Knowledge Base Article

There is a lot going on this time of year. Students have been back in school for almost a month. Halloween decorations are already popping up in the stores. The SEC 2018 football season “kicks off” in three days on Saturday September 1st and, wait for it, it is thirty-three days until the start of the CMS 2019 Fiscal Year on October 1st.

As for struggles with homework, what new Halloween decorations you may need and what time your team is playing, I will leave that up to you to decide. As for the new CMS Fiscal Year, this article winds down our series of articles focusing on the 2019 IPPS Final Rule. If you will, this article begins with a Meaningful Measures Initiative pre-game show, and then provides four quarters of excitement with a high level review of finalized proposals for the Hospital Inpatient Quality Reporting Program and the three programs 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 pay-for-reporting quality program established by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. FY 2019 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.

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 finalized the proposal to add the following factor:

• Factor 8: The costs associated with a measure outweigh the benefit of its continued use in the program. Note: CMS has clarified that using this factor 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.”

Removal of Hospital IQR Program Measures

CMS finalized their proposal to remove a total of 39 measures from across Fiscal Years (FYs) 2020, 2021, 2022, and 2023 payment determinations, with some modifications. In general, measures proposed for removal were due to the measure being duplicative of a measure in another program (i.e. Value Based Purchasing Program) or the cost of the measure outweighing the benefit of its continued use. A table summarizing the measures finalized for removal from the IQR Program can be found on page 41575-41577 of the Federal Register/Vol 83, No. 160 / Friday, August 17, 2018 / Rules and Regulations.

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. The applicable percent for FY 2019 and subsequent years is 2.00 percent. CMS estimates the total amount available for value-based incentive payments for FY 2019 to be approximately $1.9 billion.

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 Removal of Quality Measures

CMS finalized their proposal “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 statute does not require that the measure continue to remain in the Hospital IQR Program.”

This finalized 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.”

Program “Measure Removal Factors”

CMS finalized their proposal to adopt for the Hospital VBP Program the current Hospital IQR Program measure removal factors used to determine whether to remove a program measure. They also finalized 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.

Measures Finalized for Removal from the VBP Program

CMS 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” resulted in ten measures being proposed for removal from the VBP Program.

Many commenters did not support the proposal to remove the five Healthcare-Associated Infection (HAI) measures and Patient Safety and Adverse Events (Composite) (PSI 90) because they “believe patient safety measures should remain in all payment programs to sufficiently incentivize continued improvement on these measures and prioritize practices that ensure safe care.” CMS agreed and did not remove these six patient safety measures that are also in the Hospital-Acquired Condition Reduction program measure set due to their critical importance to quality improvement and patient safety in the hospital setting.  The following table includes the four measures finalized for removal from the VBP Program.

Additional information about the VBP Program can be found on the CMS Hospital VBP webpage. 

Hospital Acquired Conditions (HAC) Reduction Program

The HAC Reduction Program requires 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.

This 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.” Per CMS, “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 finalized the following policies specific to the HAC Reduction Program:

• Adopt administrative processes to receive and validate National Healthcare Safety Network (NHSN) Healthcare-Associated Infection (HAI) data that is submitted by hospitals to the Centers for Disease Control and Prevention (CDC) beginning CY 2020
• 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; and
• Established the data collection period for the FY 2021 Program Year.

Additional information about this program can be found on the CMS HAC Reduction Program webpage.  

Hospital Readmissions Reduction Program (HRRP)

The HRRP “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.

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 Finalized “Applicable Periods” for FY 2019, FY 2020, and FY 2021.

The FY 2019 readmissions payment adjustment factors were not available at the time the Final Rule was released. CMS notes that after hospitals have been given time to review their hospital-specific data, they  will post Table 15 (via the Internet on the CMS website) to display the final FY 2019 readmissions payment adjustment factors that will be applicable for discharges occurring on or after October 1, 2018. CMS expects this table to be posted in the fall of this year.

Additional information about this program can be found on the CMS HRRP webpage.

While admittedly not as exciting as a football game in the deep South, for hospitals this information is definitely part of the play book for what is to come in the 2019 IPPS Fiscal Year.