Home/Federal/Federal Register/2021-24011

Rule2021-24011

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

Primary source

Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.

Published

November 16, 2021

Issuing agencies

Health and Human Services DepartmentCenters for Medicare & Medicaid Services

Abstract

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.

Full Text

<html>
<head>
<title>Federal Register, Volume 86 Issue 218 (Tuesday, November 16, 2021)</title>
</head>
<body><pre>
[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 [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-24011]

[[Page 63457]]

Vol. 86

Tuesday,

No. 218

November 16, 2021

Part II

Department of Health and Human Services

-----------------------------------------------------------------------

Centers for Medicare & Medicaid Services

-----------------------------------------------------------------------

42 CFR Parts 412, 416, 419, et al.

45 CFR Part 180

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; 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

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 <a href="http://www.regulations.gov">http://www.regulations.gov</a>. 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: <a href="/cdn-cgi/l/email-protection#e6ab87948c89948f83c8a4878a8289a6858b95c88e8e95c8818990">[email&#160;protected]</a> or at 410-
786-4617.
Advisory Panel on Hospital Outpatient Payment (HOP Panel), contact
the HOP Panel mailbox at <a href="/cdn-cgi/l/email-protection#77362734271619121b37141a04591f1f0459101801">[email&#160;protected]</a>.
Ambulatory Surgical Center (ASC) Payment System, contact Scott
Talaga via email at <a href="/cdn-cgi/l/email-protection#e0b3838f9494ceb4818c818781a0838d93ce888893ce878f96">[email&#160;protected]</a> or Mitali Dayal via email
at <a href="/cdn-cgi/l/email-protection#4e03273a2f2227600a2f372f227c0e2d233d6026263d60292138">[email&#160;protected]</a>.
Ambulatory Surgical Center Quality Reporting (ASCQR) Program
Administration, Validation, and Reconsideration Issues, contact Anita
Bhatia via email at <a href="/cdn-cgi/l/email-protection#eeaf80879a8fc0ac868f9a878fae8d839dc086869dc0898198">[email&#160;protected]</a>.
Ambulatory Surgical Center Quality Reporting (ASCQR) Program
Measures, contact Cyra Duncan via email <a href="/cdn-cgi/l/email-protection#3a7943485b147e4f54595b547a59574914525249145d554c">[email&#160;protected]</a>.
Blood and Blood Products, contact Josh McFeeters via email at
<a href="/cdn-cgi/l/email-protection#d993b6aab1acb8f794ba9fbcbcadbcabaa99bab4aaf7b1b1aaf7beb6af">[email&#160;protected]</a>.
Cancer Hospital Payments, contact Scott Talaga via email at
<a href="/cdn-cgi/l/email-protection#d182b2bea5a5ff85b0bdb0b6b091b2bca2ffb9b9a2ffb6bea7">[email&#160;protected]</a>.
CMS Web Posting of the OPPS and ASC Payment Files, contact Chuck
Braver via email at <a href="/cdn-cgi/l/email-protection#581b302d3b33761a2a392e3d2a183b352b7630302b763f372e">[email&#160;protected]</a>.
Comment Solicitation on Temporary Policies for the PHE for COVID-
19, contact Emily Yoder via email at <a href="/cdn-cgi/l/email-protection#480d252124316611272c2d3a082b253b6620203b662f273e">[email&#160;protected]</a> or Abigail
Cesnik via email at <a href="/cdn-cgi/l/email-protection#7332111a14121a1f5d3016001d1a1833101e005d1b1b005d141c05">[email&#160;protected]</a>.
Composite APCs (Low Dose Brachytherapy and Multiple Imaging),
contact Au'Sha Washington via email at <a href="/cdn-cgi/l/email-protection#f5b480a69d94dba294869d9c9b92819a9bb5969886db9d9d86db929a83">[email&#160;protected]</a>.
Comprehensive APCs (C-APCs), contact Mitali Dayal via email at
<a href="/cdn-cgi/l/email-protection#b5f8dcc1d4d9dc9bf1d4ccd4d987f5d6d8c69bddddc69bd2dac3">[email&#160;protected]</a>.
Hospital Inpatient Quality Reporting Program--Administration
Issues, contact Julia Venanzi, <a href="/cdn-cgi/l/email-protection#b1dbc4ddd8d09fc7d4dfd0dfcbd8f1d2dcc29fd9d9c29fd6dec7">[email&#160;protected]</a>.
Hospital Outpatient Quality Reporting (OQR) Program Administration,
Validation, and Reconsideration Issues, contact Shaili Patel via email
<a href="/cdn-cgi/l/email-protection#96c5fef7fffaffb8c6f7e2f3fad6f5fbe5b8fefee5b8f1f9e0">[email&#160;protected]</a>.
Hospital Outpatient Quality Reporting (OQR) Program Measures,
contact Janis Grady via email <a href="/cdn-cgi/l/email-protection#5319323d3a207d142132372a13303e207d3b3b207d343c25">[email&#160;protected]</a>.
Hospital Outpatient Visits (Emergency Department Visits and
Critical Care Visits), contact Allison Bramlett via email at
<a href="/cdn-cgi/l/email-protection#642508080d170b0a4a2616050908011010240709174a0c0c174a030b12">[email&#160;protected]</a>, or Emily Yoder via email at
<a href="/cdn-cgi/l/email-protection#b4f1d9ddd8cd9aeddbd0d1c6f4d7d9c79adcdcc79ad3dbc2">[email&#160;protected]</a>.
Hospital Price Transparency, contact the Hospital Price
Transparency email box at <a href="/cdn-cgi/l/email-protection#7f2f0d161c1a2b0d1e110c0f1e0d1a111c0637100c0f160b1e133c171e0d181a0c3f1c120c5117170c51181009">[email&#160;protected]</a>.
Inpatient Only (IPO) Procedures List, contact Au'Sha Washington via
email at <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="763703051e17582117051e1f181102191836151b05581e1e0558111900">[email&#160;protected]</a>, or Allison Bramlett at
<a href="/cdn-cgi/l/email-protection#49082525203a2627670b3b2824252c3d3d092a243a6721213a672e263f">[email&#160;protected]</a>, or Abigail Cesnik at
<a href="/cdn-cgi/l/email-protection#38795a515f595154167b5d4b565153785b554b1650504b165f574e">[email&#160;protected]</a>.
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 <a href="/cdn-cgi/l/email-protection#d495b6bdb3b5bdb8fa97b1a7babdbf94b7b9a7fabcbca7fab3bba2">[email&#160;protected]</a>.
New Technology Intraocular Lenses (NTIOLs), contact Scott Talaga
via email at <a href="/cdn-cgi/l/email-protection#3063535f44441e64515c51575170535d431e5858431e575f46">[email&#160;protected]</a>.
No Cost/Full Credit and Partial Credit Devices, contact Scott
Talaga via email at <a href="/cdn-cgi/l/email-protection#bdeeded2c9c993e9dcd1dcdadcfdded0ce93d5d5ce93dad2cb">[email&#160;protected]</a>.
OPPS Brachytherapy, contact Scott Talaga via email at
<a href="/cdn-cgi/l/email-protection#beedddd1caca90eadfd2dfd9dffeddd3cd90d6d6cd90d9d1c8">[email&#160;protected]</a>.
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
<a href="/cdn-cgi/l/email-protection#e6a3948f858dc8a58e93878881a6858b95c88e8e95c8818990">[email&#160;protected]</a>, or Scott Talaga via email at
<a href="/cdn-cgi/l/email-protection#c794a4a8b3b3e993a6aba6a0a687a4aab4e9afafb4e9a0a8b1">[email&#160;protected]</a>, or Josh McFeeters via email at
<a href="/cdn-cgi/l/email-protection#347e5b475c41551a795772515140514647745759471a5c5c471a535b42">[email&#160;protected]</a>.
OPPS Drugs, Radiopharmaceuticals, Biologicals, and Biosimilar
Products, contact Josh McFeeters via email at
<a href="/cdn-cgi/l/email-protection#83c9ecf0ebf6e2adcee0c5e6e6f7e6f1f0c3e0eef0adebebf0ade4ecf5">[email&#160;protected]</a>, or Gil Ngan via email at
<a href="/cdn-cgi/l/email-protection#6d2a040143230a0c032d0e001e4305051e430a021b">[email&#160;protected]</a>, or Cory Duke via email at <a href="/cdn-cgi/l/email-protection#23604c515a0d6756484663404e500d4b4b500d444c55">[email&#160;protected]</a>,
or Au'Sha Washington via email at <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="226357514a430c7543514a4b4c45564d4c62414f510c4a4a510c454d54">[email&#160;protected]</a>.
OPPS New Technology Procedures/Services, contact the New Technology

[[Page 63459]]

APC mailbox at <a href="/cdn-cgi/l/email-protection#8ec0ebf9daebede6cfdecdeffefee2e7edeffae7e1e0fdceede3fda0e6e6fda0e9e1f8">[email&#160;protected]</a>.
OPPS Packaged Items/Services, contact Mitali Dayal via email at
<a href="/cdn-cgi/l/email-protection#430e2a37222f2a6d07223a222f7103202e306d2b2b306d242c35">[email&#160;protected]</a> or Cory Duke via email at
<a href="/cdn-cgi/l/email-protection#13507c616a3d5766787653707e603d7b7b603d747c65">[email&#160;protected]</a>.
OPPS Pass-Through Devices, contact the Device Pass-Through mailbox
at <a href="/cdn-cgi/l/email-protection#97d3f2e1fef4f2c7c3f6e7e7fbfef4f6e3fef8f9e4d7f4fae4b9ffffe4b9f0f8e1">[email&#160;protected]</a>.
OPPS Status Indicators (SI) and Comment Indicators (CI), contact
Marina Kushnirova via email at <a href="/cdn-cgi/l/email-protection#8cc1edfee5e2eda2c7f9ffe4e2e5fee3faedccefe1ffa2e4e4ffa2ebe3fa">[email&#160;protected]</a>.
Partial Hospitalization Program (PHP) and Community Mental Health
Center (CMHC) Issues, contact the PHP Payment Policy Mailbox at
<a href="/cdn-cgi/l/email-protection#4a1a021a1a2b33272f243e1a25262329330a29273964222239642d253c">[email&#160;protected]</a>.
RO Model, contact <a href="/cdn-cgi/l/email-protection#86d4e7e2efe7f2efe9e8d2eee3f4e7f6ffc6e5ebf5a8eeeef5a8e1e9f0">[email&#160;protected]</a> or at 844-711-2664,
Option 5.
Skin Substitutes, contact Josh McFeeters via email at
<a href="/cdn-cgi/l/email-protection#d49ebba7bca1b5fa99b792b1b1a0b1a6a794b7b9a7fabcbca7fab3bba2">[email&#160;protected]</a>.
Supervision of Outpatient Therapeutic Services in Hospitals and
CAHs, contact Josh McFeeters via email at <a href="/cdn-cgi/l/email-protection#23694c504b56420d6e406546465746515063404e500d4b4b500d444c55">[email&#160;protected]</a>.
All Other Issues Related to Hospital Outpatient Payments Not
Previously Identified, contact the OPPS mailbox at
<a href="/cdn-cgi/l/email-protection#e4ab91909485908d818a90b4b4b7a4878997ca8c8c97ca838b92">[email&#160;protected]</a>.
All Other Issues Related to the Ambulatory Surgical Center Payments
Not Previously Identified, contact the ASC mailbox at
<a href="/cdn-cgi/l/email-protection#c584968695959685a6a8b6ebadadb6eba2aab3">[email&#160;protected]</a>.

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: <a href="http://www.regulations.gov">http://www.regulations.gov</a>. Follow the search instructions on that website to
view public comments. CMS will not post on <a href="http://Regulations.gov">Regulations.gov</a> 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: <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices</a>.
The Addenda relating to the ASC payment system are available at:
<a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/ASC-Regulations-and-Notices">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/ASC-Regulations-and-Notices</a>.

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
<bullet> 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.
<bullet> 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.
<bullet> 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.
<bullet> 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.
<bullet> 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.
<bullet> 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.
<bullet> 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.
<bullet> 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.
<bullet> 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.
<bullet> 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.
<bullet> 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.
<bullet> 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]]

<bullet> 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.
<bullet> 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.
<bullet> 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.
<bullet> 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.
<bullet> 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]]

<bullet> 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.
<bullet> 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:
<bullet> Critical access hospitals (CAHs);
<bullet> Hospitals located in Maryland and paid under Maryland's
All-Payer or Total Cost of Care Model;
<bullet> Hospitals located outside of the 50 States, the District
of Columbia, and Puerto Rico; and
<bullet> 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: <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices</a>.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--
<bullet> May advise on the clinical integrity of Ambulatory Payment
Classification (APC) groups and their associated weights;
<bullet> May advise on the appropriate supervision level for
hospital outpatient services;
<bullet> May advise on OPPS APC rates for ASC covered surgical
procedures;
<bullet> Continues to be technical in nature;
<bullet> Is governed by the provisions of the FACA;
<bullet> Has a Designated Federal Official (DFO); and
<bullet> 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: <a href="https://www.cms.gov/Regulations-and-Guidance/Guidance/FACA/AdvisoryPanelonAmbulatoryPaymentClassificationGroups.html">https://www.cms.gov/Regulations-and-Guidance/Guidance/FACA/AdvisoryPanelonAmbulatoryPaymentClassificationGroups.html</a>.
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:
<bullet> 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;
<bullet> Data Subcommittee, which is responsible for studying the
data issues confronting the Panel and for recommending options for
resolving them; and
<bullet> 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 <a href="http://facadatabase.gov">http://facadatabase.gov</a>.

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: <a href="http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html">http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html</a>.
Addendum N to the CY 2022 OPPS/ASC proposed rule (which is
available via the internet on the CMS website at: <a href="http://www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html">http://www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html</a>) 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: <a href="http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html">http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html</a>.
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: <a href="http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html">http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html</a>.
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 (<a href="http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html">http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html</a>)
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,
<a href="http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html">http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html</a>, 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: <a href="http://www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html">http://www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html</a>). 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: <a href="http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html">http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html</a>.
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 <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="8de2f8f9fdecf9e4e8e3f9fdfdfecdeee0fea3e5e5fea3eae2fb">[email&#160;protected]</a> 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
<a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices</a>).
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:
<bullet> Does not contain a procedure described by a HCPCS code to
which we have assigned status indicator ``T'';
<bullet> Contains 8 or more units of services described by HCPCS
code G0378 (Hospital observation services, per hour);
<bullet> 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
<bullet> 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:
<bullet> Frequency of 25 or more claims reporting the code
combination (frequency threshold); and
<bullet> 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 <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices</a>).
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.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR16NO21.002

BILLING CODE 4120-01-C
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 <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices</a>). 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.
BILLING CODE 4120-01-P

[[Page 63475]]

[GRAPHIC] [TIFF OMITTED] TR16NO21.003

[[Page 63476]]

[GRAPHIC] [TIFF OMITTED] TR16NO21.004

BILLING CODE 4120-01-C

[[Page 63477]]

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:
<bullet> APC 8004 (Ultrasound Composite);
<bullet> APC 8005 (CT and CTA without Contrast Composite);
<bullet> APC 8006 (CT and CTA with Contrast Composite);
<bullet> APC 8007 (MRI and MRA without Contrast Composite); and
<bullet> 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: <a href="https://www.cms.gov/medicaremedicare-fee-service-paymenthospitaloutpatientppshospital-outpatient-regulations-and-notices/cms-1753-p">https://www.cms.gov/medicaremedicare-fee-service-paymenthospitaloutpatientppshospital-outpatient-regulations-and-notices/cms-1753-p</a>.
---------------------------------------------------------------------------

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

[[Page 63479]]

[GRAPHIC] [TIFF OMITTED] TR16NO21.005

[[Page 63480]]

[GRAPHIC] [TIFF OMITTED] TR16NO21.006

[[Page 63481]]

[GRAPHIC] [TIFF OMITTED] TR16NO21.007

[[Page 63482]]

[GRAPHIC] [TIFF OMITTED] TR16NO21.008

[[Page 63483]]

[GRAPHIC] [TIFF OMITTED] TR16NO21.009

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\ <a href="https://www.federalregister.gov/documents/2017/04/03/2017-06716/establishing-the-presidents-commission-on-combating-drug-addiction-and-the-opioid-crisis">https://www.federalregister.gov/documents/2017/04/03/2017-06716/establishing-the-presidents-commission-on-combating-drug-addiction-and-the-opioid-crisis</a>.
---------------------------------------------------------------------------

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. <a href="https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2011/022496s000ltr.pdf">https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2011/022496s000ltr.pdf</a>.
\4\ Exparel. FDA Package Insert. 22 March 2021. <a href="https://www.accessdata.fda.gov/drugsatfda_docs/label/2021/022496s035lbl.pdf">https://www.accessdata.fda.gov/drugsatfda_docs/label/2021/022496s035lbl.pdf</a>.
---------------------------------------------------------------------------

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

[…truncated; see source link]

View on FederalRegister.gov →Plain-text source

Indexed from Federal Register on November 16, 2021.

This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.