Recognition of payment for new technology services for ambulatory payment classification (APC) groups under the Outpatient Prospective Payment System and Supporting Regulations in 42 CFR, Part 419

Process and Information Required to Apply for Assignment to a New Technology Ambulatory Payment
Classification (APC) Group Under the Hospital Outpatient Prospective Payment System (OPPS)
Page 1

Process and Information Required for a New Technology
Ambulatory Payment Classification (APC) Assignment Under the
Hospital Outpatient Prospective Payment System (OPPS)
Please note: For process and information required to apply for transitional pass-through
payment status for drugs and biologicals, or for assignment and payment for new
pass-through device categories, go to the main OPPS web page, currently at
http://www.cms.hhs.gov/HospitalOutpatientPPS/ to see the latest instructions.
(NOTE: Due to the continuing development of the new cms.hhs.gov web site,
this link may change.)

This announcement describes in detail the process and information required for applications
requesting a New Technology APC assignment under the Medicare hospital outpatient
prospective payment system (OPPS).
Refer to the final rule in the November 30, 2001 Federal Register (66 FR 59897) for a full
discussion of the criteria and information needed for a new technology APC assignment.
Because CMS intends to make information used in the ratesetting process under the OPPS
available to the public for analysis, applicants are advised that any information submitted,
including commercial or financial data, is subject to disclosure for this purpose.
We will accept New Technology APC applications on an ongoing basis. However, we must
receive applications sufficiently in advance of the first calendar quarter in which New
Technology APC payment is sought to allow time for analysis, decision-making, and systems
changes. The table below indicates the earliest date that New Technology APC status could be
implemented once a completed application and all additional information are received.
CMS Must Have Complete
Application and All Necessary
Information by the first
business date in . . . .
March
June
September
December

Earliest Date To Be Considered
For a New Technology APC
Assignment Effective. . .
July 1
October 1
January 1
April 1

PLEASE NOTE: A longer evaluation period may be required if an application is incomplete, if
further information is required, or if a more extensive evaluation is required in order to
determine eligibility.

Process and Information Required to Apply for Assignment to a New Technology Ambulatory Payment
Classification (APC) Group Under the Hospital Outpatient Prospective Payment System (OPPS)
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An application is not considered complete until—
All required information has been submitted, AND
All questions related to such information have been answered.

Process and Information Required to Apply for Assignment to a New Technology Ambulatory Payment
Classification (APC) Group Under the Hospital Outpatient Prospective Payment System (OPPS)
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What kinds of services are appropriate for a “New Technology” APC?
New Technology APCs are reserved for a comprehensive service or procedure that is truly
new and significant enough to warrant having its own code under the Healthcare Common
Procedure Coding system (HCPCS).
New Technology APCs are intended to provide payment under the OPPS for complete
services or procedures that cannot be appropriately reported by an existing HCPCS code
assigned to a clinical APC or by a new HCPCS code that cannot be appropriately assigned to
a clinical APC. The most important criterion in determining whether a technology is ―truly
new‖ is the inability to describe appropriately, and without redundancy, the complete service
with a current individual HCPCS code or combination of codes.
A service that qualifies for a New Technology APC may be a complete, stand-alone service
(for example, water-induced thermotherapy of the prostate), or it may be a service that would
always be billed in combination with other services (for example, coronary artery
brachytherapy). Eligibility for assignment to a New Technology APC is not contingent on
hospitals billing other HCPCS codes in conjunction with a proposed new technology
procedure.
A new technology service or procedure, even though billed in combination with other,
previously existing procedures, describes a distinct procedure with a beginning, middle, and
end.
What kinds of services are NOT appropriate for a “New Technology” APC?
A device, drug, biologic, radiopharmaceutical, product, or commodity for which transitional
pass-through payment could be made under section 1833(t)(6) of the Social Security Act is
not appropriate for assignment to a New Technology APC.
Items, materials, supplies, apparatuses, instruments, implements, or equipment whose costs
are appropriately packaged into existing APC groups and that are used to accomplish more
comprehensive services or procedures which are appropriately described by existing HCPCS
codes are not eligible for payment under a New Technology APC.
Drugs, supplies, devices, and equipment do not describe a distinct procedure with a
beginning, middle, and end, and therefore are not be eligible for assignment to New
Technology APCs.
Items, supplies or equipment used as a tool or that serve as an aid in performing a variety of
procedures, such as a scalpel, are not appropriate for assignment to a New Technology APC.
Integral components of HCPCS codes, such as preparing a patient for surgery or preparation
and application of a wound dressing for wound care, are not eligible for assignment to a New
Technology APC.
To be considered for a New Technology APC, does a service or procedure have to have
been given its own CPT code (Level I HCPCS) or received prior approval for an
alphanumeric code (Level II HCPCS)?
No. Lacking an appropriate CPT code (Level I HCPCS) or alphanumeric Level II HCPCS code,
a service or procedure might only be described by using a combination of several existing codes.
This coding mixture may not fully and accurately define the service and fail to take into account

Process and Information Required to Apply for Assignment to a New Technology Ambulatory Payment
Classification (APC) Group Under the Hospital Outpatient Prospective Payment System (OPPS)
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all the resources required to deliver the comprehensive service. If, upon review, we find that the
service meets the criteria for assignment to a New Technology APC, we would consider creating
a Level II HCPCS code to describe the procedure comprehensively. Hospitals would use the
new Level II HCPCS code to bill under the OPPS for the new technology service, rather than
relying on a random combination of existing codes in an attempt to approximate a description of
the service. The Level II HCPCS code would be assigned to the New Technology APC whose
payment level most closely represents, in the aggregate, all of the resources needed to furnish the
service.
Does having a HCPCS code mean that Medicare will pay for a service under the OPPS?
No. Neither assignment of a HCPCS code nor approval of a service for assignment to a New
Technology APC assures coverage of the specific item or service in a given case. To receive
payment, a new technology service must be considered reasonable and necessary; and each use
of a new technology service is subject to medical review for determination of whether its use was
reasonable and necessary.
If CMS assigns an alphanumeric HCPCS code to a service in order to allow payment for
the service under the OPPS in a New Technology APC, does that mean the service will
subsequently be approved for a national Level I or Level II HCPCS code?
No. The American Medical Association is solely responsible for the creation of codes under the
Current Procedural Terminology (CPT), also known as Level I HCPCS codes. National HCPCS
codes (Level II alphanumeric codes) are established separately, in accordance with the annual
HCPCS cycle that is described at http://cms.hhs.gov/medicare/hcpcs/default.asp . The code
that CMS assigns to facilitate billing and payment through a New Technology APC is
independent of the other two coding systems and intended solely for hospitals to use when
billing under the OPPS.
If a new national HCPCS code, either Level I or Level II, is created explicitly for a service
during the AMA or CMS annual coding update process, does that mean the service
automatically qualifies for payment under a New Technology APC?
No. In order to be paid for under a New Technology APC, a service or procedure has to meet the
definition of services eligible for assignment to a New Technology APC and all of the applicable
criteria for assignment to a New Technology APC. Those criteria are listed below.
How are New Technology APCs different from other APC groups?
New Technology APCs are defined solely on the basis of cost and not the clinical
characteristics of a service.
The payment rate for each New Technology APC is based on the midpoint of a range of
costs, not on a relative payment weight.
Which APC groups are New tTchnology APCs?
The current series of New Technology APC groups are numbered from 1491 through 1574.
Services assigned to APCs 1491 through 1495 and APCs 1502 through 1537 are not subject to
multiple procedure payment reductions (status indicator of ―S‖). Services assigned to APCs

Process and Information Required to Apply for Assignment to a New Technology Ambulatory Payment
Classification (APC) Group Under the Hospital Outpatient Prospective Payment System (OPPS)
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1539 through 1574 and APCs 1496 through 1500 are discounted when furnished with other
procedures or services that are also subject to discounting (status indicator of ―T‖). (See the
November 24, 2006 Federal Register, Addendum A for the current list of New Technology APCs
and their payment amounts (71 FR 68239 – 40)). These series of APCs may be changed from
time to time, so readers are advised to refer to the most recently published OPPS update,
Addendum A, to see the most recent New Technology APCs in any given calendar year.
Who may apply? Device manufacturers, hospitals, or any interested party may apply to have a
new service assigned to a New Technology APC.
What are the criteria that a service must meet to be eligible for assignment to a New
Technology APC?
To be assigned to a New Technology APC, the following criteria have to be met.
The service is one that could not have been adequately represented in the claims data being
used for the most current annual OPPS payment update.
The service does not qualify for an additional payment under the transitional pass-through
provisions established under section 1833(t)(6) of the Social Security Act and in Subpart G,
Transitional Pass-through Payments in the regulations at 42 CFR 419.
The service cannot reasonably be placed in an existing APC group that is appropriate in
terms of clinical characteristics and resource costs.
The service falls within the scope of Medicare benefits under section 1832(a) of the Act.
The service is determined to be reasonable and necessary in accordance with section
1862(a)(1)(A) of the Social Security Act.
How long is a service eligible for payment within a New Technology APC?
A service is paid under a New Technology APC until sufficient claims data have been collected
to allow CMS to assign the procedure to an existing APC group that is appropriate in clinical and
resource terms. We expect this to occur within two to three years from the time a new HCPCS
code becomes effective. However, if we are able to collect sufficient claims data in less than two
years, we would consider reassigning the service to an appropriate APC. Or, if we do not have
sufficient data at the end of three years upon which to base its reassignment to an appropriate
APC, we would keep the service in a New Technology APC until adequate data become
available.
What has to be included in an application for assignment to a New Technology APC?
To enable CMS to make an appropriate determination that the criteria for a New Technology
APC assignment are met, applications for services to be assigned to a New Technology APC
must include all of the information listed below. A separate application is required for each
distinct New Technology APC assignment that is being requested. An application that does not
include all of the following information is considered incomplete and cannot be acted upon:
1. The name by which the service is most commonly known.
2. A clinical vignette, including patient diagnoses that the service is intended to treat,
the typical patient, and a description of what resources are used to furnish the service
by both the facility and the physician. For example, for a surgical procedure this

Process and Information Required to Apply for Assignment to a New Technology Ambulatory Payment
Classification (APC) Group Under the Hospital Outpatient Prospective Payment System (OPPS)
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would include staff, operating room, and recovery room services, as well as
equipment, supplies, and devices, etc.
3. A list of any drugs or devices used as part of the service that require approval from
the Food and Drug Administration (FDA) and information to document receipt of
FDA approval/clearances and the date obtained, including a copy of the FDA
approval or clearance letter. NOTE: Applicants are advised not to apply for a New
Technology APC assignment until any required FDA approvals or clearances are
received. An application is not complete without the required FDA information.
4. A description of where the service is currently being performed (by location) and the
approximate number of patients receiving the service in each location.
5. An estimate of the number of physicians who are furnishing the service nationally
and the specialties they represent.
6. Information about the clinical use and efficacy of the service, such as peer-reviewed
articles.
7. The CPT or HCPCS Level II code(s) that are currently being used to report the
service and an explanation of why use of these HCPCS codes is inadequate to report
the service under the OPPS.
8. A list of the CPT or HCPCS Level II codes for all items and procedures that are an
integral part of the service. This list should include codes for all procedures and
services that, if coded in addition to the code for the service under consideration for
new technology status, would represent unbundling.
9. A list of all CPT and HCPCS Level II codes that would typically be reported in
addition to the service.
10. A proposal for a new HCPCS code, including a descriptor and rationale for why the
descriptor is appropriate. The proposal should include the reason why the service
does not have a CPT or HCPCS Level II code, and why the CPT or HCPCS Level II
code or codes currently used to describe the service are inadequate.
11. An itemized list of the costs incurred by a hospital to furnish the new technology
service, including labor, equipment, supplies, overhead, etc.
12. Name(s), address(es), e-mail addresses and telephone number(s) of the party or
parties making the request and responsible for the information contained in the
application. If different from the requester, give the name, address, e-mail address,
and telephone number of the person that CMS should contact for any additional
information that may be needed to evaluate the application.
13. Other information as CMS may require to evaluate specific requests or that the
applicant believes CMS may need to evaluate the application.
WHERE TO SEND APPLICATIONS
Mail six copies of each completed application to the following address:
OPPS New Tech APC
Division of Outpatient Care
Mailstop C4-05-17
Centers for Medicare and Medicaid Services

Process and Information Required to Apply for Assignment to a New Technology Ambulatory Payment
Classification (APC) Group Under the Hospital Outpatient Prospective Payment System (OPPS)
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7500 Security Boulevard
Baltimore, MD 21244-1850
Questions pertaining to the pass-through payment application process may be sent via e-mail to
the Division of Outpatient Care mailbox, [email protected] or by phone to 410-7860378.
According to the Paperwork Reduction Act of 1995, no persons are required to respond to a collection of information unless it
displays a valid OMB control number. The valid OMB control number for this information collection is 0938-0860. The time
required to complete this information collection is estimated to average 12 hours per response, including the time to review
instructions, search existing data resources, gather the data needed, and complete and review the information collection. If you have
comments concerning the accuracy of the time estimate(s) or suggestions for improving this form, please write to: Centers for
Medicare & Medicaid Services, 7500 Security Boulevard, PRA Reports Clearance Officer, Mail Stop C4-26-05, Baltimore,
Maryland 21244-1850.

Last Modified: January 2007