IPPS FY 2019 Proposed Rule: Part 3 Quality Programs

on Tuesday, 22 May 2018. All News Items | Case Management | Documentation | Coding

Creating a Patient-Centered Healthcare System

“We rarely talk about cost. We talk about waste, quality, and safety, and we find our costs go down.”

  • Patrick Hagan, former COO of Seattle Children’s Hospital

This week, Part 3 in our series of articles focusing on the 2019 IPPS Proposed Rule begins with a brief discussion about the CMS Meaningful Measures Initiative and then a review of the Hospital Inpatient Quality Reporting Program, and ends with what is being proposed for the three programs that CMS views as a collective set of hospital value-based programs (the Hospital Value Based Purchasing Program, Hospital Acquired Conditions Reduction Program, and Hospital Readmission Reduction Program). 

Meaningful Measures Initiative

CMS launched the Meaningful Measures Initiative in October 2017 to “reduce” the regulatory burden on the healthcare industry, lower health care costs, and enhance patient care.” The aim of this Initiative is to identify “the highest priority areas for quality measurement and quality improvement in order to assess the core quality of care issues that are most vital to advancing our work to improve patient outcomes.”

According to the CMS Meaningful Measures Hub this Initiative “is not intended to replace any existing programs, but will help identify and select individual measures. Meaningful Measure areas are intended to increase measure alignment across CMS programs and other public and private initiatives. Additionally, it will point to high priority areas where there may be gaps in available quality measures while helping guide CMS’s effort to develop and implement quality measures to fill those gaps.”

Hospital Inpatient Quality Reporting (IQR) Program

The Hospital IQR Program is a quality reporting program established by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. CMS believes that this program “incentivizes hospitals to improve health care quality and value, while giving patients the tools and information needed to make the best decisions for them…this effort is supported by the adoption of widely-agreed upon quality measures.”

Proposals for the IQR Program are a result of CMS conducting an overall review of the Program under the “Meaningful Measures Initiative.” Current IQR Program measures were evaluated in the context of measures used in the Hospital Value Based Purchasing Program, Hospital Acquired Conditions Reduction Program and the Hospital Readmissions Reduction Program.

Proposed New “Measure Removal Factor”

Currently there are seven previously adopted “Removal Factors” that are taken into consideration when making the decision to remove a measure. CMS is proposing to add the following additional factor:

  • Factor 8: The costs associated with a measure outweigh the benefit of its continued use in the program.

CMS further clarifies that using the proposed “Factor 8” would be on a case-by case basis and provides the example of deciding “to retain a measure that is burdensome for health care providers to report if we conclude that the benefit to beneficiaries justifies the reporting burden.”

Proposed Removal of Hospital IQR Program Measures

CMS is proposing to remove a total of 39 measures from across Fiscal Years (FYs) 2020, 2021, 2022, and 2023 payment determinations. In general, measures being proposed for removal are due to the measure being duplicative of a measure in another program (i.e. Value Based Purchasing Program) or the cost of the measure outweighs the benefit of its continued use.

Topped Out Measure

Influenza Immunization Measure (NQF #1659) (IMM-2) is the only measure being proposed for removal due to the measure being “Topped Out.” CMS is proposing to remove the IMM-2 Measure beginning with the CY 2019 reporting period/FY 2021 payment determination (which applies to the performance period of January 1, 2019 through December 31, 2019).

CMS notes their “topped-out analysis shows that administration of the influenza vaccination to admitted patients is widely in practice and there is little room for improvement. We believe that hospitals will continue this practice even after the measure is removed, thus, utility in the program is limited.”

Measure Developers Advised to Avoid a Checkbox, Date or Code

One measure being proposed for removal is Home Management Plan of Care Document Given to Patient/Caregiver (CAC-3). CMS believes the cost associated with implementing and maintaining this Electronic Clinical Quality Measure (eCQM) outweighs the benefit to a beneficiary as it does not provide information evaluating the clinical quality of the activity. CMS goes on to note that they have “issued guidance that measure developers should avoid selecting or constructing measures that can be met primarily through documentation without evaluating the clinical quality of the activity – often satisfied with a checkbox, date, or code.” CMS notes that CAC-3 is an example of this type of measure.

A detailed table of measures being proposed for removal and the rationale for removal can be viewed in a related CMS Fact Sheet. An additional table that details the first payment determination year the measures are proposed for removal can be found on page 20484 of the Proposed Rule

Hospital Value Based Purchasing (VBP) Program

The Hospital VBP Program is a budget neutral program. This program is funded by reducing the base operating DRG payment amount for a hospital for each discharge in a fiscal year by an applicable percent to fund this program. For FY 2019 this applicable percent is 2.00 percent. CMS estimates the total amount available for value-based incentive payments for FY 2019 to be approximately $1.9 billion.

“The Hospital VBP Program, together with the Hospital Readmissions Reduction Program and the HAC Reduction Program, represents a key component of the way that we bring quality measurement, transparency, and improvement together with value-based purchasing to the inpatient care setting.” CMS believes as part of their “holistic quality payment program strategy” that this Program should continue to focus on measures related to:  

  • Clinical Outcomes (i.e. mortality and complications),
  • Patient and Caregiver Experience (i.e. HCAHPS survey),
  • Healthcare costs (i.e. Medicare Spending per Beneficiary measure).

Retention and Proposed Removal of Quality Measures

CMS is “proposing to revise our regulations at 42 CFR 412.164(a) to clarify that once we have complied with the statutory prerequisites for adopting a measure for the Hospital VBP Program (that is, we have selected the measure from the Hospital IQR Program measure set and included data on that measure on Hospital Compare for at least one year prior to its inclusion in a Hospital VBP Program performance period), the Hospital VBP statue does not require that the measure continue to remain in the Hospital IQR Program.”

This proposal is part of CMS’ efforts to evaluate and streamline regulations and specifically “would reduce costs…by allowing us to remove duplicative measures from the Hospital IQR Program that are retained in the Hospital VBP Program.”

Proposed Program “Measure Removal Factors”

CMS is proposing to adopt for the Hospital VBP Program the current Hospital IQR Program measure removal factors used to determine whether to remove a program measure. In addition to these seven factors CMS is proposing the following two scenarios for removing a measure:

  • When the costs associated with a measure outweigh the benefit of its continued use in the program (Removal Factor 8), or
  • When CMS believes the continued use of a measure poses specific patient safety concerns, they can promptly remove the measure without rulemaking and notify hospitals and the public of the removal of the measure along with the reason for its removal through routine communications channels.

Ten Measures Proposed for Removal from the VBP Program

CMS undertook efforts to review existing VBP Program measures “to identify how to reduce costs and complexity across programs while continuing to incentivize improvement in the quality and value of care provided to patients.” Specific measures being proposed for removal from this Program are in the following table.

Measure NameRemoval Rationale
PC-01: Elective Delivery (NQF #0469) Cost of the measure outweighs the benefit of its continued use & Measure is duplicative of measure in the Hospital IQR Program
Catheter-Associated Urinary Tract Infection (CUTI) Outcome Measure (NQF #0138) Cost of the measure outweighs the benefit of their continued use & Measures are duplicative of measures in the Hospital-Acquired Condition (HAC) Reduction Program
Central Line-Associated Bloodstream Infection (CLABSI) Outcome Measure (NQF #0139)
Harmonized Procedure Specific Surgical Site Infection Outcome Measure (NQF #0753) (Colon & Abdominal Hysterectomy SSI)
Facility-wide Inpatient Hospital-onset Methicillin-resistant Staphylococcus aureus (MRSA) Bacteremia Outcome Measure (NQF #1716)
Facility-wide Inpatient Hospital-onset Clostridium difficile Infection (CDI) Outcome Measure (NQF #1717)
Patient Safety Adverse Events (Composite) (PSI 90) (NQF #0531)
Hospital-Level, Risk Standardized Payment Associated with a 30-Day Episode-of-Care for Acute Myocardial Infarction (NQF #2431) (MI Payment) Measures duplicative of measures in Hospital IQR Program & Measure data are also captured under a more broadly applicable measure (Medicare Spending Per Beneficiary)
Hospital-Level, Risk Standardized Payment Associated with a 30-Day Episode-of-Care for Heart Failure (NQF #2436) (HF Payment)
Hospital-Level, Risk Standardized Payment Associated with a 30-Day Episode-of-Care for Pneumonia (NQF #2579) (PN Payment)
Source: 2019 IPPS Proposed Rule and Related CMS Fact Sheet

Hospital Acquired Conditions (HAC) Reduction Program

Beginning in FY 2015 (discharges on or after 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.

“The HAC Reduction Program focuses on patient safety measures, which address the Meaningful Measures Initiative quality priority of making care safe by reducing harm caused in the delivery of care.” CMS notes that “measures in the HAC Reduction Program, generally represent “never events” and often, if not always, assess preventable conditions. By including these measures in the Program, we seek to encourage hospitals to address the serious harm caused by these adverse events and to reduce them.”


CMS is making the following four proposals specific to the HAC Reduction Program:

  • Establish administrative policies for the HAC Reduction Program to collect, validate, and publicly report quality measure data independently instead of conducting these activities through the Hospital IQR Program;
  • Adjust the scoring methodology by removing domains and assigning equal weighting to each measure for which a hospital has a measure score in order to improve fairness across hospital types in the Program;
  • Establish the data collection period for the FY 2021 Program Year; and
  • Solicit stakeholder feedback regarding the potential future inclusion of additional measures, included eCQMs.

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 “focuses on care coordination measures, which address the quality priority of promoting effective communication and care coordination within the Meaningful Measures Initiative.”

A hospital can be penalized by up to 3 percent for excess hospital readmissions in the following six clinical 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.

“The Hospital Readmission Reduction Program strives to put patients first by 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.” CMS indicates in the Proposed Rule, after “thoughtful review,” there are six measures in the HRRP being proposed for removal in the Hospital IQR Program that are appropriately included in this program and as such no proposals to adopt new measures are being made.

Proposed Applicable Periods for FY 2019, FY 2020, and FY 2021

The HRRP Applicable Period is defined “as the 3-year period from which data are collected in order to calculate excess readmissions ratios and payment adjustment factors for the fiscal year, which includes aggregate payments for excess readmissions and aggregate payments for all discharges used in the calculation of the payment adjustment.” The following table outlines the proposed “Applicable Periods” for FY 2019, FY 2020, and FY 2021.

CMS Fiscal YearProposed Applicable Period for Data Collection Impacting Payment Adjustment
2019 July 1, 2014 through June 30, 2017
2020 July 1, 2015 through June 30, 2018
2021 July 1, 2016 through June 30, 2019

It is important to note that current Readmission Reduction efforts will not impact potential payment adjustments until the CMS Fiscal Year 2020 that starts October 1, 2019.

CMS is accepting comments no later than 5 p.m. EDT on June 13, 2018.


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 is a principle writer for MMP’s Wednesday@One weekly e-newsletter, an active member of our HIPAA Compliance Committee, MMP’s Education Department Program Director and co-developer of MMP’s proprietary Compliance Risk Assessment (CRA) Tool. 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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