The Centers for Medicare & Medicaid Services (CMS) issued a final rule on August 2, 2013, that updates Medicare payment policies and rates under the Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospitals Prospective Payment System (LTCH PPS) for fiscal year 2014.
The final rule will affect discharges occurring on or after October 1, 2013, and will apply to approximately 3,400 acute care hospitals and approximately 440 long term care hospitals. Below is a summary of the updates. Additional information, including a detailed fact sheet, can be found on the CMS website.
Hospital-Acquired Condition Reduction Program
In fiscal year 2015, CMS will implement the Hospital-Acquired Condition Reduction Program. This program mandates that hospitals in the lowest quartile for hospital-acquired infections (conditions that patients did not have when they were admitted to the hospital) or medical errors, will receive a 1% penalty on reimbursement, meaning they will only be paid 99% of what otherwise would be paid under IPPS. An increase in the maximum penalty under the Hospital Readmissions Reduction Program will be realized in FY 2014, moving from 1% to 2%.
Performance will be based on two domains included in the Inpatient Quality Reporting program:
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The first is a Patient Safety Indicator composite that includes 12 individual measures, including pressure ulcer rate, volume of foreign object left in the body and accidental puncture or laceration, to name a few.
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The second domain consists of 2 measures developed by the Centers for Disease Control and Prevention’s (CDC) National Health Safety Network, and includes central line-associated blood stream infections and catheter-associated urinary tract infections.
Hospital Readmissions Reduction Program
CMS is finalizing new readmission measures, in addition to the three currently endorsed by the National Quality Forum (NQF): heart failure, heart attack and pneumonia. The Readmissions Reduction Program will add two new readmission measures in FY 2015: readmissions for hip/knee arthroplasty and chronic obstructive pulmonary disease.
Hospital Inpatient Quality Reporting Program and Medicare EHR Incentive Program
Annual payment updates for hospitals that do not participate in the IQR program are reduced by 2 percentage points. In addition, hospitals will lose one-quarter of the percentage increase in their payment updates beginning in FY 2015.
Beginning in FY 2016, CMS will remove one structural measure and six chart-abstracted measures but will add five new claims-based measures:
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30-day risk-standardized COPD readmission
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30 day risk standardized COPD mortality
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30-day risk standardized stroke readmission
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30-day risk standardized stroke mortality
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Acute myocardial infarction payment per episode of care
Hospitals participating in the IQR program can submit data electronically though Certified Electronic Health Record Technology (CEHRT) across four measure sets, Emergency Department, Stroke, Perinatal Care and Venous Thromboembolism, and on up to 16 selected measures. CMS hopes this will assist with streamlining data and reporting, as well as simplify the now manual process of gathering data.
Long-Term Care Hospitals, Prospective Payment System- Exempt Cancer and Inpatient Psychiatric Quality Reporting Programs
Long-Term Care Hospitals Quality Reporting Program is being expanded by CMS and will include four new quality measures, still being finalized, that will affect fiscal year 2017 and fiscal year 2018 payment updates. The FY 2018 measures will include a "patient fall with major injury" measure that will determine payment for that year.
The Prospective Payment System-Exempt Cancer Hospital Quality Reporting Program also includes new quality measures, specifically around surgical site infections for FY 2015. In FY 2016, twelve new measures will be adopted and include patient experience of care, oncology care and surgical process of care.
Alcohol-use screening and follow-up after hospitalization for mental illness are being proposed by CMS to include in the Inpatient Psychiatric Facility Quality Reporting Program. In addition, CMS requests information on the facilities efforts to assess the patient's experience of care, however, submission of this data is voluntary.
Value-Based Purchasing Program
In fiscal year 2014, CMS will reduce base operating diagnosis-related group (DRG) payments to all hospitals reimbursed under the IPPS model by 1.25% (up from 1% in fiscal year 2013). As a result of the reduction, CMS estimates a total of $1.1 billion available to hospitals for value-based incentive payments.
Clinical process of care measures for FY 2015 will mostly be readopted in the VBP program in FY 2016 and will also include some new measures, including influenza immunization, CAUTIs and surgical site infections.
An additional policy was added by CMS which states that hospitals affected by natural disasters or extraordinary circumstances can request exception the Value-Based Purchasing program within 90 days of the disaster or circumstance.
Additional information about the Value-Based Purchasing Program can be found at
https://www.studergroup.com/our-impact/the-pay-for-performance-era-is-here/.
Reference:
CMS final rule to improve quality of care during hospital inpatient stays. Centers for Medicare & Medicaid Services, Aug 2, 2013.