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© 2018 American Hospital Association | www.aha.org

August 23, 2018

INPATIENT PPS:

THE FINAL RULE FOR FY 2019

At Issue The Centers for Medicare & Medicaid Services (CMS) Aug. 2 issued its hospital inpatient prospective payment system (PPS) and long-term care hospital (LTCH) PPS final rule for fiscal year (FY) 2019. The rule affects inpatient PPS hospitals, critical access hospitals (CAHs), LTCHs and PPS-exempt cancer hospitals. A summary of the provisions related to inpatient PPS hospitals, CAHs and PPS-exempt cancer hospitals is attached. The AHA will issue a separate advisory on finalized proposals related to the LTCH PPS. Provisions of the final rule will take effect Oct. 1. Our Take Several policies CMS finalized in this rule will reduce regulatory burden and help ensure America’s hospitals and health systems can continue to provide high-quality, efficient care for the patients and communities they serve. For example, CMS will implement the Administration’s “Meaningful Measures” initiative, a streamlined approach to quality measurement, as well as the Promoting Interoperability Program, which includes a more performance-based approach to determine whether a hospital has met meaningful use requirements. We also appreciate CMS’s approval of two chimeric antigen receptor t-cell (CAR T) products for new technology add-on payments, but remain concerned about the extraordinary costs incurred by hospitals to provide these life-saving therapies.

At A Glance

Key Takeaways

CMS finalized policies to:

Increase inpatient PPS payments by 1.85 percent in FY 2019

Continue the transition to Worksheet S-10 to distribute uncompensated care DSH payments

Implement audits of Worksheet S-10 data

Approve a number of reclassification requests and allow the wage index imputed rural floor to expire

Implement the Promoting Interoperability program, with a new scoring approach that provides more flexibility to meet program requirements

Remove 18 measures and de-duplicate 21 measures in the Inpatient Quality Reporting program

Retain the safety measure domain in the Hospital Value-based Purchasing Program

Require hospitals to publicly post their charges in a machine readable format

Approve two CAR T products for New Technology Add-on Payments

Retroactively reinstate the low-volume adjustment and Medicare-dependent hospital program

https://www.federalregister.gov/documents/2018/08/17/2018-16766/medicare-program-hospital-inpatient-prospective-payment-systems-for-acute-care-hospitals-and-the

© 2018 American Hospital Association | www.aha.org 2

What You Can Do Share this advisory with your senior management team and ask your chief financial

officer to examine the impact of the final payment changes on your Medicare revenue for FY 2019. Hospitals may assess the impact of these provisions on their organizations by using AHA’s calculators on readmissions, value-based purchasing and Medicare DSH: https://www.aha.org/inpatient-pps.

Share this advisory with your billing, medical records, quality improvement and compliance departments, as well as your clinical leadership team – including the quality improvement committee and infection control officer – to apprise them of the changes around the diagnosis-related groups and quality measurement requirements.

Please also note the following submission deadlines set forth in the final rule:

Applications for hospital reclassifications for FY 2020 are due by Sept. 4, 2018. This is also the deadline for canceling a previous wage index reclassification withdrawal, or termination.

Hospitals wishing to qualify for the payment adjustment for low-volume hospitals in FY 2019 must make a written request for low-volume status to their MAC no later than Sept. 1, 2018, per the instructions outlined in the rule.

Requests for updates to the FY 2020 MS-DRGs are due by Nov. 1, 2018 Further Questions For additional questions, please contact Erika Rogan, AHA senior associate director of policy, at (202) 626-2963 or [email protected].

https://www.aha.org/inpatient-pps

https://s3.amazonaws.com/public-inspection.federalregister.gov/2018-16766.pdf

mailto:[email protected]


August 23, 2018

INPATIENT PPS:

THE FINAL RULE FOR FY 2019

Table of Contents

FINALIZED FY 2019 PAYMENT UPDATE ...................................................................................... 5

MARKET-BASKET UPDATE.............................................................................................................. 5 LABOR-RELATED SHARE ................................................................................................................ 6

DISPROPORTIONATE SHARE HOSPITAL (DSH) PAYMENT CHANGES .................................... 6

FY 2019 DSH PAYMENTS ............................................................................................................. 6 TRANSITION TO S-10 ..................................................................................................................... 7 WORKSHEET S-10 AUDITS AND GUIDANCE ..................................................................................... 7 ANNUALIZING COST REPORTS ....................................................................................................... 7 MULTIPLE COST REPORTS ............................................................................................................ 7 DEFINITION OF UNCOMPENSATED CARE ......................................................................................... 8 TRIMS TO APPLY TO CCRS ON LINE 1 OF WORKSHEET S-10 ........................................................... 8

PRICE TRANSPARENCY ............................................................................................................... 8

PROMOTING INTEROPERABILITY PROGRAM ............................................................................ 9

CERTIFIED EHR REQUIREMENTS BEGINNING IN CY 2019 ................................................................ 9 PROMOTING INTEROPERABILITY REPORTING PERIOD ...................................................................... 9 PROMOTING INTEROPERABILITY SCORING FOR CYS 2019 AND 2020 ............................................... 9 PROMOTING INTEROPERABILITY OBJECTIVES AND MEASURES FOR CYS 2019 AND 2020 ................ 11 MEDICAID PROMOTING INTEROPERABILITY PROGRAM ................................................................... 14 ELECTRONIC CLINICAL QUALITY MEASURES (ECQM) REPORTING IN THE MEDICARE AND MEDICAID

PROMOTING INTEROPERABILITY PROGRAMS ................................................................................. 14

CHIMERIC ANTIGEN RECEPTOR (CAR) T-CELL THERAPY ..................................................... 14

MS-DRG ASSIGNMENT ............................................................................................................... 14 NEW TECHNOLOGY ADD-ON PAYMENTS (NTAPS) ......................................................................... 15 ALTERNATIVE PAYMENT APPROACHES ......................................................................................... 15

RURAL HOSPITAL PROVISIONS ................................................................................................ 16

LOW-VOLUME HOSPITALS ............................................................................................................ 16 MEDICARE-DEPENDENT HOSPITALS (MDHS) ................................................................................ 17 SOLE COMMUNITY HOSPITAL (SCH) AND MDH EFFECTIVE DATES ................................................. 17

POST-ACUTE CARE TRANSFER POLICY .................................................................................. 17


WAGE INDEX ............................................................................................................................... 18

OCCUPATIONAL MIX .................................................................................................................... 18 MEDICARE GEOGRAPHIC CLASSIFICATION REVIEW BOARD (MGCRB) REDESIGNATIONS AND

RECLASSIFICATIONS ................................................................................................................... 18 WAGE INDEX UPDATES FROM PROPOSED RULE TO FINAL RULE .................................................... 19 IMPUTED RURAL FLOOR .............................................................................................................. 21 MULTI-CAMPUS HOSPITAL RECLASSIFICATIONS ............................................................................ 21 RECLASSIFICATION REQUIREMENTS FOR A PROVIDER THAT IS THE SOLE HOSPITAL IN THE MSA ..... 22 LOCK-IN DATE FOR RURAL RECLASSIFICATIONS............................................................................ 22

ADDITIONAL REGULATORY RELIEF PROPOSALS ................................................................... 22

REQUIREMENTS FOR SUBMITTING A MEDICARE COST REPORT ...................................................... 23

KEY CODING AND MS-DRG CHANGES ..................................................................................... 24

CAR T-CELL THERAPY................................................................................................................ 24 HEART TRANSPLANT OR IMPLANT OF HEART ASSIST SYSTEM ........................................................ 25 BOWEL PROCEDURES ................................................................................................................. 25 MDC 8 (DISEASES AND DISORDERS OF THE MUSCULOSKELETAL SYSTEM AND CONNECTIVE TISSUE): SPINAL FUSION ........................................................................................................................... 26 MDC 14 (PREGNANCY, CHILDBIRTH AND THE PUERPERIUM).......................................................... 26 SYSTEMIC INFLAMMATORY RESPONSE SYNDROME (SIRS) OF NON-INFECTIOUS ORIGIN ................. 27 REVIEW OF SECONDARY DIAGNOSES ........................................................................................... 27 CHANGES TO SEVERITY LEVELS .................................................................................................. 27 OPERATING ROOM (O.R.) AND NON-O.R. ISSUES ......................................................................... 28

IMPLEMENTATION OF CMS’S “MEANINGFUL MEASURES” FRAMEWORK ............................. 29

HOSPITAL IQR PROGRAM ............................................................................................................ 30 IQR ECQM REPORTING .............................................................................................................. 31 HOSPITAL VBP PROGRAM ........................................................................................................... 32 HAC REDUCTION PROGRAM ........................................................................................................ 33 HOSPITAL READMISSIONS REDUCTION PROGRAM (HRRP) ............................................................ 33

NEXT STEPS ............................................................................................................................... 34


Finalized FY 2019 Payment Update

Market-basket Update The final rule increases inpatient PPS rates by 1.85 percent in fiscal year (FY) 2019, after accounting for inflation and other adjustments required by law. Specifically, the update includes an initial market-basket update of 2.9 percent, less 0.8 percentage points for productivity and 0.75 percentage points mandated by the Affordable Care Act (ACA). In addition, the Centers for Medicare & Medicaid Services (CMS) finalizes an increase of 0.5 percentage points to partially restore cuts made as a result of the American Taxpayer Relief Act (ATRA) of 2012. Table 1 below details the factors CMS includes in its calculation.

Table 1: Impacts of FY 2019 CMS Finalized Policies

Policy Average Impact on Payments

Market-basket update + 2.9%

Productivity cut mandated by ACA - 0.8%

Additional cut mandated by ACA - 0.75%

Partial restoration of documentation and coding cut for FYs 2010, 2011 and 2012 mandated by ATRA

+ 0.5%

Total +1.85%

The ACA and ATRA adjustments will be applied to all hospitals. However, inpatient PPS hospitals that do not submit quality data or that failed to either meet meaningful use or qualify for hardship exemption for FY 2017 will be subject to market-basket penalties. Specifically:

Hospitals not submitting quality data will be subject to a one-quarter reduction of the initial market basket (for a new market-basket rate of 2.175 percent) and, thus, will receive an update of 1.125 percent.

Hospitals that were not meaningful users of electronic health records (EHRs) in FY 2017 will be subject to a three-quarter reduction of the initial market basket (for a new market-basket rate of 0.725 percent) and, thus, will receive an update of -0.325 percent.

Hospitals that fail to meet both of these requirements will be subject to a full reduction of the initial market-basket rate (for a new market-basket rate of 0 percent), thus, receiving an update of -1.05 percent.

For more information related to the penalties described above for failure to either meet meaningful use or qualify for hardship exemption, including those that apply to critical access hospitals (CAHs), please review the Aug. 13, 2010 AHA Regulatory Advisory on meaningful use.

http://www.aha.org/advisories


Labor-related Share Also by law, CMS must adjust the proportion of the standardized amount that is attributable to wages and wage-related costs (known as the labor-related share) by a factor that reflects the relative difference in labor costs among geographic areas (known as the area wage index). For FY 2019, CMS finalizes its proposal to continue use of the labor-related share of 68.3 percent for those hospitals (including Puerto Rico hospitals) with wage indices greater than 1.0. By law, the labor-related share for those hospitals with wage indices less than or equal to 1.0 will remain at 62 percent. See the Wage Index section for more detail on wage index updates for FY 2019.

Disproportionate Share Hospital (DSH) Payment Changes

Under the DSH program, hospitals receive 25 percent of the Medicare DSH funds they would have received under the former statutory formula (described as “empirically justified” DSH payments). The remaining 75 percent flows into a separate funding pool for DSH hospitals. This pool is adjusted to account for changes in the percentage of uninsured and then distributed based on the proportion of total uncompensated care each Medicare DSH hospital provides.

FY 2019 DSH Payments For FY 2019, CMS estimates that the total amount of Medicare DSH payments that would have been made under the former statutory formula is $16.339 billion, based on the June 2018 analysis from the Office of the Actuary. Accordingly, hospitals will initially receive approximately $4.085 billion (25 percent of the estimated DSH payments) as empirically justified DSH payments The remaining $12.254 billion will flow into the 75-percent pool. As it has previously, in FY 2019, CMS adjusts the amount of the 75-percent pool to reflect changes in the percentage of uninsured. CMS determined the percentage of uninsured for FY 2019 is 9.48 percent – a substantial increase over FY 2018 rate of 8.15 percent. Thus, after inputting that rate into the statutory formula, the agency finalizes retaining 67.51 percent – or $8.27 billion – of the 75-percent pool in FY 2019. This will result to an increase of about $1.5 billion in total Medicare DSH payments in FY 2019 compared to FY 2018. To distribute the 75-percent pool, the agency will continue to calculate the percentage of total uncompensated care provided by each individual DSH hospital. Hospitals then receive that percentage of what remains of the 75-percent pool as their uncompensated care DSH payment. For example, if Hospital A accounts for 1 percent of the total uncompensated care provided by all DSH hospitals, it will receive 1 percent of the 75-percent pool remainder. In FY 2019, because that remainder is finalized as approximately $8.27 billion, it will result in $82,700,000 in uncompensated care DSH payments for Hospital A, plus the hospital’s “empirically justified” payment.


Transition to S-10 In FY 2018, CMS began incorporating cost report Worksheet S-10 data on hospital charity care and bad debt into the determination of the amount of uncompensated care each hospital provides. For FY 2019, CMS will continue phasing in the S-10 data and also continue to use data from a rolling three-year period to estimate uncompensated care payments. Specifically, for FY 2019, CMS will use FY 2014 and 2015 Worksheet S-10 data in combination with low-income insured days that reflects Medicaid days from FY 2013 and Supplemental Security Income (SSI) days from FY 2016, to determine the distribution of uncompensated care payments. In addition, CMS finalizes its proposal to continue its policy of not transitioning to the Worksheet S-10 data for Puerto Rico hospitals and Indian Health Services and Tribal hospitals. For these hospitals, as well as all-inclusive rate providers, CMS will use FY 2013 low-income insured days to determine the hospital’s share of total uncompensated care.

Worksheet S-10 Audits and Guidance CMS notes that the agency received many comments urging a full desk audit of Worksheet S-10 data, in light of concerns regarding data accuracy and consistency. Due to this overwhelming feedback, CMS will implement a full audit of S-10 data, expected to begin in the fall of 2018. Instructions for Medicare Administrative Contractors (MACs) are currently under development, although desk review and audit protocols will not be made public. While CMS noted that it revised the cost report instructions in Transmittal 11, the agency acknowledged that there are continuing opportunities to further improve guidance and education on Worksheet S-10. Therefore, it states it will also work to address stakeholder concerns through provider education and further refinement of the instructions for the Worksheet S-10, as appropriate. The AHA applauds CMS for committing to work with stakeholders to address concerns regarding the accuracy and consistency of Worksheet S-10 data. We appreciate the agency’s decision to offer further education to providers, refine Worksheet S-10 instructions, and implement a full audit of Worksheet S-10 data beginning in fall 2018.

Annualizing Cost Reports As in the past, if a hospital has a cost report that does not equal 12 months of data (in other words, a cost report with more or less than 365 days) in any given year, CMS finalizes its policy to annualize Medicaid days and uncompensated care data. The agency will not annualize SSI days because those data are not obtained from hospital cost reports.

Multiple Cost Reports CMS finalizes three proposals regarding providers with multiple cost reports beginning in the same fiscal year, including policies to:

Use the longest cost report for annualizing Medicaid data and uncompensated care data if a hospital’s cost report does not equal 12 months of data;

https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017Downloads/R11p240.pdf


discontinue its previous policy of combining cost reports for providers with multiple cost reports beginning during the same fiscal year. Since FY 2017, CMS had done this prior to determining the difference between the start date and the end date in order to verify whether annualization was needed. However, the agency states that it now believes the multiple cost report issue is thoroughly addressed by the annualization policy; and

in cases where one report spans the entirety of the following fiscal year such that the hospital has no other cost report for the latter fiscal year, use the cost report that spans both fiscal years for the latter fiscal year. For example, if a hospital has cost reports A and B beginning in FY 2019, but report B encompasses the entirety of FY 2020, cost report B will be used for FY 2020.

Definition of Uncompensated Care CMS finalizes its proposal to continue defining uncompensated care costs as the amount on Line 30 of Worksheet S–10, which is the cost of charity care (Line 23) and the cost of non-Medicare bad debt and non-reimbursable Medicare bad debt (Line 29).

Trims to Apply to CCRs on Line 1 of Worksheet S-10 CMS will continue to trim data to control for data anomalies. For FY 2019, all hospitals with a Worksheet S-10 cost-to-charge ratio (CCR) that is greater than 3.0 standard deviations above the geometric mean (i.e., hospitals with a CCR that is above the CCR “ceiling”) will receive the statewide average CCR. The agency will continue to exempt all-inclusive rates from this policy. The AHA has created a DSH calculator for hospitals to assess the impact of the policy on their organizations. It is available at: https://www.aha.org/inpatient-pps. The calculator is designed so basic financial information regarding a hospital can be entered, including its CMS Certification Number (CCN), and the dollar amount of the hospital’s DSH payment will be estimated.

Price Transparency

CMS finalized its proposal to require that hospitals publicly post their standard charges on the internet in a machine-readable format. While CMS did not further define standard charges, hospitals could post their self-pay rates before any discounts are applied or, if different, the hospital’s chargemaster. Hospitals will be required to update this information at least annually, and more often if appropriate. While CMS recognized that many commenters had responded to its Request for Information on how to make pricing information more available and user-friendly for patients, it did not respond to those comments and instead indicated that it is considering this input for future rulemaking.



Promoting Interoperability Program CMS finalizes several changes to the Promoting Interoperability Program, formerly known as the EHR Incentive Program.

Certified EHR Requirements Beginning in CY 2019 CMS finalizes the requirement that all eligible hospitals (EHs), CAHs and eligible professionals (EPs) must use the 2015 Edition certified EHR beginning in CY 2019. CMS states the up-to-date standards and functions in the 2015 Edition EHR better support interoperable exchange of health information and improve clinical workflows, adding that the application program interface (API) functionality supports health care providers and patient electronic access to health information. CMS adds that, working with the Office of the National Coordinator for Health Information Technology (ONC), they were able to estimate the percentage of EHs, EPs and CAHs that have 2015 Edition certified EHR available based on vendor readiness and information. It appears to CMS that the transition from the 2014 Edition to the 2015 Edition is on schedule for the CY 2019 EHR reporting period. CMS acknowledged the comments about the requirement to use 2015 Edition certified EHR and will consider them to inform future policymaking. The AHA remains concerned about this requirement because not all vendors have certified products available and the process of implementing upgrades, modifying workflows and ensuring that new systems are safe for patients takes considerable time to accomplish.

Promoting Interoperability Reporting Period As strongly advocated by the AHA, CMS finalizes a reporting period of a minimum of any continuous 90-day period in CYs 2019 and 2020. This will replace the current policy requiring a reporting period of a full calendar year beginning in CY 2019. CMS states the 2015 Edition certified EHR must be implemented for an EHR reporting period in CY 2019 and the 2015 Edition certified EHR does not need to be implemented on January 1, 2019. CMS adds that the applicable incentive payment year, payment adjustment years for the EHR reporting period in 2019 and 2020, deadlines for attestation and other related program requirements remain the same as established in prior rulemaking.

Promoting Interoperability Scoring for CYs 2019 and 2020 CMS finalizes a new scoring methodology for EHs and CAHs attesting to the Promoting Interoperability (PI) Program that focuses on interoperability and sharing data with patients. The AHA supports the flexible, performance-based approach to meeting promoting interoperability requirements. The new scoring methodology will be applied to four objectives derived from objectives found in Stage 3: Electronic Prescribing, Patient Electronic Access to Health Information, Health Information Exchange and Public Health and Clinical Data Registry Reporting. The Protect Patient Health Information objective will continue as a required yes/no attestation. CMS finalizes the elimination of the Coordination of Care through Patient Engagement objectives and associated measures.


The scoring approach assigns weights to individual measures under each objective, with performance-based scoring for each measure. The individual measure scores will be added together to calculate the total Promoting Interoperability score. An eligible hospital or CAH will receive a score from zero to 100 points, depending on performance on individual measures. CMS finalizes that a minimum score of 50 points will satisfy the scoring requirement. EHs and CAHs scoring below 50 points will not satisfy the scoring requirement of the PI program and will be subject to a Medicare payment penalty (estimated to be 2.1 percent in FY 2019). EHs and CAHs will be required to report on all of the required measures. CMS states this approach allows EHs and CAHs to achieve high performance in areas where they excel to offset performance in areas where they are working on additional improvement. EHs and CAHs also must attest to completing the actions included in the Security Risk Analysis measure for the Protect Patient Health Information objective. Unless an exclusion applies, failure to report any required measure or reporting a “no” response on a yes/no measure will result in an overall score of zero. Table 2 lists the final objectives and scoring methodology. Appendix A includes the specific measures and exclusions.

Table 2: Performance-based Scoring Methodology for CY2019 and CY2020

Objectives Measures Maximum Points

e-Prescribing e-Prescribing Query Prescription Drug Monitoring Program (PDMP) Verify Opioid Treatment Agreement

10 points (2019)/ 5 points (2020) 5 bonus points (2019)/ 5 points (2020) 5 bonus points 2019 and 2020

Health Information Exchange

Support Electronic Referral Loops by Sending Health Information Support Electronic Referral Loops by Receiving and Incorporating Health Information

20 points 20 points

Provider to Patient Exchange

Provide Patients Electronic Access to Their Health Information

35 points

Public Health and Clinical Data Exchange

Select two measures to report:

Immunization Registry Reporting

Syndromic Surveillance Reporting

Electronic Case Reporting

Public Health Registry Reporting

Clinical Data Registry Reporting

Electronic Reportable Laboratory Result Reporting

10 points


CAHs and EHs must report on all required objectives and measures (see Appendix A for details on the measures). A minimum score of 50 or more points is sufficient to meet the scoring-based requirement and avoid a Medicare payment penalty. The Protecting Patient Health Information objective does not have a performance-based measure but EHs and CAHs are required to attest to meeting the Security Risk Analysis measure requirements.

Promoting Interoperability Objectives and Measures for CYs 2019 and 2020 This section describes the individual objectives and measures. For CY 2019, CMS finalizes four objectives with measures associated with performance-based scoring, as well as a required objective to protecting patient health information that will not contribute to the score.

Exclusions: Some, but not all, measures have exclusion criteria to account for challenging situations that might prevent meeting the measure. If an exclusion is claimed, points for that measure will be redistributed to other measures. CMS also finalizes the removal of exclusions previously available for some Stage 3-derived measures for the Health Information Exchange and Provider to Patient Exchange objectives. Specifically, CMS removed the exclusion available for EHs and CAHs in counties that have less than 4 Mbps of broadband availability, noting that the review of the 2016 Modified Stage 2 attestation data indicated no EH or CAH claimed an exclusion based on broadband availability. CMS also states that based on the 2016 Modified Stage 2 attestation data, the exclusion criteria specific to transitions or referrals received and patient encounters in which the provider has never previously encountered the patient will not be necessary. CMS adds that EHs and CAHs may request a significant hardship exception in cases of insufficient internet connectivity. CMS will reevaluate in the future the minimum broadband speed required to provide telehealth services and determine whether an exclusion will be warranted.

Protect Patient Health Information. CMS retains the Protect Patient Health Information objective and the Security Risk Analysis measure previously finalized in EHR Incentive Program for Stage 3. As a condition of earning a score in the PI Program, EHs and CAHs must attest that they completed the actions included in the Security Risk Analysis measure at some point during the calendar year in which the EHR reporting period occurs.

Exclusions: No exclusions. Electronic Prescribing. This objective focuses on generation and transmittal of permissible discharge prescriptions electronically. For CY 2019, CMS finalizes one e-prescribing measure requiring at least one hospital discharge medication order for permissible prescriptions (for new and changed prescriptions) is queried for a drug formulary and transmitted electronically using a certified EHR. For CY 2019, CMS finalizes two bonus e-prescribing measures:


Query the Prescription Drug Monitoring Program (PDMP) requires the EH or CAH to

have the ability to use data from the certified EHR to query a PDMP for prescription

drug history, except where prohibited and in accordance with applicable law; and

verify an Opioid Treatment Agreement requires the EH or CAH to have the ability to

identify the existence of a signed opioid treatment agreement and incorporate it into

the patient’s EHR for at least one unique patient for whom a Schedule II opioid was

e-prescribed if the total duration of the patient’s Schedule II opioid prescriptions is at

least 30 cumulative days within a six month look-back period.

For CY 2020, CMS finalizes that EHs and CAHs must report the PDMP measure and the Opioid Treatment measure continues to be available for bonus points.

Exclusions: For the CY 2020 reporting period, CMS finalizes that any EH or CAH that does not have an internal pharmacy that can accept electronic prescriptions for controlled substances, and is not located within 10 miles of any pharmacy that accepts electronic prescriptions for controlled substances at the start of their EHR reporting period, or any EH or CAH that is unable to report the measure in accordance with applicable law may be excluded from the measures. CMS also finalizes that an EH or CAH that qualifies for the e-Prescribing measure exclusion is excluded from reporting on the Query of PDMP measure beginning in CY 2020.

Health Information Exchange. CMS finalizes two measures for the health information exchange objective that EHs and CAHs provide a summary of care record when transitioning or referring their patient to another setting of care — receive or retrieve a summary of care record upon receipt of a transition, referral, or upon the first patient encounter with a new patient and incorporate the information into their EHRs. For the Sending Health Information measure, for at least one transition of care or referral, the EH or CAH that transitions or refers its patient to another setting of care or provider of care: (1) creates a summary of care record using certified EHR; and (2) electronically exchanges the summary of care record. For the Receiving and Incorporating Health Information measure, for at least one electronic summary of care record received for patient encounters during the EHR reporting period for which an EH or CAH was the receiving party of a transition of care or referral, or for patient encounters during the EHR reporting period in which the EH or CAH has never before encountered the patient, the EH or CAH conducts clinical information reconciliation for medication, mediation allergy, and current problem list.

Exclusions: CMS does not provide an exclusion for the Sending Health Information exchange measure. CMS finalizes an exclusion for the Receiving and Incorporating Measure in 2019 for any EH or CAH that is unable to implement the measure. Taking an exclusion will redistribute the points to the Sending Health Information Measure.

Provider to Patient Exchange. CMS finalizes one measure for this objective to provide patients (or patient-authorized representative) with timely electronic access to their health


information. For the Provide Patients Electronic Access to Their Health Information measure, for at least one unique patient discharged from the EH or CAH inpatient or emergency department (POS 21 or 23): (1) the patient (or patient-authorized representative) is provided timely access to view online, download, and transmit his or her health information; and (2) the EH or CAH ensures the patient’s health information is available for the patient (or patient-authorized representative) to access using any application of their choice that is configured to meet the technical specifications of the API in the EH or CAH’s certified EHR. CMS did not accept recommendations to revise the second part of the measure to permit the EH or CAH to ensures the patient’s health information is available to access using at least one application that is configured to meet the technical specifications of the API in the eligible hospital or CAH’s certified EHR. CMS clarifies that the agency does anticipate that EHs, CAHs and their technology vendors will take reasonable steps to protect the privacy and security of their patients’ information. Such measures might include vetting and registering apps, or deactivating apps that function in anomalous or malicious ways. The AHA remains concerned about the timeline for adoption of these new approaches that will be required in 2019.

Exclusions: No exclusions.

Public Health and Clinical Data Exchange. CMS finalizes that EHs and CAHs any two measures available in the Public Health and Clinical Data Exchange objective. This is modification from the proposal that all EHs and CAHs report the Syndromic Surveillance Reporting measure and select one additional measure to meet the reporting requirement. Failure to report on two measures or submitting a “no” response for a measure will earn a score of zero. For the Immunization Registry Reporting measure, the EH or CAH is in active engagement with a public health agency to submit immunization data and receive immunization forecasts and histories from the public health immunization registry/immunization information system (IIS). For the Syndromic Surveillance Reporting measure, the EH or CAH is in active engagement with a public health agency to submit syndromic surveillance data from an urgent care setting. For the Electronic Case Registry Reporting measure, the EH or CAH is in active engagement with a public health agency to submit case reporting of reportable conditions. For the Public Health Registry Reporting measure, the EH or CAH is in active engagement with a public health agency to submit data to public health registries. For the Clinical Data Registry Reporting measure, the EH or CAH is in active engagement to submit data to a clinical data registry. For the Electronic Reportable Laboratory Result Reporting measure, the EH or CAH is in active engagement with a public health agency to submit electronic reportable laboratory results.

Exclusions: If an exclusion is claimed for one measure, but the eligible hospital or CAH submits a “yes” response for another measure, they will earn the 10 points for the Public Health and Clinical Data Exchange objective. If an eligible hospital or CAH claims exclusions for both measures they select to report on, the 10 points will be redistributed to the Provide Patients Electronic Access to Their Health Information measure under the Provider to Patient Exchange objective.


Appendix A contains the finalized Performance-based Scoring Methodology for the CY 2019 and CY 2020 reporting periods.

Medicaid Promoting Interoperability Program CMS finalizes to apply the scoring methodology to EHs and CAHs that are Medicare-only EHs and CAHs or dual-eligible EHs and CAHs in the PI Program. CMS also finalizes to require dual-eligible EHs and CAHs to attest to the PI Program and report clinical quality measures to CMS, not their respective state Medicaid agency, beginning with the CY 2019 reporting period. This a change from the current policy that permits dual-eligible EHs and CAHs to report clinical quality measures to their respective state Medicaid agency. The new CMS reporting requirement does not change the deeming policy in which an EH or CAH that meets Medicare meaningful use also meetings Medicaid meaningful use. CMS finalizes that states have the option to adopt the performance based scoring methodology and the measure proposals through a request to change their state Medicaid HIT Plan.

Electronic Clinical Quality Measures (eCQM) Reporting in the Medicare and Medicaid Promoting Interoperability Programs CMS finalizes the continued alignment of the eCQM reporting requirements for the PI Programs with the Hospital Inpatient Quality Reporting (IQR) Program. For CY 2019, CMS finalizes that EHs and CAHs will electronically report on at least four self-selected eCQMs from the set of 16 available CQMs for one, self-selected calendar quarter of CY 2019 data. CMS finalizes the submission period for the Medicare Promoting Interoperability Program as two months following the close of the calendar year, ending February 29, 2020. CMS also finalizes that EHs and CAHs that CAHs that report eCQMs by attestation under the Medicare Promoting Interoperability Program as a result of electronic reporting not being feasible, and EHs and CAHs that report eCQMs by attestation under their State’s Medicaid Promoting Interoperability will attest to all 16 available eCQMs for four calendar quarters of CY 2019 data. For the CY 2020 reporting period, CMS finalizes the removal of the seven eCQMs from the PI program that also were removed from the Hospital IQR Program. For CY 2020, CMS also finalizes the removal of the only outpatient eCQM, Median Time from ED Arrival to ED Departure for Discharged ED Patients (NQF 0496) (ED-3). CMS states the removal of ED-3 will reduce burden and enable eligible hospitals and CAHs to easily report electronically through the Hospital IQR Program submission mechanism.

Chimeric Antigen Receptor (CAR) T-Cell Therapy

MS-DRG Assignment CAR T-cell therapy is a cell-based gene therapy in which a patient’s own T-cells are genetically engineered in a laboratory and administered to the patient by infusion to assist in the patient’s treatment to attack certain cancerous cells. For FY 2019, CMS finalized its proposal to assign CAR T therapy procedure codes to MS-DRG 016, which will be retitled


“Autologous Bone Marrow Transplant with CC/MCC or T-cell Immunotherapy.” CMS decided not to establish a new MS-DRG for CAR T given the relative newness of the therapy, the limited number of providers delivering these treatments, the low volume of patients, redistributive effects, and the lack of long-term data surrounding length of stay, treatment complexities, and costs. However, CMS plans to collect more comprehensive clinical and cost data and may consider assigning CAR T to a new MS-DRG in the future.

New Technology Add-on Payments (NTAPs) At the same time, CMS approved two CAR T therapies, KYMRIAH™ and YESCARTA™, for NTAPs in FY 2019. NTAPs are allotted at a rate of 50 percent of the marginal cost, up to 50 percent of the cost of the technology, and are not budget neutral. According to CMS, the cost for each administration of either KYMRIAH™ or YESCARTA™ is $373,000; thus, the maximum new technology payment for these therapies is $186,500 per case. These NTAPs are approved for FY 2019 and can be effective for two to three years under current law. Given the asserted similarities between the two technologies, CMS evaluated them as one application for FY 2019 but welcomes additional comments in future rulemaking regarding whether KYMRIAH™ and YESCARTA™ are substantially similar. The agency intends to revisit the similarity of these products in next year’s proposed rule.

Alternative Payment Approaches In the proposed rule, CMS solicited comments on alternative payment approaches for CAR T, including applying a cost-to-charge ratio of 1.0 or accounting for a portion of the average sales price. However, the agency declined to finalize any further payment-related proposals, given the newness of CAR T therapy. Instead, the agency referenced that it is soliciting comments in the CY 2019 outpatient PPS/ambulatory surgery center proposed rule on a potential demonstration model to test competition and private market strategies that improve quality and reduce costs related to drugs. Specifically, in the Outpatient Prospective Payment System (OPPS) proposed rule, CMS states that the agency is “interested in how best to handle Medicare payment for the new high-cost therapies, and whether a potential Competitive Acquisition Program (CAP)-like model could be an appropriate payment and delivery structure for these drugs and biologicals.” CMS notes that it will consider alternative payment approaches for CAR T after reviewing public feedback on the potential model and gaining further experience with CAR T. However, this solicitation relates to “Authority for the CAP for Part B Drugs and Biologicals” and does not explicitly address inpatient use, which is covered by Part A. While the AHA appreciates CMS’s approval of CAR T products for NTAPs, we are concerned that NTAPs alone do not sufficiently offset the extraordinary costs associated with providing these therapies, especially given the add-on payments are temporary. As we have stated previously, CMS should:

use an alternative method of determining the cost of the CAR T therapy that ensures the agency captures cost accurately, such as using the therapy’s average sales price as a proxy for its cost, or using a cost-to-charge ratio of 1.0 (as mentioned in the proposed rule);

increase the NTAP marginal reimbursement to 100 percent for CAR T; and

https://www.gpo.gov/fdsys/pkg/FR-2018-07-31/pdf/2018-15958.pdf



consider longer-term solutions for these costly new technologies, such as making payment on a pass-through basis.

Furthermore, while a demonstration model may be informative, the potential model referenced in the final rule is not specific – and possibly not applicable – to unique characteristics of CAR T given its provision in the inpatient setting. We continue to maintain that a more appropriate and longer-term approach is needed to more precisely estimate the costs of CAR T for Medicare payments. We are also analyzing additional constructive alternatives that offer promise for sustaining beneficiary access to such new, life-saving technologies.

Rural Hospital Provisions

Low-volume Hospitals The Bipartisan Budget Act (BiBA) retroactively extended the enhanced low-volume payment adjustment. Accordingly, the FY 2019 final rule finalizes the FY 2018 low-volume adjustment policy, which was addressed in a separate notice, and the FY 2019 low-volume adjustment policy. Specifically, for FY 2018, low-volume hospitals will continue to be defined as those that are more than 15 road miles from another comparable hospital and that have up to 1,600 Medicare discharges. In order to receive the enhanced payments for FY 2018, a hospital must have notified its MAC that it qualifies by May 24, per the instructions outlined in the notice. A hospital that qualified for the low-volume payment adjustment in FY 2017 may continue to receive a low-volume payment adjustment in FY 2018 without reapplying, if it continues to meet the Medicare discharge criterion. However, the hospital must have sent written verification, received by its MAC on or before May 24, that it continues to meet the mileage criterion. In Transmittal 4046, CMS issued guidance on the manner in which it will make low-volume payments for FY 2018, given that a portion will be made retroactively. For FYs 2019 through 2022, the discharge thresholds will be modified to reflect total discharges (i.e., Medicare and non-Medicare discharges), per a hospital’s most recently submitted cost report. Payment adjustments will be made on a sliding scale. Specifically, for low-volume hospitals with 500 or fewer total discharges, the adjustment will be an additional 25 percent for each Medicare discharge. For low-volume hospitals with more than 500 total discharges but fewer than 3,800, an additional percent for each Medicare discharge will be based on the following formula finalized in the rule:

Add-on percentage = (95/330) - (number of total discharges/13,200) To receive the payments for FY 2019, a hospital must notify its MAC that it qualifies by Sept. 1, per the instructions outlined in the rule. CMS estimates that implementing this policy will increase Medicare payments by roughly $75 million in FY 2019 compared to FY 2018. Specifically, the agency estimates that 628 providers will receive approximately $426 million in FY 2019.



https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2018Downloads/R4046CP.pdf



Medicare-dependent Hospitals (MDHs) The BiBA also retroactively extended the MDH program through FY 2022. CMS states that a provider that was classified as an MDH as of Sept. 30, 2017 was automatically reinstated as an MDH effective Oct. 1, 2017, with no need to reapply for MDH classification. However, as outlined in detail in its separate notice, if the MDH had classified as a sole community hospital or cancelled its rural classification effective on or after Oct. 1, 2017, the effective date of MDH status may not be retroactive to Oct. 1, 2017. In Transmittal 4046, CMS issued guidance on the exact manner in which it will make MDH payments for FY 2018, given that a portion will be made retroactively. The BiBA also permits a hospital in an all-urban state to qualify for MDH status if it meets MDH classification criteria1 and meets one of the following criteria for rural reclassification:

The hospital is located in a rural census tract of an urban county;

the hospital is located in an area that is designated as rural by any state law or regulation in effect as of Jan. 1, 2018;

the hospital is designated as rural by any state law or regulation in effect as of January 1, 2018; or

the hospital would qualify as a rural referral center or SCH if the hospital were located in a rural area.

Sole Community Hospital (SCH) and MDH Effective Dates One way that an urban hospital can reclassify as rural is if the hospital would qualify as an SCH if the hospital were located in a rural area. However, the rural reclassification is currently effective as of the filing date, while the SCH status is effective 30 days after approval. To minimize the lag between the effective date of rural reclassification and the effective date for SCH status, CMS finalizes its proposal to make the effective date of the SCH status determination the date that the MAC receives the complete SCH application. This policy is effective for SCH applications received on or after October 1, 2018. The agency also makes a parallel change for the effective date of MDH status determination, i.e., the effective date of MDH status will be the date that the MAC receives the complete MDH application, effective for MDH applications received on or after October 1, 2018.

Post-acute Care Transfer Policy

Certain Medicare patients discharged to a post-acute care setting – including rehabilitation hospitals and units, long-term care hospitals and units, cancer hospitals, psychiatric hospitals, children’s hospitals and skilled-nursing facilities – or discharged within three days to home health services, are defined as transfer cases and are paid a daily (per-diem) rate, rather than a fixed DRG amount, up to the full PPS rate.

1 These criteria are that the hospital (i) must be located in a rural area; (ii) must not have more than 100 beds; (iii) must not be an SCH; and (iv) must have a “high percentage of Medicare discharges.”





The BiBA required that, beginning in FY 2019, this inpatient PPS post-acute care transfer policy also apply to discharges to hospice care. Accordingly, CMS finalizes the proposal that, effective for discharges on or after Oct 1, 2018, if a discharge is assigned to one of the MS-DRGs subject to the post-acute care transfer policy (listed in Table 5) and the individual is transferred to hospice care by a hospice program, the discharge will be subject to payment as a transfer case. Specifically, this includes Patient Discharge Status codes 50 and 51. CMS estimates that this will reduce Medicare payments by approximately $240 million in FY 2019.

Wage Index

The area wage index adjusts payments to reflect differences in labor costs across geographic areas. The final rule bases the FY 2019 wage index on data from FY 2015 cost reports. In addition, for FY 2019, CMS finalizes the proposal to use the Office of Management and Budget (OMB) labor market delineations that it adopted beginning with FY 2015, with updates as reflected in OMB Bulletin Nos. 13-01, 15-01 and 17-01. According to CMS, the national average hourly wage increased 1.02 percent compared to FY 2018. As a result, a number of hospitals will see a decline in their wage indices relative to last year because, even though their wages rose, they did not rise as quickly as those at other hospitals. CMS states that of the 3,252 hospitals with wage data for both FYs 2018 and 2019, 1,475 (45.4 percent) had an average hourly wage increase of 1.02 percent or more.

Occupational Mix The purpose of the occupational mix adjustment is to control for the effect of hospitals’ employment choices on the calculation of the wage index. CMS is required by law to collect data every three years on the occupational mix of employees for each short-term, acute care hospital participating in the Medicare program. CMS collected data in the 2016 Medicare Wage Index Occupational Mix Survey with the intent of computing the occupational mix adjustment for FYs 2019, 2020 and 2021. Accordingly, CMS will calculate the FY 2019 occupational mix adjustment based on data from the CY 2016 Medicare Wage Index Occupational Mix Survey. CMS also will apply the occupational mix adjustment to 100 percent of the wage index, as it has in the past.

Medicare Geographic Classification Review Board (MGCRB) Redesignations and Reclassifications Hospitals may apply to the MGCRB for geographic reclassifications for purposes of inpatient PPS payment. In order to qualify, hospitals must be proximate to the labor market area to which they are seeking reclassification. Specifically, an urban hospital must be no more than 15 miles from the area to which it wants to reclassify and a rural hospital no more than 35 miles; alternatively, at least 50 percent of the hospital's employees must reside in the area to which it wants to reclassify. Additionally, an urban hospital’s average hourly wage (AHW) must be at least 108 percent of the AHW of hospitals in the area in which the hospital is located and at least 84 percent of the AHW of hospitals in the area to

https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2019-IPPS-Final-Rule-Home-Page-Items/FY2019-IPPS-Final-Rule-Tables.html?DLPage=1&DLEntries=10&DLSort=0&DLSortDir=ascending


which it seeks reclassification. For rural hospitals, the thresholds are 106 percent and 82 percent, respectively. At the time the final rule was drafted, the MGCRB had completed its review of FY 2019 reclassification requests and 303 hospitals were approved for wage index reclassifications for FY 2019. Hospitals reclassified during FYs 2017 (230 hospitals) and 2018 (348 hospitals) will continue to be reclassified, because wage index reclassifications are effective for three years. Applications for hospital reclassifications for FY 2020 are due to the MGCRB by Sept. 4, 2018. This is also the deadline for canceling a previous wage index reclassification withdrawal, or termination. Beginning with the FY 2020 reclassification application cycle, the MGCRB now requires applications, supporting documents, and subsequent correspondence to be filed electronically through the MGCRB module of the Office of Hearings Case and Document Management System (“OH CDMS”). The MGCRB will issue all of its notices and decisions via email and these documents will be accessible electronically through OH CDMS. Registration instructions and the system user manual are available at https://www.cms.gov/Regulations-and-Guidance/Review-Boards/MGCRB/ElectronicFiling.html.

Wage Index Updates from Proposed Rule to Final Rule The wage index in the final rule is determined after taking into consideration all approved reclassifications and other classification changes2; as a result, expected payments at the individual hospital level and at the state level can vary from the proposed rule to final rule. A contributor to wage index changes is reclassification “stacking,” in which hospitals first reclassify as rural, and then utilize the more relaxed requirements offered to rural providers to reclassify to a higher wage index area. (See the criteria described above in “Medicare Geographic Classification Review Board (MGCRB) Redesignations and Reclassifications.”) AHA estimates that for FY 2019, approximately 180 hospitals have stacked reclassifications. Although CMS had prohibited reclassification stacking in the past, the agency has permitted these activities since 2016, after they were upheld in court. More details about reclassification stacking can be found in the 2016 Interim Final Rule. For FY 2019, notable changes from the proposed rule appear to be driven by activities altering the rural floor.3 Specifically, certain urban hospitals reclassified as Rural Referral Centers (RRCs), but rather than engaging in “stacking” described above, chose to remain RRCs, leading to increases in the level of their state’s rural floor and/or increases in the number of hospitals qualifying for the rural floor in their state. For example, in Massachusetts, increases in payments seem to be largely driven by one hospital’s rural reclassification, as CMS partially describes on p. 2453 of the final rule. Additionally, in

2 According to 42 CFR 412.273, hospitals that have been reclassified are permitted to withdraw their reclassification application, terminate their reclassification status, or cancel previous withdrawals or terminations 3 The rural floor reflects a provision in the Balanced Budget Act of 1997, which mandates that the area wage index applicable to any hospital that is located in an urban area of a State may not be less than the area wage index applicable to hospitals located in rural areas in that State.

https://www.cms.gov/Regulations-and-Guidance/Review-Boards/MGCRB/ElectronicFiling.html

https://www.cms.gov/Regulations-and-Guidance/Review-Boards/MGCRB/ElectronicFiling.html



Arizona, after accounting for several hospital reclassifications, the number of hospitals receiving the rural floor increased from four in the proposed rule to 45 in the final rule. These reclassifications also have an impact on estimated payments across the country because rural floor payments must adhere to national budget neutrality. Specific effects of the wage index rural floor are shown in Table 3 below, as well as on pages 2454-2455 of the final rule. Effects of the wage index are described in the Addendum of the final rule, and wage index values may be found in Table 2 and Table 3 associated with the rule.

Table 3: FY 2019 IPPS Estimated Payments Due to Rural Floor with National Budget Neutrality

State Number

of hospitals

Number of hospitals receiving

the rural floor

Percent change due to application of rural floor with

neutrality

Difference in

millions

Alabama 84 3 -0.3 -$5

Alaska 6 3 0.1 $0

Arizona 56 45 3 $58

Arkansas 45 0 -0.3 -$4

California 297 60 0.3 $38

Colorado 46 9 0.6 $7

Connecticut 30 10 2 $32

Delaware 6 0 -0.4 -$2

Washington, DC 7 0 -0.4 -$2

Florida 168 7 -0.3 -$23

Georgia 101 0 -0.3 -$9

Hawaii 12 0 -0.3 -$1

Idaho 14 0 -0.3 -$1

Illinois 125 2 -0.4 -$16

Indiana 85 0 -0.3 -$8

Iowa 34 0 -0.3 -$3

Kansas 51 0 -0.3 -$3

Kentucky 64 0 -0.3 -$6

Louisiana 90 0 -0.3 -$5

Maine 17 0 -0.3 -$2

Massachusetts 56 29 3.3 $121

Michigan 94 0 -0.4 -$15

Minnesota 49 0 -0.3 -$6

Mississippi 59 0 -0.3 -$4

Missouri 72 0 -0.3 -$7

Montana 13 1 -0.2 -$1

Nebraska 23 0 -0.3 -$2

https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2019-IPPS-Final-Rule-Home-Page-Items/FY2019-IPPS-Final-Rule-Tables.html?DLPage=1&DLEntries=10&DLSort=0&DLSortDir=ascending


Nevada 22 3 0.3 $3

New Hampshire 13 8 2.3 $14

New Jersey 64 0 -0.5 -$18

New Mexico 24 2 -0.2 -$1

New York 149 16 -0.3 -$24

North Carolina 84 0 -0.3 -$10

North Dakota 6 3 0.4 $1

Ohio 130 7 -0.3 -$12

Oklahoma 79 2 -0.3 -$5

Oregon 34 1 -0.3 -$3

Pennsylvania 150 3 -0.4 -$19

Puerto Rico 51 11 0.1 $0

Rhode Island 11 0 -0.4 -$2

South Carolina 54 6 -0.1 -$2

South Dakota 17 0 -0.2 -$1

Tennessee 90 6 -0.3 -$8

Texas 310 13 -0.3 -$20

Utah 31 0 -0.3 -$2

Vermont 6 0 -0.2 $0

Virginia 74 1 -0.3 -$7

Washington 48 3 -0.4 -$8

West Virginia 29 2 -0.2 -$2

Wisconsin 66 5 -0.3 -$5

Wyoming 10 2 0 $0

Imputed Rural Floor The imputed rural floor for those states with no rural counties is set to expire Sept. 30, 2018, and CMS elected not to extend it. Previously, CMS had calculated an imputed floor for all-urban states; this policy was adopted in FY 2005 as a temporary 3-year regulatory measure to address concerns that hospitals in all-urban states are disadvantaged by the absence of rural hospitals to set a wage index floor for those states. The imputed rural floor has been extended eight times since its initial implementation. CMS states that it has, at many points, expressed reservations about establishment of an imputed floor, considering that the methodology creates a disadvantage for certain hospitals in certain states. The AHA has supported the continuation of the imputed rural floor.

Multi-campus Hospital Reclassifications In the final rule, CMS codifies its policy that a main campus of a hospital cannot obtain an SCH, RRC or MDH status or rural reclassification independently or separately from its remote location(s), and vice versa. For the purpose of meeting rural location criteria and mileage criteria for special status, the hospital must demonstrate that the main campus and its remote location(s) each independently satisfy those requirements. For other special status criteria, such as number of beds, combined data from both the main campus and its


remote location(s) will be used to demonstrate requirements found at §412.92 (for SCHs), §412.96 (for RRCs), and §412.108 (for MDHs). This codified policy applies to main campus hospitals and remote locations that operate under a single provider agreement where services are provided and billed under the IPPS.

Reclassification Requirements for a Provider that Is the Sole Hospital in the MSA In order to obtain an MGCRB reclassification, one of the required criteria is that a hospital demonstrate that its own AHW is at least 106 percent, in the case of a hospital located in a rural area, or at least 108 percent, in the case of a hospital in an urban area, of the AHW of all other hospitals in the area in which the hospital is located. CMS allows a waiver of this criterion for hospitals that are the only hospital in their MSA. However, qualifying for the waiver often entails a hospital obtaining a statement certifying its status from its CMS Regional Office or MAC, which hospitals have indicated may be burdensome for several reasons. Thus, CMS finalizes its proposal to simplify the process: in order to qualify for a waiver, a hospital must only provide wage index data from the current year’s IPPS final rule to demonstrate that it is the only hospital in its labor market area with wage data listed within the 3-year period considered by the MGCRB. This change will apply for reclassifications in FY 2021 and beyond.

Lock-in Date for Rural Reclassifications Currently, in order for a hospital to be treated as rural in the wage index and budget-neutrality calculations for the coming FY, it must have filed for a reclassification to rural at least 70 days prior to the second Monday in June of the current FY (referred to as the “lock-in” date). However, in order to allot more time to the rate setting process, CMS finalizes that in order for a hospital to be treated as rural in the wage index and budget neutrality calculations for the coming FY, its application for rural reclassification must be approved no later than 60 days after the public display date of the inpatient PPS proposed rule. This timeframe also generally aligns with the date for proposed rule comment submission. CMS notes that the finalized lock-in date change does not affect, on a hospital-specific level, the timing of when reclassification requests may be made or when the resulting payment changes will occur.

Additional Regulatory Relief Proposals

CMS states that it is finalizing several additional policies in an effort to reduce burden by easing documentation requirements and providing flexibility in several areas. In the final rule, CMS finalizes proposals to:

Remove the provision that Part A physician certification statements detail where in the medical record the required information can be found;

remove the requirement that a written inpatient admission order be present in the medical record as a specific condition of Medicare Part A payment4; and

4 Hospitals and physicians are still required to document relevant orders in the medical record to substantiate medical necessity requirements. CMS states that this policy does not change the requirement that an


provide more flexibility for new urban teaching hospitals to enter into Medicare Graduate Medical Education (GME) affiliation agreements, which allow hospitals to share full-time equivalent cap slots to accommodate the cross training of residents. Effective for Medicare GME affiliation agreements entered into on or after July 1, 2019, new urban teaching hospitals can “lend” full-time equivalent (FTE) cap slots to an existing teaching hospital under affiliation agreements as outlined by § 413.79.

Requirements for Submitting a Medicare Cost Report Providers are required to submit cost reports annually with certain supporting documentation; cost reports submitted without such documentation are rejected. However, CMS notes in the final rule that several supporting documentation requirements need to be updated to reflect current practices, to improve report accuracy and to facilitate more efficient contractor review of cost reports. Specifically, the agency finalizes its policies to:

Incorporate the Provider Cost Reimbursement Questionnaire, Form CMS 339, into the Organ Procurement Organization (OPO) and Histocompatibility Laboratory cost report, Form CMS-216;

Revise the regulations to no longer state that a cost report will be rejected for lack of supporting documentation if it does not include a Provider Cost Reimbursement Questionnaire (Form CMS-339);

Clarify in §413.24 that a provider must submit all necessary supporting documents for its cost report;

Remove the reference in §413.24 to Intern and Resident Information System (IRIS) data being furnished on a diskette; the regulation instead will state that in order for teaching hospitals to have an acceptable cost report, teaching hospitals must submit their IRIS “data”;

Require that cost reports include a detailed bad debt listing that corresponds to the bad debt amounts claimed in the provider’s cost report, effective for cost reporting periods beginning on or after Oct. 1, for providers claiming bad debt reimbursement

Require that cost reports include a detailed listing of a hospital’s Medicaid eligible days that corresponds to the Medicaid eligible days claimed in the hospital’s cost report for determining the hospital’s DSH payment adjustment as supporting documentation, effective for cost reporting periods beginning on or after Oct. 1;

Require that cost reports include a detailed listing of charity care and/or uninsured discounts that contains information such as the patient name, dates of service, insurer (if applicable), and the amount of charity care/uninsured discount given to the patient;

individual is considered an inpatient if formally admitted as an inpatient under an order for inpatient admission.


Require that the detailed listing of charity care and/or uninsured discount correspond to the amount claimed in the hospital’s cost report as supporting documentation, effective for cost reporting periods beginning on or after Oct.1; and

Require that a home office or chain organization submit the Home Office Cost Statement directly to the servicing contractors for its providers when the home office or chain organization has allocated costs to its providers, and submit a copy of the Home Office Cost Statement to each of the contractors of its chain providers

CMS finalizes additional policies on Home Office Cost Statements, but will apply different rules depending on whether the provider and the home office have the same fiscal year end. Effective for cost reporting periods beginning Oct. 1, CMS requires that:

For providers claiming costs on their cost report that are allocated from a home office with the same fiscal year end, cost reports include a completed (and submitted to the chain provider’s contractor) Home Office Cost Statement that corresponds to the amounts allocated from the home office to the provider’s cost report; and

For providers claiming costs on their cost report that are allocated from a home office or chain organization with a different fiscal year end, cost reports include a completed (and submitted to the chain provider’s contractor) Home Office Cost Statement that corresponds to some portion of the amounts allocated from the home office to the provider’s cost report.

Because the new extensible markup language (XML)-based IRIS program is not yet available, CMS did not finalize its proposed requirement that the IRIS data contain the same total counts of direct GME FTE residents (unweighted and weighted) and indirect medical education (IME) FTE residents as the total counts of direct GME FTE and IME FTE residents in the hospital’s cost report.

Key Coding and MS-DRG Changes

CMS finalizes the following changes to the MS-DRGs:

CAR T-Cell Therapy As noted above, CMS finalizes its proposal to assign CAR T therapy procedure codes to MS-DRG 016, which will be retitled “Autologous Bone Marrow Transplant with CC/MCC or T-cell Immunotherapy.” Specifically, ICD-10-PCS procedure codes XW033C3 and XW043C3 will be assigned to Pre-Major Diagnostic Category (MDC) MS-DRG 016 for FY 2019. In addition, because CMS may consider assigning CAR T to a new MS-DRG in the future, the agency plans to collect more comprehensive clinical and cost data related to these products. In fact, the National Uniform Billing Committee recently approved a new revenue


code and value code for reporting cell/gene therapy services, including CAR T, which take effect in April 2019. They will capture services associated with the acquisition of the cells, storage, and infusion/insertion of the manipulated biologic (modified cells). These codes will provide CMS and other health plans with an opportunity to examine the associated costs directly related to these therapies.

Heart Transplant or Implant of Heart Assist System CMS reviewed ICD-10 logic and finalized its proposal to maintain for FY 2019 the current structure for the following Pre-MDC MS-DRGs where procedures involving heart assist devices in combination with codes for insertion of a percutaneous short-term external heart assist device are currently assigned:

o MS-DRGs 001 and 002 (Heart Transplant or Implant of Heart Assist System with and without MCC, respectively),

o MS-DRG 215 (Other Heart Assist System Implant), and o MS-DRGs 268 and 269 (Aortic and Heart Assist Procedures Except Pulsation

Balloon with and without MCC, respectively).

AHA had urged CMS to phase in substantial fluctuations in payment rates in order to promote predictability and reliability for the hospital field. We appreciated that the agency limited the payment decrease for MS-DRG 215 for FY 2018, and we once again urged CMS to again consider such an approach in this situation or when the relative weight for any MS-DRG is drastically reduced in a given year, particularly when it follows a significant decline in the previous year. For FY 2019, CMS did not reduce the relative weight of MS-DRG 215 by 25% as originally proposed. CMS will continue to analyze the claims data for possible future updates. CMS did note that the data for DRGs 215, as well as DRGs 001 and 002, demonstrated a wide range of variability in the average length of stay and the average costs for cases reporting procedures that involve a biventricular short-term external heart assist system versus a short-term external heart assist system. There is an even greater range in the average length of stay and the average costs when comparing the revision of a short-term external heart assist system to the revision of a synthetic substitute in the heart or to the revision of an implantable heart assist system.

Bowel Procedures CMS did not finalize its proposal to reassign 12 ICD-10-PCS procedure codes for repair of ascending colon, transverse colon, descending colon and sigmoid colon (open and percutaneous endoscopic approach) and reposition of ileum and large intestine (open and percutaneous endoscopic approach) from MS-DRGs 329, 330 and 331 (Major Small and Large Bowel Procedures with MCC, with CC, and without CC/MCC, respectively) to MS-DRGs 344, 345 and 346 (Minor Small and Large Bowel Procedures with MCC, with CC, and without CC/MCC, respectively) when reporting a bowel procedure as the only OR procedure. The AHA comments had identified potential problems interpreting the ICD-10-PCS codes and noted that because two full years of data were not available subsequent to publication of Coding Clinic advice on these procedures, CMS’ analysis and proposed MS-DRG modifications may be based on unreliable data.


MDC 8 (Diseases and Disorders of the Musculoskeletal System and Connective Tissue): Spinal Fusion CMS finalized its proposal to not make any changes to the spinal fusion MS-DRGs for FY 2019. A total of 213 ICD-10-PCS procedure codes with Z” for “no device” are being deleted, effective October 1, 2018 because a spinal fusion procedure always requires some type of device to facilitate the fusion of vertebral bones. The results of the data analysis demonstrates the reporting of an invalid spinal fusion procedure with device value “Z” represents approximately 12 percent of all discharges across the spinal fusion MS-DRGs. CMS will continue to monitor the claims data for resolution of coding inaccuracies.

MDC 14 (Pregnancy, Childbirth and the Puerperium) In the FY 2018 IPPS proposed and final rules, CMS noted that the MS-DRG logic involving a vaginal delivery under MDC 14 is technically complex as a result of the requirements that must be met to satisfy assignment to the affected MS-DRGs. CMS solicited public comments on which diagnosis or procedure codes, or both, should be considered in the logic to identify a vaginal delivery and which diagnosis codes should be considered in the logic to identify a complicating diagnosis. CMS formed an internal workgroup and systematically reviewed the logic of MDC 14 MS-DRGs and analyzed the corresponding claims data. CMS acknowledges that they cannot adopt the same approach to refine the maternity and newborn MS-DRGs because of the extremely low volume of these cases represented in the Medicare data. CMS finalized its proposal to delete 10 MS-DRGs and create 18 new MS-DRGs in MDC 14 (Pregnancy, Childbirth and the Puerperium) as shown in Table 4.

Table 4: MS-DRG Changes for MDC 14

Deleted MS-DRGs New MS-DRGs

MS-DRG 765 (Cesarean Section with CC/MCC) MS-DRG 783 (Cesarean Section with Sterilization with MCC)

MS-DRG 766 (Cesarean Section without CC/MCC)

MS-DRG 784 (Cesarean Section with Sterilization with CC)

MS-DRG 785 (Cesarean Section with Sterilization without CC/MCC)

MS-DRG 786 (Cesarean Section without Sterilization with MCC)

MS-DRG 787 (Cesarean Section without Sterilization with CC)

MS-DRG 788 (Cesarean Section without Sterilization without CC/MCC)

MS-DRG 767 (Vaginal Delivery with Sterilization and/or D&C)

MS-DRG 796 (Vaginal Delivery with Sterilization/D&C with MCC)

MS-DRG 774 (Vaginal Delivery with Complicating Diagnosis)

MS-DRG 797 (Vaginal Delivery with Sterilization/D&C with CC)

MS-DRG 775 (Vaginal Delivery without Complicating Diagnosis)

MS-DRG 798 (Vaginal Delivery with Sterilization/D&C without CC/MCC)

MS-DRG 805(Vaginal Delivery without Sterilization/D&C with MCC)


MS-DRG 806 (Vaginal Delivery without Sterilization/D&C with CC)

MS-DRG 807 (Vaginal Delivery without Sterilization/D&C without CC/MCC)

MS-DRG 777 (Ectopic Pregnancy) MS-DRG 817 (Other Antepartum Diagnoses with O.R. Procedure with MCC)

MS-DRG 778 (Threatened Abortion) MS-DRG 818 (Other Antepartum Diagnoses with O.R. Procedure with CC)

MS-DRG 780 (False Labor) MS-DRG 819 (Other Antepartum Diagnoses with O.R. Procedure without CC/MCC)

MS-DRG 781 (Other Antepartum Diagnoses with Medical Complications)

MS-DRG 831 (Other Antepartum Diagnoses without O.R. Procedure with MCC)

MS-DRG 782 (Other Antepartum Diagnoses without Medical Complications)

MS-DRG 832 (Other Antepartum Diagnoses without O.R. Procedure with CC)

MS-DRG 833 (Other Antepartum Diagnoses without O.R. Procedure without CC/MCC)

Systemic Inflammatory Response Syndrome (SIRS) of Non-Infectious Origin CMS reassigned ICD-10-CM diagnosis codes for Systemic Inflammatory Response Syndrome (SIRS) of non-infectious origin with and without acute organ dysfunction, from MS-DRGs 870 (Septicemia or Severe Sepsis with Mechanical Ventilation > 96 Hours), 871 and 872 (Septicemia or Severe Sepsis without Mechanical Ventilation > 96 Hours, with MCC, and without MCC, respectively) to MS-DRG 864 with the revised title “Fever and Inflammatory Conditions” to better reflect the diagnoses assigned there.

Review of Secondary Diagnoses In the FY 2018 inpatient PPS final rule, CMS provided public notice of its plans to conduct a comprehensive review of the CC and MCC lists for FY 2019. This is similar to the FY 2008 inpatient PPS comprehensive review of the CC list performed to better recognize severity of illness that ultimately resulted in the implementation of MS-DRGs. As an initial recommendation from the first phase of the comprehensive review of the CC/MCC lists, CMS finalized its proposal to remove the special GROUPER logic for processing claims containing two lists of ICD-10-CM diagnosis codes. These lists represent conditions that are normally coded using two or more diagnosis codes in ICD-9-CM, but required a single ICD-10-CM that combined the conditions. If one of these ICD-9-CM codes is a CC or MCC, then the single ICD-10-CM combination code used as a principal diagnosis was grouped to the MS-DRG with CC/MCC. The lists were initially developed in the absence of ICD-10 coded data by mapping the ICD-9-CM diagnosis codes to the new ICD-10-CM combination codes. The lists were created to allow replication of the ICD-9-CM MS-DRG version. Removing the list removes CC/MCCs for the conditions on the lists. CMS estimated that 0.2 percent of the inpatient PPS claims analyzed will be impacted by removal of the special logic.

Changes to Severity Levels Human Immunodeficiency Virus [HIV] Disease. CMS changed the severity level of ICD-10-CM diagnosis code B20 (Human immunodeficiency virus [HIV] disease) from an MCC to a CC. CMS noted that while the data did not strongly suggest that the categorization of HIV


as an MCC was inaccurate, the data also did not definitively support maintaining a severity level of an MCC. CMS’ clinical advisors felt that for many patients with HIV disease, symptoms are well controlled by medications, and if these patients have an HIV-related complicating disease, that complicating disease would serve as a CC or an MCC. Acute Respiratory Distress Syndrome. CMS changed the severity level of ICD-10-CM diagnosis code J80 (Acute respiratory distress syndrome from a CC to an MCC. CMS’ clinical advisors agree that the resources required to care for a patient with this secondary diagnosis are consistent with those of an MCC. Encephalopathy. CMS changed the severity level for ICD-10-CM diagnosis code G93.40 (Encephalopathy, unspecified) from an MCC to a CC. CMS indicates that unspecified encephalopathy is poorly defined, not all encephalopathies are MCCs, and the MCC status creates an incentive for coding personnel to not pursue specificity of encephalopathy.

Operating Room (O.R.) and Non-O.R. Issues For FY 2019 CMS addressed requests they received to change the designation of specific ICD-10-PCS procedure codes. Table 5 contains the procedures changing from O.R. procedures to non-O.R. procedures. Table 6 contains the procedures changing from non-O.R. to O.R. procedures. These procedures typically utilize the resources of an operating room.

Table 5: Procedures Changing from O.R. Procedures to Non-O.R. Procedure

Procedure Groups Number of ICD-10-PCS

Procedure Codes Affected

Endoscopic Destruction of Intestine 4

Drainage of Lower Lung Via Natural or Artificial Opening Endoscopic, Diagnostic

5

Table 6: Procedures Changing from Non-O.R. Procedures to O.R. Procedure

Procedure Groups Number of ICD-10-PCS

Procedure Codes Affected

Percutaneous and Percutaneous Endoscopic Excision of

Brain and Cerebral Ventricle

22

Open Scrotum and Breast Procedures 13

Open Parotid Gland and Submaxillary Gland Procedures 8

Removal and Reinsertion of Spacer, Knee Joint and Hip

Joint

8

Endoscopic Dilation of Ureter(s) with Intraluminal Device 3

Thoracoscopic Procedures of Pericardium and Pleura 9

Open Insertion of Totally Implantable Vascular Access

Devices

10


Implementation of CMS’s “Meaningful Measures”

Framework

The AHA is pleased that CMS is beginning to use its “Meaningful Measures” framework across the hospital quality reporting and value programs. The framework aligns with the AHA’s ongoing request that CMS reduce and prioritize the measures used in its quality programs so they focus on the issues that matter the most to improving care and outcomes. The Meaningful Measures framework identifies six overarching quality priorities and 19 specific measurement areas aligned with those priorities (see Table 7 below). Most of the measurement areas are ones that the AHA has consistently recommended to the agency.

Table 7: CMS Meaningful Measure Priorities and Measurement Areas

CMS Quality Priority CMS Meaningful Measure Area

Make care safer by reducing harm caused in the delivery of care

Healthcare-associated infections

Preventable health care harm

Strengthen person and family engagement as partners in their care

Care is personalized and aligned with patient goals

End-of-life care according to patient preferences

Patient’s experience of care

Patient-reported functional outcomes

Promote effective communication and coordination of care

Medication management

Hospital admissions and readmissions

Transfer of health information and interoperability

Promote effective prevention and treatment of chronic disease

Preventive care

Management of chronic conditions

Prevention, treatment and management of mental health

Prevention and treatment of opioid and substance use disorders

Risk adjusted mortality

Work with communities to promote best practices of healthy living

Equity of care

Community engagement

Make care affordable Appropriate use of health care

Patient-focused episode of care

Risk-adjusted total cost of care

CMS reviewed all of the measures in its hospital quality and value programs to determine how well they aligned with the framework. Additionally, CMS finalizes an additional measure removal criterion in both the IQR and value-based purchasing (VBP) programs assessing whether a measure’s costs outweigh the benefits of its continued use in the program. Lastly, CMS states that it intends to view “holistically” its three hospital “value” programs – hospital VBP, the Hospital-Acquired Conditions (HAC) Reduction Program and the Hospital Readmissions Reduction Program (HRRP). CMS believes the VBP should focus on clinical outcomes, patient experience and costs; the HAC program should focus on


patient safety; and the HRRP should focus on “care coordination” as measured by readmission rates. As a result, CMS removes and realigns a significant number of measures in its hospital quality reporting and value programs. The changes are summarized in Appendix B, and described in more detail in the sections that follow.

Hospital IQR Program The IQR program is CMS’s pay-for-reporting program in which hospitals must submit measures in order to avoid a payment reduction equal to one quarter of the annual market-basket update. The IQR program also includes a requirement to report on certain eCQMs. The IQR eCQM reporting requirements align with the eCQM reporting requirements in the Promoting Interoperability Program (formerly known as the hospital EHR incentive program). CMS finalizes its proposal to remove 39 measures from the IQR program for FYs 2020 through FY 2023. Appendix B lists all of the measures used in CMS’s hospital programs and the timeframes when CMS will remove them from the programs. Of the 39 measures proposed for removal, 18 measures will be removed from hospital quality programs altogether because they are “topped out” in performance, do not lead to better care or have costs that outweigh the value of continuing to report them. Examples of these measures include two “structural” measures asking hospitals to attest to whether they implement safety culture surveys and use a safe surgery checklist as well as several process of care measures (e.g., influenza vaccination). The remaining 21 measures will be “de-duplicated.” That is, the measures will be removed from the IQR program, but retained in one of the other hospital measurement programs. Hospitals will still be required to report measure data, and measure results will continue to be publicly reported on Hospital Compare. For example, CMS removed most of the condition-specific 30-day readmission measures from the IQR, but will continue to use them in the HRRP and publicly report the measure results. In the final rule, CMS reaffirms its belief that measure “de-duplication” can remove the burden and complexity of tracking measure performance in multiple programs. For example, hospitals will no longer have to look at separate preview reports for IQR and HRRP to see their readmissions performance. In the final rule, CMS indicates that some stakeholders voiced concerns that removing the six healthcare-associated infection (HAI) measures from the IQR would impinge on the transparency of hospital performance. In response, the agency will remove the measures one year later than proposed – that is, for the FY 2022 IQR program. CMS suggests this will give it extra time to transition the measures out of the IQR and ensure data remain available in an easily accessible manner. At the same time, the agency continues to indicate that “de-duplicating” the measures will not impinge on transparency, especially since its pay-for-performance programs all require public reporting of data. The AHA supports the removal of 18 measures from the IQR program. We also believe “de-duplicating” measures should lead to reduced administrative burden


without impinging upon the hospital field’s longstanding commitment to transparency.

IQR eCQM Reporting The IQR program also includes a requirement to report on certain eCQMs. For FY 2021 and FY 2022, CMS finalizes changes to further align the IQR eCQM reporting requirements with the eCQM reporting requirements in the Promoting Interoperability Program (formerly known as the EHR incentive program). FY 2021 eCQM Reporting, Submission Requirement and Reporting Period. For the FY 2021 payment determination, CMS finalizes to continue FY 2020 IQR Program requirement, specifically hospitals reporting on a minimum of four self-selected eCQMs from the 15 eCQMs available for reporting to the IQR Program. CMS finalizes hospitals will submit one self-selected quarter of eCQM data from calendar year (CY) 2019. CMS did not make any changes to the submission deadlines, sampling or case threshold policies. FY 2022 eCQMs Reporting. CMS finalizes the removal of seven eCQMs for the FY 2022 payment determination and subsequent years. CMS states the costs associated with the measures outweigh the benefit of continued use in the program. CMS referenced feedback from hospitals about ongoing challenges of implementing eCQMs, including a request for at least one year between new EHR requirements and reporting eCQMs data. CMS acknowledged that CAHs participating in the Promoting Interoperability Programs have the same eCQM reporting requirements and facilitating quality improvement for rural hospitals, small hospitals and CAHs can present unique challenges. CMS states the agency is exploring opportunities to develop more relevant measures and less burdensome methods to collect quality measure data for use by small and rural hospitals. Appendix B includes previously adopted eCQMs that will be removed and to be available for reporting in FY 2022. Certification Requirement for eCQM Reporting Beginning FY 2021 Payment Determination. CMS finalizes that hospitals must use the 2015 Edition certified EHR for the FY 2021 payment determination. CMS states that the 2015 Edition EHRs have functions, designed to permit the user to import and export one or more QRDA file, that permit the export of data for a set or subset of patients. CMS will continue to use a sub-regulatory process to incorporate updates to eCQM specifications deemed non-substantive. Proposed eCQM for Future Years. CMS received comments on the inclusion of a Hospital Harm – Opioid-related Adverse Events eCQM for future years in the Hospital IQR and Promoting Interoperability Programs. The measure uses the administration of naloxone in hospitals to monitor patients administered opioids during hospitalization and to avoid harm. CMS states measure testing was performed in multiple hospitals with various EHR systems and additional testing is being performed to provide information about the feasibility and data element validity. CMS states the agency plans to submit both measures for endorsement proceedings as part of the Patient Safety Committee as early as FY 2019. CMS adds they will consider


comments received as future policy is developed regarding potential inclusion of the Hospital Harm – Opioid-Related Adverse Events eCQM in the Hospital IQR Program

Hospital VBP Program As required by the ACA, CMS will fund the budget-neutral FY 2019 VBP program by reducing base operating diagnosis-related group payment amounts to participating hospitals by 2.0 percent. CMS estimates the pool of available VBP funds will be $1.9 billion for FY 2019.

Measure Removal. CMS finalizes the removal of four measures from the VBP program. Specifically, it is removing three condition-specific episode-based spending measures because they are duplicative with the Medicare spending per beneficiary measure. The measures will be retained in the IQR program. The agency also finalizes the removal of the early elective delivery (PC-01) measure because it does not believe the measure meaningfully differentiates provider performance on the VBP. The agency estimates that more than half of hospitals will earn the maximum number of achievement points on the measure. However, given the importance of avoiding early elective deliveries, the agency will retain PC-01 in the IQR program. The AHA agrees with CMS’s decision to “de-duplicate” these measures by removing them from VBP while retaining them in the IQR. However, CMS does not finalize the removal of five HAI measures and the claims-based patient safety indicator (PSI) measure. The agency proposed to remove these measures in order to eliminate duplication with the HAC Reduction Program and to reduce administrative burden. Indeed, since these six measures are used in both programs, hospitals must review two sets of preview reports. Furthermore, because the scoring methodologies differ between the programs, it is possible to perform well or poorly on one or both programs. Nevertheless, CMS states that it received pushback from stakeholders suggesting it was appropriate to keep the measures in both the VBP and HAC program to “strongly incentivize” hospitals to improve performance on critically important patient safety issues. As a result, hospitals will continue to be scored on the same safety measures in both the VBP and the HAC Reduction Program. The AHA is disappointed that CMS chose not to adopt its original proposal. We remain concerned by the potential for inconsistent performance and “double penalties” that can result from using the measures in both programs. We will continue to advocate for greater consistency and less duplication between the VBP and HAC Reduction programs. VBP Measure Domains and Weights. Because CMS is retaining the VBP’s patient safety measures, the agency will not remove the safety domain as it had originally proposed. As a result, the VBP retains its four equally-weighted measure domains:

Patient safety

Clinical outcomes

Person and community engagement


Efficiency and cost reduction. Hospitals may assess the impact of this program on their organizations by using AHA’s Value-based Purchasing Calculator, accessed at https://www.aha.org/inpatient-pps.

HAC Reduction Program The HAC Reduction Program imposes a 1 percent reduction to all Medicare inpatient payments for hospitals in the top (worst performing) quartile of risk-adjusted national HAC rates. The HAC Reduction Program’s measure set is unchanged. However, CMS adopts two important changes to the program – the elimination of measure domains, and the adoption of data collection and validation requirements for the HAI measures in the program. Elimination of Measure Domains. Starting with the FY 2020 program, CMS will change the HAC scoring methodology by eliminating measure domains and assigning an equal weight to all six performance measures in the program. The remainder of the scoring methodology will remain unchanged. CMS believes this change will address the concerns expressed by some small hospitals who believed it was problematic for their HAI domain scores to rest on the performance of only one or two measures. CMS estimates that the approach should penalize slightly fewer smaller hospitals. However, the agency also estimates that the approach may penalize slightly more teaching hospitals and large urban hospitals. Data Collection and Validation Requirements. Because CMS will remove all of the HAI measures in the HAC Reduction Program from the hospital IQR program, it must establish data reporting and validation requirements within the HAC Program. CMS will carry over nearly all of the same requirements used in the IQR program to the HAC program. CMS notes that any hospitals that fail measure validation will receive the lowest possible score on the validated measures.

Hospital Readmissions Reduction Program (HRRP) The HRRP imposes penalties of up to 3 percent of base inpatient PPS payments for having “excess” readmissions rates for selected conditions when compared to expected rates. CMS uses a total of six Medicare-claims-based readmission measures to assess performance in the program – acute myocardial infarction, heart failure, pneumonia, chronic obstructive pulmonary disease, isolated coronary artery bypass grafts, and elective hip and knee replacements. In the final rule, CMS estimates that readmissions penalties across all eligible hospitals will total $566 million in FY 2019. Other than finalizing the three-year performance period it will use in the FY 2019 program – that is, Jul. 1, 2014 through Jun. 30, 2017 – CMS does not adopt major changes to the HRRP in this rule. However, as finalized in the FY 2018 inpatient PPS final rule, CMS will implement the socioeconomic adjustment approach mandated by the 21st Century Cures Act. The approach is summarized in Figure 1 below, and described in more detail the AHA’s Regulatory Advisory on the FY 2018 inpatient PPS final rule.



Figure 1: HRRP Socioeconomic Adjustment Approach Beginning in FY 2019

Hospitals may assess the impact of this program on their organizations by using AHA’s Readmissions Penalty Calculator, accessed at: https://www.aha.org/inpatient-pps.

Next Steps The AHA encourages hospital leaders to estimate the impact of the provisions on their facilities. To that end, the AHA has created a readmissions penalty calculator, a VBP calculator and a DSH payment calculator for hospitals to assess the impact of these policies on their organizations. They are available at https://www.aha.org/inpatient-pps. The calculators are designed so that you enter your hospital's CCN (and some additional financial information for the DSH calculator) and the calculator will then estimate the dollar amount of your potential readmissions penalty, net VBP gain or loss, and DSH payment. Please also note the following submission deadlines set forth in the final rule:

Applications for hospital reclassifications for FY 2020 are due by Sept. 4, 2018. This is also the deadline for canceling a previous wage index reclassification withdrawal, or termination.

Hospitals wishing to qualify for the payment adjustment for low-volume hospitals in FY 2019 must make a written request for low-volume status to their MAC no later than Sept. 1, 2018, per the instructions outlined in the rule.

Requests for updates to the FY 2020 MS-DRGs are due by Nov. 1, 2018. For additional questions, please contact Erika Rogan, AHA senior associate director of policy, at (202) 626-2963 or [email protected].




mailto:[email protected]


Appendix A: Promoting Interoperability Scoring Methodology, CY 2019 and CY 2020

Objective Measure(s) Points Exclusions

Electronic Prescribing

ePrescribing: At least one hospital discharge medication order for permissible prescriptions (for new and changed prescriptions) is queried for a drug formulary and transmitted electronically using a certified EHR Query of Prescription Drug Monitoring Program (PDMP): For at least one Schedule II opioid electronically prescribed using a certified EHR during the reporting period, the EH or CAH uses data from certified EHR to conduct a query of a PDMP for prescription drug history, except where prohibited and in accordance with applicable law. Verify Opioid Treatment Agreement: For at least one unique patient for whom a Schedule II opioid was electronically prescribed by the EH or CAH using a certified EHR during the EHR reporting period, if the total duration of the patient’s Schedule II opioid prescriptions is at least 30 cumulative days within a six-month look-back period, the EH or CAH seeks to identify the existence of a signed opioid treatment agreement and incorporates it into the patient’s electronic health record using a certified EHR.

10 points in 2019 and 5 points in 2020 5 points (Bonus points for CY2019) 5 points (Bonus points for CY2019 and CY2020)

An exclusion claimed for all measures in the ePrescribing objective will equally distribute the points to the measures available for Health Information Exchange and the Provide Patients Electronic Access objectives. An exclusion claimed for the Query PDMP or Opioid Treatment Agreement measures will redistribute the respective five points to the e-Prescribing Measure.

Health Information Exchange

Support Electronic Referral Loops by Sending Health Information: For at least one transition of care or referral, the EH or CAH that transitions or refers its patient to another setting of care or provider of care (1) Creates a summary of care record using certified EHR; and (2) Electronically exchanges the summary of care record. Support Electronic Referral Loops by Receiving and Incorporating Health Information: For at least one electronic summary of care record received for patient encounters during

20 points 20 points

No exclusions for the Sending Health Information Measure. An exclusion claimed for the Receiving and Incorporating Measure will redistribute the 20 points to the Sending Health Information Measure.


the EHR reporting period for which an EH or CAH was the receiving party of a transition of care or referral, or for patient encounters during the EHR reporting period in which the EH or CAH has never before encountered the patient, the EH or CAH conducts clinical information reconciliation for medication, mediation allergy, and current problem list.

Provider to Patient Exchange

Provide Patients Electronic Access to Their Health Information. For at least one unique patient discharged from the EH or CAH inpatient or emergency department (POS 21 or 23), (1) the patient (or patient-authorized representative) is provided timely access to view online, download, and transmit his or her health information; and (2) the EH or CAH ensures the patient’s health information is available for the patient (or patient-authorized representative) to access using any application of their choice that is configured to meet the technical specifications of the API in the EH or CAH’s certified EHR.

40 points in CY 2019 / 35 points in CY 2020

No exclusions for the Provide Patients Electronic Access to Their Health Information Measure.

Public Health and Clinical Data Exchange

Syndromic Surveillance Reporting (required): The EH or CAH is in active engagement with a public health agency to submit syndromic surveillance data from an urgent care setting. Select one or more additional registries for required reporting: Immunization Registry Reporting: The EH or CAH is in active engagement with a public health agency to submit immunization data and receive immunization forecasts and histories from the public health immunization registry/immunization information system (IIS). Electronic Case Registry Reporting: The EH or CAH is in active engagement with a public health agency to submit case reporting of reportable conditions. Public Health Registry Reporting: The EH or CAH is in active engagement with a public health

10 points Any EH or CAH may be excluded from the syndromic surveillance reporting measure if lacking an emergency or urgent care department, the public health agency cannot receive electronic syndromic surveillance data in the EHR specified standards at the start of the reporting period, or the public health agency has not declared readiness to receive syndromic surveillance data as of six months prior to the start of the EHR reporting period. An exclusion claimed will redistribute the 10 points to the Provide Patients Electronic Access to Their Health Information measure.


agency to submit data to public health registries. Clinical Data Registry Reporting: The EH or CAH is in active engagement to submit data to a clinical data registry. Electronic Reportable Laboratory Result Reporting: The EH or CAH is in active engagement with a public health agency to submit electronic reportable laboratory results.


Appendix B: Measure Removal and De-Duplication in CMS Hospital Quality Reporting and Value Programs, FYs 2020-2023

X = Measure used in program

Measure removals include the fiscal year in which the measure will no longer be included in the program

Measure IQR VBP HAC HRRP

Chart-abstracted Process of Care Measures

VTE-6 Incidence of potentially preventable VTE Remove

(FY 2021)

Severe sepsis and septic shock: management bundle (NQF #500)

X

ED-1 Median time from ED arrival to departure from the emergency room for patients admitted to the hospital (NQF #0495)

Remove (FY 2021)

ED-2 Median time from admit decision to time of departure from the ED for patients admitted to the inpatient status (NQF #0497)

Remove (FY 2022)

IMM-2 Immunization for influenza (NQF #1659) Remove

(FY 2021)

PC-01 Elective delivery < 39 weeks gestation (NQF#0469)

X Remove

(FY 2021)

Electronic Clinical Quality Measures (eCQMs, reported using QRDA-1)

AMI 8a Primary PCI received within 90 Minutes of hospital arrival

Remove (FY 2022)

CAC-3 Home management plan of care document given to patient/caregiver

Remove (FY 2022)

ED-1 Median time from ED arrival to ED departure for admitted ED patients

Remove (FY 2022)

ED-2 Admit decision time to ED departure time for admitted patients

X

EHDI-1a Hearing screening prior to hospital discharge

Remove (FY 2022)

PC-01 Elective delivery (eCQM version) Remove

(FY 2022)

PC-05 Exclusive breast milk feeding X

STK-02 Discharged on antithrombotic therapy X

STK-03 Anticoagulation therapy for atrial fibrillation/flutter

X

STK-05 Antithrombotic therapy by the end of hospital day two

X

STK-06 Discharged on statin medication X

STK-08 Stroke education Remove

(FY 2022)

STK-10 Assessed for rehabilitation Remove

(FY 2022)

VTE-1 Venous thromboembolism prophylaxis X

VTE-2 Intensive care unit venous thromboembolism prophylaxis

X



Healthcare Associated Infection Measures (chart-abstracted)

Central-line associated bloodstream infection (CLABSI)

Remove (FY 2022)

X X

Surgical site infection (SSI): Colon surgery; abdominal hysterectomy

Remove (FY 2022)

X X

Catheter-associated urinary tract infection (CAUTI) Remove

(FY 2022) X X

Methicillin-resistant staphylococcus aureus (MRSA) Bacteremia

Remove (FY 2022)

X X

Clostridium difficile (C. Difficile) Remove

(FY 2022) X X

Healthcare personnel influenza vaccination X

Hospital Mortality Measures (claims-based)

Acute myocardial infarction (AMI) 30-day mortality rate

Remove (FY 2020)

X

Heart Failure (HF) 30-day mortality rate Remove

(FY 2020) X

Pneumonia (PN) 30-day mortality rate Remove

(FY 2021) X

Stroke 30-day mortality rate X

Chronic obstructive pulmonary disease (COPD) 30-day mortality rate

Remove (FY 2021)

X

Coronary artery bypass graft (CABG) 30-day mortality rate

Remove (FY 2022)

X

Hospital Readmission Measures (claims-based)

Hospital-wide all-cause unplanned readmission X

Hybrid (claims+EHR) hospital-wide readmission X

Excess days in acute care after hospitalization for AMI

X

Excess days in acute care after hospitalization for HF

X

Excess days in acute care after hospitalization for PN

X

Stroke 30-day risk standardized readmission Remove

(FY 2020)

AMI 30-day risk standardized readmission Remove

(FY 2020) X

Heart failure 30-day risk standardized readmission Remove

(FY 2020) X

Pneumonia 30-day risk standardized readmission Remove

(FY 2020) X

Total knee replacement / total hip replacement (TKA/THA) 30-day risk standardized readmission

Remove (FY 2020)

X

COPD 30-day risk standardized readmission Remove

(FY 2020) X

CABG 30-day risk standardized readmission Remove

(FY 2020) X


**PSI 90 will not be used in the FY 2019 through FY 2022 VBP programs because of the software changes needed to calculate performance using ICD-10 CM coding. However, the updated version of PSI 90 will be used beginning in the FY 2023 VBP program.

Patient Safety Measures (based on Medicare claims data)

PSI-90 Patient safety composite (NQF #0531) Remove

(FY 2020) X** X

PSI-04 Death among surgical inpatients with serious, treatable complications (NQF #0351)

X


THA/TKA complications

Remove (FY 2023) X

Efficiency and Episode-based Payment Measures (claims-based)

Medicare spending per beneficiary Remove

(FY 2020) X

AMI payment per 30-day episode of care X Remove

(FY 2019)

HF payment per 30-day episode of care X Remove

(FY 2019)

PN payment per 30-day episode of care X Remove

(FY 2019)

THA/TKA payment per 30-day episode of care X

Kidney/UTI clinical episode-based payment Remove

(FY 2020)

Cellulitis clinical episode-based payment Remove

(FY 2020)

Gastrointestinal hemorrhage clinical episode-based payment

Remove (FY 2020)

Aortic aneurysm procedure clinical episode-based payment

Remove (FY 2020)

Cholecystectomy/common duct exploration episode-based payment

Remove (FY 2020)

Spinal fusion clinical episode-based payment Remove

(FY 2020)

Patient Experience of Care (survey-based)

Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey + 3-item Care transition measure

X X

Structural Measures (web-based reporting)

Safe Surgery Checklist use Remove

(FY 2020)

Hospital survey on patient safety culture Remove

(FY 2020)

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