79152 Federal Register / Vol. 89, No. 188 / Friday, September 27, 2024 / Rules and Regulations 

any new requirements or change the 

substantive requirements. Additional 

information about these statutes and 

Executive Orders can be found at 

https://www.epa.gov/laws-regulations/ 

laws-and-executive-orders. 

A. Executive Order 12866: Regulatory 

Planning and Review and Executive 

Order 14094: Modernizing Regulatory 

Review 

This action is not a significant 

regulatory action as defined in 

Executive Order 12866(58 FR 51735, 

October 4, 1993), as amended by 

Executive Order 14094 (88 FR 21879, 

April 11, 2023), and was therefore not 

subject to Executive Order 12866 

review. 

B. Paperwork Reduction Act (PRA) 

This action does not contain any new 

information collection burden under the 

PRA, 44 U.S.C. 3501 et seq. OMB has 

previously approved the information 

collection activities contained in the 

existing regulations and has assigned 

OMB control number 2070–0162 (EPA 

ICR No. 1884.15). This action does not 

create any new reporting or 

recordkeeping obligations, and does not 

otherwise change the burden estimates 

that were approved. 

C. Regulatory Flexibility Act (RFA) 

This action is not subject to the RFA, 

5 U.S.C. 601 et seq. The RFA applies 

only to rules subject to notice and 

comment rulemaking requirements 

under the APA, 5 U.S.C. 553, or any 

other statute. This rule is not subject to 

notice and comment requirements 

under the APA because the Agency has 

invoked the APA ‘‘good cause’’ 

exemption (see Unit II.). 

D. Unfunded Mandates Reform Act 

(UMRA) 

This action does not contain an 

unfunded mandate of $100 million (in 

1995 dollars and adjusted annually for 

inflation) or more as described in 

UMRA, 2. U.S.C. 1531–1538, and does 

not significantly or uniquely affect small 

governments. The action imposes no 

enforceable duty on any state, local or 

tribal governments or the private sector. 

E. Executive Order 13132: Federalism 

This action will not have federalism 

impacts as defined in Executive Order 

13132 (64 FR 43255, August 10, 1999) 

because this action will not have 

substantial direct effects on States, on 

the relationship between the Federal 

Government and States, or on the 

distribution of power and 

responsibilities between the Federal 

Government and States. 

F. Executive Order 13175: Consultation 

and Coordination With Indian Tribal 

Governments 

This action will not have tribal 

implications as defined in Executive 

Order 13175 (65 FR 67249, November 9, 

2000) because this action will not have 

substantial direct effects on tribal 

governments, on the relationship 

between the Federal Government and 

Indian tribes, or on the distribution of 

power and responsibilities between the 

Federal Government and Indian tribes. 

G. Executive Order 13045: Protection of 

Children From Environmental Health 

Risks and Safety Risks 

This action is not subject to Executive 

Order 13045 (62 FR 19885, April 23, 

1997), because it does not address 

environmental health or safety risks 

disproportionately affecting children. 

Since this action does not concern 

human health, EPA’s 2021 Policy on 

Children’s Health also does not apply. 

H. Executive Order 13211: Actions 

Concerning Regulations That 

Significantly Affect Energy Supply, 

Distribution, or Use 

This action is not a ‘‘significant 

energy action’’ as defined in Executive 

Order 13211 (66 FR 28355, May 22, 

2001), because it is not likely to have 

any adverse effect on the supply, 

distribution or use of energy. 

I. National Technology Transfer and 

Advancement Act (NTTAA) 

This action does not involve technical 

standards under the NTTAA section 

12(d), 15 U.S.C. 272. 

J. Executive Order 12898: Federal 

Actions To Address Environmental 

Justice in Minority Populations and 

Low-Income Populations and Executive 

Order 14096: Revitalizing Our Nation’s 

Commitment to Environmental Justice 

for All 

EPA believes that this type of action 

does not concern human health or 

environmental conditions and therefore 

cannot be evaluated with respect to 

potentially disproportionate and 

adverse effects on communities with 

environmental justice concerns in 

accordance with Executive Orders 

12898 (59 FR 7629, February 16, 1994) 

and 14096 (88 FR 25251, April 26, 

2023). 

K. Congressional Review Act (CRA) 

This action is subject to the CRA, 5 

U.S.C. 801 et seq., and EPA will submit 

a rule report to each House of the 

Congress and to the Comptroller General 

of the United States. This does not meet 

the criteria set forth in 5 U.S.C. 804(2). 

List of Subjects in 40 CFR Part 711 

Environmental protection, Chemicals, 

Confidential Business Information (CBI), 

Hazardous materials, Importer, 

Manufacturer, Reporting and 

recordkeeping requirements. 

Dated: September 23, 2024. 

Michal Freedhoff, 

Assistant Administrator, Office of Chemical 

Safety and Pollution Prevention. 

Therefore, for reasons set forth in the 

preamble, EPA amends 40 CFR part 711 

as follows: 

PART 711—[AMENDED] 

■ 1. The authority citation for part 711 

continues to read as follows: 

Authority: 15 U.S.C. 2607(a). 

■ 2. Revise and republish § 711.20 to 

read as follows: 

§ 711.20 When to report. 

All information reported to EPA in 

response to the requirements of this part 

must be submitted during an applicable 

submission period. The 2024 CDR 

submission period is from June 1, 2024, 

to November 22, 2024. Subsequent 

recurring submission periods are from 

June 1 to September 30 at 4-year 

intervals, beginning in 2028. In each 

submission period, any person 

described in § 711.8 must report as 

described in this part. 

[FR Doc. 2024–22060 Filed 9–26–24; 8:45 am] 

BILLING CODE 6560–50–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Part 425 

[CMS–1799–F] 

RIN 0938–AV20 

Medicare Program: Mitigating the 

Impact of Significant, Anomalous, and 

Highly Suspect Billing Activity on 

Medicare Shared Savings Program 

Financial Calculations in Calendar 

Year 2023 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), Department 

of Health and Human Services (HHS). 

ACTION: Final rule. 

SUMMARY: This final rule addresses 

policies for assessing performance year 

(PY) 2023 financial performance of 

Medicare Shared Savings Program 

(Shared Savings Program) Accountable 

Care Organizations (ACOs); establishing 


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benchmarks for ACOs starting 

agreement periods in 2024, 2025, and 

2026; and calculating factors used in the 

application cycle for ACOs applying to 

enter a new agreement period beginning 

on January 1, 2025, and the change 

request cycle for ACOs continuing their 

participation in the program for PY 

2025, as a result of significant, 

anomalous, and highly suspect billing 

activity for selected intermittent urinary 

catheters on Medicare Durable Medical 

Equipment, Prosthetics, Orthotics & 

Supplies (DMEPOS) claims. Under the 

Shared Savings Program, providers of 

services and suppliers that participate 

in ACOs continue to receive traditional 

Medicare fee-for-service (FFS) payments 

under Medicare Parts A and B, but the 

ACO may be eligible to receive a shared 

savings payment if it meets specified 

quality and savings requirements. ACOs 

participating in two-sided models may 

also share in losses. In this final rule, we 

respond to public comments we 

received on the proposal to mitigate the 

impact of significant, anomalous, and 

highly suspect billing activity on 

Medicare Shared Savings Program 

financial calculations in calendar year 

(CY) 2023. 

DATES: These regulations are effective 

on October 15, 2024. 

FOR FURTHER INFORMATION CONTACT: 

Richard (Chase) Kendall, (410) 786– 

1000, or SharedSavingsProgram@

cms.hhs.gov. 

SUPPLEMENTARY INFORMATION: 

CPT (Current Procedural Terminology) 

Copyright Notice 

Throughout this final rule, we use 

CPT codes and descriptions to refer to 

a variety of services. We note that CPT 

codes and descriptions are copyright 

2019 American Medical Association. All 

Rights Reserved. CPT is a registered 

trademark of the American Medical 

Association (AMA). Applicable Federal 

Acquisition Regulations (FAR) and 

Defense Federal Acquisition Regulations 

(DFAR) apply. 

I. Background 

A. Statutory Background on Shared 

Savings Program Financial Calculations 

Section 1899 of the Social Security 

Act (the Act) (42 U.S.C. 1395jjj), as 

added by section 3022 of the Patient 

Protection and Affordable Care Act 

(Pub. L. 111–148, enacted March 23, 

2010), establishes the general 

requirements for payments to 

participating Accountable Care 

Organizations (ACOs) in the Shared 

Savings Program. Specifically, section 

1899(d)(1)(A) of the Act provides that 

providers of services and suppliers 

participating in an ACO will continue to 

receive payment under the original 

Medicare fee-for-service program under 

Parts A and B in the same manner as 

they would otherwise be made. 

However, section 1899(d)(1)(A) of the 

Act also provides for an ACO to receive 

payment for shared savings provided 

that the ACO meets both the quality 

performance standards established by 

the Secretary and demonstrates that it 

has achieved savings against a 

benchmark of expected average per 

capita Medicare FFS expenditures. 

Additionally, section 1899(i) of the Act 

authorizes the Secretary to use other 

payment models in place of the onesided model described in section 

1899(d) of the Act. This provision 

authorizes the Secretary to select a 

partial capitation model or any other 

payment model that the Secretary 

determines will improve the quality and 

efficiency of items and services 

furnished to Medicare beneficiaries 

without additional program 

expenditures. We have used our 

authority under section 1899(i)(3) of the 

Act to establish the Shared Savings 

Program’s two-sided payment models 

(see for example, 80 FR 32771 and 

32772, and 83 FR 67834 through 67841) 

and to mitigate shared losses owed by 

ACOs affected by extreme and 

uncontrollable circumstances during 

performance year (PY) 2017 and 

subsequent performance years (82 FR 

60916 and 60917, 83 FR 59974 through 

59977), among other uses of this 

authority described elsewhere in this 

final rule. 

Section 1899(d)(1)(B)(i) of the Act 

specifies that, in each year of the 

agreement period, an ACO is eligible to 

receive payment for shared savings only 

if the estimated average per capita 

Medicare expenditures under the ACO 

for Medicare FFS beneficiaries for Parts 

A and B services, adjusted for 

beneficiary characteristics, is at least the 

percent specified by the Secretary below 

the applicable benchmark under section 

1899(d)(1)(B)(ii) of the Act. Section 

1899(d)(1)(B)(ii) of the Act addresses 

how ACO benchmarks are to be 

established and updated under the 

Shared Savings Program. This provision 

specifies that the Secretary shall 

estimate a benchmark for each 

agreement period for each ACO using 

the most recent available 3 years of per 

beneficiary expenditures for Parts A and 

B services for Medicare FFS 

beneficiaries assigned to the ACO. This 

benchmark shall be adjusted for 

beneficiary characteristics and such 

other factors as the Secretary determines 

appropriate and updated by the 

projected absolute amount of growth in 

national per capita expenditures for 

Parts A and B services under the 

original Medicare FFS program, as 

estimated by the Secretary. 

In past rulemaking, we have used our 

authority under sections 

1899(d)(1)(B)(ii) and 1899(i)(3) of the 

Act to establish adjustments to the 

benchmark and program expenditure 

calculations, respectively, to exclude 

certain Medicare Parts A and B 

payments. In the November 2011 final 

rule (76 FR 67920 through 67922), we 

adopted an alternate payment 

methodology that excluded Indirect 

Medical Education (IME) and 

Disproportionate Share Hospital (DSH) 

payments from ACO benchmark and 

performance year expenditures due to 

concerns that the inclusion of these 

amounts would incentivize ACOs to 

avoid referring patients to the types of 

providers that receive these payments. 

In the Calendar Year (CY) 2023 

Physician Fee Schedule final rule (87 

FR 69954 through 69956), we excluded 

new supplemental payments to Indian 

Health Service/Tribal hospitals and 

hospitals located in Puerto Rico 

consistent with our longstanding policy 

to exclude IME, DSH and 

uncompensated care payments from 

ACOs’ assigned and assignable 

beneficiary expenditure calculations. In 

the interim final rule with comment 

period entitled ‘‘Medicare and Medicaid 

Programs; Basic Health Program, and 

Exchanges; Additional Policy and 

Regulatory Revisions in Response to the 

COVID–19 Public Health Emergency 

and Delay of Certain Reporting 

Requirements for the Skilled Nursing 

Facility Quality Reporting Program’’ 

which was effective on May 8, 2020, 

and appeared in the May 8, 2020 

Federal Register (85 FR 27550) 

(hereinafter referred to as the ‘‘May 8, 

2020 COVID–19 IFC’’), we established a 

methodology to adjust Shared Savings 

Program financial calculations to 

account for the COVID–19 Public Health 

Emergency (85 FR 27577 through 

27582). Specifically, we established a 

methodology that would exclude all 

Medicare Parts A and B FFS payment 

amounts for a beneficiary’s episode of 

care for treatment of COVID–19 to 

prevent distortion to, among other 

calculations, an ACO’s benchmark and 

program expenditure calculations. 

We published a proposed rule entitled 

‘‘Significant, Anomalous, and Highly 

Suspect Billing Activity on Medicare 

Shared Savings Program Financial 

Calculations in Calendar Year 2023, 

which appeared in the July 3, 2024 

Federal Register (89 FR 55168) 

(hereinafter referred to as the ‘‘SAHS 


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1 In the preamble to the proposed rule, we stated 

our investigation into the matter was ongoing, and 

that we had made referrals to law enforcement, 

recouped payments, and terminated certain 

suppliers from the Medicare program (89 FR 

55169). We clarify in this final rule that, CMS 

stopped payment to the suppliers for these claims, 

thus no recoupments were needed. 

2As claim suspensions are the ‘‘withholding of 

payment . . . from a provider or supplier of an 

approved Medicare payment amount before a 

determination of the amount of the overpayment 

exists, or until the resolution of an investigation of 

a credible allegation of fraud,’’ 42 CFR 405.370, 

amounts suspended are considered payable under 

the Shared Savings Program. 

billing activity proposed rule’’). In the 

SAHS billing activity proposed rule, we 

proposed to use our authority under 

sections 1899(d)(1)(B)(ii) and 1899(i)(3) 

of the Act to make adjustments to the 

Shared Savings Program’s benchmark 

and program expenditure calculations, 

among other calculations, to remove 

payment amounts for codes displaying 

significant, anomalous, and highly 

suspect (SAHS) billing activity in CY 

2023. We proposed this rule to mitigate 

the impact of SAHS billing activity for 

selected intermittent urinary catheter 

supplies on Shared Savings Program 

calculations. 

B. Background on Significant, 

Anomalous, and Highly Suspect Billing 

Activity in Calendar Year 2023 

In the SAHS billing activity proposed 

rule (89 FR 55169), we explained that 

recently, ACOs and other interested 

parties have raised concerns about an 

increase in billing to Medicare for 

selected intermittent urinary catheter 

supplies on Durable Medical 

Equipment, Prosthetics, Orthotics & 

Supplies (DMEPOS) claims in CY 2023, 

alleging that the increase in payments 

represents fraudulent activity (the 

‘‘alleged conduct’’). Numerous ACOs 

have alerted the Centers for Medicare & 

Medicaid Services (CMS) to potential 

impacts on their PY 2023 expenditures 

because of the increased catheter 

billings. 

In early 2023, CMS detected a 

suspicious increase in billing for urinary 

catheters. Using our authority to 

suspend payments, CMS quickly 

stopped payment on almost all of these 

claims and began investigating the 

suppliers who were billing.1 2 Since 

then, the top 15 billers of suspicious 

catheter claims have had their Medicare 

enrollment revoked. 

As explained in the proposed rule, 

CMS continues to adapt its monitoring, 

investigative targeting, and data 

analytics programs to prevent future 

fraud, waste, and abuse. CMS also 

continues to work closely with the 

Department of Health and Human 

Services Office of Inspector General and 

Department of Justice, as well as our 

Unified Program Integrity Contractors, 

to investigate health care fraud 

activities, such as those involving 

urinary catheter supplies, that exploit 

the Medicare program. 

The observed DMEPOS billing 

volume for intermittent urinary 

catheters in CY 2023 represents SAHS 

billing activity. Generally, this means 

that a given HCPCS or CPT code 

exhibits a level of billing that represents 

a significant claims increase either in 

volume or dollars (for example, dollar 

volume significantly above prior year, or 

claims volume beyond expectations) 

with national or regional impact (for 

example, not only impacting one or few 

ACOs) and represents a deviation from 

historical utilization trends that is 

unexpected and is not clearly 

attributable to reasonably explained 

changes in policy or the supply or 

demand for covered items or services. 

The billing level is significant and 

represents billing activity that would 

cause significantly inaccurate and 

inequitable payments and repayment 

obligations in the Shared Savings 

Program if not addressed. 

We explained that current Shared 

Savings Program regulations, codified at 

42 CFR part 425, do not provide a basis 

for CMS to adjust program expenditure 

or revenue calculations to remove the 

impact of SAHS billing activity such as 

that arising from the alleged conduct in 

advance of issuing an initial 

determination. CMS may reopen an 

initial determination or a final agency 

determination and issue a revised initial 

determination at any time in the case of 

fraud or similar fault, and not later than 

4 years after the date of the notification 

to the ACO of the initial determination 

of savings or losses for the relevant 

performance year for good cause 

(§ 425.315). This does not allow for CMS 

to address SAHS billing activity, which 

must be addressed prior to conducting 

financial reconciliation, which is an 

initial determination, to prevent 

significant inequity and inaccurate 

payment determinations. 

We explained that we shared (and 

continue to share) the concerns recently 

raised by some ACOs and other 

interested parties that SAHS billing 

activity for the selected codes for 

intermittent urinary catheters would 

impact Shared Savings Program 

calculations for PY 2023 and we are also 

concerned about the impact on other 

program calculations based on CY 2023 

data. Specifically, we are concerned that 

absent mitigation measures, this SAHS 

billing activity would inflate Medicare 

Parts A and B payment amounts, 

including: 

• PY 2023 reconciliation calculations, 

including expenditures for each ACO’s 

assigned beneficiaries for PY 2023, the 

national-regional blended update factor 

used to update the benchmark for all 

ACOs (refer to § 425.601(b)), and factors 

based on ACO participant revenue to 

determine the loss recoupment limits 

for ACOs participating under two-sided 

models of the BASIC track (Levels C, D, 

E) (refer to § 425.605(d)). 

• Historical benchmark calculations 

for establishing the benchmark for ACOs 

beginning new agreement periods on 

January 1, 2024, January 1, 2025, or 

January 1, 2026, for which CY 2023 

serves as benchmark year (BY) 3, BY2 

and BY1, respectively (refer to 

§ 425.652(a)). 

• Factors used in the application 

cycle for ACOs applying to enter a new 

agreement period beginning on January 

1, 2025, and the change request cycle for 

ACOs continuing their participation in 

the program for PY 2025, including data 

used to determine an ACO’s eligibility 

for Advance Investment Payments 

under § 425.630(b), or for the CMS 

Innovation Center’s new ACO Primary 

Care Flex Model (ACO PC Flex Model) 

for the January 1, 2025, start date based 

on ACO revenue status (high revenue or 

low revenue), and to determine 

repayment mechanism amounts for 

ACOs entering, or continuing in, twosided models for PY 2025 (refer to 

§ 425.204(f)). 

The accuracy of the Shared Savings 

Program’s determination of an ACO’s 

financial performance (through a 

process referred to as financial 

reconciliation) in terms of the ACO’s 

eligibility for and amount of a shared 

savings payment or liability for shared 

losses, depends on the accuracy of 

claims data. Absent CMS action, the 

SAHS billing activity would affect PY 

2023 financial reconciliation programwide rather than being limited to ACOs 

that have assigned beneficiaries directly 

impacted by the issue. For instance: 

• An ACO with assigned beneficiaries 

impacted by the SAHS billing activity 

for intermittent urinary catheters would 

see an increase in performance year 

expenditures, reducing the ACO’s 

shared savings or increasing the amount 

of shared losses owed by the ACO. The 

impact on the ACO’s performance may 

be partially mitigated if the SAHS 

billing activity also increases the ACO’s 

regional service area expenditures and 

the national expenditures used to 

calculate the two-way national-regional 

blended benchmark update factor. 

• An ACO with assigned beneficiary 

expenditures and regional service area 

expenditures with little or no impact 

from the SAHS billing activity would 


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3Refer to CMS, Shared Savings Program Fast 

Facts—As of January 1, 2024, available at https:// 

www.cms.gov/files/document/2024-shared-savingsprogram-fast-facts.pdf. 

4Refer to CMS, Shared Savings Program 

Performance Year Financial and Quality Results, 

2022, available at https://data.cms.gov/medicareshared-savings-program/performance-yearfinancial-and-quality-results/data. 

receive a relatively higher benchmark 

update under the national-regional 

blended update factors used in PY 2023 

reconciliation, and therefore, may 

appear to perform better as a result of 

the national impact of the intermittent 

urinary catheters billing increase, 

resulting in higher earned performance 

payments or lower or no losses for the 

ACO. 

Unaddressed, the SAHS billing 

activity would distort the historical 

benchmarks for an ACO that entered an 

agreement period beginning on January 

1, 2024, or will enter an agreement 

period beginning on January 1, 2025, or 

January 1, 2026 (for which CY 2023 will 

continue to be a benchmark year) and 

the accuracy of any future financial 

reconciliation performed against those 

benchmarks. Similarly, inaccurate 

revenue and expenditure calculations 

based on CY 2023 data may affect an 

ACO’s revenue status and the amount of 

funds an ACO in a two-sided model 

must secure as a repayment mechanism, 

one of the program’s important 

safeguards for protecting the Medicare 

Trust Funds. Given the scope of the 

SAHS billing activity, there is a high 

likelihood that, absent CMS action, 

shared savings and losses calculations 

for PY 2023, and for future performance 

years where CY 2023 is a benchmark 

year, would be significantly impacted 

for ACOs. Under these circumstances, 

some ACOs are likely to experience 

adverse impacts (for example, lower or 

no shared savings or higher shared 

losses) while other ACOs would 

experience windfall gains (for example, 

higher shared savings or lower or no 

shared losses). 

In the SAHS billing activity proposed 

rule (89 FR 55170), we explained that 

failing to address SAHS billing activity 

that occurred in CY 2023 would 

jeopardize the integrity of the Shared 

Savings Program. There are 480 ACOs in 

the Shared Savings Program with over 

608,000 health care providers who care 

for 10.8 million assigned FFS 

beneficiaries.3 In PY 2022, the most 

recent year for which data is available, 

savings achieved by ACOs relative to 

benchmarks amounted to $4.3 billion, of 

which ACOs received shared savings 

payments totaling $2.5 billion, and 

Medicare retained $1.8 billion in 

savings.4 ACOs are held accountable for 

100 percent of total Medicare Parts A 

and B expenditures for their assigned 

beneficiary populations (with limited 

exceptions). This incentivizes ACOs to 

generate savings for the Medicare 

program as they have the opportunity to 

share in those savings if certain 

requirements are met. It also 

discourages the ACO from generating 

unnecessary expenditures for Medicare 

as they may be required to repay those 

amounts to CMS. Accountable care 

arrangements such as this cannot 

function if the ACO may be held 

responsible for all SAHS billing activity 

that is outside of their control. Holding 

an ACO accountable for substantial 

losses due to SAHS billing activity, such 

as that observed in connection with the 

increase in billing for intermittent 

urinary catheters, is not only inequitable 

but would dramatically increase the 

level of risk associated with 

participation, making the Shared 

Savings Program unattractive. 

For these reasons, we determined it 

was timely and appropriate to undertake 

notice and comment rulemaking to 

propose an approach for mitigating the 

impact of SAHS billing activity in CY 

2023 on Shared Savings Program 

financial calculations. In this 

Background section of the final rule, we 

summarize and respond to general 

comments we received related to CMS 

undertaking notice and comment 

rulemaking on this topic. In the 

following sections of this final rule, we 

summarize and respond to public 

comments we received on the specific 

proposals outlined in the SAHS billing 

activity proposed rule and discuss our 

final policies after taking into 

consideration the public comments. 

Comment: Most commenters 

expressed broad support for the 

proposed rule or general support for the 

proposed rule with additional 

recommendations. Many commenters 

stated their ‘‘strong,’’ ‘‘full,’’ or 

‘‘general’’ support for the proposed rule 

and urged CMS to finalize the 

proposals. Many commenters also 

commended CMS for taking action to 

address concerns raised by ACOs and 

other interested parties about the impact 

of SAHS billing activity for the catheter 

codes, and many also characterized 

CMS’s attention to the matter as 

‘‘prompt,’’ ‘‘swift,’’ ‘‘timely,’’ or 

‘‘responsive to stakeholder input.’’ No 

commenters expressed general 

opposition to the proposed rule. 

Supportive commenters offered a 

variety of reasons why they believed 

undertaking rulemaking was 

appropriate to mitigate SAHS billing 

activity for selected catheter codes. 

Many commenters agreed that the 

proposals would ensure the accuracy, 

fairness, or integrity of Shared Savings 

Program financial calculations. One 

commenter described the proposal as a 

‘‘crucial step’’ and a ‘‘necessary and 

well-supported measure’’ to ensure or 

enhance the accuracy, fairness, and 

integrity of financial calculations in the 

Shared Savings Program. A couple of 

commenters agreed with CMS that 

addressing the SAHS billing activity 

promptly is essential to preventing 

inaccurate and inequitable payment and 

repayment obligations for ACOs, with 

one also stating that the proposals will 

help ‘‘rectify the financial distortions’’ 

caused by the SAHS billing activity for 

the catheter codes. One commenter 

stated that the proposed rule highlights 

CMS’s dedication to addressing fraud as 

well as ensuring that the Shared Savings 

Program operates effectively while 

fostering a more transparent and 

equitable system. Other commenters 

stated that the proposals would improve 

sustainability of the Shared Savings 

Program. For instance, one commenter 

claimed that an ‘‘accurate and fair 

reconciliation process will ensure that 

health systems, ACOs and providers 

continue to participate in value-based 

care models with CMS in the future,’’ 

and a couple of other commenters 

asserted that the proposals will help 

keep ACOs in the program. Another 

commenter said that the proposals are 

important to ‘‘maintain a strong, 

predictable ACO program,’’ and another 

mentioned that not addressing the 

SAHS billing activity could lead to 

ACOs leaving the program. 

Response: We thank commenters for 

their support for CMS’s actions to 

undertake notice and comment 

rulemaking to mitigate the impact of 

SAHS billing activity on Medicare 

Shared Savings Program financial 

calculations in CY 2023. We agree with 

the commenters who stated that 

mitigating the impact of SAHS billing 

activity in CY 2023 is important for 

promoting continued integrity and 

fairness and improving the accuracy of 

Shared Savings Program financial 

calculations. Additionally, addressing 

the SAHS billing activity promptly is 

essential to preventing inaccurate and 

inequitable payment and repayment 

obligations for ACOs. We agree with the 

commenters that this course of action 

will in turn support the sustainability of 

the Shared Savings Program. 

Comment: Commenters addressed the 

role that ACOs play in the identification 

of SAHS billing activity or fraud, waste, 

and abuse in Medicare. Many 

commenters representing ACOs stated 

that their ACO reported SAHS billing 

activity for catheter codes to regulatory 


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5https://oig.hhs.gov/fraud/report-fraud/. 

6https://www.cms.gov/medicare/medicaidcoordination/center-program-integrity/reportingfraud. 

7The Boards of Trustees, Federal Hospital 

Insurance and Federal Supplementary Medical 

Insurance Trust Funds, ‘‘2024 Annual Report of the 

Boards of Trustees of the Federal Hospital 

Insurance and Federal Supplementary Medical 

Insurance Trust Funds’’, available at https://

www.cms.gov/oact/tr/2024. 

or law enforcement agencies, with one 

adding that ‘‘as an ACO, it is our 

responsibility to report suspect fraud to 

authorities,’’ and another stating that 

they will be submitting documentation 

about suspect claims for their ACO 

beneficiaries to the HHS Office of 

Inspector General (HHS–OIG). Other 

commenters credited ACOs for playing 

a role in identifying the SAHS billing 

activity for catheter codes in CY 2023. 

One commenter stated their belief that 

ACOs are ‘‘well positioned to detect 

anomalous billing’’ given their ongoing 

and in-depth analysis of claims and 

utilization data, and others noted that 

the HHS–OIG identified ACOs as 

sources to uncover potential fraud, 

waste, and abuse by identifying patterns 

of unusual billing. One commenter 

stated they will continue to monitor for 

SAHS billing activity. Some 

commenters stated there are 

opportunities to improve how ACOs 

report fraud or better educate ACOs on 

the processes CMS and HHS–OIG 

undertake to investigate fraud. 

Response: We agree that ACOs are 

well positioned to support monitoring 

efforts that will improve the integrity of 

the Medicare program. ACOs have tools 

to detect unusual or suspect billing 

among their assigned beneficiary 

population through data reports 

provided by CMS and through their own 

data systems. We appreciate ACOs’ 

efforts to alert CMS to potential impacts 

on their PY 2023 expenditures because 

of the increased catheter billings. ACOs 

are encouraged to report potential fraud 

or abuse by submitting a complaint to 

the CMS Center for Program Integrity 

(CPI), Fraud Investigations Group (FIG), 

Division of Provider Investigations (DPI) 

at https://dpi.intake@cms.hhs.gov. 

ACOs can also report potential fraud or 

abuse by submitting a complaint to the 

OIG website,5 OIG hotline at 1–800– 

HHS–TIPS (1–800–447–8477), TTY at 

1–800–377–4950, by fax at 1–800–223– 

8164, or by mailing to: Office of 

Inspector General ATTN: OIG HOTLINE 

OPERATIONS P.O. Box 23489 

Washington, DC 20026. ACOs 

suspecting healthcare fraud, waste, or 

abuse are encouraged to visit the CMS 

CPI website 6 at https://www.cms.gov/ 

medicare/medicaid-coordination/ 

center-program-integrity, for more 

information. 

As described above, CMS continues to 

investigate the matter and we have 

taken initial actions in response. We 

have made referrals to law enforcement 

and terminated certain suppliers from 

the Medicare program. CMS also 

continues to work closely with the 

HHS–OIG and Department of Justice, as 

well as our Unified Program Integrity 

Contractors, to investigate health care 

fraud activities, such as those involving 

urinary catheters, that exploit the 

Medicare program. We also undertook 

this notice and comment rulemaking to 

propose an approach for mitigating the 

impact of SAHS billing activity in CY 

2023 on Shared Savings Program 

financial calculations. 

Comment: A couple of commenters 

appeared to interpret the proposals as 

new rules for providers to follow in 

their billing practices. One commenter, 

while stating their support for 

preventing ‘‘fraudulent practices that 

jeopardize the program’s sustainability 

and unfairly impact the financial 

calculations for participating 

providers,’’ cautioned that CMS should 

not put in place ‘‘compliance 

requirements that overly burden honest 

providers’’ and recommended that CMS 

provide additional support and 

resources to help providers understand 

and comply with the new requirements. 

The other commenter, while 

characterizing the proposed rule as 

ensuring fairness, accuracy in financial 

calculations, fraud prevention, and cost 

control, also stated that one potential 

drawback was that ‘‘some providers 

might feel unfairly targeted or burdened 

by additional scrutiny and 

adjustments.’’ 

Response: We clarify that rules or 

requirements for providers in how they 

bill or are paid by Medicare are beyond 

the scope of this proposed rule. The 

proposed changes do not impose new 

rules or requirements related to provider 

billing and payment. The proposed 

changes are specific to ACOs and 

Shared Savings Program calculations to 

mitigate the impact of SAHS billing 

activity in CY 2023 that would 

otherwise be included in Shared 

Savings Program expenditure and 

revenue calculations under the current 

regulations governing the Shared 

Savings Program. 

II. Provisions of the Regulations 

A. Identifying Codes Displaying 

Significant, Anomalous, and Highly 

Suspect Billing Activity in CY 2023 

As we explained in the SAHS billing 

activity proposed rule (89 FR 55170), 

DMEPOS billing to Medicare for 

selected intermittent urinary catheter 

supplies has increased significantly 

since the first quarter of CY 2023, with 

a relatively small number of suppliers 

submitting a large majority of all claims 

for these devices. At a program level, 

spending in these codes remained less 

than 0.1 percent of total FFS spending 

in every year from CY 2016 to CY 2022 

before increasing to nearly 1 percent in 

CY 2023. The SAHS billing activity has 

had a national impact, as evidenced by 

discussion of the issue in the 2024 

Medicare Trustees Report, which noted 

a significant increase in suspected 

fraudulent spending on certain 

intermittent catheters in 2023. The DME 

projections in the report include the 

assumption that this suspected fraud 

would be addressed during 2024.7

We explained that based on our 

evaluation of billing trends for 

individual catheter codes across CY 

2023 and in consultation with the CMS 

Center for Program Integrity (CPI) and 

the CMS Office of the Actuary (OACT), 

we have determined that two specific 

HCPCS codes displayed SAHS billing 

activity in CY 2023: A4352 (Intermittent 

urinary catheter; Coude (curved) tip, 

with or without coating (Teflon, silicone, 

silicone elastomeric, or hydrophilic, 

etc.), each) and A4353 (Intermittent 

urinary catheter, with insertion 

supplies). Both HCPCS codes were 

billed at significantly higher rates in CY 

2023 compared to CY 2022 (claims 

increasing by 163 percent for A4352 and 

by over 5,000 percent for A4353), for 

which CMS was unable to identify a 

clear justification for the increases (for 

example, neither represent a newly 

adopted code for which a natural 

increase in billing might be expected). 

The change in claim volume is 

significant and unexplained, and if not 

addressed, would cause inaccurate and 

inequitable payments and repayment 

obligations in the Shared Savings 

Program. Furthermore, the growth in 

claims is not attributable to Medicare 

providers or suppliers participating in 

Shared Savings Program ACOs and thus 

outside of the ACOs’ ability to 

reasonably control. 

Comment: Many commenters agreed 

with CMS’ determination that HCPCS 

codes A4352 and A4353 displayed 

SAHS billing activity in CY 2023. 

Multiple commenters specifically 

referred to HCPCS codes A4352 and 

A4353 when expressing their support 

for CMS’ proposals, with many others 

stating their support with less 

specificity—for instance stating their 

support for CMS to address billing 

activity associated with ‘‘catheters,’’ 


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8Refer to the definition of SAHS billing activity 

stated elsewhere in this final rule. 

9Medicare Administrative Contractors also 

released a proposed LCD on April 25, 2024 for skin 

substitute grafts/cellular and tissue-based products 

for the treatment of diabetic foot ulcers and venous 

leg ulcers. See https://www.cms.gov/newsroom/ 

press-releases/cms-statement-proposed-localcoverage-determination-lcd-skin-substitute-grafts/ 

cellular-and-tissue. 

‘‘the HCPCS codes,’’ or ‘‘the catheter 

codes.’’ 

Some commenters supported their 

agreement that the two catheter codes 

displayed SAHS billing activity by 

including data to highlight how billing 

activity for the selected catheter codes 

impacted their ACO expenditures, and 

other commenters offered data on the 

impact on national assignable FFS 

expenditures. 

Response: We appreciate the specific 

feedback from commenters and agree 

that the observed DMEPOS billing 

volume for A4352 (Intermittent urinary 

catheter; Coude (curved) tip, with or 

without coating (Teflon, silicone, 

silicone elastomeric, or hydrophilic, 

etc.), each) and A4353 (Intermittent 

urinary catheter, with insertion 

supplies) in CY 2023 represents SAHS 

billing activity. 

Comment: One commenter stated they 

identified and reported ‘‘anomalous 

billing activity’’ for an additional 

catheter billing procedure code (HCPCS 

code A4351) and that the proposal to 

identify HCPCS codes A4352 and A4353 

as SAHS billing activity in CY 2023 

does not fully address the potential 

‘‘bias’’ in financial calculations for their 

ACO of SAHS billing activity for 

catheter services. 

Response: We defined SAHS billing 

activity in the proposed rule (89 FR 

55169) to mean that a given HCPCS or 

CPT code exhibits a level of billing that 

represents a significant claims increase 

either in volume or dollars (for example, 

dollar volume significantly above prior 

year, or claims volume beyond 

expectations) with national or regional 

impact (for example, not only impacting 

one or few ACOs) and represents a 

deviation from historical utilization 

trends that is unexpected and is not 

clearly attributable to reasonably 

explained changes in policy or the 

supply or demand for covered items or 

services. The billing level is significant 

and represents billing activity that 

would cause significantly inaccurate 

and inequitable payments and 

repayment obligations in the Shared 

Savings Program if not addressed. 

In developing the proposed rule, we 

assessed the impact of an increase in 

billing to Medicare for intermittent 

urinary catheter services on DMEPOS 

claims in CY 2023. We determined that 

billing activity for HCPCS codes A4352 

and A4353 was SAHS billing activity 

while A4351 was not. HCPCS codes 

A4352 and A4353 were billed at 

significantly higher rates in CY 2023 

compared to CY 2022 (claims increasing 

by 163 percent for A4352 and by over 

5,000 percent for A4353), for which 

CMS was unable to identify a clear 

justification for the increases (for 

example, neither represent a newly 

adopted code for which a natural 

increase in billing might be expected). 

We also determined that the change in 

claim volume was significant and 

unexplained, and if not addressed, 

would cause inaccurate and inequitable 

payments and repayment obligations in 

the Shared Savings Program. 

Our assessment found that billing 

activity for HCPCS code A4351, 

however, was not SAHS billing activity. 

Compared to catheter codes A4352 and 

A4353, billing for HCPCS code A4351 

exhibited a much smaller increase 

between CY 2022 and CY 2023, with 

claims rising by approximately 16 

percent. Also, unlike A4352 and A4353, 

where the unexplained billing increase 

represented the vast majority of 

spending on those codes in CY 2023, the 

billing increase for A4351 represented a 

small proportion of total billing activity 

for the code in CY 2023. We determined 

that this level of billing did not 

represent a significant claims increase 

with national or regional impact that 

unexpectedly deviated from historical 

utilization trends. We also determined 

that the increase in utilization of HCPCS 

code A4351 was not clearly a billing 

level that was representative of activity 

that would cause significantly 

inaccurate and inequitable payments 

and repayment obligations in the Shared 

Savings Program if not addressed. This 

conclusion was based on our finding 

that the increase in billing for the code 

was so small relative to overall spending 

for most ACOs and to overall national 

or regional spending that it would be 

unlikely to have significant programwide impacts on payment and 

repayment obligations. However, we 

will continue to monitor the billing 

activity with this code in partnership 

with our program integrity colleagues. 

Comment: Some commenters stated 

that, in addition to catheter codes, codes 

for skin substitutes exhibited SAHS 

billing activity in CY 2023. Other 

commenters urged CMS to assess or 

evaluate whether additional codes 

warranted adjustment in Shared Savings 

Program calculations and cited 

increases in billing for skin substitutes 

as an example. 

Response: We assessed the impact of 

an increase in billing to Medicare for 

skin substitutes and determined that the 

billing activity for these services was 

not SAHS billing activity.8 Specifically, 

we found that increases in billing 

activity for skin substitutes were 

explained by the deviation in Local 

Coverage Determinations (LCDs) across 

Medicare Administrative Contractors 

and the variety of innovative products 

which fall under this area, which made 

these services more available in CY 

2023.9 However, we will continue to 

monitor this area and work with our 

program integrity partners. Furthermore, 

as part of our larger strategy to address 

SAHS billing activity and improper 

payments on Shared Savings Program 

financial calculations, CMS has 

proposals in the CY 2025 PFS proposed 

rule, including (respectively): to adjust 

Shared Savings Program calculations to 

mitigate the impact of SAHS billing 

activity occurring in CY 2024 and 

subsequent calendar years, and to 

establish a calculation methodology to 

account for the impact of improper 

payments in recalculating expenditures 

and payment amounts used in Shared 

Savings Program financial calculations 

upon reopening a payment 

determination. 

Comment: Some commenters 

identified additional codes or services 

that they believed exhibited SAHS 

billing activity in CY 2023 or warranted 

additional evaluation by CMS. 

Specifically, commenters mentioned: 

glucose monitoring, laboratory services, 

telemedicine, ventilators, diabetic 

supplies, collagen dressings, and other 

unspecified DMEPOS supplies billed by 

the same suppliers involved in the 

anomalous catheter billing. Several 

commenters suggested that the billing 

activity associated with some of these 

codes had regional, rather than national 

impacts, and there would be a 

detrimental impact to ACO savings 

unless accounted for by CMS. 

Response: We appreciate commenters 

notifying us of their concerns over 

billing activity in CY 2023 for other 

services; however, only the billing for 

urinary catheter services met the 

definition of SAHS billing activity as 

finalized in this rule with respect to CY 

2023. We defined SAHS billing activity 

in the proposed rule to mean that a 

given HCPCS or CPT code exhibits a 

level of billing that represents a 

significant claims increase either in 

volume or dollars (for example, dollar 

volume significantly above prior year, or 

claims volume beyond expectations) 

with national or regional impact (for 

example, not only impacting one or few 

ACOs) and represents a deviation from 


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historical utilization trends that is 

unexpected and is not clearly 

attributable to reasonably explained 

changes in policy or the supply or 

demand for covered items or services 

(89 FR 55169). The billing level is 

significant and represents billing 

activity that would cause significantly 

inaccurate and inequitable payments 

and repayment obligations in the Shared 

Savings Program if not addressed. 

Unlike the two urinary catheter codes, 

some of the other services mentioned by 

commenters were too broad in nature to 

be considered SAHS billing activity. 

While a group of codes may exhibit 

patterns that could constitute SAHS 

billing activity, each individual code 

must still exhibit SAHS billing activity 

for it to be considered under the 

definition of SAHS billing activity we 

relied on in our proposal. Some of the 

commenters’ concerns span entire claim 

types or hundreds of procedure codes, 

suggesting that SAHS billing activity 

existed only in aggregate and not for any 

individual code. For the other services 

suggested by commenters that were 

more specific in nature, the facts 

necessary to support a determination of 

SAHS billing activity had not been 

developed at the time of this 

rulemaking. 

We narrowly crafted the definition of 

SAHS billing activity in part out of 

fairness to ACOs. Both under this rule 

and a related proposal in the CY 2025 

Medicare Physician Fee Schedule (PFS) 

(89 FR 61909 through 61916) to address 

future instances of SAHS billing 

activity, we are mindful of equitable 

concerns that may arise from CMS 

revising standards for the calculation of 

an ACO’s financial performance after 

the start of a performance year or, in the 

case of CY 2023, the completion of the 

performance year. More specifically, we 

described that for billing activity to be 

considered SAHS, the billing activity 

would need to show a significant claims 

increase either in volume or dollars and 

have national or regional impact. These 

high standards are appropriate because 

the remedy we are using to correct for 

SAHS billing activity is the broad 

exclusion of the relevant CPT or HCPCS 

code from certain important financial 

calculations, and this could have mixed 

impact on Shared Savings Program 

ACOs. Without these high standards, 

ACOs are more likely to be held liable 

for losses that they would not be 

otherwise be accountable for or have a 

reduction in or loss of their shared 

savings. 

We remain committed to evaluating 

other cases when improper payments 

may have been made and assessing the 

impact on Shared Savings Program 

calculations. For these reasons, we 

proposed two policies of general 

applicability in the CY 2025 PFS (89 FR 

61596) to address instances of improper 

billing and payments. The first proposal 

in the CY 2025 PFS proposed rule 

would allow CMS to address instances 

of SAHS billing activity occurring in CY 

2024 or subsequent years prior to 

financially reconciling the performance 

year in which the activity occurred (89 

FR 61909 through 61916). Under the 

proposal, following the end of each 

calendar year, we would determine 

whether any codes exhibited SAHS 

billing activity (defined as described 

elsewhere in this final rule) and adjust 

expenditure and revenue calculations to 

exclude payment amounts. We would 

make these adjustments both when the 

calendar year serves as a benchmark or 

performance year. Additionally, under 

the proposed policy, we would adjust 

historical benchmarks used to reconcile 

the performance year when the SAHS 

activity occurred to remove payment 

amounts for the codes from benchmark 

year expenditures. 

The second proposal would provide 

relief to ACOs that are affected by 

instances of fraud or other improper 

payments that may not meet the 

definition of SAHS billing activity (89 

FR 61892 through 61909) or for which 

there is not enough information 

available at the close of the affected 

calendar year to make a determination 

of whether SAHS billing activity 

occurred. Under this proposal, an ACO 

could request the reopening of its 

previously completed financial 

reconciliation results so that they can be 

reevaluated for inaccuracies as a result 

of new information being available. In 

the CY 2025 PFS proposed rule (89 FR 

61596) we invited interested parties to 

comment on these proposals. 

Comment: Several commenters also 

urged CMS to consider HCPCS codes 

A4352 and A4353 as displaying SAHS 

billing activity for time periods beyond 

CY 2023. Multiple commenters urged 

CMS to remove—or assess whether to 

remove—the selected catheter codes 

from CY 2024, with some referencing 

CMS’s proposals in the CY 2025 PFS 

rule related to mitigating SAHS billing 

activity occurring in CY 2024 and 

subsequent years. One of these 

commenters also urged CMS to assess 

whether billing for the selected catheter 

codes in CY 2022 constitutes SAHS 

billing activity and recommended that 

CMS and HHS–OIG review potentially 

fraudulent claims for other DMEPOS 

provided between 2022 and 2024. One 

commenter expressed concerns that 

limiting the scope of the adjustment to 

the selected catheter claims and to the 

CY 2023 time period would not fully 

address the ‘‘bias’’ affecting its ACO. 

Response: With respect to any billing 

increases of the selected catheter codes 

in CY 2024, we note that this is outside 

the scope of this final rule. However, in 

the CY 2025 PFS proposed rule (89 FR 

61909 through 61916), we proposed 

policies to mitigate the impact of SAHS 

billing activity occurring in CY 2024 or 

subsequent calendar years. Specifically, 

we proposed that CMS may determine 

at its sole discretion that the billing of 

specified HCPCS or CPT codes 

represents SAHS billing activity in CY 

2024 or subsequent calendar years that 

warrants adjustments to Shared Savings 

Program calculations. 

With respect to performance years 

prior to CY 2023, we note that CMS has 

already completed financial 

reconciliation for those years, and 

therefore the policy approach proposed 

in the SAHS billing proposed rule and 

adopted in this final rule would not 

address any billing increases of catheter 

codes. As discussed elsewhere in this 

final rule, the Shared Savings Program 

reopening policy proposal in the CY 

2025 PFS proposed rule (89 FR 61892 

through 61909) presents a mechanism 

by which issues affecting already 

reconciled performance years may be 

addressed. 

Final Action: After consideration of 

public comments, we are finalizing our 

proposal to specify in the Shared 

Savings Program regulations at 

§ 425.670(b) that CMS has determined 

that the billing of HCPCS codes A4352 

(Intermittent urinary catheter; Coude 

(curved) tip, with or without coating 

(Teflon, silicone, silicone elastomeric, or 

hydrophilic, etc.), each) and A4353 

(Intermittent urinary catheter, with 

insertion supplies) represents 

significant, anomalous, and highly 

suspect billing activity for CY 2023 that 

would cause significantly inaccurate 

and inequitable payments and 

repayment obligations in the Shared 

Savings Program if not addressed. 

B. Removing Payment Amounts for 

Codes Displaying Significant, 

Anomalous, and Highly Suspect Billing 

Activity in Calendar Year 2023 From 

Shared Savings Program Expenditure 

and Revenue Calculations 

Given our concerns about leaving the 

SAHS billing activity unaddressed and 

the limitations with using an approach 

available under the current regulations 

(as we describe elsewhere in this rule), 

we proposed to revise the policies 

governing Shared Savings Program 

financial calculations to mitigate the 

impact of SAHS billing activity for 

selected catheter codes identified for CY 


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10We note that in some Shared Savings Program 

documentation (see, for example, Table 2 in the 

Medicare Shared Savings Program, Shared Savings 

and Losses, Assignment and Quality Performance 

Standard Methodology Specifications (version #11, 

January 2023), available at https://www.cms.gov/ 

files/document/medicare-shared-savings-programshared-savings-and-losses-and-assignmentmethodology-specifications.pdf-2), we classify 

claim type 72 (along with claim type 71) as Carrier 

(including physician/supplier Part B) and we 

classify claim type 82 (along with claim type 81) 

as DME. We will continue to use these 

classifications, which are based on the type of 

carrier to which the claim was submitted, for other 

program operations. As described by the CMS 

Research Data Assistance Center (ResDAC), claim 

type 71 refers to local carrier non-DMEPOS claims, 

72 to local carrier DMEPOS claims, 81 to durable 

medical equipment regional carrier (DMERC) nonDMEPOS claims, and 82 to DMERC DMEPOS 

claims (see https://resdac.org/cms-data/variables/ 

nch-claim-type-code). 

11This includes provisions under §§ 425.600, 

425.602, 425.603, 425.604, and 425.606 which are 

not relevant for the proposed policy because they 

are not applicable to PY 2023 or for agreement 

periods where CY 2023 is a benchmark year. It also 

includes certain provisions under § 425.601 which 

are not relevant for the proposed policy because the 

proposed policy does not include adjustments to 

benchmark year calculations for the benchmarks 

used to financially reconcile ACOs for PY 2023. 

These provisions are relevant for the COVID–19 

episode exclusion policy under § 425.611 because 

they are applicable to performance or benchmark 

years that overlap with the PHE for COVID–19. 

2023. The provisions would rely on our 

authority under section 1899(d)(1)(B)(ii) 

of the Act to adjust benchmark 

expenditures for beneficiary 

characteristics and such other factors as 

the Secretary determines appropriate. 

Here, we proposed to adjust the 

benchmark to remove payments for the 

specified catheter codes from the 

determination of benchmark 

expenditures. We proposed to use our 

authority under section 1899(i)(3) of the 

Act to apply this adjustment to certain 

other program calculations, including 

the determination of performance year 

expenditures. 

We proposed to exclude all Medicare 

Parts A and B payment amounts for the 

selected catheter HCPCS codes on 

DMEPOS claims from expenditure and 

revenue calculations for CY 2023. We 

would perform these adjustments for 

calculations for CY 2023 when it is the 

performance year, including when CY 

2023 is used to calculate the ACO’s 

performance year expenditures and 

when it is used to calculate the nationalregional blended update to the 

benchmark used in determining 

financial performance for PY 2023, and 

also when CY 2023 is a benchmark year 

for ACOs in agreement periods 

beginning on January 1, 2024, January 1, 

2025, or January 1, 2026. In performing 

this adjustment, we would remove 

payment amounts for the selected 

catheter HCPCS codes on DMEPOS 

claims submitted by any supplier; that 

is, we would not limit the exclusion to 

payment amounts on claims submitted 

by certain suppliers that may have 

individually displayed SAHS billing 

activity so as to protect the integrity of 

any potential investigations which may 

be ongoing. 

Specifically, we would adjust the 

following Shared Savings Program 

calculations, as applicable, to exclude 

all Medicare Parts A and B payment 

amounts on DMEPOS claims (claim 

types 72 and 82) 10 associated with 

HCPCS codes A4352 and A4353 in CY 

2023: 

• Calculation of Medicare Parts A and 

B FFS expenditures for an ACO’s 

assigned beneficiaries for all purposes 

including the following: Establishing, 

adjusting, updating, and resetting the 

ACO’s historical benchmark and 

determining performance year 

expenditures. 

• Calculation of FFS expenditures for 

assignable beneficiaries as used in 

determining county-level FFS 

expenditures and national Medicare 

FFS expenditures, including the 

following calculations: 

++ Determining average county FFS 

expenditures based on expenditures for 

the assignable population of 

beneficiaries in each county in the 

ACO’s regional service area according to 

§§ 425.601(c) and 425.654(a) for 

purposes of calculating the ACO’s 

regional FFS expenditures. 

++ Determining the 99th percentile of 

national Medicare FFS expenditures for 

assignable beneficiaries for purposes of 

the following: 

—Truncating assigned beneficiary 

expenditures used in calculating 

benchmark expenditures under 

§ 425.652(a)(4), and performance year 

expenditures under §§ 425.605(a)(3) and 

425.610(a)(4). 

—Truncating expenditures for 

assignable beneficiaries in each county 

for purposes of determining county FFS 

expenditures according to 

§§ 425.601(c)(3) and 425.654(a)(3). 

—Truncating expenditures for 

assignable beneficiaries for purposes of 

determining truncated national per 

capita FFS expenditures for purposes of 

calculating the Accountable Care 

Prospective Trend (ACPT) according to 

§ 425.660(b)(3). 

++ Determining truncated national 

per capita expenditures FFS per capita 

expenditures for assignable beneficiaries 

for purposes of calculating the ACPT 

according to § 425.660(b)(3). 

++ Determining national per capita 

expenditures for Parts A and B services 

under the original Medicare FFS 

program for assignable beneficiaries for 

purposes of capping the regional 

adjustment to the ACO’s historical 

benchmark according to § 425.656(c)(3), 

and capping the prior savings 

adjustment according to 

§ 425.658(c)(1)(ii). 

++ Determining national growth rates 

that are used as part of the blended 

growth rates used to trend forward 

benchmark year (BY) 1 and BY2 

expenditures to BY3 according to 

§ 425.652(a)(5)(ii) and as part of the 

blended growth rates used to update the 

benchmark according to §§ 425.601(b)(2) 

and 425.652(b)(2)(i). 

• Calculation of Medicare Parts A and 

B FFS revenue of ACO participants for 

purposes of calculating the ACO’s loss 

recoupment limit under the BASIC track 

as specified in § 425.605(d). 

• Calculation of total Medicare Parts 

A and B FFS revenue of ACO 

participants and total Medicare Parts A 

and B FFS expenditures for the ACO’s 

assigned beneficiaries for purposes of 

identifying whether an ACO is a high 

revenue ACO or low revenue ACO, as 

defined under § 425.20, and 

determining an ACO’s eligibility to 

receive advance investment payments 

according to § 425.630. 

• Calculation or recalculation of the 

amount of the ACO’s repayment 

mechanism arrangement according to 

§ 425.204(f)(4). 

This approach recognizes that SAHS 

billing activity has the potential to 

impact an ACO’s savings and loss 

determination for both PY 2023 (the 

year when the SAHS billing activity 

occurred) and future performance years 

for which CY 2023 is a benchmark year. 

Making adjustments when the affected 

period represents a performance year or 

benchmark year is consistent with our 

approach for the exclusion of payment 

amounts for episodes of care for 

treatment of COVID–19 that we 

established in the May 8, 2020 COVID– 

19 IFC (85 FR 27577 through 27581). 

The listed calculations reflect the 

same set of calculations that CMS 

adjusts for a beneficiary’s episode of 

care for treatment of COVID–19, 

specified at § 425.611(c), as amended by 

the CY 2021 PFS final rule (85 FR 

85044), the CY 2023 PFS final rule (87 

FR 70241), and the CY 2024 PFS final 

rule (88 FR 79548), with a few 

exceptions. First, § 425.611(c) includes 

certain provisions that are not relevant 

for the proposed policy.11 Second, the 

proposed policy includes calculations 

related to truncated national per capita 

expenditures used in determining the 


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12When establishing the ACPT in the CY 2023 

PFS final rule, we noted that the first ACPT release 

would be published in 2024 for agreement periods 

beginning on January 1, 2024, and would provide 

a projected annualized growth rate (or rates) relative 

to the 2023 benchmark year (BY3). We noted further 

that to the extent that Medicare projections made 

at that time (2024) anticipated lingering effects from 

the COVID–19 pandemic then they would be 

reflected in the ACPT (see 87 FR 69894), and we 

opted not to amend § 425.611 to include 

adjustments of ACPT-related calculations. However, 

given the known nation-wide impact of the SAHS 

billing activity in CY 2023, it is appropriate to 

propose making adjustments to ACPT-related 

calculations in this proposed rule. 

13For more details on the ACPT and the 

terminology used to describe it, refer to the CY 2023 

PFS final rule (87 FR 69881 through 69898) and 

Medicare Shared Savings Program, Shared Savings 

and Losses, Assignment and Quality Performance 

Standard Methodology, Specifications of the 

Accountable Care Prospective Trend (ACPT) and 

Three-Way Blended Benchmark Update Factor 

(May 2023, Version #1), available at https://

www.cms.gov/files/document/medicare-ssp-acptspecifications.pdf. 

ACPT as described in § 425.660(b)(3) 

that are not included in § 425.611(c).12

For agreement periods beginning on 

January 1, 2024, and in subsequent 

years, CMS incorporates a fixed 

projected growth rate determined at the 

beginning of the ACO’s agreement 

period called the ACPT into the blended 

update factor described in § 425.652(b) 

when updating an ACO’s benchmark for 

each performance year of the agreement 

period.13 Specifically, the ACPT is an 

annual rate of growth in projected 

expenditures during the ACO’s 5-year 

agreement period relative to BY3 and is 

calculated using a modified version of 

the existing FFS United States Per 

Capita Cost (USPCC) growth trend 

projections. The USPCCs are calculated 

by OACT and projects Medicare 

program spending for various recurring 

deliverables, including the Medicare 

Trustees Report and the Advance Notice 

and Announcement of Medicare 

Advantage capitation rates and Part C 

and Part D payment policies. These 

publications include both historical and 

projected future Medicare spending 

amounts expressed on a per capita basis. 

The Modified USPCC Annualized 

Growth Rate used for calculating the 

ACPT in the Shared Savings Program 

reflects the following: (1) exclusion of 

IME and DSH payments, and the 

supplemental payment for Indian 

Health Service/Tribal hospitals and 

Puerto Rico hospitals; and (2) inclusion 

of payments associated with hospice 

claims (see § 425.660(b)(1), see also 87 

FR 69882). 

In considering whether to propose 

adjusting calculations used for the 

ACPT, we considered whether adjusting 

Shared Savings Program calculations 

detailed earlier in this section to 

exclude all payment amounts for the 

selected catheter codes but not adjusting 

projected growth rates used in the threeway blend would result in a bias. We 

expected that a bias would be 

introduced if we adjusted Shared 

Savings Program calculations to remove 

SAHS billing activity from expenditures 

but did not make an adjustment for 

SAHS billing activity from the 

corresponding year used in ACPT 

projections. We thus determined it was 

necessary to adjust the ACPT to promote 

continued integrity and fairness and 

improve the accuracy of Shared Savings 

Program financial calculations. This 

ensures that the projected growth rates 

in future years (for which billing for the 

selected catheter claims is expected to 

revert to typical levels) will not be 

biased. 

As noted in the Regulatory Impact 

Statement (section V. of this final rule), 

we anticipate that the magnitude and 

direction of the net impact of these 

various adjustments may vary from ACO 

to ACO. For example, excluding the 

selected catheter payments may reduce 

an ACO’s performance year 

expenditures, but may also reduce the 

performance year regional and national 

expenditures and, in turn, the update 

factors applied to the ACO’s historical 

benchmark. If the reduction to an ACO’s 

expenditures is larger than the 

reduction to the national-regional 

blended update to the benchmark 

(indicating that the ACO’s performance 

year assigned population was 

disproportionately impacted by the 

SAHS billing activity than assignable 

beneficiaries in the ACO’s regional 

service area or the nation as a whole), 

the ACO would see an increase in total 

savings (or a reduction in total losses) 

relative to the current methodology, 

which makes no adjustments for SAHS 

billing activity. Conversely, if the 

reduction to the ACO’s performance 

year expenditures is smaller than the 

reduction to the national-regional 

blended update to the benchmark, the 

ACO would see a decrease in total 

savings (or increase in total losses) 

relative to the current methodology. 

In the SAHS billing activity proposed 

rule (89 FR 55172), we acknowledged 

that by excluding all payments for the 

selected HCPCS codes from CY 2023 

calculations, we would exclude some 

payments that would have been made 

during the period in the absence of 

SAHS billing activity. This, in turn, 

would create some degree of 

inconsistency between performance 

year expenditure calculations and 

expenditure calculations for the 

historical benchmark against which the 

performance year will be reconciled, as 

years not directly affected by the SAHS 

billing activity include some level of 

payments for the selected codes. We 

explained that we considered whether 

to propose adjusting historical 

benchmarks that will be used for PY 

2023 financial reconciliation to remove 

all payments for the selected codes from 

benchmark year expenditures (for 

example, for an ACO that started an 

agreement period in 2022, adjusting the 

benchmark used for PY 2023 financial 

reconciliation to remove payments for 

the selected codes from benchmark 

years 2019, 2020, and 2021). We 

explained that we opted against this 

approach for two reasons. 

First, historical billing for the selected 

catheter HCPCS codes has generally 

been relatively low, including in recent 

years. As noted in the Regulatory Impact 

Statement (section V. of this final rule), 

billing for these codes remained less 

than 0.1 percent of total FFS billing in 

every year from 2016 to 2022, the period 

encompassing all benchmark years for 

ACOs being financially reconciled for 

PY 2023. Thus, in a year not impacted 

by SAHS billing activity, payments for 

these codes would likely represent only 

a very small portion of an ACO’s total 

per capita expenditures or total 

expenditures for an ACO’s regional 

service area or the national assignable 

population. This conclusion is 

supported by analysis at the regional 

level. Tabulating the difference in per 

capita spending for these codes at the 

Hospital Referral Region (HRR) from 

national average per capita spending 

across 2016 to 2022 (and expressing 

such difference as a percentage of per 

capita spending) results in a standard 

deviation of only 0.03 percentage 

points. Therefore, we believe that the 

impact of adjusting the benchmarks to 

be used for PY 2023 financial 

reconciliation to exclude the selected 

catheter payments would be very small. 

Second, adjusting benchmarks for 

over 450 ACOs being reconciled for PY 

2023 would require the recalculation of 

ACO, national, and regional 

expenditures for seven benchmark 

calendar years and recalculation of 

benchmarks under multiple 

benchmarking methodologies. 

Performing these adjustments would 

delay the issuance of initial 

determinations, and thus the 

disbursement of earned performance 

payments, potentially by several 

months. The SAHS billing activity in 

CY 2023 was unforeseen and could not 

have been planned for or integrated into 

existing operational timelines. It would 

take time to recompute expenditure 

calculations for multiple years and 

benchmark calculations for multiple 

cohorts of ACOs and review and 


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14See § 425.605(d)(1)(iii)(D), 425.605(d)(1)(iv)(D), 

and 425.605(d)(1)(v)(D) for BASIC track Levels C, D 

and E, respectively. 

15See § 425.630(b). 

16See, for example, 76 FR 67948 through 67950. 

Such approaches were more focused on policies to 

support monitoring of ACO performance and 

ensuring program integrity. 

17See, for example, Medicare CY 2023 PFS final 

rule, 87 FR 70195 through 70196 (estimating that 

the addition of new low revenue ACOs would 

Continued 

validate the results. Such a delay would 

be harmful to ACOs and the 

beneficiaries they care for, as ACOs rely 

on earned performance payments for 

critical investments in care delivery. 

The negative implications of a 

prolonged delay to the issuance of 

initial determinations and earned 

performance payments for PY 2023 

would outweigh the potential benefits 

gained by adjusting the benchmarks, 

especially as we anticipate the 

magnitude of the impact of such 

adjustments would be small. 

Section 1899(d)(1)(B)(ii) of the Act 

permits the Secretary to adjust the 

benchmark for beneficiary 

characteristics and such other factors as 

the Secretary determines appropriate. 

This rule relies on this authority to 

remove payments for the specified 

catheter codes from the determination of 

benchmark expenditures where CY 2023 

serves as a benchmark year when 

establishing benchmarks for ACOs in 

agreement periods beginning in January 

2024, 2025, or 2026. 

Other changes are authorized by 

section 1899(i)(3) of the Act. 

Specifically, we rely on section 

1899(i)(3) of the Act to remove payment 

amounts for HCPCS or CPT codes for 

which CMS has identified SAHS billing 

activity from the following calculations: 

(1) performance year expenditures; (2) 

updates to the historical benchmark; 

and (3) ACO participants’ Medicare FFS 

revenue used for multiple purposes 

across the Shared Savings Program, 

including determinations of loss sharing 

limits in the two-sided models of the 

BASIC track 14 and determinations of 

eligibility for advance investment 

payments.15 Section 1899(i)(3) of the 

Act requires that we determine that the 

alternative payment methodology 

adopted under that provision will 

improve the quality and efficiency of 

items and services furnished to 

Medicare beneficiaries, without 

resulting in additional program 

expenditures. The adjustments we 

proposed, which would remove 

payment amounts for codes with 

identified SAHS billing activity from 

the specified Shared Savings Program 

calculations specified in a new section 

of the regulations at § 425.670, would 

capture and remove from program 

calculations expenditures that are 

outside of an ACO’s control, but that 

could significantly affect the ACO’s 

performance under the program. In 

particular, failing to remove these 

payments would create highly variable 

savings and loss results for individual 

ACOs that happen to have overrepresentation or under-representation 

of SAHS billing activity for the selected 

codes among their assigned beneficiary 

populations. 

As described in the Regulatory Impact 

Statement (section V. of this final rule), 

excluding payment amounts for the 

selected catheter HCPCS codes from the 

specified calculations is not expected to 

result in an increase in spending beyond 

the expenditures that would otherwise 

occur under the statutory payment 

methodology in section 1899(d) of the 

Act. Further, these adjustments to our 

calculations to remove payment 

amounts for these codes will promote 

continued integrity and fairness and 

improve the accuracy of Shared Savings 

Program financial calculations as well 

as timely completion of PY 2023 

financial reconciliation. As a result, we 

expect these policies will support ACOs 

continued participation in the Shared 

Savings Program and the program’s 

goals of lowering growth in Medicare 

FFS expenditures and improving the 

quality of care furnished to Medicare 

beneficiaries. 

Based on these considerations, and as 

specified in the Regulatory Impact 

Statement (section V. of this final rule), 

we have determined that adjusting 

certain Shared Savings Program 

calculations to remove payment 

amounts for selected codes identified as 

having SAHS billing activity in CY 2023 

from the calculation of performance 

year expenditures, updates to the 

historical benchmark, and ACO 

participants’ Medicare FFS revenue 

used for multiple purposes across the 

Shared Savings Program, meets the 

requirements for use of our authority 

under section 1899(i)(3) of the Act when 

incorporated into the existing other 

payment model we have established 

pursuant to that section. 

This final rule will be applied 

retroactively, as it affects a performance 

year that has already been completed 

(PY 2023) and a performance year that 

has already started (PY 2024). More 

specifically, we are retroactively 

adjusting expenditure calculations used 

in determining shared savings and 

losses for PY 2023 and certain other 

calculations including to establish 

historical benchmarks for ACOs 

entering an agreement period beginning 

on January 1, 2024, that are used to 

determine ACO financial performance 

for PY 2024 and subsequent years of an 

ACO’s agreement period. Section 

1871(e)(1)(A)(ii) of the Act permits a 

substantive change in regulations, 

manual instructions, interpretive rules, 

statements of policy, or guidelines of 

general applicability under Title XVIII 

of the Act to be applied retroactively to 

items and services furnished before the 

effective date of the change if the failure 

to apply the change retroactively would 

be contrary to the public interest. 

Failing to apply these policies 

retroactively would be contrary to the 

public interest because it would unfairly 

punish Shared Savings Program ACOs 

by forcing them to unexpectedly assume 

a substantial magnitude of financial risk 

for costs that are outside their control 

and were not previously contemplated 

in the Shared Savings Program, 

undermining both the sustainability of 

the Shared Savings Program and the 

public’s faith in CMS as a fair partner. 

We did not fully contemplate the 

potential for SAHS billing activity 

outside of an ACO’s control to 

negatively impact ACOs financially 

when the Shared Savings Program was 

established.16 For this reason, the 

Shared Savings Program financial 

methodology and the procedures we 

have utilized in the past did not provide 

a means to adequately account for 

instances of SAHS billing activity 

outside of an ACO’s control, and 

thereby the related financial risk is 

assumed entirely by ACOs. We view 

this outcome as particularly inequitable 

to ACOs because they have no direct 

means of controlling such costs. Unlike 

Medicare Advantage organizations, 

ACOs are not responsible for processing 

claims for their assigned beneficiaries 

and otherwise have no means of causing 

the denial of such claims. CMS thus 

cannot reasonably have expected ACOs 

to have assumed responsibility for all 

instances of SAHS billing activity 

outside of an ACO’s control when they 

joined the Shared Savings Program. Loss 

of faith in CMS’s ability to effectively 

administer the Shared Savings Program 

by ACOs, providers, and the public 

would likely substantially reduce ACO 

and provider participation in the 

program. Reduced participation, in turn, 

would significantly diminish the 

savings generated to the Medicare Trust 

Funds and quality of care improvements 

resulting from the Program and reduce 

the coordination of care performed for 

Medicare beneficiaries when obtaining 

items and services from ACO providers 

and suppliers.17 For these reasons, it 


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produce $3 billion in net savings over a 5-year 

period). 

would be contrary to the public interest 

for CMS to fail to apply a policy 

mitigating this issue retroactively. 

Undertaking notice and comment 

rulemaking for this issue prior to the 

start of PY 2023 to avoid retroactive 

rulemaking was not possible because we 

could not have foreseen the SAHS 

billing activity prior to the start of the 

performance year. More specifically, we 

were only able to determine that the 

increase in billing on HCPCS codes 

A4352 and A4353 in CY 2023 was 

significant, anomalous, and highly 

suspect after the calendar year ended. 

To identify that the billing activity in 

CY 2023 was significant, anomalous, 

and highly suspect, CMS reviewed 

actual billing levels after the calendar 

year closed and services furnished in 

CY 2023 had occurred and the billing 

level could then be compared to billing 

levels observed in prior calendar years. 

We proposed adding and reserving 

§§ 425.661 through 425.669 in subpart G 

and adding a new section at § 425.670 

to describe adjustments CMS would 

make to Shared Savings Program 

calculations to mitigate the impact of 

SAHS billing activity occurring in CY 

2023 (89 FR 55174). We proposed that 

§ 425.670(b) would specify that CMS 

has determined that the billing of 

HCPCS codes A4352 (Intermittent 

urinary catheter; Coude (curved) tip, 

with or without coating (Teflon, silicone, 

silicone elastomeric, or hydrophilic, 

etc.), each) and A4353 (Intermittent 

urinary catheter, with insertion 

supplies) represents significant, 

anomalous, and highly suspect billing 

activity for CY 2023 that warrants 

adjustment. We proposed under 

§ 425.670(c) to specify the Shared 

Savings Program calculations for which 

CMS would exclude all Medicare Parts 

A and B FFS payment amounts on 

DMEPOS claims (claim types 72 and 82) 

associated with HCPCS codes A4352 

and A4353 and include references to all 

relevant sections of the regulations in 

these provisions. In § 425.670(d), on the 

period of adjustment, we proposed to 

specify that CMS would adjust Shared 

Savings Program calculations for SAHS 

billing activity of HCPCS codes A4352 

and A4353 for CY 2023, when CY 2023 

is either a performance year or a 

benchmark year. We proposed to specify 

under § 425.670(e) that we would make 

adjustments for payments associated 

with HCPCS codes A4352 and A4353 

for BY3 in projecting per capita growth 

in Parts A and B FFS expenditures, 

according to § 425.660(b)(1), for 

purposes of calculating the ACPT for 

agreement periods beginning on January 

1, 2024. 

The following is a summary of the 

comments we received on this proposal 

and our responses. 

Comment: Many commenters 

provided input on the methodology 

outlined in the proposed rule to mitigate 

the impact of SAHS billing activity 

occurring in CY 2023. Most of these 

commenters stated their support for 

removing payment amounts for the 

specified catheter HCPCS codes in CY 

2023 from the specified Shared Savings 

Program expenditure and revenue 

calculations. 

Response: We thank the commenters 

for their support of the proposed 

adjustments to Shared Savings Program 

calculations. We interpret the 

commenters’ general descriptions of our 

proposed adjustments and broad 

support for the proposed rule as 

supportive of all the adjustments to 

Shared Savings Program calculations we 

proposed in the proposed rule (89 FR 

55171 through 55172) and described 

elsewhere in this section of the final 

rule. 

Comment: Many supportive 

commenters specified their support for 

removing ‘‘all’’ Medicare Part A and B 

payment amounts related to the selected 

catheter codes, or for removing 

Medicare Part A and B payment 

amounts for the selected catheter codes 

‘‘by any supplier’’ or ‘‘across all 

suppliers.’’ 

Response: We thank the commenters 

for their support of our proposal to 

remove payment amounts for the 

selected catheter HCPCS codes on 

DMEPOS claims submitted by any 

supplier. By removing all catheter 

HCPCS payments, we ensure that all of 

the SAHS billing activity in CY 2023 for 

the selected catheter codes will be 

removed from any calculations used to 

financially reconcile ACOs for PY 2023 

or in future performance years when CY 

2023 serves as a historical benchmark 

year for an ACO. This approach ensures 

that ACO expenditures, as well as 

regional and national expenditures, are 

not distorted by payment amounts for 

SAHS billing activity beyond the ACOs’ 

control. 

Comment: Many commenters 

supported the proposal to apply the 

adjustments when CY 2023 is a 

benchmark year for ACOs in the 

agreement periods starting in 2024, 

2025, or 2026. A couple of commenters 

stated their support for removing 

payment amounts for the specified 

catheter codes from the determination of 

‘‘benchmark expenditures’’ or from ‘‘CY 

2023 benchmark expenditures’’ without 

specifying which agreement periods 

these adjusted benchmark expenditures 

would be used to reconcile. 

Response: We thank the commenters 

for their support of the proposed 

adjustments to Shared Savings Program 

calculations when CY 2023 serves as a 

benchmark year. We explain in this 

section of the final rule that the 

adjustments would apply to BY 2023 in 

calculating the historical benchmark for 

agreement periods beginning in 2024, 

2025 and 2026. In contrast, as we also 

explain in this section of this final rule, 

we opted not to propose adjusting 

historical benchmarks that will be used 

for PY 2023 financial reconciliation to 

remove all payment amounts for the 

selected codes from benchmark year 

expenditures. That means, for example, 

that when performing financial 

reconciliation for PY 2023 for an ACO 

that started an agreement period in 

2023, we will not adjust the ACO’s 

historical benchmark to exclude 

payment amounts for the selected codes 

from expenditures for BYs 2020 through 

2022. 

While some commenters expressed 

high level support for adjusting 

benchmark expenditures, we interpret 

these comments as supportive of all the 

adjustments to Shared Savings Program 

calculations we proposed in the 

proposed rule (89 FR 55171 through 

55172) and described elsewhere in this 

section of the final rule. 

Comment: Some commenters 

specifically supported the proposal to 

exclude all Medicare Parts A and B 

payment amounts for the selected 

catheter codes on DMEPOS claims when 

CY 2023 is used to calculate the 

national-regional blended update to the 

benchmark used in determining 

financial performance for PY 2023. A 

couple of these commenters explained 

that this proposal, alongside the 

proposals to adjust ACO expenditures 

when CY 2023 serves as a performance 

year and a benchmark year, was ‘‘a 

comprehensive approach’’ and ‘‘the 

most straightforward.’’ One commenter 

stated that the proposals will promote 

accuracy and validity of the data used 

for trending benchmarks. 

Response: We thank commenters for 

their support for the proposal to remove 

payment amounts when CY 2023 is 

used to calculate the national-regional 

blended update to the benchmark. We 

agree with the comments that removing 

payment amounts in calculating both 

ACO expenditures and update factors is 

a comprehensive approach, as it will 

ensure that no SAHS billing activity for 

the selected catheter codes is included 

in the national-regional blended update 

factor and promotes symmetry when 


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18For PY 2023, the only portion of the financial 

reconciliation calculations that retain the codes is 

the calculation of historical benchmarks, excluding 

the national-regional update factor. 

comparing an ACO’s performance year 

expenditures to its updated benchmark. 

Comment: Some commenters also 

expressed support specifically for the 

proposal to exclude all Medicare Parts 

A and B payment amounts for the 

selected catheter codes on DMEPOS 

claims from CY 2023 in revenue 

calculations, or from calculations to 

determine revenue status and 

repayment mechanism amounts in the 

application and change request cycle for 

ACOs applying to enter a new 

agreement period beginning on January 

1, 2025 or continue their participation 

in the program in PY 2025. 

Response: We thank commenters for 

their support of the proposal. 

Comment: Two commenters 

expressed concern that some ACOs may 

be financially disadvantaged by the 

proposed adjustments to Shared Savings 

Program calculations, with one 

emphasizing that the approach would 

harm ACOs that have DME services 

below national and regional benchmark 

trends and thus would have more 

dollars removed from their benchmark 

than from their own expenditures. The 

commenters encouraged CMS to ensure 

that ACOs are not adversely impacted 

financially by the adjustments. They 

requested that—due to the retroactive 

nature of the policy—CMS should hold 

ACOs harmless for the removal of the 

codes or limit the impact of the policy 

using a guardrail (for example, 0.02 

percent in either direction) for PY 2023 

financial calculations. One also 

expressed concern that ACOs could be 

disadvantaged if CMS removes the 

selected catheter codes from BY 2023 

but not from future performance years 

that are reconciled using a historical 

benchmark that includes BY 2023. 

Response: We decline to adopt an 

approach that would have CMS perform 

two versions of Shared Savings Program 

calculations—one that makes 

adjustments for SAHS billing activity 

and one that does not—and then issuing 

initial determinations based on the 

version of the calculations that would 

result in a ACO maximizing their shared 

savings or minimizing their shared 

losses for PY 2023 or based on 

calculations that impose a guardrail that 

limits the impact of the proposed 

policy. As we explained elsewhere in 

this final rule, the SAHS billing activity 

for the selected catheter codes would 

cause significantly inaccurate and 

inequitable payments and repayment 

obligations if not addressed. It would be 

inequitable for ACOs to be held 

accountable for SAHS billing activity 

that occurred among their assigned 

population in the performance year. It 

would also be inequitable to allow other 

ACOs whose assigned populations were 

less affected by SAHS billing in CY 

2023 to benefit from the inclusion of 

these expenditures in the PY 2023 

benchmark update factors. Such ACOs 

would receive an inaccurate updated 

benchmark as a result of SAHS billing 

activity affecting national or regional 

expenditures. Allowing either source of 

inequity or imposing an artificial limit 

on the impacts of excluding the SAHS 

billing activity would undermine the 

integrity, fairness and accuracy of 

Shared Savings Program calculations. 

As part of our final policy, we also 

decline to remove the selected catheter 

codes from future performance years 

that are reconciled using a historical 

benchmark that includes BY 2023. For 

example, when performing financial 

reconciliation for PY 2024 for an ACO 

with benchmark years 2021 through 

2023, we will only exclude payment 

amounts for the selected catheter codes 

from BY 2023 expenditures and not 

from BY 2021, BY 2022, and PY 2024 

expenditures. As we explained in the 

proposed rule (89 FR 55172), historical 

billing for the selected catheter HCPCS 

codes has consistently been relatively 

low, including in recent years. As noted 

in the Regulatory Impact Statement 

(section V. of this final rule), billing for 

these codes remained less than 0.1 

percent of total FFS billing in every year 

from 2016 to 2022, the period 

encompassing all benchmark years for 

ACOs being financially reconciled for 

PY 2023. Thus, in a year not impacted 

by SAHS billing activity, payments for 

these codes would likely represent only 

a very small portion of an ACO’s total 

per capita expenditures or total 

expenditures for an ACO’s regional 

service area or the national assignable 

population. 

Comment: A couple of commenters 

suggested CMS should modify its 

approach to mitigating the impact of 

SAHS billing activity from the proposal. 

One commenter expressed concern over 

any approach that would remove 

catheter codes from the national 

component of the update factor used to 

calculate the benchmark for PY 2023 but 

not from the regional component of the 

update factor. The second commenter 

stated their suspicion that the impacts 

of SAHS billing activity for the catheter 

codes varies widely across ACOs and 

explained their ‘‘hope’’ that the 

methodology for adjusting historical 

benchmarks will account for individual 

and regional variation in this element, 

so it does not adversely impact 

benchmarks of some over others. 

Response: We proposed to exclude all 

Medicare Parts A and B payment 

amounts for the selected catheter 

HCPCS codes on DMEPOS claims from 

expenditure and revenue calculations 

for CY 2023. We will perform this 

adjustment when CY 2023 is used to 

calculate the ACO’s performance year 

expenditures and when it is used to 

calculate the national-regional blended 

update to the benchmark used in 

determining financial performance for 

PY 2023.18 That is, payment amounts 

will be removed from both the national 

component and the regional component 

of the national-regional blended update 

factor. By applying this adjustment to 

both components of the update factor, 

the adjustment will account for any 

individual and regional variation of 

SAHS billing activity for the catheter 

codes so that the impact of the 

exclusion of the catheter codes on an 

ACO is dependent on the degree to 

which SAHS billing activity for the 

catheter codes impacted the ACO’s 

region and the ACO’s beneficiaries. 

Additionally, we will perform this 

adjustment when CY 2023 serves as a 

benchmark year. 

Comment: Many commenters in 

support of the proposals expressed 

differing views on the anticipated 

impact of the proposed changes on 

Shared Savings Program ACOs’ 

financial performance. Many supportive 

commenters suggested the proposed 

changes would be financially 

advantageous for ACOs or that they will 

improve the accuracy of CMS’ 

evaluation of the ACO’s financial 

performance. One commenter stated 

that not finalizing the proposed changes 

and including payment amounts for 

SAHS billing activity for catheter codes 

would have a ‘‘severely inappropriate 

impact’’ on Shared Savings Program 

calculations and might lead to a loss of 

shared savings for some ACOs. Several 

commenters characterized the proposals 

as helping to hold ACO’s ‘‘harmless’’ for 

SAHS billing activity for the catheter 

codes on ACO expenditures, with one 

stating their belief that ACOs should not 

be responsible for costs ‘‘that were not 

associated with the care of their 

beneficiaries’’ and another stating that 

ACOs should not be held responsible for 

‘‘anomalous Medicare spending’’ 

beyond their control. One commenter 

stated that the proposals are vital to 

supporting ACOs in maintaining their 

financial stability, and another stated 

that the proposals are vital to ensuring 

that ACOs are not ‘‘unfairly penalized 

for expenses beyond their control.’’ 

Other commenters stated that SAHS 


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billing activity ‘‘weakens the integrity’’ 

of the Shared Savings Program and can 

have a detrimental impact on 

organizations’ financial reconciliation. 

Some supportive commenters from 

ACOs described the anticipated impact 

the SAHS billing activity would have on 

their own ACO’s financial performance 

absent the adjustments to calculations. 

One commenter stated their belief that 

the inclusion of payment amounts for 

the catheter codes would ‘‘damage the 

integrity’’ of their ACO’s PY 2023 

financial reconciliation. A few 

commenters stated that without these 

adjustments their ACOs may not share 

in savings, shared savings could be 

negatively impacted, or their ACOs 

would have a high probability of being 

liable for shared losses. One commenter 

stated that if payment amounts for the 

selected catheter codes were included, 

their ACO would have a high 

probability of being liable for shared 

losses. One commenter expressed their 

belief that removing payment amounts 

for the selected catheter codes will lead 

to a more accurate and true evaluation 

of their performance, and another stated 

that the proposals will have a 

substantial impact on their ACO’s 

‘‘sustainability.’’ A couple of 

commenters asserted their ACO 

expenditures were significantly 

impacted by the SAHS billing activity 

for the catheter codes. 

Response: We agree with the 

commenters who stated the changes we 

are finalizing in this final rule will 

improve the accuracy and integrity of 

Shared Savings Program calculations. 

SAHS billing activity in CY 2023 for the 

selected catheter codes had a substantial 

impact on ACO expenditures as well as 

national expenditures. Failing to 

address SAHS billing activity that 

occurred in CY 2023 would jeopardize 

the integrity of the Shared Savings 

Program. Holding an ACO accountable 

for substantial losses due to the SAHS 

billing activity is not only inequitable 

but will dramatically increase the level 

of risk associated with participation, 

making the Shared Savings Program 

unattractive. We also agree with the 

many commenters who characterized 

the proposals as promoting continued 

integrity and fairness and improving the 

accuracy of Shared Savings Program 

financial calculations. Alternatively, 

proceeding with program operations 

using the current methodology that does 

not adjust for SAHS billing activity 

would cause significantly inaccurate 

and inequitable payments and 

repayment obligations. 

Comment: Some commenters who 

expressed support for the proposed 

adjustments to Shared Savings Program 

calculations acknowledged the need for 

the application of the changes 

retroactively, with one stating that 

failure to do so would unfairly punish 

Shared Savings Program ACOs and 

potentially jeopardize the sustainability 

of the program. 

A couple of commenters shared a 

concern about the retroactive nature of 

the changes, with one stating that 

‘‘unforeseen financially harmful 

calculations’’ would be applied after the 

performance year has been completed 

with no time for ACOs to make any 

changes in decisions or operations. Both 

noted that ACOs used data received 

during the performance year (which 

would not have excluded payment 

amounts associated with the selected 

codes) to inform ACO activities, 

including strategies, resourced 

interventions, and participation 

decisions. 

Response: We appreciate the support 

from some commenters for the 

retroactive applicability of this 

rulemaking, and we acknowledge the 

concern expressed by others. Any 

changes to calculations involving PY 

2023 financial reconciliation or final 

historical benchmarks for ACOs starting 

new agreement periods on January 1, 

2024, must have retroactive 

applicability because PY 2023 is already 

completed and PY 2024 has already 

begun. As we explain elsewhere in this 

section, applying the proposal 

retroactively is justifiable and consistent 

with our statutory authority because 

failing to apply the proposed changes 

retroactively would be contrary to the 

public interest. Failure to modify PY 

2023 financial reconciliation and final 

historical benchmarks in the manner we 

describe in this rule would unfairly 

punish Shared Savings Program ACOs 

by forcing them to unexpectedly assume 

a substantial magnitude of unexpected 

financial risk for costs outside their 

control and not previously 

contemplated in the Shared Savings 

Program, undermining both the 

sustainability of the Shared Savings 

Program and the public’s faith in CMS 

as a fair partner. 

Comment: Several commenters 

requested that CMS provide ACOs with 

information about the payment amounts 

excluded at the regional level or at both 

the regional and national level. A 

couple of commenters requested that 

CMS not remove claims associated with 

SAHS billing activity from the monthly 

claim and claim line feeds (CCLFs), 

requesting instead that CMS flag them. 

Response: In order to promote 

transparency in calculations and 

address commenter’s concerns, within 

program reports provided with PY 2023 

financial reconciliation results, we will 

provide ACOs with the per capita 

amount of the two catheter codes 

removed from their performance year 

assigned beneficiary expenditures 

consistent with other spending 

categories. Medicare claim payment 

amounts for the two catheter codes will 

continue to be included in the monthly 

Part A, B and D Medicare CCLF files 

sent to ACOs. 

Comment: Some commenters urged 

CMS to develop or strengthen policies 

and processes to monitor, report, and 

address SAHS billing activity should it 

occur in the future. One commenter, for 

example, recommended CMS ‘‘build 

algorithms to concurrently identify 

fraud prior to making payments.’’ 

Another commenter urged CMS to work 

with ACOs to improve the process for 

reporting suspected fraud, waste, and 

abuse. Several commenters also urged 

CMS to finalize policies to mitigate the 

impact of SAHS billing activity 

occurring in CY 2024 and subsequent 

years that were proposed in the CY 2025 

PFS proposed rule. 

Response: We thank commenters on 

their suggestions for strengthening 

policies and processes to monitor for 

potential fraud, waste, and abuse. We 

will share these comments with our 

program integrity colleagues, and we 

note that we have also provided 

information to ACOs on ways they can 

report potential fraud or abuse to CPI or 

HHS–OIG. We also thank commenters 

for their support for proposed policies 

to mitigate the impact of SAHS billing 

activity occurring in CY 2024 and 

subsequent years proposed in the CY 

2025 PFS proposed rule. We will 

summarize and respond to comments 

submitted directly in response to that 

proposed rule within the CY 2025 PFS 

final rule. 

Comment: Some commenters made 

recommendations for mitigating the 

impact of SAHS billing activity on 

Innovation Center models. Most of these 

commenters requested that the Center 

for Medicare and Medicaid Innovation 

(CMS Innovation Center) perform 

similar adjustments to mitigate SAHS 

billing activity for the catheter codes in 

the ACO Realizing Equity, Access, and 

Community Health (ACO REACH) 

Model, although several commenters 

expressed concerns that the approach 

being used by the ACO REACH Model 

would disadvantage ACOs. One 

commenter requested that the CMS 

Innovation Center exclude payment 

amounts for the catheter codes from the 

Bundled Payments for Care 

Improvement Advanced Model and the 

Comprehensive Care for Joint 

Replacement Model. 


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19Failing to take any action to address this SAHS 

billing activity would result in CMS using 

inaccurate data to make eligibility determinations 

and require ACOs to establish repayment 

mechanism arrangements for inflated amounts that 

include the impact of SAHS billing activity. 

20Refer to discussion in the CY 2023 PFS final 

rule, 87 FR 69869 through 69870. 

Response: The commenters’ 

suggestions are beyond the scope of this 

rulemaking, which addresses 

adjustments to Shared Savings Program 

calculations to mitigate the impact of 

SAHS billing activity for selected 

catheter codes in CY 2023. The CMS 

Innovation Center did an assessment of 

the effects of SAHS billing in 2023 on 

each model. Determinations of whether 

action to address SAHS billing was 

necessary were made on a model-bymodel basis. 

Final Action: After consideration of 

public comments, we are finalizing our 

proposal to retroactively remove 

payment amounts for codes displaying 

SAHS billing activity in CY 2023 from 

Shared Savings Program expenditure 

and revenue calculations. Specifically, 

we are finalizing our proposal to add 

and reserve §§ 425.661 through 425.669 

in subpart G and add a new section at 

§ 425.670 to describe adjustments CMS 

will make to Shared Savings Program 

calculations to mitigate the impact of 

SAHS billing activity occurring in CY 

2023. Section 425.670(b) specifies that 

CMS has determined that the billing of 

HCPCS codes A4352 (Intermittent 

urinary catheter; Coude (curved) tip, 

with or without coating (Teflon, silicone, 

silicone elastomeric, or hydrophilic, 

etc.), each) and A4353 (Intermittent 

urinary catheter, with insertion 

supplies) represents significant, 

anomalous, and highly suspect billing 

activity for CY 2023 that warrants 

adjustment. Section 425.670(c) specifies 

the Shared Savings Program 

calculations for which CMS will 

exclude all Medicare Parts A and B FFS 

payment amounts on DMEPOS claims 

(claim types 72 and 82) associated with 

HCPCS codes A4352 and A4353 and 

includes references to all relevant 

sections of the regulations in these 

provisions. In § 425.670(d), on the 

period of adjustment, we specify that 

CMS will adjust Shared Savings 

Program calculations for SAHS billing 

activity of HCPCS codes A4352 and 

A4353 for CY 2023, when CY 2023 is 

either a performance year or a 

benchmark year. We specify under 

§ 425.670(e) that we will make 

adjustments for payments associated 

with HCPCS codes A4352 and A4353 

for BY3 in projecting per capita growth 

in Parts A and B FFS expenditures, 

according to § 425.660(b)(1), for 

purposes of calculating the ACPT for 

agreement periods beginning on January 

1, 2024. 

III. Reduction of the Comment Period 

and Reduction of the 30-Day Delay in 

Effective Date of This Final Rule 

A. Reduction of the Comment Period to 

30 Days 

In the SAHS billing activity proposed 

rule (89 FR 55174), we explained that 

there is an urgent need to address the 

impact of SAHS billing activity on 

Shared Savings Program calculations 

based on CY 2023 data used in 

determining PY 2023 financial 

performance, in establishing 

benchmarks for ACOs participating in 

agreement periods beginning on January 

1, 2024, and in calculating factors used 

in the application cycle for ACOs 

applying to enter a new agreement 

period beginning on January 1, 2025, 

and the change request cycle for ACOs 

continuing their participation in the 

program for PY 2025.19 These program 

operations depend on the timely use of 

CY 2023 data. Notice and comment 

rulemaking to consider the proposed 

adjustments to Shared Savings Program 

calculations for SAHS billing activity 

identified for CY 2023 has necessitated 

delaying key program operations that 

depend on CY 2023 data, pending the 

issuance of this final rule that specifies 

our final policy as informed by public 

comment on the SAHS billing activity 

proposed rule. We described in the 

proposed rule the impact of delayed use 

of CY 2023 data in the aforementioned 

program operations and approaches that 

would allow us to continue to meet the 

statutory requirements for notice and 

comment rulemaking procedures, such 

as by reducing the comment period, and 

possibly reducing or eliminating the 

delay in the effective date of a final rule 

(if issued). 

We explained (89 FR 55174) that 

significant delays in the issuance of 

initial determinations for PY 2023 

financial performance, and related 

shared savings payments, would be 

substantially disruptive to ACOs that 

exclusively receive revenue from shared 

savings payments, particularly small, 

rural, and low revenue ACOs and those 

serving underserved populations. With 

few exceptions, the Shared Savings 

Program historically completes 

calculations of shared savings and 

shared losses and issues initial 

determinations of ACO financial 

performance approximately 8 months 

after the conclusion of the performance 

year, and shortly thereafter issues 

performance payments to ACOs eligible 

to share in savings.20 CMS initiates 

payments to ACOs that have earned 

shared savings for a performance year in 

September of the year following the 

applicable performance year. ACOs rely 

on the orderly and timely calculation of 

financial reconciliation, and 

distribution of shared savings. We noted 

that modifications to Shared Savings 

Program financial methodology as 

proposed in the proposed rule 

necessitate delaying the delivery of 

financial reconciliation reports to ACOs, 

and issuance of performance payments 

to ACOs that have earned shared 

savings. 

We further explained in the proposed 

rule (89 FR 55174) that delayed use of 

CY 2023 data would also impair 

administration of the Shared Savings 

Program in 2024 and 2025. CY 2023 

data are instrumental in determining 

factors used in the application cycle for 

ACOs applying to enter a new 

agreement period beginning on January 

1, 2025, and change request cycle for 

existing ACOs continuing their 

participation in the program for PY 

2025. For instance, CY 2023 data will be 

used in the calculation of total Medicare 

Parts A and B FFS revenue of ACO 

participants and total Medicare Parts A 

and B FFS expenditures for the ACO’s 

assigned beneficiaries for purposes of 

identifying whether an ACO is high 

revenue or low revenue, as defined 

under § 425.20. The high/low revenue 

status is then used to determine an 

ACO’s eligibility to receive advance 

investment payments to expand 

accountable care to underserved 

communities according to § 425.630, 

and an ACO’s eligibility for the CMS 

Innovation Center’s new ACO PC Flex 

Model for the January 1, 2025 start date. 

CY 2023 data will also be the basis for 

calculating the amount of required 

repayment mechanism arrangements for 

ACOs entering two-sided models for PY 

2025. We explained that the proposed 

approach would help ensure the 

accuracy of the calculations used in 

determining ACO revenue status and 

repayment mechanism amounts. We 

noted that delays in the application 

cycle already underway could 

jeopardize our ability to timely issue 

application dispositions, execute 

participation agreements with eligible 

ACOs for the new agreement period 

beginning on January 1, 2025, deliver 

PY 2025 initial assignment list reports, 

and timely deliver initial advance 

investment payments for newly eligible 

ACOs. Substantial delays in change 


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21See for example, Medicare Shared Savings 

Program, Key Application Actions and Deadlines 

For Agreement Period Beginning on January 1, 

2025, available at https://www.cms.gov/files/ 

document/key-application-actions-anddeadlines.pdf. 

request cycle milestones also would 

jeopardize our ability to ensure ACOs 

have met program requirements to 

facilitate their continued participation 

in the Shared Savings Program for the 

performance year beginning on January 

1, 2025. 

Finally, we explained (89 FR 55175) 

that modifications to Shared Savings 

Program financial methodology as 

proposed in the proposed rule would 

also necessitate delaying the delivery of 

final historical benchmark reports to 

ACOs. We expressed our recognition 

that delaying the availability of these 

program reports to ACOs could hamper 

ACOs’ ability to set effective cost targets 

that may depend on the ACO’s projected 

financial performance based on its 

benchmark value and that substantial 

delays in issuance of the historical 

benchmark reports to ACOs could make 

it more challenging for ACOs to 

effectively curb growth in Medicare FFS 

expenditures, a central aim of the 

Shared Savings Program. 

Section 1871(b)(1) of the Act generally 

requires that Medicare rules must be 

proposed with a 60-day comment 

period. Section 1871(b)(2) of the Act 

provides that this requirement does not 

apply where a statute specifically 

permits a regulation to be issued in 

interim final form or otherwise with a 

shorter period for public comment; a 

statute establishes a specific deadline 

for the implementation of a provision 

and the deadline is less than 150 days 

after the date of the enactment of the 

statute in which the deadline is 

contained; or subsection (b) of section 

553 of title 5, United States Code, does 

not apply under subparagraph (B) of 

such subsection. Subparagraph (B) of 5 

U.S.C. 553(b) provides an exception to 

the requirement for an agency to publish 

a general notice of proposed rulemaking 

in the Federal Register when the agency 

for good cause finds (and incorporates 

the finding and a brief statement of 

reasons therefore in the rules issued) 

that notice and public procedure 

thereon are impracticable, unnecessary, 

or contrary to the public interest. 

We found that a 60-day comment 

period was both impracticable and 

contrary to the public interest (89 FR 

55174 through 55176). For the reasons 

stated, we therefore reduced the 

comment period of the proposed rule to 

30 days. We noted in the proposed rule 

that failing to use a 30-day comment 

period in lieu of a 60-day comment 

period would be impracticable and 

contrary to the public interest in part for 

the same reasons described in section 

II.B. of the proposed rule that failing to 

apply this rule retroactively to PY 2023 

and PY 2024 would be contrary to the 

public interest. Additionally, we 

explained that failing to use the reduced 

comment period would be impracticable 

and contrary to the public interest 

because the additional time would not 

substantially enhance the public’s 

ability to participate in this rulemaking, 

and it would substantially impair CMS’s 

ability to administer the Shared Savings 

Program, by delaying the following: 

• Issuance of initial determinations of 

shared savings and shared losses to 

ACOs for PY 2023. 

• Disbursement of PY 2023 earned 

performance payments to ACOs. 

• Determination of ACO revenue 

status used in determining ACO 

eligibility for advance investment 

payments and eligibility for the ACO PC 

Flex Model, in connection with the 

application cycle for ACOs applying to 

enter a new agreement period beginning 

on January 1, 2025. 

• Calculation of required amounts for 

repayment mechanism arrangements for 

ACOs entering a two-sided model for PY 

2025 and the deadline for ACO 

submission of repayment mechanism 

documentation to CMS for review, to 

ensure compliance with related 

requirements. 

• Calculation of final historical 

benchmarks for ACOs beginning an 

agreement period on January 1, 2024, 

and delivery of final historical 

benchmark reports to ACOs. 

We noted that it would be contrary to 

the public interest for ACOs to be 

harmed by the delay in administration 

of the Shared Savings Program caused 

by the rule that intended to relieve them 

from the unexpected harm arising from 

SAHS billing activity (89 FR 55175). A 

60-day comment period would have 

likely necessitated delaying these key 

operations until at least late 2024, 

substantially delaying these operations 

and related processes, which would 

harm ACOs and impair the operation of 

the Shared Savings Program and thwart 

the relief to ACOs that would otherwise 

be provided by this rule. 

We explained that a substantial delay 

to initial determinations of shared 

savings and losses for PY 2023 and 

disbursement of earned performance 

payments would be financially ruinous 

to the many ACOs that rely on these 

payments to operate (89 FR 55175). For 

example, in PY 2022, 304 ACOs earned 

$2.52 billion in performance payments. 

Shared savings payments are the 

primary revenue source of ACOs. Many 

ACOs, particularly small, rural, and low 

revenue ACOs and those serving 

underserved populations, depend on 

receiving shared savings payments on a 

predictable annual schedule to continue 

operating. We noted that it is selfevident that enabling ACOs to continue 

to operate with minimal disruption is 

itself in the public interest and in 

particular is in the interest of Medicare 

beneficiaries whose care is coordinated 

by ACOs. 

We explained that delaying 

adjudication of application and 

repayment mechanism decisions also 

would jeopardize or prevent CMS and 

ACOs starting performance year 2025 

(89 FR 55175). CMS and ACOs cannot 

timely enter into agreements for the 

agreement period beginning on January 

1, 2025, jeopardizing the expansion of 

accountable care to underserved 

communities, stifling innovation in 

primary care payment reform and 

restricting ACOs’ ability to meet 

requirements for entering or continuing 

their participation in a two-sided model 

for PY 2025. Phase 1 of the application 

period closed June 17, 2024.21 Failing to 

timely adjudicate hundreds of 

applications and over ten thousand 

change requests, for new and renewing 

ACOs, and ACOs continuing their 

participation in Shared Savings 

Program, would impair our ability to 

timely and accurately evaluate ACOs 

based on statutorily required eligibility 

criteria and existing regulatory 

requirements. We cannot start 

performance year 2025 until all 

applications and change requests have 

been reviewed, processed, and 

adjudicated. 

Additionally, we noted that given the 

limited scope of the proposed rule, 

addressing a single issue through 

proposed changes to the Shared Savings 

Program regulations, a 30-day comment 

period was a reasonable amount of time 

for public inspection and comment (89 

FR 55175). In advance of the SAHS 

billing activity proposed rule, many 

interested parties wrote to the 

Administrator requesting relief from 

SAHS billing activity, so they are 

familiar with this issue and would 

likely be ready to review the policy and 

impacts within the 30-day timeframe. 

Furthermore, we explained that 

starting notice and comment rulemaking 

sooner to allow a 60-day comment 

period was impracticable (89 FR 55175 

through 55176). As we described in the 

proposed rule, we could not have 

foreseen the SAHS billing activity in 

advance and were only able to 

determine that the increase in billing on 

HCPCS codes A4352 and A4353 in CY 

2023 was significant, anomalous, and 


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22See https://www.cms.gov/priorities/innovation/ 

innovation-models/aco-primary-care-flex-model. 

highly suspect after the calendar year 

ended. To identify that the billing 

activity in CY 2023 was SAHS billing 

activity, CMS reviewed actual billing 

levels after the calendar year closed and 

services furnished in CY 2023 had 

occurred and the billing level could 

then be compared to billing levels 

observed in prior calendar years. Careful 

analysis of the billing activity, plus 

careful analysis of the impact on ACOs 

in the Shared Savings Program, was 

critical to determining whether 

mitigation measures were necessary. 

Given the unprecedented nature of the 

circumstances, time was also required to 

develop the appropriate proposed 

mitigation approach. Once we 

determined that this billing activity in 

CY 2023 was significant, anomalous, 

and highly suspect, that it was 

necessary to mitigate its impact on 

Shared Savings Program expenditures 

and revenue calculations, and the 

appropriate proposed mitigation 

approach, we immediately began the 

process to undertake notice and 

comment rulemaking. For the 

aforementioned reasons, among others 

discussed the proposed rule, we found 

that a failure to reduce the comment 

period was impracticable and contrary 

to the public interest, and thus found 

the agency has good cause to set a 30- 

day comment period. 

The modifications to the Shared 

Savings Program financial methodology 

that we are finalizing in this final rule, 

following the 30-day comment period, 

will allow us to maintain timely 

adjudication of certain determinations 

of applicant ACOs’ eligibility to 

participate under the advance 

investment payment option, or the ACO 

PC Flex Model, for an agreement period 

beginning on January 1, 2025, and 

timely finalization of repayment 

mechanism arrangements required for 

ACOs to enter or continue their 

participation in two-sided models for 

PY 2025. While our use of the 30-day 

comment period will minimize 

disruptions to timelines for certain 

milestones, we anticipate that the 

issuance of initial determinations and 

the disbursement of earned performance 

payments for PY 2023 will still be 

delayed by approximately 6 weeks. 

Where possible, we will work to reduce 

delays and will proactively 

communicate with ACOs about changes 

in timelines for these, or other, 

milestones. 

Comment: Some commenters 

requested that CMS extend deadlines by 

the same amount of time for the annual 

application and change request cycle, 

including deadlines for risk track 

selection, participant lists, and ACO PC 

Flex Model participation decisions. 

Response: While we appreciate the 

interests of ACOs in requesting an 

extension of deadlines in the annual 

application and change request cycle by 

the same amount of time as the delay in 

issuance of performance year 

determinations, we are unable to delay 

deadlines by multiple weeks since it 

would delay application dispositions 

scheduled for early December until after 

the January 1, 2025, agreement period 

start date. This would require delaying 

the start of PY 2025 until sometime after 

January 1, 2025. This would, among 

other things, require CMS to propose 

policies for conducting financial 

calculations using a non-standard 

performance year, as was done to 

accommodate a July 1, 2019, 

performance year start date in the Share 

Savings Program final rule published in 

December 2018 (83 FR 67816). This 

would also create further delays and 

uncertainty for ACOs. A delay in 

finalizing participant lists would delay 

the publication of PY 2025 initial 

assignment lists, hindering ACOs’ 

ability to effectively coordinate care for 

their assigned beneficiary populations. 

A delay in the start of the Shared 

Savings Program’s performance year 

also may have significant adverse 

consequences for ACO professionals 

participating in ACOs. Many Shared 

Savings Program tracks are Advanced 

Alternative Payment Models (APMs) for 

purposes of the Quality Payment 

Program APM incentive. Qualifying 

APM Participants (QPs) are not subject 

to the Merit-based Incentive Payment 

System reporting requirements or 

payment adjustments (though they may 

have separate and similar reporting 

obligations under the Shared Savings 

Program). See 42 CFR 414.1310(b)(1)(i) 

and (ii). For payment years through CY 

2025, QPs also earn a lump-sum APM 

incentive payment based on estimated 

aggregate payments for covered 

professional services furnished during 

the preceding calendar year. See 42 CFR 

414.1310; 414.1450. A reduction in the 

length of the Shared Savings Program’s 

performance year could cause some 

ACO professionals to fail to achieve QP 

status. 

While we are unable to modify Shared 

Savings Program applications deadlines 

for the reasons described previously in 

this final rule, we were able to extend 

the deadline for ACOs to apply to the 

ACO PC Flex Model from August 1, 

2024, until August 23, 2024, as this 

delay would not delay Shared Savings 

Program application dispositions or the 

start of the Model.22

Furthermore, we are clarifying that we 

anticipate releasing PY2023 results in 

late October and making payments to 

ACOs in mid-November. Where 

possible, we will work to reduce delays 

and will proactively communicate with 

ACOs about changes in timelines. 

B. Reduction of the 30-Day Delay in 

Effective Date of This Final Rule 

In the proposed rule we explained 

that section 1871(e)(1)(B)(i) of the Act 

prohibits a substantive change in 

Medicare regulations from taking effect 

before the end of the 30-day period 

beginning on the date the rule is issued 

or published (89 FR 55176). Section 

1871(e)(1)(B)(ii) of the Act permits a 

substantive rule to take effect on a date 

that precedes the end of the 30-day 

period if the Secretary finds that a 

waiver of the 30-day period is necessary 

to comply with statutory requirements 

or that the application of the 30-day 

period is contrary to the public interest. 

The Administrative Procedure Act 

(APA), 5 U.S.C. 553(d), similarly 

requires a 30-day delay in the effective 

date of a substantive final rule. This 30- 

day delay in effective date can be 

waived, however, if an agency finds 

good cause to support an earlier 

effective date, among other reasons. 5 

U.S.C. 553(d)(3). We indicated in the 

proposed rule that, if CMS were to 

finalize a rule based on the proposed 

rule, we would strongly consider 

reducing or waiving the 30-day delay in 

effective date under the provisions 

described previously to the extent that 

the delay in effective date would also 

harm ACOs or thwart the purpose of 

this provision by delaying our timely 

administration of the Shared Savings 

Program functions as described in 

section III.A of the proposed rule (89 FR 

55176). We noted that this waiver 

would be in part for the same reasons 

that we reduced the comment period on 

the proposed rule from 60 days to 30 

days, as described in section III.A. of the 

proposed rule. We requested comment 

on this approach, including a possible 

finding of good cause and how ACOs 

would be impacted by the delay. 

The following is a summary of the 

comments we received and our 

responses. 

Comment: One commenter expressly 

supported an exception to the 30-day 

delay in effective date, while several 

other commenters urged CMS to finalize 

the proposed rule ‘‘as expeditiously as 

it can within its legal authority’’ and 


lotter on DSK11XQN23PROD with RULES1
79168 Federal Register / Vol. 89, No. 188 / Friday, September 27, 2024 / Rules and Regulations 

23See for example, Medicare Shared Savings 

Program, Key Application Actions and Deadlines 

For Agreement Period Beginning on January 1, 

2025, available at https://www.cms.gov/files/ 

document/key-application-actions-anddeadlines.pdf (specifying Phase 1 Dispositions to be 

issued on Oct. 17, 2024, at which time CMS makes 

available ACO Participant List and SNF Affiliate 

List dispositions, Beneficiary assignment eligibility 

Phase 1, and AIP eligibility final disposition). See 

also, CMS, Center for Medicare & Medicaid 

Innovation, ACO Primary Care Flex Model, Request 

for Applications (05/30/2024), available at https:// 

www.cms.gov/files/document/aco-pc-flex-rfa.pdf 

(explaining that an applicant ACO will be notified 

whether CMS has selected them for participation in 

the ACO PC Flex Model during the phase 1 final 

disposition on October 17, 2024, which aligns with 

the Shared Savings Program phase 1 final 

dispositions). 

others urged CMS to finalize its 

proposals as quickly as possible to 

minimize delays in shared savings 

distribution. 

Response: We thank commenters for 

their support of measures to finalize 

changes to Shared Savings Program 

regulations expeditiously to reduce 

delays to Shared Savings Program 

operations. 

We find that the application of the 30- 

day period would be impracticable and 

contrary to the public interest. In 

conjunction with our application of this 

rule retroactively and the reduction of 

the proposed rule’s comment period to 

30 days, we have determined that, for us 

to timely adjudicate applicant ACOs’ 

eligibility to participate under the 

advance investment payment option 

and the ACO PC Flex Model for 

agreement periods beginning on January 

1, 2025, and timely finalize repayment 

mechanisms necessary for ACOs to 

participate in two-sided models for PY 

2025, we must use expenditure and 

revenue calculations for CY 2023, 

adjusted to exclude all Medicare Parts A 

and B payment amounts on DMEPOS 

claims associated with HCPCS codes 

A4352 and A4353, to make certain 

initial determinations on ACO eligibility 

and determine final repayment 

mechanism amounts, and provide 

related information to ACOs no later 

than October 17, 2024.23 Delaying the 

effective date of this final rule beyond 

this date would harm ACOs and ACO 

professionals, and thwart the purpose of 

the rule. Were we to issue initial 

determinations for the advance 

investment payment option and ACO 

PC Flex Model, as well as determine 

final repayment mechanism amounts 

after this date, the aforementioned 

processes would not be complete, which 

would jeopardize entry by ACOs into 

new agreement periods beginning on 

January 1, 2025 and continued 

participation by ACOs in the Shared 

Savings Program for the PY beginning 

on January 1, 2025. Delaying the start of 

the PY 2025 would cause the harm to 

ACOs, ACO professionals, and CMS 

described in section III.A. of this final 

rule. Therefore, we find that there is 

good cause to reduce the 30-day delay 

in effective date for this final rule to 20 

days from date of display, which 

provides CMS ample time to issue Phase 

1 application dispositions on or before 

October 17, 2024 after this rule becomes 

effective. 

IV. Collection of Information 

Requirements 

Section 1899(e) of the Act provides 

that chapter 35 of title 44 U.S.C., which 

includes such provisions as the 

Paperwork Reduction Act of 1995, shall 

not apply to the Shared Savings 

Program. Accordingly, we are not 

setting out any requirements and burden 

estimates under this section of the 

preamble. Please refer to section V. 

(Regulatory Impact Statement) of this 

final rule for a discussion of the impacts 

associated with the changes described 

in section II. (Provisions of the 

Regulations) of this preamble. 

V. Regulatory Impact Statement 

A. Overview 

We have examined the impact of this 

rule as required by Executive Order 

12866 on Regulatory Planning and 

Review (September 30, 1993), Executive 

Order 13563 on Improving Regulation 

and Regulatory Review (January 18, 

2011), Executive Order 14094 entitled 

‘‘Modernizing Regulatory Review’’ 

(April 6, 2023), the Regulatory 

Flexibility Act (RFA) (September 19, 

1980, Pub. L. 96–354), section 1102(b) of 

the Act, section 202 of the Unfunded 

Mandates Reform Act of 1995 (March 

22, 1995; Pub. L. 104–4), and Executive 

Order 13132 on Federalism (August 4, 

1999), and the Congressional Review 

Act (5 U.S.C. 804(2)). 

Executive Orders 12866 and 13563 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). The Executive Order 14094 

entitled ‘‘Modernizing Regulatory 

Review’’ (hereinafter, the Modernizing 

E.O.) amends section 3(f) of Executive 

Order 12866 (Regulatory Planning and 

Review). A Regulatory Impact Analysis 

(RIA) must be prepared for rules that are 

significant under section 3(f)(1) of 

Executive Order 12866. Based on our 

estimates, OMB’s Office of Information 

and Regulatory Affairs (OIRA) has 

determined this rulemaking is not 

significant per section 3(f)(1) as 

measured by the $200 million or more 

in any 1 year threshold. OMB’s Office of 

Information and Regulatory Affairs has 

determined that this final rule does not 

meet the criteria set forth in 5 U.S.C. 

804(2). 

The RFA requires agencies to analyze 

options for regulatory relief of small 

entities. For purposes of the RFA, small 

entities include small businesses, 

nonprofit organizations, and small 

governmental jurisdictions. Most 

hospitals and most other providers and 

suppliers are small entities, either by 

nonprofit status or by having revenues 

of less than $9.0 million to $47.0 

million in any 1 year. Individuals and 

States are not included in the definition 

of a small entity. As explained 

elsewhere in this section, while this 

final rule will help preserve the 

accuracy of shared savings and losses 

calculations for ACOs in the Shared 

Savings Program, the great majority of 

ACOs will experience at most a minimal 

impact on their PY 2023 financial 

outcome. We did not prepare an 

analysis for the RFA because we 

determined, and the Secretary certified, 

that this final rule will not have a 

significant economic impact on a 

substantial number of small entities. 

In addition, section 1102(b) of the Act 

requires us to prepare an RIA if a rule 

may have a significant impact on the 

operations of a substantial number of 

small rural hospitals. This analysis must 

conform to the provisions of section 604 

of the RFA. For purposes of section 

1102(b) of the Act, we define a small 

rural hospital as a hospital that is 

located outside of a Metropolitan 

Statistical Area for Medicare payment 

regulations and has fewer than 100 

beds. As previously mentioned in this 

section of this final rule, all but a small 

fraction of ACOs will experience 

relatively minimal changes in their PY 

2023 financial outcome. We did not 

prepare an analysis for section 1102(b) 

of the Act because we determined, and 

the Secretary certified, that this final 

rule will not have a significant impact 

on the operations of a substantial 

number of small rural hospitals. 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 also 

requires that agencies assess anticipated 

costs and benefits before issuing any 

rule whose mandates require spending 

in any 1 year of $100 million in 1995 

dollars, updated annually for inflation. 

In 2024, that threshold is approximately 

$183 million. This rule imposes no 

mandates on State, local, or tribal 

governments or on the private sector. 


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Federal Register / Vol. 89, No. 188 / Friday, September 27, 2024 / Rules and Regulations 79169 

24A4352 (Intermittent urinary catheter; Coude 

(curved) tip, with or without coating (Teflon, 

silicone, silicone elastomeric, or hydrophilic, etc.), 

each), and A4353 (Intermittent urinary catheter, 

with insertion supplies). 

Executive Order 13132 establishes 

certain requirements that an agency 

must meet when it promulgates a 

proposed rule (and subsequent final 

rule) that imposes substantial direct 

requirement costs on State and local 

governments, preempts State law, or 

otherwise has Federalism implications. 

Since this regulation does not impose 

any costs on State or local governments, 

the requirements of Executive Order 

13132 are not applicable. 

B. Analysis 

In this final rule, we discuss the 

reasons that excluding payment 

amounts incurred in 2023 for two 

urinary catheter HCPCS codes 24 on 

DMEPOS claims will prevent SAHS 

billing activity from deteriorating the 

accuracy of Shared Savings Program 

calculations determining both: (1) 

shared savings or losses for PY 2023 and 

(2) historical benchmarks for future 

performance years for ACOs entering 

agreement periods in 2024, 2025 or 

2026. Total FFS spending in the two 

specified codes was minimal in 

preceding years before the SAHS billing 

activity in 2023 sharply increased in 

highly disparate ways. At a program 

level, billing for these codes remained 

less than 0.1 percent of total FFS billing 

in every year from 2016 to 2022 before 

increasing to nearly 1 percent in 2023. 

And while a handful of hospital referral 

regions (HRRs) still managed to exhibit 

billing for the specified codes totaling 

less than 0.1 percentage points of total 

spending, approximately 10 percent of 

HRRs showed billing for the specified 

codes rising to at least 2 percentage 

points of total spending. In the most 

impacted HRR, billing for these codes in 

2023 accounted for over a 5 percentagepoint increase in total per capita billing 

from 2022, an astonishing and plainly 

unjustifiable increase in billing for the 

medical device supplied under these 

codes. By analyzing ACO-level program 

data, we observed material impacts 

likely for many PY 2023 ACOs related 

to these geographically heterogeneous 

and highly suspect increases in 

spending for the specified urinary 

catheter codes. 

Preliminary estimates of PY 2023 

performance after removing the 

specified codes, using three months of 

claims runout, and applying risk 

adjustment were used to update the 

impacts estimated for ACO shared 

savings and losses. These data were 

analyzed to estimate the marginal 

impact that catheter spending had on 

each ACO’s performance. These 

marginal impact estimates continue to 

rely on analysis performed on 

preliminary data without final 

beneficiary assignment information and 

without 3 months of claims runout. 

Despite these remaining limitations, the 

precision in this analysis has increased 

relative to the analysis included in the 

proposed rule. 

Billing for the specified codes was 

estimated in this study to have a 

nominal impact to overall shared 

savings (net of losses) across the mix of 

ACOs in PY 2023. The neutral overall 

impact exemplifies to the fact that 

billing for these specific codes was not 

correlated to any ability for an average 

ACO to actively manage the rapid 

growth. For most ACOs, the inclusion of 

the specified catheter codes did not 

substantially change their estimated 

financial outcome in PY 2023. When 

expressing projected shared savings (or 

losses) as a percentage of benchmark, 

the impact of spending in the specified 

codes on projected shared savings (or 

losses) was projected to be within +/– 

0.05 percent for 56 percent of ACOs, 

within +/–0.10 percent for 74 percent of 

ACOs, and within 0.15 percent for 83 

percent of ACOs. However, the impacts 

would potentially be substantial at the 

tails of the distribution. Table 1 shows 

that failing to exclude the specified 

codes would increase the net earnings 

for one ACO in the study by an amount 

equivalent to 1.5 percent of benchmark 

spending relative to the policy we are 

finalizing to exclude the codes. At the 

other extreme, leaving in the specified 

codes was estimated to reduce earnings 

to another ACO by an amount 

equivalent to 2.4 percent of benchmark 

relative to the policy we are finalizing 

to exclude such specified codes. The 

impact estimated at these extremes 

highlights the benefit of the proposed 

policy to prevent highly suspect billing 

in the two specified codes from 

materially impacting outcomes in the 

program. 


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79170 Federal Register / Vol. 89, No. 188 / Friday, September 27, 2024 / Rules and Regulations 

While providing a valid illustration of 

the impacts likely across the 

distribution of ACOs, a key component 

of the simulation relies on preliminary 

data for PY 2023 with less than 7 days 

of claims runout (specifically, the 

estimated marginal impact of catheter 

spending on each ACO’s performance 

relative to benchmark) versus the 90 day 

claims runout used in financial 

reconciliation. Because of the 

limitations in the data used for this 

simulation, and because of the potential 

for the overall impact to be influenced 

by the proximity of individual ACOlevel outcomes to the applicable 

minimum savings rate or minimum loss 

rate (particularly for large ACOs), a 

stochastic simulation was employed to 

generate a range of outcomes 

surrounding the best estimate. 

Assuming the marginal impact of 

catheter spending on ACO gross savings 

(expressed on percent of benchmark 

basis) would vary relative to data used 

in the analysis under a normal 

distribution with standard deviation 

equal to the higher of (a) 0.1 percentage 

points or (b) one-fourth of the absolute 

value of the marginal percentage impact 

estimated for the ACO using 

preliminary data, the impact of 

removing spending in the specified 

codes across all ACOs combined was 

estimated to be roughly budget neutral 

on average, ranging from a $10 million 

decrease at the 10th percentile to a $20 

million dollar increase at the 90th 

percentile. 

C. Compliance With Requirements of 

Section 1899(i)(3) of the Act 

Certain policies, including both 

existing policies and the new policy 

described in this final rule, rely upon 

the authority granted in section 

1899(i)(3) of the Act to use other 

payment models that the Secretary 

determines will improve the quality and 

efficiency of items and services 

furnished under the Medicare program, 

and that do not result in program 

expenditures greater than those that 

would result under the statutory 

payment model. By preventing SAHS 

spending growth in the two catheter 

codes from disrupting the accuracy and 

fairness of shared savings and loss 

outcomes for ACOs in the 2023 

performance year, the policy furthers 

the goals of quality and efficiency by 

protecting the validity and integrity of 

the program’s incentive for quality and 

efficiency. The provisions of this final 

rule, together with all existing program 

policies (including but not limited to 

those requiring authority granted in 

section 1899(i)(3) of the Act), result in 

a program that is expected to improve 

the quality and efficiency of items and 

services furnished under the Medicare 

program and is not expected to result in 

a situation in which the payment 

methodology under the Shared Savings 

Program, including all policies adopted 

under the authority of section 1899(i) of 

the Act, results in more spending under 

the program than would have resulted 

under the statutory payment 

methodology in section 1899(d) of the 

Act. 

In the CY 2023 PFS final rule, we 

estimated that the projected impact of 

the payment methodology that 

incorporates all policies finalized by 

that final rule would result in $4.9 

billion in greater program savings 

compared to a hypothetical baseline 

payment methodology that excluded the 

policies that required section 1899(i)(3) 

of the Act authority (see 87 FR 70195 

and 70196). The marginal impact of the 

changes in the CY 2024 PFS final rule 

were estimated to lower net spending by 

$330 million over the 10-year window 

for all new policies combined, including 

the cap an ACO’s regional service area 

risk score growth, the addition of a new 

third step to the beneficiary assignment 

methodology, and the revised approach 

to identify the assignable beneficiary 

population (88 FR 79496). The marginal 

impact of the changes in this final rule 

are estimated to be budget neutral for 

the 2023 performance year, with a range 


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TABLE 1: Distribution of Estimated Impacts Elevated Catheter Spending (HCPCS codes 

A4352 and A4353) Would Have Imparted on Individual ACOs in PY 2023 Absent the 

Proposal (ACO Impacts Expressed as Percent of Estimated Updated PY 2023 Benchmark 

Excludin2 Specified Catheter Codes) 

Change in ACO 

Change in ACO Earnings (Shared 

Gross Savine:s Savine:s /Losses) 

Mean -0.1% 0.0% 

Min -7.3% -2.4% 

5th -0.7% -0.4% 

10th -0.3% -0.1% 

20th -0.1% 0.0% 

30th 0.0% 0.0% 

"' 

~ 40th 0.0% 0.0% .... 

= 50th 0.1% 0.0% cu 

i:; 

-

cu 

~ 60th 0.1% 0.0% 

70th 0.1% 0.0% 

80th 0.2% 0.1% 

90th 0.3% 0.1% 

95th 0.4% 0.2% 

Max 1.1% 1.5% 
Federal Register / Vol. 89, No. 188 / Friday, September 27, 2024 / Rules and Regulations 79171 

of uncertainty spanning $10 million 

lower spending at the 10th percentile to 

$20 million higher spending at the 90th 

percentile. The cumulative impact of all 

policies including the provisions in this 

final rule are estimated to result in more 

than $4.9 billion in greater program 

savings compared to the hypothetical 

baseline payment methodology that 

excludes policies that require 1899(i)(3) 

of the Act authority. Therefore, we 

estimated that the implementation of 

the provision made in this final rule 

would not result in a program with 

spending greater than what would result 

under the statutory payment model, 

consistent with the requirements of 

section 1899(i)(3)(B) of the Act. 

We will continue to reexamine this 

projection in the future to ensure that 

the requirement under section 

1899(i)(3)(B) of the Act that an 

alternative payment model not result in 

additional program expenditures 

continues to be satisfied. Additional 

Shared Savings Program data beginning 

to accumulate after the end of the 

COVID–19 public health emergency, 

along with emerging information on the 

characteristics of new entrants in the 

Shared Savings Program for agreement 

periods beginning on January 1, 2024 

and January 1, 2025, are anticipated to 

gradually improve our ability to 

reevaluate program impacts in a 

comprehensive fashion. In the event 

that we later determine that the 

payment model that includes policies 

established under section 1899(i)(3) of 

the Act no longer meets this 

requirement, we will undertake 

additional notice and comment 

rulemaking to make adjustments to the 

payment model to assure continued 

compliance with the statutory 

requirements. 

In accordance with the provisions of 

Executive Order 12866, this final rule 

was reviewed by the Office of 

Management and Budget. 

Chiquita Brooks-LaSure, 

Administrator of the Centers for 

Medicare & Medicaid Services, 

approved this document on September 

23, 2024. 

List of Subjects in 42 CFR Part 425 

Administrative practice and 

procedure, Health facilities, Health 

professions, Medicare, Reporting and 

recordkeeping requirements. 

For the reasons set forth in the 

preamble, the Centers for Medicare & 

Medicaid Services amends 42 CFR part 

425 as set forth below: 

PART 425—MEDICARE SHARED 

SAVINGS PROGRAM 

■ 1. The authority citation for part 425 

continues to read as follows: 

Authority: 42 U.S.C. 1302, 1306, 1395hh, 

and 1395jjj. 

§§ 425.661 through 425.669 [Reserved] 

■ 2. Add reserved §§ 425.661 through 

425.669 to subpart G. 

■ 3. Section 425.670 is added to subpart 

G to read as follows: 

§ 425.670 Adjustments to mitigate the 

impact of significant, anomalous, and 

highly suspect billing activity on Shared 

Savings Program financial calculations 

involving calendar year 2023. 

(a) General. This section describes 

adjustments CMS makes to Shared 

Savings Program calculations to mitigate 

the impact of significant, anomalous, 

and highly suspect billing activity 

occurring in calendar year 2023. 

(b) Significant, anomalous, and highly 

suspect billing activity for a HCPCS or 

CPT code impacting Shared Savings 

Program calculations. CMS has 

determined that the billing of the 

following HCPCS codes represents 

significant, anomalous, and highly 

suspect billing activity for calendar year 

2023 that warrants adjustment— 

(1) A4352 (Intermittent urinary 

catheter; Coude (curved) tip, with or 

without coating (Teflon, silicone, 

silicone elastomeric, or hydrophilic, 

etc.), each); and 

(2) A4353 (Intermittent urinary 

catheter, with insertion supplies). 

(c) Applicability of adjustments to 

performance year and benchmark year 

calculations. Notwithstanding any other 

provision in this part, CMS adjusts the 

following Shared Savings Program 

calculations, as applicable, to exclude 

all Medicare Parts A and B fee-forservice payment amounts on DMEPOS 

claims (claim types 72 and 82) 

associated with a HCPCS code specified 

in paragraph (b) of this section for the 

period specified in paragraph (d) of this 

section: 

(1) Calculation of Medicare Parts A 

and B fee-for-service expenditures for an 

ACO’s assigned beneficiaries for all 

purposes including the following: 

Establishing, adjusting, updating, and 

resetting the ACO’s historical 

benchmark and determining 

performance year expenditures. 

(2) Calculation of fee-for-service 

expenditures for assignable beneficiaries 

as used in determining county-level feefor-service expenditures and national 

Medicare fee-for-service expenditures, 

including the following calculations: 

(i) Determining average county feefor-service expenditures based on 

expenditures for the assignable 

population of beneficiaries in each 

county in the ACO’s regional service 

area according to §§ 425.601(c) and 

425.654(a) for purposes of calculating 

the ACO’s regional fee-for-service 

expenditures. 

(ii) Determining the 99th percentile of 

national Medicare fee-for-service 

expenditures for assignable beneficiaries 

for purposes of the following: 

(A) Truncating assigned beneficiary 

expenditures used in calculating 

benchmark expenditures under 

§ 425.652(a)(4), and performance year 

expenditures under §§ 425.605(a)(3) and 

425.610(a)(4). 

(B) Truncating expenditures for 

assignable beneficiaries in each county 

for purposes of determining county feefor-service expenditures according to 

§§ 425.601(c)(3) and 425.654(a)(3). 

(C) Truncating expenditures for 

assignable beneficiaries for purposes of 

determining truncated national per 

capita fee-for service expenditures for 

purposes of calculating the ACPT 

according to § 425.660(b)(3). 

(iii) Determining truncated national 

per capita fee-for-service Medicare 

expenditures for assignable beneficiaries 

for purposes of calculating the ACPT 

according to § 425.660(b)(3). 

(iv) Determining national per capita 

expenditures for Parts A and B services 

under the original Medicare fee-forservice program for assignable 

beneficiaries for purposes of capping the 

regional adjustment to the ACO’s 

historical benchmark according to 

§ 425.656(c)(3) and capping the prior 

savings adjustment according to 

§ 425.658(c)(1)(ii). 

(v) Determining national growth rates 

that are used as part of the blended 

growth rates used to trend forward BY1 

and BY2 expenditures to BY3 according 

to § 425.652(a)(5)(ii) and as part of the 

blended growth rates used to update the 

benchmark according to §§ 425.601(b)(2) 

and 425.652(b)(2)(i). 

(3) Calculation of Medicare Parts A 

and B fee-for-service revenue of ACO 

participants for purposes of calculating 

the ACO’s loss recoupment limit under 

the BASIC track as specified in 

§ 425.605(d). 

(4) Calculation of total Medicare Parts 

A and B fee-for-service revenue of ACO 

participants and total Medicare Parts A 

and B fee-for-service expenditures for 

the ACO’s assigned beneficiaries for 

purposes of identifying whether an ACO 

is a high revenue ACO or low revenue 

ACO, as defined under § 425.20, and 

determining an ACO’s eligibility to 


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79172 Federal Register / Vol. 89, No. 188 / Friday, September 27, 2024 / Rules and Regulations 

receive advance investment payments 

according to § 425.630. 

(5) Calculation or recalculation of the 

amount of the ACO’s repayment 

mechanism arrangement according to 

§ 425.204(f)(4). 

(d) Period of adjustment. CMS adjusts 

the Shared Savings Program 

calculations specified in paragraph (c) 

of this section for significant, 

anomalous, and highly suspect billing 

activity identified pursuant to paragraph 

(b) of this section for calendar year 

2023, when calendar year 2023 is either 

a performance year or a benchmark year. 

(e) Adjustments for growth rates used 

in calculating the ACPT. In addition to 

adjustments described in paragraph (c) 

of this section, CMS makes adjustments 

for payments associated with a HCPCS 

code specified in paragraph (b) of this 

section for BY3 in projecting per capita 

growth in Parts A and B fee-for-service 

expenditures, according to 

§ 425.660(b)(1), for purposes of 

calculating the ACPT for agreement 

periods beginning on January 1, 2024. 

Xavier Becerra, 

Secretary, Department of Health and Human 

Services. 

[FR Doc. 2024–22054 Filed 9–24–24; 4:15 pm] 

BILLING CODE 4120–01–P 

GENERAL SERVICES 

ADMINISTRATION 

48 CFR Part 552 

[GSAR–TA–2024–01; Docket No. GSA– 

GSAR–2024–0018; Sequence No. 1] 

General Services Administration 

Acquisition Regulation; Technical 

Amendments 

AGENCY: Office of Acquisition Policy, 

General Services Administration (GSA). 

ACTION: Final rule. 

SUMMARY: The General Services 

Administration (GSA) is issuing this 

final rule to amend the General Services 

Administration Acquisition Regulation 

(GSAR) to make needed editorial 

changes. 

DATES: Effective: September 27, 2024. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Thomas O’Linn, Procurement Analyst, 

at 202–445–0390 for clarification of 

content. For information pertaining to 

status or publication schedules, contact 

the Regulatory Secretariat Division at 

202–501–4755 or GSARegsec@gsa.gov. 

Please cite GSAR–TA–2024–01. 

SUPPLEMENTARY INFORMATION: This final 

rule amends the General Services 

Administration Acquisition Regulation 

(GSAR) to make needed technical 

amendments to update erroneous clause 

dates. 

List of Subjects in 48 CFR Part 552 

Government procurement. 

Jeffrey A. Koses 

Senior Procurement Executive, Office of 

Acquisition Policy, Office of Governmentwide Policy, General Services Administration. 

Therefore, GSA amends 48 CFR part 

552 as set forth below: 

PART 552—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

■ 1. The authority citation for 48 CFR 

part 552 continues to read as follows: 

Authority: 40 U.S.C. 121(c). 

552.219–18 [Amended] 

■ 2. Amend section 552.219–18 by 

removing from the date of the clause 

‘‘(DATE)’’ and adding ‘‘(MAY 2024)’’ in 

its place. 

552.238–115 [Amended] 

■ 3. Amend section 552.238–115 by 

removing from the date of the clause 

‘‘(AUG 24)’’ and adding ‘‘(SEP 2024)’’ in 

its place. 

552.238–120 [Amended] 

■ 4. Amend section 552.238–120 by 

removing from the date of the clause 

‘‘(AUG 24)’’ and adding ‘‘(SEP 2024)’’ in 

its place. 

[FR Doc. 2024–22158 Filed 9–26–24; 8:45 am] 

BILLING CODE 6820–61–P 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

50 CFR Part 622 

[Docket No. 231127–0277] 

RTID 0648–XE316 

Fisheries of the Caribbean, Gulf of 

Mexico, and South Atlantic; 2024 

Commercial Closure for Snowy 

Grouper in the South Atlantic 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Commerce. 

ACTION: Temporary rule; closure. 

SUMMARY: NMFS implements an 

accountability measure (AM) for the 

commercial harvest of snowy grouper in 

South Atlantic Federal waters. NMFS 

projects commercial landings of snowy 

grouper will reach the commercial quota 

for the July through December season. 

Therefore, NMFS closes Federal waters 

in the South Atlantic for the commercial 

harvest of snowy grouper to protect the 

resource. 

DATES: This temporary rule is effective 

from September 29, 2024, through 

December 31, 2024. 

FOR FURTHER INFORMATION CONTACT: Rick 

Devictor, NMFS Southeast Regional 

Office, phone: 727–204–5518, email: 

rick.devictor@noaa.gov. 

SUPPLEMENTARY INFORMATION: The 

snapper-grouper fishery of the South 

Atlantic includes snowy grouper and is 

managed under the Fishery 

Management Plan for the SnapperGrouper Fishery of the South Atlantic 

Region (FMP). The FMP was prepared 

by the South Atlantic Fishery 

Management Council and NMFS, and is 

implemented by NMFS under the 

authority of the Magnuson-Stevens 

Fishery Conservation and Management 

Act (Magnuson-Stevens Act) by 

regulations at 50 CFR part 622. All 

weights described in this temporary rule 

are in gutted weight. 

The commercial annual catch limit 

(ACL) for snowy grouper in 2024 is 

106,174 pounds (lb) or 48,160 kilograms 

(kg). The commercial ACL is divided 

into two commercial quotas, with a 

separate quota for each 6-month fishing 

season. Seventy percent of the 

commercial ACL is allocated for the 

January through June commercial 

fishing season and that quota is 74,322 

lb (33,712 kg) for 2024. The remaining 

30 percent of the commercial ACL for 

the July through December fishing 

season is a quota of 31,852 lb (14,448 

kg) for 2024 [50 CFR 622.190(a)(1)(i)(B) 

and (ii)(B)]. Any commercial quota 

remaining from the first season is added 

to the commercial quota in second 

season, but any commercial quota 

remaining from the second season is not 

carried forward into the next fishing 

year. The January through June quota 

was projected to be reached on June 4, 

2024, and commercial harvest was 

closed (89 FR 47871, June 4, 2024). 

Subsequently, updated commercial 

harvest information showed that 8,035 

lb (3,645 kg) of that quota was not 

harvested, and it was added to the 2024 

commercial quota for the July through 

December season. 

Under 50 CFR 622.193(b)(1), NMFS is 

required to close the commercial sector 

for snowy grouper when the commercial 

quota specified in 50 CFR 622.190(a)(1) 

is reached or is projected to be reached. 

NMFS projects that commercial 

landings of snowy grouper will reach 

the commercial quota for the 2024 July 


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