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From Health Law Daily, August 3, 2015

Quality measures continue to progress in IPPS, LTCH Final rule

By Patricia K. Ruiz, J.D.

The hospital inpatient prospective payment systems for acute care hospitals (IPPS) and long-term care hospital prospective payment system (LTCH) Final rule makes changes to quality measures relating to readmissions, value-based purchasing, and hospital-acquired conditions, according to an advance release. The Final rule also updates payment methodologies for disproportionate share hospitals, uncompensated care, and long-term care hospitals.

MS-DRG documentation and coding adjustment. Section 631 of the American Taxpayer Relief Act (ATRA) (P.L. 112-240) created a requirement that the Secretary make a recoupment adjustment to the standardized amount of Medicare payments to acute care hospitals to account for updates in Medicare severity diagnosis-related group (MS-DRG) documentation and coding that do not necessarily reflect real changes in the case-mix. While government actuaries estimated that a -9.3 percent adjustment to the standardized amount would be necessary for recovering the $11 billion recoupment required by ATRA in one year, it is CMS’ practice to delay or phase in such rate adjustments over more than one year to moderate the effects on rates. Thus, CMS made a -0.8 percent recoupment adjustment to the standardized amount in fiscal years (FYs) 2014 and 2015. For FY 2016, it is making an additional -0.8 percent recoupment adjustment to the standardized amount.

Reduction of hospital payments for excess readmissions. The Final rule also makes policy changes within the Hospital Readmissions Reduction Program, which was established under section 3025 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). It refines the pneumonia readmissions measure, expanding the measure for payment determination for FY 2017 and after. Specifically, it will include patients with a principal discharge diagnosis of pneumonia or aspiration pneumonia and patients with a principal discharge diagnosis of sepsis with a secondary diagnosis of pneumonia coded as present on admission. Patients with a principal discharge diagnosis of respiratory failure and patients with a principal discharge diagnosis of sepsis coded as having severe sepsis are not included. It also adopts an extraordinary circumstance exception policy allowing hospitals experiencing an extraordinary circumstance to request a waiver for using data from the affected time period. This policy aligns with extraordinary circumstance exceptions for other IPPS quality reporting and payment programs.

Hospital Value-Based Purchasing Program. The Final rule adopts an additional measure beginning FY 2018 and another beginning FY 2021 under the Hospital Value-Based Purchasing (VBP) Program, which was added by Section 3001(a)(1) of the ACA.

Hospital-Acquired Condition (HAC) Reduction Program. Section 3008(a) of the ACA established an incentive to hospitals to reduce the incidence of hospital-acquired conditions (HACs). The Final rule: (1) expands the population covered by the central line-associated bloodstream infection (CLABSI) and catheter-associated urinary tract infection (CAUTI) measures to include patients in select nonintensive care unit sites within a hospital; (2) adjusts the relative contribution of each domain to the score used to determine if a hospital will receive the payment adjustment; and (3) creates a policy that will allow hospitals to request a waiver for use of data from the time period affected by an extraordinary circumstance.

DSH payment adjustment and payment for uncompensated care. Section 3133 of the ACA modified payment methodology for Medicare disproportionate share hospitals (DSHs). The Final rule updates estimates of the three factors used to calculate uncompensated care payments for FY 2016. For hospitals that have undergone a merger, the methodology established in FY 2015 for the calculation of uncompensated care will be used to calculate each hospital’s relative share of uncompensated care.

LTCH PPS changes. The Final rule implements Section 1206 of the Pathway for SGR Reform Act, part of the Bipartisan Budget Act of 2013 (P.L. 113-67), which requires the establishment of an alternative site neutral payment rate for Medicare LTCH discharges that fail to meet statutorily defined criteria. These changes will apply to LTCH discharges occurring in cost reporting periods beginning on or after October 1, 2015. The rule also makes changes to address certain statutory requirements related to an LTCH’s average length of stay criterion and discharge payment percentage.

Hospital Inpatient Quality Reporting (IQR) Program. The Final rule establishes three previously finalized quality measures in the IQR Program, which was created by Section 3004(a) of the ACA, as well as a fourth previously finalized LTCH functional status measure. These measures are adopted to meet requirements of the Improving Medicare Post-Acute Care Transformation (IMPACT) Act of 2014 (P.L. 113-185) and will affect annual payment update determinations for FY 2018 and beyond. CMS will also begin to publicly report LTCH quality data beginning fall 2016 on a website such as Hospital Compare.

MainStory: TopStory ReimbursementNews AgencyNews HealthCareReformNews ComplianceNews IPPSNews CMSNews BillingNews CostReportNews DSHNews HealthReformNews LTCHNews PartANews PartBNews QualityNews

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