Health Law Daily CMS’ FY 2019 proposals increase IPPS rate, decrease LTCH PPS rate, reduce regulatory reporting
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Wednesday, April 25, 2018

CMS’ FY 2019 proposals increase IPPS rate, decrease LTCH PPS rate, reduce regulatory reporting

By Susan Smith, J.D., M.A.

CMS projects that total Medicare spending on inpatient hospital services, including capital, will increase by about $4 billion in fiscal year (FY) 2019. Although the inpatient prospective payment system (IPPS) rate would increase for FY 2019, CMS projects that the long term care hospital LTCH PPS rate would decrease by approximately 0.1 percent or $5 million, according to the advance release of the FY 2019 Medicare Hospital IPPS and LTCH PPS Proposed Rule and Request for Information.

IPPS proposed payment rates. CMS projects that the IPPS rate increase for FY 2019, together with other proposed changes to the IPPS payment policies, would increase IPPS operating payments by approximately 2.1 percent, and proposed changes in uncompensated care payments, capital payments, and changes to the low-volume hospital payments would increase IPPS payments by an additional 1.3 percent for a total increase in IPPS payments of 3.4 percent. CMS would increase IPPS operating payment approximately 1.75 percent for hospitals that successfully participate in the Hospital Inpatient Quality Reporting (IQR) Program and are meaningful electronic health record (EHR) users. The increase reflects the projected hospital market basket update of 2.8 percent reduced by a 0.8 percentage point productivity adjustment and a proposed +0.5 percentage point adjustment required by legislation, and the -0.75 percentage point adjustment to the update required by Affordable Care Act (see section 1105 of the Health Care and Education Reconciliation Act of 2010 (P.L. 111-152).

CMS is proposing to distribute roughly $8.25 billion in uncompensated care payments to disproportionate share hospitals in FY 2019. This is an increase of approximately $1.5 billion from the FY 2018.

Proposed LTCH PPS changes. CMS would update the LTCH PPS standard federal payment rate by 1.15 percent. CMS projects that LTCH PPS payments would decrease by approximately 0.1 percent or $5 million in FY 2019, which reflects the continued phase-in of the dual payment rate system, which was extended through FY 2019 by section 51005(b) of the Bipartisan Budget Act of 2018 (P.L. 115-123). CMS would eliminate the 25-percent threshold policy in a budget neutral manner. Under this proposal, the LTCH PPS standard federal payment rate would be adjusted by a factor (-0.9 percent) to maintain aggregate LTCH PPS payments at the estimated levels they would be in absence of this proposed change.

Quality reporting. The proposed rule would remove a total of 19 measures from the quality programs and will de-duplicate another 21 measures from the number of measures acute care hospitals are required to report across the quality and value-based purchasing programs, including the Hospital Inpatient Quality Reporting (IQR), Hospital Value-Based Purchasing (VBP), Hospital Readmissions Reduction (HRRP), and Hospital Acquired-Condition (HAC) Reduction Programs, and the PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program.

CMS would remove measures that are duplicative, "topped out" (meaning that the overwhelming majority of providers are performing highly on them), or where the cost outweighs the benefits of continued use in the program. One claims-based readmissions measure would be adopted. CMS would (1) revise the Hospital VBP Program’s domain weighting beginning with the FY 2021 program year by increasing the weight of the Clinical Care domain in calculating hospitals’ total performance scores; (2) update measure weighting to simplify the HAC reduction program methodology and address concerns raised by small hospitals; (3) clarify HRRP definitions needed to implement statutory requirements of the 21st Century Cures Act (P.L. 114-255).

The proposed rule would remove three measures from the LTCH Quality Reporting Program based on operational challenges with reporting or because they are duplicative of other measures in the program. The measures relate to Methicillin-resistant Staphylococcus aureus (MRSA) Bacteremia Outcome Measure (NQF #1716) (beginning FY 2020); Ventilator Associated Event Outcome Measure (beginning FY 2020); and the Seasonal Influenza Vaccine (Short Stay) (NQF #0680) (beginning FY 2021).

Electronic incentive program. The reporting period for the Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs for eligible hospitals (EHs) and critical access hospitals (CAHs)that report clinical quality measures (CQMs) electronically, would be one, self-selected calendar quarter of calendar year (CY) 2019 data. EHs and CAHs would report on at least four self-selected CQMs from the set of 16. The submission period would be the two months following the close of the calendar year, ending February 29, 2020. CMS proposes to remove 8 of the 16 CQMs beginning with the 2020 reporting period.

All eligible hospitals and CAHs under the Medicare and Medicaid EHR Incentive Programs must use the 2015 Edition of CEHRT. EHR reporting periods in 2019 and 2020 for new and returning participants attesting to CMS or their state Medicaid agency would be a minimum of any continuous 90-day period within each of the calendar years 2019 and 2020.

Meaningful use program. CMS plans to rename the "Meaningful Use" program "Promoting Interoperability" to better reflect its goals. In addition, CMS has proposed a new scoring methodology and new measures related to e-prescribing of opioids that align with the overall agency initiative on the treatment of opioid and substance use disorders. CMS would remove certain measures that do not emphasize interoperability and the electronic exchange of health information. Regulations that apply to EHs would include Puerto Rico hospitals unless otherwise indicated; however, a shorter EHR reporting period would apply in calendar year 2017 as a result of Hurricane Maria.

AHA response to the proposed rule. The American Hospital Association (AHA) acknowledged its appreciation of the steps CMS has taken in the proposed rule to reduce "regulatory barriers" to providing "high-quality, efficient patient care." Specifically, AHA noted (1) the permanent revocation of the 25 percent rule that imposed restrictions on long term care hospitals (LTCHs) provision of care; (2) the implementation of a "meaningful measures" initiative, which is a streamlined approach to quality measurement that focuses on the most critical core issues related to improving patient outcomes; (3) a more flexible, performance based approach to determine whether a hospital has met meaningful use requirements; and (4) limiting reporting periods to 90-days in 2019 and 2020. The AHA expressed disappointment that CMS will require the use of 2015 Edition Certified EHR Technology beginning in 2019.

Request for information on interoperability and price transparency. CMS has requested feedback on positive solutions to better achieve interoperability by revising conditions of participation related to interoperability as a way to increase electronic sharing of data. CMS is also seeking information from the public regarding barriers preventing providers from informing patients of their out of pocket costs.

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