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From Health Law Daily, May 5, 2017

Don’t let hospitals game inpatient quality reporting program, OIG warns CMS

By Sarah E. Baumann, J.D.

CMS’ untargeted approach for selecting hospitals for validating 2016 payment year (PY) inpatient quality reporting (IQR) program data "made it less likely to identify gaming"’ than a more targeted approach would have. Nearly 99 percent of hospitals undergoing validation passed and CMS took action against the remaining six that failed, but the HHS Office of Inspector General (OIG) recommended that CMS use analytics to target outliers for review to identify those that are manipulating IQR data. CMS concurred with the recommendation (OIG Report, No. OEI-01-15-00320, May 1, 2017).

Since fiscal year (FY) 2005, CMS has required hospitals to submit IQR data for review. Since FY 2015, Medicare reduced payments to hospitals that do not submit the required data by one-fourth of the hospital market basket update. Hospitals report data regarding hospital-acquired infections (HAIs) to the Centers for Disease Control and Prevention (CDC) National Healthcare Safety Network (NHSN) database, but report information on clinical process of care, patient experience of care, and spending per beneficiary to CMS. The data submitted also affect payments for hospitals participating in the Hospital Value-Based Purchasing (VBP) Program, the Hospital-Acquired Condition Reduction Program, and the Hospital Readmissions Reduction Program. Each year, CMS selects a random sample of 400 participating hospitals, samples medical records from those hospitals, validates the data for the clinical-process-of-care and HAI measures, and issues an overall score for each hospital. It also has the authority to sample an additional 200 hospitals based on certain thresholds—such as failure to meet validation requirements in the prior year—or analysis-based criteria—such as identifying a hospital as an outlier on a particular measure.

CMS complied with the regulatory requirement to validate IQR data for PY 2016, selecting 400 hospitals at random and targeting 49 hospitals. Among the targeted hospitals, the agency selected 25 for failing to report half their HAIs, 14 for having low passing scores on the prior year’s validation process, seven for falling into the "Other" category, and three without providing an explanation. It validated requirements for 98.7 percent of hospitals and failed five hospitals from the random sample and one hospital from the targeted sample. CMS reduced payments to the six failing hospitals by one-fourth of the market basket and excluded them from the VBP Program for the following PY.

The OIG noted that CMS selected most of the targeted hospitals using threshold-based criteria and did not target any based on aberrant data patterns. On March 1, 2017, CMS and the CDC issued a Joint Reminder on NHSN Reporting, in which they expressed concerns that hospitals might manipulate HAI data through overculturing, underculturing, or adjudication. Overculturing involves ordering diagnostic tests in the absence of clinical symptoms, while underculturing discourages such tests even though clinical symptoms exist. An adjudication deviation occurs when administrative or clinical superiors prevent hospital staff charged with reporting HAIs to the NHSN from reporting them. The OIG opined that CMS’ failure to target hospitals for validation through the use of analytic tools could have caused CMS to miss hospitals that were gaming the system through overculturing, underculturing, or adjudication. It recommended that the agency analyze IQR data to identify hospitals with questionable data patterns, prioritize those hospitals that warrant additional review, and include them in a targeted validation sample. CMS concurred with the recommendation.

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