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Daily Rules, Proposed Rules, and Notices of the Federal Government

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 416, 419, 476, 478, 480, and 495

[CMS-1589-FC]

RIN 0938-AR10

Medicare and Medicaid Programs: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; Electronic Reporting Pilot; Inpatient Rehabilitation Facilities Quality Reporting Program; Revision to Quality Improvement Organization Regulations

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule with comment period.
SUMMARY: This final rule with comment period revises the Medicare hospital outpatient prospective payment system (OPPS) and the Medicare ambulatory surgical center (ASC) payment system for CY 2013 to implement applicable statutory requirements and changes arising from our continuing experience with these systems. In this final rule with comment period, we describe the changes to the amounts and factors used to determine the payment rates for Medicare services paid under the OPPS and those paid under the ASC payment system. In addition, this final rule with comment period updates and refines the requirements for the Hospital Outpatient Quality Reporting (OQR) Program, the ASC Quality Reporting (ASCQR) Program, 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 revising the various regulations governing Quality Improvement Organizations (QIOs), including the secure transmittal of electronic medical information, beneficiary complaint resolution and notification processes, and technical changes. The technical changes to the QIO regulations reflect CMS' commitment to the general principles of the President's Executive Order on Regulatory Reform, Executive Order 13563 (January 18, 2011).
DATES: Comment Period:To be assured consideration, comments on the payment classifications assigned to HCPCS codes identified in Addenda B, AA, and BB of this final rule with comment period with the "NI" comment indicator and on other areas specified throughout this final rule with comment period must be received at one of the addresses provided in theADDRESSESsection no later than 5 p.m. EST on December 31, 2012.

Application Deadline--New Class of New Technology Intraocular Lenses:Requests for review of applications for a new class of new technology intraocular lenses must be received by 5 p.m. EST on March 1, 2013, at the following address: ASC/NTOL, Division of Outpatient Care, Mailstop C4-05-17, Centers for Medicare and Medicaid Services, 7500 Security Boulevard, Baltimore, MD 21244-1850.

ADDRESSES: You may submit comments in one of four ways (no duplicates, please):

1.Electronically.You may (and we encourage you to) submit electronic comments on this regulation tohttp://www.regulations.gov. Follow the instructions under the "submit a comment" tab.

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-1589-FC, P.O. Box 8013, Baltimore, MD 21244-1850.

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 via express or overnight mail to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1589-FC, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.

4.By hand or courier.If you prefer, you may deliver (by hand or courier) your written comments before the close of the comment period to either of the following addresses:

a. For delivery in Washington, DC--Centers for Medicare & Medicaid Services, Department of Health and Human Services, Room 445-G, Hubert H. Humphrey Building, 200 Independence Avenue SW., Washington, DC 20201.

(Because access to the interior of the Hubert H. Humphrey Building is not readily available to persons without Federal Government identification, commenters are encouraged to leave their comments in the CMS drop slots located in the main lobby of the building. A stamp-in clock is available for persons wishing to retain a proof of filing by stamping in and retaining an extra copy of the comments being filed.)

b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid Services, Department of Health and Human Services, 7500 Security Boulevard, Baltimore, MD 21244-1850.

If you intend to deliver your comments to the Baltimore address, please call the telephone number (410) 786-7195 in advance to schedule your arrival with one of our staff members.

Comments mailed to the addresses indicated as appropriate for hand or courier delivery may be delayed and received after the comment period.

For information on viewing public comments, we refer readers to the beginning of theSUPPLEMENTARY INFORMATIONsection.

FOR FURTHER INFORMATION CONTACT: Marjorie Baldo, (401) 786-4617, for issues related to new CPT and Level II HCPCS codes, exceptions to the 2 times rule, and new technology APCs.

Anita Bhatia, (410) 786-7236, Ambulatory Surgical Center Quality Reporting (ASCQR) Program--Program Administration and Reconsideration Issues.

Douglas Brown, (410) 786-0028, for issues related to Electronic Health Record (EHR) Incentive Program Electronic Reporting Pilot.

Carrie Bullock, (401) 786-0378, for issues related to blood products.

Erick Chuang, (410) 786-1816, for issues related to OPPS APC weights, mean calculation, copayments, wage index, outlier payments, and rural hospital payments.

Caroline Gallaher, (410) 786-8705, for issues related to Inpatient Rehabilitation Facility (IRF) Quality Reporting Program.

Shaheen Halim (410) 786-0641, Hospital Outpatient Quality Reporting Program (OQR)--Measures Issues and Publication of Hospital OQR Program Data, and Ambulatory Surgical Center Quality Reporting (ASCQR) Program--Measures Issues and Publication of ASCQR Program Data.

Twi Jackson, (410) 786-1159, for issues related to device-dependent APCs, no cost/full credit and partial credit devices, hospital outpatient visits, extended assessment and management composite APCs, and inpatient-only procedures.

Thomas Kessler, (401) 786-1991, for issues related to QIO regulations.

Marina Kushnirova, (410) 786-2682, for issues related to OPPS status indicators and comment indicators.

Barry Levi, (410) 786-4529, for issues related to OPPS pass-through devices, brachytherapy sources, intraoperative radiation therapy (IORT), brachytherapy composite APC, multiple imaging composite APCs, cardiac resynchronization therapy composite APC, and cardiac electrophysiologic evaluation and ablation composite APC.

Jana Lindquist, (410) 786-4533, for issues related to partial hospitalization and community mental health center (CMHC) issues.

Ann Marshall, (410) 786-3059, for issues related to hospital outpatient supervision, outpatient status, proton beam therapy, and the Hospital Outpatient Payment (HOP) Panel.

John McInnes, (410) 786-0378, for issues related to new technology intraocular lenses (NTIOLs) and packaged items/services.

James Poyer, (410) 786-2261, Hospital Outpatient Quality Reporting--Program Administration, Validation, and Reconsideration Issues.

Char Thompson, (410) 786-2300, for issues related to OPPS drugs, radiopharmaceuticals, biologicals, blood clotting factors, cost-to-charge ratios (CCRs), and ambulatory surgical center (ASC) payments.

Marjorie Baldo, (410) 786-4617, for all other issues related to hospital outpatient and ambulatory surgical center payments not previously identified.

SUPPLEMENTARY INFORMATION:

Inspection of Public Comments:All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following Web site as soon as possible after they have been received:http://www.regulations.gov. Follow the search instructions on that Web site to view public comments.

Comments received timely will also be available for public inspection, generally beginning approximately 3 weeks after publication of the rule, at the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, MD 21244, on Monday through Friday of each week from 8:30 a.m. to 4:00 p.m. EST. To schedule an appointment to view public comments, phone 1-800-743-3951.

Electronic Access

ThisFederal Registerdocument is also available from theFederal Registeronline database throughFederal Digital System (FDsys),a service of the U.S. Government Printing Office. This database can be accessed via the internet athttp://www.gpo.gov/fdsys/.

Addenda Available Only Through the Internet on the CMS Web Site

In the past, a majority of the Addenda referred to in our OPPS/ASC proposed and final rules were published in theFederal Registeras part of the annual rulemakings. However, beginning with the CY 2012 OPPS/ASC proposed rule, all of the Addenda no longer appear in theFederal Registeras 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 will be published and available only on the CMS Web site. The Addenda relating to the OPPS are available at:http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html. The Addenda relating to the ASC payment system are available at:http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/index.html. Readers who experience any problems accessing any of the Addenda that are posted on the CMS Web site identified above should contact Charles Braver at (410) 786-0378.

Alphabetical List of Acronyms Appearing in This Federal Register Document AHAAmerican Hospital Association AMAAmerican Medical Association APCAmbulatory Payment Classification ASCAmbulatory surgical center ASCQRAmbulatory Surgical Center Quality Reporting ASPAverage sales price AWPAverage wholesale price BBABalanced Budget Act of 1997, Public Law 105-33 BBRAMedicare, Medicaid, and SCHIP [State Children's Health Insurance Program] Balanced Budget Refinement Act of 1999, Public Law 106-113 BIPAMedicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000, Public Law 106-554 BLSBureau of Labor Statistics CAHCritical access hospital CAPCompetitive Acquisition Program CASPERCertification and Survey Provider Enhanced Reporting CAUTICatheter associated urinary tract infection CBSACore-Based Statistical Area CCICorrect Coding Initiative CCNCMS Certification Number CCRCost-to-charge ratio CDCCenters for Disease Control and Prevention CEOChief executive officer CERTComprehensive Error Rate Testing CFRCode of Federal Regulations CLFSClinical Laboratory Fee Schedule CMHCCommunity mental health center CMSCenters for Medicare & Medicaid Services CoP[Medicare] Condition of participation CPI-UConsumer Price Index for All Urban Consumers CPTCurrent Procedural Terminology (copyrighted by the American Medical Association) CQMClinical quality measure CRChange request CSACConsensus Standards Approval Committee CYCalendar year DFODesignated Federal Official DRADeficit Reduction Act of 2005, Public Law 109-171 DRGDiagnosis-Related Group DSHDisproportionate share hospital EACHEssential access community hospital eCQMElectronically specified clinical quality measure ECTElectroconvulsive therapy EDEmergency department E/MEvaluation and management EHRElectronic health record ESRDEnd-stage renal disease FACAFederal Advisory Committee Act, Public Law 92-463 FDAFood and Drug Administration FFS[Medicare] Fee-for-service FYFiscal year GAOGovernment Accountability Office HAIHealthcare-associated infection HCERAHealth Care and Education Reconciliation Act of 2010, Public Law 111-152 HCPCSHealthcare Common Procedure Coding System HCRISHospital Cost Report Information System HEUHighly enriched uranium HIPAAHealth Insurance Portability and Accountability Act of 1996, Public Law 104-191 HITECHHealth Information Technology for Economic and Clinical Health [Act] (found in the American Recovery and Reinvestment Act of 2009, Public Law 111-5) HOPHospital Outpatient Payment [Panel] HOPDHospital outpatient department ICD-9-CMInternational Classification of Diseases, Ninth Revision, Clinical Modification ICDImplantable cardioverter defibrillator ICUIntensive care unit IHSIndian Health Service IMRTIntensity Modulated Radiation Therapy I/OCEIntegrated Outpatient Code Editor IOLIntraocular lens IOMInstitute of Medicine IORTIntraoperative radiation treatment IPFInpatient Psychiatric Facility IPPS[Hospital] Inpatient Prospective Payment System IQR[Hospital] Inpatient Quality Reporting IRFInpatient rehabilitation facility IRF-PAIInpatient Rehabilitation Facility-Patient Assessment Instrument IRF QRPInpatient Rehabilitation Facility Quality Reporting Program LDRLow dose rate LOSLength of Stay LTCHLong-term care hospital MACMedicare Administrative Contractor MAPMeasure Application Partnership MedPACMedicare Payment Advisory Commission MEIMedicare Economic Index MFPMultifactor productivity MGCRBMedicare Geographic Classification Review Board MIEA-TRHCAMedicare Improvements and Extension Act under Division B, Title I of the Tax Relief Health Care Act of 2006, Public Law 109-432 MIPPAMedicare Improvements for Patients and Providers Act of 2008, Public Law 110-275 MMAMedicare Prescription Drug, Improvement, and Modernization Act of 2003, Public Law 108-173 MMEAMedicare and Medicaid Extenders Act of 2010, Public Law. 111-309 MMSEAMedicare, Medicaid, and SCHIP Extension Act of 2007, Public Law 110-173 MPFSMedicare Physician Fee Schedule MRAMagnetic resonance angiography MRIMagnetic resonance imaging MSAMetropolitan Statistical Area NCCINational Correct Coding Initiative NHSNNational Healthcare Safety Network NQFNational Quality Forum NTIOLNew technology intraocular lens NUBCNational Uniform Billing Committee OACT[CMS] Office of the Actuary OBRAOmnibus Budget Reconciliation Act of 1996, Public Law 99-509 OIG[HHS] Office of the Inspector General OMBOffice of Management and Budget OPD[Hospital] Outpatient Department OPPS[Hospital] Outpatient Prospective Payment System OPSFOutpatient Provider-Specific File OQR[Hospital] Outpatient Quality Reporting OTOccupational therapy PCRPayment-to-cost ratio PEPractice expense PEPPERProgram for Evaluating Payment Patterns Electronic Report PHPPartial hospitalization program PHSPublic Health Service [Act], Public Law 96-88 PPIProducer Price Index PPSProspective payment system PQRSPhysician Quality Reporting System PTPhysical therapy QDCQuality data code QIOQuality Improvement Organization RACRecovery Audit Contractor RFARegulatory Flexibility Act RTIResearch Triangle Institute, International RVURelative value unit SCHSole community hospital SCODSpecified covered outpatient drugs SIStatus indicator SIRStandardized infection ratio SLPSpeech-language pathology SNFSkilled Nursing Facility SRSStereotactic Radiosurgery TEPTechnical Expert Panel TMSTranscranial Magnetic Stimulation Therapy TOPsTransitional Outpatient Payments URUtilization review USPSTFUnited States Preventive Services Task Force UTIUrinary tract infection VBPValue-based purchasing WACWholesale acquisition cost Table of Contents I. Summary and Background A. Executive Summary of This Final Rule With Comment Period 1. Purpose 2. Summary of the Major Provisions 3. Summary of Costs and Benefits 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), Formerly Named the Advisory Panel on Ambulatory Payment Classification Groups (APC Panel) 1. Authority of the Panel 2. Establishment of the Panel 3. Panel Meetings and Organizational Structure F. Public Comments Received in Response to the CY 2013 OPPS/ASC Proposed Rule G. Public Comments Received on the CY 2012 OPPS/ASC Final Rule With Comment Period II. Updates Affecting OPPS Payments A. Recalibration of APC Relative Payment Weights 1. Database Construction a. Database Source and Methodology b. Use of Single and Multiple Procedure Claims c. Calculation and Use of Cost-to-Charge Ratios (CCRs) 2. Data Development Process and Calculation of Costs Used for Ratesetting a. Claims Preparation b. Splitting Claims and Creation of “Pseudo” Single Procedure Claims (1) Splitting Claims (2) Creation of “Pseudo” Single Procedure Claims c. Completion of Claim Records and Geometric Mean Cost Calculations (1) General Process (2) Recommendations of the Advisory Panel on Hospital Outpatient Payment Regarding Data Development d. Calculation of Single Procedure APC Criteria-Based Costs (1) Device-Dependent APCs (2) Blood and Blood Products (3) Brachytherapy Sources e. Calculation of Composite APC Criteria-Based Costs (1) Extended Assessment and Management Composite APCs (APCs 8002 and 8003) (2) Low Dose Rate (LDR) Prostate Brachytherapy Composite APC (APC 8001) (3) Cardiac Electrophysiologic Evaluation and Ablation Composite APC (APC 8000) (4) Mental Health Services Composite APC (APC 0034) (5) Multiple Imaging Composite APCs (APCs 8004, 8005, 8006, 8007, and 8008) (6) Cardiac Resynchronization Therapy Composite APC (APC 0108) f. Geometric Mean-Based Relative Payment Weights 3. Changes to Packaged Services a. Background b. Clarification of Regulations at 42 CFR 419.2(b) c. Packaging Recommendations of the HOP Panel (“The Panel”) at its February 2012 Meeting d. Packaging Recommendations of the HOP Panel (“The Panel”) at its August 2012 Meeting e. Other Packaging Proposals and Policies for CY 2013 f. Packaging of Drugs, Biologicals, and Radiopharmaceuticals (1) Existing Packaging Policies (2) Clarification of Packaging Policy for Anesthesia Drugs g. Packaging of Payment for Diagnostic Radiopharmaceuticals, Contrast Agents, and Implantable Biologicals (“Policy-Packaged” Drugs and Devices) h. Summary of Proposals 4. Calculation of OPPS Scaled Payment Weights B. Conversion Factor Update C. Wage Index Changes D. Statewide Average Default CCRs E. OPPS Payments to Certain Rural and Other Hospitals 1. Hold Harmless Transitional Payment Changes 2. Adjustment for Rural SCHs and EACHs Under Section 1833(t)(13)(B) of the Act F. OPPS Payment to Certain Cancer Hospitals Described by Section 1886(d)(1)(B)(v) of the Act 1. Background 2. Payment Adjustment for Certain Cancer Hospitals for CY 2013 G. Hospital Outpatient Outlier Payments 1. Background 2. Proposed Outlier Calculation 3. Final Outlier Calculation 4. Outlier Reconciliation H. Calculation of an Adjusted Medicare Payment From the National Unadjusted Medicare Payment I. Beneficiary Copayments 1. Background 2. OPPS Copayment Policy 3. Calculation of an Adjusted Copayment Amount for an APC Group III. OPPS Ambulatory Payment Classification (APC) Group Policies A. OPPS Treatment of New CPT and Level II HCPCS Codes 1. Treatment of New CY 2012 Level II HCPCS and CPT Codes Effective April 1, 2012 and July 1, 2012 for Which We Solicited Public Comments in the CY 2013 OPPS/ASC Proposed Rule 2. Process for New Level II HCPCS Codes That Will Be Effective October 1, 2012 and New CPT and Level II HCPCS Codes That Will Be Effective January 1, 2013 for Which We Are Soliciting Public Comments in this CY 2013 OPPS/ASC Final Rule with Comment Period B. OPPS Changes—Variations within APCs 1. Background 2. Application of the 2 Times Rule 3. Exceptions to the 2 Times Rule C. New Technology APCs 1. Background 2. Movement of Procedures From New Technology APCs to Clinical APCs 3. Payment Adjustment Policy for Radioisotopes Derived From Non-Highly Enriched Uranium (HEU) Sources a. Background b. Payment Policy D. OPPS APC-Specific Policies 1. Cardiovascular and Vascular Services a. Cardiac Telemetry (APC 0213) b. Mechanical Thrombectomy (APC 0653) c. Non-Congenital Cardiac Catheterization (APC 0080) d. Endovascular Revascularization of the Lower Extremity (APCs 0083, 0229, and 0319) e. External Electrocardiographic Monitoring (APC 0097) f. Echocardiography (APCs 0177, 0178, 0269, 0270, and 0697) 2. Gastrointestinal Services a. Laparoscopic Adjustable Gastric Band (APC 0132) b. Transoral Incisionless Fundoplication (APC 0422) c. Gastrointestinal Transit and Pressure Measurement (APC 0361) 3. Integumentary System Services a. Extracorporeal Shock Wave Wound Treatment (APC 0340) b. Application of Skin Substitute (APCs 0133 and 0134) c. Low Frequency, Non-Contact, Non-Thermal Ultrasound (APC 0015) 4. Nervous System Services a. Scrambler Therapy (APC 0275) b. Transcranial Magnetic Stimulation Therapy (TMS) (APC 0216) c. Paravertebral Neurolytic Agent (APC 0207) d. Programmable Implantable Pump (APC 0691) e. Revision/Removal of Neurostimulator Electrodes (APC 0687) 5. Ocular Services: Placement of Amniotic Membrane (APC 0233) 6. Radiology Oncology a. Proton Beam Therapy (APCs 0664 and 0667) b. Device Construction for Intensity Modulated Radiation Therapy (IMRT) (APC 0305) c. Other Radiation Oncology Services (APCs 0310 and 0412) d. Stereotactic Radiosurgery (SRS) Treatment Delivery Services (APCs 0065, 0066, 0067 and 0127) e. Intraoperative Radiation Therapy (IORT) (APC 0412) (1) Background (2) CY 2013 Proposals and Final Policies for CPT Codes 77424, 77425, and 77469 7. Imaging a. Non-Ophthalmic Fluorescent Vascular Angiography (APC 0397) b. Level II Nervous System Imaging (APC 0402) c. Computed Tomography of Abdomen/Pelvis (APCs 0331 and 0334) 8. Respiratory Services a. Bronchoscopy (APC 0415) b. Upper Airway Endoscopy (APC 0075) 9. Other Services a. Payment for Molecular Pathology Services b. Bone Marrow (APC 0112) IV. OPPS Payment for Devices A. Pass-Through Payments for Devices 1. Expiration of Transitional Pass-Through Payments for Certain Devices a. Background b. CY 2013 Policy 2. Provisions for Reducing Transitional Pass-Through Payments to Offset Costs Packaged into APC Groups a. Background b. CY 2013 Policy 3. Clarification of Existing Device Category Criterion a. Background b. Clarification of CY 2013 Policy B. Adjustment to OPPS Payment for No Cost/Full Credit and Partial Credit Devices 1. Background 2. APCs and Devices Subject to the Adjustment Policy V. OPPS Payment Changes for Drugs, Biologicals, and Radiopharmaceuticals A. OPPS Transitional Pass-Through Payment for Additional Costs of Drugs, Biologicals, and Radiopharmaceuticals 1. Background 2. Drugs and Biologicals With Expiring Pass-Through Status in CY 2012 3. Drugs, Biologicals, and Radiopharmaceuticals With New or Continuing Pass-Through Status in CY 2013 4. Provisions for Reducing Transitional Pass-Through Payments for Diagnostic Radiopharmaceuticals and Contrast Agents to Offset Costs Packaged Into APC Groups a. Background b. Payment Offset Policy for Diagnostic Radiopharmaceuticals c. Payment Offset Policy for Contrast Agents B. OPPS Payment for Drugs, Biologicals, and Radiopharmaceuticals Without Pass-Through Status 1. Background 2. Criteria for Packaging Payment for Drugs, Biologicals, and Radiopharmaceuticals a. Background b. Cost Threshold for Packaging of Payment for HCPCS Codes That Describe Certain Drugs, Nonimplantable Biologicals, and Therapeutic Radiopharmaceuticals (“Threshold-Packaged Drugs”) c. Packaging Determination for HCPCS Codes That Describe the Same Drug or Biological but Different Dosages 3. Payment for Drugs and Biologicals Without Pass-Through Status That Are Not Packaged a. Payment for Specified Covered Outpatient Drugs (SCODs) and Other Separately Payable and Packaged Drugs and Biologicals b. CY 2013 Payment Policy 4. Payment Policy for Therapeutic Radiopharmaceuticals 5. Payment for Blood Clotting Factors 6. Payment for Nonpass-Through Drugs, Biologicals, and Radiopharmaceuticals With HCPCS Codes, but Without OPPS Hospital Claims Data VI. Estimate of OPPS Transitional Pass-Through Spending for Drugs, Biologicals, Radiopharmaceuticals, and Devices A. Background B. Estimate of Pass-Through Spending VII. OPPS Payment for Hospital Outpatient Visits A. Background B. Policies for Hospital Outpatient Visits C. Transitional Care Management VIII. Payment for Partial Hospitalization Services A. Background B. PHP APC Update for CY 2013 C. Coding Changes D. Separate Threshold for Outlier Payments to CMHCs IX. Procedures That Would Be Paid Only as Inpatient Procedures A. Background B. Changes to the Inpatient List X. Policies for the Supervision of Outpatient Services in Hospitals and CAHs A. Conditions of Payment for Physical Therapy, Speech-Language Pathology, and Occupational Therapy Services in Hospitals and CAHs B. Enforcement Instruction for the Supervision of Outpatient Therapeutic Services in CAHs and Certain Small Rural Hospitals XI. Outpatient Status: Solicitation of Public Comments in the CY 2013 OPPS/ASC Proposed Rule A. Background B. Summary of Public Comments Received 1. Part A to Part B Rebilling 2. Clarifying Current Admission Instructions or Establishing Specified Clinical Criteria 3. Hospital Utilization Review 4. Prior Authorization 5. Time-Based Criteria for Inpatient Admission 6. Payment Alignment 7. Public Comments on Other Topics a. Rules for the External Review of Inpatient Claims b. Improving Beneficiary Protections c. Revising the Qualifying Criteria for Skilled Nursing Facility (SNF) Coverage C. Summary XII. CY 2013 OPPS Payment Status and Comment Indicators A. CY 2013 OPPS Payment Status Indicator Definitions B. CY 2013 Comment Indicator Definitions XIII. OPPS Policy and Payment Recommendations A. MedPAC Recommendations B. GAO Recommendations C. OIG Recommendations XIV. Updates to the Ambulatory Surgical Center (ASC) Payment System A. Background 1. Legislative History, Statutory Authority, and Prior Rulemaking for the ASC Payment System 2. Policies Governing Changes to the Lists of Codes and Payment Rates for ASC Covered Surgical Procedures and Covered Ancillary Services B. Treatment of New Codes 1. Process for Recognizing New Category I and Category III CPT Codes and Level II HCPCS Codes 2. Treatment of New Level II HCPCS Codes and Category III CPT Codes Implemented in April and July 2012 for Which We
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 (1) Background (2) Changes for CY 2013 to Covered Surgical Procedures Designated as Office-Based c. ASC Covered Surgical Procedures Designated as Device-Intensive (1) Background (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 a. Background 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 a. Background 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 1. Background 2. ASC Payment and Comment Indicators G. ASC Policy and Payment Recommendations H. Calculation of the ASC Conversion Factor and the ASC Payment Rates 1. Background 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 A. Background 1. Overview 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 1. Background 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 a. Background 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 A. Background 1. Overview 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 a. Background 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 a. Background 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 A. Overview 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 1. Introduction 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 D. Conclusion XXIII. Federalism Analysis Regulation Text I. Summary and Background A. Executive Summary of This Final Rule With Comment Period 1. Purpose

In this final rule with comment period, we are updating the payment policies and payment rates for services furnished to Medicare beneficiaries in hospital outpatient departments 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