Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals (IPPS) and the Long-Term Care Hospital Prospective Payment System and Policy Changes and Fiscal Year (FY) 2026 Rates; Changes to the FY 2025 IPPS Rates Due to Court Decision; Requirements for Quality Programs; and Other Policy Changes; Health Data, Technology, and Interoperability: Electronic Prescribing, Real-Time Prescription Benefit and Electronic Prior Authorization

The following table summarizes the information provided in the new technology add-on payment application for the Minima Stent System.

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In the proposed rule, we noted that after review of the information provided by the applicant, since the indication for which the applicant received PMA approval from FDA is included within the scope of the Breakthrough Device designation indication, it appears that the FDA- approved indication is appropriate for consideration for new technology add-on payment under the alternative pathway criteria.\132\

\132\ Breakthrough Devices Program https://www.fda.gov/medical-devices/how-study-and-market-your-device/breakthrough-devices-program.

With respect to the cost criterion, we noted that the applicant identified 6 relevant MS-DRGs using 8 ICD-10-PCS codes that most closely resemble the procedure to insert and/or dilate the great vessels using the Minima Stent System. We noted that, per the applicant, the Minima Stent System is used in the pediatric population and no cases appear in Medicare data; therefore, the applicant used CY 2022 and CY 2023 Medicare charge and discharge data accessed via Definitive Healthcare as well as data from the AOR/BOR File published as part of the FY 2025 IPPS/LTCH PPS final rule, correction notice and interim final action with comment period Data and Supplemental Files and FY 2023 IPPS/LTCH PPS final rule and correcting amendment files. However, we questioned whether using the total charges for the Medicare claims within the 6 identified MS-DRGs would provide an accurate estimate for eligible cases in a pediatric patient population where the Minima Stent System would be used.

Subject to the applicant adequately addressing this concern, we agreed that the technology meets the cost criterion and proposed to approve the Minima Stent System for new technology add-on payments for FY 2026 for use in the treatment of native or acquired pulmonary artery stenoses or coarctation of the aorta in neonates, infants, and children at least 1.5 kg in weight.

Based on preliminary information from the applicant at the time of the proposed rule, the applicant anticipated the total cost of the Minima Stent

System to the hospital to be $34,900 per patient. Per the applicant, total cost per inpatient stay was calculated based on the assumption that only one unit will be used per patient for each inpatient stay. We noted that the cost information for this technology may be updated in the final rule based on revised or additional information CMS receives prior to the final rule. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS- DRG payment for the case. As a result, we proposed that the maximum new technology add-on payment for a case involving the use of the Minima Stent System would be $22,685 for FY 2026 (that is, 65 percent of the average cost of the technology).

We invited public comments on whether the Minima Stent System meets the cost criterion and our proposal to approve new technology add-on payments for the Minima Stent System for FY 2026.

Comment: A few commenters, including the applicant expressed support for our proposal to approve new technology add-on payment for the Minima Stent System.

In response to CMS's concern about using the total charges for the Medicare claims within the six identified MS-DRGs to estimate eligible cases in a pediatric patient population, the applicant stated that the Minima Stent System was FDA-approved ten months ago and that given the newness of the procedure and absence of pediatric cases in Medicare data and other available claims data, its approach of using Medicare claims within six identified MS-DRGs was reasonable. The applicant stated that while Medicare coverage is expected to be rare with fewer than 10 cases during the new technology add-on payment period, there are circumstances where medically complex children will be covered under Medicare, citing precedent with the new technology add-on payment approval for the MAGEC[supreg] Spinal Bracing Distraction system for pediatric use in FY 2017. The applicant stated that in its original cost analysis, using Medicare cases, the new charge per case of $135,000 for the device alone surpassed the case-weighted threshold of $128,762 without including other inpatient stay charges, and that since the Minima Stent device is not replacing an existing technology, it would meet the cost criterion regardless of the applicability of Medicare charges to eligible pediatric cases.

To verify if the Medicare threshold might be too low, the applicant also reviewed data from the Healthcare Cost and Utilization Project (HCUP) Kids' Inpatient Database (KID) and HCUP National Inpatient Sample (NIS) to evaluate case distribution threshold. The applicant identified 6,855 HCUP KID cases compared to 75,638 cases Medicare cases across the six MS-DRGs used in its cost analysis. The applicant noted that pediatric cases were distributed differently compared to Medicare cases, resulting in a higher case-weighted threshold of $141,341. The applicant also stated that pediatric inpatient stays had a higher average length of stay, higher average charges, and higher average costs per stay. Based on the distribution of pediatric cases, the applicant conducted an additional cost analysis and calculated a final inflated average case-weighted standardized charge per case of $281,314, which exceeded the average case-weighted threshold amount of $141,341.

Per the applicant, data from HCUP NIS and HCUP KID suggest that for the six identified MS-DRGs, pediatric inpatient stays have higher average length of stay, higher average charges and higher average costs per stay compared to inpatient stays across all ages. Per the applicant, this suggests that using total Medicare charges in the cost criterion analysis likely resulted in an underestimated inflated case- weighted standardized charge per case for the Minima stent and that while Medicare charges are not a perfect estimate, they are a reasonable and conservative substitute.

Response: We thank the applicant and other commenters for their comments. We acknowledge the challenges of estimating charges related to use of a pediatric device using Medicare data and agree that the Medicare charges used in this analysis are reasonable based on the additional information provided by the applicant.

Based on the information provided in the application for new technology add-on payments, and after consideration of the public comments we received, we believe the Minima Stent System meets the cost criterion. The technology received PMA approval on August 28, 2024, with an indication for use in the treatment of native or acquired pulmonary artery stenoses or coarctation of the aorta in neonates, infants, and children at least 1.5 kg in weight, which is covered by its Breakthrough Device designation. Therefore, we are finalizing our proposal to approve new technology add-on payments for the Minima Stent System for FY 2026. We consider the beginning of the newness period to commence on August 28, 2024, the date on which the technology received its premarket approval for the indication covered by its Breakthrough Device designation.

Based on the information available at the time of this final rule, the cost per case of the Minima Stent System is $34,900. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case. As a result, we are finalizing that the maximum new technology add-on payment for a case involving the use of the Minima Stent System is $22,685 for FY 2026 (that is, 65 percent of the average cost of the technology).

The applicant submitted a request and was granted approval for unique ICD-10-PCS procedure codes for the Minima Stent System beginning in FY 2026. Therefore, cases involving the use of the Minima Stent System that are eligible for new technology add-on payments will be identified by ICD-10-PCS procedure codes: X27339B (Dilation of right pulmonary artery with expandable intraluminal device, percutaneous approach, new technology group 11), X27439B (Dilation of left pulmonary artery with expandable intraluminal device, percutaneous approach, new technology group 11), X27W39B (Dilation of thoracic aorta, descending with expandable intraluminal device, percutaneous approach, new technology group 11), or X27X39B (Dilation of thoracic aorta, ascending/arch with expandable intraluminal device, percutaneous approach, new technology group 11). (12) MY01 Continuous Compartmental Pressure Monitor

The following table summarizes the information provided in the new technology add-on payment application for the MY01 Continuous Compartmental Pressure Monitor. BILLING CODE 4120-01-P

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BILLING CODE 4120-01-C

In the proposed rule, we noted that after review of the information provided by the applicant, since the indication for which the applicant has received FDA

marketing authorization is included within the scope of the Breakthrough Device designation indication, it appears that the FDA marketing authorization is appropriate for consideration for new technology add-on payment under the alternative pathway criteria.\133\

\133\ Breakthrough Devices Program https://www.fda.gov/medical-devices/how-study-and-market-your-device/breakthrough-devices-program.

We noted in the proposed rule that according to the applicant, the MY01 Mobile Application was not yet available for use because the applicant was completing final testing of the application before it is available for download. We stated that we were interested in additional information on when the MY01 Continuous Compartmental Pressure Monitor, which is the subject of this new technology add-on payment application, became available for sale.

We agreed with the applicant that the MY01 Continuous Compartmental Pressure Monitor meets the cost criterion and therefore proposed to approve the MY01 Continuous Compartmental Pressure Monitor for new technology add-on payments for FY 2026, for real-time and continuous measurement of the muscle compartment pressure.

Based on preliminary information from the applicant at the time of the proposed rule, the applicant anticipated the total cost of the MY01 Continuous Compartmental Pressure Monitor to the hospital to be $3,250 per patient. Per the applicant, only one device is used per inpatient stay, and the companion MY01 Mobile Application is provided at no additional cost for any physician registered to use the device. We noted that the cost information for this technology may be updated in the final rule based on revised or additional information CMS receives prior to the final rule. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS- DRG payment for the case. As a result, we proposed that the maximum new technology add-on payment for a case involving the use of the MY01 Continuous Compartmental Pressure Monitor would be $2,112.50 for FY 2026 (that is, 65 percent of the average cost of the technology).

We invited public comments on whether the MY01 Continuous Compartmental Pressure Monitor meets the cost criterion and our proposal to approve new technology add-on payments for the MY01 Continuous Compartmental Pressure Monitor for FY 2026.

Comment: We received comments expressing support for technologies under consideration for new technology add-on payments for FY 2026.

The applicant submitted a public comment in response to CMS's request for additional information regarding the delay in the technology's market availability. The applicant stated that there was a slight market availability delay for the MY01 Mobile App due to launch and distribution orchestration and post approval compliance documentation. Per the applicant, the MY01 Mobile App was available on the Apple App Store and the Google Play Store on April 29, 2025.

Response: We thank the commenters for their comments. Based on the information provided in the application for new technology add-on payments, and after consideration of the public comments we received, we believe MY01 Continuous Compartmental Pressure Monitor meets the cost criterion. The technology received FDA marketing authorization on March 13, 2025, with an indication for real-time and continuous measurement of the muscle compartment pressure, which is covered by its Breakthrough Device designation. Therefore, we are finalizing our proposal to approve new technology add-on payments for MY01 Continuous Compartmental Pressure Monitor for FY 2026. We consider the beginning of the newness period to commence on April 29, 2025, the date on which the technology became commercially available for the indication covered by its Breakthrough Device designation.

Based on the information available at the time of this final rule, the cost per case of MY01 Continuous Compartmental Pressure Monitor is $3,250. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case. As a result, we are finalizing that the maximum new technology add-on payment for a case involving the use of MY01 Continuous Compartmental Pressure Monitor is $2,112.50 for FY 2026 (that is, 65 percent of the average cost of the technology). Cases involving the use of MY01 Continuous Compartmental Pressure Monitor that are eligible for new technology add-on payments will be identified by ICD-10-PCS procedure code XX2F3W9 (Monitoring of musculoskeletal muscle compartment pressure, micro-electro-mechanical system, percutaneous approach, new technology group 9). (13) Positive Blood Culture (PBC) Separator With Selux AST System

The following table summarizes the information provided in the new technology add-on payment application for the PBC Separator with Selux AST System. We note that Selux Diagnostics, Inc. submitted an application for new technology add-on payments for the PBC Separator with Selux AST System for FY 2024 under the name Selux NGP System, as summarized in the FY 2024 IPPS/LTCH PPS proposed rule (88 FR 26946 through 26949), that it withdrew prior to the issuance of the FY 2024 IPPS/LTCH PPS final rule (88 FR 58919). BILLING CODE 4120-01-P

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BILLING CODE 4120-01-C

In the proposed rule, we noted that after review of the information provided by the applicant, since the indication for which the applicant received 510(k)

clearance from FDA is included within the scope of the Breakthrough Device designation indication, it appears that the FDA-cleared indication is appropriate for consideration for new technology add-on payment under the alternative pathway criteria.

We agreed with the applicant that the PBC Separator with Selux AST System meets the cost criterion and therefore proposed to approve the PBC Separator with Selux AST System for new technology add-on payments for FY 2026 for use as an automated inoculum preparation system that uses lysis, centrifugation and sequential optical density measurements to generate a McFarland equivalent suspension from positive blood culture samples that can be used for quantitative in vitro AST by the Selux AST System.

Based on preliminary information from the applicant at the time of the proposed rule, the applicant anticipated the total cost of the PBC Separator with Selux AST System to the hospital to be $135.04 per patient. Per the applicant, the cost per patient includes $80 for the Selux AST Gram Negative and Selux AST Gram Positive AST Kit, $50 for the Selux AST Positive Blood Culture Kit, $4.79 for the Selux AST Analyzer Reagent Kit, and $0.25 for the Selux AST Waste Kit.

We noted that according to the applicant, the Selux AST System has been granted multiple previous FDA clearances for a different indication and sample type.\134\ However, we stated that per the applicant, the Breakthrough Device designation is for the Selux Positive Blood Culture Separator and Selux [AST] System. We stated that the previous FDA clearances for the Selux AST System were not considered Breakthrough Devices. Therefore, we noted that it appeared that the components of the Selux AST System, including the Selux AST Gram Negative and Selux AST Gram Positive AST Kit, Selux AST Analyzer Reagent Kit, and Selux AST Waste Kit are eligible for new technology add-on payment only when used in conjunction with the PBC Separator on positive blood culture samples. We further noted that the Selux AST System first received FDA 510(k) clearance on January 18, 2023, and therefore the components of the Selux AST System would still be new for FY 2026.

\134\ https://www.accessdata.fda.gov/cdrh_docs/pdf21/K211759.pdf and https://www.accessdata.fda.gov/cdrh_docs/pdf21/K211748.pdf.

We noted that the cost information for this technology may be updated in the final rule based on revised or additional information CMS receives prior to the final rule. Under Sec. 412.88(a)(2) we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case. As a result, we proposed that the maximum new technology add-on payment for a case involving the use of the PBC Separator with Selux AST System would be $87.78 for FY 2026 (that is, 65 percent of the average cost of the technology).

We invited public comments on whether the PBC Separator with Selux AST System meets the cost criterion and our proposal to approve new technology add-on payments for the PBC Separator with Selux AST System for FY 2026.

Comment: We received comments expressing support for technologies under consideration for new technology add-on payments for FY 2026.

Response: We thank the commenters for their comments. Based on the information provided in the application for new technology add-on payments, we believe the PBC Separator with Selux AST System meets the cost criterion. The technology received 510(k) clearance on February 15, 2024, with an indication for use as an automated inoculum preparation system that uses lysis, centrifugation and sequential optical density measurements to generate a McFarland equivalent suspension from positive blood culture samples that can be used for quantitative in vitro AST by the Selux AST System, which is covered by its Breakthrough Device designation. Therefore, we are finalizing our proposal to approve new technology add-on payments for the PBC Separator with Selux AST System for FY 2026. We consider the beginning of the newness period to commence on February 15, 2024, the date on which technology received its premarket approval for the indication covered by its Breakthrough Device designation.

Based on the information available at the time of this final rule, the cost per case of the PBC Separator with Selux AST System is $135.04. As noted earlier in this section, the Selux AST System has been granted multiple previous FDA clearances for a different indication and sample type.\135\ However, per the applicant, the Breakthrough Device designation is for the Selux Positive Blood Culture Separator and Selux [AST] System. The previous FDA clearances for the Selux AST System were not considered Breakthrough Devices. Therefore, it appears that the components of the Selux AST System, including the Selux AST Gram Negative and Selux AST Gram Positive AST Kit, Selux AST Analyzer Reagent Kit, and Selux AST Waste Kit are eligible for new technology add-on payment only when used in conjunction with the PBC Separator on positive blood culture samples. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case. As a result, we are finalizing that the maximum new technology add-on payment for a case involving the use of the PBC Separator with Selux AST System is $87.78 for FY 2026 (that is, 65 percent of the average cost of the technology). Cases involving the use of the PBC Separator with Selux AST System that are eligible for new technology add-on payments will be identified by ICD-10-PCS procedure code XXE5XY9 (Measurement of infection, other positive blood/isolated colonies bimodal phenotypic susceptibility technology, new technology group 9).

\135\ https://www.accessdata.fda.gov/cdrh_docs/pdf21/K211759.pdf and https://www.accessdata.fda.gov/cdrh_docs/pdf21/K211748.pdf.

(14) RECELL[supreg] Autologous Cell Harvesting Device

The following table summarizes the information provided in the new technology add-on payment application for the RECELL[supreg] Autologous Cell Harvesting Device. BILLING CODE 4120-01-P

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BILLING CODE 4120-01-C

In the proposed rule, after review of the information provided by the applicant, we noted that the RECELL[supreg] Autologous Cell Harvesting Device is also indicated for acute partial-thickness thermal burn wounds and acute full-thickness thermal burn wounds. However, we noted that under the eligibility criteria for approval under the alternative pathway for certain transformative devices, only the use of the technology for the indication that corresponds to the technology's Breakthrough Device designation would be eligible for the new technology add-on payment for FY 2026. Therefore, we noted that only the use of the RECELL[supreg] Autologous Cell Harvesting Device for acute nonthermal full thickness skin wounds after traumatic avulsion, surgical excision (for example, necrotizing soft tissue infection), or resection (for example, skin cancer), and the FDA Breakthrough Device designation it received for those uses, were relevant for purposes of the new technology add-on payment application for FY 2026.

Please see Table 10.1.A.-RECELL[supreg] Autologous Cell Harvesting Device associated with the proposed rule for the list of relevant ICD- 10-CM diagnosis codes that we believed would identify the Breakthrough Device-designated indication of acute nonthermal full thickness skin wounds after traumatic avulsion. Please see Table 10.1.B.- RECELL[supreg] Autologous Cell Harvesting Device associated with the proposed rule for the list of relevant ICD-10-PCS procedure codes that we believed would be appropriate to report in combination with use of the RECELL[supreg] Autologous Cell Harvesting Device to identify use of the technology for the Breakthrough Device-designated indication of acute nonthermal full thickness skin wounds after surgical excision (for example, necrotizing soft tissue infection) or resection (for example, skin cancer). We invited public comments on the use of these ICD-10-CM diagnosis and ICD-10-PCS procedure codes to identify use of the technology for the Breakthrough Device-designated indications for purposes of the new technology add-on payment, if approved.

We agreed with the applicant that the RECELL[supreg] Autologous Cell Harvesting Device meets the cost criterion and therefore proposed to approve the RECELL[supreg] Autologous Cell Harvesting Device for new technology add-on payments for FY 2026, when used in combination with meshed autografting for acute full-thickness thermal burn wounds in pediatric and adult patients and full-thickness skin defects after traumatic avulsion (for example, degloving) or surgical excision (for example, necrotizing soft tissue infection) or resection (for example, skin cancer).

Based on preliminary information from the applicant at the time of the proposed rule, the applicant anticipated the total cost of the RECELL[supreg] Autologous Cell Harvesting Device to the hospital to be $7,500 per device. The applicant estimated that, on average, one device is used per inpatient stay for patients with a full-thickness skin defect. We noted that the cost information for this technology may be updated in the final rule based on revised or additional information CMS receives prior to the final rule. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case. As a result, proposed that the maximum new technology add-on payment for a case involving the use of the RECELL[supreg] Autologous Cell Harvesting Device would be $4,875 for FY 2026 (that is, 65 percent of the average cost of the technology).

We invited public comments on whether the RECELL[supreg] Autologous Cell Harvesting Device meets the cost criterion and our proposal to approve new technology add-on payments for the RECELL[supreg] Autologous Cell Harvesting Device for FY 2026.

Comment: A few commenters, including the applicant, expressed support for our proposal to approve new technology add-on payment for the RECELL[supreg] Autologous Cell Harvesting Device. We received comments expressing general support of the proposed ICD-10-CM/PCS codes for which CMS specifically sought input. The applicant further stated its support for the use of the ICD-10-CM diagnosis codes listed in Table 10.1.A and the ICD-10-PCS procedure codes listed in Table 10.1.B to identify cases eligible for new technology add-on payments for FY 2026, and agreed that new technology

add-on payment eligibility is limited to the Breakthrough-designated indication for nonthermal full-thickness wounds. The applicant also supported CMS's proposal to establish a maximum payment of $4,875 per case, based on the cost of $7,500 per device.

A commenter requested more clarity regarding the circumstances in which a hospital is eligible to receive new technology add-on payments for the RECELL[supreg] Autologous Cell Harvesting Device. Per the commenter, the technology's use in combination with another procedure (meshed autografting) is atypical and stated that it would expect that such a claim must include: (i) an ICD-10-PCS code for the use of the RECELL[supreg] Autologous Cell Harvesting Device; (ii) an ICD-10-PCS code for meshed autografting; and (iii) an ICD-10-CM code to reflect use for patients with acute nonthermal full thickness skin wounds. The commenter stated that the need for the latter two seemed to be implicit in CMS's development of Table 10.1.B and Table 10.1.A, respectively, in connection with the proposed rule. However, the commenter stated that the messaging should not be implicit, but that CMS should issue a clear statement in the final rule, or consider communicating it in an implementing transmittal, or in a Medicare Learning Network (MLN) issuance.

The commenter also recommended that CMS reassess the scope of the new technology add-on payments for FY 2026 to ensure that we had identified the appropriate ICD-10-PCS and ICD-10-CM codes to capture what would be appropriate to report in combination with the use of the RECELL[supreg] Autologous Cell Harvesting Device and that would identify the pertinent Breakthrough Device indication. Per the commenter, the listed ICD-10-PCS codes in Table 10.1.B are all for excision procedures and should be removed so that CMS can populate the table with procedures for meshed autografting. The commenter also stated its concern with the listed ICD-10-CM codes in Table 10.1.A as it stated many of the listed codes are for lacerations and lacerations typically do not correlate to full thickness wound. Accordingly, the commenter stated that it is important for CMS to ensure that Table 10.1.A be populated with diagnosis codes that capture nonthermal, full thickness wounds.

Response: We thank the applicant and other commenters for their comments.

We disagree that the procedure codes for meshed autografting should be included in Tables 10.1.A or 10.1.B. Table 10.1.A.-RECELL[supreg] Autologous Cell Harvesting Device associated with the proposed rule provided the list of relevant ICD-10-CM diagnosis codes that we believed would identify the Breakthrough Device-designated indication of acute nonthermal full thickness skin wounds after traumatic avulsion. Table 10.1.B.-RECELL[supreg] Autologous Cell Harvesting Device associated with the proposed rule provided the list of relevant ICD-10-PCS procedure codes that we believed would be appropriate to report in combination with use of the RECELL[supreg] Autologous Cell Harvesting Device to identify use of the technology for the Breakthrough Device-designated indication of acute nonthermal full thickness skin wounds after surgical excision (for example, necrotizing soft tissue infection) or resection (for example, skin cancer). We had listed ICD-10-PCS procedure codes in Table 10.1.B.-RECELL[supreg] Autologous Cell Harvesting Device to identify use of the technology after surgical excision or resection because these describe procedures, not diagnoses. Either a code from Table 10.1.A or Table 10.1.B. associated with the proposed rule may be used to identify the Breakthrough Device-designated indication for the RECELL[supreg] Autologous Cell Harvesting Device.

As we noted in the proposed rule, although the RECELL[supreg] Autologous Cell Harvesting Device is also indicated for acute partial- thickness thermal burn wounds and acute full-thickness thermal burn wounds, only the use of the device for acute nonthermal full thickness skin wounds after traumatic avulsion, surgical excision (for example, necrotizing soft tissue infection), or resection (for example, skin cancer), and the FDA Breakthrough Device designation it received for those uses, were relevant for purposes of the new technology add-on payment application for FY 2026. According to its FDA indication for use, the RECELL[supreg] Autologous Cell Harvesting Device is used for application in combination with meshed autografting for both acute full-thickness thermal burn wounds and full-thickness skin defects. Therefore, it is not possible to differentiate between use of the device for acute full-thickness thermal burn wounds and full-thickness skin defects using the procedure codes for meshed autografting, and these codes are not relevant to our proposal.

Although we agree with the commenter that some of the listed diagnosis codes in Table 10.1.A associated with the proposed rule may not correlate to full thickness skin wounds after traumatic avulsion in all instances, we note that these diagnosis codes must be reported in combination with use of the RECELL[supreg] Autologous Cell Harvesting Device to be eligible for new technology add-on payment. The RECELL[supreg] Autologous Cell Harvesting Device is FDA market authorized for use in full-thickness skin defects. Therefore, we believe that when these diagnosis codes are used in combination with the list of procedure codes that uniquely identify procedures involving the use of the RECELL[supreg] Autologous Cell Harvesting Device, they would describe full thickness skin defects. Therefore, we are finalizing the lists of codes in Tables 10.1.A.- and 10.1.B.- RECELL[supreg] Autologous Cell Harvesting Device associated with the proposed rule as proposed. We note that Tables 10.A.- and 10.B.- RECELL[supreg] Autologous Cell Harvesting Device associated with this final rule are the same as Tables 10.1.A.- and 10.1.B.-RECELL[supreg] Autologous Cell Harvesting Device associated with the proposed rule, respectively, but the names of the tables were updated for this final rule.

Based on the information provided in the application for new technology add-on payments, and after consideration of the public comments we received, we believe the RECELL[supreg] Autologous Cell Harvesting Device meets the cost criterion. The technology received FDA marketing authorization on June 7, 2023, with an indication for use in combination with meshed autografting for acute full-thickness thermal burn wounds in pediatric and adult patients and full-thickness skin defects after traumatic avulsion (for example, degloving) or surgical excision (for example, necrotizing soft tissue infection) or resection (for example, skin cancer), which is covered by its Breakthrough Device designation. Therefore, we are finalizing our proposal to approve new technology add-on payments for the RECELL[supreg] Autologous Cell Harvesting Device for FY 2026. We consider the beginning of the newness period to commence on June 7, 2023, the date on which the technology received its FDA marketing authorization for the indication covered by its Breakthrough Device designation.

Based on the information available at the time of this final rule, the cost per case of the RECELL[supreg] Autologous Cell Harvesting Device is $7,500. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case. As a result, we are finalizing that the maximum new technology add-on payment for a case involving the use of the RECELL[supreg] Autologous Cell

Harvesting Device is $4,875 for FY 2026 (that is, 65 percent of the average cost of the technology). As noted earlier in this section, the RECELL[supreg] Autologous Cell Harvesting Device is also indicated for acute partial-thickness thermal burn wounds and acute full-thickness thermal burn wounds. However, we note that under the eligibility criteria for approval under the alternative pathway for certain transformative devices, only the use of the technology for the indication that corresponds to the technology's Breakthrough Device designation would be eligible for the new technology add-on payment for FY 2026. Therefore, only the use of the RECELL[supreg] Autologous Cell Harvesting Device for acute nonthermal full thickness skin wounds after traumatic avulsion, surgical excision (for example, necrotizing soft tissue infection), or resection (for example, skin cancer), and the FDA Breakthrough Device designation it received for those uses, are relevant for purposes of the new technology add-on payment for FY 2026.

Therefore, cases involving the use of the RECELL[supreg] Autologous Cell Harvesting Device that are eligible for new technology add-on payments will be identified by one of the following ICD-10-PCS procedure codes, in combination with any of the ICD-10-CM diagnosis codes listed in Table 10.A.-RECELL[supreg] Autologous Cell Harvesting Device or ICD-10-PCS procedure codes listed in Table 10.B.- RECELL[supreg] Autologous Cell Harvesting Device associated with this final rule. [GRAPHIC] [TIFF OMITTED] TR04AU25.209

(15) restor3d TIDALTM Fusion Cage

The following table summarizes the information provided in the new technology add-on payment application for the restor3d TIDALTM Fusion Cage. We note that restor3d submitted an application for new technology add-on payments for the restor3d TIDALTM Fusion Cage for FY 2025, as summarized in the FY 2025 IPPS/LTCH PPS proposed rule (89 FR 36124 through 36125), that it withdrew prior to the issuance of the FY 2025 IPPS/LTCH PPS final rule (89 FR 69204). BILLING CODE 4120-01-P

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BILLING CODE 4120-01-C

In the proposed rule, we noted that after review of the information provided by the applicant, we agreed with the applicant that the restor3d TIDALTM Fusion Cage meets the cost criterion and therefore proposed to approve the

restor3d TIDALTM Fusion Cage for new technology add-on payments for FY 2026 subject to the technology receiving FDA marketing authorization for the indication corresponding to the Breakthrough Device designation by May 1, 2025.

Based on preliminary information from the applicant at the time of the proposed rule, the applicant anticipated the cost of the restor3d TIDALTM Fusion Cage to the hospital to be $27,995 per patient. In addition, the applicant noted the costs related to the technology for required supporting instruments and materials consist of one unit each of the Instrument Kit ($6,995), TTC Fusion Nail ($7,500), and Graft Material ($1,500). The applicant estimated the total cost to the hospital to be $43,990 for each procedure per patient, including the related cost of the technology. As we discussed in the FY 2025 IPPS/LTCH PPS proposed rule (89 FR 36125) and in prior rulemaking, when determining a new technology add-on payment, we provide payment based on the cost of the actual technology (such as the drug or device itself) and not for additional costs related to the use of the device (86 FR 45146). We noted that based on the information provided by the applicant, the cost of the Instrument Kit was included in the costs of the supporting instruments and materials for each procedure related to the use of the technology, rather than the cost of the technology itself. In addition, we noted it appeared that the TTC Fusion Nail and Bone Graft were not new and unique components for this technology and could be purchased separately in support of other technologies. Furthermore, we noted that the Instrument Kit was not included in the Breakthrough Device designation, and it therefore appeared that only the restor3d TIDALTM Fusion Cage would be designated as the Breakthrough Device once market authorized and would be eligible for new technology add-on payments under the alternative pathway. Therefore, we stated it appeared any add-on payment for the restor3d TIDALTM Fusion Cage would include only the cost of the restor3d TIDALTM Fusion Cage ($27,995).

We noted that the cost information for this technology may be updated in the final rule based on revised or additional information CMS receives prior to the final rule. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case. As a result, we proposed that the maximum new technology add-on payment for a case involving the use of the restor3d TIDALTM Fusion Cage would be $18,196.75 for FY 2026 (that is, 65 percent of the average cost of the technology).

We invited public comments on whether the restor3d TIDALTM Fusion Cage meets the cost criterion and our proposal to approve new technology add-on payments for the restor3d TIDALTM Fusion Cage for FY 2026, subject to the technology receiving FDA marketing authorization for the indication corresponding to the Breakthrough Device designation by May 1, 2025.

Comment: We received comments expressing support for technologies under consideration for new technology add-on payments for FY 2026.

The applicant submitted a public comment noting that the restor3d TIDAL Fusion Cage received FDA 510(k) clearance (K242356) effective March 24, 2025, and that the Indications for Use are a subset of the Breakthrough Device designation indications.

Response: We thank the commenters for their comments.

Based on the information provided in the application for new technology add-on payments, and after consideration of the public comments we received, we believe restor3d TIDALTM Fusion Cage meets the cost criterion. The technology received 510(k) clearance from FDA on March 24, 2025, with an indication for use as part of a tibiotalocalcaneal fusion construct in a salvage procedure following failed ankle arthrodesis or failed ankle arthroplasty for patients at risk of limb loss, which is covered by its Breakthrough Device designation. Therefore, we are finalizing our proposal to approve new technology add-on payments for restor3d TIDALTM Fusion Cage for FY 2026. We consider the beginning of the newness period to commence on March 24, 2025, the date on which technology received its 510(k) clearance for the indication covered by its Breakthrough Device designation.

Based on the information available at the time of this final rule, the cost per case of TIDAL Fusion Cage System is $27,995. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case. As a result, we are finalizing that the maximum new technology add-on payment for a case involving the use of TIDAL Fusion Cage System is $18,196.75 for FY 2026 (that is, 65 percent of the average cost of the technology). Cases involving the use of TIDAL Fusion Cage System that are eligible for new technology add-on payments will be identified by ICD-10-PCS procedure codes: XRGK0CA (Fusion of left ankle joint using gyroid-sheet lattice design internal fixation device, open approach), XRGM0CA (Fusion of left tarsal joint using gyroid-sheet lattice design internal fixation device, open approach), XRGJ0CA (Fusion of right ankle joint using gyroid-sheet lattice design internal fixation device, open approach), or XRGL0CA (Fusion of right tarsal joint using gyroid-sheet lattice design internal fixation device, open approach). (16) ShortCutTM

The following table summarizes the information provided in the new technology add-on payment application for the ShortCutTM.

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After review of the information provided by the applicant, we agreed with the applicant that the ShortCutTM meets the cost criterion and therefore proposed to approve the ShortCutTM for new technology add-on payments for FY 2026 for use as a splitting device of bioprosthetic aortic valve leaflets to facilitate valve-in- valve procedures for patients at risk for coronary obstruction.

Based on preliminary information from the applicant at the time of the proposed rule, the applicant anticipated the total cost of the ShortCutTM to the hospital to be $15,000 per patient. We noted that the cost information for this technology may be updated in the final rule based on revised or additional information CMS receives prior to the final rule. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS- DRG payment for the case. As a result, we proposed that the maximum new technology add-on payment for a case involving the use of the ShortCutTM would be $9,750 for FY 2026 (that is, 65 percent of the average cost of the technology).

We invited public comments on whether the ShortCutTM meets the cost criterion and our proposal to approve new technology add-on payments for the ShortCutTM for FY 2026.

Comment: Multiple commenters, including the applicant, expressed support for our proposal to approve new technology add-on payment for the ShortCutTM device for FY 2026. Some commenters provided their perspectives regarding the clinical need for the device. Several commenters, including the applicant, noted that the device enabled splitting of pre-existing valve leaflets after insertion of the transcatheter heart valve to allow blood flow into the adjacent or “at risk” coronary artery. Per commenters, approving new technology add-on payments for ShortCutTM would make it economically feasible for hospitals to offer this breakthrough technology to Medicare patients without incurring steep losses

The applicant further reiterated that the ShortCutTM device received FDA

Breakthrough Device Designation on January 18, 2024, and FDA market clearance on September 27, 2024. The applicant also noted that CMS created a new ICD-10-PCS procedure code (X28F3VA) effective October 1, 2024, responding to the growing need for leaflet splitting in patients undergoing valve-in-valve transcatheter aortic valve replacement.

Response: We thank the commenters for their comments.

Based on the information provided in the application for new technology add-on payments, we believe the ShortCutTM meets the cost criterion. The technology received FDA marketing authorization on September 27, 2024, with an indication for use as a splitting device of bioprosthetic aortic valve leaflets to facilitate valve-in-valve procedures for patients at risk of coronary obstruction, which is covered by its Breakthrough Device designation. Therefore, we are finalizing our proposal to approve new technology add-on payments for the ShortCutTM for FY 2026. We consider the beginning of the newness period to commence on September 27, 2024, the date on which technology received its FDA marketing authorization for the indication covered by its Breakthrough Device designation.

Based on the information available at the time of this final rule, the cost per case of the ShortCutTM is $15,000. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case. As a result, we are finalizing that the maximum new technology add-on payment for a case involving the use of the ShortCutTM is $9,750 for FY 2026 (that is, 65 percent of the average cost of the technology). Cases involving the use of the ShortCutTM that are eligible for new technology add-on payments will be identified by ICD-10-PCS procedure code X28F3VA (Division of aortic valve using intraluminal bioprosthetic valve leaflet splitting technology in existing valve, percutaneous approach, new technology group 10). (17) The WiSE CRT System

The following table summarizes the information provided in the new technology add-on payment application for The WiSE CRT System.

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In the proposed rule, we noted that after review of the information provided by the applicant, we agreed with the applicant that the WiSE CRT System meets the cost criterion and therefore proposed to approve the WiSE CRT System for new technology add-on payments for FY 2026, subject to the technology receiving FDA marketing authorization for the indication corresponding to the Breakthrough Device designation by May 1, 2025.

Based on preliminary information from the applicant at the time of the proposed rule, the applicant anticipated the total cost of the WiSE CRT System to the hospital to be $63,300 per patient. The components included the electrode

and catheter ($21,970), the delivery sheath ($2,590), the battery ($12,870), and the transmitter ($25,870). We noted that the cost information for this technology may be updated in the final rule based on revised or additional information CMS receives prior to the final rule. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case. As a result, we proposed that the maximum new technology add-on payment for a case involving the use of the WiSE CRT System would be $41,145 for FY 2026 (that is, 65 percent of the average cost of the technology).

We invited public comments on whether the WiSE CRT System meets the cost criterion and our proposal to approve new technology add-on payments for the WiSE CRT System for FY 2026, subject to the technology receiving FDA marketing authorization for the indication corresponding to the Breakthrough Device designation by May 1, 2025.

Comment: A few commenters, including the applicant, expressed support for our proposal to approve new technology add-on payment for the WiSE CRT System. The applicant further stated that the WiSE CRT System received FDA approval on April 11, 2025, and that the approved indications are consistent with the Breakthrough Device designation indications. The applicant also noted that the total price of the technology is unchanged.

Response: We thank the commenters for their comments.

Based on the information provided in the application for new technology add-on payments, and after consideration of the public comments we received, we believe the WiSE CRT System meets the cost criterion. The technology received premarket approval from FDA on April 11, 2025, with an indication for adult patients who are at least 22 years of age, are indicated for CRT, have an existing or are eligible for an implanted right ventricular pacing system, and are in one of the following two categories: Patients in whom previous coronary sinus (CS) lead implantation was unsuccessful, or where an implanted lead has been turned off, referred to as “previously untreatable”; Patients with previously implanted pacemakers or Implantable Cardioverter-Defibrillators (ICDs) in whom standard CRT upgrade is not advisable due to known relative contraindications for CS lead or CRT device implantation, referred to as “high risk upgrades,” which is covered by its Breakthrough Device designation. Therefore, we are finalizing our proposal to approve new technology add-on payments for the WiSE CRT System for FY 2026. We consider the beginning of the newness period to commence on April 11, 2025, the date on which the technology received premarket approval for the indication covered by its Breakthrough Device designation.

Based on the information available at the time of this final rule, the cost per case of the WiSE CRT System is $63,300. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case. As a result, we are finalizing that the maximum new technology add-on payment for a case involving the use of the WiSE CRT System is $41,145 for FY 2026 (that is, 65 percent of the average cost of the technology). The applicant submitted a request and was granted approval for unique ICD-10-PCS procedure codes for the WiSE CRT System beginning in FY 2026. Therefore, cases involving the use of the WiSE CRT System that are eligible for new technology add-on payments will be identified by ICD- 10-PCS procedure code X2HN37B (Insertion of endocardiac pacing electrode into left ventricle, percutaneous approach, new technology group 11) in combination with XHH80HB (Insertion of ultrasound transmitter and battery for endocardiac pacing electrode into chest subcutaneous tissue and fascia, open approach, new technology group 11). (18) TriVerity Test

The following table summarizes the information provided in the new technology add-on payment application for the TriVerity Test.

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In the proposed rule, after review of the information provided by the applicant, we noted the applicant stated that the technology was not commercially available immediately after FDA clearance. We stated in the proposed rule that we were interested in additional information regarding the cause of any delay in the technology's commercial availability, including the significance of building up TriVerity cartridge inventory on its availability for routine clinical use.

With regard to the cost criterion, we stated that the applicant stated the technology is used as an aid to differentiate bacterial infections, viral infections, and non-infectious illness, as well as the likelihood of disease progression in adult patients. However, we noted that the applicant included diagnosis codes related to sepsis of newborn in the second cost criterion analysis. We questioned whether diagnosis codes related to newborns were applicable to this technology because it is indicated for use in adult patients, and whether the applicant should have removed these diagnosis codes to identify eligible cases more accurately.

Subject to the applicant adequately addressing this concern, we agreed that the technology meets the cost criterion and proposed to approve the TriVerity Test for new technology add-on payments for FY 2026, for use in conjunction with clinical assessments and other laboratory findings as an aid to differentiate bacterial infections, viral infections, and non-infectious illness, as well as to determine the likelihood of 7-day need for mechanical ventilation, vasopressors, and/or renal replacement therapy in adult patients with suspected acute infection or suspected sepsis presenting to the emergency department.

Based on preliminary information from the applicant at the time of the proposed rule, the applicant anticipated the total cost of the TriVerity Test to the hospital to be $388 per patient. The applicant stated that there would be two components for the operating cost of the technology: the TriVerity Cartridge ($375) and the PAXgene Blood RNA Tube ($13). We noted that per the applicant, the PAXgene Blood RNA Tube is an FDA-cleared tube distributed by BD and is a necessary component for hospitals to use the TriVerity Test. The applicant stated that hospitals can purchase the PAXgene Blood RNA Tubes directly from BD or from the applicant. Although the applicant stated that the PAXgene Blood RNA Tube is a new component of the device, we noted that the PAXgene Blood RNA Tube is also commercially available for other uses as a standalone sample collection device, and received FDA marketing authorization as early as April 18, 2005.\136\ Therefore, we stated that it appeared that only the cost of the TriVerity Cartridge was appropriate for consideration for new technology add-on payment. We noted that the cost information for this technology may be updated in the final rule based on revised or additional information CMS receives prior to the final rule. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS- DRG payment for the case. As a result, we proposed that the maximum new technology add-on payment for a case involving the use of the TriVerity Test would be $243.75 for FY 2026 (that is, 65 percent of the average cost of the technology).

\136\ https://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfpmn/denovo.cfm?id=DEN050003.

We invited public comments on whether the TriVerity Test meets the cost criterion and our proposal to approve new technology add-on payments for the TriVerity Test for FY 2026.

Comment: A few commenters, including the applicant, expressed support for our proposal to approve new technology add-on payment for the TriVerity Test for FY 2026.

In response to CMS's request for additional information regarding the delay in the technology's market availability, the applicant stated that the TriVerity Test was cleared by FDA on January 10, 2025, and commercial product inventory became available for hospital customers on March 13, 2025. The applicant stated that Inflammatix manufactures TriVerity cartridges at their headquarters in Sunnyvale, CA and has both an active cartridge production line and storage facilities of TriVerity cartridge inventory. The applicant stated that it affirms it has built up cartridge inventory to meet hospital customer demand for routine use of the TriVerity test.

In response to CMS's question about including diagnosis codes related to sepsis of newborn in the second cost criterion analysis, the applicant stated that while these codes were included in the algorithm to select cases for the analysis, it did not actually identify any cases with the newborn sepsis ICD-10-CM diagnosis codes. Per the applicant, removal of those codes from the case selection algorithm does not affect the results of the cost criterion analysis and the final inflated case weighted

standardized charge per case of $81,393 exceeded the case weighted threshold of $73,258 by $8,135. The applicant reiterated that the other cost criterion analysis scenario had a final inflated case weighted standardized charge per case of $70,025, which exceeded the case weighted threshold of $67,984 by $2,041 and that the TriVerity Test meets the cost criterion under both scenarios.

The applicant also agreed with CMS's statement that only the cost of the TriVerity Cartridge should be included in the new technology add-on payment calculation.

Response: We thank the applicant and other commenters for their comments. We agree that the final inflated average case-weighted standardized charge per case exceeded the average case-weighted threshold amount. Therefore, the TriVerity Test meets the cost criterion.

We stated in the proposed rule that we were interested in additional information regarding the cause of any delay in the technology's commercial availability, including the significance of building up TriVerity cartridge inventory on its availability for routine clinical use. Although the applicant affirmed that it has built up cartridge inventory to meet demand for routine use of the TriVerity Test, we note that we did not receive any information regarding the cause of any delay in the technology's commercial availability. Therefore, at this time, there is not sufficient information to determine a newness date based on a documented delay in the technology's availability on the U.S. market. Absent additional information, we consider the beginning of the newness period to commence on January 10, 2025, the date of FDA marketing authorization for the indication covered by its Breakthrough Device designation.

Based on the information provided in the application for new technology add-on payments, and after consideration of the public comments we received, we believe the TriVerity Test meets the cost criterion. The technology received FDA marketing authorization on January 10, 2025, with an indication for use in conjunction with clinical assessments and other laboratory findings as an aid to differentiate bacterial infections, viral infections, and non- infectious illness, as well as to determine the likelihood of 7-day need for mechanical ventilation, vasopressors, and/or renal replacement therapy in adult patients with suspected acute infection or suspected sepsis presenting to the emergency department. Therefore, we are finalizing our proposal to approve new technology add-on payments for the TriVerity Test for FY 2026. We consider the beginning of the newness period to commence on January 10, 2025, the date of FDA marketing authorization for the indication covered by its Breakthrough Device designation.

Based on the information available at the time of this final rule, the cost per case of the TriVerity Test for the TriVerity Cartridge component is $375. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case. As a result, we are finalizing that the maximum new technology add-on payment for a case involving the use of the TriVerity Test is $243.75 for FY 2026 (that is, 65 percent of the average cost of the technology). Cases involving the use of the TriVerity Test that are eligible for new technology add-on payments will be identified by ICD- 10-PCS procedure code XXE5XBB (Measurement of infection and immune response, gene expression testing system, new technology group 11). (19) VITEK[supreg] REVEALTM AST System

The following table summarizes the information provided in the new technology add-on payment application for the VITEK[supreg] REVEALTM AST System. BILLING CODE 4120-01-P

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BILLING CODE 4120-01-C

In the proposed rule, we noted that after review of the information provided by the applicant, since the indication for which the applicant received 510(k) clearance is included within the scope of the Breakthrough Device designation indication, it appears that the FDA- cleared indication is appropriate for consideration for new technology add-on payment under the alternative pathway criteria.\137\

\137\ Breakthrough Devices Program https://www.fda.gov/medical-devices/how-study-and-market-your-device/breakthrough-devices-program.

We noted the applicant stated the device was not commercially available until October 21, 2024, due to lead times in the supply chain and implementation of system modifications due to FDA requirements. We stated that we were interested in additional information regarding the cause for any delay in the technology's commercial availability, as it received FDA clearance on June 20, 2024, and it was not clear how lead times in the supply chain affected its availability on the market and what system modifications were required.

We agreed with the applicant that the VITEK[supreg] REVEALTM AST System meets the cost criterion and therefore proposed to approve the VITEK[supreg] REVEALTM AST System for new technology add-on payments for FY 2026, indicated for susceptibility testing direct from positive blood culture samples signaled positive by a continuous monitoring blood culture system and confirmed to contain gram-negative bacilli by Gram stain.

Based on preliminary information from the applicant at the time of the proposed rule, the applicant anticipated the total cost of the VITEK[supreg] REVEALTM AST System to the hospital to be $125 per patient for the VITEK[supreg] REVEALTM Sensor Array. Per the applicant, while there are additional capital costs for the technology, these costs were not included in the device's cost to the hospital per patient per inpatient stay. We noted that the cost information for this technology may be updated in the final rule based on revised or additional information CMS receives prior to the final rule. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case. As a result, we proposed that the maximum new technology add-on payment for a case involving the use of the VITEK[supreg] REVEALTM AST System would be $81.25 for FY 2026 (that is, 65 percent of the average cost of the technology).

We invited public comments on whether the VITEK[supreg] REVEALTM AST System meets the cost criterion and our proposal to approve new technology add-on payments for the VITEK[supreg] REVEALTM AST System for FY 2026.

Comment: A few commenters, including the applicant, submitted public comments expressing support for our proposal to approve new technology add-on payment for the VITEK[supreg] REVEALTM AST System for FY 2026. The applicant also stated that the technology meets the newness criterion for FY 2026, does not have to demonstrate substantial clinical improvement in order to qualify for new technology add-on payments, reiterated that it met the cost criterion, and agreed

with the proposed maximum new technology add-on payment of $81.25.

In response to CMS's request for additional information regarding the delay in the technology's market availability, the applicant stated the VITEK[supreg] REVEALTM received FDA clearance in June 2024, but the technology was not commercially available until October 21, 2024. Per the applicant, the basis for the delay was due to the implementation of a software requirement from FDA that could not be validated until a validation panel was available. The applicant stated that an external entity was not able to provide the aforementioned panel until September 2024, and that validation was initiated upon receipt of the panel and completed in October. Per the applicant, it had to delay commercial availability until this step was completed.

Response: We thank the commenters for their comments.

Based on the information provided in the application for new technology add-on payments, and after consideration of the public comments we received, we believe the VITEK[supreg] REVEALTM AST System meets the cost criterion. The technology received 510(k) clearance on June 20, 2024, with an indication for susceptibility testing direct from positive blood culture samples signaled positive by a continuous monitoring blood culture system and confirmed to contain gram-negative bacilli by Gram stain, which is covered by its Breakthrough Device designation. Therefore, we are finalizing our proposal to approve new technology add-on payments for the VITEK[supreg] REVEALTM AST System for FY 2026. We consider the beginning of the newness period to commence on October 21, 2024, the date on which the technology became commercially available for the indication covered by its Breakthrough Device designation.

Based on the information available at the time of this final rule, the cost per case of the VITEK[supreg] REVEALTM AST System is $125. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 65 percent of the average cost of the technology, or 65 percent of the costs in excess of the MS-DRG payment for the case. As a result, we are finalizing that the maximum new technology add-on payment for a case involving the use of the VITEK[supreg] REVEALTM AST System is $81.25 for FY 2026 (that is, 65 percent of the average cost of the technology). Cases involving the use of the VITEK[supreg] REVEALTM AST System that are eligible for new technology add-on payments will be identified by ICD-10-PCS procedure code XXE5X4A (Measurement of infection, positive blood culture small molecule sensor array technology, new technology group 10). b. Alternative Pathways for Qualified Infectious Disease Products (QIDPs) (1) EMBLAVEOTM (aztreonam-avibactam)

The following table summarizes the information provided in the new technology add-on payment application for EMBLAVEOTM (also referred to as ATM-AVI).

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In the proposed rule, we noted that after review of the information provided by the applicant, since the indication for which the applicant received NDA approval is included within the scope of the QIDP designation indication, it appears that the FDA-approved indication is appropriate for consideration for new technology add-on payment under the alternative pathway criteria.

We noted that the applicant stated that the technology is expected to be commercially available by Q3 of CY 2025 due to product availability. We stated we were interested in additional information regarding the cause for any delay in the technology's market availability as the technology received FDA approval on February 7, 2025.

We agreed with the applicant that EMBLAVEOTM meets the cost criterion and therefore proposed to approve EMBLAVEOTM for new technology add-on payments for FY 2026 for use in patients 18 years and older who have limited or no alternative options for the treatment of cIAI.

The applicant had not provided an estimate for the cost of EMBLAVEOTM at the time of the proposed rule. We stated that we expected the applicant to submit cost information prior to the final rule, and that we would provide an update regarding the new technology add-on payment amount for the technology, if approved, in the final rule. We stated that any new technology add-on payment for EMBLAVEOTM would be subject to our policy under Sec. 412.88(a)(2)(ii)(B) where we limit new technology add-on payment for QIDPs to the lesser of 75 percent of the average cost of the technology, or 75 percent of the costs in excess of the MS-DRG payment for the case.

We invited public comments on whether EMBLAVEOTM meets the cost criterion and our proposal to approve new technology add-on payments for EMBLAVEOTM for FY 2026.

Comment: A few commenters, including the applicant submitted public comments expressing support for our proposal to approve new technology add-on payment for EMBLAVEOTM for FY 2026, with the applicant further reiterating that the product meets the cost criterion.

In response to CMS's request regarding the cause for delay in the technology's market availability, the applicant stated that it expected that EMBLAVEOTM would be commercially available for use and purchase in the United States by quarter 3 (Q3) of calendar year (CY) 2025 due to delays related to first run manufacturing for the product and packaging and other processes such as securing an export license to ship the drug to the U.S., followed by customs clearance. The applicant stated that the product will not be commercially available in the U.S. until after these processes are complete and that it would notify CMS of the date when EMBLAVEOTM is first available in the U.S. The applicant requested that the newness period for the product begin on that date.

The applicant also provided the cost for EMBLAVEOTM at $327 per vial as of June 9, 2025. The applicant stated that the anticipated cost of EMBLAVEOTM in the hospital setting is $12,000.90, which was calculated using data from the clinical trials and accounted for the loading dose, patients' estimated creatinine clearance, and treatment duration. The applicant requested that CMS set the maximum new technology add-on payment for cases involving the use of EMBLAVEOTM at $9,000.68 for FY 2026 (that is, 75 percent of the average cost of the technology), because EMBLAVEOTM is a designated QIDP.

Response: We thank the commenters for their support and additional information.

As we have discussed in prior rulemaking (86 FR 45132; 77 FR 53348), generally, our policy is to begin the newness period on the date of FDA approval or clearance or, if later, the date of availability of the product on the U.S. market. The applicant states that EMBLAVEOTM is expected to be commercially available by Q3 of CY 2025 due to product availability, but it is unclear whether the technology would be available for sale prior to that date. At this time, there is not sufficient information to determine a newness date based on a documented delay in the technology's availability on the U.S. market. Absent additional information, we therefore consider the newness date for this technology to be February 7, 2025.

Based on the information provided in the application for new technology add-on payments, and after consideration of the public comments we received, we believe EMBLAVEOTM meets the cost criterion. The technology received NDA approval on February 7, 2025, with an indication for use in patients 18 years and older who have limited or no alternative options for the treatment of cIAI, which is covered by its QIDP designation. Therefore, we are finalizing our proposal to approve new technology add-on payments for EMBLAVEOTM for FY 2026. Absent additional information from the applicant, we consider the beginning of the newness period to commence on February 7, 2025, the date of FDA marketing authorization for the indication covered by its QIDP designation.

Based on the information available at the time of this final rule, the cost per case of EMBLAVEOTM is $12,000.90. Under Sec. 412.88(a)(2), we limit new technology add-on payments for QIDPs to the lesser of 75 percent of the average cost of the technology, or 75 percent of the costs in excess of the MS-DRG payment for the case. As a result, we are finalizing that the maximum new technology add-on payment for a case involving the use of EMBLAVEOTM is $9,000.68 for FY 2026 (that is, 75 percent of the average cost of the technology).

The applicant submitted a request and was granted approval for unique ICD-10-PCS procedure codes for EMBLAVEOTM beginning in FY 2026. Therefore, cases involving the use of EMBLAVEOTM that are eligible for new technology add-on payments will be identified by ICD-10-PCS procedure codes XW033PB (Introduction of aztreonam- avibactam anti-infective into peripheral vein, percutaneous approach, new technology group 11) or XW043PB (Introduction of aztreonam- avibactam anti-infective into central vein, percutaneous approach, new technology group 11). (2) CONTEPOTM (fosfomycin)

The following table summarizes the information provided in the new technology add-on payment application for CONTEPOTM (fosfomycin). We note that Nabriva Therapeutics submitted an application for CONTEPOTM for FY 2021 and FY 2022, as summarized in the FY 2021 and FY 2022 IPPS/LTCH PPS proposed rules (85 FR 32682 through 32683; 86 FR 25390 through 25392), and received conditional approval subject to the technology receiving FDA marketing authorization before July 1 of the particular fiscal year for which the applicant applied for new technology add-on payments (85 FR 58723 through 58725; 86 FR 45154 through 45155). CONTEPOTM did not receive FDA marketing authorization by the applicable July 1 deadlines, and was therefore not eligible for new technology add-on payments for FY 2021 or FY 2022 (86 FR 44972; 87 FR 48909).

Per the applicant, Meitheal Pharmaceuticals Inc. has acquired the rights to CONTEPOTM in the U.S. and is submitting the new technology add-on payment application for FY 2026. BILLING CODE 4120-01-P

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BILLING CODE 4120-01-C

In the proposed rule, after review of the information provided by the applicant, we noted that the applicant stated that the technology is expected to be commercially available within 3 months of FDA approval, and we stated that we would appreciate more information on the reasons for any delay in the commercial availability of CONTEPOTM following FDA approval.

We agreed with the applicant that CONTEPOTM meets the cost criterion and therefore proposed to approve CONTEPOTM for new technology add-on payments for FY 2026, subject to the technology receiving FDA marketing authorization for the indication corresponding to the QIDP designation by July 1, 2025. We stated that as an application submitted under the alternative pathway for certain antimicrobial products at Sec. 412.87(d), CONTEPOTM is eligible for conditional approval for new technology add-on payments if it does not receive FDA marketing authorization by July 1, 2025, provided that the technology receives FDA marketing authorization before July 1 of the fiscal year for which the applicant applied for new technology add-on payments (that is, July 1, 2026), as provided in Sec. 412.87(f)(3). We stated that if CONTEPOTM receives FDA marketing authorization before July 1, 2026, the new technology add-on payment for cases involving the use of this technology would be made effective for discharges beginning in the first quarter after FDA marketing authorization is granted. If FDA marketing authorization is received on or after July 1, 2026, no new technology add-on payments would be made for cases involving the use of CONTEPOTM for FY 2026.

Based on preliminary information from the applicant at the time of the proposed rule, the applicant anticipated the total cost of CONTEPOTM to the hospital to be $11,700 per patient. The applicant estimated that each vial costs $325 and that 3 doses are needed each day for an average treatment duration of 12 days. We noted that the cost information for this technology may be updated in the final rule based on revised or additional information CMS receives prior to the final rule. Under Sec. 412.88(a)(2)(ii)(B), we limit new technology add-on payment for technologies designated as QIDPs to the lesser of 75 percent of the average cost of the technology, or 75 percent of the costs in excess of the MS-DRG payment for the case. As a result, we proposed that the maximum new technology add-on payment for a case involving the use of CONTEPOTM would be $8,775 for FY 2026 (that is, 75 percent of the average cost of the technology).

We invited public comments on whether CONTEPOTM meets the cost criterion and our proposal to approve new technology add-on payments for CONTEPOTM for FY 2026, subject to the technology receiving FDA marketing authorization consistent with its QIDP designation by July 1, 2025.

Comment: We received comments expressing support for technologies under consideration for new technology add-on payments for FY 2026.

The applicant submitted a public comment in response to CMS's request for additional information regarding the expected delay in the commercial availability of CONTEPOTM following FDA approval. The applicant stated that once CONTEPOTM receives marketing authorization from FDA, the final label needs to be implemented and printed, and product packaging needs to be finalized and produced. The applicant stated that logistics in the supply chain and proper loading of product information in the supply chain systems would altogether take an anticipated three months from approval. The applicant stated that this was the basis of its assessment of product availability 3 months after FDA approval.

Response: We thank the commenters for their comments. As we have discussed in prior rulemaking (86 FR 45132; 77 FR 53348), generally, our policy is to begin the newness period on the date of FDA approval or clearance or, if later, the date of availability of the product on the U.S. market. The applicant states that it anticipates three months from FDA approval for commercial availability, but it is unclear when the technology would be available for sale. At this time, there is not sufficient information to determine a newness date based on a documented delay in the technology's availability on the U.S. market.

Based on the information provided in the application for new technology add-on payments, and after consideration of the public comments we received, we believe CONTEPOTM meets the cost criterion. Therefore, we are granting a conditional approval for CONTEPOTM for new technology add-on payments for FY 2026, subject to the technology receiving FDA marketing authorization before July 1, 2026 (that is, before July 1 of the fiscal year for which the applicant applied for new technology add-on payments (2026)). In the proposed rule we stated that as an application submitted under the alternative pathway for certain antimicrobial products at Sec. 412.87(d), CONTEPOTM is eligible for conditional approval for new technology add-on payments if it does not receive FDA marketing authorization by July 1, 2025, provided that the technology receives FDA marketing authorization before July 1 of the fiscal year for which the applicant applied for new technology add-on payments (that is, July 1, 2026), as provided in Sec. 412.87(f)(3) (90 FR 18217). If CONTEPOTM receives FDA marketing authorization before July 1, 2026, the new technology add-on payment for cases involving the use of this technology would be made effective for discharges beginning in the first quarter after FDA marketing authorization is granted. If FDA marketing authorization is received on or after July 1, 2026, no new technology add-on payments will be made for cases involving the use of CONTEPOTM for FY 2026.

Based on the information available at the time of this final rule, the cost per case of CONTEPOTM is $11,700. Under Sec. 412.88(a)(2), we limit new technology add-on payments for QIDPs to the lesser

of 75 percent of the average cost of the technology, or 75 percent of the costs in excess of the MS-DRG payment for the case. As a result, we are finalizing that, subject to CONTEPOTM receiving FDA marketing authorization before July 1, 2026, the maximum new technology add-on payment for a case involving the use of CONTEPOTM is $8,775 for FY 2026 (that is, 75 percent of the average cost of the technology). Cases involving the use of CONTEPOTM that are eligible for new technology add-on payments will be identified by ICD- 10-PCS procedure codes XW033WB (Introduction of fosfomycin anti- infective into peripheral vein, percutaneous approach, new technology group 11) or XW043WB (Introduction of fosfomycin anti-infective into central vein, percutaneous approach, new technology group 11). 7. Other Comments

We received several public comments requesting changes to the new technology add-on payment policies such as, but not limited to: modifying or removing the requirement for a complete and active FDA marketing authorization request, changing the deadline for an applicant for new technology add-on payments to receive FDA marketing authorization, and establishing a more frequent (such as quarterly or biannual) process to apply for new technology add-on payment. We also received comments on technologies that were not under consideration for new technology add-on payments for FY 2026. These comments were outside the scope of the proposals included in the FY 2026 IPPS/LTCH PPS proposed rule and we are therefore not addressing them in this final rule.

Section 1886(d)(3)(E) of the Act requires that, as part of the methodology for determining prospective payments to hospitals, the Secretary adjust the standardized amounts for area differences in hospital wage levels by a factor (established by the Secretary) reflecting the relative hospital wage level in the geographic area of the hospital compared to the national average hospital wage level. We currently define hospital labor market areas based on the delineations of statistical areas established by the Office of Management and Budget (OMB). A discussion of the FY 2026 hospital wage index based on the statistical areas appears under section III.B. of the preamble of this final rule.

Section 1886(d)(3)(E) of the Act requires the Secretary to update the wage index annually and to base the update on a survey of wages and wage-related costs of short-term, acute care hospitals. CMS collects these data on the Medicare cost report, CMS Form 2552-10, Worksheet S- 3, Parts II, III, IV. The aforementioned information collection requirements are in Worksheet S-3, Parts II, III, IV. of the information collection request titled “Hospitals and Health Care Complex Cost Report (CMS Form 2552-10)”. The information collection request is currently approved under OMB control number is 0938-0050 and has a September 30, 2025, expiration date. We have submitted the information collection request to OMB for reapproval. Section 1886(d)(3)(E) of the Act also requires that any updates or adjustments to the wage index be made in a manner that ensures that aggregate payments to hospitals are not affected by the change in the wage index. The adjustment for FY 2026 is discussed in section II.B. of the Addendum to this final rule.

As discussed in section III.I. of the preamble of this final rule, we also take into account the geographic reclassification of hospitals in accordance with sections 1886(d)(8)(B) and 1886(d)(10) of the Act when calculating IPPS payment amounts. Under section 1886(d)(8)(D) of the Act, the Secretary is required to adjust the standardized amounts so as to ensure that aggregate payments under the IPPS after implementation of the provisions of sections 1886(d)(8)(B), 1886(d)(8)(C), and 1886(d)(10) of the Act are equal to the aggregate prospective payments that would have been made absent these provisions. The budget neutrality adjustment for FY 2026 is discussed in section II.A.4.b. of the Addendum to this final rule.

Section 1886(d)(3)(E) of the Act also provides for the collection of data every 3 years on the occupational mix of employees for short- term, acute care hospitals participating in the Medicare program to construct an occupational mix adjustment to the wage index. The information collection request is currently approved under OMB control number is 0938-0907 and has a January 31, 2026, expiration date. We plan to submit the information collection request to OMB for reapproval in the near future. A discussion of the occupational mix adjustment that we are applying to the FY 2026 wage index appears under section III.E. of the preamble of this final rule. 2. Core-Based Statistical Areas (CBSAs) for the FY 2026 Hospital Wage Index

The wage index is calculated and assigned to hospitals on the basis of the labor market area in which the hospital is located. Under section 1886(d)(3)(E) of the Act, beginning with FY 2005 (69 FR 49026 through 49032), we delineate hospital labor market areas based on OMB- established Core-Based Statistical Areas (CBSAs). In the July 16, 2021, Federal Register (86 FR 37777), OMB finalized a schedule for future updates based on results of the decennial Census updates to commuting patterns from the American Community Survey (ACS). In accordance with that schedule, on July 21, 2023, OMB released Bulletin No. 23-01. The current statistical areas (which were implemented beginning with FY 2025) are based on revised OMB delineations issued on July 21, 2023, in OMB Bulletin No. 23-01. According to OMB, the delineations reflect the 2020 Standards for Delineating Core Based Statistical Areas (“the 2020 Standards”), which appeared in the Federal Register on July 16, 2021 (86 FR 37770 through 37778), and the application of those standards to Census Bureau population and journey-to-work data (that is, 2020 Decennial Census, the ACS, and Census Population Estimates Program data) (we refer to these revised OMB delineations as the “new OMB delineations” in this final rule). A copy of OMB Bulletin No. 23-01 may be obtained at https://bidenwhitehouse.archives.gov/wp-content/uploads/2023/07/OMB-Bulletin-23-01.pdf. We refer readers to the FY 2025 IPPS/LTCH PPS final rule (89 FR 69253 through 69266) for a full discussion of our implementation of the new OMB delineations for the FY 2025 wage index. For FY 2026, we are continuing to use the new OMB delineations that we adopted beginning with FY 2025 to calculate the area wage indexes and the transition periods. 3. Codes for Constituent Counties in CBSAs

CBSAs are made up of one or more constituent counties. Each CBSA and constituent county has its own unique identifying codes. The Federal Information Processing Standard (FIPS) county codes are maintained by the U.S. Census Bureau. In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38129 through 38130), we adopted a policy to use the FIPS county codes for purposes of crosswalking counties to CBSAs. In addition, in the same rule, we implemented the latest FIPS code updates, which were effective October 1, 2017, beginning with the FY 2018

wage indexes. These updates have been used to calculate the wage indexes in a manner generally consistent with the CBSA-based methodologies finalized in the FY 2005 IPPS final rule and the FY 2015 IPPS/LTCH PPS final rule. We refer the reader to the FY 2018 IPPS/LTCH PPS final rule (82 FR 38129 through 38130) for a complete discussion of our adoption of FIPS county codes. For FY 2026, we are continuing to use only the FIPS county codes for purposes of crosswalking counties to CBSAs. For FY 2026, Tables 2 and 3 associated with this final rule and the County to CBSA Crosswalk File and Urban CBSAs and Constituent Counties for Acute Care Hospitals File posted on the CMS website reflect the latest FIPS county code updates.

The FY 2026 wage index values are based on the data collected from the Medicare cost reports submitted by hospitals for cost reporting periods beginning in FY 2022 (the FY 2025 wage indexes were based on data from cost reporting periods beginning during FY 2021).

The FY 2026 wage index includes all of the following categories of data associated with costs paid under the IPPS (as well as outpatient costs):

Salaries and hours from short-term, acute care hospitals (including paid lunch hours and hours associated with military leave and jury duty).

Home office costs and hours.

Certain contract labor costs and hours including direct patient care (which includes nursing), certain top management, pharmacy, laboratory, and nonteaching physician Part A services, and certain contract indirect patient care services (as discussed in the FY 2008 final rule with comment period (72 FR 47315 through 47317)).

Wage-related costs, including pension costs (based on policies adopted in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51586 through 51590) and modified in the FY 2016 IPPS/LTCH PPS final rule (80 FR 49505 through 49508)) and other deferred compensation costs.

Consistent with the wage index methodology for FY 2025, the wage index for FY 2026 excludes the direct and overhead salaries and hours for services not subject to IPPS payment, such as skilled nursing facility (SNF) services, home health services, costs related to Graduate Medical Education (GME) (teaching physicians and residents) and certified registered nurse anesthetists (CRNAs), and other subprovider components that are not paid under the IPPS. The FY 2026 wage index also excludes the salaries, hours, and wage-related costs of hospital-based rural health clinics (RHCs), and federally qualified health centers (FQHCs), because Medicare pays for these costs outside of the IPPS (68 FR 45395). In addition, as explained in the FY 2004 IPPS final rule (68 FR 45397 through 45398), salaries, hours, and wage- related costs of critical access hospitals (CAHs) are excluded from the wage index as we believe that removing CAHs from the wage index is prudent policy, given the substantial negative impact these hospitals have on the wage indexes in the areas where they are located and the minimal impact they have on the wage indexes of other areas. We refer the reader to the FY 2004 IPPS final rule (68 FR 45397 through 45398) for a complete discussion regarding the exclusion of CAHs from the wage index. Similar to our treatment of CAHs, as discussed later in this section, we exclude rural emergency hospitals (REHs) from the wage index.

For FY 2020 and subsequent years, other wage-related costs are also excluded from the calculation of the wage index. As discussed in the FY 2019 IPPS/LTCH final rule (83 FR 41365 through 41369), other wage- related costs reported on Worksheet S-3, Part II, Line 18 and Worksheet S-3, Part IV, Line 25 and subscripts, as well as all other wage-related costs, such as contract labor costs, are excluded from the calculation of the wage index. 2. Use of Wage Index Data by Suppliers and Providers Other Than Acute Care Hospitals Under the IPPS

Data collected for the IPPS wage index also are currently used to calculate wage indexes applicable to suppliers and other providers, such as SNFs, home health agencies (HHAs), ambulatory surgical centers (ASCs), and hospices. In addition, they are used for prospective payments to IRFs, IPFs, and LTCHs, and for hospital outpatient services. We note, in the calendar year (CY) 2025 ESRD PPS final rule (89 FR 89097 through 89116), CMS finalized a new ESRD PPS-specific wage index that will be used to adjust ESRD PPS payments for geographic differences in area wages. We refer the reader to the CY 2025 ESRD PPS final rule for complete details regarding ESRD wage index. We further note that, in the IPPS rules, we do not address comments pertaining to the wage indexes of any supplier or provider except IPPS providers and LTCHs. Such comments should be made in response to separate proposed rules for those suppliers and providers. 3. Verification of Worksheet S-3 Wage Data

The wage data for the FY 2026 wage index were obtained from Worksheet S-3, Parts II, III, and IV of the Medicare cost report, CMS Form 2552-10 (OMB Control Number 0938-0050 with an expiration date September 30, 2025) for cost reporting periods beginning on or after October 1, 2021, and before October 1, 2022. For wage index purposes, we refer to cost reports beginning on or after October 1, 2021, and before October 1, 2022, as the “FY 2022 cost report,” the “FY 2022 wage data,” or the “FY 2022 data.” Instructions for completing the wage index sections of Worksheet S-3 are included in the Provider Reimbursement Manual (PRM), Part 2 (Pub. 15-2), Chapter 40, Sections 4005.2 through 4005.4. The data file used to construct the FY 2026 wage index includes FY 2022 data submitted to us as of January 31, 2025. As in past years, we performed an extensive review of the wage data, mostly through the use of edits designed to identify aberrant data.

We note, in previous fiscal years, we reviewed and evaluated the audited wage data, and the impacts of the COVID-19 PHE on such data. For FY 2026, we have not identified any significant issues with the FY 2022 wage data itself in terms of our audits of this data. As usual, the data was audited by the Medicare Administrative Contractors (MACs), and there were no significant issues reported across the data for all hospitals.

We requested that our MACs revise or verify data elements that resulted in specific edit failures. For the proposed FY 2026 wage index, we identified and excluded 79 providers with aberrant data that should not be included in the wage index. However, we stated that if data elements for some of these providers are corrected, we intend to include data from those providers in the final FY 2026 wage index. We also adjusted certain aberrant data and included these data in the wage index. For example, in situations where a hospital did not have documentable salaries, wages, and hours for housekeeping and dietary services, we imputed estimates, in accordance with policies established in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49965 through 49967). We instructed MACs to complete their verification of questionable data elements and to transmit any changes to the wage data no later than March 21, 2025. After we

issued the proposed rule, for the final FY 2026 wage index, we restored the data of 15 hospitals to the wage index, because their data was either verified or improved and removed the data of 2 hospitals with aberrant data. Thus, 66 hospitals with aberrant data remain excluded from the FY 2026 wage index (79-15 + 2 = 66).

In constructing the proposed FY 2026 wage index, we included the wage data for facilities that were IPPS hospitals in FY 2022, inclusive of those facilities that have since terminated their participation in the program as hospitals, as long as those data did not fail any of our edits for reasonableness. We stated in the proposed rule (90 FR 18219) that we believe that including the wage data for these hospitals is, in general, appropriate to reflect the economic conditions in the various labor market areas during the relevant past period and to ensure that the current wage index represents the labor market area's current wages as compared to the national average of wages.

As discussed in the FY 2004 IPPS final rule (68 FR 45397 through 45398) and FY 2025 IPPS/LTCH final rule (89 FR 69268), any hospital that is designated as a CAH or REH by 7 days prior to the publication of the preliminary wage index public use file (PUF) is excluded from the calculation of the wage index.

For the proposed FY 2026 wage index, we removed 7 hospitals that converted to CAH status and 5 hospitals that converted to REH status on or after January 24, 2024, the cut-off date for CAH and REH exclusion from the FY 2025 wage index, and through and including January 24, 2025, the cut-off date for CAH and REH exclusion from the FY 2026 wage index. We did not receive any comments with regard to this proposal, and we are finalizing as proposed to exclude hospitals that have subsequently converted to CAH and/or REH from the wage index calculation. Since we issued the proposed rule, we learned of 6 more hospitals that converted to CAH and/or REH status on or after January 24, 2024, and through and including January 24, 2025. We removed these additional hospitals from the FY 2026 wage index due to their conversion to CAH and/or REH status. In summary, we calculated the FY 2026 wage index using the Worksheet S-3, Parts II and III wage data of 3,036 hospitals.

For the FY 2026 wage index, we allotted the wages and hours data for a multicampus hospital among the different labor market areas where its campuses are located using campus full-time equivalent (FTE) percentages as originally finalized in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51591). Table 2, which contains the FY 2026 wage index associated with this final rule (available via the internet on the CMS website), includes separate wage data for the campuses of 29 multicampus hospitals. The following chart lists the multicampus hospitals by CMS certification number (CCN) and the FTE percentages on which the wages and hours of each campus were allotted to their respective labor market areas:

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We note that, in past years, in Table 2, we have placed a “B” to designate the subordinate campus in the fourth position of the hospital CCN. However, for the FY 2019 IPPS/LTCH PPS proposed and final rules and subsequent rules, we have moved the “B” to the third position of the CCN. Because all IPPS hospitals have a “0” in the third position of the CCN, we believe that placement of the “B” in this third position, instead of the “0” for the subordinate campus, is the most efficient method of identification and interferes the least with the other variable digits in the CCN. We also note that provider 340115 has an additional second sub campus located in a different CBSA then the main campus and its other sub campus. Therefore, in order to uniquely identify this second sub campus, we have placed a “C” in the third position of the CCN. 4. Process for Requests for Wage Index Data Corrections a. Process for Hospitals To Request Wage Index Data Corrections

The preliminary, unaudited Worksheet S-3 wage data files for the proposed FY 2026 wage index were made available on May 23, 2024, through the internet on the CMS website at https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/wage-index-files/fy-2026-wage-index-home-page. The FY 2026 preliminary Worksheet S-3 wage data file inadvertently contained cost report data with a begin date before 10/01/2021 and cost report data with a begin date after 10/01/2022. We removed these cost reports and added cost reports that were inadvertently omitted from the file originally posted on May 23. Therefore, on June 20, 2024, we posted an updated FY 2026 preliminary Worksheet S-3 wage data file.

On January 31, 2025, we posted a public use file (PUF) at https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/wage-index-files/fy-2026-wage-index-home-page containing FY 2026 wage index data available as of January 31, 2025. This PUF contains a tab with the Worksheet S-3 wage data (which includes Worksheet S-3, Parts II and III wage data from cost reporting periods beginning on or after October 1, 2021, through September 30, 2022; that is, FY 2022 wage data), a tab with the occupational mix data (which includes data from the CY 2022 occupational mix survey, Form CMS- 10079), a tab containing the Worksheet S-3 wage data of hospitals deleted from the January 31, 2025 wage data PUF, and a tab containing the CY 2022 occupational mix data of the hospitals deleted from

the January 31, 2025 occupational mix PUF. In a memorandum dated January 31, 2025, we instructed all MACs to inform the IPPS hospitals that they service of the availability of the January 31, 2025, wage index data PUFs, and the process and timeframe for requesting revisions in accordance with the FY 2026 Hospital Wage Index Development Time Table available at https://www.cms.gov/files/document/fy-2026-hospital-wage-index-development-time-table.pdf.

In the interest of meeting the data needs of the public, beginning with the proposed FY 2009 wage index, we post an additional PUF on the CMS website that reflects the actual data that are used in computing the proposed wage index. The release of this file does not alter the current wage index process or schedule.

In a memorandum dated April 17, 2024, we instructed all MACs to inform the IPPS hospitals that they service of the availability of the preliminary wage index data files and the CY 2022 occupational mix survey data files posted on May 23, 2024, and the process and timeframe for requesting revisions.

If a hospital wished to request a change to its data as shown in the May 23, 2024, preliminary wage data files and occupational mix data files, the hospital had to submit corrections along with complete, detailed supporting documentation to its MAC so that the MAC received them by September 3, 2024. Hospitals were notified of these deadlines and of all other deadlines and requirements, including the requirement to review and verify their data as posted in the preliminary wage index data files on the internet, through the letters sent to them by their MACs.

November 1, 2024, was the date by when MACs notified State hospital associations regarding hospitals that failed to respond to issues raised during the desk reviews. Additional revisions made by the MACs were transmitted to CMS throughout January 2025. CMS published the wage index PUFs that included hospitals' revised wage index data on January 31, 2025. Hospitals had until February 18, 2025, to submit requests to the MACs to correct errors in the January 31, 2025, PUF due to CMS or MAC mishandling of the wage index data, or to revise desk review adjustments to their wage index data as included in the January 31, 2025, PUF. Hospitals also were required to submit sufficient documentation to support their requests. Hospitals' requests and supporting documentation must have been received by the MAC by the February deadline (that is, by February 18, 2025, for the FY 2026 wage index).

After reviewing requested changes submitted by hospitals, MACs were required to transmit to CMS any additional revisions resulting from the hospitals' reconsideration requests by March 21, 2025. Under our current policy as adopted in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38153), the deadline for a hospital to request CMS intervention in cases where a hospital disagreed with a MAC's handling of wage data on any basis (including a policy, factual, or other dispute) was April 4, 2025. Data that were incorrect in the preliminary or January 31, 2025, wage index data PUFs, but for which no correction request was received by the February 18, 2025, deadline, are not considered for correction at this stage. In addition, April 4, 2025, was the deadline for hospitals to dispute data corrections made by CMS of which the hospital was notified after the January 31, 2025, PUF and at least 14 calendar days prior to April 4, 2025 (that is, March 21, 2025), that do not arise from a hospital's request for revisions. The hospital's request and supporting documentation must be received by CMS (and a copy received by the MAC) by the April deadline (that is, by April 4, 2025, for the FY 2026 wage index). We refer readers to the FY 2026 Hospital Wage Index Development Time Table for complete details.

Hospitals were given the opportunity to examine Table 2 associated with the proposed rule, which is listed in section VI. of the Addendum to the proposed rule and available via the internet on the CMS website at https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/wage-index-files/fy-2026-wage-index-home-page. Table 2 associated with the proposed rule contained each hospital's proposed adjusted average hourly wage used to construct the wage index values for the past 3 years, including the proposed FY 2026 wage index, which was constructed from FY 2022 data. We noted in the proposed rule that the proposed hospital average hourly wages shown in Table 2 only reflected changes made to a hospital's data that were transmitted to CMS by late January 2025.

We posted the final wage index data PUFs on April 30, 2025, on the CMS website at https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/wage-index-files/fy-2026-wage-index-home-page. The April 2025 PUFs are made available solely for the limited purpose of identifying any potential errors made by CMS or the MAC in the entry of the final wage index data that resulted from the correction process (the process for disputing revisions submitted to CMS by the MACs by March 21, 2025, and the process for disputing data corrections made by CMS that did not arise from a hospital's request for wage data revisions as discussed earlier), as previously described.

After the release of the April 2025 wage index data PUFs, changes to the wage and occupational mix data can only be made in those very limited situations involving an error by the MAC or CMS that the hospital could not have known about before its review of the final wage index data files. Specifically, neither the MAC nor CMS will approve the following types of requests:

Requests for wage index data corrections that were submitted too late to be included in the data transmitted to CMS by the MACs on or before March 21, 2025.

Requests for correction of errors that were not, but could have been, identified during the hospital's review of the January 31, 2025, wage index PUFs.

Requests to revisit factual determinations or policy interpretations made by the MAC or CMS during the wage index data correction process.

If, after reviewing the April 2025 final wage index data PUFs, a hospital believes that its wage or occupational mix data are incorrect due to a MAC or CMS error in the entry or tabulation of the final data, the hospital is given the opportunity to notify both its MAC and CMS regarding why the hospital believes an error exists and provide all supporting information, including relevant dates (for example, when it first became aware of the error). The hospital was required to send its request to CMS and to the MAC so that it was received no later than May 30, 2025. May 30, 2025, was also the deadline for hospitals to dispute data corrections made by CMS of which the hospital was notified on or after 13 calendar days prior to April 4, 2025 (that is, March 22, 2025), and at least 14 calendar days prior to May 30, 2025 (that is, May 16, 2025), that did not arise from a hospital's request for revisions. (Data corrections made by CMS of which a hospital is notified on or after 13 calendar days prior to May 30, 2025 (that is, May 17, 2025), may be appealed to the Provider Reimbursement Review Board (PRRB)). In accordance with the FY 2026 Hospital Wage Index Development Time Table posted on the CMS website at https://www.cms.gov/files/document/fy-2026-hospital-wage-index-development-time-table.pdf, the May appeals were required to be submitted to CMS

through an online submission process or through email. We refer readers to the FY 2026 Hospital Wage Index Development Time Table for complete details.

Verified corrections to the wage index data received timely (that is, by May 30, 2025) by CMS and the MACs were incorporated into the final FY 2026 wage index, which will be effective October 1, 2025.

We created the processes previously described to resolve all substantive wage index data correction disputes before we finalize the wage and occupational mix data for the FY 2026 payment rates. Accordingly, hospitals that do not meet the procedural deadlines set forth earlier will not be afforded a later opportunity to submit wage index data corrections or to dispute the MAC's decision with respect to requested changes. Specifically, our policy is that hospitals that do not meet the procedural deadlines as previously set forth (requiring requests to MACs by the specified date in February and, where such requests are unsuccessful, requests for intervention by CMS by the specified date in April) will not be permitted to challenge later, before the PRRB, the failure of CMS to make a requested data revision. We refer readers also to the FY 2000 IPPS final rule (64 FR 41513) for a discussion of the parameters for appeals to the PRRB for wage index data corrections. As finalized in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38154 through 38156), this policy also applies to a hospital disputing corrections made by CMS that do not arise from a hospital's request for a wage index data revision. That is, a hospital disputing an adjustment made by CMS that did not arise from a hospital's request for a wage index data revision is required to request a correction by the first applicable deadline. Hospitals that do not meet the procedural deadlines set forth earlier will not be afforded a later opportunity to submit wage index data corrections or to dispute CMS' decision with respect to changes.

Again, we believe the wage index data correction process described earlier provides hospitals with sufficient opportunity to bring errors in their wage and occupational mix data to the MAC's attention. Moreover, because hospitals had access to the final wage index data PUFs by late April 2025, they have an opportunity to detect any data entry or tabulation errors made by the MAC or CMS before the development and publication of the final FY 2026 wage index by August 2025, and the implementation of the FY 2026 wage index on October 1, 2025. Given these processes, the wage index implemented on October 1 should be accurate. Nevertheless, in the event that errors are identified by hospitals and brought to our attention after May 30, 2025, we retain the right to make midyear changes to the wage index under very limited circumstances.

Specifically, in accordance with Sec. 412.64(k)(1) of our regulations, we make midyear corrections to the wage index for an area only if a hospital can show that: (1) The MAC or CMS made an error in tabulating its data; and (2) the requesting hospital could not have known about the error or did not have an opportunity to correct the error, before the beginning of the fiscal year. For purposes of this provision, “before the beginning of the fiscal year” means by the May deadline for making corrections to the wage data for the following fiscal year's wage index (for example, May 30, 2025, for the FY 2026 wage index). This provision is not available to a hospital seeking to revise another hospital's data that may be affecting the requesting hospital's wage index for the labor market area. As indicated earlier, because CMS makes the wage index data available to hospitals on the CMS website prior to publishing both the proposed and final IPPS rules, and the MACs notify hospitals directly of any wage index data changes after completing their desk reviews, we do not expect that midyear corrections will be necessary. However, under our current policy, if the correction of a data error changes the wage index value for an area, the revised wage index value will be effective prospectively from the date the correction is made.

In the FY 2006 IPPS final rule (70 FR 47385 through 47387 and 47485), we revised Sec. 412.64(k)(2) to specify that, effective on October 1, 2005, that is, beginning with the FY 2006 wage index, a change to the wage index can be made retroactive to the beginning of the Federal fiscal year only when CMS determines all of the following: (1) The MAC or CMS made an error in tabulating data used for the wage index calculation; (2) the hospital knew about the error and requested that the MAC and CMS correct the error using the established process and within the established schedule for requesting corrections to the wage index data, before the beginning of the fiscal year for the applicable IPPS update (that is, by the May 30, 2025, deadline for the FY 2026 wage index); and (3) CMS agreed before October 1 that the MAC or CMS made an error in tabulating the hospital's wage index data and the wage index should be corrected.

In those circumstances where a hospital requested a correction to its wage index data before CMS calculated the final wage index (that is, by the May 30, 2025 deadline for the FY 2026 wage index), and CMS acknowledges that the error in the hospital's wage index data was caused by CMS' or the MAC's mishandling of the data, we believe that the hospital should not be penalized by our delay in publishing or implementing the correction. As with our current policy, we indicated that the provision is not available to a hospital seeking to revise another hospital's data. In addition, the provision cannot be used to correct prior years' wage index data; it can only be used for the current Federal fiscal year. In situations where our policies would allow midyear corrections other than those specified in Sec. 412.64(k)(2)(ii), we continue to believe that it is appropriate to make prospective-only corrections to the wage index.

We note that, as with prospective changes to the wage index, the final retroactive correction will be made irrespective of whether the change increases or decreases a hospital's payment rate. In addition, we note that the policy of retroactive adjustment will still apply in those instances where a final judicial decision reverses a CMS denial of a hospital's wage index data revision request. b. Process for Data Corrections by CMS After the January 31, 2025, Public Use File (PUF)

The process set forth with the wage index timetable discussed in section III.C.4. of the preamble of this final rule allows hospitals to request corrections to their wage index data within prescribed timeframes. In addition to hospitals' opportunity to request corrections of wage index data errors or MACs' mishandling of data, CMS has the authority under section 1886(d)(3)(E) of the Act to make corrections to hospital wage index and occupational mix data to ensure the accuracy of the wage index. As we explained in the FY 2016 IPPS/ LTCH PPS final rule (80 FR 49490 through 49491) and the FY 2017 IPPS/ LTCH PPS final rule (81 FR 56914), section 1886(d)(3)(E) of the Act requires the Secretary to adjust the proportion of hospitals' costs attributable to wages and wage-related costs for area differences reflecting the relative hospital wage level in the geographic areas of the hospital compared to the national average hospital wage level. We believe that, under section 1886(d)(3)(E) of the Act, we have discretion to make corrections to hospitals' data to help

ensure that the costs attributable to wages and wage-related costs in fact accurately reflect the relative hospital wage level in the hospitals' geographic areas.

We have an established multistep, 15-month process for the review and correction of the hospital wage data that is used to create the IPPS wage index for the upcoming fiscal year. Since the origin of the IPPS, the wage index has been subject to its own annual review process, first by the MACs, and then by CMS. As a standard practice, after each annual desk review, CMS reviews the results of the MACs' desk reviews and focuses on items flagged during the desk review, requiring that, if necessary, hospitals provide additional documentation, adjustments, or corrections to the data. This ongoing communication with hospitals about their wage data may result in the discovery by CMS of additional items that were reported incorrectly or other data errors, even after the posting of the January 31, 2025, PUF, and throughout the remainder of the wage index development process. In addition, the fact that CMS analyzes the data from a regional and even national level, unlike the review performed by the MACs that review a limited subset of hospitals, can facilitate additional editing of the data the need for which may not be readily apparent to the MACs. In these occasional instances, an error may be of sufficient magnitude that the wage index of an entire CBSA is affected. Accordingly, CMS uses its authority to ensure that the wage index accurately reflects the relative hospital wage level in the geographic area of the hospital compared to the national average hospital wage level, by continuing to make corrections to hospital wage data upon discovering incorrect wage data, distinct from instances in which hospitals request data revisions.

We note that CMS corrects errors to hospital wage data as appropriate, regardless of whether that correction will raise or lower a hospital's average hourly wage. For example, as discussed in section III.C. of the preamble of the FY 2019 IPPS/LTCH PPS final rule (83 FR 41364), in situations where a hospital did not have documentable salaries, wages, and hours for housekeeping and dietary services, we imputed estimates, in accordance with policies established in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49965 through 49967). Furthermore, if CMS discovers after conclusion of the desk review, for example, that a MAC inadvertently failed to incorporate positive adjustments resulting from a prior year's wage index appeal of a hospital's wage- related costs such as pension, CMS will correct that data error, and the hospital's average hourly wage will likely increase as a result.

While we maintain CMS' authority to conduct additional review and make resulting corrections at any time during the wage index development process, in accordance with the policy finalized in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38154 through 38156) and as first implemented with the FY 2019 wage index (83 FR 41389), hospitals are able to request further review of a correction made by CMS that did not arise from a hospital's request for a wage index data correction. Instances where CMS makes a correction to a hospital's data after the January 31, 2025, PUF based on a different understanding than the hospital about certain reported costs, for example, could potentially be resolved using this process before the final wage index is calculated. We believe this process and the timeline for requesting review of such corrections (as described earlier and in the FY 2018 IPPS/LTCH PPS final rule) promote additional transparency in instances where CMS makes data corrections after the January 31, 2025 PUF and provide opportunities for hospitals to request further review of CMS changes in time for the most accurate data to be reflected in the final wage index calculations. These additional appeals opportunities are described earlier and in the FY 2026 Hospital Wage Index Development Time Table, as well as in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38154 through 38156).