major standards for reporting qualitative research

Standards for reporting qualitative research: A synthesis of recommendations

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PURPOSE: Standards for reporting exist for many types of quantitative research, but currently none exist for the broad spectrum of qualitative research. The purpose of the present study was to formulate and define standards for reporting qualitative research while preserving the requisite flexibility to accommodate various paradigms, approaches, and methods. METHOD: The authors identified guidelines, reporting standards, and critical appraisal criteria for qualitative research by searching PubMed, Web of Science, and Google through July 2013; reviewing the reference lists of retrieved sources; and contacting experts. Specifically, two authors reviewed a sample of sources to generate an initial set of items that were potentially important in reporting qualitative research. Through an iterative process of reviewing sources, modifying the set of items, and coding all sources for items, the authors prepared a near-final list of items and descriptions and sent this list to five external reviewers for feedback. The final items and descriptions included in the reporting standards reflect this feedback. RESULTS: The Standards for Reporting Qualitative Research (SRQR) consists of 21 items. The authors define and explain key elements of each item and provide examples from recently published articles to illustrate ways in which the standards can be met. CONCLUSIONS: The SRQR aims to improve the transparency of all aspects of qualitative research by providing clear standards for reporting qualitative research. These standards will assist authors during manuscript preparation, editors and reviewers in evaluating a manuscript for potential publication, and readers when critically appraising, applying, and synthesizing study findings.

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T1 - Standards for reporting qualitative research

T2 - A synthesis of recommendations

AU - O'Brien, Bridget C.

AU - Harris, Ilene B.

AU - Beckman, Thomas J.

AU - Reed, Darcy A.

AU - Cook, David A.

PY - 2014/9

Y1 - 2014/9

N2 - PURPOSE: Standards for reporting exist for many types of quantitative research, but currently none exist for the broad spectrum of qualitative research. The purpose of the present study was to formulate and define standards for reporting qualitative research while preserving the requisite flexibility to accommodate various paradigms, approaches, and methods. METHOD: The authors identified guidelines, reporting standards, and critical appraisal criteria for qualitative research by searching PubMed, Web of Science, and Google through July 2013; reviewing the reference lists of retrieved sources; and contacting experts. Specifically, two authors reviewed a sample of sources to generate an initial set of items that were potentially important in reporting qualitative research. Through an iterative process of reviewing sources, modifying the set of items, and coding all sources for items, the authors prepared a near-final list of items and descriptions and sent this list to five external reviewers for feedback. The final items and descriptions included in the reporting standards reflect this feedback. RESULTS: The Standards for Reporting Qualitative Research (SRQR) consists of 21 items. The authors define and explain key elements of each item and provide examples from recently published articles to illustrate ways in which the standards can be met. CONCLUSIONS: The SRQR aims to improve the transparency of all aspects of qualitative research by providing clear standards for reporting qualitative research. These standards will assist authors during manuscript preparation, editors and reviewers in evaluating a manuscript for potential publication, and readers when critically appraising, applying, and synthesizing study findings.

AB - PURPOSE: Standards for reporting exist for many types of quantitative research, but currently none exist for the broad spectrum of qualitative research. The purpose of the present study was to formulate and define standards for reporting qualitative research while preserving the requisite flexibility to accommodate various paradigms, approaches, and methods. METHOD: The authors identified guidelines, reporting standards, and critical appraisal criteria for qualitative research by searching PubMed, Web of Science, and Google through July 2013; reviewing the reference lists of retrieved sources; and contacting experts. Specifically, two authors reviewed a sample of sources to generate an initial set of items that were potentially important in reporting qualitative research. Through an iterative process of reviewing sources, modifying the set of items, and coding all sources for items, the authors prepared a near-final list of items and descriptions and sent this list to five external reviewers for feedback. The final items and descriptions included in the reporting standards reflect this feedback. RESULTS: The Standards for Reporting Qualitative Research (SRQR) consists of 21 items. The authors define and explain key elements of each item and provide examples from recently published articles to illustrate ways in which the standards can be met. CONCLUSIONS: The SRQR aims to improve the transparency of all aspects of qualitative research by providing clear standards for reporting qualitative research. These standards will assist authors during manuscript preparation, editors and reviewers in evaluating a manuscript for potential publication, and readers when critically appraising, applying, and synthesizing study findings.

UR - http://www.scopus.com/inward/record.url?scp=84908022244&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84908022244&partnerID=8YFLogxK

U2 - 10.1097/ACM.0000000000000388

DO - 10.1097/ACM.0000000000000388

M3 - Article

C2 - 24979285

AN - SCOPUS:84908022244

SN - 1040-2446

JO - Academic Medicine

JF - Academic Medicine

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Scientific Writing

A reporting guide for qualitative studies.

Qualitative studies provide insight into complex phenomena. Unlike measurement-based studies which typically quantify what happens under experimental conditions, qualitative studies often help explain behaviors or perceptions under actual circumstances. Qualitative studies in the field of communicable diseases can be used to provide insight into why people choose high-risk behaviours and to identify the factors that influence their decisions. For example, a qualitative study may address why healthcare practitioners do not practice adequate hand hygiene and whether patients might help by reminding them to do so. The results can be surprising. For example, a recent study identified that inpatients in one hospital who were most dissatisfied with the care they received were also the least likely to ask healthcare professionals if they had washed their hands ( 1 ). Furthermore, the study identified that the decision not to pose this question was linked to patient awareness that staff satisfaction was low.

Qualitative research analyzes data from direct field observations, in-depth, open-ended interviews and written documents. Inductive analyses yield patterns and themes that generate hypotheses and offer a basis for future research. Although qualitative studies do not create generalizable evidence, well-reported studies provide enough information for readers to assess the applicability or transferability of findings to their own context ( 2 ).

There are a variety of checklists about how to report qualitative studies ( 3 - 6 ). The Canada Communicable Disease Report (CCDR) has developed a 24-item checklist that synthesizes these including the COREQ checklist noted on the EQUATOR Network ( 6 ). The CCDR checklist identifies the importance of describing how data was gathered and summarized, what trends were determined, exploring corroborative findings, offering alternative explanations and identifying possible next steps or further areas of inquiry ( Table 1 ).

Abbreviation: No., Number

Reports of qualitative studies are usually around 2,500 words in length—excluding the abstract, tables and references. As with all submissions, check CCDR’s Information for authors , published at the beginning of each volume in January of each year for general manuscript preparation and submission requirements ( 7 ).

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Standards for Reporting Qualitative Research

A synthesis of recommendations.

O’Brien, Bridget C. PhD; Harris, Ilene B. PhD; Beckman, Thomas J. MD; Reed, Darcy A. MD, MPH; Cook, David A. MD, MHPE

Dr. O’Brien is assistant professor, Department of Medicine and Office of Research and Development in Medical Education, University of California, San Francisco, School of Medicine, San Francisco, California.

Dr. Harris is professor and head, Department of Medical Education, University of Illinois at Chicago College of Medicine, Chicago, Illinois.

Dr. Beckman is professor of medicine and medical education, Department of Medicine, Mayo Clinic College of Medicine, Rochester, Minnesota.

Dr. Reed is associate professor of medicine and medical education, Department of Medicine, Mayo Clinic College of Medicine, Rochester, Minnesota.

Dr. Cook is associate director, Mayo Clinic Online Learning, research chair, Mayo Multidisciplinary Simulation Center, and professor of medicine and medical education, Mayo Clinic College of Medicine, Rochester, Minnesota.

Funding/Support: This study was funded in part by a research review grant from the Society for Directors of Research in Medical Education.

Other disclosures: None reported.

Ethical approval: Reported as not applicable.

Disclaimer: The funding agency had no role in the study design, analysis, interpretation, writing of the manuscript, or decision to submit the manuscript for publication.

Supplemental digital content for this article is available at https://links.lww.com/ACADMED/A218 .

Correspondence should be addressed to Dr. O’Brien, Office of Research and Development in Medical Education, UCSF School of Medicine, Box 3202, 1855 Folsom St., Suite 200, San Francisco, CA 94143-3202; e-mail: [email protected] .

Purpose 

Standards for reporting exist for many types of quantitative research, but currently none exist for the broad spectrum of qualitative research. The purpose of the present study was to formulate and define standards for reporting qualitative research while preserving the requisite flexibility to accommodate various paradigms, approaches, and methods.

Method 

The authors identified guidelines, reporting standards, and critical appraisal criteria for qualitative research by searching PubMed, Web of Science, and Google through July 2013; reviewing the reference lists of retrieved sources; and contacting experts. Specifically, two authors reviewed a sample of sources to generate an initial set of items that were potentially important in reporting qualitative research. Through an iterative process of reviewing sources, modifying the set of items, and coding all sources for items, the authors prepared a near-final list of items and descriptions and sent this list to five external reviewers for feedback. The final items and descriptions included in the reporting standards reflect this feedback.

Results 

The Standards for Reporting Qualitative Research (SRQR) consists of 21 items. The authors define and explain key elements of each item and provide examples from recently published articles to illustrate ways in which the standards can be met.

Conclusions 

The SRQR aims to improve the transparency of all aspects of qualitative research by providing clear standards for reporting qualitative research. These standards will assist authors during manuscript preparation, editors and reviewers in evaluating a manuscript for potential publication, and readers when critically appraising, applying, and synthesizing study findings.

Qualitative research contributes to the literature in many disciplines by describing, interpreting, and generating theories about social interactions and individual experiences as they occur in natural, rather than experimental, situations. 1–3 Some recent examples include studies of professional dilemmas, 4 medical students’ early experiences of workplace learning, 5 patients’ experiences of disease and interventions, 6–8 and patients’ perspectives about incident disclosures. 9 The purpose of qualitative research is to understand the perspectives/experiences of individuals or groups and the contexts in which these perspectives or experiences are situated. 1 , 2 , 10

Qualitative research is increasingly common and valued in the medical and medical education literature. 1 , 10–13 However, the quality of such research can be difficult to evaluate because of incomplete reporting of key elements. 14 , 15 Quality is multifaceted and includes consideration of the importance of the research question, the rigor of the research methods, the appropriateness and salience of the inferences, and the clarity and completeness of reporting. 16 , 17 Although there is much debate about standards for methodological rigor in qualitative research, 13 , 14 , 18–20 there is widespread agreement about the need for clear and complete reporting. 14 , 21 , 22 Optimal reporting would enable editors, reviewers, other researchers, and practitioners to critically appraise qualitative studies and apply and synthesize the results. One important step in improving the quality of reporting is to formulate and define clear reporting standards.

Authors have proposed guidelines for the quality of qualitative research, including those in the fields of medical education, 23–25 clinical and health services research, 26–28 and general education research. 29 , 30 Yet in nearly all cases, the authors do not describe how the guidelines were created, and often fail to distinguish reporting quality from the other facets of quality (e.g., the research question or methods). Several authors suggest standards for reporting qualitative research, 15 , 20 , 29–33 but their articles focus on a subset of qualitative data collection methods (e.g., interviews), fail to explain how the authors developed the reporting criteria, narrowly construe qualitative research (e.g., thematic analysis) in ways that may exclude other approaches, and/or lack specific examples to help others see how the standards might be achieved. Thus, there remains a compelling need for defensible and broadly applicable standards for reporting qualitative research.

We designed and carried out the present study to formulate and define standards for reporting qualitative research through a rigorous synthesis of published articles and expert recommendations.

We formulated standards for reporting qualitative research by using a rigorous and systematic approach in which we reviewed previously proposed recommendations by experts in qualitative methods. Our research team consisted of two PhD researchers and one physician with formal training and experience in qualitative methods, and two physicians with experience, but no formal training, in qualitative methods.

We first identified previously proposed recommendations by searching PubMed, Web of Science, and Google using combinations of terms such as “qualitative methods,” “qualitative research,” “qualitative guidelines,” “qualitative standards,” and “critical appraisal” and by reviewing the reference lists of retrieved sources, reviewing the Equator Network, 22 and contacting experts. We conducted our first search in January 2007 and our last search in July 2013. Most recommendations were published in peer-reviewed journals, but some were available only on the Internet, and one was an interim draft from a national organization. We report the full set of the 40 sources reviewed in Supplemental Digital Appendix 1, found at https://links.lww.com/ACADMED/A218 .

Two of us (B.O., I.H.) reviewed an initial sample of sources to generate a comprehensive list of items that were potentially important in reporting qualitative research (Draft A). All of us then worked in pairs to review all sources and code the presence or absence of each item in a given source. From Draft A, we then distilled a shorter list (Draft B) by identifying core concepts and combining related items, taking into account the number of times each item appeared in these sources. We then compared the items in Draft B with material in the original sources to check for missing concepts, modify accordingly, and add explanatory definitions to create a prefinal list of items (Draft C).

We circulated Draft C to five experienced qualitative researchers (see the acknowledgments) for review. We asked them to note any omitted or redundant items and to suggest improvements to the wording to enhance clarity and relevance across a broad spectrum of qualitative inquiry. In response to their reviews, we consolidated some items and made minor revisions to the wording of labels and definitions to create the final set of reporting standards—the Standards for Reporting Qualitative Research (SRQR)—summarized in Table 1 .

To explicate how the final set of standards reflect the material in the original sources, two of us (B.O., D.A.C.) selected by consensus the 25 most complete sources of recommendations and identified which standards reflected the concepts found in each original source (see Table 2 ).

The SRQR is a list of 21 items that we consider essential for complete, transparent reporting of qualitative research (see Table 1 ). As explained above, we developed these items through a rigorous synthesis of prior recommendations and concepts from published sources (see Table 2 ; see also Supplemental Digital Appendix 1, found at https://links.lww.com/ACADMED/A218 ) and expert review. These 21 items provide a framework and recommendations for reporting qualitative studies. Given the wide range of qualitative approaches and methodologies, we attempted to select items with broad relevance.

The SRQR includes the article’s title and abstract (items 1 and 2); problem formulation and research question (items 3 and 4); research design and methods of data collection and analysis (items 5 through 15); results, interpretation, discussion, and integration (items 16 through 19); and other information (items 20 and 21). Supplemental Digital Appendix 2, found at https://links.lww.com/ACADMED/A218 , contains a detailed explanation of each item, along with examples from recently published qualitative studies. Below, we briefly describe the standards, with a particular focus on those unique to qualitative research.

Titles, abstracts, and introductory material. Reporting standards for titles, abstracts, and introductory material (problem formulation, research question) in qualitative research are very similar to those for quantitative research, except that the results reported in the abstract are narrative rather than numerical, and authors rarely present a specific hypothesis. 29 , 30

Research design and methods. Reporting on research design and methods of data collection and analysis highlights several distinctive features of qualitative research. Many of the criteria we reviewed focus not only on identifying and describing all aspects of the methods (e.g., approach, researcher characteristics and role, sampling strategy, context, data collection and analysis) but also on justifying each choice. 13 , 14 This ensures that authors make their assumptions and decisions transparent to readers. This standard is less commonly expected in quantitative research, perhaps because most quantitative researchers share positivist assumptions and generally agree about standards for rigor of various study designs and sampling techniques. 14 Just as quantitative reporting standards encourage authors to describe how they implemented methods such as randomization and measurement validity, several qualitative reporting criteria recommend that authors describe how they implemented a presumably familiar technique in their study rather than simply mentioning the technique. 10 , 14 , 32 For example, authors often state that data collection occurred until saturation, with no mention of how they defined and recognized saturation. Similarly, authors often mention an “iterative process,” with minimal description of the nature of the iterations. The SRQR emphasizes the importance of explaining and elaborating on these important processes. Nearly all of the original sources recommended describing the characteristics and role of the researcher (i.e., reflexivity). Members of the research team often form relationships with participants, and analytic processes are highly interpretive in most qualitative research. Therefore, reviewers and readers must understand how these relationships and the researchers’ perspectives and assumptions influenced data collection and interpretation. 15 , 23 , 26 , 34

Results. Reporting of qualitative research results should identify the main analytic findings. Often, these findings involve interpretation and contextualization, which represent a departure from the tradition in quantitative studies of objectively reporting results. The presentation of results often varies with the specific qualitative approach and methodology; thus, rigid rules for reporting qualitative findings are inappropriate. However, authors should provide evidence (e.g., examples, quotes, or text excerpts) to substantiate the main analytic findings. 20 , 29

Discussion. The discussion of qualitative results will generally include connections to existing literature and/or theoretical or conceptual frameworks, the scope and boundaries of the results (transferability), and study limitations. 10–12 , 28 In some qualitative traditions, the results and discussion may not have distinct boundaries; we recommend that authors include the substance of each item regardless of the section in which it appears.

The purpose of the SRQR is to improve the quality of reporting of qualitative research studies. We hope that these 21 recommended reporting standards will assist authors during manuscript preparation, editors and reviewers in evaluating a manuscript for potential publication, and readers when critically appraising, applying, and synthesizing study findings. As with other reporting guidelines, 35–37 we anticipate that the SRQR will evolve as it is applied and evaluated in practice. We welcome suggestions for refinement.

Qualitative studies explore “how?” and “why?” questions related to social or human problems or phenomena. 10 , 38 Purposes of qualitative studies include understanding meaning from participants’ perspectives (How do they interpret or make sense of an event, situation, or action?); understanding the nature and influence of the context surrounding events or actions; generating theories about new or poorly understood events, situations, or actions; and understanding the processes that led to a desired (or undesired) outcome. 38 Many different approaches (e.g., ethnography, phenomenology, discourse analysis, case study, grounded theory) and methodologies (e.g., interviews, focus groups, observation, analysis of documents) may be used in qualitative research, each with its own assumptions and traditions. 1 , 2 A strength of many qualitative approaches and methodologies is the opportunity for flexibility and adaptability throughout the data collection and analysis process. We endeavored to maintain that flexibility by intentionally defining items to avoid favoring one approach or method over others. As such, we trust that the SRQR will support all approaches and methods of qualitative research by making reports more explicit and transparent, while still allowing investigators the flexibility to use the study design and reporting format most appropriate to their study. It may be helpful, in the future, to develop approach-specific extensions of the SRQR, as has been done for guidelines in quantitative research (e.g., the CONSORT extensions). 37

Limitations, strengths, and boundaries

We deliberately avoided recommendations that define methodological rigor, and therefore it would be inappropriate to use the SRQR to judge the quality of research methods and findings. Many of the original sources from which we derived the SRQR were intended as criteria for methodological rigor or critical appraisal rather than reporting; for these, we inferred the information that would be needed to evaluate the criterion. Occasionally, we found conflicting recommendations in the literature (e.g., recommending specific techniques such as multiple coders or member checking to demonstrate trustworthiness); we resolved these conflicting recommendations through selection of the most frequent recommendations and by consensus among ourselves.

Some qualitative researchers have described the limitations of checklists as a means to improve methodological rigor. 13 We nonetheless believe that a checklist for reporting standards will help to enhance the transparency of qualitative research studies and thereby advance the field. 29 , 39

Strengths of this work include the grounding in previously published criteria, the diversity of experience and perspectives among us, and critical review by experts in three countries.

Implications and application

Similar to other reporting guidelines, 35–37 the SRQR may be viewed as a starting point for defining reporting standards in qualitative research. Although our personal experience lies in health professions education, the SRQR is based on sources originating in diverse health care and non-health-care fields. We intentionally crafted the SRQR to include various paradigms, approaches, and methodologies used in qualitative research. The elaborations offered in Supplemental Digital Appendix 2 (see https://links.lww.com/ACADMED/A218 ) should provide sufficient description and examples to enable both novice and experienced researchers to use these standards. Thus, the SRQR should apply broadly across disciplines, methodologies, topics, study participants, and users.

The SRQR items reflect information essential for inclusion in a qualitative research report, but should not be viewed as prescribing a rigid format or standardized content. Individual study needs, author preferences, and journal requirements may necessitate a different sequence or organization than that shown in Table 1 . Journal word restrictions may prevent a full exposition of each item, and the relative importance of a given item will vary by study. Thus, although all 21 standards would ideally be reflected in any given report, authors should prioritize attention to those items that are most relevant to the given study, findings, context, and readership.

Application of the SRQR need not be limited to the writing phase of a given study. These standards can assist researchers in planning qualitative studies and in the careful documentation of processes and decisions made throughout the study. By considering these recommendations early on, researchers may be more likely to identify the paradigm and approach most appropriate to their research, consider and use strategies for ensuring trustworthiness, and keep track of procedures and decisions.

Journal editors can facilitate the review process by providing the SRQR to reviewers and applying its standards, thus establishing more explicit expectations for qualitative studies. Although the recommendations do not address or advocate specific approaches, methods, or quality standards, they do help reviewers identify information that is missing from manuscripts.

As authors and editors apply the SRQR, readers will have more complete information about a given study, thus facilitating judgments about the trustworthiness, relevance, and transferability of findings to their own context and/or to related literature. Complete reporting will also facilitate meaningful synthesis of qualitative results across studies. 40 We anticipate that such transparency will, over time, help to identify previously unappreciated gaps in the rigor and relevance of research findings. Investigators, editors, and educators can then work to remedy these deficiencies and, thereby, enhance the overall quality of qualitative research.

Acknowledgments: The authors thank Margaret Bearman, PhD, Calvin Chou, MD, PhD, Karen Hauer, MD, Ayelet Kuper, MD, DPhil, Arianne Teherani, PhD, and participants in the UCSF weekly educational scholarship works-in-progress group (ESCape) for critically reviewing the Standards for Reporting Qualitative Research.

References Cited Only in Table 2

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Reporting Qualitative Research: Standards, Challenges, and Implications for Health Design

Affiliation.

• 1 1 Department of Design and Environmental Analysis, Cornell University, Ithaca, NY, USA.
• PMID: 29742930
• DOI: 10.1177/1937586718772615

Objective: This Methods column describes the existing reporting standards for qualitative research, their application to health design research, and the challenges to implementation. Intended for both researchers and practitioners, this article provides multiple perspectives on both reporting and evaluating high-quality qualitative research.

Background: Two popular reporting standards exist for reporting qualitative research-the Consolidated Criteria for Reporting Qualitative Research (COREQ) and the Standards for Reporting Qualitative Research (SRQR). Though compiled using similar procedures, they differ in their criteria and the methods to which they apply. Creating and applying reporting criteria is inherently difficult due to the undefined and fluctuating nature of qualitative research when compared to quantitative studies.

Conclusions: Qualitative research is expansive and occasionally controversial, spanning many different methods of inquiry and epistemological approaches. A "one-size-fits-all" standard for reporting qualitative research can be restrictive, but COREQ and SRQR both serve as valuable tools for developing responsible qualitative research proposals, effectively communicating research decisions, and evaluating submissions. Ultimately, tailoring a set of standards specific to health design research and its frequently used methods would ensure quality research and aid reviewers in their evaluations.

Keywords: COREQ; SRQR; qualitative research; research methodology.

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Characteristics and quality of reporting qualitative nursing research related to the COVID-19 pandemic: a systematic search and critical review

• Ian-In Vong 1 ,
• Monique Rothan-Tondeur 1 , 2 &
• Rita Georges Nohra 1  

BMC Nursing volume  23 , Article number:  498 ( 2024 ) Cite this article

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The COVID-19 (Coronavirus disease of 2019) pandemic caused major disruption to nursing research, especially qualitative research. Researchers had to overcome numerous challenges that potentially impacted the quality of the studies carried out.

The aim of this study is to assess the characteristics and quality of reporting qualitative nursing articles on the COVID-19 pandemic.

A systematic search and critical review using content analysis was conducted on published nurse-led articles using a qualitative approach related to the COVID-19 pandemic. A combination of the Consolidated Criteria for Reporting Qualitative Research (COREQ) and Standards for Reporting Qualitative Research (SRQR) checklists and additional items identified from the literature were used to assess the characteristics and overall quality of reporting of qualitative research.

Out of 63,494 articles screened, 444 met the inclusion criteria. Most studies were published in high-impact, Quartile 1 journals, with the majority originating from the USA. Common themes included workforce experiences and the impact of pandemic restrictions. Methodological quality varied, with a notable underuse of standardized reporting checklists. Despite pandemic-induced challenges in data collection, interviews remained the predominant method. However, the adoption of remote research methods and analysis software was limited.

The findings underscore the resilience and adaptability of nursing researchers during the pandemic. High-quality publications in top-tier journals indicate rigorous academic standards. However, the low utilization of reporting checklists suggests a need for greater emphasis on methodological transparency and adherence to established quality guidelines. This review highlights the importance of enhancing qualitative research practices to improve the rigor and reliability of studies, particularly in crisis contexts.

Peer Review reports

Introduction

The COVID-19 pandemic has threatened the health and well-being of global citizens which has led to a significant change in the attitude, lifestyle, and behavior of people from diverse professions [ 1 ]. Nurses have been and remain central to the pandemic––nurses are central to preventative, curative and palliative activities associated with COVID-19, and have taken these roles on in addition to their usual roles [ 2 ]. Nurses reported low job satisfaction, high levels of burnout, stress, and anxiety [ 3 ]. Researchers have experienced a decline in research motivation [ 4 ]. Scientific productivity, particularly among female academics, has suffered due to increased childcare responsibilities and psychological distress [ 5 ]. And parent researchers struggled to balance work and family responsibilities during the pandemic [ 6 ].

On the other hand, the travel restrictions and lockdown during the pandemic have undoubtedly affected all aspects of research, including qualitative research [ 7 , 8 ]. Qualitative nursing research is essential and important for understanding patient experiences, exploring complex healthcare phenomena, and guiding patient-centered care [ 9 ]. It provides insights into the subjective experiences, perceptions, and emotions of patients, families, and providers [ 10 ], bringing a holistic perspective to understanding the phenomena under study [ 11 ]. With qualitative methodologies, insight can be gained regarding the social responses to this pandemic, they are also the best methods to help explain, address, and plan for emergencies and pandemics, such as COVID-19 [ 7 , 12 , 13 ]. Restrictions during the pandemics made traditional data collection methods challenging [ 1 , 14 ]. Nurse researchers had to adapt to perform data collection in a virtual environment, shifting from face-to-face interviews to telephone or online meetings [ 1 ]; research participants were unwilling to show their faces at virtual meetings, and face-to-face interviews were only allowed with masks on [ 7 , 8 ]. These changes affected the quality and richness of data collection, missing important non-verbal elements such as attitude, gesture, and context [ 15 , 16 ].

Given the disruptive impact of the COVID-19 pandemic on nursing qualitative research activities, and deleterious effects on nurses, like emotional exhaustion [ 17 ], psychological distress [ 18 ], and burnout [ 3 , 19 ], but nurse researchers have also been very responsive to the pandemic, the Journal of Advanced Nursing has received hundreds of manuscripts focused on the pandemic, and more than 200 papers published on the COVID-19 pandemic in 2 years [ 2 ]. We doubted the quality of the publication. Scholarly journals are the most important media source for the dissemination of such research findings and information related to connecting this new evidence to practice [ 20 ] and nursing publication plays an essential role in improving nurses’ knowledge of new information and interesting this knowledge into nursing practice [ 21 ]. Together these phenomena might run the risk of producing poor quality qualitative research. Current literature provides two bibliometric analyses of COVID-19 research published in nursing journal, these provide the readers with only objective information on nursing publication related to COVID-19. The existing literature lacks comprehensive reviews that specifically focus on the characteristics and reporting quality of qualitative nursing research related to COVID-19. This study addresses this gap by providing a thorough analysis, which is crucial for guiding future research efforts and improving the overall quality of qualitative studies in nursing. By emphasizing the importance of maintaining high research quality, this study aims to contribute valuable insights that can inform future research, policymaking, and practice in nursing.

Providing a critical review of COVID-19 qualitative nursing research is an unmet need. To achieve this goal, we designed a systematic literature search including all available COVID-19 nursing qualitative articles using a large task force dedicated to the analysis of high-volume articles. We aimed at investigating the characteristics and the methodological quality assessment of reporting COVID-19 qualitative nursing publications.

We conducted a systematic literature search and a critical review using content analysis. This type of content analysis was to enable the production of measurements, occurrences, or comparisons through statistical or quantitative methods [ 22 ]. This review builds upon the methods utilized in two similar reviews [ 23 , 24 ], which assessed the characteristics of articles and described the methodological quality of the articles by presenting the percentage of compliance with each item of a standardized methodological reporting quality checklist. Our study adopted a pre-established checklist which was designed based on the Consolidated Criteria for Reporting Qualitative Research (COREQ) [ 25 ] and the Standards for Reporting Qualitative Research (SRQR) [ 26 ], along with other items identified in the literature to examine the quality of reporting in qualitative research.

This study is an ancillary study that extracted articles related to COVID-19 from the database of a large study aims to assess the characteristics and reporting quality using a qualitative approach in the field of nursing from 2012 to January 2023.

Search strategy

Several databases were consulted to ensure the inclusion of relevant studies in the field of nursing. The main databases are academic and medical databases, such as PubMed, CINAHL (Cumulative Index to Nursing and Allied Health Literature), Cairn, Embase, Web of science and Scopus. Document search strategies are developed using the MeSH thesaurus (Medical subject headings) and related keywords. The MEDLINE strategy has been developed and tested by the research team: “nursing research“[MH] OR “nursing research“[TW] OR (“nursing research“[Title/Abstract:~2]) OR nurs*[affiliation]) AND (“qualitative research“[MH] OR “qualitative research“[TIAB] OR “qualitative study“[TIAB] OR “qualitative studies“[TIAB] OR “grounded theory“[TIAB] OR “phenomenology“[TIAB] OR “ethnography“[TIAB] OR (“qualitative study“[Title/Abstract:~2] OR “qualitative studies“[Title/Abstract:~2] OR “qualitative research“[Title/Abstract:~2] OR “qualitative theory“[Title/Abstract:~2] OR “qualitative theories“[Title/Abstract:~2] OR “grounded study“[Title/Abstract:~2] OR “grounded studies“[Title/Abstract:~2] OR “grounded theory“[Title/Abstract:~2] OR “grounded theories“[Title/Abstract:~2] OR “grounded research“[Title/Abstract:~2] OR “ethnological study“[Title/Abstract:~2] OR “ethnological studies“[Title/Abstract:~2] OR “ethnological theory“[Title/Abstract:~2] OR “ethnological theories“[Title/Abstract:~2] OR “ethnological research“[Title/Abstract:~2] OR “phenomenological study“[Title/Abstract:~2] OR “phenomenological studies“[Title/Abstract:~2] OR “phenomenological theory“[Title/Abstract:~2] OR “phenomenological theories“[Title/Abstract:~2] OR “phenomenological research“[Title/Abstract:~2]. Then, a hand search was conducted to identified articles related to COVID-19. The literature search was performed between June 2023 to August 2023.

Inclusion and exclusion criteria

Any qualitative nursing research related to COVID-19 was included. The first authors must be nurses. The language was limited to English and French. Both peer-reviewed and pre-prints articles were included.

Articles related to non-human samples and full-text unavailable were excluded.

Article screening

We followed the PRISMA 2020 (Preferred Reporting Items for Systematic Reviews and Meta-Analyses) for article selection. All articles yielded through an initial search from the databases were exported into Rayyan Software, a web-based tool designed to conduct and coordinate systematic literature reviews. Hand search was performed to identify articles related to COVID-19, and duplicates were removed. Next, affiliations were examined to determine if the first author was a nurse, and then titles and abstracts were reviewed to determine if the publication met inclusion and exclusion criteria. Two researchers finished the screening independently. Any discrepant result was discussed by the two reviewers and resolved by consensus, or where necessary, a third researcher was involved. Finally, the articles that met the inclusion and exclusion criteria were selected for full-text reading.

Data extraction and data analysis

We used the pre-established checklist combining items from the SRQR and COREQ checklists and adding other items identified in the literature to answer the objective of this study. The checklist included 33 items seen in Tables  1 and 9 items regarding characteristics of the articles, and 24 items regarding methodological quality assessment. The checklist was pilot-tested and revised. Revisions were made after discussion among the researchers and included clarification of checklist items and the response of researchers to each item. For items of the characteristics of the articles, data were extracted to Excel (Excel 2020, Microsoft Excel, Redmond, WA, USA) for categorization. For items of methodological quality assessment, ATLAS.ti software (version 23.2.1) was used. All identified articles were imported into the software for content analysis with the use of a coding function, codes were created according to the items on the data extraction checklist, researcher read the content of the full-text articles one by one, then identified and coded the phrases according to the codes. For example, the code “field note” was created, and the researcher identified and coded the content if it is mentioned in the article. The frequency of each code was calculated to identify the methodological quality of the included articles.

Ethical considerations

This study is a review based on published articles; ethical approval was not required.

A total of 63,494 articles were registered in Rayyan software. Of these, 918 articles (1.44%) were related to COVID-19. After the exclusion of 56 articles due to duplication, the titles, and abstracts of all the articles were examined and 393 articles were excluded due to affiliations in which the first author was not a nurse. The remaining studies were reviewed in full-text. There were 20 articles excluded due to articles with a non-qualitative approach, 4 articles written in a foreign language were excluded, and 1 article was excluded because of full-texted unavailable. A total of 444 full-text articles related to COVID-19 were analyzed. The flowchart is presented in Fig.  1 .

Flowchart of articles screening

Characteristics of the COVID-19 qualitative nursing research

The 444 included articles were published in 196 different journals, one of which was published on MedRxiv, an online pre-print platform for non-peer-reviewed research, with the most articles being published in the International Journal of Environmental Research and Public Health ( n  = 28, 14.3%).

Table  2 shows the most productive journals in terms of COVID-19 nursing qualitative publications. With regard to the quartile of the journals, the studies were published most frequently in Q1 journals ( n  = 260, 58.6%), followed by Q2 ( n  = 118, 26.6%), Q3 ( n  = 49, 11.0%), Q4 ( n  = 12, 2.7%). The impact factors for each journal are grouped into 6 categories: Of the 444 articles, impact factor below 1 ( n  = 54, 12.2%), impact factor between 1 and 1.999 ( n  = 72, 16.2%). In addition, impact factor between 2 and 2.999 ( n  = 107, 24.1%), impact factor between 3 and 3.999 ( n  = 92, 20.7%), impact factor between 4 and 4.999 ( n  = 87, 19.6%), and impact factor of 5 or higher ( n  = 29, 6.5%). And 3 articles published in journals with an impact factor which is not applicable.

We then assessed the distribution of countries among all the included publications. The top 10 publishing countries were the United States ( n  = 64, 14.4%), Iran ( n  = 57, 12.8%), China ( n  = 35, 7.9%), Turkey ( n  = 33, 7.4%), Spain ( n  = 32, 7.2%), Canada ( n  = 22, 5.0%), Indonesia ( n  = 19, 4.3%), Italy ( n  = 16, 3.6%) and the United Kingdom ( n  = 16, 3.6%) respectively, and South Korea ( n  = 14, 3.2%), see Fig.  2 . Regarding the year of publication, 27 articles (6.1%) were published in 2020, 170 articles (38.3%) in 2021, and 240 articles (54.1%) in 2022.

Distribution of countries of COVID-19 related qualitative nursing research published

The academic qualifications of the first authors were reported in 150 (33.8%) of the 444 articles. Of these, 113 (75.3%) first authors have a Ph.D degree ( n  = 113, 75.3%), Ph.D. candidates ( n  = 3, 2.0%), Ph.D. students ( n  = 7, 4.7%), Master degree ( n  = 23, 15.3%), Master students ( n  = 2, 1.3%), and Bachelor degree ( n  = 2, 1.3%). The affiliations of the first author were the universities ( n  = 395, 89.7%), the hospitals ( n  = 34, 7.7%), research centers ( n  = 12, 2.7%), and independent researchers ( n  = 1, 0.2%).

The focuses on COVID-19 qualitative nursing publications were categorized into 7 groups: workforce experience ( n  = 213, 48.0%), pandemic restrictions experience ( n  = 100, 22.5%), learning experience ( n  = 44, 9.9%), infected COVID-19 experience ( n  = 32, 7.2%), hospitalized experience ( n  = 30, 6.8%), psychological perception ( n  = 24, 5.4%), and guideline analysis ( n  = 1, 0.2%) during the COVID-19 pandemic, see Fig.  3 . The population was mainly clinical nurses ( n  = 197, 44.4%), nursing managers ( n  = 15, 3.4%), nurse educators ( n  = 5, 1.1%), nursing students ( n  = 50, 11.3%), other healthcare professionals ( n  = 18, 4.1%), COVID-19 patients ( n  = 31, 7.0%), other patients ( n  = 36, 8.1%), family members / caregivers ( n  = 24, 5.4%), and public ( n  = 68, 15.3%). Figures  4 and 5 shows the population distribution of the included articles.

Focuses of COVID-19 qualitative nursing research

Target population of COVID-19 qualitative nursing research

Distribution of clinical nurses

Methodological quality assessment of COVID-19 qualitative nursing research

Table  3 shows the prevalence of the items for reporting the methodological quality assessment of the included articles.

Methodological orientation

Of the 444 articles, the most adopted approach was the descriptive approach ( n  = 165, 37.1%), Fig.  6 shows the types of approach adopted. Additionally, 84 (18.9%) of the articles only mentioned “qualitative study” without specifying which approach was being adopted.

Types of approach adopted

Only one-third of the analyzed articles ( n  = 135, 30.4%) mentioned employing standardized reporting quality checklists. Among these, the COREQ checklist was the most utilized ( n  = 119, 26.8%), followed by the SRQR checklist ( n  = 16, 3.6%).

Data collection

Among the articles included, 382 (86%) used interviews/discussions as a data collection method, 20 articles (4.5%) used mixed methods for data collection, and 42 articles (9.5%) that used methods other than interviews/discussions, 2.7% used surveys with open questions, 2.03% carried out document analysis, 1.8% examined diaries, 1.6% analyzed comments on social media, 0.5% used the photovoice method, and finally 0.2% carried out an analysis of audio-newspapers, an analysis of video diaries, an analysis of media interviews, only 1 article used observation as data collection method.

With the articles using interview/discussion methods, 261 articles (64.9%) specified who conducted the interviews. And 78 of them (19.4%) provided detailed information on their professional profiles. Most articles ( n  = 327, 81.3%) mentioned the setting of data collection, with 65.4% ( n  = 214) conducted remotely, 28.4% ( n  = 93) conducted face-to-face, and 6.1% ( n  = 20) indicated that the interviews were conducted whether remotely or face-to-face depending on participants’ wishes. The remoted interviews were conducted by teleconference ( n  = 134, 57.3%), by telephone ( n  = 66, 28.2%), and by teleconference or telephone ( n  = 34, 14.5%), depending on the choice of participants. The software commonly used for teleconferencing was Zoom (44.5%), WhatsApp (11%), and Microsoft Teams (9.2%), while 35% did not mention which software was used, Fig.  7 shows the characteristics of data collection. Most articles ( n  = 340, 84.8%) specified the duration of the interviews, they were described in two ways: mean duration ( n  = 87, 25.6) or minimum and maximum duration ( n  = 253, 74.4%). Audio recording was most used (86.7%), followed by visual recording (13.0%), and a few (0.3%) mentioned whether audio/visual recording was used. Most articles ( n  = 351, 87.3%) provided interview guidelines, while only 16.9% ( n  = 68) pre-tested them.

Characteristics of data collection

Participants

Most articles ( n  = 434, 97.7%) mentioned the number of samples. Almost all the articles ( n  = 443, 99.9%) provided a detailed description of the samples. The most common sampling method was purposive sampling ( n  = 244, 66.8%), followed by convenience sampling ( n  = 34, 9.3%) and snowball sampling ( n  = 33, 9.0%). Some articles ( n  = 54, 14.8%) used mixed sampling methods.

Data analysis

The commonly used methods of analysis were content analysis ( n  = 149, 36.0%) and thematic analysis ( n  = 143, 34.4%) (Fig.  8 ). And some articles did not specify which method was used ( n  = 14, 3.4%). And the most common software chosen by the authors were NVivo (46.9%), MAXQDA (26.7%), and ATLAS.ti (16.0%).

Methods of data analysis

Presentation of results

All the articles (100%) presented their results in narrative form. The majority (90.3%) presented quotations in their results. Only 4.7% presented code recurrence. 18.7% used graphics to present their results, and 9.2% mentioned participants checking reports.

This study focused on the identification of the characteristics and reporting quality of qualitative nursing published research related to COVID-19 pandemic. We used a systematic search approach to identify qualitative nursing studies published related to the COVID-19 and then carried out a critical review with the use of content analysis of the identified articles, relying on a checklist created based on two standardized checklists (SRQR and COREQ). A total of 444 published studies were included and critically reviewed. The most productive country was the USA, which corresponds with a bibliometric analysis of COVID-19 research published in a nursing journal. This can be explained by the fact that the USA is one of the most impacted countries by COVID-19 [ 27 ] and is one of the most prolific countries regarding nursing research [ 28 ]. A significant finding of our study is that the majority of articles were published in journals ranked within Quartile 1. This suggests that the research produced during this period not only addressed urgent topics but also met high academic standards.

In addition, the findings revealed that the most represented topics and target population were related to the workforce experience and clinical nurses respectively, this is consistent with an article that focused on the reflections on nursing research during the pandemic COVID-19 [ 2 ]. Interestingly, clinical nurses were the predominant target population of the articles reviewed, this is possibly attributable to the challenge of conducting research with patients and the public due to pandemic-related restrictions. This thematic focus is likely driven by the critical challenge and changes by clinical nurses during the pandemic, highlighting their significant role in the frontline response and the need to understand and support them.

It was surprising to see that the use of standardized checklists to guide research studies by the researchers was notably low, with only 30.4% mentioning the use of standardized checklists. This finding is particularly noteworthy in the context of qualitative nursing research during the COVID-19 pandemic, a period that demanded high-quality evidence to inform rapidly changing clinical practices. The low adoption rate of standardized checklists may reflect gaps in researchers’ awareness or accessibility to these tools, or perhaps a broader issue in the research culture that undervalues structured guidance in study design and reporting, as these checklists aim to improve the quality of reporting these study types and allow readers to better understand the design, conduct, analysis and findings of published studies [ 25 ].

Traditional qualitative research data collection methods like interviews and discussions were supposed to be most impacted by the pandemic. Surprisingly, 86% ( n  = 382) of the included articles used interviews or discussions as the data collection methods, and 28% of the researchers remained choosing the face-to-face interview method. We questioned how communication and facial expression were observed if facemasks were worn during the interview. Among the included studies that used the interview method in data collection, a significant proportion with 66% of these interviews were conducted remotely, either by telephone or online. These findings align with the literature reviewed, where nursing researchers in the USA reported an increase in the use of online platforms, as well as sending emails and phone calls for data collection, a trend which has seen a significant increase [ 8 ]. Researchers in Japan also reported having to adapt their research methods according to changes in the research environment, moving from in-person interviews to remote telephone interviews, collecting data while maintaining the social distancing, and online data collection [ 8 ]. A randomized research study comparing online interviews to in-person interviews person to assess health conditions was conducted in Australia. The results of this study showed that online interviews were preferred by a greater proportion of participants than in-person interviews, and then those assigned to the online group had a lower dropout rate. Additionally, the use of online interviews did not result in a loss of data quality [ 29 ]. Another study also indicated that online modalities for conducting qualitative research did not lead to substantially different thematic findings than in-person data collection [ 30 ]. These suggest that remote data collection methods would be a good choice for researchers, especially in situations where face-to-face interactions are challenging or not possible. The success of remote interviews in maintaining data quality, participant engagement, and lower dropout rates indicates their viability as a robust alternative to traditional methods. This shift not only ensures the continuity of research during crises like the COVID-19 pandemic but also offers a flexible and efficient approach for future qualitative studies. Embracing remote data collection can enhance the adaptability of research designs and potentially broaden the reach and inclusivity of participant recruitment, making it a valuable methodological option for qualitative nursing researchers.

The adoption of software tools in data analysis was surprisingly low, with only 37% of studies utilizing such resources. This finding suggests a potential area for further development in qualitative research practices, particularly to enhance efficiency and collaboration, especially in scenarios necessitating remote work and data sharing, especially during the pandemic when social contact was limited. In addition, there are other benefits of using qualitative data analysis software, including freedom from manual and administrative tasks, saving time, greater flexibility, and improved validity and reliability, and traceability of qualitative research [ 31 ].

In summary, this study carried out an in-depth analysis of data relating to the journals, articles, researchers, and methods used, identifying both strengths and areas requiring improvement. It highlighted the editorial quality of the publications and the methodological diversity observed in qualitative nursing studies linked to the COVID-19 pandemic. We found that many articles demonstrated commendable transparency in explicitly detailing their research approach, data collection processes, sampling methods, and data analysis techniques. However, some areas need improvement. A key aspect is the insufficient representation of strategies to ensure study rigor, such as triangulation and validation by respondents. It is essential to include critical reflection on the role of researchers, potential biases and their influence during the analysis and selection of data for presentation. Additionally, discussions about data saturation and sequential analysis can significantly strengthen the quality of qualitative research reporting. It is important that authors not only explain the methods or techniques they used but also provide clear and detailed justifications for their choices.

The effective translation of nursing research into clinical practice is critical, especially as healthcare professionals heavily depend on the latest research to guide their practices and decisions. The variability in the quality and reliability of research articles can lead to the adoption of clinical practices that may not be supported by strong evidence, potentially affecting patient care and hindering the advancement of nursing practice [ 32 ]. Therefore, improving the transparency and rigor of research methodology reporting is essential to ensure that clinical practices are based on reliable and robust evidence. Our study highlights the importance of methodological clarity and the use of standardized checklists in guiding research, This is increasingly relevant as nursing research evolves to meet global health challenges. By ensuring the high quality of reporting qualitative research, we can better bridge the gap between research and clinical practice, leading to improved patient outcomes and more effective healthcare delivery.

Limitations

It is also essential to recognize that our research method may have some limitations. The diversity of qualitative research methods restricted our assessment to an overview of overall research reporting quality. Additionally, our inclusion criterion based on the first author as a nurse may have excluded studies conducted by nurse-led teams, but where academic conventions led to a different first author. The time limit of the database prevented us from including articles published after January 2023. Finally, we excluded articles not published in English or French, meaning that relevant articles in other languages may have been omitted.

Conclusions

In conclusion, we urge researchers to provide detailed information in their articles, thereby allowing audiences to carefully evaluate the effectiveness and adequacy of the methods and materials used to produce credible and useful results. We also recommend researchers to adopt validated critical appraisal checklists when conducting their studies. This study highlights the importance of continued reflection on qualitative research practices with a view to improving the reporting quality of future studies in the field of nursing, especially during the special period of a pandemic. Additionally, we plan to compare these results with ancillary studies to assess the characteristics and reporting quality of qualitative nursing research before the COVID-19 pandemic. In the future, we wish to open the way for future studies aimed at exploring the relationships between the different criteria identified and each qualitative approach.

Data availability

The data as well as detailed descriptions of the literature search and search outcome (including excluded articles) are available from the corresponding author upon request.

Abbreviations

Coronavirus disease of 2019

Consolidated Criteria for Reporting Qualitative Research

Standards for Reporting Qualitative Research

Medical Subject Heading

Cumulative Index to Nursing and Allied Health Literature

Preferred Reporting Items for Systematic Reviews and Meta-Analyses

United States of America

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Vong, II., Rothan-Tondeur, M. & Nohra, R.G. Characteristics and quality of reporting qualitative nursing research related to the COVID-19 pandemic: a systematic search and critical review. BMC Nurs 23 , 498 (2024). https://doi.org/10.1186/s12912-024-02138-x

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DOI : https://doi.org/10.1186/s12912-024-02138-x

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Supplementary information:, addenda available only through the internet on the cms website, current procedural terminology (cpt) copyright notice, table of contents, i. summary and background, a. executive summary of this document, 2. summary of the major provisions, 3. summary of costs and benefits, a. impacts of all opps changes, b. impacts of the updated wage indexes, c. impacts of the rural adjustment and the cancer hospital payment adjustment, d. impacts of the opd fee schedule increase factor, e. impacts of the proposed asc payment update, f. impacts of medicaid clinic services four walls exceptions, g. impacts of health and safety standards for obstetrical services in hospitals and critical access hospitals, 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), 1. authority of the panel, 2. establishment of the panel, 3. panel meetings and organizational structure, f. public comments received on the cy 2024 opps/asc final rule with comment period, ii. proposed updates affecting opps payments, a. recalibration of apc relative payment weights, 1. database construction, a. database source and methodology, b. proposed calculation and use of cost-to-charge ratios (ccrs), 2. proposed data development and calculation of costs used for ratesetting, a. calculation of single procedure apc criteria-based costs, (1) blood and blood products, (2) brachytherapy sources, b. comprehensive apcs (c-apcs) for cy 2025, (1) background, (2) exclusion of procedures assigned to new technology apcs from the c-apc policy, (3) exclusion of drugs and biologicals described by hcpcs code c9399 (unclassified drugs or biologicals) from the c-apc policy, (4) exclusion of cell and gene therapies from the c-apc policy, (5) exclusion of non-opioid products for pain relief under section 4135 of the consolidated appropriations act, 2023 from the c-apc policy, (6) c-apcs for cy 2025, c. calculation of composite apc criteria-based costs, (1) mental health services composite apc, (2) multiple imaging composite apcs (apcs 8004, 8005, 8006, 8007, and 8008), 3. proposed changes to packaged items and services, a. background and rationale for packaging in the opps, b. proposal on packaged items and services, c. proposed payment for diagnostic radiopharmaceuticals, (1) background on opps packaging policy for diagnostic radiopharmaceuticals, (2) proposed packaging threshold for diagnostic radiopharmaceuticals, (3) calculating the per day cost of diagnostic radiopharmaceuticals, (4) proposal to update the diagnostic radiopharmaceutical packaging threshold in cy 2026, (5) amount of separate payment for diagnostic radiopharmaceuticals exceeding the threshold, 4. proposed implementation of section 4135 of the consolidated appropriations act (caa), 5. calculation of opps scaled payment weights, b. proposed conversion factor update, 1. opd fee schedule increase factor, 2. productivity adjustment, 3. other conversion factor adjustments, 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, 1. background, 2. proposed policy for cy 2025, g. proposed hospital outpatient outlier payments, 2. outlier calculation for cy 2025, h. proposed calculation of an adjusted medicare payment from the national unadjusted medicare payment, i. proposed beneficiary copayments, 2. proposed opps copayment policy, 3. proposed calculation of an adjusted copayment amount for an apc group, iii. proposed opps ambulatory payment classification (apc) group policies, a. proposed opps treatment of new and revised hcpcs codes, 1. april 2024 hcpcs codes proposed rule comment solicitation, 2. july 2024 hcpcs codes proposed rule comment solicitation, 3. october 2024 hcpcs codes final rule comment solicitation, 4. january 2025 hcpcs codes, a. new level ii hcpcs codes final rule comment solicitation, b. new cpt codes proposed rule comment solicitation, b. proposed opps changes—variations within apcs, 2. application of the 2 times rule, 3. proposed apc exceptions to the 2 times rule, c. proposed new technology apcs, 2. proposal to exempt services with very low claims volume from apc reassignment based on the universal low volume policy, 3. procedures assigned to new technology apcs for cy 2025, a. administration of subretinal therapies requiring vitrectomy (apc 1563), b. bgrt (apc 1521), c. blinded procedure for nyha class iii/iv heart failure (apc 1590), d. bronchoscopy with transbronchial ablation of lesion(s) by microwave energy (apc 1562), e. cardiac positron emission tomography (pet)/computed tomography (ct) studies (apcs 1520 and 1522), f. cardiamp (apc 1590), g. atherosclerosis imaging-quantitative computer tomography (ai-qct) (apc 1511), h. corvia medical interatrial shunt procedure (apc 1592), i. dari motion procedure (apc 1505), j. instillation of anti-neoplastic pharmacologic/biologic agent into renal pelvis (apc 1558), k. limflow tadv procedure cpt code 0620t (apc 1579), l. liver histotripsy service (apc 1576), m. livermultiscan service (apc 1511), n. optellum lung cancer prediction (lcp) (apc 1508), o. quantitative magnetic resonance (qmr) for analysis of tissue composition (apc 1511), p. quantitative magnetic resonance cholangiopancreatography (qmrcp) (apc 1511), q. scalp cooling (apc 1514), r. supervised visits for esketamine self-administration (apcs 1513 and 1518), s. surfacer® inside-out® access catheter system (apc 1534), t. tass (apc 1537), u. magnetic resonance imaging with inhaled hyperpolarized xenon-129 contrast agent (apc 1551), d. universal low volume apc policy for clinical and brachytherapy apcs, e. apc-specific policies, 1. request for information on cardiac ct services, 2. neurostimulator and related procedures (apcs 5461 through 5465), 3. focal laser ablation (apc 5374), 4. bone mass measurement: biomechanical computed tomography (bct) analysis with vertebral fracture assessment (apcs 5521, 5523, and 5731), iv. proposed opps payment for devices, a. proposed pass-through payment for devices, 1. beginning eligibility date for device pass-through status and quarterly expiration of device pass-through payments, a. background, b. expiration of transitional pass-through payments for certain devices, 2. new device pass-through applications for cy 2025, b. applications received for device pass-through status for cy 2025, (1) alternative pathway device pass-through applications, (a) agent tm paclitaxel-coated balloon catheter, (b) aveir tm dr dual chamber leadless pacemaker system, (c) canturio tm tibial extension (cte) with canary health implanted reporting processor (chirp®) system, (d) the detour tm system, (f) ifuse bedrock granite tm implant system, (g) paradise® ultrasound renal denervation (rdn) system, (h) precision gi, (i) pulseselect tm pulsed field ablation (pfa) system, (j) symplicity spyral tm renal denervation (rdn) system, (k) paradise® ultrasound rdn system and the symplicity spyral tm rdn system device category code establishment, (2) traditional device pass-through applications, (a) ambu® ascope tm gastro, (b) omeza wound care matrix (ocm tm ), (d) oscar® peripheral multifunctional catheter, b. proposed device-intensive procedures, a. hcpcs code-level device-intensive determination, b. use of the three criteria to designate device-intensive procedures, 2. proposed device-intensive procedure policy, a. proposed change to the device-intensive status default offset methodology for new hcpcs codes, 3. device edit policy, 4. adjustment to opps payment for no cost/full credit and partial credit devices, b. policy for no cost/full credit and partial credit devices, v. proposed opps payment for drugs, biologicals, and radiopharmaceuticals, a. proposed opps transitional pass-through payment for additional costs of drugs, biologicals, and radiopharmaceuticals, 2. transitional pass-through payment period for pass-through drugs, biologicals, and radiopharmaceuticals and quarterly expiration of pass-through status, 3. drugs and biologicals with expiring pass-through payment status in cy 2024, 4. drugs, biologicals, and radiopharmaceuticals with pass-through payment status expiring in cy 2025, 5. drugs, biologicals, and radiopharmaceuticals with pass-through payment status continuing through cy 2025, b. proposed opps payment for drugs, biologicals, and radiopharmaceuticals without pass-through payment status, 1. proposed criteria for packaging payment for drugs, biologicals, and radiopharmaceuticals, a. proposed packaging threshold, b. proposed packaging of payment for hcpcs codes that describe certain drugs, certain biologicals, and certain radiopharmaceuticals under the cost thresholds, c. policy-packaged drugs, biologicals, and radiopharmaceuticals, d. packaging determination for hcpcs codes that describe the same drug or biological but different dosages, 2. proposed payment for drugs and biologicals without pass-through status that are not packaged, a. proposed payment for specified covered outpatient drugs (scods) and other separately payable drugs and biologicals, b. biosimilar biological products, d. invoice drug pricing proposal for cy 2026, 3. payment policy for radiopharmaceuticals, a. payment policy for therapeutic radiopharmaceuticals, b. payment policy for diagnostic radiopharmaceuticals, 4. proposed payment for blood clotting factors, 5. proposed payment for nonpass-through drugs, biologicals, and radiopharmaceuticals with hcpcs codes but without opps hospital claims data, 6. requirement in the cy 2025 physician fee schedule proposed rule for hopds and ascs to report discarded amounts of certain single-dose or single-use package drugs, 7. high-cost/low-cost threshold for packaged skin substitutes, b. proposals for packaged skin substitutes for cy 2025, 8. radioisotopes derived from non-highly enriched uranium (non-heu) sources, vi. estimate of opps transitional pass-through spending for drugs, biologicals, radiopharmaceuticals, and devices, a. amount of additional payment and limit on aggregate annual adjustment, b. proposed estimate of pass-through spending for cy 2025, vii. proposed opps payment for hospital outpatient visits and critical care services, viii. payment for partial hospitalization and intensive outpatient services, a. background, 1. partial hospitalization, 2. intensive outpatient program services, b. coding and billing for php and iop services under the opps, c. proposed cy 2025 payment rates for php and iop, 2. cy 2025 payment rate methodology for php and iop, d. proposed outlier policy for cmhcs, 2. cmhc outlier percentage, 3. cutoff point and percentage payment amount, 4. outlier reconciliation, 5. outlier payment cap, 6. fixed-dollar threshold, ix. services that will be paid only as inpatient services, b. changes to the inpatient only (ipo) list, x. nonrecurring policy changes, a. remote services, 1. payment for outpatient therapy services, diabetes self-management training, and medical nutrition therapy when furnished by institutional staff to beneficiaries in their homes through communications technology, 2. periodic in-person visits for mental health services furnished remotely by hospital staff to beneficiaries in their homes, 3. proposed hopd payment for telemedicine evaluation and management services, b. virtual direct supervision of cardiac rehabilitation (cr), intensive cardiac rehabilitation (icr), pulmonary rehabilitation (pr) services and diagnostic services furnished to hospital outpatients, a. virtual direct supervision of cr, icr and pr services furnished to hospital outpatients ( 42 cfr 410.27(a)(1)(b) ( 1 )), b. virtual direct supervision of diagnostic services furnished to hospital outpatients ( 42 cfr 410.28(e)(2)(iii) ), 2. extension of virtual direct supervision of cr, icr, pr services and diagnostic services furnished to hospital outpatients through december 31, 2025, c. all-inclusive rate (air) add-on payment for high-cost drugs provided by indian health service and tribal facilities, 2. proposed air add-on payment for high-cost drugs provided by indian health service and tribal facilities, d. request for information—paying all ihs and tribally operated clinics the ihs medicare outpatient all inclusive rate, 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, 1. general background, 2. potential modifications to payment adjustments for domestic niosh-approved surgical n95 respirators, 3. potential modifications to include nitrile gloves, 4. potential modifications to include other ppe and medical devices, 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/devices 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, 1. background on process for new and revised hcpcs codes, 5. january 2025 hcpcs codes, a. level ii hcpcs codes final rule comment solicitation, b. cpt codes proposed rule comment solicitation, 6. asc payment and comment indicators, b. proposed asc payment and comment indicators for cy 2025, c. proposed payment policies under the asc payment system, 1. proposed asc payment for covered surgical procedures, b. update to asc covered surgical procedure payment rates for cy 2025, c. proposed payment for asc add-on procedures eligible for complexity adjustments under the opps, (1) opps c-apc complexity adjustment policy, (2) cy 2025 asc special payment policy proposal for opps complexity-adjusted c-apcs, d. proposed low volume apcs and limit on asc payment rates for procedures assigned to low volume apcs, 2. payment for covered ancillary services, b. proposed payment for covered ancillary services for cy 2025, 3. covered surgical procedures designated as office-based procedures, b. cy 2025 proposed office-based procedures, 4. device-intensive asc covered surgical procedures, b. cy 2025 proposed device intensive procedures, c. adjustment to asc payments for no cost/full credit and partial credit devices, 5. requirement in the physician fee schedule cy 2025 proposed rule for hopds and ascs to report discarded amounts of certain single-dose or single-use package drugs, d. proposed additions to asc covered surgical procedures and covered ancillary services lists, 1. proposed additions to the list of asc covered surgical procedures, 2. proposed changes to the list of asc covered surgical procedures for cy 2025, 3. covered ancillary services, e. asc payment policy for non-opioid post-surgery pain management drugs, biologicals, and devices, 1. background on opps/asc non-opioid pain management packaging policies, f. proposed cy 2025 non-opioid policy for pain relief under the opps and asc payment system, 1. background on access to non-opioid treatments for pain relief, 2. proposed cy 2025 non-opioid policy implementation of section 4135 of the caa, 2023, a. statutory authority for opps/asc non-opioid policy, (1) drugs and biologicals subject to the asc non-opioid policy ( 42 cfr 416.174 ), (2) definition of non-opioid treatment for pain relief, (3) evidence requirement for medical devices, c. non-opioid product indications, (1) fda-approved indications for drugs and biologicals, (2) indications for medical devices, d. amount of payment, e. payment limitation, d. payment limitation with no claims data, e. qualifying products, g. proposed new technology intraocular lenses (ntiols), 1. ntiol application cycle, 2. requests to establish new ntiol classes for cy 2025, 3. payment adjustment, h. proposed calculation of the asc payment rates and the asc conversion factor, 2. calculation of the asc payment rates, a. updating the asc relative payment weights for cy 2025 and future years, b. updating the asc conversion factor, 3. display of the proposed cy 2025 asc payment rates, 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, b. cms commitment to advancing health equity using quality measurement.

• 1. Proposal To Adopt the Hospital Commitment to Health Equity (HCHE) Measure for the Hospital Outpatient Quality Reporting (OQR) and Rural Emergency Hospital Quality Reporting (REHQR) Programs and the Facility Commitment to Health Equity (FCHE) Measure for the Ambulatory Surgical Center Quality Reporting (ASCQR) Program Beginning With the CY 2025 Reporting Period/CY 2027 Payment Determination or Program Determination. 137

b. Overview of the Measures

C. pre-rulemaking measure review, d. cbe endorsement, e. measure calculation, f. data submission requirements, b. measure overview, e. data sources, f. measure calculation, g. data submission and reporting, 3. proposal to adopt the screen positive rate for social drivers of health (sdoh) measure for the hospital outpatient quality reporting (oqr), rural emergency hospital quality reporting (rehqr), and ambulatory surgical center quality reporting (ascqr) 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, 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, 1. previously finalized program measure set beginning with the cy 2027 payment determination, b. program measure set policies, 1. measure retention, 2. measure suspension or removal, 3. measure adoption, b. proposal to 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) measure overview, (3) pre-rulemaking measure review, (4) cbe endorsement, (5) data collection, submission, and reporting, (a) data collection, (i) data sources, (ii) measure specifications, (b) data submission and reporting, 2. proposed measure removals from the hospital oqr program measure set, a. proposal to remove the mri lumbar spine for low back pain measure beginning with the cy 2025 reporting period/cy 2027 payment determination, b. proposal to 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, 3. summary of proposed program measure set updates, a. proposed program measure set beginning with the cy 2027 payment determination, b. proposed program measure set updates beginning with the cy 2031 payment determination, d. administrative requirements, e. form, manner, and timing of data submission, 1. general data submission policy, a. web-based measures, (1) cms-designated information system and proposal for data submission for the hospital commitment to health equity (hche), screening for social drivers of health (sdoh), and screen positive rate for sdoh measures, (2) national healthcare safety network (nhsn), b. electronic clinical quality measures (ecqms) and proposal to require electronic health record (ehr) technology to be certified to all ecqms available to report beginning with the cy 2025 reporting period/cy 2027 payment determination, c. patient-reported outcome-based performance measures (pro-pms), (1) proposal for data submission of pro-pm data, (2) proposal for data submission and reporting requirements for 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), f. public reporting of measure data, 1. general policy, 2. proposal to publicly report the median time from emergency department (ed) arrival to ed departure for discharged ed patients—psychiatric/mental health patients strata on care compare, g. payment reduction for hospitals that fail to meet the hospital oqr program requirements for the cy 2025 payment determination, 2. reporting ratio application and associated adjustment policy for cy 2025, xvi. rural emergency hospital quality reporting (rehqr) program, 1. previously finalized program measure sets, b. program measure set policies: retention, suspension or removal, modification, and adoption, c. program measure proposals, 1. proposal to adopt health equity quality measures in the rehqr program, 2. proposal to modify the reporting period for the risk-standardized hospital visits within 7 days after hospital outpatient surgery measure beginning with the cy 2027 program determination, a. proposed program measure set beginning with the cy 2027 program determination, b. proposed program measure set beginning with the cy 2028 program determination, 2. proposed data submission policy following conversion to reh status, 3. measure-specific data submission and reporting requirements, a. data submission requirements for chart-abstracted measures, b. proposal for the hche, screening for sdoh, and screen positive rate for sdoh measures' data submission requirements and reporting requirements, c. data submission requirements for claims-based measure data, xvii. ambulatory surgical center quality reporting (ascqr) program, a. previously finalized measure set beginning with the cy 2027 payment determination, b. previously finalized measure set beginning with the cy 2031 payment determination, 3. measure modification, 4. measure adoption, 1. proposal to adopt health equity quality measures in the ascqr program, 2. summary of proposed program measure set updates, b. proposed program measure set beginning with the cy 2031 payment determination, 2. measure-specific data submission and reporting requirements, (1) cms-designated information system and proposal for data submission for the facility commitment to health equity (fche), screening for social drivers of health (sdoh), and screen positive rate for sdoh measures, (2) national health safety network (nhsn), 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, 1. statutory background, 2. policy regarding reduction to the asc payment rates for ascs that fail to meet the ascqr program requirements for a payment determination year, xviii. medicaid clinic services four walls exceptions, b. provisions of the proposed regulations, 1. ihs/tribal clinics, 2. behavioral health clinics, 3. clinics located in rural areas, 4. additional four walls considerations, 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), a. continuous eligibility in medicaid and chip ( 42 cfr 435.926 and 457.342 ), xxi. health and safety standards for obstetrical services in hospitals and critical access hospitals, 1. the u.s. maternal health crisis, 2. efforts to improve maternal health, request for information on obstetrical services standards for hospitals, cahs, and rehs: summary and responses to public comments, 1. organization, staffing, and delivery of services (§ 482.59 and § 485.649), b. proposals, 2. training for obstetrical staff in hospitals and cahs (§§ 482.59(c), 485.649(c)), b. proposed requirements for staff training for hospitals and cahs with ob services, 3. quality assessment and performance improvement (qapi) program (§ 482.21; § 485.641), i. existing qapi cop requirements, ii. data analysis and stratification, iii. maternal mortality review committees, c. solicitation of comments, 4. emergency services readiness (§ 482.55; § 485.618), b. proposal, 5. transfer protocols (§ 482.43), 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, b. proposed update to the form, time, and manner requirements for the hybrid hospital-wide all-cause readmission (hwr) and hybrid hospital-wide all-cause risk standardized mortality (hwm) measures for the fy 2026 payment determination, 1. background of the hybrid hwr and hybrid hwm measures in the hospital iqr program, 2. proposal to extend voluntary reporting of ccde and linking variable data for the hybrid hwr and hybrid hwm measures, 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 ), 2. proposal, a. overview of proposed changes, b. description of “custody”—proposed § 411.4(b)(3), c. halfway houses, d. definition of penal authority—proposed § 411.4(b)(2), b. revision to medicare special enrollment period for formerly incarcerated individuals, 3. technical corrections, xxiv. overall hospital quality star rating modification to emphasize the safety of care measure group: request for information (rfi), b. background, c. current overall hospital quality star rating methodology, d. safety of care in star ratings, e. potential future options to greater emphasize patient safety in the overall hospital quality star rating, 1. reweighting the safety of care measure group, 2. policy-based 1-star reduction for poor performance on safety of care, 3. reweighting the safety of care measure group combined with a policy-based star rating cap, f. 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. information collection burden estimate for the proposed adoption of the hospital commitment to health equity measure beginning with the cy 2025 reporting period/cy 2027 payment determination, c. information collection burden estimate for the proposed adoption of the screening for social drivers of health (sdoh) measure beginning with voluntary reporting for the cy 2025 reporting period followed by mandatory reporting beginning with the cy 2026 reporting period/cy 2028 payment determination, d. information collection burden estimate for the proposed adoption of the screen positive rate for social drivers of health (sdoh) measure beginning with voluntary reporting for the cy 2025 reporting period followed by mandatory reporting beginning with the cy 2026 reporting period/cy 2028 payment determination, e. information collection burden estimate for the proposed adoption of 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 and mandatory reporting beginning with the cy 2027 reporting period/cy 2029 payment determination, f. information collection burden for the proposed removal of two claims-based measures, g. information collection burden for the proposal to publicly report data for the median time for discharged ed patients—psychiatric/mental health patients stratification on care compare beginning in cy 2025, h. information collection burden for the proposal to require ehr technology to be certified to all ecqms available to report beginning with the cy 2025 reporting period/cy 2027 payment determination, g. summary of proposed information collection burden estimates for the hospital oqr program, b. information collection burden for the proposed adoption of the hospital commitment to health equity (hche) measure beginning with the cy 2025 reporting period/cy 2027 program determination, c. information collection burden for the proposed adoption of the screening for social drivers of health (sdoh) measure beginning with voluntary reporting for the cy 2025 reporting period followed by mandatory reporting beginning with the cy 2026 reporting period/cy 2028 program determination, d. information collection burden for the proposed adoption of the screen positive rate for social drivers of health (sdoh) measure beginning with voluntary reporting for the cy 2025 reporting period followed by mandatory reporting beginning with the cy 2026 reporting period/cy 2028 program determination, e. information collection requirements for the proposal to extend the reporting period from for the risk-standardized hospital visits within 7 days after hospital outpatient surgery measure beginning with the cy 2027 program determination, f. summary of proposed information collection burden estimates for the rehqr program, c. icrs for the ambulatory surgical center quality reporting (ascqr) program, b. information collection burden for the proposed adoption of the facility commitment to health equity (fche) measure beginning with the cy 2025 reporting period/cy 2027 payment determination, c. information collection burden for the proposed adoption of the screening for social drivers of health (sdoh) measure, beginning with voluntary reporting for the cy 2025 reporting period followed by mandatory reporting beginning with the cy 2026 reporting period/cy 2028 payment determination, d. information collection burden for the proposed adoption of the screen positive rate for social drivers of health (sdoh) measure beginning with voluntary reporting for the cy 2025 reporting period followed by mandatory reporting beginning with the cy 2026 reporting period/cy 2028 payment determination, e. summary of proposed information collection burden estimates for the 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 (§ 482.59 a and b) and cahs (§ 485.649 a through b), i. icrs regarding ob staff training for hospitals (§ 482.59(c) and cahs (§ 485.649(c)), j. icrs regarding revisions to qapi (§ 482.21) standards for ob services, k. icrs regarding emergency services readiness in emergency services (§ 482.55) for hospitals, l. transfer protocols in discharge planning (§ 482.43) for hospitals, m. total costs for all icrs related to maternal health, xxv. response to comments, xxvi. economic analyses, a. statement of need, b. overall impact of provisions of this proposed rule, c. detailed economic analyses, 1. estimated effects of opps changes in this proposed rule, a. limitations of our analysis, b. estimated effects of opps changes on hospitals, column 1: total number of hospitals, column 2: apc recalibration—all changes, column 3: wage indexes and the effect of the provider adjustments, column 4: all budget neutrality changes combined with the market basket update, column 5: all changes for cy 2025, c. estimated effects of opps changes on cmhcs, d. estimated effect of opps changes on beneficiaries, e. estimated effects of opps changes on other providers, f. estimated effects of opps changes on the medicare and medicaid programs, g. alternative opps policies considered, h. proposed add-on payment for high-cost drugs to the indian health service (ihs) all-inclusive rate (air), 2. estimated effects of cy 2024 asc payment system changes, b. estimated effects of asc payment system policies on ascs, c. estimated effects of asc payment system policies on beneficiaries, accounting statements and tables for opps and asc payment system, 3. effects of changes in requirements for the hospital outpatient quality reporting (oqr) program, b. impact of cy 2025 opps/asc proposed rule proposals, 4. effects of changes in requirements for the rural emergency hospital quality reporting (rehqr) program, 5. effects of changes in requirements for the ambulatory surgical center quality reporting (ascqr) program, 6. effects of changes in requirements for the hospital inpatient quality reporting (iqr) program, 7. effects of proposed changes for 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, 8. estimated effects of medicaid clinic services four walls exceptions, b. overall estimated effects of medicaid clinic services four walls exceptions, c. benefits of medicaid clinic services four walls exceptions, d. alternative medicaid clinic services four walls exceptions considered, 9. effects of continuous eligibility in medicaid and chip, 10. effects of proposed requirements for obstetrical services in hospitals and critical access hospitals (cahs), a. organization, staffing and delivery of services for hospitals (§ 482.59a through b) and cahs (§ 482.649a through b), b. ob staff training for hospitals (§ 482.59(c)) and cahs (§ 485.649(c)), c. quality assessment and performance improvement program (qapi) for hospitals (§ 482.21(b)(4)) and cahs (§ 485.641(e)(1)), d. maternal health qapi activities for hospitals (§ 482.21(e)) and cahs (§ 485.641(d)(4)), e. emergency services readiness for hospitals (§ 482.55(c)) and cahs (§ 485.618(e)), f. transfer protocols in discharge planning for hospitals (§ 482.43(c)), g. summary of regulatory impact analysis for obstetrical and emergency services, h. benefits, i. alternatives considered, d. regulatory review cost estimation, e. regulatory flexibility act (rfa) analysis, f. unfunded mandates reform act analysis, g. federalism, h. conclusion, list of subjects, 42 cfr part 406, 42 cfr part 407, 42 cfr part 410, 42 cfr part 411, 42 cfr part 416, 42 cfr part 419, 42 cfr part 435, 42 cfr part 440, 42 cfr part 457, 42 cfr part 482, 42 cfr part 485, part 406—hospital insurance eligibility and entitlement, part 407—supplementary medical insurance (smi) enrollment and entitlement, part 410—supplementary medical insurance (smi) benefits, part 411—exclusions from medicare and limitations on medicare payment, part 416—ambulatory surgical services, part 419—prospective payment system for hospital outpatient department services, part 435—eligibility in the states, district of columbia, the northern mariana islands, and american samoa, part 440—services: general provisions, part 457—allotments and grants to states, part 482—conditions of participation for hospitals, part 485—conditions of participation: specialized providers, enhanced content - submit public comment.

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

Proposed rule.

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.

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

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 https://www.regulations.gov . Follow the “Submit a comment” instructions.

2. By regular mail. You may mail written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-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.

Au'Sha Washington or Elise Barringer at [email protected] .

Advisory Panel on Hospital Outpatient Payment (HOP Panel), contact the HOP Panel mailbox at [email protected] .

Ambulatory Surgical Center Quality Reporting (ASCQR) Program policies, contact Anita Bhatia via email at [email protected] .

Ambulatory Surgical Center Quality Reporting (ASCQR) Program measures, contact Marsha Hertzberg via email at [email protected] .

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 [email protected] .

Blood and Blood Products, contact Au'Sha Washington via email at [email protected] or Josh McFeeters via email at [email protected] .

Cancer Hospital Payments, contact Scott Talaga via email at [email protected] .

CMS Web Posting of the OPPS and ASC Payment Files, contact Chuck Braver via email at [email protected] .

Medicaid Clinic Services Four Walls Flexibilities, contact Sheri Gaskins via email at [email protected] or Ryan Tisdale via email at [email protected] .

Composite APCs (Multiple Imaging and Mental Health) and Comprehensive APCs (C-APCs), via email at Mitali Dayal via email at [email protected] .

Device-Intensive Status and No Cost/Full Credit and Partial Credit Devices, contact Scott Talaga via email at [email protected] .

Domestic Personal Protection Equipment RFI, contact Jesse Hawkins via email at [email protected] .

Health and Safety Standards for Obstetrical Services in Hospitals and Critical Access Hospitals, contact The Clinical Standards Group, [email protected] .

Hospital Inpatient Quality Reporting (IQR) Program measures, contact Melissa Hager or Ngozi Uzokwe via email [email protected] or [email protected] .

Hospital Outpatient Quality Reporting (OQR) Program policies, contact Kimberly Go via email [email protected] .

Hospital Outpatient Quality Reporting (OQR) Program measures, contact Janis Grady via email [email protected] .

Hospital Outpatient Visits (Emergency Department Visits and Critical Care Visits), contact Abby Cesnik via email at [email protected] or Nate Vercauteren via email at [email protected] . Start Printed 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 [email protected] .

Inpatient Only (IPO) Procedures List, contact Abigail Cesnik via email at [email protected] .

Medicaid and CHIP Continuous Eligibility Policy, contact Cassie Lagorio via email at [email protected] .

New Technology Intraocular Lenses (NTIOLs), contact Scott Talaga via email at [email protected] .

No Legal Obligation to Pay Payment Exclusion, contact Frederick Grabau via email at [email protected] .

Non-Opioid Policy or Implementation of Section 4135 of the Consolidated Appropriations Act (CAA), 2023, contact Mitali Dayal via email at [email protected] or Cory Duke via email at [email protected] .

OPPS Brachytherapy, contact Cory Duke via email at [email protected] and Scott Talaga via email at [email protected] .

OPPS Data (APC Weights, Conversion Factor, Copayments, Cost-to-Charge Ratios (CCRs), Data Claims, Geometric Mean Calculation, Outlier Payments, and Wage Index), contact Erick Chuang via email at [email protected] , or Scott Talaga via email at [email protected] , or Josh McFeeters via email at [email protected] .

OPPS Dental Policy, contact Nicole Marcos via email at [email protected] .

OPPS Drugs, Radiopharmaceuticals, Biologicals, and Biosimilar Products, contact Josh McFeeters via email at [email protected] , Gil Ngan via email at [email protected] , Cory Duke via email at [email protected] , or Au'Sha Washington via email at [email protected] .

OPPS New Technology Procedures/Services, contact the New Technology APC mailbox at [email protected] .

OPPS Packaged Items/Services, contact Mitali Dayal via email at [email protected] or Cory Duke via email at [email protected] .

OPPS Pass-Through Devices, contact the Device Pass-Through mailbox at [email protected] .

OPPS Status Indicators (SI) and Comment Indicators (CI), contact Marina Kushnirova via email at [email protected] .

Outpatient Department Prior Authorization Process, contact Kelly Wojciechowski via email at [email protected] .

Overall Hospital Quality Star Rating Request for Information, contact Tyson Nakashima Sr. via email [email protected] .

Partial Hospitalization Program (PHP), Intensive Outpatient (IOP), and Community Mental Health Center (CMHC) Issues, contact the PHP Payment Policy Mailbox at [email protected] .

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 [email protected] .

Remote Services, contact Emily Yoder via email at [email protected] or Nate Vercauteren via email at [email protected] .

Rual Emergency Hospital Quality Reporting (REHQR) Program policies, contact Anita Bhatia via email at [email protected] .

Rual Emergency Hospital Quality Reporting (REHQR) Program measures, contact Melissa Hager via email [email protected] .

Special Enrollment Period for Formerly Incarcerated Individuals, contact Steve Manning via email at [email protected] .

All Other Issues Related to Hospital Outpatient Payments Not Previously Identified, contact the OPPS mailbox at [email protected] .

All Other Issues Related to the Ambulatory Surgical Center Payments Not Previously Identified, contact the ASC mailbox at [email protected] .

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: https://www.regulations.gov . Follow the search instructions on that website to view public comments. CMS will not post on Regulations.gov public comments that make threats to individuals or institutions or suggest that the individual will take actions to harm the individual. CMS continues to encourage individuals not to submit duplicative comments. We will post acceptable comments from multiple unique commenters even if the content is identical or nearly identical to other comments.

Plain Language Summary: In accordance with 5 U.S.C. 553(b)(4) , a plain language summary of this rule may be found at https://www.regulations.gov/​ .

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: https://www.cms.gov/​medicare/​payment/​prospective-payment-systems/​hospital-outpatient/​regulations-notices .

The Addenda relating to the ASC payment system are available at: https://www.cms.gov/​medicare/​payment/​prospective-payment-systems/​ambulatory-surgical-center-asc/​asc-regulations-and-notices .

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.

A. Executive Summary of This Document

F. Public Comments Received on the CY 2024 OPPS/ASC Proposed Rule

B. Conversion Factor Update

D. Proposed Universal Low Volume APC Policy for Clinical and Brachytherapy APCs

E. Proposed APC-Specific Policies Start Printed Page 59188

VI. Proposed Estimate of OPPS Transitional Pass-Through Spending for Drugs, Biologicals, Radiopharmaceuticals, and Devices

B. Estimate of Pass-Through Spending for CY 2025

VIII. Proposed Payment for Partial Hospitalization and Intensive Outpatient Services

D. Request for Information- IHS Outpatient Encounter Rate Available to All American Indian and Alaska Native (AI/AN) Outpatient Programs

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

B. CMS Commitment to Advancing Health Equity Using Quality Measurement

G. Payment Reduction for Hospitals That Fail To Meet the Hospital OQR Program

H. Payment Reduction for ASCs That Fail To Meet the ASCQR Program Requirements

A. Medicare FFS No Legal Obligation To Pay Payment Exclusion and Incarceration (Revisions to 42 CFR 411.4 )

XXIV. Overall Hospital Quality Star Rating Modification To Emphasize the Safety of Care Summary

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

B. ICRs for the Rural Emergency Hospitals Quality Reporting (REHQR) Program

H. ICRs Regarding Organization, Staffing and Delivery of Services for Hospitals (§ 482.59a and b) and CAHs (§ 485.649a Through b)

M. Total Costs for all ICRs Related to Maternal Health Start Printed Page 59189

B. Overall Impact of Provisions of Proposed Rule

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 § 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 §§ 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 § 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.

• 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 Start Printed Page 59190 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.

• 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.
• 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.
• 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.
• 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 § 416.166.
• 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)).
• 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.
• 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.
• 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.
• 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.
• 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.
• 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.
• 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.
• Changes to the Review Timeframes for the Hospital Outpatient Department (OPD) Prior Authorization Process: We are changing the current review timeframe for prior authorization Start Printed Page 59191 requests for OPD services from 10-business days to 7-calendar days for standard reviews.
• 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.
• 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.
• 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.

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.

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.

• 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.
• 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 § 411.4(b), add a definition of “penal authority,” reorganize the regulation, and make certain technical edits.
• 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 §§ 406.27(d) and 407.23(d) to remove the reference to “custody” associated with § 411.4(b) and instead tie the eligibility for this SEP to the determination made by SSA that they are no longer incarcerated.
• 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.
• 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.
• 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).

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.

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 Start Printed 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.

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.

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.

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.

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.

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.

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.

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, Start Printed Page 59193 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.

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 § 419.20(b) of the regulations, we specify the types of hospitals that are excluded from payment under the OPPS. These excluded hospitals are: Start Printed Page 59194

• Critical access hospitals (CAHs);
• Hospitals located in Maryland and paid under Maryland's All-Payer or Total Cost of Care Model;
• Hospitals located outside of the 50 States, the District of Columbia, and Puerto Rico;
• Indian Health Service (IHS) hospitals; and
• Rural emergency hospitals (REH).

On April 7, 2000, we published in the Federal Register a final rule with comment period ( 65 FR 18434 ) to implement a prospective payment system for hospital outpatient services. The hospital OPPS was first implemented for services furnished on or after August 1, 2000. Section 1833(t)(9)(A) of the Act requires the Secretary to review certain components of the OPPS, not less often than annually, and to revise the groups, the relative payment weights, and the wage and other adjustments to take into account changes in medical practices, changes in technology, the addition of new services, new cost data, and other relevant information and factors.

Since initially implementing the OPPS, we have published final rules in the Federal Register annually to implement statutory requirements and changes arising from our continuing experience with this system. These rules can be viewed on the CMS website at: https://www.cms.gov/​medicare/​payment/​prospective-payment-systems/​hospital-outpatient/​regulations-notices .

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.

On November 21, 2000, the Secretary signed the initial charter establishing the Panel, and, at that time, named the APC Panel. This expert panel is composed of appropriate representatives of providers (currently employed full-time, not as consultants, in their respective areas of expertise) who review clinical data and advise CMS about the clinical integrity of the APC groups and their payment weights. Since CY 2012, the Panel also is charged with advising the Secretary on the appropriate level of supervision for individual hospital outpatient therapeutic services. The Panel is technical in nature, and it is governed by the provisions of the Federal Advisory Committee Act (FACA). The current charter specifies, among other requirements, that the Panel—

• May advise on the clinical integrity of Ambulatory Payment Classification (APC) groups and their associated weights;
• May advise on the appropriate supervision level for hospital outpatient services;
• May advise on OPPS APC rates for ASC covered surgical procedures;
• Continues to be technical in nature;
• Is governed by the provisions of the FACA;
• Has a Designated Federal Official (DFO); and
• Is chaired by a Federal Official designated by the Secretary.

The Panel's charter was amended on November 15, 2011, renaming the Panel and expanding the Panel's authority to include supervision of hospital outpatient therapeutic services and to add critical access hospital (CAH) representation to its membership. The Panel's charter was also amended on November 6, 2014 ( 80 FR 23009 ), and the number of members was revised from up to 19 to up to 15 members. The Panel's current charter was approved on November 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: https://www.cms.gov/​Regulations-and-Guidance/​Guidance/​FACA/​AdvisoryPanelonAmbulatoryPaymentClassificationGroups.html .

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: https://mearis.cms.gov .

In addition, the Panel has established an administrative structure that, in part, currently includes the use of three subcommittee workgroups to provide preparatory meeting and subject support to the larger panel. The three current subcommittees include the following:

• APC Groups and Status Indicator Assignments Subcommittee, which advises and provides recommendations to the Panel on the appropriate status indicators to be assigned to HCPCS codes, including but not limited to whether a HCPCS code or a category of codes should be packaged or separately paid, as well as the appropriate APC assignment of HCPCS codes regarding services for which separate payment is made;
• Data Subcommittee, which is responsible for studying the data issues confronting the Panel and for recommending options for resolving them; and
• Visits and Observation Subcommittee, which reviews and makes recommendations to the Panel on all technical issues pertaining to observation services and hospital outpatient visits paid under the OPPS.

Each of these workgroup subcommittees was established by a majority vote from the full Panel during a scheduled Panel meeting, and the Panel recommended at the August 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 https://facadatabase.gov . Start Printed Page 59195

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).

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: https://www.cms.gov/​medicare/​payment/​prospective-payment-systems/​hospital-outpatient .

Addendum N to this proposed rule (which is available via the internet on the CMS website at: https://www.cms.gov/​medicare/​payment/​prospective-payment-systems/​hospital-outpatient/​regulations-notices ) 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.

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 https://www.cms.gov/​medicare/​payment/​prospective-payment-systems/​hospital-outpatient .

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.

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 ( https://www.cms.gov/​medicare/​payment/​prospective-payment-systems/​hospital-outpatient ) 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, https://www.cms.gov/​medicare/​payment/​prospective-payment-systems/​hospital-outpatient , includes information about obtaining Start Printed 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: https://www.cms.gov/​medicare/​payment/​prospective-payment-systems/​hospital-outpatient/​regulations-notices ). 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: https://www.cms.gov/​medicare/​payment/​prospective-payment-systems/​hospital-outpatient .

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 https://www.cms.gov/​medicare/​payment/​prospective-payment-systems/​hospital-outpatient/​regulations-notices ) 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:

• the CY 2005 OPPS proposed rule ( 69 FR 50524 and 50525 ) for a more comprehensive discussion of the blood-specific CCR methodology;
• 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
• 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.

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 Start Printed Page 59197 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. Start Printed Page 59198 Such recommendations should be directed via email to [email protected] or by mail to the Division of Outpatient Care, Mail Stop C4-01-26, Centers for Medicare and Medicaid Services, 7500 Security Boulevard, Baltimore, MD 21244. We will continue to add new brachytherapy source codes and descriptors to our systems for payment on a quarterly basis.

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 https://www.cms.gov/​medicare/​payment/​prospective-payment-systems/​hospital-outpatient/​regulations-notices ). 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.

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:

• Does not contain a procedure described by a HCPCS code to which we have assigned status indicator “T;”
• Contains 8 or more units of services described by HCPCS code G0378 (Hospital observation services, per hour);
• Contains services provided on the same date of service or one day before the date of service for HCPCS code G0378 that are described by one of the following codes: HCPCS code G0379 (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 Start Printed Page 59199 for assessment and management of a patient); and
• Does not contain services described by a HCPCS code to which we have assigned status indicator “J1.”

The assignment of status indicator “J2” to a specific set of services performed in combination with each other allows for all other OPPS payable services and items reported on the claim (excluding services that are not covered OPD services or that cannot by statute be paid for under the OPPS) to be deemed adjunctive services representing components of a comprehensive service and resulting in a single prospective payment for the comprehensive service based on the costs of all reported services on the claim ( 80 FR 70333 through 70336 ).

Services included under the C-APC payment packaging policy, that is, services that are typically adjunctive to the primary service and provided during the delivery of the comprehensive service, include diagnostic procedures, laboratory tests, and other diagnostic tests and treatments that assist in the delivery of the primary procedure; visits and evaluations performed in association with the procedure; uncoded services and supplies used during the service; durable medical equipment as well as prosthetic and orthotic items and supplies when provided as part of the outpatient service; and any other components reported by HCPCS codes that represent services that are provided during the complete comprehensive service ( 78 FR 74865 and 79 FR 66800 ).

In addition, payment for hospital outpatient department services that are similar to therapy services, 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 ]

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:

• Frequency of 25 or more claims reporting the code combination (frequency threshold); and
• Violation of the 2 times rule, as stated in section 1833(t)(2) of the Act and section III.B.2 of this 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 Start Printed 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 https://www.cms.gov/​medicare/​payment/​prospective-payment-systems/​hospital-outpatient/​regulations-notices ).

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.

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 Start Printed Page 59201 services assigned status indicator “J2” when they are included on a claim with a “J2” service ( 84 FR 61167 ).

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.

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 Start Printed Page 59202 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 5x10^15 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.

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.

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.

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 Start Printed Page 59204 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 https://www.cms.gov/​medicare/​payment/​prospective-payment-systems/​hospital-outpatient/​regulations-notices ).

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.

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.

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.

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 resource intensive of all outpatient mental health services. Start Printed Page 59208 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.

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:

• APC 8004 (Ultrasound Composite);
• APC 8005 (CT and CTA without Contrast Composite);
• APC 8006 (CT and CTA with Contrast Composite);
• APC 8007 (MRI and MRA without Contrast Composite); and
• APC 8008 (MRI and MRA with Contrast Composite).

We define the single imaging session for the “with contrast” composite APCs as having at least one or more imaging procedures from the same family performed with contrast on the same date of service. For example, if the hospital performs an MRI without contrast during the same session as at least one other MRI with contrast, the hospital will receive payment based on the payment rate for APC 8008, the “with contrast” composite APC.

We make a single payment for those imaging procedures that qualify for payment based on the composite APC payment rate, which includes any packaged services furnished on the same date of service. The standard (noncomposite) APC assignments continue to apply for single imaging procedures and multiple imaging procedures performed across families. For a full discussion of the development of the multiple imaging composite APC methodology, we refer readers to the CY 2009 OPPS/ASC final rule with comment period ( 73 FR 68559 through 68569 ).

For CY 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.

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 Start Printed Page 59213 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.

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.

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 § 419.2(b), we refer to them as “policy-packaged” drugs, biologicals, and radiopharmaceuticals. In particular, under § 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 § 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 Start Printed 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 ).

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 Start Printed 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 § 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.

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 ]

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' Start Printed 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.

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 Start Printed 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 § 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.

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 ).

Once we determine that the per day cost of a nonpass-through diagnostic Start Printed 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 diagnostic radiopharmaceutical, we propose that all manufacturers would need to submit ASP information in order for payment to be made based on ASP. This is because it would be inappropriate for Medicare payment for a HCPCS code to be based on the payment information submitted by one manufacturer, if that payment is used for a product made by different manufacturers. This is because the ASP information reported by one manufacturer might not reflect the ASP of the same product made by other manufacturers.

We note that ASP submissions for radiopharmaceutical payment under the OPPS would need to meet all of the existing regulatory and subregulatory requirements of the ASP reporting process under sections 1847A and 1927(b)(3) of the Act.

Specifically, we reiterate our ASP reporting requirements outlined in the CY 2010 OPPS/ASC final rule with comment period ( 74 FR 60520 ) for products for which we are encouraging the reporting of ASP, but for which reporting is not statutorily required. The ASP data submitted would need to be provided for a patient-specific dose, or patient-ready form, of the diagnostic radiopharmaceutical in order to properly calculate the ASP amount that aligns with the dose descriptor for a given HCPCS code. When reporting an ASP for a separately payable radiopharmaceutical, we expect that the ASP data reported by a manufacturer would be representative of the item(s) sold by the manufacturer. In the CY 2010 OPPS/ASC final rule with comment period ( 74 FR 60520 ), we used the term “patient-ready” 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” or “millicurie.” We defined a “patient-ready” dose for OPPS purposes as including all component materials of the radiopharmaceutical, at a minimum, and any other processing the manufacturer requires to produce the radiopharmaceutical that it sells that are reflected in the sales price, including radiolabeling, as long as any fees paid for such processing done on behalf of the manufacturer meet the definition of “bona fide service fees” under § 414.802 ( 74 FR 60525 ).

We understand that manufacturers of separately payable radiopharmaceuticals produce Start Printed Page 59219 radiopharmaceuticals that require a variety of processing steps in order to prepare the product for administration to a beneficiary. To be used for separate OPPS radiopharmaceutical payment, the ASP data reported by a manufacturer must represent sales of all of the component materials associated with the radiopharmaceutical. For our full policy on which factors to incorporate into ASP pricing, please see the CY 2010 OPPS/ASC final rule with comment period ( 74 FR 60520 through 60521 ).

In order to be used for payment under the OPPS, all radiopharmaceutical ASP submissions should meet the existing regulatory and subregulatory requirements of the ASP submission process under sections 1847A and 1927(b)(3) of the Act. In particular, we believe the “bona fide service fee” test in the ASP regulations is instructive here, and we refer readers to the CY 2010 OPPS/ASC final rule with comment period for our discussion on radiopharmaceutical ASP reporting ( 74 FR 60521 ).

To summarize our CY 2010 policy for ASP reporting on radiopharmaceuticals for OPPS payment purposes ( 74 FR 60521 ), a patient-specific dose or patient-ready form in the context of OPPS ASP submission for radiopharmaceutical payment means that the ASP reflecting manufacturer sales must represent sales of all of the component materials for the radiopharmaceutical, including a minimum of a cold kit and a radioisotope, and be reported in terms that reflect the applicable HCPCS code descriptor, such as “treatment dose” or “millicurie.” The ASP would not necessarily take into account the preparation of the final form of the radiopharmaceutical for patient administration, including radiolabeling, which may be conducted by the manufacturer, freestanding radiopharmacy, hospital pharmacy, or other entity. With respect to the latter, fees paid by the manufacturer for these services would be excluded from the ASP calculation (that is, would not be considered price concessions that reduce the ASP) only if they are “bona fide service fees” as defined in the regulations governing ASP. Thus, if the manufacturer pays a “bona fide service fee” for the services of the freestanding radiopharmacy, hospital pharmacy, or other entity, and reflects that fee in its price for the radiopharmaceutical, the amount of the “bona fide service fee” would be taken into account in the reported ASP data. However, manufacturers are not required to pay for the preparation of a radiopharmaceutical (including radiolabeling) in a freestanding radiopharmacy, hospital pharmacy, or other entity after sale of all of the component materials, and in that case, the cost of those services would not be reflected in the ASP data submitted to CMS. Manufacturers should submit ASP data for a separately payable radiopharmaceutical that incorporates prices for sales of all of the component materials by the manufacturer. We seek comment on these ASP reporting requirements outlined in the CY 2010 OPPS/ASC final rule with comment period ( 74 FR 60521 ) and previous CMS guidance on the guidelines for the Submission of OPPS ASP Data for Nonpass-Through Separately Payable Therapeutic Radiopharmaceuticals and Radiopharmaceuticals with Pass-Through Status. [ 7 ] We continue to believe that these ASP reporting practices should be applicable to radiopharmaceuticals, including both therapeutic and diagnostic radiopharmaceuticals, but seek comment from interested parties in this space to ensure that these reporting guidelines are clear and reflective of clinical practice today.

We still see the potential value in the use of ASP data for payment purposes for diagnostic radiopharmaceuticals when reported correctly and by all manufacturers who manufacture a product that is described by a given HCPCS code. We believe that the use of ASP information for OPPS payment could provide an opportunity to improve payment accuracy for separately payable diagnostic radiopharmaceuticals by applying an established methodology that has already been successfully implemented under the OPPS for other separately payable drugs and biologicals, as well as therapeutic radiopharmaceuticals. Because the per day cost calculations determine whether a diagnostic radiopharmaceutical qualifies for separate payment, using the most accurate pricing information is paramount. The use of ASP information could provide an opportunity to further improve the accuracy of the per day cost calculations and the separate payment amounts for diagnostic radiopharmaceuticals. As previously mentioned, we do not believe that the limited amount of ASP information submitted currently is adequate for the purpose of determining separate payment for those few products that currently do report ASP, which is why we are proposing to pay diagnostic radiopharmaceuticals with per day costs above the proposed $630 threshold at each diagnostic radiopharmaceutical's mean unit cost. However, we are still interested in the potential to use ASP for the purpose of determining a diagnostic radiopharmaceutical's per day cost and payment amount in the future. Therefore, we want to engage with interested parties to learn about the unique aspects and challenges that may be associated with reporting ASP for diagnostic radiopharmaceuticals, and radiopharmaceuticals in general. We specifically seek comment as to whether interested parties believe CMS should require payment for diagnostic radiopharmaceuticals on ASP in the future, such as in CY 2026 rulemaking, if interested parties are confident in their reporting ability.

We do believe that there could be situations in which it is appropriate to use ASP currently. For example, in section V.A.4. of this proposed rule, we propose to utilize ASP in payment for diagnostic radiopharmaceuticals on OPPS transitional pass-through status. In this situation, we believe the use of ASP is appropriate as the manufacturer of that diagnostic radiopharmaceutical is actively involved in the radiopharmaceutical's pass-through application, and CMS can ensure that pricing is reported appropriately for purposes of the drug pass-through cost significance tests and for purposes of payment if the pass-through status is approved. Typically, there is only one manufacturer for a diagnostic radiopharmaceutical applying for pass-through status, so CMS does not have to ensure all manufacturers are reporting ASP for that particular HCPCS code prior to establishing a separate payment amount based on ASP. Additionally, as discussed in section V.B.5. (Proposed Payment for Nonpass-Through Drugs, Biologicals, and Radiopharmaceuticals with HCPCS Codes but Without OPPS Hospital Claims Data) of this rule, we propose to base the initial payment for new diagnostic radiopharmaceuticals with HCPCS codes, but which do not have pass-through status and are without claims data, on ASP, and on the WAC for these products if ASP data for these diagnostic radiopharmaceuticals are not available. If the WAC also is unavailable, we propose to make payment for new diagnostic radiopharmaceuticals at 95 percent of the products' most recent AWP. We believe the volume of products in this category will typically be very low; however, in these rare situations, we Start Printed Page 59220 believe it would be appropriate to use ASP until a MUC is available. Similar to drugs applying for pass-through status, there is typically only one manufacturer for a diagnostic radiopharmaceutical that is new and described by a HCPCS code, but without claims data, so CMS does not have to ensure all manufacturers are reporting ASP for that particular HCPCS code prior to establishing a separate payment amount based on ASP. Additionally, although reporting of ASP is not a condition of CMS approving a HCPCS application, CMS has the opportunity to actively engage with the manufacturer, or sponsor of a HCPCS application, during the HCPCS application process. This allows for ongoing dialogue and education regarding the unique ASP reporting requirements that may be associated with a particular product, including how to ensure the reported ASP aligns with the dose descriptor for the newly assigned HCPCS code.

We seek comments on additional unique situations in which it still may be appropriate for CMS to use ASP information to assess per day costs and payment amounts for diagnostic radiopharmaceuticals for CY 2025. For example, one such unique situation could be continuing the use of ASP for a particular HCPCS code once its pass-through status has ended, if the HCPCS code was actively being paid based on ASP while on pass-through status. Under our current proposal, payment for a diagnostic radiopharmaceutical would be based on MUC once its pass-through status ends. We seek comment on this potential unique situation, as well as others of which readers may be aware, and we may finalize utilizing ASP in additional situations that commenters bring to our attention in the final rule as policies for CY 2025 depending on comments received.

As discussed, we propose to base the payment rate for diagnostic radiopharmaceuticals on mean unit cost data derived from hospital claims. We are not proposing to use ASP data for determining payment rates of non-passthrough diagnostic radiopharmaceuticals with claims data but are seeking comment on its use for determining the per day cost and setting the payment rate for diagnostic radiopharmaceuticals in the future. Additionally, we are not proposing to use WAC or AWP as a basis for payment for diagnostic radiopharmaceuticals. Similar to our reasoning for payment of therapeutic radiopharmaceuticals in the CY 2012 OPPS/ASC final rule with comment period ( 77 FR 68390 ), we believe that paying for diagnostic radiopharmaceuticals using mean unit cost would appropriately pay for the average price of nonpass-through separately payable diagnostic radiopharmaceuticals for the applicable year. 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.

As we stated in the CY 2010 OPPS/ASC final rule with comment period ( 74 FR 60523 ), we believe that WAC or AWP is not an appropriate proxy to provide OPPS payment for average therapeutic radiopharmaceutical acquisition cost and associated handling costs when manufacturers are not required to submit ASP data because payment based on WAC or AWP for separately payable drugs and biologicals is usually temporary for a calendar quarter until a manufacturer is able to submit the required ASP data in accordance with the quarterly ASP submission timeframes for reporting under section 1847A of the Act. However, WAC and AWP reported to compendia may not be reflective of a patient ready dose. We are additionally concerned about the use of WAC and AWP since ASP reporting for OPPS payment of separately payable diagnostic radiopharmaceuticals would not be required for CY 2025. The absence of appropriate ASP reporting could result in payment for a separately payable diagnostic radiopharmaceutical based on WAC or AWP indefinitely, a result which we believe would be inappropriate, as these pricing metrics do not capture all of the pricing discounts that may be reflected in the ASP.

Given all of the concerns we currently have with other pricing methodologies for diagnostic radiopharmaceuticals, we propose to rely on CY 2023 mean unit cost data derived from hospital claims data for payment rates for diagnostic radiopharmaceuticals for CY 2025.

Our proposed payment methodology for diagnostic radiopharmaceuticals that have costs above a $630 threshold would be similar, but not the same as the methodology adopted for therapeutic radiopharmaceuticals as described in the CY 2010 OPPS/ASC final rule with comment period ( 74 FR 60518 ). Although therapeutic radiopharmaceuticals are generally targeted at treating a certain disease or condition, and diagnostic radiopharmaceuticals are generally targeted at diagnosing a certain disease or condition, we believe they are clinically very similar products, manufactured in a similar manner, and should generally be paid using a similar payment methodology when paid separately. As such, we believe the same payment method as is used for therapeutic radiopharmaceuticals should apply to diagnostic radiopharmaceuticals above the cost threshold. However, as previously discussed, given our concerns with current ASP reporting patterns, we are proposing to use MUC as the basis of payment for non-passthrough diagnostic radiopharmaceuticals for CY 2025. Therefore, we believe it is appropriate for the methodology to determine the proposed payment amounts to differ between diagnostic and therapeutic radiopharmaceuticals, at least for CY 2025. We will consider aligning the payment methodologies between therapeutic and diagnostic radiopharmaceuticals, either based on ASP or MUC, in future rulemaking.

We believe mean unit cost data is an appropriate and adequate proxy for the average price for diagnostic radiopharmaceuticals and associated handling costs for these products. Mean unit cost data is reflective of the actual cost data that hospitals submit to CMS. The MUC payment methodology is consistent with our payment policy for therapeutic radiopharmaceuticals as stated in the CY 2010 OPPS/ASC final rule with comment period ( 74 FR 60523 ) and is the basis for payment of many therapeutic radiopharmaceuticals when ASP is unavailable currently.

As previously discussed, we find that the ASP data we have is not usable for the purpose of paying for diagnostic radiopharmaceuticals and, therefore, we are proposing to pay for qualifying non-passthrough diagnostic radiopharmaceuticals with claims data based on MUC. However, we are also seeking comment on how we could potentially use our equitable adjustment authority at section 1833(t)(2)(E) of the Act to make an adjustment to the ASP data that has been reported in order to make it usable for the purpose of paying equitably for these products. For example, we seek comment as to whether CMS could use its equitable adjustment authority to adjust payment for diagnostic radiopharmaceuticals based on an adjusted ASP value when the ASP amounts reported to CMS deviate by a given threshold, such as two times the MUC calculated for the diagnostic radiopharmaceutical using claims data. Alternatively, the adjusted payment rate could be an average of the reported ASP and MUC, or other methodologies suggested by commenters. We broadly seek comment on this potential use of equitable adjustment authority to make the Start Printed Page 59221 limited ASP data reported for diagnostic radiopharmaceuticals usable for purposes of setting payment rates for qualifying products.

We note, if readers do not believe it is appropriate for CMS to base the payment amount for diagnostic radiopharmaceuticals on MUC for CY 2025, we would propose in the alternative to maintain our current policy of unconditionally policy packaging all diagnostic radiopharmaceuticals regardless of their cost until an appropriate payment methodology can be established to determine a separate payment amount for diagnostic radiopharmaceuticals.

HCPCS codes that describe diagnostic radiopharmaceuticals with per day costs that meet or exceed the proposed diagnostic radiopharmaceutical packaging threshold would be assigned to a status indicator of “K”, indicating separate payment. An APC and a payment rate would be assigned as shown in Addendum B to this proposed rule. HCPCS codes that describe diagnostic radiopharmaceuticals with per day costs that are at or below the proposed diagnostic radiopharmaceutical packaging threshold would continue to be assigned to a status indicator of “N”, indicating packaged payment. We welcome comment on these determinations. The proposed list of diagnostic radiopharmaceuticals that have calculated per day costs that exceed $630 and their proposed status indicators can be found in table 5.

Definitions of status indicators can be found in Addendum D1 to this proposed rule. Addenda to this proposed rule can be found on the CMS OPPS web page.

We propose corresponding regulation text edits at § 419.2(b)(15) to only package diagnostic radiopharmaceuticals when their per day cost is at or below the per day diagnostic radiopharmaceutical packaging threshold for the applicable year. This is achieved by adding the text “at or below the per-day diagnostic radiopharmaceutical packaging threshold for the applicable year” to qualify the packaging of diagnostic radiopharmaceuticals. We also propose corresponding regulation text edits at § 419.41 (Calculation of national beneficiary copayment amounts and national Medicare program payment amounts) to codify our proposed payment policy for diagnostic radiopharmaceuticals and our existing policy for therapeutic radiopharmaceuticals.

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 sections 1833(t)(16) and 1833(i) of the 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) of the Act 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, respectively.

As the additional payments are required to begin on January 1, 2025, we propose to implement the CAA, 2023 section 4135 amendments in this proposed rule. Our proposal to implement section 4135 of CAA, 2023 can be found in section XIII.E of this proposed rule.

We established a policy in the CY 2013 OPPS/ASC final rule with comment period ( 77 FR 68283 ) of using geometric mean-based APC costs to calculate relative payment weights under the OPPS. In the CY 2024 OPPS/ASC final rule with comment period ( 88 FR 81577 through 81578 ), we applied this policy and calculated the relative payment weights for each APC for CY 2024 that were shown in Addenda A and B of the CY 2024 OPPS/ASC final rule with comment period (which were made available via the internet on the CMS website) using the APC costs discussed in sections II.A.1 and II.A.2 of the CY 2024 OPPS/ASC final rule with comment period ( 88 FR 81549 through 81572 ). For CY 2025, as we did for CY 2024, we proposed to continue to apply the policy established in CY 2013 and calculate relative payment weights for each APC for CY 2025 using geometric mean-based APC costs.

For CY 2012 and CY 2013, outpatient clinic visits were assigned to one of five levels of clinic visit APCs, with APC 0606 representing a mid-level clinic visit. In the CY 2014 OPPS/ASC final rule with comment period ( 78 FR 75036 through 75043 ), we finalized a policy that created alphanumeric HCPCS code G0463 (Hospital outpatient clinic visit for assessment and management of a patient), representing all clinic visits under the OPPS. HCPCS code G0463 was assigned to APC 0634 (Hospital Clinic Visits). We also finalized a policy to use CY 2012 claims data to develop the CY 2014 OPPS payment rates for HCPCS code G0463 based on the total geometric mean cost of the levels one through five CPT Evaluation or Assessment and Management (E/M) codes for clinic visits previously recognized under the OPPS (CPT codes 99201 through 99205 and 99211 through 99215). In addition, we finalized a policy to no longer recognize a distinction between new and established patient clinic visits.

For CY 2016, we deleted APC 0634 and reassigned the outpatient clinic visit HCPCS code G0463 to APC 5012 (Level 2 Examinations and Related Services) ( 80 FR 70372 ). For CY 2025, as we did for CY 2024, we propose to continue to standardize all of the relative payment weights to APC 5012. We believe that standardizing relative payment weights to the geometric mean of the APC to which HCPCS code G0463 is assigned maintains consistency in calculating unscaled weights that represent the cost of some of the most frequently provided OPPS services. For CY 2025, as we did for CY 2024, we propose to assign APC 5012 a relative payment weight of 1.00 and to divide the geometric mean cost of each APC by the geometric mean cost for APC 5012 to derive the unscaled relative payment weight for each APC. The choice of the APC on which to standardize the relative payment weights does not affect payments made under the OPPS because we scale the weights for budget neutrality.

Section 1833(t)(9)(B) of the Act requires that APC reclassification and recalibration changes, wage index changes, and other adjustments be made in a budget neutral manner. Budget neutrality ensures that the estimated aggregate weight under the OPPS for CY 2025 is neither greater than nor less than the estimated aggregate weight that would have been calculated without the changes. To comply with this requirement concerning the APC changes, we proposed to compare the estimated aggregate weight using the CY 2024 scaled relative payment weights to the estimated aggregate weight using the proposed CY 2025 unscaled relative payment weights.

For CY 2024, we multiplied the CY 2024 scaled APC relative payment weight applicable to a service paid under the OPPS by the volume of that service from CY 2023 claims to calculate the total relative payment weight for each service. We then added together the total relative payment weight for each of these services in order to calculate an estimated aggregate weight for the year. For CY 2025, we propose to apply the same process using the estimated CY 2025 unscaled relative payment weights rather than scaled relative payment weights. We propose to calculate the weight scalar by dividing the CY 2024 estimated aggregate weight by the unscaled CY 2025 estimated aggregate weight.

For a detailed discussion of the weight scalar calculation, we refer readers to the OPPS claims accounting document available on the CMS website at: https://www.cms.gov/​medicare/​payment/​prospective-payment-systems/​hospital-outpatient/​regulations-notices . Click on the link labeled “Hospital Outpatient Prospective Payment—Notice of Proposed Rulemaking with Comment Period (NPRM)” for 2025, which can be found under the heading “Hospital Outpatient Regulations and Notices” and open the claims accounting document link, which is labeled “2025 NPRM OPPS Claims Accounting (PDF).”

We propose to compare the estimated unscaled relative payment weights in CY 2025 to the estimated total relative Start Printed Page 59223 payment weights in CY 2024 using CY 2023 claims data, holding all other components of the payment system constant to isolate changes in total weight. Based on this comparison, we propose to adjust the calculated CY 2025 unscaled relative payment weights for purposes of budget neutrality. We propose to adjust the estimated CY 2025 unscaled relative payment weights by multiplying them by a proposed weight scalar of 1.4405 to ensure that the proposed CY 2025 relative payment weights are scaled to be budget neutral. The proposed CY 2025 relative payment weights listed in Addenda A and B to this proposed rule (which are available via the internet on the CMS website) are scaled and incorporate the recalibration adjustments discussed in sections II.A.1 and II.A.2 of this proposed rule.

Section 1833(t)(14) of the Act provides the payment rates for certain specified covered outpatient drugs (SCODs). Section 1833(t)(14)(H) of the Act provides that additional expenditures resulting from this paragraph shall not be taken into account in establishing the conversion factor, weighting, and other adjustment factors for 2004 and 2005 under paragraph (9) but shall be taken into account for subsequent years. Therefore, the cost of those SCODs (as discussed in section V.B.2 of this proposed rule) is included in the budget neutrality calculations for the CY 2025 OPPS.

Section 1833(t)(3)(C)(ii) of the Act requires the Secretary to update the conversion factor used to determine the payment rates under the OPPS on an annual basis by applying the OPD fee schedule increase factor. For purposes of section 1833(t)(3)(C)(iv) of the Act, subject to sections 1833(t)(17) and 1833(t)(3)(F) of the Act, the OPD fee schedule increase factor is equal to the hospital inpatient market basket percentage increase applicable to hospital discharges under section 1886(b)(3)(B)(iii) of the Act. In the FY 2025 IPPS/Long Term Care Hospital (LTCH) PPS proposed rule ( 89 FR 36204 ), consistent with current law, based on IHS Global, Inc.'s fourth quarter 2023 forecast, the proposed FY 2025 IPPS market basket percentage increase was 3.0 percent. We note that under our regular process for the CY 2025 OPPS/ASC final rule with comment period, we would use the market basket update for the FY 2025 IPPS/LTCH PPS final rule. If that forecast is different than the IPPS market basket percentage increase used for this proposed rule, the CY 2025 OPPS/ASC final rule with comment period OPD fee schedule increase factor would reflect that updated forecast of the market basket percentage increase.

For CY 2025, we propose to use the estimate of the hospital inpatient market basket percentage increase of 3.0 percent as one component to calculate the OPD fee schedule increase factor.

Section 1833(t)(3)(F)(i) of the Act requires that, for 2012 and subsequent years, the OPD fee schedule increase factor under subparagraph (C)(iv) be reduced by the productivity adjustment described in section 1886(b)(3)(B)(xi)(II) of the Act. Section 1886(b)(3)(B)(xi)(II) of the Act defines the productivity adjustment as equal to the 10-year moving average of changes in annual economy-wide, private nonfarm business multifactor productivity (MFP) (as projected by the Secretary for the 10-year period ending with the applicable fiscal year, year, cost reporting period, or other annual period) (the “productivity adjustment”). In the FY 2012 IPPS/LTCH PPS final rule ( 76 FR 51689 through 51692 ), we finalized our methodology for calculating and applying the productivity adjustment. The U.S. Department of Labor's Bureau of Labor Statistics (BLS) publishes the official measures of private nonfarm business productivity for the U.S. economy. We note that previously the productivity measure referenced in section 1886(b)(3)(B)(xi)(II) of the Act was published by BLS as private nonfarm business multifactor productivity. Beginning with the November 18, 2021, release of productivity data, BLS replaced the term multifactor productivity (MFP) with total factor productivity (TFP). BLS noted that this is a change in terminology only and will not affect the data or methodology. As a result of the BLS name change, the productivity measure referenced in section 1886(b)(3)(B)(xi)(II) of the Act is now published by BLS as private nonfarm business total factor productivity. However, as mentioned, the data and methods are unchanged. Please see www.bls.gov for the BLS historical published TFP data. A complete description of IHS Global, Inc.'s (IGI) TFP projection methodology is available on the CMS website at https://www.cms.gov/​data-research/​statistics-trends-and-reports/​medicare-program-rates-statistics/​market-basket-research-and-information . In addition, we note that beginning with the FY 2022 IPPS/LTCH PPS final rule, we refer to this adjustment as the productivity adjustment rather than the MFP adjustment to more closely track the statutory language in section 1886(b)(3)(B)(xi)(II) of the Act. We note that the adjustment continues to rely on the same underlying data and methodology. In the FY 2025 IPPS/LTCH PPS proposed rule ( 89 FR 36204 ), the proposed productivity adjustment for FY 2025 was 0.4 percentage point.

Therefore, we propose that the productivity adjustment for the CY 2025 OPPS/ASC would be 0.4 percentage point. We also propose that if more recent data subsequently became available after the publication of the CY 2025 OPPS/ASC proposed rule (for example, a more recent estimate of the market basket percentage increase and/or the productivity adjustment), we would use such updated data, if appropriate, to determine the CY 2025 hospital inpatient market basket update and the productivity adjustment, which are components in calculating the OPD fee schedule increase factor under sections 1833(t)(3)(C)(iv) and 1833(t)(3)(F) of the Act.

We note that section 1833(t)(3)(F) of the Act provides that application of this subparagraph may result in the OPD fee schedule increase factor under section 1833(t)(3)(C)(iv) of the Act being less than 0.0 percent for a year and may result in OPPS payment rates being less than rates for the preceding year. As described in further detail below, we propose for CY 2025 an OPD fee schedule increase factor of 2.6 percent for the CY 2025 OPPS/ASC (which is the proposed estimate of the hospital inpatient market basket percentage increase of 3.0 percent, less the proposed 0.4 percentage point productivity adjustment).

To set the OPPS conversion factor for 2025, we propose to increase the CY 2024 conversion factor of $87.382 by 2.6 percent. In accordance with section 1833(t)(9)(B) of the Act, we propose further to adjust the conversion factor for CY 2025 to ensure that any revisions made to the wage index and rural adjustment are made on a budget neutral basis. We propose to calculate an overall budget neutrality factor of 1.0026 for wage index changes by comparing proposed total estimated payments from our simulation model using the proposed FY 2025 IPPS wage indexes to those payments using the FY 2024 IPPS wage indexes, as adopted on a calendar year basis for the OPPS. We further propose to calculate an additional budget neutrality factor of 0.9982 to account for our proposed policy to cap wage index reductions for Start Printed Page 59224 hospitals at 5 percent on an annual basis.

For CY 2025, we propose to maintain the current rural adjustment policy, as discussed in section II.E of this proposed rule. Therefore, the proposed budget neutrality factor for the rural adjustment is 1.0000.

We propose to calculate a CY 2025 budget neutrality adjustment factor for the cancer hospital payment adjustment by transitioning from the target PCR of 0.89 we finalized for CYs 2020 through 2023 (which included the 1.0 percentage point reduction as required by section 16002(b) of the 21st Century Cures Act) and incrementally reducing the target PCR by an additional 1.0 percentage point for each calendar year, beginning with CY 2024, until the target PCR equals the PCR of non-cancer hospitals calculated using the most recent data minus 1.0 percentage point as required by section 16002(b) of the 21st Century Cures Act. Therefore, we propose to apply a budget neutrality adjustment factor of 1.0006 to the conversion factor for the cancer hospital payment adjustment. In accordance with section 1833(t)(18)(C) of the Act, as added by section 16002(b) of the 21st Century Cures Act ( Pub. L. 114-255 ), we reduce the target PCR by 0.01, which brings the proposed target PCR to 0.87. This is 0.02 less than the target PCR of 0.89 from CY 2021 through CY 2023, which was held at the pre-PHE target.

For this proposed rule, we estimated that proposed pass-through spending for drugs, biologicals, and devices for CY 2025 would equal approximately $625 million, which represents 0.71 percent of total projected CY 2025 OPPS spending. Therefore, we stated that the proposed conversion factor would be adjusted by the difference between the 0.27 percent estimate of pass-through spending for CY 2024 and the 0.71 percent estimate of proposed pass-through spending for CY 2025, resulting in a proposed decrease to the conversion factor for CY 2025 of 0.44 percent.

We propose that estimated payments for outliers would remain at 1.0 percent of total OPPS payments for CY 2025. We estimated for this proposed rule that outlier payments would be approximately 0.85 percent of total OPPS payments in CY 2024; the 1.00 percent for proposed outlier payments in CY 2025 would constitute a 0.15 percent increase in payment in CY 2025 relative to CY 2024.

For 2025, we propose to use a conversion factor of $87.382 in the calculation of the national unadjusted payment rates for those items and services for which payment rates are calculated using geometric mean costs; that is, the proposed OPD fee schedule increase factor of 2.6 percent for CY 2025, the required proposed wage index budget neutrality adjustment of approximately 1.0026, the proposed 5 percent annual cap for individual hospital wage index reductions adjustment of approximately 0.9982, the proposed cancer hospital payment adjustment of 1.0006, and the proposed adjustment of a decrease of 0.44 percentage point of projected OPPS spending for the difference in pass-through spending, which resulted in a proposed conversion factor for CY 2025 of $89.379.

For CY 2025, we also propose that hospitals that fail to meet the reporting requirements of the Hospital OQR Program would continue to be subject to a further reduction of 2.0 percentage points to the OPD fee schedule increase factor. For hospitals that fail to meet the requirements of the Hospital OQR Program, we propose to make all other adjustments discussed above, but use a reduced OPD fee schedule update factor of 0.6 percent (that is, the proposed OPD fee schedule increase factor of 2.6 percent further reduced by 2.0 percentage points). This would result in a proposed reduced conversion factor for CY 2025 of $87.636 for hospitals that fail to meet the Hospital OQR Program requirements (a difference of −1.743 in the conversion factor relative to hospitals that met the requirements). For further discussion of the Hospital OQR Program, we refer readers to section XV of this proposed rule. For 2025, we propose to use a reduced conversion factor of $87.636 in the calculation of payments for hospitals that fail to meet the Hospital OQR Program requirements (a difference of −1.743 in the conversion factor relative to hospitals that met the requirements).

The calculations we performed to determine the CY 2025 proposed conversion factor are shown in Table 6.

Section 1833(t)(2)(D) of the Act requires the Secretary to determine a wage adjustment factor to adjust the portion of payment and coinsurance attributable to labor-related costs for relative differences in labor and labor-related costs across geographic regions in a budget neutral manner (codified at 42 CFR 419.43(a) ). This portion of the OPPS payment rate is called the OPPS labor-related share. Budget neutrality is discussed in section II.A.5 of this proposed rule.

The OPPS labor-related share is 60 percent of the national OPPS payment. This labor-related share is based on a regression analysis that determined that, for all hospitals, approximately 60 percent of the costs of services paid under the OPPS were attributable to wage costs. We confirmed that this labor-related share for outpatient services is appropriate during our regression analysis for the payment adjustment for rural hospitals in the CY 2006 OPPS final rule with comment period ( 70 FR 68553 ). We propose to continue this policy for the CY 2025 OPPS/ASC. We refer readers to section II.C of this proposed rule for a description and an example of how the wage index for a particular hospital is used to determine payment for the hospital.

As discussed in the claims accounting narrative included with the supporting documentation for this proposed rule (which is available via the internet on the CMS website ( https://www.cms.gov/​medicare/​payment/​prospective-payment-systems/​hospital-outpatient/​regulations-notices )), for estimating APC costs, we would standardize 60 percent of estimated claims costs for geographic area wage variation using the same FY 2025 pre-reclassified wage index that we use under the IPPS to standardize costs. This standardization process removes the effects of differences in area wage levels from the determination of a national unadjusted OPPS payment rate and copayment amount.

Under 42 CFR 419.41(c)(1) and 419.43(c) (published in the OPPS April 7, 2000, final rule with comment period ( 65 FR 18495 and 18545 )), the OPPS adopted the final fiscal year IPPS post-reclassified wage index as the calendar year wage index for adjusting the OPPS standard payment amounts for labor market differences. Therefore, the wage index that applies to a particular acute care, short-stay hospital under the IPPS also applies to that hospital under the OPPS. As initially explained in the September 8, 1998, OPPS/ASC proposed rule ( 63 FR 47576 ), we believe that using the IPPS wage index as the source of an adjustment factor for the OPPS is reasonable and logical, given the inseparable, subordinate status of the HOPD within the hospital overall. In accordance with section 1886(d)(3)(E) of the Act, the IPPS wage index is updated annually.

The Affordable Care Act contained several provisions affecting the wage index. These provisions were discussed in the CY 2012 OPPS/ASC final rule with comment period ( 76 FR 74191 ). Section 10324 of the Affordable Care Act added section 1886(d)(3)(E)(iii)(II) to the Act, which defines a frontier State and amended section 1833(t) of the Act to add paragraph (19), which requires a frontier State wage index floor of 1.00 in certain cases, and states that the frontier State floor shall not be applied in a budget neutral manner. We codified these requirements at § 419.43(c)(2) and (3) of our regulations. For CY 2025 we propose to implement this provision in the same manner as we have since CY 2011. Under this policy, the frontier State hospitals would receive a wage index of 1.00 if the otherwise applicable wage index (including reclassification, the rural floor, and rural floor budget neutrality) is less than 1.00. Because the HOPD receives a wage index based on the geographic location of the specific inpatient hospital with which it is associated, the frontier State wage index adjustment applicable for the inpatient hospital also would apply for any associated HOPD. We refer readers to the FY 2011 through FY 2024 IPPS/LTCH PPS final rules for discussions regarding this provision, including our methodology for identifying which areas meet the definition of “frontier States” as provided for in section 1886(d)(3)(E)(iii)(II) of the Act: for FY 2011, 75 FR 50160 through 50161 ; for FY 2012, 76 FR 51793 , 51795 , and 51825 ; for FY 2013, 77 FR 53369 and 53370 ; for FY 2014, 78 FR 50590 and Start Printed Page 59227 50591; for FY 2015, 79 FR 49971 ; for FY 2016, 80 FR 49498 ; for FY 2017, 81 FR 56922 ; for FY 2018, 82 FR 38142 ; for FY 2019, 83 FR 41380 ; for FY 2020, 84 FR 42312 ; for FY 2021, 85 FR 58765 ; for FY 2022, 86 FR 45178 ; FY 2023, 87 FR 49006 ; and for FY 2024, 88 FR 58977 .

In addition to the changes required by the Affordable Care Act, we note that the proposed FY 2025 IPPS wage indexes continue to reflect a number of adjustments implemented in past years, including, but not limited to, reclassification of hospitals to different geographic areas, the rural floor provisions, the imputed floor wage index adjustment in all-urban states, an adjustment for occupational mix, an adjustment to the wage index based on commuting patterns of employees (the out-migration adjustment), and the permanent 5-percent cap on any decrease to a hospital's wage index from its wage index in a prior FY. Beginning with FY 2024, we include hospitals with § 412.103 reclassification along with geographically rural hospitals in all rural wage index calculations, and to exclude “dual reclass” hospitals (hospitals with simultaneous § 412.103 and Medicare Geographic Classification Review Board (MGCRB) reclassifications) implicated by the hold harmless provision at section 1886(d)(8)(C)(ii) of the Act ( 88 FR 58971 through 58973 ). We also propose to continue the low wage index hospital policy, under which we increase the wage index for hospitals with a wage index value below the 25th percentile wage index value for a fiscal year by half the difference between the otherwise applicable final wage index value for a year for that hospital and the 25th percentile wage index value for that year across all hospitals. We refer readers to the FY 2025 IPPS/LTCH PPS proposed rule ( 89 FR 36181 through 36186 ) for a detailed discussion of all proposed changes to the FY 2025 IPPS wage indexes.

We note that in the FY 2023 IPPS/LTCH PPS final rule ( 87 FR 49018 through 49021 ), we finalized a permanent approach to smooth year-to-year decreases in hospitals' wage indexes. Specifically, for FY 2023 and subsequent years, we apply a 5-percent cap on any decrease to a hospital's wage index from its wage index in the prior FY, regardless of the circumstances causing the decline. That is, a hospital's wage index for FY 2025 would not be less than 95 percent of its final wage index for FY 2024. Except for newly opened hospitals, we apply the cap for a fiscal year using the final wage index applicable to the hospital on the last day of the prior fiscal year. A newly opened hospital would be paid the wage index for the area in which it is geographically located for its first full or partial fiscal year (subject to any reclassification), and it would not receive a cap for that first year, because it would not have been assigned a wage index in the prior year (in accordance with 42 CFR 419.41(c)(1) and 419.43(c) , as noted previously).

We delineate hospital labor market areas based on Core-Based Statistical Areas (CBSAs) established by the Office of Management and Budget (OMB). As discussed in the FY 2025 IPPS/LTCH PPS proposed rule ( 89 FR 36139 through 36174 ), OMB issued revisions to the current labor market area delineations on July 21, 2023, that included a number of significant changes such as new CBSAs, urban counties that become rural, rural counties that become urban, and existing CBSAs that are split apart (OMB Bulletin 23-01). This bulletin can be found at: https://www.whitehouse.gov/​wp-content/​uploads/​2023/​07/​OMB-Bulletin-23-01.pdf . The proposed changes to the IPPS wage index based on the newest CBSA delineations are available in the FY 2025 IPPS/LTCH PPS proposed rule. We propose that corresponding changes would be adopted in the OPPS, which uses the IPPS wage index, based on the new OMB delineations in this CY 2025 OPPS/ASC proposed rule, consistent with any proposals in the FY 2025 IPPS/LTCH PPS proposed rule. We believe that using the revised delineations based on OMB Bulletin No. 23-01 will increase the integrity of the OPPS wage index system by creating a more accurate representation of current geographic variations in wage levels. We refer readers to proposed changes based on the new OMB delineations in the FY 2025 IPPS/LTCH proposed rule at 89 FR 36139 through 36174 , which includes a discussion of the effects of implementation of the proposal to adopt the revised OMB labor market area delineations on reclassified hospitals.

CBSAs are made up of one or more constituent counties. Each CBSA and constituent county has its own unique identifying codes. The FY 2018 IPPS/LTCH PPS final rule ( 82 FR 38130 ) discussed the two different lists of codes to identify counties: Social Security Administration (SSA) codes and Federal Information Processing Standard (FIPS) codes. Historically, CMS listed and used SSA and FIPS county codes to identify and crosswalk counties to CBSA codes for purposes of the IPPS and OPPS wage indexes. However, the SSA county codes are no longer being maintained and updated, although the FIPS codes continue to be maintained by the U.S. Census Bureau. The Census Bureau's most current statistical area information is derived from ongoing census data from 2020. The Census Bureau maintains a complete list of changes to counties or county equivalent entities on the website at: https://www.census.gov/​geo/​reference/​county-changes.html (which, as of May 6, 2019, migrated to: https://www.census.gov/​programs-surveys/​geography.html ). In the FY 2018 IPPS/LTCH PPS final rule ( 82 FR 38130 ), for purposes of cross walking counties to CBSAs for the IPPS wage index, we finalized our proposal to discontinue the use of the SSA county codes and begin using only the FIPS county codes. Similarly, for the purposes of cross walking counties to CBSAs for the OPPS wage index, in the CY 2018 OPPS/ASC final rule with comment period ( 82 FR 59260 ), we finalized our proposal to discontinue the use of SSA county codes and begin using only the FIPS county codes. For CY 2025, under the OPPS, we are continuing to use only the FIPS county codes for purposes of cross walking counties to CBSAs.

We propose to use the FY 2025 IPPS post-reclassified wage index for urban and rural areas as the wage index for the OPPS to determine the wage adjustments for both the OPPS payment rate and the copayment rate for CY 2025. We note that the proposed FY 2025 IPPS wage indexes reflect several proposed changes as a result of the revised OMB delineations, including proposed policies to accommodate changes in rural or urban status for existing counties, as well as addition or removal of certain individual CBSAs compared to the previous delineations. Therefore, any policies and adjustments that are finalized for the FY 2025 IPPS post-reclassified wage index would be reflected in the final CY 2025 OPPS wage index beginning on January 1, 2025, if appropriate. We refer readers to the FY 2025 IPPS/LTCH PPS proposed rule ( 89 FR 36181 through 36186 ) and the proposed FY 2025 hospital wage index files posted on the CMS website at https://www.cms.gov/​medicare/​payment/​prospective-payment-systems/​acute-inpatient-pps/​fy-2025-ipps-proposed-rule-home-page . Regarding budget neutrality for the CY 2025 OPPS wage index, we refer readers to section II.C of this proposed rule. We continue to believe that using the IPPS post-reclassified wage index as the source of an adjustment factor for the OPPS is reasonable and logical, given the inseparable, subordinate status of the HOPD within the hospital overall. Start Printed Page 59228

Hospitals that are paid under the OPPS, but not under the IPPS, do not have an assigned hospital wage index under the IPPS. Therefore, for non-IPPS hospitals paid under the OPPS, it is our longstanding policy to assign the wage index that would be applicable if the hospital was paid under the IPPS, based on its geographic location and any applicable wage index policies and adjustments. We propose to continue this policy for CY 2025. We refer readers to the FY 2025 IPPS/LTCH PPS proposed rule ( 89 FR 36181 through 36186 ) for a detailed discussion of the proposed changes to the FY 2025 IPPS wage indexes.

It has been our longstanding policy to allow non-IPPS hospitals paid under the OPPS to qualify for the out-migration adjustment if they are located in a section 505 out-migration county (section 505 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA)) ( Pub. L. 108-173 ). Applying this adjustment is consistent with our policy of adopting IPPS wage index policies for hospitals paid under the OPPS. We note that, because non-IPPS hospitals cannot reclassify, they are eligible for the out-migration wage index adjustment if they are located in a section 505 out-migration county. This is the same out-migration adjustment policy that would apply if the hospital were paid under the IPPS. For CY 2025, we propose to continue our policy of allowing non-IPPS hospitals paid under the OPPS to qualify for the outmigration adjustment if they are located in a section 505 out-migration county (section 505 of the MMA) ( 88 FR 49585 and 49586 ). Furthermore, we propose that the wage index that would apply for CY 2025 to non-IPPS hospitals paid under the OPPS would continue to include the rural floor adjustment and any policies and adjustments applied to the IPPS wage index to address wage index disparities. In addition, we propose that the wage index that would apply to non-IPPS hospitals paid under the OPPS would include the 5-percent cap on wage index decreases.

For CMHCs, for CY 2025, we propose to continue to calculate the wage index by using the post-reclassification IPPS wage index based on the CBSA where the CMHC is located. Furthermore, we propose that the wage index that would apply to a CMHC for CY 2025 would continue to include the rural floor adjustment and any policies and adjustments applied to the IPPS wage index to address wage index disparities. In addition, the wage index that would apply to CMHCs would include the 5-percent cap on wage index decreases. Also, we propose that the wage index that would apply to CMHCs would not include the outmigration adjustment because that adjustment only applies to hospitals.

Table 4A associated with the FY 2025 IPPS/LTCH PPS proposed rule (available via the internet on the CMS website at: https://www.cms.gov/​medicare/​payment/​prospective-payment-systems/​acute-inpatient-pps/​fy-2025-ipps-proposed-rule-home-page ) identifies counties that would be eligible for the out-migration adjustment. Table 2 associated with the FY 2025 IPPS/LTCH PPS proposed rule (available for download via the website noted previously) identifies IPPS hospitals that would receive the out-migration adjustment for FY 2025. We are including the outmigration adjustment information from Table 2 associated with the FY 2025 IPPS/LTCH PPS proposed rule as Addendum L to this proposed rule, with the addition of non-IPPS hospitals that would receive the section 505 outmigration adjustment under this proposed rule Addendum L is available via the internet on the CMS website. We refer readers to the CMS website for the OPPS at: https://www.cms.gov/​medicare/​payment/​prospective-payment-systems/​hospital-outpatient/​regulations-notices . At this link, readers will find a link to the proposed FY 2025 IPPS wage index tables and Addendum L.

In addition to using CCRs to estimate costs from charges on claims for ratesetting, we use overall hospital-specific CCRs calculated from the hospital's most recent cost report (OMB control number: 0938-0050 for Form CMS-2552-10) to determine outlier payments, payments for pass-through devices, and monthly interim transitional corridor payments under the OPPS during the PPS year. For certain hospitals, under the regulations at 42 CFR 419.43(d)(5)(iii) , we use the statewide average default CCRs to determine the payments mentioned earlier if it is not possible to determine an accurate CCR for a hospital in certain circumstances. This includes hospitals that are new, hospitals that have not accepted assignment of an existing hospital's provider agreement, and hospitals that have not yet submitted a cost report. We also use the statewide average default CCRs to determine payments for hospitals whose CCR falls outside the predetermined ceiling threshold for a valid CCR or for hospitals in which the most recent cost report reflects an all-inclusive rate status (Medicare Claims Processing Manual (Pub. L. 100-04), Chapter 4, Section 10.11).

We discussed our policy for using default CCRs, including setting the ceiling threshold for a valid CCR, in the CY 2009 OPPS/ASC final rule with comment period ( 73 FR 68594 through 68599 ) in the context of our adoption of an outlier reconciliation policy for cost reports beginning on or after January 1, 2009. For details on our process for calculating the statewide average CCRs, we refer readers to the Claims Accounting Narrative for this CY 2025 OPPS/ASC proposed rule, which is posted on our website. We propose to calculate the default ratios for CY 2025 using the most recent cost report data.

We no longer publish a table in the Federal Register containing the statewide average CCRs in the annual OPPS proposed rule and final rule with comment period. These CCRs with the upper limit will be available for download with each OPPS CY proposed rule and final rule on the CMS website. We refer readers to our website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​Hospital-Outpatient-Regulations-and-Notices.html ; click on the link on the left of the page titled “Annual Policy Files” and then select the relevant year to download the statewide CCRs and upper limit in the downloads section of the web page.

In the CY 2006 OPPS final rule with comment period ( 70 FR 68556 ), we finalized a payment increase for rural sole community hospitals (SCHs) of 7.1 percent for all services and procedures paid under the OPPS, excluding separately payable drugs and biologicals, brachytherapy sources, items paid at charges reduced to costs, and devices paid under the pass-through payment policy, in accordance with section 1833(t)(13)(B) of the Act, as added by section 411 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) ( Pub. L. 108-173 ). Section 1833(t)(13) of the Act provides the Secretary the authority to make an adjustment to OPPS payments for rural hospitals, effective January 1, 2006, if justified by a study of the difference in costs by APC between hospitals in rural areas and hospitals in urban areas. Our analysis showed a difference in costs for rural SCHs. Therefore, for the CY 2006 OPPS, Start Printed Page 59229 we finalized a payment adjustment for rural SCHs of 7.1 percent for all services and procedures paid under the OPPS, excluding separately payable drugs and biologicals, brachytherapy sources, items paid at charges reduced to costs, and devices paid under the pass-through payment policy, in accordance with section 1833(t)(13)(B) of the Act.

In the CY 2007 OPPS/ASC final rule with comment period ( 71 FR 68010 and 68227 ), for purposes of receiving this rural adjustment, we revised our regulations at § 419.43(g) to clarify that essential access community hospitals (EACHs) are also eligible to receive the rural SCH adjustment, assuming these entities otherwise meet the rural adjustment criteria. Currently, two hospitals are classified as EACHs, and as of CY 1998, under section 4201(c) of the Balanced Budget Act of 1997 (BBA) ( Pub. L. 105-33 ), a hospital can no longer become newly classified as an EACH.

This adjustment for rural SCHs is budget neutral and applied before calculating outlier payments and copayments. We stated in the CY 2006 OPPS final rule with comment period ( 70 FR 68560 ) that we would not reestablish the adjustment amount on an annual basis, but we may review the adjustment in the future and, if appropriate, would revise the adjustment. We provided the same 7.1 percent adjustment to rural SCHs, including EACHs, again in CYs 2008 through 2024.

For CY 2025, we propose to continue the current policy of a 7.1 percent payment adjustment for rural SCHs, including EACHs, for all services and procedures paid under the OPPS, excluding separately payable drugs and biologicals, brachytherapy sources, items paid at charges reduced to costs, and devices paid under the pass-through payment policy, applied in a budget neutral manner.

Since the inception of the OPPS, which was authorized by the Balanced Budget Act of 1997 (BBA) ( Pub. L. 105-33 ), Medicare has paid the 11 hospitals that meet the criteria for cancer hospitals identified in section 1886(d)(1)(B)(v) of the Act under the OPPS for covered outpatient department services. These cancer hospitals are exempted from payment under the IPPS. With the Medicare, Medicaid and SCHIP Balanced Budget Refinement Act of 1999 ( Pub. L. 106-113 ), the Congress added section 1833(t)(7), “Transitional Adjustment to Limit Decline in Payment,” to the Act, which requires the Secretary to determine OPPS payments to cancer and children's hospitals based on their pre-BBA payment amount (these hospitals are often referred to under this policy as “held harmless” and their payments are often referred to as “hold harmless” payments).

As required under section 1833(t)(7)(D)(ii) of the Act, a cancer hospital receives the full amount of the difference between payments for covered outpatient department services under the OPPS and a “pre-BBA amount.” That is, cancer hospitals are permanently held harmless to their “pre-BBA amount,” and they receive transitional outpatient payments (TOPs) or hold harmless payments to ensure that they do not receive a payment that is lower in amount under the OPPS than the payment amount they would have received before implementation of the OPPS, as set forth in section 1833(t)(7)(F) of the Act. The “pre-BBA amount” is the product of the hospital's reasonable costs for covered outpatient department services occurring in the current year and the base payment-to-cost ratio (PCR) for the hospital defined in section 1833(t)(7)(F)(ii) of the Act. The “pre-BBA amount” and the determination of the base PCR are defined at § 419.70(f). TOPs are calculated on Worksheet E, Part B, of the Hospital Cost Report or the Hospital Health Care Complex Cost Report (Form CMS-2552-96 or Form CMS-2552-10 (OMB NO: 0938-0050), respectively), as applicable each year. Section 1833(t)(7)(I) of the Act exempts TOPs from budget neutrality calculations.

Section 3138 of the Affordable Care Act ( Pub. L. 111-148 ) amended section 1833(t) of the Act by adding a new paragraph (18), which instructs the Secretary to conduct a study to determine if, under the OPPS, outpatient costs incurred by cancer hospitals described in section 1886(d)(1)(B)(v) of the Act with respect to APC groups exceed outpatient costs incurred by other hospitals furnishing services under section 1833(t) of the Act, as determined appropriate by the Secretary. Section 1833(t)(18)(A) of the Act requires the Secretary to take into consideration the cost of drugs and biologicals incurred by cancer hospitals and other hospitals. Section 1833(t)(18)(B) of the Act provides that, if the Secretary determines that cancer hospitals' costs are higher than those of other hospitals, the Secretary shall provide an appropriate adjustment under section 1833(t)(2)(E) of the Act to reflect these higher costs. In 2011, after conducting the study required by section 1833(t)(18)(A) of the Act, we determined that outpatient costs incurred by the 11 specified cancer hospitals were greater than the costs incurred by other OPPS hospitals. For a complete discussion regarding the cancer hospital cost study, we refer readers to the CY 2012 OPPS/ASC final rule with comment period ( 76 FR 74200 and 74201 ).

Based on these findings, we finalized a policy to provide a payment adjustment to the 11 specified cancer hospitals that reflects their higher outpatient costs, as discussed in the CY 2012 OPPS/ASC final rule with comment period ( 76 FR 74202 through 74206 ). Specifically, we adopted a policy to provide additional payments to the cancer hospitals so that each cancer hospital's final PCR for services provided in a given calendar year is equal to the weighted average PCR (which we refer to as the “target PCR”) for other hospitals paid under the OPPS. The target PCR is set in advance of the calendar year and is calculated using the most recently submitted or settled cost report data that are available at the time of final rulemaking for the calendar year. The amount of the payment adjustment is made on an aggregate basis at cost report settlement. We note that the changes made by section 1833(t)(18) of the Act do not affect the existing statutory provisions that provide for TOPs for cancer hospitals. The TOPs are assessed, as usual, after all payments, including the cancer hospital payment adjustment, have been made for a cost reporting period. Table 7 displays the target PCR for purposes of the cancer hospital adjustment for CY 2012 through CY 2024.

Section 16002(b) of the 21st Century Cures Act ( Pub. L. 114-255 ) amended section 1833(t)(18) of the Act by adding subparagraph (C), which requires that in applying § 419.43(i) (that is, the payment adjustment for certain cancer hospitals) for services furnished on or after January 1, 2018, the target PCR adjustment be reduced by 1.0 percentage point less than what would otherwise apply. Section 16002(b) also provides that, in addition to the percentage reduction, the Secretary may consider making an additional percentage point reduction to the target PCR that takes into account payment rates for applicable items and services described under section 1833(t)(21)(C) of the Act for hospitals that are not cancer hospitals described under section 1886(d)(1)(B)(v) of the Act. Further, in making any budget neutrality adjustment under section 1833(t) of the Act, the Secretary shall not take into account the reduced expenditures that result from application of section 1833(t)(18)(C) of the Act.

We propose to provide additional payments to the 11 specified cancer hospitals so that each cancer hospital's proposed PCR is equal to the weighted average PCR (or “target PCR”) for the other OPPS hospitals, generally using the most recent submitted or settled cost report data that are available, reduced by 1.0 percentage point, to comply with section 16002(b) of the 21st Century Cures Act, and adjusted by the proposed post-Public Health Emergency (PHE) transition as described later in this section. We are not proposing an additional reduction beyond the 1.0 percentage point reduction required by section 16002(b) of the 21st Century Cures Act for CY 2025.

To calculate the proposed CY 2025 target PCR, we would use the same extract of cost report data from HCRIS used to estimate costs for the CY 2025 OPPS which, in most cases, would be the most recently available hospital cost reports. Using these cost report data, we included data from Worksheet E, Part B, for each hospital, using data from each hospital's most recent cost report, whether as submitted or settled.

We then limited the dataset to the hospitals with CY 2023 claims data that we used to model the impact of the proposed CY 2025 APC relative payment weights (3,448 hospitals) because it is appropriate to use the same set of hospitals that are being used to calibrate the modeled CY 2025 OPPS. The cost report data for the hospitals in this dataset were from cost report periods with fiscal year ends ranging from 2019 to 2023; however, the cost reporting periods were predominantly from fiscal years ending in 2022 and 2023. We then removed the cost report data of the 49 hospitals located in Puerto Rico from our dataset because we did not believe their cost structure reflected the costs of most hospitals paid under the OPPS, and, therefore, their inclusion may bias the calculation of hospital-weighted statistics. We also removed the cost report data of 16 hospitals because these hospitals had cost report data that were not complete (missing aggregate OPPS payments, missing aggregate cost data, or missing both), so that all cost reports in the study would have both the payment and cost data necessary to calculate a PCR for each hospital, leading to a proposed analytic file of 3,421 hospitals with cost report data.

Using this smaller dataset of cost report data, we estimated that, on average, the OPPS payments to other hospitals furnishing services under the OPPS were approximately 87 percent of reasonable cost (weighted average PCR of 0.87). Therefore, after applying the 1.0 percentage point reduction, as required by section 16002(b) of the 21st Century Cures Act, using our standard process the payment amount associated with the cancer hospital payment adjustment to be determined at cost report settlement would be the additional payment needed to result in a target PCR equal to 0.86 for each cancer hospital.

In the CY 2024 OPPS/ASC final rule with comment period ( 88 FR 81586 through 81589 ), we explained that we believe we should begin to take into consideration the PCR of non-cancer hospitals based on the most recently available data for calculating the target PCR. We noted that we do not know if the changes in the data that have yielded lower PCRs for non-cancer hospitals are likely to continue in future years or if, when data from after the PHE is available, we will see the target PCR increase toward its historical norm. Therefore, in the CY 2024 OPPS/ASC final rule with comment period, we finalized our proposal to transition from the target PCR of 0.89 we finalized for Start Printed Page 59231 CYs 2020 through 2024 (which included the 1.0 percentage point reduction as required by section 16002(b) of the 21st Century Cures Act) and incrementally reduce the target PCR by an additional 1.0 percentage point for each calendar year, beginning with CY 2024, until the target PCR equals the PCR of non-cancer hospitals calculated using the most recent data minus 1.0 percentage point as required by section 16002(b) of the 21st Century Cures Act. Therefore, utilizing this methodology for the CY 2025 OPPS/ASC proposed rule, since the target PCR that would otherwise apply under our standard process would be a target PCR of 0.86, we propose to reduce the CY 2024 target PCR of 0.88 by 1 percentage point and propose a cancer hospital target PCR of 0.87 for CY 2025.

Table 8 shows the estimated percentage increase in OPPS payments to each cancer hospital for CY 2025, due to the cancer hospital payment adjustment policy. The actual, final amount of the CY 2025 cancer hospital payment adjustment for each cancer hospital will be determined at cost report settlement and will depend on each hospital's CY 2025 payments and costs from the settled CY 2025 cost report. We note that the requirements contained in section 1833(t)(18) of the Act do not affect the existing statutory provisions that provide for TOPs for cancer hospitals. The TOPs will be assessed, as usual, after all payments, including the cancer hospital payment adjustment, have been made for a cost reporting period.

The OPPS provides outlier payments to hospitals to help mitigate the financial risk associated with high-cost and complex procedures, where a very costly service could present a hospital with significant financial loss. As explained in the CY 2015 OPPS/ASC final rule with comment period ( 79 FR 66832 through 66834 ), we set our projected target for aggregate outlier payments at 1.0 percent of the estimated aggregate total payments under the OPPS for the prospective year. Outlier payments are provided on a service-by-service basis when the cost of a service exceeds the APC payment amount multiplier threshold (the APC payment amount multiplied by a certain amount) as well as the APC payment amount plus a fixed-dollar amount threshold (the APC payment plus a certain dollar amount). In CY 2024, the outlier threshold was met when the hospital's cost of furnishing a service exceeded 1.75 times the APC payment amount (the multiplier threshold) and exceeded the APC payment amount plus $7,750 (the fixed-dollar amount threshold) ( 88 FR 81589 through 81591 ). If the hospital's cost of furnishing a service exceeds both the multiplier threshold and the fixed-dollar threshold, the outlier payment is calculated as 50 percent of the amount by which the hospital's cost of furnishing the service exceeds 1.75 times the APC payment amount. Beginning with CY 2009 payments, outlier payments are subject to a reconciliation process similar to the IPPS outlier reconciliation process for cost reports, as discussed in the CY 2009 OPPS/ASC final rule with Start Printed Page 59232 comment period ( 73 FR 68594 through 68599 ).

It has been our policy to report the actual amount of outlier payments as a percent of total spending in the claims being used to model the OPPS. Our estimate of total outlier payments as a percent of total CY 2023 OPPS payments, using CY 2023 claims available for this CY 2025 OPPS proposed rule, is approximately 0.68 percent. Therefore, for CY 2023, we estimate that we did not meet the outlier target by 0.32 percent of total aggregated OPPS payments.

For this proposed rule, using CY 2023 claims data and CY 2024 payment rates, we estimate that the aggregate outlier payments for CY 2024 would be approximately 0.85 percent of the total CY 2024 OPPS payments. We provide estimated CY 2025 outlier payments for hospitals and CMHCs with claims included in the claims data that we used to model impacts in the Hospital-Specific Impacts—Provider-Specific Data file on the CMS website at: https://www.cms.gov/​medicare/​payment/​prospective-payment-systems/​hospital-outpatient .

For CY 2025, we propose to continue our policy of estimating outlier payments to be 1.0 percent of the estimated aggregate total payments under the OPPS. We propose that a portion of that 1.0 percent, an amount equal to less than 0.01 percent of outlier payments (or 0.0001 percent of total OPPS payments), would be allocated to CMHCs for partial hospitalization program (PHP) and intensive outpatient program (IOP) outlier payments. This is the amount of estimated outlier payments that would result from the proposed CMHC outlier threshold as a proportion of total estimated OPPS outlier payments. We propose to continue our outlier policy that if a CMHC's cost for PHP and IOP services exceeds 3.40 times the APC payment rate, the outlier payment would be calculated as 50 percent of the amount by which the cost exceeds 3.40 times the proposed APC payment rate.

For further discussion of CMHC outlier payments, we refer readers to section VIII.C of this proposed rule.

To ensure that the estimated CY 2025 aggregate outlier payments would equal 1.0 percent of estimated aggregate total payments under the OPPS, we propose that the hospital outlier threshold be set so that outlier payments would be triggered when a hospital's cost of furnishing a service exceeds 1.75 times the APC payment amount and exceeds the APC payment amount plus the fixed-dollar threshold.

We calculated the proposed fixed-dollar threshold using the standard methodology most recently used for CY 2024 ( 88 FR 81589 through 81591 ). For purposes of estimating outlier payments for CY 2025, we use the hospital-specific overall ancillary CCRs available in the April 2024 update to the Outpatient Provider-Specific File (OPSF). The OPSF contains provider-specific data, such as the most current CCRs, which are maintained by the MACs and used by the OPPS Pricer to pay claims. The claims that we generally use to model each OPPS update lag by 2 years.

In order to estimate the CY 2025 hospital outlier payments, we inflate the charges on the CY 2023 claims using the same proposed charge inflation factor of 1.084555 that we used to estimate the IPPS fixed-loss cost threshold for the FY 2025 IPPS/LTCH PPS proposed rule ( 89 FR 36572 ). We used an inflation factor of 1.04142 to estimate CY 2024 charges from the CY 2023 charges reported on CY 2023 claims before applying CY 2024 CCRs to estimate the percent of outliers paid in CY 2024. The proposed methodology for determining these charge inflation factors is discussed in the FY 2025 IPPS/LTCH PPS proposed rule ( 89 FR 36572 ). As we stated in the CY 2005 OPPS final rule with comment period ( 69 FR 65844 through 65846 ), we believe that the use of the same charge inflation factors is appropriate for the OPPS because, with the exception of the inpatient routine service cost centers, hospitals use the same ancillary and cost centers to capture costs and charges for inpatient and outpatient services.

As noted in the CY 2007 OPPS/ASC final rule with comment period ( 71 FR 68011 ), we are concerned that we could systematically overestimate the OPPS hospital outlier threshold if we did not apply a CCR inflation adjustment factor. Therefore, we propose to apply the same CCR adjustment factor that we proposed to apply for the FY 2025 IPPS outlier calculation to the CCRs used to simulate the proposed CY 2025 OPPS outlier payments to determine the fixed-dollar threshold. Specifically, for CY 2025, we propose to apply an adjustment factor of 1.03331 to the CCRs that were in the April 2024 OPSF to trend them forward from CY 2024 to CY 2025. The methodology for calculating the proposed CCR adjustment factor is discussed in the FY 2025 IPPS/LTCH PPS proposed rule ( 89 FR 36572 through 36573 ).

To model hospital outlier payments for the proposed rule, we applied the overall CCRs from the April 2024 OPSF after adjustment (using the proposed CCR inflation adjustment factor of 1.03331 to approximate CY 2025 CCRs) to charges on CY 2023 claims that were adjusted (using the proposed charge inflation factor of 1.084555 to approximate CY 2025 charges). We simulated aggregated CY 2023 hospital outlier payments using these costs for several different fixed-dollar thresholds, holding the 1.75 multiplier threshold constant and assuming that outlier payments would continue to be made at 50 percent of the amount by which the cost of furnishing the service would exceed 1.75 times the APC payment amount, until the total outlier payments equaled 1.0 percent of aggregated estimated total CY 2025 OPPS payments. We estimated that a proposed fixed-dollar threshold of $8,000, combined with the proposed multiplier threshold of 1.75 times the APC payment rate, would allocate 1.0 percent of aggregated total OPPS payments to outlier payments. For CMHCs, we propose that, if a CMHC's cost for partial hospitalization or intensive outpatient services exceeds 3.40 times the APC payment rate, the outlier payment would be calculated as 50 percent of the amount by which the cost exceeds 3.40 times the APC payment rate.

Section 1833(t)(17)(A) of the Act, which applies to hospitals, as defined under section 1886(d)(1)(B) of the Act, requires that hospitals that fail to report data required for the quality measures selected by the Secretary, in the form and manner required by the Secretary under section 1833(t)(17)(B) of the Act, incur a 2.0 percentage point reduction to their OPD fee schedule increase factor; that is, the annual payment update factor. The application of a reduced OPD fee schedule increase factor results in reduced national unadjusted payment rates that would apply to certain outpatient items and services furnished by hospitals that are required to report outpatient quality data and that fail to meet the Hospital Outpatient Quality Reporting (OQR) Program requirements. For hospitals that fail to meet the Hospital OQR Program requirements, we proposed to continue the policy that we implemented in CY 2010 that the hospitals' costs would be compared to the reduced payments for purposes of outlier eligibility and payment calculation. For more information on the Hospital OQR Program, we refer readers to section XV of this proposed rule. Start Printed Page 59233

The national unadjusted payment rate is the payment rate for most APCs before accounting for the wage index adjustment or any applicable adjustments. The basic methodology for determining prospective payment rates for HOPD services under the OPPS is set forth in existing regulations at 42 CFR part 419, subparts C and D . For this proposed rule, the payment rate for most services and procedures for which payment is made under the OPPS is the product of the conversion factor calculated in accordance with section II.B of this proposed rule and the relative payment weight described in section II.A of this proposed rule. The national unadjusted payment rate for most APCs contained in Addendum A to this proposed rule (which is available via the CMS website “ Hospital Outpatient Regulations and Notices ”) and for most HCPCS codes to which separate payment under the OPPS has been assigned in Addendum B to this proposed rule (which is available on the CMS website link above) is calculated by multiplying the proposed CY 2025 scaled weight for the APC by the CY 2025 conversion factor.

We note that section 1833(t)(17) of the Act, which applies to hospitals, as defined under section 1886(d)(1)(B) of the Act, requires that hospitals that fail to submit data required to be submitted on quality measures selected by the Secretary, in the form and manner and at a time specified by the Secretary, incur a reduction of 2.0 percentage points to their OPD fee schedule increase factor, that is, the annual payment update factor. The application of a reduced OPD fee schedule increase factor results in reduced national unadjusted payment rates that apply to certain outpatient items and services provided by hospitals that are required to report outpatient quality data and that fail to meet the Hospital OQR Program requirements. For further discussion of the payment reduction for hospitals that fail to meet the requirements of the Hospital OQR Program, we refer readers to section XIV of this proposed rule.

Below we demonstrate the steps used to determine the APC payments that will be made in a CY under the OPPS to a hospital that fulfills the Hospital OQR Program requirements and to a hospital that fails to meet the Hospital OQR Program requirements for a service that has any of the following status indicator assignments: “J1,” “J2,” “P,” “Q1,” “Q2,” “Q3,” “Q4,” “R,” “S,” “T,” “U,” or “V” (as defined in Addendum D1 to this proposed rule, which is available via the internet on the CMS website), in a circumstance in which the multiple procedure discount does not apply, the procedure is not bilateral, and conditionally packaged services (status indicator of “Q1” and “Q2”) qualify for separate payment. We note that, although blood and blood products with status indicator “R” and brachytherapy sources with status indicator “U” are not subject to wage adjustment, they are subject to reduced payments when a hospital fails to meet the Hospital OQR Program requirements.

Individual providers interested in calculating the payment amount that they would receive for a specific service from the national unadjusted payment rates presented in Addenda A and B to this proposed rule (which are available via the internet on the CMS website) should follow the formulas presented in the following steps. For purposes of the payment calculations below, we refer to the national unadjusted payment rate for hospitals that meet the requirements of the Hospital OQR Program as the “full” national unadjusted payment rate. We refer to the national unadjusted payment rate for hospitals that fail to meet the requirements of the Hospital OQR Program as the “reduced” national unadjusted payment rate. The reduced national unadjusted payment rate is calculated by multiplying the reporting ratio of 0.9805 times the “full” national unadjusted payment rate. The national unadjusted payment rate used in the calculations below is either the full national unadjusted payment rate or the reduced national unadjusted payment rate, depending on whether the hospital met its Hospital OQR Program requirements to receive the full CY 2025 OPPS fee schedule increase factor.

Step 1. Calculate 60 percent (the labor-related portion) of the national unadjusted payment rate. Since the initial implementation of the OPPS, we have used 60 percent to represent our estimate of that portion of costs attributable, on average, to labor. We refer readers to the April 7, 2000 OPPS/ASC final rule with comment period ( 65 FR 18496 through 18497 ) for a detailed discussion of how we derived this percentage. During our regression analysis for the payment adjustment for rural hospitals in the CY 2006 OPPS final rule with comment period ( 70 FR 68553 ), we confirmed that this labor-related share for hospital outpatient services is appropriate.

The formula below is a mathematical representation of Step 1 and identifies the labor-related portion of a specific payment rate for a specific service.

X is the labor-related portion of the national unadjusted payment rate.

X = .60 * (national unadjusted payment rate).

Step 2. Determine the wage index area in which the hospital is located and identify the wage index level that applies to the specific hospital. The wage index values assigned to each area would reflect the geographic statistical areas (which are based upon OMB standards) to which hospitals are assigned for FY 2025 under the IPPS, reclassifications through the Medicare Geographic Classification Review Board (MGCRB), section 1886(d)(8)(B) “Lugar” hospitals, and reclassifications under section 1886(d)(8)(E) of the Act, as implemented in § 412.103 of the regulations. We are continuing to apply for the CY 2025 OPPS wage index any adjustments for the FY 2025 IPPS post-reclassified wage index, including, but not limited to, the rural floor adjustment, a wage index floor of 1.00 in frontier states, in accordance with section 10324 of the Affordable Care Act of 2010, and an adjustment to the wage index for certain low wage index hospitals. For further discussion of the wage index we are applying for the CY 2025 OPPS, we refer readers to section II.C of this proposed rule.

Step 3. Adjust the wage index of hospitals located in certain qualifying counties that have a relatively high percentage of hospital employees who reside in the county, but who work in a different county with a higher wage index, in accordance with section 505 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 ( Pub. L. 108-173 ). Addendum L to this proposed rule (which is available via the internet on the CMS website) contains the qualifying counties and the associated wage index increase developed for the proposed FY 2025 IPPS wage index, which are listed in Table 3 associated with the FY 2025 IPPS proposed rule and available via the internet on the CMS website at: https://www.cms.gov/​medicare/​payment/​prospective-payment-systems/​acute-inpatient-pps . (Click on the link on the left side of the screen titled “FY 2025 IPPS Proposed Rule Home Page” and select “FY 2025 Proposed Rule Tables.”) This step is to be followed only if the hospital is not reclassified or redesignated under section 1886(d)(8) or section 1886(d)(10) of the Act.

Step 4. Multiply the applicable wage index determined under Steps 2 and 3 by the amount determined under Step 1 Start Printed Page 59234 that represents the labor-related portion of the national unadjusted payment rate.

The formula below is a mathematical representation of Step 4 and adjusts the labor-related portion of the national unadjusted payment rate for the specific service by the wage index.

X a is the labor-related portion of the national unadjusted payment rate (wage adjusted).

X a = labor-portion of the national unadjusted payment rate * applicable wage index.

Step 5. Calculate 40 percent (the nonlabor-related portion) of the national unadjusted payment rate and add that amount to the resulting product of Step 4. The result is the wage index adjusted payment rate for the relevant wage index area.

The formula below is a mathematical representation of Step 5 and calculates the remaining portion of the national payment rate, the amount not attributable to labor, and the adjusted payment for the specific service.

Y is the nonlabor-related portion of the national unadjusted payment rate.

Y = 0.40 * (national unadjusted payment rate).

Step 6. If a provider is an SCH, as set forth in the regulations at § 412.92, or an EACH, which is considered to be an SCH under section 1886(d)(5)(D)(iii)(III) of the Act, and located in a rural area, as defined in § 412.64(b), or is treated as being located in a rural area under § 412.103, multiply the wage index adjusted payment rate by 1.071 to calculate the total payment.

The formula below is a mathematical representation of Step 6 and applies the rural adjustment for rural SCHs.

Adjusted Medicare Payment (SCH or EACH) = Adjusted Medicare Payment * 1.071.

Step 7. The adjusted payment rate is the sum of the wage adjusted labor-related portion of the national unadjusted payment rate and the nonlabor-related portion of the national unadjusted payment rate.

Adjusted Medicare Payment = X a + Y

We are providing examples below of the calculation of both the full and reduced national unadjusted payment rates that would apply to certain outpatient items and services performed by hospitals that meet and that fail to meet the Hospital OQR Program requirements, using the steps outlined previously. For purposes of this example, we are using a provider that is located in Brooklyn, New York that is assigned to CBSA 35614. This provider bills one service that is assigned to APC 5071 (Level 1 Excision/Biopsy/Incision and Drainage). The proposed CY 2025 full national unadjusted payment rate for APC 5071 is $700.10. The proposed reduced national adjusted payment rate for APC 5071 for a hospital that fails to meet the Hospital OQR Program requirements is $686.45. This reduced rate is calculated by multiplying the reporting ratio of 0.9805 by the full unadjusted payment rate for APC 5071.

Step 1. The labor-related portion of the proposed full national unadjusted payment is approximately $420.06 (0.60 * $700.10). The labor-related portion of the proposed reduced national adjusted payment is approximately $411.87 (0.60 * $686.45).

Step 2 & 3. The FY 2025 wage index for a provider located in CBSA 35614 in New York, which includes the adoption of the proposed IPPS 2025 wage index policies, is 1.2867.

Step 4. The wage adjusted labor-related portion of the proposed full national unadjusted payment is approximately $540.49 ($420.06 *1.2867). The wage adjusted labor-related portion of the proposed reduced national adjusted payment is approximately $529.95 ($411.87 * 1.2867).

Step 5. The nonlabor-related portion of the proposed full national unadjusted payment is approximately $280.04 (0.40 * $700.10). The nonlabor-related portion of the proposed reduced national adjusted payment is approximately $274.58 (0.40 * $686.45).

Step 6. For this example of a provider located in Brooklyn, New York, the rural adjustment for rural SCHs does not apply.

Step 7. The sum of the labor-related and nonlabor-related portions of the proposed full national unadjusted payment is approximately $820.53 ($540.49 + $280.04). The sum of the portions of the proposed reduced national adjusted payment is approximately $804.53 ($529.95 + $274.58) as shown in Table 9.

Section 1833(t)(3)(B) of the Act requires the Secretary to set rules for determining the unadjusted copayment amounts to be paid by beneficiaries for covered OPD services. Section 1833(t)(8)(C)(ii) of the Act specifies that the Secretary must reduce the national unadjusted copayment amount for a covered OPD service (or group of such services) furnished in a year in a manner so that the effective copayment rate (determined on a national unadjusted basis) for that service in the year does not exceed a specified percentage. As specified in section 1833(t)(8)(C)(ii)(V) of the Act, the effective copayment rate for a covered OPD service paid under the OPPS in CY 2006, and in CYs thereafter, shall not exceed 40 percent of the APC payment rate.

Section 1833(t)(3)(B)(ii) of the Act provides that, for a covered OPD service (or group of such services) furnished in a year, the national unadjusted copayment amount cannot be less than 20 percent of the OPD fee schedule amount. However, section 1833(t)(8)(C)(i) of the Act limits the amount of beneficiary copayment that may be collected for a procedure Start Printed Page 59235 (including items such as drugs and biologicals) performed in a year to the amount of the inpatient hospital deductible for that year.

Section 4104 of the Affordable Care Act eliminated the Medicare Part B coinsurance for preventive services furnished on and after January 1, 2011, that meet certain requirements, including flexible sigmoidoscopies and screening colonoscopies, and waived the Part B deductible for screening colonoscopies that become diagnostic during the procedure. For a discussion of the changes made by the Affordable Care Act with regard to copayments for preventive services furnished on and after January 1, 2011, we refer readers to section XII.B of the CY 2011 OPPS/ASC final rule with comment period ( 75 FR 72013 ).

Section 122 of the Consolidated Appropriations Act (CAA) of 2021 ( Pub. L. 116-260 ), Waiving Medicare Coinsurance for Certain Colorectal Cancer Screening Tests, amended section 1833(a) of the Act to offer a special coinsurance rule for screening flexible sigmoidoscopies and screening colonoscopies, regardless of the code that is billed for the establishment of a diagnosis as a result of the test, or for the removal of tissue or other matter or other procedure, that is furnished in connection with, as a result of, and in the same clinical encounter as the colorectal cancer screening test. We refer readers to section X.B, “Changes to Beneficiary Coinsurance for Certain Colorectal Cancer Screening Tests,” of the CY 2022 OPPS/ASC final rule with comment period for the full discussion of this policy ( 86 FR 63740 through 63743 ). Under the regulation at 42 CFR 410.152(l)(5)(i)(B) , the Medicare Part B payment percentage for colorectal cancer screening tests described in the regulation at § 410.37(j) that are furnished in CY 2023 through CY 2026 is 85 percent, with beneficiary coinsurance equal to 15 percent.

On August 16, 2022, the Inflation Reduction Act of 2022 (IRA) ( Pub. L. 117-169 ) was signed into law. Section 11101(a) of the IRA amended section 1847A of the Act by adding a new subsection (i), which requires the payment of rebates into the Supplementary Medical Insurance Trust Fund for Part B rebatable drugs if the payment limit amount exceeds the inflation-adjusted payment amount, which is calculated as set forth in section 1847A(i)(3)(C) of the Act. The provisions of section 11101 of the IRA thus far have primarily been implemented through program instruction, as permitted under section 1847A(c)(5)(C) of the Act. As such, we issued guidance for the computation of inflation-adjusted beneficiary coinsurance under section 1847A(i)(5) of the Act and amounts paid under section 1833(a)(1)(EE) of the Act on February 9, 2023. [ 8 ]   [ 9 ] For additional information regarding implementation of section 11101 of the IRA, please see the inflation rebates resources page at https://www.cms.gov/​inflation-reduction-act-and-medicare/​inflation-rebates-medicare .

Section 11101(b) of the IRA amended sections 1833(i) and 1833(t)(8) of the Act by adding a new paragraph (9) and subparagraph (F), respectively. Section 1833(i)(9) requires under the ASC payment system that in the case of a Part B rebatable drug, in lieu of calculation of coinsurance that would otherwise apply under the ASC payment system, the provisions of section 1847A(i)(5) of the Act shall, as determined appropriate by the Secretary, apply for calculation of beneficiary coinsurance in the same manner as the provisions of section 1847A(i)(5) of the Act apply under that section. Similarly, section 1833(t)(8)(F) of the Act requires under the OPPS that in the case of a Part B rebatable drug (except for a drug that has no copayment applied under subparagraph (E) of such section or for which payment is packaged into the payment for a covered OPD service or group of services), in lieu of the calculation of the copayment amount that would otherwise apply under the OPPS, the provisions of section 1847A(i)(5) of the Act shall, as determined appropriate by the Secretary, apply in the same manner as the provisions of section 1847A(i)(5) of the Act apply under that section. Section 1847A(i)(5) of the Act requires that for Part B rebatable drugs, as defined in section 1847A(i)(2)(A) of the Act, furnished on or after April 1, 2023, in quarters in which the payment amount described in section 1847A(i)(3)(A)(ii)(I) of the Act (or, in the case of selected drugs described under section 1192(c) of the Act, the payment amount described in section 1847A(b)(1)(B) of the Act), exceeds the inflation-adjusted payment amount determined in accordance with section 1847A(i)(3)(C) of the Act, the coinsurance will be 20 percent of the inflation-adjusted payment amount for such quarter (hereafter, the inflation-adjusted coinsurance amount). This inflation-adjusted coinsurance amount is applied as a percent, as determined by the Secretary, to the payment amount that would otherwise apply for such calendar quarter in accordance with section 1847A(b)(1)(B) or (C) of the Act, as applicable, including in the case of a selected drug.

Paragraph (9) of section 1833(i) of the Act and subparagraph (F) of section 1833(t)(8) of the Act, as added by section 11101(b) of the IRA, also provide that in lieu of the amounts of payment otherwise applicable under the ASC payment system and the OPPS, the provisions of paragraph (1)(EE) of subsection (a) of section 1833 of the Act shall apply, as determined appropriate by the Secretary. Section 11101(b) of the IRA amended section 1833(a)(1) of the Act by adding a new subparagraph (EE), which requires that if the payment amount under section 1847A(i)(3)(A)(ii)(I) of the Act or, in the case of a selected drug, the payment amount described in section 1847A(b)(1)(B) of the Act, for that drug exceeds the inflation-adjusted payment amount for a Part B rebatable drug, the Part B payment amount would, subject to the Part B deductible and sequestration, equal the difference between such payment amount and the inflation-adjusted coinsurance amount. Consistent with the policy adopted in section 40 of the revised Medicare Part B Drug Inflation Rebate Guidance, the calculation to determine the applicable beneficiary coinsurance amount would not be adjusted for sequestration. CMS codified the Medicare payment for Part B rebatable drugs in the CY 2024 PFS final rule by adding new paragraph (m) to § 410.152.

In the CY 2024 OPPS/ASC final rule with comment period ( 88 FR 81594 ), we codified the OPPS program payment and cost sharing amounts for Part B rebatable drugs as required by section 1833(t)(8)(F) by adding a new paragraph (e) to § 419.41, which cross-references the regulations adopted in the CY 2024 PFS final rule (§§ 410.152(m) and 489.30(b)(6)). We also amended the regulation text to reflect our longstanding policies for calculating the Medicare program payment and cost sharing amounts for separately payable drugs and biologicals by adding a new paragraph (d) to § 419.41. Similarly, we codified the ASC cost sharing amounts for Part B rebatable drugs as required by section 1833(i)(9) of the Act by revising § 416.172(d) to include a cross-reference to 42 CFR 489.30(b)(6) , which codified Start Printed Page 59236 the cost sharing amounts for Part B rebatable drugs with prices increasing at a rate faster than inflation.

In the CY 2025 Medicare PFS proposed rule, CMS proposes to adopt new provisions at § 427.200 and § 427.201 to codify the policies regarding the computation of the inflation-adjusted beneficiary coinsurance, defined in § 427.200, for Part B rebatable drugs as required by section 1847A(i)(5) of the Act. This proposed new provision includes references to the existing provisions at §§ 410.152(m), 419.41(e), and 489.30(b)(6) of this title. CMS further proposes at § 427.201(c) that any category of products that is excluded from the identification of Part B rebatable drugs at § 427.101(b) is not subject to the inflation-adjusted beneficiary coinsurance. Examples of these excluded products include separately payable radiopharmaceuticals, skin substitute products, and qualifying biosimilar biological products.

Additionally, CMS proposes at § 427.201(b) that CMS will use the published payment amount in quarterly pricing files  [ 10 11 12 ] to determine if a Part B rebatable drug should have an adjusted beneficiary coinsurance equal to 20 percent of the inflation-adjusted payment amount as described in section 1847A(i)(3)(C) for a calendar quarter. This proposed approach deviates from the rebate calculation approach proposed in § 427.302, which relies on the specified amount defined at § 427.20 even when the specified amount and the published payment amount in quarterly pricing files differ. The approach proposed at § 427.201(b) would be used only to determine whether there should be a coinsurance adjustment and would not impact the applicability or calculation of inflation rebates. CMS believes this approach is consistent with the statutory language and appropriately reflects the differences in the statutory text of section 1847A(i)(5) of the Act, which sets forth the payment amount that is used to determine whether coinsurance should be adjusted, and section 1847A(i)(3)(A) of the Act, which sets forth the “specified amount” used to determine rebate amounts.

We refer readers to the CY 2025 Medicare PFS proposed rule for a detailed discussion of proposals related to the Part B inflation rebates, including inflation-adjusted beneficiary coinsurance and Medicare payment for Medicare Part B rebatable drugs.

For CY 2025, we propose to determine copayment amounts for new and revised APCs using the same methodology that we implemented beginning in CY 2004. (We refer readers to the November 7, 2003 OPPS final rule with comment period for a discussion of that methodology ( 68 FR 63458 ).) In addition, we propose to use the same standard rounding principles that we have historically used in instances where the application of our standard copayment methodology would result in a copayment amount that is less than 20 percent and cannot be rounded, under standard rounding principles, to 20 percent. (We refer readers to the CY 2008 OPPS/ASC final rule with comment period ( 72 FR 66687 ) in which we discuss our rationale for applying these rounding principles.) The proposed national unadjusted copayment amounts for services payable under the OPPS that would be effective January 1, 2025, are included in Addenda A and B to this proposed rule (which are available via the internet on the CMS website).

As discussed in section XIV.E of this proposed rule, for CY 2025, the Medicare beneficiary's minimum unadjusted copayment and national unadjusted copayment for a service to which a reduced national unadjusted payment rate applies will equal the product of the reporting ratio and the national unadjusted copayment, or the product of the reporting ratio and the minimum unadjusted copayment, respectively, for the service.

We note that OPPS copayments may increase or decrease each year based on changes in the calculated APC payment rates, due to updated cost report and claims data, and any changes to the OPPS cost modeling process. However, as described in the CY 2004 OPPS final rule with comment period, the development of the copayment methodology generally moves beneficiary copayments closer to 20 percent of OPPS APC payments ( 68 FR 63458 through 63459 ).

In the CY 2004 OPPS final rule with comment period ( 68 FR 63459 ), we adopted a new methodology to calculate unadjusted copayment amounts in situations including reorganizing APCs, and we finalized the following rules to determine copayment amounts in CY 2004 and subsequent years.

• When an APC group consists solely of HCPCS codes that were not paid under the OPPS the prior year because they were packaged or excluded or are new codes, the unadjusted copayment amount would be 20 percent of the APC payment rate.
• If a new APC that did not exist during the prior year is created and consists of HCPCS codes previously assigned to other APCs, the copayment amount is calculated as the product of the APC payment rate and the lowest coinsurance percentage of the codes comprising the new APC.
• If no codes are added to or removed from an APC and, after recalibration of its relative payment weight, the new payment rate is equal to or greater than the prior year's rate, the copayment amount remains constant (unless the resulting coinsurance percentage is less than 20 percent).
• If no codes are added to or removed from an APC and, after recalibration of its relative payment weight, the new payment rate is less than the prior year's rate, the copayment amount is calculated as the product of the new payment rate and the prior year's coinsurance percentage.
• If HCPCS codes are added to or deleted from an APC and, after recalibrating its relative payment weight, holding its unadjusted copayment amount constant results in a decrease in the coinsurance percentage for the reconfigured APC, the copayment amount would not change (unless retaining the copayment amount would result in a coinsurance rate less than 20 percent).
• If HCPCS codes are added to an APC and, after recalibrating its relative payment weight, holding its unadjusted copayment amount constant results in an increase in the coinsurance percentage for the reconfigured APC, the copayment amount would be calculated as the product of the payment rate of the reconfigured APC and the lowest coinsurance percentage of the codes being added to the reconfigured APC.

We noted in the CY 2004 OPPS final rule with comment period that we would seek to lower the copayment percentage for a service in an APC from the prior year if the copayment percentage was greater than 20 percent. We noted that this principle was consistent with section 1833(t)(8)(C)(ii) of the Act, which accelerates the reduction in the national unadjusted coinsurance rate so that beneficiary liability will eventually equal 20 percent of the OPPS payment rate for all OPPS services to which a copayment applies, and with section 1833(t)(3)(B) of the Act, which achieves a 20-percent copayment percentage when fully phased in and gives the Secretary the Start Printed Page 59237 authority to set rules for determining copayment amounts for new services. We further noted that the use of this methodology would, in general, reduce the beneficiary coinsurance rate and copayment amount for APCs for which the payment rate changes as the result of the reconfiguration of APCs and/or recalibration of relative payment weights ( 68 FR 63459 ).

Individuals interested in calculating the national copayment liability for a Medicare beneficiary for a given service provided by a hospital that met or failed to meet its Hospital OQR Program requirements should follow the formulas presented in the following steps.

Step 1. Calculate the beneficiary payment percentage for the APC by dividing the APC's national unadjusted copayment by its proposed payment rate. For example, using APC 5071, $140.02 is approximately 20 percent of the full national unadjusted payment rate of $700.10. For APCs with only a minimum unadjusted copayment in Addenda A and B to this proposed rule (which are available via the internet on the CMS website), the beneficiary payment percentage is 20 percent.

The formula below is a mathematical representation of Step 1 and calculates the national copayment as a percentage of national payment for a given service.

B is the beneficiary payment percentage.

B = National unadjusted copayment for APC/national unadjusted payment rate for APC.

Step 2. Calculate the appropriate wage-adjusted payment rate for the APC for the provider in question, as indicated in Steps 2 through 4 under section II.H of this with comment period. Calculate the rural adjustment for eligible providers, as indicated in Step 6 under section II.H of this final rule with comment period.

Step 3. Multiply the percentage calculated in Step 1 by the payment rate calculated in Step 2. The result is the wage-adjusted copayment amount for the APC.

The formula below is a mathematical representation of Step 3 and applies the beneficiary payment percentage to the adjusted payment rate for a service calculated under section II.H of this proposed rule, with and without the rural adjustment, to calculate the adjusted beneficiary copayment for a given service.

Wage-adjusted copayment amount for the APC = Adjusted Medicare Payment * B.

Wage-adjusted copayment amount for the APC (SCH or EACH) = (Adjusted Medicare Payment * 1.071) * B.

Step 4. For a hospital that failed to meet its Hospital OQR Program requirements, multiply the copayment calculated in Step 3 by the reporting ratio of 0.9805.

The unadjusted copayments for services payable under the OPPS that would be effective January 1, 2025, are shown in Addenda A and B to proposed rule (which are available via the CMS website). We note that the proposed national unadjusted payment rates and copayment rates shown in Addenda A and B to this proposed rule reflect the proposed CY 2025 OPD fee schedule increase factor discussed in section II.B of this proposed rule.

In addition, as noted earlier, section 1833(t)(8)(C)(i) of the Act limits the amount of beneficiary copayment that may be collected for a procedure performed in a year to the amount of the inpatient hospital deductible for that year.

Payments for OPPS procedures, services, and items are generally based on medical billing codes, specifically, HCPCS codes, that are reported on HOPD claims. HCPCS codes are used to report surgical procedures, medical services, items, and supplies under the hospital OPPS. The HCPCS is divided into two principal subsystems, referred to as Level I and Level II of the HCPCS. Level I is comprised of CPT (Current Procedural Terminology) codes, a numeric and alphanumeric coding system that is established and maintained by the American Medical Association (AMA), and consists of Category I, II, III, MAAA, and PLA CPT codes. Level II, which is established and maintained by CMS, is a standardized coding system that is used primarily to identify products, supplies, and services not included in the CPT codes. Together, Level I and II HCPCS codes are used to report procedures, services, items, and supplies under the OPPS payment system. Specifically, we recognize the following codes on OPPS claims:

• Category I CPT codes, which describe surgical procedures, diagnostic and therapeutic services, and vaccine codes;
• Category III CPT codes, which describe new and emerging technologies, services, and procedures;
• MAAA CPT codes, which describe laboratory multianalyte assays with algorithmic analyses (MAA);
• PLA CPT codes, which describe proprietary laboratory analyses (PLA) services; and
• Level II HCPCS codes (also known as alpha-numeric codes), which are used primarily to identify drugs, devices, supplies, temporary procedures, and services not described by CPT codes.

The codes are updated and changed throughout the year. CPT and Level II HCPCS code changes that affect the OPPS are published through the annual rulemaking cycle and through the OPPS quarterly update Change Requests (CRs). Generally, these code changes are effective January 1, April 1, July 1, or October 1. CPT code changes are released by the AMA (via their website) while Level II HCPCS code changes are released to the public via the CMS HCPCS website. CMS recognizes the release of new CPT and Level II HCPCS codes outside of the formal rulemaking process via OPPS quarterly update CRs. Based on our review, we assign the new codes to interim status indicators (SIs) and APCs. These interim assignments are finalized in the OPPS/ASC final rules. This quarterly process offers hospitals access to codes that more accurately describe the items or services furnished and provides payment for these items or services in a timelier manner than if we waited for the annual rulemaking process. We solicit public comments on the new CPT and Level II HCPCS codes, status indicators, and APC assignments through our annual rulemaking process.

We note that, under the OPPS, the APC assignment determines the payment rate for an item, procedure, or service. The items, procedures, or services not exclusively paid separately under the hospital OPPS are assigned to appropriate status indicators. Certain payment status indicators provide separate payment while other payment status indicators do not. In section XI “Proposed CY 2025 Payment Status and Comment Indicators” of this proposed rule, we discuss the various status indicators and comment indicators used under the OPPS. We also provide a complete list of the proposed status indicators and their definitions in Addendum D1 to this proposed rule.

For the April 2024 update, 73 new HCPCS codes were established and Start Printed Page 59238 made effective on April 1, 2024. Through the April 2024 OPPS quarterly update CR (Transmittal 12552, Change Request 13568, dated March 21, 2024), we recognized several new HCPCS codes for payment under the OPPS. In this proposed rule, we solicit public comments on the proposed APC and status indicator assignments for the codes listed in Table 10 (New HCPCS Codes Effective April 1, 2024). The proposed status indicator, APC assignment, and payment rate for each HCPCS code can be found in Addendum B to this proposed rule. The new codes effective April 1, 2024, are assigned to comment indicator “NP” in Addendum B to this proposed rule to indicate that the codes are assigned to an interim APC assignment and comments will be accepted on their interim APC assignments. The complete list of proposed status indicators and definitions used under the OPPS can be found in Addendum D1 to this proposed rule, while the complete list of proposed comment indicators and definitions can be found in Addendum D2. We note that OPPS Addendum B (OPPS payment file by HCPCS code), Addendum D1 (OPPS Status Indicators), and Addendum D2 (OPPS Comment Indicators) are available via the CMS website.

For the July 2024 update, 127 new codes were established and made effective July 1, 2024. Through the July 2024 OPPS quarterly update CR (Transmittal 12665, Change Request 13632, dated May 31, 2024), we recognized several new codes for payment and assigned them to appropriate interim OPPS status indicators and APCs. In this proposed rule, we solicit public comments on the proposed APC and status indicator assignments for the codes listed in Table 11 (New HCPCS Codes Effective July 1, 2024). The proposed status indicator, APC assignment, and payment rate for each HCPCS code can be found in Addendum B to this proposed rule. The complete list of proposed status indicators and corresponding definitions used under the OPPS can be found in Addendum D1 to this proposed rule. In addition, the new codes are assigned to comment indicator “NP” in Addendum B to this proposed rule to indicate that the codes are assigned to an interim APC assignment and comments will be accepted on their interim APC assignments. The complete list of proposed comment indicators and definitions used under the OPPS can be found in Addendum D2 to this proposed rule. We note that OPPS Addendum B (OPPS payment file by HCPCS code), Addendum D1 (OPPS Status Indicators), and Addendum D2 (OPPS Comment Indicators) are available via the internet on the CMS website.

As has been our practice in the past, we will solicit comments on the new CPT and Level II HCPCS codes that will be effective October 1, 2024, in the CY 2025 OPPS/ASC final rule with comment period, thereby allowing us to finalize the status indicators and APC assignments for the codes in the CY 2025 OPPS/ASC final rule with comment period. The HCPCS codes will be released to the public through the October 2024 OPPS Update CR and the CMS HCPCS website while the CPT codes will be released to the public through the AMA website.

For CY 2025, we propose to continue our established policy of assigning comment indicator “NI” in Addendum B to the OPPS/ASC final rule with comment period to those new HCPCS codes that will be effective October 1, 2024, to indicate that we are assigning them an interim status indicator, which is subject to public comment. We will be inviting public comments in the CY 2025 OPPS/ASC final rule with comment period on the status indicator and APC assignments, which would then be finalized in the CY 2026 OPPS/ASC final rule with comment period.

Consistent with past practice, we will solicit comments on the new Level II HCPCS codes that will be effective January 1, 2025, in the CY 2025 OPPS/ASC final rule with comment period, thereby allowing us to finalize the status indicators and APC assignments for the codes in the CY 2026 OPPS/ASC final rule with comment period. Unlike the CPT codes that are effective January 1 and are included in the OPPS/ASC proposed rules, and except for the proposed new C-codes and G-codes listed in Addendum O of this proposed rule, most Level II HCPCS codes are not released until sometime around November to be effective January 1. Because these codes are not available until November, we are unable to include them in the OPPS/ASC proposed rules. Consequently, for CY 2025, we propose to include the new Level II HCPCS codes effective January 1, 2025, in Addendum B to the CY 2025 OPPS/ASC final rule with comment period, which would be incorporated in the January 2025 OPPS quarterly update CR. Specifically, for CY 2025, we propose to continue our established policy of assigning comment indicator “NI” in Addendum B to the OPPS/ASC final rule with comment period to the new HCPCS codes that will be effective January 1, 2025, to indicate that we are assigning them an interim status indicator, which is subject to public comment. We will be inviting public comments in the CY 2025 OPPS/ASC final rule with comment period on the status indicator and APC assignments, which would then be finalized in the CY 2026 OPPS/ASC final rule with comment period.

In the CY 2015 OPPS/ASC final rule with comment period ( 79 FR 66841 through 66844 ), we finalized a revised process of assigning APC and status indicators for new and revised Category I and III CPT codes that would be effective January 1. Specifically, for the new/revised CPT codes that we receive in a timely manner from the AMA's CPT Editorial Panel, we finalized our proposal to include the codes that would be effective January 1 in the OPPS/ASC proposed rules, along with proposed APC and status indicator assignments for them, and to finalize the APC and status indicator assignments in the OPPS/ASC final rules beginning with the CY 2016 OPPS update. For those new/revised CPT codes that were received too late for inclusion in the OPPS/ASC proposed rule, we finalized our proposal to establish and use HCPCS G-codes that mirror the predecessor CPT codes and retain the current APC and status indicator assignments for a year until we can propose APC and status indicator assignments in the following year's rulemaking cycle. We note that even if we find that we need to create HCPCS G-codes in place of certain CPT codes for the PFS proposed rule, we do not anticipate that these HCPCS G-codes will always be necessary for OPPS purposes. We will make every effort to include proposed APC and status indicator assignments for all new and revised CPT codes that the AMA makes publicly available in time for us to include them in the proposed rule, and to avoid resorting to use of HCPCS G-codes and the resulting delay in utilization of the most current CPT codes. Also, we finalized our proposal to make interim APC and status indicator assignments for CPT codes that are not available in time for the proposed rule and that describe wholly new services (such as new technologies or new surgical procedures), to solicit public comments in the final rule, and to finalize the specific APC and status indicator assignments for those codes in the following year's final rule.

For the CY 2025 OPPS update, we received the CPT codes that will be effective January 1, 2025, from the AMA in time to be included in this proposed rule. The new, revised, and deleted CPT codes can be found in Addendum B to this proposed rule (which is available via the internet on the CMS website). We note that the new and revised CPT codes are assigned to comment indicator “NP” in Addendum B of this proposed rule to indicate that the code is new for the next calendar year or the code is an existing code with substantial revision to its code descriptor in the next calendar year as compared to the current calendar year with a proposed APC assignment, and that comments will be accepted on the proposed APC assignment and status indicator. Further, we note that the CPT code descriptors that appear in Addendum B are short descriptors and do not accurately describe the complete procedure, service, or item described by the CPT code. Therefore, we are including the 5-digit placeholder codes and the long descriptors for the new and revised CY 2025 CPT codes in Addendum O, specifically under the column labeled “CY 2025 OPPS/ASC Proposed Rule 5-Digit AMA/CMS Placeholder Code.” The final HCPCS code numbers will be included in the CY 2025 OPPS/ASC final rule with comment period. In summary, we solicit public comments on the proposed CY 2025 status indicators and APC assignments for the new and revised CPT codes that will be effective January 1, 2025. The CPT codes listed in Addendum B appear with short descriptors only, therefore, we list them again in Addendum O to this proposed rule with long descriptors. In addition, we propose to finalize the status indicator and APC assignments for these codes (with their final CPT code numbers) in the CY 2025 OPPS/ASC final rule with comment period. The proposed status indicator and APC assignment for these codes can be found in Addendum B to this proposed rule. In addition, the complete list of proposed comment indicators and definitions used under the OPPS can be found in Addendum D2 to this proposed rule. We note that OPPS Addendum B (OPPS payment file by HCPCS code), Addendum D1 (OPPS Status Indicators), and Addendum D2 (OPPS Comment Indicators) are available via the internet on the CMS website.

Finally, in Table 12 (Comment and Finalization Timeframes for New and Revised OPPS-Related HCPCS Codes) below, we summarize our current Start Printed Page 59251 process for updating codes through our OPPS quarterly update CRs, seeking public comments, and finalizing the treatment of these codes under the OPPS.

Section 1833(t)(2)(A) of the Act requires the Secretary to develop a classification system for covered hospital outpatient department services. In addition, section 1833(t)(2)(B) of the Act provides that the Secretary may establish groups of covered OPD services within this classification system, so that services classified within each group are comparable clinically and with respect to the use of resources. In accordance with these provisions, we developed a grouping classification system, referred to as Ambulatory Payment Classifications (APCs), as set forth in regulations at 42 CFR 419.31 . We use Level I (also known as CPT codes) and Level II HCPCS codes (also known as alphanumeric codes) to identify and group the services within each APC. The APCs are organized such that each group is homogeneous both clinically and in terms of resource use. Using this classification system, we have established distinct groups of similar services. We also have developed separate APC groups for certain medical devices, drugs, biologicals, therapeutic radiopharmaceuticals, and brachytherapy devices that are not packaged into the payment for the procedure.

We have packaged into the payment for each procedure or service within an APC group, the costs associated with those items and services that are typically ancillary and supportive to a primary diagnostic or therapeutic modality and, in those cases, are an integral part of the primary service they support. Therefore, we do not make separate payment for these packaged items or services. In general, packaged items and services include, but are not limited to, the items and services listed in regulations at 42 CFR 419.2(b) . A further discussion of packaged services is included in section II.A.3 of this proposed rule.

Under the OPPS, we generally pay for covered hospital outpatient services on a rate-per-service basis, where the service may be reported with one or more HCPCS codes. Payment varies according to the APC group to which Start Printed Page 59252 the independent service or combination of services is assigned. For CY 2025, we propose that each APC relative payment weight represents the hospital cost of the services included in that APC, relative to the hospital cost of the services included in APC 5012 (Clinic Visits and Related Services). The APC relative payment weights are scaled to APC 5012 because it is the hospital clinic visit APC and clinic visits are among the most frequently furnished services in the hospital outpatient setting.

Section 1833(t)(9)(A) of the Act requires the Secretary to review, not less often than annually, and revise the APC groups, the relative payment weights, and the wage and other adjustments described in paragraph (2) to consider changes in medical practice, changes in technology, the addition of new services, new cost data, and other relevant information and factors. Section 1833(t)(9)(A) of the Act also requires the Secretary to consult with an expert outside advisory panel composed of an appropriate selection of representatives of providers to review (and advise the Secretary concerning) the clinical integrity of the APC groups and the relative payment weights. We note that the Advisory Panel on Hospital Outpatient Payment (also known as the HOP Panel or the Panel) recommendations for specific services for the CY 2025 OPPS update will be discussed in the relevant specific sections throughout the CY 2025 OPPS/ASC final rule with comment period.

In addition, section 1833(t)(2) of the Act provides that, subject to certain exceptions, the items and services within an APC group cannot be considered comparable regarding the use of resources if the highest cost for an item or service in the group is more than 2 times greater than the lowest cost for an item or service within the same group (referred to as the “2 times rule”). The statute authorizes the Secretary to make exceptions to the 2 times rule in unusual cases, such as for low-volume items and services (but the Secretary may not make such an exception in the case of a drug or biological that has been designated as an orphan drug under section 526 of the Federal Food, Drug, and Cosmetic Act). In determining the APCs with a 2 times rule violation, we consider only those HCPCS codes that are significant based on the number of claims. We note that, for purposes of identifying significant procedure codes for examination under the 2 times rule, we consider procedure codes that have more than 1,000 single major claims or procedure codes that both have more than 99 single major claims and contribute at least 2 percent of the single major claims used to establish the APC cost to be significant ( 75 FR 71832 ). This longstanding definition of when a procedure code is significant for purposes of the 2 times rule was selected because we believe that a subset of 1,000 or fewer claims is negligible within the set of approximately 100 million single procedure or single session claims we use for establishing costs. Similarly, a procedure code for which there are fewer than 99 single claims and that comprises less than 2 percent of the single major claims within an APC will have a negligible impact on the APC cost ( 75 FR 71832 ). In this section of this proposed rule, for CY 2025, we propose to make exceptions to this limit on the variation of costs within each APC group in unusual cases, such as for certain low-volume items and services.

For the CY 2025 OPPS update, we identified the APCs with violations of the 2 times rule, and we propose changes to the procedure codes assigned to these APCs (with the exception of those APCs for which we propose a 2 times rule exception) in Addendum B to this proposed rule. We note that Addendum B does not appear in the printed version of the Federal Register as part of this proposed rule. Rather, it is published and made available via the internet on the CMS website at: https://www.cms.gov/​medicare/​payment/​prospective-payment-systems/​hospital-outpatient/​regulations-notices . To eliminate a violation of the 2 times rule and improve clinical and resource homogeneity in the APCs for which we are not proposing a 2 times rule exception, we propose to reassign these procedure codes to new APCs that contain services that are similar with regard to both their clinical and resource characteristics. In many cases, the proposed HCPCS code reassignments and associated APC reconfigurations for CY 2025 included in this proposed rule are related to changes in costs of services that were observed in the CY 2023 claims data available for CY 2025 ratesetting. Addendum B to this proposed rule identifies with a comment indicator “CH” those procedure codes for which we propose a change to the APC assignment or status indicator, or both, that were initially assigned in the July 1, 2024, OPPS Addendum B Update, which is available via the internet on the CMS website at: https://www.cms.gov/​medicare/​payment/​prospective-payment-systems/​hospital-outpatient/​addendum-a-b-updates .

While considering the APC changes that we propose for CY 2025, we reviewed all of the APCs for which we identified 2 times rule violations to determine whether any of the APCs would qualify for an exception. We used the following criteria to evaluate whether to propose exceptions to the 2 times rule for affected APCs:

• Resource homogeneity;
• Clinical homogeneity;
• Hospital outpatient setting utilization;
• Frequency of service (volume); and
• Opportunity for upcoding and code fragments.

For a detailed discussion of these criteria, we refer readers to the April 7, 2000 final rule ( 65 FR 18457 through 18458 ).

Based on the CY 2023 claims data available for this proposed rule, we found 23 APCs with violations of the 2 times rule. We applied the criteria as described above to identify the APCs for which we propose to make exceptions under the 2 times rule for CY 2025 and found that all of the 23 APCs we identified meet the criteria for an exception to the 2 times rule based on the CY 2023 claims data available for this proposed rule. We note that, on an annual basis, based on our analysis of the latest claims data, we identify violations to the 2 times rule and propose changes when appropriate. Those APCs that violate the 2 times rule are identified and appear in Table 13 below. In addition, we did not include in that determination those APCs where a 2 times rule violation was not a relevant concept, such as APC 5401 (Dialysis), which only has two HCPCS codes assigned to it that have similar geometric mean costs and do not create a 2 times rule violation. Therefore, we have only identified those APCs, including those with criteria-based costs, such as device-dependent CPT/HCPCS codes, with violations of the 2 times rule, where a 2 times rule violation is a relevant concept.

Table 13 of this proposed rule lists the 23 APCs for which we propose to make an exception under the 2 times rule for CY 2025 based on the criteria cited above and claims data submitted between January 1, 2023, and December 31, 2023, and processed on or before December 31, 2023, and CCRs, if available. The proposed geometric mean costs for covered hospital outpatient services for these and all other APCs that were used in the development of Start Printed Page 59253 this proposed rule can be found on the CMS website at: https://www.cms.gov/​medicare/​payment/​prospective-payment-systems/​hospital-outpatient/​regulations-notices .

In the CY 2002 OPPS final rule ( 66 FR 59903 ), we finalized changes to the time period in which a service can be eligible for payment under a New Technology APC. Beginning in CY 2002, we retain services within New Technology APC groups until we gather sufficient claims data to enable us to assign the service to an appropriate clinical APC. This policy allows us to move a service from a New Technology APC in less than 2 years if sufficient data are available. It also allows us to retain a service in a New Technology APC for more than 2 years if sufficient data upon which to base a decision for reassignment have not been collected.

We also adopted in the CY 2002 OPPS final rule the following criteria for assigning a complete or comprehensive service to a New Technology APC: (1) Start Printed Page 59254 the service must be truly new, meaning it cannot be appropriately reported by an existing HCPCS code assigned to a clinical APC and does not appropriately fit within an existing clinical APC; (2) the service is not eligible for transitional pass-through payment (however, a truly new, comprehensive service could qualify for assignment to a new technology APC even if it involves a device or drug that could, on its own, qualify for pass-through payment); and (3) the service falls within the scope of Medicare benefits under section 1832(a) of the Act and is reasonable and necessary in accordance with section 1862(a)(1)(A) of the Act ( 66 FR 59898 through 59903 ). For additional information about our New Technology APC policy, we refer readers to https://www.cms.gov/​medicare/​payment/​prospective-payment-systems/​hospital-outpatient/​pass-through-payment-status-new-technology-ambulatory-payment-classification-apc on the CMS website and then follow the instructions to access the MEARIS TM system for OPPS New Technology APC applications. [ 13 ]

In the CY 2004 OPPS final rule with comment period ( 68 FR 63416 ), we restructured the New Technology APCs to make the cost intervals more consistent across payment levels and refined the cost bands for these APCs to retain two parallel sets of New Technology APCs: one set with a status indicator of “S” (Significant Procedures, Not Discounted when Multiple. Paid under OPPS; separate APC payment) and the other set with a status indicator of “T” (Significant Procedure, Multiple Reduction Applies. Paid under OPPS; separate APC payment). These current New Technology APC configurations allow us to price new technology services more appropriately and consistently.

For CY 2024, there were 52 New Technology APC levels, ranging from the lowest cost band assigned to APC 1491 (New Technology—Level 1A ($0-$10)) to the highest cost band assigned to APC 1908 (New Technology—Level 52 ($145,001-$160,000)). We note that the cost bands for the New Technology APCs, specifically, APCs 1491 through 1599 and 1901 through 1908, vary with increments ranging from $10 to $14,999. These cost bands identify the APCs to which new technology procedures and services with estimated service costs that fall within those cost bands are assigned under the OPPS. Payment for each APC is made at the mid-point of the APC's assigned cost band. For example, payment for New Technology APC 1507 (New Technology—Level 7 ($501-$600)) is made at $550.50.

Under the OPPS, one of our goals is to make payments that are appropriate for the services that are necessary for the treatment of Medicare beneficiaries. The OPPS, like other Medicare payment systems, is budget neutral and increases are limited to the annual hospital market basket increase reduced by the productivity adjustment. We believe that our payment rates reflect the costs that are associated with providing care to Medicare beneficiaries and are adequate to ensure access to services ( 80 FR 70374 ). For many emerging technologies, there is a transitional period during which utilization may be low, often because providers are first learning about the technologies and their clinical utility. Quite often, parties request that Medicare make higher payments under the New Technology APCs for new procedures in that transitional phase. These requests, and their accompanying estimates for expected total patient utilization, often reflect very low rates of patient use of expensive equipment, resulting in high per-use costs for which requesters believe Medicare should make full payment. Medicare does not, and we believe should not, assume responsibility for more than its share of the costs of procedures based on projected utilization for Medicare beneficiaries and does not set its payment rates based on initial projections of low utilization for services that require expensive capital equipment. For the OPPS, we rely on hospitals to make informed business decisions regarding the acquisition of high-cost capital equipment, taking into consideration their knowledge about their entire patient base (Medicare beneficiaries included) and an understanding of Medicare's and other payers' payment policies. We refer readers to the CY 2013 OPPS/ASC final rule with comment period ( 77 FR 68314 ) for further discussion regarding this payment policy.

Some services assigned to New Technology APCs have low annual volume, which we consider to be fewer than 100 claims in the year of claims data used for ratesetting ( 86 FR 63528 ). Where utilization of services assigned to a New Technology APC is low, it can lead to wide variation in payment rates from year to year, resulting in even lower utilization and potential barriers to access to new technologies, which ultimately limits our ability to assign the service to the appropriate clinical APC. To mitigate these issues, we finalized a policy in the CY 2019 OPPS/ASC final rule with comment period to utilize our equitable adjustment authority at section 1833(t)(2)(E) of the Act to adjust how we determine the costs for low-volume services assigned to New Technology APCs ( 83 FR 58892 through 58893 ). Specifically, in the CY 2019 OPPS/ASC final rule with comment period ( 83 FR 58893 ), we established that, in each of our annual rulemakings, we would calculate and present the result of each statistical methodology (arithmetic mean, geometric mean, and median) based on up to 4 years of claims data and solicit public comment on which methodology should be used to establish the payment rate for the low-volume new technology service. In the CY 2022 OPPS/ASC final rule ( 86 FR 63529 ), we replaced the New Technology APC low volume policy with the universal low volume APC policy. Unlike the New Technology APC low volume policy, the universal low volume APC policy applies to clinical APCs and brachytherapy APCs, in addition to procedures assigned to New Technology APCs, and uses the highest of the geometric mean, arithmetic mean, or median based on up to 4 years of claims data to set the payment rate for the APC. We refer readers to the CY 2022 OPPS/ASC final rule with comment period ( 86 FR 63529 ) for further discussion regarding this policy.

Finally, we note that, in a budget-neutral system, payments may not fully cover hospitals' costs in a particular circumstance, including those for the purchase and maintenance of capital equipment. We rely on hospitals to make their decisions regarding the acquisition of high-cost equipment with the understanding that the Medicare program must be careful to establish its initial payment rates, including those made through New Technology APCs, for new services that lack hospital claims data based on realistic utilization projections for all such services delivered in cost-efficient hospital outpatient settings. As the OPPS acquires claims data regarding hospital costs associated with new procedures, we regularly examine the claims data and any available new information regarding the clinical aspects of new procedures to confirm that our OPPS payments remain appropriate for procedures as they transition into mainstream medical practice ( 77 FR 68314 ). For CY 2025, we included the proposed payment rates for New Technology APCs 1491 to 1599 and 1901 through 1908 in Addendum A to this proposed rule (which is available on the CMS website at https:// Start Printed Page 59255 www.cms.gov/​medicare/​payment/​prospective-payment-systems/​hospital-outpatient/​regulations-notices .

We continue to be concerned about payment stability for services assigned to New Technology APCs, specifically services with very low claims volume of fewer than 10 claims in the 4-year lookback period used under the universal low volume APC policy. Historically, we have used our equitable adjustment authority at section 1833(t)(2)(E) of the Act to exempt a number of services with very low claims volume from the universal low volume APC policy in instances where application of the universal low volume policy would lead to significant fluctuations in payment. Given the frequency with which we have needed to utilize our equitable adjustment authority to address significant fluctuations in payment for very low volume services, we believe that refinements to our universal low volume policy for services assigned to New Technology APCs may be necessary. We also recognize that determining initial cost estimates for these services may be particularly challenging, given the lack of cost information for new and innovative technologies.

To allow time for us to consider these issues, we propose for CY 2025 to exempt services assigned to New Technology APCs with fewer than 10 claims over the 4-year lookback period used for the universal low volume policy. Instead of assigning these services to a different New Technology APC based on the very few claims available, we propose that we would maintain the New Technology APC assignment for each service from the prior year, which in this case would be the New Technology APC assignment for CY 2024. We believe it is appropriate to apply this policy to New Technology APCs because services assigned to New Technology APCs represent new technologies for which it may be more challenging to determine an appropriate cost than for other, more established services. We believe 10 claims is an appropriate ceiling for exempting services from reassignment based on the universal low volume policy because we believe that at 10 claims a rough standard distribution begins to appear. We also believe that services with so few claims over the 4-year lookback period would be especially vulnerable to large changes in payment rates year-to-year as a result of one or two new claims being available or one or two claims from what was previously the fourth year of the lookback period no longer being included in that period.

Consistent with our overall policy regarding use of updated claims data in the final rule, we propose to perform a similar analysis for the final rule using updated claims data, including determining whether specific HCPCS codes continue to meet the criteria for our universal low volume APC policy or our proposal to exempt services with fewer than 10 claims in the 4-year lookback period from the universal low volume APC policy and maintain their CY 2024 New Technology APC assignment. We will update the APC placement as needed in the final rule.

As we described in the CY 2002 OPPS final rule ( 66 FR 59902 ), we generally retain a procedure in the New Technology APC to which it is initially assigned until we have obtained sufficient claims data to justify reassignment of the procedure to a clinically appropriate APC. In addition, in cases where we find that our initial New Technology APC assignment was based on inaccurate or inadequate information (although it was the best information available at the time), where we obtain new information that was not available at the time of our initial New Technology APC assignment, or where the New Technology APCs are restructured, we may, based on more recent resource utilization information (including claims data) or the availability of refined New Technology APC cost bands, reassign the procedure or service to a different New Technology APC that more appropriately reflects its cost ( 66 FR 59903 ).

Consistent with our current policy, for CY 2025, we propose to retain services within New Technology APC groups until we obtain sufficient claims data to justify reassignment of the service to an appropriate clinical APC. The flexibility associated with this policy allows us to reassign a service from a New Technology APC in less than 2 years if we have obtained sufficient claims data. It also allows us to retain a service in a New Technology APC for more than 2 years if we have not obtained sufficient claims data upon which to base a reassignment decision ( 66 FR 59902 ).

Effective January 1, 2021, CMS established HCPCS code C9770 (Vitrectomy, mechanical, pars plana approach, with subretinal injection of pharmacologic/biologic agent) and assigned it to a New Technology APC based on the geometric mean cost of CPT code 67036 (Vitrectomy, mechanical, pars plana approach) due to similar resource utilization. For CY 2021, HCPCS code C9770 was assigned to APC 1561 (New Technology—Level 24 ($3,001-$3,500)). This code may be used to describe the administration of HCPCS code J3398 (Injection, voretigene neparvovec-rzyl, 1 billion vector genomes). This procedure was previously discussed in depth in the CY 2021 OPPS/ASC final rule with comment period ( 85 FR 85939 through 85940 ). For CY 2022, we maintained the APC assignment of APC 1561 (New Technology—Level 24 ($3,001-$3,500)) for HCPCS code C9770 ( 86 FR 63531 through 63532 ).

HCPCS code J3398 (Injection, voretigene neparvovec-rzyl, 1 billion vector genomes) is for a gene therapy product indicated for a rare mutation-associated retinal dystrophy. Voretigene neparvovec-rzyl (Luxturna®) was approved by FDA in December of 2017 and is an adeno-associated virus vector-based gene therapy indicated for the treatment of patients with confirmed biallelic RPE65 mutation-associated retinal dystrophy. [ 14 ] This therapy is administered through a subretinal injection, which interested parties describe as an extremely delicate and sensitive surgical procedure. The FDA-approved package insert describes one of the steps for administering Luxturna as, “after completing a vitrectomy, identify the intended site of administration. The subretinal injection can be introduced via pars plana.”

Interested parties, including the manufacturer of Luxturna®, recommended CPT code 67036 (Vitrectomy, mechanical, pars plana approach) for the administration of the gene therapy. [ 15 ] However, the manufacturer previously contended the administration was not accurately described by any existing codes as CPT code 67036 (Vitrectomy, mechanical, Start Printed Page 59256 pars plana approach) does not account for the administration itself.

CMS recognized the need to accurately describe the unique procedure that is required to administer the therapy described by HCPCS code J3398. Therefore, in the CY 2021 OPPS/ASC proposed rule ( 85 FR 48832 ), we proposed to establish a new HCPCS code, C97X1 (Vitrectomy, mechanical, pars plana approach, with subretinal injection of pharmacologic/biologic agent) to describe this process. We stated that we believed this new HCPCS code accurately described the unique service associated with intraocular administration of HCPCS code J3398. We recognized that CPT code 67036 represents a clinically similar procedure and process that approximates similar resource utilization to C97X1. However, we also recognized that it is not prudent for the code that describes the administration of this unique gene therapy, C97X1, to be assigned to the same C-APC to which CPT code 67036 is assigned, as this would package the primary therapy, HCPCS code J3398, into the code that represents the process to administer the gene therapy.

Therefore, for CY 2021, we proposed to assign the services described by C97X1 to a New Technology APC with a cost band that contains the geometric mean cost for CPT code 67036. The placeholder code C97X1 was replaced by HCPCS code C9770. For CY 2021, we finalized our proposal to create HCPCS code C9770 (Vitrectomy, mechanical, pars plana approach, with subretinal injection of pharmacologic/biologic agent), and we assigned this code to APC 1561 (New Technology—Level 24 ($3,001-$3,500)) using the geometric mean cost of CPT code 67036. For CY 2022, we continued to assign HCPCS code C9770 to APC 1561 (New Technology—Level 24 ($3,001-$3,500)) using the geometric mean cost of CPT code 67036.

CY 2023 was the first year that claims data were available for HCPCS code C9770; therefore, we proposed and finalized a policy to base the payment rate of HCPCS code C9770 on claims data for that code rather than on the geometric mean cost of CPT code 67036. Given the low number of claims for this procedure, we designated HCPCS code C9770 as a low volume procedure under our universal low volume APC policy and used the greater of the geometric mean, arithmetic mean, or median cost calculated based on the available claims data to calculate an appropriate payment rate for purposes of assigning HCPCS code C9770 to a New Technology APC.

Based on the claims data available for the CY 2023 OPPS/ASC final rule with comment period, we found the median was the statistical methodology that estimated the highest cost for the service. The payment rate calculated using this methodology fell within the cost band for New Technology APC 1562 (New Technology—Level 25 ($3,501-$4,000)). Therefore, we finalized our proposal to assign HCPCS code C9770 to APC 1562 for CY 2023.

For CY 2024, we proposed and finalized that we would delete HCPCS code C9770 effective December 31, 2023 and recognize CPT code 0810T (Subretinal injection of a pharmacologic agent, including vitrectomy and 1 or more retinotomies) starting January 1, 2024 ( 88 FR 81617 through 81619 ). We determined the payment rate for CPT code 0810T using the claims data for HCPCS code C9770 and designated CPT code 0810T as a low volume procedure under our universal low volume APC policy and used the greater of the geometric mean, arithmetic mean, or median cost calculated based on the available claims data for HCPCS code C9770 to calculate an appropriate payment rate for purposes of assigning CPT code 0810T to a New Technology APC. For CY 2024, we finalized assignment of CPT code 0810T to APC 1563 (New Technology—Level 26 ($4,001-$4,500)) ( 88 FR 81617 through 81619 ).

Since CMS recognized CPT code 0810T starting January 1, 2024, we do not have claims data for CPT code 0810T available for CY 2025 rulemaking. However, as HCPCS code C9770 was still in use until December 31, 2023, we propose to determine the payment rate for CPT code 0810T using the claims data for HCPCS code C9770. This is similar to the policy we finalized for CY 2024. For CY 2025, we propose to designate CPT code 0810T as a low volume procedure under our universal low volume APC policy, given that there are only 34 claims available for HCPCS code C9770 and none for CPT code 0810T. This is below the threshold of 100 claims for a service within a year required to designate a service as a low volume service and apply our universal low volume APC policy. Therefore, we propose to use the greater of the geometric mean, arithmetic mean, or median cost calculated based on the available claims data for HCPCS code C9770 to calculate an appropriate payment rate for purposes of assigning CPT code 0810T to a New Technology APC.

Using all available claims from the 4-year lookback period, based on 34 claims, we determined the geometric mean cost to be $3,934, the arithmetic mean cost to be $4,173, and the median cost to be $4,103. Because the arithmetic mean is the statistical methodology that estimated the highest cost for the service, we propose to use this cost to determine the New Technology APC placement. The arithmetic mean of $4,173 falls within the cost band for New Technology APC 1563 (New Technology—Level 26 ($4,001-$4,500)). Therefore, we propose to assign CPT code 0810T to APC 1563 for CY 2025. Additionally, we propose to perform a similar analysis using updated claims data, including determining if CPT code 0810T continues to meet the criteria for our universal low volume APC policy, in the CY 2025 OPPS/ASC final rule with comment period and update the APC assignment as needed.

Please refer to Table 14 below for the proposed OPPS New Technology APC and status indicator assignments for CPT code 0810T for CY 2025. The proposed CY 2025 payment rates can be found in Addendum B to this proposed rule via the internet on the CMS website.

Biology Guided Radiation Therapy (BgRT) uses positron-emitting radiopharmaceuticals to control delivery of radiation therapy to treat primary and metastatic lung or bone tumors. During radiation treatment delivery, the same system applies these firing filters to the real-time positron emission tomography (PET) data collected by the radiation treatment delivery machine. Effective January 1, 2024, CMS created HCPCS codes C9794 (Therapeutic radiology simulation-aided field setting; complex, including acquisition of PET and CT imaging data required for radiopharmaceutical-directed radiation therapy treatment planning ( i.e., modeling) and C9795 (Stereotactic body radiation therapy, treatment delivery, per fraction to 1 or more lesions, including image guidance and real-time positron emissions-based delivery adjustments to 1 or more lesions, entire course not to exceed 5 fractions) to describe the modeling and treatment delivery portions of the BgRT service. We assigned HCPCS code C9794 to APC 1521 (New Technology—Level 21 ($1,901-$2,000)) and HCPCS code C9795 to APC 1525 (New Technology—Level 25 ($3,501-$4,000)) for CY 2024.

For CY 2025, the proposed OPPS payment rates are based on available CY 2023 claims data. As HCPCS codes C9794 and C9795 were effective January 1, 2024, we do not have any claims data for the service. Therefore, for CY 2025, we propose to continue to assign HCPCS code C9794 to APC 1521 (New Technology—Level 21 ($1,901-$2,000)) with a payment rate of $1,950.50 and HCPCS code C9795 to APC 1525 (New Technology—Level 25 ($3,501-$4,000)) with a payment rate of $3,750.50.

Please refer to Table 15 below for the proposed OPPS New Technology APC and status indicator assignment for HCPCS codes C9794 and C9795 for CY 2025. The proposed CY 2025 payment rates can be found in Addendum B to this proposed rule via the internet on the CMS website.

A randomized, double-blinded, controlled IDE study is currently in progress for the V-Wave interatrial shunt. The V-Wave interatrial shunt is for patients with severe symptomatic heart failure and is designed to regulate left atrial pressure in the heart. All participants who passed initial screening for the study receive a right heart catheterization procedure described by CPT code 93451 (Right heart catheterization including measurement(s) of oxygen saturation and cardiac output, when performed). Participants assigned to the experimental group also receive the V-Wave interatrial shunt procedure while participants assigned to the control group only receive right heart catheterization. The developer of V-Wave was concerned that the current coding of these services by Medicare would reveal to the study participants whether they had received the interatrial shunt because an additional procedure code, CPT code 93799 (Unlisted cardiovascular service or procedure), would be included on the claims for participants receiving the interatrial shunt. Therefore, for CY 2020, we created a temporary HCPCS code to describe the V-Wave interatrial shunt procedure for both the experimental group and the control group in the study. Specifically, we established HCPCS code C9758 (Blinded procedure for NYHA class III/IV heart failure; transcatheter implantation of interatrial shunt or placebo control, including right heart catheterization, trans-esophageal echocardiography (TEE)/intracardiac echocardiography (ICE), and all imaging with or without guidance (for example, ultrasound, fluoroscopy), performed in an approved investigational device exemption (IDE) study) to describe the service, and we assigned the service to New Technology APC 1589 (New Technology—Level 38 ($10,001-$15,000)) with a payment rate of $12,500.50.

In the CY 2021 OPPS/ASC final rule with comment period ( 85 FR 85946 ), we stated that we believe similar resources and device costs are involved with the V-Wave interatrial shunt procedure and the Corvia Medical interatrial shunt procedure (HCPCS code C9760), except that payment for HCPCS codes C9758 and C9760 differs based on how often the interatrial shunt is implanted when each code is billed. An interatrial shunt is implanted one-half of the time HCPCS code C9758 is billed, whereas an interatrial shunt is implanted every time HCPCS code C9760 is billed. Accordingly, for CY 2021, we reassigned HCPCS code C9758 to New Technology APC 1590 (New Technology—Level 39 ($15,001-$20,000)), which reflects the cost of furnishing the interatrial shunt one-half of the time the procedure is performed.

For CY 2022, we used the same claims data from CY 2019 that we did for the CY 2021 OPPS/ASC final rule with comment period. Because there were no claims reporting HCPCS code C9758, we continued to assign HCPCS code C9758 to New Technology APC 1590 with a payment rate of $17,500.50 for CY 2022. For CY 2023 we used claims data from CY 2019 through CY 2022. Because there were no claims reporting HCPCS code C9758 in CY 2023 or CY 2024, we continued to assign HCPCS code C9758 to New Technology APC 1590 with a payment rate of $17,500.50 for CY 2023 and 2024.

For CY 2025, the OPPS payment rates are proposed to be based on available CY 2023 claims data. There were only three claims for HCPCS code C9758 within this time period. As this is below the threshold of 100 claims for a service within a year, we would designate C9758 as a low volume service and apply our universal low volume APC policy. Under this policy, we would use the highest of the geometric mean cost, arithmetic mean cost, or median cost based on up to 4 years of claims data to assign HCPCS code C9758 to the appropriate New Technology APC. Given our proposal to maintain current New Technology APC assignments for CY 2025 for New Technology APC services with fewer than 10 claims in the 4-year lookback period applicable for the universal low-volume APC policy, we propose to continue assigning HCPCS code C9758 to New Technology New Technology APC 1590 with a proposed payment rate of $17,500.50.

Please refer to Table 16 below for the proposed OPPS New Technology APC and status indicator assignments for HCPCS code C9758 for CY 2025. The proposed CY 2025 payment rates can be found in Addendum B to this proposed rule via the internet on the CMS website.

Effective January 1, 2019, CMS established HCPCS code C9751 (Bronchoscopy, rigid or flexible, transbronchial ablation of lesion(s) by microwave energy, including fluoroscopic guidance, when performed, with computed tomography acquisition(s) and 3-D rendering, computer-assisted, image-guided navigation, and endobronchial ultrasound (EBUS) guided transtracheal and/or transbronchial sampling ( e.g., aspiration[s]/biopsy[ies]) and all mediastinal and/or hilar lymph node stations or structures and therapeutic intervention(s)). This microwave ablation procedure utilizes a flexible catheter to access the lung tumor via a working channel and may be used as an alternative procedure to a percutaneous microwave approach. Based on our review of the New Technology APC application for this service and the service's clinical similarity to existing services paid under the OPPS, we estimated the likely cost of the procedure would be between $8,001 and $8,500. We assigned the procedure to New Technology APC 1571 (New Technology—Level 34 ($8,001-$8,500)) for CY 2019.

In claims data available from CY 2019 for the CY 2021 OPPS/ASC final rule with comment period, there were four claims reported for bronchoscopy with transbronchial ablation of lesions by microwave energy. Given the low volume of claims for the service, we proposed for CY 2021 to apply the universal low volume APC policy we adopted in CY 2019, under which we utilize our equitable adjustment authority under section 1833(t)(2)(E) of the Act to calculate the geometric mean, arithmetic mean, and median costs to determine an appropriate payment rate for purposes of assigning bronchoscopy with transbronchial ablation of lesions by microwave energy to a New Technology APC. We found the geometric mean cost for the service to be approximately $2,693, the arithmetic mean cost to be approximately $3,086, and the median cost to be approximately $3,708. The median was the statistical methodology that estimated the highest cost for the service. The payment rate calculated using this methodology fell within the cost band for New Technology APC 1562 (New Technology—Level 25 ($3,501-$4,000)). Therefore, we assigned HCPCS code C9751 to APC 1562 for CY 2021.

In CY 2022, we again used the claims data from CY 2019 for HCPCS code C9751. Because the claims data was unchanged from when it was used in CY 2021, the values for the geometric mean cost ($2,693), the arithmetic mean cost ($3,086), and the median cost ($3,708) for the service described by HCPCS code C9751 remained the same. The highest cost metric using these methodologies was again the median and within the cost band for New Technology APC 1562 (New Technology—Level 25 ($3,501-$4,000)). Therefore, we continued to assign HCPCS code C9751 to APC 1562 (New Technology—Level 25 ($3,501-$4,000)), with a payment rate of $3,750.50 for CY 2022.

There have been no separately payable claims reported for HCPCS code C9751 since 2019. Therefore, we continued to use claims from CY 2019 to determine to payment rate for this service; and the reported claims are the same claims used to calculate the payment rate for the service in the CY 2023 and CY 2024 OPPS/ASC final rules with comment period. We continued to assign HCPCS code C9751 to APC 1562 (New Technology—Level 25 ($3,501-$4,000)), with a payment rate of $3,750.50.

For CY 2025, there are no new claims for HCPCS code C9751. Given our proposal to maintain current New Technology APC assignments for CY 2025 for New Technology APC services with fewer than 10 claims in the 4-year lookback period applicable for the universal low-volume APC policy, we propose for CY 2025 to continue to assign HCPCS code C9751 to APC 1562 (New Technology—Level 25 ($3,501-$4,000)), with a payment rate of $3,750.50.

Please refer to Table 17 below for the proposed OPPS New Technology APC and status indicator assignments for HCPCS code C9751 for CY 2025. The proposed CY 2025 payment rates can be found in Addendum B to this proposed rule via the internet on the CMS website.

For CY 2025, the OPPS payment rates for the service described by CPT codes 78431, 78432, and 78433 are proposed to be based on available CY 2023 claims data. CPT code 78431 had over 26,000 single frequency claims in CY 2023. The geometric mean for CPT code 78431 is approximately $2,350. The geometric mean falls within APC 1522 (New Technology—Level 22 ($2,001-$2,500)) with a payment rate of $2,250.50, which is the current APC assignment for this service. Therefore, we propose, for CY 2025, to assign CPT code 78431 to APC 1522 (New Technology—Level 22 ($2,001-$2,500)) with a payment rate of $2,250.50.

There were only 19 single frequency claims in CY 2023 for CPT code 78432. As this is below the threshold of 100 claims for a service within a year, we propose to apply our universal low volume New Technology APC policy and use the highest of the geometric mean cost, arithmetic mean cost, or median cost based on up to 4 years of claims data to assign CPT code 78432 to the appropriate New Technology APC. Using available claims data from CY 2021, CY 2022, and CY 2023, our analysis found the geometric mean cost of the service is approximately $1,762, the arithmetic mean cost of the service is approximately $1,923, and the median cost of the service is approximately $1,544. The arithmetic mean is the statistical methodology that estimates the highest cost for the service. The arithmetic mean cost of $1,923, is an amount that is above the cost band for APC 1520 (New Technology—Level 20 ($1,801-$1,900)), where the procedure is currently assigned. Therefore, we propose, for CY 2025, to assign CPT code 78432 to APC 1521 (New Technology—Level 21 ($1,901-$2,000)) with a payment rate of $1950.50.

There were over 1,400 single frequency claims for CPT code 78433 in CY 2023. The geometric mean for CPT code 78433 is approximately $2,010, which is an amount that is above the current New Technology APC cost band APC 1521 (New Technology—Level 21 ($1,901-$2,000)) to which it is assigned. Therefore, for CY 2025, we propose to reassign CPT code 78433 to APC 1522 (New Technology—Level 22 ($2,001-$2,500)) with a payment rate of $2,250.50.

Please refer to Table 18 below for the proposed OPPS New Technology APC and status indicator assignments for CPT codes 78431, 78432, and 78433 for CY 2025. The proposed CY 2025 payment rates can be found in Addendum B to the CY 2025 OPPS/ASC proposed rule via the internet on the CMS website.

The CardiAMP cell therapy IDE studies are two randomized, double-blinded, controlled IDE studies: the CardiAMP Cell Therapy Chronic Myocardial Ischemia Trial  [ 16 ] and the CardiAMP Cell Therapy Heart Failure Trial. [ 17 ] The two trials are designed to investigate the safety and efficacy of autologous bone marrow mononuclear cell treatment for the following: (1) patients with medically refractory and symptomatic ischemic cardiomyopathy; and (2) patients with refractory angina pectoris and chronic myocardial ischemia. On April 1, 2022, we established HCPCS code C9782 to describe the CardiAMP cell therapy IDE studies and assigned HCPCS code C9782 to APC 1574 (New Technology—Level 37 ($9,501-$10,000)) with the status indicator “T.” We subsequently revised the descriptor for HCPCS code C9782 to: (Blinded procedure for New York Heart Association (NYHA) Class II or III heart failure, or Canadian Cardiovascular Society (CCS) Class III or IV chronic refractory angina; transcatheter intramyocardial transplantation of autologous bone marrow cells ( e.g., mononuclear) or placebo control, autologous bone marrow harvesting and preparation for transplantation, left heart catheterization including ventriculography, all laboratory services, and all imaging with or without guidance ( e.g., transthoracic echocardiography, ultrasound, Start Printed Page 59262 fluoroscopy), all device(s), performed in an approved Investigational Device Exemption (IDE) study) to clarify the inclusion of the Helix trans endocardial injection catheter device in the descriptor. Additionally, we determined that APC 1590 (New Technology—Level 39 ($15,001-$20,000)) most accurately accounted for the resources associated with furnishing the procedure described by HCPCS code C9782.

For CY 2025, the OPPS payment rates are proposed to be based on available CY 2023 claims data. We have identified three single frequency paid claims for C9782 for ratesetting for CY 2025. As this is below the threshold of 100 claims for a service within a year, we would designate C9782 as a low volume service and apply our universal low volume APC policy. Under this policy, we would use the highest of the geometric mean cost, arithmetic mean cost, or median cost based on up to 4 years of claims data to assign CPT codes C9782 to the appropriate New Technology APC. Our analysis of the data found the geometric mean cost of the service is approximately $18,045, the arithmetic mean cost of the service is approximately $18,332, and the median cost of the service is approximately $20,394. The median was the statistical methodology that estimated the highest cost for the service. However, because there are only three claims for HCPCS code C9782 from the CY 2023 claims data, we have concerns that the universal low volume APC policy calculations do not accurately capture the cost of the service. Given our proposal to maintain current New Technology APC assignments for CY 2025 for New Technology APC services with fewer than 10 claims in the 4-year lookback period applicable for the universal low-volume APC policy, we therefore propose to continue to assign HCPCS code C9782 to New Technology APC 1590 with a payment rate of $17,050.50.

Please refer to Table 19 below for the proposed OPPS New Technology APC and status indicator assignments for HCPCS code C9782 for CY 2025. The proposed CY 2025 payment rates can be found in Addendum B to this proposed rule via the internet on the CMS website.

Atherosclerosis Imaging-Quantitative Computer Tomography (AI-QCT) is a Software as a Service (SaaS) that assesses the extent of coronary artery disease severity. This procedure is performed to quantify the extent of coronary plaque and stenosis in patients who have undergone coronary computed tomography analysis (CCTA). The AMA CPT Editorial Panel established the following four codes associated with this service, effective January 1, 2021:

0623T: Automated quantification and characterization of coronary atherosclerotic plaque to assess severity of coronary disease, using data from coronary computed tomographic angiography; data preparation and transmission, computerized analysis of data, with review of computerized analysis output to reconcile discordant data, interpretation and report.

0624T: Automated quantification and characterization of coronary atherosclerotic plaque to assess severity of coronary disease, using data from coronary computed tomographic angiography; data preparation and transmission.

0625T: Automated quantification and characterization of coronary atherosclerotic plaque to assess severity of coronary disease, using data from coronary computed tomographic angiography; computerized analysis of data from coronary computed tomographic angiography.

0626T: Automated quantification and characterization of coronary atherosclerotic plaque to assess severity of coronary disease, using data from coronary computed tomographic angiography; review of computerized analysis output to reconcile discordant data, interpretation and report.

Of these four CPT codes, only CPT code 0625T was determined to be separately payable in the OPPS and was assigned to status indicator = “S” (Procedure or Service, Not Discounted Start Printed Page 59263 When Multiple) starting October 1, 2022. We assigned CPT code 0625T to a separately payable status indicator based on the technology and its potential utilization in the HOPD setting, our evaluation of the service, as well as input from our medical advisors. The procedure was assigned to APC 1511 (New Technology—Level 11 ($900-$1,000)) with a payment rate of $950.50.

For CY 2024, the OPPS payment rates were proposed to be based on available CY 2022 claims data. There were 37 claims for CPT code 0625T during this time period. As this was below the threshold of 100 claims for a service within a year, we explained that we could propose to designate CPT code 0625T as a low volume service under our universal low volume New Technology APC policy and use the highest of the geometric mean cost, arithmetic mean cost, or median cost based on up to 4 years of claims data to assign code 0625T to the appropriate New Technology APC. We found the geometric mean cost for the service to be approximately $3.70, the arithmetic mean cost to be approximately $4.10, and the median cost to be approximately $3.50. Under our universal low volume New Technology APC policy, we would use the greatest of the statistical methodologies, the arithmetic mean, to assign CPT code 0625T to New Technology 1491 (New Technology Level 1A—(0-$10)) with a payment rate of $5.00. However, we acknowledged that, because CPT code 0625T was only made separately payable as part of the OPPS in October 2022, and, therefore, the claims available only reflect two months of data, we were concerned that we do not have sufficient claims data to justify reassignment to another New Technology APC ( 66 FR 69902 ). Therefore, consistent with our current policy to retain services within New Technology APC groups until we obtain sufficient claims data to justify reassignment ( 66 FR 59902 ), for CY 2024 we adopted as final our proposal to maintain CPT code 0625T's current assignment to APC 1511 (New Technology—Level 11 ($901-$1,000) with a payment rate of $950.50.

For setting CY 2025 payment rates, there were only three separately payable claims in the CY 2023 data reported for CPT code 0625T that have a geometric mean of approximately $180, which is substantially lower than the current payment rate of $950.50. In CY 2022 and CY 2023, there are a total of 40 separately payable claims reported for CPT code 0625T, but it is unlikely that a service with a current payment rate of $950.50 would have a geometric mean of $4.20, an arithmetic mean of $6.60, and a median of $3.52. These findings lead to uncertainty about the appropriate payment rate for the service described by CPT code 0625T. A review of the evidence submitted by the developer of the procedure when this procedure was originally assigned to a New Technology APC before any claims data were available indicated the procedure had a cost between $901 and $1,000. Claims assigned to CPT code 0625T from CY 2021 and CY 2022, indicate that the cost of the procedure is less than $10, which would not appear to cover basic cost of this procedure including computing time, generating a report, and having medical personnel interpret the report. For CY 2023, the geometric mean cost of approximately $180 based on three claims may better reflect the cost of the procedure described by CPT code 0625T, but there are not enough claims to be confident about the result. Therefore, we propose to use our authority under section 1833(t)(2)(E) for CY 2025 to continue to assign CPT code 0625T to APC 1511 (New Technology—Level 11 ($901-$1,000) with a payment rate of $950.50 based on the data currently available to us, which we believe best reflects the cost of the service as described by the New Technology APC application.

Refer to Table 20 below for the proposed OPPS New Technology APC and status indicator assignments for CPT code 0625T for CY 2025. The proposed CY 2025 payment rates can be found in Addendum B to the CY 2025 OPPS/ASC proposed rule via the internet on the CMS website.

On July 1, 2020, we established HCPCS code C9760 (Non-randomized, non-blinded procedure for nyha class ii, iii, iv heart failure; transcatheter implantation of interatrial shunt, including right and left heart catheterization, transeptal puncture, trans-esophageal echocardiography (tee)/intracardiac echocardiography (ice), and all imaging with or without guidance (for example, ultrasound, fluoroscopy) performed in an approved investigational device exemption (ide) study, performed in an approved investigational device exemption (ide) study) to facilitate payment for the Start Printed Page 59264 implantation of the Corvia Medical interatrial shunt.

As we stated in the CY 2021 OPPS final rule with comment period ( 85 FR 85947 ), we believe that similar resources and device costs are involved with the Corvia Medical interatrial shunt procedure and the V-Wave interatrial shunt procedure. Unlike the V-Wave interatrial shunt, which is implanted half the time the associated interatrial shunt procedure described by HCPCS code C9758 is billed, the Corvia Medical interatrial shunt is implanted every time the associated interatrial shunt procedure (HCPCS code C9760) is billed. Therefore, for CY 2021, we assigned HCPCS code C9760 to New Technology APC 1592 (New Technology—Level 41 ($25,001-$30,000)) with a payment rate of $27,500.50. We also modified the code descriptor for HCPCS code C9760 to remove the phrase “or placebo control,” from the descriptor. In CY 2022, we generally used the same claims data as was used in the CY 2021 OPPS final rule to set the payment rates for that year. Accordingly, because there were no claims for this service in CY 2019, we continued to assign HCPCS code C9760 to New Technology APC 1592 in CY 2022. There continued to be no claims data for this service in CYs 2021 or 2022, so we continued to assign HCPCS code C9760 to New Technology APC 1592 in CY 2023 and CY 2024, the years for which we used CY 2021 and CY 2022 data, respectively, for ratesetting.

For CY 2025, the OPPS payment rates are proposed to be based on available CY 2023 claims data. There were no claims for HCPCS code C9760 in CY 2023. Therefore, we propose to continue assigning HCPCS code C9760 to New Technology APC 1592.

Refer to Table 21 below for the proposed OPPS New Technology APC and status indicator assignments for CPT code C9760. The proposed CY 2025 payment rates can be found in Addendum B to this proposed rule via the internet on the CMS website.

Effective January 1, 2022, CPT code 0693T (Comprehensive full body computer-based markerless 3D kinematic and kinetic motion analysis and report) is associated with the DARI Motion Procedure, a service that provides human motion analysis to aid clinicians in pre- and post-operative surgical intervention and in making other treatment decisions, including selecting the best course of physical therapy and rehabilitation. The technology consists of eight cameras that surround a patient, which send live video to a computer workstation that analyzes the video to create a 3D reconstruction of the patient without the need for special clothing, markers, or devices attached to the patient's clothing or skin. For CY 2022, we assigned CPT code 0693T to New Technology APC 1505 (New Technology—Level 5 ($301-$400)). For CY 2023, the OPPS payment rates were based on claims submitted between January 1, 2021, and December 31, 2021, processed through June 30, 2022. Due to its effective date of January 1, 2022, there were no claims available for CPT code 0693T for rate setting in CY 2023. Therefore, in CY 2023, we continued to assign CPT code 0693T to New Technology APC 1505. For CY 2024, there were no claims available, so we again continued to assign CPT code 0693T to New Technology APC 1505.

For CY 2025, the OPPS payment rates are proposed based on available CY 2023 claims data. Although CPT code 0693T was effective January 1, 2022, we have no claims data at this time. Because we have no claims data, for CY 2025, we propose to continue to assign CPT code 0693T to APC 1505 with a proposed payment rate of $350.50.

Please refer to Table 22 below for the proposed OPPS New Technology APC and status indicator assignments for CPT code 0693T for CY 2025. The proposed CY 2025 payment rates can be found in Addendum B to this proposed rule via the internet on the CMS website.

Effective October 1, 2023, CMS established HCPCS code C9789 (Instillation of anti-neoplastic pharmacologic/biologic agent into renal pelvis, any method, including all imaging guidance, including volumetric measurement if performed) and assigned it to New Technology APC 1559 (New Technology—Level 22 ($2,001-$2,500)), with a payment rate of $2,250.50 based on our review of the clinical and resource characteristics of this service.

This code may be used to describe the unique procedure associated with the administration of the drug described by HCPCS code J9281 (Mitomycin pyelocalyceal instillation, 1 mg) or similar products. HCPCS code J9281 may be used to describe the product, Jelmyto (mitomycin for pyelocalyceal solution). The FDA approved Jelmyto in 2020, and the FDA approved indication and usage for Jelmyto is as an alkylating drug indicated for the treatment of adult patients with low-grade Upper Tract Urothelial Cancer (LG-UTUS). [ 18 ]

Because we created HCPCS code C9789 effective October 1, 2023, we have limited claims data from CY 2023 available for CY 2025 rulemaking. Specifically, we only have 6 claims available. Given our proposal to maintain current New Technology APC assignments for CY 2025 for New Technology APC services with fewer than 10 claims in the 4-year lookback period applicable for the universal low-volume APC policy, we therefore propose to continue to assign HCPCS code C9789 to New Technology APC 1559 (New Technology—Level 22 ($2,001-$2,500)).

Please refer to Table 23 below for the proposed OPPS New Technology APC and status indicator assignments for CPT code C9789 for CY 2025. The proposed CY 2025 payment rates can be found in Addendum B to this proposed rule via the internet on the CMS website.

The LimFlow TADV procedure, which is described by CPT code 0620T (Endovascular venous arterialization, tibial or peroneal vein, with transcatheter placement of intravascular stent graft(s) and closure by any method, including percutaneous or open vascular access, ultrasound guidance for vascular access when performed, all catheterization(s) and intraprocedural roadmapping and imaging guidance necessary to complete the intervention, all associated radiological supervision and interpretation, when performed), is an endovascular procedure that is used to treat patients with chronic limb- Start Printed Page 59266 threatening ischemia. According to the developer, these patients are no longer eligible for conventional endovascular or open bypass surgery to treat their artery blockage, and without this procedure, they are likely to face limb amputation.

CPT code 0620T was established in January 2021 and was assigned to APC 5194 (Level 4 Endovascular Procedures) with a payment rate of approximately $17,400, which is the highest-paying APC for endovascular procedures. While we proposed to continue to assign CPT code 0620T to APC 5194 for CY 2024, we finalized a reassignment to a New Technology APC with a higher payment rate based on comments received expressing concern that the low payment rate of the procedure would discourage providers from performing the procedure and deny access to the procedure. To determine the appropriate New Technology APC assignment for CY 2024, we looked at the available cost information. There were only 15 claims for the procedure for CY 2021 and CY 2022, so the LimFlow TADV procedure was subject to our new technology procedure low volume APC policy. An analysis of the median, arithmetic mean, and geometric mean of CPT code 0620T for CY 2024 rulemaking found that the median was approximately $25,800, the arithmetic mean was approximately $28,600, and the geometric mean was approximately $26,700. Because the arithmetic mean had the highest value of the three cost statistics, for CY 2024, we assigned CPT code 0620T to New Technology APC 1578 (New Technology—Level 41 ($25,001-$30,000)) with a payment rate of $27,500.50.

For CY 2025, the OPPS payment rates are proposed to be based on available CY 2023 claims data. There are only six single frequency claims for CPT code 0620T in the CY 2023 claims data. As this is below the threshold of 100 claims for a service within a year, we propose to again apply our universal low volume APC policy and use the highest of the geometric mean cost, arithmetic mean cost, or median cost based on up to 4 years of claims data to assign HCPCS code 0620T to the appropriate New Technology APC. Considering the available claims data for HCPCS code 0620T, the arithmetic mean is approximately $35,000; the median is approximately $36,000; and the geometric mean cost is approximately $33,000. Of these, the median is the statistical methodology that estimates the highest cost for the service. The payment rate calculated using this methodology falls within the cost band for New Technology APC 1579 (New Technology—Level 42 ($30,001-$40,000)) with a payment rate of $35,000.50. Therefore, for CY 2024, we propose to assign HCPCS code 0620T to New Technology APC 1579.

Please refer to Table 24 for the proposed New Technology APC and status indicator assignments for CPT code 0620T. The proposed CY 2025 payment rates can be found in Addendum B to this proposed rule via the internet on the CMS website.

CPT code 0686T (Histotripsy ( i.e., non-thermal ablation via acoustic energy delivery) of malignant hepatocellular tissue, including image guidance) was first effective July 1, 2021, and describes the histotripsy service associated with the use of the HistoSonics system. Histotripsy is a non-invasive, non-thermal, mechanical process that uses a focused beam of sonic energy to destroy cancerous liver tumors and is currently in a non-randomized, prospective clinical trial to evaluate the efficacy and safety of the device for the treatment of primary or metastatic tumors located in the liver. [ 19 ] When HCPCS code 0686T was first effective, the histotripsy procedure was designated as a Category A IDE clinical study (NCT04573881). Since devices in Category A IDE studies are excluded from Medicare payment, payment for CPT code 0686T only reflected the cost of the service that is performed (absent the cost of the device) each time it is reported on a claim. On March 2, 2023, the histotripsy IDE clinical study was re-designated as a Category B (Non-experimental/Investigational) IDE study. Due to this new designation, payment for CPT code 0686T in CY 2024 reflects payment for both the service that is performed and the device used each time it is reported on a claim. For CY 2024, we assigned CPT code 0686T to Start Printed Page 59267 New Technology APC 1576 (New Technology—Level 39 ($15,001-$20,000)) with a payment rate of $17,500.50.

For CY 2025, OPPS payment rates are proposed to be based on available CY 2023 claims data. We have identified one claim for CPT code 0686T within the CY 2023 claims data. As the available claims data is below the threshold of 100 claims for a service within a year, we would propose to designate CPT code 0686T as a low volume service under our universal low volume APC policy, and use the highest of the geometric mean cost, arithmetic mean cost, or median cost to assign CPT code 0686T to the appropriate New Technology APC. However, because there is only a single claim in the CY 2023 data, we have concerns that the universal low volume APC policy calculations do not accurately capture the cost of the service.

Given our proposal to maintain current New Technology APC assignments for CY 2025 for New Technology APC services with fewer than 10 claims in the 4-year lookback period applicable for the universal low-volume APC policy, and based on the fact that there have only been 3 claims for CPT code 0686T in the prior 4-year period, we propose to continue to assign CPT code 0686T to APC 1576 (New Technology—Level 39 ($15,001-$20,000)) with a payment rate of $17,500.50 as shown in Table 25.

Please refer to Table 25 below for the proposed OPPS New Technology APC and status indicator assignments for CPT code 0686T for CY 2025. The proposed CY 2025 payment rates can be found in Addendum B to this proposed rule.

Effective July 1, 2021, CPT codes 0648T (Quantitative magnetic resonance for analysis of tissue composition ( e.g., fat, iron, water content), including multiparametric data acquisition, data preparation and transmission, interpretation and report, obtained without diagnostic mri examination of the same anatomy ( e.g., organ, gland, tissue, target structure) during the same session; single organ) and 0649T (Quantitative magnetic resonance for analysis of tissue composition ( e.g., fat, iron, water content), including multiparametric data acquisition, data preparation and transmission, interpretation and report, obtained with diagnostic mri examination of the same anatomy ( e.g., organ, gland, tissue, target structure); single organ (list separately in addition to code for primary procedure)) are associated with the LiverMultiScan service. LiverMultiScan is a Software as a medical Service (SaaS) that is intended to aid the diagnosis and management of chronic liver disease, the most prevalent of which is Non-Alcoholic Fatty Liver Disease (NAFLD). It provides standardized, quantitative imaging biomarkers for the characterization and assessment of inflammation, hepatocyte ballooning, and fibrosis, as well as steatosis, and iron accumulation. LiverMultiScan receives MR images acquired from patients' providers and analyzes the images using their proprietary Artificial Intelligence (AI) algorithms. It then sends the providers a quantitative metric report of the patient's liver fibrosis and inflammation. In accordance with our SaaS add-on codes policy ( 87 FR 72032 to 72033), SaaS CPT add-on codes are assigned to the same APCs and status indicators as their standalone codes. Thus, CPT code 0649T, the add-on code for LiverMultiScan, is assigned to the identical APC and status indicator as CPT code 0648T, the standalone code for the same service. For CY 2024, we assigned CPT codes 0648T and 0649T to New Technology APC 1511 (New Technology—Level 11 ($901-$1,000) with a payment rate of $950.50.

For CY 2025, the OPPS payment rates are proposed to be based on available CY 2023 claims data. We identified 71 claims for CPT code 0648T and 72 claims CPT code 0649T for CY 2023. As this is below the threshold of 100 claims for each code within a year, we propose to apply our universal low volume APC policy and use the highest of the geometric mean cost, arithmetic mean cost, or median cost based on up to 4 years of claims data to assign CPT codes 0648T and 0649T to the appropriate New Technology APC. There are available claims data from CY 2021 and CY 2022 for CPT codes 0648T and 0649T. Our analysis of the combined data, 114 claims for CPT code 0648T and 115 claims for CPT code 0649T, yielded a geometric mean cost of approximately $180, an arithmetic mean cost of approximately $234, and a median cost of approximately $197. We believe it is appropriate to utilize our universal low volume APC policy to assign the LiverMultiScan service to a New Technology APC because we believe that the combined claims data from CY 2021 to CY 2023 provide sufficient claims to capture the cost of the service. The arithmetic mean was the statistical methodology that estimated the highest cost for CPT codes 0648T and 0649T. Therefore, we Start Printed Page 59268 propose to reassign CPT codes 0648T and 0649T to New Technology APC 1504 (New Technology—Level 4 ($201-$300)) with a payment rate of $250.50 as shown in Table 26.

CPT codes 0721T (Quantitative computed tomography (CT) tissue characterization, including interpretation and report, obtained without concurrent CT examination of any structure contained in previously acquired diagnostic imaging) and 0722T (Quantitative computed tomography (CT) tissue characterization, including interpretation and report, obtained with concurrent CT examination of any structure contained in the concurrently acquired diagnostic imaging dataset (list separately in addition to code for primary procedure)) became effective July 1, 2022, and are associated with the Optellum LCP technology. The Optellum LCP applies an algorithm to a patient's CT scan to produce a raw risk score for a patient's pulmonary nodule. The physician uses the risk score to quantify the risk of lung cancer and to determine what the next management step should be for the patient (for example, CT surveillance versus invasive procedure). In accordance with our SaaS add-on codes policy ( 87 FR 72032 to 72033), SaaS CPT add-on codes are assigned to the same APCs and status indicators as their standalone codes. Thus, CPT code 0722T, the add-on code for the Optellum LCP service, is assigned to the identical APC and status indicator as CPT code 0721T, the standalone code for the same service. For CY 2024, we assigned CPT codes 0721T and 0722T to APC New Technology 1508 (New Technology—Level 8 ($601-$700)).

For CY 2025, the OPPS payment rates are proposed to be based on available CY 2023 claims data. We identified three claims for CPT codes 0721T and 0722T for ratesetting for CY 2025. As this is below the threshold of 100 claims for a service within a year, we would usually propose to apply our universal low volume APC policy and use the highest of the geometric mean cost, arithmetic mean cost, or median cost based on up to 4 years of claims data to assign CPT codes 0721T and 0722T to the appropriate New Technology APC. There are available claims data only from CY 2023 for CPT codes 0721T and 0722T. Our analysis of the data for CPT code 0721T found the geometric mean cost of the service is approximately $84, the arithmetic mean cost of the service is approximately $98, and the median cost of the service is approximately $130. We did not identify any reported claims for CPT code 0722T. However, because there are only three claims for the Optellum LCP service and these claims show a much lower cost than would be expected based on the current APC assignment of this service, we have concerns that the universal low volume APC policy calculations do not accurately capture the cost of the service. We believe it is appropriate to continue assigning the Optellum LCP service to its current APC assignment determined from the New Technology APC application review due to insufficient claims data to capture the cost of this service at this time. Given our proposal to maintain current New Technology APC assignments for CY 2025 for New Technology APC services with fewer than 10 claims in the 4-year lookback period applicable for the universal low-volume APC policy, we propose to continue to assign CPT codes Start Printed Page 59269 0721T and 0722T to New Technology APC 1508 (New Technology—Level 8 ($601-$700)) with a proposed payment rate of $650.50.

Please refer to Table 27 below for the proposed OPPS New Technology APC and status indicator assignments for HCPCS codes 0721T and 0722T for CY 2025. The proposed CY 2025 payment rates can be found in Addendum B to this proposed rule via the internet on the CMS website.

Effective January 1, 2022, CPT codes 0697T (Quantitative magnetic resonance for analysis of tissue composition ( e.g., fat, iron, water content), including multiparametric data acquisition, data preparation and transmission, interpretation and report, obtained without diagnostic mri examination of the same anatomy ( e.g., organ, gland, tissue, target structure) during the same session; multiple organs) and 0698T (Quantitative magnetic resonance for analysis of tissue composition ( e.g., fat, iron, water content), including multiparametric data acquisition, data preparation and transmission, interpretation and report, obtained with diagnostic mri examination of the same anatomy ( e.g., organ, gland, tissue, target structure); multiple organs (list separately in addition to code for primary procedure)) are associated with the CoverScan Software as a medical Service (SaaS). This service is a medical image management and processing software package that analyzes MR data and provides quantified metrics of multiple organs such as the heart, lungs, liver, spleen, pancreas, and kidney. In accordance with our SaaS add-on codes policy ( 87 FR 72032 to 72033), SaaS CPT add-on codes are assigned to the same APCs and status indicators as their standalone codes. Thus, CPT code 0698T, the add-on code for CoverScan is be assigned to the identical APC and status indicator as CPT code 0697T, the standalone code for the same service. For CY 2024, we assigned CPT codes 0697T and 0698T to New Technology APC 1511 (New Technology—Level 11 ($900-$1,000)).

For CY 2025, the OPPS payment rates are proposed to be based on available CY 2023 claims data. We identified 46 claims for CPT code 0698T and no claims for CPT code 0697T in CY 2023. As this is below the threshold of 100 claims for a service within a year, we propose to apply our universal low volume APC policy and use the highest of the geometric mean cost, arithmetic mean cost, or median cost based on up to 4 years of claims data to assign CPT codes 0697T and 0698T to the appropriate New Technology APC. There are available claims data from CY 2022 and CY 2023 for CPT code 0697T and 0698T. Our analysis of the combined data, zero claims for CPT code 0697T and 46 claims for CPT code 0698T, yielded a geometric mean cost of approximately $444, an arithmetic mean cost of approximately $622, and a median cost of approximately $786. The median cost is the statistical methodology that estimates the highest cost for CPT codes 0697T and 0698T. Therefore, we propose, for CY 2025, to reassign CPT codes 0697T and 0698T to APC 1509 (New Technology—Level 9 ($701-$800)) with a payment rate of $750.50.

Refer to Table 28 below for the proposed OPPS New Technology APC and status indicator assignments for CPT codes 0697T and 0698T for CY 2025. The proposed CY 2025 payment rates can be found in Addendum B to this proposed rule via the internet on the CMS website.

Effective July 1, 2022, CPT codes 0723T (Quantitative magnetic resonance cholangiopancreatography (QMRCP) including data preparation and transmission, interpretation and report, obtained without diagnostic magnetic resonance imaging (MRI) examination of the same anatomy ( e.g., organ, gland, tissue, target structure) during the same session) and 0724T (Quantitative magnetic resonance cholangiopancreatography (QMRCP), including data preparation and transmission, interpretation and report, obtained with diagnostic magnetic resonance imaging (MRI) examination of the same anatomy ( e.g., organ, gland, tissue, target structure) (list separately in addition to code for primary procedure)) are associated with the QMRCP Software as a medical Service (SaaS). The service performs quantitative assessment of the biliary tree and gallbladder. It uses a proprietary algorithm that produces a three-dimensional reconstruction of the biliary tree and pancreatic duct and also provides precise quantitative information of biliary tree volume and duct metrics. In accordance with our SaaS add-on codes policy ( 87 FR 72032 to 72033), SaaS CPT add-on codes are assigned to the same APCs and status indicators as their standalone codes. Consistent with our SaaS add-on codes policy, CPT code 0724T, the add-on code for QMRCP is assigned to the identical APC and status indicator as CPT code 0723T, the standalone code for the same service. For CY 2024, we assigned CPT codes 0723T and 0724T to New Technology APC 1511 (New Technology—Level 11 ($900-$1,000)).

For CY 2025, the OPPS payment rates are proposed to be based on available CY 2023 claims data. We identified 3 claims for CPT code 0724T and no claims for CPT code 0723T in CY 2023. As this is below the threshold of 100 claims for a service within a year, we would usually propose to apply our universal low volume APC policy and use the highest of the geometric mean cost, arithmetic mean cost, or median cost based on up to 4 years of claims data to assign CPT codes 0723T and 0724T to the appropriate New Technology APC. There is only a single claim from CY 2022 for CPT code 0724T and no claims for CPT code 0723T. For CY 2023, we received 3 claims for CPT code for CPT 0724T and no claims for CPT code 0723T. Our analysis of the combined CY 2022 and CY 2023 data for CPT code 0723T and 0724T found the geometric mean cost of the service is approximately $26, the arithmetic mean cost of the service is approximately $26, and the median cost of the service is approximately $27. However, because there are only three claims for CPT codes 0723T and 0724T and these claims show costs far below what would be expected for these services given their current APC assignments, we have concerns that the universal low volume APC policy calculations do not accurately capture the cost of the service. Given our proposal to maintain current New Technology APC assignments for CY 2025 for New Technology APC services with fewer than 10 claims in the 4-year lookback period applicable for the universal low-volume APC policy, we propose to continue to assign the CPT codes 0723T and 0724T to New Technology APC 1511 (New Technology—Level 11 ($901-$1,000)) with a payment rate of $950.50.

Refer to Table 29 below for the proposed OPPS New Technology APC and status indicator assignments for Start Printed Page 59271 CPT codes 0723T and 0724T for CY 2025. The proposed CY 2025 payment rates can be found in Addendum B to this proposed rule via the internet on the CMS website.

CPT code 0662T (Scalp cooling, mechanical; initial measurement and calibration of cap) became effective on July 1, 2021, to describe initial measurement and calibration of a scalp cooling device for use during chemotherapy administration to prevent hair loss. According to Medicare's National Coverage Determination (NCD) policy, specifically, NCD 110.6 (Scalp Hypothermia During Chemotherapy to Prevent Hair Loss), the scalp cooling cap itself is classified as an incident to supply to a physician service, and would not be paid under the OPPS; however, interested parties have indicated that there are substantial resource costs of around $1,900 to $2,400 associated with calibrating and fitting the cap. CPT guidance states that CPT code 0662T should be billed once per chemotherapy session, which we interpret to mean once per course of chemotherapy. Therefore, if a course of chemotherapy involves, for example, 6 or 18 sessions, HOPDs should report CPT 0662T only once for that 6 or 18 therapy sessions. For CY 2022, we assigned CPT code 0662T to APC New Technology 1520 (New Technology—Level 20 ($1,801-$1,900)) with a payment rate of $1,850.50. For CY 2023, we did not have any claims data, so we continued to assign CPT code 0662T to APC 1520. For CY 2024 we finalized reassignment of CPT code 0662T to APC 1514 (New Technology—Level 14 ($1,201-$1,300)) with a payment rate of $1,250.50 based on 11 single frequency claims.

For CY 2025, the OPPS payment rates are proposed to be based on available CY 2023 claims data. The Scalp Cooling service became effective in the OPPS in CY 2022, and we have identified 38 single frequency paid claims for CPT code 0662T for CY 2023. As this is below the threshold of 100 claims for a service within a year, we propose to designate CPT code 0662T as a low volume service under our universal low volume APC policy and to use the highest of the geometric mean cost, arithmetic mean cost, or median cost based on up to 4 years of claims data to assign the service to the appropriate New Technology APC. Based on our review of the available claims, the geometric mean cost for CPT code 0662T is approximately $841; the median is approximately $1,351; and the arithmetic mean is approximately $1,361. Therefore, for CY 2025, we propose to designate this service as a low volume service under our universal low volume APC policy and to reassign CPT code 0662T to APC 1515 (New Technology—Level 15 ($1,301-$1,400)) with a payment rate of $1,350.50 for CY 2025 based on the arithmetic mean of approximately $1,361.

Refer to Table 30 below for the current and proposed OPPS New Technology APC and status indicator assignments for CPT code 0662T. The proposed CY 2025 payment rates can be found in Addendum B to this proposed rule via the internet on the CMS website.

On March 5, 2019, FDA approved Spravato TM (esketamine) nasal spray, used in conjunction with an oral antidepressant, for treatment of depression in adults who have tried other antidepressant medicines but have not benefited from them (treatment-resistant depression (TRD)). This is the first FDA approval of esketamine for any use.

Esketamine is a noncompetitive N-methyl D-aspartate (NMDA) receptor antagonist. It is a nasal spray supplied as an aqueous solution of esketamine hydrochloride in a vial with a nasal spray device. Each device delivers two sprays containing a total of 28 mg of esketamine. Patients would require either two (2) devices (for a 56 mg dose) or three (3) devices (for an 84 mg dose) per treatment.

Because of the risk of serious adverse outcomes resulting from sedation and dissociation caused by esketamine nasal spray administration, and the potential for misuse of the product, it is only available through a restricted distribution system under a Risk Evaluation and Mitigation Strategy (REMS). A REMS is a drug safety program that the FDA can require for certain medications with serious safety concerns to help ensure the benefits of the medication outweigh its risks. The Spravato TM REMS program requires the esketamine nasal spray to be dispensed and administered to enrolled patients in health care settings that are certified in the REMS. See www.fda.gov for more information regarding the Spravato TM REMS program compliance requirements.

A treatment session of esketamine consists of instructed nasal self-administration by the patient followed by a period of at least 2 hours post-administration observation of the patient under direct supervision of a health care professional in the certified health care setting. Refer to the CY 2020 PFS final rule and interim final rule for more information about supervised visits for esketamine nasal spray self-administration ( 84 FR 63102 through 63105 ).

To facilitate prompt beneficiary access to the new, potentially life-saving treatment for TRD using esketamine, we created two new HCPCS G codes, G2082 and G2083, effective January 1, 2020. HCPCS code G2082 is for an outpatient visit for the evaluation and management of an established patient who requires the supervision of a physician or other qualified health care professional and provision of up to 56 mg of esketamine through nasal self-administration and includes two hours of post-administration observation. For CY 2020, HCPCS code G2082 was assigned to New Technology APC 1508 (New Technology—Level 8 ($601-$700)) with a payment rate of $650.50. HCPCS code G2083 describes a similar service to HCPCS code G2082 but involves the administration of more than 56 mg of esketamine. For CY 2020, HCPCS code G2083 was assigned to New Technology APC 1511 (New Technology—Level 11 ($901-$1,000)) with a payment rate of $950.50. Updates to the APC assignments for G2082 and G2083 have been made in past rules. See the CY 2021 OPPS/ASC final rule with comment period ( 85 FR 85948 ), CY 2022 OPPS/ASC final rule with comment period ( 86 FR 63538 ), CY 2023 OPPS/ASC final rule with comment period ( 87 FR 71816-71817 ), and CY 2024 OPPS/ASC final rule with comment period ( 88 FR 81628-81630 ) for these updates.

For CY 2025, the OPPS payment rates are proposed based on available CY 2023 claims data as the available single frequency claims exceed the 100 claims threshold generally used for our universal low volume policy. Therefore, for CY 2025, we propose to assign HCPCS codes G2082 and G2083 to New Technology APCs based on the codes' geometric mean costs. Specifically, we propose to assign HCPCS code G2082 to New Technology APC 1512 (New Technology—Level 12 ($1,001-$1,100)) with a payment rate of $1,050.50 based on its geometric mean cost of $1,087, which was calculated using the available 424 single frequency claims from CY 2023 claims data. We also propose to assign HCPCS code G2083 to New Technology APC 1518 (New Technology—Level 18 ($1,601-$1,700)) with a payment rate of $1,650.50 based on its geometric mean cost of $1,643, which was calculated using the available 2,482 single frequency claims from CY 2023 claims data. We note, as we have begun to gather adequate claims data on these codes, we are considering placing HCPCS codes G2082 and G2083 in clinical APCs through future rulemaking.

The proposed New Technology APC and status indicator assignments for HCPCS codes G2082 and G2083 are shown in Table 31. The proposed CY 2025 payment rates for these HCPCS codes can be found in Addendum B to this proposed rule.

HCPCS code C9780 (Insertion of central venous catheter through central venous occlusion via inferior and superior approaches ( e.g., inside-out technique), including imaging guidance) describes the procedure associated with the use of the Surfacer® Inside-Out® Access Catheter System that is designed to address central venous occlusion. HCPCS code C9780 was established on October 1, 2021, and since its establishment the code has been assigned to New Technology APC 1534 (New Technology—Level 34 ($8,001-$8,500)).

For CY 2025, there were only 3 single frequency claims in CY 2023 for HCPCS code C9780. There were no available claims from CY 2021 or CY 2022. Given our proposal to maintain current New Technology APC assignments for CY 2025 for New Technology APC services with fewer than 10 claims in the 4-year lookback period applicable for the universal low-volume APC policy, we propose to continue to assign HCPCS code C9780 to APC 1534 (New Technology—Level 34 ($8,001-$8,500))) with a payment rate of $8,250.50. Refer to Table 32 for the proposed New Technology APC and status indicator assignments for HCPCS code C9780.

The Transcatheter Atrial Shunt System (TASS) is a nitinol self-expanding cardiovascular implant consisting of four arms including two left atrial (LA) arms and two coronary sinus (CS) arms placed between the left atrium and coronary sinus to create a 7mm flow diameter channel for blood to flow from the high pressure region of the left atrium to the lower pressure region of the right atrium via the coronary sinus. TASS is currently in a Category B IDE clinical trial. Effective October 1, 2023 CMS created HCPCS code C9792 (Blinded or nonblinded procedure for symptomatic New York Heart Association (NYHA) Class II, III, IVa heart failure; transcatheter implantation of left atrial to coronary sinus shunt using jugular vein access, including all imaging necessary to intra procedurally map the coronary sinus for optimal shunt placement ( e.g., TEE or ICE ultrasound, fluoroscopy), performed under general anesthesia in an approved investigational device exemption (IDE) study) to describe the TASS service and assigned it to APC 1537 (New Technology—Level 37 ($9,501-$10,000)) with a payment rate of $9750.50.

For CY 2025, the proposed OPPS payment rates are based on available CY 2023 claims data. Due to the effective date of the code of October 1, 2023, there were no claims available for HCPCS code C9792 for rate setting in CY 2024. Therefore, in CY 2025, we propose to continue to assign HCPCS code C9792 to APC 1537.

Please refer to Table 33 below for the current and proposed OPPS New Technology APC and status indicator assignment for HCPCS code C9792. The proposed CY 2025 payment rates can be found in Addendum B to this proposed rule via the internet on the CMS website.

HCPCS code C9791 (Magnetic resonance imaging with inhaled hyperpolarized xenon-129 contrast agent, chest, including preparation and administration of agent) was established on October 1, 2023. For CY 2023, we assigned HCPCS code C9791 to New Technology APC 1551 (New Technology—Level 14 ($1,201-$1,300)). For CY 2024, the OPPS payment rates were based on claims submitted between January 1, 2022, and December 31, 2022, processed through June 30, 2023. Due to the effective date of the Start Printed Page 59275 service of October 1, 2023, there were no claims available for HCPCS code C9791 for rate setting in CY 2024. Therefore, in CY 2024, we continued to assign HCPCS code C9791 to New Technology APC 1551.

For CY 2025, the proposed OPPS payment rates are generally based on available CY 2023 claims data. Although HCPCS code C9791 was effective October 1, 2023, we do not have any claims data for the service. Therefore, for CY 2025, we propose to continue to assign HCPCS code C9791 to APC 1551 with a proposed payment rate of $1,250.50.

Refer to Table 34 for the proposed OPPS New Technology APC and status indicator assignment for HCPCS code C9791 for CY 2025. The proposed CY 2025 payment rates can be found in Addendum B to this proposed rule via the internet on the CMS website.

In the CY 2022 OPPS/ASC final rule with comment period ( 86 FR 63743 through 63747 ), we adopted a policy to designate clinical and brachytherapy APCs as low volume APCs if they have fewer than 100 single claims that can be used for ratesetting purposes in the claims year used for ratesetting for the prospective year. For the CY 2025 OPPS/ASC proposed rule, CY 2023 claims are generally the claims used for ratesetting; and clinical and brachytherapy APCs with fewer than 100 single claims from CY 2023 that can be used for ratesetting would be low volume APCs subject to our universal low volume APC policy. As we stated in the CY 2022 OPPS/ASC final rule with comment period, we adopted this policy to reduce the volatility in the payment rate for those APCs with fewer than 100 single claims. Where a clinical or brachytherapy APC has fewer than 100 single claims that can be used for ratesetting, under our low volume APC payment adjustment policy, we determine the APC cost as the greatest of the geometric mean cost, arithmetic mean cost, or median cost based on up to 4 years of claims data. We excluded APC 5853 (Partial Hospitalization for CMHCs) and APC 5863 (Partial Hospitalization for Hospital-based PHPs) from our universal low volume APC policy given the different nature of policies that affect the partial hospitalization program. We also excluded APC 2698 (Brachytx, stranded, nos) and APC 2699 (Brachytx, non-stranded, nos) as our current methodology for determining payment rates for non-specified brachytherapy sources is appropriate.

Based on claims data available for the CY 2025 OPPS/ASC proposed rule, we proposed to designate six brachytherapy APCs and five clinical APCs as low volume APCs under the OPPS. The six brachytherapy APCs and five clinical APCs meet our criteria of having fewer than 100 single claims in the claims' year used for ratesetting (CY 2023 for the CY 2025 OPPS/ASC proposed rule). Nine of the 11 APCs were designated as low volume APCs in CY 2024. Based on data for the CY 2025 OPPS/ASC proposed rule, APC 2645 (Brachytx, non-stranded, gold-198) and APC 5881 (Ancillary Outpatient Services When Patient Dies) now meet our criteria to be designated a Low Volume APCs; and we proposed to designate those APCs as such for CY 2025.

Table 35 includes the CY 2023 claims available for ratesetting for each of the APCs we are proposing to be designated as low volume APCs for CY 2025. The cost statistics for our proposed low volume APCs, such as the median, arithmetic mean, and geometric mean cost are available for download with this proposed rule on the CMS website. We refer readers to our website at: https://www.cms.gov/​medicare/​payment/​prospective-payment-systems/​hospital-outpatient/​regulations-notices ; click on the relevant regulation to download the low volume APC cost statistics under the comprehensive (OPPS) ratesetting methodology in the downloads section of the web page.

For the 2006 coding update, the AMA's CPT Editorial Panel established six Category III CPT codes to describe cardiac computed tomography angiography (cardiac CT services) with contrast materials effective January 1, 2006. The codes were active and separately payable under the OPPS between January 1, 2006 and December 31, 2009. The CPT Editorial Panel deleted the Category III CPT codes and replaced them with Category I CPT codes 75572 through 75574 effective January 1, 2010. With the deletion of the Category III CPT codes on December 31, 2009, we crosswalked the APC assignments from the Category III CPT codes (predecessor codes) to the new Category I CPT codes effective January 1, 2010. Since 2010, the Category I CPT codes describing cardiac computed tomography angiography with contrast materials are CPT codes 75572, 75573, and 75574. The codes and their long descriptors are listed below.

• 75572: Computed tomography, heart, with contrast material, for evaluation of cardiac structure and morphology (including 3D image postprocessing, assessment of cardiac function, and evaluation of venous structures, if performed).
• 75573: Computed tomography, heart, with contrast material, for evaluation of cardiac structure and morphology in the setting of congenital heart disease (including 3D image postprocessing, assessment of left ventricular (LV) cardiac function, right ventricular (RV) structure and function and evaluation of vascular structures, if performed).
• 75574: Computed tomographic angiography, heart, coronary arteries and bypass grafts (when present), with contrast material, including 3D image postprocessing (including evaluation of cardiac structure and morphology, assessment of cardiac function, and evaluation of venous structures, if performed).

The cardiac CT codes that are described by CPT codes 75572, 75573, and 75574 have been paid separately under the OPPS since 2010. From CY 2015 through CY 2024, the OPPS payment rate, based on the geometric mean cost (GMC) for the cardiac CT codes, has ranged between $175 and $265 for these codes, as listed in Table 36 below.

We note that the OPPS payment rate applies only to the hospital outpatient facility and does not include the physician service payment. Physician services are paid under Medicare's Physician Fee Schedule (PFS).

As we have stated in every OPPS/ASC proposed and final rule, we update the OPPS payment rates on an annual basis consistent with the requirements set forth in section 1833(t)(9)(A) of the Act, which requires the HHS Secretary to review, not less often than annually, and revise the APC groups, the relative payment weights, and the wage and other adjustments to take into account changes in medical practice, changes in technology, the addition of new services, new cost data, and other relevant information and factors. Because of the annual updates, OPPS payment rates for services may fluctuate from year to year. We note that we generally use the latest claims data available to set the annual payment rates. Payment rates for the CY 2025 OPPS/ASC final rule will be based on claims with dates of service between January 1, 2023, and December 31, 2023, processed through June 30, 2024.

Over the years we have received comments noting that the payment for these codes has declined since 2017. Commenters have indicated that the payment amount is insufficient to cover the cost of providing the service and have stated that the payment amount does not consider the hospital resources required to perform these services, including the use of the equipment, medication administration, staff time, and scanner time. We have maintained over the years that an analysis of our claims data for these three (3) codes have shown geometric mean costs consistent with the geometric mean cost for APC 5571 (Level 1 Imaging with Contrast).

We have also received comments in the past urging CMS to allow hospitals the flexibility to submit charges for cardiac CT services with a revenue code other than CT scan (035X) and Radiology Diagnostic (032X) revenue codes, implying that MACs had applied edits to the cardiac CT codes that prevented hospitals from reporting a cardiology (048X) revenue code when appropriate. It is longstanding CMS policy that hospital outpatient facilities are responsible for reporting the appropriate cost centers and revenue codes on claims. As stated in section 20.5 in Chapter 4 (Part B Hospital) of the Medicare Claims Processing Manual, CMS “does not instruct hospitals on the assignment of HCPCS codes to revenue codes for services provided under OPPS since hospitals' assignment of cost vary. Where explicit instructions are not provided, HOPDs should report their charges under the revenue code that will result in the charges being assigned to the same cost center to which the cost of those services are assigned in the cost report.” We have consistently stated that hospital outpatient facilities must determine the most appropriate cost center and revenue code for the cardiac CT codes ( 87 FR 71849 , 88 FR 81664 ).

After we issued the CY 2024 OPPS/ASC final rule, interested parties notified CMS of a specific claims edit that may have affected the revenue codes reported with the cardiac CT codes in prior years' claims data. CMS confirmed the existence of the revenue code edit and removed the revenue code edit in early December 2023. We informed the public of our findings and the changes that we made in the January 2024 OPPS Update (Transmittal 12421, Change Request 13488), dated December 21, 2023. Specifically, we stated the following: “We recently identified an outdated return-to-provider (RTP) Healthcare Common Procedure Coding System-to-revenue code edit that resulted in certain claims submissions being limited to specific revenue codes for CPT codes 75572, 75573, and 75574. These claims were returned to the providers for resubmission. The outdated edit has been removed; and providers, when appropriate, may begin billing these codes with any appropriate revenue code.”

We believe the edit may have prevented some providers from reporting the cardiology revenue code (048X), which maps to the cardiology cost center (03140), when billing for cardiac CT services. In the past, commenters have indicated that the cardiology cost center has a higher cost-to-charge ratio (CCR) than the imaging cost centers, and they believe the inability to report the cardiology revenue code has resulted in a lower payment rate for cardiac CT services. Since the OPPS ratesetting process utilizes the applicable cost center's CCR to reduce the charges on the claim to estimated cost, utilizing cost centers with lower CCRs results in a lower OPPS payment compared to utilizing cost centers with higher CCRs. With the edit no longer in place, hospitals may bill for cardiac CT services with whichever revenue code they believe appropriate for CY 2024, and the CY 2026 OPPS payment rates (which most likely will be based on CY 2024 claims) will reflect those updated revenue code billing patterns.

We note that for CY 2025, based on our standard ratesetting methodology using claims submitted during CY 2023, our analysis reveals that the angiocardiography and CT scan revenue Start Printed Page 59278 codes were reported with CPT codes 75572-75574, which were mapped to cost centers angiocardiography and CT scan, as shown in Table 37.

Because we wanted to determine the extent to which the revenue edit may have affected the GMC for CPT codes 75572-75574, we conducted a study to calculate HCPCS geometric mean costs for these codes based on a simulation that assumed that differing numbers of HOPDs (specifically 25 percent, 50 percent, and 75 percent of the total number of HOPDs billing for these services) would have assigned these services to the cardiology revenue code (048X) and cardiology cost center (03140). Based upon the results of the study, we found that if 50 percent or more of HOPDs had billed these services with the cardiology revenue code (048X) and cardiology cost center (03140), the GMC for these codes would have increased and would have resulted in a revised APC assignment from APC 5571 (Level 1 Imaging with Contrast) to APC 5572 (Level 2 Imaging with Contrast). Specifically, as noted in Table 38, under our standard ratesetting methodology, the GMC for the cardiac CT codes would be approximately $182, which maps to APC 5571, while an assumption that 50 percent of HOPDs billed with the cardiology revenue code (048X) and cardiology cost center (03140) on CY 2023 claims would result in a GMC of about $386, which maps to APC 5572.

Because the RTP edit associated with the cardiac CT codes may have affected the CY 2023 data we have available to establish the CY 2025 OPPS payment rates for these services, in this CY 2025 OPPS/ASC proposed rule, we are requesting information on the following topics regarding hospitals' billing practices for cardiac CT services:

(1) Where are cardiac CT services performed in a hospital? Are cardiac CT services performed in a dedicated cardiology department, radiology department, or some other hospital outpatient department?

(2) What factors determine the revenue code assignment for cardiac CT services ( i.e., the department in which the service is performed, the type of service that is performed, or some other factor)?

(3) What revenue codes are HOPDs reporting for these services in CY 2024? Are HOPDs using the cardiology revenue code on claims for cardiac CT services now that they are no longer restricted from using this revenue code?

In addition to reviewing comments received, we will review the limited CY 2024 claims data for Cardiac CT services to ascertain the percentage of HOPDs that are utilizing the cardiology revenue code (048X) and cardiology cost center (03140) with the understanding that many HOPDs may still be updating their current billing practices. The comments received and the information we glean from the CY 2024 claims data will help us identify whether the current OPPS payment is appropriate for the cardiac CT codes, or whether we should consider revising the payment methodology for the CY 2025 OPPS. If these comments indicate a number of HOPDs sufficient to affect the geometric mean and APC assignment for these codes ( i.e., 50 percent or more of HOPDs) are now billing these codes with the cardiology revenue code and cardiology cost center, we would change the payment methodology for these codes to simulate the GMC these codes would have had for CY 2025 ratesetting, with the assumption that 50 percent or more of HOPDs would have billed in CY 2023 using the cardiology revenue code (048X) and cardiology cost center (03140) if not for the revenue code edit. We would assign these services to the APC that corresponds to the simulated GMC, which we currently project to be APC 5572 (Level 2 Imaging with Contrast). We note that if a revision in payment methodology is implemented for CY 2025 for the cardiac CT codes, specifically, CPT codes 75572, 75573, and 75574, for CY 2025, such a change would not involve reprocessing of claims with dates prior to January 1, 2025. If, after comments are received and the limited CY 2024 claims data for cardiac CT services is reviewed, we are not persuaded that 50 percent or more of HOPDs would have billed using the cardiology revenue codes (048X) and cardiology cost center (03140) in CY 2023 if not for the revenue code edit, we would maintain our standard ratesetting for these services as proposed in this proposed rule.

In the CY 2015 OPPS/ASC final rule with comment period ( 79 FR 66807 through 66808 ), we finalized a restructuring of what were previously several neurostimulator procedure-related APCs into a four-level series. In addition to that restructuring, in the CY 2015 OPPS/ASC final rule with comment period, we also made the Levels 2 through 4 APCs comprehensive APCs ( 79 FR 66807 through 66808 ). Later, in the CY 2020 OPPS/ASC final rule with comment period, we also made the Level 1 Neurostimulator and Related Procedure APC (APC 5461) a comprehensive APC ( 84 FR 61162 through 61166 ).

In reviewing the claims data available for the CY 2021 OPPS/ASC proposed rule, we believed that it was appropriate to create an additional Neurostimulator and Related Procedures level, between what were then the Levels 2 and 3 APCs. Creating this APC allowed for a smoother distribution of the costs between the different levels based on their resource costs and clinical characteristics. Therefore, for the CY 2021 OPPS, we finalized a five-level APC structure for the Neurostimulator and Related Procedures series ( 85 FR 85968 through 85970 ). In addition to creating the new level, we also assigned CPT code 0398T (Magnetic resonance image guided high intensity focused ultrasound (mrgfus), stereotactic ablation lesion, intracranial for movement disorder including stereotactic navigation and frame placement when performed) to the new Level 3 APC ( 85 FR 85970 ).

Some interested parties requested for the CY 2023 OPPS/ASC proposed rule that we create a Level 6 Neurostimulator and Related Procedures APC, due to their concerns around clinical and resource cost similarity in the Level 5 Neurostimulator and Related Procedures APC. Based on our review of the data available for the CY 2023 OPPS/ASC proposed rule, we believed that the five-level structure for the Neurostimulator and Related Procedures APC series remained appropriate. The proposed geometric mean cost for the Level 5 Neurostimulator and Related Procedures was $30,198.36 with the geometric means of cost significant codes in Level 5 ranging from approximately $28,000 to $36,000, which was well within the range of the 2 times rule. In addition, a review of the clinical characteristics of the services in the APC suggested that the current structure was appropriate. Finally, as discussed in the CY 2021 OPPS/ASC final rule with comment period, we reiterated that the OPPS is a prospective payment system. We group procedures with similar clinical characteristics and resource costs into APCs and establish a payment rate that reflects the geometric mean of all services in the group even though the cost of any individual service within the APC may be higher or lower than the APC's geometric mean. As a result, in the OPPS any individual procedure may potentially be overpaid or underpaid because the payment rate is based on the geometric mean of the entire group of services in the APC. However, the impact of these payment differences should be mitigated when distributed across a large number of APCs ( 85 FR 85968 ).

While we did not propose any changes in the CY 2023 OPPS/ASC proposed rule to the 5-level structure of the Neurostimulator and Related Procedures APC series, we recognized the interested parties' concerns regarding the granularity of the current APC levels and their request to create an additional level to address such concerns. Accordingly, we solicited comments on the potential creation of a new Level 6 APC. After consideration of those comments, we finalized a five level APC structure for the series and reassigned HCPCS code 0424T to New Tech APC 1581 ( 87 FR 71869 ).

In the CY 2024 OPPS/ASC final rule with comment period, we did not make any changes to the 5 level APC structure for the Neurostimulator and Related Procedures series. However, we made temporary changes to services previously assigned to the neurostimulator APCS: reassigning HCPCS codes 0424T and 33276 from New Tech APC 1581 to New Tech APC 1580 ( 88 FR 81645 through 81647 ) and assigning HCPCS code 0266T to New Tech APC 1580 ( 88 FR 81658 ).

For this CY 2025 OPPS/ASC proposed rule, we believe that the 5 level APC structure for the series remains appropriate. We note that while we have claims data available for HCPCS codes 0424T, 0266T, and several other codes in the APC series that are no longer active, there will be cost and coding changes associated with the new CPT codes as their claims data become Start Printed Page 59280 available. For example, CPT codes 33276 (Insertion of phrenic nerve stimulator system (pulse generator and stimulating lead[s]), including vessel catheterization, all imaging guidance, and pulse generator initial analysis with diagnostic mode activation, when performed) and 33287 (Removal and replacement of phrenic nerve stimulator, including vessel catheterization, all imaging guidance, and interrogation and programming, when performed; pulse generator) both became newly active in CY 2024. With the changes associated with those codes we believe that it is appropriate to reassign HCPCS codes 0266T and 33276 to the clinical APCs, specifically to the level 5 APC in the series. We will continue to monitor as more claims data become available for the new codes.

While we continue to believe that a five-level structure for the Neurostimulator and Related Procedures APC series remains appropriate, we continue to solicit comments from interested parties on the need for a Level 6 APC given the clinical and estimated cost characteristics of the services currently assigned to the Level 5 APC.

In summary, for the CY 2025 OPPS, we propose to maintain the current 5-level structure for the Neurostimulator and Related Procedure APC series and assign HCPCS codes 0424T, 0266T, and 33276 to the level 5 APC. However, we are also soliciting comment on potentially creating an additional Level 6 APC in the series from the current Level 5 APC that would include HCPCS codes 33276, 0266T, 64568, 0424T, 0427T, and 0431T.

See Table 39 for the services that will be reassigned to the Level 5 APC and Table 40 below for the proposed CY 2025 Neurostimulator and Related Procedures APCs.

Focal laser ablation is an MRI directed and image guided, minimally invasive procedure that targets prostate cancer tissue. The focal laser ablation procedure, represented by CPT code 0655T (Transperineal focal laser ablation of malignant prostate tissue, including transrectal imaging guidance, with mr-fused images or other enhanced ultrasound imaging), became effective July 1, 2021, and describes the destruction of localized prostate cancer tissue with the high energy source of focal laser radiation. The procedure utilizes real-time intraoperative prostate ultrasound fused with MRI guidance to allow the surgeon to precisely plan the ablation and guide the laser targeting as well as providing real-time feedback to minimize changes to the tissues outside of the targeted ablation zone. This procedure offers another therapy option for select patients with localized intermediate risk prostate cancer.

For CY 2024, we assigned CPT code 0655T to APC 5374 (Level 4 Urology and Related Services) with a payment rate of $3,321.58 based on its geometric mean cost of approximately $10,323, which was calculated using the available 16 single frequency claims from the CY 2022 claims data.

For this CY 2025 OPPS/ASC proposed rule, we reviewed the CY 2023 claims submitted between January 1, 2023, through December 31, 2023, that were processed on or before December 31, 2023, for CPT code 0655T and found seven single frequency claims available for ratesetting, with a resulting geometric mean cost of $12,777. Additionally, for this CY 2025 OPPS/ASC proposed rule, we examined the procedures assigned to the Urology Procedures APCs. Based on our examination of the procedures assigned to Urology and Related Procedures APCs and the available CY 2023 claims data, we believe it is appropriate to move CPT code 0655T to APC 5375 (Level 5 Urology and Related Services) from APC 5374 (Level 4 Urology and Related Services) because 0655T shares more resource cost and clinical homogeneity with procedures in APC 5375. Specifically, we believe CPT code 0655T shares resource and clinical homogeneity with CPT code 0714T (Transperineal laser ablation of benign prostatic hyperplasia, including imaging guidance), and CPT code 52648 (Laser vaporization of prostate, including control of postoperative bleeding, complete (vasectomy, meatotomy, cystourethroscopy, urethral calibration and/or dilation, internal urethrotomy and transurethral resection of prostate are included if performed)). We note that the seven available CY 2023 single frequency claims for CPT code 0655T would not significantly impact the geometric mean cost calculations for APC 5374 and APC 5375. Therefore, for CY 2025, we propose to reassign CPT code 0655T from APC 5374 (Level 4 Urology and Related Services) to APC 5375 (Level 5 Urology and Related Services).

CPT code 0743T (Bone strength and fracture risk using finite element analysis of functional data and bone mineral density (BMD), with concurrent vertebral fracture assessment, utilizing data from a computed tomography scan, retrieval and transmission of the scan data, measurement of bone strength and BMD and classification of any vertebral fractures, with overall fracture-risk assessment, interpretation and report) became effective January 1, 2023. This code describes the service associated with BCT analysis with concurrent vertebral fracture assessment (VFA).

In the CY 2023 OPPS/ASC final rule ( 87 FR71844 through 71846 ), we stated that, based on our review and understanding of the service, BCT analysis does not meet Medicare's definition of bone mass measurement, as specified in § 410.31(a), which specifies the coverage of, and payment for, bone mass measurements for Medicare beneficiaries. Therefore, we assigned the BCT codes (CPT codes 0554T-0558T) and CPT code 0743T to status indicator “E1” to indicate that these codes are not covered by Medicare, and not paid by Medicare when submitted on outpatient claims (any outpatient bill type). The complete long descriptors for the codes can be found in Table 41 below.

In the CY 2024 OPPS/ASC proposed rule, we proposed to continue to assign the codes to status indicator “E1” to indicate non-coverage and non-payment for the services. (See Addendum B for CY 2024/ASC proposed rule via the internet on the CMS website.) However, as discussed in the CY 2024 OPPS/ASC final rule ( 88 FR 81660 through 81661 ), based on comments received and further review of the issue, we did not finalize our proposal. We instead assigned CPT code 0555T to APC 5731 (Level 1 Minor Start Printed Page 59283 Procedures) and SI of “S,” (Procedure or Service, Not Discounted When Multiple; Paid under OPPS; separate APC payment.), CPT code 0556T to APC 5523 (Level 3 Imaging without Contrast) and SI of “S,” and CPT code 0558T to APC 5521 (Level 1 Imaging without Contrast) with SI of “S,” which were the same APC assignments for the codes between CY 2019 and CY 2022. In addition, we assigned CPT codes 0554T, 0557T, and 0743T to SI of “M” (Items and Services Not Billable to the MAC. Not paid under OPPS.) to indicate that these codes are not payable under the OPPS because they describe physician-only services. The final payment rates for these codes were listed in the OPPS Addendum B that was released with the CY 2024 OPPS/ASC final rule via the internet on the CMS website.

For CY 2025, we propose to continue to assign CPT codes 0554T and 0557T to status indicator of “M” as the codes include or describe a professional component of the service that is provided by a physician as evidenced by “interpretation and report” in the descriptor. It is important to note that CPT code 0554T is a comprehensive code (or “parent code”) that includes both technical and professional components. Because there are additional CPT codes (“child codes”) that facilities can use to describe the technical components of BCT analysis, it is appropriate for the comprehensive code that includes the professional component to be assigned a SI of “M”. In addition, we propose to continue to assign CPT code 0555T to APC 5731 (Level 1 Minor Procedures) and a SI of “S,” CPT code 0556T to APC 5523 (Level 3 Imaging without Contrast) and a SI of “S,” and CPT code 0558T to APC 5521 (Level 1 Imaging without Contrast) with a SI of “S.” However, for CY 2025, based on input from our medical advisors, we now believe the service described by CPT code 0743T is a comprehensive code and involves both a technical component and a professional component that are performed by hospital outpatient facilities. Unlike CPT 0554T, there are no additional codes to describe the technical component(s) of this service (BCT analysis and VFA) and there is a parenthetical note instructing facilities to not report the BCT analysis codes (0554T-0557T) with CPT code 0743T. Consequently, we propose to assign CPT code 0743T to APC 5523 (Level 3 Imaging without Contrast) and we propose to change the status indicator for 0743T from a “M” in CY 2024 to a “S” (Procedure or Service, Not Discounted When Multiple; Paid under OPPS; separate APC payment) for CY 2025. As a reminder, Medicare Administrative Contractors (MACs) determine whether a drug, device, procedure, or other service meets all program requirements and conditions for coverage and payment. Accordingly, we emphasize that HOPDs would only receive payment for these services when the appropriate MAC determines that the service meets the relevant conditions for coverage and payment. As we have consistently stated in past OPPS/ASC final rules (see, e.g., 87 FR 71879 and 88 FR 81660 through 81661 )), the fact that a drug, device, procedure or service is assigned a HCPCS code and a payment rate under the OPPS does not imply coverage by the Medicare program, but indicates only how the product, procedure, or service may be paid if covered by the program (see, e.g., Pub 100-04 Medicare Claims Processing, Transmittal 11937).

Please refer to Table 41 below for the proposed APCs and status indicator assignment for CPT codes 0554T-0558T and CPT code 0743T for CY 2025. The proposed CY 2025 payment rates, where applicable, can be found in Addendum B to this proposed rule via the internet on the CMS website.

The intent of transitional device pass-through payment, as implemented at § 419.66, is to facilitate access for beneficiaries to the advantages of new and truly innovative devices by allowing for adequate payment for these new devices while the necessary cost data is collected to incorporate the costs for these devices into the procedure APC rate ( 66 FR 55861 ). Under section 1833(t)(6)(B)(iii) of the Act, the period for which a device category eligible for transitional pass-through payments under the OPPS can be in effect is at least 2 years but not more than 3 years. Prior to CY 2017, our regulation at § 419.66(g) provided that this pass-through payment eligibility period began on the date CMS established a particular transitional pass-through category of devices, and we based the pass-through status expiration date for a device category on the date on which pass-through payment was effective for the category. In the CY 2017 OPPS/ASC final rule with comment period ( 81 FR 79654 ), in accordance with section 1833(t)(6)(B)(iii)(II) of the Act, we amended § 419.66(g) to provide that the pass-through eligibility period for a Start Printed Page 59285 device category begins on the first date on which pass-through payment is made under the OPPS for any medical device described by such category.

In addition, prior to CY 2017, our policy was to propose and finalize the dates for expiration of pass-through status for device categories as part of the OPPS annual update. This means that device pass-through status would expire at the end of a calendar year when at least 2 years of pass-through payments had been made, regardless of the quarter in which the device was approved. In the CY 2017 OPPS/ASC final rule with comment period ( 81 FR 79655 ), we changed our policy to allow for quarterly expiration of pass-through payment status for devices, beginning with pass-through devices approved in CY 2017 and subsequent calendar years, to afford a pass-through payment period that is as close to a full 3 years as possible for all pass-through payment devices. We also have an established policy to package the costs of the devices that are no longer eligible for pass-through payments into the costs of the procedures with which the devices are reported in the claims data used to set the payment rates ( 67 FR 66763 ).

We refer readers to the CY 2017 OPPS/ASC final rule with comment period ( 81 FR 79648 through 79661 ) for a full discussion of the current device pass-through payment policy. [ 20 ]

In the CY 2023 OPPS/ASC final rule with comment period, we finalized our policy to publicly post online OPPS device pass-through applications received on or after March 1, 2023, beginning with the issuance of the CY 2025 proposed rule and for each OPPS rulemaking thereafter. We refer readers to the CY 2023 OPPS/ASC final rule with comment period ( 87 FR 71934 through 71938 ) for a full discussion of the policy to publicly post OPPS device pass-through applications.

As stated earlier, section 1833(t)(6)(B)(iii) of the Act requires that, under the OPPS, a category of devices be eligible for transitional pass-through payments for at least 2 years, but not more than 3 years. Currently, there are 13 device categories eligible for pass-through payment. These devices are listed in Table 42 of this proposed rule where we detail the expiration dates of pass-through payment status for each of the 13 devices currently receiving device pass-through payment.

As discussed in section IV.A.2. New Device Pass-Through Applications for CY 2024 of the CY 2024 OPPS/ASC final rule with comment period, we approved HCPCS code C1601 (Endoscope, single-use ( i.e. disposable), pulmonary, imaging/illumination device (insertable)), as a new device category for pass-through status under the OPPS, with an effective date of January 1, 2024. For the full discussion of the criteria used to evaluate device pass-through applications, refer to the CY 2024 OPPS/ASC final rule with comment period, which was published in the Federal Register on November 22, 2023 ( 88 FR 81729 through 81743 ). We note that HCPCS code C1601 was established for a bronchoscope that can only be used for a single procedure and cannot be reprocessed. As such, HCPCS code C1601 only describes devices that cannot be reprocessed.

In addition, as discussed in section IV.A.2. New Device Pass-Through Applications for CY 2023 of the CY 2023 OPPS/ASC final rule with comment period, we approved HCPCS code C1747 (Endoscope, single-use ( i.e., disposable), urinary tract, imaging/illumination device (insertable)), as a new device category for pass-through status under the OPPS, with an effective date of January 1, 2023. For the full discussion on the criteria used to evaluate device pass-through applications, refer to the CY 2023 OPPS/ASC final rule with comment period, which was published in the Federal Register on November 23, 2022 ( 87 FR 71929 through 71934 ). We note that HCPCS code C1747 was established for a ureteroscope that can only be used for a single procedure and cannot be reprocessed. As such, HCPCS code C1747 only describes devices that cannot be reprocessed.

Section 1833(t)(6) of the Act provides for pass-through payments for devices, and section 1833(t)(6)(B) of the Act requires CMS to use categories in determining the eligibility of devices for pass-through payments. As part of implementing the statute through regulations, we have continued to believe that it is important for hospitals to receive pass-through payments for devices that offer substantial clinical improvement in the treatment of Medicare beneficiaries to facilitate access by beneficiaries to the advantages of the new technology. Conversely, we have noted that the need for additional payments for devices that offer little or no clinical improvement over previously existing devices is less apparent. In such cases, these devices can still be used by hospitals, and hospitals will be paid for them through appropriate APC payment. Moreover, a goal is to target pass-through payments for those devices where cost considerations are most likely to interfere with patient access ( 66 FR 55852 ; 67 FR 66782 ; and 70 FR 68629 ).

As specified in regulations at § 419.66(b)(1) through (3), to be eligible for transitional pass-through payment under the OPPS, a device must meet the following criteria:

• If required by FDA, the device must have received FDA approval or clearance and FDA marketing authorization (except for a device that has received an FDA investigational device exemption (IDE) and has been classified as a Category B device by FDA), or meet another appropriate FDA exemption; and the pass-through payment application must be submitted within 3 years from the date of the initial FDA marketing authorization, if required, unless there is a documented, verifiable delay in U.S. market availability after FDA marketing authorization is granted, in which case CMS will consider the pass-through payment application if it is submitted within 3 years from the date of market availability;
• The device is determined to be reasonable and necessary for the diagnosis or treatment of an illness or injury or to improve the functioning of a malformed body part, as required by section 1862(a)(1)(A) of the Act; and
• The device is an integral part of the service furnished, is used for one patient only, comes in contact with human tissue, and is surgically implanted or inserted (either permanently or temporarily), or applied in or on a wound or other skin lesion.

In addition, according to § 419.66(b)(4), a device is not eligible to be considered for device pass-through payment if it is any of the following: (1) equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets as defined in Chapter 1 of the Medicare Provider Reimbursement Manual (CMS Pub. 15-1); or (2) a material or supply furnished incident to a service (for example, a suture, customized surgical kit, or clip, other than a radiological site marker).

Separately, we use the following criteria, as set forth under § 419.66(c), to determine whether a new category of pass-through payment devices should be established. The device to be included in the new category must—

• Not be appropriately described by an existing category or by any category previously in effect established for transitional pass-through payments, and was not being paid for as an outpatient service as of December 31, 1996;
• Have an average cost that is not “insignificant” relative to the payment amount for the procedure or service with which the device is associated as determined under § 419.66(d) by demonstrating: (1) the estimated average reasonable cost of devices in the category exceeds 25 percent of the applicable APC payment amount for the service related to the category of devices; (2) the estimated average reasonable cost of the devices in the category exceeds the cost of the device-related portion of the APC payment amount for the related service by at least 25 percent; and (3) the difference between the estimated average reasonable cost of the devices in the category and the portion of the APC payment amount for the device exceeds 10 percent of the APC payment amount for the related service (with the exception of brachytherapy and temperature-monitored cryoablation, which are exempt from the cost requirements as specified at § 419.66(c)(3) and (e)); and
• Demonstrate a substantial clinical improvement, that is, substantially improve the diagnosis or treatment of an illness or injury or improve the functioning of a malformed body part compared to the benefits of a device or devices in a previously established category or other available treatment, or, for devices for which pass-through payment status will begin on or after January 1, 2020, as an alternative pathway to demonstrating substantial clinical improvement, a device is part of the FDA's Breakthrough Devices Program and has received marketing authorization for the indication covered by the Breakthrough Device designation.

Beginning in CY 2016, we changed our device pass-through evaluation and determination process. Device pass-through applications are still submitted to CMS through the quarterly subregulatory process, but the applications are subject to notice and comment rulemaking in the next applicable OPPS annual rulemaking cycle. Under this process, all applications that are preliminarily approved upon quarterly review will automatically be included in the next applicable OPPS annual rulemaking cycle, while submitters of applications that are not approved upon quarterly review will have the option of being Start Printed Page 59288 included in the next applicable OPPS annual rulemaking cycle or withdrawing their application from consideration. Under this notice-and-comment process, applicants may submit new evidence, such as clinical trial results published in a peer-reviewed journal or other materials, for consideration during the public comment process for the proposed rule. This process allows those applications that we are able to determine meet all of the criteria for device pass-through payment under the quarterly review process to receive timely pass-through payment status, while still allowing for a transparent, public review process for all applications ( 80 FR 70417 through 70418 ).

In the CY 2020 annual rulemaking process, we finalized an alternative pathway for devices that are granted a Breakthrough Device designation ( 84 FR 61295 ) and receive FDA marketing authorization for the indication covered by the Breakthrough Device designation. Under this alternative pathway, devices that are granted an FDA Breakthrough Device designation are not evaluated in terms of the current substantial clinical improvement criterion at § 419.66(c)(2) for the purposes of determining device pass-through payment status, but do need to meet the other requirements for pass-through payment status in our regulation at § 419.66. Devices that are part of the Breakthrough Devices Program, have received FDA marketing authorization for the indication covered by the Breakthrough Devices designation, and meet the other criteria in the regulation can be approved through the quarterly process and announced through that process ( 81 FR 79655 ). Proposals regarding these devices and whether pass-through payment status should continue to apply are included in the next applicable OPPS rulemaking cycle. This process promotes timely pass-through payment status for innovative devices, while also recognizing that such devices may not have a sufficient evidence base to demonstrate substantial clinical improvement at the time of FDA marketing authorization.

More details on the requirements for device pass-through payment applications are included on the CMS website in the application form itself at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​passthrough_​payment.html , in the “Downloads” section. In addition, CMS is amenable to meeting with applicants or potential applicants to facilitate information sharing to support the evaluation of an OPPS device pass-through payment application or discuss general application criteria, including the substantial clinical improvement criterion.

We received 14 complete applications by the March 1, 2024 quarterly deadline, which was the last quarterly deadline for applications to be received in time to be included in this proposed rule. Of the complete applications, we received two applications in the second quarter of 2023, two application in the third quarter of 2023, three applications in the fourth quarter of 2023, and seven applications in the first quarter of 2024. Three of the applications were approved for device pass-through payment during the quarterly review process: The DETOUR TM System, which received was preliminarily approved upon quarterly review under the alternative pathway effective January 1, 2024, and the AVEIR TM DR Dual Chamber Leadless Pacemaker System and the EndoSound Vision System® (EVS) which both were preliminarily approved upon quarterly review under the alternative pathway effective July 1, 2024. As previously stated, all applications that are preliminarily approved upon quarterly review will automatically be included in the next applicable OPPS annual rulemaking cycle. Therefore, the DETOUR TM System, the AVEIR TM DR Dual Chamber Leadless Pacemaker System, and the EndoSound Vision System® (EVS) are discussed in the following section IV.2.b.1.

We note that the quarterly application process and requirements have not changed because of the addition of rulemaking review. Detailed instructions on submission of a quarterly device pass-through payment application are included on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​Downloads/​catapp.pdf .

Discussions of the applications we received by the March 1, 2024 deadline are included in this proposed rule.

We received 10 device pass-through applications by the March 2024 quarterly application deadline for devices that have received Breakthrough Device designation from FDA and FDA marketing authorization for the indication for which they have a Breakthrough Device designation, and therefore were eligible to apply under the alternative pathway.

Boston Scientific Corporation submitted an application for a new device category for transitional pass-through payment status for AGENT TM Paclitaxel-Coated Balloon Catheter for CY 2025. Per the applicant, AGENT TM Paclitaxel-Coated Balloon Catheter is a device/drug combination product consisting of a semi-compliant intracoronary balloon catheter with a paclitaxel/acetyl tributyl citrate drug coating on the balloon component. The applicant asserted that AGENT TM Paclitaxel-Coated Balloon Catheter delivers paclitaxel, an antiproliferative drug, directly to the arterial tissue which inhibits the proliferation of neointimal smooth muscle cells without introducing an additional stent layer, thereby reducing the rate of restenosis. According to the applicant, AGENT TM Paclitaxel-Coated Balloon Catheter is intended for use in adult patients, after appropriate vessel preparation, undergoing percutaneous coronary intervention (PCI) in coronary arteries 2.0 mm to 4.0 mm in diameter and lesions up to 26 mm in length for the purpose of improving myocardial perfusion when treating in-stent restenosis (ISR) and the management of atherosclerotic coronary artery disease.

Please refer to the online application posting for the AGENT TM Paclitaxel-Coated Balloon Catheter, available at https://mearis.cms.gov/​public/​publications/​device-ptp/​DEP2402295H2TU , for additional detail describing this device and the disease treated by the device.

As stated previously, to be eligible for transitional pass-through payment under the OPPS, a device must meet the criteria at § 419.66(b)(1) through (4). With respect to the newness criterion at § 419.66(b)(1), AGENT TM Paclitaxel-Coated Balloon Catheter received FDA Breakthrough Device designation effective January 22, 2021, as a combination product indicated for percutaneous transluminal coronary angioplasty in coronary arteries 2.0 mm to 4.0 mm in diameter to treat ISR, up to 26 mm in length, for the purpose of improving myocardial perfusion. FDA approved the premarket approval application (PMA) for AGENT TM Paclitaxel-Coated Balloon Catheter on February 29, 2024, as indicated for use after appropriate vessel preparation in adult patients undergoing PCI in coronary arteries 2.0 mm to 4.0 mm in diameter and lesions up to 26 mm in length for the purpose of improving myocardial perfusion when treating ISR. We note that while the indication for Start Printed Page 59289 the FDA Breakthrough Device designation and the indication for the FDA premarket approval vary slightly, we believe that FDA premarket approval indication is the indication covered by the Breakthrough Device designation. We received the application for a new device category for transitional pass-through payment status for AGENT TM Paclitaxel-Coated Balloon Catheter on February 29, 2024, which is within three years of the date of the initial FDA marketing authorization.

We are inviting public comments on whether AGENT TM Paclitaxel-Coated Balloon Catheter meets the newness criterion at § 419.66(b)(1).

With respect to the eligibility criterion at § 419.66(b)(3), the device must be an integral part of the service furnished, used for one patient only, come in contact with human tissue, and be surgically inserted or implanted, or applied in or on a wound or other skin lesion. The applicant did not explicitly indicate whether the AGENT TM Paclitaxel-Coated Balloon Catheter is integral to the service provided. The applicant stated that the AGENT TM Paclitaxel-Coated Balloon Catheter is used for one patient only, comes in contact with human tissue, and is surgically implanted or inserted as required by § 419.66(b)(3).

We are inviting public comments on whether AGENT TM Paclitaxel-Coated Balloon Catheter meets the eligibility criterion at § 419.66(b)(3).

With respect to the exclusion criterion at § 419.66(b)(4), a device is not eligible to be considered for device pass-through payment if it is any of the following: (1) equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets as defined in Chapter 1 of the Medicare Provider Reimbursement Manual (CMS Pub. 15-1); or (2) a material or supply furnished incident to a service (for example, a suture, customized surgical kit, or clip, other than a radiological site marker). The applicant did not indicate whether AGENT TM Paclitaxel-Coated Balloon Catheter is equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered, or if AGENT TM Paclitaxel-Coated Balloon Catheter is a supply or material furnished incident to a service.

We are inviting public comments on whether AGENT TM Paclitaxel-Coated Balloon Catheter meets the exclusion criterion at § 419.66(b)(4).

In addition to the criteria at § 419.66(b)(1) through (4), the criteria for establishing new device categories are specified at § 419.66(c). The first criterion, at § 419.66(c)(1), provides that CMS determines that a device to be included in the category is not appropriately described by any of the existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996. According to the applicant, no previous or existing device categories for pass-through payment appropriately describe the AGENT TM Paclitaxel-Coated Balloon Catheter. Per the applicant, while device category C2623 (Catheter, transluminal angioplasty, drug-coated, non-laser) describes related or similar products to the AGENT TM Paclitaxel-Coated Balloon Catheter, the AGENT TM Paclitaxel-Coated Balloon Catheter is not appropriately described by C2623 because the devices in this category differ from AGENT TM Paclitaxel-Coated Balloon Catheter in both size and indicated use, and therefore, the device is not appropriately described by C2623. The applicant further claimed that the devices described by C2623 are approved for use in the femoral or popliteal arteries in vessels with a diameter of at least 4.0 mm, whereas AGENT TM Paclitaxel-Coated Balloon Catheter is indicated for use in coronary arteries that are between 2.0 mm to 4.0 mm in diameter. In addition, the applicant also noted that the length of the lesions (up to 180 mm) treated with devices in this device category greatly exceeds the maximum lesion size of 26 mm for AGENT TM Paclitaxel-Coated Balloon Catheter. Moreover, the applicant asserted that the devices described by C2623 are used to treat peripheral arterial disease and are contraindicated for use in coronary arteries. Per the applicant, the AGENT TM Paclitaxel-Coated Balloon Catheter is used in conjunction with transluminal PCIs which are described by different procedure codes than the percutaneous transluminal angioplasty services used for the devices in C2623. Lastly, the applicant stated that an analysis of claims found that the devices described by C2623 are typically reported with femoral or popliteal revascularization procedures (CPT® codes from 37224 to 37227).

We note that, based on the description the applicant provided, the AGENT TM Paclitaxel-Coated Balloon Catheter is a device/drug combination product consisting of a semi-compliant intracoronary balloon catheter with a paclitaxel/acetyl tributyl citrate drug coating on the balloon component and thus could be appropriately described by C2623. Specifically, we believe that C2623 may appropriately describe the AGENT TM Paclitaxel-Coated Balloon Catheter because it is a non-laser, drug-coated catheter used for transluminal angioplasty procedures. In this context, we believe the AGENT TM Paclitaxel-Coated Balloon Catheter may be similar to the devices described by C2623, and therefore, the AGENT TM Paclitaxel-Coated Balloon Catheter may also be appropriately described by C2623.

In addition, while we acknowledge that when C2623 was established as a device category code effective April 1, 2015, the procedure codes with which C2623 could be reported (CPT® 37224 and CPT® 37226) were limited to use in the femoral or popliteal arteries. However, based on the subsequent changes that were made to the procedure codes with which C2623 could be reported, we do not agree that C2623 is limited to use with femoral or popliteal revascularization procedures. First, we note that effective August 25, 2017, while C2623 was in device pass-through payment status, CMS added two procedure codes with which C2623 could be reported that were for procedures other than femoral popliteal revascularization procedures. Specifically, based on the FDA approval of a new indication for an existing device (a drug-coated balloon catheter for use with dialysis circuit procedures for the treatment of patients with dysfunctional arteriovenous fistulae  [ 21 ] ), CMS added two procedure codes, CPT® codes 36902 and 36903 (transluminal balloon angioplasty procedures in peripheral dialysis segments), with which C2623 could be reported effective August 25, 2017. The devices used with these two added CPT® codes, 36902 and 36903, which are also described by C2623, are drug-coated balloon catheters used for dialysis circuit procedures in the upper extremities. We believe that the inclusion of these additional reportable procedure codes illustrates our belief that devices that may be described by C2623 were neither intended to be restricted to the treatment of vascular lesions of a specified dimension nor anatomically limited to femoral or popliteal revascularization procedures and is inconsistent with the applicant's assertion that AGENT TM Paclitaxel-Coated Balloon Catheter is not appropriately described by C2623 because the category is only applicable for devices used in femoral or popliteal Start Printed Page 59290 arteries with a diameter of at least 4.0 mm, and not smaller coronary arteries.

Further, beginning January 1, 2018, upon the expiration of device pass-through payment status for C2623, CMS packaged the payment for the costs of each of the devices described by C2623 into the payment for the costs related to the procedure with which each device is reported in the hospital claims data (FR 82 59321 through 59323). We further note that upon becoming packaged for payment, C2623 effectively became reportable with other transluminal angioplasty procedure codes, including procedure codes for percutaneous coronary transluminal angioplasty services. Finally, we note that while, per the applicant, the devices described by C2623 are typically reported with femoral or popliteal revascularization procedures, other procedure codes, including procedure codes for other percutaneous transluminal angioplasty services and other related coronary procedure codes can and have been performed with devices described by C2623. As such, we believe that the procedures with which AGENT TM Paclitaxel-Coated Balloon Catheter is utilized could be reported with C2623.

In this context, based on the description the applicant provided, we believe the AGENT TM Paclitaxel-Coated Balloon Catheter may be similar to the devices described by C2623, and therefore, the AGENT TM Paclitaxel-Coated Balloon Catheter may also be appropriately described by C2623.

We are inviting public comment on whether AGENT TM Paclitaxel-Coated Balloon Catheter meets the device category criterion at § 419.66(c)(1).

The second criterion for establishing a device category, at § 419.66(c)(2), provides that CMS determines either of the following: (i) that a device to be included in the category has demonstrated that it will substantially improve the diagnosis or treatment of an illness or injury or improve the functioning of a malformed body part compared to the benefits of a device or devices in a previously established category or other available treatment; or (ii) for devices for which pass-through status will begin on or after January 1, 2020, as an alternative to the substantial clinical improvement criterion, the device is part of the FDA's Breakthrough Devices Program and has received FDA marketing authorization for the indication covered by the Breakthrough Device designation. AGENT TM Paclitaxel-Coated Balloon Catheter has a Breakthrough Device designation and marketing authorization from FDA for the indication covered by the Breakthrough Device designation (as explained in the discussion of the newness criterion) and therefore is not evaluated for substantial clinical improvement.

We are inviting public comment on whether AGENT TM Paclitaxel-Coated Balloon Catheter meets the device category criterion at § 419.66(c)(2)(ii).

The third criterion for establishing a device category, at § 419.66(c)(3), requires us to determine that the cost of the device is not insignificant, as described in § 419.66(d). Section 419.66(d) includes three cost significance criteria that must each be met. The applicant provided the following information in support of the cost significance requirements. The applicant stated that AGENT TM Paclitaxel-Coated Balloon Catheter would be reported with the HCPCS codes as shown in Table 43.

To meet the cost criterion for device pass-through payment status, a device must pass all three tests of the cost criterion for at least one APC. As we explained in the CY 2005 OPPS final rule ( 69 FR 65775 ), we generally use the lowest APC payment rate applicable for use with the nominated device when we assess whether a device meets the cost Start Printed Page 59291 significance criterion, thus increasing the probability the device will pass the cost significance test. Beginning in CY 2017, we calculate the device offset amount at the HCPCS/CPT code level instead of the APC level ( 81 FR 79657 ). We note the applicant utilized the CY 2024 payment rates for the three tests of the cost criterion. For our calculations, we used APC 5192, which had a CY 2024 payment rate of $5,445.84 at the time the application was received. HCPCS code 92920 in APC 5192 had a device offset amount of $1,662.61 at the time the application was received. According to the applicant, the cost of AGENT TM Paclitaxel-Coated Balloon Catheter is $5,500.00.

Section 419.66(d)(1), the first cost significance requirement, provides that the estimated average reasonable cost of devices in the category must exceed 25 percent of the applicable APC payment amount for the service related to the category of devices. The average reasonable cost of $5,500.00 for AGENT TM Paclitaxel-Coated Balloon Catheter is 101.00 percent of the applicable APC payment amount for the service related to the category of devices of $5,445.84 (($5,500.00/$5,445.84) × 100 = 101.00 percent). Therefore, we believe AGENT TM Paclitaxel-Coated Balloon Catheter meets the first cost significance requirement.

The second cost significance requirement, at § 419.66(d)(2), provides that the estimated average reasonable cost of the devices in the category must exceed the cost of the device-related portion of the APC payment amount for the related service by at least 25 percent, which means that the device cost needs to be at least 125 percent of the offset amount (the device-related portion of the APC found on the offset list). The estimated average reasonable cost of $5,500.00 for AGENT TM Paclitaxel-Coated Balloon Catheter is 330.81 percent of the cost of the device-related portion of the APC payment amount for the related service of $1,662.61 (($5,500.00/$1,662.61) × 100 = 330.81 percent). Therefore, we believe that AGENT TM Paclitaxel-Coated Balloon Catheter meets the second cost significance requirement.

The third cost significance requirement, at § 419.66(d)(3), provides that the difference between the estimated average reasonable cost of the devices in the category and the portion of the APC payment amount for the device must exceed 10 percent of the APC payment amount for the related service. The difference between the estimated average reasonable cost of $5,500.00 for AGENT TM Paclitaxel-Coated Balloon Catheter and the portion of the APC payment amount for the device of $1,662.61 is 70.46 percent of the APC payment amount for the related service of $5,445.84 ((($5,500.00−$1,662.61)/$ 5,445.84) × 100 = 70.46 percent). Therefore, we believe that AGENT TM Paclitaxel-Coated Balloon Catheter meets the third cost significance requirement.

We are inviting public comment on whether the AGENT TM Paclitaxel-Coated Balloon Catheter meets the device pass-through payment criteria discussed in this section, including the cost criterion for device pass-through payment status.

Abbott Laboratories submitted an application for a new device category for transitional pass-through payment status for the Aveir TM DR Dual Chamber Leadless Pacemaker System (Aveir TM DR System) for CY 2025. Per the applicant, the Aveir TM DR System is comprised of two leadless pacemakers, one atrial and one ventricular with each containing a generator and electrodes, that provide dual-chamber pacing therapy after being placed within the heart's myocardium through a minimally invasive catheter-based procedure. According to the applicant, the Aveir TM DR System is a programmable system equipped with bidirectional implant-to-implant communication without the need for traditional wire electrodes and can provide beat-to-beat communication and synchrony between the two pacemakers for the treatment of arrhythmia/bradycardia. Per the applicant, patients with indication for dual-chamber pacing would benefit from a dual-chamber leadless pacemaker system that provides atrial and ventricular bradycardia therapy, while eliminating the complications associated with conventional pacing systems.

Please refer to the online application posting for the Aveir TM DR System, available at https://mearis.cms.gov/​public/​publications/​device-ptp/​DEP230831B8DX0 , for additional detail describing the device and the disease treated by the device.

As stated previously, to be eligible for transitional pass-through payment under the OPPS, a device must meet the criteria at § 419.66(b)(1) through (4). With respect to the newness criterion at § 419.66(b)(1), the Aveir TM DR System received FDA Breakthrough Device designation effective March 27, 2020, as a pacemaker implantation indicated in one or more of the following permanent conditions: syncope, presyncope, fatigue, disorientation due to arrhythmia/bradycardia, or any combination of these symptoms. FDA approved the premarket approval application (PMA) for the Aveir TM DR System on June 29, 2023, for the indication covered by the Breakthrough Device designation. We received the application for a new device category for transitional pass-through payment status for the Aveir TM DR System on March 23, 2023, which is within three years of the date of the initial FDA marketing authorization.

We are inviting public comments on whether the Aveir TM DR System meets the newness criterion at § 419.66(b)(1).

With respect to the eligibility criteria at § 419.66(b)(3), the device must be an integral part of the service furnished, used for one patient only, come in contact with human tissue, and be surgically inserted or implanted, or applied in or on a wound or other skin lesion. The applicant did not indicate whether the Aveir TM DR System is integral to the service furnished. The applicant also did not explicitly state that the Aveir TM DR System is single-use; however, the applicant stated that one Aveir TM DR System is required per patient per procedure. While the applicant did not explicitly state whether the Aveir TM DR System comes in contact with human tissue or is surgically inserted or implanted, the applicant noted that the two Aveir TM Delivery Catheters are inserted into the peripheral vasculature and the cardiovascular system to deliver and implant the Aveir TM AR Atrial Leadless Pacemaker and the Aveir TM VR Ventricular Leadless Pacemaker into the right atrium and right ventricle of the heart, respectively.

We are inviting public comments on whether the Aveir TM DR System meets the eligibility criterion at § 419.66(b)(3).

With respect to the exclusion criterion at § 419.66(b)(4), a device is not eligible to be considered for device pass-through payment if it is any of the following: (1) equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets as defined in Chapter 1 of the Medicare Provider Reimbursement Manual (CMS Pub. 15-1); or (2) a material or supply furnished incident to a service (for example, a suture, customized surgical kit, or clip, other than a radiological site marker). The applicant did not indicate whether the Aveir TM DR System is equipment, an instrument, apparatus, implement, or item of this type for which depreciating and financing expenses are recovered, or if the Aveir TM DR System is a supply Start Printed Page 59292 or material furnished incident to a service.

We are inviting public comments on whether the Aveir TM DR System meets the exclusion criterion at § 419.66(b)(4).

In addition to the criteria at § 419.66(b)(1) through (4), the criteria for establishing new device categories are specified at § 419.66(c). The first criterion, at § 419.66(c)(1), provides that CMS determines that a device to be included in the category is not appropriately described by any of the existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996. The applicant asserted that the Aveir TM DR System is the only dual-chamber leadless pacemaker authorized by FDA and indicated for implantation in patients with one or more of the following permanent conditions: syncope, presyncope, fatigue, disorientation due to arrhythmia/bradycardia, or any combination of those conditions. Per the applicant, the Aveir TM DR System is a modular dual-chamber leadless pacemaker system with bidirectional implant-to-implant communication that can accommodate all pacing indications. According to the applicant, no previous or existing device categories for pass-through payment appropriately describe the Aveir TM DR System. The applicant stated that device categories C1785 (Pacemaker, dual-chamber, rate-responsive (implantable)) and C1889 (Insertable/implantable device, not otherwise classified) do not appropriately describe the Aveir TM DR System because the Aveir TM DR System received Breakthrough Device designation from FDA and has specific functionality and capabilities that are new to the market. The applicant also asserted that the Aveir TM DR system is modular, such that a single device can be implanted in a heart chamber initially, and the second pacemaker added to the other heart chamber in the future should the clinical need arise; and therefore, it is not appropriately described by either C1785 or C1889.

We have not identified an existing pass-through payment category that describes the Aveir TM DR System. We are inviting public comment on whether the Aveir TM DR System meets the device category criterion at § 419.66(c)(1).

The second criterion for establishing a device category, at § 419.66(c)(2), provides that CMS determines either of the following: (i) that a device to be included in the category has demonstrated that it will substantially improve the diagnosis or treatment of an illness or injury or improve the functioning of a malformed body part compared to the benefits of a device or devices in a previously established category or other available treatment; or (ii) for devices for which pass-through status will begin on or after January 1, 2020, as an alternative to the substantial clinical improvement criterion, the device is part of the FDA's Breakthrough Devices Program and has received FDA marketing authorization for the indication covered by the Breakthrough Device designation. The Aveir TM DR System has a Breakthrough Device designation and marketing authorization from FDA for the indication covered by the Breakthrough Device designation (as explained in more detail in the discussion of the newness criterion), and therefore, is not evaluated for substantial clinical improvement.

We are inviting public comment on whether Aveir TM DR System meets the device category criterion at § 419.66(c)(2)(ii).

The third criterion for establishing a device category, at § 419.66(c)(3), requires us to determine that the cost of the device is not insignificant, as described in § 419.66(d). Section 419.66(d) includes three cost significance criteria that must each be met. The applicant provided the following information in support of the cost significance requirements. The applicant stated that the Aveir TM DR System would be reported with HCPCS codes as shown in Table 44.

To meet the cost criterion for device pass-through payment status, a device must pass all three tests of the cost criterion for at least one APC. As we explained in the CY 2005 OPPS final rule ( 69 FR 65775 ), we generally use the lowest APC payment rate applicable for use with the nominated device when we assess whether a device meets the cost significance criterion, thus increasing the probability the device will pass the cost significance test. Beginning in CY 2017, we calculate the device offset amount at the HCPCS/CPT code level instead of the APC level ( 81 FR 79657 ). We note the applicant used the CY 2023 payment rates for the three tests of the cost criterion. For our calculations, we used APC 5224, which had a CY 2023 payment rate of $18,672.01 at the time the application was received. We used the CY 2023 APC level device offset amount of $11,739.09 for APC 5224, as HCPCS codes 0795T and 0801T provided by the applicant were not included in Addendum P to the CY 2023 OPPS/ASC final rule with comment period and no CY 2023 HCPCS/CPT code level device offset amount was available at the time the application was received. [ 22 ] According to the applicant, the cost of the Aveir TM DR System is $24,000.00.

Section 419.66(d)(1), the first cost significance requirement, provides that the estimated average reasonable cost of devices in the category must exceed 25 percent of the applicable APC payment amount for the service related to the category of devices. The average reasonable cost of $24,000.00 for the Aveir TM DR System is 128.54 percent of the applicable APC payment amount for the service related to the category of devices of $18,672.01 (($24,000.00/$18,672.01) × 100 = 128.54 percent). Therefore, we believe the Aveir TM DR System meets the first cost significance requirement.

The second cost significance requirement, at § 419.66(d)(2), provides that the estimated average reasonable cost of the devices in the category must exceed the cost of the device-related portion of the APC payment amount for the related service by at least 25 percent, which means that the device cost needs to be at least 125 percent of the offset amount (the device-related portion of the APC found on the offset list). The estimated average reasonable cost of $24,000.00 for the Aveir TM DR System is 204.45 percent of the cost of the device-related portion of the APC payment amount for the related service of $11,739.09 (($24,000.00/$11,739.09) × 100 = 204.45 percent). Therefore, we believe that the Aveir TM DR System meets the second cost significance requirement.

The third cost significance requirement, at § 419.66(d)(3), provides that the difference between the estimated average reasonable cost of the devices in the category and the portion of the APC payment amount for the device must exceed 10 percent of the APC payment amount for the related service. The difference between the estimated average reasonable cost of $24,000.00 for the Aveir TM DR System and the portion of the APC payment Start Printed Page 59294 amount for the device of $11,739.09 is 65.66 percent of the APC payment amount for the related service of $18,672.01 ((($24,000.00 − $11,739.09)/$ 18,672.01) × 100 = 65.66 percent). Therefore, we believe that the Aveir TM DR System meets the third cost significance requirement.

We are inviting public comment on whether the Aveir TM DR System meets the device pass-through payment criteria discussed in this section, including the cost criterion for device pass-through payment status.

Canary Medical, Inc. submitted an application for a new device category for transitional pass-through payment status for the CTE with CHIRP® System for CY 2025. The applicant is only seeking a new device category for transitional pass-through payment status for the CTE component (hereinafter referred to as “CTE”) of the CTE with CHIRP® System. According to the applicant, the CTE implant is a physical implant that is attached to the tibial baseplate as part of a total knee arthroplasty (TKA) to form the patient's knee prosthesis and provide additional stability to the replacement knee joint. Per the applicant the software and electronics within the CTE implant with CHIRP® system collects unprocessed 3-D accelerometer and 3-D gyroscopic sensor data using its Inertial Measurement Unit on the patient's functional movement and gait parameter post-surgery and transmits the encrypted data via the Home Base Station to the cloud platform. According to the applicant, the CTE implant with CHIRP® System is indicated for use in patients undergoing a cemented TKA procedure that are normally indicated for at least a 58 mm sized tibial stem extension.

Please refer to the online application posting for the CTE implant with CHIRP® System, available at https://mearis.cms.gov/​public/​publications/​device-ptp/​DEP240229Q7CYC , for additional detail describing the device and the disease treated by the device.

As stated previously, to be eligible for transitional pass-through payment under the OPPS, a device must meet the criteria at § 419.66(b)(1) through (4). With respect to the newness criterion at § 419.66(b)(1), the CTE implant with CHIRP® System received FDA Breakthrough Device designation effective October 24, 2019, as indicated for use with the Zimmer Persona® Personalized Knee System (K113369) for TKA in patients with severe knee pain and disabilities, including: (1) rheumatoid arthritis, osteoarthritis, traumatic arthritis, polyarthritis; (2) collagen disorders, and/or avascular necrosis of the femoral condyle; (3) post-traumatic loss of joint configuration, particularly when there is patellofemoral erosion, dysfunction or prior patellectomy; (4) moderate valgus, varus, or flexion deformities; and (5) the salvage of previously failed surgical attempts or for a knee in which satisfactory stability in flexion cannot be obtained at the time of surgery. The CTE implant with CHIRP® System is indicated to provide objective kinematic data from the implanted medical device during a patient's TKA post-surgical care. FDA noted that the kinematic data are an adjunct to standard of care and physiological parameter measurement tools applied or utilized by the physician during the course of patient monitoring and treatment post-surgery. FDA granted De Novo classification for the CTE implant with CHIRP® System on August 27, 2021, with the following indications for use: (1) to provide objective kinematic data from the implanted medical device during a patient's TKA post-surgical care. The kinematic data are an adjunct to other physiological parameter measurement tools applied or utilized by the physician during the course of patient monitoring and treatment post-surgery; (2) for use in patients undergoing a cemented TKA procedure that are normally indicated for at least a 58 mm sized tibial stem extension; (3) the objective kinematic data generated by the CTE implant with CHIRP® System are not intended to support clinical decision-making and have not been shown to provide any clinical benefit; and (4) the CTE implant with CHIRP® System is compatible with Zimmer Persona® Personalized Knee System. We note that while the indication for the FDA Breakthrough Device designation and the indication for the FDA premarket approval vary slightly, we believe that FDA premarket approval indication is the indication covered by the Breakthrough Device designation. We received the application for a new device category for transitional pass-through payment status for the CTE implant with CHIRP® System on February 29, 2024, which is within three years of the date of the initial FDA marketing authorization.

We are inviting public comments on whether the CTE implant with CHIRP® System meets the newness criterion at § 419.66(b)(1).

Regarding the eligibility criterion at § 419.66(b)(3), the device must be an integral part of the service furnished, used for one patient only, come in contact with human tissue, and be surgically inserted or implanted, or applied in or on a wound or other skin lesion. The applicant did not indicate whether the CTE implant is integral to the service furnished. We note that in CY 2014 final rule with comment period ( 78 FR 75005 ), we stated that we have interpreted the term “integral” to mean that the device is necessary to furnish or deliver the primary procedure with which it is used. For example, a pacemaker is integral to the procedure of implantation of a pacemaker. Per the applicant, the CTE implant is a physical implant that is attached to the tibial baseplate as part of a TKA to form the patient's knee prosthesis and provide additional stability to the replacement knee joint. We question whether the CTE implant is integral to the service furnished because utilization of the CTE implant during the primary procedure, TKA, appears to be purely additive in nature and not necessary to furnish or deliver the TKA consistent with our previous interpretation of integral. Further, we note that the indications for use of the CTE implant with CHIRP® System listed in the FDA DeNovo review letter states that the objective kinematic data generated by the CTE implant with CHIRP® System are not intended to support clinical decision-making and have not been shown to provide any clinical benefit. Moreover, a warning included in the device IFU for the CTE implant with CHIRP® System provides that the kinematic data obtained from this device have not been demonstrated to have clinical benefit. It is not intended to be utilized for clinical decision-making, and no data have been evaluated by FDA regarding clinical benefits. We note that the inclusion of the CTE implant does not appear to be necessary to furnish or deliver a TKA, nor does it appear that the data generated from the CTE implant post-procedure is necessary to furnish or deliver the primary service. In this context, we question whether the CTE implant can be considered integral in accordance with eligibility criteria at § 419.66(b)(3).

The applicant stated that the CTE implant was single-use, intended to be used with one patient only, comes into contact with human tissue, and is implanted into the patient's knee prosthesis.

We are inviting public comments on whether the CTE implant meets the eligibility criterion at § 419.66(b)(3).

With respect to the exclusion criterion at § 419.66(b)(4), a device is not eligible to be considered for device pass-through payment if it is any of the following: (1) Start Printed Page 59295 equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets as defined in Chapter 1 of the Medicare Provider Reimbursement Manual (CMS Pub. 15-1); or (2) a material or supply furnished incident to a service (for example, a suture, customized surgical kit, or clip, other than a radiological site marker). The applicant did not indicate whether the CTE implant is equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered, or if the CTE implant is a supply or material furnished incident to a service.

We are inviting public comments on whether the CTE implant meets the exclusion criterion at § 419.66(b)(4).

In addition to the criteria at § 419.66(b)(1) through (4), the criteria for establishing new device categories are specified at § 419.66(c). The first criterion, at § 419.66(c)(1), provides that CMS determines that a device to be included in the category is not appropriately described by any of the existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996. The applicant asserted that the CTE implant with CHIRP® System is the only device authorized by FDA with an indication to provide objective kinematic data from the implanted medical device during a patient's TKA post-surgical care. According to the applicant, no previous or existing device categories for pass-through payment appropriately describe the CTE implant. Per the applicant, the device category code C1776 (Joint device (implantable)) does not appropriately describe the CTE implant because C1776 was created for older technology that performs the function of the joint and does not describe a device that captures activity and kinematic data but is not a substitute for the natural knee.

We have not identified an existing pass-through payment category that describes the CTE implant. We are inviting public comment on whether the CTE implant meets the device category criterion at § 419.66(c)(1).

The second criterion for establishing a device category, at § 419.66(c)(2), provides that CMS determines either of the following: (i) that a device to be included in the category has demonstrated that it will substantially improve the diagnosis or treatment of an illness or injury or improve the functioning of a malformed body part compared to the benefits of a device or devices in a previously established category or other available treatment; or (ii) for devices for which pass-through status will begin on or after January 1, 2020, as an alternative to the substantial clinical improvement criterion, the device is part of the FDA's Breakthrough Devices Program and has received FDA marketing authorization for the indication covered by the Breakthrough Device designation. The CTE implant with CHIRP® system has a Breakthrough Device designation and marketing authorization from FDA for the indication covered by the Breakthrough Device designation (as explained in the discussion of the newness criterion) and therefore is not evaluated for substantial clinical improvement.

We are inviting public comment on whether the CTE implant meets the device category criterion at § 419.66(c)(2)(ii).

The third criterion for establishing a device category, at § 419.66(c)(3), requires us to determine that the cost of the device is not insignificant, as described in § 419.66(d). Section 419.66(d) includes three cost significance criteria that must each be met. The applicant provided the following information in support of the cost significance requirements. The applicant stated that the CTE implant would be reported with the HCPCS code as shown in Table 45.

To meet the cost criterion for device pass-through payment status, a device must pass all three tests of the cost criterion for at least one APC. As we explained in the CY 2005 OPPS final rule ( 69 FR 65775 ), we generally use the lowest APC payment rate applicable for use with the nominated device when we assess whether a device meets the cost significance criterion, thus increasing the probability the device will pass the cost significance test. Beginning in CY 2017, we calculate the device offset amount at the HCPCS/CPT code level instead of the APC level ( 81 FR 79657 ). We note the applicant utilized the CY 2024 payment rates for the three cost criterion tests. For our calculations, we used APC 5115, which had a CY 2024 payment rate of $12,539.82 at the time the application was received. HCPCS code 27447 had a device offset amount of $5,659.22 at the time the application was received. According to the applicant, the cost of the CTE implant part of the CTE implant with CHIRP® System is $7,250.00.

Section 419.66(d)(1), the first cost significance requirement, provides that the estimated average reasonable cost of devices in the category must exceed 25 percent of the applicable APC payment amount for the service related to the category of devices. The average reasonable cost of $7,250.00 for the CTE implant is 57.82 percent of the applicable APC payment amount for the service related to the category of devices of $12,539.82 (($7,250.00/$12,539.82) × 100 = 57.82 percent). Therefore, we believe the CTE implant meets the first cost significance requirement.

The second cost significance requirement, at § 419.66(d)(2), provides that the estimated average reasonable cost of the devices in the category must exceed the cost of the device-related portion of the APC payment amount for the related service by at least 25 percent, which means that the device cost needs to be at least 125 percent of the offset amount (the device-related portion of the APC found on the offset list). The estimated average reasonable cost of $7,250.00 for the CTE implant is 128.11 percent of the cost of the device-related portion of the APC payment amount for the related service of $5,659.22 (($7,250.00/$5,659.22) × 100 = 128.11 percent). Therefore, we believe that the CTE implant meets the second cost significance requirement.

The third cost significance requirement, at § 419.66(d)(3), provides that the difference between the estimated average reasonable cost of the Start Printed Page 59296 devices in the category and the portion of the APC payment amount for the device must exceed 10 percent of the APC payment amount for the related service. The difference between the estimated average reasonable cost of $7,250 for the CTE implant and the portion of the APC payment amount for the device of $5659.22 is 12.69 percent of the APC payment amount for the related service of $12,539.82 ((($7,250−$5,659.22)/$12,539.82) × 100 =12.69 percent). Therefore, we believe that the CTE implant meets the third cost significance requirement.

We are inviting public comment on whether the CTE implant meets the device pass-through payment criteria discussed in this section, including the cost criterion for device pass-through payment status.

Endologix, LLC submitted an application for a new device category for transitional pass-through payment status for the DETOUR TM System for CY 2025. According to the applicant, the DETOUR TM System is an implantable component, used to create a femoropopliteal bypass routed through the femoral vein. The DETOUR TM System is comprised of two main components: (1) the TORUS TM Stent Graft System, which is comprised of the TORUS TM Stent Graft and the TORUS TM Stent Graft Delivery System, and (2) the ENDOCROSS TM Device. Per the applicant, the DETOUR TM System is used to treat patients with advanced peripheral vascular disease, specifically those with long complex femoropopliteal artery stenoses and occlusions resulting in lifestyle limiting claudication or severe lower limb threatening ischemia. According to the applicant, the DETOUR TM System can restore arterial blood flow to the lower limb around the blocked femoral artery and allows for venous blood flow around the conduit for normal venous return, to reduce signs and symptoms of lower limb ischemia and prevent amputation.

Please refer to the online application posting for the DETOUR TM System, available at https://mearis.cms.gov/​public/​publications/​device-ptp/​DEP23090164QL2 , for additional detail describing the device and the disease treated by the device.

As stated previously, to be eligible for transitional pass-through payment under the OPPS, a device must meet the criteria at § 419.66(b)(1) through (4). With respect to the newness criterion at § 419.66(b)(1), the DETOUR TM System received FDA Breakthrough Device designation effective September 2, 2020, under the name the PQ Bypass System, as a device intended for percutaneous revascularization of symptomatic femoropopliteal lesions 200mm to 460mm with a chronic total occlusion 100mm to 425mm, and/or moderate-to-severe calcification, and/or in-stent-restenosis in patients with severe peripheral arterial disease. FDA approved the premarket approval application (PMA) for the DETOUR TM System on June 7, 2023, indicated for use for percutaneous revascularization in patients with symptomatic femoropopliteal lesions from 200 mm to 460 mm in length with chronic total occlusions (100 mm to 425 mm) or diffuse stenosis >70 percent who may be considered suboptimal candidates for surgical or alternative endovascular treatments. The DETOUR TM System, or any of its components, is not for use in the coronary and cerebral vasculature. We note that while the indication for the FDA Breakthrough Device designation and the indication for the FDA premarket approval vary slightly, we believe that FDA premarket approval indication is the indication covered by the Breakthrough Device designation. We received the application for a new device category for transitional pass-through payment status for the DETOUR TM System on September 1, 2023, which is within three years of the date of the initial FDA marketing authorization.

We are inviting public comments on whether the DETOUR TM System meets the newness criterion at § 419.66(b)(1).

With respect to the eligibility criteria at § 419.66(b)(3), the device must be an integral part of the service furnished, used for one patient only, come in contact with human tissue, and be surgically inserted or implanted, or applied in or on a wound or other skin lesion. Per the applicant, the DETOUR TM System is integral to the service provided and is used for one patient only. While the applicant did not indicate whether the DETOUR TM System comes in contact with human tissue, the applicant did specify that both components of the DETOUR TM System, the TORUS TM Stent Graft System and the ENDOCROSS TM Device, are inserted or implanted during the percutaneous transmural femoropopliteal bypass procedure, as required by § 419.66(b)(3).

We are inviting public comments on whether the DETOUR TM System meets the eligibility criterion at § 419.66(b)(3).

With respect to the exclusion criterion at § 419.66(b)(4), a device is not eligible to be considered for device pass-through payment if it is any of the following: (1) equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets as defined in Chapter 1 of the Medicare Provider Reimbursement Manual (CMS Pub. 15-1); or (2) a material or supply furnished incident to a service (for example, a suture, customized surgical kit, or clip, other than a radiological site marker). The applicant asserted that the DETOUR TM System meets the device eligibility requirements because it is not an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered, and it is not a supply or material furnished incident to a service.

We are inviting public comments on whether the DETOUR TM System meets the exclusion criterion at § 419.66(b)(4).

In addition to the criteria at § 419.66(b)(1) through (4), the criteria for establishing new device categories are specified at § 419.66(c). The first criterion, at § 419.66(c)(1), provides that CMS determines that a device to be included in the category is not appropriately described by any of the existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996. The applicant described that the DETOUR TM System is a minimally invasive, single-use device with an implantable component, used to create a femoropopliteal bypass routed through the femoral vein. According to the applicant, no previous or existing device categories for pass-through payment appropriately describe the DETOUR TM System. The applicant provided a list of existing and previous device categories for pass-through payment for other stents and explained why they do not believe any of the categories describe the DETOUR TM System. In summary, the applicant asserted that the referenced device categories do not adequately describe the DETOUR TM System because, in contrast to the DETOUR TM System, the referenced device categories do not have: (1) a crossing device with long needle for transmural access, (2) a crossing device with high pressure needle delivery for heavily calcified and atherosclerotic arteries, (3) a high radial strength transmural stent graft capable of self-support and sustaining blood flow through conduit bridging artery to vein and back to artery, (4) a percutaneous stent graft delivery catheter, (5) a covered stent graft to allow for arterial blood flow within the conduit as venous blood flows around it in the vein, or (6) a permanent implant to maintain arterial and venous blood flow. The reasons the applicant asserted Start Printed Page 59297 for why the DETOUR TM System is not adequately described by each of the device categories are shown in Table 46.

We have not identified an existing pass-through payment category that describes the DETOUR TM System. We are inviting public comment on whether the DETOUR TM System meets the device category criterion at § 419.66(c)(1).

The second criterion for establishing a device category, at § 419.66(c)(2), provides that CMS determines either of the following: (i) that a device to be included in the category has demonstrated that it will substantially improve the diagnosis or treatment of an illness or injury or improve the functioning of a malformed body part compared to the benefits of a device or devices in a previously established category or other available treatment; or (ii) for devices for which pass-through status will begin on or after January 1, 2020, as an alternative to the substantial clinical improvement criterion, the device is part of the FDA's Breakthrough Devices Program and has received FDA marketing authorization for the indication covered by the Breakthrough Device designation. The DETOUR TM System has a Breakthrough Device designation and marketing authorization from FDA for the indication covered by the Breakthrough Device designation (as explained in more detail in the discussion of the newness criterion) and therefore is not evaluated for substantial clinical improvement.

We are inviting public comment on whether the DETOUR TM System meets the device category criterion at § 419.66(c)(2)(i).

The third criterion for establishing a device category, at § 419.66(c)(3), requires us to determine that the cost of the device is not insignificant, as described in § 419.66(d). Section 419.66(d) includes three cost Start Printed Page 59298 significance criteria that must each be met. The applicant provided the following information in support of the cost significance requirements. The applicant stated that the DETOUR TM System would be reported with HCPCS code as shown in Table 47.

To meet the cost criterion for device pass-through payment status, a device must pass all three tests of the cost criterion for at least one APC. As we explained in the CY 2005 OPPS final rule ( 69 FR 65775 ), we generally use the lowest APC payment rate applicable for use with the nominated device when we assess whether a device meets the cost significance criterion, thus increasing the probability the device will pass the cost significance test. Beginning in CY 2017, we calculate the device offset amount at the HCPCS/CPT code level instead of the APC level ( 81 FR 79657 ). We note the applicant used the CY 2023 payment rates for the three tests of the cost criterion. For our calculations, like the applicant, we used APC 5193, which had a CY 2023 payment rate of $10,615.31 at the time the application was received. HCPCS code 0505T in APC 5193 had a CY 2023 device offset amount of $5,229.10 at the time the application was received. According to the applicant, the cost of the DETOUR TM System is $25,000.00.

Section 419.66(d)(1), the first cost significance requirement, provides that the estimated average reasonable cost of devices in the category must exceed 25 percent of the applicable APC payment amount for the service related to the category of devices. The average reasonable cost of $25,000.00 for the DETOUR TM System is 235.51 percent of the applicable APC payment amount for the service related to the category of devices of $10,615.31 (($25,000.00/$10,615.31) × 100 = 235.51 percent). Therefore, we believe the DETOUR TM System meets the first cost significance requirement.

The second cost significance requirement, at § 419.66(d)(2), provides that the estimated average reasonable cost of the devices in the category must exceed the cost of the device-related portion of the APC payment amount for the related service by at least 25 percent, which means that the device cost needs to be at least 125 percent of the offset amount (the device-related portion of the APC found on the offset list). The estimated average reasonable cost of $25,000.00 for the DETOUR TM System is 478.09 percent of the cost of the device-related portion of the APC payment amount for the related service of $5,229.10 (($25,000.00/$5,229.10) × 100 = 478.09 percent). Therefore, we believe that the DETOUR TM System meets the second cost significance requirement.

The third cost significance requirement, at § 419.66(d)(3), provides that the difference between the estimated average reasonable cost of the devices in the category and the portion of the APC payment amount for the device must exceed 10 percent of the APC payment amount for the related service. The difference between the estimated average reasonable cost of $25,000.00 for the DETOUR TM System and the portion of the APC payment amount for the device of $5,229.10 is 186.25 percent of the APC payment amount for the related service of $10,615.31 ((($25,000.00 − $5,229.10)/$10,615.31) × 100 = 186.25 percent). Therefore, we believe that the DETOUR TM System meets the third cost significance requirement.

We are inviting public comment on whether the DETOUR TM System meets the device pass-through payment criteria discussed in this section, including the cost criterion for device pass-through payment status.

(e) EndoSound Vision System TM (EVS TM )

EndoSound, Inc. submitted an application for a new device category for transitional pass-through payment status for the EVS TM for CY 2025. The applicant is only seeking a new device category for transitional pass-through payment status for the Ultrasound Disposable Kit—Diagnostic/Therapeutic (UDK-T) component (hereinafter referred to as “UDK-T”) of the EVS TM . According to the applicant, the EVS TM is an ultrasound system designed to externally attach to an upper gastrointestinal (GI) endoscope (gastroscope/upper (EGD) endoscope). Per the applicant, the EVS TM is a device that, once attached to an EGD endoscope, temporarily converts the EGD endoscope to a fully capable endoscopic ultrasound (EUS) endoscope. The applicant asserted that the EVS TM can be coupled with an upper GI endoscope device to enable real-time ultrasound imaging, ultrasound guided needle aspiration, and other EUS guided procedures within the upper GI tract and surrounding organs. According to the applicant, the EVS TM consists of: (1) the EVSScanner, a beamformer/scanner that performs ultrasound signal processing; (2) the Ultrasound Transducer Module (UTM), a reusable transducer assembly that converts the electrical signals from the scanner into ultrasound energy; (3) the Transducer Extension Cable (TEC), a cable/connector to interface the UTM to the EVSScanner; and (4) the UDK-T, a disposable mounting kit with an operator control mechanism used to Start Printed Page 59299 externally affix the EVS TM to a standard EGD endoscope and to provide needle and transducer angulation while maintaining the native gastroscope controls.

Please refer to the online application posting for the EVS TM , available at https://mearis.cms.gov/​public/​publications/​device-ptp/​DEP240228GJT0X , for additional detail describing this device and the disease treated by the device.

As stated previously, to be eligible for transitional pass-through payment under the OPPS, a device must meet the criteria at § 419.66(b)(1) through (4). With respect to the newness criterion at § 419.66(b)(1), the EVS TM , which includes the UDK-T, received FDA Breakthrough Device designation effective July 29, 2021, as a device intended to provide optical visualization of, ultrasonic visualization of, and therapeutic access to, the upper GI tract including but not restricted to the organs, tissues, and subsystems: esophagus, stomach, duodenum, and underlying areas. The instrument is introduced “per orally” when indications consistent with the requirement for procedure are observed in adult patient populations. FDA granted the applicant 510(k) clearance for the EVS TM on December 27, 2023, indicated for use such that when affixed to an endoscope, is intended to provide ultrasonic visualization of, and ultrasound guided therapeutic access to the upper GI tract including but not restricted to the organs, tissues, and subsystems: esophagus, stomach, duodenum, and underlying areas. The EVS TM , mounted on an endoscope, is introduced orally when indications consistent with the requirement for a GI procedure are met. The EVS TM is a prescription-only device to be used by a qualified physician. The clinical environments where the system can be used include clinics, hospitals, and ambulatory surgery centers. We note that while the indication for the FDA Breakthrough Device designation and the indication for the FDA premarket approval vary slightly, we believe that FDA premarket approval indication is the one covered by the Breakthrough Device designation. We received the application for a new device category for transitional pass-through payment status for the EVS TM on February 28, 2024, which is within three years of the date of the initial FDA marketing authorization.

We are inviting public comments on whether the EVS TM , inclusive of the UDK-T component, meets the newness criterion at § 419.66(b)(1).

With respect to the eligibility criterion at § 419.66(b)(3), the device must be an integral part of the service furnished, used for one patient only, come in contact with human tissue, and be surgically inserted or implanted, or applied in or on a wound or other skin lesion. The applicant did not indicate whether the UDK-T component of the EVS TM is integral to the service furnished; however, the applicant did indicate that the UDK-T is single-use, comes in contact with human tissue, and is inserted as part of an endoscopy procedure. We preliminarily approved the EndoSound Vision System® (EVS) HCPCS code C1606 (Adapter, single-use ( i.e. disposable), for attaching ultrasound system to upper gastrointestinal endoscope) upon quarterly review under the alternative pathway with an effective of July 1, 2024. We note that HCPCS code C1606 was established for an adapter for attaching an ultrasound system to an upper gastrointestinal endoscope that can only be used for a single procedure and cannot be reprocessed. As such, HCPCS code C1606 only describes devices that cannot be reprocessed.

We are inviting public comments on whether the UDK-T component of the EVS TM meets the eligibility criterion at § 419.66(b)(3).

With respect to the exclusion criterion at § 419.66(b)(4), a device is not eligible to be considered for device pass-through payment if it is any of the following: (1) equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets as defined in Chapter 1 of the Medicare Provider Reimbursement Manual (CMS Pub. 15-1); or (2) a material or supply furnished incident to a service (for example, a suture, customized surgical kit, or clip, other than a radiological site marker). The applicant claimed that the UDK-T meets the device eligibility requirements because it is not equipment or an item for which depreciation and financing expenses are recovered. In addition, the applicant asserted that the UDK-T is not a supply or material.

We are inviting public comments on whether the UDK-T component of the EVS TM meets the exclusion criterion at § 419.66(b)(4).

In addition to the criteria at § 419.66(b)(1) through (4), the criteria for establishing new device categories are specified at § 419.66(c). The first criterion, at § 419.66(c)(1), provides that CMS determines that a device to be included in the category is not appropriately described by any of the existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996. According to the applicant, the EVS TM is an ultrasound system designed to externally attach to an upper gastrointestinal (GI) endoscope (gastroscope/upper (EGD) endoscope). According to the applicant, no previous or existing device categories for pass-through payment appropriately describe the UDK-T. Per the applicant, device category C1748 (Endoscope, single-use ( i.e., disposable), Upper GI, imaging/illumination device (insertable)) does not appropriately describe the EVS TM , inclusive of the UDK-T, because: (1) the EVS TM , inclusive of the UDK-T, enables an endoscope that a hospital has to have added functionalities such as the ability to perform an EUS procedure, but is not an endoscope like the devices in C1748; (2) the EVS TM , inclusive of the UDK-T, when used with an endoscope allows EUS procedures to be done without an elevator, unlike the other devices described in C1748; and (3) the EVS TM , inclusive of the UDK-T, and the devices described in C1748 are used in different procedures. The applicant explained that CMS indicated that C1748 should always be billed with a CPT code in the ranges of 43260-43265 and 43274-43278, but there is no overlap between those CPT codes billed with C1748 and the CPT codes the applicant stated that the EVS TM would be reported with as shown in Table 48.

We have not identified an existing pass-through payment category that describes the UDK-T component of the EVS TM .

We are inviting public comment on whether the UDK-T component of the EVS TM meets the device category criterion at § 419.66(c)(1).

The second criterion for establishing a device category, at § 419.66(c)(2), provides that CMS determines either of the following: (i) that a device to be included in the category has demonstrated that it will substantially improve the diagnosis or treatment of an illness or injury or improve the functioning of a malformed body part compared to the benefits of a device or devices in a previously established category or other available treatment; or (ii) for devices for which pass-through status will begin on or after January 1, 2020, as an alternative to the substantial clinical improvement criterion, the device is part of the FDA's Breakthrough Devices Program and has received FDA marketing authorization for the indication covered by the Breakthrough Device designation. The EVS TM , inclusive of the UDK-T, has a Breakthrough Device designation and Start Printed Page 59300 marketing authorization from FDA for the indication covered by the Breakthrough Device designation (as explained in more detail in the discussion of the newness criterion) and therefore is not evaluated for substantial clinical improvement.

We are inviting public comment on whether the EVS TM , inclusive of the UDK-T component, meets the device category criterion at § 419.66(c)(2)(ii).

The third criterion for establishing a device category, at § 419.66(c)(3), requires us to determine that the cost of the device is not insignificant, as described in § 419.66(d). Section 419.66(d) includes three cost significance criteria that must each be met. The applicant provided the following information in support of the cost significance requirements. The applicant stated that the EVS TM would be reported with HCPCS codes as shown in Table 48.

To meet the cost criterion for device pass-through payment status, a device must pass all three tests of the cost criterion for at least one APC. As we explained in the CY 2005 OPPS final rule ( 69 FR 65775 ), we generally use the lowest APC payment rate applicable for use with the nominated device when we assess whether a device meets the cost significance criterion, thus increasing the probability the device will pass the cost significance test. Beginning in CY 2017, we calculate the device offset amount at the HCPCS/CPT code level instead of the APC level ( 81 FR 79657 ). We note the applicant used the CY 2024 payment rates for the three tests of the cost criterion. For our calculations, we used APC 5302, which had a CY 2024 payment rate of $1,812.99 at the time the application was received. HCPCS code 43232 in APC 5302 had a CY 2024 device offset amount of $14.50 at the time the application was received. [ 23 ] According to the applicant, the cost of the disposable, single-use UDK-T component of the EVS TM is $500.00.

Section 419.66(d)(1), the first cost significance requirement, provides that the estimated average reasonable cost of devices in the category must exceed 25 Start Printed Page 59301 percent of the applicable APC payment amount for the service related to the category of devices. The average reasonable cost of $500.00 for the UDK-T is 27.59 percent of the applicable APC payment amount for the service related to the category of devices of $1,812.99 (($500.00/$1,812.99) × 100 = 27.59 percent). Therefore, we believe the UDK-T component of the EVS TM meets the first cost significance requirement.

The second cost significance requirement, at § 419.66(d)(2), provides that the estimated average reasonable cost of the devices in the category must exceed the cost of the device-related portion of the APC payment amount for the related service by at least 25 percent, which means that the device cost needs to be at least 125 percent of the offset amount (the device-related portion of the APC found on the offset list). The estimated average reasonable cost of $500.00 for the UDK-T is 3,448.28 percent of the cost of the device-related portion of the APC payment amount for the related service of $14.50 (($500.00/$14.50) × 100 = 3,448.28 percent). Therefore, we believe that the UDK-T component of the EVS TM meets the second cost significance requirement.

The third cost significance requirement, at § 419.66(d)(3), provides that the difference between the estimated average reasonable cost of the devices in the category and the portion of the APC payment amount for the device must exceed 10 percent of the APC payment amount for the related service. The difference between the estimated average reasonable cost of $500.00 for the UDK-T and the portion of the APC payment amount for the device of $14.50 is 26.78 percent of the APC payment amount for the related service of $1,812.99 ((($500.00—$14.50)/$1,812.99) × 100 = 26.78 percent). Therefore, we believe that the UDK-T component of the EVS TM meets the third cost significance requirement.

We are inviting public comment on whether the UDK-T component of the EVS TM meets the device pass-through payment criteria discussed in this section, including the cost criterion for device pass-through payment status.

SI-BONE submitted an application for a new device category for transitional pass-through payment status for the iFuse Bedrock Granite TM Implant System for CY 2025. According to the applicant, the iFuse Bedrock Granite TM Implant System consists of iFuse Granite TM implants of various lengths and diameters and associated instruments sets. The titanium (Ti-6Al-4V ELI) iFuse Granite TM implant consists of a porous fusion sleeve with threaded length attached to a solid post that has connection and implant placement features of a typical pedicle fixation screw. The iFuse Granite TM implant is intended to provide sacropelvic fusion of the sacroiliac joint (when placed in the sacral-alar-iliac (SAI) trajectory) and fixation to the pelvis when used in conjunction with commercially available pedicle screw fixation systems as a foundational element for segmental spinal fusion only when performing both a lumbar and a sacroiliac joint (SIJ) fusion procedure in the same operative session. The applicant asserted that joint fusion occurs as a result of the device's porous surface and interstices and fixation occurs through the device's helical threaded design and traditional posterior fixation rod connection.

Per the applicant, the device can be placed into the pelvis in two trajectories: the SAI trajectory ( i.e., into the sacrum, across the SIJ and into the ilium), or directly into the ilium. The applicant explained that the iFuse Granite TM implant is typically placed in the SAI trajectory, bilaterally, and oftentimes stacked to achieve two points of fusion and fixation/stabilization across each SIJ. According to the applicant, the iFuse Granite TM implant may also be used in a single, but bilateral, configuration, where only two implants may be required when replacing traditional pedicle screws in either a SAI trajectory or iliac trajectory. The applicant asserted that the iFuse Bedrock Granite TM Implant System is always used in addition to lumbar fusion instrumentation when used to perform lumbar and SIJ fusion at the same time.

Please refer to the online application posting for the iFuse Bedrock Granite TM Implant System, available at https://mearis.cms.gov/​public/​publications/​device-ptp/​DEP240220LPFNM , for additional detail describing the device and the disease treated by the device.

As stated previously, to be eligible for transitional pass-through payment under the OPPS, a device must meet the criteria at § 419.66(b)(1) through (4). With respect to the newness criterion at § 419.66(b)(1), the iFuse Bedrock Granite TM Implant System received FDA Breakthrough Device designation effective November 23, 2021, as a treatment of the acute and chronic instabilities or deformities of the thoracic, lumbar, and sacral spine, including: (1) degenerative disc disease (DDD), as defined by back pain of discogenic origin with degeneration of the disc confirmed by patient history and radiographic studies; (2) severe spondylolisthesis (Grades 3 and 4) of the L5-S1 vertebra; (3) skeletally mature patients receiving fusions by autogenous bone graft having implants attached to the lumbar and sacral spine (L3 to sacrum) with removal of the implants after the attainment of a solid fusion; (4) spondylolisthesis; (5) trauma ( i.e., fracture or dislocation); (6) spinal stenosis; (7) deformities or curvatures ( i.e., scoliosis, kyphosis, and/or lordosis); (8) spinal tumor; and (9) pseudarthrosis, and/or failed previous fusion. Subsequently, FDA also granted the applicant 510(k) clearance for the iFuse Bedrock Granite TM Implant System on May 26, 2022 and December 22, 2022, for the indication covered by the Breakthrough Device designation with one additional indication for use: SIJ dysfunction that is a direct result of SIJ disruption and degenerative sacroiliitis, including conditions whose symptoms began during pregnancy or in the peripartum period and have persisted postpartum for more than 6 months. We note that the 510(k) clearance dated December 22, 2022, expanded the previously cleared indication of the iFuse Bedrock Granite TM Implant System to include general compatibility with certain compatible pedicle screw systems, whereas the indications under the May 26, 2022, 510(k) clearance only addressed compatibility of the iFuse Bedrock Granite TM Implant System with the SeaSpine Mariner Pedicle Screw System. Each 510(k) clearance, the May 26, 2022, and the December 22, 2022, are covered by the November 23, 2021 Breakthrough Device designation for the iFuse Bedrock Granite TM Implant System. We received the application for a new device category for transitional pass-through payment status for the iFuse Bedrock Granite TM Implant System on February 20, 2024, which is within three years of the dates of the May 26, 2022 and December 22, 2022 FDA marketing authorizations for the iFuse Bedrock Granite TM Implant System.

We are inviting public comments on whether the iFuse Bedrock Granite TM Implant System meets the newness criterion at § 419.66(b)(1).

With respect to the eligibility criterion at § 419.66(b)(3), the device must be an integral part of the service furnished, used for one patient only, come in contact with human tissue, and be surgically inserted or implanted, or applied in or on a wound or other skin lesion. The applicant did not indicate if the iFuse Bedrock Granite TM Implant System is integral to the service furnished. The applicant provided that Start Printed Page 59302 the iFuse Bedrock Granite TM Implant is single-use, permanently implanted, and surgically inserted into the patient. However, we note that we do not have sufficient information to determine if the associated instruments sets included in the iFuse Bedrock Granite TM Implant System meet the eligibility criterion at § 419.66(b)(3).

We are inviting public comments on whether the iFuse Bedrock Granite TM Implant System meets the eligibility criterion at § 419.66(b)(3).

With respect to the exclusion criterion at § 419.66(b)(4), a device is not eligible to be considered for device pass-through payment if it is any of the following: (1) equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets as defined in Chapter 1 of the Medicare Provider Reimbursement Manual (CMS Pub. 15-1); or (2) a material or supply furnished incident to a service (for example, a suture, customized surgical kit, or clip, other than a radiological site marker). The applicant did not indicate whether the iFuse Bedrock Granite TM Implant System is equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered, or if the iFuse Bedrock Granite TM Implant System is a supply or material furnished incident to a service.

We are inviting public comments on whether the iFuse Bedrock Granite TM Implant System meets the exclusion criterion at § 419.66(b)(4).

In addition to the criteria at § 419.66(b)(1) through (4), the criteria for establishing new device categories are specified at § 419.66(c). The first criterion, at § 419.66(c)(1), provides that CMS determines that a device to be included in the category is not appropriately described by any of the existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996. According to the applicant, no previous or existing device categories for pass-through payment appropriately describe the iFuse Bedrock Granite TM Implant System. Per the applicant, the device category C1821 (Interspinous process distraction device) does not appropriately describe the iFuse Bedrock Granite TM Implant System because the iFuse Bedrock Granite TM Implant System is used to fixate and fuse, while the devices described in C1821 are interspinous spacers which, after implantation, are opened or expanded to distract the neural foramina and decompress the nerves. The applicant asserted that device category C1713 (Anchor/screw for opposing bone-to-bone or soft tissue-to-bone (implantable)) also does not appropriately describe the iFuse Bedrock Granite TM Implant System because the iFuse Bedrock Granite TM Implant System allows for simultaneous fusion of the SIJ and fixation of the pelvis by connecting via Tulip Connector to the base of the stabilizing rods within the lumbosacral spinal construct, while C1713 includes implantable pins and/or screws that are used to oppose soft tissue-to-bone, tendon-to-bone, or bone-to-bone. Per the applicant, the device category C1889 (Implantable/insertable device, not otherwise classified) also does not appropriately describe the iFuse Bedrock Granite TM Implant System because it does not describe any specific device category, and therefore does not uniquely describe the device category proposed for the iFuse Bedrock Granite TM Implant System.

We note that, according to the applicant, the iFuse Bedrock Granite TM implant is intended to provide sacropelvic fusion of the sacroiliac joint (when placed in the sacral-alar-iliac (SAI) trajectory) and fixation to the pelvis when used in conjunction with commercially available pedicle screw fixation systems as a foundational element for segmental spinal fusion only when performing both a lumbar and sacroiliac joint (SIJ) fusion procedure in the same operative session. The applicant asserted that joint fusion occurs as a result of the device's porous surface and interstices and fixation occurs through the device's helical threaded design and traditional posterior fixation rod connection. We believe that the device category C1713 may appropriately describe the iFuse Bedrock Granite TM Implant System and question whether a transfixing device utilizing the Tulip Connector is sufficiently distinguishable from traditional implantable pins or screws that it is meant to replace. In this context, based on the description the applicant provided, we believe the iFuse Bedrock Granite TM Implant System may be similar to the devices described by C1713, and therefore, the iFuse Bedrock Granite TM Implant System may also be appropriately described by C1713.

In addition, we believe that the device category C1889 may appropriately describe the iFuse Bedrock Granite TM Implant System because C1889 may be used to describe any implantable/insertable device that is not otherwise described by a more specific device category and is, therefore, sufficiently broad to include implantable devices that allow for simultaneous fusion of the SIJ and fixation of the pelvis. We note that in the CY 2017 OPPS/ASC final rule with comment period ( 81 FR 79562 ), CMS created C1889 with the specific intent to recognize devices furnished during a device intensive procedure that are not described by a specific Level II HCPCS Category C-code. In this context, we believe the iFuse Bedrock Granite TM Implant System may be appropriately described by either C1713 or C1889.

We are inviting public comment on whether the iFuse Bedrock Granite TM Implant System meets the device category criterion at § 419.66(c)(1).

The second criterion for establishing a device category at § 419.66(c)(2) provides that CMS determines either of the following: (i) that a device to be included in the category has demonstrated that it will substantially improve the diagnosis or treatment of an illness or injury or improve the functioning of a malformed body part compared to the benefits of a device or devices in a previously established category or other available treatment; or (ii) for devices for which pass-through status will begin on or after January 1, 2020, as an alternative to the substantial clinical improvement criterion, the device is part of the FDA's Breakthrough Devices Program and has received FDA marketing authorization for the indication covered by the Breakthrough Device designation. The iFuse Bedrock Granite TM Implant System has a Breakthrough Device designation and marketing authorization from FDA for the indication covered by the Breakthrough Device designation (as explained in the discussion of the newness criterion) and therefore is not evaluated for substantial clinical improvement.

We are inviting public comment on whether the iFuse Bedrock Granite TM Implant System meets the device category criterion at § 419.66(c)(2)(ii).

The third criterion for establishing a device category, at § 419.66(c)(3), requires us to determine that the cost of the device is not insignificant, as described in § 419.66(d). Section 419.66(d) includes three cost significance criteria that must each be met. The applicant provided the following information in support of the cost significance requirements. The applicant stated that the iFuse Bedrock Granite TM Implant System would be reported with HCPCS codes shown in Table 49.

According to the applicant, the iFuse Bedrock Granite TM Implant System is only used when both a SIJ fusion procedure and a lumbar fusion procedure are performed in the same operative session. The applicant stated that the iFuse Bedrock Granite TM Implant System is not utilized when only a SIJ fusion procedure is performed (HCPCS code 27279) or when only a lumbar fusion procedure is performed (HCPCS code 22612, 22630 or 22633). Rather, per the applicant, the appropriate coding of the procedure where the iFuse Bedrock Granite TM Implant System is used should include the CPT code for SIJ fusion (HCPCS code 27279) and a CPT code for lumbar fusion (HCPCS code 22612, 22630 or 22633). Per the applicant, the selection of the primary lumbar fusion CPT code (HCPCS code 22612, 22630 or 22633) is dependent on the procedure performed.

To meet the cost criterion for device pass-through payment status, a device must pass all three tests of the cost criterion for at least one APC. As we explained in the CY 2005 OPPS final rule ( 69 FR 65775 ), we generally use the lowest APC payment rate applicable for use with the nominated device when we assess whether a device meets the cost significance criterion, thus increasing the probability the device will pass the cost significance test. Beginning in CY 2017, we calculate the device offset amount at the HCPCS/CPT code level instead of the APC level ( 81 FR 79657 ). We note the applicant utilized the CY 2024 payment rates for the three tests of the cost criterion. For our calculations, we used APC 5116, which had a CY 2024 payment rate of $17,756.28 at the time the application was received. The applicant stated the iFuse Bedrock Granite TM Implant System device should be reported with the SIJ fusion procedure HCPCS code 27279 along with one of the three lumbar fusion procedures (HCPCS code 22612, 22630 or 22633). While the applicant utilized HCPCS code 22612 for the device offset amount for test two of the cost criterion, we believe that HCPCS code 27279 is the appropriate HCPCS code for the offset and subsequent calculation. Specifically, it is our understanding that code 27279 is always reported when the iFuse device is used along with only one of the three specified lumbar fusion codes. That is to say, the SIJ fusion procedure described by code 27279 is always performed when the iFuse device is used along with just one of three possible lumbar procedures, depending on the specific surgical approach used. Therefore, we believe that neither HCPCS code 22612, 22630, nor 22633 is appropriate to use for the cost criterion calculation. As such, we used HCPCS 27279, the code that should always be reported with the iFuse device, for our calculations.

HCPCS code 27279 in APC 5116 had a CY 2024 device offset amount of $12,264.26 at the time the application was received. According to the applicant, the cost of the iFuse Bedrock Granite TM Implant System is $11,689.00. Section 419.66(d)(1), the first cost significance requirement, provides that the estimated average reasonable cost of devices in the category must exceed 25 percent of the applicable APC payment amount for the service related to the category of devices. The average reasonable cost of $11,689.00 for the iFuse Bedrock Granite TM Implant System is 65.83 percent of the applicable APC payment amount for the service related to the category of devices of $17,756.28 (($11,689.00/$17,756.28) × 100 = 65.83 percent). Therefore, we believe the iFuse Bedrock Granite TM Implant System meets the first cost significance requirement.

The second cost significance requirement, at § 419.66(d)(2), provides that the estimated average reasonable cost of the devices in the category must exceed the cost of the device-related portion of the APC payment amount for the related service by at least 25 percent, which means that the device cost needs to be at least 125 percent of the offset amount (the device-related portion of the APC found on the offset list). The estimated average reasonable cost of $11,689.00 for the iFuse Bedrock Granite TM Implant System is 95.31 percent of the cost of the device-related portion of the APC payment amount for the related service of $12,264.26 (($11,689.00/$12,264.26) × 100 = 95.31 percent). Therefore, we believe that the iFuse Bedrock Granite TM Implant System does not meet the second cost significance requirement.

The third cost significance requirement, at § 419.66(d)(3), provides Start Printed Page 59304 that the difference between the estimated average reasonable cost of the devices in the category and the portion of the APC payment amount for the device must exceed 10 percent of the APC payment amount for the related service. The difference between the estimated average reasonable cost of $11,689.00 for the iFuse Bedrock Granite TM Implant System and the portion of the APC payment amount for the device of $12,264.26 is negative 3.24 percent of the APC payment amount for the related service of $17,756.28 ((($11,689.00−$12,264.26)/$17,756.28) × 100 = −3.24 percent). Therefore, we believe that the iFuse Bedrock Granite TM Implant System does not meet the third cost significance requirement.

We are inviting public comment on whether the iFuse Bedrock Granite TM Implant System meets the device pass-through payment criteria discussed in this section, including the cost criterion for device pass-through payment status.

ReCor Medical, Inc. submitted an application for a new device category for transitional pass-through payment status for the Paradise® Ultrasound RDN System for CY 2025. Per the applicant, the Paradise® Ultrasound RDN System is a catheter-based system that delivers ultrasound energy in the location of sympathetic nerves surrounding the renal arteries. The applicant explained that the Paradise® Ultrasound RDN System is indicated to reduce blood pressure as an adjunctive treatment in patients with hypertension in whom lifestyle modifications and antihypertensive medications do not adequately control blood pressure. According to the applicant, the Paradise® Catheter, when used with the other Paradise® Ultrasound RDN System components, provides complete 360-degree energy delivery and targeted ablation depth with each energy emission with the goal of disrupting the nerves and consequently achieving a reduction in systemic arterial blood pressure. The applicant asserted that the Paradise® Catheter protects the artery walls using a cooling system during periods of ultrasound energy emission (also called sonications).

Per the applicant's instructions for use, the Paradise® Ultrasound RDN System includes the following components: (1) Paradise® Generator, which circulates coolant fluid and electrical energy to the Paradise® Catheter via the Paradise® Cable and Paradise® Cartridge; (2) Paradise® Catheter, which connects with the Paradise® Generator and has a distal balloon (available in six different diameters that correspond to varying artery diameter ranges) that is pressurized using coolant fluid; (3) Paradise® Cartridge, which controls the fluid flow into and out of the Paradise® Catheter when used in conjunction with the Paradise® Generator; (4) Paradise® Connection Cable, which transfers electrical energy from the Paradise® Generator to the Paradise® Catheter; (5) Paradise® Remote, included with the Paradise® Generator for optional use; and (6) Paradise® Cart, an optional wheeled cart to which the Paradise® Generator can be mounted to stabilize the Paradise® Generator during a procedure and to transport the Paradise® Generator from one location to another. Per the applicant, additional items required for the procedure include: (1) a bag of coolant fluid for inflation and cooling of balloon; (2) a 0.014 inch guidewire to track the Paradise® Catheter into position for delivery of ultrasound energy; (3) a Push/Pull style hemostasis valve; (4) a 6 French (Fr) or larger guide sheath; and (5) a 7 Fr or larger guide catheter. According to the applicant, the Paradise® Catheter, Paradise® Cartridge, and Paradise® Connection Cable are single-patient, one-time use components of the system. According to the applicant, key steps for operating the Paradise® Ultrasound RDN System include: (1) gaining access to the femoral artery using standard interventional techniques and placing a 7 Fr (or larger) guide catheter; (2) advancing the 7 Fr guide catheter into the left or right renal artery under fluoroscopic guidance; (3) performing an angiogram to verify the patency of the left or right renal artery; (4) measuring the distal, mid, and proximal artery diameters and selecting the appropriate Paradise® Catheter balloon size; (5) preparing and attaching the Paradise® Cartridge, Paradise® Connection Cable, and sterile water supply, and connecting the Paradise® Cartridge extension tubing to the Paradise® Catheter; (6) preparing and flushing the Paradise® Catheter; removing access devices from the lumen of the guide catheter and inserting a 0.014 inch guidewire; (7) verifying the balloon on the Paradise® Catheter is deflated; (8) tracking the Paradise® Catheter over the guidewire and gently inserting the Paradise® Catheter into the push/pull style hemostasis valve and guide catheter; (9) advancing and positioning the Paradise® Catheter in desired locations within the renal arteries; (10) inflating the balloon via the Paradise® Generator; (11) verifying the position of the balloon and catheter transducer via fluoroscopy and contrast injection; (12) performing denervation of the left and/or right renal artery by delivery of ultrasound energy; (13) verifying balloon deflation via fluoroscopy before moving to the next location; (14) withdrawing the Paradise® Catheter back into the guide catheter prior to moving the device into an alternate artery or accessory vessel, continuing to another position and exchanging the balloon catheter, as needed; (15) removing the Paradise® Catheter, ensuring that Paradise® Catheter balloon is in a deflated state prior to removal, by slowly withdrawing the Paradise® Catheter through the guide catheter, until completely withdrawn, and removing the guidewire and guide catheter; and (16) closing the wound per standard of practice.

Please refer to the online application posting for the Paradise® RDN System, available at https://mearis.cms.gov/​public/​publications/​device-ptp/​DEP231128137E1 , for additional detail describing the device and the disease treated by the device.

As stated previously, to be eligible for transitional pass-through payment under the OPPS, a device must meet the criteria at § 419.66(b)(1) through (4). With respect to the newness criterion at § 419.66(b)(1), the Paradise® Ultrasound RDN System received FDA Breakthrough Device designation effective December 4, 2020, as a device with the indicated use to reduce blood pressure in adult (≥22 years of age) patients with uncontrolled hypertension, who may be inadequately responsive to, or who are intolerant to anti-hypertensive medications. FDA approved the premarket approval application (PMA) for the Paradise® Ultrasound RDN System on November 7, 2023 for the indicated use to reduce blood pressure as an adjunctive treatment in hypertension patients in whom lifestyle modifications and antihypertensive medications do not adequately control blood pressure. We note that while the indication for the FDA Breakthrough Device designation and the indication for the FDA premarket approval vary slightly, we believe that FDA premarket approval indication is the one covered by the Breakthrough Device designation. We received the application for a new device category for transitional pass-through payment status for the Paradise® Ultrasound RDN System on November 28, 2023, which is within 3 years of the date of the initial FDA marketing authorization. Start Printed Page 59305

We are inviting public comments on whether the Paradise® Ultrasound RDN System meets the newness criterion at § 419.66(b)(1).

With respect to the eligibility criteria at § 419.66(b)(3), the device must be an integral part of the service furnished, be used for one patient only, come in contact with human tissue, and be surgically inserted or implanted, or applied in or on a wound or other skin lesion. The applicant did not explicitly state whether the Paradise® Ultrasound RDN System is integral to the service furnished. With respect to whether the Paradise® Ultrasound RDN System is used for one patient only, the applicant asserted that the Paradise® Catheter, Paradise® Cartridge, and Paradise® Connection Cable are single patient use. However, the Paradise® Generator, Paradise® Remote, and Paradise® Cart are reusable and are capital equipment. While the applicant did not explicitly state whether the Paradise® Ultrasound RDN System comes into contact with human tissue, the applicant provided that the Paradise® Catheter is placed within the renal artery. According to the applicant, the Paradise® Ultrasound RDN System is an implantable device. We note that the Paradise® Generator, Paradise® Remote, and Paradise® Cart are reusable, do not come in contact with the patient's tissue, are not surgically implanted or inserted, or applied in or on a wound or other skin lesion, as required by § 419.66(b)(3).

We are inviting public comments on whether the Paradise® Ultrasound RDN System meets the eligibility criterion at § 419.66(b)(3).

With respect to the exclusion criterion at § 419.66(b)(4), a device is not eligible to be considered for device pass-through payment if it is any of the following: (1) equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets as defined in Chapter 1 of the Medicare Provider Reimbursement Manual (CMS Pub. 15-1); or (2) a material or supply furnished incident to a service (for example, a suture, customized surgical kit, or clip, other than a radiological site marker). While the applicant did not explicitly state whether the Paradise® Ultrasound RDN System, or select components, is equipment, an instrument, apparatus, implement, or item for which depreciation and financing expenses are recovered, per the applicant, the Paradise® Catheter, Paradise® Cartridge, and Paradise® Connection Cable are single-use only. The applicant further explained that the Paradise® Generator, Paradise® Cart, and Paradise® Remote are capital equipment; as such, they are excluded from device pass-through payment eligibility under § 419.66(b)(4). The applicant did not explicitly state whether the Paradise® Ultrasound RDN System is a supply or material furnished incident to a service.

The applicant requested pass-through payment for the Paradise® Ultrasound RDN System, but we question whether only the Paradise® Catheter component of the Paradise® Ultrasound RDN System, as opposed to the whole system, is eligible for pass-through payments under § 419.66(b)(3) or at § 419.66(b)(4). We do not believe that the Paradise® Generator, Paradise® Cable, Paradise® Cartridge, Paradise® Connection Cable, Paradise® Remote, or Paradise® Cart meet the eligibility requirements under § 419.66(b)(3) or at § 419.66(b)(4), and, as such, are not eligible for pass-through payments.

We are inviting public comments on whether the Paradise® Ultrasound RDN System meets the exclusion criterion at § 419.66(b)(4).

In addition to the criteria at § 419.66(b)(1) through (4), the criteria for establishing new device categories are specified at § 419.66(c). The first criterion, at § 419.66(c)(1), provides that CMS determines that a device to be included in the category is not appropriately described by any of the existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996. Per the applicant, the Paradise® Ultrasound RDN System is a catheter-based system that delivers ultrasound energy in the location of sympathetic nerves surrounding the renal arteries. According to the applicant, no previous or existing device categories for pass-through payment have encompassed the Paradise® Ultrasound RDN System. Per the applicant, device categories C1753 (Catheter, intravascular ultrasound) and C1888 (Catheter, ablation, noncardiac, endovascular (implantable)) do not appropriately describe the Paradise® Ultrasound RDN System. The applicant asserted that C1753 does not appropriately describe the Paradise® Ultrasound RDN System because the Paradise® Ultrasound RDN System is used to treat a disease and denervates renal nerves, whereas C1753 was created to describe ultrasound catheter devices that are not used to treat a disease and are used for imaging of the vessel. According to the applicant, C1888 does not appropriately describe the Paradise® Ultrasound RDN System because the Paradise® Ultrasound RDN System is intended to denervate renal nerves by using ultrasound energy that does not otherwise affect the blood vessel tissue, whereas C1888 was created to describe devices that use radiofrequency or laser technologies to occlude or obliterate blood vessels. [ 24 ]

We have not identified an existing pass-through payment category that describes the Paradise® Ultrasound RDN System. We are inviting public comment on whether the Paradise® Ultrasound RDN System meets the device category criterion at § 419.66(c)(1).

We note that the applicant indicated the Paradise® Ultrasound RDN System is the only device authorized by FDA with an indication for renal denervation using ultrasound energy to achieve reductions in blood pressure. However, we note that the Symplicity Spyral TM Catheter (Symplicity Spyral TM RDN System) device, for which we also received an application for transitional pass-through payments for CY 2025 as discussed in this proposed rule, is authorized by FDA with an indication for renal denervation using a radiofrequency modality to achieve reductions in blood pressure. Accordingly, we note that while the Paradise® Ultrasound RDN System device may have a different modality ( i.e., ultrasound compared to radiofrequency) to that of the Symplicity Spyral TM Catheter device, the Paradise® Ultrasound RDN System device may have a similar mechanism of action to that of the Symplicity Spyral TM Catheter device. We question whether the device descriptions provided in the respective applications support establishing two modality specific pass-through payment device categories or a single device category that would encompass both RDN device modalities. We address this question in detail immediately following the full discussion of all other applicable eligibility criteria for both the Paradise® Ultrasound RDN System and the Symplicity Spyral TM RDN System applications.

We are inviting public comment on whether Paradise® Ultrasound RDN System meets the device category criterion at § 419.66(c)(1).

The second criterion for establishing a device category, at § 419.66(c)(2), provides that CMS determines either of the following: (i) that a device to be included in the category has demonstrated that it will substantially improve the diagnosis or treatment of an illness or injury or improve the functioning of a malformed body part Start Printed Page 59306 compared to the benefits of a device or devices in a previously established category or other available treatment; or (ii) for devices for which pass-through status will begin on or after January 1, 2020, as an alternative to the substantial clinical improvement criterion, the device is part of the FDA's Breakthrough Devices Program and has received FDA marketing authorization for the indication covered by the Breakthrough Device designation. As previously stated, the Paradise® Ultrasound RDN System has Breakthrough Device designation and marketing authorization from FDA for the indication covered by the Breakthrough Device designation (as explained in more detail in the discussion of the newness criterion) and therefore is not evaluated for substantial clinical improvement.

We are inviting public comment on whether the Paradise® Ultrasound RDN System meets the device category criterion at § 419.66(c)(2)(ii).

The third criterion for establishing a device category, at § 419.66(c)(3), requires us to determine that the cost of the device is not insignificant, as described in § 419.66(d). Section 419.66(d) includes three cost significance criteria that must each be met. The applicant provided the following information in support of the cost significance requirements. The applicant stated that Paradise® Ultrasound RDN System would be reported with HCPCS codes shown in Table 50.

To meet the cost criterion for device pass-through payment status, a device must pass all three tests of the cost criterion for at least one APC. As we explained in the CY 2005 OPPS final rule ( 69 FR 65775 ), we generally use the lowest APC payment rate applicable for use with the nominated device when we assess whether a device meets the cost significance criterion, thus increasing the probability the device will pass the cost significance test. Beginning in CY 2017, we calculate the device offset amount at the HCPCS/CPT code level instead of the APC level ( 81 FR 79657 ). We note the applicant used the CY 2023 payment rates for the three tests of the cost criterion. For our calculations, we Start Printed Page 59307 used APC 5192, which had a CY 2023 payment rate of $5,215.40 at the time the application was received. We used the CY 2023 APC level device offset amount of $1,491.08 for APC 5192, since HCPCS codes 0338T and 0339T were not included in Addendum P to the CY 2023 OPPS/ASC final rule with comment period and no CY 2023 HCPCS/CPT code level device offset amount was available at the time the application was received. [ 25 ] According to the applicant, the operating cost  [ 26 ] of the Paradise® Ultrasound RDN System is $23,000.00.

Section 419.66(d)(1), the first cost significance requirement, provides that the estimated average reasonable cost of devices in the category must exceed 25 percent of the applicable APC payment amount for the service related to the category of devices. The average reasonable cost of $23,000.00 for the Paradise® Ultrasound RDN System is 441.00 percent of the applicable APC payment amount for the service related to the category of devices of $5,215.40 (($23,000.00/$5,215.40) × 100 = 441.00 percent). Therefore, we believe the Paradise® Ultrasound RDN System meets the first cost significance requirement.

The second cost significance requirement, at § 419.66(d)(2), provides that the estimated average reasonable cost of the devices in the category must exceed the cost of the device-related portion of the APC payment amount for the related service by at least 25 percent, which means that the device cost needs to be at least 125 percent of the offset amount (the device-related portion of the APC found on the offset list). The estimated average reasonable cost of $23,000.00 for the Paradise® Ultrasound RDN System is 1,542.51 percent of the cost of the device-related portion of the APC payment amount for the related service of $1,491.08 (($23,000.00/$1,491.08) × 100 = 1,542.51 percent). Therefore, we believe that the Paradise® Ultrasound RDN System meets the second cost significance requirement.

The third cost significance requirement, at § 419.66(d)(3), provides that the difference between the estimated average reasonable cost of the devices in the category and the portion of the APC payment amount for the device must exceed 10 percent of the APC payment amount for the related service. The difference between the estimated average reasonable cost of $23,000.00 for the Paradise® Ultrasound RDN System and the portion of the APC payment amount for the device of $1,491.08 is 412.41 percent of the APC payment amount for the related service of $5,215.40 ((($23,000.00−$1,491.08)/$5,215.40) × 100 = 412.41 percent). Therefore, we believe that the Paradise® Ultrasound RDN System meets the third cost significance requirement.

We are inviting public comment on whether the Paradise® Ultrasound RDN System meets the device pass-through payment criteria discussed in this section, including the cost criterion for device pass-through payment status.

Limaca Medical submitted an application for a new device category for transitional pass-through payment status for Precision GI for CY 2025. According to the applicant, Precision GI is a motorized, battery operated, single-use, fully disposable endoscopic ultrasound-guided (EUS) fine needle biopsy device used to obtain biopsies of tissue for definitive diagnosis of pancreatic cancer and other life-threatening GI abnormalities. Per the applicant, Precision GI is untethered and battery operated with an internally powered and controlled motor, featuring a long flexible shaft transferring the proximal force of the motor through the inserted endoscope to the needle circumferential cutting tip. The device is controlled by a physician, who inserts the device into the patient's gastrointestinal (GI) tract via the ultrasound endoscope. Upon reaching the designated biopsy site, the physician operates the device's motorized mechanism that automatically rotates the needle (which is included in the device's package) to cut and extract tissue. The biopsy site is accessed through the instrument channel of an ultrasound imaging endoscope that detects the device's echogenic needle tip.

Please refer to the online application posting for Precision GI, available at https://mearis.cms.gov/​public/​publications/​device-ptp/​DEP23113023REE , for additional detail describing the device and the disease treated by the device.

As stated previously, to be eligible for transitional pass-through payment under the OPPS, a device must meet the criteria at § 419.66(b)(1) through (4). With respect to the newness criterion at § 419.66(b)(1), Precision GI received FDA Breakthrough Device designation effective March 24, 2022, as a device used with an ultrasound endoscope for fine needle biopsy of submucosal lesions, mediastinal masses, lymph nodes, and intraperitoneal masses within or adjacent to the GI tract. FDA granted the applicant 510(k) clearance for Precision GI on August 28, 2023, for the indication covered by the Breakthrough Device designation. We received the application for a new device category for transitional pass-through payment status for Precision GI on November 30, 2023, which is within three years of the date of the initial FDA marketing authorization.

We are inviting public comments on whether Precision GI meets the newness criterion at § 419.66(b)(1).

With respect to the eligibility criteria at § 419.66(b)(3), the device must be an integral part of the service furnished used for one patient only, come in contact with human tissue, and be surgically inserted or implanted, or applied in or on a wound or other skin lesion. The applicant did not indicate whether Precision GI is an integral part of the service furnished. The applicant stated that the device is intended for single-use. While the applicant did not explicitly state whether Precision GI comes in contact with human tissue and is surgically inserted or implanted, the applicant noted that Precision GI is used to sample targeted submucosal lesions, mediastinal masses, lymph nodes, and intraperitoneal masses within or adjacent to the GI tract and this is achieved by a physician who inserts Precision GI into the patient's GI tract using an ultrasound endoscope. However, we note that, while the needle (which is a component of the device and is included in the device's package) does come into contact with human tissue and is surgically inserted, the motorized mechanism of the Precision GI device itself may not come in contact with human tissue and may not be surgically implanted or inserted (either permanently or temporarily), or applied in or on a wound or other skin lesion, as required at § 419.66(b)(3). Start Printed Page 59308

We are inviting public comments on whether Precision GI meets the eligibility criterion at § 419.66(b)(3).

With respect to the exclusion criterion at § 419.66(b)(4), a device is not eligible to be considered for device pass-through payment if it is any of the following: (1) equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets as defined in Chapter 1 of the Medicare Provider Reimbursement Manual (CMS Pub. 15-1); or (2) a material or supply furnished incident to a service (for example, a suture, customized surgical kit, or clip, other than a radiological site marker). The applicant indicated that Precision GI is equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets, the applicant noted that Precision GI is a motorized, single-use, fully disposable EUS fine needle biopsy device that functions with no related capital component. The applicant stated that Precision GI is not a material or supply furnished incident. However, based on the description of the device as a biopsy device, we question whether Precision GI may be considered a supply or material furnished incident to a service and excluded from device pass-through payment eligibility under § 419.66(b)(4).

Specifically, in the CY 2001 OPPS interim final rule with comment period ( 65 FR 67804 through 67805 ), we explained how we interpreted § 419.43(e)(4)(iv). We stated that we consider a device to be surgically implanted or inserted if it is introduced into the human body through a surgically created incision. We also stated that we do not consider an item used to cut or otherwise create a surgical opening to be a device that is surgically implanted or inserted. We consider items used to create incisions, such as scalpels, electrocautery units, biopsy apparatuses, or other commonly used operating room instruments, to be supplies or capital equipment not eligible for transitional pass-through payments. We stated that we believe the function of these items is different and distinct from that of devices that are used for surgical implantation or insertion. Finally, we stated that, generally, we would expect that surgical implantation or insertion of a device occurs after the surgeon uses certain primary tools, supplies, or instruments to create the surgical path or site for implanting the device. Further, in the CY 2006 OPPS final rule with comment period ( 70 FR, 68629 through 68630 ), we adopted as final our interpretation that the surgical insertion or implantation criterion can be met by devices that are surgically inserted or implanted via a natural or surgically created orifice, as well as those devices that are inserted or implanted via a surgically created incision. We reiterated that we maintain all of the other criteria in § 419.66 of the regulations, namely, that we do not consider an item used to cut or otherwise create a surgical opening to be a device that is surgically implanted or inserted. We reiterated this interpretation in the CY 2024 OPPS final rule ( 88 FR 81543 , 81743 ).

We note that Precision GI, is inserted into the patient's GI tract via the ultrasound endoscope to reach the designated biopsy site where the device's motorized mechanism is then used for cutting and extraction of tissue endoscopically from within or adjacent to the patient's GI tract. However, we question whether Precision GI, which is described as a biopsy device, may be considered a supply or material furnished incident to a service consistent with our previous interpretation of § 419.43(e)(4)(iv) and therefore excluded from device pass-through payment eligibility under § 419.66(b)(4).

We welcome additional evidence regarding whether Precision GI should be considered a material or supply incident to a service based on our previous interpretation of § 419.43(e)(4)(iv) as it has been applied to biopsy devices and we invite public comments on whether Precision GI meets the exclusion criterion at § 419.66(b)(4).

In addition to the criteria at § 419.66(b)(1) through (4), the criteria for establishing new device categories are specified at § 419.66(c). The first criterion, at § 419.66(c)(1), provides that CMS determines that a device to be included in the category is not appropriately described by any of the existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996. The applicant asserted that Precision GI is authorized by FDA with an indication to sample targeted submucosal lesions, mediastinal masses, lymph nodes, and intraperitoneal masses within or adjacent to the gastrointestinal tract. Per the applicant, the device category C1830 (Powered bone marrow biopsy needle) does not appropriately describe Precision GI because Precision GI is not targeting the bone marrow and instead is targeting sub‐mucosal and extramural gastrointestinal lesions. According to the applicant, another device category C1782 (Morcellator) does not appropriately describe Precision GI because that device category, per Medicare Claims Processing Manual, Ch. 4, § 60.4.3, is only for laparoscopic procedures. The applicant added that Precision GI cuts and extracts tissue endoscopically, not laparoscopically.

We have not identified an existing pass-through payment category that describes Precision GI. We are inviting public comment on whether Precision GI meets the device category criterion at § 419.66(c)(1).

The second criterion for establishing a device category, at § 419.66(c)(2), provides that CMS determines either of the following: (i) that a device to be included in the category has demonstrated that it will substantially improve the diagnosis or treatment of an illness or injury or improve the functioning of a malformed body part compared to the benefits of a device or devices in a previously established category or other available treatment; or (ii) for devices for which pass-through status will begin on or after January 1, 2020, as an alternative to the substantial clinical improvement criterion, the device is part of the FDA's Breakthrough Devices Program and has received FDA marketing authorization for the indication covered by the Breakthrough Device designation. Precision GI has a Breakthrough Device designation and marketing authorization from FDA for the indication covered by the Breakthrough Device designation (as explained in more detail in the discussion of the newness criterion) and therefore is not evaluated for substantial clinical improvement.

We are inviting public comment on whether the Precision GI meets the device category criterion at § 419.66(c)(2)(ii). The third criterion for establishing a device category, at § 419.66(c)(3), requires us to determine that the cost of the device is not insignificant, as described in § 419.66(d). Section 419.66(d) includes three cost significance criteria that must each be met. The applicant provided the following information in support of the cost significance requirements. The applicant stated that Precision GI would be reported with HCPCS codes as shown in Table 51.

To meet the cost criterion for device pass-through payment status, a device must pass all three tests of the cost criterion for at least one APC. As we explained in the CY 2005 OPPS final rule ( 69 FR 65775 ), we generally use the lowest APC payment rate applicable for use with the nominated device when we assess whether a device meets the cost significance criterion, thus increasing the probability the device will pass the cost significance test. Beginning in CY 2017, we calculate the device offset amount at the HCPCS/CPT code level instead of the APC level ( 81 FR 79657 ). We note the applicant utilized the CY 2024 payment rates for the three tests of the cost criterion. For our calculations, we used APC 5302, which had a CY 2024 payment rate of $1,812.99 at the time the application was received. HCPCS code 43242 in APC 5302 had a CY 2024 device offset amount of $23.75 at the time the application was received. [ 27 ] According to the applicant, the cost of Precision GI is $1,400.00.

Section 419.66(d)(1), the first cost significance requirement, provides that the estimated average reasonable cost of devices in the category must exceed 25 percent of the applicable APC payment amount for the service related to the category of devices. The average reasonable cost of $1,400.00 for Precision GI is 77.22 percent of the applicable APC payment amount for the service related to the category of devices of $1,812.99 (($1,400.00/$1,812.99) × 100 = 77.22 percent). Therefore, we believe Precision GI meets the first cost significance requirement.

The second cost significance requirement, at § 419.66(d)(2), provides that the estimated average reasonable cost of the devices in the category must exceed the cost of the device-related portion of the APC payment amount for the related service by at least 25 percent, which means that the device cost needs to be at least 125 percent of the offset amount. The estimated average reasonable cost of $1,400.00 for Precision GI is 5894.74 percent of the cost of the device-related portion of the APC payment amount for the related service of $23.75 (($1,400.00/$23.75) × 100 = 5894.74 percent). Therefore, we believe that Precision GI meets the second cost significance requirement.

The third cost significance requirement, at § 419.66(d)(3), provides that the difference between the estimated average reasonable cost of the devices in the category and the portion of the APC payment amount for the device must exceed 10 percent of the APC payment amount for the related service. The difference between the estimated average reasonable cost of $1,400.00 for Precision GI and the portion of the APC payment amount for the device of $23.75 is 75.91 percent of the APC payment amount for the related service of $1,812.99 ((($1,400−$23.75)/$1,812.99) × 100 = 75.91 percent). Therefore, we believe that Precision GI meets the third cost significance requirement.

We are inviting public comment on whether Precision GI meets the device pass-through payment criteria discussed in this section, including the cost criterion for device pass-through payment status.

Medtronic, Inc. submitted an application for a new device category for transitional pass-through payment status for the PulseSelect TM PFA System for CY 2025. Per the applicant, the PulseSelect TM PFA System is used to perform pulmonary vein isolation (PVI) via cardiac catheter ablation to treat atrial fibrillation. According to the applicant, unlike existing methods that rely on thermal energy (either radiofrequency or cryoablation), the PulseSelect TM PFA System uses non-thermal irreversible electroporation (IRE) to induce cardiac tissue cell death. The pulsed field ablation, or IRE for PVI during cardiac catheter ablation, is performed as a percutaneous, transvenous procedure under imaging guidance. The applicant stated the PulseSelect TM PFA System consists of three elements: (1) the PulseSelect TM PFA Loop Catheter (Loop Catheter), a one-time use, steerable, multi-electrode loop catheter used to deliver IRE in pulmonary vein isolation as a treatment for atrial fibrillation; (2) the PulseSelect TM PFA Catheter Interface Cable (Catheter Interface Cable), a one-time use interface cable used to connect the Loop Catheter to the PulseSelect TM Start Printed Page 59310 PFA Generator system; and (3) the PulseSelect TM PFA Generator system (Generator system) used to deliver IRE in pulmonary vein isolation as a treatment for atrial fibrillation.

Please refer to the online application posting for the PulseSelect TM PFA System, available at https://mearis.cms.gov/​public/​publications/​device-ptp/​DEP240228J1461 , for additional detail describing the device and the disease treated by the device.

As stated previously, to be eligible for transitional pass-through payment under the OPPS, a device must meet the criteria at § 419.66(b)(1) through (4). With respect to the newness criterion at § 419.66(b)(1), the PulseSelect TM PFA System received FDA Breakthrough Device designation effective September 27, 2018, for the treatment of drug refractory recurrent symptomatic atrial fibrillation. The Medtronic multi-electrode cardiac ablation catheter (which is now known as PulseSelect TM ) is also intended to be used for cardiac electrophysiological (EP) mapping and measuring of intracardiac electrograms, delivery of diagnostic pacing stimuli, and verifying electrical isolation post-treatment. FDA approved the premarket approval application (PMA) for the PulseSelect TM PFA System on December 13, 2023, for the indication covered by the Breakthrough Device designation. We received the application for a new device category for transitional pass-through payment status for the PulseSelect TM PFA System on February 28, 2024, which is within three years of the date of the initial FDA marketing authorization.

We are inviting public comments on whether the PulseSelect TM PFA System meets the newness criterion at § 419.66(b)(1).

With respect to the eligibility criterion at § 419.66(b)(3), the device must be an integral part of the service furnished, used for one patient only, come in contact with human tissue, and be surgically inserted or implanted, or applied in or on a wound or other skin lesion. The applicant did not indicate whether the PulseSelect TM PFA System is integral to the service furnished. Per the applicant, the Loop Catheter and Catheter Interface Cable components are single-use. While the applicant did not explicitly state whether any of the device components come in contact with human tissue, based on the device description, the procedure with which the PulseSelect TM PFA System Loop Catheter is used is performed percutaneously ( i.e., passing through the skin) and transvenously ( i.e., through or across a vein) using the Loop Catheter to achieve ablation in the targeted areas. However, neither the Generator system nor the Catheter Interface Cable which is used to connect the Loop Catheter to the Generator system appear to come in contact with the patient's tissue, be surgically implanted or inserted, or applied in or on a wound or other skin lesion, as required by § 419.66(b)(3) and therefore, we do not believe that either component is eligible for device pass-through payments. We discuss the Catheter Interface Cable in more detail in the following criteria discussions.

We are inviting public comments on whether the PulseSelect TM PFA System meets the eligibility criterion at § 419.66(b)(3).

With respect to the exclusion criterion at § 419.66(b)(4), a device is not eligible to be considered for device pass-through payment if it is any of the following: (1) equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets as defined in Chapter 1 of the Medicare Provider Reimbursement Manual (CMS Pub. 15-1); or (2) a material or supply furnished incident to a service (for example, a suture, customized surgical kit, or clip, other than a radiological site marker). The applicant did not indicate whether the Loop Catheter and the Catheter Interface Cable are equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered or a material or supply furnished incident to a service. However, we note that in the application for a new device category for transitional pass-through payment status for CY 2025, the applicant stated that the Catheter Interface Cable is a one-time use cable that cannot be reprocessed. This assertion appears contrary to the information provided to CMS by the applicant in their application submission for FY 2025 IPPS new technology add-on payment under the name “PulseSelect TM Pulsed Field Ablation (PFA) Loop Catheter” ( https://mearis.cms.gov/​public/​publications/​ntap/​NTP231017BMQKQ ). Specifically, in the FY 2025 IPPS/LTCH PPS proposed rule, CMS noted that the applicant stated that the PulseSelect TM PFA Interface Cable is a component of the PulseSelect TM PFA Generator Reusable Accessories. Further, CMS explained that the new technology add-on payment application is for the PulseSelect TM PFA Loop Catheter (as opposed to the PulseSelect TM PFA System) and that the applicant had specified in its application that the PulseSelect TM PFA Generator System is not the subject of this new technology add-on payment application ( 89 FR 36124 ). Therefore, we stated that we believe the total cost should be based only on the cost of the PulseSelect TM PFA Loop Catheter.

In contrast to the new technology add-on payment application, the application for a new device category for transitional pass-through payment status is for the PulseSelect TM PFA System, which includes the PulseSelect TM PFA Generator system. The PulseSelect TM PFA Interface Cable is listed as a component of the PulseSelect TM PFA Generator System, which the applicant described as capital equipment in its new technology add-on payment application. We therefore believe the PulseSelect TM PFA Generator System, including the Catheter Interface Cable, is an item for which depreciation and financing expenses are recovered as depreciation assets and thus, is ineligible for device pass-through payment under § 419.66(b)(4).

We are inviting public comments on whether the PulseSelect TM PFA System meets the exclusion criterion at § 419.66(b)(4).

In addition to the criteria at § 419.66(b)(1) through (4), the criteria for establishing new device categories are specified at § 419.66(c). The first criterion, at § 419.66(c)(1), provides that CMS determines that a device to be included in the category is not appropriately described by any of the existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996. The applicant asserted that the PulseSelect TM PFA System is the only device authorized by FDA with an indication for cardiac electrophysiological mapping (stimulation and recording) and for treatment of drug refractory, recurrent, symptomatic paroxysmal atrial fibrillation or persistent atrial fibrillation (episode duration less than 1 year) through the use of IRE. According to the applicant, no previous or existing device categories for pass-through payment appropriately describe the PulseSelect TM PFA System. Per the applicant, device categories C2630 (Catheter, electrophysiology, diagnostic/ablation, other than 3D or vector mapping, cool-tip) and C1733 (Catheter, electrophysiology, diagnostic/ablation, other than 3D or vector mapping, other than cool-tip) do not appropriately describe the PulseSelect TM PFA System because, unlike cardiac catheter ablation technologies using thermal energy where options are either heat (radiofrequency) or cold (cryoablation), the PulseSelect TM PFA System uses non-thermal IRE to elicit targeted Start Printed Page 59311 cardiac tissue cell death. The applicant stated that the PulseSelect TM PFA System's non-thermal IRE mechanism of action avoids many risks present in thermal cardiac catheter ablation technologies.

We note that, based on the description the applicant provided, the PulseSelect TM PFA System is used to achieve catheter ablation to treat atrial fibrillation, and thus could be appropriately described by C1733. Specifically, we believe that C1733 may appropriately describe the PulseSelect TM PFA System because it includes a catheter used for ablation of tissue without a cool-tip. Further, C1733 does not specify the modality needed to deliver the ablation, whether thermal or by electroporation. In this context, we believe the PulseSelect TM PFA System may be similar to the devices described by C1733, and therefore, the PulseSelect TM PFA System may also be appropriately described by C1733.

We are inviting public comment on whether the PulseSelect TM PFA System meets the device category criterion at § 419.66(c)(1).

The second criterion for establishing a device category, at § 419.66(c)(2), provides that CMS determines either of the following: (i) that a device to be included in the category has demonstrated that it will substantially improve the diagnosis or treatment of an illness or injury or improve the functioning of a malformed body part compared to the benefits of a device or devices in a previously established category or other available treatment; or (ii) for devices for which pass-through status will begin on or after January 1, 2020, as an alternative to the substantial clinical improvement criterion, the device is part of the FDA's Breakthrough Devices Program and has received FDA marketing authorization for the indication covered by the Breakthrough Device designation. The PulseSelect TM PFA System has a Breakthrough Device designation and marketing authorization from FDA for the indication covered by the Breakthrough Device designation (as explained in the discussion of the newness criterion) and therefore is not evaluated for substantial clinical improvement.

We are inviting public comment on whether the PulseSelect TM PFA System meets the device category criterion at § 419.66(c)(2)(ii).

The third criterion for establishing a device category, at § 419.66(c)(3), requires us to determine that the cost of the device is not insignificant, as described in § 419.66(d). Section 419.66(d) includes three cost significance criteria that must each be met. The applicant provided the following information in support of the cost significance requirements. The applicant stated that the PulseSelect TM PFA System would be reported with the HCPCS code shown in Table 52.

To meet the cost criterion for device pass-through payment status, a device must pass all three tests of the cost criterion for at least one APC. As we explained in the CY 2005 OPPS final rule ( 69 FR 65775 ), we generally use the lowest APC payment rate applicable for use with the nominated device when we assess whether a device meets the cost significance criterion, thus increasing the probability the device will pass the cost significance test. Beginning in CY 2017, we calculate the device offset amount at the HCPCS/CPT code level instead of the APC level ( 81 FR 79657 ). We note that the applicant utilized the CY 2024 payment rates for the three tests of the cost criterion. For our calculations, we used APC 5213, which had a CY 2024 payment rate of $22,629.19 at the time the application was received. HCPCS code 93656 in APC 5213 had a CY 2024 device offset amount of $11,251.23 at the time the application was received.

According to the applicant, the cost of the one-time use Loop Catheter is $9,750.00. We note the applicant included the cost of the Loop Catheter ($9,750.00) and the cost of the Catheter Interface Cable ($800.00) in the cost significance tests, totaling the cost of the device as $10,550.00. However, as previously discussed, we believe that the PulseSelect TM PFA Generator System, including the PulseSelect TM PFA Catheter Interface Cable, is capital equipment and therefore not eligible for device pass-through status payment. As such we removed the cost of Catheter Interface Cable in our calculations and only included the cost of the Loop Catheter, which changed the total device cost from $10,550.00 to $9,750.00; we have used $9,750.00 to perform the cost significance tests. We further note that the decision to exclude the cost of the Catheter Interface Cable ($800.00) in the cost significance tests did not change the outcome of the cost significance criterion determinations.

Section 419.66(d)(1), the first cost significance requirement, provides that the estimated average reasonable cost of devices in the category must exceed 25 percent of the applicable APC payment amount for the service related to the category of devices. The average reasonable cost of $9,750.00 for the PulseSelect TM PFA System is 43.09 percent of the applicable APC payment amount for the service related to the category of devices of $22,629.19 (($9,750.00/$22,629.19) × 100 = 43.09 percent). Therefore, we believe the Start Printed Page 59312 PulseSelect TM PFA System meets the first cost significance requirement.

The second cost significance requirement, at § 419.66(d)(2), provides that the estimated average reasonable cost of the devices in the category must exceed the cost of the device-related portion of the APC payment amount for the related service by at least 25 percent, which means that the device cost needs to be at least 125 percent of the offset amount (the device-related portion of the APC found on the offset list). The estimated average reasonable cost of $9,750.00 for the PulseSelect TM PFA System is 86.66 percent of the cost of the device-related portion of the APC payment amount for the related service of $11,251.23 (($9,750.00/$11,251.23) × 100 = 86.66 percent). Therefore, we believe that the PulseSelect TM PFA System does not meet the second cost significance requirement.

The third cost significance requirement, at § 419.66(d)(3), provides that the difference between the estimated average reasonable cost of the devices in the category and the portion of the APC payment amount for the device must exceed 10 percent of the APC payment amount for the related service. The difference between the estimated average reasonable cost of $9,750.00 for the PulseSelect TM PFA System and the portion of the APC payment amount for the device of $11,251.23 is negative 6.63 percent of the APC payment amount for the related service of $22,629.19 ((($9,750.00−$11,251.23)/$22,629.19) × 100 = −6.63 percent). Therefore, we believe that the PulseSelect TM PFA System does not meet the third cost significance requirement.

We are inviting public comment on whether the PulseSelect TM PFA System meets the device pass-through payment criteria discussed in this section, including the cost criterion for device pass-through payment status.

Medtronic submitted an application for a new device category for transitional pass-through payment status for the Symplicity Spyral TM RDN System, for CY 2025. The applicant is only seeking a new device category for transitional pass-through payment status for the Symplicity Spyral TM Multi-Electrode RDN Catheter (hereinafter Symplicity Spyral TM Catheter) the Symplicity Spyral TM RDN System. According to the applicant, the Symplicity Spyral TM RDN System consists of the Symplicity Spyral TM Catheter and the Symplicity G3 TM generator; the applicant requested device pass-through status for the catheter component of the system only. The applicant further explained that the Symplicity Spyral TM RDN System is indicated to reduce blood pressure as an adjunctive treatment in hypertension patients in whom lifestyle modifications and antihypertensive medications do not adequately control blood pressure. Per the applicant, the Symplicity Spyral TM Catheter, when used with the Symplicity G3 TM generator, delivers radiofrequency (RF) energy through the wall of the renal artery to disrupt the surrounding renal nerves with the aim of modulating or suppressing sympathetic nerve hyperactivity. According to the applicant, the Symplicity Spyral TM Catheter is a single-use catheter used to deliver multiple ablations in both kidneys, in the renal main, accessory, and branch arteries, based on a patient's artery anatomy and size.

Per the applicant, the Symplicity Spyral TM Catheter is designed to be used with the Symplicity G3 TM generator and includes the following components: (1) 4 gold radiopaque electrodes at the spiral (helical) distal end that are deployed into a spiral (helical) shape by partially retracting the guidewire proximal to the spiral section of the catheter; (2) self-expanding electrode array assembly which radially spaces the four gold electrodes for quadratic ablation; (3) rapid exchange port; (4) straightening tool intended to facilitate safe insertion of the guidewire into the catheter; (5) cable connector attached to the catheter handle that connects the catheter to the generator; (6) catheter handle; and (7) femoral marker. Per the applicant, additional components of the Symplicity Spyral TM RDN System include the: (1) Symplicity G3 TM generator, which is only compatible with the Symplicity Spyral TM Catheter, which includes a remote control, power cable, and output for the Symplicity Spyral TM Catheter; (2) Symplicity G3 TM generator cart, an optional mobile cart; and (3) foot switch, an optional component. Per the applicant, additional items required for the procedure include: (1) a 0.36 mm (0.014 in) guidewire, preferably without hydrophilic coating; (2) a dispersive electrode; (3) a sterile bag to cover the remote control if used in the sterile field; (4) a 6 French (Fr) guide-catheter; (5) an introducer sheath; (6) a stopcock sidearm; (7) a Tuohy-Borst adapter; and (8) other standard items used to aid percutaneous transluminal catheterization in renal arteries.

According to information submitted by the applicant, key steps for operating the Symplicity Spyral TM Catheter include: (1) connecting the Symplicity Spyral TM Catheter to the Symplicity G3 TM generator; (2) inserting the Symplicity Spyral TM Catheter through a small femoral incision and guiding it to the renal artery via the abdominal aorta; (3) advancing the Symplicity Spyral TM Catheter until the distal electrode is located in the desired position within the renal artery; (4) retracting the guidewire, allowing the self-expanding catheter to expand and fit the renal arterial vessel walls; (5) delivering the treatment of RF energy to ablate the renal nerves through the activation of the catheter electrodes, which is controlled using the generator; (6) if treating another vessel, repositioning the guide catheter within the next vessel and repeating the procedure for positioning the catheter and delivering treatments; (7) upon completion of all treatments, straightening the distal end by advancing the guidewire and withdrawing both the guidewire and the straightened catheter from the guide catheter; (8) retracting the guide catheter from the sheath and removing the introducer sheath from the artery; (9) using standard of care procedures to achieve hemostasis at the puncture site; and (10) disposing of the devices.

Please refer to the online application posting for the Symplicity Spyral TM RDN System, available at https://mearis.cms.gov/​public/​publications/​device-ptp/​DEP231130WPU4J , for additional detail describing the device and the disease treated by the device.

As stated previously, to be eligible for transitional pass-through payment under the OPPS, a device must meet the criteria at § 419.66(b)(1) through (4). With respect to the newness criterion at § 419.66(b)(1), the Symplicity Spyral TM RDN System received FDA Breakthrough Device designation effective March 27, 2020, as a device with the following indicated use: the Symplicity Spyral multi-electrode renal denervation catheter and the Symplicity G3 RF Generator are indicated for the reduction of blood pressure in patients with uncontrolled hypertension despite the use of anti-hypertensive medications or in patients who may have documented intolerance to anti-hypertensive medications. FDA approved the premarket approval application (PMA) for the Symplicity Spyral TM RDN System on November 17, 2023, for the indicated use to reduce blood pressure as an adjunctive treatment in patients with hypertension in whom lifestyle modifications and antihypertensive medications do not adequately control blood pressure. We received the application for a new device category for transitional pass- Start Printed Page 59313 through payment status for the Symplicity Spyral TM Catheter on November 30, 2023, which is within 3 years of the date of the initial FDA marketing authorization.

We are inviting public comments on whether the Symplicity Spyral TM Catheter meets the newness criterion at § 419.66(b)(1).

With respect to the eligibility criteria at § 419.66(b)(3), the device must be an integral part of the service furnished, used for one patient only, come in contact with human tissue, and be surgically inserted or implanted, or applied in or on a wound or other skin lesion. The applicant did not indicate whether the Symplicity Spyral TM Catheter is integral to the service furnished. Per the applicant, the Symplicity Spyral TM Catheter is intended for single patient use only. While the applicant did not explicitly state whether the Symplicity Spyral TM Catheter comes into contact with human tissue, the applicant asserted that the Symplicity TM Catheter ablates renal nerve tissue by positioning the catheter within the renal artery, which expands and fits the renal arterial vessel walls. While the applicant did not explicitly state if the Symplicity Spyral TM Catheter is surgically inserted or implanted, per the device description, the Symplicity Spyral TM Catheter is inserted through a small femoral incision, after which it is inserted into the renal arterial vessel.

We are inviting public comments on whether the Symplicity Spyral TM Catheter meets the eligibility criterion at § 419.66(b)(3).

With respect to the exclusion criterion at § 419.66(b)(4), a device is not eligible to be considered for device pass-through payment if it is any of the following: (1) equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets as defined in Chapter 1 of the Medicare Provider Reimbursement Manual (CMS Pub. 15-1); or (2) a material or supply furnished incident to a service (for example, a suture, customized surgical kit, or clip, other than a radiological site marker). The applicant did not state whether the Symplicity Spyral TM Catheter is equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered whether the Symplicity Spyral TM Catheter is a supply or material furnished incident to a service.

We are inviting public comments on whether the Symplicity Spyral TM Catheter meets the exclusion criterion at § 419.66(b)(4).

In addition to the criteria at § 419.66(b)(1) through (4), the criteria for establishing new device categories are specified at § 419.66(c). The first criterion, at § 419.66(c)(1), provides that CMS determines that a device to be included in the category is not appropriately described by any of the existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996. According to the applicant, the Symplicity Spyral TM Catheter is a single-use catheter used to deliver multiple ablations in both kidneys, in the renal main, accessory, and branch arteries, based on a patient's artery anatomy and size. According to the applicant, no previous or existing device categories for pass-through payment appropriately describe the Symplicity Spyral TM Catheter. The applicant asserted that two categories, C1886 (Catheter, extravascular tissue ablation, any modality (insertable)) and C1888 (Catheter, ablation, noncardiac, endovascular (implantable)), do not appropriately describe the Symplicity Spyral TM Catheter. Per the applicant, C1886 does not appropriately describe the Symplicity Spyral TM Catheter because the Symplicity Spyral TM Catheter ablates renal nerve tissue via an endovascular approach by positioning the catheter within the renal artery and was created to describe devices that ablate extravascular tissue (via an extravascular approach). [ 28 ] According to the applicant, C1888 does not appropriately describe the Symplicity Spyral TM Catheter because the Symplicity Spyral TM Catheter does not ablate or otherwise affect the blood vessel tissue and was created to describe devices designed to occlude or obliterate blood vessels. [ 29 ]

We have not identified an existing pass-through payment category that describes the Symplicity Spyral TM Catheter. We are inviting public comment on whether the Symplicity Spyral TM Catheter meets the device category criterion at § 419.66(c)(1).

We note that the applicant indicated the Symplicity Spyral TM Catheter is not the only device authorized by FDA with an indication for renal denervation to achieve reductions in blood pressure. Paradise® Ultrasound RDN System, for which we also received an application for transitional pass-through payments for CY 2025 as discussed in more detail in this proposed rule, is also authorized by FDA with an indication for renal denervation using ultrasound energy to achieve reductions in blood pressure. Per the applicant, the Paradise® Ultrasound RDN System would also be described by the applicant's proposed pass-through payment category: Ablation catheter, renal nerve, via endovascular approach, any modality. Accordingly, we note that while the Symplicity Spyral TM Catheter device may have a different modality ( i.e., radiofrequency compared to ultrasound), the Symplicity Spyral TM Catheter device may have a similar mechanism of action to that of the Paradise® Ultrasound RDN System device. We question whether the device descriptions provided in the respective applications support establishing two modality specific pass-through payment device categories or a single device category that would encompass both RDN device modalities. We will address this question in detail immediately following the full discussion of all other applicable eligibility criteria for the Symplicity Spyral TM RDN System application.

We are inviting public comment on whether Symplicity Spyral TM Catheter meets the device category criterion at § 419.66(c)(1).

The second criterion for establishing a device category, at § 419.66(c)(2), provides that CMS determines either of the following: (i) that a device to be included in the category has demonstrated that it will substantially improve the diagnosis or treatment of an illness or injury or improve the functioning of a malformed body part compared to the benefits of a device or devices in a previously established category or other available treatment; or (ii) for devices for which pass-through status will begin on or after January 1, 2020, as an alternative to the substantial clinical improvement criterion, the device is part of the FDA's Breakthrough Devices Program and has received FDA marketing authorization for the indication covered by the Breakthrough Device designation. As previously stated, the Symplicity Spyral TM Catheter has Breakthrough Device designation and marketing authorization from FDA for the indication covered by the Breakthrough Device designation (as explained in more detail in the discussion of the newness criterion) and therefore is not evaluated for substantial clinical improvement.

We are inviting public comment on whether the Symplicity Spyral TM Catheter meets the device category criterion at § 419.66(c)(2)(ii).

The third criterion for establishing a device category, at § 419.66(c)(3), Start Printed Page 59314 requires us to determine that the cost of the device is not insignificant, as described in § 419.66(d). Section 419.66(d) includes three cost significance criteria that must each be met. The applicant provided the following information in support of the cost significance requirements. The applicant stated that the Symplicity Spyral TM Catheter would be reported with HCPCS codes shown in Table 53.

To meet the cost criterion for device pass-through payment status, a device must pass all three tests of the cost criterion for at least one APC. As we explained in the CY 2005 OPPS final rule ( 69 FR 65775 ), we generally use the lowest APC payment rate applicable for use with the nominated device when we assess whether a device meets the cost significance criterion, thus increasing the probability the device will pass the cost significance test. Beginning in CY 2017, we calculate the device offset amount at the HCPCS/CPT code level instead of the APC level ( 81 FR 79657 ). We note the applicant used the CY 2024 payment rates for the three tests of the cost criterion. For our calculations, we used APC 5192, which had a CY 2024 payment rate of $5,445.84 at the time the application was received. HCPCS code 0339T in APC 5192 had a CY 2024 device offset amount of $3,362.26 at the time the application was received. [ 30 ] According to the applicant, the cost of the Symplicity Spyral TM Catheter is $16,000.00.

Section 419.66(d)(1), the first cost significance requirement, provides that the estimated average reasonable cost of devices in the category must exceed 25 percent of the applicable APC payment amount for the service related to the category of devices. The average reasonable cost of $16,000.00 for the Symplicity Spyral TM Catheter is 293.80 percent of the applicable APC payment amount for the service related to the category of devices of $5,445.84 (($16,000.00/$5,445.84) × 100 = 293.80 percent). Therefore, we believe the Symplicity Spyral TM Catheter meets the first cost significance requirement.

The second cost significance requirement, at § 419.66(d)(2), provides that the estimated average reasonable cost of the devices in the category must exceed the cost of the device-related portion of the APC payment amount for the related service by at least 25 percent, which means that the device cost needs to be at least 125 percent of the offset amount (the device-related portion of the APC found on the offset list). The estimated average reasonable cost of $16,000.00 for the Symplicity Spyral TM Catheter is 475.87 percent of the cost of the device-related portion of the APC payment amount for the related service of $3,362.26 (($16,000.00/$3,362.26) × Start Printed Page 59315 100 = 475.87 percent). Therefore, we believe that the Symplicity Spyral TM Catheter meets the second cost significance requirement.

The third cost significance requirement at § 419.66(d)(3), provides that the difference between the estimated average reasonable cost of the devices in the category and the portion of the APC payment amount for the device must exceed 10 percent of the APC payment amount for the related service. The difference between the estimated average reasonable cost of $16,000.00 for the Symplicity Spyral TM Catheter and the portion of the APC payment amount for the device of $3,362.26 is 232.06 percent of the APC payment amount for the related service of $5,445.84 ((($16,000.00−$3,362.26)/$5,445.84) × 100 = 232.06 percent). Therefore, we believe that the Symplicity Spyral TM Catheter meets the third cost significance requirement.

We are inviting public comment on whether the Symplicity Spyral TM Catheter meets the device pass-through payment criteria discussed in this section, including the cost criterion for device pass-through payment status.

As previously discussed, we received two applications, the Paradise® Ultrasound RDN System and the Symplicity Spyral TM RDN System (Symplicity Spyral TM Catheter) for transitional device pass-through payments for CY 2025 that, per the applicants, are RDN devices that use an endovascular approach to enter the renal arteries and ablate renal sympathetic nerves to achieve reductions in blood pressure. We question whether the information provided for each respective nominated device supports establishing two modality specific device pass-through payment device categories or establishing a single device category that would encompass both RDN devices.

We note that the Paradise® Ultrasound RDN System and the Symplicity Spyral TM RDN System are both authorized by FDA for the indicated use to reduce blood pressure as an adjunctive treatment in patients with hypertension in whom lifestyle modifications and antihypertensive medications do not adequately control blood pressure. In addition, based on the information provided in the respective applications, it appears that the Paradise® Ultrasound RDN System and the Symplicity Spyral TM RDN System use the same procedure (renal sympathetic denervation, also called renal sympathetic nerve ablation), treat the same disease (hypertension) in the same patient population (patients in whom lifestyle modifications and antihypertensive medications do not adequately control blood pressure), and aim to achieve the same therapeutic outcome (to reduce blood pressure), using the same or similar mechanism of action (thermal ablation). We note that in addition to having the same indicated use, per the applicants, both the Paradise® Ultrasound RDN System and the Symplicity Spyral TM RDN System may be used with the same HCPCS procedure codes: 0338T  [ 31 ] or 0339T. [ 32 ] In addition, the applicant for the Symplicity Spyral TM RDN System asserted that the Paradise® Ultrasound RDN System similarly generates heat to ablate the same renal sympathetic nerves to achieve reductions in blood pressure and this similarity supports establishing a single device category that would encompass RDN devices regardless of the specified modality.

Despite these similarities, the applicants have proposed different device category descriptions. Based on the information submitted, it appears that the device category proposed for the Paradise® Ultrasound RDN System does not appropriately describe the Symplicity Spyral TM RDN System, however, we believe the device category proposed for the Symplicity Spyral TM RDN System would appropriately describe the Paradise® Ultrasound RDN System. Specifically, the applicant for the Paradise® Ultrasound RDN System proposed the following device category: Catheter, intravascular renal denervation, ultrasound, with balloon cooling;  [ 33 ] while the applicant for the Symplicity Spyral TM RDN System proposed the following device category: Ablation catheter, renal nerve, via endovascular approach, any modality. The device category descriptor the applicant proposed for the Paradise® Ultrasound RDN System specifies the device's treatment or procedure (catheter renal denervation), the ablation modality ( i.e., ultrasound), and an attribute of the catheter ( i.e., the cooling balloon). We note that while the device category descriptor the applicant proposed for the Symplicity Spyral TM RDN System device also specifies the device's treatment or procedure (catheter ablation of the renal nerves), it does not specify an ablation modality or any additional attributes of the catheter; rather, the proposed device category for the Symplicity Spyral TM RDN System device more broadly describes any ablation modality ( e.g., radiofrequency or ultrasound).

We note several differences in procedural technique with use of the Paradise® Ultrasound RDN System device compared to the Symplicity Spyral TM RDN System device. Per the applicants, the Paradise® Ultrasound RDN System delivers ablation while positioned in the main renal arteries only, whereas the Symplicity Spyral TM RDN System may deliver ablation while positioned in the main renal, accessory and branch arteries and therefore may require advancing the catheter beyond the main renal arteries. According to the applicants, the Paradise® Ultrasound RDN System procedural technique requires the measurement of the main renal artery diameter to select the appropriate size cooling balloon catheter, whereas the Symplicity Spyral TM RDN System's one size catheter does not require this measurement. Similarly, per the applicants, the Paradise® Catheter's cooling balloon requires specific procedural techniques to ensure the balloon is appropriately inflated and deflated during the procedure, but the Symplicity Spyral TM Catheter does not have this requirement.

Both the Paradise® Ultrasound RDN System and the Symplicity Spyral TM RDN System received FDA Breakthrough Device designation and marketing authorization from FDA for the indications covered by the Breakthrough Device designation, and therefore, are not evaluated for substantial clinical improvement. However, we note that per the applicant of the Paradise® Ultrasound RDN System, a separate device category Start Printed Page 59316 associated with ultrasound denervation is supported by possible differences in clinical efficacy between RDN devices using ultrasound and RDN devices using radiofrequency ablation. Specifically, the applicant of the Paradise® Ultrasound RDN System asserted that, when compared to radiofrequency RDN, on average ultrasound RDN requires fewer ablations per patient (5.4 compared to 46.9), less time per ablation (7 seconds compared to 60 seconds), less time for the total procedure (72 minutes compared to 100 minutes), and less ablation depth (1 to 6 mm compared to 2 to 3 mm). The applicant of the Paradise® Ultrasound RDN System further stated that the Paradise® Ultrasound RDN System circumferential (360 degrees) emission per individual ablation and the lack of a requirement for distal renal artery branch ablation to deliver the treatment are technological features not shared by the radiofrequency RDN device. [ 34 ] However, we note that we did not evaluate the validity or generalizability of these claims nor is it is clear if the two different ablation modalities ( i.e., ultrasound and radiofrequency) would render different clinical results in larger studies or in the long term. [ 35 36 ] We further note that we discuss these claims here solely for the purpose of determining whether the information provided supports establishing two modality-specific pass-through payment device categories or establishing a single device category that may encompass both RDN devices.

In seeking comment, we note that in accordance with section 1833(t)(6)(B)(ii)(II) of the Act, new categories must be established in such a way that no medical device is described by more than one category. We further note that CMS does not establish pass-through device categories for the purposes of describing specific devices, but rather, device categories which are intended to encompass all devices that can be appropriately described by a category. However, there are examples in which CMS has defined specific ablation modalities such as high intensity ultrasound, microwave, and cryoablation in HCPCS codes for use with the OPPS. In addition, we note the existence of several modality specific tissue ablation procedure codes in the Current Procedural Terminology (CPT®) 2024. However, there are examples where CMS has established device categories with additional granularity to differentiate similar devices with special characteristics ( e.g., implantable neurostimulators). In addition, there are examples where CMS has created HCPCS codes specifying the modality of ablation ( e.g., ultrasound, microwave). Finally, we note as previously mentioned, the intent of transitional device pass-through payment, as implemented at § 419.66, is to facilitate access for beneficiaries to the advantages of new and truly innovative devices by allowing for adequate payment for these new devices while the necessary cost data is collected to incorporate the costs for these devices into the procedure APC rate ( 66 FR 55861 ). We question whether two modality-specific device category codes may facilitate the collection of more accurate data for incorporating the costs of these two devices into the procedure APC rate as well as foster the tracking of efficacy data for these two ablation modalities.

As such, we are inviting public comment on whether the device descriptions provided in the Paradise® Ultrasound RDN System and the Symplicity Spyral TM RDN System applications support establishing two modality specific pass-through payment device categories or a single device category that would encompass both RDN device modalities.

Ambu Inc. submitted an application for a new device category for transitional pass-through payment status for the Ambu® aScope TM Gastro for CY 2025. Per the applicant, the Ambu® aScope TM Gastro is a sterile, single-use, flexible gastroscope intended to be used for: (1) endoscopic access to and examination of the upper gastrointestinal (GI) anatomy; and (2) upper GI endoscopy or esophagogastroduodenoscopy (EGD) to diagnose and treat problems in the upper GI tract, including dysphagia, gastroesophageal reflux disease, narrowing or blockages, esophageal varices, inflammation, ulcers, tumors, hiatal hernia, Celiac disease, Crohn's disease, and infections of the upper GI tract in adult patients.

According to the applicant, the Ambu® aScope TM Gastro works with the Ambu® aBox TM 2, a compatible, reusable displaying unit. The Ambu® aScope TM Gastro endoscope is inserted into the upper GI anatomy airway through the mouth, while the Ambu® aBox TM 2 is a non-sterile digital monitor intended to display live imaging data from Ambu visualization devices. The applicant is only seeking a new device category for transitional pass-through payment status for the Ambu® aScope TM Gastro.

Please refer to the online application posting for the Ambu® aScope TM Gastro, available at https://mearis.cms.gov/​public/​publications/​device-ptp/​DEP2305305795M , for additional detail describing this device and the disease treated by the device.

As stated previously, to be eligible for transitional pass-through payment under the OPPS, a device must meet the criteria at § 419.66(b)(1) through (4). With respect to the newness criterion at § 419.66(b)(1), on February 3, 2022, the applicant received 510(k) clearance from FDA for the Ambu® aScope TM Gastro, Ambu® aBox TM 2, as a sterile, single-use, flexible gastroscope intended to be used for endoscopic access to and examination of the upper gastrointestinal anatomy. The Ambu® aScope TM Gastro is intended to provide visualization via a compatible Ambu displaying unit and to be used with endotherapy accessories and other ancillary equipment. We received the application for a new device category for transitional pass-through payment status for the Ambu® aScope TM Gastro on May 30, 2023, which is within three years of the date of the initial FDA marketing authorization.

We are inviting public comments on whether Ambu® aScope TM Gastro meets the newness criterion at § 419.66(b)(1).

With respect to the eligibility criteria at § 419.66(b)(3), the device must be an integral part of the service furnished, used for one patient only, come in contact with human tissue, and be surgically inserted or implanted, or applied in or on a wound or other skin lesion. The applicant did not indicate whether the Ambu® aScope TM Gastro is integral to the service furnished. The applicant stated that the device was single-use and is intended to be used with one patient only. We note that the Ambu® aScope TM Gastro, based on the device description provided by the applicant and the evidence provided in support of the substantial clinical improvement as discussed in detail in the § 419.66(c)(2) analysis in this Start Printed Page 59317 application summary write-up, explicitly provides that the nominated device is intended to be used on one patient, for a single procedure and then disposed of. As such, we note that our evaluation and final decision as it relates to this potential category of devices (gastroscopes) will be based on the understanding that devices included in this device category (gastroscopes) can only be used for a single procedure, on a single patient, and cannot be reprocessed. While the applicant did not explicitly state whether the device comes in contact with human tissue or is surgically inserted, per the device description, Ambu® aScope TM Gastro is a flexible gastroscope intended to be used for endoscopic access to and examination of the upper GI anatomy.

We are inviting public comments on whether Ambu® aScope TM Gastro meets the eligibility criterion at § 419.66(b)(3).

With respect to the exclusion criterion at § 419.66(b)(4), a device is not eligible to be considered for device pass-through payment if it is any of the following: (1) equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets as defined in Chapter 1 of the Medicare Provider Reimbursement Manual (CMS Pub. 15-1); or (2) a material or supply furnished incident to a service (for example, a suture, customized surgical kit, or clip, other than a radiological site marker). The applicant indicated that the Ambu® aScope TM Gastro is single-use equipment, not intended for use in multiple patients, for which depreciation and financing expenses are not recovered. The applicant explained that the Ambu® aScope TM Gastro is purely an operating cost and is not subject to capitalization or a depreciation schedule.

We note that the applicant stated in the application that the Ambu® aScope TM Gastro is a supply furnished incident to a service rendered, as described, Ambu® aScope TM Gastro would be considered a supply or material furnished incident to a service and excluded from device pass-through payment eligibility under § 419.66(b)(4).

We are inviting public comments on whether the Ambu® aScope TM Gastro meets the exclusion criterion at § 419.66(b)(4).

In addition to the criteria at § 419.66(b)(1) through (4), the criteria for establishing new device categories are specified at § 419.66(c). The first criterion, at § 419.66(c)(1), provides that CMS determines that a device to be included in the category is not appropriately described by any of the existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996. Per the applicant, the Ambu® aScope TM Gastro is a sterile, single-use, flexible, imaging/illumination gastroscope device that uses an integrated camera module and built-in dual light-emitting diode (LED) illumination to provide access to, illumination, and imaging of the upper GI anatomy for diagnostic and therapeutic purposes for a GI patient. According to the applicant, no previous or existing device categories for pass-through payment appropriately describe the Ambu® aScope TM Gastro. Per the applicant, the two device categories, C1747 (Endoscope, single-use ( i.e., disposable), urinary tract, imaging/illumination device (insertable)) and C1748 (Endoscope, single-use ( i.e., disposable), upper gastrointestinal tract (GI), imaging/illumination device, (insertable)), do not appropriately describe the Ambu® aScope TM Gastro. Specifically, the applicant asserted that the urinary tract scopes described in C1747 are not indicated for use in the GI system and therefore, do not appropriately describe Ambu® aScope TM Gastro. The applicant further asserted that while C1748 describes a single-use endoscopic device, C1748 is only appropriate for single-use duodenoscopes and endoscopic retrograde cholangiopancreatography (ERCP) services. While the long descriptor of C1748 describes disposable endoscopes with imaging and illumination capabilities intended for use in the upper GI and the applicant describes the Ambu® aScope TM Gastro as a single-use, gastroscope with illumination and imaging intended for use in the upper GI anatomy, we note that C1748 only describes single-use duodenoscopes and ERCP services. As such, Ambu® aScope TM Gastro is not described by C1748.

We have not identified an existing pass-through payment category that describes Ambu® aScope TM Gastro. We are inviting public comment on whether the Ambu® aScope TM Gastro meets the device category criterion at § 419.66(c)(1).

The second criterion for establishing a device category, at § 419.66(c)(2), provides that CMS determines either of the following: (i) that a device to be included in the category has demonstrated that it will substantially improve the diagnosis or treatment of an illness or injury or improve the functioning of a malformed body part compared to the benefits of a device or devices in a previously established category or other available treatment; or (ii) for devices for which pass-through status will begin on or after January 1, 2020, as an alternative to the substantial clinical improvement criterion, the device is part of the FDA's Breakthrough Devices Program and has received FDA marketing authorization for the indication covered by the Breakthrough Device designation. The applicant claimed that Ambu® aScope TM Gastro represents a substantial clinical improvement over existing technologies in the diagnosis and management of endoscopic procedures and examination within the upper GI anatomy. The applicant outlined the following areas in which it claimed the Ambu® aScope TM Gastro would provide a substantial clinical improvement: (1) elimination of the risk of cross-contamination between patients and scopes, (2) elimination of the risk of cross-contamination for reusable gastroscopes, (3) elimination of the risk of resistant infections that originate from reusable gastroscopes, (4) avoidance of scope damage and debris after reprocessing, (5) avoidance of damaged and contaminated scopes from being used on patients, (6) elimination of the risk of patient-to-patient infections associated with contaminated scopes, and (7) avoidance of infection and death associated with reusable gastroscope contamination.

The applicant provided seven background articles about reusable GI endoscopes to support its claims. Table 54 summarizes the applicant's assertions regarding the substantial clinical improvement criterion. Please see the online posting for Ambu® aScope TM Gastro for the applicant's complete statements regarding the substantial clinical improvement criterion and the supporting evidence provided.

After review of the information provided by the applicant, we have the following concerns regarding whether Ambu® aScope TM Gastro meets the substantial clinical improvement criterion.

First, we note that the applicant identified 11 other devices that it believed are most like the Ambu® aScope TM Gastro: (1) Olympus GIF-HQ 190; (2) Olympus GIF-1TH190; (3) Olympus GIF-H190; (4) Olympus GIF-CP190N; (5) Fujifilm EG-760R; (6) Fujifilm EG-760CT; (7) Fujifilm EG- Start Printed Page 59320 760Z; (8) Fujifilm EG-740N; (9) Pentax HD Video Gastroscope EG34 i10; (10) Pentax MagniView EG 2990Zi; and (11) Pentax G EYE. According to the applicant, these devices are used during the same specific procedure(s) and/or services with which the nominated device is used. The applicant stated that the nominated device's single-use feature is unique among the comparators because its single-use feature eliminates gastroscope reprocessing. The applicant also indicated that there are no HCPCS Level I and/or Level II code(s) used to identify these existing devices. While the evidence provided demonstrates that the Ambu® aScope TM Gastro may be different than the other 11 closely related devices, it does not provide any comparative data that demonstrates that the Ambu® aScope TM Gastro offers a substantial clinical improvement when compared to the other 11 devices.

Second, we note that the nominated device was determined to be substantially equivalent to a predicate device: OLYMPUS EVIS EXERA II Gastrointestinal Videoscope GIF H180 (K100584). The FDA 510(k) summary indicated that both devices share the same technological characteristics such as insertion portion length, working channel diameter, direction of view and bending angles. We note that the 510(k) summary indicated that, unlike the predicate device, the Ambu® aScope TM Gastro is a sterile, single-use device and not intended to be reprocessed. Again, while this demonstrates that the Ambu® aScope TM Gastro may be different than the predicate device, it is unclear whether this difference demonstrates substantial clinical improvement. No comparative data demonstrating that the Ambu® aScope TM Gastro provides a substantial clinical improvement when compared to the OLYMPUS EVIS EXERA II Gastrointestinal Videoscope GIF H180 was provided. We would be interested in additional information to demonstrate whether the nominated device demonstrates a substantial clinical benefit in comparison to other existing devices.

Further, the applicant indicated that while other single-use endoscopes are available, there are no known competitive devices on the market that are single-use, transoral, and marketed in the U.S. The applicant compared the Ambu® aScope TM Gastro to the following two existing devices: (1) EndoFresh Single-Use Gastroscope; and (2) EvoEndo Model LE Single-Use Gastroscope. Specifically, the applicant noted that although EndoFresh Single-Use Gastroscope is FDA-cleared and a similar device that could also become eligible for transitional pass-through payment under the proposed additional category, it has no commercial activity in the U.S. According to the applicant, while EvoEndo Model LE Single-Use Gastroscope is used during the same specific procedure(s) and/or services as the Ambu® aScope TM Gastro, the Ambu® aScope TM Gastro is different from EvoEndo Model LE Single-Use Gastroscope because the Ambu® aScope TM Gastro is a transoral scope, not transnasal. The applicant also indicated that there are no HCPCS Level I and/or Level II code(s) used to identify EvoEndo Model LE Single-Use Gastroscope. However, we note that EvoEndo Model LE Single-Use Gastroscope is both transoral and transnasal, which is indicated on the EvoEndo's website  [ 37 ] and on its FDA 510(k)  [ 38 ] clearance letter. We also note that the applicant did not compare the Ambu® aScope TM Gastro to another single-use, FDA-cleared endoscope available on the market—EXALT [ TM ] Model D, Single-Use Duodenoscope  [ 39 ] —which we believe may be similar. We would be interested in additional information to demonstrate whether the nominated device demonstrates a substantial clinical improvement in comparison to similar single-use competitive devices such as the EvoEndo Model LE Single-Use Gastroscope and the EXALT TM Model D, Single-Use Duodenoscope.

In addition, we note that the applicant's self-sponsored studies, which are background articles by Muscarella, L.F. (2022), [ 40 ] Muscarella, L.F. (2023), [ 41 ] and Ofstead, et. al. (2022), [ 42 ] lack direct comparison of the nominated device to other devices, and do not directly show any clinical improvement that results from the use of the nominated device compared to the use of other devices. In order to demonstrate substantial clinical improvement over currently available treatments, we consider supporting evidence, preferably published peer-reviewed clinical trials, that shows improved clinical outcomes, such as reduction in mortality, complications, subsequent interventions, future hospitalizations, recovery time, pain, or a more rapid beneficial resolution of the disease process compared to the standard of care. Additional supporting evidence, preferably published peer-reviewed clinical trials, that shows these improved clinical outcomes would help inform our assessment of whether the Ambu® aScope TM Gastro demonstrates substantial clinical improvement over existing technologies.

Moreover, while the details provided in the application and all the articles submitted as evidence of substantial clinical improvement discuss potential adverse events from reusable gastroscope procedures, they do not appear to directly show any clinical improvement that results from the use of the Ambu® aScope TM Gastro. Rather, the applicant provided evidence which seems to rely on indirect inferences from other sources of data. Specifically, the applicant included an FDA Manufacturer and User Facility Device Experience (MAUDE) report  [ 43 ] which provides the details of multiple adverse event reports associated with the contamination or suspected contamination of reusable gastroscopes but does not directly show any clinical improvement that results from the use of the Ambu® aScope TM Gastro.

While the applicant claims that the Ambu® aScope TM Gastro eliminates cross-contamination associated with reusable gastroscopes and eliminates the risk of infections that originate from reusable gastroscopes, we do not believe that we have sufficient information on the prevalence of infection to evaluate the applicant's substantial clinical improvement claims for the Ambu® aScope TM Gastro. We note the Start Printed Page 59321 analyses  [ 44 45 ] on adverse event reports and the FDA MAUDE report  [ 46 ] appear to apply to flexible, reprocessed gastroscope or endoscopes, broadly, but not to disposable, single-use devices comparable to the nominated device. Therefore, we question the direct relevance of these background articles to the nominated device and the applicant's substantial clinical improvement claims. Further, we note that many of the applicant's substantial clinical improvement claims rely on an assumption that inadequate reprocessing of reusable endoscopes is positively correlated with heightened risk of infection. We note that the applicant's self-sponsored analyses of FDA adverse event reports and studies  [ 47 48 49 ] and the FDA MAUDE report  [ 50 ] do not provide evidence on the prevalence of infection, establish a clear relationship between infection risk and reprocessing procedures, or substantiate that single-use disposable scopes, or the nominated device specifically, would be a substantial clinical improvement over currently available devices. We would be interested in more information on the prevalence of infection due to incomplete/inadequate processing for gastroscopes in the U.S. and whether single-use gastroscopes reduce the infection rate in patients to identify the extent of the problem with existing technologies.

We are inviting public comment on whether Ambu® aScope TM Gastro meets the device category criterion at § 419.66(c)(2).

The third criterion for establishing a device category, at § 419.66(c)(3), requires us to determine that the cost of the device is not insignificant, as described in § 419.66(d). Section 419.66(d) includes three cost significance criteria that must each be met. The applicant provided the following information in support of the cost significance requirements. The applicant stated that Ambu® aScope TM Gastro would be reported with HCPCS codes shown in Table 55.

To meet the cost criterion for device pass-through payment status, a device must pass all three tests of the cost criterion for at least one APC. As we explained in the CY 2005 OPPS final rule ( 69 FR 65775 ), we generally use the lowest APC payment rate applicable for use with the nominated device when we assess whether a device meets the cost significance criterion, thus increasing the probability the device will pass the cost significance test. Beginning in CY 2017, we calculate the device offset amount at the HCPCS/CPT code level instead of the APC level ( 81 FR 79657 ). Start Printed Page 59324 We note the applicant used the CY 2023 payment rates for the three tests of the cost criterion. For our calculations, we used APC 5301, which had a CY 2023 payment rate of $825.51 at the time the application was received. HCPCS code 43239 in APC 5301 had a CY 2023 device offset amount of $2.64 at the time the application was received. [ 51 ] According to the applicant, the cost of Ambu® aScope TM Gastro is $799.00.

Section 419.66(d)(1), the first cost significance requirement, provides that the estimated average reasonable cost of devices in the category must exceed 25 percent of the applicable APC payment amount for the service related to the category of devices. The average reasonable cost of $799.00 for Ambu® aScope TM Gastro is 96.79 percent of the applicable APC payment amount for the service related to the category of devices of $825.51 (($799.00/$825.51) × 100 = 96.79 percent). Therefore, we believe Ambu® aScope TM Gastro meets the first cost significance requirement.

The second cost significance requirement, at § 419.66(d)(2), provides that the estimated average reasonable cost of the devices in the category must exceed the cost of the device-related portion of the APC payment amount for the related service by at least 25 percent, which means that the device cost needs to be at least 125 percent of the offset amount (the device-related portion of the APC found on the offset list). The estimated average reasonable cost of $799.00 for Ambu® aScope TM Gastro is 30,265.15 percent of the cost of the device-related portion of the APC payment amount for the related service of $2.64 (($799.00/$2.64) × 100 = 30,265.15 percent). Therefore, we believe that the Ambu® aScope TM Gastro meets the second cost significance requirement.

The third cost significance requirement, at § 419.66(d)(3), provides that the difference between the estimated average reasonable cost of the devices in the category and the portion of the APC payment amount for the device must exceed 10 percent of the APC payment amount for the related service. The difference between the estimated average reasonable cost of $799.00 for Ambu® aScope TM Gastro and the portion of the APC payment amount for the device of $2.64 is 96.47 percent of the APC payment amount for the related service of $825.51 ((($799.00−$2.64)/$825.51) × 100 = 96.47 percent). Therefore, we believe that Ambu® aScope TM Gastro meets the third cost significance requirement.

We are inviting public comment on whether the Ambu® aScope TM Gastro meets the device pass-through payment criteria discussed in this section, including the cost criterion for device pass-through payment status.

OMEZA LLC submitted an application for a new device category for transitional pass-through payment status for OCM TM for CY 2025. According to the applicant, OCM TM is an amorphous, solid, malleable sheet comprised of hydrolyzed fish peptides infused with cod liver oil, which acts as an anhydrous skin protectant. Per the applicant, OCM TM is indicated for the management of wounds. The applicant asserted that, when applied to a clean wound surface, OCM TM is naturally incorporated into the wound over time. Per the applicant, OCM TM 's cold water fish peptides provide building blocks for tissue regeneration and cell signaling molecules stimulate tissue growth. Additionally, OCM TM 's matrix-like device also contains active pharmaceutical ingredient(s) (API) and nutrients that continuously reduce biofilm impact, reduce inflammation, increase tissue proliferation, and support remodeling of tissue.

Please refer to the online application posting for the OCM TM , available at https://mearis.cms.gov/​public/​publications/​device-ptp/​DEP2403016HWP6 , for additional detail describing the device and the disease treated by the device.

As stated previously, to be eligible for transitional pass-through payment under the OPPS, a device must meet the criteria at § 419.66(b)(1) through (4). With respect to the newness criterion at § 419.66(b)(1), on September 1, 2021, the applicant received 510(k) clearance from FDA for OCM TM as a device to be used for the management of wounds including: (1) partial and full-thickness wounds, (2) pressure ulcers, (3) venous ulcers, (4) diabetic ulcers, (5) chronic vascular ulcers, (6) tunneled/undermined wounds, (7) surgical wounds (donor sites/grafts, post-Moh's surgery, post-laser surgery, podiatric, wound dehiscence), (8) trauma wounds (abrasions, lacerations, superficial partial thickness burns, skin tears), and (9) draining wounds. We received the application for a new device category for transitional pass-through payment status for OCM TM on March 1, 2024, which is within three years of the date of the initial FDA marketing authorization.

We are inviting public comments on whether OCM TM meets the newness criterion at § 419.66(b)(1).

With respect to the eligibility criteria at § 419.66(b)(3), the device must be an integral part of the service furnished, used for one patient only, come in contact with human tissue, and be surgically inserted or implanted, or applied in or on a wound or other skin lesion. The applicant did not indicate whether OCM TM is integral to the service furnished. We note that in the CY 2014 final rule with comment period ( 78 FR 75005 ), we stated that we have interpreted the term “integral” to mean that the device is necessary to furnish or deliver the primary procedure with which it is used. For example, a pacemaker is integral to the procedure of implantation of a pacemaker. OCM TM does not appear to be necessary to furnish or deliver the primary procedure with which it is used, specifically debridement. Rather, the use of OCM TM following the debridement procedure, including the duration of treatment and the reapplication frequency, seems to be based entirely on provider discretion. As such, we do not believe that OCM TM is integral to the service furnished as required by § 419.66(b)(3). The applicant stated that OCM TM is classified for one-time use and is designed for intimate contact with both regular and irregular wound beds, and as such, it is applied in or on a wound.

We are inviting public comments on whether OCM TM meets the eligibility criterion at § 419.66(b)(3).

With respect to the exclusion criterion at § 419.66(b)(4), a device is not eligible to be considered for device pass-through payment if it is any of the following: (1) equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets as defined in Chapter 1 of the Medicare Provider Reimbursement Manual (CMS Pub. 15-1); or (2) a material or supply furnished incident to a service (for example, a suture, customized surgical kit, or clip, other than a radiological site marker). The applicant did not indicate whether OCM TM is equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered, or if OCM TM is a supply or material Start Printed Page 59325 furnished incident to a service. However, in the CY 2014 final rule, we described skin substitutes as a type of supply used in a surgical procedure ( 78 FR 74929 through 74930 ). As explained the CY 2014 final rule, supplies are a large category of items that typically are either for single patient use or have a shorter life span in use than equipment. Supplies can be anything that is not equipment and include not only minor, inexpensive, or commodity-type items but also include a wide range of products used in the hospital outpatient setting, including certain implantable medical devices, which we have considered supplies since the inception of the OPPS ( 78 FR 74929 through 74930 ). We clarified that we believe skin substitutes are supplies used in a surgical procedure because, as a part of a surgical repair procedure, they reinforce and aid the healing of tissue like implantable biologicals, but with skin substitutes, the tissue is skin instead of internal connective tissues. ( 78 FR 74931 ). As such, we question whether OCM TM would be considered a supply, and as such it would be excluded from device pass-through payments under § 419.66(b)(4).

We are inviting public comments on whether OCM TM meets the exclusion criterion at § 419.66(b)(4).

In addition to the criteria at § 419.66(b)(1) through (4), the criteria for establishing new device categories are specified at § 419.66(c). The first criterion, at § 419.66(c)(1), provides that CMS determines that a device to be included in the category is not appropriately described by any of the existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996. The applicant asserted that OCM TM is indicated for the comprehensive treatment of advanced wounds and provides continuous delivery of pharmaceutical grade products through an amorphous, anhydrous solid, which reduces biofilm while simultaneously promoting tissue proliferation and remodeling. According to the applicant, no previous or existing device categories for pass-through payment appropriately describe OCM TM .

We have not identified an existing pass-through payment category that describes OCM TM . We are inviting public comment on whether OCM TM meets the device category criterion at § 419.66(c)(1).

The second criterion for establishing a device category, at § 419.66(c)(2), provides that CMS determines either of the following: (i) that a device to be included in the category has demonstrated that it will substantially improve the diagnosis or treatment of an illness or injury or improve the functioning of a malformed body part compared to the benefits of a device or devices in a previously established category or other available treatment; or (ii) for devices for which pass-through status will begin on or after January 1, 2020, as an alternative to the substantial clinical improvement criterion, the device is part of the FDA's Breakthrough Devices Program and has received FDA marketing authorization for the indication covered by the Breakthrough Device designation. The applicant claimed that OCM TM represents a substantial clinical improvement over existing technologies in the treatment of hard to heal or chronic wounds which require advanced wound care procedures such as venous leg ulcers, diabetic foot ulcers, pressure ulcers, and wound dehiscence where proper wound preparation, product application, and proper secondary dressings are a requirement. Specifically, the applicant claimed that OCM TM demonstrates: (1) superior clinical outcomes and healing for Diabetic Foot Ulcers (DFU) compared to standard of care; (2) faster healing rates than standard of care for Venous Leg Ulcers (VLUs); (3) superior clinical outcomes for patients who could not qualify for clinical trials due to comorbidities; (4) improved results when compared to results with standard of care for patients who failed prior treatment; (5) in vitro/in vivo antimicrobial properties and patient safety; and (6) improved patient safety.

The applicant provided the following clinical trial data and case studies to support these claims: (1) two randomized controlled trials (a single-site trial of patients with DFUs to evaluate percent area reduction, and a randomized, multicenter, open label study for a patient group with VLUs); (2) two real-world trials comprised of two separate case studies of patients receiving follow-up care at two different wound treatment centers; (3) one in vitro study; (4) one in vivo porcine study; and (5) one consumer research study assessing the safety of OCM TM using the skin prick method. Table 56 summarizes the applicant's assertions regarding the substantial clinical improvement criterion. Note that there are multiple variations in poster presentations for the same study; these posters are identified by study number and presentation number in parentheses. Please see the online posting for OCM TM for the applicant's complete statements regarding the substantial clinical improvement criterion and the supporting evidence provided.

After review of the information provided by the applicant, we identified the following concerns regarding whether the applicant presents clinical data to suggest that OCM [ TM ] provides a substantial clinical improvement over other similar skin protectant and wound healing products to meet the criterion at § 419.66(c)(2)(i). Based on the evidence submitted in the application, we note the following concerns: (1) lack of direct comparison between the nominated device and the predicate or reference devices for skin substitutes, particularly with respect to treatment of deep or persistent chronic wounds in people with DFU and VLU; (2) reliance on non-peer-reviewed studies, such as unpublished abstracts or conference posters, the results of which are only presented in a final data table; and (3) reliance on studies which were sponsored by the device manufacturer rather than independent research. At this time, we note that the unpublished abstract for OCM [ TM ] lacked a detailed discussion of study limitations, patient population, and assurances that studies have been thoroughly peer-reviewed, and free from implicit bias. The abstract furthermore did not state if or how standard of care treatment was administered within the same time period to control groups, and therefore we are not clear if there was a direct comparison between OCM [ TM ] and its predicate or reference devices. Furthermore, the two randomized controlled trials  [ 52 53 ] and two real world studies  [ 54 55 ] submitted by the applicant Start Printed Page 59330 to support its claims had relatively small sample sizes, some investigating only two patients total, which potentially limits the statistical significance of the results.

We note that the applicant did not provide a comparison of OCM TM to other devices it identified are closely related or similar to OCM TM . Specifically, the FDA authorization letter dated September 1, 2021, FDA identified one predicate device, SweetBio Apis (K182725), and three reference devices, INTEGRA TM Flowable Wound Matrix (K072113), Kerecis MariGen Wound Dressing (K132343), and Southwest Technologies Stimulen Collagen (K030774) to which OCM TM may be compared. We note that we did not approve transitional device pass-through payment for Kerecis MariGen Wound Dressing (K132343) for CY 2018 after determining that the clinical data provided by the applicant did not support the claim that Kerecis Omega3 Wound Dressing provides a substantial clinical improvement over other similar skin substitute products ( 82 FR 59330 through 59332 ). The FDA authorization letter noted that OCM TM and the predicate device SweetBio Apis have similar indications and the same intended use, namely, to manage wounds by providing an animal-derived collagen product that is biodegradable and incorporates into the surrounding tissue during the body's natural wound healing processes. Both products supplement the collagen constituent with additional biocompatible materials to achieve a final product that covers and protects the wound, assists in managing wound exudate, and maintains a moist wound environment. Further, the substantial equivalence table included in the FDA authorization letter indicated that OCM TM raised no new questions of safety or effectiveness when compared to the predicate and reference devices.

In the first claim, the applicant asserted OCM TM has superior clinical outcomes and healing for DFU compared to the standard of care. Based on the evidence submitted by the applicant, we note the following concerns: (1) lack of a direct comparison to the predicate or reference devices in the two randomized controlled trials and the two real world clinical studies; (2) reliance on unpublished studies; (3) reliance on manufacturer sponsored studies; and (4) small sample sizes. First, Simman, et al. (2023) describes the results of a single-site trial in patients with DFUs to evaluate percent area reduction in wound healing. The stated goal of this study was to demonstrate that a combination therapy, using OCM TM plus standard of care treatment, moves chronic DFUs from a stalled state to a healing state in a 4-week period. The study enrolled 25 patients, five of whom did not complete the study, and one of whom died during the study from comorbidities related to their underlying condition. Study group DFUs were managed with combination therapy from 4-12 weeks, and control group DFUs (comprised of six total study participants) were managed with standard of care treatment involving cleaning and debridement only.

Interim analyses presented as a poster (Bell, et al., 2023) as evidence to support the first claim was limited to 12 total study participants. The interim analysis concluded that healing rates showed an average of 63 percent area reduction for the remaining participants at 4 weeks following standard of care treatment, and an average of 91 percent area reduction at 12 weeks following the treatment in patients with DFUs managed with the combination therapy. The interim analysis study further showed that one patient with a 12-week percent area reduction of 73 percent continued to improve through week 14 while three patients' wounds had not healed at the time of analysis for those receiving combination therapy.

In the final results presented in Simman et al. (2023), the average 4-week percent area reduction was 60 percent, with three patients experiencing 100 percent closure with combination therapy. At 12 weeks, the median wound size was 0.0 cm 2 (range, 0-2.59), and the average percent area reduction was 93 percent, with five additional patients experiencing 100 percent closure with combination therapy. Average 4- and 12-week percent area reductions with standard of care alone were 42 percent and 45 percent, respectively. According to the final analysis study abstract, every wound treated with OCM TM combination therapy was reduced by more than 70 percent in 12 weeks and all wounds previously failed treatments.

We note that the Simman et al. (2023) study abstract and the interim analysis do not provide any direct comparison to standard of care treatment with another collagen-based wound matrix or device that is otherwise similar to the indications for use of OCM TM in nonhealing wounds. In addition, it is unclear if any of the control group patients received collagen-based treatments including the predicate or reference devices to draw comparisons to collagen-based skin protectants that perform similarly to OCM TM . While we recognize, given the number of skin substitute products on the U.S. market, it is not possible to compare OCM TM to each product, we believe that studies comparing the product against other powder, liquid, or gel skin substitute products could provide more evidence demonstrating the clinical superiority of OCM TM . In addition to the lack of comparison to other collagen-based wound matrix devices, the standard of care treatment in this study was limited to cleaning and debridement, which, based on the applicant's description for methods for administering OCM TM , is a step prior to administering OCM TM .

In reference to the applicant's statements that debridement combined with application of OCM TM is more effective in the removal of biofilm compared to the standard of care of debridement alone, we note that neither the abstract nor the interim analysis for this study analyzed results on removal or prevention of biofilm in isolation from the overall metric on wound percent area reduction. We note that FDA recommends sharp debridement alone as an effective method to remove the biofilm and necrotic tissue in a chronic wound (Bettle, et al., 2023). We question whether the results describing the average percent area reduction in wounds transitioning from a nonhealing state to a healing state are sufficient to show substantial clinical improvement in removal or prevention of biofilm. We further question whether the results in percent area reduction can be attributed to debridement combined with application of OCM TM as opposed to debridement alone because it is unclear if debridement was performed on all participants in the retrospective control group. Furthermore, we note that only the effects of historic standard of care treatments administered prior to the start of the study to patients in the control group were included for analysis. While one of the selection criteria for study participants was having failed prior treatment, neither the abstract nor interim analysis discussed how other variables, such as age and comorbidities, may have contributed to treatment failure, or which specific treatments failed in each of the six control group participants. We note that not all patients in the control group received, or were eligible to receive, the same standard of care treatments prior to the study and did not receive any skin substitute or wound dressing treatments during the study as a comparison to the test group patients that were treated with OCM TM . Due to the stated limitations in the Start Printed Page 59331 study as previously described, we do not believe that the applicant has demonstrated that OCM TM offers a substantial clinical improvement over existing treatments.

Finally, the sample size of 19 individuals (six of whom were assigned to the control group) in the Simman et al. (2023) study limits the generalizability of the findings. Therefore, we question whether OCM TM has superior clinical outcomes and healing for DFUs compared to the standard of care or the predicate or reference devices. Additionally, we note that the Simman et al. (2023) study abstract and interim analysis were sponsored by the manufacturer and have not been published, and therefore are not based on independent and peer-reviewed findings.

In addition to the Simman et al. (2023) study (including the abstract and interim results), in support of its first claim, the applicant submitted two posters presenting results from limited case studies investigating two patients who received treatment using OCM TM combination therapy at the point of care. The first poster (Black, et al., 2023) discussed the treatment of two patients seeking treatment for DFUs at a wound care clinic: (1) a 75-year-old female patient who developed a DFU on her right third toe whose DFU wound progressed from nonhealing to healing after one application of the combination OCM TM therapy; and (2) a 65-year-old female patient with a history of diabetes and a blister of 3-month duration that progressed from nonhealing (after treatment with collagen powder, a gauze covering, an absorbent dressing, and a protective bandage) to completely closed after nine applications of the combination OCM TM therapy over 63 days. The study authors concluded that these case studies demonstrated: (1) rapid and durable healing of chronic/nonhealing wounds in two patients with diabetes who received the combination therapy for their chronic wounds; (2) significantly faster closure of a DFU within 1 week using OCM TM combination therapy than the average healing rate of 84 days for a 1-3 cm 2 plantar ulcer managed using standard care practices; and (3) that early treatment of chronic/nonhealing wounds with OCM TM combination therapy improves outcomes and can lead to complete closure.

Similarly, the second poster (Barrett et al. (2023) presented results from a case study of two patients who received follow-up care at an outpatient wound center: (1) a 58-year-old male patient with a distal plantar lateral ulceration with infection, which required hospitalization; and (2) a 56-year-old male patient with leg trauma that had obliterated the patient's anterior tibial and peroneal arteries, leaving him with single vessel runoff to the left foot via the posterior tibial artery. In the first patient, after 5 weeks of initial negative pressure wound therapy following surgery, the percentage area reduction of the wound was 19 percent. In comparison, after three weekly follow-up applications of OCM TM combination therapy, the patient's percentage area reduction was 95 percent. In the second patient, the amputation site was noted as completely necrotic, and therefore not a candidate for standard of care negative pressure wound therapy due to poor skin condition, ischemia, and hyperalgesia. It was noted that after three applications of OCM TM combination therapy, there was a significant improvement in the wound depth and tissue color, with visible epithelialization at the wound edges despite the patient's obvious ischemia. It was noted that the wound size improved and completely healed between the fourth and fifth application of OCM TM combination therapy and after the seventh application of OCM TM combination therapy. The researchers concluded that the case studies demonstrate complete and rapid healing of refractory DFUs in two patients with diabetes who had previously undergone lower extremity amputations and that early use of OCM TM combination therapy has the potential to reduce the rate of amputations and improve patients' quality of life.

We note that both case studies (Barrett et al. (2023) and (Black, et al., 2023), were sponsored by the manufacturer and only had two study participants treated with OCM TM combination therapy, which limits the generalizability of the findings. Although the studies suggest that the two participants treated with OCM TM combination therapy showed transition to a healing state subsequent to the application of OCM TM , the results varied widely in terms of number of applications needed to achieve positive results and treatment duration. Further, these case studies provide no direct comparison to the standard of care treatment or the predicate or reference devices. We note that eligibility for standard of care treatments also varied across patients and resulted in varying degrees of percent area reduction or wound closure from prior treatments before application of OCM TM combination therapy. While in one patient, the study showed an improved clinical outcome in percentage area reduction (19 percent to 95 percent) with treatment utilizing OCM TM combination therapy, we note that the treatment including OCM TM was not only completed subsequent to standard of care treatment with a collagen wound protectant, but also delivered to the same individual rather than as a comparison to standard of care treatments in a control group.

We question whether the submitted evidence adequately supports the claim that OCM TM has superior clinical outcomes and healing for DFU compared to the standard of care. We would be interested in additional information to demonstrate whether the nominated device demonstrates a substantial clinical improvement in comparison to similar collagen-based matrix devices.

In the second claim, the applicant asserted that OCM [ TM ] provides faster healing rates than standard of care for VLUs. However, based on the evidence submitted, we note the following concerns: (1) reliance on unpublished studies; and (2) a lack of any documentation indicating the study authors, study description, methods, limitations, information on standard of care treatment for the comparison or control groups, analysis, or discussion. The only data provided were in the form of two tables. One table  [ 56 ] provided demographic information for the study participants such as race, age, gender, presence of VLUs, comorbidities, wound area, and wound age; however, there is no indication of how many initial study participants were included in the final results or how many were assigned to either the treatment or control group receiving the standard of care. The other table  [ 57 ] presented one row of data from the final results of a randomized controlled trial on VLUs showing an average percent area reduction of 66 percent at 12 weeks in OCM TM treatment group (there was no comparison to the standard of care treatment group) and an average percent area reduction of 34 percent at 4 weeks in the OCM TM treatment group compared to an average percent area reduction of 31 percent at 4 weeks in the standard of care group. Due to the lack of a study report, we have insufficient information to adequately assess this study or make a determination as to whether the study supports the claim that OCM TM Start Printed Page 59332 provides faster healing rates than standard of care for VLU.

In order to demonstrate substantial clinical improvement over currently available treatments, we consider supporting evidence, preferably published peer-reviewed clinical trials, that shows improved clinical outcomes, such as reduction in mortality, complications, subsequent interventions, future hospitalizations, recovery time, pain, or a more rapid beneficial resolution of the disease process compared to the standard of care. Additional supporting evidence, preferably published peer-reviewed clinical trials, that shows these improved clinical outcomes would help inform our assessment of whether OCM TM demonstrates substantial clinical improvement over existing technologies.

In the third claim, the applicant asserted that OCM [ TM ] provides superior clinical outcomes for patients who could not qualify for clinical trials due to comorbidities, and in the fourth claim, the applicant stated that OCM [ TM ] improved results when compared to results with standard of care for patients who failed prior treatment. The applicant used the same pair of documents as supporting evidence for both the third and fourth claims: (1) a case study by 16 independent investigators (Bettle, et al., 2023), and (2) a final summary table  [ 58 ] of the results of that case study. In the case study by the 16 independent investigators, OCM TM combination therapy was administered to 65 patients with wound ages ranging from 12 weeks to 15 years who failed prior treatment, including six patients with prior failed cellular tissue product therapies. Patients were not otherwise subjected to inclusion or exclusion criteria. According to the applicant, the findings by the 16 independent investigators showed 77 percent of wounds were closed by 12 weeks and the average area reduction was 90 percent. Wounds treated included DFUs, VLUs, pressure injuries, arterial, pyoderma, hematomas, surgical, and trauma. We note that the study lacked direct comparison to a standard of care treatment. Rather, the study compared patient data to standardized data on wound closure and mean time to total wound closure by wound type based on standardized data from the U.S. Wound Registry.

We question whether the submitted evidence adequately supports the claims that OCM TM provides superior clinical outcomes for patients who could not qualify for clinical trials, due to comorbidities, or that OCM TM improved results when compared to results with standard of care for patients who failed prior treatment. We would welcome further investigation with comparators to help determine whether the device demonstrates substantial clinical improvement over currently available treatments in the clinical setting where it is most likely to be used.

In its fifth claim, the applicant asserted that in vitro (Davis, et al., 2023) and in vivo (Davis, Jozic, et al., 2023) study results demonstrate antimicrobial properties and patient safety. The applicant further asserted that OCM TM addresses an unmet medical need, stating that no other product demonstrates antimicrobial properties and leads to complete wound healing. In the in vivo study (Davis, Jozic, et al., 2023), researchers made 31 deep reticular wounds across the paravertebral and thoracic areas on each of specific pathogen-free pigs. Pathogenic strains of Methicillin-Resistant Staphylococcus Aureus (USA300) or Pseudomonas Aeruginosa (ATCC 27312), prepared as 106 CFU/ml inoculum suspensions, were used to inoculate all wounds within 20 minutes after wounding followed by application of polyurethane dressings (Tegaderm, 3M, USA) for 72 hours before being treated. Subsequent treatment consisted of OCM TM alone in one test group, OCM TM plus a skin protectant in another test group, Aquacel Ag Advantage in the positive control group, or the wounds were left untreated in the negative control group. We note that the only in vivo study (Davis, Jozic, et al., 2023) with direct comparison to a skin protectant was conducted on non-human subjects (pigs). We question whether these data can be extrapolated to demonstrate significant clinical improvement in humans. In addition, according to the applicant, the in vitro study (Davis, et al., 2023) showed OCM TM significantly inhibiting Methicillin-resistant Staphylococcus aureus and Pseudomonas aeruginosa compared to negative controls. We note that the in vitro study (Davis, Jozic, et al., 2023) lacked a direct comparison to performance of other similar skin protectant products or wound therapies besides infection control methods such as silver sulfadiazine or Mupirocin antibiotic. We further note that both the in vitro and in vivo studies were submitted as poster presentations and that the studies have not been published and peer-reviewed in full.

We question whether the submitted evidence adequately supports the claims that OCM TM demonstrates antimicrobial properties and patient safety. Additional supporting evidence, preferably published peer-reviewed clinical trials, that demonstrates improved clinical outcomes, such as reduction in mortality, complications, subsequent interventions, future hospitalizations, recovery time, pain, or a more rapid beneficial resolution of the disease process, would help inform our assessment of whether OCM TM demonstrates substantial clinical improvement over the standard of care and existing technologies.

For its sixth claim, the applicant asserted that study results demonstrated patient safety of OCM TM . In support of this claim, the applicant provided one consumer research study—Princeton Consumer Research Corp. (2019)—of 25 subjects showing no immediate allergic reaction to OCM TM . We note that, similar to our previously stated concerns, the study did not include a direct comparison to predicate or reference devices despite claiming an improvement over standard of care treatment. Additionally, this study was also sponsored by the manufacturer and, therefore, not an independent study. Furthermore, since this study only included one type of adverse effect (allergenicity), and was limited to only 25 research subjects, there are limitations in demonstrating safety. We note that the submitted evidence does not adequately support the claims that OCM TM demonstrates substantial clinical improvement in product safety in comparison to similar products.

Finally, we note that OCM [ TM ] may not demonstrate that it substantially improves the diagnosis or treatment of an illness when compared to the benefits of other available treatments. OCM [ TM ] was determined to be substantially equivalent to a legally marketed device, the SweetBio Apis, which received 510(k) clearance on April 29, 2019. The FDA 510(k) summary for OCM [ TM ] indicated that both devices share similar technological characteristics. Per FDA, [ 59 ] the main differences between OCM TM and the predicate are the specific collagen source (OCM TM uses whitefish skin-derived collagen, while the SweetBio Apis uses porcine skin-derived collagen) and the specific identity of the supplemental components (which serve the same fundamental purpose in enabling each wound dressing to achieve the shared intended use).

We are inviting public comment on whether OCM TM meets the device category criterion at § 419.66(c)(2)(i).

The third criterion for establishing a device category, at § 419.66(c)(3), requires us to determine that the cost of the device is not insignificant, as described in § 419.66(d). Section 419.66(d) includes three cost significance criteria that must each be met. The applicant provided the following information in support of the cost significance requirements. The applicant stated that OCM TM would be reported with HCPCS codes as shown in Table 57.

To meet the cost criterion for device pass-through payment status, a device must pass all three tests of the cost criterion for at least one APC. As we explained in the CY 2005 OPPS final rule ( 69 FR 65775 ), we generally use the lowest APC payment rate applicable for use with the nominated device when we assess whether a device meets the cost significance criterion, thus increasing the probability the device will pass the cost significance test. Beginning in CY 2017, we calculate the device offset amount at the HCPCS/CPT code level instead of the APC level ( 81 FR 79657 ). We note the applicant utilized the CY 2024 payment rates for the three tests of the cost criterion. For our calculations, we used APC 5052, which had a CY 2024 payment rate of $379.92 at the time the application was received. Start Printed Page 59334 HCPCS code 11042 in APC 5052 had a device offset amount of $0.04 at the time the application was received. According to the applicant, the cost of OCM TM is $1,320.00.

Section 419.66(d)(1), the first cost significance requirement, provides that the estimated average reasonable cost of devices in the category must exceed 25 percent of the applicable APC payment amount for the service related to the category of devices. The average reasonable cost of $1,320.00 of OCM TM is 347.44 percent of the applicable APC payment amount for the service related to the category of devices of $379.92 (($1,320.00/$379.92) × 100 = 347.44 percent). Therefore, we believe OCM TM meets the first cost significance requirement.

The second cost significance requirement, at § 419.66(d)(2), provides that the estimated average reasonable cost of the devices in the category must exceed the cost of the device-related portion of the APC payment amount for the related service by at least 25 percent, which means that the device cost needs to be at least 125 percent of the offset amount (the device-related portion of the APC found on the offset list). The estimated average reasonable cost of $1,320.00 for OCM TM is 3,300,000.00 percent of the cost of the device-related portion of the APC payment amount for the related service of $0.04 (($1,320.00/$0.04) x 100 = 3,300,000.00 percent). Therefore, we believe that OCM TM meets the second cost significance requirement.

The third cost significance requirement, at § 419.66(d)(3), provides that the difference between the estimated average reasonable cost of the devices in the category and the portion of the APC payment amount for the device must exceed 10 percent of the APC payment amount for the related service. The difference between the estimated average reasonable cost of $1,320.00 for OCM TM and the portion of the APC payment amount for the device of $0.04 is 347.43 percent of the APC payment amount for the related service of $379.92 ((($1,320.00−$0.04)/$379.92) × 100 = 347.43 percent). Therefore, we believe that OCM TM meets the third cost significance requirement.

We are inviting public comment on whether OCM TM meets the device pass-through payment criteria discussed in this section, including the cost criterion for device pass-through payment status.

SIS Medical AG submitted an application for a new device category for transitional pass-through payment status for OPN NC for CY 2025. Per the applicant, OPN NC percutaneous transluminal coronary angioplasty (PTCA) dilatation catheter is a sterile, single-use, rapid exchange catheter with a distal non-compliant double layer balloon attached to a flexible distal polymer shaft. The applicant explained that OPN NC is intended for balloon dilatation of the stenotic portion of a coronary artery or bypass graft stenosis for the purpose of improving myocardial perfusion. Per the applicant, the balloon dilatation catheter is also indicated for post deployment expansion of balloon expandable coronary stents. The applicant asserted that the device is inserted to position a balloon in a calcified coronary lesion where super-high pressure is used with the intention of achieving acceptable expansion of the lesion. Per the applicant, radiopaque balloon marker bands enable accurate positioning of the device, and shaft markers for brachial and femoral techniques are also in place. According to the applicant, OPN NC is intended for all patient populations.

Please refer to the online application posting for OPN NC, available at https://mearis.cms.gov/​public/​publications/​device-ptp/​DEP231214L8XQC , for additional detail describing the device and the disease treated by the device.

As stated previously, to be eligible for transitional pass-through payment under the OPPS, a device must meet the criteria at § 419.66(b)(1) through (4). With respect to the newness criterion at § 419.66(b)(1), on March 14, 2022, the applicant received 510(k) clearance from FDA for OPN NC as a device intended for balloon dilatation of the stenotic portion of a coronary artery or bypass graft stenosis for the purpose of improving myocardial perfusion. The balloon dilatation catheter is also indicated for post deployment expansion of balloon expandable coronary stents. We received the application for a new device category for transitional pass-through payment status for OPN NC on December 14, 2023, which is within three years of the date of the initial FDA marketing authorization.

We are inviting public comments on whether OPN NC meets the newness criterion at § 419.66(b)(1).

With respect to the eligibility criteria at § 419.66(b)(3), the device must be an integral part of the service furnished, used for one patient only, come in contact with human tissue, and be surgically inserted or implanted, or applied in or on a wound or other skin lesion. Per the applicant, OPN NC is integral to the service provided and is used for one patient only. While the applicant did not explicitly state whether the device is surgically inserted or comes in contact with human tissue, per the device description, OPN NC is inserted into the patient for balloon dilation of the stenotic portion of a coronary artery or bypass graft stenosis for the purpose of improving myocardial perfusion.

We are inviting public comments on whether OPN NC meets the eligibility criterion at § 419.66(b)(3).

With respect to the exclusion criterion at § 419.66(b)(4), a device is not eligible to be considered for device pass-through payment if it is any of the following: (1) equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets as defined in Chapter 1 of the Medicare Provider Reimbursement Manual (CMS Pub. 15-1); or (2) a material or supply furnished incident to a service (for example, a suture, customized surgical kit, or clip, other than a radiological site marker). The applicant did not address whether OPN NC is equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered, or if OPN NC is a supply or material furnished incident to a service.

We are inviting public comments on whether OPN NC meets the exclusion criterion at § 419.66(b)(4).

In addition to the criteria at § 419.66(b)(1) through (4), the criteria for establishing new device categories are specified at § 419.66(c). The first criterion, at § 419.66(c)(1), provides that CMS determines that a device to be included in the category is not appropriately described by any of the existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996. The applicant described OPN NC as a percutaneous transluminal coronary angioplasty (PTCA) dilatation catheter with a distal non-compliant double layer balloon attached to a flexible distal polymer shaft. According to the applicant, no previous or existing device categories for pass-through payment appropriately describe the OPN NC. Per the applicant, the device category, C1725 (Catheter, transluminal angioplasty, non-laser (may include guidance, infusion/perfusion capability ) ) does not appropriately describe OPN NC because OPN NC is a super high pressure, non-compliant double (twin) layer balloon. Based on the description the applicant provided, OPN NC is a transluminal vascular dilatation catheter with a balloon intended for dilatation of the stenotic portion of a coronary artery or Start Printed Page 59335 bypass graft stenosis for the purpose of improving myocardial perfusion, which is consistent with the devices described by C1725. In this context, we believe OPN NC may be similar to the devices described by C1725, and therefore, OPN NC may also be appropriately described by C1725.

We are inviting public comment on whether OPN NC meets the device category criterion at § 419.66(c)(1).

The second criterion for establishing a device category, at § 419.66(c)(2), provides that CMS determines either of the following: (i) that a device to be included in the category has demonstrated that it will substantially improve the diagnosis or treatment of an illness or injury or improve the functioning of a malformed body part compared to the benefits of a device or devices in a previously established category or other available treatment; or (ii) for devices for which pass-through status will begin on or after January 1, 2020, as an alternative to the substantial clinical improvement criterion, the device is part of the FDA's Breakthrough Devices Program and has received FDA marketing authorization for the indication covered by the Breakthrough Device designation. According to the applicant, OPN NC represents a substantial clinical improvement over existing technologies in the management of patients with highly calcified coronary lesions by providing optimal lumen expansion and demonstrating better outcomes in lesion treatment compared to other devices.

The applicant provided the following evidence to support its claim: three peer-reviewed studies; a PowerPoint presenting an indirect comparison of OPN NC versus another device, Shockwave Intravascular Lithotripsy (IVL) System with Shockwave C2 Coronary Intravascular Lithotripsy (IVL) Catheter (Shockwave), [ 60 ] that uses intravascular lithotripsy (IVL) to treat calcium lesions; a spreadsheet summarizing the data presented in the PowerPoint document comparing OPN NC and Shockwave; and a background article providing an expert consensus statement from the Society for Cardiovascular Angiography & Interventions on management of in-stent restenosis and stent thrombosis. [ 61 ] Table 58 summarizes the applicant's assertion regarding the substantial clinical improvement criterion. Please see the online posting for OPN NC for the applicant's complete statements regarding the substantial clinical improvement criterion and the supporting evidence provided.

After review of the information provided by the applicant, we have the following concerns regarding whether OPN NC meets the substantial clinical improvement criterion. The applicant presented the published results of one study of 50 patients undergoing optical coherence tomography (OCT)-guided percutaneous coronary interventions, including OPN NC, to treat calcified lesions (Natalia Pinilla-Echeverri, et al., 2023). The retrospective study aimed to gain a better understanding of OPN NC calcium modification mechanisms, such as creating deep and wide calcium fractures during percutaneous coronary interventions with the intended clinical outcome of improving myocardial perfusion. Per the applicant, the study showed a primary efficacy endpoint of ≥80 percent expansion of the mean reference lumen area achieved in 80 percent of the patients treated. The applicant also presented a retrospective study evaluating 326 highly resistant coronary lesions that had failed to achieve adequate post-dilatation luminal gain with conventional NC-balloons (Secco et al., 2019). Per the study authors, an OPN NC balloon was inflated to achieve a uniform balloon expansion after the failed attempts with conventional NC-balloons. According to the authors, 413 OPN NC balloons were used (1.26 per lesion), and angiographic success was achieved in 318 lesions (97.5 percent), procedural success was achieved in 315 lesions (96.6 percent), and technical success was achieved in 288 patients (90.5 percent). The study authors also reported that the OPN NC balloon alone was able to achieve adequate expansion in 288 cases (90.5 percent), while in 30 patients, rotational atherectomy was needed and performed because of the impossibility to cross the lesion with a proper sized OPN NC balloon. The applicant presented a third study focused on patients needing treatment of in-stent restenosis (ISR) (Seiler et at., 2023). According to the authors, 208 ISR lesions were treated in 188 patients. The study authors concluded that the use of OPN NC for treatment of ISR lesions was safe (primary endpoint of the study) and may lead to a low rate of target lesion/vessel failure (TLF/TVF) during long-term follow-up. We note that these studies were not randomized clinical trials with a comparator to demonstrate clinical improvement. Instead, the applicant presented results from registries using non-randomized, retrospective study designs without a control group, which we believe may reduce the strength of the evidence presented to support the claim. The authors noted in all three studies that randomized trials may be needed to compare OPN NC to other similar devices.

Further, we also note that in one of the studies (Natalia Pinilla-Echeverri, et al., 2023), the study authors indicated that use of other calcium lesion modification devices prior to applying Start Printed Page 59338 OPN NC to the patients in that study is a potential confounder that could result in overestimation of OPN NC effectiveness. The study authors stated that this was controlled by having an exclusive OCT pullback pre-OPN NC, but indicated that calcium plaque modification caused by other devices may not be evident on OCT. The study authors further noted that since other devices were used before OPN NC, they could not comment on calcium modification from OPN NC use upfront or an OPN NC-only strategy. We would welcome any additional evidence supporting the claim that that OPN NC provides optimal lumen expansion and the impact of using other calcium lesion modification devices prior to applying OPN NC to a patient.

With regards to safety, in the Natalia Pinilla-Echeverri, et al. (2023) study, one patient was found to have had a flow limiting dissection requiring stent deployment; however, no coronary perforations or no-reflow were reported. In the Secco et al. (2019) study, three patients (0.9 percent) were reported to have experienced coronary rupture after balloon inflation and were successfully treated with stent implantation. In the Seiler, et al. (2023) study, coronary perforation was reported to have occurred twice (0.96 percent) with both successfully treated by balloon inflation and implantation of a covered stent; a total of nine (4.3 percent) locally limited, but flow limiting dissections were reported to have occurred and were successfully treated with implantation of a drug-eluting stent; 4 (1.9 percent) cases of flow deterioration due to embolization of thrombotic material (no-reflow) were found; and one patient (0.5 percent) was reported to have suffered from immediate vessel closure after stent implantation. The application did not address whether the use of the device is safe beyond the data on safety endpoints presented in the studies provided. We would welcome additional studies or evidence discussing the risk of adverse events with the use of these types of non-compliant balloons.

Finally, we are concerned that the evidence may not demonstrate that OPN NC substantially improves the treatment of an illness when compared to the benefits of other available treatments. The applicant asserted in a supporting document included in the application that OPN NC is not the only FDA-authorized device with an indication for balloon dilatation of the stenotic portion of a coronary artery or bypass graft stenosis for the purpose of improving myocardial perfusion and also an indication for post deployment expansion of balloon expandable coronary stents. OPN NC was determined to be substantially equivalent to a legally marketed device, the NC Euphora Rapid Exchange Balloon Dilatation Catheter (Medtronic Inc; K141090), which received 510(k) clearance on August 15, 2014. The FDA 510(k) summary for OPN NC indicated that the devices share similar technological characteristics. In fact, the FDA 510(k) summary indicated that OPN NC differs only in the rated burst pressure of the balloon. We note that the applicant did not compare the nominated device with the NC Euphora Rapid Exchange Balloon Dilatation Catheter, which we believe may be similar. While the applicant asserted that OPN NC is the only super-high pressure, non-compliant twin layer balloon dilatation catheter available in the U.S. and the only device on the market of this nature and capability, we would be interested in additional information to demonstrate whether the nominated device demonstrates a substantial clinical benefit in comparison to other similar NC balloon devices.

We are inviting public comment on whether OPN NC meets the substantial clinical improvement criterion at § 419.66(c)(2).

The third criterion for establishing a device category, at § 419.66(c)(3), requires us to determine that the cost of the device is not insignificant, as described in § 419.66(d). Section 419.66(d) includes three cost significance criteria that must each be met. The applicant provided the following information in support of the cost significance requirements. The applicant stated that OPN NC would be reported with HCPCS codes shown in Table 59.

To meet the cost criterion for device pass-through payment status, a device must pass all three tests of the cost criterion for at least one APC. As we explained in the CY 2005 OPPS final rule ( 69 FR 65775 ), we generally use the lowest APC payment rate applicable for use with the nominated device when we assess whether a device meets the cost significance criterion, thus increasing the probability the device will pass the cost significance test. Beginning in CY 2017, we calculate the device offset amount at the HCPCS/CPT code level instead of the APC level ( 81 FR 79657 ). We note the applicant did not provide details regarding the payment rates it applied for the three tests of the cost criterion. For our calculations, we used APC 5192, which had a CY 2023 payment rate of $5,215.40 at the time the application was received. HCPCS code 92920 in APC 5192 had a CY 2023 Start Printed Page 59339 device offset amount of $1609.99 at the time the application was received.

We note that the applicant provided two cost amounts for OPN NC: (1) a price list showing the cost of OPN NC as $2,200.00; and (2) a product list that lists the cost of OPN NC as $1,200.00. We further note that the cost included on the product list provided by the applicant for OPN NC ($1,200.00) does not pass any of the three tests of the cost criterion, but the cost included on the price list for OPN NC ($2,200.00) passes all three tests of the cost criterion.

When performed with the price list cost for OPN NC of $2,200.00, we note the following calculation outcomes: section 419.66(d)(1), the first cost significance requirement, provides that the estimated average reasonable cost of devices in the category must exceed 25 percent of the applicable APC payment amount for the service related to the category of devices. The average reasonable cost of $2,200.00 for OPN NC is 42.18 percent of the applicable APC payment amount for the service related to the category of devices of $5,215.40 (($2,200.00/$5,215.40) × 100 = 42.18 percent). Therefore, when utilizing the price list cost of $2,200.00 provided, we believe OPN NC meets the first cost significance requirement.

The second cost significance requirement, at § 419.66(d)(2), provides that the estimated average reasonable cost of the devices in the category must exceed the cost of the device-related portion of the APC payment amount for the related service by at least 25 percent, which means that the device cost needs to be at least 125 percent of the offset amount (the device-related portion of the APC found on the offset list). The estimated average reasonable cost of $2,200.00 for OPN NC is 136.65 percent of the cost of the device-related portion of the APC payment amount for the related service of $1,609.99 ($2,200.00/$1,609.99) × 100 = 136.65 percent). Therefore, when utilizing the price list cost of $2,200.00 provided, we believe that OPN NC meets the second cost significance requirement.

The third cost significance requirement, at § 419.66(d)(3), provides that the difference between the estimated average reasonable cost of the devices in the category and the portion of the APC payment amount for the device must exceed 10 percent of the APC payment amount for the related service. The difference between the estimated average reasonable cost of $2,200.00 for OPN NC and the portion of the APC payment amount for the device of $1,609.99 is 11.31 percent of the APC payment amount for the related service of $5,215.40 ((($2,200.00−$1,609.99)/$5,215.40) × 100 = 11.31 percent). Therefore, when utilizing the price list cost of $2,200.00 provided, we believe that OPN NC meets the third cost significance requirement.

When performed with the product list cost for OPN NC of $1,200.00, we note the following calculation outcomes: section 419.66(d)(1), the first cost significance requirement, provides that the estimated average reasonable cost of devices in the category must exceed 25 percent of the applicable APC payment amount for the service related to the category of devices. The average reasonable cost of $1,200.00 for OPN NC is 23.01 percent of the applicable APC payment amount for the service related to the category of devices of $5,215.40 (($1,200.00/$5,215.40) × 100 = 23.01 percent). Therefore, when utilizing the product list cost of $1,200.00 provided, we believe OPN NC does not meet the first cost significance requirement.

The second cost significance requirement, at § 419.66(d)(2), provides that the estimated average reasonable cost of the devices in the category must exceed the cost of the device-related portion of the APC payment amount for the related service by at least 25 percent, which means that the device cost needs to be at least 125 percent of the offset amount (the device-related portion of the APC found on the offset list). The estimated average reasonable cost of $1,200.00 for OPN NC is 74.53 percent of the cost of the device-related portion of the APC payment amount for the related service of $1,609.99 ($1,200.00/$1,609.99) × 100 = 74.53 percent). Therefore, when utilizing the product list cost of $1,200.00 provided, we believe OPN NC does not meet the second cost significance requirement.

The third cost significance requirement, at § 419.66(d)(3), provides that the difference between the estimated average reasonable cost of the devices in the category and the portion of the APC payment amount for the device must exceed 10 percent of the APC payment amount for the related service. The difference between the estimated average reasonable cost of $1,200.00 for OPN NC and the portion of the APC payment amount for the device of $1,609.99 is negative 7.86 percent of the APC payment amount for the related service of $5,215.40 ((($1,200.00−$1,609.99)/$5,215) × 100 = −7.86 percent). Therefore, when utilizing the product list cost of $1,200.00 provided, we believe that OPN NC does not meet the third cost significance requirement.

Based on the conflicting amounts provided for the reasonable cost of OPN NC, we question whether OPN NC meets the cost significance criterion. We would welcome additional information regarding this inconsistency on the estimated average reasonable cost of OPN NC.

We are inviting public comment on whether the OPN NC meets the device pass-through payment criteria discussed in this section, including the cost criterion for device pass-through payment status.

Biotronik, Inc. submitted an application for a new device category for transitional pass-through payment status for OSCAR® Peripheral Multifunctional Catheter (OSCAR®) for CY 2025. According to the applicant, OSCAR® is a tool used to simplify the treatment of peripheral artery disease (PAD), a disease process characterized by the narrowing of arteries that supply blood to the limbs, usually the legs. In severe cases PAD can cause tissue death and gangrene, leading to amputation. Per the applicant, OSCAR® can simplify the process of peripheral interventions, reduce the time required to perform the procedure and the need for repeat procedures, reduce the risk of complications associated with changing out multiple medical devices, minimize radiation exposure, and enhance patient comfort.

Please refer to the online application posting for OSCAR®, available at https://mearis.cms.gov/​public/​publications/​device-ptp/​DEP230601F6NM2 , for additional detail describing the device and the disease treated by the device.

As stated previously, to be eligible for transitional pass-through payment under the OPPS, a device must meet the criteria at § 419.66(b)(1) through (4). With respect to the newness criterion at § 419.66(b)(1), on July 5, 2022, the applicant received 510k clearance from FDA for OSCAR® as a device to be used for percutaneous transluminal interventions in the peripheral vasculature to provide support during access into and to dilate stenoses in femoral, popliteal and infrapopliteal arteries. The product is also intended for injecting radiopaque contrast media for angiography. We received the application for a new device category for transitional pass-through payment status for OSCAR® on June 1, 2023, which is within three years of the date of the initial FDA marketing authorization.

We are inviting public comments on whether OSCAR® meets the newness criterion at § 419.66(b)(1). Start Printed Page 59340

With respect to the eligibility criteria at § 419.66(b)(3), the device must be an integral part of the service furnished, used for one patient only, come in contact with human tissue, and be surgically inserted or implanted, or applied in or on a wound or other skin lesion. The applicant did not explicitly state whether OSCAR® is integral to the service provided. While the applicant did not explicitly state whether the device is used for one patient only or whether it comes in contact with human tissue, per the device description, OSCAR® is surgically inserted into the lower extremity peripheral vascular system and is single-use. We are inviting public comments on whether OSCAR® meets the eligibility criterion at § 419.66(b)(3).

With respect to the exclusion criterion at § 419.66(b)(4), a device is not eligible to be considered for device pass-through payment if it is any of the following: (1) equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets as defined in Chapter 1 of the Medicare Provider Reimbursement Manual (CMS Pub. 15-1); or (2) a material or supply furnished incident to a service (for example, a suture, customized surgical kit, or clip, other than a radiological site marker). The applicant did not indicate whether OSCAR® is equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered, or if OSCAR® is a supply or material furnished incident to a service.

We are inviting public comments on whether OSCAR® meets the exclusion criterion at § 419.66(b)(4).

In addition to the criteria at § 419.66(b)(1) through (4), the criteria for establishing new device categories are specified at § 419.66(c). The first criterion, at § 419.66(c)(1), provides that CMS determines that a device to be included in the category is not appropriately described by any of the existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996. The applicant asserted that OSCAR® is a combination device authorized by FDA with an indication to diagnose and treat peripheral vascular lesions, identify obstructions, and cross the areas of obstruction and restore blood flow using a single system. According to the applicant, no previous or existing device categories for pass-through payment appropriately describe OSCAR®. Per the applicant, OSCAR® has the functionality of multiple devices currently used during lower extremity peripheral vasculature interventions. The applicant provided multiple HCPCS codes that could describe some of the components of OSCAR®; however, only one of the codes provided, C1725, is a device category HCPCS code, and, therefore, C1725 is the only device category we evaluated for this criterion. Per the applicant, the device category C1725 (Catheter, transluminal angioplasty, non-laser (may include guidance, infusion/perfusion capability)) does not appropriately describe OSCAR® because OSCAR® can cover the functionality of support catheters, several sizes of angioplasty balloons, chronic total occlusion crossing devices, reentry catheters, resistant lesion preparation devices, and dissection-reducing devices. According to the applicant, current pass-through coding does not adequately capture OSCAR®'s full functionality and the added clinical and economic value derived from its simplification of peripheral vascular interventions.

We note, based on the description the applicant provided, that when the OSCAR® support catheter and OSCAR® dilator are combined with the OSCAR® PTA balloon, the device is used to complete a transluminal angioplasty, which is consistent with the devices described by C1725. In this context, we believe that OSCAR® may be similar to the devices described by C1725 and, therefore, may be appropriately described by C1725.

We are inviting public comment on whether OSCAR® meets the device category criterion at § 419.66(c)(1).

The second criterion for establishing a device category, at § 419.66(c)(2), provides that CMS determines either of the following: (i) that a device to be included in the category has demonstrated that it will substantially improve the diagnosis or treatment of an illness or injury or improve the functioning of a malformed body part compared to the benefits of a device or devices in a previously established category or other available treatment; or (ii) for devices for which pass-through status will begin on or after January 1, 2020, as an alternative to the substantial clinical improvement criterion, the device is part of the FDA's Breakthrough Devices Program and has received FDA marketing authorization for the indication covered by the Breakthrough Device designation. The applicant claimed that OSCAR® represents a substantial clinical improvement over existing technologies in the diagnosis and management of peripheral artery disease because it uses less equipment, cuts down procedure time, and mitigates risks like vascular damage, infections, and radiation exposure, thereby enhancing clinical efficiency and safety.

The applicant provided four background documents supporting its substantial clinical improvement claim. [ 62 ] Please see the online posting for OSCAR® for the applicant's complete statements regarding the substantial clinical improvement criterion and the supporting evidence provided.

After review of the information provided by the applicant, we have the following concerns regarding whether OSCAR® meets the substantial clinical improvement criterion. First, the applicant did not submit peer-reviewed or published clinical evidence to substantiate clinical improvement over existing devices. The applicant submitted four background documents in support of OSCAR®: (1) a clinical benefit table, (2) a presentation on the Evaluation of Market Acceptance, (3) the OSCAR® US Evaluation of Market Acceptance Report, and the (4) OSCAR® Clinical Evaluation Report. All four of these documents rely on data from the Evaluation of Market Acceptance. We note these documents are not published or peer-reviewed, and reflect data collected for marketing purposes rather than clinical improvement purposes. The data included appear to be opinion-based survey questions asked of Start Printed Page 59342 physicians recruited by the applicant for the purpose of the Evaluation of Market Acceptance and note that these documents suggest an implicit bias. We question the link between these documents and the claims the applicant made that OSCAR® shows substantial clinical improvement because it uses less equipment, cuts down procedure time, and mitigates risks like vascular damage, infections, and radiation exposure, thereby enhancing clinical efficiency and safety. We request clarification on how the support documents directly relate to the substantial clinical improvement claims.

Further, we question how a collection of devices currently available on the market consolidated into a single packaged product demonstrates substantial clinical improvement. According to the applicant, with OSCAR® some procedures may be performed with a single device which cuts down procedure time and mitigates risks like vascular damage, infections, and radiation exposure, thereby enhancing clinical efficiency and safety. The applicant asserted several benefits of using OSCAR® over multiple devices, including reducing (1) the need to remove and replace multiple devices, which may reduce the incidence of complications like infection and vessel damage; (2) the need to use ill-fitting devices; (3) the need for multiple guidewires in several procedures; and (4) the incidence of complications, such as infections and vessel damage. However, we did not receive comparative data supporting the claim that OSCAR® offers superiority over currently available treatments in terms of clinical benefit or safety. The evidence provided did not discuss any advantages of using a single system of devices rather than multiple individual devices with diverse functionalities. We would welcome any additional evidence supporting these claims.

Furthermore, per the applicant, OSCAR® is effective in preparing intravascular lesions for advanced interventions, particularly stenting, and by ensuring optimal lesion preparation, OSCAR® elevates the success rate of these procedures, enhances patient safety, and streamlines institutional operations. According to the applicant, OSCAR® handles chronic total occlusions (CTOs) and incorporates reentry capabilities, features traditionally found in standalone devices. The applicant asserted this integration enhances patient safety, simplifies procedures, and elevates the efficiency of operations. However, we note that the applicant did not provide clinical information in support of these claims. Again, we would welcome any additional evidence supporting these claims.

Finally, we question whether OSCAR® can be sufficiently distinguished from similar existing technologies to demonstrate substantial clinical improvement. OSCAR® was determined to be substantially equivalent to a legally marketed device, the INFINITY Angioplasty Balloon Catheter TM , which received 510(k) clearance on May 20, 2020. The FDA 510(k) summary for OSCAR® indicated that the devices share similar technological characteristics, and that OSCAR® differs only in that it combines support catheters to be used with the dilator and balloon catheter. We did not receive data demonstrating how OSCAR® offers a substantial clinical improvement compared to the INFINITY Angioplasty Balloon Catheter. We would be interested in additional information to demonstrate whether the nominated device demonstrates a substantial clinical benefit in comparison to INFINITY Angioplasty Balloon Catheter.

Further, per the applicant, there are six device types that it believed OSCAR® is most closely related to: (1) workhorse guidewires (Abbott, Boston Scientific, Terumo, Medtronic, Biotronik, Cook Medical, Cordis); (2) premium guidewires (Abbott, Asahi Intecc, Boston Scientific, Cook Medical and more); (3) workhorse & premium support catheters (Philips, Boston Scientific, Cook Medical, Medtronic, Asahi Intecc, Teleflex and more); (4) angioplasty balloons (Abbott, BD Interventional, Biotronik, Cook Medical, Medtronic and more); (5) lesion preparation balloons (Philips, Medtronic, BD Interventional and Cagent Vascular); and (6) chronic total occlusion and reentry devices. We do not believe that OSCAR® is similar to the workhorse guidewires and premium guidewires listed because OSCAR® does not include guidewires. We would welcome additional information illustrating how OSCAR® is similar to the listed workhorse guidewires and premium guidewires and evidence demonstrating the benefits of OSCAR® over these other devices.

While we note that OSCAR® is comparable, we did not receive data demonstrating how OSCAR® offers a substantial clinical improvement compared to the workhorse and premium support catheters, angioplasty balloons, lesion preparation balloons, or chronic total occlusion and reentry devices and would be interested in additional evidence demonstrating the substantial clinical benefits of OSCAR® over these other devices.

Additional evidence comparing OSCAR® to existing technologies would be particularly helpful to determine whether the device demonstrates substantial clinical improvements over currently available treatments in the clinical setting where it is most likely to be used. Specifically, we would welcome published peer-reviewed clinical trials that show improved clinical outcomes, such as reduction in mortality, complications, subsequent interventions, future hospitalizations, recovery time, pain, or a more rapid beneficial resolution of the disease process compared to the standard of care.

We are inviting public comment on whether OSCAR® meets the device category criterion at § 419.66(c)(2)(i).

The third criterion for establishing a device category, at § 419.66(c)(3), requires us to determine that the cost of the device is not insignificant, as described in § 419.66(d). Section 419.66(d) includes three cost significance criteria that must each be met. The applicant provided the following information in support of the cost significance requirements. The applicant stated that OSCAR® would be reported with HCPCS codes as shown in Table 61.

To meet the cost criterion for device pass-through payment status, a device must pass all three tests of the cost criterion for at least one APC. As we explained in the CY 2005 OPPS final rule ( 69 FR 65775 ), we generally use the lowest APC payment rate applicable for use with the nominated device when we assess whether a device meets the cost significance criterion, thus increasing the probability the device will pass the cost significance test. Beginning in CY 2017, we calculate the device offset amount at the HCPCS/CPT code level instead of the APC level ( 81 FR 79657 ). We note the applicant used the CY 2023 payment rates for the three tests of the cost criterion. For our calculations, we used APC 5183, which had a CY 2023 payment rate of $2,978.97 at the time the application was received. HCPCS code 75625 in APC 5183 had a CY 2023 device offset amount of $530.85 at the time the application was received. [ 63 ] According to the applicant, the cost of OSCAR® is $2,020.00.

Section 419.66(d)(1), the first cost significance requirement, provides that the estimated average reasonable cost of devices in the category must exceed 25 percent of the applicable APC payment amount for the service related to the category of devices. The estimated average reasonable cost of $2,020.00 for OSCAR is 67.81 percent of the applicable APC payment amount for the service related to the category of devices of $2,978.97 (($2,020.00/$2,978.97) × 100 = 67.81 percent). Therefore, we believe OSCAR meets the first cost significance requirement.

The second cost significance requirement, at § 419.66(d)(2), provides that the estimated average reasonable cost of the devices in the category must exceed the cost of the device-related portion of the APC payment amount for the related service by at least 25 percent, which means that the device cost needs to be at least 125 percent of the offset amount (the device-related portion of the APC found on the offset list). The estimated average reasonable cost of $2,020.00 for OSCAR® is 380.52 percent of the cost of the device-related portion of the APC payment amount for the related service of $530.85 (($2,020.00/$530.85) × 100 = 380.52 percent). Therefore, we believe that OSCAR® meets the second cost significance requirement.

The third cost significance requirement, at § 419.66(d)(3), provides that the difference between the estimated average reasonable cost of the devices in the category and the portion of the APC payment amount for the device must exceed 10 percent of the APC payment amount for the related service. The difference between the estimated average reasonable cost of $2,020.00 for OSCAR® and the portion of the APC payment amount for the device of $530.85 is 49.99 percent of the APC payment amount for the related service of $2978.97 ((($2,020.00−$530.85)/$ 2,978.97) × 100 = 49.99 percent). Therefore, we believe that OSCAR® meets the third cost significance requirement.

We are inviting public comment on whether the OSCAR® meets the device pass-through payment criteria discussed in this section, including the cost criterion for device pass-through payment status.

Under the OPPS, prior to CY 2017, device-intensive status for procedures was determined at the APC level for APCs with a device offset percentage greater than 40 percent ( 79 FR 66795 ). Beginning in CY 2017, CMS began determining device-intensive status at the HCPCS code level. In assigning device-intensive status to an APC prior to CY 2017, the device costs of all the procedures within the APC were calculated and the geometric mean device offset of all of the procedures had to exceed 40 percent. Almost all of the procedures assigned to device-intensive APCs utilized devices, and the device costs for the associated HCPCS codes exceeded the 40-percent threshold. The no cost/full credit and partial credit device policy ( 79 FR 66872 through Start Printed Page 59346 66873) applies to device-intensive procedures and is discussed in detail in section IV.B.4 of this proposed rule. A related device policy was the requirement that certain procedures assigned to device-intensive APCs require the reporting of a device code on the claim ( 80 FR 70422 ) and is discussed in detail in section IV.B.3 of this proposed rule. For further background information on the device-intensive APC policy, we refer readers to the CY 2016 OPPS/ASC final rule with comment period ( 80 FR 70421 through 70426 ).

As stated earlier, prior to CY 2017, under the device-intensive methodology we assigned device-intensive status to all procedures requiring the implantation of a device that were assigned to an APC with a device offset greater than 40 percent and, beginning in CY 2015, that met the three criteria as listed. Historically, the device-intensive designation was at the APC level and applied to the applicable procedures within that APC. In the CY 2017 OPPS/ASC final rule with comment period ( 81 FR 79658 ), we changed our methodology to assign device-intensive status at the individual HCPCS code level rather than at the APC level. Under this policy, a procedure could be assigned device-intensive status regardless of its APC assignment, and device-intensive APC designations were no longer applied under the OPPS or the ASC payment system.

We believe that a HCPCS code-level device offset is, in most cases, a better representation of a procedure's device cost than an APC-wide average device offset based on the average device offset of all of the procedures assigned to an APC. Unlike a device offset calculated at the APC level, which is a weighted average offset for all devices used in all of the procedures assigned to an APC, a HCPCS code-level device offset is calculated using only claims for a single HCPCS code. We believe that this methodological change results in a more accurate representation of the cost attributable to implantation of a high-cost device, which ensures consistent device-intensive designation of procedures with a significant device cost. Further, we believe a HCPCS code-level device offset removes inappropriate device-intensive status for procedures without a significant device cost that are granted such status because of their APC assignment.

Under our existing policy, procedures that meet the criteria listed in section IV.C.1.b of this proposed rule are identified as device-intensive procedures and are subject to all the policies applicable to procedures assigned device-intensive status under our established methodology, including our policies on device edits and no cost/full credit and partial credit devices discussed in sections IV.C.3 and IV.C.4 of this proposed rule.

We clarified our established policy in the CY 2018 OPPS/ASC final rule with comment period ( 82 FR 52474 ), where we explained that device-intensive procedures require the implantation of a device and additionally are subject to the following criteria:

• All procedures must involve implantable devices that would be reported if device insertion procedures were performed;
• The required devices must be surgically inserted or implanted devices that remain in the patient's body after the conclusion of the procedure (at least temporarily); and
• The device offset amount must be significant, which is defined as exceeding 40 percent of the procedure's mean cost.

We changed our policy to apply these three criteria to determine whether procedures qualify as device-intensive in the CY 2015 OPPS/ASC final rule with comment period ( 79 FR 66926 ), where we stated that we would apply the no cost/full credit and partial credit device policy—which includes the three criteria listed previously—to all device-intensive procedures beginning in CY 2015. We reiterated this position in the CY 2016 OPPS/ASC final rule with comment period ( 80 FR 70424 ), where we explained that we were finalizing our proposal to continue using the three criteria established in the CY 2007 OPPS/ASC final rule with comment period for determining the APCs to which the CY 2016 device intensive policy will apply. Under the policies we adopted in CYs 2015, 2016, and 2017, all procedures that require the implantation of a device and meet the previously described criteria are assigned device-intensive status, regardless of their APC placement.

As part of our effort to better capture costs for procedures with significant device costs, in the CY 2019 OPPS/ASC final rule with comment period ( 83 FR 58944 through 58948 ), for CY 2019, we modified our criteria for device-intensive procedures. We had heard from interested parties that the criteria excluded some procedures that interested parties believed should qualify as device-intensive procedures. Specifically, we were persuaded by interested party arguments that procedures requiring expensive surgically inserted or implanted devices that are not capital equipment should qualify as device-intensive procedures, regardless of whether the device remains in the patient's body after the conclusion of the procedure. We agreed that a broader definition of device-intensive procedures was warranted, and made two modifications to the criteria for CY 2019 ( 83 FR 58948 ). First, we allowed procedures that involve surgically inserted or implanted single-use devices that meet the device offset percentage threshold to qualify as device-intensive procedures, regardless of whether the device remains in the patient's body after the conclusion of the procedure. We established this policy because we no longer believe that whether a device remains in the patient's body should affect a procedure's designation as a device-intensive procedure, as such devices could, nonetheless, comprise a large portion of the cost of the applicable procedure. Second, we modified our criteria to lower the device offset percentage threshold from 40 percent to 30 percent, to allow a greater number of procedures to qualify as device intensive. We stated that we believe allowing these additional procedures to qualify for device-intensive status will help ensure these procedures receive more appropriate payment in the ASC setting, which will help encourage the provision of these services in the ASC setting. In addition, we stated that this change would help to ensure that more procedures containing relatively high-cost devices are subject to the device edits, which leads to more correctly coded claims and greater accuracy in our claims data. Specifically, for CY 2019 and subsequent years, we finalized that device-intensive procedures will be subject to the following criteria:

• All procedures must involve implantable devices assigned a CPT or HCPCS code;
• The required devices (including single-use devices) must be surgically inserted or implanted; and
• The device offset amount must be significant, which is defined as exceeding 30 percent of the procedure's mean cost ( 83 FR 58945 ).

In addition, to further align the device-intensive policy with the criteria used for device pass-through payment status, we finalized, for CY 2019 and subsequent years, that for purposes of Start Printed Page 59347 satisfying the device-intensive criteria, a device-intensive procedure must involve a device that:

• Has received FDA marketing authorization, has received an FDA investigational device exemption (IDE), and has been classified as a Category B device by FDA in accordance with §§ 405.203 through 405.207 and 405.211 through 405.215, or meets another appropriate FDA exemption from premarket review;
• Is an integral part of the service furnished;
• Is used for one patient only;
• Comes in contact with human tissue;
• Is surgically implanted or inserted (either permanently or temporarily); and
• Is not either of the following:

++ Equipment, an instrument, apparatus, implement, or item of the type for which depreciation and financing expenses are recovered as depreciable assets as defined in Chapter 1 of the Medicare Provider Reimbursement Manual (CMS Pub. 15-1); or

++ A material or supply furnished incident to a service (for example, a suture, customized surgical kit, scalpel, or clip, other than a radiological site marker) ( 83 FR 58945 ).

In addition, for new HCPCS codes describing procedures requiring the implantation of devices that do not yet have associated claims data, in the CY 2017 OPPS/ASC final rule with comment period ( 81 FR 79658 ), we finalized a policy for CY 2017 to apply device-intensive status with a default device offset set at 41 percent for new HCPCS codes describing procedures requiring the implantation or insertion of a device that did not yet have associated claims data until claims data are available to establish the HCPCS code-level device offset for the procedures. This default device offset amount of 41 percent was not calculated from claims data; instead, it was applied as a default until claims data were available upon which to calculate an actual device offset for the new code. The purpose of applying the 41-percent default device offset to new codes that describe procedures that implant or insert devices was to ensure ASC access for new procedures until claims data become available.

As discussed in the CY 2019 OPPS/ASC proposed rule and final rule with comment period ( 83 FR 37108 through 37109 and 58945 through 58946 , respectively), in accordance with our policy stated previously to lower the device offset percentage threshold for procedures to qualify as device-intensive from greater than 40 percent to greater than 30 percent, for CY 2019 and subsequent years, we modified this policy to apply a 31-percent default device offset to new HCPCS codes describing procedures requiring the implantation of a device that do not yet have associated claims data until claims data are available to establish the HCPCS code-level device offset for the procedures. In conjunction with the policy to lower the default device offset from 41 percent to 31 percent, we continued our current policy of, in certain rare instances (for example, in the case of a very expensive implantable device), temporarily assigning a higher offset percentage if warranted by additional information such as pricing data from a device manufacturer ( 81 FR 79658 ). Once claims data are available for a new procedure requiring the implantation or insertion of a device, device-intensive status is applied to the code if the HCPCS code-level device offset is greater than 30 percent, according to our policy of determining device-intensive status by calculating the HCPCS code-level device offset.

In addition, in the CY 2019 OPPS/ASC final rule with comment period, we clarified that since the adoption of our policy in effect as of CY 2018, the associated claims data used for purposes of determining whether or not to apply the default device offset are the associated claims data for either the new HCPCS code or any predecessor code, as described by CPT coding guidance, for the new HCPCS code. Additionally, for CY 2019 and subsequent years, in limited instances where a new HCPCS code does not have a predecessor code as defined by CPT, but describes a procedure that was previously described by an existing code, we use clinical discretion to identify HCPCS codes that are clinically related or similar to the new HCPCS code but are not officially recognized as a predecessor code by CPT, and to use the claims data of the clinically related or similar code(s) for purposes of determining whether or not to apply the default device offset to the new HCPCS code ( 83 FR 58946 ). Clinically related and similar procedures for purposes of this policy are procedures that have few or no clinical differences and use the same devices as the new HCPCS code. In addition, clinically related and similar codes for purposes of this policy are codes that either currently or previously describe the procedure described by the new HCPCS code. Under this policy, claims data from clinically related and similar codes are included as associated claims data for a new code, and where an existing HCPCS code is found to be clinically related or similar to a new HCPCS code, we apply the device offset percentage derived from the existing clinically related or similar HCPCS code's claims data to the new HCPCS code for determining the device offset percentage. We stated that we believe that claims data for HCPCS codes describing procedures that have minor differences from the procedures described by new HCPCS codes will provide an accurate depiction of the cost relationship between the procedure and the device(s) that are used, and will be appropriate to use to set a new code's device offset percentage, in the same way that predecessor codes are used. If a new HCPCS code has multiple predecessor codes, the claims data for the predecessor code that has the highest individual HCPCS-level device offset percentage is used to determine whether the new HCPCS code qualifies for device-intensive status. Similarly, in the event that a new HCPCS code does not have a predecessor code but has multiple clinically related or similar codes, the claims data for the clinically related or similar code that has the highest individual HCPCS level device offset percentage is used to determine whether the new HCPCS code qualifies for device-intensive status.

As described above, under our existing policies for assigning a device offset percentage to new HCPCS codes, we first rely on the associated claims data for new HCPCS codes. For new HCPCS codes that do not have available claims data yet, we rely on any available claims data from a predecessor code for the new HCPCS code, as described by CPT coding guidance. We assign the device offset percentage to the new HCPCS code that is the device offset percentage of the predecessor code for which we have available claims data. If claims data from the new HCPCS or any predecessor code is unavailable, we use clinical discretion to identify HCPCS codes that are clinically related or similar to the new HCPCS code but are not officially recognized as a predecessor code by CPT, and to use the claims data of the clinically related or similar code(s) for purposes of determining a device offset percentage to the new HCPCS code ( 83 FR 58946 ). Clinically related and similar procedures for purposes of this policy are procedures that have few or no clinical differences and use the same devices. If a clinically similar procedure that uses the same devices is not available, then for new HCPCS codes Start Printed Page 59348 describing procedures requiring the insertion or implantation of devices that do not yet have claims data (from either the new HCPCS code or any predecessor code), we apply a default device offset set at 31 percent.

As we stated previously, the purpose of applying the default device offset to new codes that describe procedures that implant or insert devices is to ensure access in the ASC setting for new procedures until claims data become available. Also, under the OPPS, the default device offset is useful for establishing a device amount for new device-intensive procedures. For example, under our policy for no cost/full credit or partial credit devices, we reduce the OPPS payment for device-intensive procedures by the lesser of the full or partial credit a hospital receives for a replaced device or the device offset amount. Additionally, we may remove the device offset amount from the OPPS payment for procedures that are terminated prior to administering anesthesia (since the device was not used for the procedure).

While we do allow for additional information in consideration of a higher offset percentage than the default device offset, it would be extremely rare that the appropriate determination of a device offset percentage would rely on pricing data or invoices from a device manufacturer rather than the default device offset percentage. However, we are aware that there may be certain situations where the default device offset percentage would not adequately reflect the existing device portion of the procedure's costs when compared to the cost of similar devices. This difference could impede our ability to accurately remove device offset amounts from new device-intensive procedures under the OPPS. As HOPDs and ASCs perform new procedures with significant device costs, we believe it is appropriate to modify our default device offset methodology to pay HOPDs and ASCs more appropriately when we lack claims data for these newer procedures. Therefore, for this CY 2025 OPPS/ASC proposed rule and subsequent calendar years, we propose to modify our default device offset percentage policy for new device-intensive procedures. Specifically, for new HCPCS codes that describe a procedure that requires the implantation or insertion of a single-use device that meets our requirements of a device as described above and the procedure lacks claims data (from either the new HCPCS code or any predecessor code), we would apply a default device offset percentage that is the greater of 31 percent or the device offset percentage of the APC to which the procedure has been assigned. We propose this methodological change for both the OPPS and ASC Payment System for CY 2025 and subsequent calendar years. We still believe that a HCPCS code-level device offset is, in most cases, a more accurate representation of a procedure's device cost than an APC-wide average device offset based on the average device offset of all the procedures assigned to an APC. However, because newer device-intensive procedures lack claims data, we believe the APC-wide average device offset percentage is, in many cases, a better reflection of the estimated device costs of the procedure than a default 31 percent offset. Additionally, there can be instances where the typical device costs of procedures in an APC can be significantly greater than the 31 percent default device offset. For these reasons, we propose to modify our default device offset percentage for new device-intensive procedures that describe the implantation or insertion of a single-use device that meets our requirements of a device (as described above) and that do not yet have associated claims data, by applying a default device offset percentage that is the greater of 31 percent or the device offset percentage of the APC to which the procedure has been assigned. This proposal would apply to new procedures assigned to clinical APCs, but not new procedures assigned to New Technology APCs.

As we indicated in the CY 2019 OPPS/ASC proposed rule and final rule with comment period, we may consider additional information for an offset percentage greater than the default offset percentage (which, for this proposed rule, is the greater of 31 percent or the APC-level offset percentage) for new HCPCS codes describing procedures requiring the implantation (or, in some cases, the insertion) of a device that do not yet have associated claims data, such as pricing data or invoices from a device manufacturer. This would be for our consideration in extremely rare circumstances, such as an extremely high-cost implantable device. While we believe our proposed modification of a default device offset will improve payment under the OPPS and ASC payment system, we will continue to accept additional information in consideration of an alternative offset percentage. This information should be directed to the Division of Outpatient Care, Mail Stop C4-01-26, Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, MD 21244-1850, or electronically at [email protected] . Additional information can be submitted prior to issuance of an OPPS/ASC proposed rule or as a public comment in response to an issued OPPS/ASC proposed rule. Device offset percentages will be set in each year's final rule.

The full listing of the proposed CY 2025 device-intensive procedures, which incorporates our proposed changes to the default device offset policy, can be found in Addendum P to this proposed rule (which is available via the internet on the CMS website). Further, our claims accounting narrative contains a description of our device offset percentage calculation. Our claims accounting narrative for this proposed rule can be found under supporting documentation for the CY 2025 OPPS/ASC proposed rule on our website at: https://www.cms.gov/​medicare/​medicare-fee-for-service-payment/​hospitaloutpatientpps .

In the CY 2015 OPPS/ASC final rule with comment period ( 79 FR 66795 ), we finalized a policy and implemented claims processing edits that require any of the device codes used in the previous device-to-procedure edits to be present on the claim whenever a procedure code assigned to any of the APCs listed in Table 5 of the CY 2015 OPPS/ASC final rule with comment period (the CY 2015 device-dependent APCs) was reported on the claim. In addition, in the CY 2016 OPPS/ASC final rule with comment period ( 80 FR 70422 ), we modified our previously existing policy and applied the device coding requirements exclusively to procedures that require the implantation of a device assigned to a device-intensive APC. In the CY 2016 OPPS/ASC final rule with comment period, we also finalized our policy that the claims processing edits are such that any device code, when reported on a claim with a procedure assigned to a device-intensive APC (listed in Table 42 of the CY 2016 OPPS/ASC final rule with comment period ( 80 FR 70422 )), will satisfy the edit.

In the CY 2017 OPPS/ASC final rule with comment period ( 81 FR 79658 through 79659 ), we changed our policy for CY 2017 and subsequent years to apply the CY 2016 device coding requirements to the newly defined device-intensive procedures. For CY 2017 and subsequent years, we also specified that any device code, when reported on a claim with a device-intensive procedure, will satisfy the edit. In addition, we created HCPCS code C1889 to recognize devices furnished during a device-intensive procedure that are not described by a specific Level II HCPCS Category C-code. Reporting HCPCS code C1889 Start Printed Page 59349 with a device-intensive procedure will satisfy the edit requiring a device code to be reported on a claim with a device-intensive procedure. In the CY 2019 OPPS/ASC final rule with comment period, we revised the description of HCPCS code C1889 to remove the specific applicability to device-intensive procedures ( 83 FR 58950 ). For CY 2019 and subsequent years, the description of HCPCS code C1889 is “Implantable/insertable device, not otherwise classified.”

In the CY 2024 OPPS/ASC final rule with comment period ( 88 FR 81758 through 81759 ), we finalized our proposal to establish a procedure-to-device edit for the procedures assigned to APC 5496 (Level 6 Intraocular Procedures) and require hospitals to report the correct device HCPCS codes when reporting any of the four procedures—CPT codes 0308T, 0616T, 0617T, and 0618T. While we noted that interested parties have previously recommended in past rulemaking that we reestablish all of our previous procedure-to-device edits, we did not expect to extend this policy beyond the procedures assigned to APC 5496 (Level 6 Intraocular Procedures). This APC represents a unique situation—the APC (which was the Level 5 Intraocular APC in previous years) had been a Low Volume APC (fewer than 100 claims in a claims year) since we established our Low Volume APC policy, the procedures associated with this APC have significant procedure costs often greater than $15,000, and the procedures associated with this APC require the implantation of a high-cost intraocular device. Additionally, in our review of claims data for some of the procedures, we noticed unusual coding, charge, and cost data. These claims had an outsized impact because of the low volume of claims for the APC which impeded our ability to determine a payment rate accurately and appropriately for APC 5496 (Level 6 Intraocular Procedures). Further, because of the low volume of procedures assigned to this APC, we did not believe the reinstatement of procedure-to-device edits for the four procedures assigned to this APC would be administratively burdensome to hospitals. We finalized our proposal to modify our device edits policy to require a procedure-to-device edit for procedures assigned to APC 5496 (Level 6 Intraocular Procedures) for CY 2024. We propose to continue this policy for APC 5496 (Level 6 Intraocular Procedures) for CY 2025 and subsequent CYs and note that new CPT placeholder code 6X004 (Implantation of iris prosthesis, including suture fixation and repair or removal of iris, when performed) is replacing CPT code 0616T (Insertion of iris prosthesis, including suture fixation and repair or removal of iris, when performed; without removal of crystalline lens or intraocular lens, without insertion of intraocular lens) effective January 1, 2025. Additionally, CPT codes 0617T and 0618T currently assigned to APC 5496 (Level 6 Intraocular Procedures) will be deleted effective January 1, 2025. Therefore, for CY 2025, the procedure-to-device edit for procedures assigned to APC 5496 (Level 6 Intraocular Procedures) will apply to CPT code 0308T and 6X004.

We are not proposing any other changes to our device edit policy for CY 2025.

To ensure equitable OPPS payment when a hospital receives a device without cost or with full credit, in CY 2007, we implemented a policy to reduce the payment for specified device-dependent APCs by the estimated portion of the APC payment attributable to device costs (that is, the device offset) when the hospital receives a specified device at no cost or with full credit ( 71 FR 68071 through 68077 ). Hospitals were instructed to report no cost/full credit device cases on the claim using the “FB” modifier on the line with the procedure code in which the no cost/full credit device is used. In cases in which the device is furnished without cost or with full credit, hospitals were instructed to report a token device charge of less than $1.01. In cases in which the device being inserted is an upgrade (either of the same type of device or to a different type of device) with a full credit for the device being replaced, hospitals were instructed to report as the device charge the difference between the hospital's usual charge for the device being implanted and the hospital's usual charge for the device for which it received full credit. In CY 2008, we expanded this payment adjustment policy to include cases in which hospitals receive partial credit of 50 percent or more of the cost of a specified device. Hospitals were instructed to append the “FC” modifier to the procedure code that reports the service provided to furnish the device when they receive a partial credit of 50 percent or more of the cost of the new device. We refer readers to the CY 2008 OPPS/ASC final rule with comment period for more background information on the “FB” and “FC” modifiers payment adjustment policies ( 72 FR 66743 through 66749 ).

In the CY 2014 OPPS/ASC final rule with comment period ( 78 FR 75005 through 75007 ), beginning in CY 2014, we modified our policy of reducing OPPS payment for specified APCs when a hospital furnishes a specified device without cost or with a full or partial credit. For CY 2013 and prior years, our policy had been to reduce OPPS payment by 100 percent of the device offset amount when a hospital furnishes a specified device without cost or with a full credit and by 50 percent of the device offset amount when the hospital receives partial credit in the amount of 50 percent or more of the cost for the specified device. For CY 2014, we reduced OPPS payment, for the applicable APCs, by the full or partial credit a hospital receives for a replaced device. Specifically, under this modified policy, hospitals are required to report on the claim the amount of the credit in the amount portion for value code “FD” (Credit Received from the Manufacturer for a Replaced Device) when the hospital receives a credit for a replaced device that is 50 percent or greater than the cost of the device. For CY 2014, we also limited the OPPS payment deduction for the applicable APCs to the total amount of the device offset when the “FD” value code appears on a claim. For CY 2015, we continued our policy of reducing OPPS payment for specified APCs when a hospital furnishes a specified device without cost or with a full or partial credit and to use the three criteria established in the CY 2007 OPPS/ASC final rule with comment period ( 71 FR 68072 through 68077 ) for determining the APCs to which our CY 2015 policy will apply ( 79 FR 66872 through 66873 ). In the CY 2016 OPPS/ASC final rule with comment period ( 80 FR 70424 ), we finalized our policy to no longer specify a list of devices to which the OPPS payment adjustment for no cost/full credit and partial credit devices would apply and instead apply this APC payment adjustment to all replaced devices furnished in conjunction with a procedure assigned to a device-intensive APC when the hospital receives a credit for a replaced specified device that is 50 percent or greater than the cost of the device.

In the CY 2017 OPPS/ASC final rule with comment period ( 81 FR 79659 through 79660 ), for CY 2017 and subsequent years, we finalized a policy Start Printed Page 59350 to reduce OPPS payment for device-intensive procedures, by the full or partial credit a provider receives for a replaced device, when a hospital furnishes a specified device without cost or with a full or partial credit. Under our current policy, hospitals continue to be required to report on the claim the amount of the credit in the amount portion for value code “FD” when the hospital receives a credit for a replaced device that is 50 percent or greater than the cost of the device.

In the CY 2014 OPPS/ASC final rule with comment period ( 78 FR 75005 through 75007 ), we adopted a policy of reducing OPPS payment for specified APCs when a hospital furnishes a specified device without cost or with a full or partial credit by the lesser of the device offset amount for the APC or the amount of the credit. We adopted this change in policy in the preamble of the CY 2014 OPPS/ASC final rule with comment period and discussed it in subregulatory guidance, including Chapter 4, Section 61.3.6 of the Medicare Claims Processing Manual. Further, in the CY 2021 OPPS/ASC final rule with comment period ( 85 FR 86017 through 86018 , 86302 ), we made conforming changes to our regulations at § 419.45(b)(1) and (2) that codified this policy.

We are not proposing any changes to our policies regarding payment for no cost/full credit and partial credit devices for CY 2025.

Section 1833(t)(6) of the Act provides for temporary additional payments or “transitional pass-through payments” for certain drugs and biologicals. Throughout this proposed rule, the term “biological” is used because this is the term that appears in section 1861(t) of the Act. A “biological” as used in this proposed rule includes (but is not necessarily limited to) a “biological product” or a “biologic” as defined under section 351 of the PHS Act. As enacted by the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 (BBRA) (Pub. L. 106113), this pass-through payment provision requires the Secretary to make additional payments to hospitals for: current orphan drugs for rare diseases and conditions, as designated under section 526 of the Federal Food, Drug, and Cosmetic Act; current drugs and biologicals and brachytherapy sources used in cancer therapy; and current radiopharmaceutical drugs and biologicals. “Current” refers to those types of drugs or biologicals mentioned above that are hospital outpatient services under Medicare Part B for which transitional pass-through payment was made on the first date the hospital OPPS was implemented.

Transitional pass-through payments also are provided for certain “new” drugs and biologicals that were not being paid for as an HOPD service as of December 31, 1996, and whose cost is “not insignificant” in relation to the OPPS payments for the procedures or services associated with the new drug or biological. For pass-through payment purposes, radiopharmaceuticals are included as “drugs.” As required by statute, transitional pass-through payments for a drug or biological described in section 1833(t)(6)(C)(i)(II) of the Act can be made for a period of at least 2 years, but not more than 3 years, after the payment was first made for the drug as a hospital outpatient service under Medicare Part B. Proposed CY 2025 pass-through drugs and biologicals and their designated APCs are assigned status indicator “G” in Addenda A and B to this proposed rule (which are available on the CMS website). [ 64 ]

Section 1833(t)(6)(D)(i) of the Act specifies that the pass-through payment amount, in the case of a drug or biological, is the amount by which the amount determined under section 1842(o) of the Act for the drug or biological exceeds the portion of the otherwise applicable Medicare OPD fee schedule that the Secretary determines is associated with the drug or biological. The methodology for determining the pass-through payment amount is set forth in regulations at 42 CFR 419.64 . These regulations specify that the pass-through payment equals the amount determined under section 1842(o) of the Act minus the portion of the APC payment that CMS determines is associated with the drug or biological.

Section 1847A of the Act establishes the average sales price (ASP) methodology, which is used for payment for drugs and biologicals described in section 1842(o)(1)(C) of the Act furnished on or after January 1, 2005. The ASP methodology, as applied under the OPPS, uses several sources of data as a basis for payment, including the ASP, the wholesale acquisition cost (WAC), and the average wholesale price (AWP). In this proposed rule, the term “ASP methodology” and “ASP-based” are inclusive of all data sources and methodologies described therein. Additional information on the ASP methodology can be found on our website at: https://www.cms.gov/​medicare/​payment/​fee-for-service-providers/​part-b-drugs/​average-drug-sales-price .

The pass-through application  [ 65 ] and review process for drugs and biologicals is described on our website at: https://www.cms.gov/​medicare/​payment/​prospective-payment-systems/​hospital-outpatient/​pass-through-payment-status-new-technology-ambulatory-payment-classification-apc .

As required by statute, transitional pass-through payments for a drug or biological described in section 1833(t)(6)(C)(i)(II) of the Act can be made for a period of at least 2 years, but not more than 3 years, after the payment was first made for the drug or biological as a hospital outpatient service under Medicare Part B. Our current policy is to accept pass-through applications on a quarterly basis and to begin pass-through payments for approved pass-through drugs and biologicals on a quarterly basis through the next available OPPS quarterly update after the approval of a drug's or biological's pass-through status. However, prior to CY 2017, we expired pass-through status for drugs and biologicals on an annual basis through notice-and-comment rulemaking ( 74 FR 60480 ). In the CY 2017 OPPS/ASC final rule with comment period ( 81 FR 79662 ), we finalized a policy change, beginning with pass-through drugs and biologicals approved in CY 2017 and subsequent calendar years, to allow for a quarterly expiration of pass-through payment status for drugs, biologicals, and radiopharmaceuticals to afford a pass-through payment period that is as close to a full 3 years as possible for all pass-through drugs, biologicals, and radiopharmaceuticals.

This change eliminated the variability of the pass-through payment eligibility period, which previously varied based Start Printed Page 59351 on when a particular application was initially received. We adopted this change for pass-through approvals beginning on or after CY 2017, to allow, on a prospective basis, for the maximum pass-through payment period for each pass-through drug without exceeding the statutory limit of 3 years. Notice of drugs for which pass-through payment status is ending during the calendar year is included in the quarterly OPPS Change Request transmittals.

There are 25 drugs and biologicals for which pass-through payment status expires by December 31, 2024, as listed in Table 62. These drugs and biologicals will have received OPPS pass-through payment for 3 years during the period of April 1, 2021 through December 31, 2024. In accordance with the policy finalized in CY 2017 and described earlier, pass-through payment status for drugs and biologicals approved in CY 2017 and subsequent years will expire on a quarterly basis, with a pass-through payment period as close to 3 years as possible.

With the exception of those groups of drugs and biologicals that are always packaged when they do not have pass-through payment status (specifically, anesthesia drugs; drugs, biologicals, and radiopharmaceuticals  [ 66 ] that function as supplies when used in a diagnostic test or procedure; and drugs and biologicals that function as supplies when used in a surgical procedure), our standard methodology for providing payment for drugs and biologicals with expiring pass-through payment status in an upcoming calendar year is to determine the product's estimated per day cost and compare it with the OPPS drug packaging threshold for that calendar year, which is proposed to be $140 for CY 2025 for all drugs, biologicals, and therapeutic radiopharmaceuticals (for diagnostic radiopharmaceuticals we propose separate payment when their per day cost exceeds the proposed threshold of $630). These proposals are discussed further in section V.B.1 of this proposed rule. If the estimated per day cost for the drug or biological is less than or equal to the applicable OPPS drug packaging threshold, we package payment for the drug or biological into the payment for the associated procedure in the upcoming calendar year. If the estimated per day cost of the drug or biological is greater than the OPPS drug packaging threshold, we provide separate payment at the applicable ASP methodology-based payment amount (which is generally ASP plus 6 percent), as discussed further in section V.B.2 of this proposed rule.

We propose to end pass-through payment status in CY 2025 for 28 drugs and biologicals. These drugs and biologicals, which were initially approved for pass-through payment status between April 1, 2022 and January 1, 2023, are listed in Table 63. The APCs and HCPCS codes for these drugs and biologicals, which have pass-through payment status that will end by December 31, 2025, are assigned status indicator “G” (Pass-Through Drugs and Biologicals) in Addenda A and B to this proposed rule (which are available on the CMS website). [ 67 ] The APCs and HCPCS codes for these drugs and biologicals are assigned status indicator “G” only for the duration of their pass-through status.

Section 1833(t)(6)(D)(i) of the Act sets the amount of pass-through payment for pass-through drugs and biologicals (the pass-through payment amount) as the difference between the amount authorized under section 1842(o) of the Act and the portion of the otherwise applicable OPD fee schedule that the Secretary determines is associated with the drug or biological. For CY 2025, we are continuing our policy to pay for pass-through drugs and biologicals using the ASP methodology, meaning a payment rate based on ASP, WAC, or AWP, as applicable. This payment rate is generally ASP plus 6 percent, equivalent to the payment rate these drugs and biologicals would receive in the physician's office setting in CY 2025. We note that, under the OPD fee schedule, separately payable drugs assigned to an APC are generally payable at ASP plus 6 percent. Therefore, a $0 pass-through payment amount would continue to be paid for pass-through drugs and biologicals under the CY 2025 OPPS because the difference between the amount authorized under section 1842(o) of the Act, which is generally ASP plus 6 percent, and the portion of the otherwise applicable OPD fee schedule that the Secretary determines is appropriate, which is generally ASP plus 6 percent, is $0.

In the case of policy-packaged drugs (which include the following: anesthesia drugs; drugs, biologicals, and radiopharmaceuticals  [ 68 ] that function as supplies when used in a diagnostic test or procedure; and drugs and biologicals that function as supplies when used in a surgical procedure), their pass-through payment amount will continue to be equal to a payment rate calculated using the ASP methodology, meaning a payment rate based on ASP, WAC, or AWP. This payment rate will generally continue to be ASP plus 6 percent for CY 2025, minus a payment offset for the portion of the otherwise applicable OPD fee schedule that the Secretary determines is associated with the drug or biological. We note that if not for the pass-through payment status of these policy-packaged products, payment for these products would be packaged into the associated procedure and therefore, there are associated OPD fee schedule amounts for them.

We will continue our policy to update pass-through payment rates on a quarterly basis on the CMS website during CY 2025 if later quarter ASP submissions (or more recent WAC or AWP information, as applicable) indicate that adjustments to the payment rates for these pass-through payment drugs or biologicals are necessary. For a full description of this policy, we refer readers to the CY 2006 OPPS/ASC final rule with comment period ( 70 FR 68632 through 68635 ).

For CY 2025, consistent with our CY 2024 policy for diagnostic and therapeutic radiopharmaceuticals, we would continue to provide payment for both diagnostic and therapeutic radiopharmaceuticals that are granted pass-through payment status based on the ASP methodology. As stated earlier, for purposes of pass-through payment, we consider radiopharmaceuticals to be drugs under the OPPS. Therefore, if a diagnostic or therapeutic radiopharmaceutical receives pass-through payment status during CY 2025, we would continue to follow the standard ASP methodology to determine the pass-through payment rate that drugs receive under section 1842(o) of the Act, which is generally ASP plus 6 percent. If ASP data are not available for a radiopharmaceutical, we would continue to provide pass-through payment at WAC plus 3 percent (consistent with our policy in section V.B.2.a of this proposed rule), the equivalent payment provided for pass-through drugs and biologicals without ASP information. Additional detail on the WAC plus 3 percent payment policy can be found in section V.B.2.a of this proposed rule. If WAC information also is not available, we would continue to provide payment for the pass-through radiopharmaceutical at 95 percent of its most recent AWP.

We refer readers to Table 63 below for the list of drugs and biologicals with pass-through payment status expiring during CY 2025.

We propose to continue pass-through payment status in CY 2025 for 57 drugs and biologicals. These drugs and biologicals, which were approved for pass-through payment status with effective dates beginning between April 1, 2023 and April 1, 2024, are listed in Table 64. The APCs and HCPCS codes for these drugs and biologicals, which have pass-through payment status that would continue after December 31, 2025, are assigned status indicator “G” in Addenda A and B to this proposed rule (which are available on the CMS website). [ 69 ]

Section 1833(t)(6)(D)(i) of the Act sets the amount of pass-through payment for pass-through drugs and biologicals (the pass-through payment amount) as the difference between the amount authorized under section 1842(o) of the Act and the portion of the otherwise applicable OPD fee schedule that the Secretary determines is associated with the drug or biological. For CY 2025, we are continuing our policy to pay for pass-through drugs and biologicals at a payment rate based on the ASP methodology, which may be based on ASP, WAC, or AWP, but is generally ASP plus 6 percent, which is equivalent to the payment rate these drugs and biologicals would receive in the physician's office setting in CY 2025. We will continue with our policy of paying a $0 pass-through payment amount for pass-through drugs and biologicals that are not policy-packaged under the CY 2025 OPPS, because the difference between the amount authorized under section 1842(o) of the Act, which would generally be ASP plus 6 percent, and the portion of the otherwise applicable OPD fee schedule that the Secretary determines is appropriate, which would also generally be ASP plus 6 percent, is $0.

In the case of policy-packaged drugs (which include the following: anesthesia drugs; drugs, biologicals, and radiopharmaceuticals  [ 70 ] that function as supplies when used in a diagnostic test or procedure; and drugs and biologicals that function as supplies when used in a surgical procedure), their pass-through payment amount would continue to be equal to a payment rate based on the ASP methodology, which may be based on ASP, WAC, or AWP, but would generally be ASP plus 6 percent for CY 2025, minus a payment offset for any predecessor drug products contributing to the pass-through payment. We note if not for the pass-through payment status of these policy-packaged products, payment for these products would be packaged into the associated procedure and therefore, there are associated OPD fee schedule amounts for them. We are continuing our policy to update pass-through payment rates on a quarterly basis on our website during CY 2025 if later quarter ASP submissions (or more recent WAC or AWP information, as applicable) indicate that adjustments to the payment rates for these pass-through payment drugs or biologicals are necessary. For a full description of this policy, we refer readers to the CY 2006 OPPS/ASC final rule with comment period ( 70 FR 68632 through 68635 ).

For CY 2025, consistent with our CY 2024 policy for diagnostic and therapeutic radiopharmaceuticals, we propose to continue our policy to provide payment for both diagnostic and therapeutic radiopharmaceuticals that are granted pass-through payment status based on the ASP methodology. As stated earlier, for purposes of pass-through payment, we consider radiopharmaceuticals to be drugs under the OPPS. Therefore, if a diagnostic or therapeutic radiopharmaceutical receives pass-through payment status during CY 2025, we will continue to follow the standard ASP methodology to determine the pass-through payment rate that drugs receive under section 1842(o) of the Act, which would generally be ASP plus 6 percent. If ASP data are not available for a radiopharmaceutical, we would provide pass-through payment at WAC plus 3 percent (consistent with our policy in section V.B.2.a of this proposed rule), the equivalent payment provided for pass-through drugs and biologicals without ASP information. Additional detail on the WAC plus 3 percent payment policy can be found in section V.B.2.a of this proposed rule. If WAC information also is not available, we would provide payment for the pass-through radiopharmaceutical at 95 percent of its most recent AWP.

The drugs and biologicals that would have pass-through payment status expire after December 31, 2025, are shown in Table 64.

In accordance with section 1833(t)(16)(B) of the Act, the threshold for establishing separate APCs for payment of drugs and biologicals was set to $50 per administration during CYs 2005 and 2006. In CY 2007, we used the four-quarter moving average Producer Price Index (PPI) levels for Pharmaceutical Preparations (Prescription) to trend the $50 threshold forward from the third quarter of CY 2005 (when the Pub. L. 108-173 mandated threshold became effective) to the third quarter of CY 2007. We then rounded the resulting dollar amount to the nearest $5 increment in order to determine the CY 2007 threshold amount of $55. Using the same methodology as that used in CY 2007 (which is discussed in more detail in the CY 2007 OPPS/ASC final rule with comment period ( 71 FR 68085 through 68086 )), we set the packaging threshold for establishing separate APCs for drugs and biologicals at $135 for CY 2024 ( 88 FR 81776 through 81777 ).

Following the CY 2007 methodology, for this proposed rule, we use the most recently available four quarter moving average PPI levels to trend the $50 threshold forward from the third quarter of CY 2005 to the third quarter of CY 2025 and round the resulting dollar amount ($140.81) to the nearest $5 increment, which yielded a figure of $140. In performing this calculation, we used the most recent forecast of the quarterly index levels for the PPI for Pharmaceuticals for Human Use (Prescription) (Bureau of Labor Statistics series code WPUSI07003) from IGI. IGI is a nationally recognized economic and financial forecasting firm with which CMS contracts to forecast the various price indexes including the PPI Pharmaceuticals for Human Use (Prescription). Based on these calculations using the CY 2007 OPPS methodology, we propose a packaging threshold for CY 2025 of $140 for drugs, biologicals, and therapeutic radiopharmaceuticals.

We propose in section II.A.3.c of this proposed rule to pay separately for diagnostic radiopharmaceuticals with a per-day cost above the proposed packaging threshold for CY 2025 of $630. We also propose that starting in CY 2026 and subsequent years, we would update this threshold by the PPI for Pharmaceuticals for Human Use (Prescription) (Bureau of Labor Statistics series code WPUSI07003) from IHS Global, Inc (IGI). For the diagnostic radiopharmaceutical packaging threshold, we propose to use the same methodology as that used in CY 2007 (which is discussed in more detail in the CY 2007 OPPS/ASC final rule with comment period ( 71 FR 68085 and 68086 )) to calculate the update to the OPPS drug packaging threshold. Specifically, we propose that starting for the CY 2026 rulemaking, 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. We refer readers to section II.A.3.c.(4) of this proposed rule for information regarding our proposal to update the proposed diagnostic radiopharmaceutical packaging threshold in future years.

We also propose that if more recent data are subsequently available (for example, a more recent estimate of the PPI for Pharmaceutical Preparations (Prescription), we would use such data, if appropriate, to determine the CY 2025 packaging threshold for drugs, biologicals, therapeutic radiopharmaceuticals, and diagnostic radiopharmaceuticals for the CY 2025 OPPS/ASC final rule with comment period.

To determine the proposed CY 2025 packaging status for all nonpass-through drugs, biologicals, diagnostic and therapeutic radiopharmaceuticals that are not policy packaged, we calculated, on a HCPCS code-specific basis, the per day cost of all drugs, biologicals, and therapeutic radiopharmaceuticals that had a HCPCS code in CY 2023 and were paid (via packaged or separate payment) under the OPPS. We used data from CY 2023 claims processed through December 31, 2023, for this calculation. However, we did not perform this calculation for those drugs and biologicals with multiple HCPCS codes that include different dosages, as described in section V.B.1.d of this proposed rule, or for the following policy-packaged items that we propose to continue to package in CY 2025: anesthesia drugs; drugs, biologicals, and contrast agents and other drugs that function as supplies when used in a diagnostic test or procedure; and drugs and biologicals that function as supplies when used in a surgical procedure. Consistent with our policy described in section V.B.5., in situations where we have no claims data and must determine if these products exceed the per-day cost threshold, we estimated the average number of units of each product that would typically be furnished to a patient during one day in the hospital outpatient setting and utilized the ASP methodology to determine whether their payment will be packaged as well as their payment status indicators.

In order to calculate the per day costs for drugs, biologicals, diagnostic radiopharmaceuticals, and therapeutic radiopharmaceuticals to determine their proposed packaging status in CY 2025, we used the methodology that was described in detail in the CY 2006 OPPS proposed rule ( 70 FR 42723 through 42724 ) and finalized in the CY 2006 OPPS final rule with comment period ( 70 FR 68636 through 68638 ). For each drug and biological HCPCS code, we used an estimated payment rate based on the ASP methodology, which is generally ASP plus 6 percent (which is the payment rate we propose for separately payable drugs and biologicals for CY 2025, as discussed in more detail in section V.A.1 of this proposed rule) to calculate the CY 2025 proposed rule per day costs. We used the manufacturer-submitted ASP data from the fourth quarter of CY 2023 (data that were used for payment purposes in the physician's office setting, effective April 1, 2024) to determine the proposed rule per day cost.

As is our standard methodology, for CY 2025, we propose to use payment rates based on the ASP data from the fourth quarter of CY 2023 for budget neutrality estimates, packaging determinations, impact analyses, and completion of Addenda A and B to this proposed rule (which are available via the internet on the CMS website) because these are the most recent data available for use at the time of development of the CY 2025 OPPS proposed rule. These data also are the basis for drug payments in the physician's office setting, effective April 1, 2024. Exceptions to our standard methodology include:

• For therapeutic radiopharmaceuticals that do not have pass-through status as of October 1, 2024, and do not have an ASP-based payment rate, we did not use a payment rate based on WAC or AWP for those items, consistent with our policy described in section V.B.3.a of this proposed rule. We used their mean unit cost derived from the CY 2023 hospital Start Printed Page 59364 claims data to determine their per day cost.
• For diagnostic radiopharmaceuticals that do not have pass-through status as of October 1, 2024, we used their mean unit cost derived from the CY 2023 hospital claims data to determine their per day cost. We did not use an ASP-based, WAC-based, or AWP-based payment rate for those items unless there was no mean unit cost reported for the product, consistent with our proposed policy described in section V.B.3.b of this proposed rule.
• For items other than diagnostic or therapeutic radiopharmaceuticals that did not have either an ASP-based payment rate, a payment rate based on WAC, or a payment rate based on AWP, we used mean unit cost of the items derived from the CY 2023 hospital claims data to determine their per day cost.

We propose to package drugs, biologicals, and therapeutic radiopharmaceuticals with a per day cost less than or equal to $140 and identify items with a per day cost greater than $140 as separately payable unless they are policy-packaged. For diagnostic radiopharmaceuticals, we propose to package those items with a per day cost less than or equal to $630 and identify items with a per day cost greater than $630 as separately payable. Consistent with our past practice, we cross-walked historical OPPS claims data from the CY 2023 HCPCS codes that were reported to the CY 2023 HCPCS codes that we display in Addendum B to this proposed rule (which is available on the CMS website)  [ 71 ] for proposed payment in CY 2025.

Our policy during previous cycles of OPPS rulemaking has been to use updated ASP and claims data to make final determinations of the packaging status of HCPCS codes for drugs, biologicals, and therapeutic radiopharmaceuticals for the OPPS/ASC final rule with comment period. We note that it is also our policy to make an annual packaging determination for a HCPCS code only when we develop the OPPS/ASC final rule with comment period for the update year. Only HCPCS codes that are identified as separately payable in the final rule with comment period are subject to quarterly updates. For our calculation of per day costs of HCPCS codes for drugs, biologicals, and radiopharmaceuticals in this proposed rule, we propose to use ASP data from the fourth quarter of CY 2023, which is the basis for calculating payment rates for drugs and biologicals in the physician's office setting using the ASP methodology, effective April 1, 2024, along with updated hospital claims data from CY 2023. We note that we also propose to use these data for budget neutrality estimates and impact analyses for this proposed rule.

Payment rates for HCPCS codes for separately payable drugs and biologicals included in Addenda A and B of this proposed rule are based on ASP data from the second quarter of CY 2024. These data will be the basis for calculating payment rates for drugs and biologicals in the physician's office setting using the ASP methodology, effective October 1, 2024. These payment rates would then be updated in the January 2025 OPPS update, based on the most recent ASP data to be used for physicians' office and OPPS payment as of January 1, 2025. For drugs and biologicals that do not currently have a payment rate based on ASP, WAC, or AWP, for therapeutic radiopharmaceuticals that do not currently have an ASP payment rate, and for all diagnostic radiopharmaceuticals, we calculate their mean unit cost from all of the CY 2023 claims data and updated cost report information available for this proposed rule to determine their final per day cost.

Consequently, the packaging status of some HCPCS codes for drugs, biologicals, and radiopharmaceuticals in the OPPS/ASC proposed rule may be different from the same drugs' HCPCS codes' packaging status determined based on the data used for this final rule with comment period. Under such circumstances, we propose to continue to follow the established policies initially adopted for the CY 2005 OPPS ( 69 FR 65780 ) in order to more equitably pay for those drugs whose costs fluctuate relative to the proposed CY 2025 OPPS drug packaging threshold and the drug's payment status (packaged or separately payable) in CY 2024. These established policies have not changed for many years and are the same as described in the CY 2016 OPPS/ASC final rule with comment period ( 80 FR 70434 ). Specifically, for CY 2025 and subsequent years, consistent with our historical practice, we propose to apply the following policies to those HCPCS codes for drugs, biologicals, and therapeutic radiopharmaceuticals whose relationship to the drug packaging threshold changes based on the updated drug packaging threshold and on the final updated data:

• HCPCS codes for drugs, biologicals, and radiopharmaceuticals that were paid separately in CY 2024 and 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 drug packaging threshold or diagnostic radiopharmaceutical packaging threshold, based on the updated ASPs and hospital claims data used for the CY 2025 final rule, would continue to receive separate payment in CY 2025.
• HCPCS codes for drugs, biologicals, and radiopharmaceuticals that were packaged in CY 2024 and 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 drug packaging threshold or diagnostic radiopharmaceutical packaging threshold, based on the updated ASPs and hospital claims data used for the CY 2025 final rule, would remain packaged in CY 2025.
• HCPCS codes for drugs, biologicals, and 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 or diagnostic radiopharmaceutical packaging threshold, based on the updated ASPs and hospital claims data used for the CY 2025 final rule, would receive separate payment in CY 2025.

As mentioned earlier in this section, under the OPPS, we package several categories of nonpass-through drugs, biologicals, and radiopharmaceuticals, regardless of the cost of the products. Because the products are packaged according to the policies in 42 CFR 419.2(b) , we refer to these packaged drugs, biologicals, and radiopharmaceuticals as “policy-packaged” drugs, biologicals, and radiopharmaceuticals. These policies are either longstanding or based on longstanding principles and inherent to the OPPS and are as follows:

• Anesthesia, certain drugs, biologicals, and other pharmaceuticals; medical and surgical supplies and equipment; surgical dressings; and devices used for external reduction of fractures and dislocations (§ 419.2(b)(4));
• Intraoperative items and services (§ 419.2(b)(14));
• Drugs, biologicals, and radiopharmaceuticals that function as supplies when used in a diagnostic test or procedure (including but not limited to, diagnostic radiopharmaceuticals, 72 Start Printed Page 59365 contrast agents, and pharmacologic stress agents) (§ 419.2(b)(15)); and
• Drugs and biologicals that function as supplies when used in a surgical procedure (including, but not limited to, skin substitutes and similar products that aid wound healing and implantable biologicals) (§ 419.2(b)(16)).

The policy at § 419.2(b)(16) is broader than the policy at § 419.2(b)(14). As we stated in the CY 2015 OPPS/ASC final rule with comment period: “We consider all items related to the surgical outcome and provided during the hospital stay in which the surgery is performed, including postsurgical pain management drugs, to be part of the surgery for purposes of our drug and biological surgical supply packaging policy” ( 79 FR 66875 ). The category described by § 419.2(b)(15) is large and includes diagnostic radiopharmaceuticals that have a per day cost below the proposed diagnostic radiopharmaceutical packaging threshold that we discussed in section II.A.3 of this proposed rule, [ 73 ] contrast agents, stress agents, and some other products. The category described by § 419.2(b)(16) includes skin substitutes and some other products. We believe it is important to reiterate that cost consideration is not a factor when determining whether an item is a surgical supply ( 79 FR 66875 ).

We welcome ongoing dialogue and engagement from interested parties regarding suggestions for payment changes for consideration in future rulemaking.

In the CY 2010 OPPS/ASC final rule with comment period ( 74 FR 60490 through 60491 ), we finalized a policy to make a single packaging determination for a drug, rather than an individual HCPCS code, when a drug has multiple HCPCS codes describing different dosages because we believe that adopting the standard HCPCS code-specific packaging determinations for these codes could lead to inappropriate payment incentives for hospitals to report certain HCPCS codes instead of others. We continue to believe that making packaging determinations on a drug-specific basis eliminates payment incentives for hospitals to report certain HCPCS codes for drugs and allows hospitals flexibility in choosing to report all HCPCS codes for different dosages of the same drug or only the lowest dosage HCPCS code. Therefore, we propose to continue our policy to make packaging determinations on a drug-specific basis, rather than a HCPCS code-specific basis, for those HCPCS codes that describe the same drug or biological but different dosages in CY 2025.

In order to propose a packaging determination that is consistent across all HCPCS codes that describe different dosages of the same drug or biological, we aggregated both our CY 2023 claims data and our pricing information, which is based on the ASP methodology, generally ASP plus 6 percent, across all of the HCPCS codes that describe each distinct drug or biological in order to determine the mean units per day of the drug or biological in terms of the HCPCS code with the lowest dosage descriptor. The following drugs did not have pricing information available for the ASP methodology for this proposed rule; and, as is our current policy for determining the packaging status of other drugs, we used the mean unit cost available from the CY 2023 claims data to make the proposed packaging determinations for them: HCPCS code C9257 (Injection, bevacizumab, 0.25 mg); HCPCS code J3471 (injection, hyaluronidase, ovine, preservative free, per 1 usp unit (up to 999 usp units)); HCPCS code J3472 (Injection, hyaluronidase, ovine, preservative free, per 1000 usp units); HCPCS code J7100 (Infusion, dextran 40,500 ml); and HCPCS code J7110 (Infusion, dextran 75,500 ml).

For all other drugs and biologicals that have HCPCS codes describing different doses, we then multiplied the proposed weighted average ASP methodology based payment rate, which is generally ASP plus 6 percent, per-unit payment amount across all dosage levels of a specific drug or biological by the estimated units per day for all HCPCS codes that describe each drug or biological from our claims data to determine if the estimated per day cost of each drug or biological is less than or equal to the proposed CY 2025 drug packaging threshold of $140 (in which case all HCPCS codes for the same drug or biological would be packaged) or greater than the proposed CY 2025 drug packaging threshold of $140 (in which case all HCPCS codes for the same drug or biological would be separately payable). The proposed packaging status of each drug and biological HCPCS code to which this methodology would apply in CY 2025 is displayed in Table 65.

We propose that our policy to make packaging determinations on a drug-specific basis, rather than a HCPCS code-specific basis, for those HCPCS codes that describe the same drug or biological but different dosages in CY 2025 would also apply to diagnostic radiopharmaceuticals. In order to propose a packaging determination that is consistent across all HCPCS codes that describe different dosages of the same diagnostic radiopharmaceutical, we would aggregate our CY 2023 claims data across all of the HCPCS codes that describe each distinct diagnostic radiopharmaceutical in order to determine the mean units per day of the diagnostic radiopharmaceutical in terms of the HCPCS code with the lowest dosage descriptor. We would then analyze the aggregate per day cost of the diagnostic radiopharmaceutical to determine if the per day cost is less than or equal to the proposed CY 2025 diagnostic radiopharmaceutical packaging threshold of $630 (in which case all HCPCS codes for the same diagnostic radiopharmaceutical would be packaged) or greater than the proposed CY 2025 diagnostic radiopharmaceutical packaging threshold of $630 (in which case all HCPCS codes for the same diagnostic radiopharmaceutical would be separately payable). There are currently no diagnostic radiopharmaceuticals that this policy would apply to.

Section 1833(t)(14) of the Act defines certain separately payable radiopharmaceuticals, drugs, and biologicals and mandates specific payments for these items. Under section 1833(t)(14)(B)(i) of the Act, a “specified covered outpatient drug” (known as a SCOD) is defined as a covered outpatient drug, as defined in section 1927(k)(2) of the Act, for which a separate APC has been established and that either is a radiopharmaceutical agent or a drug or biological for which payment was made on a pass-through basis on or before December 31, 2002.

Under section 1833(t)(14)(B)(ii) of the Act, certain drugs and biologicals are designated as exceptions and are not included in the definition of SCODs. These exceptions are—

• A drug or biological for which payment is first made on or after January 1, 2003, under the transitional pass-through payment provision in section 1833(t)(6) of the Act.
• A drug or biological for which a temporary HCPCS code has not been assigned.
• During CYs 2004 and 2005, an orphan drug (as designated by the Secretary).

Section 1833(t)(14)(A)(iii) of the Act requires that payment for SCODs in CY Start Printed Page 59367 2006 and subsequent years be equal to the average acquisition cost for the drug for that year as determined by the Secretary, subject to any adjustment for overhead costs and considering the hospital acquisition cost survey data collected by the Government Accountability Office (GAO) in CYs 2004 and 2005, and later periodic surveys conducted by the Secretary as set forth in the statute. If hospital acquisition cost data are not available, the law requires that payment be equal to payment rates established under the methodology described in section 1842(o), section 1847A, or section 1847B of the Act, as calculated and adjusted by the Secretary as necessary for purposes of paragraph (14). We refer to this alternative methodology as the “statutory default.” Most physician Part B drugs are paid at ASP plus 6 percent in accordance with section 1842(o) and section 1847A of the Act.

Section 1833(t)(14)(E)(ii) of the Act provides for an adjustment in OPPS payment rates for SCODs to consider overhead and related expenses, such as pharmacy services and handling costs. Section 1833(t)(14)(E)(i) of the Act required MedPAC to study pharmacy overhead and related expenses and to make recommendations to the Secretary regarding whether, and if so how, a payment adjustment should be made to compensate hospitals for overhead and related expenses. Section 1833(t)(14)(E)(ii) of the Act authorizes the Secretary to adjust the weights for ambulatory procedure classifications for SCODs to consider the findings of the MedPAC study. [ 74 ]

It has been our policy since CY 2006 to apply the same treatment to all separately payable drugs and biologicals, which include SCODs, and drugs and biologicals that are not SCODs. Therefore, we apply the payment methodology in section 1833(t)(14)(A)(iii) of the Act to SCODs, as required by statute, but we also apply it to separately payable drugs and biologicals that are not SCODs, which is a policy determination rather than a statutory requirement. For CY 2023 and subsequent years, we finalized a policy to apply section 1833(t)(14)(A)(iii)(II) of the Act to all separately payable drugs and biologicals, including SCODs. Although we do not distinguish SCODs in this discussion, we note that we are required to apply section 1833(t)(14)(A)(iii)(II) of the Act to SCODs; but we also are applying this provision to other separately payable drugs and biologicals, consistent with our history of using the same payment methodology for all separately payable drugs and biologicals.

For a detailed discussion of our OPPS drug payment policies from CY 2006 to CY 2012, we refer readers to the CY 2013 OPPS/ASC final rule with comment period ( 77 FR 68383 through 68385 ). In the CY 2013 OPPS/ASC final rule with comment period ( 77 FR 68386 through 68389 ), we first adopted the statutory default policy to pay for separately payable drugs and biologicals at ASP plus 6 percent based on section 1833(t)(14)(A)(iii)(II) of the Act. We have continued this policy of paying for separately payable drugs and biologicals at the statutory default for CYs 2014 through 2024.

In the case of a drug or biological during an initial sales period in which data on the prices for sales of the drug or biological are not sufficiently available from the manufacturer, section 1847A(c)(4) of the Act permits the Secretary to make payments that are based on WAC. Under section 1833(t)(14)(A)(iii)(II) of the Act, the amount of payment for a separately payable drug equals the average price for the drug for the year established under, among other authorities, section 1847A of the Act. As explained in greater detail in the CY 2019 PFS final rule, under section 1847A(c)(4) of the Act, although payments may be based on WAC, unlike section 1847A(b) of the Act (which specifies that payments using ASP or WAC must be made with a 6 percent add-on), section 1847A(c)(4) of the Act does not require that a particular add-on amount be applied to WAC-based pricing for this initial period when ASP data are not available. Consistent with section 1847A(c)(4) of the Act, in the CY 2019 PFS final rule ( 83 FR 59661 to 59666), we finalized a policy that, effective January 1, 2019, WAC-based payments for Part B drugs made under section 1847A(c)(4) of the Act will utilize a 3-percent add-on in place of the 6 percent add-on that was being used according to our policy in effect as of CY 2018. For the CY 2019 OPPS, we followed the same policy finalized in the CY 2019 PFS final rule ( 83 FR 59661 to 59666). Since CY 2020, we have continued to utilize a 3 percent add-on instead of a 6 percent add-on for drugs that are paid based on WAC pursuant to our authority under section 1833(t)(14)(A)(iii)(II) of the Act ( 84 FR 61318 and 85 FR 86039 ), which provides, in part, that the amount of payment for a SCOD is the average price of the drug in the year established under section 1847A of the Act. We also apply this provision to non-SCOD separately payable drugs. Because we establish the average price for a drug paid based on WAC under section 1847A of the Act as WAC plus 3 percent instead of WAC plus 6 percent, we believe it is appropriate to price separately payable drugs paid based on WAC at the same amount under the OPPS. Our policy to pay for drugs and biologicals at WAC plus 3 percent, rather than WAC plus 6 percent, applies whenever WAC-based pricing is used for a drug or biological under section 1847A(c)(4). We refer readers to the CY 2019 PFS final rule ( 83 FR 59661 to 59666) for additional background on this policy.

Consistent with our current policy, payments for separately payable drugs and biologicals are included in the budget neutrality adjustments, under the requirements in section 1833(t)(9)(B) of the Act. Also, the budget neutral weight scalar is not applied in determining payments for these separately payable drugs and biologicals.

Separately payable drug, biological, and radiopharmaceutical payment rates are listed in Addenda A and B to this proposed rule (available on the CMS website). [ 75 ] These addenda provide the proposed CY 2025 payment rates based on the ASP methodology for separately payable nonpass-through drugs, biologicals, and radiopharmaceuticals and the ASP methodology for pass-through drugs, biologicals, and radiopharmaceuticals. Except for proposed payment rates for radiopharmaceuticals, these rates are based either on ASP information that is the basis for calculating payment rates for drugs and biologicals in the physician's office setting effective April 1, 2024, or WAC, AWP, or mean unit cost from CY 2023 claims data and updated cost report information available for this proposed rule. For nonpass-through therapeutic radiopharmaceuticals, payment rates are based on ASP data or mean unit cost. We propose in section II.A.3.c.(5) to pay separately at mean unit cost for diagnostic radiopharmaceuticals with per day costs above the proposed threshold; the payment rates proposed for qualifying diagnostic radiopharmaceuticals are entirely mean unit cost. In general, these published proposed payment rates are not the same as the actual January 2025 payment rates. This is because payment rates for drugs, biologicals, and Start Printed Page 59368 therapeutic radiopharmaceuticals with ASP information for January 2025 will be determined through the standard quarterly process where ASP data submitted by manufacturers for the third quarter of CY 2024 (July 1, 2024, through September 30, 2024) will be used to set the payment rates that are released for the quarter beginning in January 2025 in December 2024. In addition, in Addenda A and B to this proposed rule, payment rates for drugs, biologicals, and therapeutic radiopharmaceuticals for which there was no ASP, WAC, or AWP information available for April 2024, as well as all separately payable diagnostic radiopharmaceuticals, are based on mean unit cost in the available CY 2023 claims data. If new pricing information becomes available for payment for the quarter beginning in January 2025, we will price payment for these drugs, biologicals, therapeutic radiopharmaceuticals, and diagnostic radiopharmaceuticals based on their newly available information. Finally, there may be drugs, biologicals and therapeutic radiopharmaceuticals that have ASP, WAC, or AWP information available for this proposed rule (reflecting April 2024 ASP data) that do not have ASP, WAC, or AWP information available for the quarter beginning in January 2025. These drugs, biologicals and therapeutic radiopharmaceuticals would then be paid based on mean unit cost data derived from CY 2023 hospital claims. Therefore, the proposed payment rates listed in Addenda A and B to this proposed rule are not for January 2025 payment purposes and are only illustrative of the CY 2025 OPPS payment methodology using the most recently available information at the time of issuance of this proposed rule.

We note that payment amounts for most drugs separately payable under Medicare Part B are determined using the methodology in section 1847A of the Act, and in many cases, payment is based on the average sales price (ASP) plus a statutorily mandated 6 percent add-on.

For CY 2025, we propose to clarify that only ASP data or, if ASP data are not available, mean unit cost data, would be used to set payment rates for separately payable nonpass-through therapeutic radiopharmaceuticals under the OPPS as described further in section V.B.3.a of this proposed rule. We propose for CY 2025 to use mean unit cost data to set payment rates for separately payable nonpass-through diagnostic radiopharmaceuticals for which we propose separate payment because their cost exceeds the per-day threshold. Otherwise, we are not proposing any changes to our policies for payment for separately payable drugs and biologicals; and we propose to continue our payment policy that has been in effect since CY 2013 to pay for separately payable drugs and biologicals in accordance with section 1833(t)(14)(A)(iii)(II) of the Act (the statutory default).

For CY 2024, we finalized the exception of biosimilars from the OPPS threshold packaging policy when their reference products are separately paid ( 88 FR 81783 through 81785 ). This policy allows for separate payment for biosimilars even if the biosimilar's per-day cost is below the packaging threshold if the biosimilar's reference product is separately paid. This policy removes the financial incentive to use a more expensive separately payable biological and promotes biosimilar use as a lower cost alternative to higher cost reference products.

Payment rates for drugs and biologicals (including biosimilars) under Medicare Part B are determined using the methodology in section 1847A of the Act, and in many cases, payment is based on the average sales price (ASP) plus a statutorily mandated 6 percent add-on. Additionally, Section 11403 of the IRA requires that a qualifying biosimilar be paid at ASP plus 8 percent of the reference product's ASP rather than 6 percent during the applicable 5-year period. Section 1847A(b)(8)(B)(ii) of the Act defines the applicable 5-year period for a qualifying biosimilar for which payment has been made using ASP (that is, payment under section 1847A(b)(8) of the Act) as of September 30, 2022 as the 5-year period beginning on October 1, 2022. For a qualifying biosimilar for which payment is first made using ASP during the period beginning October 1, 2022, and ending December 31, 2027, the statute defines the applicable 5-year period as the 5-year period beginning on the first day of such calendar quarter of such payment ( 88 FR 81783 ). These payment rates are published in the quarterly release of Addendum B or ASP pricing files.

We have observed that in recent years there has been an increasing number of drug and biological HCPCS codes for which ASP, WAC, AWP, and mean unit cost information is not available. These are often HCPCS codes for new drugs or biologicals that have been approved for marketing, but for which the manufacturer does not have sales data, and WAC, AWP, and mean unit cost information is not available. As a result, we are unable to assign a payable status indicator to these drugs or biologicals due to of a lack of payment data. The numbers of drug and biological HCPCS codes without payment rates from Addendum B for the CY 2022 through CY 2024 OPPS/ASC final rules with comment period are listed in Table 66.

In order to provide appropriate payment rates for these drugs and biologicals without pricing data, we propose to adopt an invoice pricing policy beginning in CY 2026. Because this policy necessitates significant operational changes to implement, we propose to implement it beginning in CY 2026, rather than CY 2025. For CY 2025, the affected drugs and biologicals would continue to be assigned a non-payable status indicator until we implement our invoice pricing policy, if adopted. We believe invoice pricing is appropriate for use under the OPPS because it provides temporary drug or biological cost information to generate a representative payment rate for a drug or biological and supports the utilization of new drug or biological HCPCS codes. Otherwise, the new drug and biological HCPCS codes would not receive payment under the OPPS, which would discourage their use by providers. Currently, the Physician Fee Schedule utilizes invoice pricing for drugs and biologicals when other types of pricing information are not available.

We propose that, for separately payable drugs or biologicals for which CMS does not provide a payment rate in Addendum B, which would indicate to MACs that CMS does not have pricing information (specifically, that ASP, WAC, AWP, and mean unit cost information is not available to determine a payment rate), MACs would calculate the payment based on provider invoices. The drug or biological invoice cost would be the net acquisition cost minus any rebates, chargebacks, or post-sale concessions. Before calculating an invoice-based payment amount, MACs would use the provider invoice to determine that: (a) the drug is not policy packaged; and (b) the per-day cost of the drug, biological, therapeutic radiopharmaceutical or diagnostic radiopharmaceutical is above the threshold packaging amount, as applicable. If both conditions are met, we propose that MACs would use the provider invoice amount to set a payment rate for the separately payable drug, biological, or radiopharmaceutical until its payment amount becomes available to CMS. We generally would expect invoice pricing to be temporary, lasting two to three quarters, for qualified drugs required to report ASP under 1847A of the Act. For drug products that are not required to report ASP under 1847A of the Act ( i.e., diagnostic pharmaceuticals), invoice pricing may be used longer term until a MUC can be calculated. We propose that we would not begin using invoice pricing for drugs, biologicals, and radiopharmaceuticals without pricing information until CY 2026 because we would need to make technical updates to outpatient hospital claims to allow the hospitals to report drug invoice pricing. We intend to work with the National Uniform Billing Committee (NUBC) in order to create a value code that would allow for the reporting of invoice prices of drugs, biologicals, and radiopharmaceuticals for purposes of this policy.

For a complete history of the OPPS payment policy for radiopharmaceuticals, we refer readers to the CY 2005 OPPS final rule with comment period ( 69 FR 65811 ), the CY 2006 OPPS final rule with comment period ( 70 FR 68655 ), and the CY 2010 OPPS/ASC final rule with comment period ( 74 FR 60524 ).

In the CY 2023 OPPS/ASC final rule with comment period, we adopted as final our proposal to continue our longstanding payment policy for therapeutic radiopharmaceuticals for CY 2023 and subsequent years. Accordingly, this payment policy for therapeutic radiopharmaceuticals will continue to apply in CY 2025.

Specifically, our policy of paying for separately payable pass-through therapeutic radiopharmaceuticals under the ASP methodology adopted for separately payable drugs and biologicals described in section V.A.1 of this proposed rule will continue to apply for CY 2025. We will pay for separately payable nonpass-through therapeutic radiopharmaceuticals through a modified ASP methodology where we pay at ASP plus 6 percent if ASP data are available. However, if ASP information is unavailable for a separately payable nonpass-through therapeutic radiopharmaceutical, we will continue to base the payment rate on mean unit cost data derived from hospital claims. Our policy not to use WAC or AWP to establish payment for separately payable nonpass-through therapeutic radiopharmaceuticals if ASP is not available will continue for CY 2025. We explained our rationale in the CY 2010 OPPS/ASC final rule with comment period ( 74 FR 60524 through 60525 ) when we first adopted our policy to apply the principles of separately payable drug pricing to therapeutic radiopharmaceuticals.

We note that in the CY 2024 OPPS final rule with comment period ( 88 FR 81786 ), we stated that the ASP payment methodology for separately payable nonpass-through therapeutic radiopharmaceuticals did allow for using WAC or AWP to establish a payment rate for these items. This was an error and conflicted with the policy implemented in CY 2010 and continued in subsequent years. The statement also conflicted with the policy that we proposed and finalized for CY 2023 and subsequent years in the CY 2023 OPPS/ASC final rule with comment period ( 87 FR 71969 ). The policy implemented in CY 2010 regarding ASP payment for separately payable nonpass-through therapeutic radiopharmaceuticals remains our intended policy. Therefore, we will pay for all nonpass-through separately payable therapeutic radiopharmaceuticals at ASP plus 6 percent based on the statutory default described in section 1833(t)(14)(A)(iii)(II) of the Act. For a full discussion of ASP-based payment for therapeutic radiopharmaceuticals, we refer readers to the CY 2010 OPPS/ASC final rule with comment period ( 74 FR 60520 through 60521 ). We will rely on CY 2023 mean unit cost data derived from hospital claims data for payment rates for separately payable nonpass-through therapeutic radiopharmaceuticals for which ASP data are unavailable and update the payment rates for these products according to our usual process for updating the payment rates for separately payable drugs and biologicals on a quarterly basis if updated ASP information becomes available.

The proposed CY 2025 payment rates for separately payable nonpass-through therapeutic radiopharmaceuticals are included in Addenda A and B of this proposed rule (which are available on the CMS website). [ 76 ]

For CY 2025, we propose, as described in section II.A.3 of this proposed rule, to pay separately for diagnostic radiopharmaceuticals with a per day cost above our proposed diagnostic radiopharmaceutical packaging threshold (proposed at $630 for CY 2025). We propose to pay for pass-through diagnostic radiopharmaceuticals based on ASP WAC, and AWP.

We propose to base the payment rate for separately payable nonpass-through diagnostic radiopharmaceuticals on mean unit cost data derived from hospital claims. As discussed in Section II.A.3.c.(5), we are not proposing to use Start Printed Page 59370 ASP data when mean unit cost data are available for a separately payable nonpass-through diagnostic radiopharmaceutical, but we are seeking comment on using ASP for setting the payment rate for nonpass-through diagnostic radiopharmaceuticals in the future. Additionally, we are not proposing to use WAC or AWP as a basis for payment for nonpass-through diagnostic radiopharmaceuticals when mean unit cost data derived from hospital claims is available. We believe that paying for nonpass-through diagnostic radiopharmaceuticals using mean unit cost would appropriately pay for the average price of a nonpass-through separately payable diagnostic radiopharmaceutical. In our view, 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. As we stated in the CY 2010 OPPS/ASC final rule with comment period ( 74 FR 60523 ), we believe that WAC or AWP is not an appropriate proxy to provide OPPS payment for radiopharmaceuticals because these pricing methodologies do not include discounts. Specifically, the absence of appropriate ASP reporting could result in payment for a separately payable diagnostic radiopharmaceutical based on WAC or AWP indefinitely, a result which we believe would be inappropriate, as these pricing metrics do not capture all of the pricing discounts that may be reflected in the ASP.

Additionally, we propose to base the initial payment for new diagnostic radiopharmaceuticals with HCPCS codes that do not have pass-through status or claims data on ASP, and on the WAC for these products if ASP data for these diagnostic radiopharmaceuticals are not available. If the WAC also is unavailable, we propose to make payment for new diagnostic radiopharmaceuticals at 95 percent of the products' most recent AWP. We believe the volume of products in this category will typically be very low; however, in these rare situations, we believe it would be appropriate to use ASP until a MUC is established for new diagnostic radiopharmaceuticals with HCPCS codes that do not have passthrough status or claims data.

The proposed CY 2025 payment rates for separately payable nonpass-through diagnostic radiopharmaceuticals are included in Addenda A and B of this proposed rule (which are available on the CMS website). [ 77 ]

For CY 2025, we propose to continue our established policy to provide payment for blood clotting factors using the same methodology as other separately payable drugs and biologicals under the OPPS and to continue to pay a furnishing fee. For a full discussion of our established payment policy for blood clotting factors, please refer to the CY 2023 OPPS/ASC final rule with comment period ( 87 FR 71969 through 71970 ). In accordance with our policy as finalized in the CY 2008 OPPS/ASC final rule with comment period ( 72 FR 66765 ), we will announce the actual figure of the percent change in the applicable CPI and the updated furnishing fee calculation based on that figure through the applicable program instructions and posting on the CMS website at https://www.cms.gov/​medicare/​payment/​fee-for-service-providers/​part-b-drugs/​average-drug-sales-price .

In the CY 2023 OPPS/ASC final rule with comment period, we adopted as final our proposal to continue our longstanding payment policy for nonpass-through drugs, biologicals, and radiopharmaceuticals with HCPCS codes but without OPPS hospital claims data for CY 2023 and subsequent years. Therefore, for CY 2025, this policy will continue to apply. For a detailed discussion of the payment policy and methodology, we refer readers to the CY 2016 OPPS/ASC final rule with comment period ( 80 FR 70442 through 70443 ). Consistent with our policy, because we have no claims data and must determine if these products exceed the per-day cost threshold, we estimated the average number of units of each product that would typically be furnished to a patient during one day in the hospital outpatient setting and utilized the ASP methodology to determine whether their payment will be packaged as well as their payment status indicators.

Section 90004 of the Infrastructure Investment and Jobs Act ( Pub. L. 117-9 , November 15, 2021) (“the Infrastructure Act”) amended section 1847A of the Act to re-designate subsection (h) as subsection (i) and insert a new subsection (h), which requires manufacturers to provide a refund to CMS for certain discarded amounts from a refundable single-dose container or single-use package drug. The CY 2025 PFS proposed rule includes proposals related to the discarded drug refund policy, including proposals that may impact hospital outpatient departments (HOPDs) and ambulatory surgical centers (ASCs). Similar to our CY 2023 and CY 2024 notice in the OPPS/ASC proposed rule ( 87 FR 71988 ), we wanted to ensure interested parties were aware of these proposals and knew to refer to the CY 2025 PFS proposed rule for a full description of the proposed policy. Interested parties are asked to submit comments on any proposals to implement Section 90004 of the Infrastructure Act to the CY 2025 PFS proposed rule. Public comments on these proposals will be addressed in the CY 2025 PFS final rule with comment period.

In the CY 2014 OPPS/ASC final rule with comment period ( 78 FR 74938 ), we unconditionally packaged skin substitute products into their associated surgical procedures as part of a broader policy to package all drugs and biologicals that function as supplies when used in a surgical procedure. As part of the policy to package skin substitutes, we also finalized a methodology that divides the skin substitutes into a high-cost group and a low-cost group, to ensure adequate resource homogeneity among APC assignments for the skin substitute application procedures ( 78 FR 74933 ). In the CY 2015 OPPS/ASC final rule with comment period ( 79 FR 66886 ), we stated that skin substitutes are best characterized as either surgical supplies or devices because of their required surgical application and because they share significant clinical similarity with other surgical devices and supplies.

Skin substitutes assigned to the high-cost group are described by HCPCS codes 15271 through 15278. Skin Start Printed Page 59371 substitutes assigned to the low-cost group are described by HCPCS codes C5271 through C5278. Geometric mean costs for the various procedures are calculated using only claims for the skin substitutes that are assigned to each group. Specifically, claims billed with HCPCS codes 15271, 15273, 15275, or 15277 are used to calculate the geometric mean costs for procedures assigned to the high-cost group, and claims billed with HCPCS codes C5271, C5273, C5275, or C5277 are used to calculate the geometric mean costs for procedures assigned to the low-cost group ( 78 FR 74935 ).

Each of the HCPCS codes described earlier are assigned to one of the following three skin procedure APCs according to the geometric mean cost for the code: APC 5053 (Level 3 Skin Procedures): HCPCS codes C5271, C5275, and C5277; APC 5054 (Level 4 Skin Procedures): HCPCS codes C5273, 15271, 15275, and 15277; or APC 5055 (Level 5 Skin Procedures): HCPCS code 15273. In CY 2024, the payment rate for APC 5053 (Level 3 Skin Procedures) was $599.02, the payment rate for APC 5054 (Level 4 Skin Procedures) was $1,739.33, and the payment rate for APC 5055 (Level 5 Skin Procedures) was $3,421.82. This information is also available in Addenda A and B of the CY 2024 final rule with comment period ( 88 FR 81540 ) (the Addenda A and B are available on the CMS website https://www.cms.gov/​medicare/​payment/​prospective-payment-systems/​hospital-outpatient/​regulations-notices ).

We have continued the high-cost/low-cost categories policy since CY 2014. Under the current policy, skin substitutes in the high-cost category are reported with the skin substitute application CPT codes, and skin substitutes in the low-cost category are reported with the analogous skin substitute HCPCS C-codes. For a discussion of the CY 2014 and CY 2015 methodologies for assigning skin substitutes to either the high-cost group or the low-cost group, we refer readers to the CY 2014 OPPS/ASC final rule with comment period ( 78 FR 74932 through 74935 ) and the CY 2015 OPPS/ASC final rule with comment period ( 79 FR 66882 through 66885 ).

For a discussion of the high-cost/low-cost methodology that was adopted in CY 2016 and has been in effect since then, we refer readers to the CY 2016 OPPS/ASC final rule with comment period ( 80 FR 70434 through 70435 ). Beginning in CY 2016, we adopted a policy where we determined the high-cost/low-cost status for each skin substitute product based on either a product's geometric mean unit cost (MUC) exceeding the geometric MUC threshold or the product's per day cost (PDC) (the total units of a skin substitute multiplied by the mean unit cost and divided by the total number of days) exceeding the PDC threshold. We assigned each skin substitute that exceeded either the MUC threshold or the PDC threshold to the high-cost group. In addition, we assigned any skin substitute with a MUC or a PDC that did not exceed either the MUC threshold or the PDC threshold to the low-cost group ( 87 FR 71976 ).

However, some skin substitute manufacturers have raised concerns about significant fluctuation in both the MUC threshold and the PDC threshold from year to year using the methodology developed in CY 2016. The fluctuation in the thresholds may result in the reassignment of several skin substitutes from the high-cost group to the low-cost group, which, under current payment rates, can be a difference of over $1,000 in the payment amount for the same procedure. In addition, these interested parties were concerned that the inclusion of cost data from skin substitutes with pass-through payment status in the MUC and PDC calculations would artificially inflate the thresholds. Skin substitute interested parties requested that CMS consider alternatives to the current methodology used to calculate the MUC and PDC thresholds and whether it might be appropriate to establish a new cost group in between the low-cost group and the high-cost group to allow for assignment of moderately priced skin substitutes to a newly created middle group.

We share the goal of promoting payment stability for skin substitute products and their related procedures as price stability allows hospitals using such products to more easily anticipate future payments associated with these products. We have attempted to limit year-to-year shifts for skin substitute products between the high-cost and low-cost groups through multiple initiatives implemented since CY 2014, including: establishing separate skin substitute application procedure codes for low-cost skin substitutes ( 78 FR 74935 ); using a skin substitute's MUC calculated from outpatient hospital claims data instead of an average of ASP plus 6 percent as the primary methodology to assign products to the high-cost or low-cost group ( 79 FR 66883 ); and establishing the PDC threshold as an alternate methodology to assign a skin substitute to the high-cost group ( 80 FR 70434 through 70435 ).

To allow additional time to evaluate concerns and suggestions from interested parties about the volatility of the MUC and PDC thresholds, in the CY 2018 OPPS/ASC proposed rule ( 82 FR 33627 ), we proposed that a skin substitute that was assigned to the high-cost group for CY 2017 would be assigned to the high-cost group for CY 2018, even if it did not exceed the CY 2018 MUC or PDC thresholds. We finalized this policy in the CY 2018 OPPS/ASC final rule with comment period ( 82 FR 59347 ). For more detailed information and discussion regarding the goals of this policy and the subsequent comment solicitations in CY 2019 and CY 2020 regarding possible alternative payment methodologies for graft skin substitute products, please refer to the CY 2018 OPPS/ASC final rule with comment period ( 82 FR 59347 ); the CY 2019 OPPS/ASC final rule with comment period ( 83 FR 58967 to 58968); and the CY 2020 OPPS/ASC final rule with comment period ( 84 FR 61328 to 61331).

For CY 2025, consistent with our policy since CY 2016, we propose to continue to determine the high-cost/low-cost status for each skin substitute product based on either a product's geometric MUC exceeding the geometric MUC threshold or the product's PDC (the total units of a skin substitute multiplied by the MUC and divided by the total number of days) exceeding the PDC threshold. Consistent with the methodology as established in the CY 2014 OPPS/ASC through CY 2018 OPPS/ASC final rules with comment period, we analyzed CY 2023 claims data to calculate the MUC threshold (a weighted average of all skin substitutes' MUCs) and the PDC threshold (a weighted average of all skin substitutes' PDCs). The proposed CY 2025 MUC threshold is $50 per cm 2 (rounded to the nearest $1) and the proposed CY 2025 PDC threshold is $840 (rounded to the nearest $1). Also, the availability of a HCPCS code for a particular human cell, tissue, or cellular or tissue-based product (HCT/P) does not mean that that product is appropriately regulated solely under section 361 of the PHS Act and the FDA regulations in 21 CFR part 1271 . Manufacturers of HCT/Ps should consult with the FDA Tissue Reference Group (TRG) or obtain a determination through a Request for Designation (RFD) on whether their HCT/Ps are appropriately regulated solely under section 361 of the PHS Act and the regulations in 21 CFR part 1271 .

For CY 2025, as we did for CY 2024, we propose to assign each skin substitute that exceeds either the MUC Start Printed Page 59372 threshold or the PDC threshold to the high-cost group. In addition, we propose to assign any skin substitute that does not exceed either the MUC threshold or the PDC threshold to the low-cost group except that we propose that any skin substitute product that is assigned to the high-cost group in CY 2024 would be assigned to the high-cost group for CY 2025, regardless of whether it exceeds or falls below the CY 2025 MUC or PDC threshold. This policy was established in the CY 2018 OPPS/ASC final rule with comment period ( 82 FR 59346 through 59348 ).

For CY 2025, we propose to continue to assign skin substitutes with pass-through payment status to the high-cost category. We propose to assign skin substitutes with pricing information but without claims data to calculate a geometric MUC or PDC to either the high-cost or low-cost category based on the product's ASP plus 6 percent payment rate as compared to the MUC threshold. If ASP is not available, we propose to use WAC plus 3 percent to assign a product to either the high-cost or low-cost category. Finally, if neither ASP nor WAC is available, we propose to use 95 percent of AWP to assign a skin substitute to either the high-cost or low-cost category. We propose to continue to use WAC plus 3 percent instead of WAC plus 6 percent to conform to our proposed policy described in section V.B.2.b of this proposed rule to establish a payment rate of WAC plus 3 percent for separately payable drugs and biologicals that do not have ASP data available. We propose that any skin substitute product that is assigned a code in the HCPCS A2XXX series would be assigned to the high-cost skin substitute group including new products without pricing information. New skin substitutes without pricing information that are not assigned a code in the HCPCS A2XXX series would be assigned to the low-cost category until pricing information is available to compare to the CY 2024 MUC and PDC thresholds. For a discussion of our policy under which we assign skin substitutes without pricing information that are not assigned a code in the HCPCS A2XXX series to the low-cost category until pricing information is available, we refer readers to the CY 2016 OPPS/ASC final rule with comment period ( 80 FR 70436 ).

Table 67 includes the proposed CY 2025 cost category assignment for each skin substitute product.

Radioisotopes are widely used in modern medical imaging, particularly for cardiac imaging and predominantly for the Medicare population. Technetium-99m (Tc-99m), the radioisotope used in the majority of such diagnostic imaging services, is produced through the radioactive decay of molybdenum-99 (Mo-99). Historically, most of the Mo-99 used in the United States was produced in legacy reactors outside of the United States using highly enriched uranium (HEU).

The United States wanted to eliminate domestic reliance on these reactors and promoted the conversion of all medical radioisotope production to non-HEU sources. Alternative methods for producing Tc-99m without HEU are technologically and economically viable, but it was expected that this change in the supply source for the radioisotope used for modern medical imaging would introduce increased costs into the payment system that would not be fully accounted for in the historical claims data until all Tc-99m was produced from non-HEU sources.

Therefore, beginning in CY 2013, we finalized a policy to provide an additional payment of $10 for the marginal cost for radioisotopes produced by non-HEU sources ( 77 FR 68323 ). Under this policy, hospitals report HCPCS code Q9969 (Tc-99m from non-highly enriched uranium source, full cost recovery add-on per study dose) once per dose along with any diagnostic scan or scans furnished using Tc-99m as long as the Tc-99m doses used can be certified by the hospital to be at least 95 percent derived from non-HEU sources ( 77 FR 68323 ).

We stated in the CY 2013 OPPS/ASC final rule with comment period ( 77 FR 68321 ) that our expectation was that this additional payment would be needed for the duration of the industry's conversion to alternative methods of producing Tc-99m without HEU. We also stated that we would reassess, and propose, if necessary, on an annual basis whether such an adjustment continued to be necessary and whether any changes to the adjustment were warranted ( 77 FR 68321 ). The Secretaries of Energy and Health and Human Services issued a certification regarding the supply of non-HEU-sourced Mo-99 effective January 2, 2022 ( 86 FR 73270 ). Mo-99 is the precursor material from which Tc-99m is sourced. The certification by the Secretary of Energy stated that there was a sufficient global supply of Mo-99 produced without the use of HEU available to meet the needs of patients in the United States. In the CY 2023 OPPS/ASC final rule with comment period, we stated that we believed the conversion to non-HEU sources of Tc-99m had reached a point where it was necessary to reassess our policy of providing an additional payment of $10 for the marginal cost for radioisotopes produced by non-HEU sources ( 87 FR 71987 ).

In the OPPS, diagnostic radiopharmaceuticals are currently packaged into the cost of the associated diagnostic imaging procedure no matter the per day cost of the radiopharmaceutical (though we are proposing in this rule to provide separate payment for high-cost diagnostic radiopharmaceuticals starting in CY 2025). The cost of the radiopharmaceutical is included as a part of the cost of the diagnostic imaging procedure and is reported through Medicare claims data. Medicare claims data used to set payment rates under the OPPS generally is from 2 years prior to the payment year.

As we explained in the CY 2023 OPPS/ASC final rule with comment period ( 87 FR 71987 ), the claims data we used to set payment rates for CY 2024 (generally CY 2022 claims data) contained claims for diagnostic radiopharmaceuticals that reflect both HEU-sourced Tc-99m and non-HEU-sourced Tc99m, rather than radiopharmaceuticals sourced solely from non-HEU Tc-99m. The cost of HEU-sourced Tc-99m is substantially lower than the cost of non-HEU-sourced Tc-99m. Therefore, we explained that providers who use radiopharmaceuticals in CY 2024 that contain only non-HEU-sourced Tc-99m might not receive a payment that is reflective of the radiopharmaceutical's current cost without the add-on payment. We believed that extending the additional $10 add-on payment described by HCPCS code Q9969 for non-HEU-sourced Tc-99m through the end of CY 2024 would ensure adequate payment for non-HEU-sourced Tc-99m. Starting in CY 2025, we believed the Medicare claims data utilized to set payment rates (likely CY 2023 claims data) would only include claims for diagnostic radiopharmaceuticals that utilized non-HEU-sourced Tc-99m, meaning the data would reflect the full cost of the Tc-99m diagnostic radiopharmaceuticals that would be used by providers in CY 2025. As a Start Printed Page 59378 result, we believed there would no longer be a need for the additional $10 add-on payment for CY 2025 or future years.

The conversion of the last major global Mo-99 producer from HEU to Low Enriched Uranium (LEU) was previously expected to complete by December 31, 2022 but did not occur until March 2023, so it is possible that some claims for diagnostic radiopharmaceuticals in CY 2023 would report the cost of HEU-sourced Tc-99m. This means that in CY 2025, as in CY 2024, there is the possibility that the payment rate for procedures using diagnostic radiopharmaceuticals could be lower than the costs providers will face for these procedures because providers will only have access to non-HEU-sourced Tc-99m. Therefore, we adopted a policy in the CY 2024 OPPS final rule with comment period ( 88 FR 81803 ) to extend the additional $10 add-on payment described by HCPCS code Q9969 for non-HEU-sourced Tc-99m through the end of CY 2025 to continue to ensure adequate payment for non-HEU-sourced Tc-99m.

Recently, the Department of Energy and other interested parties raised another issue affecting the domestic supply chain for Mo-99 and Tc-99 that, left unaddressed, could cause payment inequity among outpatient hospital providers. Foreign Mo-99 production has historically been subsidized by foreign governments, resulting in prices below the true cost of production. These artificially low, government-subsidized prices have created a disincentive for investments in Mo-99 production infrastructure, and they also created a barrier to entry for new producers, including U.S. companies. This in turn has resulted in unreliable production and periodic shortages. In response to the 2009-2010 shortages, Congress passed the American Medical Isotopes Production Act of 2012 (AMIPA), which directs the Secretary of Energy to provide financial and technical support to U.S. companies working to build new irradiation and manufacturing facilities to produce Mo-99 without HEU.

It was expected that the transition from HEU to LEU-based production would also involve the transition to a Full Cost Recovery pricing model; however, it does not appear that this transition has occurred in practice. Foreign producers continue to rely on multipurpose nuclear research reactors for Mo-99 production, and the global Mo-99 supply chain has not established a system of verifying that all of the costs attributable to Mo-99 production are being incorporated into the price of the product.

U.S. companies have made significant progress towards establishing the infrastructure needed for large-scale Mo-99 production. Unlike many foreign producers, U.S. companies must price their products high enough to cover the full cost of operating their production facilities. Based in part on the differences in pricing models, U.S. companies have experienced challenges in competing with foreign producers for customers. Currently, there is no domestic production of Mo-99.

Once U.S. companies initiate or resume Mo-99 production, the difference in pricing models will likely create a payment inequity, as hospitals purchasing Tc-99m derived from domestically produced Mo-99 would likely pay higher prices than those purchasing Tc-99m derived from imported Mo-99. We propose to address the payment inequity resulting from the higher cost of domestically produced Tc-99m by establishing a new add-on payment of $10 per dose for radiopharmaceuticals that use Tc-99m derived from domestically produced Mo-99 starting on January 1, 2026 using our equitable adjustment authority under section 1833(t)(2)(E) of the Act. We believe the $10 add-on payment for domestically produced Tc-99m would ensure equitable payments by paying providers who use domestically produced Tc-99m radiopharmaceuticals when available an amount that reflects the anticipated higher cost of these products. The $10 add-on payment will help to preserve provider and beneficiary access to domestically produced Tc-99m radiopharmaceuticals by providing an additional payment amount that addresses the additional costs of domestically produced Tc-99m radiopharmaceuticals. DOE/NNSA would establish the criteria to certify whether the Tc-99m radiopharmaceutical dose is domestically produced and eligible for the add-on payment, which would be included in the CY 2026 OPPS/ASC proposed rule. The CY 2026 OPPS/ASC proposed rule would include additional details on how providers would bill for this add-on payment in CY 2026.

Section 1833(t)(6)(E) of the Act limits the total projected amount of transitional pass-through payment for drugs, biologicals, and categories of devices for a given year to an “applicable percentage,” currently not to exceed 2.0 percent of total program payments estimated to be made for all covered services under the OPPS furnished for that year. If we estimate before the beginning of the calendar year that the total amount of pass-through payments in that year would exceed the applicable percentage, section 1833(t)(6)(E)(iii) of the Act requires a uniform prospective reduction in the amount of each of the transitional pass-through payments made in that year to ensure that the limit is not exceeded. We estimate the pass-through spending to determine whether payments exceed the applicable percentage and the appropriate pro rata reduction to the conversion factor for the projected level of pass-through spending in the following year to ensure that total estimated pass-through spending for the prospective payment year is budget neutral, as required by section 1833(t)(6)(E) of the Act.

For devices, developing a proposed estimate of pass-through spending in CY 2025 entails estimating spending for two groups of items. The first group of items consists of device categories that are currently eligible for pass-through payment and that will continue to be eligible for pass-through payment in CY 2025. The CY 2008 OPPS/ASC final rule with comment period ( 72 FR 66778 ) describes the methodology we have used in previous years to develop the pass-through spending estimate for known device categories continuing into the applicable update year. The second group of items consists of devices that we know are newly eligible, or project may be newly eligible, for device pass-through payment in the remaining quarters of CY 2024 or beginning in CY 2025. The sum of the proposed CY 2025 pass-through spending estimates for these two groups of device categories equals the proposed total CY 2025 pass-through spending estimate for device categories with pass-through payment status. We determined the device pass-through estimated payments for each device category based on the amount of payment as required by section 1833(t)(6)(D)(ii) of the Act, and as outlined in previous rules, including the CY 2014 OPPS/ASC final rule with comment period ( 78 FR 75034 through 75036 ). We note that, beginning in CY 2010, the pass-through evaluation process and pass-through payment methodology for implantable biologicals newly approved for pass-through payment beginning on or after January 1, 2010, that are surgically inserted or implanted (through a surgical incision Start Printed Page 59379 or a natural orifice) use the device pass-through process and payment methodology ( 74 FR 60476 ). As has been our past practice ( 76 FR 74335 ), in the proposed rule, we propose to include an estimate of any implantable biologicals eligible for pass-through payment in our estimate of pass-through spending for devices. Similarly, we finalized a policy in CY 2015 that applications for pass-through payment for skin substitutes and similar products be evaluated using the medical device pass-through process and payment methodology ( 76 FR 66885 through 66888 ). Therefore, as we did beginning in CY 2015, for CY 2025, we also propose to include an estimate of any skin substitutes and similar products in our estimate of pass-through spending for devices.

For drugs and biologicals eligible for pass-through payment, section 1833(t)(6)(D)(i) of the Act establishes the pass-through payment amount as the amount by which the amount authorized under section 1842(o) of the Act (or, if the drug or biological is covered under a competitive acquisition contract under section 1847B of the Act, an amount determined by the Secretary equal to the average price for the drug or biological for all competitive acquisition areas and year established under such section as calculated and adjusted by the Secretary) exceeds the portion of the otherwise applicable fee schedule amount that the Secretary determines is associated with the drug or biological. Consistent with current policy, we propose to apply a rate of ASP plus 6 percent to most drugs and biologicals for CY 2025, and therefore our estimate of drug and biological pass-through payment for CY 2025 for this group of items is $10.2 million.

Payment for certain drugs, specifically diagnostic radiopharmaceuticals and contrast agents without pass-through payment status, is packaged into payment for the associated procedures, and these products are not separately paid. In addition, we policy-package all non-pass-through drugs, biologicals, and radiopharmaceuticals that function as supplies when used in a diagnostic test or procedure, drugs and biologicals that function as supplies when used in a surgical procedure, drugs and biologicals used for anesthesia, and other categories of drugs and biologicals, as discussed in section V.B.1.c of this proposed rule. Consistent with current policy, we propose that all of these policy-packaged drugs and biologicals with pass-through payment status will be paid at ASP+6 percent, like other pass-through drugs and biologicals, for CY 2025, less the policy-packaged drug APC offset amount described below. Our estimate of pass-through payment for policy-packaged drugs and biologicals with pass-through payment status approved prior to CY 2025 is not $0. This is because the pass-through payment amount and the fee schedule amount associated with the drug or biological will not be the same, unlike for separately payable drugs and biologicals. In section V.A.6 of this proposed rule, we discuss our policy to determine if the costs of certain policy-packaged drugs or biologicals are already packaged into the existing APC structure. If we determine that a policy-packaged drug or biological approved for pass-through payment resembles predecessor drugs or biologicals already included in the costs of the APCs that are associated with the drug receiving pass-through payment, we propose to offset the amount of pass-through payment for the policy-packaged drug or biological. For these drugs or biologicals, the APC offset amount is the portion of the APC payment for the specific procedure performed with the pass-through drug or biological, which we refer to as the policy-packaged drug APC offset amount. Consistent with current policy, if we determine that an offset is appropriate for a specific policy-packaged drug or biological receiving pass-through payment, we propose to reduce our estimate of pass-through payments for these drugs or biologicals by the APC offset amount.

Similar to pass-through spending estimates for devices, the first group of drugs and biologicals requiring a pass-through payment estimate consists of those products that were recently made eligible for pass-through payment and that will continue to be eligible for pass-through payment in CY 2025. The second group contains drugs and biologicals that we know are newly eligible, or project will be newly eligible, in the remaining quarters of CY 2024 or beginning in CY 2025. The sum of the CY 2025 pass-through spending estimates for these two groups of drugs and biologicals equals the total CY 2025 pass-through spending estimate for drugs and biologicals with pass-through payment status.

For CY 2025, we propose to set the applicable pass-through payment percentage limit at 2.0 percent of the total projected OPPS payments for CY 2025, consistent with section 1833(t)(6)(E)(ii)(II) of the Act and our OPPS policy from CY 2004 through CY 2024 ( 88 FR 81805 ). The pass-through payment percentage limit is calculated using pass-through spending estimates for devices and for drugs and biologicals.

For the first group of devices, consisting of device categories that are currently eligible for pass-through payment and will continue to be eligible for pass-through payment in CY 2025, there are 8 active categories for CY 2025. The active categories are described by HCPCS codes C1747, C1826, C1827, C1600, C1601, C1602, C1603 and C1604. Based on the information from the device manufacturers, we estimate that HCPCS code C1747 will cost $19.5 million in pass-through expenditures in CY 2025, HCPCS code C1826 will cost $151,991 in pass-through expenditures in CY 2025, HCPCS code C1827 will cost $364,793 in pass-through expenditures in CY 2025, HCPCS code C1600 will cost $21.9 million in pass-through expenditures in CY 2025, HCPCS code C1601 will cost $14.4 million in pass-through expenditures in CY 2025, HCPCS code C1602 will cost $8.2 million in pass-through expenditures in CY 2025, HCPCS code C1603 will cost $6.6 million in pass-through expenditures in CY 2025, and HCPCS code C1604 will cost $20.0 million in pass-through expenditures in CY 2025. Therefore, we propose an estimate for the first group of devices of $91.1 million.

In estimating our proposed CY 2025 pass-through spending for device categories in the second group, we included the following: (1) device categories that we assumed at the time of the development of the proposed rule would be newly eligible for pass-through payment in CY 2025; (2) additional device categories that we estimated could be approved for pass-through status after the development of this proposed rule and before January 1, 2025; and (3) contingent projections for new device categories established in the second through fourth quarters of CY 2025. For CY 2025, we propose to use the general methodology described in the CY 2008 OPPS/ASC final rule with comment period ( 72 FR 66778 ), while also taking into account recent OPPS experience in approving new pass-through device categories. For this proposed rule, the proposed estimate of CY 2025 pass-through spending for this second group of device categories was $523.7 million.

To estimate proposed CY 2025 pass-through spending for drugs and biologicals in the first group, specifically those drugs and biologicals recently made eligible for pass-through payment and continuing on pass-through payment status for at least one quarter in CY 2025, we propose to use Start Printed Page 59380 the CY 2023 Medicare hospital outpatient claims data regarding their utilization, information provided in their respective pass-through applications, other historical hospital claims data, pharmaceutical industry information, and clinical information regarding these drugs and biologicals to project the CY 2025 OPPS utilization of the products.

For the known drugs and biologicals (excluding policy-packaged diagnostic radiopharmaceuticals, contrast agents, drugs, biologicals, and radiopharmaceuticals that function as supplies when used in a diagnostic test or procedure, and drugs and biologicals that function as supplies when used in a surgical procedure) that will be continuing on pass-through payment status in CY 2025, we estimated the pass-through payment amount as the difference between the general payment rate of ASP+6 percent and the payment rate for non-pass-through drugs and biologicals that would be separately paid. Because we propose to utilize a payment rate of ASP plus 6 percent for most drugs and biologicals in this proposed rule, the proposed payment rate difference between the pass-through payment amount and the non-pass-through payment amount is $0 for this group of drugs.

Because payment for policy-packaged drugs and biologicals is packaged if the product is not paid separately due to its pass-through payment status, we propose to include in the CY 2025 pass-through estimate the difference between payment for the policy-packaged drug or biological at ASP+6 percent (or WAC+6 percent, or 95 percent of AWP, if ASP or WAC information is not available) and the policy-packaged drug APC offset amount, if we determine that the policy-packaged drug or biological approved for pass-through payment resembles a predecessor drug or biological already included in the costs of the APCs that are associated with the drug receiving pass-through payment. Given the proposal to pay separately for diagnostic radiopharmaceuticals that exceed the proposed per-day threshold referenced in section II.A.3.c of this proposed rule, for CY 2025, all diagnostic radiopharmaceuticals that are currently on pass-through will be separately payable once their pass-through status has expired. For this first group of policy-packaged drugs and biologicals, we estimate pass-through spending for CY 2025 of $200,000 as compared to $90 million for CY 2024 OPPS/ASC final rule ( 88 FR 81806 ).

To estimate proposed CY 2025 pass-through spending for drugs and biologicals in the second group (that is, drugs and biologicals that we knew at the time of development of this proposed rule were newly eligible or recently became eligible for pass-through payment in CY 2024, additional drugs and biologicals that we estimated could be approved for pass-through status subsequent to the development of this proposed rule and before January 1, 2025, and projections for new drugs and biologicals that could be initially eligible for pass-through payment in the second through fourth quarters of CY 2025), we propose to use utilization estimates from pass-through applicants, pharmaceutical industry data, clinical information, recent trends in the per unit ASPs of hospital outpatient drugs, and projected annual changes in service volume and intensity as our basis for making the CY 2025 pass-through payment estimate. We also propose to consider the most recent OPPS experience in approving new pass-through drugs and biologicals. Using our proposed methodology for estimating CY 2025 pass-through payments for this second group of drugs, we calculated a proposed spending estimate for this second group of drugs and biologicals of approximately $10 million.

We estimate for this proposed rule that the amount of pass-through spending for the device categories and the drugs and biologicals that are continuing to receive pass-through payment in CY 2025 and the amount of pass-through spending for those device categories, drugs, and biologicals that first become eligible for pass-through payment during CY 2025 would be approximately $625 million (approximately $614.8 million for device categories and approximately $10.2 million for drugs and biologicals), which represents only 0.71 percent of total projected OPPS payments for CY 2025 (approximately $88.2 billion). Therefore, we estimate that pass-through spending in CY 2025 would not exceed the 2.0 percent of total projected OPPS CY 2025 program spending limit provided for in section 1833(t)(6)(E) of the Act.

For CY 2025, we propose to continue our current clinic and emergency department (ED) hospital outpatient visits payment policies. For a description of these policies, we refer readers to the CY 2016 OPPS/ASC final rule with comment period ( 80 FR 70448 ). We also propose to continue our payment policy for critical care services for CY 2025. For a description of this policy, we refer readers to the CY 2016 OPPS/ASC final rule with comment period ( 80 FR 70449 ), and for the history of this payment policy, we refer readers to the CY 2014 OPPS/ASC final rule with comment period ( 78 FR 75043 ).

As we stated in the CY 2022 OPPS/ASC final rule with comment period ( 86 FR 63663 ), the volume control method for clinic visits furnished by non-excepted off-campus provider-based departments (PBDs) applies for CY 2022 and subsequent years. More specifically, we finalized a policy to continue to utilize a PFS-equivalent payment rate for the hospital outpatient clinic visit service described by HCPCS code G0463 when it is furnished by these departments for CY 2022 and beyond. The PFS-equivalent rate for CY 2025 is 40 percent of the proposed OPPS payment. Under this policy, these departments will be paid approximately 40 percent of the OPPS rate for the clinic visit service in CY 2025.

In the CY 2023 OPPS/ASC final rule with comment period ( 87 FR 71748 ), we finalized a policy that excepted off-campus provider-based departments (PBDs) (departments that bill the modifier “PO” on claim lines) of rural Sole Community Hospitals (SCHs), as described under 42 CFR 412.92 and designated as rural for Medicare payment purposes, are exempt from the clinic visit payment policy that applies a PFS-equivalent payment rate for the clinic visit service, as described by HCPCS code G0463, when provided at an off-campus PBD excepted from section 1833(t)(21) of the Act. For the full discussion of this policy, we refer readers to the CY 2023 OPPS/ASC final rule with comment period ( 87 FR 72047 through 72051 ). For CY 2025, we propose to continue to exempt excepted off-campus PBDs of rural SCHs from the clinic visit payment policy. We will continue to monitor the effect of this change in Medicare payment policy, including on the volume of these types of OPD services.

This section discusses payment for partial hospitalization services as well as intensive outpatient services. Since CY 2000, Medicare has paid for partial hospitalization services under the OPPS. Beginning in CY 2024, as authorized by section 4124 of the Consolidated Appropriations Act (CAA), 2023 ( Pub. L. 117-328 ), Medicare began paying for intensive outpatient services furnished by hospital outpatient departments, Start Printed Page 59381 community mental health centers, federally qualified health centers, and rural health clinics in addition to opioid treatment programs. Additional background on the partial hospitalization and intensive outpatient benefits is included in the following paragraphs.

A partial hospitalization program (PHP) is an intensive outpatient program of psychiatric services provided as an alternative to inpatient psychiatric care for individuals who have an acute mental illness, which includes, but is not limited to, conditions such as depression, schizophrenia, and substance use disorders (SUD). Section 1861(ff)(1) of the Act defines partial hospitalization services as the items and services described in paragraph (2) prescribed by a physician and provided under a program described in paragraph (3) under the supervision of a physician pursuant to an individualized, written plan of treatment established and periodically reviewed by a physician (in consultation with appropriate staff participating in such program), which sets forth the physician's diagnosis, the type, amount, frequency, and duration of the items and services provided under the plan, and the goals for treatment under the plan. Section 1861(ff)(2) of the Act describes the items and services included in partial hospitalization services. Section 1861(ff)(3)(A) of the Act specifies that a PHP is a program furnished by a hospital to its outpatients or by a community mental health center (CMHC), as a distinct and organized intensive ambulatory treatment service, offering less than 24-hour-daily care, in a location other than an individual's home or inpatient or residential setting. Section 1861(ff)(3)(B) of the Act defines a CMHC for purposes of this benefit. We refer readers to sections 1833(t)(1)(B)(i), 1833(t)(2)(B), 1833(t)(2)(C), and 1833(t)(9)(A) of the Act and 42 CFR 419.21 , for additional information regarding PHP.

Partial hospitalization program policies and payment have been addressed under OPPS since CY 2000. In CY 2008, we began efforts to strengthen the PHP benefit through extensive data analysis, along with policy and payment changes, by implementing two refinements to the methodology for computing the PHP median. For a detailed discussion on these policies, we refer readers to the CY 2008 OPPS/ASC final rule with comment period ( 72 FR 66670 through 66676 ). In CY 2009, we implemented several regulatory, policy, and payment changes. For a detailed discussion on these policies, we refer readers to the CY 2009 OPPS/ASC final rule with comment period ( 73 FR 68688 through 68697 ). In CY 2010, we retained the two-tier payment approach for partial hospitalization services and used only hospital-based PHP data in computing the PHP APC per diem costs, upon which PHP APC per diem payment rates are based ( 74 FR 60556 through 60559 ). In CY 2011 ( 75 FR 71994 ), we established four separate PHP APC per diem payment rates: two for CMHCs (APC 0172 and APC 0173) and two for hospital-based PHPs (APC 0175 and APC 0176) and instituted a two-year transition period for CMHCs to the CMHC APC per diem payment rates. For a detailed discussion, we refer readers to section X.B of the CY 2011 OPPS/ASC final rule with comment period ( 75 FR 71991 through 71994 ). In CY 2012, we determined the relative payment weights for partial hospitalization services provided by CMHCs based on data derived solely from CMHCs and the relative payment weights for partial hospitalization services provided by hospital-based PHPs based exclusively on hospital data ( 76 FR 74348 through 74352 ). In the CY 2013 OPPS/ASC final rule with comment period, we finalized our proposal to base the relative payment weights that underpin the OPPS APCs, including the four PHP APCs (APCs 0172, 0173, 0175, and 0176), on geometric mean costs rather than on the median costs. For a detailed discussion on this policy, we refer readers to the CY 2013 OPPS/ASC final rule with comment period ( 77 FR 68406 through 68412 ).

In the CY 2014 OPPS/ASC proposed rule ( 78 FR 43621 through 43622 ) and CY 2015 OPPS/ASC final rule with comment period ( 79 FR 66902 through 66908 ), we continued to apply our established policies to calculate the four PHP APC per diem payment rates based on geometric mean per diem costs using the most recent claims data for each provider type. For a detailed discussion on this policy, we refer readers to the CY 2014 OPPS/ASC final rule with comment period ( 78 FR 75047 through 75050 ). In the CY 2016 OPPS/ASC final rule with comment period ( 80 FR 70453 through 70467 ), we described our extensive analysis of the claims and cost data and ratesetting methodology, corrected a cost inversion that occurred in the final rule data with respect to hospital-based PHP providers, and renumbered the PHP APCs. In the CY 2017 OPPS/ASC final rule with comment period ( 81 FR 79687 through 79691 ), we continued to apply our established policies to calculate the PHP APC per diem payment rates based on geometric mean per diem costs and finalized a policy to combine the Level 1 and Level 2 PHP APCs for CMHCs and for hospital-based PHPs. We also implemented an eight-percent outlier cap for CMHCs to mitigate potential outlier billing vulnerabilities. For a comprehensive description of PHP payment policy, including a detailed methodology for determining PHP per diem amounts, we refer readers to the CY 2016 and CY 2017 OPPS/ASC final rules with comment period ( 80 FR 70453 through 70455 and 81 FR 79678 through 79680 , respectively).

In the CYs 2018 and 2019 OPPS/ASC final rules with comment period ( 82 FR 59373 through 59381 and 83 FR 58983 through 58998 , respectively), we continued to apply our established policies to calculate the PHP APC per diem payment rates based on geometric mean per diem costs, designated a portion of the estimated 1.0 percent hospital outpatient outlier threshold specifically for CMHCs, and proposed updates to the PHP allowable HCPCS codes. We finalized these proposals in the CY 2020 OPPS/ASC final rule with comment period ( 84 FR 61352 ).

In the CY 2020 OPPS/ASC final rule with comment period ( 84 FR 61339 through 61350 ), we finalized a proposal to use the calculated CY 2020 CMHC geometric mean per diem cost and the calculated CY 2020 hospital-based PHP geometric mean per diem cost, but with a cost floor equal to the CY 2019 final geometric mean per diem costs as the basis for developing the CY 2020 PHP APC per diem rates. Also, we continued to designate a portion of the estimated 1.0 percent hospital outpatient outlier threshold specifically for CMHCs, consistent with the percentage of projected payments to CMHCs under the OPPS, excluding outlier payments.

In the April 30, 2020 interim final rule with comment ( 85 FR 27562 through 27566 ), effective as of March 1, 2020 and for the duration of the COVID-19 Public Health Emergency (PHE), hospital and CMHC staff were permitted to furnish certain outpatient therapy, counseling, and educational services (including certain PHP services), incident to a physician's services, to beneficiaries in temporary expansion locations, including the beneficiary's home, as long as the location met all conditions of participation to the extent not waived. A hospital or CMHC could furnish such services using telecommunications technology to a Start Printed Page 59382 beneficiary in a temporary expansion location if that beneficiary was registered as an outpatient. In the CY 2023 OPPS/ASC final rule ( 87 FR 72247 ), we confirmed that these provisions applied only for the duration of the COVID-19 PHE. On May 11, 2023, the COVID-19 PHE ended, and accordingly, these flexibilities ended as well.

In the CY 2021 OPPS/ASC final rule with comment period ( 85 FR 86073 through 86080 ), we continued our current methodology to utilize cost floors, as needed. Since the final calculated geometric mean per diem costs for both CMHCs and hospital-based PHPs were significantly higher than each proposed cost floor, a floor was not necessary at the time, and we did not finalize the proposed cost floors in the CY 2021 OPPS/ASC final rule with comment period.

In the CY 2022 OPPS/ASC final rule with comment period ( 86 FR 63665 through 63666 ), we explained that we observed a number of changes, likely as a result of the COVID-19 PHE, in the CY 2020 OPPS claims that we would have ordinarily used for CY 2022 ratesetting, and this included changes in the claims for partial hospitalization. We explained that significant decreases in utilization and in the number of hospital-based PHP providers who submitted CY 2020 claims led us to believe that CY 2020 data were not the best overall approximation of expected PHP services in CY 2022. Therefore, we finalized our proposal to calculate the PHP per diem costs using the year of claims consistent with the calculations that would be used for other OPPS services, by using the CY 2019 claims and the cost reports that were used for CY 2021 final rulemaking to calculate the CY 2022 PHP per diem costs. In addition, for CY 2022 and subsequent years, we finalized our proposal to use cost and charge data from the Hospital Cost Report Information System (HCRIS) as the source for the CMHC cost-to-charge ratios (CCRs), instead of using the Outpatient Provider Specific File (OPSF) ( 86 FR 63666 ).

In the CY 2023 OPPS/ASC final rule with comment period ( 87 FR 71995 ), we explained that we continued to observe a decrease in the number of hospital-based and CMHC PHP days in our trimmed dataset due to the continued effects of COVID-19; however, the Medicare outpatient service volumes appeared to be returning to more normal, pre-pandemic levels. Therefore, we finalized our proposal to use the latest available CY 2021 claims but use the cost information from prior to the COVID-19 PHE for calculating the CY 2023 CMHC and hospital-based PHP APC per diem costs. The application of the OPPS standard methodology, including the effect of budget neutralizing all other OPPS policy changes unique to CY 2023, resulted in the final calculated CMHC PHP APC payment rate being unexpectedly lower than the CY 2022 final CMHC PHP APC rate. Therefore, in the interest of accurately paying for CMHC PHP services, under the unique circumstances of budget neutralizing all other OPPS policy changes for CY 2023, and in keeping with our longstanding goal of protecting continued access to PHP services provided by CMHCs by ensuring that CMHCs remain a viable option as providers of mental health care in the beneficiary's own community, we finalized utilizing the equitable adjustment authority of section 1833(t)(2)(E) of the Act to appropriately pay for CMHC PHP services at the same payment rate as for CY 2022, that is, $142.70. In addition, we clarified the payment under the OPPS for new HCPCS codes that designate non-PHP services provided for the purposes of diagnosis, evaluation, or treatment of a mental health disorder and are furnished to beneficiaries in their homes by clinical staff of the hospital would not be recognized as PHP services; however, none of the PHP regulations would preclude a patient that is under a PHP plan of care from receiving other reasonable and medically necessary non-PHP services from a hospital ( 87 FR 72001 and 72002 ).

In the CY 2024 OPPS/ASC final rule with comment period ( 88 FR 81811 ), we revised the regulation at § 424.24(e)(1)(i) to require the physician certification for PHP services to include a certification that the patient requires such services for a minimum of 20 hours per week, as required by section 1861(ff)(1) of the Act, as amended by section 4124(a) of Division FF of the CAA, 2023. In addition, we modified the regulations for PHP at § 410.43 to include references to SUD. In the same CY 2024 OPPS/ASC final rule, we also established separate payment rates for PHP days with 3 services and days with 4 or more services. Accordingly, we established four separate PHP APC per diem payment rates: one for CMHCs for 3-service days and another for CMHCs for 4-service days (APC 5853 and APC 5854, respectively), and one for hospital-based PHPs for 3-service days and another for hospital-based PHPs for 4-service days (APC 5863 and APC 5864, respectively). We also finalized a policy to utilize the separate CMHC rates for 3-service and 4-service PHP days as the Medicare Physician Fee Schedule (MPFS) rates, depending upon whether a nonexcepted off-campus hospital outpatient department furnishes 3 or 4 PHP services in a day. Lastly, we finalized several changes beginning in CY 2024 to align coding, billing, and payment between PHPs and intensive outpatient programs, which are discussed in greater detail in the following sections of this CY 2025 OPPS/ASC proposed rule.

Section 4124(b) of the CAA, 2023 established Medicare coverage for intensive outpatient services effective for items and services furnished on or after January 1, 2024. An intensive outpatient program (IOP) is a distinct and organized program of psychiatric services for individuals who have an acute mental illness, which includes, but is not limited to, conditions such as depression, schizophrenia, and SUD. Intensive outpatient services are not required to be provided in lieu of inpatient hospitalization. Section 1861(ff)(4) of the Act defines intensive outpatient services as the items and services described in paragraph (2) prescribed by a physician for an individual determined (not less frequently than every other month) by a physician to have a need for such services for a minimum of 9 hours per week and provided under a program described in paragraph (3) under the supervision of a physician pursuant to an individualized, written plan of treatment established and periodically reviewed by a physician (in consultation with appropriate staff participating in such program), which plan sets forth the physician's diagnosis, the type, amount, frequency, and duration of the items and services provided under the plan, and the goals for treatment under the plan. Section 1861(ff)(2) of the Act describes the items and services included in intensive outpatient services. Section 1861(ff)(4)(C) of the Act specifies that an IOP is a program furnished by a hospital to its outpatients, a CMHC, a Federally qualified health center (FQHC), or by a rural health clinic (RHC) as a distinct and organized intensive ambulatory treatment service, offering less than 24-hour-daily care, in a location other than an individual's home or inpatient or residential setting. Section 1861(ff)(3)(B) of the Act defines a CMHC for purposes of this benefit. We refer readers to sections 1833(t)(1)(B)(i), 1833(t)(2)(B), 1833(t)(2)(C), and 1833(t)(9)(A) of the Start Printed Page 59383 Act and 42 CFR 419.21 , for additional information regarding IOP.

In the CY 2024 OPPS/ASC final rule with comment period ( 88 FR 81812 through 81857 ), we established payment and program requirements for the IOP benefit furnished by a hospital to its outpatients, or by a CMHC, an FQHC, or an RHC. In addition, we established Medicare Part B coverage for IOP services provided by Opioid Treatment Programs (OTPs) for the treatment of opioid use disorder (OUD). We refer readers to the CY 2025 Physician Fee Schedule (PFS) proposed rule, published elsewhere in the Federal Register , for additional information regarding CY 2025 proposed payment policies for IOP services furnished by FQHCs and RHCs.

Consistent with the statutory definition of intensive outpatient services under section 1861(ff)(2) of the Act, we finalized regulations at 42 CFR 410.44 to set forth the conditions and exclusions applicable for intensive outpatient services, and at § 424.24 to set forth the content of the certification and plan of treatment requirements for intensive outpatient services. We also revised certain existing regulations at §§ 410.2, 410.3, 410.10, 410.27, 410.150, and 419.21 to add a regulatory definition of intensive outpatient services and to include intensive outpatient services in the regulations for medical and other health services paid for under Medicare Part B, and in the case of § 419.21, under the OPPS. Additionally, we created regulations at § 410.111 to establish the requirements for coverage of IOP services furnished in CMHCs, and at § 410.173 to establish conditions of payment for IOP services furnished in CMHCs. Lastly, we revised § 410.155 to exclude IOP services from the outpatient mental health treatment limitation, consistent with the statutory requirement of section 1833(c)(2) of the Act, as amended by section 4124(b)(3) of the CAA, 2023.

In addition, as discussed in greater detail in the following sections, we established coding, billing, and payment policies for IOP that align with the policies established for PHP provided in the same settings. Specifically, we established four separate IOP APC per diem payment rates at the same rates we proposed for the PHP APCs: one for CMHCs for 3-service days and another for CMHCs for 4-service days (APC 5851 and APC 5852, respectively), and one for hospital-based IOPs for 3-service days and another for hospital-based IOPs for 4-service days (APC 5861 and APC 5862, respectively). Similar to the policy finalized for PHP, we finalized a policy to utilize the CMHC rates for 3-service and 4-service IOP days as the MPFS rates, depending upon whether a nonexcepted hospital outpatient department furnishes 3 or 4 IOP services in a day.

We also established payment for IOP provided by an RHC or FQHC at the same rate as APC 5861, which is the 3-service hospital-based IOP rate (§ 405.2462(j)). Furthermore, we established a payment adjustment for IOP provided by an OTP based on 3 times the payment rate for APC 5861 beginning in CY 2024 (§ 410.67(d)(4)(i)(F)). As noted earlier in this CY 2025 OPPS/ASC proposed rule, additional information regarding CY 2025 proposed payment policies for IOP services furnished by FQHCs and RHCs can be found in the CY 2025 PFS proposed rule, published elsewhere in the Federal Register .

In the CY 2024 OPPS/ASC final rule, we finalized a billing requirement that all providers use condition code 41 to indicate that a claim is for partial hospitalization services and use condition code 92 to identify intensive outpatient claims, effective January 1, 2024. Since the statutory definitions of both IOP and PHP generally include the same types of items and services covered, we stated in the CY 2024 final OPPS rule that we believe it is appropriate to align the programs using a consistent list of services, so that level of intensity would be the only differentiating factor between partial hospitalization services and intensive outpatient services. The use of condition codes 41 for PHP claims and 92 for IOP claims allows us to differentiate between these services for billing purposes.

We recognize that the level of intensity of mental health services that a patient requires may vary over time; therefore, we believe utilizing a consolidated list of HCPCS codes to identify services under both the IOP and PHP benefits supports a smooth transition for patients when a change in the intensity of their services is necessary to best meet their needs. For example, a patient receiving IOP services may experience an acute mental health need that necessitates more intense services through a PHP. Alternatively, an IOP patient that no longer requires the level of intensity provided by the IOP can access less intense mental health services, such as individual mental health services. The full list of HCPCs codes recognized under the PHP and IOP benefits can be found in the Medicare Claims Processing internet Only Manual, Chapter 4, Sections 260.1 and 261.1, respectively, and their subsections, available at https://www.cms.gov/​regulations-and-guidance/​guidance/​manuals/​downloads/​clm104c04.pdf .

To qualify for payment for the IOP APC (5851, 5852, 5861, or 5862) or the PHP APC (5853, 5854, 5863, or 5864), one service provided that day must be from the Partial Hospitalization and Intensive Outpatient Primary list. We refer readers to the CY 2024 OPPS final rule for further discussion regarding our expectation that at least one of the services on the PHP and IOP Primary list will be indicated per day for patients who need the level of care offered by a PHP or IOP program. The PHP and IOP Primary List can be found in the CY 2024 OPPS/ASC final rule at 88 FR 81821 .

Beginning in CY 2024, we recognized caregiver training services and Principal Illness Navigation (PIN) services as PHP and IOP services. We explained that the reported costs associated with providing such services are included when we calculate the PHP and IOP payment rates; however, these services do not count toward the determination of whether a PHP or IOP day is paid at the 3-service or 4-service rate. We refer readers to the CY 2024 OPPS final rule for a detailed discussion of this policy ( 88 FR 81823 through 81825 ).

As finalized in the CY 2024 OPPS final rule, if new codes are established that represent the PHP and IOP services described under §§ 410.43(a)(4) and 410.44(a)(4), respectively, such codes are added to the list of codes recognized for payment for PHP or IOP through sub-regulatory guidance. We note that coding updates frequently occur outside of the standard rulemaking timeline. We adopted this sub-regulatory process in order to pay expeditiously when new codes are created that describe any of the services enumerated at §§ 410.43(a)(4) and 410.44(a)(4), which PHPs and IOPs, respectively, would provide. We explained that this policy applies to new codes that are crosswalked to a previously included code, or whose code descriptor is substantially similar to a descriptor for a code on the list or describes a service on the list. We stated that any additional services not described at §§ 410.43(a)(4) or 410.44(a)(4) would be added to the lists in regulation through notice and comment rulemaking. We note that for CY 2025, we are not proposing to add any new services not described at §§ 410.43(a)(4) or 410.44(a)(4) to the list of PHP and IOP services. Start Printed Page 59384

Beginning in CY 2024, we established four separate PHP APC per diem payment rates: one for CMHCs for 3-service days and another for CMHCs for 4-service days (APC 5853 and APC 5854, respectively), and one for hospital-based PHPs for 3-service days and another for hospital-based PHPs for 4-service days (APC 5863 and APC 5864, respectively). In addition, for hospital-based PHPs, we finalized a policy to calculate payment rates using the broader OPPS data set, instead of using hospital-based PHP data only. We explained that using the broader OPPS data set allows CMS to capture data from claims not identified as PHP, but that also include the service codes and intensity required for a PHP day. Because we established consistent coding and payment between the PHP and IOP benefits, we considered all OPPS data for PHP days and non-PHP days that include 3 or more of the same service codes. We established four separate IOP APC per diem payment rates at the same rates we proposed for the PHP APCs: one for CMHCs for 3-service days and another for CMHCs for 4-service days (APC 5851 and APC 5852, respectively), and one for hospital-based IOPs for 3-service days and another for hospital-based IOPs for 4-service days (APC 5861 and APC 5862, respectively).

In the CY 2024 OPPS/ASC final rule, we noted that the standard PHP day is typically four services or more per day. We explained that we have historically provided payment for three services a day for extenuating circumstances when a beneficiary would be unable to complete a full day of PHP treatment. As we stated in the CY 2008 OPPS/ASC final rule with comment period ( 72 FR 66672 ), it was never our intention that days with only three units of service should represent the number of services provided in a typical PHP day. Our intention was to cover days that consisted of three units of service only in certain limited circumstances. For example, as we noted in the CY 2009 OPPS/ASC proposed rule ( 73 FR 41513 ), we believe 3-service days may be appropriate when a patient is transitioning towards discharge (or days when a patient is at the beginning of his or her PHP stay). Another example of when it may be appropriate for a program to provide only three units of service in a day is when a patient is required to leave the PHP early for the day due to an unexpected medical appointment.

We also explained that prior to CY 2024, we historically prepared the data by first applying PHP-specific trims and data exclusions and assessing CCRs. We direct the reader to the CY 2016 OPPS/ASC final rule with comment period ( 80 FR 70463 through 70465 ) for a more complete discussion of these trims, data exclusions, and CCR adjustments. In prior rules, we have typically included a discussion of PHP-specific data trims, exclusions, and CCR adjustments; we did not include that discussion in the CY 2024 OPPS/ASC proposed or final rule. We stated that these PHP-specific data trims and exclusions addressed limitations as well as anomalies in the PHP data. However, as noted earlier, we finalized a methodology for CY 2024 to calculate hospital-based PHP payment rates for 3 services per day and 4 services per day based on cost per day using the broader OPPS data set. Accordingly, we did not apply PHP-specific trims and data exclusions, but rather we applied the same trims and data exclusions consistent with the OPPS.

We stated in the CY 2024 OPPS/ASC final rule ( 88 FR 81830 ) that while no IOP benefit existed prior to the CAA, 2023, the types of items and services included in IOP had been, and were, paid for by Medicare either as part of the PHP benefit or under the OPPS more generally. Additionally, we stated that prior to the CAA, 2023, CMS had begun gathering information from interested parties on IOP under Medicare. In the CY 2023 OPPS/ASC proposed rule ( 87 FR 44679 ), we issued a comment solicitation on intensive outpatient mental health treatment, including SUD treatment furnished by IOPs, to collect information regarding whether there are any gaps in coding that may be limiting access to needed levels of care for treatment of mental health disorders or SUDs for Medicare beneficiaries, and specific information about IOP services, such as the settings of care in which these programs typically furnish services, the range of services typically offered, and the range of practitioner types that typically furnish these services.

We explained that along with the requirements for IOP mandated by the CAA, 2023, we took into consideration information we received from the comment solicitation to construct an appropriate data set to develop proposed rates for IOP. Since IOPs furnish the same types of services as PHP, just at a lower intensity, we stated that we believe it was appropriate to use the same data and methodology for calculating payment rates for both PHP and IOP for CY 2024. We explained that although PHP claims can be specifically identified, there was no specific identifier or billing code to indicate IOP services that may have been provided before CY 2024. However, we noted that hospitals have been permitted to furnish and bill for many of these services as outpatient services under the OPPS. Thus, we analyzed a broader set of data that included both PHP and non-PHP days with 3 or more services in order to calculate proposed payment for PHP services. In order to establish consistent payment between PHP and IOP, we set IOP payment rates at the same rates as PHP. We stated that the primary goal in developing the payment rate methodology for IOP and PHP services was to pay providers an appropriate amount relative to the patients' needs, and to avoid cost inversion in future years. We stated that setting the IOP payment rates equal to the PHP payment rates was appropriate because IOP was a newly established benefit, and we did not have definitive data on utilization. However, we explained that both programs utilize the same services, but furnish them at different levels of intensity, with different numbers of services furnished per day and per week, depending on the program. Therefore, we stated that we expect it would be appropriate to pay the same per diem rates for IOP and PHP services unless future data analysis supports calculating rates independently.

For CY 2025, we propose to use the latest available cost information, from cost reports beginning three fiscal years prior to the year that is the subject of the rulemaking, and CY 2023 OPPS claims to update the payment rates for the four PHP APCs and the four IOP APCs finalized in the CY 2024 OPPS/ASC final rule. This proposal is consistent with the overall proposed use of cost data for the OPPS, which is discussed in section II.A.1.a of this proposed rule. In accordance with the methodology finalized in the CY 2024 OPPS/ASC final rule, we propose to base the payment rate for each PHP APC on the geometric mean per diem cost for days with 3 services and 4 or more services, calculated separately for CMHCs and hospital outpatient departments. We propose to use the broader