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From Health Law Daily, May 2, 2014

CMS proposes updates to inpatient psychiatric facilities quality reporting measures, prospective payment rates

By Patricia K. Ruiz, JD

HHS and CMS are seeking to update quality measures and reporting requirements under the quality reporting program for inpatient psychiatric facilities (IPFs), according to the advance release of a Proposed rule to be published in the Federal Register on May 6, 2014. The Proposed rule also addresses prospective payment rates for Medicare inpatient hospital services provided by IPFs, the implementation of ICD-10-CM and ICD-10-PCS codes, and new methods for updating the cost of living adjustment (COLA).

Background. The Medicare, Medicaid, and State Children’s Health Insurance Balanced Budget Refinement Act of 1999 (BBRA) (P.L. 106-113) required the establishment and implementation of an IPF PPS. Section 124 specifically required that the Secretary develop a per diem PPS for inpatient hospital services furnished in psychiatric hospitals and psychiatric units. The PPS was to include an adequate patient classification system reflecting differences in patient resource use and costs among those hospitals and units. The inpatient IPF prospective payment system (PPS) was implemented in November 2004 (69 FR 66922). The Final rule set forth the per diem Federal rates for the period of January 1, 2005, to June 30, 2006, and provided payment for inpatient operating and capital costs for IPF services covered under Medicare Part A.

Inpatient Psychiatric Facilities Quality Reporting (IPFQR) Program. Under sec. 1886(s)(4) of the Social Security Act), added and amended by sec. 3401(f) and 10322(a) of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), the Secretary is required to implement a quality reporting program for IPFs and psychiatric units. For rate year 2014 and each subsequent year, the Secretary is required to reduce any annual update to a standard Federal rate for discharges occurring in that rate year by 2.0 percentage points for any IPF or psychiatric unit that does not comply with quality data submission requirements. CMS has proposed new quality measures to take effect starting fiscal year 2016, including hours of physical restraint use, hours of seclusion use, patients discharged on multiple antipsychotic medications, alcohol use screening, follow-up after hospitalization for mental illness, and creation of post-discharge continuing care plans.

Other proposed updates. Pursuant to 42 CFR 412.428, the Rehabilitation, Psychiatric, and Long Term Care (RPL) market basket update of 2.7 percent would be reduced by 0.3 percentage points. The per diem rate for fiscal year 2015 would be updated to $727.67, and the electroconvulsive therapy payment would be updated to $313.27. The fixed dollar loss threshold amount would be updated to $10,125 to maintain outlier payments at 2 percent of total IPF PPS payments. The Proposed rule would set the national urban cost-to-charge ratio (CCR) ceilings at 1.7049, and the rural CCR would be 1.8823. The national median CCR would be set at 0.6220 for rural IPFS and would be set at 0.4700 for urban IPFs. According to the Proposed rule, these amounts are used in the outlier calculation to determine if an IPF’s CCR is statistically accurate and for new providers without an established CCR.

CMS proposed ICD-10-CM/PCS and ICD-9-CM/PCS codes to be eligible for the MS-DRG and comorbidity payment adjustments under the IPF PPS. The Proposed rule also seeks to establish a wage index budget-neutrality adjustment of 1.003, based on the best available hospital wage index. CMS also proposed changes to COLA factors for IPFs in Alaska and Hawaii, based on the approach finalized in the fiscal year 2014 inpatient hospital prospective payment system (IPPS) Final rule (78 FR 50985, August 19, 2013).

For a look at our coverage of the FY 2014 payment rates, see here.

MainStory: TopStory AgencyNews HealthCareReformNews ReimbursementNews IPPSNews CMSNews BillingNews HealthReformNews IPFNews PartANews QualityNews PaymentNews

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