Solicited Public Comments in the CY 2013 OPPS/ASC Proposed Rule
3. Process for New Level II HCPCS Codes and Category I and Category III CPT Codes for Which We Are Soliciting Public Comments in This CY 2013 OPPS/ASC Final Rule With Comment Period
C. Update to the Lists of ASC Covered Surgical Procedures and Covered Ancillary Services
1. Covered Surgical Procedures
a. Additions to the List of ASC Covered Surgical Procedures
b. Covered Surgical Procedures Designated as Office-Based
(2) Changes for CY 2013 to Covered Surgical Procedures Designated as Office-Based
c. ASC Covered Surgical Procedures Designated as Device-Intensive
(2) Changes to List of Covered Surgical Procedures Designated as Device-Intensive for CY 2013
d. Adjustment to ASC Payments for No Cost/Full Credit and Partial Credit Devices
e. ASC Treatment of Surgical Procedures Removed From the OPPS Inpatient List for CY 2013
2. Covered Ancillary Services
D. ASC Payment for Covered Surgical Procedures and Covered Ancillary Services
1. Payment for Covered Surgical Procedures
b. Update to ASC Covered Surgical Procedure Payment Rates for CY 2013
c. Waiver of Coinsurance and Deductible for Certain Preventive Services
d. Payment for the Cardiac Resynchronization Therapy Composite
e. Payment for Low Dose Rate (LDR) Prostate Brachytherapy Composite
2. Payment for Covered Ancillary Services
b. Payment for Covered Ancillary Services for CY 2013
E. New Technology Intraocular Lenses (NTIOLs)
1. NTIOL Cycle and Evaluation Criteria
2. NTIOL Application Process for Payment Adjustment
3. Requests to Establish New NTIOL Classes for CY 2013 and Deadline for Public Comments
4. Payment Adjustment
5. Revisions to the Major NTIOL Criteria Described in 42 CFR 416.195
6. Request for Public Comment on the “Other Comparable Clinical Advantages” Improved Outcome
7. Announcement of CY 2013 Deadline for Submitting Requests for CMS Review of Appropriateness of ASC Payment for Insertion of an NTIOL Following Cataract Surgery
F. ASC Payment and Comment Indicators
2. ASC Payment and Comment Indicators
G. ASC Policy and Payment Recommendations
H. Calculation of the ASC Conversion Factor and the ASC Payment Rates
2. Calculation of the ASC Payment Rates
a. Updating the ASC Relative Payment Weights for CY 2013 and Future Years
b. Updating the ASC Conversion Factor
3. Display of CY 2013 ASC Payment Rates
XV. Hospital Outpatient Quality Reporting Program Updates
2. Statutory History of the Hospital Outpatient Quality Reporting (Hospital OQR) Program
3. Measure Updates and Data Publication
a. Process for Updating Quality Measures
b. Publication of Hospital OQR Program Data
B. Process for Retention of Hospital OQR Program Measures Adopted in Previous Payment Determinations
C. Removal or Suspension of Quality Measures From the Hospital OQR Program Measure Set
1. Considerations in Removing Quality Measures From the Hospital OQR Program
2. Removal of One Chart-Abstracted Measure for the CY 2013 and Subsequent Years Payment Determinations
3. Suspension of One Chart-Abstracted Measure for the CY 2014 and Subsequent Years Payment Determinations
4. Deferred Data Collection of OP-24: Cardiac Rehabilitation Measure: Patient Referral From an Outpatient Setting for the CY 2014 Payment Determination
D. Quality Measures for CY 2015 Payment Determination
E. Possible Quality Measures Under Consideration for Future Inclusion in the Hospital OQR Program
F. Payment Reduction for Hospitals That Fail To Meet the Hospital OQR Program Requirements for the CY 2013 Payment Update
2. Reporting Ratio Application and Associated Adjustment Policy for CY 2013
G. Requirements for Reporting of Hospital OQR Data for the CY 2014 Payment Determination and Subsequent Years
1. Administrative Requirements for the CY 2014 Payment Determination and Subsequent Years
2. Form, Manner, and Timing of Data Submitted for the Hospital OQR Program for the CY 2014 Payment Determination and Subsequent Years
b. General Requirements
c. Chart-Abstracted Measure Requirements for CY 2014 and Subsequent Payment Determination Years
d. Claims-Based Measure Data Requirements for the CY 2014 and CY 2015 Payment Determinations
e. Structural Measure Data Requirements for the CY 2014 Payment Determination and Subsequent Years
f. Data Submission Requirements for OP-22: ED-Patient Left Without Being Seen for the CY 2015 Payment Determination
g. Population and Sampling Data Requirements for the CY 2014 Payment Determination and Subsequent Years
3. Hospital OQR Program Validation Requirements for Chart-Abstracted Measure Data Submitted Directly to CMS for the CY 2014 Payment Determination and Subsequent Years
a. Random Selection of Hospitals for Data Validation of Chart-Abstracted Measures for the CY 2014 Payment Determination and Subsequent Years
b. Targeting and Targeting Criteria for Data Validation Selection for CY 2014 Payment Determination and for Subsequent Years
c. Methodology for Encounter Selection for the CY 2014 Payment Determination and Subsequent Years
d. Validation Score Calculation for the CY 2014 Payment Determination and Subsequent Years
H. Hospital OQR Reconsideration and Appeals Procedures for the CY 2014 Payment Determination and Subsequent Years
I. Extraordinary Circumstances Extension or Waiver for the CY 2013 Payment Determination and Subsequent Years
J. Electronic Health Records (EHRs)
K. 2013 Medicare EHR Incentive Program Electronic Reporting Pilot for Eligible Hospitals and CAHs
XVI. Requirements for the Ambulatory Surgical Centers Quality Reporting (ASCQR) Program
2. Statutory History of the ASC Quality Reporting (ASCQR) Program
3. History of the ASCQR Program
B. ASCQR Program Quality Measures
1. Considerations in the Selection of ASCQR Program Quality Measures
2. ASCQR Program Quality Measures
3. ASC Measure Topics for Future Consideration
4. Clarification Regarding the Process for Updating ASCQR Program Quality Measures
C. Requirements for Reporting of ASC Quality Data
1. Form, Manner, and Timing for Claims-Based Measures for the CY 2014 Payment Determination and Subsequent Payment Determination Years
b. Form, Manner, and Timing for Claims-Based Measures for the CY 2015 Payment Determination and Subsequent Payment Determination Years
2. Data Completeness and Minimum Threshold for Claims-Based Measures Using QDCs
b. Data Completeness Requirements for the CY 2015 Payment Determination and Subsequent Payment Determination Years
3. Other Comments on the ASCQR Program
D. Payment Reduction for ASCs That Fail To Meet the ASCQR Program Requirements
1. Statutory Background
2. Reduction to the ASC Payment Rates for ASCs That Fail To Meet the ASCQR Program Requirements for the CY 2014 Payment Determination and Subsequent Payment Determination Years
XVII. Inpatient Rehabilitation Facility (IRF) Quality Reporting Program Updates
B. Updates to IRF QRP Measures Which Are Made as a Result of Review by the National Quality Forum (NQF) Process
C. Process for Retention of IRF Quality Measures Adopted in Previous Fiscal Year Rulemaking Cycles
D. Measures for the FY 2014 Payment Determination
1. Clarification Regarding Existing IRF Quality Measures That Have Undergone Changes During the NQF Measure Maintenance Processes
2. Updates to the “Percent of Residents Who Have Pressure Ulcers That Are New or Worsened” Measure
XVIII. Revisions to the Quality Improvement Organization (QIO) Regulations (42 CFR Parts 476, 478, and 480)
A. Summary of Changes
B. Quality of Care Reviews
1. Beneficiary Complaint Reviews
2. Completion of General Quality of Care Reviews
C. Use of Confidential Information That Explicitly or Implicitly Identifies Patients
D. Secure Transmissions of Electronic Versions of Medical Information
E. Active Staff Privileges
F. Technical Corrections
XIX. Files Available to the Public Via the Internet
XX. Collection of Information Requirements
A. Legislative Requirements for Solicitation of Comments
B. Requirements in Regulation Text
1. 2013 Medicare EHR Incentive Program Electronic Reporting Pilot for Hospitals and CAHs (§ 495.8)
C. Associated Information Collections Not Specified in Regulatory Text
1. Hospital OQR Program
2. Hospital OQR Program Measures for the CY 2012, CY 2013, CY 2014 and CY 2015 Payment Determinations
a. Previously Adopted Hospital OQR Program Measures for the CY 2012, CY 2013, and CY 2014 Payment Determinations
b. Hospital OQR Program Measures for the CY 2014 Payment Determination
c. Hospital OQR Program Measures for CY 2015
3. Hospital OQR Program Validation Requirements for CY 2014
4. Hospital OQR Program Reconsideration and Appeals Procedures
5. ASCQR Program Requirements
a. Claims-Based Outcome Measures for the CY 2014 Payment Determination
b. Claims-Based Process, Structural, and Volume Measures for the CY 2015 and CY 2016 Payment Determinations
c. Program Administrative Requirements and QualityNet Accounts; Extraordinary Circumstance and Extension Requests; Reconsideration Requests
6. IRF QRP
a. Pressure Ulcer Measure
b. CAUTI Measure
XXI. Waiver of Proposed Rulemaking and Response to Comments
A. Waiver of Proposed Rulemaking
B. Response to Comments
XXII. Economic Analyses
A. Regulatory Impact Analysis
2. Statement of Need
3. Overall Impacts for OPPS and ASC Payment Provisions
4. Detailed Economic Analyses
a. Estimated Effects of OPPS Changes in This Final Rule With Comment Period
(1) Limitations of Our Analysis
(2) Estimated Effects of OPPS Changes on Hospitals
(3) Estimated Effects of OPPS Changes on CMHCs
(4) Estimated Effect of OPPS Changes on Beneficiaries
(5) Estimated Effects of OPPS Changes on Other Providers
(6) Estimated Effects of OPPS Changes on the Medicare and Medicaid Programs
(7) Alternative OPPS Policies Considered
b. Estimated Effects of ASC Payment System Final Policies
(1) Limitations of Our Analysis
(2) Estimated Effects of ASC Payment System Final Policies on ASCs
(3) Estimated Effects of ASC Payment System Final Policies on Beneficiaries
(4) Alternative ASC Payment Policies Considered
c. Effects of the Revisions to the QIO Regulations
d. Accounting Statements and Tables
e. Effects of Requirements for the Hospital OQR Program
f. Effects of the EHR Electronic Reporting Pilot
g. Effects of Proposals for the ASCQR Program
h. Effects of Updates to the IRF QRP
B. Regulatory Flexibility Act (RFA) Analysis
C. Unfunded Mandates Reform Act Analysis
XXIII. Federalism Analysis
I. Summary and Background
A. Executive Summary of This Final Rule With Comment Period
In this final rule with comment period, we are updating the payment policies and payment rates for services furnished to Medicare beneficiaries in hospital outpatient departments and Ambulatory Surgical Centers (ASCs) beginning January 1, 2013. Section 1833(t) of the Social Security Act (the Act) requires us to annually review and update the relative payment weights and the conversion factor for services payable under the Outpatient Prospective Payment System (OPPS). Under section 1833(i) of the Act, we annually review and update the ASC payment rates. We describe these and various other statutory authorities in the relevant sections of this final rule.
In addition to establishing payment rates for CY 2013, we are updating and implementing new requirements under the Hospital Outpatient Quality Reporting (OQR) Program, the Ambulatory Surgical Center Quality Reporting (ASCQR) Program, and the Inpatient Rehabilitation Facility (IRF) Quality Reporting Program. We are continuing the electronic reporting pilot for the Electronic Health Record (EHR) Incentive Program and making revisions to the regulations governing the Quality Improvement Organizations (QIOs), including the secure transmittal of electronic medical information, beneficiary complaint resolution and notification processes, and technical corrections. The technical changes to the QIO regulations that we are making to improve the regulations reflect CMS' commitment to the principles of the President's Executive Order on Regulatory Reform, Executive Order 13563 (January 18, 2011).
2. Summary of the Major Provisions
• OPPS Update:For CY 2013, we are increasing the payment rates under the OPPS by an Outpatient Department (OPD) fee schedule increase factor of 1.8 percent. This increase is based on the final hospital inpatient market basket percentage increase of 2.6 percent for inpatient services paid under the hospital inpatient prospective payment system (IPPS), minus the multifactor productivity (MFP) adjustment of 0.7 percentage points, and minus a 0.1 percentage point adjustment required by the Affordable Care Act. Under this final rule with comment period, we estimate that total payments for CY 2013, including beneficiary cost-sharing, to the more than 4,000 facilities paid under the OPPS (including general acute care hospitals, children's hospitals, cancer hospitals, and community mental health centers (CMHCs)), will be approximately $48.1 billion, an increase of approximately $4.6 billion compared to CY 2012 payments, or $600 million excluding our estimated changes in enrollment, utilization, and case-mix.
We are continuing to implement the statutory 2.0 percentage point reduction in payments for hospitals failing to meet the hospital outpatient quality reporting requirements, by applying a reporting factor of 0.980 to the OPPS payments and copayments for all applicable services.
•Geometric Mean-Based Relative Payment Weights:CMS has discretion under the statute to set OPPS payments based upon either the estimated mean or median costs of services within an Ambulatory Payment Classification (APC) group, the unit of payment. To improve our cost estimation process, forCY 2013 we are using the geometric mean costs of services within an APC to determine the relative payment weights of services, rather than the median costs that we have used since the inception of the OPPS. Our analysis shows that the change to means will have a limited payment impact on most providers, with a small number experiencing payment gain or loss based on their service-mix.
•Rural Adjustment:We are continuing the adjustment of 7.1 percent to the OPPS payments to certain rural sole community hospitals (SCHs), including essential access community hospitals (EACHs). This adjustment will apply to all services paid under the OPPS, excluding separately payable drugs and biologicals, devices paid under the pass-through payment policy, and items paid at charges reduced to cost.
•Cancer Hospital Payment Adjustment:For CY 2013, we are continuing our policy to provide additional payments to cancer hospitals so that the hospital's payment-to-cost ratio (PCR) with the payment adjustment is equal to the weighted average PCR for the other OPPS hospitals using the most recent submitted or settled cost report data. Based on those data, a target PCR of 0.91 will be used to determine the CY 2013 cancer hospital payment adjustment to be paid at cost report settlement. That is, the payment amount associated with the cancer hospital payment adjustment will be the additional payment needed to result in a PCR equal to 0.91 for each cancer hospital.
•Payment Adjustment Policy for Radio-Isotopes Derived from Non-Highly Enriched Uranium Sources:We are exercising our statutory authority to make payment adjustments necessary to ensure equitable payments in order to provide an adjustment for CY 2013 to cover the marginal cost of hospital conversion to the use of non-HEU sources of radio-isotopes used in medical imaging. The adjustment will cover the marginal cost of radio-isotopes produced from non-HEU sources over the costs of radio-isotopes produced by HEU sources.
•Payment of Drugs, Biologicals, and Radiopharmaceuticals:For CY 2013, payment for the acquisition and pharmacy overhead costs of separately payable drugs and biologicals that do not have pass-through status will be set at the statutory default of average sales price (ASP) plus 6 percent.
•Supervision of Hospital Outpatient Therapeutic Services:We are clarifying the application of the supervision regulations to physical therapy, speech-language pathology, and occupational therapy services that are furnished in OPPS hospitals and critical access hospitals (CAHs). In addition, in this final rule we note that we will extend the enforcement instruction one final year through CY 2013. This additional year, which we expect will be the final year of the extension, will provide additional opportunities for stakeholders to bring their issues to the Hospital Outpatient Payment Panel.
•Outpatient Status:We are concerned about recent increases in the length of time that Medicare beneficiaries spend as outpatients receiving observation services. In addition, hospitals continue to express concern about Medicare Part A to Part B rebilling policies when a hospital inpatient claim is denied because the inpatient admission was not medically necessary. In the CY 2013 OPPS/ASC proposed rule (77 FR 45155 through 45157), we provided an update on the Part A to Part B Rebilling Demonstration that is in effect for CY 2012 through CY 2014, which was designed to assist us in evaluating these issues. We also solicited public comments on potential clarifications or changes to our policies regarding patient status that may be appropriate, which we discuss in this final rule with comment period.
•Ambulatory Surgical Center Payment Update:For CY 2013, we are increasing payment rates under the ASC payment system by 0.6 percent. This increase is based on a projected CPI-U update of 1.4 percent minus a multifactor productivity adjustment required by the Affordable Care Act that is projected to be 0.8 percent. Based on this update, we estimate that total payments to ASCs (including beneficiary cost-sharing and estimated changes in enrollment, utilization, and case-mix), for CY 2013 will be approximately $4.074 billion, an increase of approximately $310 million compared to estimated CY 2012 payments.
•New Technology Intraocular Lenses:We are revising the regulations governing payments for new technology intraocular lenses (NTIOLs) to require that the IOL's labeling, which must be approved by the FDA, contain a claim of a specific clinical benefit based on a new lens characteristic in comparison to currently available IOLs. We also are revising the regulations to require that any specific clinical benefit referred to in § 416.195(a)(2) must be supported by evidence that demonstrates that the IOL results in a measurable, clinically meaningful, improved outcome.
•Ambulatory Surgical Center Quality Reporting (ASCQR) Program:For the ASCQR Program, we address the public comments received as a result of our solicitation in the proposed rule on our approach for future measure selection and development as well as certain measures for future potential inclusion in the ASCQR Program measure set. We are finalizing our approach to future measure selection and development for the ASCQR Program. For the CY 2015 payment determination and subsequent years' payment determinations, we are adopting requirements for claims-based measures regarding the dates for submission and payment of claims and data completeness. We also are finalizing our policy regarding how the payment rates will be reduced in CY 2014 and in subsequent calendar years for ASCs that fail to meet program requirements, and we are clarifying our policy on updating measures.
•Hospital Outpatient Quality Reporting (OQR) Program:For the Hospital OQR Program, we are not establishing any new measures for CY 2013. We also are not specifying any new targeting criteria to select hospitals for validation of medical records. We are confirming the removal or suspension of data collection for specific measures. We are specifying that the criteria we will consider when determining whether to remove measures for the Hospital Inpatient Quality Reporting (IQR) Program will also apply to the Hospital OQR Program. We are providing that measures adopted in future rulemaking are automatically adopted for all subsequent year payment determinations unless we remove, suspend, or replace them. We are making changes to administrative forms used in the program. We are extending the deadline for submitting a notice of participation form and to enter structural measures data.
•Electronic Health Record (EHR) Incentive Program:For the EHR Incentive Program, we are extending the 2012 Medicare EHR Incentive Program Electronic Reporting Pilot for Eligible Hospitals and CAHs through 2013, exactly as finalized for 2012. We recently issued a final rule (77 FR 53968) for Stage 2 of the Medicare and Medicaid EHR Incentive Programs.
•Inpatient Rehabilitation Facility Quality Reporting Program (IRF QRP):We are: (1) Adopting updates on one (out of two) previously adopted measure for the IRF QRP that will affect annual prospective payment amounts for FY 2014; (2) adopting a nonrisk-adjusted version of an NQF-endorsed pressure ulcer measure for the IRF QRP, and we will not publicly report any pressure ulcer measure data until we begin risk adjustment of these data; (3) adopting apolicy that will provide that any measure that has been adopted for use in the IRF QRP will remain in effect until the measure is actively removed, suspended, or replaced; and (4) adopting policies regarding when notice-and-comment rulemaking will be used to update existing IRF QRP measures.
•Revisions to the Quality Improvement Organization (QIO) Regulations:We are revising the QIO program regulations to: (1) Give QIOs the authority to send and receive secure transmissions of electronic versions of medical information; (2) provide more detailed and improved procedures for QIOs when completing Medicare beneficiary complaint reviews and general quality of care reviews, including procedures related to a new alternative dispute resolution process called “immediate advocacy”; (3) increase the information beneficiaries receive in response to QIO review activities; (4) convey to Medicare beneficiaries the right to authorize the release of confidential information by QIOs; and (5) make other technical changes that are designed to improve the regulations. The technical changes to the QIO regulations that we are making to improve the regulations reflect CMS' commitment to the principles of the President's Executive Order on Regulatory Reform, Executive Order 13563 (January 18, 2011).
3. Summary of Costs and Benefits
In sections XXII. and XXIII. of this final rule with comment period, we set forth a detailed analysis of the regulatory and federalism impacts that the changes will have on affected entities and beneficiaries. Key estimated impacts include the following:
a. Impacts of the OPPS Update
(1) Impacts of All OPPS Changes
Table 57 in section XXII. of this final rule with comment period displays the distributional impact all the OPPS changes on various groups of hospitals and CMHCs for CY 2013 compared to all estimated OPPS payments in CY 2012. We estimate that the policies in this final rule will result in a 1.9 percent overall increase in OPPS payments to providers. We estimate that the increase in OPPS expenditures, including beneficiary cost-sharing, will be approximately $600 million, not taking into account potential changes in enrollment, utilization, and case-mix. Taking into account estimated spending changes that are attributable to these factors, we estimate an increase of approximately $4.571 billion in OPPS expenditures, including beneficiary cost-sharing, for CY 2013 compared to CY 2012 OPPS expenditures. We estimate that total OPPS payments, including beneficiary cost-sharing, will be $48.1 billion for CY 2013.
We estimated the isolated impact of our OPPS policies on CMHCs because CMHCs are only paid for partial hospitalization services under the OPPS. Continuing the provider-specific structure that we adopted for CY 2011 and basing payment fully on the type of provider furnishing the service, we estimate a 4.4 percent decrease in CY 2013 payments to CMHCs relative to their CY 2012 payments.
(2) Impacts of Basing APC Relative Payment Weights on Geometric Mean Costs
We estimate that our final policy to base the APC relative payment weights on the geometric mean costs rather than the median costs of services within an APC will not significantly impact most providers. Payments to very low volume urban hospitals and to hospitals for which disproportionate share hospital (DSH) data are not available will increase by an estimated 2.5 and 4.3 percent, respectively. The hospitals for which DSH data are not available are largely non-IPPS psychiatric hospitals. In contrast, payments to CMHCs will decrease by an estimated 3.9 percent due to basing the relative payment weights on the geometric mean costs of services rather than the median costs of services.
(3) Impacts of the Updated Wage Indices
We estimate no significant impacts related to updating the wage indices and applying the frontier State wage index. Adjustments to the wage indices other than the frontier State wage adjustment will not significantly affect most hospitals. The updated wage indices will most affect urban hospitals in the Pacific and East South Central regions and rural hospitals in the Mountain and Pacific regions.
(4) Impacts of the Rural Adjustment and the Cancer Hospital Payment Adjustment
There are no significant impacts of our CY 2013 payment policies for hospitals that are eligible for the rural adjustment or for the cancer hospital payment adjustment. We are not making any change in policies for determining the rural and cancer hospital payment adjustments, and the adjustment amounts do not significantly impact the budget neutrality adjustments for these policies.
(5) Impacts of the OPD Fee Schedule Increase Factor
We estimate that, for most hospitals, the application of the OPD fee schedule increase factor of 1.8 percent to the conversion factor for CY 2013 will mitigate the small negative impacts of the budget neutrality adjustments. Certain low volume hospitals and hospitals for which DSH data are not available will experience larger increases ranging from 4.5 percent to 8.2 percent. As a result of the OPD fee schedule increase factor and other budget neutrality adjustments, we estimate that rural and urban hospitals will experience similar increases of approximately 1.8 percent for urban hospitals and 2.1 percent for rural hospitals. Classifying hospitals by teaching status or type of ownership suggests that these hospitals will receive similar increases.
b. Impacts of the ASC Payment Update
For impact purposes, the surgical procedures on the ASC list of covered procedures are