2015 IPPS Final Rule released

HCPRO Website, August 5, 2014


A significant portion of updates in the Fiscal Year 2015 IPPS final rule pertain to the Hospital Value-Based Purchasing (VBP) Program, the Hospital Readmissions Reduction Program, and the Hospital-Acquired Condition (HAC) Reduction Program.
“The IPPS rule speaks strongly about quality and with the patient care quality initiatives that CMS is driving and supporting,” says Gloryanne Bryant, RHIA, CDIP, CCS, CCDS, AHIMA Approved ICD-10-CM/PCS Trainer, past president of the California Health Information Association, and National Director of Coding Quality, Education, Systems and Support National Revenue Cycle- Kaiser Foundation Health Plan Inc. & Hospitals.
This quality focus creates a need for increased interdisciplinary collaboration across quality, HIM, risk management, revenue cycle, compliance, and technology.
“In addition, the use of data is ever increasing with these initiatives to guide quality and future decision making,” Bryant says. Organizations will need to establish strong data governance in the near future.
“The 2015 IPPS rule emphasizes that hospitals, physicians, coders, and clinical documentation integrity staff must understand the risk-adjustment methodologies inherent to value-based purchasing, which are outlined on the web,” says James S. Kennedy, MD, CCS, CDIP, president of CDIMD – Physician Champions in Smyrna, Tennessee. “These complex documentation requirements must be woven into the hospital’s EMR fabric so as to not impede the physician’s natural work flow or burden him or her with numerous post-discharge queries.”
Several of the changes to the quality initiatives are mandated by the Affordable Care Act (ACA).
Hospital Value-Based Purchasing
CMS finalized an increase in the applicable percent reduction to 1.5% of base operating DRG payment amounts to all participating hospitals as part of the VBP program. CMS will use that money, estimated at $1.4 billion, to make value-based incentive payments to hospitals meeting established performance standards.
For FY 2017, CMS will add two new safety measures and one new clinical care-process measure, re-adopt the current version of the central line-associated blood stream infection (CLABSI), and remove six “topped-out” clinical process measures.
Because CMS is removing the topped out measures, it will revise the domain weighting for FY 2017.
In addition, CMS will adopt one new hospital-level risk-standardized complication rate following elective hip and knee arthroplasty measure with a 30-month performance period for FY 2019 and a 36-month performance period for FY 2020. 
HAC Reduction Program
HACs are a group of reasonably preventable conditions that patients did not have upon admission to a hospital, but which they develop during the hospital stay.
The ACA requires CMS to reduce payment by 1% for hospitals that rank in the 25% with the highest rate of HACs.
In the 2014 IPPS final rule, CMS finalized the scoring method for calculating a HAC score for each hospital. The score consists of two domains. The first is based on Patient Safety Indicator (PSI) 90, an administrative claims based measure.
The second domain is based on two healthcare-associated infection measures:
  • Catheterassociated urinary tract infection
For FY 2016 a third healthcare associated infection measure, surgical site infections (SSI), will be added to the program in domain 2.  
Hospital Readmissions Reduction Program
CMS finalized the third increase in the Hospital Readmissions Reduction Program maximum penalty, raising it from 2% to 3%, as required by the ACA.
The readmissions reduction program began in 2013 with a 1% maximum reduction in payments for hospitals with excessive readmissions. The maximum penalty increased to 2% for FY 2014 and will be 3% in FY 2015.
CMS will assess hospitals’ readmission penalties using these five readmissions measures:
  • Heart attack
  •  Heart failure
  • Pneumonia
  • Chronic obstructive pulmonary disease
  • Hip/knee arthroplasty
As part of the FY 2015 IPPS final rule, CMS finalized an updated method to account for planned readmissions.
CMS will add readmissions for coronary artery bypass graft (CABG) surgical procedures to the list for FY 2017.
Hospital Inpatient Quality Reporting Program
The Hospital Inpatient Quality Reporting (IQR) Program was originally mandated as part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. The program allows CMS to pay hospitals that successfully report designated quality measures a higher annual update to their payment rates. Hospitals that did not successfully report the quality measures face a reduction in payments.
CMS is finalizing a total of 63 measures (47 required and 16 voluntary electronic clinical quality measures) in the Hospital IQR Program measure set for the FY 2017 payment determination and subsequent years. CMS reduced the number of required measures from 57 to 47 and added 11 new measures (one chart-abstracted, four claims-based, and six voluntary electronic clinical quality measures).
Documentation and Coding Adjustment
Section 631 of the American Taxpayer Relief Act of 2012 requires CMS to recover $11 billion by 2017 to fully recoup documentation and coding overpayments related to the transition to the MS-DRGs that began in FY 2008. For FY 2015, CMS will make another -0.8% adjustment to continue the recovery process.
MS-DRG changes
CMS also considered several MS-DRG changes for FY 2015.
CMS finalized its proposal to create the following MS-DRGs for endovascular cardiac valve replacements:
  • MS-DRG 266 (endovascular cardiac valve replacement with MCC)
  •  MS-DRG 267 (endovascular cardiac valve replacement without MCC)
CMS also will replace MS-DRG 490 and 491 with the following new MS-DRGs:
  •  MS-DRG 518 (back and neck procedures except spinal fusion with MCC or disc device/neurostimulator)
  • MS-DRG 519 (back and neck procedures except spinal fusion with CC)
  • MS-DRG 520 (back and neck procedures except spinal fusion without CC/MCC)
CMS also finalized 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 will publish the final rule in the Federal Register August 22. A display copy is available online.