Home/Federal/Federal Register/2024-15087

Proposed Rule2024-15087

Medicare and Medicaid Programs: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems; Quality Reporting Programs, Including the Hospital Inpatient Quality Reporting Program; Health and Safety Standards for Obstetrical Services in Hospitals and Critical Access Hospitals; Prior Authorization; Requests for Information; Medicaid and CHIP Continuous Eligibility; Medicaid Clinic Services Four Walls Exceptions; Individuals Currently or Formerly in Custody of Penal Authorities; Revision to Medicare Special Enrollment Period for Formerly Incarcerated Individuals; and All-Inclusive Rate Add-On Payment for High-Cost Drugs Provided by Indian Health Service and Tribal Facilities

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

July 22, 2024

Issuing agencies

Health and Human Services DepartmentCenters for Medicare & Medicaid Services

Abstract

This proposed rule would revise the Medicare hospital Outpatient Prospective Payment System (OPPS) and the Medicare Ambulatory Surgical Center (ASC) payment system for calendar year 2025 based on our continuing experience with these systems. In this proposed rule, 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 proposed rule would update and refine the requirements for the Hospital Outpatient Quality Reporting Program, Rural Emergency Hospital Quality Reporting Program, Ambulatory Surgical Center Quality Reporting Program, and Hospital Inpatient Quality Reporting Program. This proposed rule would request information on options being considered for future changes to the Overall Hospital Quality Star Rating methodology. The proposed rule would narrow the description of "custody" for purposes of Medicare's no legal obligation to pay payment exclusion. The proposed rule would revise the eligibility requirements in the special enrollment period (SEP) for formerly incarcerated individuals to tie the eligibility for this SEP to the determination made by the Social Security Administration that they are no longer incarcerated for releases that occur on and after January 1, 2025. This rule also proposes to codify the requirement in the Consolidated Appropriations Act, 2023 (CAA, 2023) to provide 12 months of continuous eligibility to children under the age of 19 in Medicaid and CHIP, with limited exceptions. Further, this proposed rule would provide updates to the Conditions of Participation (CoPs) for hospitals and critical access hospitals (CAHs) in an effort to advance the health and safety of pregnant, birthing, and postpartum patients. This rule proposes to separately pay IHS and tribal hospitals for high-cost drugs furnished in hospital outpatient departments through an add-on payment in addition to the AIR under the authorities used to calculate the AIR starting January 1, 2025. This rule also requests further information related to a Tribal Technical Advisory Group request to apply the Indian Health Service encounter rate to all outpatient tribal clinics. Finally, the proposed rule would provide exceptions to the Medicaid clinic services benefit four walls requirement for Indian Health Service and Tribal clinics, and, at state option, for behavioral health clinics and clinics located in rural areas.

Full Text

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<title>Federal Register, Volume 89 Issue 140 (Monday, July 22, 2024)</title>
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[Federal Register Volume 89, Number 140 (Monday, July 22, 2024)]
[Proposed Rules]
[Pages 59186-59581]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-15087]

[[Page 59185]]

Vol. 89

Monday,

No. 140

July 22, 2024

Part II

Department of Health and Human Services

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Centers for Medicare & Medicaid Services

42 CFR Parts 406, 407, 410, et al.

Office of the Secretary

45 CFR Part 180

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Medicare and Medicaid Programs; Proposed Rule

Federal Register / Vol. 89 , No. 140 / Monday, July 22, 2024 /
Proposed Rules

[[Page 59186]]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 406, 407, 410, 411, 416, 419, 435, 440, 457, 482 and
485

Office of the Secretary

45 CFR Part 180

[CMS-1809-P]
RIN 0938-AV35

Medicare and Medicaid Programs: Hospital Outpatient Prospective
Payment and Ambulatory Surgical Center Payment Systems; Quality
Reporting Programs, Including the Hospital Inpatient Quality Reporting
Program; Health and Safety Standards for Obstetrical Services in
Hospitals and Critical Access Hospitals; Prior Authorization; Requests
for Information; Medicaid and CHIP Continuous Eligibility; Medicaid
Clinic Services Four Walls Exceptions; Individuals Currently or
Formerly in Custody of Penal Authorities; Revision to Medicare Special
Enrollment Period for Formerly Incarcerated Individuals; and All-
Inclusive Rate Add-On Payment for High-Cost Drugs Provided by Indian
Health Service and Tribal Facilities

AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of
Health and Human Services (HHS).

ACTION: Proposed rule.

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SUMMARY: This proposed rule would revise the Medicare hospital
Outpatient Prospective Payment System (OPPS) and the Medicare
Ambulatory Surgical Center (ASC) payment system for calendar year 2025
based on our continuing experience with these systems. In this proposed
rule, 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 proposed rule
would update and refine the requirements for the Hospital Outpatient
Quality Reporting Program, Rural Emergency Hospital Quality Reporting
Program, Ambulatory Surgical Center Quality Reporting Program, and
Hospital Inpatient Quality Reporting Program. This proposed rule would
request information on options being considered for future changes to
the Overall Hospital Quality Star Rating methodology. The proposed rule
would narrow the description of ``custody'' for purposes of Medicare's
no legal obligation to pay payment exclusion. The proposed rule would
revise the eligibility requirements in the special enrollment period
(SEP) for formerly incarcerated individuals to tie the eligibility for
this SEP to the determination made by the Social Security
Administration that they are no longer incarcerated for releases that
occur on and after January 1, 2025. This rule also proposes to codify
the requirement in the Consolidated Appropriations Act, 2023 (CAA,
2023) to provide 12 months of continuous eligibility to children under
the age of 19 in Medicaid and CHIP, with limited exceptions. Further,
this proposed rule would provide updates to the Conditions of
Participation (CoPs) for hospitals and critical access hospitals (CAHs)
in an effort to advance the health and safety of pregnant, birthing,
and postpartum patients. This rule proposes to separately pay IHS and
tribal hospitals for high-cost drugs furnished in hospital outpatient
departments through an add-on payment in addition to the AIR under the
authorities used to calculate the AIR starting January 1, 2025. This
rule also requests further information related to a Tribal Technical
Advisory Group request to apply the Indian Health Service encounter
rate to all outpatient tribal clinics. Finally, the proposed rule would
provide exceptions to the Medicaid clinic services benefit four walls
requirement for Indian Health Service and Tribal clinics, and, at state
option, for behavioral health clinics and clinics located in rural
areas.

DATES: To be assured consideration, comments must be received at one of
the addresses provided below, by September 9, 2024.

ADDRESSES: In commenting, please refer to file code CMS-1809-P.
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="https://www.regulations.gov">https://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-1809-P, P.O. Box 8010,
Baltimore, MD 21244-8010.
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-1809-P, 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:
Au'Sha Washington or Elise Barringer at <a href="/cdn-cgi/l/email-protection#4a051a1a19670b190967183f262f272b2123242d0a29273964222239642d253c">[email&#160;protected]</a>.
Advisory Panel on Hospital Outpatient Payment (HOP Panel),
contact the HOP Panel mailbox at <a href="/cdn-cgi/l/email-protection#bffeeffcefded1dad3ffdcd2cc91d7d7cc91d8d0c9">[email&#160;protected]</a>.
Ambulatory Surgical Center Quality Reporting (ASCQR) Program
policies, contact Anita Bhatia via email at
<a href="/cdn-cgi/l/email-protection#31705f5845501f73595045585071525c421f5959421f565e47">[email&#160;protected]</a>.
Ambulatory Surgical Center Quality Reporting (ASCQR) Program
measures, contact Marsha Hertzberg via email at
<a href="/cdn-cgi/l/email-protection#6e230f1c1d060f40260b1c1a140c0b1c092e0d031d4006061d40090118">[email&#160;protected]</a>.
All-Inclusive Rate (AIR) Add-On Payment for High-Cost Drugs
Provided by Indian Health Service (IHS) and Tribal Facilities,
contact Nate Vercauteren via email at
<a href="/cdn-cgi/l/email-protection#652b04110d040b4b330017060410110017000b250608164b0d0d164b020a13">[email&#160;protected]</a>.
Blood and Blood Products, contact Au'Sha Washington via email at
<a href="/cdn-cgi/l/email-protection#18596d4b70794f796b7071767f6c7776587b756b3670706b367f776e">[email&#160;protected]</a> or Josh McFeeters via email at
<a href="/cdn-cgi/l/email-protection#2c66435f44594d02614f6a494958495e5f6c4f415f0244445f024b435a">[email&#160;protected]</a>.
Cancer Hospital Payments, contact Scott Talaga via email at
<a href="/cdn-cgi/l/email-protection#c99aaaa6bdbde79da8a5a8aea889aaa4bae7a1a1bae7aea6bf">[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#195a716c7a72375b6b786f7c6b597a746a3771716a377e766f">[email&#160;protected]</a>.
Medicaid Clinic Services Four Walls Flexibilities, contact Sheri
Gaskins via email at <a href="/cdn-cgi/l/email-protection#5c0f34392e35721b3d2f3735322f1c3f312f7234342f723b332a">[email&#160;protected]</a> or Ryan Tisdale via
email at <a href="/cdn-cgi/l/email-protection#df8da6beb1f18bb6acbbbeb3ba9fbcb2acf1b7b7acf1b8b0a9">[email&#160;protected]</a>.
Composite APCs (Multiple Imaging and Mental Health) and
Comprehensive APCs (C-APCs), via email at Mitali Dayal via email at
<a href="/cdn-cgi/l/email-protection#4c0125382d202562082d352d207e0c2f213f6224243f622b233a">[email&#160;protected]</a>.
Device-Intensive Status and No Cost/Full Credit and Partial
Credit Devices, contact Scott Talaga via email at
<a href="/cdn-cgi/l/email-protection#b0e3d3dfc4c49ee4d1dcd1d7d1f0d3ddc39ed8d8c39ed7dfc6">[email&#160;protected]</a>.
Domestic Personal Protection Equipment RFI, contact Jesse
Hawkins via email at <a href="/cdn-cgi/l/email-protection#ddb7b8aeaeb8f3b5bcaab6b4b3ae9db5b5aef3bab2ab">[email&#160;protected]</a>.
Health and Safety Standards for Obstetrical Services in
Hospitals and Critical Access Hospitals, contact The Clinical
Standards Group, <a href="/cdn-cgi/l/email-protection#d39bb6b2bfa7bbb2bdb780b2b5b6a7aa9abda2a6baa1bab6a093b0bea0fdbbbba0fdb4bca5">[email&#160;protected]</a>.
Hospital Inpatient Quality Reporting (IQR) Program measures,
contact Melissa Hager or Ngozi Uzokwe via email
<a href="/cdn-cgi/l/email-protection#a9c4ccc5c0dadac887c1c8ceccdbe9cac4da87c1c1da87cec6df">[email&#160;protected]</a> or <a href="/cdn-cgi/l/email-protection#69070e061300471c1306021e0c290a041a4701011a470e061f">[email&#160;protected]</a>.
Hospital Outpatient Quality Reporting (OQR) Program policies,
contact Kimberly Go via email <a href="/cdn-cgi/l/email-protection#22694b4f4047504e5b0c654d62414f510c4a4a510c454d54">[email&#160;protected]</a>.
Hospital Outpatient Quality Reporting (OQR) Program measures,
contact Janis Grady via email <a href="/cdn-cgi/l/email-protection#a5efc4cbccd68be2d7c4c1dce5c6c8d68bcdcdd68bc2cad3">[email&#160;protected]</a>.
Hospital Outpatient Visits (Emergency Department Visits and
Critical Care Visits), contact Abby Cesnik via email at
<a href="/cdn-cgi/l/email-protection#87c6e5eee0e6eeeba9c4e2f4e9eeecc7e4eaf4a9efeff4a9e0e8f1">[email&#160;protected]</a> or Nate Vercauteren via email at
<a href="/cdn-cgi/l/email-protection#1f517e6b777e7131497a6d7c7e6a6b7a6d7a715f7c726c3177776c31787069">[email&#160;protected]</a>.

[[Page 59187]]

IHS Outpatient Encounter Rate available to all American Indian
and Alaska Native (AI/AN) Outpatient Programs Request for
Information, contact Lisa Parker via email at
<a href="/cdn-cgi/l/email-protection#a4e8cdd7c58af4c5d6cfc1d695e4c7c9d78accccd78ac3cbd2">[email&#160;protected]</a>.
Inpatient Only (IPO) Procedures List, contact Abigail Cesnik via
email at <a href="/cdn-cgi/l/email-protection#aaebc8c3cdcbc3c684e9cfd9c4c3c1eac9c7d984c2c2d984cdc5dc">[email&#160;protected]</a>.
Medicaid and CHIP Continuous Eligibility Policy, contact Cassie
Lagorio via email at <a href="/cdn-cgi/l/email-protection#e4a7859797858a809685caa885838b968d8ba4878997ca8c8c97ca838b92">[email&#160;protected]</a>.
New Technology Intraocular Lenses (NTIOLs), contact Scott Talaga
via email at <a href="/cdn-cgi/l/email-protection#90c3f3ffe4e4bec4f1fcf1f7f1d0f3fde3bef8f8e3bef7ffe6">[email&#160;protected]</a>.
No Legal Obligation to Pay Payment Exclusion, contact Frederick
Grabau via email at <a href="/cdn-cgi/l/email-protection#5e182c3b3a3b2c373d3570192c3f3c3f2b1e3d332d7036362d70393128">[email&#160;protected]</a>.
Non-Opioid Policy or Implementation of Section 4135 of the
Consolidated Appropriations Act (CAA), 2023, contact Mitali Dayal
via email at <a href="/cdn-cgi/l/email-protection#85c8ecf1e4e9ecabc1e4fce4e9b7c5e6e8f6abededf6abe2eaf3">[email&#160;protected]</a> or Cory Duke via email at
<a href="/cdn-cgi/l/email-protection#7d3e120f0453390816183d1e100e5315150e531a120b">[email&#160;protected]</a>.
OPPS Brachytherapy, contact Cory Duke via email at
<a href="/cdn-cgi/l/email-protection#8ac9e5f8f3a4ceffe1efcae9e7f9a4e2e2f9a4ede5fc">[email&#160;protected]</a> and Scott Talaga via email at
<a href="/cdn-cgi/l/email-protection#f5a6969a8181dba19499949294b5969886db9d9d86db929a83">[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#c481b6ada7afea87acb1a5aaa384a7a9b7eaacacb7eaa3abb2">[email&#160;protected]</a>, or Scott Talaga via email at
<a href="/cdn-cgi/l/email-protection#6132020e15154f35000d00060021020c124f0909124f060e17">[email&#160;protected]</a>, or Josh McFeeters via email at
<a href="/cdn-cgi/l/email-protection#a1ebced2c9d4c08fecc2e7c4c4d5c4d3d2e1c2ccd28fc9c9d28fc6ced7">[email&#160;protected]</a>.
OPPS Dental Policy, contact Nicole Marcos via email at
<a href="/cdn-cgi/l/email-protection#5a14333935363f74173b283935291a39372974323229743d352c">[email&#160;protected]</a>.
OPPS Drugs, Radiopharmaceuticals, Biologicals, and Biosimilar
Products, contact Josh McFeeters via email at
<a href="/cdn-cgi/l/email-protection#6a200519021f0b4427092c0f0f1e0f18192a09071944020219440d051c">[email&#160;protected]</a>, Gil Ngan via email at
<a href="/cdn-cgi/l/email-protection#94d3fdf8badaf3f5fad4f7f9e7bafcfce7baf3fbe2">[email&#160;protected]</a>, Cory Duke via email at <a href="/cdn-cgi/l/email-protection#10537f62693e54657b7550737d633e7878633e777f66">[email&#160;protected]</a>,
or Au'Sha Washington via email at <a href="/cdn-cgi/l/email-protection#450430362d246b1224362d2c2b22312a2b052628366b2d2d366b222a33">[email&#160;protected]</a>.
OPPS New Technology Procedures/Services, contact the New
Technology APC mailbox at <a href="/cdn-cgi/l/email-protection#4a042f3d1e2f29220b1a092b3a3a2623292b3e232524390a29273964222239642d253c">[email&#160;protected]</a>.
OPPS Packaged Items/Services, contact Mitali Dayal via email at
<a href="/cdn-cgi/l/email-protection#1e53776a7f7277305a7f677f722c5e7d736d3076766d30797168">[email&#160;protected]</a> or Cory Duke via email at
<a href="/cdn-cgi/l/email-protection#5f1c302d26711b2a343a1f3c322c7137372c71383029">[email&#160;protected]</a>.
OPPS Pass-Through Devices, contact the Device Pass-Through
mailbox at <a href="/cdn-cgi/l/email-protection#084c6d7e616b6d585c69787864616b697c6167667b486b657b2660607b266f677e">[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#044965766d6a652a4f71776c6a6d766b7265446769772a6c6c772a636b72">[email&#160;protected]</a>.
Outpatient Department Prior Authorization Process, contact Kelly
Wojciechowski via email at <a href="/cdn-cgi/l/email-protection#c48fa1a8a8bdea93abaea7ada1a7acabb3b7afad84a7a9b7eaacacb7eaa3abb2">[email&#160;protected]</a>.
Overall Hospital Quality Star Rating Request for Information,
contact Tyson Nakashima Sr. via email <a href="/cdn-cgi/l/email-protection#d88ca1abb7b6f696b9b3b9abb0b1b5b998bbb5abf6b0b0abf6bfb7ae">[email&#160;protected]</a>.
Partial Hospitalization Program (PHP), Intensive Outpatient
(IOP), and Community Mental Health Center (CMHC) Issues, contact the
PHP Payment Policy Mailbox at <a href="/cdn-cgi/l/email-protection#3c6c746c6c5d45515952486c5350555f457c5f514f1254544f125b534a">[email&#160;protected]</a>.
Payment Policy for Devices in Category B Investigational Device
Exemption Clinical Trials Policy and Drugs with a Medicare Coverage
with Evidence Development (CED) Designation, contact Cory Duke via
email at <a href="/cdn-cgi/l/email-protection#1a59756863345e6f717f5a79776934727269347d756c">[email&#160;protected]</a>.
Remote Services, contact Emily Yoder via email at
<a href="/cdn-cgi/l/email-protection#84c1e9ede8fdaaddebe0e1f6c4e7e9f7aaececf7aae3ebf2">[email&#160;protected]</a> or Nate Vercauteren via email at
<a href="/cdn-cgi/l/email-protection#86c8e7f2eee7e8a8d0e3f4e5e7f3f2e3f4e3e8c6e5ebf5a8eeeef5a8e1e9f0">[email&#160;protected]</a>.
Rual Emergency Hospital Quality Reporting (REHQR) Program
policies, contact Anita Bhatia via email at
<a href="/cdn-cgi/l/email-protection#490827203d28670b21283d2028092a243a6721213a672e263f">[email&#160;protected]</a>.
Rual Emergency Hospital Quality Reporting (REHQR) Program
measures, contact Melissa Hager via email <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="d19cb4bdb8a2a2b0ff99b0b6b4a391b2bca2ffb9b9a2ffb6bea7">[email&#160;protected]</a>.
Special Enrollment Period for Formerly Incarcerated Individuals,
contact Steve Manning via email at <a href="/cdn-cgi/l/email-protection#e4b790819281caa9858a8a8d8a83a4878997ca8c8c97ca838b92">[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#bef1cbcacedfcad7dbd0caeeeeedfeddd3cd90d6d6cd90d9d1c8">[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#c485978794949784a7a9b7eaacacb7eaa3abb2">[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="https://www.regulations.gov">https://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.
Plain Language Summary: In accordance with 5 U.S.C. 553(b)(4), a
plain language summary of this rule may be found at <a href="https://www.regulations.gov/">https://www.regulations.gov/</a>.

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 calendar year
(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/payment/prospective-payment-systems/hospital-outpatient/regulations-notices">https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices</a>.
The Addenda relating to the ASC payment system are available at:
<a href="https://www.cms.gov/medicare/payment/prospective-payment-systems/ambulatory-surgical-center-asc/asc-regulations-and-notices">https://www.cms.gov/medicare/payment/prospective-payment-systems/ambulatory-surgical-center-asc/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
(AMA). All Rights Reserved. CPT is a registered trademark of the AMA.
Applicable Federal Acquisition Regulations and Defense Federal
Acquisition Regulations 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 on the CY 2024 OPPS/ASC Proposed
Rule
II. Proposed Updates Affecting OPPS Payments
A. Recalibration of APC Relative Payment Weights
B. Conversion Factor Update
C. Proposed Wage Index Changes
D. Proposed Statewide Average Default Cost-to-Charge Ratios
(CCRs)
E. Proposed Adjustment for Rural Sole Community Hospitals (SCHs)
and Essential Access Community Hospitals (EACHs) Under Section
1833(t)(13)(B) of the Act for CY 2025
F. Proposed Payment Adjustment for Certain Cancer Hospitals for
CY 2025
G. Proposed Hospital Outpatient Outlier Payments
H. Proposed Calculation of an Adjusted Medicare Payment From the
National Unadjusted Medicare Payment
I. Proposed Beneficiary Copayments
III. Proposed OPPS Ambulatory Payment Classification (APC) Group
Policies
A. Proposed OPPS Treatment of New and Revised HCPCS Codes
B. Proposed OPPS Changes--Variations Within APCs
C. Proposed New Technology APCs
D. Proposed Universal Low Volume APC Policy for Clinical and
Brachytherapy APCs
E. Proposed APC-Specific Policies

[[Page 59188]]

IV. Proposed OPPS Payment for Devices
A. Proposed Pass-Through Payment for Devices
B. Proposed Device-Intensive Procedures
V. Proposed OPPS Payment for Drugs, Biologicals, and
Radiopharmaceuticals
A. Proposed OPPS Transitional Pass-Through Payment for
Additional Costs of Drugs, Biologicals, and Radiopharmaceuticals
B. Proposed OPPS Payment for Drugs, Biologicals, and
Radiopharmaceuticals Without Pass-Through Payment Status
VI. Proposed Estimate of OPPS Transitional Pass-Through Spending for
Drugs, Biologicals, Radiopharmaceuticals, and Devices
A. Amount of Additional Payment and Limit on Aggregate Annual
Adjustment
B. Estimate of Pass-Through Spending for CY 2025
VII. Proposed OPPS Payment for Hospital Outpatient Visits and
Critical Care Services
VIII. Proposed Payment for Partial Hospitalization and Intensive
Outpatient Services
A. Background
B. Coding and Billing for PHP and IOP Services Under the OPPS
C. Proposed CY 2025 Payment Rates for PHP and IOP
D. Proposed Outlier Policy for CMHCs
IX. Services That Will Be Paid Only as Inpatient Services
A. Background
B. Changes to the Inpatient Only (IPO) List
X. Nonrecurring Policy Changes
A. Remote Services
B. Virtual Direct Supervision of Cardiac Rehabilitation (CR),
Intensive Cardiac Rehabilitation (ICR), Pulmonary Rehabilitation
(PR) Services and Diagnostic Services Furnished to Hospital
Outpatients
C. All-Inclusive Rate (AIR) Add-On Payment for High-Cost Drugs
Provided by Indian Health Service and Tribal Facilities
D. Request for Information- IHS Outpatient Encounter Rate
Available to All American Indian and Alaska Native (AI/AN)
Outpatient Programs
E. Coverage Changes for Colorectal Cancer (CRC) Screening
Services
F. Request for Comment on Payment Adjustments Under the IPPS and
OPPS for Domestic Personal Protective Equipment
G. Payment for HIV Pre-Exposure Prophylaxis (PrEP) in Hospital
Outpatient Departments
H. Payment Policy for Devices in Category B Investigational
Device Exemption (IDE) Clinical Trials Policy and Drugs With a
Medicare Coverage With Evidence Development (CED) Designation
XI. Proposed CY 2025 OPPS Payment Status and Comment Indicators
A. Proposed CY 2025 OPPS Payment Status Indicator Definitions
B. Proposed CY 2025 Comment Indicator Definitions
XII. MedPAC Recommendations
A. OPPS Payment Rates Update
B. Medicare Safety Net Index
C. ASC Cost Data
XIII. Proposed Updates to the Ambulatory Surgical Center (ASC)
Payment System
A. Background, Legislative History, Statutory Authority, and
Prior Rulemaking for the ASC Payment System
B. Proposed ASC Treatment of New and Revised Codes
C. Proposed Payment Policies Under the ASC Payment System
D. Proposed Additions to ASC Covered Surgical Procedures and
Covered Ancillary Services Lists
E. ASC Payment Policy for Non-Opioid Post-Surgery Pain
Management Drugs, Biologicals, and Devices
F. Proposed CY 2025 Non-Opioid Policy for Pain Relief Under the
OPPS and ASC Payment System
G. Proposed New Technology Intraocular Lenses (NTIOLs)
H. Proposed Calculation of the ASC Payment Rates and the ASC
Conversion Factor
XIV. Cross-Program Proposals for the Hospital Outpatient Quality
Reporting (OQR), Rural Emergency Hospital Quality Reporting (REHQR),
and Ambulatory Surgical Center Quality Reporting (ASCQR) Programs
A. Background
B. CMS Commitment to Advancing Health Equity Using Quality
Measurement
C. Proposal To Modify the Immediate Measure Removal Policy for
the Hospital Outpatient Quality Reporting (OQR) and Ambulatory
Surgical Center Quality Reporting (ASCQR) Programs Beginning With CY
2025
XV. Hospital Outpatient Quality Reporting (OQR) Program
A. Background and Statutory Authority
B. Program Measure Set Policies
C. Program Measure Proposals
D. Administrative Requirements
E. Form, Manner, and Timing of Data Submission
F. Public Reporting of Measure Data
G. Payment Reduction for Hospitals That Fail To Meet the
Hospital OQR Program
XVI. Rural Emergency Hospital Quality Reporting (REHQR) Program
A. Background and Statutory Authority
B. Program Measure Set Policies: Retention, Suspension or
Removal, Modification, and Adoption
C. Program Measure Proposals
D. Administrative Requirements
E. Form, Manner, and Timing of Data Submission
F. Public Reporting of Measure Data
XVII. Ambulatory Surgical Center Quality Reporting (ASCQR) Program
A. Background and Statutory Authority
B. Program Measure Set Policies
C. Program Measure Proposals
D. Administrative Requirements
E. Form, Manner, and Timing of Data Submission
F. Public Reporting of Measure Data
G. Request for Information (RFI)--Development of Frameworks for
Specialty Focused Reporting and Minimum Case Number for Required
Reporting
H. Payment Reduction for ASCs That Fail To Meet the ASCQR
Program Requirements
XVIII. Medicaid Clinic Services Four Walls Exceptions
XIX. Changes to the Review Timeframes for the Hospital Outpatient
Department (OPD) Prior Authorization Process
XX. Provisions Related to Medicaid and the Children's Health
Insurance Program (CHIP)
XXI. Health and Safety Standards for Obstetrical Services in
Hospitals and Critical Access Hospitals
A. Background
B. Provisions of the Proposed Regulations
XXII. Modification to the Hybrid Hospital-Wide All-Cause Readmission
and Hybrid Hospital-Wide All-Cause Risk Standardized Mortality
Measures in the Hospital Inpatient Quality Reporting Program
XXIII. Individuals Currently or Formerly in the Custody of Penal
Authorities
A. Medicare FFS No Legal Obligation To Pay Payment Exclusion and
Incarceration (Revisions to 42 CFR 411.4)
B. Revision to Medicare Special Enrollment Period for Formerly
Incarcerated Individuals
XXIV. Overall Hospital Quality Star Rating Modification To Emphasize
the Safety of Care Summary
A. Background
B. Current Overall Hospital Quality Star Rating Methodology
C. Safety of Care in Star Ratings
D. Potential Future Options to Greater Emphasize Patient Safety
in the Overall Hospital Quality Star Rating
E. Solicitation of Public Comment
XXIII. Files Available to the Public via the Internet
XXIV. Collection of Information Requirements
A. ICRs for the Hospital Outpatient Quality Reporting (OQR)
Program
B. ICRs for the Rural Emergency Hospitals Quality Reporting
(REHQR) Program
C. ICRs for the Ambulatory Surgical Center Quality Reporting
(ASCQR) Program
D. ICRs Related to Medicaid Clinic Services Four Walls
Exceptions
E. ICRs for Changes to the Review Timeframes for Hospital
Outpatient Department (OPD) Prior Authorization Process
F. ICRs for the Hospital Inpatient Quality Reporting (IQR)
Program
G. ICRs for Continuous Eligibility (42 CFR 435.926 and 457.342)
H. ICRs Regarding Organization, Staffing and Delivery of
Services for Hospitals (Sec. 482.59a and b) and CAHs (Sec.
485.649a Through b)
I. ICRs Regarding OB Staff Training for Hospitals (Sec.
482.59(c) and CAHs (Sec. 485.649(c))
J. ICRs Regarding Revisions to QAPI (Sec. 482.21) Standards for
OB Services
K. ICRS Regarding Emergency Services Readiness in Emergency
Services (Sec. 482.55) for Hospitals
L. Transfer Protocols in Discharge Planning (Sec. 482.43) for
Hospitals
M. Total Costs for all ICRs Related to Maternal Health

[[Page 59189]]

XXV. Response to Comments
XXVI. Economic Analyses
A. Statement of Need
B. Overall Impact of Provisions of Proposed Rule
C. Detailed Economic Analyses
D. Regulatory Review Cost Estimation
E. Regulatory Flexibility Act (RFA) Analysis
F. Unfunded Mandates Reform Act Analysis
G. Federalism
H. Conclusion

I. Summary and Background

A. Executive Summary of this Document

1. Purpose

In this proposed rule, we propose to update 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, 2025. 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 of the Department of Health and Human
Services (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 practice, 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 proposed rule
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 proposed rule.
In addition, this proposed rule would update and refine the
requirements for the Hospital Outpatient Quality Reporting (OQR)
Program, the Rural Emergency Hospital Quality Reporting (REHQR)
Program, the Ambulatory Surgical Center Quality Reporting (ASCQR)
Program, and the Hospital Inpatient Quality Reporting (IQR) Program.
This proposed rule would request information on options being
considered for future changes to the Overall Hospital Quality Star
Rating methodology. Given that the maternal health crisis in the United
States is among the highest in high-income countries and also
disproportionately impacts racial and ethnic minorities, we are
proposing updates to the CoPs for hospitals and CAHs in an effort to
advance the health and safety of pregnant, birthing, and post-partum
women.
The proposed rule would narrow the description of ``custody'' for
the purposes of Medicare's no legal obligation to pay payment exclusion
at Sec. 411.4(b), add a definition of ``penal authority,'' reorganize
the regulation, and make certain technical edits. The proposed rule
would revise the eligibility requirements in the special enrollment
period (SEP) for formerly incarcerated individuals at Sec. Sec.
406.27(d) (Premium Part A) and 407.23(d) (Part B) to tie the
eligibility for this SEP to the determination made by SSA that they are
no longer incarcerated for releases beginning on January 1, 2025 and
limit the current eligibility criteria for the SEP, with reference to
``custody'' associated with Sec. 411.4(b) to releases between January
1, 2023 and December 31, 2024.
Finally, this proposed rule includes a proposal to create
exceptions to the Medicaid clinic services benefit four walls
requirement, to authorize Medicaid payment for services provided
outside the four walls of the clinic for IHS/Tribal clinics, behavioral
health clinics, and clinics located in rural areas. Our current
regulation at 42 CFR 440.90(b) includes an exception to the four walls
requirement under the Medicaid clinic services benefit only for certain
clinic services furnished to individuals who are unhoused. We believe
these proposed exceptions would help maintain and improve access for
the populations served by IHS/Tribal clinics, behavioral health
clinics, and clinics located in rural areas.
Please note, some sections of this proposed rule contain a request
for information (RFI). In accordance with the implementing regulations
of the Paperwork Reduction Act of 1995 (PRA), specifically 5 CFR
1320.3(h)(4), these general solicitations are exempt from the PRA.
Facts or opinions submitted in response to general solicitations of
comments from the public, published in the Federal Register or other
publications, regardless of the form or format thereof, provided that
no person is required to supply specific information pertaining to the
commenter, other than that necessary for self-identification, as a
condition of the agency's full consideration, are not generally
considered information collections and therefore not subject to the
PRA.
Respondents are encouraged to provide complete but concise
responses. These RFIs are issued solely for information and planning
purposes; they do not constitute a Request for Proposal (RFP),
applications, proposal abstracts, or quotations. These RFIs do not
commit the U.S. Government to contract for any supplies or services or
make a grant award. Further, CMS is not seeking proposals through these
RFIs and will not accept unsolicited proposals. Responders are advised
that the U.S. Government will not pay for any information or
administrative costs incurred in response to these RFIs; all costs
associated with responding to these RFIs will be solely at the
interested party's expense. Not responding to these RFIs does not
preclude participation in any future procurement, if conducted. It is
the responsibility of the potential responders to monitor these RFI
announcements for additional information pertaining to these requests.
Please note that CMS will not respond to questions about the policy
issues raised in these RFIs. CMS may or may not choose to contact
individual responders. Such communications would only serve to further
clarify written responses. Contractor support personnel may be used to
review RFI responses. Responses to this notice are not offers and
cannot be accepted by the U.S. Government to form a binding contract or
issue a grant. Information obtained as a result of these RFIs may be
used by the U.S. Government for program planning on a non-attribution
basis. Respondents should not include any information that might be
considered proprietary or confidential. These RFIs should not be
construed as a commitment or authorization to incur cost for which
reimbursement would be required or sought. All submissions become U.S.
Government property and will not be returned. CMS may publicly post the
comments received, or a summary thereof.
2. Summary of the Major Provisions
<bullet> OPPS Update: For CY 2025, we propose to increase the
payment rates under the OPPS by an Outpatient Department (OPD) fee
schedule increase factor of 2.6 percent. This increase factor is based
on the proposed inpatient hospital market basket percentage increase of
3.0 percent for inpatient services paid under the hospital inpatient
prospective payment system (IPPS) reduced by a proposed productivity
adjustment of 0.4 percentage point. Based on this update, we estimate
that total payments to OPPS providers (including beneficiary cost

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sharing and estimated changes in enrollment, utilization, and case mix)
for calendar year (CY) 2025 would be approximately $88.2 billion, a
proposed increase of approximately $5.2 billion compared to estimated
CY 2024 OPPS payments.
We are continuing to implement the statutory 2.0 percentage point
reduction in payments for hospitals that fail to meet the hospital
outpatient quality reporting requirements by applying a reporting
factor of 0.9805 to the OPPS payments and copayments for all applicable
services.
<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. In light of the impact of the COVID-19 PHE on healthcare
utilization, we extended our policy to update the ASC payment system
using the hospital market basket update an additional 2 years--through
CYs 2024 and 2025. Using the hospital market basket methodology, for CY
2025, we propose to increase payment rates under the ASC payment system
by 2.6 percent for ASCs that meet the quality reporting requirements
under the ASCQR Program. This increase is based on a proposed hospital
market basket percentage increase of 3.0 percent reduced by a
productivity adjustment of 0.4 percentage point. Based on this proposed
update, we estimate that total payments to ASCs (including beneficiary
cost sharing and estimated changes in enrollment, utilization, and
case-mix) for CY 2025 will be approximately $7.4 billion, an increase
of approximately $202 million compared to estimated CY 2024 Medicare
payments.
<bullet> Data Used in CY 2025 OPPS/ASC Ratesetting: To set OPPS and
ASC payment rates, we normally use the most updated claims and cost
report data available. The best available claims data is the most
recent set of data which would be from 2 years prior to the calendar
year that is the subject of rulemaking. Cost report data usually lags
the claims data by a year, and we believe that using the most updated
cost report extract available from the Healthcare Cost Report
Information System (HCRIS) is appropriate for CY 2025 OPPS ratesetting.
Therefore, we are using our typical data process of using the most
updated cost reports and claims data available for CY 2025 OPPS
ratesetting.
<bullet> Device Pass-Through Payment Applications: For CY 2025, we
received 14 complete applications for device pass-through payments. We
solicit public comment on these applications and will make final
determinations on these applications in the CY 2025 OPPS/ASC final rule
with comment period.
<bullet> Changes to the List of ASC Covered Surgical Procedures and
Ancillary Services Lists: For CY 2025, we propose to add 20 medical and
dental procedures to the ASC CPL and ancillary services lists based
upon existing criteria at Sec. 416.166.
<bullet> Changes to the Inpatient Only (IPO) List: For CY 2025, we
propose to add three services for which codes were newly created by the
AMA CPT Editorial Panel for CY 2025 to the IPO list: CPT codes 0894T
(Cannulation of the liver allograft in preparation for connection to
the normothermic perfusion device and decannulation of the liver
allograft following normothermic perfusion), 0895T (Connection of liver
allograft to normothermic machine perfusion device, hemostasis control;
initial 4 hours of monitoring time, including hourly physiological and
laboratory assessments (e.g., perfusate temperature, perfusate pH,
hemodynamic parameters, bile production, bile pH, bile glucose,
biliary), and 0896T (Connection of liver allograft to normothermic
machine perfusion device, hemostasis control; each additional hour,
including physiological and laboratory assessments (e.g., perfusate
temperature, perfusate pH, hemodynamic parameters, bile production,
bile pH, bile glucose, biliary bicarbonate, lactate levels, macroscopic
assessment)).
<bullet> Remote Services: For CY 2025, we are clarifying our
policies for remotely furnished outpatient therapy services, Diabetes
Self-Management Training and Medical Nutrition Therapy services and
mental health services furnished remotely to beneficiaries in their
homes by hospital staff to maintain alignment across payment systems.
<bullet> All-Inclusive Rate (AIR) Add-On Payment for High-Cost
Drugs Provided by Indian Health Service and Tribal Facilities: In CY
2024 OPPS/ASC rulemaking, due to health equity and beneficiary access
concerns, we solicited comment from the public on whether Medicare
should pay separately for certain high-cost drugs provided by IHS and
tribal facilities and, if so, how we might do so. Based on the
responses we received, we are proposing, starting January 1, 2025, to
separately pay IHS and tribal hospitals for high-cost drugs furnished
in hospital outpatient departments through an add-on payment in
addition to the AIR under the authorities used to calculate the AIR.
<bullet> Clinical Trials Coding and Payment: We propose technical
refinements to our Category B clinical trials coding and payment policy
for devices and procedures. We are also proposing to extend our coding
and payment policy to drugs and devices that meet CAG's coverage and
evidence development (CED) requirement for which there is a control
arm.
<bullet> Payment for HIV Pre-Exposure Prophylaxis (PrEP) in
Hospital Outpatient Departments: For CY 2025, we are proposing to pay
for HIV PrEP drugs covered as an additional preventive service and
related services under the OPPS, if covered by CMS through a National
Coverage Determination. We propose a site neutral policy where products
are generally paid similar rates under the OPPS and Physician Fee
Schedule.
<bullet> Diagnostic Radiopharmaceuticals Separate Payment: We
propose to pay separately for diagnostic radiopharmaceuticals with per
day costs above a threshold of $630, which is approximately two times
the volume weighted average cost amount currently associated with
diagnostic radiopharmaceuticals. We also propose to update the $630
threshold in CY 2026 and subsequent years by the Producer Price Index
(PPI) for Pharmaceutical Preparations. Finally, we propose to pay for
separately payable diagnostic radiopharmaceuticals based on their Mean
Unit Cost (MUC) derived from OPPS claims and seek comment on the use of
Average Sales Price (ASP) for payment in future years.
<bullet> Exclusion of Cell and Gene Therapies from Comprehensive
Ambulatory Payment Classification (C-APC) Packaging: We propose to
exclude qualifying cell and gene therapies from C-APC packaging and
seek comment on whether there are other changes to the C-APC packaging
policy we should consider for future years.
<bullet> Add-on Payment for Radiopharmaceutical Technetium-99m (Tc-
99m): For CY 2025, an add-on payment applies radiopharmaceuticals that
use Tc-99m produced without use of highly enriched uranium (HEU). We
propose for CY 2026 that we would replace the add-on payment for
radiopharmaceuticals produced without the use of Tc-99m derived from
non-HEU sources with an add-on payment for radiopharmaceuticals that
use Tc-99m derived from domestically produced Mo-99.
<bullet> Changes to the Review Timeframes for the Hospital
Outpatient Department (OPD) Prior Authorization Process: We are
changing the current review timeframe for prior authorization

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requests for OPD services from 10-business days to 7-calendar days for
standard reviews.
<bullet> Cross-Program Proposals for the Hospital Outpatient
Quality Reporting (OQR), Rural Emergency Hospital Quality Reporting
(REHQR), and Ambulatory Surgical Center Quality Reporting (ASCQR)
Programs: We propose to: (1) adopt the Hospital Commitment to Health
Equity (HCHE) measure in the Hospital OQR and REHQR Programs and the
Facility Commitment to Health Equity (FCHE) measure in the ASCQR
Program beginning with the CY 2025 reporting period/CY 2027 payment or
program determination; (2) adopt the Screening for Social Drivers of
Health (SDOH) measure in all three programs beginning with voluntary
reporting for the CY 2025 reporting period followed by mandatory
reporting beginning with the CY 2026 reporting period/CY 2028 payment
or program determination; (3) adopt the Screen Positive Rate for SDOH
measure in all three programs beginning with voluntary reporting for
the CY 2025 reporting period followed by mandatory reporting beginning
with the CY 2026 reporting period/CY 2028 payment or program
determination; and (4) modify the Immediate Measure Removal policy for
adopted Hospital OQR and ASCQR Program measures beginning with CY 2025.
<bullet> Hospital Outpatient Quality Reporting (OQR) Program: In
addition to the cross-program proposals, we propose to: (1) adopt the
Patient Understanding of Key Information Related to Recovery After a
Facility-Based Outpatient Procedure or Surgery, Patient Reported
Outcome-Based Performance Measure (Information Transfer PRO-PM)
beginning with voluntary reporting for the CY 2026 reporting period
followed by mandatory reporting beginning with the CY 2027 reporting
period/CY 2029 payment determination; (2) remove the MRI Lumbar Spine
for Low Back Pain measure beginning with the CY 2025 reporting period/
CY 2027 payment determination; (3) remove the Cardiac Imaging for
Preoperative Risk Assessment for Non-Cardiac, Low-Risk Surgery measure
beginning with the CY 2025 reporting period/CY 2027 payment
determination; (4) require electronic health record (EHR) technology to
be certified to all electronic clinical quality measures (eCQMs)
available to report beginning with the CY 2025 reporting period/CY 2027
payment determination; and (5) publicly report the Median Time from
Emergency Department (ED) Arrival to ED Departure for Discharged ED
Patients measure--Psychiatric/Mental Health Patients stratification on
Care Compare beginning with CY 2025.
<bullet> Rural Emergency Hospital Quality Reporting (REHQR)
Program: In addition to the cross-program proposals, we propose to: (1)
extend the reporting period for the Risk-Standardized Hospital Visits
Within 7 Days After Hospital Outpatient Surgery measure from one year
to two years beginning with the CY 2027 program determination; and (2)
establish when, after status conversion, REHs would be required to
report data under the REHQR Program.
<bullet<ls-thn-eq> Ambulatory Surgical Center Quality Reporting
(ASCQR) Program: In addition to the cross-program proposals, we are
requesting public comment on the potential development of frameworks
for specialty focused reporting and minimum case number for required
reporting under the ASCQR Program.
<bullet<ls-thn-eq> Hospital Inpatient Quality Reporting (IQR)
Program: We propose to continue voluntary reporting of the core
clinical data elements (CCDEs) and linking variables for both the
Hybrid Hospital-Wide Readmission (HWR) and Hybrid Hospital-Wide
Standardized Mortality (HWM) measures, for the performance period of
July 1, 2023 through June 30, 2024, impacting the FY 2026 payment
determination for the Hospital IQR Program.
<bullet> Overall Hospital Quality Star Rating: We are requesting
information on potential modifications to the Safety of Care measure
group in the Overall Hospital Quality Star Rating methodology.
<bullet> Medicare FFS No Legal Obligation to Pay Payment Exclusion
and Incarceration: We propose to narrow the description of ``custody''
for purposes of Medicare's no legal obligation to pay payment exclusion
at Sec. 411.4(b), add a definition of ``penal authority,'' reorganize
the regulation, and make certain technical edits.
<bullet> Revision to Medicare Special Enrollment Period for
Formerly Incarcerated Individuals: The proposed rule would revise the
eligibility requirements in the special enrollment period (SEP) for
formerly incarcerated individuals at Sec. Sec. 406.27(d) and 407.23(d)
to remove the reference to ``custody'' associated with Sec. 411.4(b)
and instead tie the eligibility for this SEP to the determination made
by SSA that they are no longer incarcerated.
<bullet> Continuous Eligibility in Medicaid and CHIP: We propose to
revise Medicaid and CHIP regulations to codify the requirement within
the CAA, 2023 to require States to provide 12 months of continuous
eligibility to children under the age of 19 in Medicaid and CHIP, with
limited exceptions. Specifically, we propose to remove the option to
provide continuous eligibility to a subgroup of Medicaid and CHIP
enrollees and for a time period of less than 12 months. For CHIP, we
propose to remove the option to disenroll children from CHIP during a
continuous eligibility period for failure to pay premiums.
<bullet> Medicaid Clinic Services Four Walls Exceptions: Beginning
with the effective date of any final rule implementing this proposal,
we propose to add three exceptions to the Medicaid clinic services
benefit four walls requirement at 42 CFR 440.90. Our current regulation
at 42 CFR 440.90(b) allows for Medicaid payment for clinic services
furnished outside of the four walls of the clinic only to individuals
who are unhoused. Our proposal would add a mandatory exception to the
four walls requirement for IHS/Tribal clinics at 42 CFR 440.90(c) and
optional exceptions for behavioral health clinics and clinics located
in rural areas at 42 CFR 440.90(d) and (e), respectively.
<bullet> Health and Safety Standards for Obstetrical Services in
Hospitals and Critical Access Hospitals: CMS is proposing new
Conditions of Participation (CoPs) for hospitals and CAHs for
obstetrical services, including new requirements for maternal quality
assessment and performance improvement (QAPI), maternal health data
reporting, baseline standards for the organization, staffing, and
delivery of care within obstetrical units, and staff training on
evidence-based best practices on an annual basis. CMS is further
proposing revisions to the emergency services CoP related to emergency
readiness for hospitals and CAHs that provide emergency services. In
addition, CMS is proposing revisions to the Discharge Planning CoP for
all hospitals and CAHs related to transfer protocols. Lastly, CMS is
soliciting comments on whether these proposed requirements should also
apply to rural emergency hospitals (REHs).
3. Summary of Costs and Benefits
In section XXVI of this proposed rule, we set forth a detailed
analysis of the regulatory and federalism impacts that the proposed
changes would have on affected entities and beneficiaries. Key
estimated impacts are described below.
a. Impacts of All OPPS Changes
Table 131 in section XXVI.C of this proposed rule displays the
distributional impact of all the proposed OPPS changes on various
groups of hospitals and CMHCs for CY 2025

[[Page 59192]]

compared to all estimated OPPS payments in CY 2024. We estimate that
the proposed policies in this proposed rule would result in a 2.3
percent overall increase in OPPS payments to providers. We estimate
that total OPPS payments for CY 2025, including beneficiary cost-
sharing, to the approximately 3,500 facilities paid under the OPPS
(including general acute care hospitals, children's hospitals, cancer
hospitals, and CMHCs) would increase by approximately $1.8 billion
compared to CY 2024 payments, excluding our estimated changes in
enrollment, utilization, and case-mix.
We estimated the isolated impact of our proposed OPPS policies on
CMHCs because CMHCs have historically only been paid for partial
hospitalization services under the OPPS. Since CY 2024, they have also
been paid for new intensive outpatient program (IOP) 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 7.2 percent increase in CY 2025 payments to
CMHCs relative to their CY 2024 payments.
b. Impacts of the Updated Wage Indexes
We estimate that our update of the wage indexes based on the fiscal
year (FY) 2025 IPPS final rule wage indexes would result in a 0.1
percent increase for urban hospitals under the OPPS and a 1.0 percent
increase for rural hospitals. These wage indexes include the
implementation of the Office of Management and Budget (OMB) labor
market area delineations based on 2020 Decennial Census data, with
updates, as discussed in section II.C of this proposed rule.
c. Impacts of the Rural Adjustment and the Cancer Hospital Payment
Adjustment
For CY 2025, 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. Section 16002(b) of the 21st Century Cures
Act requires that this weighted average PCR be reduced by 1.0
percentage point. In light of the COVID-19 PHE impact on claims and
cost data used to calculate the target PCR, we had maintained the CY
2021 target PCR of 0.89 through CYs 2022 and 2023. However, in CY 2024,
we finalized a policy to reduce the target PCR by 1.0 percentage point
each calendar year until the target PCR equals the PCR of non-cancer
hospitals using the most recently submitted or settled cost report
data. For CY 2024, we finalized a target PCR of 0.88. For CY 2025, we
are proposing a target PCR of 0.87 to determine the CY 2025 cancer
hospital payment adjustment to be paid at cost report settlement. That
is, the payment adjustments would be the additional payments needed to
result in a PCR equal to 0.87 for each cancer hospital.
d. Impacts of the OPD Fee Schedule Increase Factor
For the CY 2025 OPPS/ASC, we are proposing an OPD fee schedule
increase factor of 2.6 percent and proposing to apply that increase
factor to the conversion factor for CY 2025. As a result of the
proposed OPD fee schedule increase factor and the proposed budget
neutrality adjustments, we estimate that urban hospitals would
experience an increase in payments of approximately 2.4 percent and
that rural hospitals would experience an increase in payments of 2.8
percent. Classifying hospitals by teaching status, we estimate non-
teaching hospitals would experience an increase in payments of 2.5
percent, minor teaching hospitals would experience an increase in
payments of 2.6 percent, and major teaching hospitals would experience
an increase in payments of 2.1 percent. We also classified hospitals by
the type of ownership. We estimate that hospitals with voluntary
ownership would experience an increase of 2.3 percent in payments,
while hospitals with government ownership would experience an increase
of 2.4 percent in payments. We estimate that hospitals with proprietary
ownership would experience an increase of 3.5 percent in payments.
e. Impacts of the Proposed 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 2025 payment
rates, compared to estimated CY 2024 payment rates, generally ranges
between an increase of 1 percent and an increase of 4 percent,
depending on the service, with some exceptions. We estimate the impact
of applying the proposed inpatient hospital market basket update to ASC
payment rates will increase payments by $202 million under the ASC
payment system in CY 2025.
f. Impacts of Medicaid Clinic Services Four Walls Exceptions
We estimate that the proposed exceptions to the four walls
requirement under the Medicaid clinic services benefit for IHS/Tribal
clinics, behavioral health clinics, and clinics located in rural areas
would increase total expenditures by $1.18 billion from FY 2025 through
2029. Our estimate includes a Federal impact of $1.15 billion and
impact to States of $30 million. These estimates are discussed in more
detail in section XXVI of this proposed rule.
g. Impacts of Health and Safety Standards for Obstetrical Services in
Hospitals and Critical Access Hospitals
We propose maternal health focused revisions to the CoPs for
hospitals and critical access hospitals (CAHs), which are estimated to
increase burden on hospitals and CAHs by $446 million annually with
total costs estimated at $4.46 billion over 10 years. We expect an
average annual cost of $70,671 per hospital and CAH. As discussed in
detail in section XXVI, we expect the benefits of these proposed
policies to include reduced maternal morbidity and mortality, leading
to financial benefits for patients, their families, and payors. We also
expect that the proposed policies are likely to reduce inequality in
maternal health outcomes among pregnant and postpartum women from
different groups and lead to overall improvements in patient care.
B. Legislative and Regulatory Authority for the Hospital OPPS
When Title XVIII of the Act was enacted, Medicare payment for
hospital outpatient services was based on hospital-specific costs. In
an effort to ensure that Medicare and its beneficiaries pay
appropriately for services and to encourage more efficient delivery of
care, the Congress mandated replacement of the reasonable cost-based
payment methodology with a prospective payment system (PPS). The
Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33) added section
1833(t) to the Act, authorizing implementation of a PPS for hospital
outpatient services. The OPPS was first implemented for services
furnished on or after August 1, 2000. Implementing regulations for the
OPPS are located at 42 CFR parts 410 and 419.
The Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of
1999 (BBRA) (Pub. L. 106-113) made major changes in the hospital OPPS.
The following Acts made additional changes to the OPPS: the Medicare,

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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; the
Consolidated Appropriations Act, 2021 (Pub. L. 116-260), enacted on
December 27, 2020; the Inflation Reduction Act, 2022 (Pub. L. 117-169),
enacted on August 16, 2022; and Consolidated Appropriations Act (CAA),
2023 (Pub. L. 117-238), enacted December 29, 2022.
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 excluded from payment under the OPPS. These excluded
hospitals are:

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<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;
<bullet> Indian Health Service (IHS) hospitals; and
<bullet> Rural emergency hospitals (REH).

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/payment/prospective-payment-systems/hospital-outpatient/regulations-notices">https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices</a>.

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). 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 21, 2022, 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 21, 2023. 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
2022, we published a Federal Register notice requesting nominations to
fill vacancies on the Panel (87 FR 68499). CMS is currently accepting
nominations at: <a href="https://mearis.cms.gov">https://mearis.cms.gov</a>.
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 21, 2023, meeting that the
subcommittees continue. We accepted this recommendation.
For discussions of earlier Panel meetings and recommendations, we
refer readers to previously published OPPS/ASC proposed and final
rules, the CMS website mentioned earlier in this section, and the FACA
database at <a href="https://facadatabase.gov">https://facadatabase.gov</a>.

[[Page 59195]]

F. Public Comments Received on the CY 2024 OPPS/ASC Final Rule With
Comment Period

We received approximately 180 timely pieces of correspondence on
the CY 2024 OPPS/ASC final rule with comment period that appeared in
the Federal Register on November 22, 2023 (88 FR 81540) and the related
correction notice. In-scope comments were related to the interim APC
assignments and/or status indicators of new or replacement Level II
HCPCS codes, which are identified with comment indicator ``NI'' in OPPS
Addendum B, ASC Addendum AA, and ASC Addendum BB to that final rule).

II. Proposed Updates Affecting OPPS Payments

A. Recalibration of APC Relative Payment Weights

1. Database Construction
a. Database Source and Methodology
Section 1833(t)(9)(A) of the Act requires that the Secretary review
not less often than annually and revise the relative payment weights
for Ambulatory Payment Classifications (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 2025 OPPS, we propose to recalibrate the APC relative
payment weights for services furnished on or after January 1, 2025, and
before January 1, 2026 (CY 2025), using the same basic methodology that
we described in the CY 2024 OPPS/ASC final rule with comment period (88
FR 81549 through 81552), using CY 2023 claims data. That is, we propose
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 2025, we began with approximately 145 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, 2023, and before January 1, 2024, before applying our
exclusionary criteria and other methodological adjustments. After the
application of those data processing changes, we used approximately 73
million final action claims to develop the proposed CY 2025 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 this
proposed rule on the CMS website at: <a href="https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient">https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient</a>.
Addendum N to this proposed rule (which is available via the
internet on the CMS website at: <a href="https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices">https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices</a>)
includes the proposed list of bypass codes for CY 2025. The proposed
list of bypass codes contains codes that are reported on claims for
services in CY 2023 and, therefore, includes codes that were in effect
in CY 2023 and used for billing. We propose to retain these deleted
bypass codes on the proposed CY 2025 bypass list because these codes
existed in CY 2023 and were covered OPD services in that period, and CY
2023 claims data were used to calculate proposed CY 2025 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 this proposed rule. HCPCS
codes that we propose to add for CY 2025 are identified by asterisks
(*) in the fourth column of Addendum N.
b. Proposed Calculation and Use of Cost-to-Charge Ratios (CCRs)
For CY 2025, we propose 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
proposed CY 2025 APC payment rates are based, we calculated hospital-
specific departmental CCRs for each hospital for which we had CY 2023
claims data by comparing these claims data to the most recently
available hospital cost reports, which, in most cases, are from CY
2022. For the proposed CY 2025 OPPS payment rates, we used the set of
claims processed during CY 2023. 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 2023 (the year
of claims data we used to calculate the proposed CY 2025 OPPS payment
rates) and updates to the National Uniform Billing Committee (NUBC)
2023 Data specifications Manual. That crosswalk is available for review
and continuous comment on the CMS website at <a href="https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient">https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient</a>.
In accordance with our longstanding policy, similar to our
finalized policy for CY 2024 OPPS ratesetting, we propose to calculate
CCRs for the standard cost centers--cost centers with a predefined
label--and nonstandard cost centers--cost centers defined by a
hospital--accepted by the electronic cost report database. In general,
the most detailed level at which we calculate CCRs is the hospital-
specific departmental level.
While we generally view the use of additional cost data as
improving our OPPS ratesetting process, we have historically not
included cost report lines for certain nonstandard cost centers in the
OPPS ratesetting database construction when hospitals have reported
these nonstandard cost centers on cost report lines that do not
correspond to the cost center number. We believe it is important to
further investigate the accuracy of these cost report data before
including such data in the ratesetting process. Further, we believe it
is appropriate to gather additional information from the public as well
before including them in OPPS ratesetting. For CY 2025, we propose not
to include the nonstandard cost centers reported in this way in the
OPPS ratesetting database construction.
2. Proposed Data Development and Calculation of Costs Used for
Ratesetting
In this section of this proposed rule, we discuss the use of claims
to calculate the OPPS payment rates for CY 2025. The Hospital OPPS page
on the CMS website on which this proposed rule is posted (<a href="https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient">https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient</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="https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient">https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient</a>, includes information about obtaining

[[Page 59196]]

the ``OPPS Limited Data Set,'' which now includes the additional
variables previously available only in the OPPS Identifiable Data Set,
including International Classification of Diseases, Tenth Revision,
Clinical Modification (ICD-10-CM) diagnosis codes and revenue code
payment amounts. This file is derived from the CY 2023 claims that are
used to calculate the proposed payment rates for this proposed rule.
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 used the methodology described in sections II.A.2.a through
II.A.2.c of this proposed rule to calculate the costs we used to
establish the proposed relative payment weights used in calculating the
OPPS payment rates for CY 2025 shown in Addenda A and B to this
proposed rule (which are available via the internet on the CMS website
at: <a href="https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices">https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices</a>). We refer readers to section
II.A.4 of this proposed rule for a discussion of the conversion of APC
costs to scaled payment weights.
We note that under the OPPS, CY 2019 was the first year in which
the claims data used for setting payment rates (CY 2017 data) contained
lines with the modifier ``PN,'' which indicates nonexcepted items and
services furnished and billed by off-campus provider-based departments
(PBDs) of hospitals. Because nonexcepted items and 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 2025 OPPS, we
propose to continue to remove claim lines with modifier ``PN'' from the
ratesetting process.
For details of the claims accounting process used in this CY 2025
OPPS/ASC proposed rule, we refer readers to the claims accounting
narrative under supporting documentation for this proposed rule on the
CMS website at: <a href="https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient">https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient</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 propose to continue to establish payment rates for blood and
blood products using our blood-specific CCR methodology (88 FR 49562),
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. To address the differences in CCRs and to better reflect
hospitals' costs, our methodology simulates 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 and
applies this mean ratio to the overall CCRs of hospitals not reporting
costs and charges for blood cost centers on their cost reports. We
propose to calculate the costs upon which the proposed 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 takes into account the unique charging
and cost accounting structure of each hospital, as it 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. This
methodology also yields more accurate estimated costs for these
products and results in payment rates for blood and blood products that
appropriately reflect the relative estimated costs of these products
for hospitals without blood cost centers and for these blood products
in general.
We refer readers to Addendum B to this proposed rule (which is
available via the internet on the CMS website at <a href="https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices">https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices</a>) for the proposed CY 2025 payment rates for blood
and blood products (which are generally identified with status
indicator ``R'').
For a more detailed discussion of payments for blood and blood
products through APCs, we refer readers to:
<bullet> the CY 2005 OPPS proposed rule (69 FR 50524 and 50525) for
a more comprehensive discussion of the blood-specific CCR methodology;
<bullet> the CY 2008 OPPS/ASC final rule with comment period (72 FR
66807 through 66810) for a detailed history of the OPPS payment for
blood and blood products; and
<bullet> the CY 2015 OPPS/ASC final rule with comment period (79 FR
66795 and 66796) for additional discussion of 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.
(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--cancer treatment through solid source radioactive
implants--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 and 68241). As we have
stated in prior OPPS updates, we believe that adopting the

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general OPPS prospective payment methodology for brachytherapy sources
is appropriate for a number of reasons (77 FR 68240). The general OPPS
methodology uses costs based on claims data to set the relative payment
weights for hospital outpatient services. This payment methodology
results in more consistent, predictable, and equitable payment amounts
per source across hospitals by averaging the extremely high and low
values, in contrast to payment based on hospitals' charges adjusted to
costs. We believe that the OPPS methodology, as opposed to payment
based on hospitals' charges adjusted to cost, also would provide
hospitals with incentives for efficiency in the provision of
brachytherapy services to Medicare beneficiaries. Moreover, this
approach is consistent with our payment methodology for the vast
majority of items and services paid under the OPPS. We refer readers to
the CY 2016 OPPS/ASC final rule with comment period (80 FR 70323
through 70325) for further discussion of the history of OPPS payment
for brachytherapy sources.
For CY 2025, except where otherwise indicated, we propose to
continue our policy and use the costs derived from CY 2023 claims data
to set the proposed CY 2025 payment rates for brachytherapy sources
because CY 2023 is the year of data we propose to use to set the
proposed payment rates for most other items and services that would be
paid under the CY 2025 OPPS. With the exception of the proposed payment
rate for brachytherapy source C2645 (Brachytherapy planar source,
palladium-103, per square millimeter) and the proposed payment rates
for low-volume brachytherapy APCs discussed in section III.D of this
proposed rule, we propose to base the payment rates for brachytherapy
sources on the geometric mean unit costs for each source, consistent
with the methodology that we propose for other items and services paid
under the OPPS, as discussed in section II.A.2 of this proposed rule.
We also propose for CY 2025 and subsequent years 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). For CY 2025 and subsequent years, we propose 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, per
mCi), which is based on the policy we established in the CY 2008 OPPS/
ASC final rule with comment period (72 FR 66785). For CY 2025 and
subsequent years, we also propose 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 2025 payment rates for brachytherapy sources
are included on Addendum B to this 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 the brachytherapy
source's APC--APC 2648 (Brachytx planar, p-103). 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\ for APC 2648 (Brachytx planar, p-
103). Our CY 2018 claims data available for the CY 2020 OPPS/ASC final
rule with comment period (84 FR 61142) included two claims with a
geometric mean cost for HCPCS code C2645 of $1.02 per mm\2\. In
response to comments from interested parties, we agreed 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, CY 2022, CY 2023, and CY 2024 OPPS/ASC
final rules with comment period (85 FR 85879 through 85880, 86 FR
63469, 87 FR 71760-71761, and 88 FR 81553), 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 CYs 2021 through 2024.
There are no CY 2023 claims available that reported HCPCS code
C2645 for this CY 2025 OPPS/ASC proposed rule. Therefore, in the
absence of claims data, we propose to continue to use our equitable
adjustment authority under section 1833(t)(2)(E) of the Act to maintain
the CY 2024 payment rate of $4.69 per mm\2\ for HCPCS code C2645, which
is proposed to be assigned to APC 2648 (Brachytx planar, p-103), for CY
2025.
Additionally, for CY 2022 and subsequent calendar years, we adopted
a Universal Low Volume APC policy for clinical and brachytherapy APCs.
As discussed in further detail in section X.C of the CY 2022 OPPS/ASC
final rule with comment period (86 FR 63743 through 63747), we adopted
this policy to mitigate wide variation in payment rates that occur from
year to year for APCs with low utilization. Such volatility in payment
rates from year to year can result in even lower utilization and
potential barriers to access. Brachytherapy APCs that have fewer than
100 single claims used for ratesetting purposes are designated as Low
Volume APCs unless an alternative payment rate is applied, such as the
use of our equitable adjustment authority under section 1833(t)(2)(E)
of the Act in the case of APC 2648 (Brachytx planar, p-103), for which
HCPCS code C2645 (Brachytherapy planar source, palladium-103, per
square millimeter) is the only code assigned as discussed previously in
this section.
For CY 2025, we propose to designate six brachytherapy APCs as Low
Volume APCs as these APCs meet our criteria to be designated as Low
Volume APCs. For more information on the brachytherapy APCs we propose
to designate as Low Volume APCs, see section III.D of this proposed
rule.
We invite interested parties to submit recommendations for new
codes to describe new brachytherapy sources.

[[Page 59198]]

Such recommendations should be directed via email to
<a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="1a756f6e6a7b6e737f746e6a6a695a79776934727269347d756c">[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 2025
(1) Background
In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74861
through 74910), we finalized a comprehensive payment policy that
packages payment for adjunctive and secondary items, services, and
procedures into the most costly primary procedure under the OPPS at the
claim level. The policy was finalized in CY 2014, but the effective
date was delayed until January 1, 2015, to allow additional time for
further analysis, opportunity for public comment, and systems
preparation. The comprehensive APC (C-APC) policy was implemented
effective January 1, 2015, with modifications and clarifications in
response to public comments received regarding specific provisions of
the C-APC policy (79 FR 66798 through 66810).
A C-APC is defined as a classification for the provision of a
primary service and all adjunctive services provided to support the
delivery of the primary service. We established C-APCs as a category
broadly for OPPS payment and implemented 25 C-APCs beginning in CY 2015
(79 FR 66809 and 66810). We have gradually added new C-APCs since the
policy was implemented beginning in CY 2015, with the number of C-APCs
now totaling 72 (80 FR 70332; 81 FR 79584 and 79585; 83 FR 58844
through 58846; 84 FR 61158 through 61166; 85 FR 85885; 86 FR 63474; 87
FR 71769; and 88 FR 81562).
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. One example of a primary service would be a partial mastectomy
and an example of a secondary service packaged into that primary
service would be a radiation therapy procedure.
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 and 66801). A list of services excluded from
the C-APC policy is included in Addendum J to this proposed rule (which
is available via the internet on the CMS website at <a href="https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices">https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices</a>). If a service does not appear on this
list of excluded services, payment for it will be packaged into the
payment for the primary C-APC service when it appears on an outpatient
claim with a primary C-APC service.
The C-APC policy payment methodology set forth in the CY 2014 OPPS/
ASC final rule with comment period 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,'' \1\
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.
---------------------------------------------------------------------------

\1\ Status indicator ``J1'' denotes Hospital Part B Services
Paid Through a Comprehensive APC. Further information can be found
in CY 2025 Addendum D1.
---------------------------------------------------------------------------

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.'' \2\ Specifically, we make a payment through C-
APC 8011 for a claim that:
---------------------------------------------------------------------------

\2\ Status indicator ``J2'' denotes Hospital Part B Services
That May Be Paid Through a Comprehensive APC. Further information
can be found in CY 2025 Addendum D1.
---------------------------------------------------------------------------

<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 (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

[[Page 59199]]

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, such as speech language
pathology, 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, 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.\3\
---------------------------------------------------------------------------

\3\ <a href="https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c15.pdf">https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c15.pdf</a>.
---------------------------------------------------------------------------

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 the items and services included in the C-APC service
payment bundle.) Charges for services that would otherwise be
separately payable are added to the charges for the primary service.
This process differs from our traditional cost accounting methodology
only in that all such services on the claim are packaged (except
certain services as described above). We apply our standard data trims,
which exclude claims with extremely high primary units or extreme
costs.
The comprehensive geometric mean costs are used to establish
resource similarity and, along with clinical similarity, dictate the
assignment of the primary services to the C-APCs. We establish a
ranking of each primary service (single unit only) to be assigned to
status indicator ``J1'' according to its comprehensive geometric mean
costs. For the minority of claims reporting more than one primary
service assigned to status indicator ``J1'' or units thereof, we
identify one ``J1'' service as the primary service for the claim based
on our cost-based ranking of primary services. We then assign these
multiple ``J1'' procedure claims to the C-APC to which the service
designated as the primary service is assigned. If the reported ``J1''
services on a claim map to different C-APCs, we designate the ``J1''
service assigned to the C-APC with the highest comprehensive geometric
mean cost as the primary service for that claim. If the reported
multiple ``J1'' services on a claim map to the same C-APC, we designate
the most costly service (at the HCPCS code level) as the primary
service for that claim. This process results in initial assignments of
claims for the primary services assigned to status indicator ``J1'' to
the most appropriate C-APCs based on both single and multiple procedure
claims reporting these services and clinical and resource homogeneity.
Complexity Adjustments. We use complexity adjustments to provide
increased payment for certain comprehensive services. We apply a
complexity adjustment by promoting qualifying paired ``J1'' service
code combinations or paired code combinations of ``J1'' services and
certain add-on codes (as described further below) from the originating
C-APC (the C-APC to which the designated primary service is first
assigned) to the next higher paying C-APC in the same clinical family
of C-APCs. We apply this type of complexity adjustment when the paired
code combination represents a complex, costly form or version of the
primary service according to the following criteria:
<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 proposed rule, in the
originating C-APC (cost threshold).
These criteria identify paired code combinations that occur
commonly and exhibit materially greater resource requirements than the
primary service. The CY 2017 OPPS/ASC final rule with comment period
(81 FR 79582) included a revision to the complexity adjustment

[[Page 59200]]

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 2025, we 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 2025, along with all the
other proposed complexity adjustments, in Addendum J to this proposed
rule (which is available via the internet on the CMS website at <a href="https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices">https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices</a>).
Addendum J to this proposed rule includes the cost statistics for
each code combination that would qualify for a complexity adjustment
(including primary code and add-on code combinations). Addendum J to
this proposed rule also contains summary cost statistics for each of
the paired code combinations that describe a complex code combination
that would qualify for a complexity adjustment and 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 will be reassigned to C-APC
5224 when CPT code 33208 is the primary code. Providing the information
contained in Addendum J to this proposed rule allows interested parties
the opportunity to better assess the impact associated with the
assignment of claims with each of the paired code combinations eligible
for a complexity adjustment.
(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 them. Beginning in CY 2002, we retain services
within New Technology APC groups until we gather sufficient claims data
to enable us to assign the service to an appropriate clinical APC. This
policy allows us to move a service from a New Technology APC in less
than 2 years if sufficient data are available. It also allows us to
retain a service in a New Technology APC for more than 2 years if
sufficient data upon which to base a decision for reassignment have not
been collected (82 FR 59277).
The C-APC payment policy packages payment for adjunctive and
secondary items, services, and procedures into the most costly primary
procedure under the OPPS at the claim level. Prior to CY 2019, when a
procedure assigned to a New Technology APC was included on the claim
with a primary procedure, identified by OPPS status indicator ``J1,''
payment for the new technology service was typically packaged into the
payment for the primary procedure. Because the new technology service
was not separately paid in this scenario, the overall number of single
claims available to determine an appropriate clinical APC for the new
service was reduced. This was contrary to the objective of the New
Technology APC payment policy, which is to gather sufficient claims
data to enable us to assign the service to an appropriate clinical APC.
To address this issue and ensure that there 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 beginning in CY 2020, payment for services assigned to a
New Technology APC would be excluded from being packaged into the
payment for comprehensive observation

[[Page 59201]]

services assigned status indicator ``J2'' when they are included on a
claim with a ``J2'' service (84 FR 61167).
(3) Exclusion of Drugs and Biologicals Described by HCPCS Code C9399
(Unclassified Drugs or Biologicals) From the C-APC Policy
Section 1833(t)(15) of the Act, as added by section 621(a)(1) of
the Medicare Prescription Drug, Improvement, and Modernization Act of
2003 (Pub. L. 108-173), provides for payment under the OPPS for new
drugs and biologicals until HCPCS codes are assigned. Under this
provision, we are required to make payment for a covered outpatient
drug or biological that is furnished as part of covered outpatient
department services but for which a HCPCS code has not yet been
assigned in an amount equal to 95 percent of average wholesale price
(AWP) for the drug or biological.
In the CY 2005 OPPS/ASC final rule with comment period (69 FR
65805), we implemented section 1833(t)(15) of the Act by instructing
hospitals to bill for a drug or biological that is newly approved by
the Food and Drug Administration (FDA) and that does not yet have a
HCPCS code by reporting the National Drug Code (NDC) for the product
along with the newly created HCPCS code C9399 (Unclassified drugs or
biologicals). We explained that when HCPCS code C9399 appears on a
claim, the Outpatient Code Editor (OCE) suspends the claim for manual
pricing by the Medicare Administrative Contractor (MAC). The MAC prices
the claim at 95 percent of the drug or biological's AWP, using Red Book
or an equivalent recognized compendium, and processes the claim for
payment. We emphasized that this approach enables hospitals to bill and
receive payment for a new drug or biological concurrent with its
approval by the FDA. The hospital does not have to wait for the next
quarterly release or for approval of a product specific HCPCS code to
receive payment for a newly approved drug or biological or to resubmit
claims for adjustment. We instructed that hospitals would discontinue
billing HCPCS code C9399 and the NDC upon implementation of a product
specific HCPCS code, status indicator, and appropriate payment amount
with the next quarterly update. We also note that HCPCS code C9399 is
paid in a similar manner in the ASC setting, as 42 CFR 416.171(b)
outlines that certain drugs and biologicals for which separate payment
is allowed under the OPPS are considered covered ancillary services for
which the OPPS payment rate, which is 95 percent of AWP for HCPCS code
C9399, applies. Since the implementation of the C-APC policy in 2015,
payment for drugs and biologicals described by HCPCS code C9399 had
been included in the C-APC payment when these products appear on a
claim with a primary C-APC service. Packaging payment for these drugs
and biologicals that appear on a hospital outpatient claim with a
primary C-APC service is consistent with our C-APC packaging policy
under which we make payment for all items and services, including all
non-pass-through drugs, reported on the hospital outpatient claim as
being integral, ancillary, supportive, dependent, and adjunctive to the
primary service and representing components of a complete comprehensive
service, with certain limited exceptions (78 FR 74869). It was our
position that the total payment for the C-APC with which payment for a
drug or biological described by HCPCS code C9399 is packaged includes
payment for the drug or biological at 95 percent of its AWP.
However, we determined that in certain instances, drugs and
biologicals described by HCPCS code C9399 are not being paid at 95
percent of their AWPs when payment for them is packaged with payment
for a primary C-APC service. In order to ensure payment for new drugs,
biologicals, and radiopharmaceuticals described by HCPCS code C9399 at
95 percent of their AWP, for CY 2023 and subsequent years, we finalized
our proposal to exclude any drug, biological, or radiopharmaceutical
described by HCPCS code C9399 from packaging when the drug, biological,
or radiopharmaceutical is included on a claim with a ``J1'' service,
which is the status indicator assigned to a C-APC, and a claim with a
``J2'' service, which is the status indicator assigned to comprehensive
observation services. See Addendum J for the CY 2025 C-APC payment
policy exclusions.
In the CY 2023 OPPS/ASC final rule with comment period, we
finalized the proposal in section XI. ``CY 2023 OPPS Payment Status and
Comment Indicators'' to add a new definition to status indicator ``A''
to include unclassified drugs and biologicals that are reportable with
HCPCS code C9399 (87 FR 72051). The definition, found in Addendum D1,
would ensure the MAC prices claims for drugs, biologicals, or
radiopharmaceuticals billed with HCPCS code C9399 at 95 percent of the
drug or biological's AWP and pays separately for the drug, biological,
or radiopharmaceutical under the OPPS when it appears on the same claim
as a primary C-APC service.
(4) Exclusion of Cell and Gene Therapies From the C-APC Policy
As previously discussed in this section, and in the CY 2014 OPPS/
ASC final rule with comment period (78 FR 74865), the C-APC policy
packages payment for items and services that are typically integral,
ancillary, supportive, dependent, or adjunctive to the primary service
and provided during the delivery of the comprehensive service,
including diagnostic procedures, laboratory tests and other diagnostic
tests and treatments that assist in the delivery of the primary
procedure. In the CY 2014 OPPS/ASC final rule (78 FR 74861), we
finalized defining a comprehensive APC as a classification for the
provision of a primary service and all adjunctive services provided to
support the delivery of the primary service. Because a comprehensive
APC treats all individually reported codes as representing components
of the comprehensive service, we make a single prospective payment
based on the cost of all individually reported codes that represent the
provision of a primary service and all adjunctive services provided to
support that delivery of the primary service.
We generally treat all items and services reported on a C-APC claim
as integral, ancillary, supportive, dependent, and adjunctive to the
primary service and representing components of a comprehensive service.
Historically, items packaged for payment provided in conjunction with
the primary C-APC service also include all drugs, biologicals, and
radiopharmaceuticals, regardless of cost, except those drugs with pass-
through payment status and those drugs that are usually self-
administered (SADs), unless they function as supplies (78 FR 74868
through 74869 and 74909).
Our intent has been to make a single prospective payment based on
the cost of all individually reported codes that appear on a claim with
the primary C-APC service, which we believe represent the provision of
a primary service and all adjunctive services provided to support that
delivery of the primary service. However, there are rare instances
where the cell and gene therapies listed in Table 1, which are usually
separately payable under the OPPS, appear on the same claim as a
primary C-APC service and therefore, have their payment packaged with
payment for the primary C-APC service. The therapies in Table 1 are
usually separately paid and priced using the ASP methodology when not
on a C-APC claim. Given the unique nature of these therapies, we do not
believe they

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function as integral, ancillary, supportive, dependent, or adjunctive
to any of the current C-APCs primary services. The cell therapies
described in Table 1 are primarily for the treatment of specific
cancers and are administered through an intravenous infusion. The gene
therapies listed in Table 1 are generally for the treatment of certain
rare ocular or spinal conditions caused by specific genetic mutations
and are also either intravenously infused or administered through a
subretinal injection. When these products are administered, they are
the primary treatment being administered to a patient and thus, are not
integral, ancillary, supportive, dependent, or adjunctive to any
primary C-APC services. Additionally, the current primary C-APC
services describe common surgical procedures, such as breast/lymphatic
surgery and musculoskeletal procedures. The cell and gene therapies
listed in Table 1 are intended to treat a specific condition and would
not be used to support the outcome of any primary C-APC procedure. For
example, HCPCS code J3399 (Injection, onasemnogene abeparvovec-xioi,
per treatment, up to 5x10[supcaret]15 vector genomes) may be used to
describe the gene therapy Zolgensma. This product is FDA-approved as an
adeno-associated virus (AAV) vector-based gene therapy indicated for
the treatment of pediatric patients less than 2 years of age with
spinal muscular atrophy (SMA) with bi-allelic mutations in the survival
motor neuron 1 (SMN1) gene. The specified mechanism of onasemnogene
abeparvovec is a recombinant AAV9-based gene therapy designed to
deliver a copy of the gene encoding the human SMN protein.\4\ The
function of a product such as Zolgensma, is not intended to be
integral, ancillary, supportive, dependent, and adjunctive to any C-APC
as the gene therapy itself is an independent treatment.
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\4\ Zolgensma. FDA Package Insert. October 2023. <a href="https://www.fda.gov/media/126109/download?attachment">https://www.fda.gov/media/126109/download?attachment</a>.
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Yescarta (HCPCS code Q2041) is an example of a cell therapy that
functions as an independent treatment. Based on its FDA-approved
indication,\5\ this product's intended clinical use would not be
integral, ancillary, supportive, dependent, or adjunctive to any
current C-APC primary service. Yescarta is indicated as a CD19-directed
genetically modified autologous T cell immunotherapy for the treatment
of Adult patients with large B-cell lymphoma that is refractory to
first-line chemoimmunotherapy or that relapses within 12 months of
first-line chemoimmunotherapy and adult patients with relapsed or
refractory large B-cell lymphoma after two or more lines of systemic
therapy, including diffuse large B-cell lymphoma (DLBCL) not otherwise
specified, primary mediastinal large B-cell lymphoma, high grade B-cell
lymphoma, and DLBCL arising from follicular lymphoma. Yescarta is the
primary treatment being performed when administered for these FDA-
approved indications and should not be packaged as supportive of any C-
APC primary service even if the two services appear on the same claim.
We explained in the CY 2014 OPPS/ASC final rule with comment period (78
FR 74868) that intravenous drugs, for example, are OPPS services that
are considered adjunctive to the primary procedure because the correct
administration of the drug either promotes a beneficial outcome, such
as the use of intravenous pain medications, or prevents possible
complications, such as the use of intravenous blood pressure
medications to temporarily replace oral blood pressure medications and
reduce the risk of a sudden rise in blood pressure when a normal daily
medication is stopped. In the case of the cell and gene therapies
described in Table 1, however, we do not believe the therapies
``promote a beneficial outcome'' or ``prevent possible complications''
of any of the procedures currently designated as primary C-APC
services. While the cell and gene therapies in Table 1 may ``promote a
beneficial outcome'' for the patient in general, we do not believe the
provision of cell and gene therapies are ``promoting a beneficial
outcome'' for any of the primary C-APC services themselves, as the cell
and gene therapies are serving as independent therapies. These are
distinguishable from the previous examples of intravenous pain
medications that are directly related to the primary C-APC service and
promote a beneficial outcome for that procedure. Further, in the CY
2014 OPPS/ASC final rule with comment period (78 FR 74865), we stated
that we proposed to package into C-APCs all of these integral,
ancillary, supportive, dependent, and adjunctive services, hereinafter
collectively referred to as ``adjunctive services,'' provided during
the delivery of the comprehensive service. This includes the diagnostic
procedures, laboratory tests and other diagnostic tests, and treatments
that assist in the delivery of the primary procedure. We do not believe
that the cell and gene therapies listed in Table 1 are assisting in the
delivery of any primary procedure currently assigned to a C-APC.
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\5\ FDA Package Insert. Yescarta. April 2024. <a href="https://www.fda.gov/media/108377/download?attachment">https://www.fda.gov/media/108377/download?attachment</a>.
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Therefore, for CY 2025 only, we propose not to package payment for
the cell and gene therapies listed in Table 1 into the payment for the
primary C-APC service when they appear on the same claim as primary C-
APCs services. We propose this policy for one year only in order to
gather more information from interested parties as to whether this
proposed policy appropriately captures all of the unique therapies,
such as the cell and gene therapies listed in Table 1, that function as
primary treatments and do not support C-APC primary services. As
discussed later in this section, we welcome comments from readers on
this proposal and the potential need for a different, modified,
expanded, or supplemental policy for future rulemaking. We will assess
whether to continue this policy, or a modified version of this policy,
beyond one year in future rulemaking, taking into consideration the
comments received.
We are not proposing to include therapies that are on drug pass-
through status for all of CY 2025 in Table 1 because pass-through drugs
are already excluded from C-APC packaging. We are proposing that
products for which pass-through status is expiring in CY 2025 would be
excluded from C-APC packaging after their pass-through status expires.
For example, the product described by HCPCS code Q2056 has pass-through
status expiring June 30, 2025. Until its pass-through status expires,
the product will be excluded from C-APC packaging due to the pass-
through C-APC exclusion policy, but after its pass-through status
expires, we propose that the therapy would continue to be excluded from
C-APC packaging under our proposed exclusion for cell and gene
therapies. For more information on drug pass-through status, including
expiring and continuing pass-through status, please see section V.A. of
this proposed rule.
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We propose to exclude the therapies listed in Table 1 from C-APC
packaging. We seek comment on this proposal, and we seek comment on
whether there are any additional cell and gene therapies that may be
appropriate to exclude from C-APC packaging for CY 2025. Commenters
should explain why any additional cell and gene therapies that they
believe should be excluded from C-APC packaging are not integral,
ancillary, supportive, dependent, or adjunctive to any C-APC primary
service. We seek comment on whether this proposal should be extended
beyond 1 year or if a different, expanded, or supplemental policy
approach may be warranted in future rulemaking. For example, we are
interested in comments on whether there are other classes of drugs,
biologicals, or other products that are not clearly integral,
ancillary, adjunctive, or supportive of a primary C-APC service but
could appear on the same claim as the C-APC for that primary service
and for which payment would be packaged into the C-APC payment under
our current policy. We would expect clinical evidence supporting
commenters' assertion that other identified classes of drugs,
biologicals, medical devices, or other

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products are not clearly supportive of a primary C-APC service but may
nonetheless appear on the same claim as a primary C-APC procedure.
Similarly, we seek comment on whether interested parties believe it is
appropriate for these other classes of drugs, biologicals, or medical
devices to be excluded from packaging with all C-APCs or only specific
C-APCs, such as the Comprehensive Observation Services C-APC (SI =
``J2'').
Finally, we seek comment on the following:
(1) Because the cell and gene therapies listed in Table 1 are not
integral, ancillary, supportive, dependent, or adjunctive to any
current C-APC procedure, how could CMS structure a new C-APC, or
similar packaged payment policy, for the service to administer cell or
gene therapies, such by creating as a Chimeric Antigen Receptor (CAR)
T-cell therapy administration C-APC, with which the CAR-T or gene
therapy would be integral, ancillary, supportive, dependent, or
adjunctive to the primary C-APC service?
(2) What integral, ancillary, supportive, dependent, or adjunctive
items and services are routinely provided as part of the administration
of cell and gene therapies or in conjunction with cell and gene
therapies generally?
We recognize that currently, the following HCPCS codes are
associated with CAR-T therapy: HCPCS code 0537T (Chimeric antigen
receptor t-cell (car-t) therapy; harvesting of blood-derived t
lymphocytes for development of genetically modified autologous car-t
cells, per day), 0538T (Chimeric antigen receptor t-cell (car-t)
therapy; preparation of blood-derived t lymphocytes for transportation
(e.g., cryopreservation, storage)), 0539T (Chimeric antigen receptor t-
cell (car-t) therapy; receipt and preparation of car-t cells for
administration), and 0540T (Chimeric antigen receptor t-cell (car-t)
therapy; car-t cell administration, autologous) as discussed in
previous OPPS rulemaking, including the CY 2022 OPPS/ASC final rule
with comment period (86 FR 63550 through 63552).
Separately, we also seek comment on whether policy revisions to the
C-APC policy may be appropriate in future rulemaking, such as a
modified outlier payment policy specific to C-APCs to address related
situations in the future. We list all proposed C-APC exclusion
categories for CY 2025 in Addendum J to this proposed rule (which is
available via the internet on the CMS website at <a href="https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices">https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices</a>).
(5) Exclusion of Non-Opioid Products for Pain Relief Under Section 4135
of the Consolidated Appropriations Act, 2023 From the C-APC Policy
The Consolidated Appropriations Act (CAA), 2023 (Pub. L. 117-328),
was signed into law on December 29, 2022. Section 4135(a) and (b) of
the CAA, 2023, titled ``Access to Non-Opioid Treatments for Pain
Relief,'' amended section 1833(t)(16) and section 1833(i) of the Social
Security Act, respectively, to provide for temporary additional
payments for non-opioid treatments for pain relief (as that term is
defined in section 1833(t)(16)(G)(i) of the Act). In particular,
section 1833(t)(16)(G) provides that with respect to a non-opioid
treatment for pain relief furnished on or after January 1, 2025, and
before January 1, 2028, the Secretary shall not package payment for the
non-opioid treatment for pain relief into payment for a covered OPD
service (or group of services) and shall make an additional payment for
the non-opioid treatment for pain relief as specified in clause (ii) of
that section. Clauses (ii) and (iii) of section 1833(t)(16)(G) of the
Act provide for the amount of additional payment and set a limitation
on that amount. As stated earlier in this section, our current policy
is to exclude from the packaged C-APC payment those items and services
that are required by statute to be separately paid.
Accordingly, we propose to exclude the non-opioid treatments for
pain relief identified as satisfying the required criteria for payment
under Section 4135 of the CAA, 2023 from the C-APC policy to ensure
payment is not packaged into any C-APC and that separate payment is
made in accordance with the statute. Please see section XIII.F. of this
proposed rule for a list of the products that we propose would qualify
for payment under the new payment policy for non-opioid drugs,
biologicals, and devices for pain relief.
(6) C-APCs for CY 2025
For CY 2025 and subsequent years, we propose 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 are not proposing
to convert any standard APCs to C-APCs in CY 2025; thus, we propose
that the number of C-APCs for CY 2025 would be the same as the number
for CY 2024, which is 72 C-APCs.
Table 2 lists the proposed C-APCs for CY 2025, all of which were
established in past rules. All C-APCs are also displayed in Addendum J
to this proposed rule (which is available via the internet on the CMS
website). Addendum J to this proposed rule also contains all the data
related to the C-APC payment policy methodology, including the list of
complexity adjustments and other information.
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c. Calculation of Composite APC Criteria-Based Costs
As discussed in the CY 2008 OPPS/ASC final rule with comment period
(72 FR 66613), we believe it is important that the OPPS enhance
incentives for hospitals to provide necessary, high-quality care as
efficiently as possible. For CY 2008, we developed composite APCs to
provide a single payment for groups of services that are typically
performed together during a single clinical encounter and that result
in the provision of a complete service. Combining payment for multiple,
independent services into a single OPPS payment in this way enables
hospitals to manage their resources with maximum flexibility by
monitoring and adjusting the volume and efficiency of services
themselves. An additional advantage to the composite APC model is that
we can use data from correctly coded multiple procedure claims to
calculate payment rates for the specified combinations of services,
rather than relying upon single procedure claims which may be low in
volume and/or incorrectly coded. Under the OPPS, we currently have
composite policies for mental health services and multiple imaging
services. We 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,
59242, and 59246 through 52950) for more recent background.
(1) Mental Health Services Composite APC
For CY 2025, we propose 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 (88 FR 49572). 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 2018 OPPS/ASC proposed rule and final rule with comment
period (82 FR 33580, 33581, 59246, and 59247), 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 for APC 5863, which was the
maximum partial hospitalization per diem payment rate for a hospital,
and finalized a policy that the hospital would continue to be paid the
payment rate for composite APC 8010. This policy applied in CYs 2018
through 2023.
In the CY 2024 OPPS/ASC proposed rule, we stated that APC 5863 was
no longer the maximum partial hospitalization per diem payment rate for
a hospital due to the creation of APC 5864, which is 4 or more
hospital-based PHP services per day (88 FR 49572). We solicited comment
on whether APC 5864 would be appropriate to use as the daily mental
health cap, as we have historically set the daily mental health cap for
composite APC 8010 at the maximum partial hospitalization per diem
payment rate for a hospital (88 FR 49572). Based on public comments
received and our longstanding policy, in CY 2024 OPPS/ASC final rule,
we finalized APC 5864, four hospital-based PHP services per day, as the
daily mental health cap (88 FR 81566).
We continue to believe that the costs associated with administering
a partial hospitalization program at a hospital represent the most
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For CY 2025 and subsequent years, we propose to continue this policy
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 per diem payment rate for 4 partial
hospitalization services provided in a day by a hospital (the payment
amount for APC 5864), those specified mental health services would be
paid through composite APC 8010. In addition, we propose to continue to
set the payment rate for composite APC 8010 at the same payment rate
that we propose for APC 5864, which is a partial hospitalization per
diem payment rate for 4 partial hospitalization services furnished in a
day by a hospital.
Under this proposed policy, the Integrated OCE (I/OCE) would
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 5864 for all the specified mental health
services furnished by the hospital on that single date of service by
paying for the services through composite APC 5863.
(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 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 2025, we propose 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 2025, except where otherwise indicated, we propose to use
the costs derived from CY 2023 claims data to set the proposed CY 2025
payment rates. Therefore, for CY 2025, the proposed payment rates for
the five multiple imaging composite APCs (APCs 8004, 8005, 8006, 8007,
and 8008) were based on proposed geometric mean costs calculated from
CY 2023 claims available for the CY 2025 OPPS/ASC proposed rule that
qualify 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 used to calculate the
geometric mean costs for these composite APCs since CY 2014, as
described in the CY 2014 OPPS/ASC final rule with comment period (78 FR
74918). The imaging HCPCS codes referred to as ``overlap bypass codes''
that we removed from the bypass list for purposes of calculating the
proposed multiple imaging composite APC geometric mean costs, in
accordance with our established methodology as stated in the CY 2014
OPPS/ASC final rule with comment period (78 FR 74918), are identified
by asterisks in Addendum N to this proposed rule (which is available
via the internet on the CMS website) and are discussed in more detail
in section II.A.1.a of this proposed rule.
For this CY 2025 OPPS/ASC proposed rule, we were able to identify
approximately 0.95 million ``single session'' claims out of an
estimated 2.1 million potential claims for payment through composite
APCs from our ratesetting claims data, which represents approximately
45.0 percent of all eligible claims, to calculate the proposed CY 2025
geometric mean costs for the multiple imaging composite APCs. Table 3
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 2025.
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3. Proposed 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

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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. 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.
b. Proposal on Packaged Items and Services
For CY 2025, 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 2025, we do not propose any changes to the overall packaging
policy discussed. We propose 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.
c. Proposed Payment for Diagnostic Radiopharmaceuticals
(1) Background on OPPS Packaging Policy for Diagnostic
Radiopharmaceuticals
Under the OPPS, we package several categories of nonpass-through
drugs, biologicals, and radiopharmaceuticals, regardless of the cost of
the products. Because the products are packaged according to the
policies in Sec. 419.2(b), we refer to them as ``policy-packaged''
drugs, biologicals, and radiopharmaceuticals. In particular, under
Sec. 419.2(b)(15), payment for drugs, biologicals, and
radiopharmaceuticals that function as supplies when used in a
diagnostic test or procedure is packaged with the payment for the
related procedure or service. Packaging costs into a single aggregate
payment for a service, encounter, or episode of care is a fundamental
principle that distinguishes a prospective payment system from a fee
schedule. In general, packaging the costs of supportive items and
services into the payment for the primary procedure or service with
which they are associated encourages hospital efficiencies and enables
hospitals to manage their resources with maximum flexibility.
In the CY 2008 OPPS/ASC final rule with comment period we finalized
the packaging status of diagnostic radiopharmaceuticals as part of our
overall enhanced packaging approach for the CY 2008 OPPS and subsequent
years (72 FR 66635 through 66641). Importantly, we believed diagnostic
radiopharmaceuticals are always intended to be used with a diagnostic
nuclear medicine procedure and function as supplies when used in a
diagnostic test or procedure, making it appropriate to package the
payment for the diagnostic radiopharmaceutical into the payment for the
related nuclear medicine procedure. Diagnostic radiopharmaceuticals are
one specific type of product that is policy packaged under the category
described by Sec. 419.2(b)(15). Since we implemented this policy in CY
2008, interested parties have raised concerns regarding policy
packaging of diagnostic radiopharmaceuticals. In previous rulemaking
(87 FR 71962 and 71963), commenters recommended that CMS always pay
separately under the OPPS for diagnostic radiopharmaceuticals, not just
when the products have pass-through payment status. Many of these
commenters mentioned that pass-through payment status helps the
diffusion of new diagnostic radiopharmaceuticals into the market.
However, commenters believe the packaged payment rate is often
inadequate after pass-through status expires, especially in cases where
the diagnostic radiopharmaceutical is high-cost and has low
utilization.
We have heard from interested parties regarding alternative payment
methodologies, such as subjecting diagnostic radiopharmaceuticals to
the drug packaging threshold and creating separate APC payments for
diagnostic radiopharmaceuticals with a per-day cost greater than $500.
Interested parties have also recommended that we analyze our nuclear
medicine APC structure and consider establishing additional nuclear
medicine APCs to reflect the costs of diagnostic radiopharmaceuticals
more accurately. Historically, commenters opposed incorporating the
cost of diagnostic radiopharmaceuticals into the associated nuclear
medicine APC as the nuclear medicine APCs are sometimes paid at a lower
rate than the payment rate for the diagnostic radiopharmaceutical
itself when it has pass-through payment status (87 FR 71962 and 71963).
Importantly, commenters historically have also been concerned that
packaging payment for precision diagnostic radiopharmaceuticals in the
outpatient hospital setting creates barriers to beneficiary access for
safety net hospitals serving a high proportion of Medicare
beneficiaries and hospitals serving underserved communities (87 FR
71962 and 71963). Commenters specified that certain populations, such
as those with Alzheimer's disease, depend on the use of certain high-
cost diagnostic radiopharmaceuticals. Commenters discussed difficulties
enrolling hospitals in clinical studies due to OPPS packaging policies
and suggested that we pay separately under the OPPS specifically for
radiopharmaceuticals that are used for Alzheimer's disease.
Additionally, commenters have recommended that CMS continue to apply
radiolabeled product edits to the nuclear medicine procedures to ensure
that all packaged costs are included on nuclear medicine

[[Page 59214]]

claims to establish appropriate payment rates in the future. Beginning
January 1, 2008, CMS implemented OPPS edits that require hospitals to
include a HCPCS code for a radiolabeled product when a separately
payable nuclear medicine procedure is present on a claim. This policy
to require hospitals to include a HCPCS code for a radiolabeled product
for a separately payable nuclear medicine procedure ended in CY 2014
(78 FR 75033 through 75034).
Many of these comments and our responses have been discussed in
rulemaking since the policy to package diagnostic radiopharmaceuticals
was adopted, and they prompted us to solicit comment on the payment of
diagnostic radiopharmaceuticals in the CY 2024 OPPS/ASC proposed rule
(88 FR 49577). In that proposed rule, we stated we continue to believe
that diagnostic radiopharmaceuticals are an integral component of many
nuclear medicine and imaging procedures and charges associated with
them should be reported on hospital claims to the extent they are used.
Accordingly, we reiterated our belief that the payment for the
diagnostic radiopharmaceutical should be reflected within the payment
for the primary procedure with which it is used. We noted that
ratesetting uses the geometric mean of reported procedure costs, which
in the example of nuclear medicine procedures includes the costs of the
reported diagnostic radiopharmaceutical, based on data submitted to CMS
from all hospitals paid under the OPPS to set the payment rate for the
service. The costs that are calculated by Medicare reflect the average
costs of items and services that are packaged into a primary procedure
and will not necessarily equal the sum of the cost of the primary
procedure and the average sales price of the specific items and
services used in the procedure in each case. Furthermore, we explained
that the costs are based on the reported costs submitted to Medicare by
the hospitals and not the list price established by the manufacturer.
Claims data that include the diagnostic radiopharmaceutical packaged
with the associated procedure should reflect the combined cost of the
procedure and the radiopharmaceutical used in the procedure.
As we have reiterated over the years, we believe packaging policies
are inherent principles of the OPPS and are essential to a prospective
payment system. At the same time, we have explained that we are
committed to ensuring beneficiary access to diagnostic
radiopharmaceuticals while also ensuring the availability of new and
innovative diagnostic tools for Medicare beneficiaries. Therefore, we
sought public comments on potential modifications to our packaging
policy for diagnostic radiopharmaceuticals to ensure equitable payment
and continued beneficiary access.
As described in the CY 2024 OPPS/ASC proposed rule (88 FR 49578),
we solicited comment on how the OPPS packaging policy for diagnostic
radiopharmaceuticals has impacted beneficiary access, including whether
there are specific patient populations or clinical disease states for
whom this issue is especially critical.
In addition, we solicited comment on the following potential
approaches that would enhance beneficiary access, while also
maintaining the principles of the outpatient prospective payment
system. These approaches included: (1) paying separately for diagnostic
radiopharmaceuticals with per-day costs above the OPPS drug packaging
threshold of $140; (2) establishing a specific per-day cost threshold
that may be greater or less than the OPPS drug packaging threshold; (3)
restructuring APCs, including by adding nuclear medicine APCs for
services that utilize high-cost diagnostic radiopharmaceuticals; (4)
creating specific payment policies for diagnostic radiopharmaceuticals
used in clinical trials; and (5) adopting codes that incorporate the
disease state being diagnosed or a diagnostic indication of a
particular class of diagnostic radiopharmaceuticals.
Finally, we were interested in hearing from stakeholders how the
suggested policy modifications might impact our overarching goal of
utilizing packaging policies to better align OPPS policies with those
of a prospective payment system rather than a fee schedule. We stated
we would also like to know if making any of the suggested policy
changes could have negative consequences for beneficiaries, such as
unintentionally influencing clinical practice decisions, increasing
beneficiary cost-sharing obligations, or inadvertently encouraging the
use of higher-cost diagnostic radiopharmaceuticals over lower cost, but
equally effective, diagnostic options.
We received a significant number of comments in response to the
comment solicitation on potential issues caused by our current payment
policy for diagnostic radiopharmaceuticals under the OPPS and on new
approaches to payment for these products. Commenters expressed concerns
regarding the CMS policy to package diagnostic radiopharmaceuticals and
the financial implications this policy has for facilities. Commenters
believe that, for newer, more innovative radiopharmaceuticals, the
current OPPS packaging policy has led to a lack of patient access to
the technologies after the radiopharmaceutical's pass-through status
expires, especially if there is no clinical alternative to the
radiopharmaceutical. Most commenters requested that CMS provide
separate payment for diagnostic radiopharmaceuticals. Some commenters
believed paying separately for all diagnostic radiopharmaceuticals
regardless of their per-day cost was the best methodology to avoid
encouraging price inflation for diagnostic radiopharmaceuticals to
reach a certain threshold. Other commenters thought that applying the
existing OPPS per-day cost threshold ($135 for CY 2024) to the payment
of diagnostic radiopharmaceuticals would be an adequate solution.
Others supported a $500 threshold, and many cited the Facilitating
Innovative Nuclear Diagnostics Act (FIND Act) of 2023 as their
rationale for that number and recognized that the $500 threshold number
may be a more targeted approach relative to the OPPS drug packaging
threshold as the higher cost diagnostic radiopharmaceuticals are the
most disadvantaged by the OPPS packaging policy in their view. For the
full discussion on the comment solicitation summarized here, refer to
the CY 2024 OPPS/ASC final rule with comment period (88 FR 81573
through 81577).
(2) Proposed Packaging Threshold for Diagnostic Radiopharmaceuticals
As stated in the CY 2024 OPPS final rule with comment period (88 FR
81577), we agree with commenters that payment for diagnostic
radiopharmaceuticals is a complex and important issue. We explained
that we intended to further consider these points and take them into
consideration for future notice and comment rulemaking. After
significant consideration and ongoing engagement from interested
parties, we are proposing a change to our current policy that packages
diagnostic radiopharmaceuticals regardless of their cost.
We continue to believe diagnostic radiopharmaceuticals are always
intended to be used with a diagnostic nuclear medicine procedure and
function as supplies when used in a diagnostic test or procedure,
generally making it appropriate to package payment for them with
payment for the related nuclear medicine procedure. While we continue
to believe that this should be the policy for most diagnostic

[[Page 59215]]

radiopharmaceuticals, we believe there are certain situations in which
the packaged payment amount attributed to the diagnostic
radiopharmaceutical used in an imaging procedure assigned to a nuclear
medicine APC may not adequately account for the cost of a diagnostic
radiopharmaceutical that has a significantly higher cost, but lower
utilization relative to the other diagnostic radiopharmaceuticals that
may be used with the procedure. In situations where a hospital may have
to pay significantly more to purchase a diagnostic radiopharmaceutical
than Medicare pays, a hospital may decide not to provide that specific
diagnostic radiopharmaceutical imaging agent to Medicare beneficiaries.
This could potentially deny access to diagnostic tools for which there
is no clinical alternative. To ensure Medicare payment policy is not
providing a financial disincentive to using high cost, low utilization
diagnostic radiopharmaceuticals, especially when those agents may be
the most clinically appropriate, and to ensure appropriate beneficiary
access, we believe a subset of diagnostic radiopharmaceuticals with
higher per day costs should be paid separately and not packaged into
the diagnostic procedure with which the diagnostic radiopharmaceutical
is used.
To address these concerns, we propose to pay separately for any
diagnostic radiopharmaceutical with a per day cost greater than $630.
Any diagnostic radiopharmaceutical with a per day cost below that
threshold would continue to be policy packaged under the current policy
at Sec. 419.2(b)(15). We discuss our methodology for determining the
proposed per day cost threshold of $630 in further detail in this
section.
To determine an appropriate threshold, we estimated the approximate
payment that would typically be attributable to diagnostic
radiopharmaceutical payment within each nuclear medicine APC (APCs
5591, 5592, 5593, and 5594). We did this by assessing the offsets
associated with these APCs that were directly attributable to ``policy
packaged'' drugs. The offset amounts used are correlated with the
approximate portion of APC payment associated with these ``policy
packaged'' drugs. For nuclear medicine APCs, the primary ``policy
packaged'' drugs are diagnostic radiopharmaceuticals. To calculate this
threshold, we calculated a volume weighted average of the offset dollar
amount of each nuclear medicine APC. This involved taking the offset
percentage for ``policy packaged'' drugs, multiplying it by the APC
geometric mean to get an offset dollar amount, and then multiplying
that offset amount by the number of single claims to get the total
offset amount for each nuclear medicine APC level. We then calculated
the sum of the total offset amount for all 4 of the nuclear medicine
APCs. We divided this number by the total number of single claims for
all 4 nuclear medicine APCs, resulting in $314.28, which represents the
volume weighted average policy packaged offset amount for the nuclear
medicine APC series. We then took that number and multiplied it by 2,
and rounded it to the nearest $5 increment, which resulted in $630. See
Table 4 for the values used to calculate this threshold amount. We note
that the data values in Table 4 were collected without unpackaging the
set of diagnostic radiopharmaceuticals listed in Table 5. If we
finalize our proposal and those diagnostic radiopharmaceuticals are
unpackaged, it would change the APC geometric mean unit costs (MUCs) as
well as the offset percentages. This is why the APC geometric mean cost
values listed below are not the same as in the addenda to this rule.
[GRAPHIC] [TIFF OMITTED] TP22JY24.008

The offset percentages used have been updated based on the
available data for CY 2025 rulemaking and would be updated for the
final rule. However, the file and corresponding offset percentages used
are similar to the ones that can be found in the CY 2024 NFRM APC
Offset File. These files are available via the internet on the CMS OPPS
website.\6\
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\6\ <a href="https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/annual-policy-files">https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/annual-policy-files</a>.
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We propose to multiply by two the volume weighted average amount of
the offset to establish the threshold triggering separate payment
because this amount would ensure that separate payment would apply only
to diagnostic radiopharmaceuticals whose costs significantly exceed the
approximate amount of payment already attributed to the product in the
nuclear medicine APC payment. This is consistent with the principles of
a prospective payment system where some payments are lower than
hospitals' costs while other payments are greater than a hospitals'

[[Page 59216]]

costs. However, diagnostic radiopharmaceuticals with costs more than
double the volume weighted average amount of the offset could present a
hospital with a significant financial loss. This is why the OPPS has
several payment provisions that rely on a multiplier of costs as a
threshold for modifying payment.
Our proposed approach to multiply the average offset amount by two
is consistent with the two-times rule the OPPS uses to determine
Ambulatory Payment Classification (APC) levels, where a significant
service that has a cost greater than two times the lowest cost
significant service in an APC is generally moved to a higher level APC
in the series. The two-times rule requires that the highest calculated
cost of an individual procedure categorized to any given APC cannot
exceed two times the calculated cost of the lowest cost procedure
categorized to that same APC. We note that the two-times rule does not
apply to diagnostic radiopharmaceuticals themselves, but only to the
procedures in which they are used, which is why we are proposing a
diagnostic radiopharmaceutical packaging threshold utilizing a similar
two-times methodology.
Our proposed approach to multiply the average offset amount by two
is also generally consistent with the OPPS outlier policy applicable to
certain high-cost procedures, where costs greater than 1.75 times the
APC payment trigger an additional outlier payment. The OPPS provides
outlier payments to hospitals to help mitigate the financial risk
associated with high-cost and complex procedures, where a very costly
service could present a hospital with significant financial loss.
Outlier payments are provided on a service basis when the cost of a
service exceeds the APC payment amount multiplier threshold (1.75) as
well as the APC payment amount plus a fixed-dollar amount threshold.
The proposed diagnostic radiopharmaceutical packaging threshold would
serve a similar purpose as the outlier policy, in that it would provide
payments to hospitals to help mitigate the financial risk associated
with high-cost diagnostic radiopharmaceuticals, where a very costly
diagnostic radiopharmaceutical could present a hospital with
significant financial loss.
While we are proposing two, and believe two is the most appropriate
number for the multiplier for the volume weighted average amount of the
offset, for the reasons articulated for the OPPS outlier policy, we
seek comment on the alternatives of using 1.75 times the volume
weighted average amount of the offset as the threshold amount for
triggering separate payment, or another appropriate multiplier amount.
For example, an interested party could present data that a financial
disincentive to use diagnostic radiopharmaceuticals exists when costs
are 1.75 times, or three times or five times, the volume weighted
average offset amount. Since the hospital outpatient outlier payment
policy is a longstanding policy familiar to most hospitals, we seek
comment on utilizing elements of that policy for purposes of our
proposed diagnostic radiopharmaceutical packaging policy in order to
help hospitals mitigate the financial risk that may be associated with
furnishing high-cost and complex diagnostic radiopharmaceuticals. As
previously mentioned, we seek comment on the use of 1.75 times as the
multiplier threshold rather than 2. Although the outlier policy uses
both a 1.75 multiplier threshold and a fixed-dollar threshold, we are
seeking comment regarding the use of 1.75 as the multiplier to set a
fixed dollar threshold for the volume weighted average amount of the
offset as the goals of the outlier policy and this proposed diagnostic
radiopharmaceutical policy are similar.
We also solicit comment on the alternative of using the standard
drug packaging threshold, which is proposed to be $140 for CY 2025 in
this rule, as the threshold for separate payment for diagnostic
radiopharmaceuticals. We believe that diagnostic radiopharmaceuticals
are functioning as supplies to the nuclear medicine procedure in which
they are used. Because diagnostic radiopharmaceuticals function as
supplies in the diagnostic procedures in which they are used, they are
serving as an item that is integral, ancillary, supportive, dependent,
or adjunctive to the primary diagnostic service. This is in contrast to
therapeutic drugs, biologicals, and therapeutic radiopharmaceuticals
that are typically packaged under the standard drug packaging
threshold. These products could be the only therapeutic modality
provided to a patient during an encounter and may not serve as an item
that is integral, ancillary, supportive, dependent, or adjunctive to
the primary service. Due to this clinical difference, we do not believe
that using the standard drug packaging threshold is appropriate for
diagnostic radiopharmaceuticals, and therefore we are proposing a
threshold specific to diagnostic radiopharmaceuticals. We would be
interested to hear from commenters whether they agree or disagree with
this assessment.
(3) Calculating the Per Day Cost of Diagnostic Radiopharmaceuticals
We are proposing to calculate the per day costs for diagnostic
radiopharmaceuticals using a methodology similar to the one we use for
determining the per day costs of drugs and biologicals for comparison
to the OPPS drug packaging threshold, proposed to be $140 for CY 2025.
We propose to calculate the per day cost based on the methodology
described in section V.B.1.b. of this proposed rule, which relies on
the methodology in the CY 2006 OPPS/ASC proposed rule (70 FR 42723 and
42724) and finalized in the CY 2006 OPPS final rule with comment period
(70 FR 68636 through 68638). Though the clinical use of the drugs,
biologicals, and therapeutic radiopharmaceuticals differs from
diagnostic radiopharmaceuticals, we believe the method of determining
how much of that item is used per day should be similar. Therefore, we
are proposing to use a similar methodology for determining the per day
costs of diagnostic radiopharmaceuticals, as we do drugs, biologicals,
and therapeutic radiopharmaceuticals. This methodology consists of nine
steps:
Step 1. After application of the CCRs, we aggregated all line-items
for a single date of service on a single claim for each product. This
resulted in creation of a single line-item with the total number of
units and the total cost of a diagnostic radiopharmaceutical given to a
patient in a single day.
Step 2. We then created a separate record for each diagnostic
radiopharmaceutical by date of service, regardless of the number of
lines on which the diagnostic radiopharmaceutical was billed on each
claim. For example, ``diagnostic radiopharmaceutical X'' is billed on a
claim with two different dates of service, and for each date of
service, the diagnostic radiopharmaceutical is billed on two line-items
with a cost of $10 and 5 units for each line-item. In this case, the
computer program would create two records for this diagnostic
radiopharmaceutical, and each record would have a total cost of $20 and
10 units of the product.
Step 3. We trimmed records with unit counts per day greater or less
than 3 standard deviations from the geometric mean.
Step 4. For each remaining record for a diagnostic
radiopharmaceutical, we calculated the cost per unit of the diagnostic
radiopharmaceutical. If the HCPCS descriptor for ``diagnostic

[[Page 59217]]

radiopharmaceutical X'' is ``per 1 millicurie'' and one record was
created for a total of 10 millicurie (as indicated by the total number
of units for the diagnostic radiopharmaceutical on the claim for each
unique date of service), the computer program divided the total cost
for the record by 10 to give a per unit cost. We then weighted this
unit cost by the total number of units in the record. We did this by
generating a number of line-items equivalent to the number of units in
that particular claim. Thus, a claim with 100 units of ``diagnostic
radiopharmaceutical X'' and a total cost of $200 would be given 100
line-items, each with a cost of $2, while a claim of 50 units with a
cost of $50 would be given 50 line items, each with a cost of $1.
Step 5. We trimmed the unit records with cost per unit greater or
less than 3 standard deviations from the geometric mean.
Step 6. We aggregated the remaining unit records to determine the
mean cost per unit of the diagnostic radiopharmaceutical.
Step 7. Using only the records that remained after records with
unit counts per day greater or less than 3 standard deviations from the
geometric mean were trimmed (step 3), we determined the total number of
units billed for each item and the total number of unique per-day
records for each item. We divided the count of the total number of
units by the total number of unique per day records for each item to
calculate an average number of units per day.
Step 8. We used the payment rate (the mean unit cost (MUC) derived
from the CY 2023 hospital claims data) for each diagnostic
radiopharmaceutical and multiplied the payment rate by the average
number of units per day for each diagnostic radiopharmaceutical to
arrive at its per day cost.
Step 9. We packaged the items with per day costs less than or equal
to $630 and designated items with per day costs greater than $630 as
separately payable.
As just described, to determine the proposed CY 2025 packaging
status for all nonpass-through diagnostic radiopharmaceuticals, we
propose to use the per day cost, calculated on a HCPCS code-specific
basis, of each diagnostic radiopharmaceutical that had a HCPCS code in
CY 2023 and was paid (via packaged or separate payment) under the OPPS.
We used data from CY 2023 claims processed through December 31, 2023,
for this calculation.
We propose to continue to package payment for diagnostic
radiopharmaceuticals with per day costs less than or equal to $630
under our existing packaging policy for diagnostic radiopharmaceuticals
that function as surgical supplies under Sec. 419.2(b)(15). Similar to
our policy for the drug packaging threshold, we propose to use updated
claims data to make final determinations of the packaging status of
HCPCS codes for diagnostic radiopharmaceuticals for each OPPS/ASC final
rule with comment period. We propose to make an annual packaging
determination for each diagnostic radiopharmaceutical HCPCS code only
when we develop the OPPS/ASC final rule with comment period for the
update year. We propose that only diagnostic radiopharmaceutical HCPCS
codes that are identified as separately payable in the final rule with
comment period would be subject to quarterly updates.
Consequently, the packaging status of some HCPCS codes for
diagnostic radiopharmaceuticals in the OPPS/ASC proposed rule may
differ from the same HCPCS codes' packaging status determined based on
the data used for the final rule with comment period. Under these
circumstances, we propose to follow the established policies for the
OPPS drug packaging threshold, which were initially adopted for the CY
2005 OPPS (69 FR 65780), to more equitably pay for those diagnostic
radiopharmaceuticals whose costs fluctuate relative to the proposed CY
2025 OPPS diagnostic radiopharmaceutical packaging threshold in a way
that affects the product's payment status (packaged or separately
payable). Our policy for the OPPS drug packaging threshold has not
changed for many years and is the same as described in the CY 2016
OPPS/ASC final rule with comment period (80 FR 70434). We believe these
same policies should apply to diagnostic radiopharmaceuticals in order
to ensure payment consistency for those diagnostic radiopharmaceuticals
whose costs fluctuate relative to the proposed CY 2025 OPPS diagnostic
radiopharmaceutical packaging threshold. For CY 2025, similar to our
historical practice for the drug packaging threshold, we propose to
apply the following policies to those HCPCS codes for diagnostic
radiopharmaceuticals whose relationship to the diagnostic
radiopharmaceutical packaging threshold changes based on the final
updated data: HCPCS codes for diagnostic radiopharmaceuticals that are
proposed for separate payment in CY 2025, and that then have per day
costs equal to or less than the CY 2025 final rule diagnostic
radiopharmaceutical packaging threshold, based on the updated hospital
claims data used for the CY 2025 final rule, would remain packaged in
CY 2025. HCPCS codes for diagnostic radiopharmaceuticals for which we
proposed packaged payment in CY 2025 but that then have per-day costs
greater than the CY 2025 final rule drug packaging threshold, based on
updated hospital claims data used for the CY 2025 final rule, would
receive separate payment in CY 2025.
(4) Proposal To Update the Diagnostic Radiopharmaceutical Packaging
Threshold in CY 2026
Starting in CY 2026 and subsequent years, we propose to update the
proposed threshold amount of $630 by the PPI for Pharmaceuticals for
Human Use (Prescription) (Bureau of Labor Statistics series code
WPUSI07003) from IHS Global, Inc (IGI). IGI is a nationally recognized
economic and financial forecasting firm with which CMS contracts to
forecast the various price indexes including the Producer Price Index
(PPI) Pharmaceuticals for Human Use (Prescription). This is the same as
the update factor used for the OPPS drug packaging threshold, where we
originally used the four-quarter moving average PPI levels for
Pharmaceutical Preparations (Prescription) to trend the $50 threshold
forward from the third quarter of CY 2005 (when the Pub. L. 108-173
mandated threshold became effective) to the third quarter of the
applicable calendar year. We believe it is appropriate to use the same
PPI for Pharmaceuticals for Human Use (Prescription) for the diagnostic
radiopharmaceutical packaging threshold, as diagnostic
radiopharmaceuticals are also prescription pharmaceuticals for human
use. We propose that starting for CY 2026, we would use the most
recently available four quarter moving average PPI levels to trend the
final CY 2025 threshold forward from the third quarter of CY 2024 to
the third quarter of CY 2025 and round the resulting dollar amount to
the nearest $5 increment. This proposal to update the diagnostic
radiopharmaceutical packaging threshold maintains consistency with our
longstanding methodology for updating the OPPS drug packaging
threshold, which is discussed in more detail in section V.B.1.a. of
this rule and also in the CY 2007 OPPS/ASC final rule with comment
period (71 FR 68085 and 68086).
(5) Amount of Separate Payment for Diagnostic Radiopharmaceuticals
Exceeding the Threshold
Once we determine that the per day cost of a nonpass-through
diagnostic

[[Page 59218]]

radiopharmaceutical exceeds the proposed cost threshold of $630 per day
for CY 2025, we then propose to assign that radiopharmaceutical to an
APC, making it a specified covered outpatient drug (SCOD) per section
1833(t)(14)(B) of the Act. Accordingly, we propose to pay for those
nonpass-through, separately payable diagnostic radiopharmaceuticals
based on our authority under section 1833(t)(14)(A)(iii)(II) of the
Act. While under this authority we would ordinarily use the ASP
methodology under section 1847A of the Act, we find that the ASP data
we have is not usable for payment purposes. As previously mentioned,
radiopharmaceuticals are not required to report ASP under 1847A, and as
such, there are very few manufacturers reporting ASP for their products
currently. Of those few manufacturers reporting ASP, the ASP values
that we do have generally do not align with the ASP we would expect
based on the cost and MUC data submitted to CMS by hospitals. For
example, a frequently used diagnostic radiopharmaceutical has a
reported ASP that is over 23,000 percent higher than the MUC derived
from claims data. As manufacturers of diagnostic radiopharmaceuticals
may be unaware of the correct reporting requirements, we believe it
would be inappropriate to propose to pay for separately payable
diagnostic radiopharmaceuticals based on their ASPs as currently
reported, without giving manufacturers the opportunity to submit,
certify, or restate the ASPs of their products. We believe MUC is an
appropriate proxy for the average price for a diagnostic
radiopharmaceutical for a given year, as it is calculated based on the
average costs for a particular year and is directly reflective of the
actual cost data that hospitals submit to CMS.
Under our policy for therapeutic radiopharmaceuticals (74 FR
60520), there are several requirements for reporting ASP. For example,
ASP data submitted would need to be provided for a patient-specific
dose, or patient-ready form, of the radiopharmaceutical in order to
properly calculate the ASP amount for a given HCPCS code if that HCPCS
code dose descriptor was per study dose or similar. ASP data submitted
should align with the code's dose descriptor and billing unit. We
stated we would expect that the ASP data reported by a manufacturer
would be representative of the item(s) sold by the manufacturer. We
used the term ``patient-ready'' in that rule to ensure that ASP data
submitted for OPPS payment purposes for separately payable
radiopharmaceuticals reflect the costs of all the component materials
of the finished radiopharmaceutical product. We expect that the ASP
data would represent the sales price of all of the component materials
of the finished radiopharmaceutical product sold by the manufacturer in
terms that reflect the applicable HCPCS code descriptor such as ``per
study dose'', ``per millicurie''and ``up to XX millicuries.'' For the
few manufacturers currently reporting ASP data for their diagnostic
radiopharmaceuticals, we believe it may be possible that they are not
aware of the reporting requirements or are unaware of how to properly
report ASP for their product, as CMS has not used ASP as the basis of
payment for non-passthrough diagnostic radiopharmaceuticals before.
Therefore, we believe a reasonable alternative for separate payment of
diagnostic radiopharmaceuticals that exceed the per day cost threshold
is the use of their mean unit cost from claims data. This is consistent
with our current practice for therapeutic radiopharmaceuticals when ASP
data is not available. For diagnostic radiopharmaceuticals, we believe
that ASP data is effectively not available for purposes of determining
a payment amount and, therefore, payment based on MUC is a reasonable
alternative.
We previously acknowledged (74 FR 35335), and continue to
acknowledge, the complexities associated with reporting ASP for
radiopharmaceuticals. We encourage manufacturers to submit ASP
information for diagnostic radiopharmaceuticals, if possible. While CMS
is proposing to use MUC to pay for separately payable diagnostic
radiopharmaceuticals in CY 2025, manufacturers can begin, or continue,
to report ASP data for potential future use in paying for diagnostic
radiopharmaceuticals. For CY 2025, ASP reporting is voluntary for
diagnostic radiopharmaceuticals paid under the OPPS. We encourage
interested parties to submit comments regarding potential issues that
may arise that prevent appropriate ASP reporting for diagnostic
radiopharmaceuticals. If manufacturers choose to report ASP data, the
data must meet reporting requirements in order to be used for payment
under the OPPS.
Manufacturers that choose to report ASP data for their diagnostic
radiopharmaceuticals would need to provide comprehensive data in order
for CMS to calculate an ASP amount for a given HCPCS code. In instances
where there is more than one manufacturer of a particular

[…truncated; see source link]

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Indexed from Federal Register on July 22, 2024.

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