[Federal Register Volume 62, Number 171 (Thursday, September 4, 1997)]
[Proposed Rules]
[Pages 46698-46707]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-23380]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Care Financing Administration
42 CFR Part 416
[BPD-831-P]
RIN 0938-AH15
Medicare Program; Adjustment in Payment Amounts for New
Technology Intraocular Lenses
AGENCY: Health Care Financing Administration (HCFA), HHS.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would establish in regulations a process
under which interested parties may request, with respect to a class of
new technology intraocular lenses (IOLs), a review of the
appropriateness of the current payment amount for IOLs furnished by
Medicare-participating ambulatory surgical centers.
The rule implements section 141(b) of the Social Security Act
Amendments of 1994, which requires us to develop and implement this
process.
DATES: Comments will be considered if we receive them at the
appropriate address, as provided below, no later than 5 p.m. on
November 3, 1997.
ADDRESSES: Mail written comments (1 original and 3 copies) to the
following address: Health Care Financing Administration, Department of
Health and Human Services, Attention: BPD-831-P, P.O. Box 26688,
Baltimore, MD 21207-0488.
If you prefer, you may deliver your written comments (1 original
and 3 copies) to one of the following addresses:
Room 309-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW.,
Washington, DC 20201, or
Room C5-09-26, 7500 Security Boulevard, Baltimore, MD 21244-1850.
Comments may also be submitted electronically to the following e-
mail address: [email protected] E-mail comments must include the full
name and address of the sender and must be submitted to the referenced
address to be considered. All comments must be incorporated in the e-
mail message because we may not be able to access attachments.
Electronically submitted comments will be available for public
inspection at the Independence Avenue address below.
Because of staffing and resource limitations, we cannot accept
comments by facsimile (FAX) transmission. In commenting, please refer
to file code BPD-831-P. Comments received timely will be available for
public inspection as they are received, generally beginning
approximately 3 weeks after publication of a document, in Room 309-G of
the Department's offices at 200 Independence Avenue, SW., Washington,
DC, on Monday through Friday of each week from 8:30 a.m. to 5 p.m.
(phone: (202) 690-7890).
Copies: To order copies of the Federal Register containing this
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FOR FURTHER INFORMATION CONTACT: Cathaleen Ahern, (410) 786-4515.
SUPPLEMENTARY INFORMATION:
I. Background
A. Payment for Ambulatory Surgical Center Facility Services
Section 1832(a)(2)(F)(i) of the Social Security Act (the Act)
provides that benefits under the Medicare supplementary medical
insurance program (Part B) include services furnished in connection
with surgical procedures that, under section 1833(i)(1)(A) of the Act,
are specified by us and are performed on an inpatient basis in a
hospital but that also can be performed safely on an ambulatory basis
in an ambulatory surgical center (ASC) or in a hospital outpatient
department. To participate in the Medicare program as an ASC, a
facility must meet the standards specified under section
1832(a)(2)(F)(i) of the Act and 42 CFR 416.25 (``Basic requirements'').
Our regulations at 42 CFR part 416 contain the coverage and payment
rules for services furnished by Medicare-participating ASCs.
Section 1833(i)(2)(A) of the Act authorizes us to pay ASCs a
prospectively-determined rate for facility services. ``Facility
services'' means services that are furnished in conjunction with
covered surgical procedures performed in an ASC, or in a hospital on an
outpatient basis. Section 416.61 sets forth included and excluded
facility services. ASC facility services payment rates represent our
[[Page 46699]]
estimate of a fair fee that takes into account the costs incurred by
ASCs generally in furnishing facility services in connection with
performing a surgical procedure. ASC payment rates do not include
physician fees and other medical items and services, such as laboratory
services or prosthetic devices, for which separate payment may be
authorized under other provisions of the Medicare program. However, an
intraocular lens (IOL) is included as an ASC facility service under
section 1833(i)(2)(A)(iii) of the Act.
Payment for ASC facility services is subject to the usual Medicare
Part B deductible and coinsurance requirements. Therefore,
participating ASCs are paid 80 percent of the prospectively-determined
rate adjusted for regional wage variations. The beneficiary pays a
coinsurance amount equal to 20 percent of the wage-adjusted ASC
facility fee.
Currently, the Medicare program covers approximately 2,300
procedures performed in an ASC. We assign to each procedure one of
eight standard payment rates. Collectively, the procedures assigned a
particular payment rate constitute an ASC payment group. The current
payment group rates follow:
Group 1--$312
Group 2--$419
Group 3--$479
Group 4--$591
Group 5--$674
Group 6--$785
Group 7--$935
Group 8--$923
All procedures within a payment group are paid the same rate, adjusted
for geographic wage variation. (A detailed discussion of the ASC
payment methodology and rate-setting procedures is set forth in the
final notice published in the Federal Register on February 8, 1990,
entitled ``Revision of Ambulatory Surgery Center Payment Rate
Methodology'' (55 FR 4526).)
A ninth payment group allotted exclusively to extracorporeal
shockwave lithotripsy services was established in the notice with
comment period published December 31, 1991 (56 FR 67666). The decision
in American Lithotripsy Society v. Sullivan, 785 F. Supp. 1034 (D.D.C.
1992), prohibits us from paying for these services under the ASC
benefit at this time. Extracorporeal shockwave lithotripsy payment
rates are the subject of a separate document, and a proposed notice was
published October 1, 1993 (58 FR 51355).
B. Payment for Intraocular Lenses Furnished in an Ambulatory Surgical
Center
At the inception of the ASC benefit on September 7, 1982, Medicare
paid 80 percent of the reasonable charge for IOLs supplied for
insertion concurrent with or following cataract surgery performed in an
ASC. Section 4063(b) of the Omnibus Budget and Reconciliation Act of
1987 (OBRA 1987) (Pub. L. 100-203), enacted on December 22, 1987,
amended section 1833(i)(2)(A) of the Act to mandate that we include
payment for an IOL furnished by an ASC for insertion during or
following cataract surgery as part of the ASC facility fee rather than
paying for the IOL separately, in addition to the facility fee. Payment
included in the facility fee for an IOL must be reasonable and related
to the cost of acquiring the class of IOL involved.
Thus, for services furnished beginning March 12, 1990, which was
the effective date of the final notice published in the Federal
Register on February 8, 1990, entitled ``Revision of Ambulatory Surgery
Center Payment Rate Methodology'' (55 FR 4526), Medicare included
payment for an IOL in payment group 6 and payment group 8, the two
payment groups that include IOL insertion procedures. The Physicians'
Current Procedural Terminology (CPT) codes for groups 6 and 8 and their
descriptors follow:
Payment Group 6
CPT code 66985--Insertion of intraocular lens prosthesis (secondary
implant), not associated with concurrent cataract removal.
CPT code 66986--Exchange of intraocular lens. (This CPT code was
first listed in CPT 1992; we added it to the ASC list effective January
30, 1992.)
Payment Group 8
CPT code 66983--Intracapsular cataract extraction with insertion of
intraocular lens prosthesis (one stage procedure).
CPT code 66984--Extracapsular cataract removal with insertion of
intraocular lens prosthesis (one stage procedure), manual or mechanical
technique (eg, irrigation and aspiration or phacoemulsification).
Initially, we set the payment amount for IOLs at $200. We did not
categorize IOLs into different classes for the reasons discussed below.
The $200 allowance applied to any IOL furnished for surgical insertion
by an ASC.
Our identification of $200 as the appropriate amount of payment for
an IOL was influenced by the Office of Inspector General's (OIG's)
finding that ASCs were able to negotiate an average IOL price of $200,
and that discounts in unknown amounts were available to other ASCs.
(See Medicare Certified Ambulatory Surgical Centers, Cataract Surgery
Costs and Related Issues, OAI-09-88-00490, published March 1988. Copies
can be obtained from the Office of Inspector General, Department of
Health and Human Services, (415) 556-0675.)
In Outpatient Ophthalmic Surgery Society, Inc. v. Shalala, No. 90-
0305 (D.D.C. January 31, 1994), the court rejected both arguments that
were mounted in a challenge to the $200 IOL payment amount. The court
deferred to our reliance on the OIG study as the basis for determining
the IOL payment amount and upheld our determination that there is no
medical justification to recognize different classes of IOLs.
Section 4151(c)(3) of the Omnibus Budget Reconciliation Act of 1990
(OBRA 1990) (Pub. L. 101-508), enacted on November 5, 1990, froze the
IOL payment amount at $200 for IOLs furnished by ASCs in conjunction
with surgery performed during the period beginning November 5, 1990 and
ending December 31, 1992. We continued paying an IOL allowance of $200
from January 1, 1993 through December 31, 1993.
Section 13533 of the Omnibus Budget Reconciliation Act of 1993
(OBRA 1993) (Pub. L. 103-66), enacted on August 10, 1993, mandated that
payment for an IOL furnished by an ASC be equal to $150 beginning
January 1, 1994 through December 31, 1998.
II. Provisions of This Proposed Rule
A. Requirement for Review of Payment for New Technology Intraocular
Lenses
On October 31, 1994, the Congress passed the Social Security Act
Amendments of 1994 (SSAA 1994) (Pub. L. 103-432). Section 141(b) of
SSAA 1994 requires us, not later than 1 year after the date of
enactment (that is, by October 31, 1995), to develop and implement a
process under which interested parties may request, with respect to a
class of new technology IOLs, a review of the appropriateness of the
payment amount provided for IOLs furnished by ASCs under section
1833(i)(2)(A)(iii) of the Act. Since January 1, 1994, the payment
amount for IOLs furnished by ASCs under section 1833(i)(2)(A)(iii) of
the Act has been $150.
Section 141(b)(1) of SSAA 1994 stipulates that an IOL may not be
treated as a new technology IOL unless it has been approved by the Food
and Drug
[[Page 46700]]
Administration (FDA). Section 141(b)(2) of SSAA 1994 requires that, in
determining whether to provide a payment adjustment, we take into
account whether use of the IOL is likely to result in reduced risk of
intraoperative or postoperative complication or trauma, accelerated
postoperative recovery, reduced induced astigmatism, improved
postoperative visual acuity, more stable postoperative vision, or any
other comparable clinical advantages.
Section 141(b)(3) of SSAA 1994 requires that we publish at least
annually a list of the requests received for review of the
appropriateness of the IOL payment amount with respect to a new
technology IOL. We must provide a 30-day comment period on the IOLs
that are the subject of the requests for review. Within 90 days of the
close of the comment period, we must publish a notice of the
determinations made with respect to the appropriateness of the IOL
payment amount for the IOLs for which a review was requested. Any
adjustment of the IOL payment amount (or payment limit) for a
particular IOL or class of IOLs that we determine is warranted would be
effective not later than 30 days following publication of the final
notice of our determination.
Implementation of section 141(b) of SSAA 1994 requires three
principal policy decisions:
Identification of a class or classes of new technology
IOLs.
Determination of whether the current IOL payment amount is
appropriate for an IOL identified as belonging to a class of new
technology IOLs.
Identification of the payment adjustment to be applied if
the current payment amount is found to be inappropriate.
In the sections that follow, we discuss the factors that led us to
the process that is the subject of this proposed rule. We welcome
comments on the options selected and rejected, and on potential
alternatives not considered.
B. Identification of a Class of New Technology Intraocular Lenses
1. Distinguishing Among Classes of Intraocular Lenses
In order to prepare the final notice entitled ``Revision of
Ambulatory Surgery Center Payment Rate Methodology'' (55 FR 4526) that
was published in the Federal Register on February 8, 1990, we sought
supporting documentation that would justify pricing IOLs according to
IOL type or ``class,'' and that would establish the basis for
distinguishing among different types of IOLs, such as placement of the
IOL within the eye, either as anterior chamber or posterior chamber
IOLs; or the style of the IOL, either single-piece or multi-piece; or
characterization of the IOL as ``advanced technology.''
On February 22, 1989, the FDA advised us in a letter that its
premarket approval review process determined whether IOLs were ``safe
and effective'' not by comparing IOLs with one another, but by
comparing them with a set of historical IOL data known collectively as
the ``grid.'' The FDA noted that no additional labeling or advertising
claims of the superiority of one IOL (or type of IOL) over another had
been approved at that time; that is, medical benefits of one IOL or
type of IOL over another had not been proven in the studies that were
submitted to the FDA. There were no across-the-board differences in the
indications and contraindications or in the warnings sections of the
package insert that would imply across-the-board medical benefits for
one IOL or type of IOL over another.
The studies that were submitted to HCFA at that time failed to
yield conclusive evidence of specific clinical conditions or
indications that required or influenced the use of one IOL over
another, nor did HCFA find justification for a differentiated price
structure based on IOL type. We therefore determined that a $200
payment amount was both reasonable and related to the costs incurred by
ASCs to acquire IOLs available at that time. As noted above, a Federal
court sustained this determination. (See Outpatient Ophthalmic Surgery
Society, Inc. v. Shalala, No. 90-0305 (D.D.C. January 31, 1994).)
2. Criterion To Define a Class of New Technology Intraocular Lenses
There still is no universally accepted definition of what
constitutes a ``class of new technology intraocular lenses.'' Section
141(b) of SSAA 1994 does not define new technology IOLs other than to
specify that an IOL may not be treated as a new technology IOL unless
it has been approved by the FDA. We must therefore first define the
characteristics that distinguish a ``new technology'' IOL from other
IOLs in order to comply with section 141(b) of SSAA 1994.
Section 141(b) of SSAA 1994 requires that we take clinical outcomes
such as ``reduced risk of intraoperative or postoperative complication
or trauma'' and ``reduced induced astigmatism'' into account in
determining whether to provide a payment adjustment with respect to a
particular IOL.
Because they are identified with such specificity, we infer that
the clinical outcomes listed in the law are intended to characterize
IOLs that belong to a ``class of new technology intraocular lenses,''
the use of which not only produces the specified clinical outcomes, but
does so to a greater degree than other IOLs. We submit that the latter
consideration is crucial because of the abundant evidence that
demonstrates that IOLs have attained a level of technical
sophistication, clinical success, and patient satisfaction that exceeds
that of the more than 1 million IOLs implanted during clinical trials
conducted between 1978 and 1982. (An analysis of the 1978 through 1982
clinical trial data forms the FDA's ``grid,'' the historical control
group against which newer IOLs are measured.) To illustrate, 93 percent
and 96.8 percent of patients in more recent trials of two IOLs that
were approved in 1994 achieved visual acuity of 20/40 or better,
compared to 88 percent of patients in the historical control group. The
``best cases,'' those without any preoperative ocular pathology or
macular degeneration at any time, achieved visual acuity of 20/40 or
better in 97 percent and 99.5 percent of the patients in the two newer
trials, compared to 94 percent of the control group grid patients. The
high level of improved vision and the low rate of adverse effects
already attainable using currently available IOLs seem to leave little
room for substantive improvements in the areas listed as desirable
outcomes in SSAA 1994. At issue, then, is how to recognize IOLs that
exceed the already superior levels of performance of IOLs readily
accessible in the current market to such an extent that they warrant
being recognized as belonging to a separate and distinct class of IOLs.
Determining if use of a particular IOL results in specific clinical
outcomes, and the degree to which outcomes attainable by use of that
IOL exceed what would be expected if a different IOL were used,
requires an assessment of scientific data. We therefore considered
convening an expert panel to evaluate claims of the clinical
superiority of an IOL, or asking contractor medical directors to do so.
Part of the FDA's responsibility is granting premarket approval of
applications for new IOLs, through analysis by specialists such as
ophthalmologists; chemical, biomedical, and mechanical engineers;
microbiologists; and toxicologists. As part of the premarket approval
process, an FDA group of experts evaluates
[[Page 46701]]
claims of safety and effectiveness, and approves the claims for the
purposes of labeling and advertising. The FDA also has an advisory
panel composed of practicing ophthalmologists and other clinicians who
review clinical data and advise the FDA on the approvability of
applications. This panel reviews any new device that presents new
questions of safety and effectiveness.
Because the expertise and review process already exist within the
Department of Health and Human Services, it would be duplicative for us
to convene an expert panel for the purpose of evaluating claims of the
clinical superiority of an IOL. Therefore, we propose that the
criterion for identifying an IOL to be treated by us as a ``new
technology'' IOL under the process proposed in this rule be that all
claims of the IOL's specific clinical advantages and superiority over
existing IOLs with respect to the factors listed in section 141(b) of
SSAA 1994, for example, reduced risk of intraoperative or postoperative
complication or trauma, accelerated postoperative recovery, reduced
induced astigmatism, improved postoperative visual acuity, more stable
postoperative vision, or other comparable clinical advantages, have
been approved by the FDA for labeling and advertising purposes.
We asked the FDA if the premarket approval process would allow it
to approve these claims for labeling and advertising purposes. The FDA
responded on March 31, 1995 as follows:
Intraocular lenses are regulated by the FDA as Class III,
restricted devices that require premarket approval (PMA) prior to
marketing in the United States. FDA's authority to regulate labeling
can be found throughout the Federal Food, Drug and Cosmetic Act
(FFDCA) (i.e., Sections 201, 301, 501, 502, 507, 519, 520, 701,
704). IOL labeling is reviewed and approved by the FDA as part of
the PMA review process (Section 515(c)(1)(f) of the FFDCA). Any
extraordinary labeling claims are similarly reviewed by the FDA as
part of the PMA process. A device would be deemed to be misbranded
if `its labeling is false or misleading in any particular' (Section
502(a) of the FFDCA).
As a restricted device, an intraocular lens would also be deemed
to be misbranded if its advertising is false or misleading or lacks
information required by the FFDCA, including intended uses (Sections
502(q) and (r) of the FFDCA). * * * Both clinical and bench testing
could be used by firms to document additional claims, although
clinical data would be needed if the clinical relevance or benefit
of the ``high-tech'' feature were not well established.
In order to further define what distinguishes an IOL that would be
treated as a ``new technology'' IOL under section 141(b) of SSAA 1994,
we considered proposing as a second criterion the requirement that the
IOL be appropriately characterized as a product of ``new technology.''
We would have expected a ``new technology'' IOL to embody materials,
design, fabrication, or other features that are ``new,'' that is,
original and generally recognized as a significant innovation relative
to the materials, design, fabrication, or features of contemporary
IOLs. However, any lens, whether new or previously approved, would have
to demonstrate clinical advantages to the FDA's satisfaction in order
to comply with the SSAA 1994 requirement of achieving clinical
advantages. Thus, we hold the view that this definition of ``new'' is
not required. We welcome comments on this issue.
Once we determine that an IOL satisfies the clinical criterion
proposed above as the standard for treating an IOL as a ``new
technology lens,'' that IOL will be considered as belonging to a
``class of new technology lenses'' for the purposes of implementing the
payment review in accordance with section 141(b) of SSAA 1994 as
described below.
3. Five-Year Limit on Subsets of ``New Technology''
We propose to impose certain constraints on payment adjustments
that result from the process that is the subject of this proposed rule
to ensure that Medicare payments for IOLs furnished under section
1833(i)(2)(A)(iii) of the Act remain reasonable and related to their
acquisition cost.
We do not believe that all IOLs that could satisfy the overall
criteria of ``new technology'' proposed in this rule would necessarily
be of the same type or category. Rather, based on our assessment of the
kinds of IOLs that are currently in clinical trials, we believe ``new
technology'' IOLs could logically be grouped into smaller subsets of
``new technology,'' each of which is defined or identified by a common
salient feature or characteristic, such as fabrication from the same
material, or being multifocal in design, or designed to correct
astigmatism.
For payment purposes, after we accept an IOL as satisfying the
criterion that we have proposed for belonging to a ``class of new
technology lenses,'' we propose to assign that IOL to a subset of IOLs
with which it shares a common feature that distinguishes it from other
``new technology'' IOLs. We further propose to set the lifespan of each
subset of ``new technology'' IOLs at 5 years. That is, beginning the
sixth year following our initial recognition of a ``new technology''
subset, the new technology attribute that the IOLs in the subset have
in common would cease to be considered a characteristic of ``new
technology,'' and the Medicare payment adjustment for IOLs in that
subset would be discontinued. We would not consider for payment
adjustment any other IOLs whose primary distinguishing feature was that
attribute. For IOLs approved at the beginning of the fifth year of the
subset term, Medicare would pay any ``new technology'' adjustment for 1
year only.
We are proposing a 5-year limit because defining a ``new
technology'' characteristic as ``new'' for fewer than 5 years does not
seem fair to manufacturers whose model(s) of the new technology IOL may
receive FDA approval sometime after the original IOL that opened the
subset within the class of ``new technology'' IOLs receives its
premarket approval. But to define a ``new technology'' characteristic
as ``new'' for more than 5 years seems to impose an unnecessary and
unwarranted drain on the Medicare trust fund, given the natural course
of market forces that have repeatedly succeeded in reducing IOL costs
in a few years following introduction of a modification or innovation
in design or material.
4. Impact of Memorandum of Understanding
On September 19, 1995, we published a final rule with comment
period in the Federal Register entitled ``Medicare Program; Criteria
and Procedures for Extending Coverage to Certain Devices and Related
Services'' (60 FR 48417). That regulation discussed a memorandum of
understanding between the FDA and HCFA regarding extending Medicare
coverage to certain investigational devices. Although the criteria to
be used in the process described in the rule include determining
whether or not a ``significant modification'' has been made to a
device, that determination will not affect the process described in
this proposed rule. We will consult with the FDA should issues arise
concerning the classification of lenses.
C. Appropriateness of Payment Amount
SSAA 1994 requires us to review the appropriateness of the current
IOL payment amount with respect to a class of new technology IOLs.
Although SSAA 1994 itself does not provide explicit guidance on the
standard for judging the appropriateness of the current IOL payment
amount, section 1833(i)(2)(A)(iii) of the Act requires that the IOL
payment amount included in
[[Page 46702]]
the ASC facility fee be reasonable and related to the cost of acquiring
the class of IOL involved. Therefore, after we determine that an IOL
meets the criterion that qualifies it to be treated as a new technology
IOL under the process proposed in this rule, we must next determine if
the current IOL payment amount is reasonable and related to the cost of
acquiring that IOL.
At this time, the only method we are aware of for determining IOL
acquisition costs is to survey purchasers and audit invoices. The OIG
conducted such a survey in preparing its 1994 report entitled
Acquisition Costs of Prosthetic Intraocular Lenses, OEI-05-92-01030.
(Copies can be obtained from the Office of Inspector General,
Department of Health and Human Services, (312) 353-4124.) The OIG found
that when IOL payments were fixed at $200, ASCs could acquire and were
acquiring IOLs for an average of $126 in 1991 and $112 in 1992. This
does not take into account discounts available to the majority of
purchasers because the financial arrangements took many forms, only a
few of which were straightforward rebates or price reductions. The OIG
also discovered that the newest type of IOL available at the time of
its review (a foldable, ultraviolet-absorbing, silicone IOL) was
obtainable within relatively the same price range as other IOLs in the
study (from $75 to $475 for the foldable IOLs, compared to a range of
$30 to $450 for rigid IOLs). The OIG determined that ASCs were buying
foldable IOLs for $125 or less, at a time when the Medicare IOL payment
amount was $200.
We are developing IOL cost data as part of the 1994 Medicare
Ambulatory Surgical Center Payment Rate Survey of Facility Overhead and
Procedure Specific Costs (Form HCFA-452B). Although that information is
not yet available, we believe that the current payment amount of $150
continues to exceed the average cost to an ASC of acquiring an approved
IOL.
We may find, however, that IOLs affected by this regulation will
not have been in widespread use by ASCs at the time a review of the IOL
is requested under the provisions of section 141(b) of SSAA 1994.
Therefore, because actual acquisition cost information may be sparse,
we propose also to take into account list price; manufacturing costs;
selling costs; general and administrative overhead costs; research and
development costs; manufacturer discount and rebate packages; and any
other factors that may be relevant indicators that the current payment
amount is not appropriate for the type of new technology IOL under
review. We welcome comments on criteria that would facilitate an
objective determination of what constitutes a payment that is both
reasonable and related to acquisition cost with respect to ``new
technology'' IOLs. The criteria should include the use of readily
verifiable data, for example, studies published in peer-reviewed
journals.
D. Payment Adjustment When Current Payment Amount Is Inappropriate
The final step in the process that is the subject of this proposed
rule involves determining the amount of a payment adjustment if we find
that the current IOL payment amount is inappropriate. Among the factors
that we propose to take into account in order to determine the amount
of the adjustment to be made if the current IOL allowance is found to
be inappropriate with respect to the acquisition cost of the particular
IOL are the following:
Market projections based on anticipated clinical
indications of need for the IOL and the percent of the Medicare
population expected to present that need on an annual basis.
Additional incremental costs incurred to manufacture a new
technology IOL relative to the cost of manufacturing other IOLs, such
as the cost attributable to using a more sophisticated piece of
machinery or the cost of fabricating a new IOL material.
Additional costs incurred to conduct clinical trials that
document for FDA approval the clinical superiority of the IOL relative
to the costs incurred to conduct clinical trials for other IOLs.
Research and development costs incurred that exceed those
associated with other IOLs approved by the FDA.
Current and historical pricing, sales volume, and
revenues.
A reasonable rate of return and profit based on the
manufacturer's investment in the IOL.
We considered other options for determining the amount of an
adjustment to be made if the current payment amount was found to be
inappropriate for an IOL being reviewed under the provisions proposed
in this rule including--
Application of a single flat, across-the-board percentage
increase to the IOL payment amount for every IOL that we determined
satisfied the criteria defining a ``new technology'' IOL;
The percent of the IOL industry's investment in research
and development that ultimately leads to innovations in IOLs; and
The percentage of sales attributable to an IOL for which a
review was requested.
We rejected these options, however, primarily because they are
inconsistent with the overall statutory mandate that payment be
reasonable and related to the cost of acquiring an IOL.
E. Implementation of the Payment Adjustment
1. Two-Year Limit on Payment Adjustment
A related issue pertains to the appropriate length of time the
adjusted payment amount would be allowed by Medicare for a particular
``new technology'' IOL. We propose to allow a single IOL the benefit of
any payment adjustment determined to be appropriate for a period of 2
years following the review process proposed in this rule. At the
conclusion of the 2-year payment adjustment period, Medicare payment
for the IOL would then revert to the payment rate for IOLs furnished by
an ASC that is in effect at that time.
Supporting a 2-year payment limit is the OIG's 1994 report
(Acquisition Costs of Prosthetic Intraocular Lenses, OEI-05-92-01030),
which found a decrease in IOL prices generally over a 2-year period
ranging from 11 to 14 percent in various settings. We assume this
decrease is attributable to technology diffusion and the associated
development of similar lenses by competing firms. We believe a
desirable new technology IOL with demonstrated clinical superiority
would be subject to equivalent conditions, and thus experience a
similar drop in acquisition cost over a 2-year period.
2. Operational Payment Principles
The payment adjustments we publish in the Federal Register would be
implemented prospectively, effective 30 days from the date of their
publication. This implementation date of a payment adjustment is
required under section 141(b) of SSAA 1994.
We propose to apply the same payment adjustment amount established
for the first IOL or IOLs approved within a new technology subset to
all IOLs that we subsequently accept as satisfying the criteria for
``new technology'' that are assigned to the same subset. If a new
technology IOL were to qualify under more than one subset of
technology, and the subsets had different payment rates, the IOL would
be paid for at the higher (or highest) applicable rate.
We expect that more than one manufacturer would be working to
develop IOLs that rely on the same or similar technology that defines
``new technology'' under the provisions of this
[[Page 46703]]
rule. If we were to make a payment adjustment under the provisions
proposed in this rule, the payment adjustment amount would be based on
information regarding IOL production, acquisition costs, and IOL
benefits that is submitted by the manufacturer or manufacturers that
first request review for a particular type of new technology IOLs.
Manufacturers would have 3 years during which to submit requests for
review of equivalent IOLs approved by the FDA that were in a ``new
technology'' subset already approved by us and still benefit from the
full 2-year payment adjustment term. Requests for review of an IOL
submitted during the third year of a technology's designation as
``new'' would only have the benefit of a payment adjustment for 1 year.
If an interested party wants an IOL to be considered for a payment
adjustment under section 141(b) of SSAA 1994, that interested party
must request a review in accordance with the process proposed in this
rule, which request would be approved and published in a final rule and
codified in the Code of Federal Regulations. In accordance with section
141(b) of SSAA 1994, we would adhere to a yearly cycle of receiving
requests for review, publishing those requests, reviewing comments on
the requests, reviewing the requests, and publishing our
determinations. We would not make determinations or provide for payment
adjustments outside this schedule, although interested parties may
submit requests for review as soon as FDA grants its approval. We would
compile these requests for publication in the next applicable Federal
Register notice.
We propose to assign codes to be used to bill for IOLs that qualify
for the payment adjustment. The list of these IOLs, with the
appropriate billing code, would be published annually in the Federal
Register. Billing for any other IOLs using ``new technology'' billing
codes would constitute fraud.
We invite comments on the suitability of these proposals and
solicit suggestions for alternative approaches for determining how to
identify IOLs as ``new technology''; for evaluating the appropriateness
of the current IOL allowance; for calculating the amount of an
adjustment to be made in the event the current IOL payment amount is
found to be inappropriate with respect to a particular IOL; and for
defining the period of time during which the payment adjustment would
be in effect. We believe that any adjustment amount should be modest,
since the high quality, readily accessible IOLs currently on the market
leave only marginal room for improvement. We do not believe that an
upward adjustment is warranted unless the new technology IOLs, as a
group, cost more to produce, are appreciably superior clinically, and
successfully fulfill a need unmet before that time in an innovative
manner.
F. Review and Adjustment Process
In this section, we describe the process that we propose to
implement annually in order to determine the appropriateness of IOL
pricing as required under section 141(b) of SSAA 1994.
1. Federal Register Notice Inaugurates Annual Cycle
The process, which is designed to be repeated annually on a 365-day
cycle, would be initiated by publication of a Federal Register notice
that would serve a threefold purpose.
a. Deadline for submission of a request for review. The publication
date of the Federal Register notice announcing the deadline by which
any interested parties would have to submit requests in order for us to
review the appropriateness of the Medicare payment allowance under
section 1833(i)(2)(A)(iii) of the Act with respect to a particular IOL
would be established as ``Day 1'' of the 365-day annual review cycle.
The ``Day 1'' Federal Register notice would include the deadline for
submission of requests to review (the date of publication of the
Federal Register notice plus 125 days); the requirements to be
satisfied in order for an IOL to be treated as a ``new technology'' IOL
under section 141(b) of SSAA 1994; the specific information that must
accompany a request for review as well as the format in which that
information is to be submitted; the address to which the request is to
be sent; the factors that we would take into account in determining
whether the current IOL payment amount is appropriate; the factors that
we would take into account in determining the payment adjustment to be
made; and any other information that we believe is relevant and
necessary.
b. List of intraocular lenses for payment adjustment. The Federal
Register notice published on ``Day 1'' of the 365-day cycle, in
addition to announcing the deadline for submission of requests to
review for the forthcoming year, would list those IOLs, identified as
new technology IOLs, for which we had found a payment adjustment to be
appropriate during the prior year's review. The ``Day 1'' notice would
also include information on the amount of any payment adjustment
determined for a particular IOL; the subset of ``new technology'' under
which each IOL would be classified; the beginning date of the period
when the payment adjustment would be effective (``Day 1,'' the date of
publication of the Federal Register notice, plus 30 days); the code(s)
to be used to bill for the IOL; the expiration date of the period
during which the payment adjustment would be allowed (2 years from the
date of publication of the Federal Register notice); and, the
expiration date of the IOL's ``new technology'' designation (5 years
from the date of publication of the Federal Register notice). Because
ASC rates are prospectively set, we would make payment adjustments
prospectively.
c. Summary of previous year's determinations. The ``Day 1'' Federal
Register notice would list any other IOLs to which a payment adjustment
still applied as the result of reviews in earlier years; the type of
``new technology'' under which each IOL had been classified whether or
not it qualified for a payment adjustment; the amount of the payment
adjustment allowed for each type of IOL; the code(s) to be used to
bill; and the dates when the ``new technology'' designation of the IOL
and the applicable payment adjustment would expire.
2. Publication of Requests for Review
We would provide that we must receive requests for review no later
than 125 days from the date of publication of the ``Day 1'' Federal
Register notice inviting requests for review. We would compile a list
of any requests for review that we received timely. The list, including
the manufacturer's name and the model number of the IOL to be reviewed,
would be published in a Federal Register notice with comment period.
This second notice would be published no later than 245 days from the
publication date of the first Federal Register notice that initiated
the annual review cycle by inviting requests for review. The public
would have 30 days to comment on the IOLs included in the list of those
for which a payment review had been requested.
3. Our Review and Publication of Determinations
We would review any comments that were submitted regarding the list
of IOLs published in the Federal Register along with the information
submitted with the request to review to decide whether an adjustment of
the current IOL payment amount was appropriate with respect to each IOL
on the list. Because of the rigid time frame for this process, the
applicant must submit sufficient information in a timely manner to
allow for review. At our
[[Page 46704]]
discretion, we may request additional information. If an initial
submission is incomplete, however, we would make a determination based
on the information submitted.
As described in an earlier section, we propose to take the
following factors into account in determining whether to provide a
payment adjustment:
The IOL meets the definition of a ``new technology IOL''
in Sec. 416.180 (``Definitions'').
The extent to which the current IOL payment amount is
reasonable and reflects the acquisition cost of the IOL under review.
No later than 90 days after the close of the public comment period,
we would publish in the Federal Register a notice announcing our
determinations with respect to the requests for review that had been
published 120 days previously announcing the amount of any new payment
adjustments; announcing the deadline for submission of the upcoming
year's requests for review 125 days from that time; and summarizing
payment adjustments made previously that were still in effect. With
publication of this notice, the annual cycle would be repeated with a
new ``Day 1'' date.
The following table summarizes the key events in the annual review
cycle that is the subject of this proposed rule:
------------------------------------------------------------------------
Event Timeframe
------------------------------------------------------------------------
Publication of a Federal Register notice Date of publication of
inviting requests for review, announcing our this notice constitutes
determinations of adjustments to be made to ``Day 1'' of the annual
``new technology'' IOL payment amounts, and review cycle.
summarizing adjustments from prior years
that are still in effect.
Effective date for any payment adjustments ``Day 1'' date plus 30
that we determine are appropriate as days.
published in the Federal Register on ``Day
1.''.
Deadline for receipt of the IOL review ``Day 1'' date plus 125
requests for our consideration. days.
Publication in the Federal Register of the ``Day 1'' date plus 245
list of requests for review. days.
End of 30-day public comment period regarding ``Day 1'' date plus 275
the list of requests for review. days.
Publication of a Federal Register notice ``Day 1'' date plus 365
inviting requests for review, announcing our days; cycle starts over
determinations of adjustments to be made to with new ``Day 1.''
``new technology'' IOL payment amounts, and
summarizing adjustments from prior years
that are still in effect.
------------------------------------------------------------------------
To summarize the process that we propose in this rule, in order for
us to treat an IOL as a new technology IOL under the provisions of SSAA
1994, the IOL must have obtained FDA approval to include in labeling
and advertising claims of superior clinical advantages over other IOLs.
If we find that the IOL for which a review is requested meets this
criterion and if we determine that the current payment amount for IOLs
furnished by ASCs is inappropriate with respect to the IOL, that is,
the current IOL payment amount is not reasonable and is not related to
the cost of acquiring the IOL, we would adjust the payment amount for
the IOL. In determining the amount of adjustment, we propose to take
into account development and manufacturing costs and sales projections
as elements of cost with respect to the IOL under review, both alone
and relative to other IOLs.
G. Requirements for Content of a Request To Review
We propose to require interested parties seeking a review of the
IOL allowance under section 141(b) of the SSAA 1994 to submit certain
information that we regard as critical if we are to make a fair and
objective determination that the payment amount for an IOL paid under
section 1833(i)(2)(A)(iii) of the Act is or is not appropriate.
Interested parties requesting a review of the IOL payment amount with
respect to a particular IOL would be required to submit the following:
identification of the individual IOL under consideration as a ``new
technology'' IOL for which a payment review is requested, including the
name of the manufacturer, model number, trade name, and the date the
FDA granted premarket approval for the IOL; a copy of the FDA's summary
of safety and effectiveness; a copy of the labeling claims of specific
clinical advantages approved by the FDA; reports of modifications made
after FDA approval; development and manufacturing costs of the ``new
technology'' IOL relative to the costs of manufacturing other approved
IOLs; the costs of conducting clinical trials for the IOL in question
relative to the costs of conducting clinical trials for other approved
IOLs; indications and contraindications for use; epidemiological data
indicating demand for the IOL; sales price, sales history, and
revenues, and prices and projected revenues during the period of the
payment adjustment; names of purchasers; and other information we
consider appropriate for making a determination. We cannot be all-
inclusive in this list since we may need information that we cannot
foresee at this time. We may modify our requests for information as
changes in technology dictate. We may request supplemental information
from individual interested parties during the review process. The
interested party would be responsible for demonstrating to our
satisfaction that a payment adjustment for the IOL under review is
warranted, especially given the widespread availability of high quality
IOLs at a cost equal to or less than the current Medicare IOL
allowance. The burden of proof would be on the interested party to show
that the current IOL payment amount is inappropriate for the new
technology IOL for which a review is requested.
Interested parties should be aware that 45 CFR 5.65(c) provides
that a submitter of information may designate all or part of the
information as being exempt from mandatory disclosure under Exemption 4
of the Freedom of Information Act.
III. Collection of Information Requirements
This document does not impose information collection and
recordkeeping requirements. Consequently, it need not be reviewed by
the Office of Management and Budget under the authority of the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).
IV. Response to Comments
Because of the large number of items of correspondence we normally
receive on Federal Register documents published for comment, we are not
able to acknowledge or respond to them individually. We will consider
all comments we receive by the date and time specified in the DATES
section of this preamble, and, if we proceed with a subsequent
document, we will respond to the comments in the preamble to that
document.
V. Regulatory Impact Statement
We generally prepare a regulatory flexibility analysis that is
consistent with the Regulatory Flexibility Act
[[Page 46705]]
(RFA) (5. U.S.C. 601 through 612) unless the Secretary certifies that a
proposed rule would not have a significant economic impact on a
substantial number of small entities. For purposes of the RFA, we
consider all manufacturers of IOLs, ASCs, hospital outpatient
departments, and physicians who perform IOL insertion surgery to be
small entities. Individuals and States are not included in the
definition of a small entity. We are not preparing a regulatory
flexibility analysis because we have determined, and the Secretary
certifies, that this proposed regulation would not have a significant
economic impact on a substantial number of small entities.
Also, section 1102(b) of the Act requires the Secretary to prepare
a regulatory impact analysis if a proposed rule would have a
significant impact on the operations of a substantial number of small
rural hospitals. This analysis must conform to the provisions of
section 603 of the RFA. For purposes of section 1102(b) of the Act, we
define a small rural hospital as a hospital that is located outside of
a Metropolitan Statistical Area and has fewer than 50 beds. We are not
preparing a rural hospital impact statement because we have determined,
and the Secretary certifies, that this proposed regulation would not
have a significant impact on the operations of a substantial number of
small rural hospitals.
Although this proposed rule is not an ``economically significant''
rule under Executive Order 12866, we present below a voluntary analysis
of the effects of this proposed rule because many beneficiaries who
undergo IOL insertion surgery following a cataract extraction could be
affected.
We believe that the fiscal impact of this rule would be negligible.
We do not expect that making this payment adjustment would have an
impact on the availability or prices of other IOLs. We do not expect
that it would affect competition, employment, or investment. The ocular
implant industry is mature, with a successful product readily available
to purchasers. Our data suggest that we pay, under the Medicare
program, more than the acquisition cost for most of the IOLs used
today. New technology IOLs would achieve improvements in only small
segments of the industry, since the majority of IOLs function superbly.
The IOLs under development that we are aware of would substitute for
spectacles in some cases, and in others would allow the patient to wear
a single vision prescription rather than bifocals. The desirability of
this feature to the Medicare population is not known.
There would be no significant program savings, even if the use of
these IOLs reduced expenditures for spectacles or eliminated the need
for follow-up treatment. The complexities of claims processing for an
additional payment on top of a bundled, fixed payment would be
considerable. Manual claims processing or a significant reconfiguration
of claims processing software would be required. The payment method for
ASC-type procedures performed in hospital outpatient departments
requires that we use a blend of 42 percent of the hospital's costs or
charges and 58 percent of the ASC rate as a basis for payment. The
addition of an adjustment to two of the ASC rates would complicate
hospital payment. The review process to determine which IOLs qualify
for a payment adjustment would be costly in terms of staff hours and
Federal Register publication costs. We would have to develop new codes
to identify specific IOLs, which creates the possibility of
``upcoding,'' or using those codes for IOLs not eligible for the
adjustment. We would also have to undertake an extensive educational
effort, to explain the use of the new codes to the provider community
and to our contractors. This would involve manual issuances and program
memoranda. These direct and indirect costs more than outweigh the
marginal benefit available to a few manufacturers.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.
List of Subjects in 42 CFR Part 416
Health facilities, Kidney diseases, Medicare, Reporting and
recordkeeping requirements.
For the reasons set forth in the preamble, 42 CFR part 416 would be
amended as follows:
PART 416--AMBULATORY SURGICAL SERVICES
1. The authority citation for part 416 continues to read as
follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
2. A new subpart F, consisting of Secs. 416.180, 416.185, 416.190,
416.195, and 416.200, is added to read as follows:
Subpart F--Adjustment in Payment Amounts for New Technology Intraocular
Lenses
Secs.
416.180 Definitions.
416.185 Payment review process.
416.190 Who may request a review.
416.195 Content of a request to review.
416.200 Application of the payment adjustment.
Subpart F--Adjustment in Payment Amounts for New Technology
Intraocular Lenses
Sec. 416.180 Definitions.
As used in this subpart, the following definitions apply:
Class of new technology intraocular lenses (IOLs) means all of the
IOLs, collectively, that HCFA determines to have met the definition of
``new technology IOL'' under the provisions of this subpart.
Interested party means any individual, partnership, corporation,
association, society, scientific or academic establishment,
professional or trade organization, or any other legal entity.
New technology IOL means an IOL that HCFA determines to have met
the following criterion: The FDA has approved for use in labeling and
advertising the IOL's claims of specific clinical advantages and
superiority over existing IOLs with regard to reduced risk of
intraoperative or postoperative complication or trauma, accelerated
postoperative recovery, reduced induced astigmatism, improved
postoperative visual acuity, more stable postoperative vision, or other
comparable clinical advantages.
New technology subset means a group of IOLs that HCFA determines to
meet the criterion for being treated as new technology IOLs and that
share a common feature or features that distinguish them from other
IOLs. For example, all new technology IOLs that are made of a
particular bioengineered material could comprise one subset, while all
that rely on a particular optical innovation could comprise another.
Sec. 416.185 Payment review process.
(a) HCFA publishes a Federal Register notice announcing the
deadline and requirements for submitting a request for HCFA to review
payment for an IOL.
(b) HCFA receives requests for review of payment for an IOL.
(c) HCFA compiles a list of the requests it receives timely and
identifies the IOL manufacturer's name, the model number of the IOL to
be reviewed, the interested party or parties that submit requests, and
a summary of the interested party's grounds for requesting review of
the appropriateness of the IOL payment amount.
(d) HCFA publishes the list of requests in a Federal Register
notice with comment period, giving the public 30 days to comment on the
IOLs for which review was requested.
[[Page 46706]]
(e) HCFA reviews the information submitted with the request to
review, any timely comments that are submitted regarding the list of
IOLs published in the Federal Register, and any other timely
information that HCFA deems relevant to decide whether to provide a
payment adjustment. Factors that HCFA takes into account in determining
whether the IOL payment amount provided under section
1833(i)(A)(2)(iii) of the Act is appropriate with respect to an IOL for
which a review was requested include, but are not limited to, the
following:
(1) Whether the IOL meets the definition of a ``new-technology
IOL'' in Sec. 416.180.
(2) What it costs ASCs to acquire IOLs in the new technology subset
to which the IOL under review belongs.
(3) Whether the current IOL payment allowance is reasonable with
regard to the IOL under review.
(f) If HCFA determines that the current IOL payment allowance is
not appropriate for the IOL under review, HCFA establishes a payment
adjustment that takes into account the following factors:
(1) IOL manufacturing costs.
(2) The IOL manufacturer's selling costs and general and
administrative overhead costs.
(3) Research and development costs attributable to the IOL.
(4) Manufacturer discount and rebate packages.
(5) Other information that HCFA considers appropriate in
determining a payment adjustment.
(g) Within 90 days of the end of the comment period following the
Federal Register notice identified in paragraph (d) of this section
that lists IOLs for which a review was requested, HCFA publishes its
determinations with regard to payment adjustments in the Federal
Register. In the same Federal Register notice, HCFA also announces the
deadline and requirements for submitting requests for the next annual
cycle of reviews.
(h) Payment adjustments are effective beginning 30 days after the
publication of HCFA's determinations in the Federal Register.
Sec. 416.190 Who may request a review.
Any party who is able to furnish the information required in
Sec. 416.195 may request that HCFA review the appropriateness of the
payment amount provided under section 1833(i)(2)(A)(iii) of the Act
with respect to an IOL that meets the definition of a new technology
IOL in Sec. 416.180.
Sec. 416.195 Content of a request to review.
The interested party requesting a review of the IOL payment amount
must timely furnish convincing evidence that the payment amount
provided under section 1833(i)(2)(A)(iii) of the Act is not appropriate
for a new technology IOL and that a payment adjustment is reasonable
and warranted.
(a) Requirements for a request to review the appropriateness of the
IOL payment amount for a new technology IOL. In order for HCFA to
consider a request to review the IOL payment amount with regard to a
particular IOL, the request must meet all of the following
requirements:
(1) Identification of an IOL. The interested party must provide the
following information:
(i) The name of the manufacturer, the model number, and the trade
name of the IOL.
(ii) A copy of the FDA's summary of the IOL's safety and
effectiveness.
(iii) A copy of the labeling claims of specific clinical advantages
approved by the FDA for the IOL.
(iv) A copy of the IOL's original FDA approval notification.
(v) Reports of modifications made subsequent to original FDA
approval.
(vi) Indications and contraindications for use of the IOL.
(vii) Epidemiological data indicating demand for the IOL.
(viii) Other information that HCFA finds necessary for
identification of the IOL.
(2) IOL costs. To enable HCFA to review the appropriateness of the
payment amount provided under section 1833(i)(2)(A)(iii) of the Act
with regard to the IOL, the following documented evidence of the cost
of the IOL and the manufacturer's investment in the IOL is required:
(i) The manufacturer's current list price for the IOL and a history
of the IOL's pricing since FDA approval was obtained.
(ii) Manufacturing costs of the IOL relative to the costs of
manufacturing other approved IOLs.
(iii) Research and development costs incurred to create the IOL,
using research and development costs of other FDA-approved IOLs for
purposes of comparison.
(iv) Costs incurred to conduct clinical trials for the purpose of
demonstrating for FDA approval the clinical superiority of the IOL
relative to the costs incurred to conduct clinical trials for other
approved IOLs.
(v) Sales and revenue history of the IOL, and sales and revenues
projected for the IOL if a payment adjustment were approved by HCFA.
(vi) Names of purchasers of the IOL.
(vii) Other information HCFA finds necessary for making a
determination.
(b) Confidential information. To the extent that information
received from an IOL manufacturer can reasonably be characterized as a
trade secret or as privileged or confidential commercial or financial
information, Exemption 4 of the Freedom of Information Act (5 U.S.C.
552(b)(4)) and, with respect to trade secrets, the Trade Secrets Act
(18 U.S.C. 1905), allow HCFA to maintain the confidentiality of the
information and to protect it from disclosure not otherwise authorized
or required by Federal law.
Sec. 416.200 Application of the payment adjustment.
(a) New technology subset. (1) HCFA designates a predominant
characteristic of a new technology IOL that both sets it apart from
other IOLs and links it with other similar IOLs with the same
characteristic to establish within the ``class of new technology IOLs''
a specific subset of new technology.
(2) Each subset is recognized for purposes of this subpart as
belonging to the class of new technology IOLs for a period of 5 years,
effective beginning the date that the first IOL that defines the subset
is identified.
(3) During the fifth year following the date that the first IOL is
designated as belonging to the subset, requests to review IOLs that
would be considered part of the subset that expires at the end of the
year are not considered.
(4) Beginning on the sixth anniversary date of the effective date
of the recognition of a subset, payment adjustments applicable to IOLs
in that subset cease for all IOLs in that subset and payment reverts to
the payment rate in effect at that time for IOLs under section
1833(i)(2)(A)(iii) of the Act.
(b) Duration of payment adjustment. (1) Any single model of IOL for
which HCFA determines that a payment adjustment is appropriate receives
the payment adjustment for a period of 2 years.
(2) On the second anniversary date of implementation of a payment
adjustment approved for the IOL under the provisions of this subpart,
payment for the IOL reverts to the IOL payment rate in effect at that
time under section 1833(i)(2)(A)(iii) of the Act.
(c) Similarity of payment adjustment. All IOLs included in the same
subset of new technology IOLs and for which HCFA determines a payment
adjustment is appropriate receive the same payment adjustment.
(d) Basis for payment. (1) In order for HCFA to consider an IOL for
a payment
[[Page 46707]]
adjustment under this subpart, an interested party must submit timely a
request for review prepared in accordance with the requirements in
Sec. 416.195, and the IOL must be included in the list of requests for
review that is published annually in the Federal Register in accordance
with the process described in Sec. 416.185.
(2) In order for HCFA to make an IOL payment adjustment under this
subpart, the IOL for which the adjustment is approved must be
identified in the list of determinations HCFA publishes in the Federal
Register 125 days after publication of the list of requests for review.
(i) HCFA assigns a unique billing code to each IOL for which it
determines a payment adjustment is appropriate.
(ii) Using the billing code assigned to an IOL for which HCFA
determines a payment adjustment is appropriate under this subpart in
order to bill for a different IOL constitutes fraud.
(Sections 1832(a)(2)(F)(i) and 1833(i)(2)(a) of the Social Security
Act (42 U.S.C. 1395k(a)(2)(F)(i) and 1395l(i)(2)(a)))
(Catalog of Federal Domestic Assistance Program No. 93.774,
Medicare--Supplementary Medical Insurance Program)
Dated: January 17, 1997.
Bruce C. Vladeck,
Administrator, Health Care
Financing Administration.
Dated: March 10, 1997.
Donna E. Shalala,
Secretary.
[FR Doc. 97-23380 Filed 9-3-97; 8:45 am]
BILLING CODE 4120-01-P
