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IPPS 2016 Proposed Rule Raises Hospital Pay, Emphasizes Quality

CMS readies host of changes

In the fiscal year (FY) 2016 Inpatient Prospective Payment System (IPPS) proposed rule, released April 17, the Centers for Medicaid & Medicare Services (CMS) announced the usual changes to Medicare Severity Diagnosis-Related Groups (MS-DRGs) and their relative weights, the market basket update, and the expansion of its value-based payment quality measures, as it has in previous years, according to a report from HealthLeaders Media.

The proposed increase in operating payment rates to hospitals is 1.1%. According to the CMS: “Hospitals that do not successfully participate in the Hospital IQR [Inpatient Quality Reporting] Program and do not submit the required quality data will be subject to a one-fourth reduction of the market basket update.” Further, the agency projects that “the rate increase, together with other proposed changes to IPPS payment policies, will increase IPPS operating payments by approximately 0.3 percent.”

New is the integration of ICD-10-CM/PCS — adding more insurance against the delay of the code set’s scheduled October 1 implementation. The CMS made significant improvements to the ICD-10 MS-DRGs for hip revisions and added new MS-DRGs for percutaneous intracardiac (PCI) procedures.

The two-midnight rule in the FY 2014 IPPS proposed rule established a benchmark that stays expected to last two or more midnights would generally be considered appropriate for payment, whereas stays expected to last fewer than two midnights would generally be considered appropriate for outpatient payment. Because of provider concern about the rule, however, the CMS and Congress prohibited recovery auditors from reviewing patient status on hospital admissions between October 1, 2013, and April 30, 2015. The Medicare Access and CHIP [Children’s Health Insurance Program] Reauthorization Act of 2015 –– the law that permanently repealed the sustainable growth rate –– further extended this prohibition to September 30, 2015.

The CMS will continue to review short inpatient hospital stays, long outpatient stays with observation services, and the related –0.2% IPPS payment adjustment. The agency plans to include information in the calendar year 2016 Outpatient Prospective Payment System (OPPS) proposed rule regarding these services.

The CMS is also proposing a refinement to the pneumonia readmission measure to expand the measure’s cohort and the formal adoption of an extraordinary circumstance exception (ECE) policy. In the past, the CMS defined the pneumonia cohort for mortality and readmission measurement to include various pneumonia codes as a principal diagnosis, excluding cases in which sepsis, aspiration pneumonia, or respiratory failure served as the principal diagnosis. The CMS proposes to amend the readmission cohort (but not the mortality cohort) to include these excluded cases, effective with the FY 2017 payment determination.

The Hospital Value-Based Purchasing (HVBP) Program adjusts payments to hospitals for inpatient services based on their performance on an announced set of measures. The CMS proposes removing these two measures:

  • IMM-2: Influenza Immunization
  • AMI-7a: Fibrinolytic Therapy Received Within 30 Minutes of Hospital Arrival

If the CMS does remove these measures, it plans to move PC-01 (elective delivery) to the Patient Safety domain and to remove the Clinical Care–Process subdomain for FY 2018 and beyond. The Patient Safety domain will have an increased weight in the HVBP scoring methodology in FY 2018 (from 20% to 25%).

CMS is proposing to adopt the Three-Item Care Transition Measure for FY 2018, and the Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate Following Chronic Obstructive Pulmonary Disease Hospitalization beginning in FY 2021.

The IPPS proposed rule indicates that 19.4% of hospitals are anticipated to be penalized with a 1% reduction in MS-DRG payments for all traditional Medicare discharges in FY 2016 because of the Hospital-Acquired Condition Reduction Program (HACRP) performance.

The CMS is proposing three changes to the HACRP:

  • Expanding the population covered by central line-associated bloodstream infection (CLABSI) and catheter-associated urinary tract infection (CAUTI) measures from ICU locations to select medical and surgical wards in FY 2018
  • Adjusting the relative contribution of each domain to the total HAC score
  • Adding an ECE policy

The CMS is not proposing to add or remove any categories in the rule.

The agency is placing an increased emphasis on performance for hospital-associated infections (HAI) — specifically, the weight for the HAI domain will increase from 75% to 85%. This increase is due to stakeholders’ requests and to the expanded number of measures finalized in prior rules, which increased from four to six.

Patient Safety Indicator 90 (PSI 90) continues to undergo National Quality Forum (NQF) maintenance review. The CMS is considering adding three new measures:

  • PSI 9: Peri-Operative Hemorrhage Rate
  • PSI 10: Peri-Operative Physiologic Metabolic Derangement Rate
  • PSI 11: Postoperative Respiratory Failure

The CMS proposes removing nine measures from the Hospital IQR Program, including six “topped out” measures. Those measures are:

  • STK-01: Venous Thromboembolism (VTE) Prophylaxis for Patients with Ischemic or Hemorrhagic Stroke
  • STK-06: Discharged on Statin Medication
  • STK-08: Stroke Education
  • VTE-1: Venous Thromboembolism Prophylaxis
  • VTE-2: ICU Venous Thromboembolism Prophylaxis
  • VTE-3: Venous Thromboembolism Patients With Anticoagulation Overlap Therapy

However, the CMS plans to retain all but STK-01 as electronic clinical quality measures for the FY 2018 payment determination and beyond.

The CMS is proposing to remove SCIP-Inf-4 (Cardiac Surgery Patients With Controlled Postoperative Blood Glucose). In January, the agency formally suspended the collection of data for SCIP-Inf-4 beginning with July 1, 2014, discharges.

In addition, the CMS plans to require hospitals to report 16 of the 28 electronic clinical quality measures under the Hospital IQR Program that align with the Medicare Electronic Health Records (HER) Incentive Program for FY 2018 payment determination.

The CMS also plans to align the reporting and submission timelines for the clinical quality measures under the Medicare EHR Incentive Program for eligible hospitals and critical access hospitals with the reporting and submission timelines for the Hospital IQR Program.

Source: HealthLeaders Media; April 21, 2015.

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