Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems; Quality Reporting Programs; Overall Hospital Quality Star Rating; Hospital Price Transparency; and Notice of Closure of a Teaching Hospital and Opportunity To Apply for Available Slots

Under the OPPS, prior to CY 2017, device-intensive status for procedures was determined at the APC level for APCs with a device offset percentage greater than 40 percent (79 FR 66795). Beginning in CY 2017, CMS began determining device-intensive status at the HCPCS code level. In assigning device-intensive status to an APC prior to CY 2017, the device costs of all the procedures within the APC were calculated and the geometric mean device offset of all of the procedures had to exceed 40 percent. Almost all of the procedures assigned to device-intensive APCs utilized devices, and the device costs for the associated HCPCS codes exceeded the 40-percent threshold. The no cost/full credit and partial credit device policy (79 FR 66872 through 66873) applies to device-intensive procedures and is discussed in detail in section IV.B.4. of the CY 2026 OPPS/ASC proposed rule. A related device policy was the requirement that certain procedures assigned to device-intensive APCs require the reporting of a device code on the claim (80 FR 70422) and is discussed in detail in section IV.B.3. of the CY 2026 OPPS/ASC proposed rule. For further background information on the device-intensive APC policy, we refer readers to the CY 2016 OPPS/ASC final rule with comment period (80 FR 70421 through 70426). a. HCPCS Code-Level Device-Intensive Determination

As stated earlier, prior to CY 2017, under the device-intensive methodology we assigned device-intensive status to all procedures requiring the implantation of a device that were assigned to an APC with a device offset greater than 40 percent and, beginning in CY 2015, that met the three criteria as listed. Historically, the device- intensive designation was at the APC level and applied to the applicable procedures within that APC. In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79658), we changed our methodology to assign device-intensive status at the individual HCPCS code level rather than at the APC level. Under this policy, a procedure could be assigned device-intensive status regardless of its APC assignment, and device-intensive APC designations were no longer applied under the OPPS or the ASC payment system.

We believe that a HCPCS code-level device offset is, in most cases, a better representation of a procedure's device cost than an APC-wide average device offset based on the average device offset of all of the procedures assigned to an APC. Unlike a device offset calculated at the APC level, which is a weighted average offset for all devices used in all of the procedures assigned to an APC, a HCPCS code-level device offset is calculated using only claims for a single HCPCS code. We believe that this methodological change results in a more accurate representation of the cost attributable to implantation of a high-cost device, which ensures consistent device-intensive designation of procedures with a significant device cost. Further, we believe a HCPCS code-level device offset removes inappropriate device-intensive status for procedures without a significant device cost that are granted such status because of their APC assignment.

Under our existing policy, procedures that meet the criteria listed in section IV.C.1.b. of this final rule with comment period are identified as device-intensive procedures and are subject to all the policies applicable to procedures assigned device-intensive status under our established methodology, including our policies on device edits and no cost/full credit and partial credit devices discussed in sections IV.C.3. and IV.C.4. of this final rule with comment period. b. Use of the Three Criteria To Designate Device-Intensive Procedures

We clarified our established policy in the CY 2018 OPPS/ASC final rule with comment period (82 FR 52474), where we explained that device- intensive procedures require the implantation of a device and additionally are subject to the following criteria:

All procedures must involve implantable devices that would be reported if device insertion procedures were performed.

The required devices must be surgically inserted or implanted devices that remain in the patient's body after the conclusion of the procedure (at least temporarily); and

The device offset amount must be significant, which is defined as exceeding 40 percent of the procedure's mean cost.

We changed our policy to apply these three criteria to determine whether procedures qualify as device-intensive in the CY 2015 OPPS/ASC final rule with comment period (79 FR 66926), where we stated that we would apply the no cost/full credit and partial credit device policy-- which includes the three criteria listed previously--to all device- intensive procedures beginning in CY 2015. We reiterated this position in the CY 2016 OPPS/ASC final rule with comment period (80 FR 70424), where we explained that we were finalizing our proposal to continue using the three criteria established in the CY 2007 OPPS/ASC final rule with comment period for determining the APCs to which the CY 2016 device intensive policy will apply. Under the policies we adopted in CYs 2015, 2016, and 2017, all procedures that require the implantation of a device and meet the previously described criteria are assigned device-intensive status, regardless of their APC placement. 2. Device-Intensive Procedure Policy

As part of our effort to better capture costs for procedures with significant device costs, in the CY 2019 OPPS/ASC final rule with comment period (83 FR

58944 through 58948), for CY 2019, we modified our criteria for device- intensive procedures. We had heard from interested parties that the criteria excluded some procedures that interested parties believed should qualify as device-intensive procedures. Specifically, we were persuaded by interested party arguments that procedures requiring expensive surgically inserted or implanted devices that are not capital equipment should qualify as device-intensive procedures, regardless of whether the device remains in the patient's body after the conclusion of the procedure. We agreed that a broader definition of device- intensive procedures was warranted, and made two modifications to the criteria for CY 2019 (83 FR 58948). First, we allowed procedures that involve surgically inserted or implanted single-use devices that meet the device offset percentage threshold to qualify as device-intensive procedures, regardless of whether the device remains in the patient's body after the conclusion of the procedure. We established this policy because we no longer believe that whether a device remains in the patient's body should affect a procedure's designation as a device- intensive procedure, as such devices could, nonetheless, comprise a large portion of the cost of the applicable procedure. Second, we modified our criteria to lower the device offset percentage threshold from 40 percent to 30 percent, to allow a greater number of procedures to qualify as device intensive. We stated that we believed allowing these additional procedures to qualify for device-intensive status would help ensure these procedures receive more appropriate payment in the ASC setting, which would help encourage the provision of these services in the ASC setting. In addition, we stated that this change would help to ensure that more procedures containing relatively high- cost devices are subject to the device edits, which leads to more correctly coded claims and greater accuracy in our claims data. Specifically, for CY 2019 and subsequent years, we finalized that device-intensive procedures will be subject to the following criteria:

All procedures must involve implantable devices assigned a CPT or HCPCS code;

The required devices (including single-use devices) must be surgically inserted or implanted; and

The device offset amount must be significant, which is defined as exceeding 30 percent of the procedure's mean cost (83 FR 58945).

In addition, to further align the device-intensive policy with the criteria used for device pass-through payment status, we finalized, for CY 2019 and subsequent years, that for purposes of satisfying the device-intensive criteria, a device-intensive procedure must involve a device that:

Has received FDA marketing authorization, has received an FDA investigational device exemption (IDE), and has been classified as a Category B device by FDA in accordance with Sec. Sec. 405.203 through 405.207 and 405.211 through 405.215, or meets another appropriate FDA exemption from premarket review;

Is an integral part of the service furnished;

Is used for one patient only;

Comes in contact with human tissue;

Is surgically implanted or inserted (either permanently or temporarily); and

Is not either of the following:

++ Equipment, an instrument, apparatus, implement, or item of the type for which depreciation and financing expenses are recovered as depreciable assets as defined in Chapter 1 of the Medicare Provider Reimbursement Manual (CMS Pub. 15-1); or

++ A material or supply furnished incident to a service (for example, a suture, customized surgical kit, scalpel, or clip, other than a radiological site marker) (83 FR 58945).

In addition, for new HCPCS codes describing procedures requiring the implantation of devices that do not yet have associated claims data, in the CY 2017 OPPS/ASC final rule with comment period (81 FR 79658), we finalized a policy for CY 2017 to apply device-intensive status with a default device offset set at 41 percent for new HCPCS codes describing procedures requiring the implantation or insertion of a device that did not yet have associated claims data until claims data are available to establish the HCPCS code-level device offset for the procedures. This default device offset amount of 41 percent was not calculated from claims data; instead, it was applied as a default until claims data were available upon which to calculate an actual device offset for the new code. The purpose of applying the 41-percent default device offset to new codes that describe procedures that implant or insert devices was to ensure ASC access for new procedures until claims data become available.

As discussed in the CY 2019 OPPS/ASC proposed rule and final rule with comment period (83 FR 37108 through 37109 and 83 FR 58945 through 58946, respectively), in accordance with our policy stated previously to lower the device offset percentage threshold for procedures to qualify as device-intensive from greater than 40 percent to greater than 30 percent, for CY 2019 and subsequent years, we modified this policy to apply a 31-percent default device offset to new HCPCS codes describing procedures requiring the implantation of a device that do not yet have associated claims data until claims data are available to establish the HCPCS code-level device offset for the procedures. In conjunction with the policy to lower the default device offset from 41 percent to 31 percent, we continued our current policy of, in certain rare instances (for example, in the case of a very expensive implantable device), temporarily assigning a higher offset percentage if warranted by additional information such as pricing data from a device manufacturer (81 FR 79658). Once claims data are available for a new procedure requiring the implantation or insertion of a device, device-intensive status is applied to the code if the HCPCS code-level device offset is greater than 30 percent, according to our policy of determining device-intensive status by calculating the HCPCS code-level device offset.

In addition, in the CY 2019 OPPS/ASC final rule with comment period, we clarified that since the adoption of our policy in effect as of CY 2018, the associated claims data used for purposes of determining whether or not to apply the default device offset are the associated claims data for either the new HCPCS code or any predecessor code, as described by CPT coding guidance, for the new HCPCS code. Additionally, for CY 2019 and subsequent years, in limited instances where a new HCPCS code does not have a predecessor code as defined by CPT, but describes a procedure that was previously described by an existing code, we use clinical discretion to identify HCPCS codes that are clinically related or similar to the new HCPCS code but are not officially recognized as a predecessor code by CPT, and to use the claims data of the clinically related or similar code(s) for purposes of determining whether or not to apply the default device offset to the new HCPCS code (83 FR 58946). Clinically related and similar procedures for purposes of this policy are procedures that have few or no clinical differences and use the same devices as the new HCPCS code. In addition, clinically related and similar codes for purposes of this policy are codes that either currently or previously describe the procedure described by the

new HCPCS code. Under this policy, claims data from clinically related and similar codes are included as associated claims data for a new code, and where an existing HCPCS code is found to be clinically related or similar to a new HCPCS code, we apply the device offset percentage derived from the existing clinically related or similar HCPCS code's claims data to the new HCPCS code for determining the device offset percentage. We stated that we believe that claims data for HCPCS codes describing procedures that have minor differences from the procedures described by new HCPCS codes will provide an accurate depiction of the cost relationship between the procedure and the device(s) that are used, and will be appropriate to use to set a new code's device offset percentage, in the same way that predecessor codes are used. If a new HCPCS code has multiple predecessor codes, the claims data for the predecessor code that has the highest individual HCPCS-level device offset percentage is used to determine whether the new HCPCS code qualifies for device-intensive status. Similarly, in the event that a new HCPCS code does not have a predecessor code but has multiple clinically related or similar codes, the claims data for the clinically related or similar code that has the highest individual HCPCS level device offset percentage is used to determine whether the new HCPCS code qualifies for device-intensive status.

In the CY 2025 OPPS/ASC final rule with comment period (89 FR 94214 through 92419), we finalized a change to our methodology for applying default device offset percentages for new device-intensive procedures. Under our previous policy, if a new CPT/HCPCS code did not have available claims data, either from the new HCPCS code or any predecessor code or clinically-similar code that uses the same device, and the CPT/HCPCS code otherwise met our criteria for device-intensive status, we would apply a default device offset percentage of 31 percent. However, we were aware of certain situations where the default device offset amount might not adequately reflect the existing device portion of the procedure's costs when compared to the cost of similar devices. A potential large difference between the default device offset amount and the device portion of similar devices might impede our ability to accurately remove device offset amounts from new device- intensive procedures under the OPPS and to set payment rates for device-intensive procedures under the ASC payment system. Therefore, for CY 2025 and subsequent CYs, we finalized our proposal to modify our default device offset percentage policy for new device-intensive procedures. Specifically, for new CPT/HCPCS codes that both describe a procedure that requires the surgical implantation or insertion of a single-use device that exceeds 30 percent of the procedure's cost and that meets our requirements of a device as described here and lack claims data (from either the new HCPCS code or any predecessor code or clinically-similar code that uses the same device), we would apply a default device offset percentage that is the greater of 31 percent or the device offset percentage of the APC to which the procedure has been assigned. We stated that we still believe that a HCPCS code-level device offset is, in most cases, a more accurate representation of a procedure's device cost than an APC-wide average device offset based on the average device offset of all the procedures assigned to an APC. However, because newer device-intensive procedures lack claims data, we believe the APC-wide average device offset percentage is, in many cases, a better reflection of the estimated device costs of the procedure than a default 31 percent offset. Additionally, there can be instances where the typical device costs of procedures in an APC can be significantly greater than the 31 percent default device offset. For these reasons, we finalized our modification to our default device offset percentage for new device-intensive procedures. This methodological change was finalized for both the OPPS and ASC Payment System for CY 2025 and subsequent CYs and applies to new procedures assigned to clinical APCs, but not to new procedures assigned to New Technology APCs.

Additionally, in the CY 2025 OPPS/ASC final rule with comment period (89 FR 92414 through 92419), we stated that we were persuaded by commenters that the lack of a device edit for device-intensive procedures, particularly new technologies, might lead to an underreporting of device costs and total procedure costs and potentially impede beneficiary access to such new technologies over time. Therefore, in addition to finalizing a modification to our device edits policy for CY 2025, we finalized a modification to our device offset percentage calculation. For procedures subject to our modified device edits policy for CY 2025 that cannot report modifier “CG” to bypass this claims processing edit, the device offset percentages calculated (for the CPT/HCPCS code or its predecessor code) are based on hospital claims that reported a device code. We stated that we believed that hospital outpatient claims that report a device code with such procedures provide, in general, a more accurate representation of the procedures' total costs. We also finalized, for purposes of determining device offset percentages, that we will not use claims data from procedures that had a status indicator of “E1” during the calendar year we are using for ratesetting and determining device offset percentages. Lastly, we refined our process for applying device offset percentages to use available claims data from predecessor codes annually, rather than the first year of the successor code's activation date, until we have available claims data from the successor code.

In the CY 2026 OPPS/ASC proposed rule (90 FR 33609), we proposed to continue these policies for CY 2026. As we indicated in the CY 2019 OPPS/ASC proposed rule and final rule with comment period, additional information for our consideration of an offset percentage higher than the default of 31 percent (or the APC-wide default offset percentage) for new HCPCS codes describing procedures requiring the implantation (or, in some cases, the insertion) of a device that do not yet have associated claims data, such as pricing data or invoices from a device manufacturer, should be directed to the Division of Outpatient Care, Mail Stop C4-01-26, Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, MD 21244-1850, or electronically [email protected]. We stated in the CY 2026 OPPS/ASC proposed rule that additional information can be submitted prior to issuance of an OPPS/ASC proposed rule or as a public comment in response to an issued OPPS/ASC proposed rule. Device offset percentages will be set in each year's final rule.

We received public comments on these proposals. The following is a summary of the comments we received and our responses.

Comment: Commenters supported our assignment of device-intensive status and the proposed device offset percentages for the following CPT/HCPCS codes:

CPT code 0671T (Insertion of anterior segment aqueous drainage device into the trabecular meshwork, without external reservoir, and without concomitant cataract removal, one or more);

CPT code 0970T (Ablation, benign breast tumor (e.g., fibroadenoma), percutaneous, laser, including imaging guidance when performed, each tumor);

CPT code 0971T (Ablation, malignant breast tumor(s), percutaneous, laser, including imaging guidance when performed, unilateral);

CPT code 52284 (Cystourethroscopy, with mechanical urethral dilation and urethral therapeutic drug delivery by drug-coated balloon catheter for urethral stricture or stenosis, male, including fluoroscopy, when performed);

CPT code 52443 (placeholder code 52XX2) (Cystourethroscopy with initial transurethral anterior prostate commissurotomy with a nondrug-coated balloon catheter followed by therapeutic drug delivery into the prostate by a drug-coated balloon catheter, including transrectal ultrasound and fluoroscopy, when performed);

CPT codes 66989 (Extracapsular cataract removal with insertion of intraocular lens prosthesis (1-stage procedure), manual or mechanical technique (e.g., irrigation and aspiration or phacoemulsification), complex, requiring devices or techniques not generally used in routine cataract surgery (e.g., iris expansion device, suture support for intraocular lens, or primary posterior capsulorrhexis) or performed on patients in the amblyogenic developmental stage; with insertion of intraocular (e.g., trabecular meshwork, supraciliary, suprachoroidal) anterior segment aqueous drainage device, without extraocular reservoir, internal approach, one or more),

CPT code 66991 (Extracapsular cataract removal with insertion of intraocular lens prosthesis (1 stage procedure), manual or mechanical technique (e.g., irrigation and aspiration or phacoemulsification); with insertion of intraocular (e.g., trabecular meshwork, supraciliary, suprachoroidal) anterior segment aqueous drainage device, without extraocular reservoir, internal approach, one or more), and

HCPCS code C9781 (Arthroscopy, shoulder, surgical; with implantation of subacromial spacer (e.g., balloon), includes debridement (e.g., limited or extensive), subacromial decompression, acromioplasty, and biceps tenodesis when performed);

Response: We appreciate the commenters' support for our proposed device-intensive assignments and proposed device offset percentages based on CY 2024 claims data available for the CY 2026 OPPS/ASC proposed rule. Final device-intensive assignments are based on CY 2024 claims data available found in Addendum P of this final rule with comment period.

Comment: One commenter recommended a nomination process for device- intensive procedures.

Response: We thank the commenter for their recommendation. We believe it is important for our current methodology to rely on cost information from claims data for determining device-intensive status for CPT/HCPCS codes. Additionally, we believe our current methodology of determining device-intensive status and device offset percentages in the absence of claims data and seeking public comments on our determinations in our notice and comment rulemaking remains an appropriate methodology that relies on engagement with healthcare interested parties. Therefore, we do not see a need to create a nomination process for device-intensive procedures at this time.

Comment: One commenter requested that CMS update Addendum P for the CY 2026 OPPS/ASC final rule to include the default device offset of 31 percent for CPT codes 0956T (Partial craniectomy, channel creation, and tunneling of electrode for sub-scalp implantation of an electrode array, receiver, and telemetry unit for continuous bilateral electroencephalography monitoring system, including imaging guidance) and 0960T (Replacement of sub-scalp implanted electrode array, receiver, and telemetry unit with tunneling of electrode for continuous bilateral electroencephalography monitoring system, including imaging guidance) as these are device-intensive procedures requiring sophisticated implantable devices with external wearable components and cloud services.

Response: We thank the commenter and note that we inadvertently omitted CPT codes 0956T and 0960T from Addendum P in the CY 2026 OPPS/ ASC proposed rule, although we did propose in the CY 2026 OPPS/ASC proposed rule that such procedures were device-intensive in the ASC setting in Addenda AA and FF. We are therefore accepting the commenter's recommendation and assigning device-intensive status to CPT codes 0956T and 0960T with a device offset percentage of 31 percent in this CY 2026 OPPS/ASC final rule with comment period.

Comment: Some commenters recommended that we modify our definition of device-intensive procedures to include non-insertable or implantable devices. The CPT/HCPCS codes commenters recommended assigning device- intensive status include:

CPT code 0686T (Histotripsy (i.e., non-thermal ablation via acoustic energy delivery) of malignant hepatocellular tissue, including image guidance);

CPT code 0888T (Histotripsy (i.e., non-thermal ablation via acoustic energy delivery) of malignant renal tissue, including imaging guidance);

CPT code 15013 (Preparation of skin cell suspension autograft, requiring enzymatic processing, manual mechanical disaggregation of skin cells, and filtration; first 25 sq cm or less of harvested skin); and

HCPCS code C8002 (Preparation of skin cell suspension autograft, automated, including all enzymatic processing and device components (do not report with manual suspension preparation)).

The commenters asserted that failure to assign device-intensive status to these procedures will result in ASC payment rates that do not accurately reflect the resource costs of furnishing these services, potentially limiting beneficiary access to innovative skin cell suspension autograft procedures and certain histotripsy procedures in the ASC setting.

Response: We appreciate the commenters' recommendations. We do not believe we should expand our definition of devices to include the costs of skin substitute products or capital-intensive equipment, as our current ratesetting methodology adequately captures the costs for such items and services for developing OPPS/ASC payment rates. Therefore, we are not accepting the commenter's recommendation.

Comment: One commenter disagreed with our proposed device offset percentage for CPT code 0202T (Posterior vertebral joint(s) arthroplasty (e.g., facet joint[s] replacement), including facetectomy, laminectomy, foraminotomy, and vertebral column fixation, injection of bone cement, when performed, including fluoroscopy, single level, lumbar spine) at 59.21 percent. The commenter was unclear how we determined this figure, and stated it is unclear since this procedure was previously on the IPO list and the APC-wide device offset percentage is 59.63 percent.

Response: While CPT code 0202T was on the inpatient-only list for CY 2024, we did receive one claim for CY 2026 OPPS/ASC ratesetting from CY 2024. Based on this CY 2024 claim available for this final rule with comment period, we are not relying on our default device offset methodology and assigning device-intensive status to CPT code 0202T using the CY 2024 claim data available. The final device offset percentage for CPT code 0202T under the OPPS can be found in Addendum P to this final rule with comment period.

Comment: Two commenters requested that CMS assign device-intensive status to HCPCS code C9779 (Endoscopic submucosal dissection (esd), including endoscopy or colonoscopy, mucosal closure, when performed). The commenters noted that endoscopic submucosal dissection requires specialized, expensive single-use devices and equipment that represent a significant portion of the total procedure cost, warranting device- intensive recognition to ensure appropriate reimbursement. Both commenters asserted that without proper device-intensive status, the payment may be insufficient to cover the actual costs of performing this complex procedure, potentially limiting patient access to this advanced endoscopic technique in both hospital outpatient and ASC settings.

Response: For this final rule with comment period, the device offset percentage for HCPCS code C9779 is below our device-intensive threshold based on 963 claims for this service in the CY 2024 data and, therefore, does not qualify for device-intensive for CY 2026.

Comment: Some commenters recommended that we establish the device offset percentage for CPT code 47384 (placeholder code 4001X) (Ablation, irreversible electroporation, liver, one or more tumors, including imaging guidance, percutaneous) and CPT code 55877 (placeholder code 5XX11) (Ablation, irreversible electroporation, prostate, one or more tumors, including imaging guidance, percutaneous) using CPT code 0600T (Ablation, irreversible electroporation; one or more tumors per organ, other than liver or prostate, including imaging guidance, when performed, percutaneous). The commenters argue that CPT code 0600T was the predecessor code to CPT codes 47384 and 55877 and therefore under our policy for establishing device offset percentages for new device-intensive procedures, we should rely on claims data from CPT code 0600T to establish the device offset percentages for the new procedures.

Response: We agree with the commenters' recommendation. We inadvertently did not use claims data from predecessor CPT code 0600T for establishing the proposed device offset percentages for CPT codes 47384 and 55877 for the CY 2026 OPPS/ASC proposed rule. We are accepting the commenters' recommendations and establishing the device offset percentage for CPT codes 47384 and 55877 using the claims data from CPT code 0600T for CY 2026.

Comment: Multiple commenters requested that CMS classify CPT code 52282 (Cystourethroscopy, with insertion of permanent urethral stent) as device-intensive. The commenters believed that CMS's claims data analysis is fundamentally flawed because no permanent urethral stents have been available in the U.S. market since April 2016, making any recent claims data implausible and not reflective of actual procedural activity, with analysis showing that over 33 percent of the 111 claims used were inappropriately billed to female patients despite the procedure being indicated only for males. The commenters urged CMS to exclude all existing hospital outpatient claims for CPT 52282 from payment calculations, designate the procedure as device-intensive using manufacturer pricing as a device offset, and ensure adequate reimbursement to support patient access to upcoming clinically proven permanent urethral stent technologies for BPH treatment. Separately, a commenter requested that CMS consider granting device-intensive status for CPT code 62287 (Decompression procedure, percutaneous, of nucleus pulposus of intervertebral disc, any method utilizing needle based technique to remove disc material under fluoroscopic imaging or other form of indirect visualization, with discography and/or epidural injection(s) at the treated level(s), when performed, single or multiple levels, lumbar) due to a lack of consistent reporting of device costs associated with this procedure. The commenter stated that if the invoice cost of devices used in the procedure were compared to the reimbursement rate, the device-related portion of the reimbursement would exceed the 30 percent threshold required for device-intensive status.

Response: We appreciate the concerns the commenters have raised but note that hospitals have reported these CPT codes across a significant number of claims in total over the past several years and the device offset percentages of such claims has not exceeded our device-intensive threshold of 30 percent in each of the past several years. We believe it would be inappropriate to disregard the entirety of such claims data for determining device-intensive status as we rely on hospitals to accurately report device costs for OPPS/ASC ratesetting. Therefore, we are not accepting the commenters' recommendation to assign device- intensive status to CPT codes 52282 and 62287 for CY 2026.

Comment: Commenters requested that CMS retain the predecessor device offset percentages for the newly restructured lower extremity revascularization CPT codes (placeholder codes 37X02-37X46) rather than adopting the APC device offset percentage, arguing that this approach aligns with CMS's standard policy of maintaining historical device offset data when codes are revised or bifurcated.

Response: We agree with the commenters that the newly-restructured lower extremity revascularization CPT codes have a suitable predecessor code for which we can use claims data for determining device offset percentages. Therefore, for such procedures that are separately payable, we are accepting the commenters' recommendation and will assign a device offset percentage to the new lower extremity revascularization CPT codes based on claims data from the predecessor code. Specifically, for CY 2026, we rely on the mapping that follows:

Claims data from CPT code 37220 (Revascularization, endovascular, open or percutaneous, iliac artery, unilateral, initial vessel; with transluminal angioplasty) for determining the device offset percentage for CPT codes 37254 (Revascularization, endovascular, open or percutaneous, iliac vascular territory, with transluminal angioplasty, including all maneuvers necessary for accessing and selectively catheterizing the artery and crossing the lesion, including all imaging guidance and radiological supervision and interpretation necessary to perform the angioplasty within the same artery, unilateral; straightforward lesion, initial vessel) and 37256 (Revascularization, endovascular, open or percutaneous, iliac vascular territory, with transluminal angioplasty, including all maneuvers necessary for accessing and selectively catheterizing the artery and crossing the lesion, including all imaging guidance and radiological supervision and interpretation necessary to perform the angioplasty within the same artery, unilateral; complex lesion, initial vessel) (placeholder codes 37XX1 and 37X03);

Claims data from CPT code 37221 (Revascularization, endovascular, open or percutaneous, iliac artery, unilateral, initial vessel; with transluminal stent placement(s), includes angioplasty within the same vessel, when performed) for determining the device offset percentage for CPT codes 37258 (Revascularization, endovascular, open or percutaneous, iliac vascular territory, with transluminal stent placement, including transluminal angioplasty when performed, including all maneuvers necessary for accessing and selectively catheterizing the artery and crossing the lesion, including all imaging guidance and radiological

supervision and interpretation necessary to perform the stent placement and angioplasty when performed, within the same artery, unilateral; straightforward lesion, initial vessel) and 37260 (Revascularization, endovascular, open or percutaneous, iliac vascular territory, with transluminal stent placement, including transluminal angioplasty when performed, including all maneuvers necessary for accessing and selectively catheterizing the artery and crossing the lesion, including all imaging guidance and radiological supervision and interpretation necessary to perform the stent placement and angioplasty when performed, within the same artery, unilateral; complex lesion, initial vessel) (placeholder codes 37X05 and 37X07);

Claims data from CPT code 37224 (Revascularization, endovascular, open or percutaneous, femoral, popliteal artery(s), unilateral; with transluminal angioplasty) for determining the device offset percentage for CPT codes 37263 (Revascularization, endovascular, open or percutaneous, femoral and popliteal vascular territory, with transluminal angioplasty, including all maneuvers necessary for accessing and selectively catheterizing the artery and crossing the lesion, including all imaging guidance and radiological supervision and interpretation necessary to perform the angioplasty within the same artery, unilateral; straightforward lesion, initial vessel) and 37265 (Revascularization, endovascular, open or percutaneous, femoral and popliteal vascular territory, with transluminal angioplasty, including all maneuvers necessary for accessing and selectively catheterizing the artery and crossing the lesion, including all imaging guidance and radiological supervision and interpretation necessary to perform the angioplasty within the same artery, unilateral; complex lesion, initial vessel) (placeholder codes 37X10 and 37X12);

Claims data from CPT code 37225 (Revascularization, endovascular, open or percutaneous, femoral, popliteal artery(s), unilateral; with atherectomy, includes angioplasty within the same vessel, when performed) for determining the device offset percentage for CPT codes 37271 (Revascularization, endovascular, open or percutaneous, femoral and popliteal vascular territory, with transluminal atherectomy, including transluminal angioplasty when performed, including all maneuvers necessary for accessing and selectively catheterizing the artery and crossing the lesion, including all imaging guidance and radiological supervision and interpretation necessary to perform the atherectomy and angioplasty when performed, within the same artery, unilateral; straightforward lesion, initial vessel) and 37273 (Revascularization, endovascular, open or percutaneous, femoral and popliteal vascular territory, with transluminal atherectomy, including transluminal angioplasty when performed, including all maneuvers necessary for accessing and selectively catheterizing the artery and crossing the lesion, including all imaging guidance and radiological supervision and interpretation necessary to perform the atherectomy and angioplasty when performed, within the same artery, unilateral; complex lesion, initial vessel) (placeholder codes 37X18 and 37X20);

Claims data from CPT code 37226 (Revascularization, endovascular, open or percutaneous, femoral, popliteal artery(s), unilateral; with transluminal stent placement(s), includes angioplasty within the same vessel, when performed) for determining the device offset percentage for CPT codes 37267 (Revascularization, endovascular, open or percutaneous, femoral and popliteal vascular territory, with transluminal stent placement, including transluminal angioplasty when performed, including all maneuvers necessary for accessing and selectively catheterizing the artery and crossing the lesion, including all imaging guidance and radiological supervision and interpretation necessary to perform the stent placement and angioplasty when performed, within the same artery, unilateral; straightforward lesion, initial vessel) and 37269 (Revascularization, endovascular, open or percutaneous, femoral and popliteal vascular territory, with transluminal stent placement, including transluminal angioplasty when performed, including all maneuvers necessary for accessing and selectively catheterizing the artery and crossing the lesion, including all imaging guidance and radiological supervision and interpretation necessary to perform the stent placement and angioplasty when performed, within the same artery, unilateral; complex lesion, initial vessel) (placeholder codes 37X14 and 37X16);

Claims data from CPT code 37227 (Revascularization, endovascular, open or percutaneous, femoral, popliteal artery(s), unilateral; with transluminal stent placement(s) and atherectomy, includes angioplasty within the same vessel, when performed) for determining the device offset percentage for CPT codes 37275 (Revascularization, endovascular, open or percutaneous, femoral and popliteal vascular territory, with transluminal stent placement, with transluminal atherectomy, including transluminal angioplasty when performed, including all maneuvers necessary for accessing and selectively catheterizing the artery and crossing the lesion, including all imaging guidance and radiological supervision and interpretation necessary to perform the stent placement, atherectomy, and angioplasty when performed, within the same artery, unilateral; straightforward lesion, initial vessel) and 37277 (Revascularization, endovascular, open or percutaneous, femoral and popliteal vascular territory, with transluminal stent placement, with transluminal atherectomy, including transluminal angioplasty when performed, including all maneuvers necessary for accessing and selectively catheterizing the artery and crossing the lesion, including all imaging guidance and radiological supervision and interpretation necessary to perform the stent placement, atherectomy, and angioplasty when performed, within the same artery, unilateral; complex lesion, initial vessel) (placeholder codes 37X22 and 37X24);

Claims data from CPT code 37228 (Revascularization, endovascular, open or percutaneous, tibial, peroneal artery, unilateral, initial vessel; with transluminal angioplasty) for determining the device offset percentage for CPT codes 37280 (Revascularization, endovascular, open or percutaneous, tibial and peroneal vascular territory, with transluminal angioplasty, including all maneuvers necessary for accessing and selectively catheterizing the artery and crossing the lesion, including all imaging guidance and radiological supervision and interpretation necessary to perform the angioplasty within the same artery, unilateral; straightforward lesion, initial vessel), 37282 (Revascularization, endovascular, open or percutaneous, tibial and peroneal vascular territory, with transluminal angioplasty, including all maneuvers necessary for accessing and selectively catheterizing the artery and crossing the lesion, including all imaging guidance and radiological supervision and interpretation necessary to perform the angioplasty within the same artery, unilateral; complex lesion, initial vessel), 37296 (Revascularization, endovascular, open or percutaneous, inframalleolar vascular territory, with transluminal angioplasty, including all maneuvers necessary for accessing and selectively catheterizing the artery and

crossing the lesion, including all imaging guidance and radiological supervision and interpretation necessary to perform the angioplasty within the same artery, unilateral; straightforward lesion, initial vessel), 37298 (Revascularization, endovascular, open or percutaneous, inframalleolar vascular territory, with transluminal angioplasty, including all maneuvers necessary for accessing and selectively catheterizing the artery and crossing the lesion, including all imaging guidance and radiological supervision and interpretation necessary to perform the angioplasty within the same artery, unilateral; complex lesion, initial vessel) (placeholder codes 37X27, 37X29, 37X43, and 37X45);

Claims data from CPT code 37229 (Revascularization, endovascular, open or percutaneous, tibial, peroneal artery, unilateral, initial vessel; with atherectomy, includes angioplasty within the same vessel, when performed) for determining the device offset percentage for CPT codes 37288 (Revascularization, endovascular, open or percutaneous, tibial and peroneal vascular territory, with transluminal atherectomy, including transluminal angioplasty when performed, including all maneuvers necessary for accessing and selectively catheterizing the artery and crossing the lesion, including all imaging guidance and radiological supervision and interpretation necessary to perform the atherectomy and angioplasty when performed, within the same artery, unilateral; straightforward lesion, initial vessel) and 37290 (Revascularization, endovascular, open or percutaneous, tibial and peroneal vascular territory, with transluminal atherectomy, including transluminal angioplasty when performed, including all maneuvers necessary for accessing and selectively catheterizing the artery and crossing the lesion, including all imaging guidance and radiological supervision and interpretation necessary to perform the atherectomy and angioplasty when performed, within the same artery, unilateral; complex lesion, initial vessel) (placeholder codes 37X35 and 37X37);

Claims data from CPT code 37230 (Revascularization, endovascular, open or percutaneous, tibial, peroneal artery, unilateral, initial vessel; with transluminal stent placement(s), includes angioplasty within the same vessel, when performed) for determining the device offset percentage for CPT codes 37284 (Revascularization, endovascular, open or percutaneous, tibial and peroneal vascular territory, with transluminal stent placement, including transluminal angioplasty when performed, including all maneuvers necessary for accessing and selectively catheterizing the artery and crossing the lesion, including all imaging guidance and radiological supervision and interpretation necessary to perform the stent placement and angioplasty when performed, within the same artery, unilateral; straightforward lesion, initial vessel) and 37286 (Revascularization, endovascular, open or percutaneous, tibial and peroneal vascular territory, with transluminal stent placement, including transluminal angioplasty when performed, including all maneuvers necessary for accessing and selectively catheterizing the artery and crossing the lesion, including all imaging guidance and radiological supervision and interpretation necessary to perform the stent placement and angioplasty when performed, within the same artery, unilateral; complex lesion, initial vessel) (placeholder codes 37X31 and 37X33);

Claims data from CPT code 37231 (Revascularization, endovascular, open or percutaneous, tibial, peroneal artery, unilateral, initial vessel; with transluminal stent placement(s) and atherectomy, includes angioplasty within the same vessel, when performed) for determining the device offset percentage for CPT codes 37292 (Revascularization, endovascular, open or percutaneous, tibial and peroneal vascular territory, with transluminal stent placement, with transluminal atherectomy, including transluminal angioplasty when performed, including all maneuvers necessary for accessing and selectively catheterizing the artery and crossing the lesion, including all imaging guidance and radiological supervision and interpretation necessary to perform the stent placement, atherectomy, and angioplasty when performed, within the same artery, unilateral; straightforward lesion, initial vessel) and 37294 (Revascularization, endovascular, open or percutaneous, tibial and peroneal vascular territory, with transluminal stent placement, with transluminal atherectomy, including transluminal angioplasty when performed, including all maneuvers necessary for accessing and selectively catheterizing the artery and crossing the lesion, including all imaging guidance and radiological supervision and interpretation necessary to perform the stent placement, atherectomy, and angioplasty when performed, within the same artery, unilateral; complex lesion, initial vessel) (placeholder codes 37X39 and 37X41);

After consideration of the public comments we received, we are finalizing our proposed continued use of HCPCS code-level device- intensive determination and three criteria to designate device- intensive procedures, in accordance with existing policies as discussed in the CY 2026 OPPS/ASC proposed rule section IV.B.1.a (90 FR 33607). We are also finalizing our proposed continuation of our device- intensive procedure policy, proposed use of CY 2024 claims information for determining device offset percentages and assigning device- intensive status, and our proposed default device offset policy for determining device offset percentages in the absence of claims data for device-intensive procedures, in accordance with existing policies as discussed in the CY 2026 OPPS/ASC proposed rule section IV.B.1.b (90 FR 33607).

Comments and our responses related to device-intensive procedure policy and the procedures we proposed for device-intensive status under the ASC payment system for CY 2026 can be found in section XIII.C.4. of this final rule with comment period. Our responses and final determinations related to device-intensive status for certain procedures under the ASC payment system are also applied to our final determinations of device-intensive status under the OPPS. The full listing of the final CY 2026 device-intensive procedures can be found in Addendum P to this final rule with comment period (which is available via the internet on the CMS website). Further, our claims accounting narrative contains a description of our device offset percentage calculation. Our claims accounting narrative for this final rule with comment period can be found under supporting documentation for the CY 2026 OPPS/ASC final rule with comment period on our website at https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient. 3. Device Edit Policy

In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66795), we finalized a policy and implemented claims processing edits that require any of the device codes used in the previous device-to- procedure edits to be present on the claim whenever a procedure code assigned to any of the APCs listed in Table 5 of the CY 2015 OPPS/ASC final rule with comment period (the CY 2015 device-dependent APCs) was reported on the claim. In addition, in the CY 2016 OPPS/ASC final rule with

comment period (80 FR 70422), we modified our previously existing policy and applied the device coding requirements exclusively to procedures that require the implantation of a device assigned to a device-intensive APC. In the CY 2016 OPPS/ASC final rule with comment period, we also finalized our policy that the claims processing edits are such that any device code, when reported on a claim with a procedure assigned to a device-intensive APC (listed in Table 42 of the CY 2016 OPPS/ASC final rule with comment period (80 FR 70422)), will satisfy the edit.

In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79658 through 79659), we changed our policy for CY 2017 and subsequent years to apply the CY 2016 device coding requirements to the newly defined device-intensive procedures. For CY 2017 and subsequent years, we also specified that any device code, when reported on a claim with a device- intensive procedure, will satisfy the edit. In addition, we created HCPCS code C1889 to recognize devices furnished during a device- intensive procedure that are not described by a specific Level II HCPCS Category C-code. Reporting HCPCS code C1889 with a device-intensive procedure will satisfy the edit requiring a device code to be reported on a claim with a device-intensive procedure. In the CY 2019 OPPS/ASC final rule with comment period, we revised the description of HCPCS code C1889 to remove the specific applicability to device-intensive procedures (83 FR 58950). For CY 2019 and subsequent years, the description of HCPCS code C1889 is “Implantable/insertable device, not otherwise classified.”

In the CY 2024 OPPS/ASC final rule with comment period (88 FR 81758 through 81759), we finalized our proposal to establish a procedure-to- device edit for the procedures assigned to APC 5496 (Level 6 Intraocular Procedures) and require hospitals to report the correct device HCPCS codes when reporting any of the four procedures--CPT codes 0308T and 0616T, 0617T, and 0618T. (We note that CPT codes 0617T and 0618T were deleted effective January 1, 2025 and CPT code 0616T was deleted effective January 1, 2025 and replaced with new CPT code 66683.) We have noted that interested parties have previously recommended in past rulemaking that we reestablish all our previous procedure-to-device edits, but we do not expect to extend this policy beyond the procedures assigned to APC 5496 (Level 6 Intraocular Procedures). This APC represents a unique situation--the APC (which was the Level 5 Intraocular APC in previous years) had been a Low Volume APC (fewer than 100 claims in a claims year) since we established our Low Volume APC policy, the procedures associated with this APC have significant procedure costs often greater than $15,000, and the procedures associated with this APC require the implantation of a high- cost intraocular device. In the CY 2025 OPPS/ASC final rule, we finalized to continue this policy for APC 5496 (Level 6 Intraocular Procedures) for CY 2025 and subsequent years.

In the CY 2025 OPPS/ASC final rule with comment period (89 FR 92419 through 92422), we finalized a modification to our device edits policy. While historically our device edits policy has only applied to procedures that are device-intensive based on the most recent claims data available, commenters had raised concerns about hospitals underreporting device costs in years when certain device-intensive procedures had lost device-intensive status because the device portion of a procedure can fluctuate above and below our device-intensive threshold of 30 percent. Commenters indicated to us that the presence of the device edit requirement can have a significant impact on the device portion and geometric mean cost of a procedure, particularly for newer technologies. Therefore, for CY 2025 and subsequent CYs, we finalized a policy to apply our device edits policy permanently once a procedure is designated as a device-intensive procedure in a given year. Additionally, we finalized a policy to reinstate our device edits policy for procedures that have been device-intensive since we began assigning device-intensive status at the HCPCS code level on January 1, 2017. We believed that by applying our device edit policy to procedures that were device-intensive on or after January 1, 2017, we might continue to receive device cost information for relatively new procedures with limited claims data, which may have been impacted by our policy to require that only existing device-intensive procedures be subject to our device edits policy. For CY 2026, under our modified device edits policy, our device edits requirement will apply to procedures that are designated as device-intensive in CY 2026 and will apply in subsequent years.

We did not propose any changes to our device edit policy for CY 2026 in the CY 2026 OPPS/ASC proposed rule. We received public comments. The following is a summary of the comments we received and our responses.

Comment: Some commenters supported CMS's current device edits policy.

Response: We appreciate commenters support of our device edits policy.

Comment: One commenter recommended we reinstate procedure-to-device edits, particularly for joint replacement procedures.

Response: We believe hospitals have adequate experience in coding and billing for joint replacement procedures, which are subject to our device edits policy, and do not believe it is necessary to reinstate specific procedure-to-device edits for joint replacement procedures. Therefore, we are not accepting the commenter's recommendation.

Comment: Commenters recommended that CMS establish specific new device category HCPCS C-codes to improve capturing device costs for certain procedures under the OPPS/ASC ratesetting methodologies. Specifically, commenters requested we establish a C-code for a bone- anchored annular implant, C-codes for devices used with procedures we are finalizing to remove from the inpatient-only list for CY 2026, and C-codes to describe the drug-coated balloon catheter and guidewire used for urethral stricture or prostatic hyperplasia.

Response: While we may create new device category C-codes for device categories approved under transitional pass-through status to be paid at charges reduced to cost, we do not believe it is appropriate or necessary to create additional device category C-codes outside of the transitional pass-through approval process. We believe hospitals have sufficient experience in coding and reporting significant device costs correctly on hospital claims using the existing device category HCPCS C-codes as well as uncoded revenue codes

After consideration of public comments, we are finalizing our proposal, without modification, to continue our device edits policy for CY 2026. 4. Adjustment to OPPS Payment for No Cost/Full Credit and Partial Credit Devices a. Background

To ensure equitable OPPS payment when a hospital receives a device without cost or with full credit, in CY 2007, we implemented a policy to reduce the payment for specified device-dependent APCs by the estimated portion of the APC payment attributable to device costs (that is, the device offset) when the hospital receives a specified device at no cost or with full credit (71 FR 68071 through 68077).

Hospitals were instructed to report no cost/full credit device cases on the claim using the “FB” modifier on the line with the procedure code in which the no cost/full credit device is used. In cases in which the device is furnished without cost or with full credit, hospitals were instructed to report a token device charge of less than $1.01. In cases in which the device being inserted is an upgrade (either of the same type of device or to a different type of device) with a full credit for the device being replaced, hospitals were instructed to report as the device charge the difference between the hospital's usual charge for the device being implanted and the hospital's usual charge for the device for which it received full credit. In CY 2008, we expanded this payment adjustment policy to include cases in which hospitals receive partial credit of 50 percent or more of the cost of a specified device. Hospitals were instructed to append the “FC” modifier to the procedure code that reports the service provided to furnish the device when they receive a partial credit of 50 percent or more of the cost of the new device. We refer readers to the CY 2008 OPPS/ASC final rule with comment period for more background information on the “FB” and “FC” modifiers payment adjustment policies (72 FR 66743 through 66749).

In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75005 through 75007), beginning in CY 2014, we modified our policy of reducing OPPS payment for specified APCs when a hospital furnishes a specified device without cost or with a full or partial credit. For CY 2013 and prior years, our policy had been to reduce OPPS payment by 100 percent of the device offset amount when a hospital furnishes a specified device without cost or with a full credit and by 50 percent of the device offset amount when the hospital receives partial credit in the amount of 50 percent or more of the cost for the specified device. For CY 2014, we reduced OPPS payment, for the applicable APCs, by the full or partial credit a hospital receives for a replaced device. Specifically, under this modified policy, hospitals are required to report on the claim the amount of the credit in the amount portion for value code “FD” (Credit Received from the Manufacturer for a Replaced Device) when the hospital receives a credit for a replaced device that is 50 percent or greater than the cost of the device. For CY 2014, we also limited the OPPS payment deduction for the applicable APCs to the total amount of the device offset when the “FD” value code appears on a claim. For CY 2015, we continued our policy of reducing OPPS payment for specified APCs when a hospital furnishes a specified device without cost or with a full or partial credit and to use the three criteria established in the CY 2007 OPPS/ ASC final rule with comment period (71 FR 68072 through 68077) for determining the APCs to which our CY 2015 policy will apply (79 FR 66872 through 66873). In the CY 2016 OPPS/ASC final rule with comment period (80 FR 70424), we finalized our policy to no longer specify a list of devices to which the OPPS payment adjustment for no cost/full credit and partial credit devices would apply and instead apply this APC payment adjustment to all replaced devices furnished in conjunction with a procedure assigned to a device-intensive APC when the hospital receives a credit for a replaced specified device that is 50 percent or greater than the cost of the device. b. Policy for No Cost/Full Credit and Partial Credit Devices

In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79659 through 79660), for CY 2017 and subsequent years, we finalized a policy to reduce OPPS payment for device-intensive procedures, by the full or partial credit a provider receives for a replaced device, when a hospital furnishes a specified device without cost or with a full or partial credit. Under our current policy, Under our current policy, hospitals continue to be required to report on the claim the amount of the credit in the amount portion for value code “FD” when the hospital receives a credit for a replaced device that is 50 percent or greater than the cost of the device.

In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75005 through 75007), we adopted a policy of reducing OPPS payment for specified APCs when a hospital furnishes a specified device without cost or with a full or partial credit by the lesser of the device offset amount for the APC or the amount of the credit. We adopted this change in policy in the preamble of the CY 2014 OPPS/ASC final rule with comment period and discussed it in subregulatory guidance, including chapter 4, section 61.3.6 of the Medicare Claims Processing Manual. Further, in the CY 2021 OPPS/ASC final rule with comment period (85 FR 86017 through 86018, 86302), we made conforming changes to our regulations at Sec. 419.45(b)(1) and (2) that codified this policy.

We did not propose any changes related to our policies regarding payment for no cost/full credit and partial credit devices for CY 2026 in the CY 2026 OPPS/ASC proposed rule, and we did not receive public comments. We are maintaining our current policy for CY 2026.

Section 1833(t)(6) of the Act (42 U.S.C. 1395l(t)(6)) provides for temporary additional payments or “transitional pass-through payments” for certain drugs and biologicals. A “biological” as used in this final rule with comment period, and as codified at 42 CFR 414.802 and 414.902 includes a “product licensed under section 351 of the PHS [Public Health Service] Act”. As enacted by the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 (BBRA) (Pub. L. 106- 113), this pass-through payment provision requires the Secretary to make additional payments to hospitals for: current orphan drugs for rare diseases and conditions, as designated under section 526 of the Federal Food, Drug, and Cosmetic Act; current drugs and biologicals and brachytherapy sources used in cancer therapy; and current radiopharmaceutical drugs and biologicals. “Current” refers to those types of drugs or biologicals mentioned above that are hospital outpatient services under Medicare Part B for which transitional pass- through payment was made on the first date the hospital OPPS was implemented.

Transitional pass-through payments also are provided for certain “new” drugs and biologicals that were not being paid for as a Hospital Outpatient Department (HOPD) service as of December 31, 1996, and whose cost is “not insignificant” in relation to the OPPS payments for the procedures or services associated with the new drug or biological. For pass-through payment purposes, radiopharmaceuticals are included as “drugs.” As required by statute, transitional pass- through payments for a drug or biological described in section 1833(t)(6)(C)(i)(II) of the Act can be made for a period of at least 2 years, but not more than 3 years, after the payment was first made for the drug as a hospital outpatient service under Medicare Part B. Final CY 2026 pass-through drugs and biologicals and their designated APCs are assigned status indicator “G” in Addenda A and

B to this final rule with comment period (which are available on the CMS website).\65\

\65\ https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient.

Section 1833(t)(6)(D)(i) of the Act specifies that the pass-through payment amount, in the case of a drug or biological, is the amount by which the amount determined under section 1842(o) of the Act (42 U.S.C. 1395u(o)) for the drug or biological exceeds the portion of the otherwise applicable Medicare Outpatient Department (OPD) fee schedule that the Secretary determines is associated with the drug or biological. The methodology for determining the pass-through payment amount is set forth in regulations at 42 CFR 419.64. In accordance with section V.B.9. of the CY 2026 OPPS/ASC proposed rule, skin substitutes with an approved Biologics License Application (BLA) would be considered under transitional drug pass-through payment status. As such, we proposed to amend our regulation at Sec. 419.64 to remove paragraph (a)(4)(iv), which currently reads “A biological that is not a skin substitute or similar product that aids wound healing.” The regulations at 42 CFR 419.64(d) specify that the pass-through payment equals the amount determined under section 1842(o) of the Act minus the portion of the Ambulatory Payment Classification (APC) payment that CMS determines is associated with the drug or biological.

Section 1847A of the Act (42 U.S.C. 1395w-3a) establishes the average sales price (ASP) methodology, which is used for payment for drugs and biologicals described in section 1842(o)(1)(C) of the Act furnished on or after January 1, 2005. The ASP methodology, as applied under the OPPS, uses several sources of data as a basis for payment, including the ASP, the wholesale acquisition cost (WAC), and the average wholesale price (AWP). In this final rule with comment period, the term “ASP methodology” and “ASP-based” are inclusive of all data sources and methodologies described therein. Additional information on the ASP methodology can be found on our website at https://www.cms.gov/medicare/payment/fee-for-service-providers/part-b-drugs/average-drug-sales-price.

The pass-through application \66\ and review process for drugs and biologicals is described on our website at https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/pass-through-payment-status-new-technology-ambulatory-payment-classification-apc.

\66\ To apply for OPPS transitional Pass-Through Payment Status and New Technology Ambulatory Payment Classification (APC), applicants complete an application that is subject to the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et seq.). This information collection (CMS-10008) is currently approved under OMB control number of 0938-0802 and has an expiration date of July 31, 2027.

We received a comment on our proposal.

Comment: We received a comment requesting that CMS codify in regulation that biologicals classified and approved by the FDA under section 351 will be evaluated for coding and pass-through payment under CMS' drugs and biologics pathways and applications.

Response: While under this policy, skin substitute products approved as a drug or biological product (via the BLA pathway) under section 351 of the PHS Act may be eligible for drug pass-through, we note that, the policy does not apply to the evaluation for coding or transitional pass-through payment for other products that are not skin substitute products, including other drugs and biological products approved under section 351 of the PHS Act.

In accordance with section V.B.9. of the CY 2026 OPPS/ASC final rule with comment period, skin substitutes with an approved BLA will be considered under the transitional drug pass-through payment process. As such, we are finalizing our proposal to amend our regulation at Sec. 419.64 to remove paragraph (a)(4)(iv) “A biological that is not a skin substitute or similar product that aids wound healing.” For more information on our payment policy for skin substitute products, we refer readers to section V.B.9 of this final rule with comment period. 2. Transitional Pass-Through Payment Period for Pass-Through Drugs, Biologicals, and Radiopharmaceuticals and Quarterly Expiration of Pass- Through Status

As required by statute, transitional pass-through payments for a drug or biological described in section 1833(t)(6)(C)(i)(II) of the Act can be made for a period of at least 2 years, but not more than 3 years, after the payment was first made for the drug or biological as a hospital outpatient service under Medicare Part B. Drugs and biologicals pass-through applications are accepted and approved on a quarterly basis in which pass-through payments for approved applications could begin on the next available OPPS quarterly update. Furthermore, our current policy, which was finalized in CY 2017 OPPS/ ASC final rule with comment period (81 FR 79662), is to allow for quarterly expiration of pass-through payment status for drugs, biologicals, and radiopharmaceuticals to afford a pass-through payment period that is as close to a full 3 years as possible to allow, on a prospective basis, for the maximum pass-through payment period without exceeding the statutory limit of 3 years. Notice of drugs for which pass-through payment status is ending during the calendar year is included in the quarterly OPPS Change Request transmittals. 3. Drugs and Biologicals With Expiring Pass-Through Payment Status in CY 2025

There are 28 drugs and biologicals for which pass-through payment status expires by December 31, 2025, as listed in Table 104. These drugs and biologicals will have received OPPS pass-through payment for 3 years during the period of April 1, 2022 through December 31, 2025. In accordance with the policy finalized in the CY 2017 OPPS/ASC final rule with comment period (81 FR 79662) and described earlier, pass- through payment status for drugs and biologicals approved in CY 2017 and subsequent years will expire on a quarterly basis, with a pass- through payment period as close to 3 years as possible.

With the exception of those groups of drugs and biologicals that are always packaged when they do not have pass-through payment status (specifically, anesthesia drugs; drugs, biologicals, and radiopharmaceuticals \67\ that function as supplies when used in a diagnostic test or procedure; and drugs and biologicals that function as supplies when used in a surgical procedure), our standard methodology for providing payment for drugs and biologicals with expiring pass-through payment status in an upcoming calendar year is to determine the product's estimated per day cost and compare it with the OPPS drug packaging threshold for that calendar year, which is proposed to be $140 for CY 2026 for all drugs, biologicals, and therapeutic radiopharmaceuticals (for high-cost diagnostic radiopharmaceuticals, we would provide separate payment when their per day cost greater than the finalized threshold of $655). These policies are discussed further in section V.B.1. of this final rule with comment period. If the estimated per day cost for the drug or biological is less than or equal to the applicable OPPS drug packaging threshold, we package payment for the

drug or biological into the payment for the associated procedure in the upcoming calendar year. If the estimated per day cost of the drug or biological is greater than the OPPS drug packaging threshold, we provide separate payment at the applicable ASP methodology-based payment amount (which is generally ASP plus 6 percent), as discussed further in section V.B.2. of this final rule with comment period.

\67\ In the CY 2025 OPPS/ASC final rule with comment period (89 FR 93948), we finalized the diagnostic radiopharmaceuticals policy to separately pay those products when the per-day costs are greater than a threshold. Please refer to section II.A.3.c. of the CY 2025 OPPS/ASC final rule for more information regarding this policy.

BILLING CODE 4120-01-P

[GRAPHIC] [TIFF OMITTED] TR25NO25.139

[GRAPHIC] [TIFF OMITTED] TR25NO25.140

BILLING CODE 4120-01-C 4. Drugs, Biologicals, and Radiopharmaceuticals With Pass-Through Payment Status Expiring in CY 2026

We proposed to end pass-through payment status in CY 2026 for 52 drugs and biologicals. These drugs and biologicals, which were initially approved for pass-through payment status between April 1, 2023 and January 1, 2024, are listed in Table 105. The APCs and Healthcare Common Procedure Coding System (HCPCS) codes for these drugs and biologicals, which have pass-through payment status that will end by December 31, 2026, are assigned status indicator “G” (Pass-Through Drugs and Biologicals) in Addenda A and B to this final rule with comment period (which are available on the CMS website).\68\ The APCs and HCPCS codes for these drugs and biologicals are assigned status indicator “G” only for the duration of their pass-through status.

\68\ https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient.

Section 1833(t)(6)(D)(i) of the Act sets the amount of pass-through payment for pass-through drugs and biologicals (the pass-through payment amount) as the difference between the amount authorized under section 1842(o) of the Act and the portion of the otherwise applicable OPD fee schedule that the Secretary determines is associated with the drug or biological. For CY 2026, we are continuing our policy to pay for pass-through drugs and biologicals using the ASP methodology, meaning a payment rate based on ASP, WAC, or AWP, as applicable. This payment rate is generally ASP plus 6 percent, equivalent to the payment rate these drugs and biologicals would receive in the physician's office setting in CY 2026. We note that, under the OPD fee schedule, separately payable drugs assigned to an APC are generally payable at ASP plus 6 percent. Therefore, a $0 pass-through payment amount will continue to be paid for pass-through drugs and biologicals under the CY 2026 OPPS because the difference between the amount authorized under section 1842(o) of the Act, which is generally ASP plus 6 percent, and the portion of the otherwise applicable OPD fee schedule that the Secretary determines is appropriate, which is generally ASP plus 6 percent, is $0.

In the case of policy-packaged drugs (which include the following: anesthesia drugs; drugs, biologicals, and radiopharmaceuticals \69\ below the applicable cost threshold that function as supplies when used in a diagnostic test or procedure; and drugs and biologicals that function as supplies when used in a surgical procedure), their pass- through payment amount will continue to be equal to a payment rate calculated using the ASP methodology, meaning a payment rate based on ASP, WAC, or AWP. This payment rate will generally continue to be ASP plus 6 percent for CY 2026, minus a payment offset for the portion of the otherwise applicable OPPS payment that the Secretary determines is associated with the drug or biological. We note that if not for the pass-through payment status of these policy-packaged products, payment for these products would be packaged into the associated procedure and therefore, there are associated OPPS payment amounts for them.

\69\ In the CY 2025 OPPS/ASC final rule with comment period (89 FR 93948), we finalized the diagnostic radiopharmaceuticals policy to separately pay those products when the per-day costs are greater than a threshold. Please refer to section II.A.3.c. of the CY 2025 OPPS/ASC final rule for more information regarding this policy.

We note that in the CY 2025 OPPS/ASC final rule with comment period (89 FR 93948 through 93963), we modified the regulation text at 42 CFR 419.2(b)(15) to specify that only those

diagnostic radiopharmaceuticals with per-day costs at or below the per- day diagnostic radiopharmaceutical packaging threshold for the applicable year are policy-packaged. Meaning, for those diagnostic radiopharmaceuticals that are below the diagnostic radiopharmaceutical packaging threshold, for purposes of pass-through co-insurance calculations, they are treated like policy packaged drugs. For those diagnostic radiopharmaceuticals above the diagnostic radiopharmaceutical packaging threshold, they are not packaged, and are not considered policy packaged; therefore, for purposes of pass-through co-insurance calculations, they are treated like separately payable drugs assigned to an APC. Accordingly, a $0 pass-through payment amount is assigned consistent with our policy described previously in this section for separately payable drugs assigned to an APC.

We will continue our policy to update pass-through payment rates on a quarterly basis on the CMS website during CY 2026 if later quarter ASP submissions (or more recent WAC or AWP information, as applicable) indicate that adjustments to the payment rates for these pass- through payment drugs or biologicals are necessary. For a full description of this policy, we refer readers to the CY 2006 OPPS/ASC final rule with comment period (70 FR 68632 through 68635).

For CY 2026, consistent with our CY 2025 policy for diagnostic and therapeutic radiopharmaceuticals, we will continue to provide payment for both diagnostic and therapeutic radiopharmaceuticals that are granted pass-through payment status based on the ASP methodology. As stated earlier, for purposes of pass-through payment, we consider radiopharmaceuticals to be drugs under the OPPS. Therefore, if a diagnostic or therapeutic radiopharmaceutical receives pass-through payment status during CY 2026, we will continue to follow the standard ASP methodology to determine the pass-through payment rate that drugs receive under section 1842(o) of the Act, which is generally ASP plus 6 percent. If ASP data are not available for a radiopharmaceutical, we will continue to provide pass-through payment at WAC plus 3 percent (consistent with our policy in section V.B.2.a. of this final rule with comment period), the equivalent payment provided for pass-through drugs and biologicals without ASP information. Additional detail on the WAC plus 3 percent payment policy can be found in section V.B.2.a. of this final rule with comment period. If WAC information also is not available, we will continue to provide payment for the pass-through radiopharmaceutical at 95 percent of its most recent AWP.

We refer readers to Table 105 for the list of drugs and biologicals with pass-through payment status expiring during CY 2026. BILLING CODE 4120-01-P

[GRAPHIC] [TIFF OMITTED] TR25NO25.141

[GRAPHIC] [TIFF OMITTED] TR25NO25.142

[GRAPHIC] [TIFF OMITTED] TR25NO25.143

[GRAPHIC] [TIFF OMITTED] TR25NO25.144

BILLING CODE 4120-01-C

We did not receive public comments on our proposal, and therefore, we are finalizing our proposal to end pass-through payment status in CY 2026 for 52 drugs and biologicals. However, we did receive comment regarding our clarification included in the CY 2026 OPPS/ASC proposed rule regarding the co-insurance calculations for diagnostic radiopharmaceuticals (90 FR 33614).

In the CY 2025 OPPS/ASC final rule with comment period (89 FR 93948 through 93963), we modified the regulation text at 42 CFR 419.2(b)(15) to specify that only those diagnostic radiopharmaceuticals with per-day costs at or below the per-day diagnostic radiopharmaceutical packaging threshold for the applicable year are policy-packaged. Meaning, for those diagnostic radiopharmaceuticals that are below the diagnostic radiopharmaceutical packaging threshold, for purposes of pass-through co-insurance calculations, they are treated like policy packaged drugs. For those diagnostic radiopharmaceuticals above the diagnostic radiopharmaceutical packaging threshold, they are not packaged, and are not considered policy packaged; therefore, for purposes of pass-through co-insurance calculations, they are treated like separately payable drugs assigned to an APC. Accordingly, a $0 pass-through payment amount is assigned consistent with our policy described previously in this section for separately payable drugs assigned to an APC.

Comment: A few commenters asked for additional clarification from CMS regarding the calculation of beneficiary copayments for diagnostic radiopharmaceuticals while on drug pass-through. Commenters requested that CMS clarify that diagnostic radiopharmaceuticals that exceed the applicable cost threshold while on transitional pass-through status would have a beneficiary copayment listed. Commenters also asked for clarification regarding the beneficiary co-insurance for specific product HCPCS codes, such as HCPCS Code A9608 (Flotufolastat f18 diag 1 mci) and HCPCS code A9611 (flurpiridaz F 18).

Commenters also requested clarification that, for any diagnostic radiopharmaceutical that is separately paid specifically because it is on transitional drug pass-through status, and whose payment is expected to be below the diagnostic radiopharmaceutical cost threshold, no beneficiary copayment should apply, which the commenter states is consistent with the principle that such costs are packaged.

Commenters contend that when a diagnostic radiopharmaceutical is applying for drug pass-through status, CMS is not making a fair comparison if it uses the diagnostic radiopharmaceutical's ASP, WAC, or AWP to determine if the diagnostic radiopharmaceutical would otherwise be packaged, because if the product had claims data, CMS would use the MUC, which is often lower than ASP, WAC, and AWP, to determine if the product was above or below the packaging threshold. Therefore, in the commenter's view, CMS is incorrectly determining that pass-through applicants would otherwise be above the packaging threshold, and thus that the product would otherwise be separately paid and that the pass- through amount is $0, resulting in applicable co-insurance for the beneficiary.

One commenter believed CMS should calculate the co-insurance for all diagnostic radiopharmaceuticals under

the policy packaged method. Additionally, this commenter stated that it is impossible for interested parties or CMS to know whether a product will exceed the cost threshold under the MUC methodology in future claims data and therefore whether a product will or will not be considered policy packaged.

Response: We thank the commenters for engaging with CMS on this issue. Only those diagnostic radiopharmaceuticals with estimated per- day costs at or below the per-day diagnostic radiopharmaceutical packaging threshold for the applicable year are policy-packaged. Meaning, for these diagnostic radiopharmaceuticals that are estimated to be below the diagnostic radiopharmaceutical packaging threshold, for purposes of pass-through co-insurance calculations, they are treated like policy packaged drugs. These diagnostic radiopharmaceuticals would have an overall $0 co-insurance payment. If a drug is policy packaged, meaning absent pass-through status there would be no separate payment for the drug, the pass-through payment amount is generally equal to a payment rate calculated using the ASP methodology (89 FR 94226). Per statute, 1833(t)(8) of the Act, there is no copayment on the pass- through payment amount. Therefore, policy packaged drugs have a $0 copayment amount, since the entirety of their separate payment amount is due to their passthrough payment status.

For those diagnostic radiopharmaceuticals estimated to be above the diagnostic radiopharmaceutical packaging threshold, their payment is not policy packaged, and they are not considered policy packaged; therefore, for purposes of pass-through co-insurance calculations, they are treated like a separately payable drug assigned to an APC. Accordingly, a $0 pass-through payment amount is assigned consistent with our policy described previously in this section for separately payable drugs assigned to an APC. The pass-through amount is the amount that is not subject to co-insurance. The non-pass-through payment amount is still subject to co-insurance provisions, including 1833(t)(3)(B) of the Act and Sec. 419.41(d). These diagnostic radiopharmaceuticals would have a co-insurance payment.

Estimating the per day costs of radiopharmaceuticals with HCPCS codes, but without hospital claims data, is consistent with our longstanding policy regarding payment for non-pass-through drugs, biologicals, and radiopharmaceuticals with HCPCS codes but without OPPS Hospital Claims Data where CMS estimates the average number of units of each product that would typically be furnished to a patient during one day in the hospital outpatient setting and utilizes the available payment rate for the product, to determine whether their payment will be packaged.

Specifically for HCPCS Codes A9608 (Flotufolastat f18 diag 1 mci) and A9611 (flurpiridaz F 18), these HCPCS codes have co-insurance assigned during CY 2025 as these products were determined to have an estimated per day cost above the diagnostic radiopharmaceutical packaging threshold.

Comment: A commenter asked CMS to confirm that multiple offsets are not applied to the pass-through payment for diagnostic radiopharmaceuticals. This commenter was concerned that CMS may be inappropriately subtracting both the ASP-based payment under the separately payable drug methodology and subtracting the policy-packaged drug amount under the policy-packaged drug methodology.

Response: We can confirm that the payment should not have multiple offsets subtracted, either the policy-packaged offset or the threshold- packaged offset depending on the calculations performed as discussed earlier in this section to determine co-insurance status. 5. Drugs, Biologicals, and Radiopharmaceuticals With Pass-Through Payment Status Continuing Through CY 2026

We proposed to continue pass-through payment status in CY 2026 for 61 drugs and biologicals. These drugs and biologicals, which were approved for pass-through payment status with effective dates beginning between April 1, 2024 and October 1, 2025, are listed in Table 106. The APCs and HCPCS codes for these drugs and biologicals, which have pass- through payment status that would continue after December 31, 2026, are assigned status indicator “G” in Addenda A and B to the CY 2026 OPPS/ ASC proposed rule (which are available on the CMS website).\70\

\70\ https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient.

Section 1833(t)(6)(D)(i) of the Act sets the amount of pass-through payment for pass-through drugs and biologicals (the pass-through payment amount) as the difference between the amount authorized under section 1842(o) of the Act and the portion of the otherwise applicable OPD fee schedule that the Secretary determines is associated with the drug or biological. For CY 2026, we are continuing our policy to pay for pass-through drugs and biologicals at a payment rate based on the ASP methodology, which may be based on ASP, WAC, or AWP, but is generally ASP plus 6 percent, which is equivalent to the payment rate these drugs and biologicals would receive in the physician's office setting in CY 2026. We will continue with our policy of paying a $0 pass-through payment amount for pass-through drugs and biologicals that are not policy-packaged under the CY 2026 OPPS, because the difference between the amount authorized under section 1842(o) of the Act, which would generally be ASP plus 6 percent, and the portion of the otherwise applicable OPD fee schedule that the Secretary determines is appropriate, which would also generally be ASP plus 6 percent, is $0.

In the case of policy-packaged drugs (which include the following: anesthesia drugs; drugs, biologicals, and radiopharmaceuticals \71\ that function as supplies when used in a diagnostic test or procedure; and drugs and biologicals that function as supplies when used in a surgical procedure), their pass-through payment amount would continue to be equal to a payment rate based on the ASP methodology, which may be based on ASP, WAC, or AWP, but would generally be ASP plus 6 percent for CY 2026, minus a payment offset for any predecessor drug products contributing to the pass-through payment. We note if not for the pass- through payment status of these policy-packaged products, payment for these products would be packaged into the associated procedure and therefore, there are associated OPD fee schedule amounts for them.

\71\ In the CY 2025 OPPS/ASC final rule with comment period (89 FR 93948), we finalized a diagnostic radiopharmaceuticals policy to separately pay those products when the per-day costs are greater than a threshold. Please refer to section II.A.3.c. of the CY 2025 OPPS/ASC final rule for more information regarding this policy.

We are continuing our policy to update pass-through payment rates on a quarterly basis on our website during CY 2026 if later quarter ASP submissions (or more recent WAC or AWP information, as applicable) indicate that adjustments to the payment rates for these pass-through payment drugs or biologicals are necessary. For a full description of this policy, we refer readers to the CY 2006 OPPS/ASC final rule with comment period (70 FR 68632 through 68635).

For CY 2026, consistent with our CY 2025 policy for diagnostic and therapeutic radiopharmaceuticals, we proposed to continue our policy to provide payment for both diagnostic and therapeutic radiopharmaceuticals

that are granted pass-through payment status based on the ASP methodology. As stated earlier, for purposes of pass-through payment, we consider radiopharmaceuticals to be drugs under the OPPS. Therefore, if a diagnostic or therapeutic radiopharmaceutical receives pass- through payment status during CY 2026, we will continue to follow the standard ASP methodology to determine the pass-through payment rate that drugs receive under section 1842(o) of the Act, which would generally be ASP plus 6 percent. If ASP data are not available for a radiopharmaceutical, we would provide pass-through payment at WAC plus 3 percent (consistent with our policy in section V.B.2.a. of this final rule with comment period), the equivalent payment provided for pass- through drugs and biologicals without ASP information. Additional detail on the WAC plus 3 percent payment policy can be found in section V.B.2.a. of this final rule with comment period. If WAC information also is not available, we would provide payment for the pass-through radiopharmaceutical at 95 percent of its most recent AWP.

The drugs and biologicals that would have pass-through payment status expire after December 31, 2026, are shown in Table 106. BILLING CODE 4120-01-P

[GRAPHIC] [TIFF OMITTED] TR25NO25.145

[GRAPHIC] [TIFF OMITTED] TR25NO25.146

[GRAPHIC] [TIFF OMITTED] TR25NO25.147

[GRAPHIC] [TIFF OMITTED] TR25NO25.148

BILLING CODE 4120-01-C

We received public comments on these proposals. The following is a summary of the comments we received and our responses.

Comment: A commenter expressed support for maintaining pass-through status for iDose[supreg] TR for all of CY 2026.

Response: We thank the commenter for their comment. We are maintaining drug pass-through status for iDose TR, which may be described by HCPCS Code J7355, for all of CY 2026.

Comment: A commenter expressed support for our inclusion of IMDELLTRA[supreg] and PAVBLU[supreg] in the List of Drugs with Pass- Through Payment Status Expiring After 2026 (Table 106) and acknowledged that we did not include drugs that were granted pass-through status after April 1, 2025 in Table 106 in the CY 2026 OPPS/ASC proposed rule, due to the timing of preparation of the CY 2026 OPPS/ASC proposed rule. The commenter requested that BKEMV\TM\, which was granted pass-through status effective July 1, 2025, be included in Table 106 in the CY 2026 OPPS/ASC final rule with comment period.

Response: We thank the commenter for their comment. BKEMV\TM\ is included in Table 106 in this final rule final rule with comment period.

After consideration of public comments, we are finalizing as proposed to continue pass-through payment status in CY 2026 for 61 drugs and biologicals.