Health Information Management

IPPS proposed rule focuses on quality measures

HIM-HIPAA Insider, May 5, 2014

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by Jaclyn Fitzgerald, Editor
Quality measures are at the top of the list of potential changes outlined in CMS’ 2015 IPPS proposed rule, published in the Federal Register April 30. The proposed rule addresses several issues related to the Affordable Care Act, including the hospital-acquired condition (HAC) reduction, readmissions reduction, and hospital value-based purchasing (VBP) programs.
Buried in the 1,688-page proposed rule is mention of a new ICD-10 implementation date of October 1, 2015. On p. 648 of the rule, CMS states, "The ICD-10-CM/PCS transition is scheduled to take place on October 1, 2015. After that date, we will collect nonelectronic health record-based quality measure data coded only in ICD-10-CM/PCS." In two additional places (p. 1065 and p. 1074), CMS states, "ICD-10 will officially be implemented on October 1, 2015."
CMS announced May 1 that it will soon release an interim final rule to confirm that October 1, 2015, ICD-10 implementation date.
The proposed rule does not contain any changes to the 2-midnight rule. However, CMS is asking for input on an alternative payment methodology for short-stay inpatient cases that also may be treated on an outpatient basis, including how to define a short stay.           
CMS proposed a 1% reduction in payments for hospitals with the highest rate of HACs to comply with the ACA. The reduction will apply to the bottom 25% of hospitals (i.e., those with the worst HAC rates). CMS is not planning to add or remove any HAC categories from the current list, but it did ask for continued public comments.
CMS proposed increasing the maximum payment reduction for hospital readmissions from 2% to 3%. CMS proposes to assess hospitals’ readmissions penalties using five readmissions measures endorsed by the National Quality Forum. Under that program, CMS defines a readmission as an admission to a subsection (d) hospital within 30 days of a discharge from the same or another subsection (d) hospital.
VBP adjusts payments to hospitals under the IPPS based on the quality of care they deliver to patients. VBP incentives are funded by a reduction in base-operating DRG payments. The base-operating DRG includes the wage-adjusted DRG operating payment as well as any new technology add-on payments.
CMS will increase the applicable percent reduction, the portion of Medicare payments available to fund the value-based incentive payments under the program, to 1.5% of the base operating DRG payment amounts as mandated by the ACA.
In addition to the proposed changes related to the ACA, CMS also proposed to create the following MS-DRGs for endovascular cardiac valve replacements:
  • Proposed new MS-DRG 266 (endovascular cardiac valve replacement with MCC)
  • Proposed new MS-DRG 267 (endovascular cardiac valve replacement without MCC)
CMS also proposed to remove and replace MS-DRG 490 and 491 with the following MS-DRGs:
  • Proposed new MS-DRG 518 (back & neck procedures except spinal fusion with MCC or disc device/neurostimulator)
  • Proposed new MS-DRG 519 (back & neck procedures except spinal fusion with CC)
  • Proposed new MS-DRG 520 (back & neck procedures except spinal fusion without CC/MCC)
CMS also proposes removing the following additional diagnosis codes to MS-DRG 794 (neonate with significant problems):
  • V17.0, family history of psychiatric condition
  • V17.2, family history of other neurological diseases
  • V17.49, family history of other cardiovascular diseases
  • V18.0, family history of diabetes mellitus
  • V18.19, family history of other endocrine and metabolic diseases
  • V18.8, family history of infectious and parasitic diseases
  • V50.3, ear piercing
CMS proposed to increase the Hospital Inpatient Quality Reporting Program IPPS operating payment rates by 1.3% after reductions, including a 0.8% coding and documentation reduction. CMS estimates Medicare payments to inpatient facilities will decrease by $241 million in FY 2015.

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