CPT codes and descriptions only are copyright 1999 American Medical Association. All rights reserved. Applicable FARS/DFARS apply.

We expect to implement a Medicare prospective payment system (PPS) for hospital outpatient services on July 1, 2000. One aspect of the outpatient PPS involves the recognition of new technology items and services as discrete payment groups under the PPS. The PPS will also provide for additional payments to hospitals at amounts higher than the amounts that would otherwise be paid under the PPS for certain drugs, biologicals, and medical devices, as provided for in the transitional pass-through payment provision under section 201(b) of the Balanced Budget Act of 1999 (BBRA). These are temporary payments for a period of 2 to 3 years. Actual hospital cost information gathered during this period will be used to appropriately assign the new technologies and the pass-through items to clinically related payment groups with comparable resource costs in the future.

In this document we describe, below, the process that we will use to (1) identify those items and services potentially eligible for such payments and (2) establish codes for them through the HCFA Common Procedure Coding System (HCPCS) that will be used to initiate payment and process claims for such items.

A large number of the items that may be treated as new technologies or for which payment may be made under the BBRA pass-through provision are already known to us through our own data gathering activities or through comments on the outpatient PPS proposed rule. Many of the items already have HCPCS codes, and we are taking steps to establish temporary codes for the remainder in an orderly fashion. We expect to be able to commence payments for some of these items as either new technologies or pass-throughs when the outpatient PPS is implemented on July 1, 2000 and for others possibly on October 1, 2000. These known items are listed, below, in section VI.

Other items potentially eligible for payment as new technologies or pass-throughs and not listed below are not known to us at this time. Therefore, we ask that interested parties take the steps outlined ,below, in sections III and IV to bring such items to our attention.

A. New Technology Items and Services. New technology refers to--

B. Transitional Pass-through Items

A manufacturer or other interested party who wishes to bring items that may be eligible for payment as new technologies or under the pass-through provision to our attention should mail their requests for consideration to the following address ONLY:

To be considered, requests MUST include the following information:

• Trade/brand name of item.
• A detail description of the clinical application of the item, including HCPCS code(s) to identify the procedure(s) with which the item is used.
• Current wholesale cost of the item.
• Current retail cost of the item (i.e., actual cost paid by hospitals net of .all discounts, rebates, and incentives in cash or in-kind).
• For drugs, submit the most recent average wholesale price (AWP) of the drug and the date associated with the AWP quote.
• If the item is a service, itemize the costs required to perform the procedure, e.g., labor, equipment, supplies, overhead, etc.
  If the item requires FDA approval, submit information that confirms receipt of FDA approval and the date obtained.
• If the item already has an assigned HCPCS code, include the code and its descriptor in your submission plus a dated copy of the HCPCS code Arecommendation application@ previously submitted for this item.
• If the item does not have an assigned HCPCS code, follow the procedure discussed, below, in section IV for obtaining HCPCS codes and submit a copy of the application with your payment request.
• Name, address, and telephone number of the party making the request.

We believe some items not yet known to us do not yet have assigned HCPCS codes. We expect to use national HCPCS codes in the hospital outpatient PPS to the greatest extent possible. These codes are established by a well-ordered process that operates on an annual cycle, starting with submission of information by interested parties due by April 1 and leading to announcement of new codes in October of each year.

Considering the exigencies of implementing a new system, we intend to establish temporary codes in 2000 to permit implementation of additional payments for other eligible items effective beginning October 1, 2000. The process for submitting information will be the same as for national codes.

For items that might be candidates for payment as new technologies or pass-throughs but that DO NOT have established HCPCS codes, submit the regular application for a national HCPCS code in accordance with the instructions found on the Internet at http://www.hcfa.gov/medicare/hcpcs.htm. Send applications for national HCPCS codes to --

The deadline for submission of applications for a national HCPCS code for the calendar year 2001 cycle is April 1, 2000. The HCPCS process will proceed to assign national codes as warranted, and we expect these codes will be used in the hospital outpatient PPS starting January 1, 2001. Because the coding application will contain information vital to determining a specific item or product=s eligibility for new technology or pass-through payments, we are requesting that a copy of the national HCPCS coding application be sent concurrently to Attention: PPS New Tech/Pass-Throughs, Division of Practitioner and Ambulatory Care at the address specified, above, in section III.

This year, we plan to implement new technology payments and pass-through payments payment for appropriate items on October 1, 2000, if they come to our attention by April 1, 2000. We will use the same submissions made for national HCPCS codes as the basis for making temporary code assignments. A very large volume of requests or systems constraints could affect our ability to fully achieve this goal.

Any applications for HCPCS codes received after April 1, 2000 will be retained for the next cycle of the national HCPCS code assignment process starting April 1, 2001. However, we will also consider these items for assignment of temporary codes that may take effect in January 2001 or in a later quarterly update cycle.

How quickly additional payment for a new item can be implemented will depend on processing and systems constraints; it will in general require at least 6 months and may require as many as 9 months or possibly longer. Thus, for example, a submission that we receive in May (which is too late for October implementation) might get a temporary code to be used for implementing additional payments starting the following January.

As indicated above, we expect to be able to commence payment for some of the new technology or pass-through items identified, below, when the outpatient PPS system is implemented on July 1, 2000 and for others possibly on October 1, 2000. However, we note that we are still evaluating the eligibility of a number of the items listed for payment as either new technologies or pass-through items.

Please note that HCPCS codes for drugs and radiopharmaceuticals listed below reflect the lowest dosages although payment for higher doses will be possible, as will be explained in the forthcoming final rule on the outpatient PPS.

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Last Updated March 9, 2000