CMS makes changes to electronic health records, price transparency in Inpatient Prospective Payment proposed rule

On April 24, 2018, the Centers for Medicare and Medicaid Services (CMS) released the proposed rule for the Hospital Inpatient Prospective Payment Systems (IPPS) for Acute Care Hospitals and Long Term Care Hospital Prospective Payment System (LTCH PPS) and Proposed Policy Changes and Fiscal Year 2019 Rates.

May 9, 2018 | Health care

The proposed rule would make updates to the payment rates for Medicare Part A services under the Inpatient Prospective Payment System, as well as rates for LTCHs paid under Medicare.

Under the proposed rule, the net increase of IPPS payments will be 3.4 percent, due in part to a 21.93 percent upward adjustment to disproportionate share hospital (DSH) payments for uncompensated care. CMS projects that LTCH PPS payments would decrease by approximately 0.1 percent in FY 2019, reflecting the continued phase-in of a dual payment rate system, which was recently extended through FY 2019 by the Bipartisan Budget Act of 2018.

Of particular note, the proposed rule includes policies that would require hospitals to post standard charges online and that would modify the electronic health record (EHR) incentive program to emphasize interoperability. For each of these policies, CMS has included in the proposed rule Requests for Information (RFIs) on possible future changes. These proposals reflect the emphasis that the Administration is placing on price transparency and interoperability of EHRs.

In addition, the proposed rule includes policies that would eliminate a number of measures that hospitals must report as part of Medicare’s five hospital quality and value programs.

The proposed rule is scheduled to be published in the Federal Register on May 7, 2018. Comments are due to CMS by June 25, 2018.

Select key provisions of the proposed rule are highlighted below.

Movement towards transparency

The proposed rule would require hospitals to make their standard charges available online in a machine-readable format, with updates occurring at least annually. Hospitals will retain the option to publish their chargemaster directly, or elect another form. Hospitals currently are required to make standard charges available to the public, although the format is not specified.

In its RFI on transparency, CMS solicits comments on a number of other potential regulatory actions, including:

  • A definition of “standard charges”
  • The format of cost information that would be most useful to individuals
  • Whether health care providers should be required to provide information to patients on out-of-pocket costs for a service in advance
  • Whether CMS should require health care providers to provide patients with information on what Medicare pays for a particular service
  • The most appropriate enforcement mechanism for price transparency requirements
  • The effect of Medigap coverage on individuals’ understanding of their out-of-pocket costs

Medicare and Medicaid electronic health record incentive programs

The proposed rule reiterates that all eligible hospitals and critical access hospitals (CAHs) must use the 2015 Edition of Certified Electronic Health Record Technology (CEHRT) beginning with an EHR reporting period in calendar year 2019. An EHR reporting period is defined as any continuous 90-day period in calendar years 2019 and 2020.

In addition, the proposed rule would make significant changes to electronic health record (EHR) incentive programs, emphasizing interoperability of EHR systems rather than adoption of EHR systems within a provider’s organization. As part of this shift, the rule renames the Meaningful Use program “Promoting Interoperability.”

Noting that quality measures are often reported through other channels, the rule proposes to eliminate half of the EHR incentive program’s clinical quality measurements, while proposing a new scoring methodology that captures performance in areas such as health information exchange, and patient access to electronic health information. Instead of a “pass/fail” approach to scoring.

Request for information on interoperability

The proposed rule contains a request for information (RFI) on interoperability, with particular interest in proposals to revise Medicare conditions of participation or other health and safety standards to further promote interoperability. The RFI outlines several examples of possible interoperability-related conditions, including policies that would require:

  • Hospitals transferring medically necessary information to another facility upon a patient transfer or discharge do so electronically
  • Hospitals to send required discharge information to a community provider via electronic means if possible (if a community provider can be identified)
  • Hospitals to make certain information available to patients or a specified third-party application (for example, required discharge instructions) via electronic means if requested

Meaningful measures and burden reduction

Under the proposed rule, acute care hospitals would be required to report on fewer measures across each of the five quality and value-based purchasing programs. The proposed policies are summarized below.

  • Hospital Inpatient Quality Reporting (IQR) program: Remove 18 “topped out” measures, and remove 21 additional measures that are captured in one of the other hospital quality programs
  • Hospital Value-Based Purchasing (VBP) program: De-duplicates 10 measures in both the Safety and the Efficiency and Cost Reduction domains, citing information already collected elsewhere
  • Hospital-Acquired Conditions (HAC) reduction program: Administrative updates to streamline methodologies that were particularly burdensome to small hospitals
  • PPS-Exempt Cancer Hospital Reporting (PCHQR) program: Proposes one new measure, removes six measures, and taking a more claims-based approach to capturing information
  • Long-Term Care Hospital Quality Reporting Program (LTCH QRP): Remove three measures with significant operational challenges to reporting/duplicative of other measures within the program itself, and consider alternative measures for future use in some cases

In addition to the changes in the quality reporting programs described above, CMS also proposes several other strategies for reducing the administrative burden of hospitals, including policies that would:

  • 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
  • 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.
  • Allow hospitals to 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 requirements (beginning in FY 2021)
  • Allow certain hospitals which are excluded from the IPPS (for example, LTCHs) to operate IPPS-excluded units
  • Allow that an IPPS-excluded satellite of an IPPS‑excluded unit of an IPPS-excluded hospital would not have to comply with the separateness and control requirements so long as the satellite of the unit is not co-located with an IPPS hospital

This article contains general information only and Deloitte is not, by means of this article, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This article is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor.

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Anne Phelps
Principal | Deloitte Risk and Financial Advisory

US Health Care Regulatory Leader
Deloitte & Touche LLP

Daniel Esquibel
Senior Manager | Deloitte Risk and Financial Advisory

Deloitte & Touche LLP

Ethan Joselow
Manager | Deloitte Risk and Financial Advisory

Deloitte & Touche LLP

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