2018 IPPS and LTCH Proposed Policy Updates
The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule April 14 that would update 2018 Medicare payment and polices in the Inpatient Prospective Payment System (IPPS) and Long-term Care Hospitals Prospective Payment System (LTCH PPS). The proposed changes apply to approximately 3,330 acute care hospitals and approximately 420 LTCHs and, if finalized, will affect discharges occurring on or after October 1.
2018 IPPS Payment Rates
The proposed increase in operating payment rates for general acute care hospitals paid under the IPPS that successfully participate in the Hospital Inpatient Quality Reporting (IQR) Program and are meaningful electronic health record (EHR) users is approximately 1.6 percent.
There are four possible applicable percentage increases that can be applied to the national standardized amount, as shown below (exceptions apply to Puerto Rico).
This proposed increase reflects the projected hospital market basket update of 2.9 percent adjusted by:
- -0.4 percentage point required for productivity;
- -0.6 percent adjustment to offset the estimated costs of the two-midnight policy;
- proposed +0.4588 percentage point adjustment required by the statute, as recently amended by the 21st Century Cures Act; and
- -0.75 percentage point adjustment required by the Affordable Care Act.
Other additional payment adjustments will include:
- continued penalties for excess readmissions;
- a continued 1 percent penalty for hospitals in the worst performing quartile under the Hospital Acquired Condition Reduction Program; and
- continued upward and downward adjustments under the Hospital Value-Based Purchasing (VBP) Program.
CMS is also proposing to update estimates of the three factors used to determine uncompensated care payments for 2018.
Hospital-Acquired Conditions (HAC) Reduction Program
CMS is proposing to make five changes to existing HAC Reduction Program policies:
- Specify the dates of the time period used to calculate hospital performance for the 2020 HAC Reduction Program;
- Request comments on additional measures for potential future adoption;
- Request comments on accounting for social risk factors;
- Request comments on accounting for disability and medical complexity in the Centers for Disease Control and Prevention National Healthcare Safety Network (CDC NHSN) measures in Domain 2; and
- Update the Extraordinary Circumstance Exception(ECE) policy.
Hospital Readmissions Reduction Program (HRRP)
In accordance with the 21st Century Cures Act, CMS is proposing:
- A methodology for calculating the proportion of dual-eligible patients;
- A methodology for assigning hospitals to peer groups; and
- A payment adjustment formula calculation methodology.
Clinical Quality Measures (CQMs)
CMS is proposing for 2017:
- Reporting period: For eligible hospitals and CAHs demonstrating meaningful use for the first time in 2017 or that have demonstrated meaningful use in any year prior to 2017, the reporting period would be two self-selected quarters of CQM data in 2017;
- CQMs: If an eligible hospital or CAH is only participating in the EHR Incentive Program, or is participating in both the EHR Incentive Program and the Hospital IQR Program, the eligible hospital or CAH would report on at least six (self-selected) of the available CQMs;
CMS is proposing for 2018:
- Reporting period: For eligible hospitals and CAHs reporting CQMs electronically that demonstrate meaningful use for the first time in 2018 or that have demonstrated meaningful use in any year prior to 2018, the reporting period would be the first three quarters of 2018. For the Medicare EHR Incentive Program only, the submission period for reporting CQMs electronically would be the two months following the close of the calendar year, ending February 28, 2019.
- CQMs: For eligible hospitals and CAHs participating only in the EHR Incentive Program, or participating in both the EHR Incentive Program and the Hospital IQR Program, the eligible hospital or CAH would report on at least six (self-selected) of the available CQMs.
For EPs in the EHR Incentive Program, CMS is proposing the following changes:
- Reporting Periods: For 2017, CMS is proposing to modify the CQM reporting period for EPs electronically reporting CQMs under the Medicaid EHR Incentive Program to a minimum of a continuous 90-day period during the calendar year.
- CQMs: Align the specific CQMs available to EPs participating in the Medicaid EHR Incentive Program with those available to professionals participating in the Merit-based Incentive Payment System.
Medicare and Medicaid EHR Incentive Programs
CMS is proposing to modify the EHR reporting periods for new and returning participants attesting to CMS or their state Medicaid agency from the full year to a minimum of any continuous 90-day period during the calendar year.
As mandated by the 21st Century Cures Act, CMS is proposing to add a new exception from the Medicare payment adjustments for EPs, eligible hospitals, and CAHs that demonstrate through an application process that compliance with the requirement for being a meaningful EHR user is not possible because their certified EHR technology has been decertified under the Office of the National Coordinator for Health Information Technology (ONC) Certification Program.
Also mandated by the 21st Century Cures Act, CMS is proposing to exempt ambulatory surgical center (ASC)-based EPs from the 2017 and 2018 Medicare payment adjustments if they furnish substantially all of their covered professional services in an ASC. To determine the final definition of “substantially,” CMS is requesting public comment on two proposed alternative definitions:
- An EP who furnishes 75 percent or more of their covered professional services in sites of service identified by the codes used in the HIPAA standard transaction as an ASC setting in the calendar year that is two years before the payment adjustment year
- An EP who furnishes 90 percent or more of their covered professional services in sites of service identified by the codes used in the HIPAA standard transaction as an ASC setting in the calendar year that is two years before the payment adjustment year.
CMS also proposes to use Place of Service (POS) code 24 to identify services furnished in an ASC and is requesting public comment on whether other POS codes or mechanisms should be used to identify sites of service in addition to or in lieu of POS code 24.
Hospital Inpatient Quality Reporting (IQR) Program
CMS is proposing to:
- Re-word the current pain management questions in the hospital Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey to focus on the hospital’s communications with patients about the patients’ pain during the hospital stay beginning with surveys in January 2018; and
- Change the risk adjustment methodology used in the Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate following Acute Ischemic Stroke Hospitalization measure to include stroke severity codes (based on the NIH Stroke Scale), beginning with the 2023 payment determination.
CMS is also proposing voluntary reporting of one new measure, the Hybrid Hospital-Wide Readmission Measure with Claims and Electronic Health Record Data, for the 2018 reporting period.
CMS is proposing a number of changes in relation to the reporting of electronic clinical quality measures (eCQMs):
- Modify the previously finalized eCQM reporting requirements for the 2017 reporting period/2019 payment determination, such that hospitals would be required to select and submit six of the available eCQMs included in the Hospital IQR Program measure set and provide two, self-selected, calendar year quarters of data, in alignment with the electronic reporting requirements for CQMs in the Medicare EHR Incentive Program for hospitals;
- Modify the previously finalized eCQM reporting requirements for the 2018 reporting period/2020 payment determination, such that hospitals would be required to select and submit six of the available eCQMs, and provide data for the first three calendar quarters (Q1-Q3) of 2018, in alignment with the electronic reporting requirements for CQMs in the Medicare EHR Incentive Program for hospitals;
- Make changes to several related technical eCQM submission requirements beginning with the 2019 payment determination, including which edition of certified EHR technology hospitals should use for eCQM reporting, in alignment with the Medicare EHR Incentive Program for hospitals;
- Modify the previously finalized validation process for eCQM data to reduce the number of cases required to be submitted and to include additional exclusion criteria beginning with the 2020 payment determination and subsequent years; and
- Continue the medical record submission requirements for validation of eCQM data that were finalized in the 2017 IPPS/LTCH PPS final rule for the 2021 payment determination and subsequent years.
Hospital VBP Program
In this program, CMS is proposing to:
- Remove the current 8-indicator Patient Safety for Selected Indicators (PSI 90) measure from the Safety domain beginning with the 2019 program year;
- Adopt the 10-indicator modified Patient Safety and Adverse Events Composite PSI 90 measure beginning in the 2023 program year;
- Adopt the Hospital-Level, Risk-Standardized Payment Associated with a 30-day Episode of Care for Pneumonia measure for the Efficiency and Cost Reduction domain beginning with the 2022 program year; and
- Revise the Efficiency and Cost Reduction domain weighting beginning with the 2021 program year to reflect the implementation of condition-specific payment measures in the Hospital VBP Program.
PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program
CMS is proposing to add four measures that assess end-of-life care:
- Proportion of Patients Who Died from Cancer Receiving Chemotherapy in the Last 14 Days of Life (NQF #0210);
- Proportion of Patients Who Died from Cancer Admitted to the ICU in the Last 30 Days of Life (NQF #0213);
- Proportion of Patients Who Died from Cancer Not Admitted to Hospice (NQF #0215); and
- Proportion of Patients Who Died from Cancer Admitted to Hospice for Less than Three Days (NQF #0216).
CMS is also proposing to remove three cancer-specific, chart-abstracted process measures:
- Adjuvant Chemotherapy is Considered or Administered Within four Months (120 Days) of Diagnosis to Patients Under the Age of 80 with AJCC III (Lymph Node Positive) Colon Cancer (NQF #0223);
- Combination Chemotherapy is Considered or Administered Within four Months (120 Days) of Diagnosis for Women Under 70 with AJCC T1c, or Stage II or III Hormone Receptor Negative Breast Cancer (NQF #0559); and
- Adjuvant Hormonal Therapy (NQF #0220).
Inpatient Psychiatric Facility Quality Reporting Quality Reporting (IPFQR) Program
Beginning with 2020 payment determination and continuing for subsequent years, CMS is proposing to:
- add the Medication Continuation following Inpatient Psychiatric Discharge measure, which is calculated from claims data;
- update the IPFQR Program’s extraordinary circumstances exception (ECE) policy to align with other programs’ ECE provisions;
- change how the annual data submission period is specified to align the end of this period with the deadline for submitting a Notice of Participation (NOP) or withdrawing from the program; and
- consider factors by which it would evaluate measures to be removed from or retained in the IPFQR Program.
LTCH PPS Changes
CMS is proposing to update the LTCH PPS standard federal payment rate by 1 percent, consistent with the provisions of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).
In addition, CMS is proposing a regulatory moratorium on the implementation of the 25-percent threshold policy for 2018 while it conducts an evaluation to determine if it is still needed.
CMS is also proposing to:
- revise its short-stay outlier payment adjustment; and
- implement various provisions of the 21st Century Cures Act that affect LTCHs.
LTCH Quality Reporting Program (QRP)
Under the LTCH QRP, the applicable annual update to the LTCH PPS standard federal payment rate for discharges is reduced by two percentage points if the LTCH does not submit data on specified quality measures. Beginning with the 2020 program year, LTCHs must also report standardized patient assessment data related to five specified patient assessment categories.
CMS is proposing to replace the current pressure ulcer measure with an updated version of that measure, as well as adopt two new companion measures (one process and one outcome), beginning with the 2020 LTCH QRP. The proposed measures are:
- Changes in Skin Integrity Post-Acute Care: Pressure Ulcer/Injury;
- Compliance with Spontaneous Breathing Trial (SBT) by Day 2 of the LTCH Stay; and
- Ventilator Liberation Rate.
Further, CMS is proposing to remove two currently adopted measures: Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678) and All-Cause Unplanned Readmission Measure for 30 Days Post-Discharge from LTCHs.
CMS is also proposing that, beginning with the 2020 program year, LTCHs begin reporting standardized patient assessment data and additional standardized patient assessment data with respect to five specified patient assessment categories required by law, including:
- functional status;
- cognitive function;
- special services, treatments and interventions;
- medical conditions and co-morbidities; and
CAH 96-hour Certification Requirement
CMS is providing notice that it will direct Quality Improvement Organizations (QIOs), Medicare administrative contractors, the Supplemental Medical Review Contractor (SMRC), and recovery audit contractors (RACs) to make the CAH 96-hour certification requirement a low priority for medical record reviews conducted on or after October 1. Absent concerns of probable fraud, waste or abuse of the coverage requirement, these contractors will not conduct medical record reviews.