedures during CY 2022. The table displays 30 of the procedures
                receiving the greatest estimated CY 2021 aggregate Medicare payments to
                ASCs. The HCPCS codes are sorted in descending order by estimated CY
                2021 program payment.
                 Column 1--CPT/HCPCS code.
                 Column 2--Short Descriptor of the HCPCS code.
                 Column 3--Estimated CY 2021 ASC Payments were calculated
                using CY 2019 ASC utilization (the most recent full year of ASC
                utilization) and the CY 2021 ASC payment rates. The estimated CY 2021
                payments are expressed in millions of dollars.
                 Column 4--Estimated CY 2022 Percent Change reflects the
                percent differences between the estimated ASC payment for CY 2021 and
                the estimated payment for CY 2022 based on the final update.
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                c. Estimated Effects of Proposed ASC Payment System Policies on
                Beneficiaries
                 We estimate that the CY 2022 update to the ASC payment system will
                be generally positive (that is, result in lower cost-sharing) for
                beneficiaries with respect to the new procedures designated as office-
                based for CY 2022. First, other than certain preventive services where
                coinsurance and the Part B deductible is waived to comply with sections
                1833(a)(1) and (b) of the Act, the ASC coinsurance rate for all
                procedures is 20 percent. This contrasts with procedures performed in
                HOPDs under the OPPS, where the beneficiary is responsible for
                copayments that range from 20 percent to 40 percent of the procedure
                payment (other than for certain preventive services), although the
                majority of HOPD procedures have a 20-percent copayment. Second, in
                almost all cases, the ASC payment rates under the ASC payment system
                are lower than payment rates for the same procedures under the OPPS.
                Therefore, the beneficiary coinsurance amount under the ASC payment
                system will almost always be less than the OPPS copayment amount for
                the same services. (The only exceptions will be if the ASC coinsurance
                amount exceeds the hospital inpatient deductible since the statute
                requires that OPPS copayment amounts not exceed the hospital inpatient
                deductible. Therefore, in limited circumstances, the ASC coinsurance
                amount may exceed the hospital inpatient deductible and, therefore, the
                OPPS copayment amount for similar services.) Beneficiary coinsurance
                for services migrating from physicians' offices to ASCs may decrease or
                increase under the ASC payment system, depending on the particular
                service and the relative payment amounts under the MPFS compared to the
                ASC. While the ASC payment system bases most of its payment rates on
                hospital cost data used to set OPPS relative payment weights, services
                that are performed a majority of the time in a physician office are
                generally paid the lesser of the ASC amount according to the standard
                ASC ratesetting methodology or at the
                [[Page 63983]]
                nonfacility practice expense based amount payable under the PFS. For
                those additional procedures that we designate as office-based in CY
                2022, the beneficiary coinsurance amount under the ASC payment system
                generally will be no greater than the beneficiary coinsurance under the
                PFS because the coinsurance under both payment systems generally is 20
                percent (except for certain preventive services where the coinsurance
                is waived under both payment systems).
                3. Accounting Statements and Tables
                 As required by OMB Circular A-4 (available on the Office of
                Management and Budget website at: https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/assets/OMB/circulars/a004/a-4.html), we have
                prepared accounting statements to illustrate the impacts of the OPPS
                and ASC changes in this final rule with comment period. The first
                accounting statement, Table 87, illustrates the classification of
                expenditures for the CY 2022 estimated hospital OPPS incurred benefit
                impacts associated with the final CY 2022 OPD fee schedule increase.
                The second accounting statement, Table 88, illustrates the
                classification of expenditures associated with the 2.0 percent CY 2022
                update to the ASC payment system, based on the provisions of the final
                rule with comment period and the baseline spending estimates for ASCs.
                Both tables classify most estimated impacts as transfers.
                [GRAPHIC] [TIFF OMITTED] TR16NO21.188
                BILLING CODE 4120-01-C
                [[Page 63984]]
                4. Effects of Changes in Requirements for the Hospital OQR Program
                a. Background
                 We refer readers to the CY 2018 OPPS/ASC final rule (82 FR 59492
                through 59494), for the previously estimated effects of changes to the
                Hospital Outpatient Quality Reporting (OQR) Program for the CY 2018, CY
                2019, and CY 2021 payment determinations. Of the 3,163 hospitals that
                met eligibility requirements for the CY 2021 payment determination, we
                determined that 77 hospitals did not meet the requirements to receive
                the full annual Outpatient Department (OPD) fee schedule increase
                factor.
                b. Impact of CY 2022 OPPS/ASC Finalized Policies
                 We anticipate that some of the CY 2022 Hospital OQR Program
                finalized policies will impact the number of facilities that will
                receive payment reductions. In this final rule, we are finalizing our
                proposals to: (1) Adopt the COVID-19 Vaccination Coverage Among HCP
                measure (OP-38), beginning with the CY 2022 reporting period; (2) adopt
                the Breast Screening Recall Rates measure (OP-39), beginning with the
                CY 2022 reporting period; (3) adopt the STEMI eCQM (OP-40), beginning
                as a voluntary measure with the CY 2023 reporting period, and then as a
                mandatory measure beginning with the CY 2024 reporting period; (4)
                require the Outpatient and Ambulatory Surgery Consumer Assessment of
                Healthcare Providers and Systems (OAS CAHPS) Survey measures (OP-37a-
                e), with voluntary reporting beginning with the CY 2023 reporting
                period and mandatory reporting beginning with CY 2024 reporting period/
                CY 2026 payment determination; (5) remove the Fibrinolytic Therapy
                Received Within 30 Minutes measure (OP-2), effective with the CY 2023
                reporting period; (6) remove the Median Time to Transfer to Another
                Facility for Acute Coronary Intervention measure (OP-3), effective with
                the CY 2023 reporting period; (7) remove the option for hospitals to
                send medical records to the validation contractor via paper and
                removable media and require electronic submission; (8) reduce the
                number of days hospitals have to submit medical records to the CDAC
                from 45 days to 30 days; (9) enhance the targeting criteria used for
                hospital selection by adopting criteria currently used in inpatient
                data validation by adding the following criteria: (a) Having a lower
                bound confidence interval score of 75 percent or less; and (b) having
                not been selected in the previous 3 years; (10) extend our existing ECE
                policy to apply to eCQMs, to further align with the Hospital Inpatient
                Quality Reporting (IQR) Program; and (11) require use of technology
                updated consistent with 2015 Edition Cures Update criteria beginning
                with the CY 2023 reporting period. We are also finalizing our proposal
                with modification to require the Cataracts: Improvement in Patient's
                Visual Function within 90 Days Following Cataract Surgery measure (OP-
                31) beginning with the CY 2025 reporting period/CY 2027 payment
                determination instead of the CY 2023 reporting period/CY 2025 payment
                determination.
                 As shown in Table 81 in section XXII.B.4. (Collection of
                Information) of this final rule with comment period, we estimate a
                total information collection burden decrease for 3,300 OPPS hospitals
                of -73,344 hours at a cost of -$3,109,786 annually associated with our
                proposed policies and updated burden estimates across a 5-year period
                from the CY 2022 reporting period/CY 2024 payment determination through
                the CY 2027 reporting period/CY 2029 payment determination, compared to
                our currently approved information collection burden estimates. We
                refer readers to section XXII.B. of this final rule (information
                collection requirements) for a detailed discussion of the calculations
                estimating the changes to the information collection burden for
                submitting data to the Hospital OQR Program. As discussed in this
                section of the final rule, we are finalizing policies that will have
                additional economic impact. The finalized policies not discussed in
                this section are believed to have no further economic impact beyond
                information collection burden.
                 In section XV.B.4.a. of this final rule with comment period, we are
                finalizing the adoption of the COVID-19 Vaccination Coverage Among HCP
                measure (OP-38) beginning with the CY 2022 reporting period/CY 2024
                payment determination. Hospitals will submit data through the Centers
                for Disease Control and Prevention (CDC) National Healthcare Safety
                Network (NHSN). The NHSN is a secure, internet-based system maintained
                by the CDC and provided free. Currently the CDC does not estimate
                burden for COVID-19 vaccination reporting under the CDC PRA package
                currently approved under OMB control number 0920-1317 because the
                agency has been granted a waiver under section 321 of the National
                Childhood Vaccine Injury Act (NCVIA).\605\ Although the burden
                associated with the COVID-19 Vaccination Coverage Among HCP measure
                (OP-38) is not accounted for under the CDC PRA 0920-1317 or 0920-0666,
                the cost and burden information is included here. We estimate that it
                will take each hospital on average approximately 1 hour per month to
                report data for the COVID-19 Vaccination Coverage Among HCP measure
                (OP-38) which may vary between 45 minutes and 1 hour and 15 minutes to
                enter this data into NHSN. Beginning with the CY 2022 reporting period/
                FY 2024 payment determination, hospitals will incur an additional
                annual burden between 9 hours (0.75 hours/month x 12 months) and 15
                hours (1.25 hours/month x 12 months) per hospital and between 29,700
                hours (9 hours/hospital x 3,300 hospitals) and 49,500 hours (15 hours/
                hospital x 3,300 hospitals) for all hospitals. Each hospital will incur
                an estimated cost of between $323.28 (9 hours x $35.92/hr) and $538.80
                annually (15 hours x $35.92/hr).\606\ The estimated cost across all
                3,300 hospitals will be between $1,066,824 ($323.28/hospital x 3,300
                hospitals) and $1,778,040 ($538.80/hospital x 3,300 hospitals) annually
                thereafter. We recognize that many healthcare facilities are also
                reporting other COVID-19 data to HHS. We believe the benefits of
                reporting data on the COVID-19 Vaccination Coverage Among HCP measure
                (OP-38) outweigh the associated costs of reporting. We did not receive
                any comments on the estimated time to collect data and enter it into
                the NHSN as well as any additional costs associated with this measure.
                ---------------------------------------------------------------------------
                 \605\ Section 321 of the National Childhood Vaccine Injury Act
                (NCVIA) provides the PRA waiver for activities that come under the
                NCVIA, including those in the NCVIA at section 2102 of the Public
                Health Service Act (42 U.S.C. 300aa-2). Section 321 is not codified
                in the U.S. Code, but can be found in a note at 42 U.S.C. 300aa-1.
                 \606\ https://www.bls.gov/oes/current/oes436013.htm. Accessed on
                April 13, 2021. The adjusted hourly wage rate of $35.92/hr includes
                an adjustment of 100 percent of the median hourly wage to account
                for the cost of overhead, including fringe benefits.
                ---------------------------------------------------------------------------
                 In section XV.B.4.c. of this final rule with comment period, we are
                finalizing the adoption of the STEMI eCQM (OP-40). Similar to the FY
                2019 IPPS/LTCH PPS final rule, we believe that costs associated with
                adoption of eCQMs are multifaceted and include not only the burden
                associated with reporting but also the costs associated with
                implementing and maintaining Program requirements, such as maintaining
                measure specifications in hospitals EHR systems for all of the eCQMs
                available
                [[Page 63985]]
                for use in the Hospital OQR Program (83 FR 41771).
                 As described in section XV.D.6. of this final rule with comment
                period, we are finalizing certification requirements requiring the use
                of the 2015 Edition Cures Update for eCQMs beginning with the CY 2025
                payment determination. We expect this finalization to have no impact on
                information collection burden for the Hospital OQR Program because this
                policy does not require hospitals to submit new data to CMS. With
                respect to any costs unrelated to data submission, although this
                finalized policy will require some investment in systems updates, the
                Medicare Promoting Interoperability Program (previously known as the
                Medicare and Medicaid EHR Incentive Programs) previously finalized a
                requirement that hospitals use the 2015 Edition Cures Update for eCQMs
                (85 FR 84818 through 84825). Because all hospitals participating in the
                Hospital OQR Program are subsection (d) hospitals that also participate
                in the Medicare Promoting Interoperability Program (previously known as
                the Medicare and Medicaid EHR Incentive Programs), we do not anticipate
                any additional costs as a result of the finalization of this policy.
                This is because the burden and costs involved in updating to the 2015
                Edition Cures Update is the same regardless of whether the technology
                is used for eCQMs. Therefore, we believe that the Medicare Promoting
                Interoperability Program has already addressed the additional costs
                unrelated to data submission through their previously finalized
                requirements.
                 In section XV.D.9.c. of this final rule with comment period, we are
                finalizing the proposal to reduce the number of days hospitals have to
                submit medical records to the CDAC from 45 days to 30 days. In previous
                years, charts were requested by the CMS CDAC contractor and hospitals
                were given 45 days from the date of the request to submit the requested
                records. This may be an additional administrative burden to hospitals
                selected for validation. However, this deadline is in line with the
                Hospital IQR Program's validation policy, the large majority of
                hospitals that have participated in Hospital OQR Program data
                validation efforts have submitted their records prior to 30 days in the
                current process, and outpatient records typically contain significantly
                fewer pages than the inpatient records. Therefore, we believe the
                impact of finalizing this policy to be minimal.
                5. Effects of Requirements for the ASCQR Program
                a. Background
                 In section XVI. of this final rule with comment period, we discuss
                our finalized policies affecting the Ambulatory Surgical Center Quality
                Reporting (ASCQR) Program. For the CY 2021 payment determination, all
                6,811 ASCs that met eligibility requirements for the ASCQR Program
                received the annual payment update due to data submission requirements
                being excepted under the ASCQR Program's Extraordinary Circumstances
                Exceptions policy in consideration of the COVID-19 public health
                emergency.\607\
                ---------------------------------------------------------------------------
                 \607\ Centers for Medicare & Medicaid Services. COVID-19 Quality
                Reporting Programs Guidance Memo. Available at https://www.cms.gov/files/document/guidance-memo-exceptions-and-extensions-quality-reporting-and-value-based-purchasing-programs.pdf.
                ---------------------------------------------------------------------------
                b. Impact of CY 2022 OPPS/ASC Finalized Policies
                 In section XVI. of this final rule with comment period, we are
                finalizing our proposals to: (1) Require four patient safety outcome
                measures beginning with the CY 2023 reporting period/CY 2025 payment
                determination: (a) Patient Burn (ASC-1); (b) Patient Fall (ASC-2); (c)
                Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure, Wrong Implant
                (ASC-3); and (d) All-Cause Hospital Transfer/Admission (ASC-4); (2) add
                two additional data collection survey modes of OAS CAHPS measures
                collection to the existing three modes of collection and provide survey
                administration requirements; and (3) adopt the COVID-19 Vaccination
                Coverage Among HCP measure (ASC-20), beginning with the CY 2022
                reporting period/CY 2024 payment determination. We note that we are
                finalizing with modification our proposals to: (1) Require the
                Cataracts: Improvement in Patient's Visual Function within 90 days
                Following Cataract Surgery (ASC-11) measure beginning with the CY 2025
                reporting period/CY 2027 payment determination instead of the CY 2023
                reporting period/CY 2025 payment determination; and (2) require the
                Outpatient and Ambulatory Surgery Consumer Assessment of Healthcare
                Providers and Systems (OAS CAHPS) Survey measures (ASC-15 a-e) with
                voluntary reporting beginning with the CY 2023 reporting period and
                mandatory reporting beginning with CY 2025 reporting period/CY 2027
                payment determination instead of the CY 2024 reporting period/CY 2026
                payment determination.
                 As shown in Tables 82 and 83 in section XXII.C.3.e. (Collection of
                Information) of this final rule with comment period, we estimate a
                total information collection burden increase for 4,646 ACSs of +67,085
                hours at a cost of +$2,844,404 annually associated with our proposed
                policies and updated burden estimates across a 4 year period from the
                CY 2023 reporting period/CY 2025 payment determination through the CY
                2026 reporting period/CY 2028 payment determination, compared to our
                currently approved information collection burden estimates. We refer
                readers to section XXIII.C. of the preamble of this final rule with
                comment period (information collection requirements) for a detailed
                discussion of the calculations estimating the changes to the
                information collection burden for submitting data to the ASCQR Program.
                 In section XVI.B.3.a. of this final rule with comment period, we
                are finalizing the adoption of the COVID-19 Vaccination Coverage Among
                HCP measure (ASC-20) beginning with the CY 2022 reporting period/CY
                2024 payment determination. The impacts and benefits associated with
                finalizing this proposal are comparable to those previously discussed
                for the same measure being finalized in the Hospital OQR Program.
                Currently the CDC does not estimate burden for COVID-19 vaccination
                reporting under the CDC PRA package currently approved under OMB
                control number 0920-1317 because the agency has been granted a waiver
                under section 321 of the National Childhood Vaccine Injury Act
                (NCVIA).\608\ Although the burden associated with the COVID-19
                Vaccination Coverage Among HCP measure (ASC-20) is not accounted for
                under the CDC PRA 0920-1317 or 0920-0666, the cost and burden
                information is included here. We estimate that each ASC will spend on
                average approximately 1 hour per month to collect data for the COVID-19
                Vaccination Coverage Among HCP measure (ASC-20) and enter it into NHSN.
                We have estimated that the associated burden is comprised of
                administrative hours and wages. We believe an Administrative Assistant
                will spend between 45 minutes and 1 hour and 15 minutes to enter this
                data into NHSN. Beginning with the CY 2022 reporting period/FY 2024
                payment
                [[Page 63986]]
                determination, ASCs will incur an additional annual burden between 9
                hours (0.75 hours/month x 12 months) and 15 hours (1.25 hours/month x
                12 months) per ASC and between 41,814 hours (9 hours/hospital x 4,646
                ASCs) and 69,690 hours (15 hours/hospital x 4,646 ASCs) for all ASCs.
                Each ASC will incur an estimated cost of between $323.28 (9 hours x
                $35.92/hour) and $538.80 annually (15 hours x $35.92/hour). The
                estimated cost across all 4,646 ASCs will be between $1,501,959
                ($323.28/ASC x 4,646 ASCs) and $2,503,265 ($538.80/ASC x 4,646 ASCs)
                annually thereafter. We did not receive comments on the estimated time
                to collect data and enter it into the NHSN as well as any additional
                costs associated with this measure.
                ---------------------------------------------------------------------------
                 \608\ Section 321 of the National Childhood Vaccine Injury Act
                (NCVIA) provides the PRA waiver for activities that come under the
                NCVIA, including those in the NCVIA at section 2102 of the Public
                Health Service Act (42 U.S.C. 300aa-2). Section 321 is not codified
                in the U.S. Code, but can be found in a note at 42 U.S.C. 300aa-1.
                ---------------------------------------------------------------------------
                6. Effects of Requirements for the RO Model
                a. Financial Impact
                 We have examined the impact of this final rule as required by
                Executive Order 12866 and other laws and Executive Orders, requiring
                economic analysis of the effects of final rules. We are finalizing a
                different model performance period than was finalized in the Hospital
                Outpatient Prospective Payment (OPPS) and Ambulatory Surgical Center
                (ASC) Payment Systems and Quality Reporting Programs final rule with
                comment period (85 FR 85866) (hereinafter referred to as ``CY 2021
                OPPS/ASC final rule''). We are also finalizing an updated baseline
                period, lower discounts, the removal of brachytherapy from the included
                modalities, and the removal of liver cancer from the list of included
                cancer types finalized under the publication of the Medicare Program;
                Specialty Care Models to Improve Quality of Care and Reduce
                Expenditures Final Rule (Specialty Care Models final rule) (85 FR
                61114) on September 29, 2020. We have updated our net estimate of the
                RO Model impact to reflect all of the modifications to the RO Model
                design in this final rule. Accordingly, we have prepared an RIA that,
                to the best of our ability, reflects the economic impact of the
                policies contained in this final rule.
                b. Statement of Need for the Radiation Oncology (RO) Model
                 In the CY 2021 OPPS/ASC proposed rule (86 FR 42350), we noted that
                the statement of need for the RO Model described in the Specialty Care
                Models final rule (85 FR 61347) and the CY 2021 OPPS/ASC final rule (85
                FR 86296) remains unchanged.
                c. Impact of RO Model
                 Based on the finalized policy of the Specialty Care Models final
                rule (85 FR 61114), we expected a savings of $230 million for Medicare
                over a 5-year model performance period. The CY 2021 OPPS/ASC final rule
                with comment period (85 FR 86296) included a savings estimate of $220
                million for Medicare over a 4.5-year model performance period. We now
                expect that the finalized modifications included in this final rule,
                which include a change to a revised model performance period that
                begins January 1, 2022 and ends December 31, 2026, a revised baseline
                period, the removal of brachytherapy and liver cancer, as well as the
                lowered discounts, will reduce savings to $150 million for Medicare
                over the course of the five-year model performance period.
                d. Anticipated Effects
                (1) Scale of the Radiation Oncology (RO) Model
                 As we stated in the CY 2022 OPPS/ASC proposed rule (86 FR 42350),
                revising the model performance period to begin January 1, 2022 will not
                affect the number of PGPs or HOPDs we expect to furnish RT services in
                the simulated selected CBSAs. We currently expect the model performance
                period that begins January 1, 2022, and ends December 31, 2026, will
                include approximately 282,000 episodes, 250,000 beneficiaries, and $4.6
                billion in total episode spending of allowed charges over the model
                performance period. The revision was primarily the result of updated
                FFS Part B enrollment projections, slower assumed growth in RT episodes
                per patient, and minor technical changes to the projection process than
                was assumed in the Specialty Care Models final rule in September 2020.
                (2) Effects of the RO Model on the Medicare Program
                (a) Overview
                 Under the current FFS payment system, RT services are paid on a per
                service basis to both PGPs (including freestanding radiation therapy
                centers) and HOPDs through the PFS and the OPPS, respectively. The RO
                Model is a mandatory model designed to test a prospectively determined
                episode payment for RT services furnished to Medicare beneficiaries
                during episodes initiated between January 1, 2022 and December 31,
                2026.
                (b) Data and Methods
                 Similar to the analysis performed for the regulatory impact
                analysis for the Specialty Care Models final rule (85 FR 61347) and the
                CY 2022 OPPS/ASC proposed rule (86 FR 42350), a stochastic simulation
                based on the policies in this final rule was created to estimate the
                financial impacts of the RO Model relative to baseline expenditures.
                (c) Medicare Estimate
                 Table 91 summarizes the estimated impact of the RO Model with a
                model performance period that begins January 1, 2022, and ends December
                31, 2026. We estimate that on net the Medicare program would save $150
                million over the 5-year model performance period. Changes in the
                estimated impacts for this policy relative to those presented in the
                CY2022 OPPS/ASC proposed rule (86 FR 42350 through 42352) generally
                reflect updated economic assumptions, no material technical changes
                were made to our projection methodology. As in the Specialty Care
                Models final rule (85 FR 61350) and the CY 2021 OPPS/ASC final rule
                with comment period (85 FR 86297), this is the net Medicare Part B
                impact that includes both Part B premium and Medicare Advantage United
                States Per Capita Costs (MA USPCC) rate financing interaction effects.
                This estimate excludes changes in beneficiary cost sharing liability to
                the extent it is not a Federal outlay under the policy.
                 As codified at Sec. 512.280(d), the APM incentive payment will
                apply only to the professional episode payment amounts and not the
                technical episode payment amounts. Moreover, due to the 2-year lag in
                Quality Payment Program performance and payment periods and quality
                data reporting starting in 2022, APM incentive payments will only be
                made during 2024. We projected that 80 percent (down from 83 percent as
                projected in the Specialty Care Models final rule) of physician
                participants (measured by unique NPI) will receive the APM incentive
                payment under the Quality Payment Program for 2022.
                 Complete information regarding the data sources and underlying
                methodology used to determine amounts for reconciliation were not
                available at the time of this forecast. Like in the Specialty Care
                Models final rule, in the case of the incomplete payment withhold, we
                assumed CMS retains payment only in the event that offsetting payment
                errors were made elsewhere. Moreover, past CMS experience in the and
                Hospital Value-Based Purchasing (VBP) and Merit-based Incentive Payment
                System (MIPS) programs that included value-based reporting requirements
                has shown a low rate of non-compliance on the part of providers and
                suppliers. Given the
                [[Page 63987]]
                limited spending being withheld, scoring criteria (that is the use of
                the Aggregate Quality Score (AQS) and its application to the quality
                withhold, as finalized at 85 FR 61226 through 61231), and specified
                timeframes involved, we assume that quality and patient experience
                withholds, on net, would have a negligible financial impact to CMS.
                 A key assumption underlying the impact estimate is that the volume
                and intensity (V&I) of the bundled services per episode remains
                unchanged between the baseline period and when bundled RO payments are
                made. If V&I were to decrease by 1.0 percent annually for the bundled
                services absent the RO Model, then we estimated the RO Model to be
                approximately budget neutral between January 1, 2022 and December 31,
                2026. Similarly, if V&I increases by 1.0 percent annually then net
                Medicare outlays would be reduced by $280 million for this projection
                period. Although V&I growth from 2014 through 2019 fell within this 1.0
                percent range and did not exhibit a secular trend, actual experience
                may differ.
                 Please also note that due to the current public health crisis
                caused by the COVID-19 virus, the forecasted impacts for the RO Model
                are subject to an additional level of uncertainty. The duration of the
                current COVID-19 pandemic, its severity, and future policy measures
                taken in response are variables that are significant but unknown at
                this time. This forecast assumes that Medicare FFS billing and
                treatment patterns for beneficiaries observed during the 2017 to 2019
                baseline period have resumed by the start of 2022.To the extent that
                this assumption does not hold, actual experience may vary
                significantly. Table 91 summarizes our estimated impacts of this final
                rule with comment period.
                [GRAPHIC] [TIFF OMITTED] TR16NO21.189
                e. Effects on RO Participants
                 We believe that the finalized changes will not affect the total
                cost of learning the billing system for the RO Model but will, however,
                affect the burden estimate for reporting quality measures and clinical
                data elements.
                 We believe the burden estimate for quality measure and clinical
                data element reporting requirements that is provided for Small
                Businesses in CY 2021 OPPS/ASC final rule with comment period (85 FR
                86297) apply to RO participants that are not considered small entities.
                The burden estimate for collecting and reporting quality measures and
                clinical data for the RO Model may be equal to or less than that for
                small businesses, which we estimated to be approximately $1,845 per
                entity per year based on 2020 wages. Since we estimated approximately
                500 Professional participants and Dual participants will be collecting
                and reporting this data, the total annual burden estimate for
                collecting and reporting quality measures and clinical data is
                approximately $922,500 for a total of $4,612,500 over 5 years, and this
                remains unchanged in this final rule.
                 Like the Medicare Specialty Models final rule (85 FR 61358), this
                final rule with comment period affects: (1) Radiation oncology PGPs
                that furnish RT services in both freestanding radiation therapy centers
                and HOPDs; (2) PGPs that furnish RT services only in HOPDs; (3) PGPs
                that are categorized as freestanding radiation therapy centers; and (4)
                HOPDs. Based on the finalized modifications to the design of the RO
                Model, we believe that on average, Medicare FFS payments to PGPs
                (including freestanding radiation therapy centers) will increase by 6.3
                percent and Medicare FFS payments to HOPDs will be reduced by 9.9
                percent over the life of the Model as shown in Table 92 below. This
                estimate is made under the assumption of no changes to PFS clinical
                labor rates as outlined in the CY 2022 PFS proposed rule (CMS-1751-P)
                occurring. To the extent the PFS were to finalize clinical labor RVU
                adjustment policies outlined in the recent proposed rule, we would
                expect PGPs to see an average increase of 10.2 percent and HOPDs a
                decrease of 11.3 percent over the lifetime of the RO Model.
                [[Page 63988]]
                 Under Medicare FFS, PGPs that furnish RT professional services to
                HOPDS are largely paid through the PFS and freestanding radiation
                therapy centers are largely paid through the PFS for both RT
                professional and technical services. In contrast, HOPDs are paid
                through the OPPS for RT technical services. Unit-cost increases under
                the PFS are projected to be lower than under the OPPS over time. This
                means that when the payment rates of the PFS and the OPPS (along with
                the volume of HCPCS codes of non-participant episodes) are used to
                determine the trend factors for each cancer type, PGPs (including
                freestanding radiation therapy centers), on average, are projected to
                experience incremental gains to payment over time, while HOPDs, on
                average, are projected to experience incremental losses to payment over
                time. In other words, the impact for HOPDs and PGPs depends on a
                combination of the RO Model's discount factor and the RO Model's trend
                factor, which blends the latest OPPS and PFS payment rates based on
                their historical claims volume in non-participating RT providers and RT
                suppliers. Given that PFS rates are not expected to increase between
                2019 and 2026 and the OPPS rates are, blending these rates together
                leads to an average increase in allowed charges expected for PGPs
                (including freestanding radiation therapy centers) and an average
                decrease in allowed charges expected for HOPDs (because HOPDs that are
                RO participants will not get the full OPPS rate increase but rather a
                trend that blends OPPS with PFS). Table 92 provides additional
                information about the expected impacts by year:
                [GRAPHIC] [TIFF OMITTED] TR16NO21.190
                 We believe that this impact would be reduced for smaller RO
                participants, those RO participants that are eligible for the low
                volume opt-out in some performance years, and that there would be no
                impact for those RO participants that are eligible for the low volume
                opt-out for the entire model performance period (see section
                XVII.C.3.d. of this final rule with comment period).
                 We solicited comment on the assumptions and analysis presented
                throughout the regulatory impact section, section XXIV.C.6, of this
                final rule with comment period.
                 Comment: Some commenters called attention to the three percent
                change in the number of physician participants (measured by unique NPI)
                that will receive the APM incentive payment under the Quality Payment
                Program for 2022 as CMS now projects 80 percent (down from 83 percent
                as projected in the Specialty Care Models final rule) of physician
                participants will receive the APM incentive payment. These commenters
                note that it will be devastating for those practices unable to attain
                Advanced APM status as many of them will be left with fewer resources.
                 Response: Please see Table 92 in this final rule with comment
                period. It is important to note that the PGP figures in Table 92
                encompass entities defined under the RO Model as a Medicare-enrolled
                PGPs and includes freestanding radiation therapy centers, as both are
                paid through the MPFS. The HOPD figures in Table 92 encompass entities
                defined under the RO Model as HOPDs, which are paid through the OPPS.
                On average, we estimate that PGPs (including freestanding radiation
                therapy centers) furnishing included RT services under the RO Model
                will see an increase in payment relative to those same entities outside
                of the RO Model, whereas HOPDs furnishing included RT services under
                the RO Model are expected, on average, to see a decrease in payment
                relative to their counterparts outside of the RO Model.
                 As seen in Table 92, we project that for PGP participants, the RO
                Model discounts will be offset in the first year of the model
                performance period by use of blended PFS and OPPS trend update factors.
                By 2024 RO participants that are PGPs (including freestanding radiation
                therapy centers) are expected to see an average increase in payment
                rates on average of approximately 6.3 percent. Over the lifetime of the
                RO Model we expect about 95 percent of RO participants that are PGPs
                (including freestanding radiation therapy centers) to see increases in
                payment relative to traditional FFS. This is due to the OPPS receiving
                projected updates of 2.3 percent on average for the 2019-2026 period,
                the PFS being legislated to receive effectively no conversion factor
                update on net for these years, and the use of blended updates
                redistributing a large portion of work RVU revisions finalized in the
                CY 2021 PFS PPS final rule onto HOPDs. Also, we assume limited dollars
                under the APM incentive payment, because it is limited to one year.
                 Comment: Some commenters stated that CMS' regulatory impact
                analysis significantly underestimates the cost of collecting and
                reporting quality measures and CDEs, and that CMS does not adequately
                recognize the time and resources necessary to comply with the reporting
                requirements. One commenter stated hearing that one hospital system
                that spanned eight regions within the health system uses an existing
                radiation oncology EHR system, but only a couple of the regions are
                using it to document care. Those systems that are using the EHR system
                to document care need to implement various software product upgrades to
                support the higher level CEHRT requirements. The commenter reported a
                cost of an estimated $1.74 million for all eight regions to be
                compliant with Model requirements, and that this cost does not include
                the cost associated with staff time or the ramp up time necessary to
                train and operationalize these new systems. This same commenter
                reported that a large academic medical center with OCM experience, has
                reported to them that
                [[Page 63989]]
                the cost of compliance is three- to four-times the anticipated cost of
                the 2-percent withhold.
                 Response: We thank these commenters for explaining their concerns.
                We continue to expect the burden costs per small entity associated with
                quality measure reporting to be small because three of the four
                measures for the RO Model are already in use in other CMS programs; and
                compliance with the Treatment Summary Communication (the measure not
                currently in use) is a best practice that should already be the
                standard of care across PGPs and HOPDs. In the Medicare Specialty
                Models final rule (85 FR 61360), we explain that the use of EHR
                technology is not included in the regulatory impact analysis as part of
                the cost of the Model, because an entity's EHR has many uses within the
                clinical setting and is not solely used for RO Model measures
                reporting. Please note that we will be monitoring burden on RO
                participants throughout the model performance period.
                 Comment: Many commenters stated that CMS estimates do not
                appropriately account for the proposed conversion factor and relative
                value units (RVUs) under the CY 2022 Medicare Physician Fee Schedule
                (MPFS) proposed rule. Many commenters believed CMS has failed to
                account for the continued decline in MPFS rates that factor into the RO
                Model payment methodology as part of the trend factor calculation.
                These commenters stated that under the CY 2022 MPFS proposed rule, CMS
                is proposing cuts of 8.75 percent across all radiation oncology
                services, due to the proposed change in Clinical Labor Pricing Inputs
                and the expiration of the Consolidated Appropriations Act (CCA), which
                equates to a cut of 3.75 percent to the conversion factor. These
                commenters stated that the MPFS proposals in the CY 2022 MPFS proposed
                rule affect the RO Model due to its trend factors, which use the MPFS
                and the OPPS payment rates to update the national base rate amounts
                each year. These commenters argued that CMS is understating the impact
                of the cuts with the comparison to 2020, not 2021. One commenter noted
                that CMS's impact estimates for PGPs, in particular, is deceiving,
                given significant reductions in MPFS payments proposed by CMS. Many
                commenters also noted their belief that the proposed payment reductions
                under the MPFS, when combined with the Model's withholds and discount
                factor, will be unsustainable for RT providers and RT suppliers under
                the Model and likely result in access issues for beneficiaries. They
                argued that these reductions have the potential to put many practices
                at financial risk, particularly those with thin operating margins.
                 One commenter argued that CMS inappropriately included the
                incentive payments provided to Qualified Participant (QP) status in its
                budgetary calculations for the RO Model. This commenter cites the Act
                at section 1833(z)(1)(C), which states: ``Payments under this
                subsection shall not be taken into account for purposes of determining
                actual expenditures under an alternative payment model and for purposes
                of determining or rebasing any benchmarks used under the alternative
                payment model.'' In Table 78 of the CY 2022 OPPS/ASC proposed rule (86
                FR 42351), CMS has included the incentive payments for RO Model QPs in
                its calculations of net savings attributable to the Model. The
                commenter stated that the purpose of the QP incentive payments is to
                help support APM participants as they transition from the traditional
                fee-for-service system to payment under APMs, and that these incentive
                payments should not be considered costs attributable to the RO Model.
                 A couple of commenters stated that CMS estimates do not
                appropriately account for sequestration. Finally, a commenter urges CMS
                to release the assumptions upon which their actuaries rest their
                analysis, as well as the analysis itself, so that stakeholders can
                understand how they arrived at their calculations.
                 Response: We direct readers to section XVIII.C.5.h of this final
                rule with comment period where we address comments specific to the
                impact of the discount factors on payment and to section XVIII.C.5.d of
                this final rule with comment period where we address comments
                concerning the trend factor methodology with its incorporation of MPFS
                and OPPS rates as part of an annual update for the PC and TC of each
                disease site. We do, however, acknowledge that the RO estimates could
                change due to CY 2022 or subsequent MPFS policies, in addition to a
                variety of other factors. It is important to note that the figures
                listed in Table 92 should be interpreted as an overall comparison
                between those participating in the RO Model to those outside of it
                during the 5-year model performance period, all else equal. This
                analysis therefore excludes impacts due to other CMS policy changes.
                The figures listed in Table 92 are averages and should not be
                interpreted as the reduction or increase in current payment that an
                individual PGP (including freestanding radiation therapy centers) or an
                individual HOPD receives.
                 As for the comment concerning the inclusion of APM incentive
                payments in the RO Model savings estimates, the APM incentive payment
                will not be included in accounting of expenditures during the Model's
                reconciliation for RO participants. Finally, actuarial assumptions used
                to calculate the financial impacts of the RO Model are included in this
                section of this final rule with comment period. We have added several
                clarifying statements throughout this section to facilitate
                understanding of the RO Model's financial impacts and the actuarial
                assumptions on which these impacts are based.
                7. Effects of Requirements for Hospitals To Make Public a List of Their
                Standard Charges
                 In this final rule with comment period, we are modifying 45 CFR
                180.30(b) and adding new Sec. 180.30(b)(3) to include that state
                forensic hospitals will be deemed to have met requirements, similar to
                our policy to deem Federally owned/operated hospitals as having met
                requirements. These state forensic hospitals and have closed
                populations, are not open to the general public, and the cost of care
                is funded by the state. This proposal will reduce the overall burden we
                estimated in the Hospital Price Transparency final rule by removing
                such hospitals from the obligation to make public standard charges in
                the form and manner prescribed at 45 CFR 180.
                 In the Hospital Price Transparency final rule, we estimated the
                total burden for hospitals to review and post their standard charges
                for the first year to be 150 hours per hospital at $11,898.60 per
                hospital for a total burden of 900,300 hours (150 hours x 6,002
                hospitals) and total cost of $71,415,397 ($11,898.60 x 6,002 hospitals)
                (84 FR 65595). We estimated the total annual burden for hospitals to
                review and post their standard charges for subsequent years to be 46
                hours per hospital at $3,610.88 per hospital for a total annual burden
                for subsequent years of 276,092 hours (46 hours x 6,002 hospitals) and
                total annual cost of $21,672,502 ($3,610.88 x 6,002 hospitals). For
                purposes of the changes in this rule, we assume that state forensic
                hospitals have complied with the Hospital Price Transparency final rule
                requirements in the first year of implementation (CY 2021) and are
                therefore basing our burden reduction estimate on the cost of
                implementation for subsequent years alone. In other words, because
                state forensic hospitals would no longer be required to make the annual
                updates as required under the
                [[Page 63990]]
                Hospital Price Transparency final rule, the burden reduction applies to
                CY 2022 and subsequent years.
                 We estimate that 111 \609\ hospitals would meet our definition of
                `state forensic hospital'. To estimate the associated burden reduction
                for state forensic hospitals, we used the hourly cost for each labor
                category by referencing Bureau of Labor Statistics report on
                Occupational Employment and Wages (May 2020), as indicated in Table
                93.\610\
                ---------------------------------------------------------------------------
                 \609\ SAMHSA. National Mental Health Services Survey (N-MHSS):
                2019 Data on Mental Health Treatment Facilities. https://www.samhsa.gov/data/sites/default/files/reports/rpt29388/2019_NMHSS/2019-NMHSS-R.pdf.
                 \610\ Bureau of Labor Statistics. National Occupational
                Employment and Wage Estimates, May 2020. Available at https://www.bls.gov/oes/current/oes_nat.htm.
                [GRAPHIC] [TIFF OMITTED] TR16NO21.191
                 We estimate a reduction in burden of 2 hours for a general
                operations manager to review and determine updates in compliance
                requirements, or a savings of $241.80 (2 hours * $120.90) per hospital.
                We estimate a total burden reduction of 222 hours (2 hours * 111
                hospitals) with a total burden reduction $26,839.80 (222 hours *
                $120.90).
                 Next, we estimate a reduction in burden of 32 hours for a business
                operations specialist because they will no longer be required to update
                necessary processes and procedures and gather and compile required
                information, a savings of $2,410.24 (32 hours * $75.32) per hospital.
                We estimate a total burden reduction of 3,552 hours (32 hours * 111
                hospitals) with a total burden reduction $267,536.64 (3,552 hours *
                $75.32).
                 Finally, we estimate a reduction in burden of 12 hours for network
                and computer system administrator because they will no longer be
                required to maintain the required systems to make this data publicly
                available, a savings of $1,032.24 (12 hours * $86.02) per hospital. We
                estimate a total burden reduction of 1,332 hours (12 hours * 111
                hospitals) with a total burden reduction $114,578.64 (1,332 hours *
                $86.02).
                 Therefore, we believe the total annual burden reduction for the
                proposal in this rule, for subsequent years, to be 46 hours (2 hours +
                32 hours + 12 hours) per hospital, with a savings of $3,684.28 ($241.80
                + $2,410.24 + $1,032.24) per hospital. We also estimate a total annual
                burden reduction for subsequent years of 5,106 hours (46 hours * 111
                hospitals) and a total cost of $408,955.08 ($3,684.28 * 111 hospitals),
                as shown in Table 94.
                [GRAPHIC] [TIFF OMITTED] TR16NO21.192
                 We received a several comments related to the burden and costs of
                complying with the Hospital Price Transparency final rule. We addressed
                comments on these issues in the CY 2020 Hospital Price Transparency
                final rule's Collection of Information Requirements and Regulatory
                Impact Analysis (84 FR 65591-65602) and did not propose in the CY 2022
                OPPS/ASC proposed rule to change any of the policies or cost analysis
                previously established. Accordingly we consider these comments out of
                scope.
                 Comment: Some commenters indicated that any modifications to the
                hospital price transparency final rule requirements could negate much
                of the
                [[Page 63991]]
                work that has been done and would require hospitals to start over to
                recreate their files in a new format. Commenters stated that additional
                requirements would create excess administrative burden and would
                require a minimum of six months to implement, noting the needed time to
                gather data and execute the necessary IT build for reporting.
                 Response: In this final rule with comment period, we are finalizing
                the following policies: (1) Increasing the civil monetary penalty using
                a scaling factor; (2) deeming state forensic hospitals as having met
                requirements; and (3) requiring hospitals to ensure that the machine-
                readable file is accessible to automated searches and direct downloads.
                In the proposed rule, we determined that neither increasing the penalty
                amount nor ensuring the machine-readable file is barrier free would
                result in a cost burden over the amount that was estimated in the
                impact analysis in the Hospital Price Transparency final rule. We
                further estimated that the policy to deem state forensic hospitals as
                having met requirements would reduce hospital burden. None of the
                policies modify any other requirements in the Hospital Price
                Transparency final rule (such as changes in formatting requirements or
                data elements that must be displayed). We therefore disagree with
                commenters that the modifications made in this final rule will
                ``negate'' work already done by hospitals to come into compliance or
                that such policy modifications would cause a hospital to spend 6 months
                to gather and display information or that such policy modifications
                would ``require hospitals to start over to recreate their files in a
                new format.'' Additionally, we have assessed the final policies in this
                final rule with comment period to result in an overall burden reduction
                and therefore disagree that the policies we are finalizing in this rule
                will ``create excess administrative burden.''
                 Comment: Some commenters recommended that in the spirit of setting
                hospitals up for success, CMS should provide sufficient notification
                when making any changes to the reporting requirements and allow
                hospitals adequate time for feedback related to costs of
                implementation. A few commenters suggested that CMS collect post-
                implementation cost estimates and publish them on a public facing
                website or otherwise take them into account in future impact analyses.
                 Response: We believe that the rulemaking process provides
                sufficient notification of proposed changes and allows adequate time
                for stakeholders to submit substantive comments related to costs of
                implementation. We appreciate the additional suggestions related to
                development of future impact analyses, however, we believe that such a
                requirement (if finalized in future rulemaking) would impose an
                unnecessary burden on stakeholders and CMS.
                D. Regulatory Review Costs
                 If regulations impose administrative costs on private entities,
                such as the time needed to read and interpret a rule, we should
                estimate the cost associated with regulatory review. Due to the
                uncertainty involved with accurately quantifying the number of entities
                that will review a rule, we assumed that the number of commenters on
                this final rule with comment period (1,349) will be the number of
                reviewers of this final rule with comment period. We acknowledge that
                this assumption may understate or overstate the costs of reviewing
                proposed rule. It is possible that not all commenters will review the
                proposed rule in detail, and it is also possible that some reviewers
                will choose not to comment on the proposed rule. Nonetheless, we
                believe that the number of commenters on the CY 2022 OPPS/ASC proposed
                rule is a fair estimate of the number of reviewers of the final rule.
                We welcome any comments on the approach in estimating the number of
                entities that will review the final rule. We also recognize that
                different types of entities are, in many cases, affected by mutually
                exclusive sections of the proposed rule and the final rule with comment
                period, and, therefore, for the purposes of our estimate, we assumed
                that each reviewer reads approximately 50 percent of the rule.
                 Using the wage information from the 2020 BLS for medical and health
                service managers (Code 11-9111), we estimated that the cost of
                reviewing this rule is $114.24 per hour, including overhead and fringe
                benefits (https://www.bls.gov/oes/current/oes_nat.htm). Assuming an
                average reading speed, we estimate that it will take approximately 8
                hours for the staff to review half of final rule. For each facility
                that reviewed the proposed rule, the estimated cost is $913.92 (8 hours
                x $114.24). Therefore, we estimated that the total cost of reviewing
                the final rule is $17,057,493 ($913.92 x 18,664 reviewers on the CY
                2022 proposed rule).
                E. Regulatory Flexibility Act (RFA) Analysis
                 The RFA requires agencies to analyze options for regulatory relief
                of small entities, if a rule has a significant impact on a substantial
                number of small entities. For purposes of the RFA, many hospitals are
                considered small businesses either by the Small Business
                Administration's size standards with total revenues of $41.5 million or
                less in any single year or by the hospital's not-for-profit status.
                Most ASCs and most CMHCs are considered small businesses with total
                revenues of $16.5 million or less in any single year. For details, we
                refer readers to the Small Business Administration's ``Table of Size
                Standards'' at http://www.sba.gov/content/table-small-business-size-standards. As its measure of significant economic impact on a
                substantial number of small entities, HHS uses a change in revenue of
                more than 3 to 5 percent. We do not believe that this threshold will be
                reached by the requirements in this final rule with comment period. As
                a result, the Secretary has determined that this final rule with
                comment period will not have a significant impact on a substantial
                number of small entities.
                 In addition, section 1102(b) of the Act requires us to prepare a
                regulatory impact analysis if a rule may have a significant impact on
                the operations of a substantial number of small rural hospitals. This
                analysis must conform to the provisions of section 604 of the RFA. For
                purposes of section 1102(b) of the Act, we define a small rural
                hospital as a hospital that is located outside of a metropolitan
                statistical area and has 100 or fewer beds. We estimate that this final
                rule with comment period would increase payments to small rural
                hospitals by approximately 2 percent. Therefore, it should not have a
                significant impact on approximately 583 small rural hospitals. We note
                that the estimated payment impact for any category of small entity will
                depend on both the services that they provide as well as the payment
                policies and/or payment systems that may apply to them. Therefore, the
                most applicable estimated impact may be based on the specialty,
                provider type, or payment system.
                 The analysis above, together with the remainder of this preamble,
                provides a regulatory flexibility analysis and a regulatory impact
                analysis. We note that the policies established in this final rule with
                comment period apply more broadly to OPPS providers and do not
                specifically focus on small rural hospitals. As a result, the impact on
                those providers may depend more significantly on their case mix of
                services provided, since the broader impact on the hospital category is
                more dependent on the OPD update factor, as indicated in the impact
                table.
                [[Page 63992]]
                F. Unfunded Mandates Reform Act Analysis
                 Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also
                requires that agencies assess anticipated costs and benefits before
                issuing any rule whose mandates require spending in any 1 year of $100
                million in 1995 dollars, updated annually for inflation. In 2021, that
                threshold level is currently approximately $158 million. This final
                rule with comment period does not mandate any requirements for state,
                local, or tribal governments, or for the private sector.
                G. Conclusion
                 The changes we are making in this final rule with comment period
                will affect all classes of hospitals paid under the OPPS and will
                affect both CMHCs and ASCs. We estimate that most classes of hospitals
                paid under the OPPS will experience a modest increase or a minimal
                decrease in payment for services furnished under the OPPS in CY 2022.
                Table 84 demonstrates the estimated distributional impact of the OPPS
                budget neutrality requirements that would result in a 1.6 percent
                increase in payments for all services paid under the OPPS in CY 2022,
                after considering all of the changes to APC reconfiguration and
                recalibration, as well as the OPD fee schedule increase factor, wage
                index changes, including the frontier state wage index adjustment,
                estimated payment for outliers, and changes to the pass-through payment
                estimate. However, some classes of providers that are paid under the
                OPPS would experience more significant gains or losses in OPPS payments
                in CY 2022.
                 The updates we are making to the ASC payment system for CY 2022
                would affect each of the approximately 5,600 ASCs currently approved
                for participation in the Medicare program. The effect on an individual
                ASC would depend on its mix of patients, the proportion of the ASC's
                patients who are Medicare beneficiaries, the degree to which the
                payments for the procedures offered by the ASC are changed under the
                ASC payment system, and the extent to which the ASC provides a
                different set of procedures in the coming year. Table 85 demonstrates
                the estimated distributional impact among ASC surgical specialties of
                the productivity-adjusted hospital market basket update factor of 2.0
                percent for CY 2022.
                H. Federalism Analysis
                 Executive Order 13132 establishes certain requirements that an
                agency must meet when it promulgates a proposed rule (and subsequent
                final rule) that imposes substantial direct costs on state and local
                governments, preempts state law, or otherwise has federalism
                implications. We have examined the OPPS and ASC provisions included in
                this final rule with comment period in accordance with Executive Order
                13132, Federalism, and have determined that they will not have a
                substantial direct effect on state, local or tribal governments,
                preempt state law, or otherwise have a federalism implication. As
                reflected in Table 84 of this final rule with comment period, we
                estimate that OPPS payments to governmental hospitals (including state
                and local governmental hospitals) will increase by 1.7 percent under
                this final rule with comment period. While we do not know the number of
                ASCs or CMHCs with government ownership, we anticipate that it is
                small. The analyses we have provided in this section of this final rule
                with comment period, in conjunction with the remainder of this
                document, demonstrate that this final rule with comment period is
                consistent with the regulatory philosophy and principles identified in
                Executive Order 12866, the RFA, and section 1102(b) of the Act.
                 This final rule with comment period will affect payments to a
                substantial number of small rural hospitals and a small number of rural
                ASCs, as well as other classes of hospitals, CMHCs, and ASCs, and some
                effects may be significant. However, as noted in section XXIV.E., this
                final rule should not have a significant effect on small rural
                hospitals.
                 Chiquita Brooks-LaSure, Administrator of the Centers for Medicare &
                Medicaid Services, approved this document on October, 28, 2021.
                List of Subjects
                42 CFR Part 412
                 Administrative practice and procedure, Health facilities, Medicare,
                Puerto Rico, Reporting and recordkeeping requirements.
                42 CFR Part 416
                 Health facilities, Health professions, Medicare, Reporting and
                recordkeeping requirements.
                42 CFR Part 419
                 Hospitals, Medicare, Reporting and recordkeeping requirements.
                42 CFR Part 512
                 Administrative practice and procedure, Health facilities, Medicare,
                Reporting and recordkeeping requirements.
                45 CFR Part 180
                 Hospitals, Reporting and recordkeeping requirements.
                Centers for Medicare & Medicaid Services
                 For the reasons set forth in the preamble, the Centers for Medicare
                & Medicaid Services amends 42 CFR chapter IV as set forth below:
                PART 412--PROSPECTIVE PAYMENT SYSTEMS FOR INPATIENT HOSPITAL
                SERVICES
                0
                 1. The authority citation for part 412 continues to read as follows:
                 Authority: 42 U.S.C. 1302 and 1395hh.
                0
                2. Section 412.3 is amended by revising paragraph (d)(2)(i) to read as
                follows:
                Sec. 412.3 Admissions.
                * * * * *
                 (d) * * *
                 (2) * * *
                 (i) For those services and procedures removed on or after January
                1, 2020, the exemption in this paragraph (d)(2) will last for 2 years
                from the date of such removal.
                * * * * *
                PART 416--AMBULATORY SURGICAL SERVICES
                0
                3. The authority citation for part 416 continues to read as follows:
                 Authority: 42 U.S.C. 1302 and 1395hh.
                0
                4. Section 416.164 is amended by revising paragraphs (a)(4) and (b)(6)
                to read as follows:
                Sec. 416.164 Scope of ASC services.
                 (a) * * *
                 (4) Drugs and biologicals for which separate payment is not allowed
                under the hospital outpatient prospective payment system (OPPS), with
                the exception of non-opioid pain management drugs and biologicals that
                function as a supply when used in a surgical procedure as determined by
                CMS under Sec. 416.174;
                * * * * *
                 (b) * * *
                 (6) Non-opioid pain management drugs and biologicals that function
                as a supply when used in a surgical procedure as determined by CMS
                under Sec. 416.174.
                * * * * *
                0
                5. Section 416.166 is revised to read as follows:
                [[Page 63993]]
                Sec. 416.166 Covered surgical procedures.
                 (a) Covered surgical procedures. Effective for services furnished
                on or after January 1, 2022, covered surgical procedures are those
                procedures that meet the general standards described in paragraph (b)
                of this section (whether commonly furnished in an ASC or a physician's
                office) and are not excluded under paragraph (c) of this section.
                 (b) General standards. Subject to the exclusions in paragraph (c)
                of this section, covered surgical procedures are surgical procedures
                specified by the Secretary and published in the Federal Register and/or
                via the internet on the CMS website that are separately paid under the
                OPPS, that would not be expected to pose a significant safety risk to a
                Medicare beneficiary when performed in an ASC, and for which standard
                medical practice dictates that the beneficiary would not typically be
                expected to require active medical monitoring and care at midnight
                following the procedure.
                 (c) General exclusions. Notwithstanding paragraph (b) of this
                section, covered surgical procedures do not include those surgical
                procedures that --
                 (1) Generally result in extensive blood loss;
                 (2) Require major or prolonged invasion of body cavities;
                 (3) Directly involve major blood vessels;
                 (4) Are generally emergent or life-threatening in nature;
                 (5) Commonly require systemic thrombolytic therapy;
                 (6) Are designated as requiring inpatient care under Sec.
                419.22(n) of this chapter;
                 (7) Can only be reported using a CPT unlisted surgical procedure
                code; or
                 (8) Are otherwise excluded under Sec. 411.15 of this chapter.
                 (d) Additions to the list of ASC covered surgical procedures.
                Surgical procedures are added to the list of ASC covered surgical
                procedures as follows:
                 (1) Nominations. On or after January 1, 2023, an external party may
                nominate a surgical procedure by March 1 of a calendar year for the
                list of ASC covered surgical procedures for the following calendar
                year.
                 (2) Inclusion in rulemaking. If CMS identifies a surgical procedure
                that meets the requirements at paragraph (a) of this section, including
                a surgical procedure nominated under paragraph (d)(1) of this section,
                it will propose to add the surgical procedure to the list of ASC
                covered surgical procedures in the next available annual rulemaking.
                0
                6. Section 416.171 is amended by revising paragraphs (b)(1) and (4) to
                read as follows:
                Sec. 416.171 Determination of payment rates for ASC services.
                * * * * *
                 (b) * * *
                 (1) Covered ancillary services specified in Sec. 416.164(b), with
                the exception of radiology services and certain diagnostic tests as
                provided in Sec. 416.164(b)(5) and non-opioid pain management drugs
                and biologicals that function as a supply when used in a surgical
                procedure as determined by CMS under Sec. 416.174.
                * * * * *
                 (4) Notwithstanding paragraph (b)(2) of this section, procedures
                assigned to Low Volume APCs where the otherwise applicable payment rate
                calculated based on the standard methodology for such procedures
                described in paragraph (b) of this section would exceed the payment
                rate for the equivalent service set under the payment system
                established under part 419 of this chapter, for which the payment rate
                will be set at an amount equal to the amount under that payment system.
                * * * * *
                0
                7. Section 416.174 is added to reads as follows:
                Sec. 416.174 Payment for non-opioid pain management drugs and
                biologicals that function as supplies in surgical procedures.
                 (a) Eligibility for separate payment for non-opioid pain management
                drugs and biologicals. Beginning on or after January 1, 2022, a non-
                opioid pain management drug or biological that functions as a surgical
                supply is eligible for separate payment if CMS determines it meets the
                following requirements:
                 (1) The drug is approved under a new drug application under section
                505(c) of the Federal Food, Drug, and Cosmetic Act (FDCA), under an
                abbreviated new drug application under section 505(j), or, in the case
                of a biological product, is licensed under section 351 of the Public
                Health Service Act. The product has an FDA approved indication for pain
                management or analgesia.
                 (2) The per-day cost of the drug or biological must exceed the OPPS
                drug packaging threshold set annually through notice and comment
                rulemaking.
                 (b) [Reserved]
                PART 419--PROSPECTIVE PAYMENT SYSTEM FOR HOSPITAL OUTPATIENT
                DEPARTMENT SERVICES
                0
                8. The authority citation for part 419 continues to read as follows:
                 Authority: 42 U.S.C. 1302, 1395l(t), and 1395hh.
                0
                9. Section 419.22 is amended by revising paragraph (n) to read as
                follows:
                Sec. 419.22 Hospital services excluded from payment under the
                hospital outpatient prospective payment system.
                * * * * *
                 (n) Services and procedures that the Secretary designates as
                requiring inpatient care.
                * * * * *
                0
                10. Section 419.23 is added to read as follows:
                Sec. 419.23 Removal of services and procedures from the Inpatient
                Only List.
                 (a) Inpatient Only List. CMS maintains a list of services and
                procedures that the Secretary designates as requiring inpatient care
                under Sec. 419.22(n) that are not paid under the hospital outpatient
                prospective payment system. This list is referred to as the Inpatient
                Only List.
                 (b) Removals from the Inpatient Only List. CMS assesses annually
                whether a service or procedure on the Inpatient Only List described in
                paragraph (a) of this section should be removed from the list by
                determining whether the service or procedure meets at least one of the
                following criteria:
                 (1) Most outpatient departments are equipped to provide the service
                or procedure to the Medicare population.
                 (2) The simplest service or procedure described by the code may be
                performed in most outpatient departments.
                 (3) The service or procedure is related to codes that CMS has
                already removed from the Inpatient Only List described in paragraph (a)
                of this section.
                 (4) CMS determines that the service or procedure is being performed
                in numerous hospitals on an outpatient basis.
                 (5) CMS determines that the service or procedure can be
                appropriately and safely performed in an ambulatory surgical center,
                and is specified as a covered ambulatory surgical procedure under Sec.
                416.166 of this chapter, or CMS has proposed to specify it as a covered
                ambulatory surgical procedure under Sec. 416.166 of this chapter.
                0
                11. Section 419.46 is amended by revising paragraphs (f)(1) and (3) to
                read as follows:
                Sec. 419.46 Participation, data submission, and validation
                requirements under the Hospital Outpatient Quality Reporting (OQR)
                Program.
                * * * * *
                 (f) * * *
                 (1) Upon written request by CMS or its contractor, a hospital must
                submit to
                [[Page 63994]]
                CMS supporting medical record documentation that the hospital used for
                purposes of data submission under the program. The specific sample that
                a hospital must submit will be identified in the written request. A
                hospital must submit the supporting medical record documentation to CMS
                or its contractor within 30 days of the date identified on the written
                request, in the form and manner specified in the written request.
                * * * * *
                 (3) CMS will select a random sample of 450 hospitals for validation
                purposes, and will select an additional 50 hospitals for validation
                purposes based on the following criteria:
                 (i) The hospital fails the validation requirement that applies to
                the previous year's payment determination; or
                 (ii) The hospital has an outlier value for a measure based on the
                data it submits. An ``outlier value'' is a measure value that is
                greater than 5 standard deviations from the mean of the measure values
                for other hospitals, and indicates a poor score; or
                 (iii) Any hospital that has not been randomly selected for
                validation in any of the previous 3 years; or
                 (iv) Any hospital that passed validation in the previous year, but
                had a two-tailed confidence interval that included 75 percent.
                * * * * *
                PART 512--RADIATION ONCOLOGY MODEL AND END STAGE RENAL DISEASE
                TREATMENT CHOICES MODEL
                0
                12. The authority citation for part 512 continues to read as follows:
                 Authority: 42 U.S.C. 1302, 1315a, and 1395hh.
                0
                13. Section 512.205 is amended by:
                0
                a. Adding the definition for ``Baseline period'' in alphabetical order;
                0
                b. Revising the definition for ``Discount factor'';
                0
                c. Adding definitions for ``EUC'', ``Legacy CCN'', and ``Legacy TIN''
                in alphabetical order;
                0
                d. Revising the definition for ``Model performance period'';
                0
                e. Removing the definition of ``Performance year (PY)'';
                0
                f. Revising the definition for ``PY'' and ``Stop-loss reconciliation
                amount''; and
                0
                g. Adding definitions for ``Track One'', ``Track Two'', and ``Track
                Three'' in alphabetical order.
                 The additions and revisions read as follows:
                Sec. 512.205 Definitions.
                * * * * *
                 Baseline period means the three calendar year period that begins on
                January 1 no fewer than five years but no more than six years prior to
                the start of the model performance period during which episodes must
                initiate in order to be used in the calculation of the national base
                rates, each RO participant's historical experience adjustment for the
                PC or TC or both for the model performance period, and the RO
                participant's case mix adjustment for the PC or TC or both for PY1. The
                baseline period is January 1, 2017 through December 31, 2019, unless
                the RO Model is prohibited by law from starting in calendar year (CY)
                2022, in which case the baseline period will be delayed based on the
                new model performance period (for example, if the model performance
                period starts any time in CY 2023, then the baseline period would be CY
                2018 through CY 2020).
                * * * * *
                 Discount factor means the percentage by which CMS reduces payment
                of the professional component and technical component.
                 (1) The reduction of payment occurs after the trend factor, the
                geographic adjustment, and the RO Model-specific adjustments have been
                applied, but before beneficiary cost-sharing and standard CMS
                adjustments, including sequestration, have been applied.
                 (2) The discount factor does not vary by cancer type.
                 (3) The discount factor for the professional component is 3.5
                percent; the discount factor for the technical component is 4.5
                percent.
                * * * * *
                 EUC stands for ``extreme and uncontrollable circumstance'' and
                means a circumstance that is beyond the control of one or more RO
                participants, adversely impacts such RO participants' ability to
                deliver care in accordance with the RO Model's requirements, and
                affects an entire region or locale.
                * * * * *
                 Legacy CCN means a CMS certification number (CCN) that an RO
                participant that is a hospital outpatient department (HOPD) or its
                predecessor(s) previously used to bill Medicare for included RT
                services but no longer uses to bill Medicare for included RT services.
                 Legacy TIN means a taxpayer identification number (TIN) that an RO
                participant that is a PGP, or a freestanding radiation therapy center,
                or its predecessor(s) previously used to bill Medicare for included RT
                services but no longer uses to bill Medicare for included RT services.
                * * * * *
                 Model performance period means the five performance years (PYs)
                during which RO episodes must initiate and terminate. The model
                performance period begins on January 1, 2022 and ends on December 31,
                2026, unless the RO Model is prohibited by law from starting on January
                1, 2022, in which case the model performance period begins on the
                earliest date permitted by law that is January 1, April 1, or July 1.
                * * * * *
                 PY stands for performance year and means each 12-month period
                beginning on January 1 and ending on December 31 during the model
                performance period, unless the model performance period begins on a
                date other than January 1, in which case, the first performance year
                (PY1) begins on that date and ends on December 31 of the same year.
                * * * * *
                 Stop-loss reconciliation amount means the amount set forth in Sec.
                512.285(f) owed by CMS for the loss incurred under the Model to RO
                participants that have fewer than 60 episodes during the baseline
                period and were furnishing included RT services before the start of the
                model performance period in the CBSAs selected for participation.
                * * * * *
                 Track One means a track for Professional participants and Dual
                participants that meet all RO Model requirements as specified in Sec.
                512.220, including use of CEHRT.
                 Track Two means a track for Professional participants and Dual
                participants that meet all RO Model requirements as specified in Sec.
                512.220, except for use of CEHRT.
                 Track Three means a track for Professional participants and Dual
                participants who do not meet one or more of the RO Model requirements
                set forth at Sec. 512.220(a); and for all Technical participants.
                * * * * *
                0
                14. Section 512.210 is amended by --
                0
                a. Revising paragraphs (a) and (b)(5).
                0
                b. Adding paragraph (b)(6);
                0
                c. Revising paragraph (c); and
                0
                d. Adding paragraph (e).
                 The revisions and additions read as follows:
                Sec. 512.210 RO participants and geographic areas.
                 (a) RO participants. Unless otherwise specified in paragraph (b) or
                (c) of this section, any Medicare-enrolled PGP, freestanding radiation
                therapy center, or HOPD that furnishes included RT services in a 5-
                digit ZIP Code linked to a CBSA selected for participation to an
                [[Page 63995]]
                RO beneficiary for an RO episode that begins and ends during the model
                performance period must participate in the RO Model.
                 (b) * * *
                 (5) Participates in the Pennsylvania Rural Health Model; or
                 (6) Participates in the Community Transformation Track of the
                Community Health Access and Rural Transformation (CHART) Model as a
                participating hospital.
                 (c) Low volume opt-out. A PGP, freestanding radiation therapy
                center, or HOPD that would otherwise be required to participate in the
                RO Model may choose to opt-out of the RO Model as follows:
                 (1) If the PGP, freestanding radiation therapy center, or HOPD
                furnished fewer than 20 episodes in the calendar year that is two years
                prior to the start of PY1 across all CBSAs selected for participation,
                it may opt out of the RO Model for PY1.
                 (2) If the PGP, freestanding radiation therapy center, or HOPD
                furnished fewer than 20 episodes in the calendar year that is two years
                prior to the start of PY2 across all CBSAs selected for participation,
                it may opt out of the RO Model for PY2.
                 (3) If the PGP, freestanding radiation therapy center, or HOPD
                furnished fewer than 20 RO episodes in PY1 across all CBSAs selected
                for participation, and PY1 begins on January 1, it may choose to opt
                out of the RO Model for PY3. In the event that PY1 begins on a date
                other than January 1, the PGP, freestanding radiation therapy center,
                or HOPD may opt-out of the RO Model for PY3 if the total number of
                furnished episodes of the calendar year in which PY1 began and RO
                episodes in PY1 is fewer than 20 across all CBSAs selected for
                participation.
                 (4) If the PGP, freestanding radiation therapy center, or HOPD
                furnished fewer than 20 RO episodes in PY2 across all CBSAs selected
                for participation, it may opt out of the RO Model for PY4.
                 (5) If the PGP, freestanding radiation therapy center, or HOPD
                furnished fewer than 20 RO episodes in PY3 across all CBSAs selected
                for participation, it may opt out of the RO Model for PY5.
                 (6) At least 30 days prior to the start of each PY, CMS provides
                notice to RO participants eligible for the low volume opt-out for the
                upcoming PY of such eligibility. The RO participant must attest that it
                intends to opt out of the RO Model prior to the start of the upcoming
                PY.
                 (7) An entity is not eligible for the low-volume opt out if its
                current TIN or CCN, or its legacy TIN or legacy CCN, or both were used
                to bill Medicare for 20 or more episodes or RO episodes, as applicable,
                of RT services in the two years prior to the applicable PY across all
                CBSAs selected for participation.
                * * * * *
                 (e) Notice of change in TIN or CCN. An RO participant must furnish
                written notice to CMS in a form and manner specified by CMS at least 90
                days before the effective date of any change in TIN or CCN that is used
                to bill Medicare.
                0
                15. Section 512.217 is amended --
                0
                 a. By revising paragraphs (a), (b), and (c)(1);
                0
                 b. In paragraph (c)(3)(i) by removing the word ``and'' at the end of
                the paragraph;
                0
                 c. In paragraph (c)(3)(ii) by removing the period at the end of the
                paragraph and adding ``; and'' in its place; and
                0
                 d. By revising paragraphs (d)(1)(i) and (d)(2)(i).
                 The revisions and addition read as follows:
                Sec. 512.217 Identification of individual practitioners.
                 (a) General. Upon the start of each PY, CMS creates and provides to
                each RO participant that is a PGP or a freestanding radiation therapy
                center an individual practitioner list identifying by NPI each
                individual practitioner associated with the RO participant. For RO
                participants that begin participation in the RO Model after the start
                of a PY, but at least 30 days prior to the last QP determination date
                as specified at Sec. 414.1325 of this chapter, CMS creates and
                provides an individual practitioner list to that RO participant.
                 (b) Review of individual practitioner list. Up until the last QP
                determination date as specified at Sec. [thinsp]414.1325 of this
                chapter, the RO participant must review the individual practitioner
                list, correct any inaccuracies in accordance with paragraph (d) of this
                section, and certify the list (as corrected, if applicable) in a form
                and manner specified by CMS and in accordance with paragraph (c) of
                this section. The RO participant may correct any inaccuracies in its
                individual practitioner list until the last QP determination date as
                specified at Sec. 414.1325 of this chapter. Any Dual participant,
                Professional participant, or Technical participant that is a
                freestanding radiation therapy center and joins the RO Model after the
                start of a PY must review and certify its individual practitioner list
                by the last QP determination date as specified at Sec. 414.1325 of
                this chapter.
                 (c) * * *
                 (1) Up until the last QP determination date as specified at Sec.
                414.1325 of this chapter, an individual with the authority to legally
                bind the RO participant must certify the accuracy, completeness, and
                truthfulness of the individual practitioner list to the best of his or
                her knowledge, information, and belief.
                * * * * *
                 (d) * * *
                 (1) * * *
                 (i) An RO participant must notify CMS of an addition to its
                individual practitioner list when an eligible clinician reassigns his
                or her rights to receive payment from Medicare to the RO participant.
                The notice must be submitted in the form and manner specified by CMS up
                until the last QP determination date as specified at Sec. 414.1325 of
                this chapter.
                * * * * *
                 (2) * * *
                 (i) An RO participant must notify CMS when an individual on the RO
                participant's individual practitioner list ceases to be an individual
                practitioner up until the last QP determination date as specified at
                Sec. 414.1325 of this chapter. The notice must be submitted in the
                form and manner specified by CMS.
                * * * * *
                0
                 16. Section 512.220 is amended by revising paragraphs (a)(1) and (b)
                to read as follows:
                Sec. 512.220 RO participant compliance with RO Model requirements.
                 (a) * * *
                 (1) An RO participant must satisfy the requirements of this section
                to be included in Track One under the RO Model in a particular PY. An
                RO participant that meets all of these RO Model requirements in a
                particular PY, excluding use of CEHRT, will be in Track Two for such
                PY. An RO participant that does not meet one or more of the RO Model
                requirements in paragraph (a) of this section in a particular PY will
                be in Track Three for such PY.
                * * * * *
                 (b) CEHRT. (1) RO participants must use CEHRT, and ensure that
                their individual practitioners use CEHRT, in a manner sufficient to
                meet the applicable requirements of the Advanced APM criteria as
                specified at Sec. 414.1415(a)(1)(i) of this chapter.
                 (2) Within 30 days of the start of PY1 and each subsequent PY, the
                RO participant must certify its use of CEHRT throughout such PY in a
                manner sufficient to meet the requirements set
                [[Page 63996]]
                forth in Sec. 414.1415(a)(1)(i) of this chapter.
                 (3) An RO participant that joins the RO Model at any time during an
                ongoing PY must certify their use of CEHRT by the last QP determination
                date as specified at Sec. 414.1325 of this chapter.
                0
                 17. Section 512.230 is amended by revising paragraphs (a) and (b) to
                read as follows:
                Sec. 512.230 Criteria for determining cancer types.
                 (a) Included cancer types. CMS includes in the RO Model cancer
                types that satisfy the following criteria:
                 (1) The cancer type is commonly treated with radiation per
                nationally recognized, evidence-based clinical treatment guidelines;
                 (2) The cancer type has one or more associated current ICD-10 codes
                that have demonstrated pricing stability; and
                 (3) The Secretary has not determined that the cancer type is not
                suitable for inclusion in the RO Model.
                 (b) Removing cancer types. CMS removes cancer types in the RO Model
                if it determines:
                 (1) That there is a >=10 percent error in established national base
                rates; or
                 (2) The cancer type does not meet the criteria set forth in
                paragraph (a) of this section.
                * * * * *
                0
                18. Section 512.240 is revised to read as follows:
                Sec. 512.240 Included modalities.
                 The modalities included in the RO Model are 3-dimensional conformal
                RT (3DCRT), intensity-modulated RT (IMRT), stereotactic radiosurgery
                (SRS), stereotactic body RT (SBRT), proton beam therapy (PBT), and
                image-guided radiation therapy (IGRT).
                0
                 19. Section 512.245 is amended by revising paragraph (a) to read as
                follows:
                Sec. 512.245 Included RO episodes.
                 (a) General. Any RO episode that begins on or after the first day
                of the model performance period and ends on or before the last day of
                the model performance period is included in the model performance
                period.
                * * * * *
                0
                 20. Section 512.250 is amended by revising (b)(1) and (2) to read as
                follows:
                Sec. 512.250 Determination of national base rates.
                * * * * *
                 (b) * * *
                 (1) CMS excludes from episode pricing and RO episode pricing any
                claim containing an RT service furnished:
                 (i) In Maryland, Vermont, or any of the U.S. Territories;
                 (ii) In the inpatient setting;
                 (iii) By an entity classified as an ASC, CAH, or PPS-exempt cancer
                hospital; or
                 (iv) By an HOPD participating in the Pennsylvania Rural Health
                Model at the time the RT service was furnished.
                 (2) CMS excludes the following episodes from the determination of
                the national base rates:
                 (i) Episodes that are not linked to a CBSA selected for
                participation in the RO Model;
                 (ii) Episodes that are not attributed to an RT provider or RT
                supplier;
                 (iii) Episodes that are not assigned an included cancer type; or
                 (iv) Episodes for which the total allowed amount for RT services
                listed on claims used to calculate an episode's payment amount is not
                greater than $0.
                * * * * *
                0
                 21. Section 512.255 is amended by--
                0
                a. Revising paragraphs (c)(7), (8), and (10), (c)(12)(iv), and (c)(13);
                and
                0
                b. Adding paragraph (c)(14).
                 The revisions and addition read as follows:
                Sec. 512.255 Determination of participant-specific professional
                episode payment and participant-specific technical episode payment
                amounts.
                * * * * *
                 (c) * * *
                 (7) Adjustments for RO participants with fewer than 60 episodes
                during the baseline period. (i) RO participants that have fewer than 60
                episodes in the baseline period do not receive a historical experience
                adjustment during the model performance period.
                 (ii) RO participants that have fewer than 60 episodes in the
                baseline period do not receive a case mix adjustment for PY1.
                 (iii) RO participants that have fewer than 60 episodes in the
                baseline period that continue to have fewer than 60 episodes in the
                rolling 3-year period used to determine the case mix adjustment for
                each PY and that have never received a case mix adjustment do not
                receive a case mix adjustment for that PY.
                 (iv) RO participants that have fewer than 60 episodes in the
                baseline period and were furnishing included RT services in the CBSAs
                selected for participation before the start of the model performance
                period are eligible to receive a stop-loss reconciliation amount, if
                applicable, as described in Sec. 512.285(f).
                 (8) Discount factor. CMS reduces each episode payment by the
                discount factor after applying the trend factor, geographic adjustment,
                and case mix and historical experience adjustments to the national base
                rate.
                * * * * *
                 (10) Quality withhold. In accordance with Sec. 414.1415(b)(1) of
                this chapter, CMS withholds 2 percent from each professional episode
                payment after applying the trend factor, geographic adjustment, case
                mix and historical experience adjustments, and discount factor to the
                national base rate. RO participants may earn back this withhold, in
                part or in full, based on their AQS.
                * * * * *
                 (12) * * *
                 (iv) In the case of incomplete episodes, the beneficiary
                coinsurance payment equals 20 percent of the FFS amounts that would
                have been paid in the absence of the RO Model for the services
                furnished by the RO participant that initiated the PC and the RO
                participant that initiated the TC (if applicable).
                * * * * *
                 (13) Sequestration. In accordance with applicable law, CMS deducts
                a percentage from each episode payment after applying the trend factor,
                geographic adjustment, case mix and historical experience adjustments,
                discount, withholds, and coinsurance to the national base rate.
                 (14) Modifications to the participant-specific adjustments for
                changes in TINs or CCNs. (i) CMS calculates the RO participant's case
                mix adjustments in accordance with paragraph (c)(3) of this section
                based on all episodes and RO episodes, as applicable, attributed to the
                RO participant's legacy TIN(s) or legacy CCN(s), and current TIN or
                CCN, during the 3-year period that determines the case mix adjustment
                for each PY.
                 (ii) CMS calculates the RO participant's historical experience
                adjustments in accordance with paragraph (c)(4) of this section based
                on all episodes attributed to the RO participant's legacy TIN(s) or
                legacy CCN(s), and current TIN or CCN, during the baseline period.
                0
                22. Section 512.275 is amended by adding paragraph (d) to read as
                follows:
                Sec. 512.275 Quality measures, clinical data, and reporting.
                * * * * *
                 (d) Technical participants and reporting of quality measures and
                clinical data elements. Technical participants that are freestanding
                radiation therapy centers and also begin furnishing the professional
                component during the model performance period must:
                 (1) Notify CMS no later than 30 days after the technical
                participant begins
                [[Page 63997]]
                furnishing the professional component, in a form and manner specified
                by CMS; and
                 (2) Report quality measures and clinical data elements by the next
                submission period, as described in paragraph (c) of this section.
                Sec. 512.280 [Amended]
                0
                23. Section 512.280 is amended by removing and reserving paragraph
                (f)(4) to read as follows:
                Sec. 512.280 RO Model Medicare Program Waivers
                * * * * *
                 (f) * * *
                 (4) [Reserved]
                * * * * *
                0
                 24. Section 512.285 is amended by revising paragraphs (c)(3),
                (c)(4)(i) and (ii), (d), and (f) introductory text to read as follows:
                Sec. 512.285 Reconciliation process.
                * * * * *
                 (c) * * *
                 (3) Total incomplete episode amount. For incomplete episodes
                initiated in the PY, CMS determines the total incomplete episode amount
                by calculating the difference between the following amounts:
                 (i) The sum of all FFS amounts that would have been paid to the RO
                participant in the absence of the RO Model for any included RT services
                furnished during such incomplete episodes, as determined by no-pay
                claims. CMS owes this sum to the RO participant for such incomplete
                episodes.
                 (ii) The sum of the participant-specific episode payment amounts
                paid to the RO participant for such incomplete episodes initiated in
                the PY.
                 (4) * * *
                 (i) If the sum described in paragraph (c)(3)(i) of this section is
                more than the sum described in paragraph (c)(3)(ii) of this section,
                the difference is subtracted from the total duplicate RT services
                amount described in paragraph (c)(2) of this section and the resulting
                amount is the total incorrect episode payment amount.
                 (ii) If the sum described in paragraph (c)(3)(i) of this section is
                less than the sum described in paragraph (c)(3)(ii) of this section,
                the difference is added to the total duplicate RT services amount
                described in paragraph (c)(2) of this section and the resulting amount
                is the total incorrect episode payment amount.
                * * * * *
                 (d) Quality reconciliation payment amount. For Professional
                participants and Dual participants, CMS determines the quality
                reconciliation payment amount for each PY by multiplying the
                participant's AQS (as a percentage) by the total quality withhold
                amount for all RO episodes initiated during the PY.
                * * * * *
                 (f) Stop-loss reconciliation amount. CMS determines the stop-loss
                reconciliation amount for RO participants that have fewer than 60
                episodes during the baseline period and were furnishing included RT
                services before the start of the model performance period in the CBSAs
                selected for participation by--
                * * * * *
                0
                 25. Section 512.292 is added to read as follows:
                Sec. 512.292 Overlap with other models tested under Section 1115A and
                CMS programs.
                 Participant-specific professional episode payments and Participant-
                specific technical episode payments made under the RO Model are not
                adjusted to reflect payments made under models being tested under 1115A
                of the Act or the Medicare Shared Savings Program under section 1899 of
                the Act.
                0
                 26. Section 512.294 is added to read as follows:
                Sec. 512.294 Extreme and uncontrollable circumstances.
                 (a) General. If CMS determines that there is an EUC pursuant to
                paragraph (b) of this section, CMS may grant RO participants exceptions
                to the RO Model requirements under paragraph (c) of this section and
                revise the RO Model's pricing methodology under paragraphs (e) and (f)
                of this section.
                 (b) Determination factors. CMS determines whether there is an EUC
                based on the following factors:
                 (1) Whether the RO participants are furnishing services within a
                geographic area considered to be within an ``emergency area'' during an
                ``emergency period'' as defined in section 1135(g) of the Social
                Security Act;
                 (2) Whether the geographic area within a county, parish, U.S.
                territory, or tribal government designated under the Stafford Act
                served as a condition precedent for the Secretary's exercise of the
                1135 waiver authority, or the National Emergencies Act; or
                 (3) Whether a state of emergency has been declared in the
                geographic area.
                 (c) Modified requirements. CMS may grant RO Participants exceptions
                to the following RO Model requirements:
                 (1) Reporting requirements. CMS may delay or exempt RO participants
                from one or more of the RO Model's quality measure or clinical data
                element reporting requirements if an EUC impacts the RO participants'
                ability to comply with quality measure or clinical data element
                reporting requirements.
                 (2) Other requirements. CMS may issue a notice on the RO Model
                website that may waive compliance with or modify the following RO Model
                requirements:
                 (i) The requirement set forth at Sec. 512.220(a)(2)(vii) that RO
                participants provide Peer Review (audit and feedback on treatment
                plans).
                 (ii) The requirement set forth at Sec. 512.220(a)(3) that RO
                participants actively engage with an AHRQ-listed patient safety
                organization (PSO).
                 (d) Model performance period. If CMS determines that the EUC
                affects the United States and if CMS determines that the EUC would
                impact RO participants' ability to implement the requirements of the RO
                Model prior to the start of the model performance period, CMS may amend
                the model performance period.
                 (e) Trend factor. If CMS determines that the EUC affects the entire
                United States, and if CMS determines that as a result of the EUC, the
                trend factor (specific to the PC, TC, or both for an included cancer
                type) for the upcoming PY has increased or decreased by more than 10
                percent compared to the corresponding trend factor of the previous CY
                when FFS payment rates are held constant with the previous CY, CMS may
                modify the trend factor calculation for the PC, TC, or both the PC and
                TC of an included cancer type in a manner that ensures the trend factor
                is consistent with the average utilization from the previous CY.
                 (f) Quality withhold. In response to a national, regional, or local
                event, CMS may adjust the quality withhold by choosing to repay the
                quality withhold during the next reconciliation and award all possible
                points in the subsequent AQS calculation amount or to not apply the
                quality withhold to RO Model payments during the EUC if CMS removes the
                quality measure and clinical data element reporting requirements
                pursuant to paragraph (c)(1) of this section.
                DEPARTMENT OF HEALTH AND HUMAN SERVICES
                 For the reasons set forth in the preamble, the Department of Health
                and Human Services amends 45 CFR part 180 as set forth below:
                PART 180--HOSPITAL PRICE TRANSPARENCY
                0
                 27. The authority citation for part 180 continues to read as follows:
                [[Page 63998]]
                 Authority: 42 U.S.C. 300gg-18, 42 U.S.C. 1302.
                0
                 28. Section 180.20 is amended by adding a definition for ``State
                forensic hospital'' in alphabetical order to read as follows:
                Sec. 180.20 Definitions.
                * * * * *
                 State forensic hospital means a public psychiatric hospital that
                provides treatment for individuals who are in the custody of penal
                authorities.
                * * * * *
                0
                 29. Section 180.30 is amended--
                0
                 a. In paragraph (b) introductory text by removing the phrase
                ``Federally owned or operated hospitals'' and adding in its place the
                phrase ``Federal and State hospitals''; and
                0
                 b. By adding paragraph (b)(3).
                 The addition reads as follows:
                Sec. 180.30 Applicability.
                * * * * *
                 (b) * * *
                 (3) State forensic hospitals that provide treatment exclusively to
                individuals who are in the custody of penal authorities.
                * * * * *
                0
                 30. Section 180.50 is amended--
                0
                a. In paragraph (d)(3)(ii) by removing the word ``and'' at the end of
                the paragraph;
                0
                b. In paragraph (d)(3)(iii) by removing the period at the end of the
                paragraph and adding ``; and'' in its place; and
                0
                c. By adding paragraph (d)(3)(iv).
                 The addition reads as follows:
                Sec. 180.50 Requirements for making public hospital standard charges
                for all items and services.
                * * * * *
                 (d) * * *
                 (3) * * *
                 (iv) To automated searches and direct file downloads through a link
                posted on a publicly available website.
                * * * * *
                0
                 31. Section 180.90 is amended by revising paragraph (c)(2) to read as
                follows:
                Sec. 180.90 Civil monetary penalties.
                * * * * *
                 (c) * * *
                 (2) CMS determines the daily dollar amount for a civil monetary
                penalty for which a hospital may be subject as follows:
                 (i) For each day during Calendar Year 2021 that a hospital is
                determined by CMS to be out of compliance, the maximum daily dollar
                amount for a civil monetary penalty to which the hospital may be
                subject is $300. Even if the hospital is in violation of multiple
                discrete requirements of this part, the maximum total sum that a single
                hospital may be assessed per day is $300.
                 (ii) Beginning January 1, 2022, for each day a hospital is
                determined by CMS to be out of compliance:
                 (A) For a hospital with a number of beds equal to or less than 30,
                the maximum daily dollar civil monetary penalty amount to which it may
                be subject is $300, even if the hospital is in violation of multiple
                discrete requirements of this part.
                 (B) For a hospital with at least 31 and up to and including 550
                beds, the maximum daily dollar civil monetary penalty amount to which
                it may be subject is the number of beds times $10, even if the hospital
                is in violation of multiple discrete requirements of this part.
                 (C) For a hospital with a number of beds greater than 550, the
                maximum daily dollar civil monetary penalty amount to which it may be
                subject is $5,500, even if the hospital is in violation of multiple
                discrete requirements of this part.
                 (D)(1) CMS will use the most recently available, finalized Medicare
                hospital cost report to determine the number of beds for a Medicare-
                enrolled hospital, for purposes of determining the maximum daily dollar
                civil monetary penalty amount under paragraph (c)(2) of this section.
                 (2) If the number of beds for the hospital cannot be determined
                according to paragraph (c)(2)(ii)(D)(1) of this section, CMS will
                request that the hospital provide documentation of its number of beds,
                in a form and manner and by the deadline prescribed by CMS in a written
                notice provided to the hospital. Should the hospital fail to provide
                CMS with this documentation in the prescribed form and manner, and by
                the specified deadline, CMS will impose on the hospital the maximum
                daily dollar civil monetary penalty amount according to paragraph
                (c)(2)(ii)(C) of this section.
                * * * * *
                 Dated: October 29, 2021.
                Xavier Becerra,
                Secretary, Department of Health and Human Services.
                [FR Doc. 2021-24011 Filed 11-2-21; 4:15 pm]
                BILLING CODE 4120-01-P
                

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