IPPS FY 2018 Final Rule: Part 2 Quality Programs

on Tuesday, 15 August 2017. All News Items | Case Management | Documentation | Coding

Advancing Better Care, Smarter Spending and Healthier People

CMS strives “to put patients first, ensuring they are empowered to make decisions about their own healthcare along with their clinicians using information from data-driven insights that are increasingly aligned with meaningful quality measures. We support technology that reduces burden and allows clinicians to focus on providing high-quality healthcare for their patients. We also support innovative approaches to improve quality, accessibility, and affordability of care while paying particular attention to improving clinicians’ and beneficiaries’ experience when interacting with our programs.”

  • CMS Fiscal Year 2018 IPPS/LTCH Final Rule (CMS-1677-F)

This week in part 2 of our series of articles focusing on the 2018 IPPS Final Rule, we highlight

Finalized Quality Program proposals.

Hospital Inpatient Quality Reporting (IQR) Program Proposed Changes

The Hospital IQR Program was established by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. This program currently includes the following measures:

  • Process of care measures,
  • Risk-Adjusted outcome measures,
  • The Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) patient experience-of-care survey measure,
  • Structural measures,
  • Emergency Department throughput measures,
  • Patient safety and adverse event measures,
  • Immunization measures,
  • Hospital-acquired infection measures, and
  • Payment measures.

Hospital specific data for all of these measured is featured on the Hospital Compare  website. Hospital Compare is an interactive web tool that assists beneficiaries by providing information on hospital quality of care to those who need to select a hospital.


Previously Adopted Measure: Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) Survey Measure

CMS finalized their proposal to replace three existing questions about pain management with three new questions addressing communication about pain beginning with the FY 2020 payment determination.

Currently, the HCAHPS Survey’s “Pain Management Composite Measure” includes the following three questions:

  • HCAHPS Q12: During this hospital stay, did you need medicine for pain?
  • HCAHPS Q13: During this hospital stay, how often was your pain well controlled?
  • HCAHPS Q14: During this hospital stay, how often did the hospital staff do everything they could to help you with your pain?

CMS finalized revising the current questions and use the new questions to form a new composite measure “Communication About Pain,” to replace the “Pain Management” composite measure. The new “Communication About Pain” composite measure includes the following three questions:

  • HP1: During this hospital stay, did you have any pain?
  • HP2: During this hospital stay, how often did hospital staff talk with you about how much pain you had?
  • HP3: During this hospital stay, how often did hospital staff talk with you about how to treat your pain?

CMS notes that “the new questions address how providers communicate with patients about pain while removing any ambiguities in the wording or intent of the question” and “in light of the ongoing opioid epidemic, we believe it is important the Communication About Pain composite measure is abundantly clear in its focus on communication about pain between providers and their patients and be applicable to all patients who experienced pain during their hospital stay.” The new questions were finalized and will begin being used on the HCAHPS Survey in January of 2018.

Previously Adopted Measure: Hospital 30-Day, All Cause, Risk Standardized Mortality Rate (RSMR) following Acute Ischemic Stroke Hospitalization Measure (Stroke 30-Day Mortality Rate Measure)

CMS finalized their proposal to refine the Stroke 30-Day Mortality Rate Measure for the FY 2023 payment determination and subsequent years by including the National Institutes of Health (NIH) Stroke Scale and notes that “the updated measure model better differentiates the risk of mortality among patients.”

NIH Stroke Scale: Key Highlights

  • The American Heart Association (AHA) and American Stroke Association (ASA) collaborated with CMS in developing this measure refinement.
  • “Initial assessment of stroke severity, such as the NIH Stroke Scale score, is one of the strongest predictors of mortality in ischemic stroke patients and is part of the national guidelines on stroke care.”
  • Why now? “The previously adopted measure includes 42 risk variables, but does not include an assessment of stroke severity because, previously, it has not been available in claims data and was not routinely performed by all providers.” ICD-10-CM codes for the NIH Stroke Scale were implemented in October 2016 meaning that “hospitals can now record the NIH Stroke Scale as a representation of stroke severity in Medicare claims by using ICD-10-CM codes, and CMS can include this as a variable in the risk-adjustment model for the refined Stroke 30-Day Mortality Rate measure and other claims-based measures with minimal data collection burden for hospitals.”

CMS Puts Hospitals on Notice: Considerations for Hospitals

CMS indicates that they “proposed this measure now to inform hospitals that they should begin to include the NIH stroke severity scale codes in the claims they submit for patients with a discharge diagnosis of ischemic stroke.” Following is a list of some considerations and need to know information:

  • You will need to work with your Physicians to ensure that they are measuring and recording stroke severity.
  • Coders will need to include the appropriate ICD-10 code for the Physician’s documented NIH Stroke Scale score in the Medicare claims.
  • Which NIH Stroke Scale needs to be reported for this measure? CMS clarified in the Final Rule that “The intent of the risk adjustment for stroke severity is to account for patients’ clinical status at the time they are admitted to the hospital. Therefore, the refined Stroke 30-Day Morality Rate measure would utilize only the initial NIH Stroke Scale score, which is administered upon admission. We refer readers to the current clinical guidelines describing the qualifications and appropriate administration of the NIH Stroke Scale.
  • Advice on the subcategory to report the NIH Stroke Scale scores can be found in Coding Clinic 2016, 4th Quarter, page 61.
  • CMS notes they plan to “provide hospitals with dry run results of this proposed, refined measure in their confidential hospital-specific feedback reports prior to implementation of the proposed, refined measure for the FY 2023 payment determination.”

Adoption of a Hybrid Hospital-Wide All-Cause Unplanned Readmission Measure:

CMS finalized their proposal to adopt the Hybrid Hospital-Wide All-Cause Unplanned Readmission Measure (NQF #2879) as a voluntary measure for the CY 2018 reporting period.

CMS defines “hybrid” outcome measures as quality measures that utilize more than one source of data. “Hybrid measure results must be calculated by CMS to determine hospitals’ risk-adjusted rates relative to national rates used in public reporting. With a hybrid measure, hospitals can submit data extracted from the EHR, and we can perform the measure calculations.”

This measure was endorsed by the NQF on December 9, 2016 and “aligns with the National Quality Strategy (NQS) priorities of making care safer by reducing harm caused in the delivery of care and promoting effective communication and coordination of care.”

Key Highlights

  • This is a voluntary measure for the reporting of data on discharges over a 6-month period in the first two quarters of CY 2018 (January 1, 2018 through June 30, 2018),
  • CMS will use two sources of data for the calculation: Medicare Part A claims and core clinical data elements for Medicare FFS beneficiaries who are 65 years or older, comprising the measure cohort. Electronic specifications for extraction of the core clinical data elements from hospital EHRs is available on the CMS website at: http://cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html.
  • Information about 13 core clinical data elements will be captured from the EHR during the Index Admission. CMS notes that “all 13 core clinical data elements were shown to be statistically significant predictors of readmission in one or more risk-adjustment models of the five specialty cohort groups used to calculate the proposed voluntary Hybrid HWR measure.” The following table outlines the 13 core clinical data elements.
Table 1: Core Clinical Data Elements
Data ElementsUnits of MeasurementTime Window for First Captured Values
Heart Rate Beats per minute 0-2 hours
Systolic Blood Pressure mmHg 0-2 hours
Respiratory Rate Breath per minute 0-2 hours
Temperature Degrees Fahrenheit 0-2 hours
Oxygen saturation Percent 0-2 hours
Weight Pounds 0-24 hours
Hematocrit % red blood cells 0-24 hours
White Blood Cell Count Cells/mL 0-24 hours
Potassium mEq/L 0-24 hours
Sodium mEq/L 0-24 hours
Bicarbonate mmol/L 0-24 hours
Creatinine mg/dL 0-24 hours
Glucose mg/dL 0-24 hours

While initially voluntary, CMS is considering proposing this be a required measure as early as the CY 2021 reporting period/FY 2023 payment determination and requiring hospitals to submit the core clinical data elements as early as CY 2021. Any requirement for mandatory reporting on this measure would be proposed through future rulemaking.

Modifications of previously finalized Electronic Quality Measures (eCQM) reporting requirements:

For the CY 2017 reporting period/FY 2019 payment determination CMS finalized a modification to their proposals. Following are the finalized requirements:   

  • Select and submit four of the available eCQMs included in the Hospital IQR Program measure set, instead of the proposed six; and
  • Provide one, self-selected, calendar year quarters of data, instead of the proposed two quarters.

These requirements further decrease the required number of eCQMs and quarters of reporting as compared with the previously finalized requirements in the FY 2017 IPPS Final Rule.

Hospital Value Based Purchasing (VBP) Program

The VBP program is an incentive payment program for participating hospitals. In order to fund this budget neutral program, the Act instructs the Secretary to reduce the base operating DRG payment amount for a hospital for each discharge in a fiscal year by an applicable percent. For FY 2018 the amount is 2.00 percent. CMS estimates the total amount available for value-based incentive payments for FY 2018 is approximately $1.9 billion.

Current PSI 90 Measure to be Removed Beginning with FY 2019 Program Year

In the Proposed Rule, CMS noted that an ICD-10 version of the current PSI 90 measure is not being developed, nor will software be available to calculate performance scores for the FY 2019 program year. The FY 2019 program year would include ICD-10 data meaning CMS would be unable to calculate performance scores. CMS finalized the proposal to remove the current PSI 90 measure from the Hospital VBP Program beginning with the FY 2019 program year (October 1, 2018).

New Measure Finalized: Hospital-Level, Risk Standardized Payment Associated with a 30-Day Episode-of-Care for Pneumonia (PN Payment)

CMS finalized their proposal to adopt the PN Payment measure beginning with the FY 2022 program year. In the proposed rule CMS noted evidence of variation in payments for pneumonia patients in the proposed measure. Specifically, for the July 2011 through June 2014 reporting period in the Hospital IQR program, the median 30-day risk-standardized payment among Medicare FFS patients aged 65 or older hospitalized for pneumonia was $15,988 and ranged from $9,193 to $26,546. This variation in payments suggests there is opportunity for improvement.

Index admissions to be included in this measure are Medicare FFS patients aged 65 or older with:

  • A principal discharge diagnosis of pneumonia, including viral, bacterial and aspiration pneumonia, or
  • A principal discharge diagnosis of sepsis (but not severe sepsis) with a secondary diagnosis of pneumonia (including viral, bacterial and aspiration pneumonia) coded as present on admission.

This measure will be added to the Efficiency and Cost Reduction Domain of the Hospital VBP Program and CMS believes “that adding the PN Payment measure, paired with MORT-30-PN measure, will provide actionable feedback to hospitals on the overall value of their services to beneficiaries.” Publicly reported PN Payment measure data became available on Hospital Compare on July 26, 2017. Along with CMS, MMP encourages you to view your hospitals’ data.

Modified Version of PSI-90 Finalized: Patient Safety and Adverse Events (Composite)

CMS finalized the adoption of a modified version of the current PSI 90 measure for the Hospital VBP Program for the FY 2023 program year and subsequent years. The new Patient Safety and Adverse Events (Composite) measure will include the 10 individual PSI component indicators listed in the following table.

Proposed measure to be added to the Safety Domain.

Table 2: Individual PSI Component Indicators included in Proposed Patient Safety and Adverse Evens (Composite)
PSI 03 Pressure Ulcer Rate
PSI 06 Iatrogenic Pneumothorax Rate
PSI 08 In-Hospital Fall with Hip Fracture Rate
PSI 09 Perioperative Hemorrhage or Hematoma Rate*
PSI 10 Postoperative Acute Kidney Injury Requiring Dialysis Rate*
PSI 11 Postoperative Respiratory Failure*
PSI 12 Perioperative Pulmonary Embolism (PE) or Deep Vein Thrombosis (DVT) Rate
PSI 13 Postoperative Sepsis Rate
PSI 14 Postoperative Wound Dehiscence Rate
PSI 15 Unrecognized Abdominopelvic Accidental Puncture/Laceration Rate

(*) Denotes new component for the Patient Safety and Adverse Events (Composite) measure)

PSI 07 Central Venous Catheter-Related Blood Stream Infection Rate is no longer included due to potential overlap with the central line-associated blood stream infections (CLABSI) measure which has been included in the Hospital VBP Program since the FY 2013 IPPS Final Rule.

CMS anticipates “the Patient Safety and Adverse Events (Composite) measure will provide actionable information and specific direction for prevention of patient safety events, because hospitals can track and monitor individual PSI rates and develop targeted improvements to patient safety using this measure data.” They go on to refer readers to the Toolkit for Using the AHRQ quality indicators available at: http://www.ahrq.gov/professionals/systems/hospital/qitoolkit/index.html.

Hospital Acquired Conditions (HAC) Reduction Program

Beginning in FY 2015 (discharges beginning on October 1, 2014), the HAC Reduction Program required payments be adjusted to hospitals ranking in the worst-performing quartile with respect to the risk-adjusted HAC quality measures. This group of hospitals are subject to a 1 percent payment reduction.  

CMS recognizes “that the HAC Reduction Program represents a key component of the way we bring quality measurement and improvement together with payment.”

CMS finalized the following two proposals for the HAC Reduction Program:

  • Finalized returning to a 24-month data collection period used to calculate hospital performance for the FY 2020 Program,
  • The Extraordinary Circumstance Exception policy has been updated to align with other quality programs beginning in FY 2018 as related to extraordinary circumstances that occur on or after October 1, 2017.

CMS indicates in a HAC Reduction Program FY 2018 Fact Sheet they will be reporting FY 2018 Program information for each hospital on Hospital Compare in December 2017. This Fact Sheet and additional information about the program can be found on the CMS HAC Reduction Program webpage.  

Hospital Readmissions Reduction Program (HRRP)

The HRRP became effective for discharges beginning on or after October 1, 2012. This program reduces a hospital’s base operating DRG payment for all admissions to account for excess readmissions associated with the following six conditions:  

  • Acute Myocardial Infarction (AMI),
  • Heart Failure (HF),
  • Pneumonia (PN),
  • Total Hip Arthroplasty/Total Knee Arthroplasty (THA/TKA),
  • Chronic Obstructive Pulmonary Disease (COPD); and
  • Coronary Artery Bypass Graft (CABG) Surgery.

21st Century Cures Act

The 21st Century Cures Act enacted on December 13, 2016 directs “the Secretary to assign hospitals to peer groups, develop a methodology that allows for separate comparisons for hospitals within these groups, and allows for changes in the risk adjustment methodology…. It “also directs MedPAC to conduct a review of overall hospital readmissions and whether such readmissions are related to any changes in outpatient and emergency services furnished. A report on the study is required to be submitted in the MedPAC’s report to Congress no later than June 2018.”

In accordance with the 21st Century Cures Act, CMS finalized the following HRRP proposals:

  • The proportion of full benefit dual-eligible beneficiaries is defined as the proportion of dual-eligible patients among all Medicare Fee-For Service and Medicare Advantage stays during the 3-year period that corresponds to the performance period.
  • Individuals will be counted as a full benefit dual-eligible patient if the beneficiary was identified as full-benefit dual status in the State Medicare and Modernization Act (MMA) files for the month he/she was discharged from the hospitals.
  • Hospitals will be stratified into five peer groups; and
  • A change to the payment adjustment formula calculation methodology was adopted.

Additional, HRRP Finalized Proposals

  • CMS finalized the applicable time period for calculation of aggregate payments for excess readmissions for FY 2018 as the three year period from July 1, 2013 through June 30, 2016; and
  • The Extraordinary Circumstances Exception policy has been updated to align with other quality programs beginning in FY 2018 as related to extraordinary circumstances that occur on or after October 1, 2017.

FY 2018 Hospital Readmission Penalties  

Readmission penalties are based on a hospital’s performance over three years. For FY 2018, penalties are based on hospital performance between July 2013 and June 2016.

Kaiser Health News is “a national policy news service that is part of the nonpartisan Henry J. Kaiser family foundation.” In an August 3rd Kaiser Health News article, (http://khn.org/news/under-trump-hospitals-face-same-penalties-embraced-by-obama/) Jordan Rau wrote that “Medicare is punishing 2,573 hospitals, just two dozen short of what it did last year under former President Barack Obama, according to federal records released Wednesday. Starting in October, the federal government will cut those hospitals’ payments by as much as 3 percent for a year.

If you want to know how your hospital will fair in the coming fiscal year, the Kaiser Health News article provides a link to a spreadsheet of hospital specific penalty compare of FY 2017 and FY 2018.


CMS FY 2018 IPPS Final Rule in the Federal Register: https://www.gpo.gov/fdsys/pkg/FR-2017-08-14/pdf/2017-16434.pdf

CMS FY 2018 IPPS Final Rule Homepage: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2018-IPPS-Final-Rule-Home-Page.html

CMS Fact Sheet Announcing release of 2018 IPPS Final Rule: https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2017-Fact-Sheet-items/2017-08-02.html

Article by Beth Cobb

Beth Cobb, RN, BSN, ACM, CCDS, is the Manager of Clinical Services at Medical Management Plus, Inc.  Beth has over twenty-five years of experience in healthcare including eleven years in Case Management at a large multi-facility health system.  In her current position, Beth monitors, interprets and communicates current and upcoming Case Management / Clinical Documentation issues as they relate to specific entities concerning Medicare.  You may contact Beth at This email address is being protected from spambots. You need JavaScript enabled to view it..

This material was compiled to share information.  MMP, Inc. is not offering legal advice.  Every reasonable effort has been taken to ensure the information is accurate and useful.

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