© 2018 American Hospital Association

May 16, 2018

The Centers for Medicare & Medicaid Services (CMS) April 24 released its fiscal year (FY) 2019 proposed rule for the hospital inpatient and long-term care hospital (LTCH) prospective payment systems (PPS). The rule affects inpatient PPS hospitals, critical access hospitals (CAHs), LTCHs and PPS-exempt cancer hospitals. A summary of the proposals related to inpatient PPS hospitals, CAHs and PPS-exempt cancer hospitals is attached. The AHA will issue a separate advisory on proposals related to the LTCH PPS. Comments on the proposed rule are due to CMS by June 25. The final rule will be published on or around Aug. 1 and take effect Oct. 1. Top 10 Takeaways for Hospital/Health System Leaders The proposed rule would:

• Payment Update: increase inpatient PPS payments by 1.75 percent in FY 2019. • Medicare DSH: continue its transition to using charity care and bad debt data

from the cost report worksheet S-10 to distribute disproportionate share (DSH) hospital uncompensated care payments.

• Price Transparency: require hospitals to make available a list of their current standard charges via the Internet in a machine-readable format.

• Health Information Technology: make several changes to the meaningful use program, including renaming to the “Promoting Interoperability” program, increasing flexibility in meeting objectives and adopting a new scoring approach.

• RFI on Interoperability: seek input on whether it should promote interoperability by including electronic sharing of health information as a Medicare condition of participation for hospitals, skilled-nursing facilities and other care settings.

• New Technology: assign Chimeric Antigen Receptor (CAR) T-cell therapy procedures to their own Medicare-severity diagnosis-related group, while soliciting comments on whether they qualify for new technology payment.

• Rural Hospitals: retroactively reinstate the low-volume adjustment (LVA) and Medicare-dependent hospital program.

• Transfer Policy: expand the post-acute care transfer policy to include discharges to hospice.

• Wage Index: make several, almost entirely technical changes to the area wage index, with applications for hospital reclassification for FY 2020 due by Sept. 4, 2018.

• Quality Measures: begin implementing its “Meaningful Measures” framework across the hospital quality reporting and value programs.

INPATIENT PPS: THE PROPOSED RULE FOR FY 2019

AT A GLANCE

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Our Take The rule contains several key proposals that would help deliver on CMS’s promise to ease regulatory barriers and allow America’s hospitals and health systems to better provide high-quality, efficient patient care. For example, the rule would begin to implement the CMS’s “meaningful measures” initiative, a streamlined approach to quality measurement that can help ensure programs are focused on the core issues that are most critical to providing high-quality care and improving patient outcomes. It also proposes a more flexible, performance-based approach to determine whether a hospital has met meaningful use requirements. CMS also would reduce burden by limiting the reporting periods to 90 days in 2019 and 2020. We are disappointed, however, that the agency would require use of 2015 Edition Certified EHR Technology beginning in 2019. What You Can Do Participate in an AHA members-only webinar on June 5 at 2:00 p.m. ET to provide

feedback on your concerns with this regulation. To register for this 60-minute webinar, visit here.

Share this advisory with your senior management team and ask your chief financial officer to examine the impact of the proposed payment changes on your Medicare revenue for FY 2019. Hospitals may assess the impact of these provisions on their organizations by using AHA’s calculators on readmissions, value-based purchasing and Medicare DSH: https://www.aha.org/inpatient-pps.

Notify your Medicare Administrative Contractor by May 29 if you qualify for enhanced LVA payments in FY 2018.

Verify CMS’s table listing the factor used to calculate uncompensated care payments for Medicare DSH hospitals. Hospitals have until June 25 to review this table and notify CMS in writing of any inaccuracies.

Verify your wage data are accurate. CMS released the final wage index data public use files in April on its website, and hospitals must submit a letter requesting correction of errors and supporting documentation to CMS by May 30.

Verify that you have attested to meaningful use. Attestation status can be determined through CMS’s website.

Share this advisory with your billing, medical records, quality improvement and compliance departments, as well as your clinical leadership team – including the quality improvement committee and infection control officer – to apprise them of the proposals around the diagnosis-related groups and quality measurement requirements.

Submit comments to CMS with your specific concerns by June 25 at www.regulations.gov. The final rule will be published on or around Aug. 1 and take effect Oct. 1.

Further Questions For additional questions, please contact Joanna Hiatt Kim, vice president of payment policy, at (202) 626-2340 or jkim@aha.org.

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May 16, 2018

BACKGROUND

The Centers for Medicare & Medicaid Services (CMS) April 24 released its proposed rule for the fiscal year (FY) 2019 hospital inpatient and long-term care hospitals (LTCH) prospective payment systems (PPS). Comments are due June 25. The final rule will be issued by Aug. 1 and take effect Oct.1. A detailed summary of the proposed rule follows.

SUMMARY

Inpatient PPS Rate Update The proposed rule would increase inpatient PPS rates by 1.75 percent in FY 2019, after accounting for inflation and other adjustments required by law. Specifically, the update includes an initial market-basket update of 2.8 percent, less 0.8 percentage points for productivity and 0.75 percentage points mandated by the Affordable Care Act (ACA). In addition, in accordance with the Medicare Access & CHIP Reauthorization Act (MACRA) of 2015, CMS proposes an increase of 0.5 percentage points to partially restore cuts made as a result of the American Taxpayer Relief Act (ATRA) of 2012. Table 1 below details the factors CMS includes in its estimate.

Table 1: Impacts of FY 2019 CMS Proposed Policies

Policy Average Impact on Payments

Market-basket update + 2.8% Productivity cut mandated by the ACA - 0.8% Additional cut mandated by ACA - 0.75% Partial restoration of documentation and coding cut for FYs 2010, 2011 and 2012 mandated by ATRA

+ 0.5%

Total +1.75% The ACA and ATRA adjustments would be applied to all hospitals. However, inpatient PPS hospitals that do not submit quality data or that failed to either meet meaningful use or qualify for hardship exemption for FY 2017 would be subject to market-basket penalties. Specifically:

INPATIENT PPS: THE PROPOSED RULE FOR FY 2019

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• Hospitals not submitting quality data would be subject to a one-quarter reduction in their initial market-basket rate. Thus, they would start with a market-basket rate of 2.1 percent and would receive an update of 1.05 percent.

• Hospitals that were not meaningful users of EHRs in CY 2017 would be subject to a three-quarter reduction in their initial market-basket rate. Thus, they would start with a market-basket rate of 0.7 percent and would receive an update of -0.55 percent.

• Hospitals that fail to meet both of these requirements would be subject to a full reduction in their initial market-basket rate. Thus, they would start with a market-basket rate of 0.0 and would receive an update of -1.05 percent.

For more information related to the penalties described above for failure to either meet meaningful use or qualify for hardship exemption, including those that apply to critical access hospitals (CAHs), please review the Aug. 13, 2010 AHA Regulatory Advisory on meaningful use. Also by law, CMS must adjust the proportion of the standardized amount that is attributable to wages and wage-related costs (known as the labor-related share) by a factor that reflects the relative difference in labor costs among geographic areas (known as the area wage index). For FY 2019, CMS proposes to continue use of the labor-related share the agency finalized in FY 2018 – 68.3 percent for those hospitals with wage indices greater than 1.0. By law, the labor-related share for those hospitals with wage indices less than or equal to 1.0 will remain at 62 percent. Disproportionate Share Hospital (DSH) Payment Changes Under the DSH program, hospitals receive 25 percent of the Medicare DSH funds they would have received under the former statutory formula (described as “empirically justified” DSH payments). The remaining 75 percent flows into a separate funding pool for DSH hospitals. This pool is reduced as the percentage of uninsured declines and is distributed based on the proportion of total uncompensated care each Medicare DSH hospital provides. FY 2019 DSH Payments. For FY 2019, CMS estimates that the total amount of Medicare DSH payments that would have been made under the former statutory formula is $16.295 billion. Accordingly, CMS proposes that hospitals would initially receive 25 percent of these funds, or $4.074 billion, as empirically justified DSH payments. The remaining $12.221 billion would flow into the 75 percent pool. As it has previously, in FY 2019, CMS would adjust the amount of the 75-percent pool to reflect changes in the percentage of uninsured. To calculate what portion of the 75 percent pool is retained, CMS determined that the percentage of uninsured for FY 2019 would be 9.48 percent – a substantial increase over FY 2018 rate of 8.15 percent. Thus, after inputting that rate into the statutory formula, it proposed to retain 67.51 percent – or $8.25 billion – of the 75-percent pool in FY 2019. This would result to an increase of about $1.5 billion in total Medicare DSH payments in FY 2019 compared to FY 2018.

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To distribute the 75 percent pool, the agency would continue to calculate uncompensated care provided by DSH hospitals. It then would determine what percentage of total uncompensated care each individual DSH hospital accounts for. Hospitals would receive that percentage of what remains of the 75 percent pool as their uncompensated care DSH payment. For example, if Hospital A accounts for 1 percent of the total uncompensated care provided by all DSH hospitals, it would receive 1 percent of the 75 percent pool. Transition to S-10. In FY 2018, CMS began incorporating the cost report Worksheet S-10 data on hospital charity care and bad debt to determine the amount of uncompensated care each hospital provides. For FY 2019, CMS proposes to continue phasing in the S-10 data and also continue to use data from a rolling three-year period to estimate uncompensated care payments. Specifically, for FY 2019, CMS would use FY 2014 and 2015 Worksheet S-10 data in combination with FY 2013 Medicaid days and SSI ratios to determine the distribution of uncompensated care payments. In addition, CMS proposes to continue its policy of not transitioning to the Worksheet S-10 data for Puerto Rico hospitals and Indian Health Services and Tribal hospitals. Instead it will use FY 2013 Medicaid and Medicare SSI days for FY 2019. CMS also makes several technical proposals related to these data:

• Annualizing Cost Reports. As in the past, if a hospital has a cost report that does not equal 12 months of data (in other words, are more or less than 365 days) in any given year, CMS proposes to annualize Medicaid days and uncompensated care data. The agency does not propose to annualize SSI days because that data are not obtained from hospital cost reports.

• Multiple Cost Reports. CMS proposes to discontinue its previous policy concerning treatment of hospitals that filed multiple cost reports beginning gin the same FY. Under this policy, CMS had combined data across the multiple cost reports before determining the difference between the start date and the end date to determine if annualization was needed. However, it now believes the multiple cost report issue is thoroughly addressed by annualization policy described above. It further states that in many cases where a hospital files two cost reports beginning in the same fiscal year, combining the data across multiple cost reports before annualizing would yield a similar result to choosing the longer of the two cost reports and then annualizing the data if the cost report is shorter or longer than 12 months. In addition, the agency states that, even in cases where a hospital files more than one cost report beginning in the same fiscal year, it is not uncommon for one of those cost reports to span exactly 12 months.

• Definition of Uncompensated Care. CMS proposes to continue defining uncompensated care to include line 30 of the Worksheet S-10, which includes the cost of charity care and non-Medicare bad debt.

• Trims to Apply to CCRs on Line 1 of Worksheet S-10. CMS would continue to trim data to control for data anomalies. For FY 2019, all hospitals with a

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Worksheet S-10 cost-to-charge ratio (CCR) that is above a CCR “ceiling”, or that is greater than 3.0 standard deviations above the geometric mean, will receive the statewide average CCR. The agency would continue to exempt all-inclusive rates from this policy.

• Worksheet S-10 Audits. CMS states that it continues to audit the S-10 data, including to examine, for example, hospitals’ ratio of uncompensated care costs to total operating expenses.

CMS has published on its website a table listing uncompensated care payments and other DSH-related information for all hospitals it estimates would receive these payments in FY 2019. Hospitals have until June 25 to review this table and notify CMS in writing of any inaccuracies. The AHA has created a DSH calculator for hospitals to assess the impact of the policy on their organizations. It is available at: https://www.aha.org/inpatient-pps. The calculator is designed so basic financial information regarding a hospital can be entered, including its CMS Certification Number (CCN), and the dollar amount of the hospital’s DSH payment will be estimated. Transparency Under current law, hospitals are required to establish and make public a list of their standard charges. However, CMS is creating more specific guidelines, effective Jan. 1, 2019, that would require hospitals to make available a list of their current standard charges via the internet in a machine-readable format and to update this information at least annually, or more often, as appropriate. This could be in the form of the charge master itself or another form of the hospital’s choice, as long as the information is in machine-readable format. CMS also is considering potential actions that would further their objective of hospitals undertaking efforts to engage in consumer-friendly communication of their charges to help patients understand what their potential financial liability might be for services they obtain at the hospital. These actions also would enable patients to compare charges for similar services across hospitals. Therefore, it is seeking information regarding barriers that prevent providers from informing patients of their out-of-pocket costs; changes that are needed to support greater transparency around patient obligations for their out-of-pocket costs; what can be done to better inform patients of these obligations; and what role providers should play in this initiative. It also is considering making information regarding hospital non-compliance with the requirements public and intends to consider additional enforcement mechanisms in future rulemaking. Promoting Interoperability Program For CY 2019 and subsequent years, to emphasize the focus on interoperability and patient access to their health information, CMS will rename the Medicare and Medicaid EHR Incentive Program to the Promoting Interoperability (PI) Program. Certified EHR Requirements Beginning in CY 2019. CMS proposes to retain the requirement that all eligible hospitals (EHs), CAHs and eligible professionals (EPs) must use the 2015 Edition certified EHR beginning in CY 2019. CMS states that more up-to-

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date standards and functions in the 2015 Edition EHR better support interoperable exchange of health information and improve clinical workflows, adding that the application program interface (API) functionality supports health care providers and patient electronic access to health information. CMS also states, based on previous EHR Incentive Program attestation data, at least 90 percent of EHs and CAHs and 66 percent of EPs have 2015 Edition available as of the first quarter of CY 2018. The AHA is concerned about this requirement because not all vendors have certified products available and the process of implementing upgrades, modifying workflows and ensuring that new systems are safe for patients takes considerable time to accomplish. In addition, although the Office of the National Coordinator for Health IT (ONC) finalized certification criteria in 2015 to support use of APIs, ONC did not identify a standard for the certification. The needed standard will not be ready to include in EHRs until the end of 2018. Promoting Interoperability Reporting Period. As strongly advocated by the AHA, CMS proposes a reporting period of a minimum of any continuous 90-day period in CYs 2019 and 2020. This would replace the current policy requiring a reporting period of a full calendar year beginning in CY 2019. CMS states the proposed reporting period permits time to test and implement the 2015 Edition certified EHR and become familiar with new scoring methodology, if finalized. Promoting Interoperability Scoring for CY2019 and CY 2020. CMS proposes a new scoring methodology for EHs and CAHs attesting to the PI Program that focuses on interoperability and sharing data with patients. The AHA shares the agency’s goals of a scoring approach that provides increased flexibility and reduced provider burden, as allowed by the Bipartisan Budget Act (BiBA) of 2018. The new scoring methodology would be applied to four objectives derived from objectives found in Stage 3: Electronic Prescribing, Patient Electronic Access to Health Information, Health Information Exchange and Public Health and Clinical Data Registry Reporting. The Protect Patient Health Information objective would continue as a required yes/no attestation. CMS proposes to eliminate the Coordination of Care through Patient Engagement objectives and associated measures. The scoring approach assigns weights to individual measures under each objective, with performance-based scoring for each measure. The individual measure scores would be added together to calculate the total Promoting Interoperability score. An eligible hospital or CAH will receive a score from zero to 100 points, depending on performance on individual measures. CMS proposes to consider a total score of 50 points or more to satisfy the requirement to report on the objectives and measures of meaningful use. EHs and CAHs scoring below 50 points would not be considered meaningful users of EHRs and would be subject to a Medicare payment penalty (estimated to be 2.1 percent in FY 2019). EHs and CAHs would be required to report on all of the required measures. CMS states this approach allows EHs and CAHs to achieve high performance in areas where they excel to offset performance in areas where they are working on additional improvement. EHs and CAHs also must attest to completing the actions included in the Security Risk

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Analysis measure for the Protect Patient Health Information objective. Unless an exclusion applies, failure to report any required measure or reporting a “no” response on a yes/no measure would result in an overall score of zero. CMS states that if a new scoring methodology is not finalized, the current Stage 3 methodology, objectives and measures would be maintained with the addition of two opioid measures proposed in the rule. Table 2 lists the proposed objectives and scoring methodology. Appendix A includes the specific measures and exclusions.

Table 2: Proposed Performance-based Scoring Methodology for 2019

Objective Maximum Points e-Prescribing 20 points in 2019 (includes 10 bonus

points for new opioid measures) Health information exchange 40 points Provider to patient exchange 40 points Public health and clinical data exchange 10 points CAHs and EHs must report on all required objectives and measures (see Appendix A for measures). An overall score of 50 or more points would be sufficient to meet meaningful use and avoid a Medicare payment penalty. The Protecting Patient Health Information objective does not have a performance-based measure but EHs and CAHs are required to attest to meeting the Security Risk Analysis measure requirements.

Promoting Interoperability Objectives and Measures for CY 2019 and CY 2020. This section describes the individual objectives and measures. For CY 2019, CMS proposes four objectives with measures associated with performance-based scoring that are derived from the objectives and measures included in the Medicare and Medicaid EHR Incentive Program Stage 3 requirements, as well as a required objective to protecting patient health information that would not contribute to the score. Exclusions: Some, but not all, measures have proposed exclusion criteria to account for challenging situations that might prevent meeting the measure. If an exclusion is claimed, points for that measure would be redistributed to other measures. CMS also proposes to remove exclusion criteria previously available for some Stage 3-derived measures for the Health Information Exchange and Provider to Patient Exchange objectives. Specifically, the exclusion criteria related to broadband availability is proposed for removal because CMS cites Federal Communication Commission (FCC) data indicating no counties have less than 4Mbps of broadband availability. CMS also proposes to remove exclusions because it found that no EH or CAH claimed an exclusion based on the number of transitions or referrals received and patient encounters for which the provider has never previously encountered the patient.

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Protect Patient Health Information. CMS proposes to retain the Protect Patient Health Information objective and the Security Risk Analysis measure previously finalized in EHR Incentive Program for Stage 3. Exclusions: No exclusions. Electronic Prescribing. This objective focuses on generation and transmittal of permissible discharge prescriptions electronically. For CY 2019, CMS proposes one e-prescribing measure and two bonus measures addressing the opioid crisis. For CY 2020, CMS proposes to require the bonus measures. For the e-prescribing measure, at least one hospital discharge medication order for permissible prescriptions (for new and changed prescriptions) is queried for a drug formulary and transmitted electronically using a certified EHR. The bonus measures include:

• the ability of the EH or CAH to use data from the certified EHR to query a Prescription Drug Monitoring Program (PDMP) for prescription drug history, except where prohibited and in accordance with applicable law; and

• the ability of the EH or CAH to identify the existence of a signed opioid treatment agreement and incorporate it into the patient’s EHR for at least one unique patient for whom a Schedule II opioid was e-prescribed if the total duration of the patient’s Schedule II opioid prescriptions is at least 30 cumulative days within a six month look-back period.

Exclusions: CMS proposes that any EH or CAH that does not have an internal pharmacy that can accept e-prescriptions and is not located within 10 miles of a pharmacy that accept e-prescriptions at the start of the EH or CAH’s EHR reporting period may be excluded from the measure. CMS also proposes that any EH or CAH that does not have an internal pharmacy that can accept electronic prescriptions for controlled substances, and is not located within 10 miles of any pharmacy that accepts electronic prescriptions for controlled substances at the start of their EHR reporting period, or any EH or CAH that is unable to report the measure in accordance with applicable law may be excluded from the measures. Health Information Exchange. CMS proposes two measures for the health information exchange objective that EHs and CAHs provide a summary of care record when transitioning or referring their patient to another setting of care — receive or retrieve a summary of care record upon receipt of transition or referral or upon the first patient encounter with a new patient; and incorporate the information into their EHRs. For the Sending Health Information measure, for at least one transition of care or referral, the EH or CAH that transitions or refers its patient to another setting of care or provider of care: (1) creates a summary of care record using certified EHR; and (2) electronically exchanges the summary of care record. For the Receiving and Incorporating Health Information measure, for at least one electronic summary of care record received for patient encounters during the EHR reporting period for which an EH or CAH was the receiving party of a transition of care or referral, or for patient encounters during the EHR reporting period in which the EH or CAH has never before encountered the

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patient, the EH or CAH conducts clinical information reconciliation for medication, mediation allergy, and current problem list. Exclusions: CMS does not propose an exclusion for the Sending Health Information exchange measure. CMS proposes an exclusion for the Receiving and Incorporating Measure in 2019 for any EH or CAH that is unable to implement the measure. Taking an exclusion would redistribute the points to the Sending Health Information Measure. Provider to Patient Exchange. CMS proposes one measure for this objective to provide patients (or patient-authorized representative) with timely electronic access to their health information. For the Provide Patients Electronic Access to Their Health Information measure, for at least one unique patient discharged from the EH or CAH inpatient or emergency department (POS 21 or 23): (1) the patient (or patient-authorized representative) is provided timely access to view online, download, and transmit his or her health information; and (2) the EH or CAH ensures the patient’s health information is available for the patient (or patient-authorized representative) to access using any application of their choice that is configured to meet the technical specifications of the API in the EH or CAH’s certified EHR. Exclusions. No exclusions proposed. Public Health and Clinical Data Exchange. CMS proposes that EHs and CAHs report the Syndromic Surveillance Reporting measure and one additional measure for this objective to be in active engagement with a public health agency or clinical data registry. For the Syndromic Surveillance Reporting measure, the EH or CAH is in active engagement with a public health agency to submit syndromic surveillance data from an urgent care setting. For the Immunization Registry Reporting measure, the EH or CAH is in active engagement with a public health agency to submit immunization data and receive immunization forecasts and histories from the public health immunization registry/immunization information system (IIS). For the Electronic Case Registry Reporting measure, the EH or CAH is in active engagement with a public health agency to submit case reporting of reportable conditions. For the Public Health Registry Reporting measure, the EH or CAH is in active engagement with a public health agency to submit data to public health registries. For the Clinical Data Registry Reporting measure, the EH or CAH is in active engagement to submit data to a clinical data registry. For the Electronic Reportable Laboratory Result Reporting measure, the EH or CAH is in active engagement with a public health agency to submit electronic reportable laboratory results. Exclusions: Any EH or CAH may be excluded from the syndromic surveillance reporting measure if one of these conditions is met: the EH or CAH lacks an emergency or urgent care department; the public health agency cannot receive electronic syndromic surveillance data in the EHR specified standards at the start of the reporting period; or the public health agency has not declared readiness to receive syndromic surveillance data as of six months prior to the start of the EHR reporting period. An exclusion claimed will redistribute the 10 points to the Provide Patients Electronic Access to Their Health Information measure.

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Appendix A contains the proposed Performance-Based Scoring Methodology for the CY 2019 and CY 2020 reporting periods. Potential New Measure. CMS seeks comment on a potential new measure for the Health Information Exchange objective. The potential measure, Health Information Exchange Across the Care Continuum, would require an EH or CAH to send an electronic summary of care record or receive and incorporate an electronic summary of care record, for transitions of care and referrals with a provider of care other than an EH or CAH. This includes long-term care facilities, post-acute care providers, skilled nursing facilities, home health and behavioral health settings. Medicaid Promoting Interoperability Program. CMS proposes to apply the scoring methodology to EHs and CAHs that are Medicare-only EHs and CAHs or dual-eligible EHs and CAHs in the PI Program. CMS proposes to require dual-eligible EHs and CAHs to attest to the PI Program and report clinical quality measures to CMS, not their respective state Medicaid agency, beginning with the CY 2019 reporting period. This proposal would not change the deeming policy in which an EH or CAH that meets Medicare meaningful use also meetings Medicaid meaningful use. CMS proposes to give states the option to adopt the performance based scoring methodology and the measure proposals through a request to change their state Medicaid HIT Plan. CMS requests comments on modification of objectives and measures for eligible professionals in the Medicaid PI Program and the benefits and burdens of policy alignment with the Merit-Based Incentive Payment System requirements for eligible clinicians. Future Program Direction. CMS seeks comment on future activities that could be an alternative to the proposed measures. Examples include:

• participating in the Trusted Exchange Framework and Common Agreement within the Heath Information Exchange (HIE) objective;

• maintaining an open API to allow patients to access their health information through a preferred third party within the Provide Patient Access objective; or

• participating in a pilot which allows population level data access through an API within the Public Health and Clinical Data Exchange objective.

eCQM reporting in the Medicare and Medicaid Promoting Interoperability Programs. CMS proposes to continue to align eCQM reporting requirements for the PI Programs with the Hospital Inpatient Quality Reporting (IQR) Program. CMS proposes that states will continue to have flexibility to determine the method of reporting clinical quality measures and the submission periods. Request for Information (RFI) on Interoperability CMS includes in the rule an RFI on ways to promote interoperability by making changes to Medicare conditions of participation, conditions for coverage, and requirements for participation for long-term care facilities and post-acute care providers. Examples include requiring that hospitals transferring medically necessary information to another

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facility upon transfer or discharge do so electronically, requiring that hospitals and other facilities electronically send discharge information to a community provider via electronic means if possible, or requiring that hospitals make certain information available to patients or a specified third-party application via electronic means if requested. The agency also asks for input on barriers, and how to advance interoperability for providers and patients more generally (including identification of “fundamental barriers”), and particularly among providers that were not eligible for the EHR incentive program. Given the importance of these standards, and the significant consequences of failing to meet them, the AHA is concerned that any additional requirements must be evaluated against the feasibility of meeting them in all settings. Chimeric Antigen Receptor (CAR) T-Cell Therapy CAR T-cell therapy is a cell-based gene therapy in which a patient’s own T-cells are genetically engineered in a laboratory and administered to the patient by infusion to assist in the patient’s treatment to attack certain cancerous cells. For FY 2019, CMS proposes to assign CAR-T therapy procedure codes to a different MS-DRG (see “Key Coding and MS-DRG Changes” below for more information). CMS also discusses these technologies in the context of new technology add-on payments. Specifically, the inpatient PPS provides additional payments (at a rate of 50 percent of the marginal cost) for cases with relatively high costs involving eligible new medical services or technologies. New technology add-on payments are not subject to budget neutrality and, therefore, do not reduce payments for all other inpatient services. To gain approval for such payments, a technology must be considered new, be inadequately paid otherwise and represent a substantial clinical improvement over previously available technologies. Two CAR T-cell technologies, KYMRIAH ™ and YESCARTA™, have submitted new technology add-on payment applications; CMS solicits comments on whether they meet the criteria for additional payments. Finally, CMS invites public comments on alternative payment approaches, including in the context of the proposed rule’s discussion of the pending KYMRIAH™ and YESCARTA™ new technology add-on payment applications, and the most appropriate way to establish payment for FY 2019 under any alternative approaches. CMS is concerned about redistributive effects away from core hospital services toward specialized services and the impact it may have on payment for core services. The AHA is also concerned about the effect this technology will have on the inpatient PPS given that it is administered in a budget neutral manner and is analyzing CMS’s proposals carefully to determine the best course of action. Rural Hospital Provisions Low-volume Hospitals. The BiBA retroactively extended the enhanced low-volume payment adjustment. For FY 2018, CMS issued a separate notice that implements this change; for FY 2019, the agency’s implementation proposals are contained in the rule. For FY 2018, low-volume hospitals will continue to be defined as those that are more than 15 road miles from another comparable hospital and that have up to 1,600 Medicare discharges. In order to receive the enhanced payments for FY 2018, a hospital must send a written request for low-volume hospital status that is received by its MAC no later than May 29, per the instructions outlined in the

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notice. A hospital that qualified for the low-volume payment adjustment in FY 2017 may continue to receive a low-volume payment adjustment in FY 2018 without reapplying, if it continues to meet the Medicare discharge criterion; however, the hospital must send written verification that is received by its Medicare Administrative Contractor (MAC) no later than May 29, that it continues to meet the mileage criterion. CMS states that it will be issuing guidance on the exact manner in which it intends to make low-volume payments for FY 2018, given that a portion will be made retroactively. The AHA is working to ensure these payments are made in a timely and accurate manner. For FYs 2019 through 2022, the discharge thresholds would be modified to 500 total discharges and 3,800 total discharges, per a hospital’s most recently submitted cost report. CMS would continue to calculate the adjustment based on a continuous, linear sliding scale formula. Specifically, qualifying hospitals with 500 or fewer total discharges would receive a low-volume hospital payment adjustment of 25 percent. For qualifying hospitals with fewer than 3,800 total discharges, but more than 500 discharges, CMS proposes that the adjustment be calculated using the following formula:

Add-on Percentage = (95 / 330) - (total discharges / 13,200)1

To receive the enhanced payments, beginning Oct. 1, a hospital must make a written request for low-volume status that is received by its MAC by Sept. 1, per the instructions outlined in the rule. Medicare-dependent Hospitals (MDHs). The BiBA also retroactively extended the MDH program through FY 2022. CMS states that a provider that was classified as an MDH as of Sept. 30, 2017 was automatically reinstated as an MDH effective Oct. 1, 2017, with no need to reapply for MDH classification. However, as outlined in detail in its separate notice, if the MDH had classified as a sole-community hospital (SCH) or cancelled its rural classification effective on or after Oct. 1, 2017, the effective date of MDH status may not be retroactive to Oct. 1, 2017. CMS states that it will be issuing guidance on the exact manner in which it intends to make MDH payments for FY 2018, given that a portion will be made retroactively. The AHA is working to ensure these payments are made in a timely and accurate manner. The BiBA also permits a hospital in an all-urban state to qualify for MDH status if it meets MDH classification criteria2 and meets one of the following criteria for rural reclassification:

• The hospital is located in a rural census tract of an urban county; • the hospital is located in an area that is designated as rural by any state law or

regulation in effect as of Jan. 1, 2018;

1 While CMS includes this formula as its actual proposed regulation, it includes an erroneous formula in the preamble to the rule; we will alert the agency to this discrepancy to ensure that the correct formula is adopted. 2 These criteria are that the hospital (i) must be located in a rural area; (ii) must not have more than 100 beds; (iii) must not be an SCH; and (iv) must have a “high percentage of Medicare discharges.”

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• the hospital is designated as rural by any state law or regulation in effect as of January 1, 2018; or

• the hospital would qualify as a rural referral center or SCH if the hospital were located in a rural area.

MDH and SCH Effective Dates. One way that an urban hospital can reclassify as rural is if the hospital would qualify as a rural referral center (RRC) or as an SCH if the hospital were located in a rural area. However, the rural reclassification is currently effective as of the filing date, while the SCH status is effective 30 days after approval. To minimize the lag between the effective date of rural reclassification and the effective date for SCH status, CMS proposes to make the effective date the date that CMS receives the complete SCH application, effective for SCH applications received on or after October 1, 2018. The agency proposes to make a parallel change for the effective date of MDH status. Post-acute Care Transfer Policy Certain Medicare patients discharged to a post-acute care setting – including rehabilitation hospitals and units, long-term care hospitals and units, cancer hospitals, psychiatric hospitals, children’s hospitals and skilled-nursing facilities – or discharged within three days to home health services, are defined as transfer cases and are paid a daily (per-diem) rate, rather than a fixed DRG amount, up to the full PPS rate. The BiBA required that, beginning in FY 2019, this inpatient PPS post-acute care transfer policy also apply to discharges to hospice care. Accordingly, CMS proposes that, if a discharge is assigned to one of the MS-DRGs subject to the post-acute care transfer policy (listed in Table 5) and the individual is transferred to hospice care by a hospice program, the discharge would be subject to payment as a transfer case. The agency proposes that patients with a discharge of either “50” or “51” would qualify as being discharged to hospice. CMS estimates that this would reduce Medicare payments by approximately $240 million in FY 2019. Wage Index The area wage index adjusts payments to reflect differences in labor costs across geographic areas. The proposed rule would base the FY 2019 wage index on data from FY 2015 cost reports. In addition, for FY 2019, CMS proposes to use the OMB labor market delineations that it adopted beginning with FY 2015, with updates as reflected in OMB Bulletin Nos. 13-01, 15-01 and 17-01. According to CMS, the national average hourly wage increased 1.02 percent compared to FY 2018. As a result, a number of hospitals could see a decline in their wage indices relative to last year because, even though their wages rose, they did not rise as quickly as those at other hospitals. Occupational Mix. The purpose of the occupational mix adjustment is to control for the effect of hospitals’ employment choices on the calculation of the wage index. CMS is required to collect data every three years on the occupational mix of employees for each short-term, acute care hospital participating in the Medicare program. CMS collected data in the 2016 Medicare Wage Index Occupational Mix Survey with the intent of computing the occupational mix adjustment for FYs 2019, 2020 and 2021. Accordingly, CMS proposes to calculate the FY 2019 occupational mix adjustment based on data from the 2016 Medicare Wage Index Occupational Mix Survey. CMS

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also proposes to apply the occupational mix adjustment to 100 percent of the wage index, as has in the past. Imputed Rural Floor. The imputed rural floor for those states with no rural counties is set to expire Sept. 30, 2018, and CMS does not propose to extend the policy for FY 2019. CMS states that it has, at many points, expressed reservations about establishment of an imputed floor, considering that the methodology creates a disadvantage in the application of the wage index to hospitals in states with rural hospitals, but no urban hospitals receiving the rural floor. Medicare Geographic Classification Review Board (MGCRB) Redesignations and Reclassifications. Hospitals may apply to the MGCRB for geographic reclassifications for purposes of inpatient PPS payment. Generally, hospitals must be proximate to the labor market area to which they are seeking reclassification and must demonstrate characteristics similar to hospitals located in that area. At the time the proposed rule was drafted, the MGCRB had completed its review of FY 2019 reclassification requests and 337 hospitals were approved for wage index reclassifications for FY 2019. Hospitals reclassified during FYs 2017 (259 hospitals) and 2018 (345 hospitals) will continue to be reclassified, because wage index reclassifications are effective for three years. Applications for hospital reclassifications for FY 2020 are due to the MGCRB by Sept. 4, 2018. Hospitals with current reclassifications are encouraged to analyze the area wage indexes published in the proposed rule and confirm that the areas to which they have been reclassified still result in a higher wage index than their geographic area wage index. Hospitals may withdraw their reclassifications by contacting the MGCRB within 45 days of the issuance of the proposed rule. Multicampus Hospital Reclassifications. CMS proposes to codify its policy that a main campus of a hospital cannot obtain an SCH, rural referral center (RRC) or MDH status or rural reclassification independently or separately from its remote location(s), and vice versa. Rather, if the criteria are met, the hospital (both the main campus and its remote location(s) would be granted the special status or rural reclassification. Reclassification Requirements for a Provider that Is the Sole Hospital in the MSA. In order to obtain an MGCRB reclassification, one of the required criteria is that a hospital must demonstrate that its own average hourly wage is at least 106 percent in the case of a hospital located in a rural area. In the case of a hospital located in an urban area, that hospital must demonstrate at least 108 percent of the average hourly wage of all other hospitals in the area in which the hospital is located to obtain reclassification. CMS allows a waiver of this criterion for hospitals that are the only hospital in their MSA. However, qualifying for the waiver often entails a hospital obtaining a statement certifying its status from its CMS Regional Office or MAC, which they have indicated may be burdensome for several reasons. Thus, CMS is proposing to simplify the process so that in order to qualify for a waiver, a hospital must only provide documentation from Table 2 of the current year’s final rule demonstrating it is the only provider listed within its CBSA with an average hourly wage value. This change would apply for reclassifications in FY 2021 and beyond.

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Lock-in Date for Rural Reclassifications. Currently, in order for a hospital to be treated as rural in the wage index and budget-neutrality calculations for the coming FY, it must have filed for a reclassification to rural at least 70 days prior to the second Monday in June of the current FY (referred to as the “lock-in” date). However, in order to allot more time to the rate setting process, CMS is proposing that in order for a hospital to be treated as rural in the wage index and budget neutrality calculations for the coming FY, its application for rural reclassification must be approved no later than 60 days after the public display date of the inpatient PPS proposed rule. This proposed change does not affect, on a hospital-specific level, the timing of when reclassification requests may be made or when the resulting payment changes would occur. Additional Regulatory Relief Proposals CMS states that in addition to other proposals in the rule, it is seeking to reduce burden by easing documentation requirements and providing flexibility in several areas, including by proposing to:

• remove the requirement that Part A certification statements detail where in the medical record the required information can be found;

• remove the requirement that a written inpatient admission order be present in the medical record as a specific condition of Medicare Part A payment; and

• provide more flexibility for new urban teaching hospitals to enter into Medicare Graduate Medical Education (GME) affiliation agreements, which allow hospitals to share full-time equivalent cap slots to accommodate the cross training of residents.

Requirements for Submitting a Medicare Cost Report Providers are required to submit cost reports annually with certain supporting documentation; cost reports submitted without such documentation are rejected. However, CMS notes that several supporting documentation requirements need to be updated to reflect current practices, to improve the accuracy and to facilitate more efficient contractor review of cost reports. Specifically, the agency proposes to:

• incorporate the Provider Cost Reimbursement Questionnaire, Form CMS 339, into the Organ Procurement Organization (OPO) and Histocompatibility Laboratory cost report, Form CMS-216;

• revise the regulations to no longer state that a cost report will be rejected for lack of supporting documentation if it does not include a Provider Cost Reimbursement Questionnaire (Form CMS-339);

• clarify that a provider must submit all necessary supporting documents for its cost report consistent with recordkeeping requirements in 42 CFR §§413.20 and 413.24.

• remove the reference to Intern and Resident Information System (IRIS) data being furnished on a diskette;

• require that the IRIS data contain the same total counts of direct GME FTE residents (unweighted and weighted) and IME FTE residents as the total counts of direct GME FTE and IME FTE residents in the hospital’s cost report, effective for cost reports filed on or after Oct. 1;

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• require that cost reports include a detailed bad debt listing that corresponds to the bad debt amounts claimed in the provider’s cost report, effective for cost reporting periods beginning on or after Oct. 1;

• require that cost reports include a detailed listing of a hospital’s Medicaid eligible days that corresponds to the Medicaid eligible days claimed in the hospital’s cost report for determining the hospital’s DSH payment adjustment as supporting documentation, effective for cost reporting periods beginning on or after Oct. 1;

• require that cost reports include a detailed listing of charity care and/or uninsured discounts that contains information such as the patient name, dates of service, insurer (if applicable), and the amount of charity care and/or uninsured discount that corresponds to the amount claimed in the hospital’s cost report as supporting documentation, effective for cost reporting periods beginning on or after Oct.1; and

• require that cost reports include a Home Office Cost Statement completed by the home office or chain organization with amounts that correspond to those on the provider’s cost report as supporting documentation, effective for cost reporting periods beginning on or after Oct. 1.

Key Coding and MS-DRG Changes CMS proposes the following changes to the MS-DRGs:

• Pre-MDC: CAR T-Cell Therapy. Currently, CAR T-cell procedures are described by two ICD-10-PCS procedure codes that have no impact on MS-DRG assignment. However, for FY 2019, CMS proposes to assign the codes to MS-DRG 016 (proposed revised title: Autologous Bone Marrow Transplant with CC/MCC or T-cell Immunotherapy).

As mentioned above, CMS also invites public comments on alternative payment approaches, including establishing a new MS-DRG. Given that a new MS-DRG must be established in a budget-neutral manner, CMS is concerned about redistributive effects away from core hospital services toward specialized services and the impact it may have on payment for core services.

• Major Diagnostic Category (MDC) 6 (Diseases and Disorders of the

Digestive System): Bowel Procedures

CMS proposes to reassign 12 ICD-10-PCS procedure codes for repair of ascending colon, transverse colon, descending colon and sigmoid colon (open and percutaneous endoscopic approach) and reposition of ileum and large intestine (open and percutaneous endoscopic approach). The procedures would be reassigned from MS-DRGs 329, 330 and 331 (Major Small and Large Bowel Procedures with Major Complications Comorbidities (MCC), with Complications or Comorbidities (CC), and without CC/MCC, respectively) to MS-DRGs 344, 345 and 346 (Minor Small and Large Bowel Procedures with MCC, with CC, and without CC/MCC, respectively) when reporting a bowel procedure as the only O.R. procedure. These are minor procedures relative to the major bowel procedures assigned to MS-DRGs 329, 330 and 331.

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• Major Diagnostic Category (MDC) 8 (Diseases and Disorders of the

Musculoskeletal System and Connective Tissue): Spinal Fusion

A total of 213 ICD-10-PCS procedure codes with Z” for “no device” are being deleted, effective October 1, 2018 because a spinal fusion procedure always requires some type of device to facilitate the fusion of vertebral bones. The results of the data analysis demonstrates the reporting of an invalid spinal fusion procedure with device value “Z” represents approximately 12 percent of all discharges across the spinal fusion MS-DRGs.

• Major Diagnostic Category (MDC) 14 (Pregnancy, Childbirth and the

Puerperium)

The FY 2018 inpatient PPS proposed and final rule noted that the MS-DRG logic involving a vaginal delivery under MDC 14 is technically complex due to the requirements to satisfy assignment to the affected MS-DRGs. CMS solicited public comments on which diagnosis or procedure codes, or both, should be considered in the logic to identify a vaginal delivery. CMS also solicited public comments on which diagnosis codes should be considered in the logic to identify a complicating diagnosis.

CMS formed an internal workgroup and systematically reviewed the logic of MDC 14 MS-DRGs and analyzed the corresponding claims data. CMS acknowledges that they cannot adopt the same approach to refine the maternity and newborn MS-DRGs because of the extremely low volume of these cases represented in the Medicare data.

CMS proposes to delete 10 MS-DRGs and create 18 new MS-DRGs with a three-way severity level split in MDC 14 (Pregnancy, Childbirth and the Puerperium) as shown below in Table 3.

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Table 3: Proposed MS-DRG Changes for MDC 14

Proposed Deletion of MS-DRGs Proposed Creation of MS-DRGs MS-DRG 765 (Cesarean Section with CC/MCC)

MS-DRG 783 (Cesarean Section with Sterilization with MCC)

MS-DRG 766 (Cesarean Section without CC/MCC)

MS-DRG 784 (Cesarean Section with Sterilization with CC)

MS-DRG 785 (Cesarean Section with Sterilization without CC/MCC)

MS-DRG 786 (Cesarean Section without Sterilization with MCC)

MS-DRG 787 (Cesarean Section without Sterilization with CC)

MS-DRG 788 (Cesarean Section without Sterilization without CC/MCC)

MS-DRG 767 (Vaginal Delivery with Sterilization and/or D&C)

MS-DRG 796 (Vaginal Delivery with Sterilization/D&C with MCC)

MS-DRG 774 (Vaginal Delivery with Complicating Diagnosis)

MS-DRG 797 (Vaginal Delivery with Sterilization/D&C with CC)

MS-DRG 775 (Vaginal Delivery without Complicating Diagnosis)

MS-DRG 798 (Vaginal Delivery with Sterilization/D&C without CC/MCC)

MS-DRG 805(Vaginal Delivery without Sterilization/D&C with MCC)

MS-DRG 806 (Vaginal Delivery without Sterilization/D&C with CC)

MS-DRG 807 (Vaginal Delivery without Sterilization/D&C without CC/MCC)

MS-DRG 777 (Ectopic Pregnancy) MS-DRG 817 (Other Antepartum Diagnoses with O.R. Procedure with MCC)

MS-DRG 778 (Threatened Abortion)

MS-DRG 818 (Other Antepartum Diagnoses with O.R. Procedure with CC)

MS-DRG 780 (False Labor) MS-DRG 819 (Other Antepartum Diagnoses with O.R. Procedure without CC/MCC)

MS-DRG 781 (Other Antepartum Diagnoses with Medical Complications)

MS-DRG 831 (Other Antepartum Diagnoses without O.R. Procedure with MCC)

MS-DRG 782 (Other Antepartum Diagnoses without Medical Complications)

MS-DRG 832 (Other Antepartum Diagnoses without O.R. Procedure with CC)

MS-DRG 833 (Other Antepartum Diagnoses without O.R. Procedure without CC/MCC)

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• Major Diagnostic Category (MDC) 18 (Infectious and Parasitic Diseases

(Systematic or Unspecified Sites): Systemic Inflammatory Response Syndrome (SIRS) of Non-Infectious Origin

CMS proposes to reassign ICD-10-CM diagnosis codes for Systemic Inflammatory Response Syndrome (SIRS) of non-infectious origin with and without acute organ dysfunction, from MS-DRGs 870 (Septicemia or Severe Sepsis with Mechanical Ventilation > 96 Hours), 871 and 872 (Septicemia or Severe Sepsis without Mechanical Ventilation > 96 Hours, with MCC, and without MCC, respectively) to MS-DRG 864 and to revise the title of MS-DRG 864 to “Fever and Inflammatory Conditions.”

• Review of Secondary Diagnoses. In the FY 2018 inpatient PPS final rule, CMS

provided public notice of its plans to conduct a comprehensive review of the CC and MCC lists for FY 2019. This is similar to the FY 2008 inpatient PPS comprehensive review of the CC list performed to better recognize severity of illness that ultimately resulted in the implementation of MS-DRGs. As an initial recommendation from the first phase of the comprehensive review of the CC/MCC lists, CMS is proposing to remove the special GROUPER logic for processing claims containing two lists of ICD-10-CM diagnosis codes. These lists represent conditions that are normally coded using two or more diagnosis codes in ICD-9-CM, but required a single ICD-10-CM that combined the conditions. If one of these ICD-9-CM codes is a CC or MCC, then the single ICD-10-CM combination code used as a principal diagnosis would be grouped to the MS-DRG with CC/MCC. The lists were initially developed in the absence of ICD-10 coded data by mapping the ICD-9-CM diagnosis codes to the new ICD-10-CM combination codes. The lists were created to allow replication of the ICD-9-CM MS-DRG version. Removing the list would in effect remove CC/MCCs for the conditions on the lists. CMS estimates that 0.2 percent of the inpatient PPS claims analyzed will be impacted by removal of the special logic.

• Operating Room (O.R.) and Non-O.R. Issues. CMS proposes to change four

procedure codes from O.R. procedures to non-O.R. procedures. In addition, CMS proposes to change 73 procedure codes from non-O.R. to O.R. procedures as the procedures typically utilize the resources of an operating room.

Implementation of CMS’s “Meaningful Measures” Framework The AHA is pleased that CMS proposes to begin implementing its “Meaningful Measures” framework across the hospital quality reporting and value programs. The framework aligns with the AHA’s ongoing request that CMS reduce and prioritize the measures used in its quality programs so they focus on the issues that matter the most to improving care and outcomes. The Meaningful Measures framework identifies six overarching quality priorities and 19 specific measurement areas aligned with those priorities (see Table 4 below). Many of the measurement areas are ones that the AHA has consistently recommended to the agency.

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Table 4: CMS Meaningful Measure Priorities and Measurement Areas

CMS Quality Priority CMS Meaningful Measure Area Make care safer by reducing harm caused in the delivery of care

Healthcare-associated infections Preventable health care harm

Strengthen person and family engagement as partners in their care

Care is personalized and aligned with patient goals End-of-life care according to patient preferences Patient’s experience of care Patient-reported functional outcomes

Promote effective communication and coordination of care

Medication management Hospital admissions and readmissions 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 health care Patient-focused episode of care Risk-adjusted total cost of care

CMS reviewed all of the measures in its hospital quality and value programs to determine how well they aligned with the framework. Additionally, CMS proposes to add a measure removal criterion to the inpatient quality reporting (IQR) and value-based purchasing (VBP) programs assessing whether a measure’s costs outweigh the benefits of its continued use in the program. Lastly, CMS states that it intends to view “holistically” its three hospital “value” programs – hospital VBP, the Hospital-Acquired Conditions (HAC) Reduction Program and the Hospital Readmissions Reduction Program (HRRP). CMS believes the VBP should focus on clinical outcomes, patient experience and costs; the HAC program should focus on patient safety; and the HRRP should focus on “care coordination” as measured by readmission rates. As a result, CMS proposes to remove and realign a significant number of measures from its hospital quality reporting and value programs. The changes are summarized in Appendix B, and described in more detail in the sections that follow. Hospital IQR Program The IQR program is CMS’s pay-for-reporting program in which hospitals must submit measures in order to avoid a payment reduction equal to one quarter of the annual

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market-basket update. The IQR program also includes a requirement to report on certain electronic clinical quality measures (eCQMs). The IQR eCQM reporting requirements generally align with the eCQM reporting requirements in the Promoting Interoperability Program (formerly known as the hospital EHR incentive program). CMS proposes to remove 39 measures from the IQR program for FYs 2020 through FY 2023. Appendix B lists all of the measures used in CMS’s hospital programs and the timeframes when CMS would remove them from the programs. Of the 39 measures proposed for removal, 18 measures would be removed from hospital quality programs altogether because they are “topped out” in performance, do not lead to better care or have a costs that outweigh their value. Examples of these measures include two “structural” measures asking hospitals to attest to whether they implement safety culture surveys and use a safe surgery checklist as well as several process of care measures (e.g., influenza vaccination). The remaining 21 measures would be “de-duplicated.” That is, the measures would be removed from the IQR program, but retained in one of the other hospital measurement programs. Hospitals would still be required to report measure data, and measure results would continue to be publicly reported on Hospital Compare. For example, CMS proposes to remove six healthcare-associated infection (HAI) measures from the hospital IQR and hospital VBP programs, but would retain the HAI measures in the HAC program. The existing data reporting requirements for the HAI measures would carry over to the HAC program. Similarly, CMS proposes to remove most of the claims-based 30-day readmission measures from the IQR, but will continue to use them in the HRRP and publicly report the measure results. CMS states that “de-duplication” of measures can remove the burden and complexity of tracking measure performance in multiple programs. For example, hospitals must currently track preview reports for HAIs measures in the IQR, VBP and HAC programs, all of which could report slightly different results given the differences in performance periods and scoring methodologies across the programs. The AHA supports the removal of 18 measures from the IQR program. We also believe “de-duplicating” measures should lead to reduced administrative burden, but are assessing CMS’s proposals in more detail to understand their impact on hospital performance in the VBP and HAC programs. FY 2021 eCQM Reporting, Submission Requirement and Reporting Period. For the FY 2021 payment determination, CMS proposes to continue FY 2020 IQR Program requirement, specifically hospitals reporting on a minimum of four self-selected eCQMs from the 15 eCQMs available for reporting to the IQR Program. CMS proposes hospitals submit one self-selected quarter of eCQM data from calendar year (CY) 2019. CMS proposes to extend the same eCQM reporting and submission requirements for the Medicare and Medicaid Promoting Interoperability Program. CMS does not propose any changes to the submission deadlines. CMS also does not propose changes to sampling or case threshold policies. eCQMs Available for Reporting for FY 2022. CMS proposes to remove seven eCQMs beginning with the FY 2022 payment determination and subsequent years. CMS states

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that a reduction in the number of eCQMs in both the Hospital IQR Program and Medicare and Medicaid Promoting Interoperability Programs would focus on a small set of eCQMs yet allow flexibility to hospitals to select the reported eCQMs. CMS acknowledges feedback from hospitals about ongoing challenges of implementing eCQMs, including a need for at least one year between new EHR requirements and reporting eCQMs data. CMS also adds that a delay until FY 2022 payment determination would spare hospitals that allocated and expended resources in 2018 to prepare for the CY 2019 reporting period. Appendix B includes previously adopted eCQMs proposed to be removed and to be available for reporting in FY 2022. Certification Requirement for eCQM Reporting Beginning FY 2021 Payment Determination. CMS proposes that hospitals use the 2015 Edition certified EHR for the FY 2021 payment determination. CMS states that the 2015 Edition EHRs have functions, designed to permit the user to import and export one or more QRDA file, that permit the export of data for a set or subset of patients. CMS also references availability of optional 2015 edition certification criteria to support filtering data by demographics, provider site or diagnosis. CMS will continue to use a sub-regulatory process to incorporate updates to eCQM specifications deemed non-substantive. Proposed eCQM for Future Years. CMS proposes the inclusion of a Hospital Harm – Opioid-related Adverse Events eCQM for future years in the Hospital IQR and Promoting Interoperability Program. The measure uses the administration of naloxone in hospitals to monitor patients administered opioids during hospitalization and to avoid harm. Request for Comment on eCQM Implementation. CMS cites several stakeholder concerns with the eCQM program design and operations as well as stakeholder support for increasing the availability of new eCQMs. CMS requests stakeholder comment on several aspects on eCQM implementation, maintenance and reporting, including the aspects of eCQMs most costly to hospitals, ideas for alternative approaches such as sharing data with third parties that use machine learning and natural language processing to classify quality of care. Hospital VBP Program As required by the ACA, CMS will fund the budget-neutral FY 2019 VBP program by reducing base operating diagnosis-related group payment amounts to participating hospitals by 2.0 percent. CMS estimates the pool of available VBP funds will be $1.9 billion for FY 2019. Proposed Measure Removal. CMS proposes to remove 10 measures from the hospital VBP program. See Appendix B for a list of the measures that would be removed and the timing of their removal. However, all of the measures removed from the VBP would be retained in other hospital programs. For example, the seven infection and patient safety measures proposed for removal would be retained in the HAC program. Proposed Measure Domains and Weights for FY 2021. Currently, the VBP includes a “safety” domain weighted as 25 percent of a hospital’s VBP total performance score (TPS). However, because CMS has proposed to remove all of the safety measures from the VBP, CMS proposes to revise the VBP measure domain weights. The agency would

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remove the safety domain altogether, and increase the weight of the “clinical outcomes” domain to 50 percent of the VBP TPS. The remaining two domains – efficiency/cost reduction and person/community engagement – would remain weighted at 25 percent each. CMS’s proposed domain reweighting, and the measures that would be in each domain, are outlined in Table 5 below.

Table 5: Proposed VBP Domain Re-Weighting and Measures for FY 2021

Clinical Outcomes (50 percent of VBP Score) AMI 30-day mortality rate Heart Failure (HF) 30-day mortality rate Pneumonia 30-day mortality rate COPD 30-day mortality rate CABG 30-day mortality rate THA/TKA complications

Person and Community Engagement (25 percent of VBP Score) HCAHPS survey + 3-item Care Transition Measure

Efficiency and Cost Reduction (25 percent of VBP Score) Medicare spending per beneficiary

HAC Reduction Program The HAC Reduction Program imposes a 1 percent reduction to all Medicare inpatient payments for hospitals in the top (worst performing) quartile of risk-adjusted national HAC rates. CMS does not propose to add or remove any measures from the HAC Reduction Program. However, CMS proposes two important changes to the program – the elimination of measure domains, and the adoption of data collection and validation requirements for the HAI measures in the program. Elimination of Measure Domains. CMS proposes to change the HAC scoring methodology by eliminating measure domains and assigning an equal weight to all six performance measures in the program. The remainder of the scoring methodology would remain unchanged. CMS believes this change would address the concerns expressed by some small hospitals who believed it was problematic for their HAI domain scores to rest on the performance of only one or two measures. CMS estimates that the approach should penalize slightly fewer smaller hospitals. However, the agency also estimates that the approach may penalize slightly more teaching hospitals and large urban hospitals. The AHA is further examining the impact of these changes. Data Collection and Validation Requirements. Because CMS has proposed to remove all of the HAI measures in the HAC Reduction Program from the hospital IQR program, it must establish data reporting and validation requirements within the HAC Program. CMS proposes to carry over nearly all of the same requirements used in the IQR program to the HAC program. CMS notes that any hospitals that fail measure validation would receive the lowest possible score on the selected measures.

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Hospital Readmissions Reduction Program (HRRP) The HRRP imposes penalties of up to 3 percent of base inpatient PPS payments for having “excess” readmissions rates for selected conditions when compared to expected rates. CMS uses a total of six Medicare-claims-based readmission measures to assess performance in the program – acute myocardial infarction, heart failure, pneumonia, chronic obstructive pulmonary disease, isolated coronary artery bypass grafts, and elective hip and knee replacements. CMS proposes no major changes to the HRRP for FY 2019. However, as finalized in the FY 2018 inpatient PPS final rule, CMS will implement the socioeconomic adjustment approach mandated by the 21st Century Cures Act. The approach is described in the AHA’s Regulatory Advisory on the FY 2018 inpatient PPS final rule. CMS also proposes to continue using a three-year performance period for the HRRP (i.e., July 1, 2014 – June 30, 2017). The AHA continues to have concerns that CMS is combining data collected under both ICD-9 (which ended on Sept. 30, 2015) and ICD-10. We will again urge the agency to examine this impact.

NEXT STEPS

The AHA will host a members-only webinar on June 5 at 2:00 p.m. ET to discuss the provisions of the proposed rule and gather input from the field for AHA’s comment letter and advocacy to CMS. To register for this 60-minute webinar, click here. Given the changes included in this year’s proposed rule, the AHA encourages hospital leaders to estimate the impact of the provisions on their facilities. To that end, the AHA has created a readmissions penalty calculator, a VBP calculator and a DSH payment calculator for hospitals to assess the impact of these policies on their organizations. They are available at https://www.aha.org/inpatient-pps. The calculators are designed so that you enter your hospital's CCN (and some additional financial information for the DSH calculator) and the calculator will then estimate the dollar amount of your potential readmissions penalty, net VBP gain or loss, and DSH payment. The AHA also encourages hospitals to notify their MAC by May 29 if they qualify for enhanced low-volume adjustment payments for FY 2018, per the instructions outlined in CMS’s notice. We also recommend that hospitals verify that their wage data are accurate. CMS released the final wage index data public use files in April on its website, and hospitals must submit a letter requesting correction of errors and supporting documentation to CMS by May 30. In addition, hospitals should verify whether they have attested to meaningful use. Attestation status can be determined through CMS’s EHR Incentive Program registration and attestation website.

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All comments are due to CMS by June 25 and may be submitted electronically at www.regulations.gov. Follow the instructions for “Comment or Submission” and enter the file code CMS-1694-P to submit comments on this proposed rule. You also may submit written comments to CMS. By regular mail: Centers for Medicare & Medicaid Services Department of Health and Human Services Attention: CMS-1694-P P.O. Box 8011 Baltimore, MD 21244-1850

By express or overnight mail: Centers for Medicare & Medicaid Services Department of Health and Human Services Attention: CMS-1694-P Mail Stop C4-26-05 7500 Security Boulevard Baltimore, MD 21244-1850

FURTHER QUESTIONS

For additional questions, please contact Joanna Hiatt Kim, vice president of payment policy, at (202) 626-2340 or jkim@aha.org.

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Appendix A: Promoting Interoperability Scoring Methodology, CY 2019 and CY 2020

Objective Measure(s) Points Exclusions Electronic Prescribing

ePrescribing: At least one hospital discharge medication order for permissible prescriptions (for new and changed prescriptions) is queried for a drug formulary and transmitted electronically using a certified EHR Query of Prescription Drug Monitoring Program (PDMP): For at least one Schedule II opioid electronically prescribed using a certified EHR during the reporting period, the EH or CAH uses data from certified EHR to conduct a query of a Prescription Drug Monitoring Program (PDMP) for prescription drug history, except where prohibited and in accordance with applicable law. Verify Opioid Treatment Agreement: For at least one unique patient for whom a Schedule II opioid was electronically prescribed by the EH or CAH using a certified EHR during the EHR reporting period, if the total duration of the patient’s Schedule II opioid prescriptions is at least 30 cumulative days within a six-month look-back period, the EH or CAH seeks to identify the existence of a signed opioid treatment agreement and incorporates it into the patient’s electronic health record using a certified EHR.

10 points in 2019 and 5 points in 2020 5 points (Bonus points for CY2019) 5 points (Bonus points for CY2019)

An exclusion claimed for all measures in the ePrescribing objective will equally distribute the points to the measures available for Health Information Exchange and the Provide Patients Electronic Access objectives. An exclusion claimed for the Query PDMP or Opioid Treatment Agreement measures will redistribute the respective five points to the e-Prescribing Measure.

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Health Information Exchange

Support Electronic Referral Loops by Sending Health Information: For at least one transition of care or referral, the EH or CAH that transitions or refers its patient to another setting of care or provider of care (1) creates a summary of care record using certified EHR; and (2) electronically exchanges the summary of care record. Support Electronic Referral Loops by Receiving and Incorporating Health Information: For at least one electronic summary of care record received for patient encounters during the EHR reporting period for which an EH or CAH was the receiving party of a transition of care or referral, or for patient encounters during the EHR reporting period in which the EH or CAH has never before encountered the patient, the EH or CAH conducts clinical information reconciliation for medication, mediation allergy and current problem list.

20 points 20 points

No exclusions proposed for the Sending Health Information Measure. An exclusion claimed for the Receiving and Incorporating Measure will redistribute the 20 points to the Sending Health Information Measure.

Provider to Patient Exchange

Provide Patients Electronic Access to Their Health Information. For at least one unique patient discharged from the EH or CAH inpatient or emergency department (POS 21 or 23), (1) the patient (or patient-authorized representative) is provided timely access to view online, download, and transmit his or her health information; and (2) the EH or CAH ensures the patient’s health information is available for the patient (or patient-authorized

40 points in CY 2019 and 35 points in CY 2020

No exclusions proposed for the Provide Patients Electronic Access to Their Health Information Measure.

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representative) to access using any application of their choice that is configured to meet the technical specifications of the API in the EH or CAH’s certified EHR.

Public Health and Clinical Data Exchange

Syndromic Surveillance Reporting (required): The EH or CAH is in active engagement with a public health agency to submit syndromic surveillance data from an urgent care setting. Select one or more additional registries for required reporting: Immunization Registry Reporting: The EH or CAH is in active engagement with a public health agency to submit immunization data and receive immunization forecasts and histories from the public health immunization registry/immunization information system (IIS). Electronic Case Registry Reporting: The EH or CAH is in active engagement with a public health agency to submit case reporting of reportable conditions. Public Health Registry Reporting: The EH or CAH is

10 points Any EH or CAH may be excluded from the syndromic surveillance reporting measure if lacking an emergency or urgent care department, the public health agency cannot receive electronic syndromic surveillance data in the EHR specified standards at the start of the reporting period, or the public health agency has not declared readiness to receive syndromic surveillance data as of six months prior to the start of the EHR reporting period. An exclusion claimed will redistribute the 10 points to the Provide Patients Electronic Access to Their Health Information Measure.

© 2018 American Hospital Association 29

in active engagement with a public health agency to submit data to public health registries. Clinical Data Registry Reporting: The EH or CAH is in active engagement to submit data to a clinical data registry. Electronic Reportable Laboratory Result Reporting: The EH or CAH is in active engagement with a public health agency to submit electronic reportable laboratory results.

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Appendix B: Proposed Measure Removal and De-Duplication in CMS Hospital Quality Programs, FYs 2020-2022

Measure IQR VBP HAC HRRP

Chart Abstracted Process of Care Measures VTE-6 Incidence of potentially preventable VTE Remove

(FY 2021)

Severe sepsis and septic shock: management bundle (NQF #500)

X

ED-1 Median time from ED arrival to departure from the emergency room for patients admitted to the hospital (NQF #0495)

Remove (FY 2021)

ED-2 Median time from admit decision to time of departure from the ED for patients admitted to the inpatient status (NQF #0497)

Remove (FY 2022)

IMM-2 Immunization for influenza (NQF #1659) Remove (FY 2021)

PC-01 Elective delivery < 39 weeks gestation (NQF#0469)

X Remove (FY 2021)

Electronic Clinical Quality Measures (eCQMs, reported using QRDA-1) AMI 8a Primary PCI received within 90 Minutes of hospital arrival

Remove (FY 2022)

CAC-3 Home management plan of care document given to patient/caregiver

Remove (FY 2022)

ED-1 Median time from ED arrival to ED departure for admitted ED patients

Remove (FY 2022)

ED-2 Admit decision time to ED departure time for admitted patients

X

EHDI-1a Hearing screening prior to hospital discharge

Remove (FY 2022)

PC-01 Elective delivery (eCQM version) Remove (FY 2022)

PC-05 Exclusive breast milk feeding X STK-02 Discharged on antithrombotic therapy X STK-03 Anticoagulation therapy for atrial fibrillation/flutter

X

STK-05 Antithrombotic therapy by the end of hospital day two

X

STK-06 Discharged on statin medication X STK-08 Stroke education Remove

(FY 2022)

STK-10 Assessed for rehabilitation Remove (FY 2022)

VTE-1 Venous thromboembolism prophylaxis X VTE-2 Intensive care unit venous thromboembolism prophylaxis

X

Healthcare Associated Infection Measures (chart-abstracted) Central-line associated bloodstream infection (CLABSI)

Remove (FY 2021)

Remove (FY 2021)

X

Surgical site infection (SSI): Colon surgery; abdominal hysterectomy

Remove (FY 2021)

Remove (FY 2021)

X

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Measure IQR VBP HAC HRRP Catheter-associated urinary tract infection (CAUTI) Remove

(FY 2021) Remove

(FY 2021) X

Methicillin-resistant staphylococcus aureus (MRSA) Bacteremia

Remove (FY 2021)

Remove (FY 2021)

X

Clostridium difficile (C. Difficile) Remove (FY 2021)

Remove (FY 2021)

X

Healthcare personnel influenza vaccination X Hospital Mortality Measures (claims based)

Acute myocardial infarction (AMI) 30-day mortality rate

Remove (FY 2020)

X

Heart Failure (HF) 30-day mortality rate Remove (FY 2020)

X

Pneumonia (PN) 30-day mortality rate Remove (FY 2021)

X

Stroke 30-day mortality rate X Chronic obstructive pulmonary disease (COPD) 30-day mortality rate

Remove (FY 2021)

X

Coronary artery bypass graft (CABG) 30-day mortality rate

Remove (FY 2022)

X

Hospital Readmission Measures (claims-based) Hospital-wide all-cause unplanned readmission X Hybrid (claims+EHR) hospital-wide readmission X Excess days in acute care after hospitalization for AMI

X

Excess days in acute care after hospitalization for HF

X

Excess days in acute care after hospitalization for PN

X

Stroke 30-day risk standardized readmission Remove (FY 2020)

AMI 30-day risk standardized readmission Remove (FY 2020)

X

Heart failure 30-day risk standardized readmission Remove (FY 2020)

X

Pneumonia 30-day risk standardized readmission Remove (FY 2020)

X

Total knee replacement / total hip replacement (TKA/THA) 30-day risk standardized readmission

Remove (FY 2020)

X

COPD 30-day risk standardized readmission Remove (FY 2020)

X

CABG 30-day risk standardized readmission Remove (FY 2020)

X

Patient Safety Measures (based on Medicare claims data) PSI-90 Patient safety composite (NQF #0531) Remove

(FY 2020) Remove

(FY 2019) X

PSI-04 Death among surgical inpatients with serious, treatable complications (NQF #0351)

X

THA/TKA complications

Remove (FY 2023)

X

Efficiency and Episode-based Payment Measures (claims-based) Medicare spending per beneficiary Remove

(FY 2020) X

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Measure IQR VBP HAC HRRP AMI payment per 30-day episode of care X Remove

(FY 2019)

HF payment per 30-day episode of care X Remove (FY 2019)

PN payment per 30-day episode of care X Remove (FY 2019)

THA/TKA payment per 30-day episode of care X Kidney/UTI clinical episode-based payment Remove

(FY 2020)

Cellulitis clinical episode-based payment Remove (FY 2020)

Gastrointestinal hemorrhage clinical episode-based payment

Remove (FY 2020)

Aortic aneurysm procedure clinical episode-based payment

Remove (FY 2020)

Cholecystectomy/common duct exploration episode-based payment

Remove (FY 2020)

Spinal fusion clinical episode-based payment Remove (FY 2020)

Patient Experience of Care (survey-based) Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey + 3-item Care transition measure

X X

Structural Measures (web-based reporting) Safe Surgery Checklist use Remove

(FY 2020)

Hospital survey on patient safety culture Remove (FY 2020)