On April 24, the Centers for Medicare & Medicaid Services (CMS) released its fiscal year (FY) 2019 inpatient prospective payment system (IPPS) and long-term care hospital prospective payment system (LTCH PPS) proposed rule. CMS proposes to reduce regulatory burdens for inpatient hospitals and increase price transparency and better data sharing between hospitals and other providers and suppliers. Highlights from the proposed rule are explained in further detail below.
Updates to Medicare Payment Rates
The proposed rule would update Medicare payment rates for both acute care hospitals and long-term care hospitals. IPPS payment rates would increase 1.25 percent for hospitals that successfully participate in the Hospital Inpatient Quality Reporting (IQR) Program and are meaningful electronic health record (EHR) users. CMS also proposes a positive 0.5 percentage adjustment required by the Medicare Access and CHIP Reauthorization Act of 2015 for a total increase of 1.75 percent for hospitals that successfully participate in the IQR Program and are meaningful EHR users. Overall, LTCH PPS payments would decrease by about 0.1 percent or $5 million in FY 2019, as CMS continues the gradual implementation of the dual payment rate system for LTCHs.
Removal of Written Inpatient Admission Order as a Condition for Payment
CMS proposes to no longer require a written inpatient admission order to be present in the medical record as a specific condition of payment under Medicare Part A. The new policy would address technical documentation discrepancies, including missing practitioner admission signatures, co-signatures, authentication signatures, and signatures after discharge, that keep otherwise medically necessary inpatient claims from being paid by Medicare. CMS emphasizes that the new policy would not change the “2 midnight” payment policy or the requirement for an individual to be formally admitted as an inpatient under an order for inpatient admission.
Revamping the Medicare and Medicaid EHR Incentive Programs
CMS proposes substantive changes to the Medicare and Medicaid EHR Incentive Programs. In addition to renaming the programs, which would now be called the Promoting Interoperability (PI) Programs, EHR measurement would increasingly focus on interoperability (the ability of different systems to communicate, exchange data, and use the information being exchanged) and improving patient access to health information.
EHR reporting periods in 2019 and 2020 for new and returning participants attesting to CMS or a state Medicaid agency would be any continuous 90-day period within each calendar year (CY). Beginning in CY 2019, all participants would be required to use the 2015 Edition of certified EHR technology (CEHRT).
CMS proposes the implementation of a new performance-based scoring methodology for participants submitting an attestation to CMS under the Medicare PI Program and would give states the option of adopting the new scoring methodology for their own Medicaid PI Programs. CMS would add two new measures relating to e-prescribing for opioids. The Query of Prescription Drug Monitoring Program measure and Verify Opioid Treatment Agreement measure would be optional for EHR reporting periods in 2019 and able to be excluded in 2020 for any participant unable to report on the measures. A hospital would need to earn a score of at least 50 out of 100 to satisfy the requirement to report on the objectives and measures of meaningful use beginning in 2019. If a new scoring methodology is not finalized, CMS would maintain the current Stage 3 methodology with the addition of the two new opioid measures.
Hospitals reporting clinical quality measures electronically as part of the PI Program would only be required to report on four self-selected clinical quality measures out of 16 for CY 2019. For CY 2020, CMS would remove the following eight clinical quality measures: Primary PCI Received Within 90 Minutes of Hospital Arrival; Home Management Plan of Care Document Given to Patient/Caregiver; Median Time from ED Arrival to ED Departure for Admitted ED Patients; Hearing Screening Prior to Hospital Discharge; Elective Delivery; Stroke Education; Assessed for Rehabilitation; and Median Time from ED Arrival to ED Departure for Discharged ED Patients. These proposed changes would also be adopted for inclusion in the Hospital Inpatient Quality Reporting (IQR) Program, which is discussed in more detail below.
Increasing Hospital Price Transparency
The Affordable Care Act (ACA) added section 2718(e) of the Public Health Service Act, which requires hospitals to make public a list of the standard charges for the items and services they provide. CMS expected this list to be updated at least annually. The agency is concerned that there remains insufficient price transparency and proposes to require hospitals to make available a list of current standard charges in a machine readable format. The information would need to be available via the internet and be updated at least annually.
As a result of insufficient price transparency, CMS expresses concerns regarding patients receiving bills from out-of-network ancillary providers at in-network hospitals and that chargemaster data is insufficiently clear for consumers. In order to improve price transparency CMS requests comments on several topics, including: how to define “standard charges;” ways to better inform patients about out-of-pocket costs; whether health care providers should provide information on what Medicare reimburses for particular services; and whether noncompliance with transparency requirements should be public and possible enforcement mechanisms for noncompliance.
Elimination of the 25 percent Threshold Policy for LTCHs
CMS would eliminate the 25 percent threshold policy for LTCHs, which is currently under a moratorium for FY 2018. The 25 percent threshold policy is a per discharge payment adjustment that is applied when the number of patients from any single referring hospital exceeds a certain threshold (generally 25 percent) for a given cost reporting period. The policy would apply to all discharges (excluding subclause (ii) LTCHs or grandfathered hospitals-within-hospitals, high-cost outlier discharges, and Medicare Advantage discharges) regardless of whether an LTCH was paid the site neutral payment rate or the LTCH PPS federal payment rate.
Reducing Quality Reporting Measures
As part of the Meaningful Measures Initiative CMS proposes to reduce the number of measures hospitals are required to report in the quality and value-based purchasing programs by removing duplicative, highly performed, and excessively burdensome measures. CMS proposes a new measure removal factor examining whether “the costs associated with a measure outweighs the benefit of its continued use in the program.” This factor would apply to measures in the Hospital IQR, PPS-Exempt Cancer Hospital Quality Reporting Program, and the LTCH Quality Reporting Program. Based on these criteria, CMS would remove a total of 19 measures and eliminate the duplication of 21 measures across the quality and value-based programs. A detailed breakdown of the measures CMS proposes to remove is available in the CMS Fact Sheet.
Hospital Inpatient Quality Reporting Program
In addition to the removal of 39 measures from the Hospital IQR Program, CMS proposes two changes regarding the reporting of electronic clinical quality measures (eCQMs) for the 2019 reporting period (affecting 2021 payment determinations). If finalized, hospitals would be required to submit one self-selected calendar quarter of discharge data for four eCQMs in the measure set. The proposed rule would require the use of 2015 CEHRT for the submission of eCQMs beginning with the 2019 reporting period.
CMS requests comment on a Claims-Only Hospital-Wide All-Cause Risk Standardized Mortality Measure, and/or a Hybrid Hospital-Wide All-Cause Risk Standardized Mortality Measure. CMS is considering the inclusion of one or both mortality measures. CMS also proposes the inclusion of the Hospital Harm – Opioid-Related Adverse Events eCQM. CMS wishes to incentivize hospitals to closely monitor patients receiving opioids during a hospitalization to prevent opioid-induced respiratory depression. CMS requests stakeholder feedback on the future development of eCQMs and ways for CMS to address challenges surrounding eCQM use.
Revised Separateness and Control Requirements for Certain IPPS-Excluded Satellites
CMS has proposed to revise the requirements for IPPS-excluded satellite facilities regarding separateness and control such that IPPS-excluded satellite facilities co-located with IPPS-excluded hospitals would not be required to comply with these requirements. The separateness and control requirements would continue to apply to satellite facilities co-located with IPPS participating hospitals. CMS states that the policy is similar to the hospital-within-hospital regulation CMS finalized for FY 2018. This proposal would not affect IPPS-excluded satellite facilities co-located with grandfathered IPPS hospitals.
Flexibility for New Urban Teaching Hospitals
CMS proposes to provide more flexibility for urban teaching hospitals to form a Medicare Graduate Medical Education (GME) affiliated group. Participating in a GME affiliated group allows hospitals to receive increases and decreases to their FTE caps in order to share cap slots. The Secretary may prescribe rules allowing institutions of the same affiliated group to apply the limitation on the number of residents on an aggregate basis. CMS believes this will facilitate increased training in local and smaller community-based hospitals. CMS acknowledges concerns about gaming in the case of GME affiliated groups of existing and new teaching hospitals. However, CMS believes new urban teaching hospitals are likely to be similarly situated and therefore less likely to participate in a group where the agreement would only provide advantages to one of the participating hospitals. If finalized, this change would begin with affiliation agreements for the residency training year beginning July 1, 2019. The change would apply to both Medicare GME and emergency Medicare GME affiliation agreements.
Disproportionate Share Hospital Payments
The ACA reduced Disproportionate Share Hospital (DSH) payments to twenty-five percent of the payment that would otherwise be provided to IPPS hospitals. The remaining seventy-five percent of payments that would have been provided to hospitals receiving DSH payments is distributed as uncompensated care payments. This amount is based on the amount of uncompensated care a hospital provides relative to the amount of uncompensated care reported by all hospitals. In making this determination for FY 2019, CMS proposes to increase the incorporation of worksheet S-10 data for the calculation of a hospital’s uncompensated care amounts. If finalized, CMS would use S-10 data for the FY 2014 and FY 2015 cost reporting periods and only incorporate the low-income insured days for FY 2013. CMS again proposes to define “uncompensated care” as the amount of Line 30 of Worksheet S-10, which is the cost of charity care, the cost of non-Medicare bad debt, and nonreimbursable Medicare bad debt.
The proposed rule would increase DSH payments by $1.5 billion, to $8.250 billion in FY 2019, which CMS notes is an increase of 21.9% from FY 2018. A notable reason for the increase is the incorporation of an increased uninsured rate for calendar year 2019 (9.1% in 2018; 9.6% in 2019). This reverses a trend of decreases in the uninsured rate since the implementation of the ACA.
Payments for New Technologies
The proposed rule contains a discussion of the status of seven new technology add-ons approved for FY 2018. CMS has a process for identifying and providing payment for new medical services and technologies. To receive an add-on payment for a new medical service or technology the following criteria must be met: (1) the medical service or technology must be new; (2) the medical service or technology must be costly such that the DRG rate otherwise applicable to discharges involving the medical service or technology is determined to be inadequate; and (3) the service or technology must demonstrate a substantial clinical improvement over existing services or technologies.
The proposed rule also discusses the status of fifteen applications for add-on payments for FY 2019. This includes applications for two CAR T immunotherapies, which CMS will evaluate as one application. CMS states that the technologies are intended to treat the same or similar disease, in the same or similar patient population, using the same or similar mechanism of action. For FY 2019, CMS proposes to assign cases involving the utilization of these CAR T therapies to a MS-DRG related to autologous bone marrow transplants.
Request for Information on Interoperability
The proposed rule includes a Request for Information on the possibility of revising hospital Conditions of Participation regarding interoperability. For example, CMS would consider requiring hospitals transferring medically necessary information to another facility electronically upon a patient transfer or discharge or requiring hospitals to making certain information available to patients electronically if requested.
The proposed rule will be published in the Federal Register on May 7, 2018 and public comments are due no later than 5:00 p.m. on June 25, 2018.