ffy 2014 medicare inpatient prospective payment system ......revises the conditions of participation...
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FFY 2014 Medicare Inpatient Prospective Payment System
Summary of the Final Rule
August 2013
The Centers for Medicare & Medicaid Services (CMS) has published its final rule for rate updates and
policy changes to the Medicare inpatient prospective payment system (IPPS) and long-term care hospital
prospective payment system (LTCH PPS) for federal fiscal year (FFY) 2014. The final rule was released
on August 2 and published in the August 19 Federal Register and is available at
http://www.gpo.gov/fdsys/pkg/FR-2013-08-19/pdf/2013-18956.pdf. Unless otherwise noted, all policy
and payment changes are effective for discharges occurring on or after October 1, 2013.
Provisions related to the LTCH PPS, including the LTCH quality reporting program, will be summarized
under separate cover and available soon on the CHA Regulatory Tracker at
http://www.calhospital.org/publication/cha-regulatory-tracker under the Final Rules tab.
The final rule:
Implements a revised Medicare DSH methodology in accordance with the ACA provisions;
Updates policies relating to the Hospital Value-Based Purchasing (VBP) program and the Hospi-
tal Readmissions Reduction program;
Establishes several aspects of the Hospital Acquired Conditions Payment Reduction program for
FFY 2015;
Updates and establishes requirements for the inpatient quality reporting program, as well as the
quality programs for PPS-exempt cancer hospitals and inpatient psychiatric facilities (IPFs) that
are participating in Medicare (LTCH quality program provisions are included in the LTCH sum-
mary);
Establishes guidelines for admission and medical review criteria for payment of hospital inpatient
services; and
Revises the conditions of participation (CoPs) for hospitals relating to the administration of vac-
cines by nursing staff, as well as the CoPs for critical access hospitals relating to the provision of
acute care inpatient services.
This rule also finalizes policy issued in separate rulemaking that included payment policies related to
Medicare Part B inpatient billing in hospitals. A summary of these provisions will be available under sep-
arate cover and posted to the CHA Regulatory Tracker soon.
FFY 2014 Final Payment and Policy Changes
CMS estimates that total Medicare operating payments to all acute care hospitals for discharges occurring
after October 1, 2013, would increase by 0.7 percent for a total of $1.2 billion compared to FFY 2013. A
summary is provided in Table 1 below. CHA estimates California hospitals will see a decrease in
overall payments of 1.2 percent, or $125.6 million, from FFY 2013. This is largely due to the signifi-
cant decrease in Medicare DSH payments discussed below.
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 2
August 2013
Table 1: Summary of the FFY 2014 CMS Final Rule Policies
Federal Oper-
ating Rate
Hospital-
Specific Rates Federal Capital Rate
Market Basket (MB) Update/Capital Input Price Index +2.5%
(unchanged) +2.5%
(unchanged) +0.9%
(unchanged)
ACA-Mandated Productivity MB Reduction -0.5%
(proposed at -
0.4%)
-0.5%
(proposed at -
0.4%) —
ACA-Mandated Pre-Determined MB Reduction -0.3%
(unchanged) -0.3%
(unchanged) —
Subtotal –payment rate inflation update +1.7% +1.7%
American Taxpayer Relief Act (ATRA)-Mandated Ret-
rospective Coding Adjustment Reduction -0.8%
(unchanged) — —
Inpatient Admission Guidance Offset -0.2%
(unchanged) -0.2%
(unchanged) -0.2%
(unchanged)
Net Rate Change
(EXCLUDING BUDGET NEUTRALITY)
+0.7%
(proposed at
+0.8%)
+1.5%
(proposed at
+1.6%)
+0.7%
(unchanged)
Market Basket Update and Productivity Adjustments
CMS estimates the FFY 2014 IPPS market basket to be 2.5 percent. However, the Affordable Care Act
(ACA) requires an adjustment in FFY 2014 for multifactor productivity (now finalized at - 0.5 percentage
points), as well as a 0.3 percent decrease in the market basket. This results in a 1.7 percent increase in the
market basket for hospitals. Hospitals that do not report data to the hospital inpatient quality reporting
(IQR) program remain subject to the 2 percent reduction in their market basket.
Documentation and Coding Adjustments
CMS will reduce operating payments by 0.8 percent to account for the documentation and coding adjust-
ment for FFYs 2010, 2011 and 2012 that would, in part, fulfill the requirement of the American Tax Re-
lief Act of 2013 (ATRA), which requires CMS to recoup $11 billion over the next four years (FFY 2014-
2017). Because retrospective adjustments are one-time reductions, the reduction taken in FFY 2014 re-
turns to the baseline. If CMS were to proceed in reducing payments each year by 0.8 percent, in FFY 2018
payments would increase by 3.2 percent.
Federal Operating and Capital Rates
Incorporating the final rule updates with the effect of budget neutrality adjustments, the table below lists
the federal operating and capital rates for FFY 2014 compared to the rates currently in effect:
Table 2: Federal Operating and Capital Rates for FFY 2014
Final
FFY 2013
Final
FFY 2014 Percent Change
Federal Operating Rate $5,348.76 $5,370.28 +0.4%
(proposed at +0.5%)
Federal Capital Rate $425.49 $429.31 +0.9%
(proposed at +1.5%)
Effect of Sequestration for FFY 2014
While the final rule does not specifically address the 2 percent sequester reductions to all Medicare pay-
ments authorized by the Budget Control Act (BCA) of 2011 and currently in effect, sequester will contin-
ue unless Congress intervenes. Sequester is not applied to the payment rate; instead, it is applied to Medi-
care claims after determining co-insurance, any applicable deductibles, and any applicable Medicare sec-
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 3
August 2013
ondary payment adjustments. Other Medicare payment lines — such as graduate medical education
(GME), bad debt, and electronic health record (EHR) incentives — are also affected by the sequester re-
ductions.
Additional Factors Affecting Payment Impacts
Table 3 below summarizes the CMS estimates of the impact of all policy and payment changes by provid-
er type for FFY 2014.
Table 3: Summary of FFY 2014 IPPS Impact
Hospital Category CMS Total
Impact Estimate*
All Hospitals 0.5%
All Urban Hospitals 0.7%
Urban: Pacific Census Division -0.5%
Rural Hospitals -1.6%
Rural: Pacific Census Division 0%
Source: Table I on page 2,109 of the display copy of the final rule
Although the FY 2014 standardized amounts increase 0.7 percent compared to FFY 2013, the payment
impact analysis shows aggregate payments increasing 0.5 percent. Other significant factors affecting the
payment impact of the final rule include but are not limited to changes in the Medicare DSH methodolo-
gy, readmissions reduction program and the wage index. A complete summary of the national impact of
all the related provisions is available in the regulatory impact analysis section of the final rule.
Outlier Methodology and Fixed-Loss Threshold
In prior rulemaking, CMS received numerous suggestions to improve the accuracy of its methodology for
setting the outlier threshold. CMS made no changes for FFY 2013 but agreed to consider them for FFY
2014. In the final rule CMS adopts its proposed changes in the methodology to calculate a fixed-loss cost
threshold consistent with the 5.1 percent target.
1) For FFY 2014 and subsequent years, CMS will determine the charge inflation factor using a one-year period
of the most recent charge data instead of comparing periods using only the most recent six months of charge
data. To compute the one-year average annualized rate-of-change in charges per case for FFY 2014, CMS
compared the third quarter of FFY 2011 through the second quarter of FFY 2012 (April 1, 2011, through
March 31, 2012) to the third quarter of FFY 2012 through the second quarter of FFY 2013 (April 1, 2012,
through March 31, 2013). This rate of change was 4.7 percent (1.047329) or 9.7 percent (1.096898) over two
years.
2) For FFY 2014, CMS adjusts the CCRs from the March 2013 update of the Provider-Specific File
(PSF) – the most recent data available for the final rule. To make the adjustment, CMS compares the
percentage change in the national average case-weighted operating CCR and capital CCR from the
March 2013 update of the PSF to the national average case-weighted operating CCR and capital CCR
from the March 2012 update of the PSF. CMS used total transfer-adjusted cases from FFY 2012 to de-
termine the national average case-weighted CCRs for both sides of the comparison.
Adhering to its policy since the FFY 2009 IPPS final rule, CMS applies only a one-year adjustment
factor to the CCRs.
CMS finalized its proposal to not make any adjustments for the possibility that hospitals’ CCRs and outli-
er payments may be reconciled when cost reports are settled.
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 4
August 2013
CMS had proposed to exclude the new uncompensated care DSH payments from the outlier fixed-loss
threshold. CMS argued that the uncompensated care DSH payments were not factored into the methodol-
ogy for the fixed-loss threshold because it had proposed to make those payments on a periodic interim
basis rather than a per-claim basis. CHA opposed this proposal as it caused a higher outlier threshold and
was inconsistent with the statutory provisions that require all amounts attributable to Medicare DSH to be
part of the outlier determinations. CMS agreed with CHA and other commenters and has agreed to make
the uncompensated care DSH payments on a per-claim basis (see Medicare DSH section) and to account
for them in setting the threshold.
To maintain total outlier payments at 5.1 percent of total IPPS payments, CMS is adopting an outlier
threshold of $21,748 for FFY 2014 (proposed at $24,140). The new threshold amount represents a 0.3
percent decrease compared to the current threshold of $21,821.
Market Basket Rebasing
Every four years, CMS rebases and revises the inpatient PPS market basket. CMS rebases the market bas-
ket periodically so that the cost weights in the market basket will reflect recent changes between base pe-
riods in the mix of goods and services that hospitals purchase and best available data. CMS last rebased
the hospital market basket for FFY 2010, with FFY 2006 cost report data used as the base period for con-
structing the market basket cost weights. CMS finalized its proposal to establish FFY 2010 as the base
period for determining expenditures by spending category, primarily using Medicare cost report data and
supplemented by other sources. The final market basket produces an increase of 2.5 percent for FFY
2014, which is the same increase determined using the current market basket.
Hospital Area Wage Index and Labor Share
CMS is not proposing any major changes to the calculation of Medicare hospital wage indexes, the rural
floor budget neutrality policy, the imputed rural floor methodology or the current administrative reclassi-
fication rules. With that said, CMS finalized its proposal to extend the imputed rural floor through FFY
2014. Last year CMS temporarily revised the methodology, and both New Jersey and Rhode Island hospi-
tals benefit from the imputed rural floor.
CMS estimates that 424 hospitals will benefit from the rural floor and imputed rural floor, while the re-
maining 2,983 IPPS hospitals will have their wage index reduced by the rural floor budget neutrality ad-
justment of 0.990150 (or 0.99 percent). In aggregate, rural hospitals will experience a 0.3 percent de-
crease in payments as a result of the application of the rural floor budget neutrality. CMS estimates that
Massachusetts hospitals will receive approximately a 5.5 percent increase in IPPS payments due to the
application of the rural floor in FFY 2014. Other states benefitting significantly from the rural and imput-
ed rural floors are: California ($94 million, 182 of 309 hospitals), Connecticut (imputed floor, $65 mil-
lion, 19 of 32 hospitals), New Jersey (imputed floor, $14 million, 25 of 64 hospitals), Nevada ($11 mil-
lion, 19 of 24 hospitals), and New Hampshire ($9 million, nine of 13 hospitals).
In February, the Office of Management and Budget released new information regarding metropolitan sta-
tistical areas, micropolitan statistical areas and combined-based statistical areas that reflect the 2010 cen-
sus. While not as sweeping as the 2003 changes, CMS states there are enough changes regarding the ef-
fects of the new designations that would need to be considered prior to proposing and establishing revised
policies. Therefore, CMS expects to make changes in FFY 2015 to allow for sufficient time to consider
next steps. CHA is currently reviewing the changes in anticipation of rulemaking. We do know, howev-
er, that one additional hospital will be rural in the state of Massachusetts, thereby augmenting the rural
floor significantly. This will have significant implications for the area wage index next year.
CMS finalized its proposal to update the labor-related share value for hospitals with a wage index of
greater than 1 to 69.6 percent for FFY 2014, a slight increase when compared to the current labor share of
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 5
August 2013
68 percent. By law, the labor-related share for hospitals with a wage index of less than one will remain at
62 percent. This policy results in a positive impact for California’s hospitals.
Finally, applications for FFY 2015 hospital wage index reclassifications are due to the Medicare Ge-
ographic Classification Review Board (MGCRB) by September 3, 2013. Applications not received
by the MGCRB by this deadline will not be considered.
Applications/instructions for hospital wage index reclassifications are available on the CMS Web site at:
http://www.cms.gov/MGCRB/.
Updates to the MS-DRGs and Relative Weights for FFY 2014
CMS is did not propose any major changes to the Medicare-Severity Diagnosis Related Group (MS-DRG)
classifications. For FFY 2014, CMS would maintain a total of 751 MS-DRG groupings. Overall, com-
pared to the current weights, 85 percent of the MS-DRG weights would change by less than +/- 6 percent
for FFY 2014. The FFY 2014 MS-DRGs and weights are available in Table 5 on the CMS website at
www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2014-IPPS-Final-
Rule-Home-Page.html.
For FFY 2014, CMS concludes there are sufficient data in the FFY 2011 cost reports to support a mean-
ingful analysis of using distinct CCRs for implantable devices, MRIs, CT scans and cardiac catheteriza-
tion. Based on its analyses, CMS has finalized its proposal to create new distinct CCRs for these services.
Specifically, rather than having a single CCR for “Supplies and Equipment,” which includes low-cost
supplies and high-cost implantable devices, a distinct CCR will be carved out of the “Supplies and
Equipment” CCR, leaving one CCR for “Supplies” and one for “Implantable Devices.”
For radiology, which currently is comprised of general radiology ancillary services and MRIs and CT
scans, the costs for MRIs and CT scans would be separated from general radiology, creating two distinct
CCRs, one for MRIs and one for CT scans, respectively. Finally, by separating the costs of cardiac cathe-
terization out of the CCR for general cardiology, a distinct CCR has been created for cardiac catheteriza-
tion. Breaking out these four additional CCRs would increase the number of CCRs used to calculate the
relative weights from 15 to 19.
The table below, which combines data from the proposed and final rules, shows the FFY 2013 final rule
CCRs, FFY 2014 proposed rule CCRs computed with the existing 15 cost centers, FFY 2014 proposed
rule CCRs computed with 19 cost centers and the FFY 2014 final rule CCRs with the four new CCRs for
implantable devices, MRIs, CT scans and cardiac catheterization.
Group
FY 2013
Final Rule
15 CCRs
FY 2014
Proposed Rule
15 CCRs
FY 2014
Proposed Rule
19 CCRs
FY 2014
Final Rule
19 CCRs
Routine days 0.514 0.502 0.502 0.500
Intensive days 0.442 0.423 0.423 0.414
Drugs 0.199 0.193 0.193 0.193
Supplies & Equipment 0.335 0.327 0.293 0.300
Implantable Devices n/a n/a 0.361 0.356
Therapy Services 0.37 0.355 0.355 0.356
Laboratory 0.143 0.133 0.133 0.134
Operating Room 0.238 0.225 0.225 0.221
Cardiology 0.145 0.134 0.132 0.130
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 6
August 2013
Group
FY 2013
Final Rule
15 CCRs
FY 2014
Proposed Rule
15 CCRs
FY 2014
Proposed Rule
19 CCRs
FY 2014
Final Rule
19 CCRs
Cardiac Catheterization n/a n/a 0.135 0.136
Radiology 0.136 0.128 0.170 0.171
MRI n/a n/a 0.091 0.090
CT Scans n/a n/a 0.045 0.045
Emergency Room 0.226 0.207 0.207 0.206
Blood 0.389 0.371 0.371 0.365
Other Services 0.397 0.399 0.399 0.400
Labor & Delivery 0.450 0.445 0.445 0.424
Inhalation Therapy 0.189 0.187 0.187 0.186
Anesthesia 0.109 0.120 0.120 0.119
As noted in the table below, the largest increases in MS-DRG relative weights are for MS-DRGs associ-
ated with cardiac catheterization and implantable cardiac devices. The largest reductions are in MS-DRG
relative weights for MS-DRGs associated with traumatic head injury and concussion, which are high us-
ers of CT scanning and MRI services.
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 7
August 2013
MS-DRGS THAT WOULD EXPERIENCE THE LARGEST DECREASE
IN RELATIVE WEIGHT
MS-
DRG
Type
Title
Potential
Relative
Weights
with 15
CCRs
Potential
Relative
Weights
with 19
CCRs
Percentage
Change
090 MED Concussion without CC/MCC 0.7614 0.7013 -7.9%
084 MED Traumatic Stupor & Coma, Coma >1 Hour without CC/MCC 0.9137 0.8516 -6.8%
087 MED Traumatic Stupor & Coma, Coma <1 Hour without CC/MCC 0.7899 0.7369 -6.7%
965 MED Other Multiple Significant Trauma without CC/MCC 1.0450 0.980 -6.1%
185 MED Major Chest Trauma without CC/MCC 0.7281 0.6845 -6.0%
089 MED Concussion with CC 0.9959 0.9366 -6.0%
123 MED Neurological Eye Disorder 0.7355 0.6920 -5.9%
343 SURG Appendectomy without Complicated Principal
Diagnosis without CC/MCC
0.9880 0.9517 -5.7%
053 MED Spinal Disorders & Injuries without CC/MCC 0.9355 0.8825 -5.7%
066 MED Intracranial Hemorrhage or Cerebral Infarction
without CC/MCC
0.8034 0.7579 -5.7%
MS-DRGS THAT WOULD EXPERIENCE THE LARGEST INCREASE IN RELATIVE WEIGHT
MS-
DRG
Type
Title
Potential
Relative
Weights
with 15
CCRs
Potential
Relative
Weights
with 19
CCRs
Percentage
Change
454 SURG Combined Anterior/Posterior Spinal Fusion with CC 7.6399 8.0563 5.5%
455 SURG Combined Anterior/Posterior Spinal Fusion Without CC/MCC 5.9862 6.3133 5.5%
484 SURG Major Joint & Limb Reattachment Procedure of
Upper Extremity without CC/MCC
2.1211 2.2380 5.5%
225 SURG Cardiac Defibrillator Implant with Cardiac
Catheterization without AMI/HF/Shock without MCC
5.6298 5.9530 5.7%
223 SURG Cardiac Defibrillator Implant with Cardiac
Catheterization with AMI/HF/Shock without MCC
6.0956 6.4482 5.8%
458 SURG Spinal Fusion Except Cervical with Spinal
Curve/Malignant/Infection OR 9+ Fusion without CC/MCC
4.8794 5.1630 5.8%
245 SURG AICD Generator Procedures 4.4627 4.7320 6.0%
849 MED Radiotherapy 1.3423 1.4258 6.2%
946 MED Rehabilitation without CC/MCC 1.1295 1.2024 6.5%
227 SURG Cardiac Defibrillator Implant without Cardiac
Catheterization without MCC
5.2193 5.5714 6.7%
Commenters generally supported the proposals to implement additional CCRs for implantable devices
and cardiac catheterization, but many commenters opposed implementation of distinct CCRs for MRIs
and CT scans or requested that CMS reconsider their impact before adopting them. Commenters ex-
pressed concern that CCRs are very low for these services due to hospital cost reporting practices that
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 8
August 2013
allocate capital costs for MRIs and CT scan across the entire hospital, rather than to the appropriate indi-
vidual radiology cost centers. Specifically, some hospitals currently use an imprecise “square footage”
allocation methodology for the costs of large, moveable equipment like CT scan and MRI machines.
Commenters noted that, despite the fact that CMS recommends using two alternative allocation methods
— “direct assignment” or “dollar value” — as a more accurate methodology for directly assigning
equipment costs, industry analysis suggests that approximately only half of the reported cost centers for
CT scan and MRI rely on these preferred methodologies.
The commenters expressed concern that “square footage” allocation results in CCRs that “lack face valid-
ity,” because the proposed CCRs for CT scans and MRIs are less than the proposed CCR for general radi-
ology, inaccurately reflecting the higher resources used for MRIs and CT scans relative to the less expen-
sive plain film x-rays. Commenters said that more time is needed by hospitals to modify their cost report-
ing practices.
CMS disagreed with the comments, noting that hospitals have had sufficient time to make cost reporting
changes, and believes that these changes will foster more careful cost reporting in the future.
Graduate Medical Education Payments
For the purposes of calculating the Medicare share for direct GME payments, for FFY 2014 CMS will
include inpatient days for labor and delivery services effective for cost reporting periods beginning on or
after October 1, 2013. CMS recently adopted this policy change for the Medicare DSH purposes, a policy
CHA opposed. CMS notes that this policy will reduce direct GME payments to hospitals and may impact
the eligibility of hospitals seeking SCH status.
Notices of Closure of Teaching Hospitals; Opportunity to Apply for Available Slots
CMS announces rounds 4, 5 and 6 of ACA section 5506 redistributions of residency cap slots because of
a closure of a teaching hospital.
Round Closed Hospital Notice Date Application Due Date
Round 4 Peninsula Hospital Center (Far Rockaway, NY) April 9, 2012 July 25, 2013
Round 5 1. Infirmary West Hospital (Mobile, AL)
2. Montgomery Hospital (Norristown, PA)
May 31, 2013 August 29, 2013
Round 6 1. Cooper Green Mercy Hospital (Birmingham, AL)
2. Sacred Heart Hospital (Chicago, IL)
August 2, 2013 October 31, 2013
Hospitals that seek to apply for and receive slots from one of these closed teaching hospitals must submit
their applications to the CMS central office (not the relevant CMS regional office) by the application due
date. CMS must have actually received the applications by the due date; a postmark will not suffice.
CMS encourages applicants to notify it by email ([email protected]) indicating that a
hard copy of the application has been mailed.
For FFY 2014, the IME adjustment factor will remain at 1.35.
Medicare-Dependent Hospitals
The Medicare-dependent hospitals (MDH) program is set to expire September 30, 2013. CMS notes that
all hospitals that previously qualified for MDH status will no longer have MDH status and will be paid
based on the federal rate beginning in FFY 2014. Last year, CMS proposed and finalized revisions to sole
community hospital (SCH) policies to allow MDHs to apply for SCH status and be paid as such under
certain proposed conditions following expiration of the MDH program.
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 9
August 2013
Rural Low-Volume Adjustment
The temporary changes to the rural low-volume adjustment made as a result of the ACA and ATRA will
expire on September 30, 2013. Without legislative action CMS will return to the low-volume hospital
definition and payment definition used prior to FFY 2011.
Hospital Acquired Conditions for FFY 2014
CMS will not expand the list of categories or conditions subject to the 2005 Deficit Reduction Act provi-
sions that would reduce payment for hospital acquired conditions not present on admission. CMS will
continue to recognize the FFY 2013 list of 12 categories.
Hospital Services Furnished under Arrangements
CMS delays until January 1, 2015, the implementation of its revised policy under which a hospital may
furnish services under arrangements (i.e., only therapeutic and diagnostic services may be furnished under
arrangements). Routine services (bed and board, or nursing services and other related services) may not
be provided under arrangements. CMS expects all hospitals to be fully compliant with the policy by Janu-
ary 1, 2015, and believes the financial impact of the additional delay will be negligible.
Medicare Disproportionate Share (DSH) Payments
Currently, a hospital is eligible to receive DSH payments on a per-discharge basis for each Medicare inpa-
tient under a complex statutory formula, if its disproportionate patient percentage (DPP) meets or exceeds
a 15 percent threshold. The DPP is calculated as follows: (Medicare Supplemental Security Income (SSI)
days / total Medicare days) + (Medicaid, non-Medicare days / total patient days). A CMS fact sheet on
the current DSH qualifying formula and adjustment factor formula is available on the CMS website at
www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-
MLN/MLNProducts/downloads/Disproportionate_Share_Hospital.pdf.
The ACA requires a reduction to and redistribution of DSH funding beginning in FFY 2014. Under the
law, 25 percent of estimated DSH funding under the traditional formula will continue to be paid to each
DSH-eligible hospital as per-discharge payments. The remaining 75 percent will be reduced to reflect the
impact of insurance expansion and then redistributed to hospitals as a new and separate uncompensated
care payment. This payment will be determined based on each hospital’s ratio of uncompensated care
relative to the total for all DSH-eligible hospitals. CMS has broad authority on how to implement these
program changes and has finalized its proposed methodology for FFY 2014 in this rule. More specifically
CMS finalizes:
The amount of funding to be dedicated to the new uncompensated care payment;
How to reduce and distribute that funding as mandated by the ACA;
DSH eligibility; and
DSH payment methods, including reconciling payment at cost report settlement
Funding Dedicated to the New Uncompensated Care Payment (Factor 1)
To implement the ACA-mandated DSH payment changes, CMS must project national DSH program ex-
penditures for FFY 2014 under the traditional per-discharge formula. This projection is critical because it
sets the basis for the amount of funding that will be distributed to hospitals as lump-sum uncompensated
care payments under the new DSH payment methodology.
Using its Office of the Actuary estimate from July 2013, CMS is projecting DSH program expenditures to
be $12.772 billion for FFY 2014 (an increase of 3.5 percent from the proposed rule’s March estimates).
Absent the ACA mandated cut, California’s DSH payments were estimated at approximately $2 billion for
FFY 2014. As adopted, this estimate is based on data from 2010 Medicare cost reports and the FFY 2014
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 10
August 2013
IPPS proposed rule impact file. The estimate includes projections for inflation, utilization and case mix
changes.
As mandated by the ACA, 25 percent of projected DSH funding will continue to be paid to eligible hospi-
tals under the per-discharge formula. CMS projects this value to be $3.139 billion, but this value can and
will fluctuate based on hospital-specific utilization changes. The remaining 75 percent, projected to be
$9.579 billion, will be reduced and then serve as the basis for funding to be distributed as lump-sum un-
compensated care payments. CMS is adopting its proposal not to revise this estimate upward or down-
ward to reflect actual expenditures in a given year.
ACA-Mandated DSH Funding Reductions (Factor 2)
The ACA requires that DSH funding dedicated to uncompensated care payments ($9.579 billion) be re-
duced by a factor that reflects the impact of insurance expansion before it is distributed to hospitals.
For FFY 2014, CMS is adopting with modifications its proposal to utilize insurance coverage estimates
from the Congressional Budget Office (CBO) to calculate this factor. As adopted, CMS will use CBO’s
March 2010 and May/July 2013 (most recent) estimates. CMS will also utilize CBO estimates for all res-
idents, including unauthorized immigrants. CMS believes the inclusion of unauthorized immigrants more
fully reflects the levels of uninsured.
CHA supported the use of these estimates and the inclusion of the unauthorized immigrants but urged
CMS to modify its methodology to shift CBO’s insurance coverage estimates from a calendar year to the
federal fiscal year. CMS agreed, and the effect of this change is a higher rate of uninsured and, therefore,
a smaller DSH funding reduction.
Based on CBO’s projections, from FFY 2013 to FFY 2014, the rate of uninsured is estimated to drop from
18 percent to 16 percent, an 11.1 percent reduction. Factoring in an additional ACA-mandated reduction
of 0.1 percentage points, CMS had proposed to reduce the funding dedicated to uncompensated care pay-
ments by 11.2 percent, or about $1.0365 billion. As a result, for FFY 2014, the fixed amount available for
distribution as uncompensated care payments would have been $8.217 billion.
In the final rule, CMS adjusted the uninsured estimates so the weighted average of uninsured equals 17 percent
(rather than 16 percent, as noted above). This change results in a new adjustment factor of 0.943. Using this fac-
tor, the final rule amount available for uncompensated care payments for FY 2014 is approximately $9.033 bil-
lion (0.943 times the Factor 1 estimate of $9.579 billion), an increase of 9.9 percent from the proposed rule.
Distribution of Uncompensated Care Payments
The ACA-mandated DSH payment methodology requires that the funding dedicated to uncompensated
care payments (finalized at $9.033 billion) be distributed to hospitals based on each hospital’s ratio of un-
compensated care relative to the total for all DSH-eligible hospitals.
FFY 2014, CMS will use Medicaid days and Medicare SSI days as a proxy for uncompensated care in-
stead of the S-10 data reported on the Medicare Cost Report. These days currently make up the numerator
of the DPP formula used to determine DSH eligibility under the traditional per-discharge formula. CMS
believes, and CHA agrees, that the use of low-income patient days is a valid proxy for the treatment costs
associated with uninsured patients. With that said, CMS responded to several comments regarding its dis-
cussion and use of the uncompensated care data reported on Worksheet S-10 of the Medicare cost report
for use in future years. CMS notes in the final rule that it plans to work with the industry to review and
make any necessary revision and clarifications to the S-10 instructions to ensure accurate and consistent
reporting across hospitals. In addition, CMS agreed to examine for possible future rulemaking the sugges-
tion to include insured low-income days from exempt units (for example, inpatient rehabilitation units
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 11
August 2013
paid under the IRF PPS or inpatient psychiatric units paid under the IPF PPS) of the hospital in order to
better capture the treatment costs of the uninsured by the hospital.
To calculate the uncompensated care payment factor, CMS will use the cost report data in its cur-
rent form and will not provide a review and update/correction period for hospitals. CMS has made a
file available on its website that includes the patient days relevant to the adopted formula and each hospi-
tal’s uncompensated care payment factor. The file is available at www.cms.gov/Medicare/Medicare-Fee-
for-Service-Payment/AcuteInpatientPPS/FY2014-IPPS-Final-Rule-Home-Page.html. This file also in-
cludes other data critical to the new DSH payment methodology. CMS has calculated a payment factor
for every hospital in the country based on its share of days to total days for all FFY 2014 CMS-projected
DSH-eligible hospitals. If a hospital is not determined to be DSH-eligible until cost report settlement,
CMS will use this pre-determined payment factor to make the new uncompensated care payment. As pro-
posed and adopted, CMS will not revise these factors upward or downward to reflect actual patient days.
California Impact
CHA estimates that California hospitals will experience a 21 percent decrease in Medicare DSH payments
for FFY 2014 or $429 million. This is a slight decrease in the size of the cut as compared to the proposed
rule which was estimated at $466 million for FFY 2014.
Estimated DSH Payments at
100% of the Traditional Per-
Discharge Formula
Estimated DSH Payment Under Newly
Proposed Methodology — 25% Rate-
Based Payment plus New Uncompen-
sated Care Payment
Estimated Impact of
Newly Proposed
Methodology
US Estimate B
(18.74% Scaling Factor)
$12,772,390,592 $12,226,370,894 ($546,019,698)
CA Estimate B
$2,056,259,320 $1,626,982,463 ($429,276,857)
Source: CHA DataSuite Analysis. This estimate includes an 18.74 percent scaling factor that allows CMS to predict
the estimated uncompensated care payments which are fixed. The 25 percent traditional DSH payments will still
vary based on volume as it would have done absent any change in the methodology.
DSH Eligibility
CMS is projecting that 2,437 hospitals will be eligible for DSH payments in FFY 2014. Hospitals not
identified as DSH-eligible will not receive any DSH payments unless/until determined to be DSH-eligible
at cost report settlement. For example, CMS excludes over 200 sole community hospitals that it believes
will not become eligible for Medicare DSH payments from the files.
CMS’ list is based on the Medicaid fraction listed in the March 2013 update of the Provider Specific File
(based on 2010 or 2011 cost report data) and the FFY 2011 SSI ratios (based on FFY 2011 Medicare inpa-
tient claims) published June 27, 2013 on the CMS website at www.cms.gov/Medicare/Medicare-Fee-for-
Service-Payment/AcuteInpatientPPS/dsh.html. According to CMS, this is the most recently available data
on the DPP for hospitals that are qualified to receive Medicare DSH payments.
CMS has made a file available on its website that includes DSH eligibility status. The file is available at
www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2014-IPPS-Final-
Rule-Home-Page.html. This file also includes other data critical to the new DSH payment methodology.
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 12
August 2013
For Sole Community Hospitals (SCHs) that are eligible for DSH payments, CMS will consider the new
uncompensated care payments in determining whether a SCH will be paid at the federal or hospital-
specific rate. In addition, CMS noted in the final rule that the 12 percent cap for SCHs will only apply to
the empirically calculated DSH payments (25 percent pool) and not applied to the uncompensated care
DSH payments.
Hospitals participating in the Bundled Payments for Care Improvement (BPCI) initiative and hospitals in
Puerto Rico will be eligible for DSH payments. As has been the case in prior years, Maryland hospitals
and hospitals participating in the Rural Community Hospital Demonstration Program will not be eligible
for DSH payments.
DSH Payment and Cost Report Settlement
CMS is adopting its proposal to continue the practice of determining final DSH-eligibility at cost report
settlement. Eligibility will continue to be determined based on the traditional formula’s threshold (a DPP
of 15 percent or more).
In response to CHA and industry comments and concerns over potential cash flow issues and appropriate
payment levels from Medicare Advantage (MA) plans, CMS is not adopting its proposal to make the un-
compensated care payment as a lump-sum payment on a periodic basis. Instead, CMS will make these
payments on a per-discharge basis through the claims process based on a CMS-estimated claims figure
(three-year average, FFY 2010-2012). As a result, CMS will make both the traditional DSH payment at
25 percent and the uncompensated care payment on a per-discharge basis. CHA is very pleased that CMS
made this important change.
The FFY 2014 Medicare IPPS PRICER software will provide both the traditional DSH payment at 25
percent and the uncompensated care per-claim amount. This modification will assist MA plans that use
the PRICER to estimate FFS payments and will ensure full DSH payment to hospitals from non-
contracting MA plans and hospitals that have contractually linked MA payments to the fee-for-service
IPPS rate.
Following current practice, CMS will determine DSH eligibility and reconcile traditional DSH payments
(at the 25 percent level) based on actual program year cost report data.
CMS will also reconcile the new uncompensated care payments to ensure that hospitals receive the exact
payment amount adopted in this final rule. CMS will recoup any overpayments that may occur when the
actual number of hospital claims is higher than the CMS-estimated claims figure adopted in the final rule
and used for distribution of this payment.
For hospitals projected by CMS to be DSH-eligible, but ultimately determined to be ineligible at cost re-
port settlement, CMS will recoup both the traditional DSH and uncompensated care payments. Alterna-
tively, hospitals not determined to be DSH-eligible until cost report settlement will be paid both the tradi-
tional DSH payment amount and the uncompensated care amount based on the pre-determined hospital-
specific uncompensated care payment factor. CMS has calculated a payment factor for every hospital in
the country based on its share of days to total days for all FFY 2014 CMS-projected, DSH-eligible hospi-
tals. As proposed and adopted, the data and factors used to determine the distribution of the uncompen-
sated care payments are fixed and will not be re-estimated at time of settlement.
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 13
August 2013
Schematic for Newly Adopted DSH Payment Methodology
2. Continue to pay traditional DSH at 25% of current DSH adjustment val-ue. Final rule:
$3.193 billion
Will fluctuate based on hospital-specific utilization changes
Pay on per-discharge basis dur-ing FFY 2014
1. Project DSH-eligible hospitals using traditional DSH formula (15 % DPP or more) and project total DSH payments for the nation using traditional per-discharge formula. Final rule:
$12.772 billion
Includes adjustments for inflation, utilization, and case mix changes
Fixed amount as finalized – re-estimated each year
3a. Take 75% of total DSH payments to fund uncompensated care payments . Final rule:
$9.579 billion - fixed amount as finalized
3b. Adjust amount for uncompensated care payments to reflect impact of insurance expansion. Final rule:
$9.033 billion (5.7% cut) - fixed amount as finalized
5.6% decrease in the uninsured + ACA-mandated 0.1 percentage point
Based on CBO projections
3c. Distribute amount for uncompensated care payments to each DSH-eligible hospital based on hospital’s ratio of uncompensated care relative to the total for all DSH-eligible hospitals. Final rule: Uncompensated care Proxy = Medicaid days + Medicare SSI days/Total Na-tionwide
Pay on per-discharge basis during FFY 2014
4. Cost report settlement Final rule:
Determine actual DSH eligibility at cost report settlement.
Reconcile 25% traditional DSH per-discharge payment based on actual program year cost re-port data.
Reconcile uncompensated care per-discharge payment to ensure value paid out = hospital-specific value adopted in final rule.
Do not update nationwide value of uncompensated care payment amount or hospital-specific uncompensated care factors – these data are fixed as adopted by CMS.
Recoup both 25% traditional DSH payment and uncompensated care payment if projected by CMS to be DSH-eligible, but ultimately determined to be ineligible at cost report settlement.
Pay both 25% traditional DSH payment and uncompensated care payment if not determined to be DSH-eligible until cost report settlement.
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 14
August 2013
Counting of Patient Days Associated with Medicare Advantage Plans in the Medicare and Medicaid
Fractions of the Disproportionate Patient Percentage (DPP) Calculation
Making both policy and legal arguments, commenters disagreed that MA beneficiaries are entitled to Part
A and that they should be included in the DPP fraction as proposed by CMS. The final rule responds care-
fully to the comments, but finalizes its proposal to readopt its policy of counting the days patients are en-
rolled in Medicare Advantage in the Medicare fraction of the DSH calculation beginning FFY 2014.
Admission and Medical Review Criteria for Hospital Inpatient Services
CMS largely codified several of its proposals to revise the requirements for inpatient admission and medi-
cal review criteria under Part A. CMS notes that additional guidance is in development and will be made
available on or before October 1, 2013, when the policies become effective. Questions regarding the pro-
posal should be sent via email to [email protected]. CMS also notes that it will undertake
significant provider education to answer many of the questions not addressed in the final rule.
As a first step, CMS hosted a national provider call on August 15. The transcript and audio file from the
call, regarding the inpatient hospital admission and medical review criteria (two-midnight provision) and
Part B inpatient billing, are available at www.cms.gov/Outreach-and-
Education/Outreach/OpenDoorForums/ODFSpecialODF.html.
CMS finalized the following policies effective October 1, 2013. CHA has provided s separate summary
related to the Part B inpatient rebilling guidelines that are also effective October 1.
Physician Orders for Inpatient Admission
A patient must be formally admitted as an inpatient pursuant to an order for inpatient admission by a phy-
sician or other qualified practitioner who has admitting privileges at the hospital or CAH and who is re-
sponsible for the inpatient care of the patient at the hospital or CAH.
CMS does not finalize any new documentation requirements nor require any particular form or procedure
for documentation. CMS finalizes a requirement under new §412.3 that the physician order must be pre-
sent in the medical record and supported by physician admission and progress notes, and further clarifies
that the physician order is a required component of the physician certification (§412.3(c)). CMS also re-
quires the physician certification to be signed and documented in the medical record before discharge
(§424.13(b)); however, a recertification of an extended stay is required earlier (such as in the case of inpa-
tient psychiatric services where recertification is first required as of the 12th day of hospitalization and no
less frequently than every 30 days thereafter).
With respect to its proposed requirement that only the physician or other qualified practitioner "who is
responsible for the inpatient care of the patient at the hospital" could sign the inpatient admission order,
commenters noted that emergency department physicians, hospitalists, physicians in group practices and
residents working under the supervision of attending physicians all currently sign orders for admission but
are not responsible for inpatient care of the patient. CMS agrees and modifies this requirement to permit
inpatient admission orders by practitioners who may not be responsible for the inpatient care but are oth-
erwise qualified to admit patients and are knowledgeable about the patient's hospital course, medical plan
of care and current condition to order the admission (§412.3(b)).
Inpatient Admission Guidance
The final rule establishes the guidelines for when physicians should order an inpatient admission. This
guidance applies to all hospitals, CAHs and LTCHs, but does not apply to IRFs. IRFs have separate ad-
mission criteria that are applied.
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 15
August 2013
CMS finalized its proposal to generally consider a hospital inpatient admission spanning two midnights as
reasonable and necessary for payment under Part A. In response to several comments raised by CHA and
other provider groups, CMS made some improvements to the proposal that are detailed below.
CMS underscores in the final rule that a physician’s order and certification regarding medical necessity
will be given no presumptive weight; claim reviewers will look to all documentation in the medical rec-
ord, as well as the order for inpatient admission.
Under the final rule, services on the inpatient-only list that are designated as inpatient-only (even if per-
formed as inpatient, one-day procedures) are appropriate for inpatient hospital admission and payment
under Part A.
In addition, if a physician expects a patient to require an inpatient stay for a surgical procedure, diagnostic
test, and other treatment that will cross at least two midnights (one Medicare utilization day) and admits
the patient to the hospital based on that expectation (with the requisite documentation), the inpatient ad-
mission will be generally deemed appropriate for Part A payment.
Notably, if an unforeseen circumstance, such as beneficiary death or transfer, or an unexpected event such
as a discharge against medical advice or unexpected rapid improvement, results in a shorter beneficiary
stay than the physician’s expectation of at least two midnights, the patient may still be considered to be
appropriately treated on an inpatient basis, and payment may be made under Part A. In developing manu-
al guidance, CMS will identify additional unusual situations that would qualify for this exception, but
notes that treatment in an ICU would not qualify. Commenters sought guidance on how to make admis-
sion decisions for transfer patients from another hospital; CMS responds that because transfer scenarios
are complex, it will provide guidance in manual instructions, which it indicates will be one of its highest
priorities.
CMS distinguishes in the final rule between the two-midnight benchmark and the two-midnight presump-
tion. The two-midnight benchmark is guidance for admitting practitioners and reviewers to identify when
an inpatient admission is generally appropriate for coverage and payment.
In response to CHA’s and others’ comments, CMS revises the starting point for determining whether the
two-midnight benchmark will be met as: The starting point is when the beneficiary begins receiving hos-
pital care on either an inpatient basis or outpatient basis, including time spent receiving observation ser-
vices, emergency department treatment, and procedures provided in an operating room or other treatment
area. CMS notes that, where a physician cannot reliably predict whether the patient will require a stay of
longer than two midnights, he/she should continue to treat the patient as an outpatient and admit when
additional information suggests a stay that would meet the benchmark.
The two-midnight presumption is guidance for Medicare review contractors (e.g., MACs, RACs, CERT)
to select claims for review under the presumption that the occurrence of two midnights after admission
appropriately signifies an inpatient status for a medically necessary claim. Inpatient hospital claims with
lengths of stay greater than two midnights after formal admission will be presumed generally appropriate
for Part A payment; they will not be the focus of medical review efforts unless there is evidence of sys-
tematic gaming, abuse or delays in the provision of care in an attempt to qualify for the two-midnight pre-
sumption. CMS does not define systematic gaming or abuse in the final rule.
CMS notes it will monitor all hospitals for intentional or unwarranted delays, or patterns of incorrect DRG
assignments, and contractors may still review claims for medical necessity of services or stay, validation
of provider coding and documentation, or if directed by CMS or the HHS OIG.
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 16
August 2013
Impact of Admission and Medical Review Criteria
Finally, CMS notes that it will share additional guidance with its medical review contractors in the near
future. CHA will review and share that guidance with the membership when it is available. CMS does
note, however, that while time spent as an outpatient does not count toward inpatient time for a qualifying
SNF stay, Medicare review contractors (as well as the hospital) may take that time into account to deter-
mine whether the two-midnight benchmark was met and, therefore, payable under Part A.
As noted earlier in this summary, CMS is finalizing its policy to adjust the standardized amount by -0.2
percent to account for what it believes will be an increase in inpatient utilization as a result of this policy.
CHA and others strongly objected to this payment reduction and find the policy unwarranted and unjusti-
fied. We will continue to work with our national association partners to track the true impact of this poli-
cy going forward.
Change to Hospital CoPs for Administration of Pneumococcal Vaccines
42 CFR 482.23(c)(3) contains the Medicare hospital condition of participation related to preparation and
administration of influenza and pneumococcal polysaccharide vaccines. CMS had intended to establish a
policy under which hospitals had the flexibility to administer these vaccines without prior practitioner or-
der and only after assessing patients for contraindications to the vaccine administration; it had not intend-
ed to exclude other pneumococcal vaccines available currently or in the future. Commenters supported
the proposal to delete “polysaccharide” from the text of the regulation to clarify CMS policy that a hospi-
tal may include any type of pneumococcal vaccine in its physician-approved policy for administration by
nurses without prior practitioner order, if the vaccine has been FDA-approved for the patient population
involved. The effective date of the change is October 1, 2013.
CMS indicates it cannot estimate costs (or savings) for this clarification but is confident that it will not
impose any burdens on hospitals. CMS notes benefits of improved patient access to pneumococcal vac-
cines as well as the benefit of having more than one supply of vaccine, especially in the case of a shortage.
Inpatient Quality Reporting Program (IQR)
In the FFY 2013 IPPS final rule, CMS finalized its proposal to reduce the number of measures for the
FFY 2015 payment year to 59. See Appendix A for a complete listing of the IQR measures for FFY
2014-16.
Refinements to the Hospital IQR Measures for FFY 2014
CMS has finalized its proposals for the following measures with limited exception as noted below:
1. Modifies the 30-day readmission measures (for AMI, HF, PN, THA/TKA and hospital-wide re-
admission) to incorporate an algorithm identifying planned readmissions that would be excluded
from the measures, beginning in 2013. The algorithm was endorsed by the National Quality Fo-
rum (NQF) during its recent review of the measures. CHA supported this change but will contin-
ue to seek additional refinements in the readmission measures in the future.
2. Expands the CLABSI and CAUTI measures to select non-ICU locations beginning with infections
occurring on or after January 1, 2015. CMS has delayed implementation until one year from the
proposed rule due to concerns raised by CHA and others regarding the significant administrative
complexities that must be addressed prior to implementation. Beginning in 2015, CMS will ex-
pand the measure to medical wards, surgical wards and medical/surgical wards.
3. Adopts revised specifications of the measure SCIP Inf 4: Controlled 6AM Glucose for Cardiac
Surgery Patients, to incorporate recent NQF endorsement maintenance decisions, beginning with
January 1, 2014, discharges. The NQF changed the measure from controlled glucose at 6AM to a
more comprehensive measure of controlled glucose 18-24 hours post-cardiac surgery, and re-
quires that corrective action be documented if post-operative glucose is over 180mg/dl.
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 17
August 2013
4. Revises the Medicare spending per beneficiary (MSPB) measure to include Railroad Retirement
Board beneficiaries for the FFY 2016 payment determinations.
Addition/Removal of Hospital IQR Program Measures for FFY 2016
For FFY 2016, CMS finalized its proposal to remove seven of the eight measures proposed from the IQR
program. Below is a table noting each of the measures removed and the reason cited by CMS.
Measure Proposed for Removal for FFY 2016 CMS Reason for Proposed Removal
AMI-2: Aspirin prescribed at discharge Either recommended for removal by MAP or “topped out”
AMI-10: Statin prescribed at discharge Either recommended for removal by MAP or “topped out”
PN-3b: Blood culture performed in the emergency
department prior to first antibiotic received in hospital
No longer NQF endorsed, MAP recommended removal;
MAP believes it is topped out, and there is inadequate link to
patient outcomes
HF-1: Discharge instructions No longer NQF endorsed, MAP recommended removal,
challenges in validating efficacy
HF-3: ACEI or ARB for LVSD Either recommended for removal by MAP or “topped out”
SCIP-Inf-10: Surgery patients with perioperative tem-
perature management Either recommended for removal by MAP or “topped out”
Participation in a systematic clinical database registry
for stroke care Stroke measure set more meaningful
CMS chose to suspend IMM-1: Immunization for pneumonia rather than remove the measure. CMS notes
that, while it cannot feasibly implement the measure currently as newly defined, it does not meet the crite-
ria for removal from the IQR program. Therefore, CMS reserves the right to at a later date reintroduce
data collection through sub-regulatory guidance.
Despite significant concerns raised by the field and CHA, CMS has finalized five new measures for FFY
2016 and beyond. The addition of five new measures and the removal of seven measures would bring the
FFY 2016 measure set to 58 quality measures. The five new measures are:
1) 30-day Risk Standardized COPD Readmission
Similar to the AMI, HF and PH, this measure assesses 30-day readmission rates for patients hospital-
ized with acute exacerbation of COPD. This measure also incorporates the new planned readmission
algorithm that will exclude several planned readmissions.
2) 30-day Risk Standardized Stroke Readmission
The measure assesses the readmissions rate for patients hospitalized for an acute ischemic stroke.
This measure is not NQF endorsed, and CHA raised concerns that the measures as currently adopted
do not appropriately take into account stroke severity. CMS acknowledges the concerns raised by
commenters and notes that it will continue to refine the measures
3) 30-day Risk Standardized COPD Mortality
This measure assesses the 30-day mortality rates of patients hospitalized with acute exacerbation of
COPD. This is an NQF-endorsed measure.
4) 30-day Risk Standardized Stroke Mortality
This measure assesses the 30-day mortality rate for patients hospitalized with acute ischemic stroke.
Similar to the stroke readmissions measure, this measure failed to receive NQF endorsement in 2012.
5) AMI Payment Per Episode of Care
CMS notes evidence of variation in payments at hospitals for AMI patients. Mean 30-day risk-
standardized payment among Medicare FFS patients aged 65 or older hospitalized for AMI in 2008
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 18
August 2013
was $20,207, and ranged from $15,521 to $27,317 across 1,846 hospitals. The AMI payment meas-
ure assesses hospital risk-standardized payment associated with a 30-day episode-of-care for AMI for
any non-federal acute care hospital. The measure includes Medicare FFS patients aged 65 or older
admitted for an AMI and calculates payments for these patients over a 30-day episode-of-care begin-
ning with the index admission. In general, the measure uses the same approach to risk-adjustment as
the 30-day outcome measures previously adopted for the Hospital IQR program, including the AMI,
HF and PN readmission and mortality measures. This measure has not yet been submitted to NQF for
review.
Additional details regarding the measure methodologies are available at http://cms.gov/Medicare/Quality-
Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html.
CHA opposed many of the measures adopted into the FFY 2016 IQR program and will continue to work
with others in raising our concerns with CMS directly and through the Measures Application Partnership.
The MAP will reconvene this fall to review a new set of measures that CMS must submit for review by
not later than December 1, 2013. CHA is an active participant in the MAP process and will participate in
the fall meetings. Additional information regarding the MAP is available at www.qualityforum.org/map/.
Form, Manner, and Timing of Quality Data Submission for the IQR Program
CMS finalizes the following changes to the IQR Program procedural requirements:
The deadline for a hospital to withdraw from participation in the IQR program for a fiscal year is
changed from August 15 of the preceding fiscal year to May 15 of the prior year (e.g., May 15, 2014
for the FFY 2016 payment determination).
For chart-abstracted measures, current procedures will continue, but the quarterly data submission
deadline time is clarified to mean 11:59 p.m. Pacific time.
Data submission requirements for HCAHPS are retained for FFY 2017 with no changes. Certain re-
quirements are codified.
The deadline for submission of data on the previously adopted Healthcare Provider Influenza Vac-
cination measure is May 15t of the calendar year when the flu season ends. For example, the deadline
May 15, 2014, applies for the period between October 1, 2013 (or when flu vaccines they become
available) and March 31, 2014.
The Medicare Beneficiary ID number must be reported to the NHSN system for all events reported for
Medicare beneficiaries beginning with CY Q3 2014 events, the first quarter for which validation will
be required for the FFY 2017 payment determination. CMS had proposed to begin this requirement
earlier (for the FFY 2016 payment determination) but delayed the start in response to comments.
CMS does not finalize proposed changes to the submission deadlines for structural measures or for the
annual Data Accuracy and Completeness Acknowledgement (DACA). For structural measures, re-
porting with respect to a calendar year must occur from April 1 through May 15t of the subsequent
year. For the DACA, the submission deadline remains May 15t with respect to data submitted for the
previous calendar year.
Beginning with the FFY 2015 payment determination, hospitals with a quarterly overall validation
result of <75 percent may no longer appeal mismatched data elements to state quality improvement
organizations (QIOs). CMS believes this process is redundant because a hospital can request recon-
sideration of a determination that it has not met the IQR program requirements.
The forms for extraordinary circumstances waivers or extensions may be signed by hospital-
designated personnel other than the CEO. In addition, the forms may be submitted online via the
QualityNet website. Further, a waiver or extension may be granted if a problem with the CMS data
collection system directly affected the ability of a hospital to submit data.
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 19
August 2013
Additional information regarding modifications to the validation process for measures in the IQR program
is detailed in the final rule and available upon request.
Voluntary Electronic Submission of IQR Program Measures in CY 2014
CMS made several modifications from the proposed rule regarding data submission requirements for hos-
pitals that elect to volunteer to submit electronically reporting measures in CY 2014.
Hospitals may voluntarily report up to four measure sets electronically for one quarter (CY Q1, CY Q2 or
CY Q3) for purposes of the FFY 2016 IQR program. (The proposed rule would have required hospitals
opting for electronic reporting to electronically report all four measure sets for one quarter.) The
measures sets are: stroke (seven of the eight measures), venous thromboembolism (six measures), perina-
tal care (one measure) and emergency department (two measures). CMS clarifies that hospitals that
choose to engage in voluntary electronic reporting must continue to report measures via chart abstraction
for all four quarters of 2014 unless the measure is in one of the measure sets it has reported electronically
for one quarter. Also, if a hospital chooses to report the stroke measure set electronically, it must still re-
port the measure STK-1 via chart-abstracted methods. In addition, the hospital must report all measures
in the measure set electronically. That is, a hospital that reports some of the measures in a measure set
electronically and others via chart abstraction will not receive credit for reporting the measures under the
IQR program. In addition, if a hospital chooses to report more than one measure set electronically, they
must all be reported in the same calendar quarter.
A hospital that would like CMS to use the electronically reported IQR program data to determine whether
the hospital has satisfied the meaningful use quality measure reporting requirement of the Medicare EHR
Incentive program must electronically report the data for CY Q1, CY Q2 or CY Q3 by November 30,
2014, or, if it is in its first year of demonstrating meaningful use, by July 1, 2014. Because the EHR Incen-
tive program is fiscal-year based, CMS will not be able to use electronic submission of IQR program data
for the fourth quarter of CY 2014 to determine whether a hospital has satisfied the Medicare EHR Incen-
tive program clinical quality reporting requirement. The hospital must satisfy all other requirements of the
Medicare EHR Incentive program.
The Medicare EHR Incentive program data submission process will be used, following submission re-
quirements finalized in the stage 2 final rule (77 FR 54088) and subsequent rulemaking. For hospitals
choosing voluntary electronic reporting, the QualityNet account will be used. Data will be extracted from
the Certified Electronic Health Record Technology (CEHRT) and submitted to CMS using the Health
Level Seven (HL7) Quality Reporting Document Architecture (QRDA) Category I Revision 2 standard.
After considering public comments, CMS finalizes its proposal to adopt the QRDA I reporting standard
for hospitals voluntarily submitting measures electronically for the IQR program.
CMS proposed that data submitted through the voluntary electronic submission in CY 2014 would not be
publicly reported, but reports that a majority of commenters opposed withholding these data from Hospital
Compare. In this section of the final rule, CMS finalizes a policy that it will make the data publicly avail-
able if it deems that the data are accurate enough to be publicly reported. Elsewhere in the final rule,
CMS contradicts this by stating that no comments were received and that the proposed policy not to report
these data is finalized. CHA will work to bring clarity to this CMS policy and notify hospitals when that
information is available.
Data submitted electronically for the FFY 2016 IQR program will not be validated. CMS notes concern
among commenters, including CHA, about the need for validation of electronically submitted measure
data, and notes that it intends to develop and propose a validation strategy for electronically reported qual-
ity measures in future rulemaking that will complement the vendor certification process for electronic
clinical quality measures.
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 20
August 2013
CMS intends to recognize on the Hospital Compare website hospitals electing to voluntarily report clini-
cal quality measures electronically in CY 2014 for the IQR program. While not required, CMS encour-
ages hospitals that elect to report quality measures electronically for one quarter to also submit the same
data via chart abstraction. CMS notes that many hospitals will be reporting chart-abstracted data on these
same measures to the Joint Commission, so no additional reporting burden would be involved.
Responding to comments, CMS states that it does not expect that implementation of ICD-10 will have
significant impacts on electronic reporting of measures because the electronic specifications include ICD-
10 codes. CHA remains concerned about the CMS approach to electronic reporting of the IQR measures
and will continue to urge CMS to make additional refinements in future rulemaking.
Hospital Value Based Purchasing Program (VBP)
As required by law, the available funding pool for the hospital value-based purchasing program (VBP)
was equal to 1 percent of the base-operating, diagnosis related group (DRG) payments to all participating
hospitals in FFY 2013. For FFY 2014, this will increase to 1.25 percent. CMS estimates the total amount
available for VBP for FFY 2014 is $1.1 billion. VBP program payments overall would be budget neutral.
As noted in Appendix A of the final rule, CMS estimates that 44 percent of hospitals would have a change
in base operating DRG payment amounts that is between -0.2 percent and +0.2 percent. The estimated
effects shown in the Appendix table by hospital type all fall within that range, with the largest effects for
high DSH hospitals (-0.23 percent) and small urban bed size (+.18 percent). These estimates are only
slightly revised from the proposed rule.
FFY 2014 and 2015 VBP
In previous rulemaking CMS adopted 17 measures for the Hospital VBP program for FFY 2014. Each
year CMS includes a table in the proposed and final rules that includes a proxy hospital-specific incentive
payment adjustment factors. Table 16A posted on the CMS website lists the factors for FFY 2014. Once
the review and correction process is complete, CMS will publish a new table (16B) that will reflect the
actual adjustment factors used in calculating the FFY 2014 value based purchasing payment. The revised
table is expected to be posted in October of this year.
In the FFY 2013 IPPS final rule, CMS adopted 19 measures for the FFY 2015 program. A complete list of
measures for FFY 2015 is noted in Appendix B.
VBP Measures Proposed for FFY 2016
In total 17 measures are finalized for the FFY 2016 program. CMS has finalized its proposal to modify the
VBP measure set for the FFY 2016 payment determination. For FFY 2016, CMS will remove the follow-
ing measures.
Measures Removed Beginning with the FFY 2016
Payment Determination
Measure Reason for Removal
AMI-8, Primary PCI received within 90 minutes
of hospital arrival
Topped out
*SCIP-Inf-1, Prophylactic antibiotic received
within one hour prior to surgical incision
Topped out (determined after publication of pro-
posed rule)
PN-3b, Blood cultures performed in the ED prior
to initial antibiotic received in hospital
No longer endorsed by the NQF
HF-1, Discharge planning No longer endorsed by the NQF
*SCIP-Inf-4 Measure specifications changed beginning Janu-
ary 1, 2014.
Notes: *Measure not identified for removal in proposed rule.
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 21
August 2013
In addition, CMS finalized the following measures for inclusion in the FFY 2016 program:
IMM-2: Influenza Immunization
This is an NQF-endorsed measure of whether patients age six months and older are screened for influenza
immunization status and vaccinated prior to discharge if indicated. Hospitals began reporting this measure
under the Hospital Inpatient Quality Reporting (IQR) program with January 1, 2012, discharges.
CAUTI: Catheter- associated Urinary Tract Infection
Data collection on this measure, which occurs through the CDC National Healthcare Safety Network
(NHSN), began for the IQR program with January 1, 2012, discharges. CMS notes that it may consider
adopting the expansion of the CAUTI measure beyond the non-ICU settings in future rulemaking, but for
now remains limited to the ICU setting for the purposes of inclusion in the VBP Program.
SSI: Surgical Site Infection (colon and abdominal hysterectomy)
Reporting on this measure is currently limited to colon and abdominal hysterectomy procedures. Data col-
lection and public reporting on this measure are currently stratified by surgery site. In response to public
comment CMS did modify its proposed scoring methodology from the proposed rule. CMS will award
points to each strata and then compute a weighted average of the points awarded based on predicted infec-
tions. CMS provides an example of a hospital that received five improvement points for the SSI-colon
stratum, with 1.0 predicted SSI-colon infections, and eight achievement points for the SSI-abdominal hys-
terectomy stratum, with 2.0 predicted SSI-abdominal hysterectomy infections, would receive a composite
SSI measure score as follows: ((5 * 1.0) + (8 * 2.0)) / (1.0 + 2.0) = 7 points.
The CLABSI measure, which is part of the FFY 2015 VBP program measure set, is now finalized for con-
tinuation in FFY 2016.
CHA had expressed significant concerns regarding the overlap of measures between the VBP program and
measures finalized in the Hospital Acquired Conditions Reduction Program for FFY 2015. CMS disa-
greed with stakeholder comment and noted that outcome measures such as CLABSI and CAUTI track
infections that could cause significant health risks to Medicare beneficiaries, and as a result it is appropri-
ate to provide hospitals with incentives to avoid these infections under more than one program. CMS indi-
cates it will consider ways to align the programs to minimize provider burden and incentivize high-quality
care.
With respect to HCAHPS, CMS indicates that it is analyzing the effects of patients’ overall mental or
emotional health on HCAHPS scores (a new item added to the survey beginning in January 2013) and,
based on that analysis, will determine whether a patient-mix adjustment for these factors is warranted.
CHA will monitor this development closely, as we had urged CMS not to adopt this item in the HCAHPS
measure.
Finally, CMS believes that the Medicare Spending Per Beneficiary (MSPB) measure, which CHA op-
posed for inclusion in the program, gives hospitals incentive to redesign systems of care and coordinate
with other providers to improve quality and efficiency. In addition, CMS believes that hospitals have a
significant influence on Medicare spending surrounding a hospitalization. The MSPB efficiency measure
is combined with quality measures to calculate a hospital’s total performance score under the VBP pro-
gram.
A complete list of the FFY 2014, 2015 and 2016 VBP measures are noted in Appendix B. A discussion of
future measures under consideration in the VBP program is noted in the final rule and will also be dis-
cussed this fall at the MAP meetings.
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 22
August 2013
Baseline and Performance Periods
CMS adopts in the final rule the CY 2014 performance period and corresponding CY 2012 baseline peri-
od for three domains: clinical process of care, patient experience of care (HCAHPS) and efficiency (Med-
icare spending per beneficiary). CMS already adopted baseline and performance periods for FFY 2016
mortality and AHRQ PSI measures in last year’s rulemaking. The following table shows the performance
periods for FFY 2016; for reference, the FFY 2015 periods are shown as well. CMS inadvertently ex-
cluded performance periods for CLABSI, CAUTI and SSI but has done so in the CY 2014 OPPS pro-
posed rule (78 FR 43659) for inclusion.
Domain/Measures Baseline Period Performance Period
FY 2015 (Final)
Clinical process of care Jan. 1, 2011 – Dec. 31, 2011 Jan.1, 2013 – Dec. 31, 2013
Patient experience of care
(HCAHPS)
Jan. 1, 2011 – Dec. 31, 2011 Jan.1, 2013 – Dec. 31, 2013
Efficiency (Medicare spending
per beneficiary)
May 1, 2011 – Dec. 31, 2011 May 1, 2013 – Dec. 31, 2013
Outcomes
Mortality Oct. 1, 2010 – June 30, 2011 Oct. 1 2012 – June 30, 2013
AHRQ PSI Oct. 15, 2010 – June 30, 2011 Oct. 15, 2012 – June 30, 2013
CLABSI Jan. 1, 2011 – Dec. 31, 2011 Feb. 1, 2013 – Dec. 31, 2013
FY 2016 (Final)
Clinical process of care Jan. 1, 2012 – Dec. 31, 2012 Jan.1, 2014 – Dec. 31, 2014
Patient experience of care
(HCAHPS)
Jan. 1, 2012 – Dec. 31, 2012 Jan.1, 2014 – Dec. 31, 2014
Efficiency (Medicare spending
per beneficiary)
Jan. 1, 2012 – Dec. 31, 2012 Jan.1, 2014 – Dec. 31, 2014
Outcomes
Mortality Oct. 1, 2010 – June 30, 2011 Oct. 1, 2012 – June 30, 2014
AHRQ PSI Oct. 15, 2010 – June 30, 2011 Oct. 15, 2012 – June 30, 2014
CLABSI (Dates proposed in CY 2014
OPPS proposed rule)
January 1, 2011 – December
31, 2011
(Dates proposed in CY 2014
OPPS proposed rule)
February 1, 2013 – December
31, 2013
For the mortality and AHRQ measures, CMS finalizes the baseline and performance periods for FFYs
2017 through 2019 shown in the next table. CMS notes that, while the performance periods for the mor-
tality measure would ultimately be 36 months, the AHRQ PSI 90-measure performance period would
have a 24-month span, which it says is consistent with the AHRQ recommendation for public reporting
on this measure.
Outcome Measure
Proposed
Baseline Period
Proposed
Performance Period
FY 2017
Mortality Oct. 1, 2010 – June 30, 2012 Oct. 1, 2013 – June 30, 2015
AHRQ PSI Oct. 15, 2010 – June 30, 2012 Oct. 1, 2013 – June 30, 2015
FY 2018
Mortality Oct. 1, 2009 – June 30, 2012 Oct. 1, 2013 – June 30, 2016
AHRQ PSI July 1, 2010 – June 30, 2012 July 1, 2014 – June 30, 2016
FY 2019
Mortality July 1, 2009 – June 30, 2012 July 1, 2014 – June 30, 2017
Performance Standards and Scoring Methodology
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 23
August 2013
The final rule includes tables presenting CMS’ achievement thresholds and benchmarks for the FFY 2016
VBP program. The updated achievement thresholds and benchmarks reflect the CMS decision to calcu-
late separate scores for the two SSI strata (discussed above).
Domain Weighting for FFY 2016 and Reclassification for FFY 2017
As shown in the following table, for FFY 2016 CMS finalizes its proposal to modify the domain weights
used to calculate a hospital’s total performance score (TPS). CHA continues to remain concerned with the
shift in domain weights to the measures that have less reliability and validity and in some instances lack
appropriate risk adjustment.
VBP Program Weighting (Fiscal Year)
Domain 2013 2014 2015 2016 (final)
Clinical process of care 70% 45% 20% 10%
Patient experience of care 30% 30% 30% 25%
Outcomes 25% 30% 40%
Efficiency 20% 25%
CMS will continue the current policy for calculating a hospital’s performance score when it has scores for
fewer than four domains. Beginning in FFY 2015, a hospital must have scores for at least two domains in
order to have a TPS under the VBP program. (For FFYs 2013 and 2014, a hospital must have scores for
all domains in order to receive a TPS.) Under the final rule, a hospital with fewer than four domain scores
would continue to have its scores reweighted proportionately to assure that the TPS for each hospital is
based on 100 points.
Despite CHA objections to collapsing of the clinical care and process measure domain as well as the con-
tinued adoption of domains with only one measure, CMS adopts proposed changes to the program do-
mains weights for FFY 2017 and finalizes new domains that it believes align with the National Quality
Strategy.
FFY 2017 Domains for VBP FFY 2017 Weight
Patient and caregiver-centered experience of care/care coordination 25%
Clinical care
Clinical care – outcomes
Clinical care – process
35%
25%
10%
Efficiency and cost reduction 25%
Safety 15%
The proposed mapping of FFY 2016 VBP program measures into the reclassified domains is shown in the
table in Appendix B.
Hospital Readmission Reduction Program
Section 3025 of the ACA directs the Secretary to account for “excess readmissions” that began last Octo-
ber. Operating DRG payment rates are reduced based on a hospital’s ratio of actual to expected readmis-
sions. In FFY 2013, the maximum payment reduction was 1 percent; for FFY 2014 it is 2 percent, and it
will be capped at 3 percent for FFY 2015 and beyond.
Previously, CMS finalized and used the 30-day, all-cause readmission measures for acute myocardial in-
farction (AMI), heart failure (HF) and pneumonia (PN) for use in the first year of the program (FFY
2013).
Planned Readmissions Algorithm
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 24
August 2013
In response to numerous comments from CHA, AHA and other stakeholders calling for CMS to exclude
planned readmissions from the measures as required by the ACA, CMS developed an algorithm that is
applied to the Medicare FFS claims data and that identifies planned readmissions across the readmission
measures. The CMS Planned Readmission Algorithm Version 2.1 Report is available on the CMS web-
site.
For FFY 2014, CMS finalizes its proposal to apply the algorithm to the AMI, HF and PN measures. CMS
sought NQF endorsement of the revised algorithm, and each of the three measures was endorsed in Janu-
ary and March 2013, respectively. CHA supported this change but continues to seek additional refine-
ments for these measures.
In addition to the expanded list of planned readmissions through use of the algorithm, CMS finalizes its
proposal that if the first readmission is planned, it will not count as a readmission, nor will any subsequent
unplanned readmission within 30 days of the index readmission count as a readmission. In other words,
unplanned readmissions that occur after a planned readmission and fall within the 30-day post discharge
timeframe will no longer be counted as outcomes for the index admission. This change will affect a very
small percentage of readmissions (approximately 0.3 percent of index admissions nationally for AMI, 0.2
percent for HF and less than 0.1 percent for PN).
Proposed Floor Adjustment Factor and Applicable Periods for FFY 2014
A hospital’s readmissions “adjustment factor” for a fiscal year is equal to the greater of the adjustment
factor determined based on the hospital’s excess readmissions or the floor adjustment factor specified in
subparagraph (C). The final rule announces that the floor adjustment factor for FFY 2014 will be 0.98
(previously 0.99 for FFY 2013). As finalized in the FFY 2013 IPPS final rule, CMS rounds the ratio to the
fourth decimal place. Thus, for FFY 2014, a hospital subject to the Hospital Readmissions Reduction pro-
gram would have an adjustment factor that is between 1.0 and 0.9800. CMS notes that 18 hospitals are
subject to the maximum reduction of 2 percent in FFY 2014, and all but one of the hospitals also received
the 1.0 reduction in FFY 2013.
CMS finalizes that the applicable period for FFY 2014 under the Hospital Readmissions Reduction program
would be the three-year period from July 1, 2009, to June 30, 2012.
Additional Measures for FFY 2015
Despite significant comment regarding the lack of appropriate risk adjustment in the measures, CMS fi-
nalized its proposal to continue the measures from FFY 2013 and add two additional measures for FFY
2015. CMS will add the following measures for the FFY 2014 program:
30-Day, All-Cause, Risk-Standardized Readmission Rate Following Chronic Obstructive Pulmo-
nary Disease Hospitalization (NQF #1891)
30-Day, All-Cause, Risk-Standardized Readmission Rate Following Elective Total Hip Arthro-
plasty and Total Knee Arthroplasty (NQF #1551) (finalized in the IQR program in the FFY 2013
final rule.)
Hospital-Acquired Condition Payment Reduction Program for FFY 2015
Section 3008 of the ACA directs the HHS Secretary to make an adjustment to payments beginning on Oc-
tober 1, 2014 (FFY 2015), to implement the HAC payment reduction program. Payments are to be ad-
justed to account for hospital acquired conditions (HACs) with respect to discharges during FFY 2015 or
later. The amount of payment shall be equal to 99 percent of the amount of payment that would otherwise
apply. The ACA requires the Secretary to apply a risk adjustment methodology and to make available
confidential data for review and correction by hospitals prior to public reporting. Finally, the statute pro-
vides that there may be no administrative or judicial review with respect to what qualifies as an applicable
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 25
August 2013
hospital, the specifications of a HAC, the determination of an applicable period and what information is
reported to hospitals and the public.
The following provisions were finalized in the FFY 2014 IPPS final rule. Additional rulemaking in FFY
2015 is expected to fully implement this program. This program is expected to reduce IPPS payments by
about $300 million per year.
Eligibility
Under the statute all subsection d hospitals (including SCHs), including Maryland hospitals, are subject to
the HAC Reduction Program. However, Maryland hospitals may obtain a waiver.
Payment Adjustment
The payment adjustment is specified in section 3008, under which applicable hospitals would receive
payment equal to 99 percent of the amount that would otherwise apply under the IPPS. The HAC Reduc-
tion program adjustment must be applied after the adjustments made under the Hospital VBP program and
the Readmissions Reduction program. Neither the proposed or final rule provided a numerical example of
this calculation. CHA anticipates additional information will be provided in the FFY 2015 IPPS rule.
Finalized Measures and Measurement Time Periods
CMS adopts three measures for the FFY 2015 HAC program, using two domains. Additional CDC HAI
measures are also finalized for inclusion in the measure sets for FFY 2016 and FFY 2017, as noted in the
table below.
Final HAC Reduction Program Measures
FY 2015 FY 2016 FY 2017
Domain 1: AHRQ Patient Safety Indicators
PSI-90 (PSI-90 is a composite of eight PSI measures):
PSI-3 (Pressure ulcer rate)
PSI-6 (Iatrogenic pneumothorax)
PSI-7 (Central venous catheter related blood stream infections rate)
PSI-8 (Postoperative hip fracture rate)
PSI-12 (Postoperative VE or DVT rate)
PSI-13 (Postoperative sepsis rate
PSI-14 (Wound dehiscence rate)
PSI-15 (Accidental puncture or laceration)
X X X
Domain 2: CDC HAI Measures
Central Line-associated Blood Stream Infection (CLABSI) X X X
Catheter-associated Urinary Tract Infection (CAUTI) X X X
Surgical Site Infection (SSI):
◦ SSI Following Colon Surgery
◦ SSI Following Abdominal Hysterectomy
X X
Methicillin-resistant Staphylococcus aureus (MRSA) X
Clostridium difficile X
Domain 1 would include the AHRQ PSI 90 composite measure derived from Medicare FFS administra-
tive claims. This domain will be weighted at 35 percent (down from 50 percent in the proposed rule).
Domain 2 would include CDC HAI measures, which use chart-abstracted data and are reported through
the CDC National Healthcare Safety Network. This domain will be weighted 65 percent (an increase
from 50 percent in the proposed rule.) Both domains would be used to calculate a total HAC score.
CMS finalizes two years of data to calculate measure scores in both domains. The time periods for FFY
2015 are noted below.
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 26
August 2013
FFY 2015 Measurement Period
Domain 1 (PSI Composite) July 1, 2011- June 30, 2013
Domain 2 (HAI Measures) January 1, 2012 - December 31, 2013
Minimum Case Counts for Measures
In determining whether a hospital receives a score for the Domain1 PSI-90 measure, CMS will use the
same method that is used for the VBP program to determine whether a hospital has a complete score on
PSI-90. That is, a hospital must have three or more discharges for at least one indicator within the compo-
site. If a hospital has fewer than three eligible discharges for all eight of the PSI-90 components, no score
will be calculated for the composite measure. In calculating the composite score, the national rate is sub-
stituted for any PSI-90 component measure for which the hospital has fewer than three eligible discharges.
A hospital’s score, or rate, for the PSI-90 composite is a weighted average of rates of the component indi-
cators.
Similarly, for the Domain 2 CDC HAI measures, CMS will use the same inclusion criteria that apply for
these measures under the hospital IQR program. For these measures, CDC calculates a standard infection
rate (SIR) which compares the number of HAIs at a facility to a national baseline. The number of ob-
served infections is divided by the number of expected infections, which is calculated using event rates
from a standard population during a baseline period. Calculation of an SIR for a measure requires that the
facility have one or more predicted HAI events. Additional information on the SIR calculation is available
at the CDC website at www.cdc.gov/HAI/surveillance/QA_stateSummary.html#a6.
Risk Adjustment
Section 3008 requires the Secretary to establish and apply appropriate risk adjustment methodology when
determining the hospitals subject to the 1 percent payment reduction. CMS will use the existing measure-
level risk adjustments for this purpose. In responding to comments, CMS indicates that the risk adjustment
methodology for the measures meets NQF criteria. CMS does not believe the risk adjustment factors used
for the measures unfairly penalize large and teaching hospitals, but it will monitor this.
Performance Scoring Methodology
CMS finalizes a scoring methodology that differs from the proposed rule and makes modest improve-
ments. CHA believes this is a step in the right direction but remains concerned and will continue to seek
further refinements for this program.
Under the final methodology, any hospital with a score on a measure will be assigned points for that
measure, which will be counted toward the total HAC score. CMS believes that making the change to as-
sign points to the entire distribution of scores will reduce any potential artificial cut-off points, and that
taken together, the scoring changes will better reflect the variation in performance on measures and will
reduce the impact on large and teaching hospitals. CMS intends to continue examining this impact and
consider “releasing additional analysis in future rulemaking.”
The points assigned to a measure are summarized in the following table. For each measure, hospitals with
a score will be assigned to deciles – increments of 10 – with points assigned to each decile. As shown in
the table, a hospital in the eighth percentile for a measure (between the 70th and 80
th percentile) would re-
ceive eight points on the measure. For Domain 1, points will be based on the PSI-90 composite score val-
ue (rather than the independent measures within the composite).
For Domain 2, the score will consist of the average points assigned to the SIR for each NHSN measure
(CLABSI and CAUTI for FFY 2015). While the use of points is similar to the VBP program, CMS points
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 27
August 2013
out that in the case of the HAC score, having more points indicates a poorer performance, which is the
opposite of VBP program scoring.
Scoring of Measures for HAC Reduction Program
Percentile Points
1st – 10th 1
11th – 20th 2
21st - 30th 3
31st - 40th 4
41st - 50th 5
51st - 60th 6
61st - 70th 7
71st - 80th 8
81st - 90th 9
91st - 100th 10
Domain 2 scores will be based on measure results that hospitals submit to the CDC NHSN for the IQR
program. Because the two measures for FFY 2015 currently capture HAIs in the ICU only, a hospital that
participates in the IQR program but has no ICU beds can apply for an ICU waiver so that they are not pe-
nalized for not reporting on these measures. CMS reports that 377 hospitals have an ICU waiver, or 10
percent of the 3,321 hospitals participating in the IQR program.
For those hospitals with an ICU waiver from reporting on the CDC HAI measures for the IQR program,
the total HAC score will be calculated based entirely on the Domain 1 measures. However, a hospital that
is eligible to report HAIs, does not have a zero ICU beds waiver and fails to report to NHSN, will receive
the maximum score of 10 points for Domain 2.
If data are sufficient to calculate an SIR for at least one of the CDC HAI measures, a Domain 2 score will
be calculated, and the total HAC score will be a weighted average of the Domain 1 (35 percent weight)
and Domain 2 (65 percent weight) scores. If data are not sufficient to calculate an SIR, the total HAC
score will be the Domain 1 score alone. If there are data sufficient to calculate a Domain 2 score but not
sufficient data to calculate a PSI 90 (Domain 1) score, the total HAC score will equal the Domain 2
score. No total HAC score will be calculated if a hospital has insufficient data for either a Do-
main 1 or Domain 2 score.
Reporting of Hospital-Specific Information, Including Review and Correction of Information
As required by law, CMS finalized its proposal to make information available to the public regarding the
total HAC score for eligible hospitals (including hospitals in Maryland). Before the information is made
public, CMS will provide each hospital with a confidential hospital-specific report that contains certain
information related to claims-based measure data for the PSI measure, the domain scores for each domain
and the total HAC score.
Hospitals would be given 30 days to review and correct both the claims-based AHRQ PSI measure in do-
main 1 as well as the point allocations for the measures in each domain, the domain scores and the total
HAC score.
For the Domain 2 CDC HAI chart-abstracted measures proposed for inclusion in the FFY 2015 HAC Re-
duction program, the hospital IQR program data review and correction process will be used. Under the
hospital IQR program, chart-abstracted data are submitted for a calendar quarter, and hospitals have an
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 28
August 2013
opportunity to submit, review and correct any chart-abstracted measure during the calendar quarter and for
four-and-a-half months following the end of the calendar quarter.
The 30-day review and corrections period will begin when the hospitals’ confidential reports and accom-
panying discharge-level information are posted to their QualityNet accounts. During the review and cor-
rection period, hospitals will notify CMS of any errors in their total HAC score using the technical assis-
tance contact information provided in their confidential reports. In addition, a hospital could notify CMS
if it suspects that discrepancies exist in the application of the HAC scoring methodology (assignment of
points to measures, domain scoring, domain weighting). If CMS confirms that it made an error in creating
the data extract or in calculating the total HAC score, the calculations will be corrected and new confiden-
tial reports provided to affected subsection hospitals.
In the case of errors that take more time than anticipated to correct, CMS will notify hospitals that correct-
ed HAC scores will be made available through delivery of confidential reports followed by a second 30-
day review and correction period, subsequent publication and posting on Hospital Compare website. Any
corrections to a hospital’s total HAC score will then be used to recalculate a hospital’s quartile in order to
determine the correct HAC Reduction program adjustment factor.
Impact Analysis
The regulatory impact analysis presented in Appendix A of the final rule includes a discussion of the es-
timated effects of the proposed HAC Reduction program for FFY 2015. CMS used Medicare fee-for-
service discharges for the period July 1, 2009, through June 30, 2011, to calculate the AHRQ PSI score,
and Hospital Compare data on the CDC measures from December 2012, to estimate a total HAC score for
hospitals under the final rule methodology. CMS calculated results for 3,468 hospitals.
The table shown below summarizes the results of CMS’ analysis, which are shown more fully in a table
in the final rule’s Appendix A. CMS does not offer an explanation for the low number of teaching hospi-
tals in the HAC Reduction program analysis.
CMS Analysis of Total HAC Scores Under Final Rule
by Type of Hospital
Hospital Characteristics
Worst
Performing Quartile
Characteristic
Number of
Hospitals
Percent
Number of
Hospitals
Percent
< 50 beds 656 19.6% 119 18.1%
50 - 99 680 20.4% 181 26.6%
100 - 199 893 26.7% 204 22.8%
200 - 299 512 15.3% 133 26.0%
300 - 399 268 8.0% 71 26.5%
400 - 499 125 3.7% 37 29.6%
500+ 205 6.1% 75 36.6%
Teaching 276 8.3% 134 48.6%
Non-Teaching 3,063 91.7% 686 22.4%
Non-Profit 2,026 60.7% 511 25.2%
Government 558 16.7% 148 26.5%
For-Profit 755 22.6% 161 21.3%
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 29
August 2013
CMS Analysis of Total HAC Scores Under Final Rule
by Type of Hospital
Hospital Characteristics
Worst
Performing Quartile
Characteristic
Number of
Hospitals
Percent
Number of
Hospitals
Percent
Urban 2,493 72.1% 639 25.6%
Rural 965 27.9% 201 20.8%
Non-DSH 749 21.9% 145 19.4%
DSH Quartile 1 658 19.3% 149 22.6%
DSH Quartile 2 665 19.5% 150 22.6%
DSH Quartile 3 669 19.6% 186 27.8%
DSH Quartile 4 673 19.7% 200 29.7%
Inpatient Psychiatric Quality Reporting Program (IPFQR)
In the FFY 2013 IPPS/LTCH final rule, CMS established a quality reporting program beginning in FFY
2014 for inpatient psychiatric facilities (IPFs) as required by the ACA. An IPF that does not meet the re-
quirements of participation in the IPFQR for a fiscal year is subject to a two percentage point reduction in
the update factor for that year, and may result in a negative annual update for that year. CHA has released
its FFY 2014 payment update notice for the IPF PPS, available online at
http://www.calhospital.org/fy2014-ipf-payment-update
IPFQR Measures
Six measures were previously adopted for the FFY 2014 payment determination and subsequent years. In
this rule, CMS finalized two additional measures beginning with the FFY 2016 payment determination. A
table showing current and newly adopted FFY 2016 measures follows:
Final IPFQR Program Measures
Measure ID Description FFYs 2014
and 2015 FFY 2016
NQF #0640/HBIPS-2 Hours of Physical Restraint Use X X
NQF #0641/HBIPS-3 Hours of Seclusion Use X X
NQF #0552/HBIPS-4
Patients Discharged on Multiple Antipsychotic
Medications (HBIPS-4) X X
NQF #0560/HBIPS-5
Patients Discharged on Multiple Antipsychotic
Medications with Appropriate Justification X X
NQF #0557/HBIPS-6 Post-Discharge Continuing Care Plan X X
NQF #0558/HBIPS-7
Post-Discharge Continuing Care Plan
Transmitted to Next Level of Care Provider Upon
Discharge
X X
SUB-1: Alcohol Use Screening X
NQF# 0576 Follow-Up After Hospitalization for Mental Illness X
Despite CHA and field objections to the proposed measures, CMS has finalized two of the three measures.
CMS did not finalize SUB-4—Alcohol and Drug Use Assessing Status After Discharge, acknowledging
provider burden and noted that a claims-based version of the measure was not viable.
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 30
August 2013
New Measures for FFY 2016
SUB-1 – Alcohol Use Screening
This measure assesses the percentage of patients 18 and older who are screened during an IPF stay for
unhealthy alcohol use. This measure was recently submitted for NQF review. The MAP supported the
direction of this measure, noting that it must receive NQF endorsement before being finalized for the pro-
gram.
This measure assesses whether discharged patients are contacted between seven and 30 days after hospital
discharge to collect information about their alcohol or drug use. Similar to SUB-1, this measure’s NQF
review is pending, and the MAP voted to support direction.
NQF#0567 – Follow-up After Hospitalization for Mental Illness (FUH)
This measure assesses the percentage of discharges for patients six and older who are admitted to IPFs for
treatment of selected mental health disorders and who subsequently receive outpatient treatment from a
provider or who received partial hospitalization services. This measure is currently specified for the
health plan setting. This measure is NQF endorsed and supported by the MAP.
This measure was proposed as a chart-abstracted measure, but is finalized instead as a claims-based
measure to address burden and privacy concerns raised by commenters. CMS will calculate this measure
using Medicare Part A and Part B claims data; no data collection or reporting by IPFs will be required.
The calculation of this measure will occur using data for the 12-month period beginning July 1 of the year
immediately preceding the reporting year for chart abstracted measures. For example, for the FY 2016
payment determination, CMS will calculate this measure for July 1, 2013 through June 30, 2014. CMS
will consider transitioning this measure to chart-abstracted data collection, taking into account comments
received in response to the proposed rule. Because this is now a claims-based measure, it will only be
reported on the over 65 Medicare FFS population, rather than for all patients over the age of six as noted
above.
CMS finalizes its proposal for voluntary submission of information regarding patient experience of care.
CMS intends to pursue adoption of a standardized measure of patient experience of care in the IPFQR in
the near future, and would like to know whether the IPFs participating in the IPFQR assess patient experi-
ence of inpatient behavioral health services using a standardized instrument. If yes, CMS would also like
to know the name of the survey they administer. Voluntary submission of this information will occur
through a web-based tool and will not affect the FFY 2016 payment determination. Additional infor-
mation will be forthcoming via the QualityNet website.
Data Collection and Reporting
CMS finalizes its data submission and public reporting periods to conform with the IQR program. Below
is a table that summarizes the payment determination year, reporting period, submission deadlines and
proposed public display timelines.
Public Display
CMS finalizes its proposal to change the timing of public display of IPFQR data in order to better align
with the IQR program. For the FFY 2014 payment determination and subsequent years, submitted data
will be displayed publicly on the CMS website in April of each calendar year following the start of the
respective payment determination year (e.g., public display for the FFY 2014 payment determination will
begin April 2014.) Hospitals may preview the data for a 30-day period approximately 12 weeks prior to
public display; this aligns with the preview and display periods for the IQR program.
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 31
August 2013
IPFQR Program Time Frames
Payment De-
termination
Year
Reporting Period for
Services Provided*
Data Submission
Time Frame
DACA
Deadline
Public
Display
Begins
FFY 2014 Q4 2012 – Q1 2013
(October 1, 2012 –
March 31, 2013)
July 1, 2013-
August 15, 2013
August 15,
2013
April 2014
FFY 2015 Q2 2013- Q4 2013
(April 1, 2013 –
December 31, 2013)
July 1, 2014 - August
15, 2014
August 15,
2014
April 2015
FFY 2016 Q1-Q4 2014 (January 1, 2013 –
December 31, 2013)
July 1, 2015- August
15, 2015
August 15,
2015
April 2016
*The claims-based measure, “Follow-up After Hospitalization for Mental Illness,” will be calculated for the 12-month
period beginning July 1 of the year immediately preceding the reporting year for chart-abstracted measures. For example,
for the FY 2016 payment determination, CMS will calculate this measure for July 1, 2013, through June 30, 2014.
PPS-Exempt Cancer Hospital Quality Reporting Program (PCHQR)
In the FFY 2013 IPPS/LTCH final rule, CMS established a quality reporting program beginning in FFY
2014 for PPS-exempt cancer hospitals (PCHs), as required under section 1866(k) of the Act, as added by
section 3005 of the ACA. The PPS-exempt Cancer Hospital Quality Reporting (PCHQR) program fol-
lows many of the policies established for the Hospital IQR program, including the principles for selecting
measures and the procedures for hospital participation in the program. No policy was adopted on the con-
sequences if a PCH fails to meet the quality reporting requirements; CMS indicated its intention to ad-
dress the issue in future rulemaking. Five measures were adopted for the new cancer hospital quality re-
porting program for FFY 2014. Existing and newly finalized measures are shown in the table below.
New PCHQR Program Measures
In this rule, CMS adopts one new measure for the PCHQR program in FFY 2015 and 12 new measures
beginning in FFY 2016. The new measures, listed below, include the NHSN measure of surgical site in-
fections following colon surgeries and abdominal hysterectomies, six surgical care improvement project
(SCIP) measures, five clinical process/oncology measures and the HCAHPS. One additional oncology
measure, Multiple Myeloma-Treatment with Bisphosphonates (NQF #0380), was proposed but not final-
ized. CMS was persuaded by comments regarding the clinical basis of the measure and concerns about
data collection burden. With the exception of the oncology measures, all the new measures adopted for
the PCHQR program are included in the Hospital IQR program. Measure specifications are available on
the QualityNet.org website.
Finalized PCHQR Program Measures
Measures Beginning with the FFY 2014 Program Year
NHSN CLABSI outcome measure (NQF #0139)
NHSN CAUTI outcome measure (NQF #0138)
Adjuvant chemotherapy is considered or administered with four months (120 days) of surgery to
patients < 80 with AJCC T1c (lymph node positive) colon cancer (NQF #0223)
Combination chemotherapy is considered or administered within four months (120 days) of
diagnosis to women < 70 with AJCC T1c or Stage II or III hormone receptor negative breast
cancer. (NQF #0559)
Adjuvant hormonal therapy (Tamoxifen or third generation aromatase inhibitor is considered or
administered within one year of diagnosis to women > 18 with AJCC T1cN0M0, or Stage II or
III hormone receptor positive breast cancer.) (NQF #0220)
Measures Beginning with the FFY 2015 Program Year
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 32
August 2013
Finalized PCHQR Program Measures
Surgical Site Infection (SSI) (NQF #0753)
Measures Beginning with the FFY 2016 Program Year
Surgical Care Improvement Project (SCIP)
SCIP-Inf-1: Prophylactic Antibiotic Received Within one Hour Prior to Surgical Incision
(NQF#0527)
SCIP-Inf-2: Prophylactic Antibiotic Selection for Surgical Patients (NQF #0528)
SCIP-Inf-3: Prophylactic Antibiotic Discontinued Within 24 Hrs After Surgery End Time (NQF
#0529)
SCIP-Inf-9: Urinary Catheter Removed on Post-Operative Day 1 or Post-Operative Day 2 with
Day of Surgery Being Day Zero (NQF #0453)
SCIP-Card 2: Surgery Patients on Beta Blocker Therapy Prior to Admission who Received a
Beta Blocker During the Perioperative Period (NQF #0284)
SCIP- VTE 2: Surgery Patients who Received Appropriate VTE Prophylaxis within 24 Hrs Prior
to Surgery to 24 Hrs After Surgery End Time (NQF #0218)
Clinical Process/Oncology Care Measures
Oncology-Radiation Dose Limits to Normal Tissues (NQF #0382)
Oncology: Plan of Care for Pain (NQF #0383)
Oncology: Pain Intensity Quantified (NQF #0384)
Prostate Cancer-Avoidance of Overuse Measure-Bone Scan for Staging Low-Risk Patients
(NQF #0389)
Prostate Cancer-Adjuvant Hormonal Therapy for High-Risk Patients (NQF #0390)
Patient Experience of Care
HCAHPS
Public Display
As proposed, CMS will publicly display in 2014 data for two of the five previously adopted measures.
They are the measures involving adjuvant chemotherapy for colon cancer (NQF #0223) and combination
chemotherapy for breast cancer (NQF #0559). CMS defers public reporting of the other measures while it
engages in testing and assessing data quality, including reliability and validity of the measure rates.
Data Submission and Other Procedures
CMS finalizes modified procedures for data submission under the PCHQR program beginning with the
FFY 2015 program year. These involve: 1) a process for granting waivers from program requirements
under extraordinary circumstances similar to other quality reporting programs, and 2) specified reporting
periods and data submission timelines for the new measures. PCHs will report on the SSI measure begin-
ning with January 1, 2014, events. HCAHPS reporting will begin with discharges occurring on April 1,
2014. The SCIP and oncology process measures will be reported beginning with January 1, 2015, dis-
charges. Certain exceptions are provided with respect to required reporting of the HAI measures to ac-
count for hospitals with few procedures and those that do not have locations that meet NHSN criteria for
CLABSI and CAUTI reporting.
Additional Information
In August, CHA issued facility-specific CHA DataSuite reports detailing the final FFY 2014 Medicare
DSH reductions. An additional set of facility-specific reports detailing the final FFY 2014 IPPS policy
and payment proposals was also distributed. Questions or comments regarding the FFY 2014 IPPS final
rule should be directed to Alyssa Keefe, vice president federal regulatory affairs at (202) 488-4688, or
[email protected]. Questions related to the FFY 2014 CHA DataSuite reports should be directed to
Amber Ott, vice president finance, at (916) 552-7669, or [email protected].
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 33
August 2013
APPENDIX A
Summary Hospital IQR Program Measures for Payment Determinations for FFYs 2014, 2015 and
2016 Measure 2014 2015 2016
Acute Myocardial Infarction (AMI) Measures
AMI-2 Aspirin prescribed at discharge X X Removed
AMI-7a Fibrinolytic (thrombolytic) agent received within
30 minutes of hospital arrival
X X X
AMI-8a Timing of receipt of primary Percutaneous
Coronary Intervention (PCI)
X X X
AMI-10 Statin prescribed at discharge X X Removed
Heart Failure (HF) Measures
HF-1 Discharge instructions X X Removed
HF-2 Evaluation of left ventricular systolic function X X X
HF-3 Angiotensin Converting Enzyme Inhibitor (ACE-I) or Angio-
tensin II Receptor Blocker (ARB) for left ventricular
systolic dysfunction
X X Removed
Stroke (STK) Measure Set
STK-1 VTE prophylaxis X X
STK-2 Antithrombotic therapy for ischemic stroke* X X
STK-3 Anticoagulation therapy for Afib/flutter* X X
STK-4 Thrombolytic therapy for acute ischemic stroke* X X
STK-5 Antithrombotic therapy by the end of hospital day 2* X X
STK-6 Discharged on statin* X X
STK-8 Stroke education* X X
STK-10 Assessed for rehabilitation services* X X
Venous Thromboembolism (VTE) Measure Set
VTE-1 VTE prophylaxis* X X
VTE-2 ICU VTE prophylaxis* X X
VTE-3 VTE patients with anticoagulation overlap therapy* X X
VTE-4 VTE patients receiving un-fractionated Heparin with dos-
es/labs monitored by protocol*
X X
VTE-5 VTE discharge instructions* X X
VTE-6 Incidence of potentially preventable VTE* X X
Pneumonia (PN) Measures
PN-3b Blood culture performed before first antibiotic
received in hospital
X X Removed
PN-6 Appropriate initial antibiotic selection X X X
Surgical Care Improvement Project (SCIP) Measures
SCIP INF-1 Prophylactic antibiotic received within 1 hour
prior to surgical incision
X X X
SCIP-INF-2 Prophylactic antibiotic selection for surgical
patients
X X X
SCIP-INF 3 Prophylactic antibiotics discontinued within
24 hours after surgery end time (48 hours for cardiac surgery)
X X X
SCIP-INF-4 Cardiac surgery patients with controlled 6 AM postop-
erative serum glucose
X X X
SCIP–INF-9 Postoperative urinary catheter removal on postopera-
tive day 1 or 2 with day of surgery being day zero
X X X
SCIP-INF-10 Surgery patients with perioperative
temperature management
X X Removed
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 34
August 2013
Measure 2014 2015 2016
SCIP-Cardiovascular-2: Surgery patients on a Beta Blocker
prior to arrival who received a Beta Blocker during the
perioperative period
X X X
SCIP-VTE-1: Surgery patients with venous
thromboembolism (VTE) prophylaxis ordered
X Previously Removed
SCIP-VTE-2: Surgery patients who received appropriate
VTE prophylaxis within 24 hours pre/post surgery
X X X
Mortality Measures (Medicare Patients)
AMI 30-day mortality rate X X X
Heart failure 30-day mortality rate X X X
Pneumonia 30-day mortality rate X X X
Stroke 30-day mortality rate X
COPD 30-day mortality rate X
Patients’ Experience of Care Measures
HCAHPS survey X X X
Readmission Measures (Medicare Patients)
AMI 30-Day Risk Standardized Readmission X X X
Heart Failure 30-Day Risk Standardized Readmission X X X
Pneumonia 30-Day Risk Standardized Readmission X X X
30-Day Risk Standardized Readmission following Total
Hip/Total Knee Arthroplasty
X X
Hospital-Wide All Cause Unplanned Readmission X X
Stroke 30-day Risk Standardized Readmission X
COPD 30-day Risk Standardized Readmission X
AHRQ Patient Safety Indicators (PSIs), Inpatient Quality Indicators (IQIs). Composite Measures and Nurs-
ing Sensitive Care
PSI 06: Iatrogenic pneumothorax, adult X Previously Removed
PSI 11: Postoperative respiratory failure X Previously Removed
PSI 12: Postoperative PE or DVT X Previously Removed
PSI 14: Postoperative wound dehiscence X Previously Removed
PSI 15: Accidental puncture or laceration X Previously Removed
IQI 11: Abdominal aortic aneurysm (AAA) mortality rate X Previously Removed
IQI 19: Hip fracture mortality rate X Previously Removed
Complication/patient safety for selected indicators
(composite)
X X X
Mortality for selected medical conditions (composite) X Previously Removed
PSI 04: Death among surgical inpatients with serious,
treatable complications
X X X
Structural Measures
Participation in a Systematic Database for Cardiac Surgery X X X
Participation in a Systematic Clinical Database Registry for
Stroke Care
X X Removed
Participation in a Systematic Clinical Database Registry for
Nursing Sensitive Care
X X X
Participation in a Systematic Clinical Database Registry for
General Surgery
X X X
Safe Surgery Checklist Use X
Healthcare-Associated Infections Measures
Central Line Associated Bloodstream Infection (CLABSI) X X X
Surgical Site Infection X X X
Catheter-Associated Urinary Tract Infection (CAUTI) X X X
MRSA Bacteremia X X
Clostridium Difficile (C.Diff) X X
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 35
August 2013
Measure 2014 2015 2016
Healthcare Personnel Influenza Vaccination X X
Surgical Complications
Hip/Knee Complication: Hospital-Level Risk Standardized Com-
plication Rate (RSCR) following Elective Primary
Total Hip Arthroplasty
X X
Hospital Acquired Condition (HAC) Measures
Foreign Object Retained After Surgery X Previously Removed
Air Embolism X Previously Removed
Blood Incompatibility X Previously Removed
Pressure Ulcer Stages III & IV X Previously Removed
Falls and Trauma (includes Fracture, Dislocation,
Intracranial Injury, Crushing Injury, Burn, Electric Shock)
X Previously Removed
Vascular Catheter-Associated Infection X Previously Removed
Catheter-Associated Urinary Tract Infection (UTI) X Previously Removed
Manifestations of Poor Glycemic Control X Previously Removed
Emergency Department (ED) Throughput Measures
ED-1 – Median time from ED arrival to departure from the
emergency room for patients admitted to the hospital*
X X X
ED-2 – Median time from admit decision to time of departure
from the ED for ED patients admitted to the inpatient status*
X X X
Prevention
Immunization for Influenza X X X
Immunization for Pneumonia X X Suspended
Cost Efficiency
Medicare Spending per Beneficiary X X X
AMI Payment per Episode of Care X
Perinatal Care
Elective delivery < 39 completed weeks gestation* X X
* Measure adopted for voluntary electronic reporting in CY 2014
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 36
August 2013
APPENDIX B
Hospital Value Based Purchasing Program Quality Measures for
FFYs 2014 (Final), 2015 (Final), and 2016 (Final)
Measure ID Measure Description 2014 2015
Final
2016
Process of Care Measures
AMI-7a Fibrinolytic Therapy Received Within 30 Minutes
of Hospital Arrival X X X
AMI-8a Primary PCI Received Within 90 Minutes of
Hospital Arrival X X Removed
IMM-2 Influenza Immunization X
HF-1 Discharge Instructions X X Removed
PN-3b Blood Cultures Performed in the Emergency
Department Prior to Initial Antibiotic Received in Hospital X X Removed
PN-6 Initial Antibiotic Selection for CAP in
Immunocompetent Patient X X X
SCIP-Inf-1 Prophylactic Antibiotic Received Within One
Hour Prior to Surgical Incision X X Removed
SCIP-Inf-2 Prophylactic Antibiotic Selection for Surgical
Patients X X X
SCIP-Inf-3 Prophylactic Antibiotics Discontinued Within
24 Hours After Surgery End Time X X X
SCIP-Inf-4 Cardiac Surgery Patients with Controlled 6 AM Postoperative
Serum Glucose X X Removed
SCIP-Inf-9 Urinary Catheter Removal on Post-Operative Day
1 or 2 X X X
SCIP-Card-2 Surgery Patients on a Beta Blocker Prior to
Arrival That Received a Beta Blocker During the Periopera-
tive Period
X X X
SCIP-VTE-1 Surgery Patients with Recommended Venous Thromboembo-
lism Prophylaxis Ordered X Removed N/A
SCIP-VTE-2 Surgery Patients Who Received Appropriate
Venous Thromboembolism Prophylaxis Within
24 Hours Prior to Surgery to 24 Hours After
Surgery
X X X
Patient Experience of Care Measures
Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS)
Communication with Nurses X X X
Communication with Doctors X X X
Responsiveness of Hospital Staff X X X
Pain Management X X X
Communication About Medicines X X X
Cleanliness and Quietness of Hospital Environment X X X
Discharge Information X X X
Overall Rating of Hospital X X X
Outcome Measures
MORT-30-AMI
Acute Myocardial Infarction (AMI) 30-Day
Mortality Rate X X X
MORT-30-HF Heart Failure (HF) 30-Day Mortality Rate X X X
MORT-30-PN Pneumonia (PN) 30-Day Mortality Rate X X X
AHRQ PSI 90
Complication/patient safety for selected indicators (compo-
site) X X
CLABSI Central Line-Associated Blood Stream Infection X X
CAUTI Catheter-Associated Urinary Tract Infection X
CHA Summary: FFY 2014 Medicare Inpatient Prospective Payment System Final Rule Page 37
August 2013
Measure ID Measure Description 2014 2015
Final
2016
SSI Surgical Site Infection
Colon
Abdominal Hysterectomy
X
Efficiency Measures
MSPB-1 Medicare Spending per Beneficiary X X
Final VBP Measure Domains for FFY 2017 Measure ID Name (Abbreviated) Current Domain Final FFY 2017
NQS-Based Domain
AMI-7a Fibrinolytic Therapy W/in 30 Min. Clin. Process of Care Clinical Care – Process
IMM-2 Influenza Immunization Clin. Process of Care Clinical Care – Process
PN-6 Initial Antibiotic Selection Clin. Process of Care Clinical Care – Process
SCIP-Inf-2 Prophylactic Antibiotic Selection Clin. Process of Care Clinical Care – Process
SCIP-Inf-3 Prophyl. Antibiotics Discontinued Clin. Process of Care Clinical Care – Process
SCIP-Inf-9 Urinary Catheter Removal Clin. Process of Care Clinical Care – Process
SCIP–Card-2 Surgery Patients -- Beta Blocker Clin. Process of Care Clinical Care – Process
SCIP-VTE-2 Surgery Appropriate VTE Proph. Clin. Process of Care Clinical Care – Process
HCAHPS HCAHPS Patient Experience of
Care
Patient and Caregiver
Centered Experience of
Care/Care Coordination
MORT-30-AMI AMI 30-Day Mortality Rate Outcome Clin. Care – Outcomes
MORT-30-HF Heart Failure 30-Day Mortality Outcome Clin. Care – Outcomes
MORT-30-PN Pneumonia 30-Day Mortality Rate Outcome Clin. Care – Outcomes
AHRQ PSI 90 Patient Safety Composite Outcome Safety
CLABSI
Central Line-Associated Blood
Stream Infection
Outcome Safety
CAUTI Catheter-Associated Urinary Tract Infection Outcome Safety
SSI Surgical Site Infection Outcome Safety
MSPB-1 Medicare Spending per Beneficiary Efficiency Efficiency and Cost
Reduction