Medicare and Medicaid Programs: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems; Quality Reporting Programs; Overall Hospital Quality Star Ratings; and Hospital Price Transparency nts applied to the IPPS wage index. 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 and the previously described proposed transitional payment exception for hospitals significantly impacted by the discontinuation of the low wage index hospital policy. For CMHCs, for CY 2026, 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 2026 would continue to include the rural floor adjustment and any policies and adjustments applied to the IPPS wage index. 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 VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00039 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 33514 Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 Frm 00039 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 33514 Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules adjustment because that adjustment only applies to hospitals. Table 4A associated with the FY 2026 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-2026-ipps-proposed-rule-home-page) identifies counties that would be eligible for the out-migration adjustment. Table 2 associated with the FY 2026 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 2026. We are including the outmigration adjustment information from Table 2 associated with the FY 2026 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 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 2026 IPPS wage index tables and Addendum L. D. Proposed Statewide Average Default Cost-to-Charge Ratios (CCRs) 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 assign 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 proposed rule, which is posted on the CMS website. We propose to calculate the default ratios for CY 2026 using the mo tewide average CCRs, we refer readers to the Claims Accounting Narrative for this proposed rule, which is posted on the CMS website. We propose to calculate the default ratios for CY 2026 using the most recent cost report data. We will update these ratios in the final rule with comment period if more recent cost report data are available. We no longer publish a table in the Federal Register containing the statewide average CCRs in the annual OPPS/ASC proposed rule and final rule with comment period. These CCRs and the upper limit CCR value at which we would apply statewide CCRs will be available for download with each OPPS/ ASC CY proposed rule and final 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 link on the left of the page titled ‘‘Annual Policy Files’’ and then select the relevant year to download the statewide CCRs and upper limits in the ‘‘Downloads’’ section of the web page. 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 2026 I loads’’ section of the web page. 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 2026 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, we finalized a payment adjustment for rural SCHs of 7.1 percent for all s areas and hospitals in urban areas. Our analysis showed a difference in costs for rural SCHs. Therefore, for the CY 2006 OPPS, 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 com r 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 2025 (89 FR 93977). For CY 2026, 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. F. Proposed Payment Adjustment for Certain Cancer Hospitals for CY 2026 1. Background Since the inception of the OPPS, which was authorized by the BBA, 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 fo ception of the OPPS, which was authorized by the BBA, 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 VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00040 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules 33515 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 fo 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), respective 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 es 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 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 6 displays the target PCR for purposes of the cancer hospital adjustment for CY 2012 through CY 2025. 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 2. Proposed Policy for CY 2026 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 adj ection 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 Secretary shall use a target PCR that is 1.0 percentage point less than the target PCR that would otherwise apply. Section 16002(b) of the 21st Century Cures Act also provides that, in addition to the VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00041 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00042 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules 33517 G. Proposed Hospital Outpatient Outlier Payments 1. Background 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 project here 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 2025, 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 $7,175 (the fixed-dollar amount threshold) (89 FR 93980 through 93982). 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 amo er 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 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 2024 OPPS payments, using CY 2024 claims available for this CY 2026 OPPS/ASC proposed rule, is approximately 0.82 percent. Therefore, for CY 2024, we estimate that we did not meet the outlier target by 0.18 percent of total aggregated OPPS payments. For this CY 2026 OPPS/ASC proposed rule, using CY 2024 claims data and CY 2025 payment rates, we estimate that the aggregate outlier payments for CY 2025 would be approximately 0.92 percent of the total CY 2025 OPPS payments. We provide estimated CY 2026 outlier payments for hos payment rates, we estimate that the aggregate outlier payments for CY 2025 would be approximately 0.92 percent of the total CY 2025 OPPS payments. We provide estimated CY 2026 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. 2. Proposed Outlier Calculation for CY 2026 For CY 2026, 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 ult 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 VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00043 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00044 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules 33519 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 r 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 vi d 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 0.9806 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-rela ed 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 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 e 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 2026 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. For CY 2026, we propose to apply for the CY 2026 OPPS wage index any adjustments for the FY 2026 IPPS post-reclassified wage index, including, but not limited to, the rural floor adjustment and a wage index floor of 1.00 in frontier states, in accordance with section 10324 of the Affordable Care Act of 2010. For further discussion of the wage index we are applying for the CY 2026 OPPS, including the low wage index hospital policy, we refer readers to section II.C. of this proposed rule. Step 3. Adjust the wage index of hospitals located in ndex we are applying for the CY 2026 OPPS, including the low wage index hospital policy, 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 2026 IPPS wage index, which are listed in Table 3 associated with the FY 2026 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 2026 IPPS Proposed Rule Home Page’’ and select ‘‘FY 2026 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 6 IPPS Proposed Rule Home Page’’ and select ‘‘FY 2026 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 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. Xa is the labor-related portion of the national unadjusted payment rate (wage adjusted). Xa = 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 p age 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. Xa is the labor-related portion of the national unadjusted payment rate (wa ed portion of the national unadjusted payment rate and the nonlabor-related portion of the national unadjusted payment rate. Xa is the labor-related portion of the national unadjusted payment rate (wage adjusted). VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00045 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 33520 Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules Y is the nonlabor-related portion of the national unadjusted payment rate. Adjusted Medicare Payment = Xa + 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 2026 full national unadjusted payment rate for APC 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 2026 full national unadjusted payment rate for APC 5071 is $703.32. The proposed reduced national adjusted payment rate for APC 5071 for a hospital that fails to meet the Hospital OQR Program requirements is $716.08. 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 $438.19 (0.60 * $703.32). The labor-related portion of the proposed reduced national adjusted payment is approximately $429.65 (0.60 * $716.08). Step 2 & 3. The FY 2026 wage index for a provider located in CBSA 35614 in New York, which includes the adoption of the proposed IPPS 2026 wage index policies, is 1.2589. Step 4. The wage adjusted labor- related portion of the proposed full national unadjusted payment is approximately $551.64 ($438.19 * 1.2589). The wage adjusted labor-related portion of the proposed reduced national adjusted payment is approximately $540.89 ($429.65 * 1.2589). Step 5. The payment is approximately $551.64 ($438.19 * 1.2589). The wage adjusted labor-related portion of the proposed reduced national adjusted payment is approximately $540.89 ($429.65 * 1.2589). Step 5. The nonlabor-related portion of the proposed full national unadjusted payment is approximately $292.13 (0.40 * $730.32). The nonlabor-related portion of the proposed reduced national adjusted payment is approximately $286.43(0.40 * $716.08). 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 $843.77 ($551.64 + $292.13). The sum of the portions of the proposed reduced national adjusted payment is approximately $827.32 ($540.89 + $286.43) as shown in Table 8. I. Proposed Beneficiary Copayments 1. Background 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 amoun 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 (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 or a procedure (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), 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 o 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 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 were initially implemented through program instruction, as permitted under section 1847A(c)(5)(C) of the Act. On February 9, 2023 and December 14, VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00046 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00047 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 33522 Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules quarter. This approach deviates from the rebate calculation approach set forth in § 427.302, which relies on the specified amount defined at § 427.20 even when the specified amount and the published payment amount in qu ach deviates from the rebate calculation approach set forth 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. We note that the cost sharing amounts of rebatable drugs paid under the OPPS published in the quarterly Addendum A and B updates reflect the inflation- adjusted coinsurance applied as a percent of the payment amount that would otherwise apply in accordance with section 1847A(b)(1)(B) or (C) of the Act, as determined by the Secretary pursuant to 1847A(i)(5) of the Act using the methodology in § 427.201. As we explained in the CY 2025 PFS final rule (89 FR 98237), this policy is intended to hold beneficiaries harmless in situations where the payment amount is calculated differently from the specified amount, and we believe 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’’ us 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 full discussion at 89 FR 98237 and 98238 for additional details. 2. Proposed OPPS Copayment Policy For CY 2026, 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 woul 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, 2026, 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 2026, 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 throug ed 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 amo PC. • 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 calcula ating 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 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 cop tary the 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). 3. Proposed Calculation of an Adjusted Copayment Amount for an APC Group 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, $140.07 is 20 percent of the full national unadjusted payment rate of $730.32. 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 re d 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 VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00048 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules 33523 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 proposed rule. Calculate the rural adjustment for eligible providers, as indicated in Step 6 under section II.H. of this proposed rule. 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 ma is proposed rule. 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, 2026, are shown in Addenda A and B to this 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 CY 2026 OPD fee schedule increase factor ia 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 CY 2026 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. III. Proposed OPPS Ambulatory Payment Classification (APC) Group Policies A. Proposed OPPS Treatment of New and Revised HCPCS Codes Payments for OPPS procedures, services, and items are generally based on medical billing codes, specifically, Healthcare Common Procedure Coding System (HCPCS) codes, that are reported on hospital outpatient department (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 cipal 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 AA); • 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 t 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 2026 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 status indicators and their definitions in Addendum D1 to this proposed rule. 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 dicators and their definitions in Addendum D1 to this proposed rule. 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00049 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 33524 Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules 1. April 2025 HCPCS Codes Proposed Rule Comment Solicitation For the April 2025 update, 104 new HCPCS codes were established and made effective on April 1, 2025. Through the April 2025 OPPS quarterly update CR (Transmittal 13135, Change Request 13993, dated March 20, 2025), 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 9 (New HCPCS Codes Effective April 1, 2025). 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, 2025, 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 ew codes effective April 1, 2025, 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. BILLING CODE 4120–01–P 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00050 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules 33525 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00051 Fmt 4701 Sfmt 4725 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm W 9 K S D n o d n o m m a h k VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00051 Fmt 4701 Sfmt 4725 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00052 Fmt 4701 Sfmt 4725 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00053 Fmt 4701 Sfmt 4725 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00054 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00055 Fmt 4701 Sfmt 4725 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00056 Fmt 4701 Sfmt 4725 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00057 Fmt 4701 Sfmt 4725 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00058 Fmt 4701 Sfmt 4725 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00059 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00060 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM \FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00060 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules 33535 B. OPPS Changes—Variations Within APCs 1. Background 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 u 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 egulations 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 the independent service or combination of services is assigned. For CY 2026, 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. 1. Application of the 2 Times Rule 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 section 1833(t)(2) of the Act to consider changes in medical practice, changes in technology, the addition of new ser ups, the relative payment weights, and the wage and other adjustments described in section 1833(t)(2) of the Act 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 2026 OPPS update will be discussed in the relevant specific sections throughout the CY 2026 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 gro onsidered 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’’). VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00061 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00062 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules 33537 C. New Technology APCs 1. Background 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 C. 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) 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 ht 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/Medicare-Fee- for-Service-Payment/ HospitalOutpatientPPS/passthrough payment on the CMS website and then follow the instructions to access the MEARISTM system for OPPS New Technology APC applications.14 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 14 Currently approved under OMB control number 0938–0860; expires October 31, 2027. 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 2025, th eduction 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 2025, 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 APC 1507 (New VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00063 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00064 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00064 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules 33539 established services. We continue to believe 10 claims is an appropriate ceiling for exempting services from reassignment based on the universal low volume APC policy because we believe that at 10 claims a rough standard distribution begins to appear. We also continue to 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 crite ated 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 would be subject to our proposed policy to continue exempting services with fewer than 10 claims in the 4-year lookback period from the universal low volume APC policy and maintain the New Technology APC assignment from the previous year. We would update the APC placement as needed in the final rule. 3. Procedures Assigned to New Technology APC Groups for CY 2026 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 wh dequate 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 2026, 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). a. Administration of Subretinal Therapies Requiring Vitrectomy (APC 1563) Effective January 1, 2021, CM ve not obtained sufficient claims data upon which to base a reassignment decision (66 FR 59902). a. Administration of Subretinal Therapies Requiring Vitrectomy (APC 1563) 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 ($3001–$3500)). 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 ($3001–$3500)) 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. 6 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.15 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 , 15 Luxturna. FDA Package Insert. Available: https://www.fda.gov/media/109906/download. gene therapy.16 However, the manufacturer previously contended the administration was not accurately described , 15 Luxturna. FDA Package Insert. Available: https://www.fda.gov/media/109906/download. gene therapy.16 However, the manufacturer previously contended the administration was not accurately described by any existing codes as CPT code 67036 (Vitrectomy, mechanical, 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 final rule with comment period, we established a new HCPCS code, C9770 (Vitrectomy, mechanical, pars plana approach, with subretinal injection of pharmacologic/biologic agent) to describe this process. For CY 2021, we assigned HCPCS code C9770 to APC 1561 (New Technology—Level 24 ($3001–$3500)) 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 ($3001–$3500)) 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 fo ode 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 APC 1562 (New Technology—Level 25 ($3501–$4000)). 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 (S ur 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, 16 LUXTURNA REIMBURSEMENT GUIDE FOR TREATMENT CENTERS. https://myspark generation.com/uploads/2022/09/LUXTURNA- Reimbursement-Guide-for-Treatment-Centers-ISI- Update-April-2022-P-RPE65-US-320025.pdf. VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00065 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 33540 Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules 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 e 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 ($4001–$4500)) (88 FR 81617 through 81619). For 2025, claims data for CPT code 0810T was not yet available. Therefore, we continued to use claims data for HCPCS code C9770 to determine the appropriate APC for CPT code 0810T and finalized to continue to assign CPT code 0810T to APC 1563 for CY 2025. CY 2026 is the first year that we have claims data available for CPT code 0810T, and there are 6 claims available. Since the procedure described by CPT code 0810T was billed using HCPCS code C9770 prior to January 1, 2024, we propose to use the available combined 42 claims for both codes during this time period to allow for a more accurate picture of the costs associated with this procedure. For CY 2026, we propose to designate CPT code 0810T as a low volume procedure under our universal low volume APC policy, given that there are only 42 ture of the costs associated with this procedure. For CY 2026, we propose to designate CPT code 0810T as a low volume procedure under our universal low volume APC policy, given that there are only 42 combined claims available. 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 from a 4-year lookback period to calculate an appropriate payment rate for purposes of assigning CPT code 0810T to a New Technology APC. Using all available claims for CPT code 0810T and HCPCS code C9770 from the 4-year lookback period, based on 42 claims, we determined the geometric mean cost to be approximately $4,040, the arithmetic mean cost to be $4,327, and the median cost to be $3,999. 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 $4,327 falls within the cost band for APC 1563 (New Tech t estimated the highest cost for the service, we propose to use this cost to determine the New Technology APC placement. The arithmetic mean of $4,327 falls within the cost band for APC 1563 (New Technology—Level 26 ($4001–$4500)). Therefore, we propose to continue to assign CPT code 0810T to APC 1563 for CY 2026. 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 2026 OPPS/ASC final rule with comment period and update the APC assignment as needed. Please refer to Table 13 for the proposed OPPS New Technology APC and status indicator assignments for CPT code 0810T for CY 2026. The proposed CY 2026 payment rates can be found in Addendum B to this proposed rule via the internet on the CMS website. b. BgRT (APC 1514 and 1525) 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) da on 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 ($1901–$2000)) and HCPCS code C9795 to APC 1525 (New Technology—Level 25 ($3501–$4000)) for CY 2024. For CY 2025, we continued to assign HCPCS code C9794 to APC 1521 (New Technology—Level 21 ($1901–$2000)) with a payment rate of $1,950.50 and HCPCS code C9795 to APC 1525 (New Te –$4000)) for CY 2024. For CY 2025, we continued to assign HCPCS code C9794 to APC 1521 (New Technology—Level 21 ($1901–$2000)) with a payment rate of $1,950.50 and HCPCS code C9795 to APC 1525 (New Technology—Level 25 ($3501–$4000)) with a payment rate of $3,750.50 because we did not have any claims data for the service. Effective January 1, 2025, HCPCS codes C9794 and C9795 were replaced by HCPCS codes G0562 and G0563, respectively. For CY 2026, the proposed OPPS payment rates are based on available CY 2024 claims data. There are no CY 2024 claims for HCPCS codes G0562 and G0563 since they were not effective until CY 2025. However, as HCPCS codes C9794 and C9795 were still in use until December 31, 2024, we propose to determine the payment rate for HCPCS codes G0562 and G0563 using the available claims data for HCPCS codes C9794 and C9795, respectively. For CY 2026, we propose to designate HCPCS codes G0562 and G0563 as low volume procedures under our universal low volume APC policy, given that there are only 16 claims for C9794 and 28 claims for C9795 during the claims period. For HCPCS code G0562, using all available claims for C9794, we determined the arithmetic mean cost to be given that there are only 16 claims for C9794 and 28 claims for C9795 during the claims period. For HCPCS code G0562, using all available claims for C9794, we determined the arithmetic mean cost to be $1,241, the median cost to be $1,203, and the geometric mean cost to be $1,121. Because the arithmetic VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00066 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00067 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00068 Fmt 4701 Sfmt 4725 E:\FR\FM\17JYP2.SGM 17JYP2 > H P G H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00069 Fmt 4701 Sfmt 4725 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00070 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00071 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 33 o m m a h k / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00071 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 33546 Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules h. Corvia Medical Interatrial Shunt Procedure (APC 1592) 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 or placebo control, 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) to facilitate payment for the 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, whic e 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 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. For CY 2025, the OPPS payment rates were based on available CY 2023 claims data. There were two claims for HCPCS code C9760 in CY 2023. We continued to assign HCPCS code C9760 to APC 1592 (New Technology—Level 41 ($25,001–$30,000)) based on our CY 2025 policy 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. For CY 2026, the OPPS echnology 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. For CY 2026, the OPPS payment rates are proposed to be based on available CY 2024 claims data. There were no claims for HCPSC code C9760 in CY 2024. Therefore, for CY 2026, given our proposal to maintain current New Technology APC assignments for CY 2026 for New Technology APC services with fewer than 10 claims in the 4-year lookback period applicable for the universal low-volume APC policy moving forward, we propose to continue to assign HCPCS code C9760 to APC 1592 (New Technology—Level 41 ($25,001–$30,000)) with a payment rate of $27,500.50. Please refer to Table 20 for the proposed OPPS New Technology APC and status indicator assignments for CPT code C9760. The proposed CY 2026 payment rates can be found in Addendum B to this proposed rule via the internet on the CMS website. 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00072 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 26500 R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00072 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00073 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k > H P G H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00074 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00075 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00076 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00077 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00078 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00079 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265 D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00079 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00080 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00081 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00082 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00083 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k > H P G H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00084 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 > H P G H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00085 Fmt 4701 Sfmt 4725 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00086 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P rm 00085 Fmt 4701 Sfmt 4725 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00086 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00087 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 > H P G H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00088 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00089 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k > H P G H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00090 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00091 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00092 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / 0000 Frm 00092 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules 33567 ‘‘PN’’ to indicate that an item or service is a nonexcepted item or service. For a full discussion of our initial implementation of section 603, we refer readers to the CY 2017 OPPS/ASC final rule with comment period (81 FR 79699 through 79719) and the interim final rule with comment period (79720 through 79729). For a detailed discussion of the current PFS Relativity Adjuster related to payments under section 603, we refer readers to the CY 2018 OPPS/ASC final rule with comment period (82 FR 52356 through 52637) and the CY 2019 PFS final rule with comment period (82 FR 59505 through 59513). 2. Payment for Radiation Therapy Services Furnished at Nonexcepted Off- Campus PBDs The PFS Relativity Adjuster is not applied to radiation therapy services (radiation treatment delivery and related imaging guidance services) furnished by nonexcepted off-campus PBDs. Due to section 1848(c)(2)(K) of the Act, which required maintenance of the CY 2016 coding and payment inputs fo elivery and related imaging guidance services) furnished by nonexcepted off-campus PBDs. Due to section 1848(c)(2)(K) of the Act, which required maintenance of the CY 2016 coding and payment inputs for these services for CY 2017 and CY 2018 under the PFS, when the section 603 requirements were implemented in the CY 2017 final OPPS rule, we instructed nonexcepted off-campus PBDs to bill the PFS G-codes for these services. As we explained in that rule: ‘‘. . .–[S]everal radiation treatment delivery and imaging guidance services also are reported using different codes under the MPFS and the OPPS. CMS established HCPCS Level II G-codes to describe radiation treatment delivery services when furnished in the physician office setting (79 FR 67666 through 67667). However, these HCPCS G- codes are not recognized under the OPPS; rather, CPT codes are used to describe these services when furnished in the HOPD. Both sets of codes were implemented for CY 2015 and were maintained for CY 2016. Under the MPFS, there is a particular statutory provision under section 1848(c)(2)(K) of the Act that requires maintenance of the CY 2016 coding and payment inputs for these services for CY 2017 and CY 2018 the MPFS, there is a particular statutory provision under section 1848(c)(2)(K) of the Act that requires maintenance of the CY 2016 coding and payment inputs for these services for CY 2017 and CY 2018. Accordingly, the finalized CY 2017 MPFS rates for these services were calculated based on the maintenance of the CY 2016 coding payment inputs. On that basis, we are establishing payment amounts for nonexcepted items and services consistent with the payments that would be made to other facilities under the MPFS. That is, an off-campus PBDs submitting claims for nonexcepted items and services will bill the HCPCS G-codes established under the MPFS to describe radiation treatment delivery procedures. However, the off-campus PBD must append modifier ‘‘PN’’ to each applicable claim line for nonexcepted items and services. The payment amount for these services will be set to reflect the technical component rate for the code under the MPFS.’’ (81 FR 79726). As discussed in the CY 2026 Physician Fee Schedule (PFS) proposed rule, we propose to delete radiation therapy G-codes (G6001—G6017) that describe imaging guidance for radiation treatment (G6001, G6002, G6017) and radiation treatment del Fee Schedule (PFS) proposed rule, we propose to delete radiation therapy G-codes (G6001—G6017) that describe imaging guidance for radiation treatment (G6001, G6002, G6017) and radiation treatment delivery (G6003– G6015) because CPT codes 77402, 77407, and 77412 have been revised and may be used to report these services instead. See Table 44 for the long descriptors of the G codes that will be deleted effective January 1, 2026 and Table 45 for the current and revised long descriptors for CPT codes 77402, 77407, and 77412. The proposed CY 2026 payment rates for the radiation treatment delivery codes can be found in Addendum B to this proposed rule via the internet on the CMS website. If finalized as proposed, the G-codes that nonexcepted off-campus PBDs currently use to report radiation therapy services will no longer be available after December 31, 2025. To continue paying the PFS-equivalent rate for these services to these departments, we propose that, effective January 1, 2026, nonexcepted off-campus PBDs use the revised CPT codes described in the 2026 PFS proposed rule. In other words, because the G codes are being eliminated, we propose that the revised CPT codes be used to pre cepted off-campus PBDs use the revised CPT codes described in the 2026 PFS proposed rule. In other words, because the G codes are being eliminated, we propose that the revised CPT codes be used to preserve the existing policy of paying nonexcepted off-campus PBDs a specific radiation treatment rate, which is the technical component for the code under the MPFS. Crosswalk information between the G codes and the revised CPT codes is available under the Downloads section 24 of the PFS proposed rule, under ‘‘CY 2025 Analytic Crosswalk to CY 2026.’’ Nonexcepted off-campus PBDs should continue to append the ‘‘PN’’ modifier to each applicable claim line for these services. We emphasize that this is not a new policy but rather a continuation of current policy adjusting for the newly revised CPT codes and the corresponding deletion of the G codes. BILLING CODE 4120–01–P 24 https://www.cms.gov/medicare/payment/fee- schedules/physician/federal-regulation-notices. 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00093 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 33568 Federal Register / Vol. 90, No. 135 / Th P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00093 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 33568 Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00094 Fmt 4701 Sfmt 4725 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00095 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00096 Fmt 4701 Sfmt 4725 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00097 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00098 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules 33573 NO CAM system (herein after collectively referred to as the aprevo® Cervical ACDF System) for CY o d n o m m a h k Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules 33573 NO CAM system (herein after collectively referred to as the aprevo® Cervical ACDF System) for CY 2026. Per the applicant, the aprevo® Cervical ACDF System is designed to stabilize the cervical spinal column and facilitate fusion. The applicant further explained that the personalized aprevo® Cervical ACDF System devices incorporate patient-specific features to allow the clinician to tailor the deformity correction to the individual needs of the patient and include an aperture for the packing of bone graft. Per the applicant, the aprevo® Cervical ACDF System includes the following components: (1) aprevo® implants with slightly different heights for each vertebral level, (2) aprevo® insertion instrument, and (3) for the aprevo® Cervical ACDF–X system only, integrated fixation screws. The applicant further stated that the aprevo® Cervical ACDF–X NO CAM system has a part that blocks screws from backing out. implant, which includes two Please refer to the online application posting for the aprevo® Cervical ACDF System, available at https:// mearis.cms.gov/public/publications/ device-pt s from backing out. implant, which includes two Please refer to the online application posting for the aprevo® Cervical ACDF System, available at https:// mearis.cms.gov/public/publications/ device-ptp/DEP250303GJ8LW. 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 aprevo® Cervical ACDF System received FDA Breakthrough Device designation effective September 15, 2023, under the name aprevo® C cervical interbody fusion device. The approved FDA indication for the aprevo® Cervical ACDF System is: • For use in skeletally mature patients with degenerative cervical conditions including cervical disc degeneration, stenosis, deformity, and/ or instability of the cervical spine (C2– T1) at one or more levels. DDD 26 is defined as discogenic pain with degeneration of the disc confirmed by history and radiographic studies. These patients should have had at least six (6) weeks of non-operative treatment. These devices are to be filled with autograft bone and/or allogenic bone graft composed of cancellous, cortical, and/or cortico- ents should have had at least six (6) weeks of non-operative treatment. These devices are to be filled with autograft bone and/or allogenic bone graft composed of cancellous, cortical, and/or cortico-cancellous bone. The aprevo® -C cervical interbody fusion devices can be used with supplemental fixation, such as an anterior plate, or as a standalone construct to be used [with the] integrated bone screw fixation. FDA granted the applicant 510(k) clearance for the aprevo® Cervical ACDF System on November 15, 2024, with separate indications for the aprevo® Cervical ACDF system and the aprevo® Cervical ACDF–X system (with and without CAM).27 We note that while the indication for the FDA Breakthrough Device designation and the indication for the FDA 510(k) clearance for the aprevo® Cervical ACDF System vary, per FDA, the FDA 510(k) clearance indication is covered by the Breakthrough Device designation. We received the application for a new device category for transitional pass- through payment status for the aprevo® Cervical ACDF System on March 3, 2025, which is within 3 years of the date of the initial FDA marketing authorization. It is unclear to us whether the aprevo® Cervical ACDF ent status for the aprevo® Cervical ACDF System on March 3, 2025, which is within 3 years of the date of the initial FDA marketing authorization. It is unclear to us whether the aprevo® Cervical ACDF system and the aprevo® Cervical ACDF–X system (with and without CAM) are different devices such that they should be evaluated separately for OPPS pass-through payment status. We note that the aprevo® Cervical ACDF–X system (with and without CAM) includes additional components, such as the integrated fixation screws, and has a different indicated use as stated in the November 15, 2024 FDA 510(k) clearance letter (K242260). Specifically, based on the FDA 510(k) clearance indication, we note that a key difference of the aprevo® Cervical ACDF–X system (with and without CAM)’s interbody implant is that it incorporates integrated screw fixation and may be used as a standalone system for certain indications. We also note that, for deformity procedures to correct coronal angulation or any use of hyperlordotic correction (20°), the aprevo® Cervical ACDF–X system (with and without CAM) must include supplemental fixation such as posterior cervical screw fixation or anterior plating. We are inviti yperlordotic correction (20°), the aprevo® Cervical ACDF–X system (with and without CAM) must include supplemental fixation such as posterior cervical screw fixation or anterior plating. We are inviting public comments on whether the aprevo® Cervical ACDF system and aprevo® Cervical ACDF–X system should be evaluated separately for OPPS pass-through payment status. Separately, we are inviting public comments on whether the aprevo® Cervical ACDF 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 26 The Medicare Coverage Database defines DDD as degenerative disc disease. In addition, we believe that DDD is commonly referred to as degenerative disk disease in the healthcare industry. 27 For more information on the aprevo® Cervical ACDF System’s indications, we refer readers to the November 15, 2024, FDA 510(k) clearance letter (K242260) https://www.accessdata.fda.gov/cdrh_ docs/pdf24/K242260.pdf 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 applic gov/cdrh_ docs/pdf24/K242260.pdf 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 aprevo® Cervical ACDF System meets the requirements at § 419.66(b)(3). insertion instrument, the With respect to the aprevo® Cervical ACDF System, we question whether the aprevo® integrated fixation screws, and/or the CAM components or parts are integral to the service furnished. We note that, in the CY 2014 OPPS/ASC 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. Given our interpretation of integral, we question whether these components and parts of the aprevo® Cervical ACDF System are integral to the service furnished as it remains unclear which of these components and parts are utilized during the primary procedure and we question whether some of these components or parts may be purely additive in nature and not necessary to furnish r which of these components and parts are utilized during the primary procedure and we question whether some of these components or parts may be purely additive in nature and not necessary to furnish the service. Specifically, we note that it is unclear whether other available insertion instruments may be used to implant the aprevo® implant, and, for the aprevo® Cervical ACDF–X system, whether any or all of the integrated fixation screws may be replaced with other commercially available screws. In addition, it is unclear whether the CAM is part of the aprevo® implant, part of the integrated fixation screws, or is a separate part altogether. It is also unclear whether the CAM can be removed and replaced by other products, and whether there are any requirements for its utilization. We are interested in additional information about these components and parts of the aprevo® Cervical ACDF System, including how and when they are used, and whether they can be substituted with other products. We are inviting public comments on whether the aprevo® Cervical ACDF System meets the eligibility criterion at § 419.66(b)(3). With respect to the exclusion criteria at § 419.66(b)(4), a device is not We are inviting public comments on whether the aprevo® Cervical ACDF System meets the eligibility criterion at § 419.66(b)(3). With respect to the exclusion criteria at § 419.66(b)(4), a device is not eligible to be considered for 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 VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00099 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 33574 Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules insertion instrument, the material or supply furnished incident to a service (for example, a suture, customized surgical kit, or clip, other than a radiological site marker). Per the applicant, the aprevo® Cervical ACDF System is (1) not considered equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciatio , the aprevo® Cervical ACDF System is (1) not considered equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets, and is (2) not a material or supply furnished incident to a service, and, therefore, is eligible to be considered for pass-through payment. With respect to the aprevo® Cervical ACDF System, we question whether the aprevo® integrated fixation screws, and/or the CAM components or parts may be considered a material or supply furnished incident to the service. Specifically, as discussed previously with respect to criteria at § 419.66(b)(3), we note that it is unclear whether other available insertion instruments may be used to implant the aprevo® and, for the aprevo® Cervical ACDF–X system, whether any or all of the integrated fixation screws may be replaced with other commercially available screws. In addition, we are unclear about whether the CAM is part of the aprevo® integrated fixation screws, or is a separate part altogether, and whether the CAM can be removed and replaced by other products. We are seeking clarification about each of these components and parts, including ho ixation screws, or is a separate part altogether, and whether the CAM can be removed and replaced by other products. We are seeking clarification about each of these components and parts, including how and when they are used and whether they can be substituted with other commercially available products. We question whether these components or parts of the aprevo® Cervical ACDF System 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). We are inviting public comments on implant, part of the implant whether the aprevo® Cervical ACDF 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 existing pass-through code C1831 (Interbody cag 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 existing pass-through code C1831 (Interbody cage, anterior, lateral or posterior, personalized (implantable)) does not appropriately describe the aprevo® Cervical ACDF System because C1831 was created for the original (lumbar-specific) aprevo® product. According to the applicant, the aprevo® Cervical ACDF System device is different from C1831 because (1) the original (lumbar-specific) aprevo® and the nominated aprevo® Cervical ACDF System are separate and distinct products that have no overlap in anatomical indications for use or patient population; (2) the original (lumbar- specific) aprevo® and the aprevo® Cervical ACDF System are billed with different primary procedure CPT codes, are indicated for a different set of surgical approaches, are typically assigned to different places of service, and are mapped to different payment classifications; and (3) CMS transmittals state that C1831 is limited to lumbar procedures. We note, based on the description provided by the applicant, that the aprevo® Cervical ACDF System is a personaliz fications; and (3) CMS transmittals state that C1831 is limited to lumbar procedures. We note, based on the description provided by the applicant, that the aprevo® Cervical ACDF System is a personalized interbody cage that is implanted using an anterior surgical approach, and therefore, could be appropriately described by C1831. Specifically, C1831 may appropriately describe the aprevo® Cervical ACDF System because it describes any device that is a personalized interbody cage, designed for anterior, lateral, or posterior procedures. We 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. In this context, we believe that the aprevo® Cervical ACDF System may be similar to devices described by C1831 and therefore, the aprevo® Cervical ACDF System may be appropriately described by C1831. We are inviting public comment on whether the aprevo® Cervical ACDF 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 ic comment on whether the aprevo® Cervical ACDF 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 aprevo® Cervical ACDF 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 of the newness criterion) and therefore is not evaluated for substantial clinical improvement. We are invi or the indication covered by the Breakthrough Device designation (as explained in more detail of the newness criterion) and therefore is not evaluated for substantial clinical improvement. We are inviting public comment on whether the aprevo® Cervical ACDF System 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 stated that the aprevo® Cervical ACDF System would be reported with HCPCS codes as shown in Table 47. 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00100 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules 33575 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/ASC final rule (69 FR 65775), we generally use t 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/ASC 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 2025 payment rates for the three tests of the cost criterion. For our calculations, we used APC 5115, which had a CY 2025 payment rate of $12,866.82 at the time the application was received. HCPCS code 22554 in APC 5115 had a device offset amount of $5,190.48 at the time the application was received. Per the applicant, the average number of levels for cervical interbody fusions per procedure is expected to be 3.25, based on the projected mix of diagnoses between deformity and degenerative condition. The applicant stated that, per procedure, the first level costs $19,000.00, and each additional level costs 3.25, based on the projected mix of diagnoses between deformity and degenerative condition. The applicant stated that, per procedure, the first level costs $19,000.00, and each additional level costs $6,000.00. Therefore, according to the applicant, the average cost per procedure for the aprevo® Cervical ACDF System is $32,500.00. insertion Regarding the cost of the aprevo® Cervical ACDF System, as discussed previously with respect to § 419.66(b)(3) and (b)(4), we remain unclear regarding how and when the aprevo® instrument, the integrated fixation screws, and the CAM components and parts are used and whether they can be substituted with other commercially available products. Therefore, we question how these components and parts are accounted for in the estimated average cost of the aprevo® Cervical ACDF System and whether these components or parts are eligible for OPPS pass-through payment status. In addition, we remain unclear whether the aprevo® Cervical ACDF system and the aprevo® Cervical ACDF–X system (with and without CAM) are different devices with different associated costs and, as such, whether this may require separate cost significance test evaluations. For the purposes Cervical ACDF–X system (with and without CAM) are different devices with different associated costs and, as such, whether this may require separate cost significance test evaluations. For the purposes of this proposed rule, we use the average cost per procedure provided by the applicant for the aprevo® Cervical ACDF System ($32,500.00). We welcome additional information about the use and cost of the aprevo® insertion instrument, the integrated fixation screws, and the CAM at each level per procedure. We also welcome information on the costs of the various systems (the aprevo® Cervical ACDF system and the aprevo® Cervical ACDF–X system (with and without CAM)) should we determine they are different devices. 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 $32,500.00 for the aprevo® Cervical ACDF System is 252.59 percent of the applicable APC payment amount for the service related to the category of devices of $12,866.82 (($32,500.00/$12,866.82) × 100 = $32,500.00 for the aprevo® Cervical ACDF System is 252.59 percent of the applicable APC payment amount for the service related to the category of devices of $12,866.82 (($32,500.00/$12,866.82) × 100 = 252.59 percent). Therefore, when utilizing the average cost provided by the applicant, we believe that the aprevo® Cervical ACDF 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 $32,500.00 for the aprevo® Cervical ACDF System is 626.15 percent of the cost of the device-related portion of the APC payment amount for the related service of $5,190.48 (($32,500.00/ $5,190.48) × 100 = 626.15 percent). Therefore, when utilizing the average cost provided by the applicant, we VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm vice of $5,190.48 (($32,500.00/ $5,190.48) × 100 = 626.15 percent). Therefore, when utilizing the average cost provided by the applicant, we VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00101 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00102 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules 33577 the FARAWAVETM PFA Catheter is not a 3D or vector mapping catheter. In addition, the applicant asserted that the existing pass-through codes C1733 (Catheter, electrophysiology, diagnostic/ ablation, other than 3D or vector mapping, other than cool-tip) and C2630 (Catheter, electrophysiology, diagnostic/ ablation, other than 3D or vector mapping, cool-tip) do not appropriately describe the FARAWAVETM PFA Catheter because these codes describe catheters that deliver thermal energy, whereas the FARAWAVETM PFA Catheter utilizes pulsed field energy to perform irreversible electroporation and deliver TM PFA Catheter because these codes describe catheters that deliver thermal energy, whereas the FARAWAVETM PFA Catheter utilizes pulsed field energy to perform irreversible electroporation and deliver tissue selective ablation. The applicant also noted that the FARAWAVETM PFA Catheter does not have a cool tip, as described by pass- through device code C2630. Finally, the applicant stated that the existing pass- through code C1889 (Implantable/ insertable device, not otherwise classified) does not appropriately describe the FARAWAVETM PFA Catheter. We note that C1889 is not a device pass-through category code, and therefore, would not describe the FARAWAVETM PFA Catheter for the purposes of device pass-through. We note that, based on the description provided by the applicant, the FARAWAVETM PFA Catheter is used to achieve catheter ablation to treat PAF, and therefore, could be appropriately described by C1733 (Catheter, electrophysiology, diagnostic/ablation, other than 3D or vector mapping, other than cool-tip). Specifically, we believe that the pass-through payment category C1733 might appropriately describe the FARAWAVETM PFA Catheter because it includes a catheter used for ablat ping, other than cool-tip). Specifically, we believe that the pass-through payment category C1733 might appropriately describe the FARAWAVETM PFA Catheter because it includes a catheter used for ablation of tissue without a cool-tip. Further, C1733 does not specify the ablation modality, such as thermal energy or electroporation. In this context, we believe that the FARAWAVETM PFA Catheter might be appropriately described by C1733. category or other available treatment; or (2) 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 FARAPULSETM PFA 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 newness criterion), and therefore, is not evaluated for substantial clinical improvement. We are inviting public comment on We are inviting public comment on whether the FARAWAVETM PFA Cathe il in the newness criterion), and therefore, is not evaluated for substantial clinical improvement. We are inviting public comment on We are inviting public comment on whether the FARAWAVETM PFA Catheter meets the device category criterion at § 419.66(c)(1). whether the FARAWAVETM PFA Catheter meets the device category criterion at § 419.66(c)(2). The second criterion for establishing The third criterion for establishing a a device category, at § 419.66(c)(2), provides that CMS determines either of the following: (1) 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 device category, at § 419.66(c)(3), requires CMS 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 stated that the FARAWAVETM PFA Catheter would be reported with HCPCS code as shown in Table 48. To meet the cost criterion for device pass-through payment status, that must each be met. The applicant stated that the FARAWAVETM PFA Catheter would be reported with HCPCS code 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 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 device offset amount of $11,251.23 at the time the application was received. According to the applicant, the cost of the FARAWAVETM PFA Catheter is $7,983.00. Section 419.66(d)(1), the first cost significance requirement of $11,251.23 at the time the application was received. According to the applicant, the cost of the FARAWAVETM PFA Catheter is $7,983.00. 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 $7,983.00 for the FARAWAVETM PFA Catheter is 35.28 percent of the applicable APC payment amount for the service related to the category of devices of $22,629.19 (($7,983.00/$22,629.19) × 100 = 35.28 percent). Therefore, we believe that the FARAWAVETM PFA 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 VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00103 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00104 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00104 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules 33579 the existing pass-through codes C1879 29 (Tissue marker (implantable)) and C1819 (Tissue localization excision device) do not appropriately describe the SCOUT MDTM Delivery System because the SCOUT MDTM Delivery System is different than other wire-free localization/fiducial devices used for breast conserving surgery and is the only device that: (1) incorporates application-specific integrated circuit (ASIC) technology customized for use with the SCOUT MDTM Surgical Guidance System; (2) uses radar technology to detect, locate and identify the implanted reflector(s) within ±1 millimeter (mm) of accuracy; (3) utilizes up to 4 uniquely shaped reflectors for a more clearly defined radiographic image of the area of interest to be excised; (4) incorporates differentiated radar signatures and detection cadences specific to each reflector; (5) can detect for a more clearly defined radiographic image of the area of interest to be excised; (4) incorporates differentiated radar signatures and detection cadences specific to each reflector; (5) can detect up to 4 unique reflectors simultaneously or individually to more precisely identify pre-defined surgical margins; and (6) has no significant MRI artifact. The applicant further explained that the SCOUT MDTM Delivery system includes four distinct implant (SCOUT MDTM Reflector) shapes, each with a unique radar signature that enables clear detection and identification of the multiple localization devices previously placed to mark the desired surgical margins during the excision procedure. Upon review, we have not identified an existing pass-through payment category that describes the SCOUT MDTM Delivery System. We are inviting public comment on whether the SCOUT MDTM Delivery 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: (1) that a device to be included in the category has demonstrated that it will substantially improve the diagnosis or treatme , at § 419.66(c)(2), provides that CMS determines either of the following: (1) 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 (2) 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 SCOUT MDTM Surgical Guidance 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 of the newness criterion) and therefore is not evaluated for substantial clinical improvement. We are inviting public comment on whether the SCOUT MDTM Delivery System meets the device category criterion at § 419.66(c)(2). The third criterion for establishing a dev tantial clinical improvement. We are inviting public comment on whether the SCOUT MDTM Delivery System meets the device category criterion at § 419.66(c)(2). The third criterion for establishing a device category, at § 419.66(c)(3), requires CMS 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 stated that the SCOUT MDTM Delivery System would be reported with HCPCS codes as shown in Table 49. 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 2025 payment rates for the three tests of th 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 2025 payment rates for the three tests of the cost criterion. For our calculations, we used APC 5071, which had a CY 2025 payment rate of $703.59 at the time the application was received. HCPCS code 19287 in APC 5071 had a device offset amount of $240.56 at the 29 Effective July 1, 2013, CMS deleted HCPCS code C1879 (Tissue marker, implantable) because it is described by HCPCS code A4648 (Tissue marker, implantable, any type). Centers for Medicare & Medicaid Services (2013). Pub 100–04 Medicare Claims Processing (Transmittal 2718) in CMS Manual System. Accessed at https://www.cms.gov/ regulations-and-guidance/guidance/transmittals/ 2013-transmittals-items/r2718cp. VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00105 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00106 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h d n o m m a h k / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00106 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules 33581 describe VasQTM because VasQTM is not a dialysis access system, is not permitted to be cannulated, and does not have direct contact with blood. Upon review, we have not identified an existing pass-through payment category that describes VasQTM. We are inviting public comment on whether VasQTM 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: (1) 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 (2) for devices for which pass-through status will begin on or after January 1, 2020, as an alternative to the device or devices in a previously established category or other available treatment; or (2) 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. VasQTM has a Breakthrough Device designation and marketing authorization from FDA for the indication covered by the Breakthrough Device designation (as explained in more detail of the newness criterion) and therefore is not evaluated for substantial clinical improvement. We are inviting public comment on whether VasQTM meets the device category criterion at § 419.66(c)(2). The third criterion for establishing a device category, at § 419.66(c)(3), requires CMS 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 stated that VasQTM would be reported with HCPCS codes as shown in Table 50. To meet the cost criterion for device pass-through pay three cost significance criteria that must each be met. The applicant stated that VasQTM would be reported with HCPCS codes as 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 2024 payment rates for the three tests of the cost criterion. For our calculations, we used APC 5183, which had a CY 2024 payment rate of $3,037.01 at the time the application was received. HCPCS code 36821 in APC 5183 had a device offset amount of $49.81 at the time the application was received. According to the applicant, the cost of VasQTM is $4,900.00. Section 419.66(d)(1), the first cost significance requirement, provides that the es unt of $49.81 at the time the application was received. According to the applicant, the cost of VasQTM is $4,900.00. 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 $4,900.00 for VasQTM is 161.34 percent of the applicable APC payment amount for the service related to the category of devices of $3,037.01 (($4,900.00/$3,037.01) × 100 = 161.34 percent). Therefore, we believe that VasQTM 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 $4,900.00 for VasQTM is 9,837.38 percent of the cost of the device rcent of the offset amount (the device-related portion of the APC found on the offset list). The estimated average reasonable cost of $4,900.00 for VasQTM is 9,837.38 percent of the cost of the device-related portion of the APC payment amount for the related service of $49.81 (($4,900.00/ $49.81) × 100 = 9,837.38 percent). Therefore, we believe that VasQTM 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 $4,900.00 for VasQTM and the portion of the APC payment amount for the device of $49.81 is 159.70 percent of the APC payment amount for the related service of $3,037.01 ((($4,900.00¥$49.81)/ $3,037.01) × 100 = 159.70 percent). Therefore, we believe that VasQTM meets the third cost significance requirement. We are inviting public comment on whether VasQTM meets the cost criterion at § 419.66(c)(3). (2) Traditional Device Pass-Thr fore, we believe that VasQTM meets the third cost significance requirement. We are inviting public comment on whether VasQTM meets the cost criterion at § 419.66(c)(3). (2) Traditional Device Pass-Through Applications (a) Axoguard HA+ Nerve ProtectorTM Axogen Corporation submitted an application for a new device category for transitional pass-through payment status for the Axoguard HA+ Nerve ProtectorTM for CY 2026. Per the VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00107 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00108 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules 33583 believe that the pass-through payment category C1763 may appropriately describe the Axoguard HA+ Nerve ProtectorTM. Additionally, we believe that the pass-through payment category C1765 may also appropriately describe the Axoguard HA+ Nerve ProtectorTM because the device, as described by the applicant, is design M. Additionally, we believe that the pass-through payment category C1765 may also appropriately describe the Axoguard HA+ Nerve ProtectorTM because the device, as described by the applicant, is designed to be placed on and around neural structures to be a protective interface between a nerve and the surrounding tissue, to minimize the potential for soft tissue attachments, and to ensure the nerve’s ability to glide through tissue structures during anatomic movement, and therefore may be appropriately described as an adhesion barrier consistent with devices described by C1765. We further note that the two neuroplasty procedure codes that could be used with the Axoguard HA+ Nerve ProtectorTM (CPT® codes 64718 and 64721) have previously been used with both categories C1763 and C1765 and that FDA has previously approved devices described by C1763 and C1765 and billed using CPT® codes 64718 or 64721 for neuroplasty and/or transposition of the ulnar nerve at elbow or median nerve at carpal tunnel. We also note that the inclusion of these neuroplasty devices in categories C1763 and C1765 appears contradictory to the applicant’s assertion that the categories are inapplicable for devices in unnel. We also note that the inclusion of these neuroplasty devices in categories C1763 and C1765 appears contradictory to the applicant’s assertion that the categories are inapplicable for devices indicated for peripheral nerves. In this context, we believe the Axoguard HA+ Nerve ProtectorTM may be similar to the devices described by C1763 and C1765, and therefore, the Axoguard HA+ Nerve ProtectorTM may be appropriately described by C1763 and C1765. We are inviting public comment on whether the Axoguard HA+ Nerve ProtectorTM 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: (1) 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 (2) 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 de egory or other available treatment; or (2) 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 asserted that the Axoguard HA+ Nerve ProtectorTM represents a substantial clinical improvement over existing technologies in the management of peripheral nerve injuries where there is no nerve gap, specifically in protecting a nerve following a revision (secondary) CT or CuT nerve decompression procedure. The applicant provided three redacted manufacturer internal reports to support these claims, as well as eight background articles/documents about the predicate device, the Axoguard Nerve ProtectorTM. We note that the predicate device differs from the Axoguard HA+ Nerve ProtectorTM in that the nominated device has a dry coating of sodium hyaluronate and sodium alginate applied to both sides that forms a thin layer of lubricous hydrogel when hydrated. The addition of the dry coating of sodium hyaluronate and as a dry coating of sodium hyaluronate and sodium alginate applied to both sides that forms a thin layer of lubricous hydrogel when hydrated. The addition of the dry coating of sodium hyaluronate and sodium alginate to the Axoguard Nerve ProtectorTM appears to be the distinguishing feature of the device that is the subject of this application. In addition, the applicant submitted 32 supplemental background articles describing topics including general disease processes and disease prevalence. The applicant’s assertions regarding the substantial clinical improvement criterion are shown in Table 51. Please see the online posting for the Axoguard HA+ Nerve ProtectorTM for the applicant’s complete statements regarding the substantial clinical improvement criterion and the supporting evidence provided. BILLING CODE 4120–01–P 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00109 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 33584 Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 22: \17JYP2.SGM 17JYP2 33584 Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00110 Fmt 4701 Sfmt 4725 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00111 Fmt 4701 Sfmt 4725 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00112 Fmt 4701 Sfmt 4725 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00113 Fmt 4701 Sfmt 4725 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00114 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00115 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00116 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / V P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00116 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules 33591 technologies because it addresses a critical unmet need by providing a novel feature to continuously measure real-time IRP during urological surgeries. According to the applicant, IRP management during ureteroscopy is a vitally important patient safety consideration. Per the applicant, irrigation of the renal collecting system during ureteroscopy is essential for maintaining a clear field of view, which is crucial for effective kidney stone treatment; however, the use of irrigation to enhance visibility typically increases IRP. The applicant stated that dangerous IRP elevations can occur without immediate warning signs, with symptoms often emerging only after significant physiological damage has taken place. The applicant further asserted that a prolonged increase in IRP can lead to complications both during and post procedure. The applicant provided nine background documents to support these claims, which include six stu ther asserted that a prolonged increase in IRP can lead to complications both during and post procedure. The applicant provided nine background documents to support these claims, which include six studies and three sets of clinical guidelines. The applicant’s assertions regarding the substantial clinical improvement criterion are shown in Table 53. Please see the online posting for the LithoVueTM Elite System for the applicant’s complete statements regarding the substantial clinical improvement criterion and the supporting evidence provided. 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00117 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 33592 Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00118 Fmt 4701 Sfmt 4725 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00119 Fmt 4701 Sfmt 4725 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00120 Fmt 4701 Sfmt 470 M 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00119 Fmt 4701 Sfmt 4725 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00120 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00121 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 33596 Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules is yet to be determined. Somani et al. (2025) details the findings of a Delphi panel assembled by the European Association of Urologists. The panel did not come to a consensus on a safe or acceptable IRP threshold during endourological procedures. Bhojani et al. (2023) established that a ureteroscope with pressure monitoring, such as the LithoVueTM Elite Ureteroscope, can be used to better understand the role of IRP during retrograde intrarenal surgery. Yet, these articles highlight that there is no consensus on the IRP levels or duration that may negatively impact patients, therefore questioning whether it is clinically relevant to continuously measure IRP in real-time. We again note that n s no consensus on the IRP levels or duration that may negatively impact patients, therefore questioning whether it is clinically relevant to continuously measure IRP in real-time. We again note that no evidence was presented on the current standard of care in regard to continuous monitoring of IRP levels during ureteroscopy. Without this information, it is unclear if the clinical outcomes of a patient population would improve as a result of the LithoVueTM Elite Ureteroscope’s continuous IRP monitoring during ureteroscopy procedures. Additionally, we note that, based on the language in the application, it is our understanding that continuous real-time pressure monitoring may only be relevant in kidney stone procedures. We would be interested in evidence and further information on other procedures where pressure is continuously monitored during ureteroscopy. We question whether the evidence submitted by the applicant demonstrates that the use of continuous real-time intraoperative IRP monitoring by a ureteroscope offers a substantial clinical improvement over currently available treatments. We are inviting public comment on whether the LithoVueTM Elite Ureteroscope meets the device c nitoring by a ureteroscope offers a substantial clinical improvement over currently available treatments. We are inviting public comment on whether the LithoVueTM Elite Ureteroscope meets the device category criterion at § 419.66(c)(2). The third criterion for establishing a device category, at § 419.66(c)(3), requires CMS 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 stated that the LithoVueTM Elite Ureteroscope would be reported with HCPCS codes in the codes as shown in Table 54. BILLING CODE 4120–01–P 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00122 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules 33597 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00123 Fmt 4701 Sfmt 4725 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00124 Fmt 4701 Sfmt 4702 E:\ k VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00123 Fmt 4701 Sfmt 4725 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00124 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00125 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 33600 Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules improvement criterion are shown in Table 55. Please see the online posting for the VersaVueTM Single-Use Flexible Cystoscope for the applicant’s complete statements regarding the substantial clinical improvement criterion and the supporting evidence provided. BILLING CODE 4120–01–P 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00126 Fmt 4701 Sfmt 4725 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00127 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 4701 Sfmt 4725 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00127 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00128 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules 33603 collection or confounders not accounted for, such as changes in clinical practice between the 2 study years. Further, per the study authors, we note that urine cultures were ordered more frequently in the reusable cystoscope group, potentially increasing the likelihood of a UTI diagnosis in the reusable cystoscope group. We would be interested in whether equivalent pre- and post-procedure urine cultures from patients in both groups would have yielded different results. We note that the evidence is not conclusive to support whether the use of single-use, disposable cystoscopes results in improved clinical outcomes compared to reuseable, reprocessed cystoscopes. Moreover, while not included in the evidence submitted by the applicant in support of the substantial clinic copes results in improved clinical outcomes compared to reuseable, reprocessed cystoscopes. Moreover, while not included in the evidence submitted by the applicant in support of the substantial clinical improvement claims for the VersaVueTM Single-Use Flexible Cystoscope, we note that two studies, Anderson et al. (2024) and Johnson et al. (2023), provide notable evidence directly related to the use of single-use, disposable cystoscopes versus reusable cystoscopes.42 43 Anderson et al. (2024), a systematic review (using meta- analyses techniques) comparing the clinical outcomes of all single-use, disposable endoscopes used in urology with those of reusable endoscopes across a range of urological procedures, found that of the seven studies that reported the rate of postoperative infections, none found a statistically significant difference in postoperative infection rate between single-use, disposable endoscopes and reusable endoscopes.44 Further, we note that the Anderson et al. (2024) sub-group analysis of cystoscopes found no difference in overall complication rates or postoperative infection rates between the single-use, disposable cystoscopes and the reusable cystoscope subgroup sub-group analysis of cystoscopes found no difference in overall complication rates or postoperative infection rates between the single-use, disposable cystoscopes and the reusable cystoscope subgroups. Similarly, Johnson et al. (2023) found no statistically significant difference in adverse events in a multicenter, randomized trial comparing single-use, disposable cystoscopes (Ambu® aScope 4TM Cysto) with reusable cystoscopes for ureteral stent removal in 102 patients.45 Given the evidence in these additional studies, we question whether the 42 Anderson, S., Patterson, K., Skolarikos, A., Somani, B., Bolton, D.M., & Davis, N.F. (2024). Perspectives on technology: To use or to reuse, that is the endoscopic question—a systematic review of single-use endoscopes. BJU International, 133(1), 14–24. https://doi.org/10.1111/bju.16206. 43 Johnson, B.A., Raman, J.D., Best, S.L., & Lotan, Y. (2023). Prospective randomized trial of single- use vs reusable cystoscope for ureteral stent removal. Journal of Endourology, 37(10). https:// doi.org/10.1089/end.2023.0134. 44 Anderson, 2024, op. cit. 45 Johnson, 2023, op. cit. totality of available evidence establishes that the use of a single-use, di urnal of Endourology, 37(10). https:// doi.org/10.1089/end.2023.0134. 44 Anderson, 2024, op. cit. 45 Johnson, 2023, op. cit. totality of available evidence establishes that the use of a single-use, disposable cystoscope results in substantial clinical improvement when compared to reuseable, reprocessed cystoscopes, and furthermore, whether the use of the VersaVueTM Single-Use Flexible Cystoscope compared to reusable, reprocessed cystoscopes results in decreased adverse events, including post-procedure encounters and infections. We welcome studies that evaluate whether the use of the VersaVueTM Single-Use Flexible Cystoscope results in substantial clinical improvement over reusable, reprocessed cystoscopes, such as a reduction in mortality, complications, subsequent interventions, future hospitalizations, recovery time, pain, or a more rapid beneficial resolution of the disease process compared to reuseable, reprocessed cystoscopes. Third, in the second, third, fourth and fifth claims, the applicant asserted that the use of single-use, disposable cystoscopes avoids post-cystoscopy infections, device malfunctions, and contamination problems associated with reusable devices, and elimi the applicant asserted that the use of single-use, disposable cystoscopes avoids post-cystoscopy infections, device malfunctions, and contamination problems associated with reusable devices, and eliminates the need for reprocessing and avoids the risk of infection associated with improper reprocessing. In support of these claims, the applicant provided 46 Lee, J., Kaplan-Marans, E., Jivanji, D., Tennenbaum, D., & Schulman, A. (2022). Post- cystoscopy infections and device malfunctions in reprocessed flexible cystoscopes in a national database. Canadian Journal of Urology, 29(6), 11361–11365. https://pubmed.ncbi.nlm.nih.gov/ 36495577. 47 Muscarella, L.F. (2022, January 28). Contamination of flexible endoscopes and associated infections: A comprehensive review and analysis of FDA adverse event reports. Discussions in Infection Control. https://lfm-hcs.com/2022/01/ contamination-of-flexible-endoscopes-and- associated-infections/. 48 U.S. Food and Drug Administration. (2021, April 1). FDA is investigating reports of infections associated with reprocessed urological endoscopes: Agency is taking action to remind health care providers about the proper way to clean certain devices for reus is investigating reports of infections associated with reprocessed urological endoscopes: Agency is taking action to remind health care providers about the proper way to clean certain devices for reuse. [FDA News Release]. https:// www.fda.gov/news-events/press-announcements/ fda-investigating-reports-infections-associated- reprocessed-urological-endoscopes. 49 U.S. Food and Drug Administration. (2025, January 31). Update on alert: Endoscope accessories forceps/irrigation plug issue from Olympus. https:// www.fda.gov/medical-devices/medical-device- recalls/update-alert-endoscope-accessories- forcepsirrigation-plug-issue-olympus. 50 U.S. Food and Drug Administration. (2024, June 6). About the Manufacturer and User Facility Device Experience (MAUDE) database. U.S. Department of Health and Human Services. https:// www.fda.gov/medical-devices/mandatory-reporting- requirements-manufacturers-importers-and-device- user-facilities/about-manufacturer-and-user- facility-device-experience-maude-database. 51 U.S. Food and Drug Administration, 2024, op. cit. 52 U.S. Food and Drug Administration, 2024, op. cit. two retrospective reviews (Lee et al., 2022 and Muscarella, 2022) of medical device r atabase. 51 U.S. Food and Drug Administration, 2024, op. cit. 52 U.S. Food and Drug Administration, 2024, op. cit. two retrospective reviews (Lee et al., 2022 and Muscarella, 2022) of medical device reports (MDRs) from the FDA Manufacturer and User Facility Device Experience (MAUDE) database, an FDA News Release (2021, April 1) concerning infection and contamination risks associated with reusable urological endoscopes, and an FDA Update (2025, January 31) communicating the recall of endoscope accessories from Olympus® reusable urological endoscopes as supporting evidence.46 47 48 49 First, we question whether, per the applicant, the avoidance of device malfunctions, contamination problems, and the elimination of the need for reprocessing demonstrates substantial clinical improvement, as these are not clinical outcome metrics. Second, while we concur that avoiding post-cystoscopy infections is important, we note that none of the studies the applicant submitted as evidence evaluated or assessed the VersaVueTM Single-Use Flexible Cystoscope and that none of the studies compared clinical outcomes, such as adverse events (including post- cystoscopy infection) associated with the use of ssessed the VersaVueTM Single-Use Flexible Cystoscope and that none of the studies compared clinical outcomes, such as adverse events (including post- cystoscopy infection) associated with the use of the VersaVueTM Single-Use Flexible Cystoscope to clinical outcomes associated with reusable cystoscopes. Third, while these studies discuss potential adverse events from reusable cystoscope procedures, we note that FDA states that the FDA MAUDE database’s MDR data are not intended to be used to evaluate rates of adverse events, evaluate a change in event rates over time, or compare adverse event occurrence rates across devices.50 FDA explains that the MAUDE database is a passive surveillance system, and that incidence, prevalence, or cause of an event cannot be determined from this surveillance system alone due to under- reporting of events, inaccuracies in reports, lack of verification that the device caused the reported event, and lack of information about frequency of device use.51 FDA further explains that the submission of an MDR itself does not necessarily demonstrate that the device caused or contributed to the adverse outcome or event.52 Therefore, we question whether these stu further explains that the submission of an MDR itself does not necessarily demonstrate that the device caused or contributed to the adverse outcome or event.52 Therefore, we question whether these studies can substantiate that the use of single-use, disposable cystoscopes, like the VersaVueTM Single-Use Flexible Cystoscope, would result in substantial clinical improvements over currently available reuseable, reprocessed cystoscopes. Fourth, while the applicant asserted that the FDA News Release (2021, April 1) encouraged manufacturers to transition to single- use, disposable devices, we note that this FDA News Release does not VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00129 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 33604 Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules specifically reference single-use, disposable cystoscopes but, rather encouraged manufacturers to transition to devices with features that eliminate the need for reprocessing and provided information to manufacturers on how to modify and validate their reprocessing instructions. As such, we rs to transition to devices with features that eliminate the need for reprocessing and provided information to manufacturers on how to modify and validate their reprocessing instructions. As such, we question the assertion that this FDA communication encouraged manufacturers to transition to single-use, disposable cystoscopes, such as the VersaVueTM Single-Use Flexible Cystoscope. We further note that FDA stated that the risk of infection from reuseable, reprocessed urological endoscopes was low based on its data.53 We also note that the FDA Update (2025, January 31) communicated a medical device recall of the Olympus® endoscope accessory (MAJ–891 Forceps/Irrigation Plug) that is attached to the instrument channel port of a certain endoscope, due to the risk of infection that may result from improper reprocessing, but that this communication made no mention of the use of the nominated device or single- use, disposable devices, instead it appears to be a concern related to a particular reusable device.54 While the applicant asserted that the use of single-use, disposable cystoscopes avoids risk of infection associated with improper reprocessing, the applicant did not submit any FDA reusable device.54 While the applicant asserted that the use of single-use, disposable cystoscopes avoids risk of infection associated with improper reprocessing, the applicant did not submit any FDA safety communications directly related 53 U.S. Food and Drug Administration, 2021, op. cit. 54 U.S. Food and Drug Administration, 2025, op. cit. to single-use, disposable cystoscopes. We question whether the evidence provided by the applicant directly supports this claim. Finally, we note that 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). Based on the information provided by the applicant, approximately 510,600 units of single- use, disposable cystoscope devices, like those that would be included in the proposed device category for single-use, disposable cystoscopes, are estimated to have sold annually in the U.S. Moreover, the applicant provided that, of the 2.2 million fl t would be included in the proposed device category for single-use, disposable cystoscopes, are estimated to have sold annually in the U.S. Moreover, the applicant provided that, of the 2.2 million flexible cystoscopy procedures furnished annually, 23 percent are performed with single-use, disposable cystoscopes, further, single- use, disposable cystoscopes are used in at least 500 hospitals and clinics, including 35 to 50 academic medical centers. Based on the information provided in the application, it appears as though single-use, disposable cystoscopes are widely available and consistently utilized for the purposes of performing cystoscopy procedures in outpatient facilities. As such, we question whether the creation of a device pass-through payment category code for single-use, disposable cystoscopes is consistent with the intent of transitional device pass-through payment and necessary to appropriately incorporate adequate cost data of these devices into the applicable procedure APC. We question whether the evidence submitted by the applicant demonstrates that the use of single-use, disposable cystoscopes results in improved patient outcomes and reduced patient risk compared APC. We question whether the evidence submitted by the applicant demonstrates that the use of single-use, disposable cystoscopes results in improved patient outcomes and reduced patient risk compared to the use of reusable devices. Further, we question whether the VersaVueTM Single-Use Flexible Cystoscope offers a substantial clinical improvement in the treatment of Medicare beneficiaries over other available treatment and whether a transitional device pass-through category for single-use, disposable cystoscopes is in alignment with the intent of the transitional device pass- through payment program policy. We are inviting public comment on whether the VersaVueTM Single-Use Flexible Cystoscope meets the device category criterion at § 419.66(c)(2). The third criterion for establishing a device category, at § 419.66(c)(3), requires CMS 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 stated that the VersaVueTM Single-Use Flexible Cystoscope would be reported with HCPCS codes as shown in Table 56. BILLING CODE 4120–01–P 2 S L A S O P O R P h t i w at must each be met. The applicant stated that the VersaVueTM Single-Use Flexible Cystoscope would be reported with HCPCS codes as shown in Table 56. BILLING CODE 4120–01–P 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00130 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules 33605 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00131 Fmt 4701 Sfmt 4725 E:\FR\FM\17JYP2.SGM 17JYP2 / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00132 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00133 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 33608 Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules that are not capital equipment should qualify as device-intensive procedures, regardless of whether the devic a h k 33608 Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules 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 b ond, 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 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 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 lement, 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 d lated 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 83 FR 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 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 sub fault 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 associ cy 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 VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00134 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules 33609 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 ationship 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. In the CY 2025 OPPS/ASC final rule with comment period (89 FR 94214 through 92419), we finalized a change to our methodology for applying default device offset percentages for new device-intensive procedures. Under our previous policy, if a new CPT/HCPCS code did not have available claims data, either from the new HCPCS code or any predecessor code or clinically-similar code that uses the same device, and the er our previous policy, if a new CPT/HCPCS code did not have available claims data, either from the new HCPCS code or any predecessor code or clinically-similar code that uses the same device, and the CPT/HCPCS code otherwise met our criteria for device-intensive status, we would apply a default device offset percentage of 31 percent. However, we were aware of certain situations where the default device offset amount might not adequately reflect the existing device portion of the procedure’s costs when compared to the cost of similar devices. A potential large difference between the default device offset amount and the device portion of similar devices might impede our ability to accurately remove device offset amounts from new device-intensive procedures under the OPPS and to set payment rates for device-intensive procedures under the ASC payment system. Therefore, for CY 2025 and subsequent CYs, we finalized our proposal to modify our default device offset percentage policy for new device- intensive procedures. Specifically, for new CPT/HCPCS codes that both describe a procedure that requires the surgical implantation or insertion of a single-use device that exceeds 30 percent of evice- intensive procedures. Specifically, for new CPT/HCPCS codes that both describe a procedure that requires the surgical implantation or insertion of a single-use device that exceeds 30 percent of the procedure’s cost and that meets our requirements of a device as described above and lack claims data (from either the new HCPCS code or any predecessor code or clinically-similar code that uses the same device), 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 stated that 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 sig etter 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 finalized our modification to our default device offset percentage for new device-intensive procedures. This methodological change was finalized for both the OPPS and ASC Payment System for CY 2025 and subsequent CYs and applies to new procedures assigned to clinical APCs, but not to new procedures assigned to New Technology APCs. Additionally, in the CY 2025 OPPS/ ASC final rule with comment period (89 FR 92414 through 92419), we stated that we were persuaded by commenters that the lack of a device edit for device- intensive procedures, particularly new technologies, might lead to an underreporting of device costs and total procedure costs and potentially impede beneficiary access to such new technologies over time. Therefore, in addition to finalizing a modification to our device edits policy for CY 2025, we finalized a modification to our device offset percentage calculation. For procedures subject t over time. Therefore, in addition to finalizing a modification to our device edits policy for CY 2025, we finalized a modification to our device offset percentage calculation. For procedures subject to our modified device edits policy for CY 2025 that cannot report modifier ‘‘CG’’ to bypass this claims processing edit, the device offset percentages calculated (for the CPT/HCPCS code or its predecessor code) are based on hospital claims that reported a device code. We stated that we believed that hospital outpatient claims that report a device code with such procedures provide, in general, a more accurate representation of the procedures’ total costs. We also finalized, for purposes of determining device offset percentages, that we will not use claims data from procedures that had a status indicator of ‘‘E1’’ during the calendar year we are using for ratesetting and determining device offset percentages. Lastly, we refined our process for applying device offset percentages to use available claims data from predecessor codes annually, rather than the first year of the successor code’s activation date, until we have available claims data from the successor code. We propose to continue ble claims data from predecessor codes annually, rather than the first year of the successor code’s activation date, until we have available claims data from the successor code. We propose to continue these policies for CY 2026. As we indicated in the CY 2019 OPPS/ASC proposed rule and final rule with comment period, additional information for our consideration of an offset percentage higher than the default of 31 percent (or the APC-wide default 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, 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 outpatientpps@ cms.hhs.gov. Additional information can be submitted prior to issuance of an OPPS/ASC proposed rule or as a public comment (see DATES section of this proposed rule) 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 prop public comment (see DATES section of this proposed rule) 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 2026 device-intensive procedures 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 2026 OPPS/ ASC proposed rule on our website at https://www.cms.gov/medicare/ payment/prospective-payment-systems/ hospital-outpatient. 3. Device Edit Policy 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 d 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 VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00135 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 33610 Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules 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 2 riod (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 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 finali ears, 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 and 0616T, 0617T, and 0618T. (We note that CPT codes 0617T and 0618T were deleted effective January 1, 2025 and CPT code 0616T was deleted effective January 1, 2025 and replaced with new CPT code 66683.) We have noted that interested parties have previously recommended in past rulemaking that we reestablish all our previous procedure-to-device edits, but we do 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 significan ocular 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. In the CY 2025 OPPS/ASC final rule, we finalized to continue this policy for APC 5496 (Level 6 Intraocular Procedures) for CY 2025 and subsequent years. In the CY 2025 OPPS/ASC final rule with comment period (89 FR 92419 through 92422), we finalized a modification to our device edits policy. While historically our device edits policy has only applied to procedures that are device-intensive based on the most recent claims data available, commenters had raised concerns about hospitals underreporting device costs in years when certain device-intensive procedures had lost device-intensive status because the device portion of a procedure can fluctuate above and below our device-intensive threshold of 30 percent. Commenters indicated to us that the presence of the device edit requirement can have a significant impact on the device portion and g uate above and below our device-intensive threshold of 30 percent. Commenters indicated to us that the presence of the device edit requirement can have a significant impact on the device portion and geometric mean cost of a procedure, particularly for newer technologies. Therefore, for CY 2025 and subsequent CYs, we finalized a policy to apply our device edits policy permanently once a procedure is designated as a device- intensive procedure in a given year. Additionally, we finalized a policy to reinstate our device edits policy for procedures that have been device- intensive since we began assigning device-intensive status at the HCPCS code level on January 1, 2017. We believed that by applying our device edit policy to procedures that were device-intensive on or after January 1, 2017, we might continue to receive device cost information for relatively new procedures with limited claims data, which may have been impacted by our policy to require that only existing device-intensive procedures be subject to our device edits policy. For CY 2026, under our modified device edits policy, our device edits requirement will apply to procedures that are designated as device-intensive in CY ocedures be subject to our device edits policy. For CY 2026, under our modified device edits policy, our device edits requirement will apply to procedures that are designated as device-intensive in CY 2026 and will apply in subsequent years. We are not proposing any changes to our device edit policy for CY 2026. 4. Adjustment to OPPS Payment for No Cost/Full Credit and Partial Credit Devices a. Background 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 insert sed. 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 e 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 VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00136 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 nt of the credit in the amount portion for value code ‘‘FD’’ (Credit Received from the VerDate Sep 2014 22:23 Jul 16, 2025 Jkt 265001 PO 00000 Frm 00136 Fmt 4701 Sfmt 4702 E:\FR\FM\17JYP2.SGM 17JYP2 2 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 135 / Thursday, July 17, 2025 / Proposed Rules 33611 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 devi