Medicare and Medicaid Programs; Calendar Year 2026 Home Health Prospective Payment System (HH PPS) Rate Update; Requirements for the HH Quality Reporting Program and the HH Value-Based Purchasing Expanded Model; Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program Updates; DMEPOS Accreditation Requirements; Provider Enrollment; and Other Medicare and Medicaid Policies

In the CY 2026 HH PPS proposed rule, we solicited public comment on each of these issues for the following sections of this document that contain information collection requirements (ICRs). 1. ICRs for HH QRP a. Data Reporting Requirements

Failure to submit HH QRP data required under section 1895(b)(3)(B)(v) of the Act with respect to a program year would result in the reduction of the annual home health market basket percentage increase otherwise applicable to an HHA for the corresponding calendar year by 2 percentage points. As we noted in the CY 2018 HH PPS final rule (82 FR 52738 through 51740), we believe the reconsideration requirements, and the associated burden would be incurred subsequent to an administrative action. In accordance with the implementing regulations for the PRA (5 CFR 1320.4(a)(2) and (c)), the burden associated with any information collected subsequent to the administrative action is exempt from the requirements of the PRA. We have, however, provided detailed cost estimates in section VIII. of the proposed rule. We welcomed public comments on the accuracy of the cost estimate assigned to this administrative burden. b. Removal of Standardized Patient Assessment Data Elements

As discussed in section III.D.3. of the proposed rule, we proposed to remove four items as standardized patient assessment data elements beginning with the CY 2026 HH QRP. The four assessment items proposed for collection are (1) Living Situation; (2) Food Runs Out; (3) Food Doesn't Last; and (4) Utilities as outlined in section III.D.5. of the proposed rule. All elements discussed will be collected at the start of care and resumption of care timepoints. To clarify, home health episodes begin with either a start of care or a resumption of care, corresponding to admission in other PAC settings. We assumed the Living Situation and Utilities data elements require 0.3 minutes each of clinician time to complete. We assume the Food Runs Out and Food Doesn't Last data elements require 0.15 minutes each of clinician time to complete. Therefore, we estimated that there will be a decrease in clinician burden per OASIS assessment of 0.9 minutes at the start of care and resumption of care. We also proposed to remove the patient COVID-19 vaccination item beginning with the CY 2026 HH QRP. This item is collected at the transfer of care, death at home, and discharge assessment timepoints of the OASIS and requires 0.3 minutes of clinician time to complete at each of these time points.

The net effect of these proposals is a decrease in four data elements collected at the start of care and one data element at transfer of care, death at home, and discharge for the OASIS implemented on April 1, 2026.

For purposes of calculating the costs associated with the information collection requirements, we obtained median hourly wages for these from the U.S. Bureau of Labor Statistics' May 2024 National Occupational Employment and Wage Estimates (https://www.bls.gov/oes/current/oes_nat.htm). To account for other indirect costs such as overhead and fringe benefits (100 percent), we have doubled the hourly wage. These amounts are detailed in table 38. [GRAPHIC] [TIFF OMITTED] TR02DE25.068

The OASIS is completed by RNs or PTs, or very occasionally by occupational therapists (OT) or speech language pathologists (SLP/ST). Data from 2023 show that the SOC/ROC OASIS is completed by RNs (approximately 75.42 percent of the time), PTs (approximately 23.71 percent of the time), and other therapists, including OTs and SLP/STs (approximately 0.87 percent of the time). Based on this analysis, we estimated a weighted clinician average hourly wage of $ 91.72, inclusive of fringe benefits, using the hourly wage data in table G2 (0.7542 x $90.00 + 0.2371 x $97.14 + 0.0087 x $93.15 = $91.72. Individual providers determine the staffing resources necessary.

For purposes of estimating burden, we compare item-level burden estimates for the OASIS to be released on April 1, 2026 that removes the SDOH and COVID-19 data elements, to the originally planned OASIS update for January 1, 2027 release finalized in CY 2024 HH PPS final rule (88 FR 77763 through 77768) that included the collection of four SDOH items and a COVID 19 data element. This comparison of the intended release of OASIS in January 1, 2027 with the April 1, 2026 being finalized with this rule will outline the extent of the reduction in burden.

A first step in calculating a change in burden based on removal of the SDOH and COVID-19 items is to estimate the total increase in the number OASIS assessments expected to be collected in CY 2027 with implementation of all payer OASIS data submissions. In the CY 2023 HH PPS Final Rule, we estimated that all payer OASIS data submission would increase overall annual OASIS assessments by 30 percent. Table G2 shows the total number of OASIS assessments at each

OASIS time point in CY 2023 before implementation of all payer OASIS data submissions. Table 2 also shows the total expected assessments in CY 2027 based on our estimates that implementing all payer submission in will increase the number of assessments at each timepoint by 30 percent. (CY 2023 assessment total + CY 2023 assessment total * 0.3= Estimated CY 2027 Assessment total based on all payer data collection). This estimated total for CY 2027 will be used to calculate the CY 2027 OASIS burden with the planned additions of the SDOH and COVID-19 items and the April 1, 2026 OASIS being finalized with the collection of these items removed. [GRAPHIC] [TIFF OMITTED] TR02DE25.069

The totals from table 39 are used to calculate the hourly burden estimates in table 40 based on the following calculations: BILLING CODE 4120-01-P [GRAPHIC] [TIFF OMITTED] TR02DE25.070

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BILLING CODE 4120-01-C

Table 40 summarizes the estimated clinician hourly burden for the OASIS that will be implemented in 2026 with the finalized changes of a decrease in four data elements at start of care and resumption of care and a decrease in a data element at transfer of care, death at home, and discharge compared to the originally scheduled 2027 OASIS burden if these reductions were not implemented. This is calculated by multiplying the total number of assessments by the decrease in assessment time required. We calculate the 2027 and 2026 burden estimates in minutes and then calculate hourly burden estimates shown in Table 40. We estimated a net decrease of 194,181 hours of clinician burden across all HHAs or 16.31 hours (194,181/11,904) for each of the 11,904 active HHAs.

[GRAPHIC] [TIFF OMITTED] TR02DE25.075

Table 41 summarizes the estimated clinician costs for the 2027 OASIS and the 2026 OASIS with the net reduction of four data elements at start of care and resumption of care and one data element removed from transfer of care, death at home, and discharge using CY 2024 BLS wage inputs. Total clinician costs for 2027 and 2026 are estimated by multiplying total hourly burden for each year as reported in table 40 by the weighted clinician average hourly wage of $91.72. We then calculate the difference in clinician-estimated costs between 2027 and 2026. This calculates the estimated decrease in costs associated with adding the four data elements at the start of care and resumption of care and removing a data element at transfer of care, death at home, and discharge. For the COVID-19 items collected at transfer of care, death at home, and discharge, we estimate a decrease in clinician cost of $4,326,249 or $363 ($4,326,249/11,904) for each of the 11,904 active HHAs. For the four SDOH data elements removed at the start of care or resumption of care, we estimate a decrease in clinician cost of $13,484,033 or $1,133 ($13,484,033/11,904) for each of the 11,904 active HHAs. For all proposals, we estimate a decrease in clinician costs of $17,786,980 between 2027 and 2026 related to the implementation of the proposals outlined in the proposed rule across all HHAs or a $1,494 decrease (-$17,786,980/11,904) for each of the 11,904 active HHAs. This decrease in burden will begin with the April 1, 2026, OASIS assessments. The burden estimates detailed in this section have been submitted for OMB review and approval as part of revision of the information collection request currently approved under OMB control number 0938-1279.\85\

\85\ The currently approved OASIS information collection request expires 12/31/2027. https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202406-0938-007. [GRAPHIC] [TIFF OMITTED] TR02DE25.076

(1) COVID-19 Data Element Burden

Comment: A majority of commenters supported the CMS recommendation to remove the COVID-19 Vaccine: Percent of Patients Who Are Up to Date measure from the HHQRP with most citing the collection burden associated with the measure. Many commenters highlighted the many other sources that can provide national COVID-19 vaccination rates.

Response: We thank commenters for their support. We agree that the burden associated with this measure, including the resources spent by HH staff in trying to ascertain patients' vaccination status, outweigh the benefit of its continued use in the program, given the end of the PHE, the decrease in COVID cases as well as the availability of treatments. After consideration of the public comments, we are finalizing our proposal to remove the COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date measure from the HH QRP beginning with the CY 2026 HH QRP. Beginning with patients discharged on or after April 1, 2026, HHAs would not be required to collect and submit the Patient/Resident COVID-19 Vaccine measure data to CMS. Until that time and with the posting of this final rule, HHAs may

submit any valid response (0--No, 1--Yes or dash) on a Transfer, Death at home, or Discharge OASIS assessment, without any future quality measure implications. (2) SDOH Data Elements Burden

Comment: A slight majority of commenters supported the proposal to remove the four standardized patient assessment data elements focused on collecting information related to SDOH. These commenters often acknowledged the importance of better understanding of SDOH in addressing healthcare challenges but noted that there may be less burdensome methods to obtaining the required SDOH data.

Response: We thank commenters for their support for our proposal to remove these four SDOH items from the standardized patient assessment data elements collected and submitted using the OASIS. We continue to monitor the HH QRP data collection requirements to look for ways to reduce administrative burden, where appropriate, while maintaining a high standard of quality care. We agree that removing these items at this time will alleviate some of the burden on HH providers associated with HH QRP data collection and submission requirements. We intend to align the HH QRP more closely with our overarching goal for improved health care delivery through health IT advances and low-burden interoperable electronic systems. As we stated in the CY 2026 HH PPS proposed rule (90 FR 2908), we plan to refocus efforts on how data elements can improve care coordination, efficiency, reduction in errors, and patient experience.

Final Decision: After consideration of the public comments, we are finalizing our proposal to remove four standardized patient assessment data elements (one item for Living Situation (R0310); two items for Food (R0320A and R0320B); and one item for Utilities (R0330)) collected under the SDOH category from the HH QRP beginning with the CY 2026 HH QRP without modification. c. ICRs for the Modification of the HHCAHPS Survey

Beginning with the CY 2027 Public Reporting Period/CY 2028 Payment Determination as described in section III.H. of the proposed rule, we proposed to modify the HHCAHPS Survey measure beginning in April 2026. Specifically, the updated measures include updates to the Care of Patients and Communication between Providers and Patients measures, and removal of Specific Care Issues measure and replacing this measure with three single-item measures related to reviewing home safety, reviewing medications and discussing side effects of medications. As part of these changes, the HHCAHPS Survey is being reduced by 8 survey items. Under OMB control number 0938-1066,\86\ we estimated the time to complete the current HHCAHPS Survey to be approximately 12 minutes per respondent and approximately 1,043,447 respondents would complete and submit the HHCAHPS Survey as part of the Home Health Quality Reporting Program annually. We estimated the combination of survey removals and additions would result in a decrease of 3 minutes (.05 hour) per respondent to complete the updated version of the HHCAHPS Survey. Therefore, we estimated the updated time to complete the shorter HHCAHPS Survey would be 9 minutes per respondent (0.15 hour) at $32.66 per hour.\87\ Our estimate is based on the written length of the survey and CMS's experience with the revised survey during the mode experiment (CMS 10784, OMB control number 0938-1404). In aggregate, we estimated a burden of 153,884 hours (1,025,894 patients (updated estimated of number of patients) x 0.15 hr.) at a cost of $5,025,851 (153,884 hr. x $32.66/hr.) or $4.90 per survey ($5,025,851/1,025,894 patients). The burden estimates detailed in this section will be submitted for OMB review and approval as part of revision of the information collection request currently approved under OMB control number 0938-1066.

\86\ The currently approved HHCAHPS information collection request expires July 31, 2026.

\87\ To derive the average costs for individuals, we used data from the U.S. Bureau of Labor Statistics' May 2024 National Occupational Employment and Wage Estimates for our salary estimate (www.bls.gov/oes/current/oes_nat.htm). We believe that the burden will be addressed under All Occupations (occupation code 00-0000) at $32.66/hr. since the group of individual respondents varies widely from working and nonworking individuals and by respondent age, location, years of employment, and educational attainment, etc. Unlike our private sector adjustment to the respondent hourly wage (see below), we are not adjusting this figure for fringe benefits and overhead since the individuals' activities would occur outside the scope of their employment.

2. ICRs for the Expanded HHVBP Model a. ICRs for the Changes to the Measure Removal Factors and HHVBP Model Applicable Measure Set

The changes to the measure removal factors, changes to the HHVBP applicable measure set, and the RFI for the expanded HHVBP Model included in section IV. of the proposed rule do not result in an increase in costs to HHAs. Section 1115A(d)(3) of the Act exempts Innovation Center model tests and expansions, which include the expanded HHVBP Model, from the provisions of the PRA. Specifically, this section provides that the provisions of the PRA do not apply to the testing and evaluation of Innovation Center models or to the expansion of such models. 3. ICRs for Updates to the Home Health Agency Conditions of Participation (CoPs) To Align With the OASIS All-Payer Submission Requirements

As discussed in section V. of the final rule, we proposed technical revisions to the HHA CoPs to further clarify that the existing requirement for reporting OASIS information applies to all HHA patients receiving skilled services. This technical change sought to provide clarity by creating alignment between the terminology used in the CoPs and requirements for data collection and submission to OASIS for purposes of the HH QRP. CMS did not propose to introduce any new required OASIS items with the implementation of the all payer proposal that would require a change to OASIS submission processes nor did CMS propose to require any change to HHA electronic medical record systems. HHAs will continue to have access to technical support relative to submission of OASIS data via the QIES Technical Support Office website https://qtso.cms.gov/ and iQIES team at CMS. For a review of the burden and operational costs associated with the transition to the OASIS all- payer submission requirements we refer readers to the CY 2023 HH PPS final rule “Collection of Information” section (87 FR 66877 through 66879) and to the CY 2024 HH PPS final rule for the latest burden estimates (88 FR 77850 through 77855).

Comment: A commenter requested additional clarification regarding the OASIS all-payer requirements. The commenter noted that the proposed policy shift would be a significant operations change for HHAs and the electronic medical record (EMR) systems they utilize. The commenter suggested CMS update the OASIS validation rules and engage EMR vendors in pilot testing.

Response: While the commenter noted the operational change that this policy requires, HHAs have had substantial time to prepare for the transition to the OASIS all-payer requirement as this policy was initially finalized in 2022 in the CY 2023 HH PPS final rule (87 FR 66862). This requirement does not revise the previously-finalized requirements for submitting data to OASIS and does change the data required to be collected

that was finalized in the CY 2023 HH PPS final rule. Therefore, we do not believe this technical change would result in an increase in burden for HHAs. After consideration of public comment, we are finalizing the technical changes to the CoPs as proposed. These technical changes to update terminology further clarify that the requirement for reporting OASIS information applies to all HHA patients receiving skilled services and align the language in the CoPs with the requirements finalized in the CY 2023 and CY 2025 HH PPS final rules. 4. Medicare and Medicaid Provider Enrollment

As discussed in section VI.A. of this final rule, we proposed and are finalizing several changes to our Medicare provider enrollment regulations, with one minor revision to a Medicaid provider enrollment provision in 42 CFR part 455, subpart E. Except as otherwise explained in this section VIII. of this final rule, we do not believe that any of our provider enrollment provisions implicate an ICR burden. a. Submission of Additional Documentation

We proposed to add new paragraph (C) to Sec. 424.510(d)(2)(iii) such that CMS could require a provider or supplier to submit any documentation (that is, documentation beyond that currently required under Sec. 424.510(d)(1)) to verify and confirm the information furnished on the enrollment application; this includes, but is not limited to, documentation regarding the provider's or supplier's ownership or management. We cannot predict the number or types of providers and suppliers that would be requested to provide such documentation or the specific documentation involved; this is because it would vary widely by provider and supplier. Nonetheless, we believe a general estimate, solely for purposes of this ICR section, is possible.

In terms of cost, it has been our experience that Form CMS-855 applications are completed by the provider's or supplier's office staff. Accordingly, we will use the following wage category and hourly rate from the U.S. Bureau of Labor Statistics' (BLS) May 2024 National Occupational Employment and Wage Estimates for all salary estimates (https://data.bls.gov/oes/#/industry/000000). [GRAPHIC] [TIFF OMITTED] TR02DE25.077

We anticipated that: (1) most of the requested documentation would be that which helps validate the provider's or supplier's ownership and management; (2) 5,000 providers and suppliers per year would have to secure and submit it; and (3) it would take the provider or supplier 15 minutes (0.25 hr) to do so. This results in an annual burden of 1,250 hours and $55,350 ($44.28 x 5,000 x 0.25). b. DMEPOS Liability Insurance

To enroll and maintain enrollment in the Medicare program, DMEPOS suppliers under Sec. 424.57(c)(10) must have a comprehensive liability insurance policy of at least $300,000 that covers the supplier's place of business, customers, and employees. We proposed to revise Sec. 424.57(c)(10) such that an “authorized official” of the DMEPOS supplier (as that term is defined in Sec. 424.502) must sign the liability insurance policy. We do not have data indicating the number of DMEPOS suppliers whose liability insurance policies are signed by: (1) an authorized official; or (2) someone of equivalent status within the organization who nonetheless may not be listed as an authorized official on the supplier's application. Therefore, we are unable to project any ICR burden associated with this change. However, we solicited comment from the DMEPOS supplier community on the possible burden. c. Miscellaneous

We also proposed in Sec. 424.516 to reduce the timeframe in which a provider or supplier must report an adverse legal action to CMS from 90 days to 30 days. We do not believe this would result in a change in provider burden. This is because regardless of the reporting timeframe involved, the change must be reported; that is, only the timeframe for disclosure is changing, not the burden.

We received no comments on our provider enrollment ICR burden estimates and are therefore finalizing them as proposed. 5. DMEPOS Supplier Accreditation Organizations (AOs)

Section 424.57 requires that DMEPOS suppliers be accredited by a CMS-approved AO to enroll in and bill the Medicare program. The main purpose of accreditation is to confirm--typically via a survey of the DMEPOS supplier's location--that the supplier meets detailed quality standards involving, for example, its administration, financial management, customer service, and DMEPOS product safety. Section 424.58, which was promulgated in 2006, outlines some of the components and requirements of the DMEPOS accreditation program, which CMS oversees but the AOs largely operate. These components include but are not limited to: (1) the process via which an organization can apply to become an AO; and (2) AO submission of accreditation data to CMS.

Two core concerns have arisen regarding aspects of the DMEPOS accreditation program. First, non-compliance with the quality standards among DMEPOS suppliers has continued notwithstanding the accreditation requirement. Second, we believe that the current provisions in Sec. 424.58 must be strengthened to help ensure that AOs are adequately executing their DMEPOS accreditation activities. In our view, and as explained in section VI.B. of the proposed rule, we believe additional requirements are

needed and proposed (and are finalizing) a number of them.

This section VIII of the this final outlines the estimated ICR burden associated with several of these data categories. Other costs are addressed in the regulatory impact analysis (RIA) of this final rule. We note that only those categories that involve a new burden-- that is, above and beyond the current provisions of Sec. 424.58--are addressed. a. Submission of Data During AO Initial Application and Reapproval Application

Current Sec. 424.58(b) (which would become new paragraphs (c) and (d)) outlines information that organizations must submit when applying or reapplying to become a DMEPOS AO. We proposed additional data that must be provided in these situations. These data elements are outlined in Table 43, which also lists our estimated hour burden of compiling, preparing, drafting, and submitting this information. [GRAPHIC] [TIFF OMITTED] TR02DE25.078

As we believe that clinicians (such as nurses) and AO managers would be most likely to prepare and submit the application, we would use the following May 2024 BLS median wage categories: [GRAPHIC] [TIFF OMITTED] TR02DE25.079

The aforementioned statement in Sec. 424.58(c)(1)(xxiii) must be signed by the AO's chief executive officer (CEO) or someone with equivalent authority within the AO. To account for this task, we would also use May 2024 BLS median wage category of “Chief Executives” (Occupation Code 11-1011). The wage amount is $99.24; with fringe benefits and overhead, it is $198.48.

There are currently 8 CMS-approved DMEPOS AOs. For purposes of this ICR estimate only, we assume that all 8 would apply for reapproval sometime within the next 3-year timeframe (which is the standard OMB approval period) and that 2 organizations would initially apply for AO approval. This would result in a total hour burden for this period of 520 hours (52 hours x 10 organizations). Of these 520 hours, 10 hours (or 1 hour for each of the 10 AOs) would involve the CEO's review and signature of the statement, resulting in a cost of $1,985 (10 x $198.48). As for the remaining 510 hours, we believe that nurses and the aforementioned managers would be equally involved in preparing the application. We would hence use a midpoint wage estimate of $101.71 (($90.00 + $113.42)/2). This results in a total 3-year cost of $53,857 (($101.71 x 510 hours) + $1,985), with an annual burden of 173 hours and $17,952.

Except as otherwise noted, we will use the $101.71 wage figure for the remainder of our DMEPOS accreditation ICR estimates. b. Monthly Submission of Data

Existing Sec. 424.58(c)(1) (new paragraph (e)(1)(i)) requires AOs to submit certain data to CMS on a monthly basis (for example, notice of accreditation decisions). We proposed in new paragraph (e)(1) that each AO must also--as part of its monthly submission to CMS--furnish notice of: (1) the instances where the AO had the discretion to perform a survey but decided not to (including the reason for the AO's decision); and (2) all currently resolved deficiencies among its DMEPOS suppliers.

Although we cannot determine how many DMEPOS AOs there would be over the next 3 years, we will--for purposes of this ICR only--use the current number of 8 AOs.

We estimate it would take an AO a total of 6 hours each month to compile and submit the data in (1) and (2). (That is, about 3 hours for each task.) This would result in an ICR burden over 3 years of 1,728 hours (6 hours x 8 AOs x 12 months x 3 years) at a cost of $175,755 (1,728 hours x $101.71), with the annual burden being 576 hours and $58,585. c. CMS Ad-Hoc Data Requests

We noted that new paragraph (e)(1)(ii) would state that CMS may at any time request the AO to submit any of the information described in paragraph (e)(1)(i); this data must be furnished to CMS within 3 business days of the request. We cannot predict the number of instances where CMS would request this data or the specific information that would be solicited. However, solely for purposes of this ICR, we estimate that we would request paragraph (e)(1)(i) data from each AO 3 times per year and that it would take the AO 3 hours to accumulate data for each request. This would result in a 3-year burden of 216 hours (3 hours x 3 requests x 8 AOs x 3 years) and $21,969 (216 x $101.71). The annual burden would be 72 hours and $7,323. d. Notice to CMS of Changes to the AO's Accreditation Standards, Requirements, or Survey Process

Among the monthly data the AO must submit under current paragraph (c)(1)(v) is notice of any changes to the AO's accreditation standards, requirements, or survey process. We proposed to remove this provision from the monthly reporting requirement and instead in new paragraph (e)(2) require the AO to: (1) report such changes to us 60 days before the planned effective date; and (2) submit detailed information about the changes, the rationale for them, and an accompanying crosswalk. We do not expect the 60-day requirement to impose an additional burden since the changes would still be reported to us, but we believe the additional information in (2) that must be furnished would.

Per our experience, each AO undertakes and reports these program revisions to us about twice per year. We estimate that the additional details that must be submitted would take 2 hours for the AO to compile. The resulting 3-year burden would thus be 96 hours (2 per year x 2 hours x 8 AOs x 3 years) and $9,764 (96 x $101.71), with the annual burden being 32 hours and $3,255. e. Submission of Complaint Data

AOs under existing Sec. 424.58(c)(1)(iii) must report to CMS each month all complaints related to DMEPOS suppliers. We proposed to remove this requirement from Sec. 424.58(c)(1)(iii) and establish a new paragraph (e)(3) devoted exclusively to complaints. There are two new ICR-related provisions therein. Specifically--

Upon receipt of a complaint, the AO must notify CMS in writing of the complaint within 5 calendar days of receiving it; and

Notify CMS in writing of the result of its review of the complaint, the result of the survey, or of any action the AO took against the supplier.

The more frequent reporting of complaints to CMS--as well as notice of the results of the AO's investigation--would constitute an additional ICR burden. Given the number of complaints currently reported to us on a monthly basis, we estimate that each AO would annually report 50 complaints to us and, in turn, submit 50 investigation reports to us. We project that the former would take 1 hour to complete and submit and the latter 3 hours, for an average of 2 hours. This results in a 3-year burden of 4,800 hours ((50 complaint reports + 50 investigation reports)) x 2 hours x 8 AOs x 3 years) at a cost of $488,208 (4,800 x $101.71), with the annual burden being 1,600 hours and $162,736. f. Corrective Action Plans (CAPs)

New paragraph (e)(4) would require AOs to notify CMS in writing of any decision to apply a CAP to a specific supplier within 10 calendar days of the decision. The notice must include: (1) the reason for the decision; (2) a detailed explanation and justification as to why the AO applied a CAP instead of revoking the supplier's accreditation; and (3) the details of the supplier's CAP. We believe that each AO would submit approximately 75 such notices to CMS per year and that each notice would take 2 hours to complete. The 3-year burden would therefore be 3,600 hours (75 submissions x 2 hours x 8 AOs x 3 years) and $366,156 (3,600 x $101.71). The annual burden would be 1,200 hours and $122,052. g. Denials and Terminations of DMEPOS Supplier's Accreditation

Under proposed Sec. 424.58(e)(5)(i), the AO must notify CMS in writing of any decision to deny accreditation to (or terminate the accreditation of) a DMEPOS supplier within 5 calendar days of the decision; the notification must include the reason for the denial or termination. While AOs are currently required under Sec. 424.58(c)(1)(iv) to report DMEPOS supplier terminations to CMS on a monthly basis, new paragraph (e)(5) would increase the frequency with which this information must be provided. We project that each AO would submit approximately 100 such reports to CMS each year. Each report would take 2 hours to prepare and submit. This would result in a 3-year burden of 4,800 hours (100 reports x 8 AOs x 3 years x 2 hours) and $488,208 (4,800 x $101.71) and an annual burden of 1,600 hours and $162,736.

Proposed Sec. 424.58(e)(5)(ii)(A)(5) would require an AO to deny or terminate a DMEPOS supplier's accreditation if directed by CMS. The AO under Sec. 424.58(e)(5)(ii)(B)(2) would also have to notify CMS in writing that it has taken the directed action. We

estimate that each year an AO would submit roughly 20 notices to CMS and that it would take 0.5 hours for the AO to do so each time. The total 3-year burden would thus be 240 hours (20 reports x 0.5 x 8 AOs x 3 years) and $24,410 (240 hours x $101.71). The annual burden would be 80 hours and $8,137. h. Voluntary Terminations

New Sec. 424.58(g) would outline procedures via which an AO can voluntarily withdraw from the DMEPOS accreditation program. Part of this process involves: (1) notifying CMS in writing of its decision; and (2) providing written notice to each of its accredited DMEPOS suppliers. For purposes of this ICR only, we estimate that 1 DMEPOS AO over a 3-year period would voluntarily terminate its accreditation and that the tasks in (1) and (2) would take the AO 6 hours combined to complete (mostly involving the second task, which we believe would be done via a listserv message to all suppliers) at a cost of $610 (1 x 6 hours x $101.71). The annual burden would be 2 hours and $203. i. Involuntary Terminations

New Sec. 424.58(h)(4) would require a terminated AO to provide written notice of the termination to each of its accredited DMEPOS suppliers. As with voluntary terminations, we estimate that 1 DMEPOS AO over a 3-year period would have its CMS approval terminated. We estimate it would take the AO 6 hours to notify its DMEPOS suppliers of the termination via a list-serv message. This would result in a 3-year burden of 6 hours at a cost of $610. The annual burden would be 2 hours and $203. j. Acknowledgement of Suspension and Lifting Thereof

New Sec. 424.58(i) states that if CMS notifies the AO that its accreditation program has been suspended, the AO must send CMS a written acknowledgment of CMS' notice. Likewise, the AO must notify CMS in writing of its acknowledgment of a CMS notification that the suspension has been lifted. We project that 1 AO over a 3-year period would be suspended and that each of the two acknowledgments would take 1 hour to complete and submit. The 3-year burden would hence be 2 hours (1 hour x 2 acknowledgments) at a cost of $203. The annual burden would be 0.667 hours and $68. k. Conflicts of Interest and Consulting

New Sec. 424.58(m) and (n) would establish requirements regarding AO consulting services and conflicts of interest, respectively. There are two principal ICR aspects of these requirements:

The AO's submission of a report upon CMS request regarding any consulting activities it has engaged or is engaging in (paragraph (m)(4)).

Preparation and submission to CMS (upon the latter's request) of the AO's written consulting firewall polices (paragraph (m)(5)).

(These documents must also be submitted with an AO's request for initial approval or reapproval of its DMEPOS accreditation program, though the burden associated with this is included in the ICR calculations for AO initial and reapproval applications.)

We project that the report in paragraph (m)(4) would take an AO 2 hours to complete and submit and that CMS would request it twice per year. This would result in a 3-year burden of 96 hours (2 reports per year x 2 hours x 8 AOs x 3 years) and $9,764 (96 x $101.71), or 32 hours and $3,255 annually. Regarding the firewall policies and procedures, we estimate that it would take the AO 2 hours to prepare and submit these policies and that CMS would request them once a year. The 3-year burden of this activity would be 48 hours (2 hours x 1 request per year x 8 AOs x 3 years) and $4,882, or 16 hours and $1,627 per year. The combined annual ICR burden of the requirements of paragraph (m) are 48 hours (32 + 16) and $4,882 ($3,255 + $1,627). l. AO Changes of Ownership

We proposed in new Sec. 424.58(o) procedures for which a DMEPOS AO can undergo a change of ownership. Said procedures would be those outlined in Sec. 488.5(f). The latter section contains several actions that we believe would have ICR implications for an AO changing its ownership. Table 45 outlines these actions and the estimated time burden of completing each of them: [GRAPHIC] [TIFF OMITTED] TR02DE25.080

Regarding the 135-hour burden for Sec. 488.5(f)(2)(iii), we note that we published a final rule in the April 29, 2022, Federal Register titled “Medicare Program; Accrediting Organizations--Changes of Ownership” (87 FR 25413).

This final rule added new requirements and processes for AO changes of ownership. The estimated burden therein for the activity in Sec. 488.5(f)(2)(iii) was 135 hours, and the material to be submitted would be prepared by individuals in the BLS wage categories of Registered Nurse, Medical or Health Services Manager, and Accountant or Auditor (Occupation Code 13-2011). Therefore, we would use this hour burden for paragraph (f)(2)(iii) (as applied to DMEPOS AO ownership changes) and a combined average wage for these three BLS categories. We previously mentioned the wages for the first two categories, $90.00 and $113.42. For accountants and auditors, the median wage with fringe benefits and overhead is $78.54. The average of these three figures is $93.99.

We assume for purposes of this ICR that 1 DMEPOS AO over a 3-year period would undergo a change of ownership. Using our total hour burden from table 45G8, this would result in a 3-year burden of 152 hours and $14,286. The annual burden would be 51 hours and $4,762. m. DMEPOS Supplier Change in Majority Ownership

We proposed in new Sec. 424.551 that a DMEPOS supplier that undergoes a change in majority ownership (CIMO) (as that term is defined in Sec. 424.551) that does not qualify for an exception under that section must enroll in Medicare as an initial DMEPOS supplier, obtain a new accreditation, and receive an accreditation survey. This would require completion of an initial Form CMS-855S Medicare Enrollment Application--Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Suppliers,\88\ OMB No.: 0938-1056).

\88\ The currently approved CMS-855S information collection request expires 12/31/2025.

We projected in section IX. of the proposed rule that an average of 3,768 DMEPOS suppliers each year have a CIMO. We currently require any DMEPOS supplier undergoing a change of ownership involving a new tax identification number to enroll in Medicare as a new supplier. Since these suppliers already have to complete a new enrollment application, there would be no change in their Form CMS-855S information collection burden. Although we do not have concrete estimates as to what portion of the 3,768 suppliers fall into this category, we believe it is roughly 400-500. We will therefore base our Form CMS-855S burden projections on an estimated 3,300 affected suppliers.

Per previous projections, completion of an initial Form CMS-855S application takes approximately 4 hours, resulting in an annual time burden of 13,200 hours (3,300 hours x 4). In terms of costs, office and administrative support workers (BLS median wage of $44.28) complete the application for a 3.5-hour burden, and a general and operations manager ($99.00 wage) spends 0.5 hours reviewing and signing the form. This results in an annual cost burden of $674,784 ((3.5 hours x 3,300 x $44.28) + (0.5 hours x 3,300 x $99.00)). n. Totals

Table 46 outlines the annual ICR burdens associated with our proposed DMEPOS accreditation provisions: [GRAPHIC] [TIFF OMITTED] TR02DE25.081

The costs of our DMEPOS accreditation provisions to DMEPOS suppliers--as well as additional costs to DMEPOS AOs--are addressed in section IX.C.6. of the proposed rule.

We solicited comment from stakeholders regarding any potential DMEPOS accreditation ICR burdens that may not have been addressed in this section VIII.B.5. of the proposed rule. The burden estimates detailed in this

section will be submitted for OMB review and approval as part of new information collection request. (That is, a request for a new OMB control number.)

We did not receive any comments on our ICR estimates for our proposed DMEPOS accreditation provisions. We are thus finalizing them as proposed. 6. ICRs for the Exemption Process for Prior Authorization of Certain DMEPOS Items (Sec. 414.234(c)(1) and (c)(1)(ii))

We proposed to add technical language to Sec. 414.234(c)(1) that provides for the exemption process in Sec. 414.234(c)(1)(ii). We also proposed to exempt a supplier from the mandatory prior authorization process (OMB Control No. 0938-1293) in newly proposed Sec. 414.234(c)(1)(ii)(A) upon demonstration of compliance with Medicare coverage, coding, and payment rules and that this exemption would remain in effect until CMS withdraws the exemption. In proposed Sec. 414.234(c)(1)(ii)(B), we would provide 60-day notice of an exemption from mandatory prior authorization requirements. Similarly, we proposed to provide 60-day notice if an exemption is withdrawn. We would exempt suppliers that achieved a prior authorization provisional affirmation threshold of at least 90 percent during a periodic assessment. If the rate of prior authorizations with non-affirmations submitted becomes higher than 10 percent during an annual assessment, we would consider withdrawing exemption for the specific noncompliant supplier, until the following periodic assessment.

We estimated there would be savings for compliant suppliers who meet the 90 percent affirmation threshold. We based our savings estimates on presumptions, which we would discuss herein, and internal data obtained from the DME MACs. Compliant suppliers would not have to submit prior authorization requests (PARs). The burden associated with submitting prior authorization requests is the time and effort necessary for the submitter to locate and obtain the supporting documentation for the prior authorization request and to forward the materials to the MAC for review. CMS expects that this information would generally be maintained by suppliers as a normal course of business and that this information would be readily available. The documentation submitted must support medical necessity for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member, Medicare benefit eligibility, and meet all other applicable Medicare statutory and regulatory requirements. a. Wage Estimates

To derive average costs, we used data from the U.S. Bureau of Labor Statistics' (May 2024 Occupational Employment Statistics report) to find the mean hourly wage, the cost of fringe benefits and overhead (calculated at 100 percent of salary), and the adjusted hourly wage. Based on the Bureau of Labor Statistics report (Healthcare Support Occupations), we estimate an average hourly rate of $19.06 with a loaded rate of $38.12.

The process of submitting, and unit cost of reviewing expedited prior authorization requests is the same for standard review. Items on the Required Prior Authorization List are rarely used in emergent situations, consequently, we expect the request for expedited reviews to remain low.

In addition to mail, suppliers can submit documentation through fax, electronic portals, and esMD, so supplier burden should not be affected by the method of submission. CMS estimates that the average time for office clerical activities associated with this task to be 30 minutes. Average labor costs (including 100 percent fringe benefits) used to estimate the costs are calculated using data available from the BLS.

We based the estimated number of responses for Year 1 on the number of prior authorization requests for the DMEPOS items currently on the Required Prior Authorization List for Calendar Year 2024. We estimate a 3 percent increase in the number of PARs received in CYs 2024, 2025, and 2026. In Year One (CY 2026) we anticipate that there would be 232,836 initial requests and 57,017 resubmissions.

We estimated around 30,000 initial prior authorization requests for DMEPOS items that could potentially be added to the Required Prior Authorization List in the future. Of these, we estimated only 80 percent would submit an initial prior authorization request, resulting in 24,000 additional initial requests, plus the estimated CY 2026 initial requests of 232,836, for a total of 256,836 initial requests in CY 2026.

We assumed that 20 percent of the estimated initial prior authorization requests received (256,836) would receive a non- affirmative decision and would resubmit their request, for a total of 51,367 level one resubmissions. We assumed that subsequent resubmissions would be 10 percent of the previous level resubmission, totaling 5,137 for level 2 resubmissions, and 514 for level 3 resubmissions. In sum, we estimated the total number of submissions for Year 1 to be 256,836 initial requests plus 57,017 resubmissions for a total of 313,852 submissions. We estimated the cost of mailing medical records to be $6,275 in Year 1. The total estimated burden for Year 1 is $5,988,332, which includes the time associated with submitting prior authorization requests multiplied by the loaded rate of $38.12 an hour, plus the cost of mailing records and documents. b. Prior Authorization Process for Certain DMEPOS Items

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We expect an annual growth rate of 3 percent for the number of requests based on more people aging into the program and qualifying for coverage. Accordingly, in Year 2 we estimated that there would be 264,541 initial prior authorization requests from Year 1 plus and an additional 24,000 initial requests from codes that would potentially be added to the Required Prior Authorization List in Year 2 for a total of 288,541 initial requests. Using the same rates of resubmissions described in Year 1, we estimated 64,056 resubmission requests for the total number of submissions in Year 2 of 352,597. We assumed 20 percent of initial requests will be resubmitted for a level one total of 57,708. Subsequent resubmissions would be 10 percent of the previous level resubmission, totaling 5,771 for level 2 resubmissions, and 577 for level 3 resubmissions. Accordingly, we estimated a total burden of $6,727,543 for Year 2. [GRAPHIC] [TIFF OMITTED] TR02DE25.083

The annual burden for Year 1 is $5,988,332, the annual burden for Year 2 is $6,727,543 for an average annual burden of $6,357,938.

The provisions permit CMS to exempt suppliers that achieve a prior authorization provisional affirmation threshold of at least 90 percent during a periodic assessment. If the rate of non-payable claims submitted becomes higher than 10 percent during an assessment, we would withdraw exemption for the specific noncompliant supplier. We assessed data from previous years to determine the number of suppliers that would have met the 90 percent compliance rate.

To assess the reduction in burden for compliant suppliers, we started by looking at the total number of provider transaction access numbers (PTANs), a unique identification number assigned by Medicare to providers and suppliers that bill Medicare for services, submitting claims for payment and mandatory prior authorization requests. That total number for 2024 was 9,298. Of the total number of PTANs, 6 percent of those PTANs met the criteria for an exemption from mandatory prior authorization requirements, or 558 total PTANs. We were unable to determine the number of compliant suppliers in future years. However, if we average the data from previous years, the average percentage of compliant suppliers or PTANs is 4 percent. [GRAPHIC] [TIFF OMITTED] TR02DE25.084

The total burden is assessed in Table 49. By reducing the total average annual burden ($6,357,938) by the average number of suppliers (represented by PTANs) not submitting prior authorization requests by 4 percent, we have an average savings of $254,318 per year.

We did not receive comments on this proposal and therefore are finalizing this provision without modification. 7. DMEPOS Competitive Bidding Program a. ICRs for the Submission of Financial Documents (Sec. 414.402)

The following changes will be submitted to OMB for reinstatement under control number 0938-1016 (CMS-10169). CMS notes that we let the previously approved requirements and burden lapse as the requirements/ burden were no longer relevant at the time of the December 31, 2021, expiration date, and we wanted to avoid creating unnecessary confusion and soliciting comment on such outdated requirements/burden.

As discussed in section VII of this final rule, we are streamlining the DMEPOS CBP financial standards requirements and evaluation, while still ensuring that suppliers offered contracts are financially stable enough to participate in the Medicare DMEPOS CBP for the duration of the contract performance period. Specifically, CMS is finalizing that it will only require suppliers to submit a credit report with a numerical credit score or rating during the bid window. The submission of a tax return extract, income statement, balance sheet, and statement of cash flows would no longer be required, which would significantly reduce the time it takes a supplier's Administrative Services Manager to assemble and upload financial documents during the bidding process by minus 5 hours and 15 minutes (from 8 hr and 21 min to 3 hr and 6 min). We anticipate that an Administrative Services Manager has the requisite knowledge, access to information, and decision-making authority related to a bidder's business operations necessary to formulate a bid.

As a result of this revised requirement, CMS will no longer utilize revenue data from the bidder's tax return to determine if a bidder meets the definition of a “small supplier” in the DMEPOS CBP (that is, a supplier that generates gross revenue of $3.5 million or less in annual receipts including Medicare and non-Medicare revenue). In its place, CMS is adding a question to Form A that requires a bidder to attest whether it meets the definition of a small supplier.

While we do not know the exact number of bidders that would bid in the next round, for the purpose of scoring the PRA-related impact of this rule, we assume that the number of bidders would increase by approximately 1,000 bidders (from 1,500 to 2,500 bidders) as a result of the proposals discussed in sections VII.B, C, and F. of this rule. As a result, we estimate there would be approximately 833.33 bidders annually over 3 years (2,500 bidders/3 yr) in the next round and each bidder would complete Form A. This is an increase of 333.33 bidders/yr (1,000 bidders/3 yr).

We expect the estimated burden associated with this new attestation to be minimal, as suppliers should already be aware of their current revenue levels. Specifically, we estimate that the average amount of time to complete the attestation question would be 6 minutes (0.1 hr).

In aggregate, we estimate an annual savings of minus 1,717 hours (333.33 bids/yr x [0.1 hr increase-5.25 hr reduction]) and minus $178,946 (1,717 hr x $104.22/hr).

Our July 2, 2025, NPRM did not receive PRA-related comments from the public. Therefore, CMS is finalizing the proposed provision and burden. b. ICRs for Adjustments to Single Payment Amounts (SPAs) (Sec. 414.408(b))

The following changes will be submitted to OMB for reinstatement under control number 0938-1016 (CMS-10169). CMS notes that we let the previously approved requirements and burden lapse as the requirements/ burden were no longer relevant at the time of the December 31, 2021, expiration date and we wanted to avoid creating unnecessary confusion and soliciting comment on such outdated requirements/burden.

As discussed in section VII of this final rule, we are adding an annual update factor to adjust the SPAs for the second and third year of a DMEPOS CBP contract performance period by the same annual covered item update factors applied to the fee schedule amounts for the items in non-CBAs. Therefore, a bidder will no longer need to account for the potential future effects of price increases when formulating its bid amounts at the time of bidding and entering it on Form B.

We estimate this change will reduce the amount of time for an Administrative Services Manager to complete Form B by minus 24 minutes (0.4 hr) (from 3 hrs to 2.6 hrs). We anticipate that an Administrative Services Manager has the requisite knowledge, access to information, and decision-making authority related to a bidder's business operations necessary to formulate a bid.

While we do not know the exact number of bidders that would bid in the next round, for the purpose of scoring the PRA-related impact of this rule, we assume that the average bidder will bid in 22 competitions. While we previously estimated that the average bidder will complete 35 Form Bs, we believe that the additional 1,000 bidders (from 1,500 to 2,500 bidders as noted in VIII.B.7.a. of this final rule) will only submit, on average, bids for approximately two competitions in the next round of the DMEPOS CBP, thereby reducing the average number of Form B submissions by minus 13 competitions/bidder (35 current--22 revised).

However, when considering the decrease in the number of competitions each bidder will submit a bid(s), on average, along with the number of additional bidders, we estimate a reduction of minus 97,000 hours ([Current: 1,500 bidders x 35 competitions/bidder x 3 hrs)]--[Revised: 2,500 bidders x 22 competitions/bidder x 1.1 hr)] and minus $10,109,340 (97,000 hr x $104.22/hr).

The finalizing of adding an annual update factor to adjust the SPAs for the second and third year of a DMEPOS CBP contract performance period was a result of internal review and response to industry feedback.

Our July 2, 2025, the proposed rule did not receive PRA-related comments from the public. Therefore, CMS is finalizing the proposed provision and burden. c. ICRs for Determining the Number of Contracts Awarded (Sec. 414.414(h))

The following changes will be submitted to OMB for reinstatement under control number 0938-1016 (CMS-10169). CMS notes that we let the previously approved requirements and burden lapse as the requirements/ burden were no longer relevant at the time of the December 31, 2021, expiration date and we wanted to avoid creating unnecessary confusion and soliciting comment on such outdated requirements/burden.

As discussed in section VII.B of this rule, we revised how CMS determines the number of DMEPOS CBP contracts to award to DMEPOS suppliers by using contract supplier utilization information from previous rounds of the DMEPOS CBP for product categories previously included in the DMEPOS CBP as well as information on current supplier utilization for new product categories.

With this change, bidders will no longer have to determine the capacity that they could furnish in each competitive bidding area and product category combination (competition) and enter the applicable capacity estimate(s) on Form B of their bid submission. We believe it took a supplier's Administrative Services Manager approximately 90 minutes (1.5 hr) to determine their estimated capacity for each Form B so the removal of the requirement to determine an estimated capacity in each competition and entering it on each Form B will result in an estimated reduction in burden of minus 1.5 hours per form.

As previously mentioned, while we do not know the exact number of bidders that will bid in the next round, for purposes of scoring the PRA-related impact of this rule, we assume that the average bidder would bid in 22 competitions. While we previously estimated that the average bidder would complete 35 Form B's, we believe that the additional 1,000 bidders (from 1,500 to 2,500 bidders as noted in section VIII.B.7.a. of this final rule) would only submit, on average, bids for approximately two competitions in the next round of the DMEPOS CBP, reducing the average number of Form B submissions by minus 13 competitions/bidder (35 current--22 revised).

We anticipate that an Administrative Services Manager has the requisite knowledge, access to information, and decision-making authority related to a bidder's business operations necessary to formulate a bid.

However, when considering the decrease in the number of competitions each bidder will submit a bid(s), on average, along with the number of additional bidders, we estimate a reduction of minus 97,000 hours ([Current: 1,500 bidders x 35 competitions/bidder x 3 hrs)]--[Revised: 2,500 bidders x 22 competitions/bidder x 1.1 hr)] and minus $10,109,340 (97,000 hr x $104.22/hr). The finalizing of no longer requiring capacity estimates and use of contract supplier utilization information from previous rounds of the DMEPOS CBP for product categories previously included in the DMEPOS CBP, as well as information on current supplier utilization for new product categories, was a result of internal review.

Our July 2, 2025, the proposed rule did not receive PRA-related comments from the public. Therefore, CMS is finalizing the proposed provision and burden. d. ICRs for the Remote Item Delivery (RID) CBA and Revising the Definition of Item Related to Medical Supplies (Sec. 414.402)

The following changes will be submitted to OMB for reinstatement under control number 0938-1016 (CMS-10169). CMS notes that we let the previously approved requirements and burden lapse as the requirements/ burden were no longer relevant at the time of the December 31, 2021, expiration date and we wanted to avoid creating unnecessary confusion and soliciting comment on such outdated requirements/burden.

As discussed in section VII.F of this rule, we are finalizing the creation of a new definition under Sec. 414.402 for the purpose of establishing one or more RID CBAs wherein contract suppliers would be responsible for furnishing the items and services under the product category primarily on a mail order basis to all Medicare beneficiaries regardless of where they live in the CBA, but could also furnish the items on a non-mail order basis.

As discussed in section VII.E of this rule, we are also finalizing that ostomy and urological supplies are medical supplies mandated for inclusion under the DMEPOS CBP by section 1847(a)(2)(A) of the Act.

We assume that both changes will result in an increase in burden as suppliers will potentially have additional CBAs and product categories in which they could bid. However, while we do not know the exact number of bidders that would bid in the next round, for purposes scoring the PRA-related impact of this rule we assume that the average bidder would bid in 22 competitions. We previously estimated that the average bidder would complete 35 Form Bs, we believe that the additional 1,000 bidders (from 1,500 to 2,500 bidders as noted in section VII.B.7.a. of this final rule) would only submit, on average, bids for approximately two competitions in the next round of the DMEPOS CBP, reducing the average number of Form B submissions by minus 13 competitions/bidder (35 current-22 revised).

We estimate that it will take 1 hour at $104.22/hr for a supplier's Administrative Services Manager to develop its bid amount for each product category that they bid and 6 minutes (0.1 hr) to complete Form B.

We anticipate that an Administrative Services Manager has the requisite knowledge, access to information, and decision-making authority related to a bidder's business operations necessary to formulate a bid.

When considering the decrease in the number of competitions each bidder will submit a bid(s), on average, along with the number of additional bidders, we estimate a reduction of minus 97,000 hours ([Current: 1,500 bidders x 35 competitions/bidder x 3 hrs)]-[Revised: 2,500 bidders x 22 competitions/bidder x 1.1 hr)] and minus $10,109,340 (97,000 hr x $104.22/hr).

Our July 2, 2025, NPRM did not receive PRA-related comments from the public. As a result, CMS is finalizing the proposed provision and burden. e. Summary of Annual Burden Estimates for DMEPOS CBP Finalized Requirements BILLING CODE 4120-01-P

[GRAPHIC] [TIFF OMITTED] TR02DE25.085

BILLING CODE 4120-01-C

In the absence of an appropriation for FY 2026 or a Continuing Resolution, the federal government shut down on October 1, 2025. During the funding lapse, which lasted from October 1, 2025 through November 12, 2025, only excepted operations continued, which largely excluded work on this final rule. Accordingly, most of the work on this final rule was not completed in accordance with our usual schedule for final calendar-year-based payment rules, which aims for an issuance date of November 1 followed by an effective date of January 1 to ensure that the policies are effective at the start of the calendar year to which they apply. We ordinarily provide a 60-day delay in the effective date of final rules after the date they are issued. The 60-day delay in effective date generally required by Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (also known as the Congressional Review Act), 5 U.S.C. 801(a)(3), can be waived, however, if the agency finds for good cause that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest, and the agency incorporates a statement of the findings and its reasons in the rule issued. We believe it would be impracticable and contrary to the public interest to delay the effective date of the HH PPS, HH PPS Grouper refinements, recalibration of the case-mix weights, updates to the functional impairment levels and comorbidity subgroups, and quality reporting portions of this final rule. The HH PPS is a calendar-year payment system, and we typically issue the final rule by November 1 of each year to ensure that the payment policies for the system, associated HH PPS Grouper, and quality reporting requirements are effective on January 1, the first day of the calendar year to which the policies are intended to apply. If the effective date of this final rule were to be delayed by 60 days, the policies adopted in this final rule would not be effective until after January 1, 2026 which would result in HHAs receiving 2025 payment rates, instead of receiving 2026 payment rates. This would be contrary to the public's interest in ensuring that home health agencies and state survey agencies receive appropriate payments in a timely manner. For these reasons we find that the delayed effective date is both impracticable and contrary to the public interest, and we are waiving such delay in the effective date of this final rule.

Section 1895(b)(1) of the Act requires the Secretary to establish an HH PPS for all costs of home health services paid under Medicare. In addition, section 1895(b) of the Act requires: (1) the computation of a standard prospective payment amount include all costs for home health services covered and paid for on a reasonable cost basis and that such amount be initially based on the most recent audited cost report data available to the Secretary; (2) the prospective payment amount under the HH PPS to be an appropriate unit of service based on the number, type, and duration of visits provided within that unit; and (3) the standard prospective payment amount be adjusted to account for the effects of case-mix and wage levels among HHAs. Section 1895(b)(3)(B) of the Act addresses the annual update to the standard prospective payment amounts by the home health applicable percentage increase. Section 1895(b)(4) of the Act governs the payment computation. Sections 1895(b)(4)(A)(i) and (b)(4)(A)(ii) of the Act requires the standard prospective payment amount be adjusted for case-mix and geographic differences in wage levels. Section 1895(b)(4)(B) of the Act requires the establishment of appropriate case-mix adjustment factors for significant variation in costs among different units of services. Lastly, section 1895(b)(4)(C) of the Act requires the establishment of wage adjustment factors that reflect the relative level of wages, and wage-related costs applicable to home health services furnished in a geographic area compared to the applicable national average level.

Section 1895(b)(3)(B)(iv) of the Act provides the Secretary with the authority to implement adjustments to the standard prospective payment amount (or amounts) for subsequent years to eliminate the effect of changes in aggregate payments during a previous year or years that were the result of changes in the coding or classification of different units of services that do not reflect real changes in case- mix. Section 1895(b)(5) of the Act provides the Secretary with the option to make changes to the payment amount otherwise paid in the case of outliers because of unusual variations in the type or amount of medically necessary care. Section 1895(b)(3)(B)(v) of the Act requires HHAs to submit data for purposes of measuring health care quality and links the quality data submission to the annual applicable percentage increase.

Sections 1895(b)(2) and 1895(b)(3)(A) of the Act, as amended by sections 51001(a)(1) and 51001(a)(2) of the BBA of 2018 respectively, required the Secretary to implement a 30-day unit of payment, for 30- day periods beginning on and after January 1, 2020. Section 1895(b)(3)(D)(i) of the Act, as added by section 51001(a)(2)(B) of the BBA of 2018, requires the Secretary to annually determine the impact of differences between assumed behavior changes, as described in section 1895(b)(3)(A)(iv) of the Act, and actual behavior changes on estimated aggregate expenditures under the HH PPS with respect to years beginning with 2020 and ending with 2026. Section 1895(b)(3)(D)(ii) of the Act requires the Secretary, at a time and in a manner determined appropriate, through notice and comment rulemaking, to provide for one or more permanent increases or decreases to the standard prospective payment amount (or amounts) for applicable years, on a prospective basis, to offset for such increases or decreases in estimated aggregate expenditures, as determined under section 1895(b)(3)(D)(i) of the Act. Additionally, 1895(b)(3)(D)(iii) of the Act requires the Secretary, at a time and in a manner determined appropriate, through notice and comment rulemaking, to provide for one or more temporary increases or decreases to the payment amount for a unit of home health services for applicable years, on a prospective basis, to offset for such increases or decreases in estimated aggregate expenditures, as determined under section 1895(b)(3)(D)(i) of the Act. The HH PPS wage index utilizes the wage adjustment factors used by the Secretary for purposes of sections 1895(b)(4)(A)(ii) and (b)(4)(C) of the Act for hospital wage adjustments. 2. HH QRP

Section 1895(b)(3)(B)(v) of the Act authorizes the HH QRP, which requires HHAs to submit data in accordance with the requirements specified by CMS. Failure to submit data required under section 1895(b)(3)(B)(v) of the Act with respect to a program year would result in the reduction of the annual home health market basket percentage increase otherwise applicable to an HHA for the corresponding calendar year by 2 percentage points. 3. Expanded HHVBP Model

In the CY 2022 HH PPS final rule (86 FR 62292 through 62336) and codified at 42 CFR part 484, subpart F, we finalized our policy to expand the HHVBP Model to all Medicare certified

HHAs in the 50 States, territories, and District of Columbia beginning January 1, 2022. CY 2022 was a pre-implementation year. CY 2023 was the first performance year in which HHAs individual performance on the applicable measures affects their Medicare payments in CY 2025. In this final rule, we include changes to the expanded HHVBP Model applicable measure set and measure weights, a new measure removal factor, and summarize comments received in response to a request for information (RFI) related to potential future measure concepts that was included in the proposed rule. 4. Updates to the Home Health Agency CoPs To Align With the OASIS All- Payer Submission Requirements

This final rule updates the CoPs to clarify that the OASIS all- payer submission requirement applies to all HHA patients receiving skilled services. beneficiaries. 5. Provider Enrollment

Consistent with section 1866(j) of the Act, we proposed several Medicare provider enrollment provisions to strengthen and clarify certain aspects of the provider enrollment process. These include but are not limited to: (1) adding and modifying grounds for denying, revoking, or deactivating a provider's or supplier's Medicare enrollment; and (2) expanding the reasons for which CMS can apply a retroactive effective date for provider and supplier enrollment revocations. These changes are necessary to help ensure that payments are made only to qualified providers and suppliers, which we believe would assist in protecting the Trust Funds and Medicare beneficiaries. 6. DMEPOS Supplier Accreditation Organizations

Section 1834(a)(20) of the Act and 42 CFR 424.57 require DMEPOS suppliers to be accredited by a CMS-approved AO to enroll in and bill the Medicare program. The main purpose of accreditation is to confirm-- typically via a survey of the DMEPOS supplier's location--that the supplier meets detailed quality standards involving, for example, its administration, financial management, customer service, and DMEPOS product safety. Section 424.58 outlines some of the components and requirements of the DMEPOS accreditation program. However, this regulatory section has not been updated since its promulgation in 2006. Given the ongoing problem of non-compliant DMEPOS suppliers--as well as the regulatory gaps that exist in Sec. 424.58--we believe it is necessary via this final rule to strengthen our oversight of DMEOS accreditation by enhancing the regulatory requirements of Sec. 424.58. 7. DMEPOS Prior Authorization

Consistent with provisions in section 1834(a)(15) of the Act and existing authority at Sec. 414.234(c)(1)(ii) that permits exemption from prior authorization for certain compliant suppliers, we proposed and are finalizing guidelines for establishing an exemption and withdrawal of an exemption. Furthermore, we are finalizing the proposed notification requirements to put suppliers on notice that the exemption has either been granted or withdrawn. 8. DMEPOS Competitive Bidding Program

This rule revises the DMEPOS CBP to enhance its effectiveness in achieving the objectives of the program as mandated by section 1847(a) of the Act. This rule revises how SPAs mandated by section 1847(b)(5)(A) of the Act will be calculated and how CMS determines the number of contracts it would award in each CBA for every product category, taking into account the ability of bidding entities (bidders) to furnish items or services in sufficient quantities to meet the anticipated needs of individuals for such items or services in the CBA on a timely basis as mandated by section 1847(b)(4)(A) of the Act. This rule will also apply annual inflation update factors to the SPAs. Additionally, this final rule would establish special payment rules for class II continuous glucose monitors and insulin infusion pumps to pay for these items and all related supplies and accessories on a 90-day rental basis under the DMEPOS CBP. This rule classifies class III continuous glucose monitors and insulin infusion pumps used in conjunction with class III continuous glucose monitors as items that require frequent and substantial servicing and make payment for the items using the same 90-day rental method and payment amounts established for class II continuous glucose monitors and insulin infusion pumps under the DMEPOS CBP. This rule also establishes the definition of “remote item delivery competitive bidding area” under the DMEPOS CBP. In addition, this final rule revises the methodology used to establish bid limits and addresses the conditions for determining when contracts cannot be awarded in accordance with section 1847(b)(2)(A)(iii) of the Act because the total amounts to be paid to contractors in a CBA are expected to be less than the total amounts that will otherwise be paid. This proposed rule also revises the definition of “item” to clarify that items that may be included in a CBP include medical supplies, including ostomy, tracheostomy, and urological supplies in accordance with section 1847(a)(2)(A) of the Act. Also, this proposed rule streamlines the requirements and evaluation of the DMEPOS CBP financial standards as well as the processes for evaluating and notifying a bidder of any applicable covered document(s) not submitted by the CDRD. In addition, this rule codifies the DMEPOS CBP bid surety bond rider process. This rule also adds a Tribal exception to the DMEPOS CBP. This rule adds a termination clause to the DMEPOS CBP supplier contracts that could be utilized during a public health emergency.

We have examined the impacts of this final rule as required by E.O. 12866, “Regulatory Planning and Review”; E.O. 13132, “Federalism ; E.O. 13563, “Improving Regulation and Regulatory Review”; E.O. 14192, “Unleashing Prosperity Through Deregulation”; and the Regulatory Flexibility Act (RFA), 5 U.S.C. 601 through 612; section 1102(b) of the Social Security Act; section 202 of the Unfunded Mandates Reform Act of 1995.”; and the Congressional Review Act (5 U.S.C. 804(2)).

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select those regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; and distributive impacts). Section 3(f) of Executive Order 12866 defines a “significant regulatory action” as any regulatory action that is likely to result in a rule that may: (1) have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the Executive Order itself.

A regulatory impact analysis (RIA) must be prepared for a regulatory action

that is significant under section 3(f)(1) of Executive Order 12866. Based on our analysis, OMB's Office of Information and Regulatory Affairs has determined this rulemaking is significant pursuant to section 3(f)(1) of Executive Order 12866. Furthermore, in accordance with Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (also known as the Congressional Review Act), OIRA has determined that this rule meets the criteria for a major rule as defined in 5 U.S.C. 804(2). Accordingly, we have prepared a regulatory impact analysis that presents, to the best of our ability, the estimated costs and benefits associated with this rulemaking.