A Guide to Regulation and Legislation Volume Fifteen

CMS finalized in the 2019 IPPS/LTCH Final Rule. The rule goes into effect October 1, 2018. CLA’s Regulatory Advisor offers a concise summary of the changes.

Navigating health reform

CMS Releases 2019 Final Payment Rule for Inpatient and Long-Term Care Hospitals

  • Jennifer Boese
  • 9/6/2018

The Centers for Medicare and Medicaid Services (CMS) released the final 2019 Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital (LTCH) Rule (CMS 1694-F). The following includes a high level overview of key provisions.

Inpatient prospective payment system and policy updates

Roughly 3,330 acute care hospitals will be impacted by the changes in this rule. The rule takes effect October 1, 2018. Those changes cover payment, policies, and quality programs.

Market-basket update

The rule provides a 2.9 percent market-basket update. Statutory reductions will apply.

Disproportionate Share Hospital (DSH)

Due to an increased percentage in the number of uninsured, CMS added an additional $1.5 billion to the pool of dollars distributed among DSH hospitals based on levels of uncompensated care. CMS will also continue incorporating the uncompensated care cost data from Worksheet S-10 of the Medicare cost report into the methodology for distributing these funds. For fiscal year (FY) 2019, CMS will use Worksheet S-10 data from the FY 2014 and FY 2015 cost reports in combination with Medicaid days from the FY 2013 cost report and FY 2016 supplemental security income (SSI) ratios to determine the distribution of uncompensated care payments.

Price transparency

CMS followed through on its public statements to work towards more price transparency for consumers by finalizing an update to its guidelines to specifically require hospitals to make their standard charges public via the Internet in a readable format and update them annually (or more often) if there are changes.

Part A certification statements

CMS removed the requirement to state where in a medical record required information can be found.

Physician orders

CMS removed the requirement that a written inpatient order is present in the medical record as a condition of Part A payment. The agency found that in some instances, payment was denied solely due to technical discrepancies in the order, but that medical necessity was clearly evident in the medical record. CMS still indicates, however, the requirement that, for purposes of Part A payment, an individual becomes an inpatient when formally admitted as an inpatient.

Graduate Medical Education (GME)

New urban teaching hospitals gain additional flexibility to enter into Medicare GME affiliation agreements, which allow hospitals to share full time equivalent cap slots to accommodate the cross training of residents.

Cost report forms

CMS finalized additional documentation in certain instances, including for Organ Procurement Organizations (OPO) and Histocompatibility Laboratories, as well as reporting bad debt, DSH, charity care, and uninsured discounts.

  • OPO/Histocompatibility Laboratory ― Provider Cost is required to be included on Reimbursement Questionnaire, Form CMS-339 into the OPO and Histocompatibility Laboratory cost report, Form CMS-216.
  • Bad Debt ― For cost reporting periods beginning on or after October 1, 2018, a cost report will be rejected for lack of supporting documentation for providers claiming Medicare bad debt reimbursement if it does not include a detailed bad debt listing that corresponds to the bad debt amounts claimed in the provider’s cost report.
  • DSH ― For cost reporting periods beginning on or after October 1, 2018, the cost report of hospitals claiming a DSH payment adjustment will be rejected for lack of supporting documentation if it does not include a detailed listing of the hospital’s Medicaid eligible days that correspond to the Medicaid eligible days claimed in the hospital’s cost report. In addition, if the hospital submits an amended cost report that changes its Medicaid eligible days, the hospital must submit an amended listing or an addendum to the original listing of the hospital’s Medicaid eligible days that corresponds to the Medicaid eligible days claimed in the hospital’s amended cost report.
  • Charity Care or Uninsured Discounts ― CMS finalizes a new requirement that effective for cost reporting periods beginning October 1, 2018, cost reports of DSH eligible hospitals reporting charity care and/or uninsured discounts will be rejected for lack of supporting documentation if it does not include a detailed listing of charity care and/or uninsured discounts that corresponds to the amounts claimed in the hospital’s cost report. A hospital must include a listing with its cost report submission that supports the amounts reported in its cost report, including information, such as: patient name, dates of service, insurer (if applicable), and the amount of the charity care and/or uninsured discount given to the patient. CMS specifically highlights the use of Worksheet S-10 in DSH payments and, therefore, the need for documentation.
  • Home Office and Chain Organizations ― CMS is requiring home office organizations to submit their Home Office Cost Statement to each of the contractors of their chain providers.
Wage index

CMS will allow the imputed floor for all-urban states to expire under both the original methodology and the alternative methodology on September 30, 2018. Twenty-two hospitals from New Jersey, Rhode Island, and Delaware will no longer receive an increase in their FY 2019 wage index due to this policy. CMS also eliminated other wage-related costs from the calculation of the wage index for the FY 2020 wage index and subsequent years. Hospitals will use average hourly wage data from the current year’s IPPS final rule that is available on the CMS website to demonstrate they are the only hospital in their Metropolitan Statistical Area for the purpose of meeting an exemption from certain wage index geographic reclassification. This change begins in FY 2021.

IPPS-excluded units

CMS policies now allow certain hospitals which are excluded from the IPPS (for example, LTCHs) to operate IPPS-excluded units as long as that arrangement would be allowed under the applicable hospital conditions of participation. In addition, CMS will not require an IPPS-excluded satellite of an IPPS excluded unit of an IPPS-excluded hospital to comply with the separateness and control requirements as long as the satellite of the unit is not co-located with an IPPS hospital.

Low-volume adjustment (LVA) and Medicare Dependent
Hospitals (MDH)

Under the Bipartisan Budget Act of 2018, Congress extended both the MDH and the LVA payment adjustments for another five years (through September 30, 2022). However, Congress altered the LVA criteria beginning in FY 2019. CMS now requires LVA hospitals to also alert their Medicare Administrative Contractors (MACs) by May 24, 2018, that they qualify as an LVA under current criteria for the FY 2018, and must alert their MACs by September 1, 2018, that they qualify under the new criteria beginning FY 2019. For an MDH, the MDH status is automatically reinstated.

CAR-T-cell therapy

CMS finalized its policy to assign CAR-T-cell therapies to Medicare Severity-Diagnosis Related Group (MS-DRG) code 016 and rename that code to “Autologous Bone Marrow Transplant with CC/MCC or T-cell Immunotherapy.” In addition CMS approved both KYMRIAH and YESCARTA for new technology add-on payments for FY 2019. CMS noted the maximum new technology add-on payment for a case involving the use of KYMRIAH or YESCARTA is $186,500 for FY 2019. Additionally, CMS has opened a national coverage determination (NCD) analysis on CAR T-cell therapy for Medicare beneficiaries with advanced cancer and expected that NCD analysis to be completed by May 17, 2019. Finally, CMS is seeking feedback on potential demonstration payment models for CAR-T-cell therapies.

Rural Community Hospital and Frontier Demonstrations

CMS provided details on extending the Rural Community Hospital Demonstrations another five years, as required under the 21st Century Cures Act. CMS also discussed the Frontier Community Health Integration Project (FCHIP) Demonstration, which tests new models for providing coordinated health care in the most sparsely-populated rural counties.

Meaningful Use and other electronic health record (EHR) changes

CMS finalized the change from the “Meaningful Use” program name to “Promoting Interoperability.” This change is in line with the agency’s desire to move forward with interoperability, which CMS also believes will be aided by using the EHR program. Other changes include:

90-day reporting period

For 2019 and 2020, the EHR reporting will be a minimum of a continuous, self-selected 90-day period for each calendar year.

2015 CEHRT requirement

Providers are required to use the 2015 edition certified EHR technology (CEHRT) beginning in 2019 reporting period/2021 payment period.

New scoring methodology

CMS has moved away from the pass/fail approach to a performance approach based on a 100-point scoring methodology. The new system will include four broad objectives (e-prescribing, health information exchange, provider to patient exchange, and public health and clinical data exchange) and a reduced number of measures. A minimum of 50 points is required to satisfactorily be a meaningful user. CMS also requires that eligible hospitals and critical access hospitals (CAHs) attest to having completed the actions included in the Security Risk Analysis measure at some point during the calendar year in which the EHR reporting period occurs. There are no points for this and it does not contribute to the score methodology.

  • E-Prescribing Objective ― The e-Prescribing measure is worth up to 10 points in CY 2019 and up to 5 points in CY 2020. CMS adds the following measures beginning in 2019:
    • The Query of Prescription Drug Monitoring Program measure is voluntary in 2019 and mandatory in 2020 and is worth up to 5 points each year.
    • The Verify Opioid Treatment Agreement measure, is optional in both 2019 and 2020 and worth up to 5 points. Several exclusion policies are now final.
  • Health Information Exchange Objective ― The Support Electronic Referral Loops by Sending Health Information measure is worth up to 20 points. No exclusions are available. A new measure, Support Electronic Referral Loops by Receiving and Incorporating Health Information, is final and is worth up to 20 points. An exclusion is available in CY 2019.
  • Provider to Patient Exchange Objective ― This objective is finalized and the Patients Electronic Access to Their Health Information measure is worth up to 40 points beginning with the EHR reporting period in CY 2019. No exclusions are available.
  • Public Health and Clinical Data Exchange Objective ― Eligible hospitals and CAHs must submit a yes/no response for any two measures associated with the Public Health and Clinical Data Exchange objective to earn 10 points for the objective. Failure to report on two measures or submitting a “no” response for a measure will earn a score of zero. Exclusions exist for this measure.

View our supplemental material to see the final performance-based scoring methodology for EHR reporting periods in CY 2019 and 2020.

Electronic clinical quality measures (eCQMs)

For hospitals and CAHs that report clinical quality measures electronically, the reporting period for the Medicare and Medicaid EHR Incentive Programs will be one, self selected calendar quarter of data for four self-selected eCQMs for the CY 2019 reporting period/FY 2021 payment determination. CMS also finalized the removal of eight eCQMs in 2020.

Quality programs and measures

Overall, CMS removed 18 measures from its five quality programs and “de-duplicated” another 21 measures. A quick summary of each of the five program changes follows.

View our supplemental material to see all removed measures.

Hospital Inpatient Quality Reporting (IQR) Program

CMS removed 39 measures between the payment determinations years of FY 2020 and FY 2023 from the IQR program. Some of the measures will still be in other required programs. CMS delayed the removal of five measures (CDI, CAUTI, CLABSI, MRSA, and Colon and Abdominal Hysterectomy SSI measures) from the IQR program one year, removing them in CY 2020 reporting period/FY 2022 payment determination.

Hospital Value-Based Purchasing (VBP) Program

CMS updated the Hospital VBP Program and will remove three condition-specific payment measures from the Efficiency and Cost Reduction domain and the Elective Delivery which is in the Patient Safety domain. CMS did not finalize its proposal to remove the Patient Safety Domain and then reweight the remaining three domains. Instead, it will retain the current four domains in the Hospital VBP Program at the same weighting.

HAC Reduction Program

CMS made no measure changes in 2019 and finalized its equal measure weighting changes beginning in 2020.

Hospital Readmissions Reduction Program (HRRP)

CMS removed multiple measures from the HRRP program. It finalized the requirement from the 21st Century Cures Act to assess eligible hospital readmission performance relative to hospitals with a similar proportion of dual-eligible Medicare-Medicaid patients. To do so, CMS will assign eligible hospitals into five equal sized peer groups based on their proportion of dual eligible patients and clarify definitions needed to implement this requirement.

PPS-Exempt Cancer Hospital Quality Reporting (PCHQR)

For hospitals under the PCHQR program, CMS finalized a new measure and removed four others. The new measure is a claims-based hospital 30-day unplanned readmission outcome measure, which begins with the FY 2021 program year. The four measures removed relate to health care associated infections, oncology, or prostate cancer.

Long-term care hospitals (LTCH) payment and policy changes

Nearly 420 LTCHs will be impacted by the changes in this rule. Those changes cover payment, policies, and quality programs. Several key policies are highlighted.

Market-basket update

CMS finalized a 1.35 percent market basket update, assuming all clinical requirements are met.

25 Percent Rule

CMS eliminated the 25 Percent Rule entirely.

Long-Term Care Hospital Quality Reporting
Program (LTCH QRP)

CMS removed three burdensome measures:

  • National Healthcare Safety Network (NHSN) Facility-Wide Inpatient Hospital-Onset Methicillin-Resistant Staphylococcus aureus (MRSA) Bacteremia Outcome Measure (NQF #1716) (beginning with the FY 2020 LTCH QRP)
  • National Healthcare Safety Network (NHSN) Ventilator Associated Event (VAE) Outcome Measure (beginning with the FY 2020 LTCH QRP)
  • Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine (Short Stay) (NQF #0680) (beginning with the FY 2021 LTCH QRP)

CMS also finalized changes to how it will notify LTCHs of non-compliance.