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Federal Register / Vol. 86, No. 9 / Thursday, January 14, 2021 / Rules and Regulations TABLE 3ILLUSTRATED IMPACT ON THE MEDICARE PROGRAM BY MCIT COVERAGE PATHWAYContinued Costs in millions FY 2021

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Low-cost Scenario
High-cost Scenario

We believe the assumptions used in the three scenarios are reasonable to show the possible wide range of impacts for implementing this proposed pathway, in particular for a technology that would not have otherwise been eligible for coverage.
Comment: A commenter supported CMS assertion that new technology may mitigate ongoing chronic health issues or improve efficiency of services thereby reducing some cost for Medicare, and that incentivizing breakthrough medical devices will lead to both direct cost offsets i.e., cost savings and indirect benefits e.g., quality of life, clinical outcomes across multiple therapeutic areas. Another expressed concern that funding for MCIT will result in neutrality adjustments across the Physician Fee Schedule PFS.
Response: We appreciate these comments. Payment for Medicare covered physician services and other services paid under the PFS are subject to statutorily-required budget neutrality adjustments, determined based on the utilization of particular services. The RIA did not incorporate changes to PFS
as we do not expect that it is likely PFS
will require adjustment.
The RFA requires agencies to analyze options for regulatory relief of small entities. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small governmental jurisdictions. Some hospitals and other providers and suppliers are small entities, either by nonprofit status or by having revenues of less than $7.5 million to $38.5
million in any 1 year. Individuals and States are not included in the definition of a small entity. We reviewed the Small Business Administrations Table of Small Business Size Standards Matched to North American Industry Classification System NAICS Codes to determine the NAICS U.S. industry titles and size standards in millions of dollars and/or number of employees that apply to small businesses that could be impacted by this rule.18 We 18 Small Business Administration, Table of Small Business Size Standards Matched to North American Industry Classification System NAICS
Codes, available at https www.sba.gov/sites/

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9.5
291.5

determined that small businesses potentially impacted may include surgical and medical instrument manufacturers NAICS code 339112, dollars not provided/1,000 employees, Offices of Physicians except Mental Health Specialists NAICS code 621111, $12 million/employees not provided, and Freestanding Ambulatory Surgical and Emergency Centers NAICS code 621493, $16.5
million/employees not provided.
During the first 4 years of MCIT, we anticipate approximately 14 surgical and medical instrument manufacturers may participate, and based off of U.S.
Census data, the majority of this businesses type are small businesses with less than 1,000 employees 968 out of 1,093 businesses have less than 500
employees.19 As such, this final rule will impact less than 5 percent of these businesses, and the revenue impact, if any, would not be negative. Rather, it would be a positive impact because MCIT would provide Medicare coverage and subsequent payment to providers who purchase the devices from these manufacturers. For Offices of Physicians except Mental Health Specialists and Freestanding Ambulatory Surgical and Emergency Centers that may be providing the breakthrough devices, the majority are small businesses with less than 1,000 employees 4,060 out of 4,385 and 160,367 out of 161,286 have less than 500 employees, respectively.20 Given that we estimate, at most in the high-cost scenario, that 6,500 beneficiaries would utilize breakthrough devices through MCIT per year, and even if each beneficiary were to access services at only one of these small businesses that is, no two beneficiaries used the same office or center, still less than 5 percent of these small businesses would be impacted by MCIT. As such, the revenue impact, if any, would not be negative, rather, it default/files/2019-08/
SBA%20Table%20of%20Size%20Standards_
Effective%20Aug%2019%2C%202019_Rev.pdf.
19 2017 County Business Patterns and 2017
Economic Census. Number of Firms, Number of Establishments, Employment, Annual Payroll, and Preliminary Receipts by Enterprise Employment Size for the United States, All Industries: 2017
release date: May 6, 2020.
20 Id.

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FY 2022
23.7
728.8

FY 2023
42.7
1,311.9

FY 2024
66.4
2,040.7

would be a positive impact because MCIT would provide Medicare coverage and subsequent payment to providers.
Overall, this final rule results in a payment, not a reduction in revenue.
We are not preparing a further analysis for the RFA because we have determined, and the Secretary certifies, that the proposed rule and this subsequent final rule will not have a significant negative economic impact on a substantial number of small entities because small entities are not being asked to undertake additional effort or take on additional costs outside of the ordinary course of business. Rather, for small entities that develop or provide breakthrough devices to patients, the proposed rule and this final rule are a means for the device to be covered through the Medicare program, which does not detract from revenue and could be viewed as a positive economic impact. With the limited information we had to base this estimate, we solicited public comment on improvements to this estimate for this final rule.
After consideration of the public comments we received, we are finalizing the rule as proposed.
In addition, section 1102b of the Act requires us to prepare a regulatory impact analysis if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 604 of the RFA. For purposes of section 1102b of the Act, we define a small rural hospital as a hospital that is located outside of a Metropolitan Statistical Area for Medicare payment regulations and has fewer than 100 beds. We are not preparing an analysis for section 1102b of the Act because we have determined, and the Secretary certifies, that the proposed rule and the final rule would not have a significant impact on the operations of a substantial number of small rural hospitals because small rural hospitals are not being asked to undertake additional effort or take on additional costs outside of the ordinary course of business. Obtaining breakthrough devices for patients is at the discretion of providers. We are not requiring the purchase and use of breakthrough devices. Providers should
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