Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the

641 Pages·2017·13.03 MB·English

41144 Federal Register/Vol. 83, No. 160/Friday, August 17, 2018/Rules and Regulations
DEPARTMENT OF HEALTH AND access hospitals (CAHs) participating in Program Administration, Validation,
HUMAN SERVICES the Medicare and Medicaid Electronic and Reconsideration Issues.
Health Record (EHR) Incentive Programs Reena Duseja, (410) 786–1999 and
Centers for Medicare & Medicaid (now referred to as the Promoting Cindy Tourison, (410) 786–1093,
Services Interoperability Programs). In addition, Hospital Inpatient Quality Reporting—
we are finalizing modifications to the Measures Issues Except Hospital
42 CFR Parts 412, 413, 424, and 495 requirements that apply to States Consumer Assessment of Healthcare
operating Medicaid Promoting Providers and Systems Issues; and
[CMS–1694–F]
Interoperability Programs. We are Readmission Measures for Hospitals
RIN 0938–AT27 updating policies for the Hospital Issues.
Value-Based Purchasing (VBP) Program, Kim Spalding Bush, (410) 786–3232,
Medicare Program; Hospital Inpatient the Hospital Readmissions Reduction Hospital Value-Based Purchasing
Prospective Payment Systems for Program, and the Hospital-Acquired Efficiency Measures Issues.
Acute Care Hospitals and the Long- Condition (HAC) Reduction Program. Elizabeth Goldstein, (410) 786–6665,
Term Care Hospital Prospective We also are making changes relating Hospital Inpatient Quality Reporting
Payment System and Policy Changes to the required supporting and Hospital Value-Based Purchasing—
and Fiscal Year 2019 Rates; Quality documentation for an acceptable Hospital Consumer Assessment of
Reporting Requirements for Specific Medicare cost report submission and the Healthcare Providers and Systems
Providers; Medicare and Medicaid supporting information for physician Measures Issues.
Electronic Health Record (EHR) certification and recertification of Joel Andress, (410) 786–5237 and
Incentive Programs (Promoting claims. Caitlin Cromer, (410) 786–3106, PPS-
Interoperability Programs) Exempt Cancer Hospital Quality
Requirements for Eligible Hospitals, DATES: This final rule is effective on Reporting Issues.
October 1, 2018.
Critical Access Hospitals, and Eligible Mary Pratt, (410) 786–6867, Long-
Professionals; Medicare Cost FORFURTHERINFORMATIONCONTACT: Term Care Hospital Quality Data
Reporting Requirements; and Donald Thompson, (410) 786–4487, and Reporting Issues.
Physician Certification and Michele Hudson, (410) 786–4487, Elizabeth Holland, (410) 786–1309,
Recertification of Claims Operating Prospective Payment, MS– Promoting Interoperability Programs
DRGs, Wage Index, New Medical Clinical Quality Measure Related Issues.
AGENCY: Centers for Medicare & Service and Technology Add-On Kathleen Johnson, (410) 786–3295
Medicaid Services (CMS), HHS. Payments, Hospital Geographic and Steven Johnson (410) 786–3332,
ACTION: Final rule. Reclassifications, Graduate Medical Promoting Interoperability Programs
Education, Capital Prospective Payment, Nonclinical Quality Measure Related
SUMMARY: We are revising the Medicare Excluded Hospitals, Sole Community Issues.
hospital inpatient prospective payment Hospitals, Medicare Disproportionate Kellie Shannon, (410) 786–0416,
systems (IPPS) for operating and capital- Share Hospital (DSH) Payment Acceptable Medicare Cost Report
related costs of acute care hospitals to Adjustment, Medicare-Dependent Small Submissions Issues.
implement changes arising from our Rural Hospital (MDH) Program, and Thomas Kessler, (410) 786–1991,
continuing experience with these Low-Volume Hospital Payment Physician Certification and
systems for FY 2019. Some of these Adjustment Issues. Recertification of Claims.
changes implement certain statutory Michele Hudson, (410) 786–4487, SUPPLEMENTARYINFORMATION:
provisions contained in the 21st Mark Luxton, (410) 786–4530, and
Century Cures Act and the Bipartisan Emily Lipkin, (410) 786–3633, Long- Electronic Access
Budget Act of 2018, and other Term Care Hospital Prospective This Federal Register document is
legislation. We also are making changes Payment System and MS–LTC–DRG available from the Federal Register
relating to Medicare graduate medical Relative Weights Issues. online database through Federal Digital
education (GME) affiliation agreements Siddhartha Mazumdar, (410) 786– System (FDsys), a service of the U.S.
for new urban teaching hospitals. In 6673, Rural Community Hospital Government Printing Office. This
addition, we are providing the market Demonstration Program Issues. database can be accessed via the
basket update that will apply to the rate- Jeris Smith, (410) 786–0110, Frontier internet at: http://www.gpo.gov/fdsys.
of-increase limits for certain hospitals Community Health Integration Project
Tables Available Through the Internet
excluded from the IPPS that are paid on Demonstration Issues.
on the CMS Website
a reasonable cost basis, subject to these Cindy Tourison, (410) 786–1093,
limits for FY 2019. We are updating the Hospital Readmissions Reduction In the past, a majority of the tables
payment policies and the annual Program—Readmission Measures for referred to throughout this preamble
payment rates for the Medicare Hospitals Issues. and in the Addendum to the proposed
prospective payment system (PPS) for James Poyer, (410) 786–2261, Hospital rule and the final rule were published
inpatient hospital services provided by Readmissions Reduction Program— in the Federal Register as part of the
long-term care hospitals (LTCHs) for FY Administration Issues. annual proposed and final rules.
2019. Elizabeth Bainger, (410) 786–0529, However, beginning in FY 2012, the
In addition, we are establishing new Hospital-Acquired Condition Reduction majority of the IPPS tables and LTCH
requirements or revising existing Program Issues. PPS tables are no longer published in
S2 requirements for quality reporting by Joseph Clift, (410) 786–4165, the Federal Register. Instead, these
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UL specific Medicare providers (acute care Hospital-Acquired Condition Reduction tables, generally, will be available only
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with hospitals, PPS-exempt cancer hospitals, Program—Measures Issues. through the internet. The IPPS tables for
D and LTCHs). We also are establishing Grace Snyder, (410) 786–0700 and this final rule are available through the
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PR new requirements or revising existing James Poyer, (410) 786–2261, Hospital internet on the CMS website at: http://
R082 requirements for eligible professionals Inpatient Quality Reporting and www.cms.hhs.gov/Medicare/Medicare-
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Federal Register/Vol. 83, No. 160/Friday, August 17, 2018/Rules and Regulations 41145
AcuteInpatientPPS/index.html. Click on L. Process for Requests for Wage Index B. PPS-Exempt Cancer Hospital Quality
the link on the left side of the screen Data Corrections Reporting (PCHQR) Program
titled, ‘‘FY 2019 IPPS Final Rule Home M. Labor-Related Share for the FY 2019 C. Long-Term Care Hospital Quality
Wage Index Reporting Program (LTCH QRP)
Page’’ or ‘‘Acute Inpatient—Files for
IV. Other Decisions and Changes to the IPPS D. Changes to the Medicare and Medicaid
Download.’’ The LTCH PPS tables for
for Operating System EHR Incentive Programs (Now Referred
this FY 2019 final rule are available A. Changes to MS–DRGs Subject to to as the Medicare and Medicaid
through the internet on the CMS website Postacute Care Transfer and MS–DRG Promoting Interoperability Programs)
at: http://www.cms.gov/Medicare/ Special Payment Policies IX. Revisions of the Supporting
Medicare-Fee-for-Service-Payment/Long B. Changes in the Inpatient Hospital Documentation Required for Submission
TermCareHospitalPPS/index.html Updates for FY 2019 (§412.64(d)) of an Acceptable Medicare Cost Report
under the list item for Regulation C. Rural Referral Centers (RRCs) Annual X. Requirements for Hospitals To Make
Updates to Case-Mix Index and Public a List of Their Standard Charges
Number CMS–1694–F. For further
Discharge Criteria (§412.96) via the Internet
details on the contents of the tables
D. Payment Adjustment for Low-Volume XI. Revisions Regarding Physician
referenced in this final rule, we refer Hospitals (§412.101) Certification and Recertification of
readers to section VI. of the Addendum E. Indirect Medical Education (IME) Claims
to this final rule. Payment Adjustment (§412.105) XII. Request for Information on Promoting
Readers who experience any problems F. Payment Adjustment for Medicare Interoperability and Electronic
accessing any of the tables that are Disproportionate Share Hospitals (DSHs) Healthcare Information Exchange
posted on the CMS websites identified for FY 2019 (§412.106) through Possible Revisions to the CMS
above should contact Michael Treitel at G. Sole Community Hospitals (SCHs) and Patient Health and Safety Requirements
Medicare-Dependent, Small Rural for Hospitals and Other Medicare- and
(410) 786–4552.
Hospitals (MDHs) (§§412.90, 412.92, and Medicaid-Participating Providers and
Table of Contents 412.108) Suppliers
H. Hospital Readmissions Reduction XIII. MedPAC Recommendations
I. Executive Summary and Background Program: Updates and Changes XIV. Other Required Information
A. Executive Summary
(§§412.150 Through 412.154) A. Publicly Available Data
B. Background Summary
I. Hospital Value-Based Purchasing (VBP) B. Collection of Information Requirements
C. Summary of Provisions of Recent
Program: Policy Changes C. Response to Public Comments
Legislation Implemented in this Final
J. Changes to the Hospital-Acquired Regulation Text
Rule
Condition (HAC) Reduction Program Addendum—Schedule of Standardized
D. Issuance of Notice of Proposed
K. Payments for Indirect and Direct Amounts, Update Factors, Rate-of-
Rulemaking
Graduate Medical Education Costs Increase Percentages Effective With Cost
II. Changes to Medicare Severity Diagnosis-
(§§412.105 and 413.75 Through 413.83) Reporting Periods Beginning on or After
Related Group (MS–DRG) Classifications
L. Rural Community Hospital October 1, 2018 and Payment Rates for
and Relative Weights
Demonstration Program LTCHs Effective for Discharges
A. Background
M. Revision of Hospital Inpatient Occurring on or After October 1, 2018
B. MS–DRG Reclassifications
Admission Orders Documentation I. Summary and Background
C. Adoption of the MS–DRGs in FY 2008
Requirements Under Medicare Part A II. Changes to the Prospective Payment Rates
D. FY 2019 MS–DRG Documentation and
V. Changes to the IPPS for Capital-Related for Hospital Inpatient Operating Costs for
Coding Adjustment
Costs Acute Care Hospitals for FY 2019
E. Refinement of the MS–DRG Relative
A. Overview A. Calculation of the Adjusted
Weight Calculation
B. Additional Provisions Standardized Amount
F. Changes to Specific MS–DRG
C. Annual Update for FY 2019 B. Adjustments for Area Wage Levels and
Classifications
VI. Changes for Hospitals Excluded From the Cost-of-Living
G. Recalibration of the FY 2019 MS–DRG
IPPS C. Calculation of the Prospective Payment
Relative Weights
H. Add-On Payments for New Services and A. Rate-of-Increase in Payments to Rates
Technologies for FY 2019 Excluded Hospitals for FY 2019 III. Changes to Payment Rates for Acute Care
III. Changes to the Hospital Wage Index for B. Revisions to Regulations Governing Hospital Inpatient Capital-Related Costs
Acute Care Hospitals Satellite Facilities for FY 2019
A. Background C. Revisions to Regulations Governing A. Determination of Federal Hospital
B. Worksheet S–3 Wage Data for the FY Excluded Units of Hospitals Inpatient Capital-Related Prospective
2019 Wage Index D. Report on Adjustment (Exceptions) Payment Rate Update
C. Verification of Worksheet S–3 Wage Payments B. Calculation of the Inpatient Capital-
Data E. Critical Access Hospitals (CAHs) Related Prospective Payments for FY
D. Method for Computing the FY 2019 VII. Changes to the Long-Term Care Hospital 2019
Unadjusted Wage Index Prospective Payment System (LTCH PPS) C. Capital Input Price Index
E. Occupational Mix Adjustment to the FY for FY 2019 IV. Changes to Payment Rates for Excluded
2019 Wage Index A. Background of the LTCH PPS Hospitals: Rate-of-Increase Percentages
F. Analysis and Implementation of the B. Medicare Severity Long-Term Care for FY 2019
Occupational Mix Adjustment and the Diagnosis-Related Group (MS–LTC– V. Changes to the Payment Rates for the
FY 2019 Occupational Mix Adjusted DRG) Classifications and Relative LTCH PPS for FY 2019
Wage Index Weights for FY 2019 A. LTCH PPS Standard Federal Payment
G. Application of the Rural, Imputed, and C. Modifications to the Application of the Rate for FY 2019
Frontier Floors Site Neutral Payment Rate (§412.522) B. Adjustment for Area Wage Levels Under
H. FY 2019 Wage Index Tables D. Changes to the LTCH PPS Payment the LTCH PPS for FY 2019
I. Revisions to the Wage Index Based on Rates and Other Proposed Changes to the C. LTCH PPS Cost-of-Living Adjustment
S2 Hospital Redesignations and LTCH PPS for FY 2019 (COLA) for LTCHs Located in Alaska and
ULE Reclassifications E. Elimination of the ‘‘25-Percent Hawaii
with R J. OCuomt-Mmiugtriantgio Pna Attedrjnuss tomf eHnot sBpaistaeld on T(§h4r1e2sh.5o3ld8) P olicy’’ Adjustment D. OAudtjluiesrt m(HeCntO f)o Cr aLsTeCs H PPS High-Cost
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41146 Federal Register/Vol. 83, No. 160/Friday, August 17, 2018/Rules and Regulations
F. Computing the Adjusted LTCH PPS for certain hospitals and hospital units (RNHCIs) are also excluded from the
Federal Prospective Payments for FY excluded from the IPPS. In addition, it IPPS.
2019 makes payment and policy changes for • Sections 123(a) and (c) of the BBRA
VI. Tables Referenced in This Rule Generally inpatient hospital services provided by (Pub. L. 106–113) and section 307(b)(1)
Available Through the Internet on the
long-term care hospitals (LTCHs) under of the BIPA (Pub. L. 106–554) (as
CMS Website
the long-term care hospital prospective codified under section 1886(m)(1) of the
Appendix A—Economic Analyses
I. Regulatory Impact Analysis payment system (LTCH PPS). This final Act), which provide for the
A. Statement of Need rule also makes policy changes to development and implementation of a
B. Overall Impact programs associated with Medicare IPPS prospective payment system for
C. Objectives of the IPPS and the LTCH hospitals, IPPS-excluded hospitals, and payment for inpatient hospital services
PPS LTCHs. of LTCHs described in section
D. Limitations of Our Analysis We are establishing new requirements 1886(d)(1)(B)(iv) of the Act.
E. Hospitals Included in and Excluded • Sections 1814(l), 1820, and 1834(g)
and revising existing requirements for
From the IPPS of the Act, which specify that payments
quality reporting by specific providers
F. Effects on Hospitals and Hospital Units
are made to critical access hospitals
Excluded From the IPPS (acute care hospitals, PPS-exempt
(CAHs) (that is, rural hospitals or
G. Quantitative Effects of the Policy cancer hospitals, and LTCHs) that are
facilities that meet certain statutory
Changes Under the IPPS for Operating participating in Medicare. We also are
Costs establishing new requirements and requirements) for inpatient and
H. Effects of Other Policy Changes revising existing requirements for outpatient services and that these
I. Effects of Changes in the Capital IPPS eligible professionals (EPs), eligible payments are generally based on 101
J. Effects of Payment Rate Changes and percent of reasonable cost.
hospitals, and CAHs participating in the
Policy Changes Under the LTCH PPS • Section 1866(k) of the Act, as added
Medicare and Medicaid Promoting
K. Effects of Requirements for Hospital by section 3005 of the Affordable Care
Interoperability Programs. We are
Inpatient Quality Reporting (IQR) Act, which establishes a quality
Program updating policies for the Hospital
reporting program for hospitals
L. Effects of Requirements for the PPS- Value-Based Purchasing (VBP) Program,
described in section 1886(d)(1)(B)(v) of
Exempt Cancer Hospital Quality the Hospital Readmissions Reduction
the Act, referred to as ‘‘PPS-exempt
Reporting (PCHQR) Program Program, and the Hospital-Acquired
M.T Eefrfmec Ctsa oref RHeoqsupiirteaml Qenutasl iftoyr Rtheep oLrotinngg- Condition (HAC) Reduction Program. can•cSere chtoiosnp i1ta8l8s6.’(’ a)(4) of the Act, which
We are making changes relating to the
Program (LTCH QRP) specifies that costs of approved
supporting documentation required for
N. Effects of Requirements Regarding the educational activities are excluded from
an acceptable Medicare cost report
Medicare and Medicaid Promoting the operating costs of inpatient hospital
Interoperability Programs submission and the supporting services. Hospitals with approved
O. Alternatives Considered information for physician certification graduate medical education (GME)
P. Reducing Regulation and Controlling and recertification of claims.
programs are paid for the direct costs of
Regulatory Costs Under various statutory authorities,
GME in accordance with section 1886(h)
Q. Overall Conclusion we are making changes to the Medicare
of the Act.
R. Regulatory Review Costs IPPS, to the LTCH PPS, and to other • Section 1886(b)(3)(B)(viii) of the
II. Accounting Statements and Tables
related payment methodologies and
A. Acute Care Hospitals Act, which requires the Secretary to
programs for FY 2019 and subsequent
B. LTCHs reduce the applicable percentage
fiscal years. These statutory authorities
III. Regulatory Flexibility Act (RFA) Analysis increase that would otherwise apply to
IV. Impact on Small Rural Hospitals include, but are not limited to, the the standardized amount applicable to a
V. Unfunded Mandate Reform Act (UMRA) following: subsection (d) hospital for discharges
Analysis • Section 1886(d) of the Social occurring in a fiscal year if the hospital
VI. Executive Order 13175 Security Act (the Act), which sets forth does not submit data on measures in a
VII. Executive Order 12866 a system of payment for the operating form and manner, and at a time,
Appendix B: Recommendation of Update
costs of acute care hospital inpatient specified by the Secretary.
Factors for Operating Cost Rates of
Payment for Inpatient Hospital Services stays under Medicare Part A (Hospital • Section 1886(o) of the Act, which
I. Background Insurance) based on prospectively set requires the Secretary to establish a
II. Inpatient Hospital Update for FY 2019 rates. Section 1886(g) of the Act requires Hospital Value-Based Purchasing (VBP)
A. FY 2019 Inpatient Hospital Update that, instead of paying for capital-related Program, under which value-based
B. Update for SCHs and MDHs for FY 2019 costs of inpatient hospital services on a incentive payments are made in a fiscal
C. FY 2019 Puerto Rico Hospital Update reasonable cost basis, the Secretary use year to hospitals meeting performance
D. Update for Hospitals Excluded From the a prospective payment system (PPS). standards established for a performance
IPPS • Section 1886(d)(1)(B) of the Act, period for such fiscal year.
E. Update for LTCHs for FY 2019 which specifies that certain hospitals • Section 1886(p) of the Act, as added
III. Secretary’s Recommendation
and hospital units are excluded from the by section 3008 of the Affordable Care
IV. MedPAC Recommendation for Assessing
Payment Adequacy and Updating IPPS. These hospitals and units are: Act, which establishes a Hospital-
Payments in Traditional Medicare Rehabilitation hospitals and units; Acquired Condition (HAC) Reduction
LTCHs; psychiatric hospitals and units; Program, under which payments to
I. Executive Summary and Background
children’s hospitals; cancer hospitals; applicable hospitals are adjusted to
A. Executive Summary extended neoplastic disease care provide an incentive to reduce hospital-
S2 hospitals, and hospitals located outside acquired conditions.
ULE 1. Purpose and Legal Authority the 50 States, the District of Columbia, • Section 1886(q) of the Act, as added
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with This final rule makes payment and and Puerto Rico (that is, hospitals by section 3025 of the Affordable Care
D policy changes under the Medicare located in the U.S. Virgin Islands, Act and amended by section 10309 of
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PR inpatient prospective payment systems Guam, the Northern Mariana Islands, the Affordable Care Act and section
R082 (IPPS) for operating and capital-related and American Samoa). Religious 15002 of the 21st Century Cures Act,
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Federal Register/Vol. 83, No. 160/Friday, August 17, 2018/Rules and Regulations 41147
Readmissions Reduction Program.’’ and provides for a 4-year transitional CMS. To reduce the regulatory burden
Under the program, payments for blended payment rate for discharges on the healthcare industry, lower health
discharges from an ‘‘applicable occurring in LTCH cost reporting care costs, and enhance patient care, in
hospital’’ under section 1886(d) of the periods beginning in FYs 2016 through October 2017, we launched the
Act will be reduced to account for 2019. Section 51005(b) of the Bipartisan Meaningful Measures Initiative.1This
certain excess readmissions. Section Budget Act of 2018 amended section initiative is one component of our
15002 of the 21st Century Cures Act 1886(m)(6)(B) by adding new clause (iv), agency-wide Patients Over Paperwork
requires the Secretary to compare which specifies that the IPPS Initiative,2which is aimed at evaluating
cohorts of hospitals to each other in comparable amount defined in clause and streamlining regulations with a goal
determining the extent of excess (ii)(I) shall be reduced by 4.6 percent for to reduce unnecessary cost and burden,
readmissions. FYs 2018 through 2026. increase efficiencies, and improve
• Section 1886(r) of the Act, as added • Section 1886(m)(6) of the Act, as beneficiary experience. The Meaningful
by section 3133 of the Affordable Care amended by section 15009 of the 21st Measures Initiative is aimed at
Act, which provides for a reduction to Century Cures Act (Pub. L. 114–255), identifying the highest priority areas for
disproportionate share hospital (DSH) which provides for a temporary quality measurement and quality
payments under section 1886(d)(5)(F) of exception to the application of the site improvement, in order to assess the core
the Act and for a new uncompensated neutral payment rate under the LTCH quality of care issues that are most vital
care payment to eligible hospitals. PPS for certain spinal cord specialty to advancing our work to improve
Specifically, section 1886(r) of the Act hospitals for discharges in cost reporting patient outcomes. The Meaningful
requires that, for fiscal year 2014 and periods beginning during FYs 2018 and Measures Initiative represents a new
each subsequent fiscal year, subsection 2019. approach to quality measures that will
(d) hospitals that would otherwise • Section 1886(m)(6) of the Act, as foster operational efficiencies and will
receive a DSH payment made under amended by section 15010 of the 21st reduce costs, including collection and
section 1886(d)(5)(F) of the Act will Century Cures Act (Pub. L. 114–255), reporting burden while producing
receive two separate payments: (1) 25 which provides for a temporary quality measurement that is more
Percent of the amount they previously exception to the application of the site focused on meaningful outcomes.
would have received under section neutral payment rate under the LTCH
The Meaningful Measures framework
1886(d)(5)(F) of the Act for DSH (‘‘the PPS for certain LTCHs with certain
has the following objectives:
empirically justified amount’’), and (2) discharges with severe wounds • Address high-impact measure areas
an additional payment for the DSH occurring in cost reporting periods
that safeguard public health;
hospital’s proportion of uncompensated beginning during FY 2018.
care, determined as the product of three • Section 1886(m)(5)(D)(iv) of the • Patient-centered and meaningful to
factors. These three factors are: (1) 75 Act, as added by section 1206(c) of the patients;
Percent of the payments that would Pathway for Sustainable Growth Rate • Outcome-based where possible;
otherwise be made under section (SGR) Reform Act of 2013 (Pub. L. 113– • Fulfill each program’s statutory
1886(d)(5)(F) of the Act; (2) 1 minus the 67), which provides for the requirements;
percent change in the percent of establishment of a functional status • Minimize the level of burden for
individuals who are uninsured (minus quality measure in the LTCH QRP for health care providers (for example,
0.2 percentage point for FY 2018 and FY change in mobility among inpatients through a preference for EHR-based
2019); and (3) a hospital’s requiring ventilator support. measures, where possible, such as
uncompensated care amount relative to • Section 1899B of the Act, as added electronic clinical quality measures;3
the uncompensated care amount of all by section 2(a) of the Improving • Significant opportunity for
DSH hospitals expressed as a Medicare Post-Acute Care
improvement;
pe•rceSnetcatgioen. 1886(m)(6) of the Act, as TArcatn, Psfuobrm. La.t i1o1n3 –A1c8t5 o)f, w20h1i4c h(I pMrPovAiCdTes • Address measure needs for
added by section 1206(a)(1) of the for the establishment of standardized population based payment through
Pathway for Sustainable Growth Rate data reporting for certain post-acute care alternative payment models; and
(SGR) Reform Act of 2013 (Pub. L. 113– providers, including LTCHs. • Align across programs and/or with
67) and amended by section 51005(a) of other payers.
2. Improving Patient Outcomes and
the Bipartisan Budget Act of 2018 (Pub. In order to achieve these objectives,
Reducing Burden Through Meaningful
L. 115–123), which provided for the we have identified 19 Meaningful
Measures
establishment of site neutral payment Measures areas and mapped them to six
rate criteria under the LTCH PPS, with Regulatory reform and reducing overarching quality priorities, as shown
implementation beginning in FY 2016, regulatory burden are high priorities for in the following table:
Quality priority Meaningful measure area
Making Care Safer by Reducing Harm Caused in the Delivery of Care Healthcare-Associated Infections.
Preventable Healthcare Harm.
Strengthen Person and Family Engagement as Partners in Their Care Care is Personalized and Aligned with Patient’s Goals.
End of Life Care According to Preferences.
Patient’s Experience of Care.
S2 Patient Reported Functional Outcomes.
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with 1Meaningful Measures web page: https:// 2Remarks by Administrator Seema Verma at the 3We refer readers to section VIII.A.9.c. of the
D www.cms.gov/Medicare/Quality-Initiatives-Patient- Health Care Payment Learning and Action Network preamble of this final rule where we discuss public
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Quality priority Meaningful measure area
Promote Effective Communication and Coordination of Care ................. Medication Management.
Admissions and Readmissions to Hospitals.
Transfer of Health Information and Interoperability.
Promote Effective Prevention and Treatment of Chronic Disease .......... Preventive Care.
Management of Chronic Conditions.
Prevention, Treatment, and Management of Mental Health.
Prevention and Treatment of Opioid and Substance Use Disorders.
Risk Adjusted Mortality.
Work with Communities to Promote Best Practices of Healthy Living .... Equity of Care.
Community Engagement.
Make Care Affordable .............................................................................. Appropriate Use of Healthcare.
Patient-focused Episode of Care.
Risk Adjusted Total Cost of Care.
By including Meaningful Measures in payment policies and payment rates, discharge, effective for discharges
our programs, we believe that we can consistent with the applicable statutory occurring on or after October 1, 2018.
also address the following cross-cutting provisions. A general summary of the Accordingly, we are making conforming
measure criteria: proposed changes that we included in amendments to §412.4(c) of the
• Eliminating disparities; the proposed rule issued prior to this regulation, effective for discharges on or
• Tracking measurable outcomes and final rule is presented in section I.D. of after October 1, 2018, to specify that if
impact; the preamble of this final rule. a discharge is assigned to one of the
• Safeguarding public health; MS–DRGs subject to the postacute care
• Achieving cost savings; a. MS–DRG Documentation and Coding
transfer policy and the individual is
• Improving access for rural Adjustment
transferred to hospice care by a hospice
co•mmReudnuitciiensg; abnudrd en. ReSlieecft Aiocnt 6o3f 12 0o1f 2th (eA ATRmAer, iPcuanb. T La. x1p1a2y–e r ppraoygmraemnt, aths ea dtriasnchsfaerrg ec aisse s.u bject to
We believe that the Meaningful 240) amended section 7(b)(1)(B) of
Measures Initiative will improve Public Law 110–90 to require the c. DSH Payment Adjustment and
outcomes for patients, their families, Secretary to make a recoupment Additional Payment for Uncompensated
and health care providers, while adjustment to the standardized amount Care
reducing burden and costs for clinicians of Medicare payments to acute care
Section 3133 of the Affordable Care
and providers, as well as promoting hospitals to account for changes in MS–
Act modified the Medicare
operational efficiencies. DRG documentation and coding that do
disproportionate share hospital (DSH)
We received numerous comments not reflect real changes in case-mix,
payment methodology beginning in FY
from stakeholders regarding the totaling $11 billion over a 4-year period
2014. Under section 1886(r) of the Act,
Meaningful Measures Initiative and the of FYs 2014, 2015, 2016, and 2017. The
which was added by section 3133 of the
impact of its implementation in CMS’ FY 2014 through FY 2017 adjustments
Affordable Care Act, starting in FY
quality programs. Many of these represented the amount of the increase
2014, DSHs receive 25 percent of the
comments pertained to specific program in aggregate payments as a result of not
amount they previously would have
proposals, and are discussed in the completing the prospective adjustment
received under the statutory formula for
appropriate program-specific sections of authorized under section 7(b)(1)(A) of
Medicare DSH payments in section
this final rule. However, commenters Public Law 110–90 until FY 2013. Prior
1886(d)(5)(F) of the Act. The remaining
also provided insights and to the ATRA, this amount could not
amount, equal to 75 percent of the
recommendations for the ongoing have been recovered under Public Law
amount that otherwise would have been
development of the Meaningful 110–90. Section 414 of the Medicare
paid as Medicare DSH payments, is paid
Measures Initiative generally, including: Access and CHIP Reauthorization Act of
as additional payments after the amount
ensuring transparency in public 2015 (MACRA) (Pub. L. 114–10)
is reduced for changes in the percentage
reporting and usability of publicly replaced the single positive adjustment
of individuals that are uninsured. Each
reported data; evaluating the benefit of we intended to make in FY 2018 with
Medicare DSH will receive an
individual measures to patients via use a 0.5 percent positive adjustment to the
additional payment based on its share of
in quality programs weighed against the standardized amount of Medicare
the total amount of uncompensated care
burden to providers of collecting and payments to acute care hospitals for FYs
for all Medicare DSHs for a given time
reporting that measure data; and 2018 through 2023. (The FY 2018
period.
identifying additional opportunities for adjustment was subsequently adjusted
alignment across CMS quality programs. to 0.4588 percent by section 15005 of In this FY 2019 IPPS/LTCH PPS final
We look forward to continuing to work the 21st Century Cures Act.) Therefore, rule, we are updating our estimates of
with stakeholders to refine and further for FY 2019, we are making an the three factors used to determine
implement the Meaningful Measures adjustment of +0.5 percent to the uncompensated care payments for FY
Initiative, and will take commenters’ standardized amount. 2019. We are continuing to use
insights and recommendations into uninsured estimates produced by CMS’
S2 account moving forward. b. Expansion of the Postacute Care Office of the Actuary (OACT) as part of
ULE Transfer Policy the development of the National Health
with R 3. Summary of the Major Provisions Section 53109 of the Bipartisan Expenditure Accounts (NHEA) in the
D Below we provide a summary of the Budget Act of 2018 amended section calculation of Factor 2. We also are
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PR major provisions in this final rule. In 1886(d)(5)(J)(ii) of the Act to also continuing to incorporate data from
R082 general, these major provisions are as include discharges to hospice care by a Worksheet S–10 in the calculation of
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of uncompensated care by combining heart failure (HF), pneumonia, chronic Network (NHSN) Central Line-
data on uncompensated care costs from obstructive pulmonary disease (COPD), Associated Bloodstream Infection
Worksheet S–10 for FYs 2014 and 2015 total hip arthroplasty/total knee (CLABSI) Outcome Measure (NQF
with proxy data regarding a hospital’s arthroplasty (THA/TKA), and coronary #0139); (3) American College of
share of low-income insured days for FY artery bypass graft (CABG). In this final Surgeons-Centers for Disease Control
2013 to determine Factor 3 for FY 2019. rule, we are establishing the applicable and Prevention (ACS–CDC) Harmonized
In addition, we are using only data periods for FY 2019, FY 2020, and FY Procedure Specific Surgical Site
regarding low-income insured days for 2021. We also are codifying the Infection (SSI) Outcome Measure (NQF
FY 2013 to determine the amount of definitions of dual-eligible patients, the #0753); (4) National Healthcare Safety
uncompensated care payments for proportion of dual-eligibles, and the Network (NHSN) Facility-wide Inpatient
Puerto Rico hospitals, Indian Health applicable period for dual-eligibility. Hospital-onset Methicillin-resistant
Service and Tribal hospitals, and all- Staphylococcus aureus Bacteremia
f. Hospital Value-Based Purchasing
inclusive rate providers. For this final (MRSA) Outcome Measure (NQF
(VBP) Program
rule, we are establishing the following #1716); (5) National Healthcare Safety
policies: (1) For providers with multiple Section 1886(o) of the Act requires the Network (NHSN) Facility-wide Inpatient
cost reports, beginning in the same Secretary to establish a Hospital VBP Hospital-onset Clostridium difficile
fiscal year, to use the longest cost report Program under which value-based Infection (CDI) Outcome Measure (NQF
and annualize Medicaid data and incentive payments are made in a fiscal #1717); and (6) Patient Safety and
uncompensated care data if a hospital’s year to hospitals based on their Adverse Events (Composite) (NQF
cost report does not equal 12 months of performance on measures established #0531) (PSI 90). We are not finalizing
data; (2) in the rare case where a for a performance period for such fiscal our proposal to remove the Safety
provider has multiple cost reports, year. As part of agency-wide efforts domain from the Hospital VBP Program,
beginning in the same fiscal year, but under the Meaningful Measures as we are not finalizing our proposals to
one report also spans the entirety of the Initiative to use a parsimonious set of remove all of the measures in this
following fiscal year, such that the the most meaningful measures for domain, and therefore we also are not
hospital has no cost report for that fiscal patients, clinicians, and providers in finalizing changes to the domain
year, the cost report that spans both our quality programs and the Patients weighting.
fiscal years will be used for the latter Over Paperwork Initiative to reduce
g. Hospital-Acquired Condition (HAC)
fiscal year; and (3) to apply statistical costs and burden and program
Reduction Program
trim methodologies to potentially complexity, as discussed in section
aberrant cost-to-charge ratios (CCRs) and I.A.2. of the preamble of this final rule, Section 1886(p) of the Act, as added
potentially aberrant uncompensated we are removing a total of 4 measures under section 3008(a) of the Affordable
care costs reported on the Worksheet from the Hospital VBP Program, all of Care Act, establishes an incentive to
S–10. which will continue to be used in the hospitals to reduce the incidence of
Hospital IQR Program, in order to hospital-acquired conditions by
d. Changes to the LTCH PPS
reduce the costs and complexity of requiring the Secretary to make an
In this final rule, we set forth changes tracking these measures in multiple adjustment to payments to applicable
to the LTCH PPS Federal payment rates, programs. Specifically, we are removing hospitals effective for discharges
factors, and other payment rate policies one measure, beginning with the FY beginning on October 1, 2014. This 1-
under the LTCH PPS for FY 2019. In 2021 program year: (1) Elective Delivery percent payment reduction applies to a
addition, we are eliminating the 25- (NQF #0469) (PC–01). We also are hospital whose ranking in the worst-
percent threshold policy, and under this removing three measures from the performing quartile (25 percent) of all
policy, we are applying a one-time Hospital VBP Program, effective with applicable hospitals, relative to the
adjustment of approximately 0.9 percent the effective date of this FY 2019 IPPS/ national average, of conditions acquired
to the LTCH PPS standard Federal LTCH PPS final rule: (1) Hospital-Level, during the applicable period and on all
payment rate in FY 2019 to ensure this Risk-Standardized Payment Associated of the hospital’s discharges for the
elimination of the 25-percent threshold With a 30-Day Episode-of-Care for Acute specified fiscal year. As part of our
policy is budget neutral. Myocardial Infarction (NQF #2431) agency-wide Patients over Paperwork
(AMI Payment); (2) Hospital-Level, Risk- and Meaningful Measures Initiatives,
e. Reduction of Hospital Payments for
Standardized Payment Associated With discussed in section I.A.2. of the
Excess Readmissions
a 30-Day Episode-of-Care for Heart preamble of this final rule, we are
We are making changes to policies for Failure (NQF #2436) (HF Payment); and retaining the measures currently
the Hospital Readmissions Reduction (3) Hospital-Level, Risk-Standardized included in the HAC Reduction Program
Program, which was established under Payment Associated With a 30-Day because the measures address a
section 1886(q) of the Act, as added by Episode-of-Care for Pneumonia (PN performance gap in patient safety and
section 3025 of the Affordable Care Act, Payment) (NQF #2579). In addition, we reduce harm caused in the delivery of
as amended by section 10309 of the are renaming the Clinical Care domain care. In this final rule, we are: (1)
Affordable Care Act and further as the Clinical Outcomes domain, Establishing administrative policies to
amended by section 15002 of the 21st beginning with the FY 2020 program collect, validate, and publicly report
Century Cures Act. The Hospital year. We also are adopting measure NHSN healthcare-associated infection
Readmissions Reduction Program removal factors for the Hospital VBP (HAI) quality measure data that
requires a reduction to a hospital’s base Program. facilitate a seamless transition,
S2 operating DRG payment to account for We are not finalizing our proposals to independent of the Hospital IQR
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UL excess readmissions of selected remove of the following six patient Program, beginning with January 1,
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with applicable conditions. For FY 2018 and safety measures: (1) National Healthcare 2020 infectious events; (2) changing the
D subsequent years, the reduction is based Safety Network (NHSN) Catheter- scoring methodology by removing
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PR on a hospital’s risk-adjusted Associated Urinary Tract Infection domains and assigning equal weighting
R082 readmission rate during a 3-year period (CAUTI) Outcome Measure (NQF to each measure for which a hospital
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G for acute myocardial infarction (AMI), #0138); (2) National Healthcare Safety has a measure; and (3) establishing the
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41150 Federal Register/Vol. 83, No. 160/Friday, August 17, 2018/Rules and Regulations
applicable period for FY 2021. In certification criteria for CEHRT. These performance-based scoring
addition, we are summarizing changes are in alignment with changes methodology, which consists of a
comments we received regarding the or current established policies under the smaller set of objectives as well as a
potential future inclusion of additional Medicare and Medicaid Promoting smaller set of new and modified
measures, including eCQMs. Interoperability Programs (previously measures; (3) the removal of certain
known as the Medicare and Medicaid CQMs beginning with the reporting
h. Hospital Inpatient Quality Reporting
EHR Incentive Programs). In addition, period in CY 2020 as well as the CY
(IQR) Program
we are summarizing public comments 2019 reporting requirements we
Under section 1886(b)(3)(B)(viii) of we received on two measures we are proposed to align the CQM reporting
the Act, subsection (d) hospitals are considering for potential future requirements for the Promoting
required to report data on measures inclusion in the Hospital IQR Program, Interoperability Programs with the
selected by the Secretary for a fiscal year as well as on the potential future Hospital IQR Program; (4) the
in order to receive the full annual development and adoption of electronic codification of policies for subsection
percentage increase that would clinical quality measures generally. (d) Puerto Rico hospitals; (5)
otherwise apply to the standardized amendments to the prior approval
i. Long-Term Care Hospital Quality
amount applicable to discharges policy applicable in the Medicaid
Reporting Program (LTCH QRP)
occurring in that fiscal year. Promoting Interoperability Program to
In this final rule, we are making The LTCH QRP is authorized by align with the prior approval policy for
several changes. As part of agency-wide section 1886(m)(5) of the Act and MMIS and ADP systems and to
efforts under the Meaningful Measures applies to all hospitals certified by minimize burden on States; and (6)
Initiative to use a parsimonious set of Medicare as long-term care hospitals deadlines for funding availability for
the most meaningful measures for (LTCHs). Under the LTCH QRP, the States to conclude the Medicaid
patients and clinicians in our quality Secretary reduces by 2 percentage Promoting Interoperability Program.
programs and the Patients Over points the annual update to the LTCH
Paperwork initiative to reduce burden, PPS standard Federal rate for discharges 4. Summary of Costs and Benefits
cost, and program complexity, as for an LTCH during a fiscal year if the • Adjustment for MS–DRG
discussed in section I.A.2. of the LTCH fails to submit data in accordance Documentation and Coding Changes.
preamble of this final rule, we are with the LTCH QRP requirements Section 414 of the MACRA replaced the
adding a new measure removal factor specified for that fiscal year. As part of single positive adjustment we intended
and removing a total of 39 measures agency-wide efforts under the to make in FY 2018 once the
from the Hospital IQR Program. We are Meaningful Measures Initiative to use a recoupment required by section 631 of
finalizing a modified version of our parsimonious set of the most the ATRA was complete with a 0.5
proposal to remove 5 of those measures meaningful measures for patients and percent positive adjustment to the
such that removal is delayed by 1 year. clinicians in our quality programs and standardized amount of Medicare
For a full list of measures being the Patients Over Paperwork Initiative payments to acute care hospitals for FYs
removed, we refer readers to section to reduce cost and burden and program 2018 through 2023. (The FY 2018
VIII.A.5.c. of the preamble of this final complexity, as discussed in section adjustment was subsequently adjusted
rule. Beginning with the CY 2018 I.A.2. of the preamble of this final rule, to 0.4588 percent by section 15005 of
reporting period/FY 2020 payment we are removing three measures from the 21st Century Cures Act.) For FY
determination and subsequent years, we the LTCH QRP. We also are adopting a 2019, we are making an adjustment of
are removing 17 claims-based measures new measure removal factor and are +0.5 percent to the standardized amount
and two structural measures. Beginning codifying the measure removal factors consistent with the MACRA.
with the CY 2019 reporting period/FY in our regulations. In addition, we are • Expansion of the Postacute Care
2021 payment determination and updating our regulations to expand the Transfer Policy. Section 53109 of the
subsequent years, we are removing three methods by which an LTCH is notified Bipartisan Budget Act of 2018 amended
chart-abstracted measures and two of noncompliance with the section 1886(d)(5)(J)(ii) of the Act to also
claims-based measures. Beginning with requirements of the LTCH QRP for a include discharges to hospice care by a
the CY 2020 reporting period/FY 2022 program year and how CMS will notify hospice program as a qualified
payment determination and subsequent an LTCH of a reconsideration decision. discharge, effective for discharges
years, we are removing six chart- occurring on or after October 1, 2018.
j. Medicare and Medicaid Promoting
abstracted measures, one claims-based Accordingly, we are making conforming
Interoperability Programs (Previously
measure, and seven eCQMs from the amendments to §412.4(c) of the
Referred to as Medicare and Medicaid
Hospital IQR Program measure set. regulation to specify that, effective for
EHR Incentive Programs)
Beginning with the CY 2021 reporting discharges on or after October 1, 2018,
period/FY 2023 payment determination, In this final rule, we are finalizing if a discharge is assigned to one of the
we are removing one claims-based several changes to reduce burden, MS–DRGs subject to the postacute care
measure. increase interoperability and improve transfer policy, and the individual is
In addition, for the CY 2019 reporting patient electronic access to their health transferred to hospice care by a hospice
period/FY 2021 payment determination, information under the Medicare and program, the discharge will be subject to
we are: (1) Requiring the same eCQM Medicaid Promoting Interoperability payment as a transfer case. We estimate
reporting requirements that were Programs (previously referred to as that this statutory expansion to the
adopted for the CY 2018 reporting Medicare and Medicaid EHR Incentive postacute care transfer policy will
S2 period/FY 2020 payment determination Programs). Specifically, we are reduce Medicare payments under the
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UL (82 FR 38355 through 38361), such that finalizing: (1) An EHR reporting period IPPS by approximately $240 million in
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D with hcaolsepnidtaalrs qsuuabrmteirt oofn 2e0, 1se9l fd-saetale fcotre d4 odfa ya sm inin CimYus m20 o1f9 a annyd c 2o0n2ti0n fuoor unse 9w0 and FY• 2M01e9d.i care DSH Payment Adjustment
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PR eCQMs in the Hospital IQR Program returning participants attesting to CMS and Additional Payment for
R082 measure set; and (2) requiring that or their State Medicaid agency; (2) Uncompensated Care. Under section
D
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Federal Register/Vol. 83, No. 160/Friday, August 17, 2018/Rules and Regulations 41151
3133 of the Affordable Care Act), DSH aberrant CCRs and potentially aberrant payment amount reductions for that
payments to hospitals under section uncompensated care costs. year, as estimated by the Secretary. The
1886(d)(5)(F) of the Act are reduced and We project that the amount available estimated amount of base operating MS–
an additional payment for to distribute as payments for DRG payment amount reductions for the
uncompensated care is made to eligible uncompensated care for FY 2019 will FY 2019 program year and, therefore,
hospitals, beginning in FY 2014. increase by approximately $1.5 billion, the estimated amount available for
Hospitals that receive Medicare DSH as compared to the estimate of overall value-based incentive payments for FY
payments receive 25 percent of the payments, including Medicare DSH 2019 discharges is approximately $1.9
amount they previously would have payments and uncompensated care billion.
received under the statutory formula for payments, that will be distributed in FY • Changes to the HAC Reduction
Medicare DSH payments in section 2018. The payments have redistributive Program. A hospital’s Total HAC score
1886(d)(5)(F) of the Act. The remainder, effects, based on a hospital’s and its ranking in comparison to other
equal to an estimate of 75 percent of uncompensated care amount relative to hospitals in any given year depend on
what otherwise would have been paid the uncompensated care amount for all several different factors. Any significant
as Medicare DSH payments, is the basis hospitals that are estimated to receive impact due to the HAC Reduction
for determining the additional payments Medicare DSH payments, and the Program changes for FY 2019, including
for uncompensated care after the calculated payment amount is not which hospitals will receive the
amount is reduced for changes in the directly tied to a hospital’s number of adjustment, will depend on actual
percentage of individuals that are discharges. experience.
• Update to the LTCH PPS Payment The removal of NHSN HAI measures
uninsured and additional statutory
Rates and Other Payment Policies. from the Hospital IQR Program and the
adjustments. Each hospital that receives
Based on the best available data for the subsequent cessation of its validation
Medicare DSH payments will receive an
409 LTCHs in our database, we estimate processes for NHSN HAI measures and
additional payment for uncompensated
that the changes to the payment rates the creation of a validation process for
care based on its share of the total
and factors that we present in the the HAC Reduction program represent
uncompensated care amount reported
preamble and Addendum of this final no net change in reporting burden
by Medicare DSHs. The reduction to
rule, which reflect the continuation of across CMS hospital quality programs.
Medicare DSH payments is not budget
the transition of the statutory However, with the finalization of our
neutral.
application of the site neutral payment proposal to remove HAI chart-abstracted
For FY 2019, we are updating our
rate, the update to the LTCH PPS measures from the Hospital IQR
estimates of the three factors used to
standard Federal payment rate for FY Program, we anticipate a total burden
determine uncompensated care
2019, and the one-time permanent shift of 43,200 hours and approximately
payments. We are continuing to use
adjustment of approximately 0.9 percent $1.6 million, as a result of no longer
uninsured estimates produced by OACT
to the LTCH PPS standard Federal needing to validate those HAI measures
as part of the development of the NHEA
payment rate to ensure the elimination under the Hospital IQR Program and
in the calculation of Factor 2. We also
of the 25-percent threshold policy is beginning the validation process under
are continuing to incorporate data from budget neutral, will result in an the HAC Reduction Program.
Worksheet S–10 in the calculation of estimated increase in payments in FY • Changes to the Hospital Inpatient
hospitals’ share of the aggregate amount 2019 of approximately $39 million. Quality Reporting (IQR) Program.
of uncompensated care by combining • Changes to the Hospital Across 3,300 IPPS hospitals, we
data on uncompensated care costs from Readmissions Reduction Program. For estimate that our finalized requirements
Worksheet S–10 for FY 2014 and FY FY 2019 and subsequent years, the for the Hospital IQR Program in this
2015 with proxy data regarding a reduction is based on a hospital’s risk- final rule will result in the following
hospital’s share of low-income insured adjusted readmission rate during a 3- changes to costs and burdens related to
days for FY 2013 to determine Factor 3 year period for acute myocardial information collection for this program,
for FY 2019. To determine the amount infarction (AMI), heart failure (HF), compared to previously adopted
of uncompensated care for Puerto Rico pneumonia, chronic obstructive requirements: (1) A total collection of
hospitals, Indian Health Service and pulmonary disease (COPD), total hip information burden reduction of
Tribal hospitals, and all-inclusive rate arthroplasty/total knee arthroplasty 1,046,138 hours and a total cost
providers, we are using only the data (THA/TKA), and coronary artery bypass reduction of approximately $38.3
regarding low-income insured days for graft (CABG). Overall, in this final rule, million for the CY 2019 reporting
FY 2013. In addition, in this final rule, we estimate that 2,610 hospitals will period/FY 2021 payment determination,
we are establishing the following have their base operating DRG payments due to the removal of ED–1, IMM–2, and
policies: (1) For providers with multiple reduced by their determined proxy FY VTE–6 measures; and (2) a total
cost reports beginning in the same fiscal 2019 hospital-specific readmission collection of information burden
year, to use the longest cost report and adjustment. As a result, we estimate that reduction of 858,000 hours and a total
annualize Medicaid data and the Hospital Readmissions Reduction cost reduction of $31.3 million for the
uncompensated care data if a hospital’s Program will save approximately $566 CY 2020 reporting period/FY 2022
cost report does not equal 12 months of million in FY 2019. payment determination due to the
data; (2) in the rare case where a • Value-Based Incentive Payments removal of ED–2; and (3) a total
provider has multiple cost reports under the Hospital VBP Program. We collection of information burden
beginning in the same fiscal year, but estimate that there will be no net reduction of 43,200 hours and a total of
S2 one report also spans the entirety of the financial impact to the Hospital VBP $1.6 million for the CY 2021 reporting
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UL following fiscal year such that the Program for the FY 2019 program year period/FY 2023 payment determination
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with hospital has no cost report for that fiscal in the aggregate because, by law, the due to validation of the NHSN HAI
D year, the cost report that spans both amount available for value-based measures no longer being conducted
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PR fiscal years will be used for the latter incentive payments under the program under the Hospital IQR Program once
R082 fiscal year; and (3) to apply statistical in a given year must be equal to the total the HAC Reduction Program begins
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41152 Federal Register/Vol. 83, No. 160/Friday, August 17, 2018/Rules and Regulations
in the preamble of this final rule for the index applicable to the area where the 1996, or FY 2006) or the IPPS Federal
HAC Reduction Program. hospital is located. If the hospital is rate based on the standardized amount.
Further, we anticipate that the located in Alaska or Hawaii, the SCHs are the sole source of care in their
removal of 39 measures will result in a nonlabor-related share is adjusted by a areas. Specifically, section
reduction in costs unrelated to cost-of-living adjustment factor. This 1886(d)(5)(D)(iii) of the Act defines an
information collection. For example, it base payment rate is multiplied by the SCH as a hospital that is located more
may be costly for health care providers DRG relative weight. than 35 road miles from another
to track the confidential feedback, If the hospital treats a high percentage hospital or that, by reason of factors
preview reports, and publicly reported of certain low-income patients, it such as an isolated location, weather
information on a measure where we use receives a percentage add-on payment conditions, travel conditions, or absence
the measure in more than one program. applied to the DRG-adjusted base of other like hospitals (as determined by
Also, when measures are in multiple payment rate. This add-on payment, the Secretary), is the sole source of
programs, maintaining the known as the disproportionate share hospital inpatient services reasonably
specifications for those measures, as hospital (DSH) adjustment, provides for available to Medicare beneficiaries. In
well as the tools we need to collect, a percentage increase in Medicare addition, certain rural hospitals
validate, analyze, and publicly report payments to hospitals that qualify under previously designated by the Secretary
the measure data may result in costs to either of two statutory formulas as essential access community hospitals
CMS. In addition, beneficiaries may find designed to identify hospitals that serve are considered SCHs.
it confusing to see public reporting on a disproportionate share of low-income Under current law, the Medicare-
the same measure in different programs. patients. For qualifying hospitals, the dependent, small rural hospital (MDH)
We anticipate that our finalized policies amount of this adjustment varies based program is effective through FY 2022.
will reduce the above-described costs. on the outcome of the statutory Through and including FY 2006, an
• Changes Related to the LTCH QRP. calculations. The Affordable Care Act MDH received the higher of the Federal
In this final rule, we are removing two revised the Medicare DSH payment rate or the Federal rate plus 50 percent
measures beginning with the FY 2020 methodology and provides for a new of the amount by which the Federal rate
LTCH QRP and one measure beginning additional Medicare payment that was exceeded by the higher of its FY
with the FY 2021 LTCH QRP, for a total considers the amount of uncompensated 1982 or FY 1987 hospital-specific rate.
of three measures. We also are adopting care beginning on October 1, 2013. For discharges occurring on or after
If the hospital is training residents in
a new quality measure removal factor October 1, 2007, but before October 1,
an approved residency program(s), it
for the LTCH QRP. We estimate that the 2022, an MDH receives the higher of the
receives a percentage add-on payment
impact of these changes is a reduction Federal rate or the Federal rate plus 75
for each case paid under the IPPS,
in costs of approximately $1,148 per percent of the amount by which the
known as the indirect medical
LTCH annually or approximately Federal rate is exceeded by the highest
education (IME) adjustment. This
$482,469 for all LTCHs annually. of its FY 1982, FY 1987, or FY 2002
• Changes to the Medicare and percentage varies, depending on the hospital-specific rate. MDHs are a major
ratio of residents to beds.
Medicaid Promoting Interoperability source of care for Medicare beneficiaries
Additional payments may be made for
Programs. We believe that, overall, the in their areas. Section 1886(d)(5)(G)(iv)
cases that involve new technologies or
finalized proposals in this final rule will of the Act defines an MDH as a hospital
medical services that have been
reduce burden, as described in detail in that is located in a rural area (or, as
approved for special add-on payments.
section XIV.B.9. of the preamble and To qualify, a new technology or medical amended by the Bipartisan Budget Act
Appendix A, section I.N. of this final service must demonstrate that it is a of 2018, a hospital located in a State
rule. substantial clinical improvement over with no rural area that meets certain
B. Background Summary technologies or services otherwise statutory criteria), has not more than
available, and that, absent an add-on 100 beds, is not an SCH, and has a high
1. Acute Care Hospital Inpatient payment, it would be inadequately paid percentage of Medicare discharges (not
Prospective Payment System (IPPS) under the regular DRG payment. less than 60 percent of its inpatient days
Section 1886(d) of the Social Security The costs incurred by the hospital for or discharges in its cost reporting year
Act (the Act) sets forth a system of a case are evaluated to determine beginning in FY 1987 or in two of its
payment for the operating costs of acute whether the hospital is eligible for an three most recently settled Medicare
care hospital inpatient stays under additional payment as an outlier case. cost reporting years).
Medicare Part A (Hospital Insurance) This additional payment is designed to Section 1886(g) of the Act requires the
based on prospectively set rates. Section protect the hospital from large financial Secretary to pay for the capital-related
1886(g) of the Act requires the Secretary losses due to unusually expensive cases. costs of inpatient hospital services in
to use a prospective payment system Any eligible outlier payment is added to accordance with a prospective payment
(PPS) to pay for the capital-related costs the DRG-adjusted base payment rate, system established by the Secretary. The
of inpatient hospital services for these plus any DSH, IME, and new technology basic methodology for determining
‘‘subsection (d) hospitals.’’ Under these or medical service add-on adjustments. capital prospective payments is set forth
PPSs, Medicare payment for hospital Although payments to most hospitals in our regulations at 42 CFR 412.308
inpatient operating and capital-related under the IPPS are made on the basis of and 412.312. Under the capital IPPS,
costs is made at predetermined, specific the standardized amounts, some payments are adjusted by the same DRG
rates for each hospital discharge. categories of hospitals are paid in whole for the case as they are under the
S2 Discharges are classified according to a or in part based on their hospital- operating IPPS. Capital IPPS payments
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UL list of diagnosis-related groups (DRGs). specific rate, which is determined from are also adjusted for IME and DSH,
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with The base payment rate is comprised of their costs in a base year. For example, similar to the adjustments made under
D a standardized amount that is divided sole community hospitals (SCHs) the operating IPPS. In addition,
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PR into a labor-related share and a receive the higher of a hospital-specific hospitals may receive outlier payments
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Federal Register/Vol. 83, No. 160/Friday, August 17, 2018/Rules and Regulations 41153
The existing regulations governing cost reporting periods beginning on or C. Summary of Provisions of Recent
payments to hospitals under the IPPS after October 1, 2002. The LTCH PPS Legislation Implemented in This Final
are located in 42 CFR part 412, subparts was established under the authority of Rule
A through M. sections 123 of the BBRA and section
1. Pathway for SGR Reform Act of 2013
307(b) of the BIPA (as codified under
2. Hospitals and Hospital Units (Pub. L. 113–67)
section 1886(m)(1) of the Act). During
Excluded From the IPPS
the 5-year (optional) transition period, a The Pathway for SGR Reform Act of
Under section 1886(d)(1)(B) of the LTCH’s payment under the PPS was 2013 (Pub. L. 113–67) introduced new
Act, as amended, certain hospitals and based on an increasing proportion of the payment rules in the LTCH PPS. Under
hospital units are excluded from the LTCH Federal rate with a corresponding section 1206 of this law, discharges in
IPPS. These hospitals and units are: decreasing proportion based on cost reporting periods beginning on or
Inpatient rehabilitation facility (IRF) reasonable cost principles. Effective for after October 1, 2015, under the LTCH
hospitals and units; long-term care cost reporting periods beginning on or PPS, receive payment under a site
hospitals (LTCHs); psychiatric hospitals after October 1, 2006 through September neutral rate unless the discharge meets
and units; children’s hospitals; cancer 30, 2015 all LTCHs were paid 100 certain patient-specific criteria. In this
hospitals; extended neoplastic disease percent of the Federal rate. Section final rule, we are continuing to update
care hospitals, and hospitals located 1206(a) of the Pathway for SGR Reform certain policies that implemented
outside the 50 States, the District of Act of 2013 (Pub. L. 113–67) established provisions under section 1206 of the
Columbia, and Puerto Rico (that is, the site neutral payment rate under the Pathway for SGR Reform Act.
hospitals located in the U.S. Virgin LTCH PPS, which made the LTCH PPS
Islands, Guam, the Northern Mariana a dual rate payment system beginning in 2. Improving Medicare Post-Acute Care
Islands, and American Samoa). FY 2016. Under this statute, based on a Transformation Act of 2014 (IMPACT
Religious nonmedical health care rolling effective date that is linked to the Act) (Pub. L. 113–185)
institutions (RNHCIs) are also excluded date on which a given LTCH’s Federal
The Improving Medicare Post-Acute
from the IPPS. Various sections of the FY 2016 cost reporting period begins,
Care Transformation Act of 2014
Balanced Budget Act of 1997 (BBA, Pub. LTCHs are generally paid for discharges
(IMPACT Act) (Pub. L. 113–185),
L. 105–33), the Medicare, Medicaid and at the site neutral payment rate unless
enacted on October 6, 2014, made a
SCHIP [State Children’s Health the discharge meets the patient criteria
number of changes that affect the Long-
Insurance Program] Balanced Budget for payment at the LTCH PPS standard
Term Care Hospital Quality Reporting
Refinement Act of 1999 (BBRA, Pub. L. Federal payment rate. The existing
Program (LTCH QRP). In this final rule,
106–113), and the Medicare, Medicaid, regulations governing payment under
we are continuing to implement
and SCHIP Benefits Improvement and the LTCH PPS are located in 42 CFR
portions of section 1899B of the Act, as
Protection Act of 2000 (BIPA, Pub. L. part 412, subpart O. Beginning October
added by section 2(a) of the IMPACT
106–554) provide for the 1, 2009, we issue the annual updates to
Act, which, in part, requires LTCHs,
implementation of PPSs for IRF the LTCH PPS in the same documents
among other post-acute care providers,
hospitals and units, LTCHs, and that update the IPPS (73 FR 26797
to report standardized patient
psychiatric hospitals and units (referred through 26798).
assessment data, data on quality
to as inpatient psychiatric facilities
4. Critical Access Hospitals (CAHs) measures, and data on resource use and
(IPFs)). (We note that the annual
other measures.
updates to the LTCH PPS are included Under sections 1814(l), 1820, and
along with the IPPS annual update in 1834(g) of the Act, payments made to 3. The Medicare Access and CHIP
this document. Updates to the IRF PPS critical access hospitals (CAHs) (that is, Reauthorization Act of 2015 (Pub. L.
and IPF PPS are issued as separate rural hospitals or facilities that meet 114–10)
documents.) Children’s hospitals, certain statutory requirements) for
cancer hospitals, hospitals located inpatient and outpatient services are Section 414 of the Medicare Access
outside the 50 States, the District of generally based on 101 percent of and CHIP Reauthorization Act of 2015
Columbia, and Puerto Rico (that is, reasonable cost. Reasonable cost is (MACRA, Pub. L. 114–10) specifies a 0.5
hospitals located in the U.S. Virgin determined under the provisions of percent positive adjustment to the
Islands, Guam, the Northern Mariana section 1861(v) of the Act and existing standardized amount of Medicare
Islands, and American Samoa), and regulations under 42 CFR part 413. payments to acute care hospitals for FYs
2018 through 2023. These adjustments
RNHCIs continue to be paid solely
5. Payments for Graduate Medical follow the recoupment adjustment to
under a reasonable cost-based system,
Education (GME) the standardized amounts under section
subject to a rate-of-increase ceiling on
inpatient operating costs. Similarly, Under section 1886(a)(4) of the Act, 1886(d) of the Act based upon the
extended neoplastic disease care costs of approved educational activities Secretary’s estimates for discharges
hospitals are paid on a reasonable cost are excluded from the operating costs of occurring from FYs 2014 through 2017
basis, subject to a rate-of-increase inpatient hospital services. Hospitals to fully offset $11 billion, in accordance
ceiling on inpatient operating costs. with approved graduate medical with section 631 of the ATRA. The FY
The existing regulations governing education (GME) programs are paid for 2018 adjustment was subsequently
payments to excluded hospitals and the direct costs of GME in accordance adjusted to 0.4588 percent by section
hospital units are located in 42 CFR with section 1886(h) of the Act. The 15005 of the 21st Century Cures Act.
parts 412 and 413. amount of payment for direct GME costs 4. The 21st Century Cures Act (Pub. L.
ULES2 3. Long-Term Care Hospital Prospective ftohre ah coospsti traelp’so nrtuinmgb peer roiof dre issi dbeansetsd ionn 114–255)
with R Payment System (LTCH PPS) that period and the hospital’s costs per The 21st Century Cures Act (Pub. L.
D The Medicare prospective payment resident in a base year. The existing 114–255), enacted on December 13,
O
PR system (PPS) for LTCHs applies to regulations governing payments to the 2016, contained the following provision
R082 hospitals described in section various types of hospitals are located in affecting payments under the Hospital
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