Nearly 20 providers received a welcome surprise late last month when the Centers for Medicare & Medicaid Services (CMS) announced hundreds of millions of dollars in funding awards associated with its Transforming Clinical Practice Initiative (TCPI) and its continuing push to reduce the prevalence of hospital-acquired conditions and readmissions nationwide.

The two providers chosen to participate in the second round of the Support and Alignment Networks under TCPI were the Virginia Cardiac Services Quality Initiative (VCQI) and the American Psychological Association, each of which will receive more than $650,000 in funding during their first year in the program. In all the two providers will receive $5 million over the next three years to “leverage primary and specialist care transformation work and learning that will catalyze the adoption of Alternative Payment Models on a large scale,” CMS noted in a press release.

“The Support and Alignment Networks 2.0 represents a significant enhancement to the TCPI network expertise and will help clinicians prepare for the proposed new Quality Payment Program, which CMS is implementing as part of bipartisan legislation Congress passed last year repealing the Sustainable Growth Rate, also known as the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA),” the release read. “The TCPI is one of the largest federal investments uniquely designed to support clinician practices through collaborative peer-based learning networks.

The intent of the program includes the following goals, CMS noted: 

  • Improving the quality of care delivered;
  • Rapidly transitioning practices through the phases of transformation in preparation for participation in and alignment with Alternative Payment Models; and
  • Reducing total cost of care.

“Through this initiative, the Support and Alignment Network 2.0 awardees will identify, enroll, and provide tailored technical assistance to advanced clinician practices in order to accelerate transformation and diffuse this learning throughout the TCPI initiative,” CMS noted.

The awardees’ activities, coaching, and technical assistance should result in the rapid transition of practices through five phases of transformation, according to the announcement, including setting aims, using data to drive care, achieving progress on aims, achieving benchmark status, and thriving as a business as pay-for-value becomes a reality.

“This will ultimately position practices to successfully participate in Alternative Payment Models. Critical to this approach is the capacity for these awardees to accurately identify large numbers of clinicians and practices in advanced states of readiness through sound data analytics capabilities, to enroll them into the Support and Alignment 2.0 network, to provide them with tailored technical assistance, and to help them determine the most suitable Alternative Payment Model options,” CMS’s announcement read. “Further, awardees will need to tailor direct technical assistance and support services to these clinicians’ and practices’ needs.”

To participate in the model, awardees committed to the following:

  • Providing quality improvement support to 5,000 or more clinicians;
  • Providing support to a learning network that is multi-regional or national in scope;
  • Collaborating in generating evidence-based guidelines for clinical practice;
  • Engaging in effective use of measurement through clinical registries and electronic health records; and
  • Commitment to improve safety and person and family engagement

Around the same time, CMS also announced the awarding of nearly $350 million in funding awarded through the Hospital Improvement and Innovation Networks to continue patient safety improvement efforts started under the Partnership for Patients initiative. The awards went to 16 national, regional, or state hospital associations, Quality Improvement Organizations, and health system organizations to continue efforts in reducing hospital-acquired conditions and readmissions.

The recipient organizations included:

  • Carolinas Healthcare System
  • Dignity Health
  • Healthcare Association of New York State
  • HealthInsight
  • The Health Research and Educational Trust of the American Hospital Association
  • Health Research and Educational Trust of New Jersey
  • Health Services Advisory Group
  • The Hospital and Healthsystem Association of Pennsylvania
  • Iowa Healthcare Collaborative
  • Michigan Health & Hospital Association (MHA) Health Foundation
  • Minnesota Hospital Association
  • Ohio Children’s Hospitals’ Solutions for Patient Safety
  • Ohio Hospital Association
  • Premier, Inc.
  • Vizient, Inc.
  • Washington State Hospital Association

For more information on the Transforming Clinical Practice Initiative, go online to:

To view CMS’s press release on the $350 million in awards, go online to:

Mark Spivey is a national correspondent for He can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

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The work of healthcare quality professionals is critical to reducing waste and improving health outcomes, and the National Association for Healthcare Quality (NAHQ) is leading efforts to celebrate this good work. Healthcare Quality Week takes a time-out to celebrate and say thanks for this good work.

Every day, healthcare quality professionals contribute to organizations and the communities around the globe by: 

  • Leading continuous improvement initiatives
  • Effecting, monitoring, and analyzing existing and new processes and outcome measures
  • Integrating new evidence-based practices into healthcare delivery
  • Keeping patients safe and limiting risk
  • Leading population health management
  • Ensuring regulatory and accreditation requirements are achieved
  • Making sense of the volume to value movement; limiting waste and improving outcomes and reimbursements.  

“Healthcare quality professionals play a critical role in improving an organization’s or health system’s clinical and financial outcomes,” says NAHQ President Michael Greer, RN MHA CPHQ CHCP. “Many times the nature of their work means they’re behind the scenes, making a remarkable difference.”

While the hard work and dedication of these professionals may sometimes go unnoticed, NAHQ set out to recognize the impact of these indispensable team members by celebrating Healthcare Quality Week (HQW) annually. Beginning in the early 1980s, HQW was established as a week to recognize the influence that healthcare quality professionals and their organizations have on positive health outcomes. This year, the week takes place October 16-22, and there are several ways to get involved.

NAHQ has developed a number of resources for organizations and individuals to join our effort to raise awareness for healthcare quality professionals.

  • Observe National Healthcare Quality Week or Day, whichever suits your organization and its budget.
  • Download the free Healthcare Quality Week poster and display it as is. You can add your organization’s information to the customizable poster (for customization, view in Adobe Reader or Acrobat).
  • Host a Lunch-and-Learn presentation (a presentation has been prepared for you)
  • Download the official 2016 HQW logo and e-mail signature.
  • Get social By:
    • Changing your Facebook cover photo and Twitter cover photo to promote HQW.
    • Posting updates and discussions on your social channels using our sample posts. Be sure to use the hashtag #HQW2016.
  • Use the press release template to bring awareness to the great work you do all year long.

NAHQ invites anyone who supports the profession to join in the celebration. Visit NAHQ’s website to download these resources. And, visit the NAHQ Facebook page to see how others are celebrating and to share your own stories and photos. Tell us how you plan to recognize healthcare quality professionals and get energized for the week!

Celebrate this week and what it means to your organization by highlighting your contributions to the profession and sharing them with your internal and external stakeholders.

NAHQ: Committed to Serving Healthcare Quality Professionals

NAHQ defines excellence in the ever-evolving, fast-moving profession of healthcare quality. It identifies and validates the body of knowledge required to serve as a quality professional and provides those individuals with the tools they need to meet that standard. Our members execute quality functions across the continuum of healthcare. They are members of quality departments, direct and ancillary care providers, and healthcare administrators.

“Healthcare quality is evolving at a rapid pace,” explains Stephanie Mercado, BA, CAE NAHQ executive director. “And, while we know all healthcare professionals support quality, we know quality professionals are designed to materially impact and lead these efforts forward. NAHQ is committed to providing healthcare quality professionals with the content, resources and networks that will make them indispensable in their work setting, reducing waste and improving outcomes.”

NAHQ offers extensive educational programming, including a Quality Principles program for professionals new to the field or looking to refresh their knowledge; preparation programs for CPHQ certification; and the industry-elevating HQ Essential Competencies for advanced and master practitioners in healthcare quality. In addition to educational opportunities, NAHQ provides networking through its live events and online NAHQ Network, and career resources though our job board and competencies. Beyond membership, NAHQ collaborates with institutions, corporations, and other organizations to advance the field of healthcare quality.

About the Author
Jessica Weglarz is the Director of Certification, Marketing, and Membership for the National Association for Healthcare Quality. Ms. Weglarz received her bachelor’s degree in marketing and management from Drake University and earned her MBA from Bradley University.

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Tuesday, 11 October 2016 04:13

Are you Ready to Bundle?

Written by

The Centers for Medicare & Medicaid Services (CMS) has announced that the proposed rule for bundled payments (also known as episode payments) for high-quality, coordinated cardiac and hip fracture care modules will be targeted for initial implementation in 98 randomly selected metropolitan demonstration areas starting in July 2017.

The full phase-in will occur over the next five years, with completion by the end of the 2021 calendar year.

At the same time the healthcare industry was focused on implementing ICD-10, some of our colleagues in the industry have been testing the Bundled Payments for Care Improvement (BPCI) episode payment models in the last few years. Each model combines various conditions and care settings to assess if improved care can be delivered at lower costs to Medicare. 

 Now’s the time to learn more about bundled payments and their effect on revenue cycle management, because payment models are shifting. Organizations can be proactive in educating themselves about the opportunities and challenges arising from value-based reimbursement (VBR) and the Patient Protection and Affordable Care Act (PPACA) in order to reap the benefits of the new bundled payment strategies.

What is a Bundled Payment?

BPCI from CMS was developed to test bundling payments for a single condition. Traditionally, providers’ services for care of a patient’s condition have been billed independently. For example, consider a patient scheduled for a knee arthroplasty. The full spectrum of care for the procedure starts before the surgery and ends after the surgical procedure. The patient sees the primary care physician, has laboratory tests done, and visits the surgeon before surgery takes place. These encounters traditionally have been billed and paid separately even though the services are all related to the knee replacement surgery. With bundled payments, the services are grouped together and one payment is received for the episode.

Assuring success with a bundled payment program requires more than achieving targets. The goal of bundled payments is to have all the healthcare organizations involved in the episode of care coordinate services, focus on quality, and reduce costs. A successful model requires all providers to work together. This has been challenging for organizations that are not part of integrated delivery networks (IDNs).

The new models for cardiac and hip fracture care that will be implemented in 2017 provide some assistance for non-IDNs. Medicare will allow hospitals to have financial arrangements with non-IDN organizations to encourage cost savings sharing. The details are outlined in the proposed rule. 

In the bundled payment model, there is one payment for the entire episode of care for a knee arthroplasty. If an organization delivers the quality care target at a lower cost than the CMS payment, it keeps the difference in revenue. If the costs are more than the CMS payment, the organization absorbs the extra cost. The important element in the model is that the quality of care must meet CMS standards for treatment of the condition.

Organizations volunteered to test the BPCI models to determine the effect on cost and quality of outcome of bundling these services. The participating organizations completed a deep analysis of their data on up to 48 conditions to identify areas of improvement to reduce cost and improve the quality of care. 

Some organizations also completed an analysis of the clinical processes related to those conditions. As a result of their additional analyses, some health systems have implemented their own initiatives to improve clinical outcomes and influence costs while maintaining or improving quality across their health systems. Due to progressive implementations and claims lag, only two years of data are available at this time. While early results are mixed, individual organizations have reported positive results with bundled payment models.

Seeing opportunity, companies have developed solutions to help organizations complete the data analysis and methodologies necessary to improve key clinical processes in preparation for implementing bundled payments. These tools are important as we look at a broader implementation in the demonstration sites.

New Proposed Rule

The proposed change in bundled payment models adds incentives for organizations, physicians, and other providers to work together to deliver better care at lower costs.

The BPCI is expanding to test a new model for heart attack, bypass surgery, and hip (extending to femur) and knee replacement. For the cardiac bundles, hospitals in 98 randomly selected metropolitan statistical areas (MSAs) will participate. Hospitals outside these geographic areas will not participate in the model. There is no application process for hospitals for these models. For the hip/femur fracture surgeries model, which builds on the existing Comprehensive Care for Joint Replacement (CJR) model, CMS proposes to test these bundled payments in the same 67 MSAs that were selected for that model.

In addition, CMS proposes to limit financial risk for the remaining rural hospitals that are located in participating MSAs, such as sole community hospitals, Medicare-dependent hospitals, and rural referral centers.  

The new bundled payment model includes inpatient stays and services for these particular qualifying conditions through 90 days following patient discharge. The hospital is responsible for cost and quality of care for these patients, and for coordinating with physicians and other providers of services during this period.

The notice of the proposed rule from CMS has provided an illuminating example:

“Consider hospitals in model years 4 and 5 in a region where Medicare historically spent an average of $50,000 for each coronary bypass surgery patient, taking into account the costs of surgery as well as all related care provided in the 90 days after hospital discharge. Target prices would reflect the average historical pricing minus the discount rate based on quality performance and improvement.

  • Hospital A is performing at the highest overall level on quality measures and its discount rate is 1.5 percent for the episode. As a result, its quality-adjusted target price for bypass surgery is $49,250 (or $50,000 minus the discount of $750). By taking measures to avoid readmissions and other unnecessary costs, Hospital A is able to reduce average total hospitalization and related 90-day post-discharge costs for bypass surgery patients to $48,000. Hospital A would be paid average savings of $1,250 per patient. 
  • Hospital B, in the same region, also reduces its average costs to $48,000 per patient. However, it achieves only acceptable overall performance on quality measures. Its discount rate is 3 percent and its quality-adjusted target price is $48,500 (or $50,000 minus the discount of $1,500). Hospital B would be paid average savings of $500 per patient.
  • Hospital C also only achieves acceptable performance on quality measures (discount rate of 3 percent) and has a quality-adjusted target price of $48,500. However, Hospital C has average costs of $50,000 per patient. If Hospital C is unable to improve its cost and/or quality performance, it would have to repay Medicare an average of $1,500 per patient.”

CMS has developed its phased approach to provide time for organizations to process the changes they have implemented. When the first model year ends in 2018, the actual spending for these conditions will be compared with the target costs for Medicare A and B. When a hospital delivers quality care meeting or exceeding the published standards while achieving lower-than-target cost, the hospital keeps the savings. The savings that can be retained will be capped at 20 percent by the end of the five-year implementation period.

If the hospital does not meet quality standards and does not improve its performance, it will be required to repay Medicare. To protect hospitals from repayment risk, CMS will minimize the risk by phasing it in over the five-year implementation period. The total losses are limited to 3 percent for the second through fourth quarters of 2018 and 5 percent for 2019 through 2021.

The repayment amount is the difference between its quality-adjusted target price previously set by Medicare and what the organization charged for the episode.

Medicare is providing tools for hospitals to assist them in improving and coordinating care. It is also providing data on spending and utilization. As with the BPCI models, Medicare wants participating hospitals to share what they have learned throughout the process. Proactive organizations can reach out to their peers through national summits and other information-sharing strategies.  

It is important that your organization review and comment on the new rule before the proposed implementation in 2017. Examining your data on the trial conditions is an excellent proactive step to take.

What Does the Bundled Payment Model Mean to Medical Coding?

The keys to revenue cycle are medical coding and diagnosis-related group (DRG) assignment. As your organization prepares for the initiative, you still will want to focus on quality and accuracy of codes and DRGs. With DRGs driving the conditions to bundle, identifying the most accurate DRG will be even more important because only those conditions appropriate for bundling are included in the new payment model. Take these next steps:

  • Educate yourself and your team on all the components of bundled payments.
  • Examine your data using a comprehensive, episodic view rather than an encounter view.
    • As a simple example, consider looking at duplicate laboratory tests ordered for an episode. 
  • Discuss bundled payments with your revenue cycle peers. 
    • Determine if you have initiatives on bundled payments underway in your organization.
  • Ensure that your DRGs are fine-tuned.
    • Complete an audit on these DRGs to see if you have any underlying concerns. 
    • Fine-tune your coding team skills.


The clock is ticking on your preparedness for bundled payments. Educate yourself now so your organization will be optimally prepared.

Proactive organizations can learn about the opportunities and challenges arising from the new bundled payment strategies that are part of value-based reimbursement. These organizations have helped themselves to the menu of data analysis tools and process improvement methodologies developed by companies to prepare their clients for the next round of implementation. Organizations have also helped each other understand the effects of bundled payments through peer-to-peer forums, including national summits on bundled payments.

About the Author

Laurie bring nearly 30 years of experience in healthcare, healthcare information systems, and product management to Career Step, where she drives the product management of the company’s offerings. Prior to joining Career Step, Laurie served in various executive positions with companies such as xG Health Solutions, WellPoint, Resolution Health, QuadraMed, Kaiser Permanente, SoftMed, 3M HIS, and Stanford Health Services. She has also served on various boards and committees within the American Health Information Management Association (AHIMA) and is a respected leader in health information management. Laurie holds a bachelor’s degree in Information Systems Management from the University of San Francisco.

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You can learn more about the models and outcomes and the new proposal from the links below:




The August 2 issue of the Federal Register includes a proposed rule issued by the Centers for Medicare & Medicaid Services (CMS) entitled Advancing Care Coordination through Episode Payment Models (EPMs). The 60-day comment period ended on October 3. 

The proposed rule includes details on the new, retrospective mandatory EPMs for acute myocardial infarction (AMI), triggered by an AMI admission and for percutaneous coronary intervention (PCI) treatment for AMI patients. It also includes a new mandatory episode for coronary artery bypass graft (CABG) admissions. Similar to the Comprehensive Care for Joint Replacement (CJR) mandatory episode, which began in April, the hospital is the entity at financial risk.

The proposed rule includes a path for eligible clinicians (who meet the criteria as a qualified participant) to qualify for Advanced Alternative Payment Model status (under the Medicare Access and CHIP Reauthorization Act or MACRA) through EPM participation beginning in April 2018. Also included in the proposed rule is a cardiac rehabilitation (CR) incentive payment intended to increase utilization of CR services for Medicare beneficiaries.

CMS will select and announce the 98 geographic areas for AMI and CABG participation in the final rule.  The mandatory episode is scheduled to begin in July 2017 and conclude in December 2021 (downside risk begins in year two following one-year participation in upside participation that spans 2017 and the first quarter of 2018).

As proposed, the AMI and CABG EPMs begin with inpatient admission to an anchor hospital and would include medical and surgical services provided to Medicare patients both during the inpatient hospitalization through 90 days post-discharge. 

All episodes are triggered by an inpatient admission and include MS-DRGs.  For the AMI episode, this includes MS-DRGs 280–282 or, in the case of PCI treatment, MS-DRGs 246–251. For the CABG episode, this includes MS-DRGs 231–236. 

The proposed episode models include both Part A and B services. There are some proposed exclusions for hospitals participating in the voluntary Bundled Payments for Care Improvement (BPCI) Initiative for AMI, PCI or CABG episodes or certain rural counties.  The proposed model includes quality targets for both AMI and CABG episodes.  For AMI, CMS proposes four quality measures (three required and one voluntary measure) and two required measures for CABG.  The Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey data completed by Medicare beneficiaries is included among the measures for both AMI and CABG.

For the cardiac rehab incentive payment, a retrospective payment will be included based on the use of these services by Medicare beneficiaries (attributed to participant hospitals). These payments will be added to the standard Medicare cardiac-rehab payments for services provided to Medicare beneficiaries through the five-year model duration with no downside risk included. 

As proposed, this includes an initial payment of $25 for each of the first 11 services with the payment increasing to $175 per service following the initial 11 services. CMS has signaled, in the proposed rule, its intent to select 90 geographic areas for the cardiac rehab hospital participants, 45 where the AMI and CABG episodes are slated for implementation and 45 geographic areas not selected.  It is anticipated that CMS will publish the final rule prior to year-end.

About the Author

Kim Charland is the editor of VBPmonitor and the senior vice president of clinical innovation with Panacea Healthcare Solutions. Kim has 30 years of experience in health information and reimbursement management for hospitals and physician offices. Kim’s primary role with Panacea is publisher of, which is the company’s newest online monitor and is focused on value-based purchasing and quality. She is also co-host of’s Internet news broadcast Talk-Ten-Tuesdays. In addition, she assists with product development for Panacea’s consulting and software divisions, as well as the MedLearn publishing division. Kim is also recognized as a national speaker who has spoken for numerous organizations.

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v mahn dinicolaEDITOR’S NOTE: All individual years listed in this article are fiscal years, unless otherwise noted.

The Centers for Medicare & Medicaid Services (CMS) finalized multiple changes to quality reporting programs for hospitals in the Inpatient Prospective Payment System (IPPS) final rule for 2017, CMS-1655-F, which was posted to the Federal Register on Aug. 22, 2016. This article summarizes the most substantive changes for five hospital quality reporting programs.

Hospital Readmissions Reduction Program
Starting on page 56,973

In 2016 there were 3,464 hospitals in the Hospital Readmissions Reduction Program (HRRP). Of those, 2,665 received penalties for excess readmissions, totaling approximately $420 million across all U.S. hospitals. Twenty-three percent of hospitals had no penalty. The maximum allowable penalty of 3 percent was assigned to only 38 hospitals.

In the previous IPPS rule, the HRRP was expanded to include the isolated coronary artery bypass graft (CABG) population beginning in 2017. The 2016 rule specified the expansion of the pneumonia measure cohort in 2017 to include principal diagnosis codes for aspiration pneumonia, patients with a principal diagnosis of non-severe sepsis with a secondary diagnosis of pneumonia, and patients with only a principal diagnosis of viral or bacterial pneumonia. The expanded pneumonia cohort is expected to increase qualifying cases by as much as 50 percent in many hospitals. 

There were no new clinical cohorts required for future years in the new IPPS final rule, leaving the following six measures in the HRRP for 2017 and beyond:

  • Acute MI 30-Day, All-Cause, Risk-Standardized Readmission Rate
  • Heart Failure 30-Day, All-Cause, Risk-Standardized Readmission Rate
  • Pneumonia (expanded) 30-Day, All-Cause, Risk-Standardized Readmission Rate
  • COPD 30-Day, All-Cause, Risk-Standardized Readmission Rate
  • Total Hip or Knee Arthroplasty 30-Day, All-Cause, Risk-Standardized Readmission Rate
  • CABG 30-Day, All-Cause, Risk-Standardized Readmission Rate   

The applicable discharges for 2018 payment determination will be those occurring from July 1, 2013 to June 30, 2016, so there is nothing you can do to impact penalties for 2018. There are only nine months left to influence penalties for 2019, which are based on discharges occurring from July 1, 2014 through June 30, 2017. The maximum allowable penalty remains capped at 3 percent of a hospital’s Medicare payment.   

Hospital-Acquired Conditions Reduction Program
Starting on page 57,011

The most significant change in the new IPPS final rule for the Hospital Acquired Conditions (HAC) Reduction Program is the adoption of the modified AHRQ PSI-90 composite measure, beginning with payment determination for 2018. Previously, this measure, called “Patient Safety for Selected Indictors,” contained eight individual measures, which will now be expanded to 10. Three measures have been added while PSI 7 Central-line Associated Blood Stream Infections (CLABSI) has been removed due to redundancy with the HAC Reduction Program as well as other programs that include this measure. The final rule also renames the measure as the “Patient Safety and Adverse Events Composite.” 

The modified AHRQ PSI-90 Composite Measure contains the following measures:

  • PSI 3 Pressure Ulcer Rate
  • PSI 6 Latrogenic Pneumothorax
  • PSI 8 Post-op Hip Fracture Rate
  • PSI 9 Post-op Hemorrhage or Hematoma (new)
  • PSI 10 Physiologic/Metabolic Derangement (new)
  • PSI 11 Post-op Respiratory Failure (new)
  • PSI 12 Post-op PE or DVT
  • PSI 13 Post-op Sepsis Rate
  • PSI 14 Wound Dehiscence Rate
  • PSI 15 Accidental Puncture/Laceration

Note: There are substantial revisions to the risk-adjustment methodology for the modified AHRQ PSI-90 Composite, which adds assigned weights for degree of harm to the current volume measure.

Finally, CMS revised applicable periods from previous rules for 2018 and 2019, calling for a 15-month applicable period for 2018 (July 1, 2014 to Sept. 30, 2015), and a 21-month applicable period for 2019 (Oct. 1, 2015 to Sept. 30, 2017). This change was made in order to avoid mixing ICD-9 diagnosis codes with ICD-10 diagnosis codes, the latter of which went into use for all U.S. hospitals on Oct. 1, 2015. Note that the revised risk-adjusted AHRQ software for ICD-10 codes is not expected to be published until late in the 2017 calendar year. 

There are no changes to domain weights, which leaves Domain 1 (containing the modified PSI-90 Composite Measure) at 15 percent of the total score and Domain 2 (containing Hospital-Acquired Infections) at 85 percent for 2018 and beyond. The hospital-acquired infections included in the 2018 HAC Reduction Program and collected for discharges in the 2015 and 2016 calendar years are: 

  • Catheter-Associated Urinary Tract Infections (CAUTI) for ICU and Non-ICU Patients
  • Central-Line Associated Blood Stream Infections (CLABSI) for ICU and Non-ICU Patients
  • Surgical Site Infection for Abdominal Hysterectomy and Colon Surgery
  • Methicillin-Resistant Staphylococcus aureus (MRSA)
  • Clostridium Difficile Infections (CDI)

The most substantive change involved the expansion of CAUTI and CLABSI measures to include both ICU and non-ICU pediatric and adult medical and surgical patients discharged in the 2015 and 2016 calendar years.

The HAC Reduction Program was originally designed so that 25 percent of all hospitals would receive performance penalties; however, current scoring methodologies have resulted in only 21.9 percent of hospitals receiving penalties in 2015 and 23.7 percent in 2016. To correct for this, CMS is revising the scoring methodology, beginning with 2018 payment determination. The revised scoring methodology uses a Winsoried Z-score instead of the previous linear scale. This approach will evaluate performance more favorably for smaller hospitals that have few cases in either Domain 1 or 2. However, it is likely to impact disproportionate share hospitals (DSHs) with a moderately high volume of underprivileged patients. CMS estimates that using this scoring methodology, top-quartile penalties for these hospitals may increase from 28 to 35 percent (affecting about 11 more).  

Hospital Value-Based Purchasing Program
Starting on page 56,979

The Hospital Value-Based Purchasing (VBP) Program, which applies to all subsection (d) hospitals in the U.S., has a current funding pool capped at 2 percent of all hospital base operating DRG payments, leaving approximately $1.8 billion ($1.489 billion in the 2016 fiscal year) available for funding value-based payment incentives in 2017.

Similar to the changes in the HAC Reduction Program described above, in order to keep ICD-9 and ICD-10 claims separate, this year’s rule modifies the timelines for the applicable period in 2018 for the PSI-90 Composite Measure to the 15 months between July 1, 2014 and Sept. 30, 2015 (this measure is currently in the Patient Safety domain). However, due to the required timelines associated with the VBP rulemaking process, which requires that measures be displayed in Hospital Compare for a full year prior to inclusion in the VBP Program, CMS is unable to adopt the modified PSI-90 Composite measure for 2019. Future rulemaking is expected to incorporate the modified version, as well as revised timelines for 2019 to align with other programs. 

Other changes include the renaming of the “Patient/Caregiver Experience of Care/Care Coordination Domain,” which reflects results from the Hospital Consumer Assessment of Health Plans and Systems (HCAHPS) survey. Effective 2019, this will be known as the “Person and Community Engagement” domain, and will retain its weighting of 25 percent. There were no changes to the existing HCAHPS measures in this domain. Also in 2019, the CAUTI and CLABSI measures will be expanded to include both ICU and non-ICU patients.

The big surprise came with the announcement that CMS is proposing to remove the PSI-90 Composite measure from the Value-Based Purchasing program beginning with 2019 payment determination, although they are suggesting that the adoption of the modified version of the PSI-90 Composite measure may be adopted in future years. 

The 2021 program will include the expanded pneumonia measure cohort in the 30-day mortality measure, as described above in the Hospital Readmission Reduction Program. In addition, two episode-of care payment measures will be added to the Care Efficiency domain for 2021, which currently contains only a single measure: Medicare Spending per Beneficiary (MSPB). These include:

  • Hospital-level, Risk-standardized Payment Associated with 30-day Episode-of-Care for Acute MI (NQF No. 2431)
  • Hospital-level, Risk-standardized Payment Associated with 30-day Episode-of-Care for Heart Failure (NQF No. 2436)

These new measures will use a baseline period of July 1, 2012 to June 30, 2015 to compare performance for discharges occurring from July 1, 2017 to June 30, 2019, so hospitals still have some time to begin examining costs for these populations prior to the applicable period. 

It is interesting to note that the National Quality Forum (NQF) Measures Application Partnership (MAP) vote on the approval of these measures reflected concerns with both of these proposed measures, including the lack of risk adjustment using sociodemographic variables and the potential that they overlap with the existing Medicare Spending per Beneficiary measure. Fifty-eight percent of NQF MAP committee members voted not to support the Acute MI 30-day Episode-of-Care measure, and 65 percent voted not to support the Heart Failure 30-day Episode-of-Care measure. 

Hospital Inpatient Quality Reporting Program
Starting on page 57,111

Perhaps the biggest surprise in this year’s final rule was an unexpected reduction in the number of electronic clinical quality measures (eCQMs) required for submission for discharges occurring in the 2017 calendar year (for 2019 payment determination).  After a great deal of public comment about the barriers and challenges facing hospitals in achieving accurate eCQM data, CMS modified the original proposal to transition from a requirement of four to 15 eCQMs to only eight. Hospitals may select which eight measures they submit. However, in order to meet Hospital IQR program requirements, a full year of data for discharges taking place from Jan. 1, 2017 to Dec. 31, 2017 will be required for electronic submission to CMS. 

Hospitals may submit their data quarterly, biannually, or annually using a QRDA-1 format from a 2014 or 2015 version of certified healthcare reporting technology (CEHRT) software.  Submissions for discharges must be complete by Feb. 28, 2018.

Thirteen eCQM measures have been finalized for removal, leaving the following 15 for hospitals to choose from when selecting their eight eCQM measures: 

  • AMI-8a PCI Within 90 Minutes of Arrival
  • CAC-3 Home Management Plan Given to Patient or Caregiver
  • EHDI-1a Hearing Screening Prior to DC
  • ED-1 Mean Time from Arrival to ED Departure for Admitted ED Patients
  • ED-2 Admit Decision Time to ED Departure for Admitted Patients
  • PC-01 Elective Delivery
  • PC-5 Exclusive Breast Milk Feeding
  • STK-2 Discharged on Antithrombotic
  • STK-3 Anticoagulation for Atrial Fib/Flutter
  • STK-05 Antithrombotic Therapy by End of Hospital Day 2
  • STK-06 Discharged on Statin Meds
  • STK-8 Stroke Education
  • STK-10 Assessed for Rehabilitation
  • VTE-1 VTE Prophylaxis
  • VTE-2 ICU VT Prophylaxis

CMS is encouraging hospitals to submit early and to use pre-submission testing tools, such as the CMS Pre-Submission Validation Application (PSVA), which can be downloaded from Quality Net at Note that these tools check for file formatting errors, not data accuracy.  

Not surprisingly, the number of chart-abstracted measures continues to decline. In this year’s final rule, both the eCQM and chart-abstraction versions of STK-4 Thrombolytic Therapy for Acute Ischemic Stroke and VTE-5 Discharge Instructions have been removed. These measures have “topped out” statistically and are no longer useful for public reporting. In addition, the electronic version of VTE-5 has met substantial technical feasibility issues in capturing specific clinical details needed for accurate measure computation. The following six chart-abstracted measures remain for 2017 and beyond:

  • ED-1 Median Time from ED Arrival to ED Departure for Admitted Patients **
  • ED-2 Admit Decision Time to ED Departure Time for Admitted Patients **
  • PC-01 Elective Delivery Prior to 39 Completed Weeks of Gestation **
  • VTE-6 Incidence of Potentially Preventable VTE
  • IMM-2 Influenza Immunization
  • Severe Sepsis and Septic Shock: Management Bundle (Composite Measure)

** Note: ED-1, ED-2, and PC-01 are required for chart-abstracted submission even if hospitals select these as three of their eight required eCQM measures. 

This year’s final rule marks the end of the remaining Pneumonia and Surgical Care Improvement Project (SCIP) core measures for submission to CMS due to the fact that they have also statistically “topped out.” In addition, the Healthy Term Newborn Measure has been removed due to the fact that the measurement steward has changed the measure construct to focus on unexpected complications in newborns. These changes are effective with discharges taking place in the 2017 calendar year for 2019 payment determination.

No changes were made to the CMS claims-based measures evaluating mortality and 30-day unplanned readmissions or to the National Healthcare Safety Network (NHSN) Infection measures. However, the PSI-90 Composite measure in the complications domain will transition to the modified PSI-90 Patient Safety and Adverse Events Composite beginning with the 2018 program, following the same specifications and timelines as described above in the HAC Program.   

Two “structure of care” Measures were also retired for 2019 payment determination.  These include the web-based reporting measures for participation in a systematic clinical database registry for nursing sensitive care and general surgery. These changes reflect CMS’s opinion that reporting to these registries bears little correlation to favorable patient outcomes. The remaining structure of care measures for the patient surgery checklist and the patient safety culture reporting requirements remain in effect.

Additional proposed changes to the Hospital IQR Program were finalized, including minor revisions to data validation procedures, which will require 200 randomly selected hospitals that are submitting eCQMs to provide copies of their electronic health records for 32 cases. These records will be used to validate data accuracy of electronic measures, compared to the details of the patient encounter found in the clinical documentation. Requirements for full payment in 2019 will not require a given percentage of data accuracy, but instead will be based on whether the hospitals comply with submitting at least 24 of the 32 (75 percent) requested records in a timely manner (30 days from the request) to CMS.   

An additional 400 hospitals not selected for eCQM validation will be randomly selected to submit patient records for chart-abstracted measures, in addition to another 200 hospitals targeted for validation because of abnormal or conflicting data patterns or late data submissions. As required in past years, chart-abstracted validations will require a minimum agreement rate of 75 percent  in order for hospitals to receive full payment updates in 2019.

Three new clinical episode-based payment measures were finalized for the 2019 payment determination, which CMS will calculate from Medicare claims data. These include:

  • Aortic Aneurysm Procedure Clinical Episode-Based Payment
  • Cholecystectomy/Common Duct Exploration Clinical Episode-Based Payment
  • Spinal Fusion Clinical Episode-Based Payment

Finally, the expanded pneumonia cohort was designated as the third “excess days” measure for 2019 payment determination, in addition to those for acute MI and heart failure. For these measures, emergency department (ED) readmissions are counted as a half day, observation status readmissions are rounded to the nearest half-day, and inpatient readmissions are counted as full days.

CMS is inviting public comment for future measures being considered as well. These include:

  • Risk adjustment of the MORT-30-STK Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate Following Acute Ischemic Stroke using the National Institute of Health (NIH) Stroke Scale as an Assessment of Stroke Severity
  • NHSN Antimicrobial Use Measures to evaluate antibiotic use compared to predicted antibiotic use in both adult and pediatric populations
  • Behavioral health measures for patients in acute-care hospital beds
  • Stratification of hospital IQR measures by race, ethnicity, gender, and disability

Hospital-based Inpatient Psychiatric Services Quality Reporting Program
Starting on page 57,236

There are currently 13 measures required for submission to CMS for hospital-based inpatient psychiatric facilities providing services during the 2016 calendar year that impact payment determination in 2018. These include:

  • Hours of Physical Restraint Use
  • Hours of Seclusion Use
  • Patients Discharged on Multiple Antipsychotic Medications with Appropriate Justification
  • Follow-up after Hospitalization for Mental Illness
  • Alcohol Use Screening
  • Alcohol Brief Intervention Provided or Offered (and subset measure for intervention)
  • Tobacco Use Screening
  • Tobacco Use Brief Intervention Provided or Offered (and subset measure for intervention)
  • Influenza Immunization
  • Influenza Vaccination Coverage among Healthcare Personnel
  • Assessment of Patient Experience of Care
  • Use of an Electronic Health Record

Previous rulemaking from last year’s final rule requires two new measures to begin with services delivered in the 2017 calendar year (2019 payment determination) for patients discharged from an inpatient facility to home (self-care) or any other site of care. These include:

  • Transition record with specified elements received by discharged patients
  • Timely transmission of transition record

The following new measures, one chart-abstracted and one claims-based, were finalized in this year’s rule for the Hospital-based Inpatient Psychiatric Services (HBIPS) Quality Reporting program for the 2017 calendar year (2019 payment determination):

  • SUB-3 Alcohol and Other Drug Use Disorder Treatment Provided or Offered at Discharge and SUB-3a Alcohol & Other Drug Use Disorder Treatment at Discharge (chart-abstracted)
  • 30-Day All-Cause Unplanned Readmission Following Psychiatric Hospitalization in an IPF (claims-based)

Finally, a modification to the Screening for Metabolic Disorder measure, originally proposed to begin with July 1, 2016 discharges, was pushed forward to begin with Jan. 1, 2017 discharges for 2019 payment determination. This measure evaluates the screening of psychiatric patients for body mass index, blood pressure, lipids, and either a glucose or HgA1c level. This modification requires the denominator cohort to exclude psychiatric patients with a length of stay greater than 365 days or less than or equal to three days. In previous measure specifications, the exclusion criteria were specified as less than three days. The data devil is in the details. 

About the Author

Vicky Mahn-DiNicola is the VP of clinical analytics and research for MidasPlus, Inc. a Xerox company for which she serves as a speaker, author, and clinical consultant in the areas of healthcare analytics, quality improvement, regulatory reporting, and healthcare transformation. A certified Lean Six Sigma Black Belt, Ms. Mahn completed her undergraduate and post-graduate studies at the University of Arizona, where she continues to serve as adjunct faculty. 

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