FY 2015 Inpatient PPS Proposed Rule: What You Need to Know. June 18, 2014

Transcription

1 FY 2015 Inpatient PPS Proposed Rule: What You Need to Know June 18, 2014

2 IPPS Proposed Rule FY15 Issued April 30 Comments due June 30 Expect final rule by August 1 Key issues: Payment update Medicare DSH AWI Two-Midnight MDH/LVA Quality/Performance payment programs ICD-10 Price Transparency

3 IPPS Payment Update Increase inpatient PPS rates by 1.3 percent Policy Average Impact on Payments Market basket update 2.7% Productivity cut mandated in the - 0.4% Affordable Care Act of 2010 (ACA) Additional cut mandated in ACA - 0.2% Documentation and coding cut for FYs - 0.8% 2010, 2011, and 2012 mandated by the American Taxpayer Relief Act of 2012 (ATRA) Total +1.3% Note: This update does not include hospital-specific payment changes due to readmissions, VBP, HACs, MU, etc.

4 IPPS Medicare DSH Payment Background: ACA required changes to Medicare DSH payments beginning in FY % 75 % Pool of funds using old formula method New pool of funds - Reduced as uninsured declines - Payments made based on amount of uncompensated care DSH hospital provides Reminder of changes implemented in FY 2014: Used Medicaid days + Medicare SSI Days as proxy for uncompensated care Reduced Medicare DSH by $546 million (compared to FY 2013)

5 IPPS Medicare DSH Payment CMS would continue same structure in FY 2015 Proposes to continue to use Medicaid days + Medicare SSI Days as proxy Solicits comments on improvements to S-10, timeline for implementing as proxy Formula results in Medicare DSH reductions of $132 million (compared to FY 2014) AHA DSH Calculator at 1

6 IPPS Area Wage Index (AWI) OMB issued new labor markets (CBSAs) on February 28, 2013 Did not implement for FY 2014 CMS proposes to implement for FY 2015 Transition periods Urban Rural = 3 years at urban AWI Decreased AWI = 1 year at blended AWI CAH = 2 year transition 1

7 IPPS Two-Midnight Policy CMS requests exceptions to the two-midnight rule (e.g., Mechanical Initiated Vent) Requests comment on an alternative payment policy for short inpatient hospital stays to supplement 2-midnights - Design, definition, payment CAH physician certification requirements - Complete 96-hour certification by 1-day pre-claim submission - Critical Access Hospital Relief Act 1

8 IPPS MDH/LVA MDH/Low-Volume Payment Adjustment CMS Interim Final Rule issued March 18 Oct. 1, 2013-March 31, 2014 CMS document issued June 12 April 1 Sept. 30, 2014 FY 2015 Inpatient PPS Proposed rule Oct. 1, 2014-March 31, 2015

9 IPPS Transition to ICD-10 Rule not definitive, but separate announcement on May 1: implementation will begin on Oct. 1, 2015 HHS will release an interim final rule 1

10 IPPS - Price Transparency ACA requires: each hospital to establish, update and make public a list of its standard charges for items and services it provides Rule reminds hospitals of this obligation Offers flexibility to hospitals in meeting this requirement Can publicly post or be in response to inquiry Must be updated annually

11 IPPS - Price Transparency Watch for an AHA Toolkit this summer

12 IPPS HACs Hospital-acquired Conditions Beginning in FY 2015, 1-percent payment reduction for hospitals in top quartile of HAC rates Measures/scoring method finalized in FY 2014 rule Two domains: PSI domain (35%), HAI domain (65%) FY 2015 program estimated to penalize 753 hospitals (23.2%), $330 million

13 IPPS HACs Hospital-acquired Conditions Beginning in FY 2015, 1-percent payment reduction for hospitals in top quartile of HAC rates Measures/scoring method finalized in FY 2014 rule Two domains: PSI domain (35%), HAI domain (65%) FY 2015 program estimated to penalize 753 hospitals (23.2%), $330 million Penalizes 53% of major teaching hospitals Penalizes 42% of urban hospitals with 500+ beds Raises concerns about inadequate risk adjustment evaluating

14 IPPS HACs Hospital-acquired Conditions For FY 2016, CMS proposes changes to domain weighting: PSI domain 25% HAI domain 75% Concerns: PSI measures have significant flaws; HAI measures overlap with VBP The AHA remains deeply concerned that the HAC policy is misguided and poorly designed.

15 IPPS HACs Hospital-acquired Conditions For FY 2016, CMS proposes changes to domain weighting: PSI domain 25% HAI domain 75% Concerns: PSI measures have significant flaws; HAI measures overlap with VBP The AHA remains deeply concerned that the HAC policy is misguided and poorly designed. AHA HAC Penalty Calculator: assess the impact of the policy on your organization. Available at aha.org/haccalc

16 IPPS Readmissions ACA required penalties for excess readmissions Program began in FY 2013 maximum 1-percent penalty In FY 2015, maximum 3-percent penalty Two new measures for FY 2015: COPD and THA/TKA CMS proposes updates to planned readmissions algorithm Planned readmissions Unplanned readmissions

17 IPPS Readmissions ACA required penalties for excess readmissions Program began in FY 2013 maximum 1-percent penalty In FY 2015, maximum 3-percent penalty Two new measures for FY 2015: COPD and THA/TKA CMS proposes updates to planned readmissions algorithm Planned readmissions Unplanned readmissions Penalties up to $440 million

18 IPPS Readmissions ACA required penalties for excess readmissions Program began in FY 2013 maximum 1-percent penalty In FY 2015, maximum 3-percent penalty Two new measures for FY 2015: COPD and THA/TKA CMS proposes updates to planned readmissions algorithm Planned readmissions Unplanned readmissions Readmissions Calculator at

19 IPPS VBP Program ACA required the Value-based purchasing program beginning in FY 2013 In FY 2015, funded by reducing base operating payments by 1.5 percent Budget neutral: all funds withheld must be paid out to hospitals CMS estimates that the available pool of funds for VBP payments is $1.4 billion for FY Proposes measure and methodology changes for FY 2017 and FY 2019 VBP Calculator at

20 IPPS Inpatient Quality Reporting Inpatient Quality Reporting Proposes significant measure changes for FY 2017 Removes 15 measures, adds 11 measures Expands voluntary emeasure reporting option Credit for both IQR and EHR Incentive Program Adds 6 measures that are only reportable as emeasures AHA concerns Lack of NQF endorsement (several measures) Accuracy and feasibility of emeasures

21 IPPS Proposed Rule FY15 Our Take Next Steps Advisory Comment Letter Member Feedback

22 FY 2015 Inpatient PPS Proposed Rule: What You Need to Know June 18, 2014