CMS Proposes Value Based Purchasing Program Rules for Hospital Inpatient

On Friday, CMS announced its highly anticipated proposed rules for its new hospital value based purchasing program. The pdf of the proposed rules can be found here: http://www.ofr.gov/OFRUpload/OFRData/2011-00454_PI.pdf
(Note: this link will not likely become live until 1/13/2011).

Although these are "new" proposed rules, there are really no surprises in terms of payment methodology. The amount "at risk" due to poor performance is probably lower than what was initially expected (ie: 1-2% rather than 4-5%).


The following are excerpts from the CMS press release and fact sheet that may be of interest:

• Under the program, hospitals that perform well on quality measures relating both to clinical process of care and to patient experience of care, or those making improvements in their performance on those measures, would receive higher payments.
• The financial incentives would be funded by a reduction in the base operating DRG payments for each discharge, which under the statute will be 1% in FY 2013, rising to 2% by FY 2017.
• CMS will accept comments on the hospital value-based purchasing Program proposed rule until March 8, 2010, and will respond to them in a final rule to be issued next year.
• For the FY 2013 hospital value-based purchasing program, CMS proposes to use 17 clinical process of care measures as well as 8 measures from the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey that document patients’ experience of care.
• CMS also proposes to adopt three mortality outcome measures, eight Hospital Acquired Condition (HAC) measures, and nine Agency for Healthcare Research and Quality (AHRQ) measures for the FY 2014 Hospital VBP program.
• Proposed Performance Period: As required by the Affordable Care Act, CMS is proposing a performance period that ends prior to the beginning of FY 2013, specifically from July 1, 2011 through March 31, 2012, for the FY 2013 hospital value-based purchasing payment determination. CMS anticipates that in future fiscal years, the Agency may propose to use a full year as the performance period. In addition, CMS is proposing to use an 18-month performance period for the three proposed mortality measures for the FY 2014 Hospital VBP payment determination, and expects to propose a performance period for the eight HAC and nine AHRQ measures in future rulemaking.
• Proposed Scoring Methods: CMS proposes to score each hospital on relative achievement and improvement ranges for each applicable measure. A hospital’s performance on each quality measure would be evaluated based on the higher of an achievement score in the performance period or an improvement score, which is determined by comparing the hospital’s score in the performance period with its score during a baseline period of performance. For each of the proposed clinical process and patient experience of care measures that apply to a hospital for FY 2013, CMS proposes that a hospital would earn 0-10 points for achievement based on where its performance for the measure fell within an achievement range, which is a scale between an achievement threshold and a benchmark. With regard to the improvement score, CMS proposes that a hospital would earn 0-9 points based on how much its performance on the measure during the performance period improved from its performance on the measure during the baseline period. Finally, CMS would calculate a Total Performance Score (TPS) for each hospital by combining its scores on all of the measures within each domain, multiplying its performance score on each domain by the proposed weight for the domain, and adding the weighted scores for the domains.
• Proposed Incentive Payment Calculations:  CMS proposes to translate each hospital’s TPS into a value-based incentive payment using a linear exchange function.  The linear exchange function provides the same marginal incentives to both lower- and higher-performing hospitals.
• CMS proposes to notify each hospital of the estimated amount of its value-based incentive payment for FY 2013 through its QualityNet account at least 60 days prior to Oct. 1, 2012.  CMS proposes to notify each hospital of the exact amount of its value-based incentive payment on or about Nov. 1, 2012.
• CMS will accept public comments on the proposed rule through March 8, 2010  CMS will review all comments and respond to them in a final Hospital VBP rule scheduled to be released some time in 2011.

PROPOSED QUALITY MEASURES FY2013   
AMI-2: Aspirin Prescribed at Discharge
AMI-7a: Fibrinolytic Therapy Received Within 30 Minutes of Hospital Arrival
AMI-8a: Primary PCI Received Within 90 Minutes of Hospital Arrival
 
HF-1: Discharge Instructions
HF-2: Evaluation of LVS Function
HF-3: ACEI or ARB for LVSD

PN-2: Pneumococcal Vaccination
PN-3b: Blood Cultures Performed in the ED Prior to Initial Antibiotic Received in Hospital
PN-6: Initial Antibiotic Selection for CAP in Immunocompetent Patient
PN-7: Influenza Vaccination 
SCIP-Inf-1: Prophylactic Antibiotic Received Within One Hour Prior to Surgical Incision
SCIP-Inf-2: Prophylactic Antibiotic Selection for Surgical Patients
SCIP-Inf-3: Prophylactic Antibiotics Discontinued Within 24 Hours After Surgery End Time
SCIP-Inf-4: Cardiac Surgery Patients with Controlled 6AM Postoperative Serum Glucose
SCIP-Card-2: Surgery Pts. on a Beta Blocker Prior to Arrival... 
SCIP-VTE-1: Surgery Pts. with Recommended Venous Thromboembolism Prophylaxis Ordered
SCIP-VTE-2: Surgery Pts. Who Received Appropriate Venous Thromboembolism Prophylaxis...
 
HCAHPS: Communication with Nurses
HCAHPS: Communication with Doctors
HCAHPS: Responsiveness of Hospital Staff
HCAHPS: Pain Management
HACHPS: Communication About Medicines
HACHPS: Cleanliness and Quietness of Hospital Environment
HACHPS: Discharge Information
HACHPS: Overall Rating of Hospital

PROPOSED ADDITIONAL QUALITY MEASURES FOR FISCAL YEAR 2014

Mortality-30-AMI: Acute Myocardial Infarction (AMI) 30-day Mortality Rate
Mortality-30-HF: Heart Failure (HF) 30-day Mortality Rate
Mortality-30-PN: Pneumonia (PN) 30-Day Mortality Rate

Foreign Object Retained After Surgery
Air Embolism
Blood Incompatibility
Pressure Ulcer Stages III & IV
Falls and Trauma: (Includes: Fracture, Dislocation, Intracranial Injury, Crushing Injury, Burn, Electric Shock)
Vascular Catheter-Associated Infections
Catheter-Associated Urinary Tract Infection (UTI)
Manifestations of Poor Glycemic Control

PSI 06 – Iatrogenic pneumothorax, adult
PSI 11 – Post Operative Respiratory Failure
PSI 12 – Post Operative PE or DVT
PSI 14 – Post Operative would dehiscence
PSI 15 – Accidental puncture or laceration
IQI 11 – Abdominal aortic aneurysm (AAA) repair mortality rate (with or without volume)
IQI 19 – Hip fracture mortality rate

Complication/patient safety for selected indicators (composite)
Mortality for selected medical conditions (composite)

RAC for Medicaid?

The following is a press release from CMS (Nov 5, 2010) announcing some of the details for the implementation of Medicaid RAC. Items of interest to quality professionals are in red.

MEDICAID RECOVERY AUDIT CONTRACTORS RULE ANNOUNCED TO HELP REDUCE IMPROPER PAYMENTS
CMS ANNOUNCES EDUCATION EFFORT TO SUPPORT PROGRAM

The Centers for Medicare & Medicaid Services (CMS) today proposed new rules to help states reduce improper payments for Medicaid health care claims through the use of Medicaid Recovery Audit Contractors (RACs) as part of the Affordable Care Act’s larger strategy to crack down on waste, fraud and abuse in the health care system. Medicaid RACs are contractors, working for States, that will audit payments made to health care providers to identify Medicaid payments that may have been underpaid or overpaid, and recover overpayments or correct underpayments, similar to the RAC program in Medicare.

“Reducing improper payments is a key goal of the Administration, and the tools provided by the Affordable Care Act will help us achieve that goal,” said CMS Administrator Donald Berwick, M.D. “We are using many of the lessons that we learned from the Medicare RAC program in the development and implementation of the Medicaid RACs, including a far-reaching education effort for health care providers and State managers.”

Under the Affordable Care Act, States must establish Medicaid RAC programs by submitting state plan amendments to CMS by December 31, 2010. The law allows CMS to provide extensions or exceptions to States, if necessary, and details regarding these processes are included in the proposed regulation. In addition, the proposed regulation issued by CMS today outlines the requirements that states must meet and the Federal contribution CMS will provide to assist in funding the state RAC programs.

Medicaid RACs will be paid by the States on a contingency basis to review Medicaid provider claims, identify and recover overpayments made for services provided under Medicaid State plans and Medicaid waivers. The proposed regulation allows States the discretion to determine whether to pay their Medicaid RACs on a contingency basis or under some other fee structure for identifying underpayments.

CMS is encouraging interested parties to comment on the proposals included in the regulation. These include the payment methodology for identifying overpayments and underpayments as well as the recovery of overpayments and correction of underpayments, and the requirement that RACs report fraud or criminal activity whenever they have reasonable grounds to believe such activity has occurred.

Under the regulation, as proposed, a State may use its current administrative appeals process or may modify its process for Medicaid RAC-related appeals. All fees paid to the Medicaid RACs must come from amounts recovered after all available appeals have been exhausted.

Because CMS has proposed to require States to implement their programs in a timely manner, CMS is providing educational programs to help States understand both the Medicare and Medicaid RAC programs. On October 1, 2010, CMS released a State Medicaid Director letter which provided initial guidance to the States regarding the RAC program. CMS issued an educational DVD entitled “Medicaid RACs: Are You Ready?” targeted to State Medicaid and Program Integrity Directors and held a webinar for states offering RAC procurement tips. Additionally, on November 4, 2010, CMS hosted an educational forum describing Lessons Learned from CMS’s experience with Medicare RACs.

A copy of the regulation may be viewed at the Federal Register’s website, http://www.ofr.gov/inspection.aspx. For Additional information on the Affordable Care Act can be accessed at, http://www.healthcare.gov/.

CMS Posts Final FY11 Inpatient Rules, Payment Updates, and RHQDAPU Measures.

On Friday afternoon, CMS issued a press release announcing that the final FY11 inpatient prospective payment system rules have been posted to the Federal Register.

Excerpts of the press release is cut and pasted below wiht items of interest to healthcare quality professionals in red:

"In today’s action, CMS is updating acute care hospital rates by 2.35 percent. This update reflects a market basket increase of 2.6 percent for inflation, which is a slight increase over the FY 2010 inflation rate. The final rule reduces the 2.6 percent inflation update by 0.25 percent, as required by the Affordable Care Act. Further, CMS will apply a “documentation and coding” adjustment of -2.9 percent. Hospital coding practices following adoption of the Medicare severity DRGs increased aggregate payments to hospitals, but did not reflect actual increases in patients’ severity of illness. Under legislation passed in 2007, CMS is required to recoup the entire amount of FY 2008 and 2009 excess spending due to changes in hospital coding practices no later than FY 2012. CMS has determined that a -5.8 percent adjustment is necessary to recoup these overpayments. The -2.9 percent adjustment for FY 2011 is one-half of this amount. CMS estimates that payments to general acute care hospitals for operating expenses in FY 2011 will decline by 0.4 percent, or $440 million, compared with FY 2010 under the final rule, taking into account all factors that would affect spending."

"The final rule adds 12 measures to the RHQDAPU set, and retires one current measure – Mortality for selected surgical procedures (composite). However, only 10 of the new measures – including rates of occurrence for 8 of 10 categories of conditions that are subject to the hospital-acquired conditions (HACs) policy ‑ will be considered in determining a hospital’s FY 2012 update. The remaining 2 measures to be reported in 2011 would be considered in determining the hospital’s FY 2013 update."

The 1877 page document can be found here: http://www.ofr.gov/OFRUpload/OFRData/2010-19092_PI.pdf

• Changes to RHQDAPU start on page 505.
• The list of 47 measures adopted for FY11 start on page 517.
• The list of 55 measures adopted for FY12 start on page 567.
• The list of 57 measures adopted for FY13 start on page 595.
• The list of 60 measures adopted for FY14 start on page 606.
• A list of future potential measures being considered for adoption into RHQDAPU starts on page 608.

Hospitals in 16 Indiana Counties Qualify for Higher Medicare IPPS Payment

In the June 2, 2010 updated CMS IPPS Proposed rules for FY2011, increased payment was described for hospitals in counties with the lowest per capita Medicare spending (lowest quartile).

Counties in Indiana that qualified are:

• Adams
• Brown
• DeKalb
• Elkhart
• Franklin
• Huntington
• Jackson
• Kosciusko
• LaGrange
• Marshall
• Monroe
• Noble
• Orange
• Wabash
• Wells
• Whitley

The following is excerpt of text from the proposed rule. You can read the complete proposed rules at the following: http://edocket.access.gpo.gov/2010/pdf/2010-12567.pdf (starts on page 30926)

E. Additional Payments for Qualifying Hospitals With Lowest Per Capita Medicare Spending

1. Background
Section 1109 of Public Law 111–152, provides for additional payments for FY2011 and 2012 for ‘‘qualifying hospitals.’’ Section 1109(d) defines a ‘‘qualifying hospital’’ as a ‘‘subsection (d) hospital * * * that is located in a county that ranks, based upon its ranking in age, sex and race adjusted spending for benefits under parts A and B * * * per enrollee within the lowest quartile of such counties in the United States.’’ Therefore, a ‘‘qualifying hospital’’ is one that meets the following conditions: (1) A ‘‘subsection (d) hospital’’ as defined in section 1886(d)(1)(B) of the Act; and (2) located in a county that ranks within the lowest quartile of counties based upon its spending for benefits under Medicare Part A and Part B per enrollee adjusted for age, sex, and race. Section 1109(b) of Public Law 111–152 makes available $400 million to qualifying hospitals for FY 2011 and FY 2012. Section 1109(c) of Public Law 111–152 requires the $400 million to be divided among each qualifying hospital in proportion to the ratio of the individual qualifying hospital’s FY 2009 IPPS operating hospital payments to the sum of total FY2009 IPPS operating hospital payments made to all qualifying hospitals.

CMS Releases Hospital Outpatient and Ambulatory Surgery Center Payment Update

Last week CMS released the CY2010 hospital outpatient payment update in a final rule with comment period. Hospitals will be getting a 2.1% increase in payments from Medicare, however, hospitals that are not participating in HOP QDRP will only be getting 0.1% increase.

The full text of the press release is below with items of interest to hospital quality professionals in Red.

The full text (1936 pages!) of the final rules (with comment period) can be downloaded at: http://federalregister.gov/OFRUpload/OFRData/2009-26499_PI.pdf
The HOP QDRP section starts on page 1135.

(Note! CY2012 HOP QDRP Measures under consideration can be found on page 1167.)



FINAL 2010 POLICY, PAYMENT CHANGES FOR HOSPITAL OUTPATIENT DEPARTMENTS AND AMBULATORY SURGICAL CENTERS‏

OVERVIEW

On Oct. 30, 2009, the Centers for Medicare & Medicaid Services (CMS) issued a final rule with comment period that updates payment policies and rates for both hospital outpatient departments (HOPDs) and ambulatory surgical centers (ASCs) for calendar year (CY) 2010. The update to ASC rates constitutes the third year of a four-year transition to a revised payment system that aligns ASC payment rates with those paid to HOPDs for similar services. The final rule with comment period also seeks to promote higher quality, efficient services for Medicare beneficiaries by adopting improvements to the Hospital Outpatient Quality Data Reporting Program (HOP QDRP) and establishing procedures to make the data collected through the HOP QDRP publicly available.

CMS projects that total payments for services furnished to people with Medicare in HOPDs during CY 2010 under the Outpatient Prospective Payment System (OPPS) will be $32.2 billion, while total projected CY 2010 payments under the ASC payment system will be approximately $3.4 billion.

OUTPATIENT PROSPECTIVE PAYMENT SYSTEM

Background:

Since August 2000, Medicare has paid hospitals for most services furnished in their outpatient departments under the OPPS. Medicare currently pays more than 4,000 hospitals ‑‑ including general acute care hospitals, inpatient rehabilitation facilities, inpatient psychiatric facilities,
long-term acute care hospitals, children’s hospitals, and cancer hospitals ‑‑ for outpatient services under the OPPS. Medicare also pays community mental health centers (CMHCs) under the OPPS for partial hospitalization services. The OPPS payments cover facility resources including equipment, supplies, and hospital staff, but do not pay for the services of physicians and nonphysician practitioners who are paid separately under the Medicare Physician Fee Schedule (MPFS).

All services under the OPPS are classified into groups called Ambulatory Payment Classifications (APCs). Services in each APC are similar clinically and require the use of similar resources. A payment rate is established for each APC. The APC payment rates are adjusted for geographic cost differences, and payment rates and policies are updated annually through rulemaking. The final rule is generally issued by November 1 each year and, unless otherwise specified, becomes effective January 1 of the subsequent year.

Beneficiaries share in the cost of services under the OPPS by paying either a 20 percent coinsurance rate or, for certain services, a copayment required under the Medicare law not to exceed 40 percent of the total payment for the APC. The statutory copayment is gradually being replaced by the 20 percent coinsurance as the composition of APC groups is updated in response to policy changes or new cost data. CMS estimates that the overall beneficiary share of the total payments for Medicare covered outpatient services will be about 22.6 percent in CY 2010.

Significant Changes For Calendar Year 2010

CMS projects that the aggregate Medicare payments to providers under the OPPS in CY 2010 will be $32.2 billion, a $1.9 billion increase over projected payments in CY 2009.

Implementing New Coverage Authorized by MIPPA: The final rule with comment period implements several expansions of Medicare coverage that were required in the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), including:

Kidney disease education –CMS is establishing payment to rural providers under the Medicare Physician Fee Schedule (MPFS) for kidney disease education services furnished on or after Jan. 1, 2010 for Medicare beneficiaries diagnosed with Stage IV chronic kidney disease.

Pulmonary and cardiac rehabilitation – CMS is establishing OPPS payment for new, comprehensive pulmonary and intensive cardiac rehabilitation services furnished to beneficiaries with chronic obstructive pulmonary disease, cardiovascular disease, and related conditions, effective Jan. 1, 2010.


Strengthening Ties between Payment and Quality:
Payment reduction for failure to report quality measures – As required by law, CMS will reduce the CY 2010 annual inflation update factor by two percentage points for most services furnished by hospitals that failed to meet the CY 2009 reporting requirements of the HOP QDRP. The reduction will not apply to payments for separately payable pass-through drugs, biologicals and devices, separately payable non-pass-through drugs and non-implantable biologicals, separately payable therapeutic radiopharmaceuticals, and services assigned to New Technology APCs.

Quality measures to be reported – CMS will continue to require hospitals subject to HOP QDRP requirements to provide quality data for the current 7 chart-abstracted emergency department and surgical care measures and 4 claims-based imaging efficiency measures for CY 2011 payment determinations.

Validation of quality reporting – CMS will be implementing a HOP QDRP validation requirement to ensure that hospitals are accurately reporting measures using chart-abstracted data. Under this requirement, CMS will select a sample of reported cases, request the corresponding medical records, re-abstract the HOP QDRP chart-abstracted measures, and compare the results with the measures reported by the hospital. Hospitals will be required to return paper copies of requested medical records for this CY 2011 requirement within a 45 calendar day timeframe. However, the validation results will not affect a hospital’s CY 2011 OPPS payment. This initial validation requirement for CY 2011 will provide hospitals an opportunity to become familiar with the process for future years.

Public reporting of quality data – CMS is establishing procedures to make HOP QDRP quality measure data publicly available as early as June 2010.

Supervision of Hospital Outpatient Services:
· Supervision requirements for outpatient services – In order to ensure that hospital outpatient services are appropriately supervised by qualified practitioners while not impeding beneficiary access to these services, and in response to concerns raised by the hospital community, CMS is revising or further defining several current policies for the supervision of outpatient services. First, in CY 2010, CMS will allow certain nonphysician practitioners ‑ specifically physician assistants, nurse practitioners, clinical nurse specialists, certified nurse-midwives, and licensed clinical social workers ‑ to provide direct supervision for all hospital outpatient therapeutic services that they are authorized to personally perform according to their state scope of practice rules and hospital-granted privileges. Under current policy, only physicians may provide the direct supervision of these services.


For purposes of on-campus hospital outpatient therapeutic services, CMS is defining “direct supervision” to mean that the physician or nonphysician practitioner must be present anywhere on the hospital campus and immediately available to furnish assistance and direction throughout the performance of the procedure. For services furnished in an off-campus provider-based department, “direct supervision” would continue to mean that the physician or nonphysician practitioner must be present in the off-campus provider-based department and immediately available to furnish assistance and direction throughout the performance of the procedure.

CMS also will require that all hospital outpatient diagnostic services furnished directly or under arrangement, whether provided in the hospital, in a provider-based department, or at a nonhospital location, follow the MPFS physician supervision requirements for individual tests.

Payment for Drugs, Biologicals, and Radiopharmaceuticals:
Drugs and pharmacy overhead – CMS will pay for the acquisition and pharmacy overhead costs of separately payable drugs and biologicals without pass-through status at the average sales price (ASP) plus 4 percent in CY 2010. The payment rate of ASP plus 4 percent is based upon the cost of separately payable drugs and biologicals calculated from hospital claims and cost reports (ASP minus 3 percent), with an adjustment for pharmacy overhead cost that reflects the redistribution of $200 million of the pharmacy overhead cost currently attributed to packaged drugs and biologicals (both coded and uncoded) to separately payable drugs and biologicals without pass-through status.

Pass-through implantable biologicals – Beginning in CY 2010, implantable biologicals that are surgically implanted (through a surgical incision or a natural orifice) and that are not receiving pass-through payment before Jan. 1, 2010 will be evaluated for pass-through status using the device category pass-through process rather than the drug and biological pass-through process. Implantable biologicals that initially qualify for device pass-through status beginning on or after Jan. 1, 2010 will be paid at hospitals’ charges adjusted to cost for the two to three year pass-through payment period.

Drug and biological pass-through payment eligibility period – Consistent with current policy, in CY 2010, CMS will continue to recognize the first date of OPPS pass-through payment of ASP plus 6 percent as the beginning of the two to three year pass-through payment eligibility period for a new drug or non-implantable biological.

· Therapeutic radiopharmaceuticals – Beginning Jan. 1, 2010, CMS will provide payment for separately payable therapeutic radiopharmaceuticals with ASP data at ASP plus 4 percent. If ASP data are not available, payment will be based upon mean unit cost from hospital claims data. Subregulatory guidance on submitting ASP for OPPS radiopharmaceutical payment based on ASP is available on the CMS Web site at: www.cms.hhs.gov/HospitalOutpatientPPS/.

Payment for Brachytherapy Sources:
CMS is adopting the proposal to pay for brachytherapy sources based on median unit costs in CY 2010, as calculated from claims data according to the standard OPPS ratesetting methodology.

Partial Hospitalization Services, including Services Provided by CMHCs:
CMS will continue paying two separate partial hospitalization program (PHP) per diem rates: one for days with three services ($150) and one for days with four or more services ($211). The CMHC multiple outlier threshold will continue to be set at 3.4 times the APC payment amount for the higher intensity partial hospitalization day for CY 2010.


AMBULATORY SURGICAL CENTERS

Background:

There are approximately 5,000 Medicare-participating ASCs. Since Jan. 1, 2008, ASCs have been paid under a revised ASC payment system that both aligns payment in ASCs and hospital outpatient settings by basing ASC payment rates on the APC relative weights for similar services and extends payment to more surgical services in ASCs than under the prior payment system. To minimize the impact of the revised payment system, the ASC payment rates calculated under the new ratesetting methodology are being phased in over four years. CY 2010 is the third year of the transition. In general, the revised ASC payment rate for a surgical procedure is a percentage of the payment rate for the same procedure under the OPPS; however, there are a few exceptions. For device-intensive procedures (assigned to a subset of the OPPS device-dependent APCs where device costs account for more than 50 percent of the total cost of the service), ASCs receive the same payment for the device cost as under the OPPS. For new ASC procedures that are predominantly performed in physicians’ offices, the ASC payment is capped at the amount the physician is paid under the MPFS for practice expenses for providing the same procedure in an office.

In the CY 2008 final rule that revised the ASC payment system, CMS added approximately 800 procedures to the list of ASC procedures for which payment could be made. Only those surgical procedures that would be expected to pose a significant safety risk to beneficiaries or that would be expected to require an overnight stay following the procedure are excluded from the ASC list. These changes in payment policies for ASCs give patients broader access to surgical services in settings that are clinically appropriate.

Significant Changes For Calendar Year 2010:

ASC Payment Rate Updates: The revised ASC payment rates were established to reflect the same relativity of resource use among procedures as under the OPPS, taking into consideration the lower costs of surgical procedures performed in ASCs and maintaining budget neutrality in the payment system. By law, CY 2010 is the first year that CMS may provide an inflation update under the revised ASC payment system. The percentage increase in the Consumer Price Index for All Urban Consumers that updates the ASC conversion factor for CY 2010 is 1.2 percent.

Changes to ASC Covered Surgical Procedures and Covered Ancillary Services: CMS is adding 26 surgical procedures to the list of procedures for which Medicare would pay when performed in an ASC. CMS also is newly designating 6 procedures as office-based procedures (subject to payment at the lesser of the national office practice expense payment to the physician or the national ASC rate), and temporarily designating an additional 16 procedures as office-based procedures based on coding changes for CY 2010. The final rule with comment period also updates the list of device-intensive procedures and covered ancillary services and their rates, consistent with the OPPS update.

The CY 2010 OPPS/ASC final rule with comment period will appear in the Nov. 20 Federal Register. Comments on designated provisions are due by 5:00 p.m. Eastern time on Dec. 29, 2009. CMS will respond to comments in the CY 2011 OPPS/ASC final rule.
For more information on the CY 2010 final rule with comment period for the OPPS and ASC payment system, please see the CMS Web site at:
OPPS: http://www.cms.hhs.gov/HospitalOutpatientPPS/
ASC payment system: http://www.cms.hhs.gov/ASCPayment/

CMS Announces New IPPS Quality Measures for FY2010

On Firday afternoon, CMS released the final rules for FY2010 IPPS. You can find the federal register entry here.

Ther press release from CMS is as follows. Areas of interest to acute care healthcare professionals are in red.


FOR IMMEDIATE RELEASE
July 31, 2009

MEDICARE ADDS QUALITY MEASURES FOR REPORTING BY ACUTE CARE HOSPITALS FOR INPATIENT STAYS IN FY 2010

OVERVIEW:
On July 31, 2009, the Centers for Medicare & Medicaid Services (CMS) issued a final rule that revises policies and payment rates for general acute care hospitals that are paid for inpatient services under the Inpatient Prospective Payment System (IPPS), effective for discharges in fiscal year 2010 – that is, on or after October 1, 2009. In addition to promoting accurate payment for inpatient services to Medicare beneficiaries, the final rule strengthens the relationship between payment and quality of service, by expanding the quality measures that hospitals must report in order to receive the full market basket update in fiscal year 2011. Under the Medicare law, hospitals that choose not to participate in the voluntary reporting program or do not participate successfully will receive an inflation update equal to the hospital market basket less two percentage points The final rule sets the market basket at 2.1 percent, and, therefore, hospitals that do not successfully report the quality measures will receive updates of 0.1 percent.

The final rule does not change the list of hospital-acquired conditions (HACs) in FY 2010, but describes CMS’s plans to evaluate the impact of the existing policy on hospital practices and patient care.

This Fact Sheet discusses only the quality provisions of the IPPS FY 2010 final rule; separate fact sheets also issued today provide more detail on the payment and policy changes.

BACKGROUND: The Reporting Hospital Quality Data for Annual Payment Update (RHQDAPU) and HACs initiatives represent significant steps toward implementing value-based purchasing (VBP) in Medicare. VBP is intended to transform Medicare from a passive payer for
services to a prudent purchaser of services, paying not just for quantity of services but for quality as well.

The RHQDAPU initiative grew out of the Hospital Quality Initiative developed by CMS in consultation with hospital groups. Participation in the program is voluntary, but after initial levels of participation proved disappointing, Congress added a financial incentive to the program in the Medicare Prescription Drug, Improvement and Modernization Act (MMA) of 2003. Under the MMA, hospitals that chose not to participate or failed to meet the criteria for successful reporting in a given year received the annual payment update reduced by 0.4 percentage points. The Deficit Reduction Act of 2005 increased this reduction to 2.0 percentage points. Since the implementation of the financial incentive, hospital participation has increased to 99 percent and, of participating hospitals, 97 percent receive the full annual payment update in FY 2009.

In the meantime, the RHQDAPU measure set has grown from a starter set of 10 quality measures in 2004 to the current set of 43 quality measures. The 43 measures include 25 chart-abstracted measures (heart attack, heart failure, pneumonia, surgical care improvement), 16 claims-based measures (mortality and readmissions measures for heart attack, heart failure, pneumonia; AHRQ Patient Safety Indicators and Inpatient Quality Indicators; nursing sensitive care), 1 survey-based measure (patient satisfaction), and 1 structural measure (participation in a cardiac surgery registry).

CHANGES TO THE RHQDAPU PROGRAM FOR FY 2011:
Additions: The IPPS FY 2010 final rule adds four new measures and program requirements to the current measures for which hospitals must submit data under the RHQDAPU program to receive the full market basket update in FY 2011. This includes two new chart-abstracted measures for surgical care improvement and two structural measures. The new Surgical Care Improvement Project (SCIP) measures are additions to the existing SCIP measure set for which data elements are already being collected and submitted to CMS. Therefore, the additional chart abstraction burden for hospitals will be minimal. CMS believes that the two structural measures will promote hospital participation in nursing-sensitive care and stroke care registries that collect quality data.
The additions to the quality measures are summarized in the following table:

Surgical Care Improvement Project (SCIP) Measures
SCIP INF 9 - Urinary Catheter Removed on Postoperative Day 1 (POD1) or postoperative Day 2 (POD2)
SCIP INF 10 - Surgery Patients with Perioperative Temperature Management

Structural Measures
Participation in a Systematic Clinical Database Registry: Nursing Sensitive Care
Participation in a Systematic Clinical Database Registry: Stroke Care

Retirement of Measure: The final rule notes that CMS retired the Acute Myocardial Infarction (AMI)-6 – Beta-blocker at arrival measure. CMS took this action based on the evolving evidence for care of AMI patients and changes in the American College of Cardiology/American Heart Association (ACC/AHA) practice guidelines. The new guidelines recommend that early beta-blockers should be avoided in certain patient populations due to increased mortality risk. Retirement of this measure is based on evidence that revision of the measure would be impractical and might cause unintended consequences, including harm to certain AMI patients.

Program Requirements: CMS currently provides hospitals that will not be receiving the full market basket update an opportunity to submit a RHQDAPU reconsideration request to CMS. The final rule now requires hospitals that are denied the full market basket update for FY 2010 because they fail to meet the RHQDAPU validation requirements to submit a copy of all the paper medical records that they submitted to the CMS contractor each quarter for purposes of the validation, along with a copy of the reconsideration request form. CMS believes this new process will streamline the reconsideration process and reduce the number of subsequent hospital appeals to the Provider Reimbursement Review Board (PRRB).

The final rule also provides hospitals that receive a new CMS Certification Number (CCN) more time - 180 calendar days from the date identified as the ‘‘open date’’ on CMS’s Online System Certification and Reporting (OSCAR) system - to submit a RHQDAPU participation form. This change will make it possible for CMS to verify accurately whether these hospitals intend to participate in the RHQDAPU program, while ensuring that they have a sufficient amount of time to implement the operational requirements. Hospitals will still be required to report data starting with the calendar quarter following the date that they submit their RHQDAPU participation form.

Finally, CMS has modified the validation requirement starting with FY 2012 to improve the reliability and quality of the process. CMS will randomly select 800 hospitals on an annual basis, and will validate 12 medical records on a quarterly basis throughout the year from each selected hospital. CMS will increase the quarterly sample size from the current 5 records to 12 records to achieve a more reliable validation estimate of the RHQDAPU data reported by the hospital. CMS will also develop targeting criteria to supplement the random sample beginning in FY 2011 to make sure that hospitals do not receive quality payments that have failed validation in the past or have not been included in the sample several years in a row.

HOSPITAL-ACQUIRED CONDITIONS UPDATE: The final rule does not change the list of hospital-acquired conditions (HACs) in FY 2010. During the coming fiscal year, CMS is planning to conduct a joint evaluation of the program’s impact, working with sister agencies within the Department of Health and Human Services - the Centers for Disease Control and Prevention (CDC), the Agency for Healthcare Research and Quality (AHRQ), and the Office of Public Health and Science (OPHS). The evaluation will provide valuable information about the program’s impact with regard to preventing HACs.

Under the HAC payment provision, Medicare has selected ten categories of conditions that are reasonably preventable through adherence to evidence-based guidelines, and that, when present as a secondary diagnosis at discharge, result in the case being assigned to a higher paying MS-DRG. Beginning for discharges on or after October 1, 2008, CMS no longer pays at the higher MS-DRG if the only secondary diagnoses on a claim are on the HAC list and were not reported as present at admission.

The HAC payment provision was mandated by the Deficit Reduction Act of 2005 to provide hospitals a payment incentive to encourage the prevention of these conditions. CMS designated eight categories of conditions as HACs during the IPPS rulemaking for FY 2008 and expanded the list of HACs in FY 2009. Although CMS has not yet evaluated the impact of this policy, CMS has received anecdotal reports that hospitals across the country are increasing their efforts to prevent HACs from occurring.

The final rule was placed on display at the Federal Register today, and can be found under Special Filings at: www.archives.gov/federal-register/public-inspection/index.html.
It will appear in the August 27, 2009, Federal Register.
For more information, please see: www.cms.hhs.gov/AcuteInpatientPPS/01_overview.asp.