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FY 2011 Medicare Inpatient PPS Interim Final Rule. August 16, 2010 Note: This presentation is posted at www.premierinc.com/advisorlive. Speaker . Danielle Lloyd, M.P.H. Senior director Reimbursement Policy Premier . FY 2011 Interim Final Inpatient PPS Rule.

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fy 2011 medicare inpatient pps interim final rule

FY 2011 Medicare Inpatient PPS Interim Final Rule

August 16, 2010

Note: This presentation is posted at www.premierinc.com/advisorlive

speaker
Speaker

Danielle Lloyd, M.P.H.

Senior director

Reimbursement Policy

Premier

fy 2011 interim final inpatient pps rule
FY 2011 Interim Final Inpatient PPS Rule
  • Published in the August 16, Federal Register.
  • Market basket update of 2.6% reduced to 2.35% for hospitals reporting quality measures, or 0.6% reduced to 0.35% for those not reporting.
  • On average, a 0.4% drop ($440M) in operating payments compared to FY 10.
  • On average, a 0.5% drop ($21M) in capital payments compared to FY 10.
  • Behavioral offset of 2.9% to both operating an capital payments in FY 11 for changes in documentation and coding as a result of the implementation of MS-DRGs in FYs 08 and 09. Anticipates a 2.9% adjustment in FY 12.
  • Retires 1 and adds 10 quality measures (total of 55) for payment. Hospitals will begin reporting 2 additional measures in FY 2011 for payment determination in FY 2013: 1) AMI-10 Statin at Discharge, a chart-based measure; and 2) Central Line Associated Blood Stream Infection, which hospitals must report through the CDC’s NHSN.
  • Extends 72 hour bundling rule to non-diagnostic services starting June 25, 2010-- comments due September 28, 2010.
fy 2011 interim final inpatient pps rule4
FY 2011 Interim Final Inpatient PPS Rule
  • Published in the August 16, Federal Register.
  • Market basket update
    • 2.6% reduced to 2.35% for hospitals reporting quality measures, or
    • 0.6% reduced to 0.35% for those not reporting.
  • On average, a 0.4% drop ($440M) in operating payments compared to FY 10.
  • On average, a 0.5% drop ($21M) in capital payments compared to FY 10.
  • Extends 72 hour bundling rule to non-diagnostic services starting June 25, 2010-- comments due September 28, 2010.
behavioral offset
Behavioral offset
  • Payment reduction for changes in documentation and coding as a result of the MS-DRG implementation in FYs 08 and 09.
    • One-time recoupment of 2.9% in FY 2011
    • Expected one-time recoupment of 2.9% in FY 2012.
    • Prospective correction of 3.9% still needed.
  • 2.9% prospective adjustment to the capital federal rate.
  • 2.9% offset to hospital-specific rates of Sole Community and Medicare Dependent Hospitals
    • Leaves 2.5% recoupment (for total of 5.4%) as SCHs/MDHs were not previously reduced by 1.5% as were the other hospitals.
ffy 2011 rhqdapu measure requirements
FFY 2011 RHQDAPU Measure Requirements
  • Retires the claims-based AHRQ Mortality for Selected Surgical Procedures Composite
    • AHRQ issued guidance in June 2009 “the measure is not recommended for comparative reporting”
  • RHQDAPU remaining measures:
    • 27 Chart Abstracted measures (AMI, HF, PN and SCIP)
    • 14 Claims-based measures
      • 30-Day Mortality (AMI, HF, PN)
      • 30-Day Risk Standardized Readmission (AMI, HF, PN)
      • AHRQ PSI, IQIs and Composite
      • Nursing Sensitive/PSI Harmonized measure with PSI-4
    • 3 Structural Measures – Participation in a Registry
      • Cardiac Surgery, Stroke and Nursing Sensitive Care
finalized for ffy 2012 payment
Finalized for FFY 2012 Payment
  • Retain the existing FY 2011 measures
  • Adopt the proposed10 claims-based measures
    • 2 AHRQ PSIs
      • PSI-11 Post-Operative Respiratory Failure
      • PSI-12 Post-Operative Pulmonary Embolism or DVT
    • 8 Hospital Acquired Condition (HACs)
      • Foreign Object Retained After Surgery
      • Air Embolism
      • Blood Incompatibility
      • Pressure Ulcer Stages III & IV
      • Falls and Trauma:
      • Vascular Catheter-Associated Infection
      • Catheter-Associated Urinary Tract Infection (UTI)
      • Manifestations of Poor Glycemic Control
ffy 2012 rhqdapu proposals not finalized
FFY 2012 RHQDAPU Proposals Not Finalized
  • CMS will revisit in a future rule making process
    • Submission of all-patient data to allow CMS to calculate the patient volume for the 55 MS-DRGs relating to the APU measures
      • CMS determine this submission as proposed, would be burdensome to hospitals.
    • Retirement of measures
      • No measures are currently planned for retirement in FFY 2012
finalized for ffy 2013 payment
Finalized for FFY 2013 Payment
  • Retain the existing FY 2012 measures
  • Add one new chart abstracted measure
    • AMI-10 Statin at Discharge, a chart-based measure
      • Data collection begins with January 1, 2011 discharges
  • Add one new Healthcare-Associated Infection (HAI)
    • Central Line Associated Blood Stream Infection (NQF #0139)
      • Via National Healthcare Safety Network (NHSN)
      • Data collection begins with January 1, 2011 discharges
  • Registry-Based Measures
    • CMS will revisit the proposal to require hospitals to use registries to report measures in future rule making
finalized for fy 2014 payment
Finalized for FY 2014 Payment
  • Retain the existing FY 2013 measures
  • Add 5 new measures
    • Data collection begins with January 1, 2012 discharges
      • ED Throughput – Admit Decision Time to ED Departure for admitted patients
      • ED Throughput – Median time from ED Arrival to ED Departure for admitted patients
      • Global Flu Immunization
      • Global Pneumonia Immunization
      • HAI measure – Surgical Site Infection
        • Data collection via NHSN
  • Retire PN-2 and PN-7 Pneumonia population specific measures to accommodate Global Immunization measures
additional rhqdapu changes
Additional RHQDAPU Changes
  • Synchronize APU Data Submission and Validation
    • CMS aligns the quarterly discharge periods within the calendar year
    • Effective with FY 2013 payment decision
      • Data must be submitted in all 4 calendar quarters of 2011
      • Data Validation will use 4 quarters of data
        • 4th qtr of CY that occurs 2 years before payment determination and the first 3 calendar quarters of the following year
        • Example 2013 validation
          • 4th calendar quarter 2010 through 3rd calendar quarter 2011
ehrs and rhqdapu
EHRs and RHQDAPU
  • EHR quality measures reporting for Meaningful Use
    • Per the HITECH Act, CMS finalized an EHR incentive program that uses quality measure reporting to demonstrate meaningful use of a certified EHR
    • HITECH Act requires that preference be given to quality measures used in RHQDAPU
  • EHR Incentive Program and RHQDAPU are two separate programs that will overlap with reporting of quality measures
    • If a measure is submitted for EHR and used in RHQDAPU hospitals will submit once for both programs
hospital acquired conditions
Hospital-acquired conditions

Hospitals will not qualify for higher payment for the following HACs:

  • Object left in during surgery (acute reaction to foreign substance)
  • Air embolism
  • Blood incompatibility replaces code with 5 new codes in 2011
  • Catheter-associated urinary tract infections
  • Pressure ulcers (Stages III/IV)
  • Surgical site infections (e.g., Mediastinitis after CABG, certain orthopedic and Bariatric surgeries ) expanded in 2009
  • Vascular catheter-associated infections (e.g. blood stream infection)
  • Hospital-acquired falls leading to injuries (including fractures, dislocations, intracranial injury, crushing injury and burns) - two new codes in 2010
  • DVT/PE after hip and knee replacement* - new in 2009
  • Poor glycemic control (Ketoacidosis & Coma- hypoglycemic & hyporosmolar) new in 2009
  • *There is no payment ramification for PE
low cost counties
Low-cost Counties
  • Hospitals located in counties with the lowest Medicare Part A and B spending (bottom quartile) will receive a bonus.
  • Spending adjusted by age, sex and race similarly to Medicare Advantage.
  • $400M apportioned based on 2009 spending (not budget neutral)
    • $150M in FY 11
    • $250M in FY 12.
  • 276 counties with 416 qualifying hospitals.
wage index
Wage Index
  • Wage index floor of 1.00 for hospitals located in “frontier” states: Wyoming, Montana, North Dakota, and South Dakota.
  • Restores wage comparison for reclassifications to 84% for urban, 82% for rural, and 85% for groups
  • Calculates rural and imputed floors budget neutrality on a national basis
cost reports and transfer policy
Cost Reports and Transfer Policy

CMS Cost Report

  • Finalizes proposal to adopt new standard cost centers for CT scanning, MRIs, and cardiac catherization.
    • to improve the accuracy of cost estimations.

Transfer Policy

  • Expands the post-acute transfer policy related to transfers from an IPPS hospital to:
    • hospitals that do not have an agreement to participate with Medicare under the IPPS, and
    • Critical Access Hospitals (CAHs).
  • No material impact on Medicare payments.
disproportionate share hospital dsh payments
Disproportionate Share Hospital (DSH) Payments
  • DSH adjustment is calculated using Supplemental Security Income (SSI) fraction, and Medicaid fraction.
    • Data drawn from CMS Medicare Provider Analysis and Review (MedPAR) and SSI eligibility data provided by the Social Security Administration.
      • SSI is determined by CMS matching Medicare records and SSI eligibility records for each patient.
  • CMS revises data matching process for FY 2011 and beyond.
    • Uncertain of impact on providers
  • Clarifies Medicare Advantage patients are “eligible” for Part A services
direct graduate medical education
Direct graduate medical education
    • Hospitals may submit their Medicare GME affiliation agreements to CMS electronically.
  • Clarifies definition of residents in approved medical residency programs for the purpose of receiving Medicare IME and direct GME payments. Specifically:
    • Chief residents who have completed an approved medical residency program and satisfied their minimum requirements for board certification should not be considered as residents
    • Individuals who extend their training beyond the length of the approved residency program should bill for services under PFS
    • To include as a resident ask: Does the resident need the training for board certification in that specialty and is s/he is a formal program?
new technology add on payments
New technology add-on payments
  • FY 2010 technologies:
    • CardioWest™ Temporary Total Artificial Heart System (continuation)
    • Spiration® IBV® valve system to limit airflow into leaking lung (continuation)
  • FY 2011 applications:
    • AutoLitt™ laser for brain tumor removal (approved)
    • LipiScan™ coronary imaging system (denied)
      • LipiScan™ coronary imaging system with Intravascular Ultrasound (denied)
outliers
Outliers
  • To qualify for outlier payments in FY 11, the cost of the case must be more than the DRG, including add-ons, plus the fixed-loss threshold of $23,075 for CMS to then cover 80% of the balance.
  • This is down from the FY 10 threshold of $23,140.
rural provisions
Rural Provisions
  • Medicare Dependent Hospitals
    • Extends program for FY 11.
    • Clarifies that patients who have exhausted Part A are in counted in the 60% calculation .
  • Low-volume adjustment
    • Provides an add-on payment for low volume hospitals, FYs 2011 and 2012 determined by using a sliding scale.
crna pass through
CRNA pass through
  • Certified Registered Nurse Anesthetists (CRNA) services are paid based on reasonable costs for certain rural and critical access hospitals (CAHs).
  • Effective for cost-reporting periods beginning on or after October 1, 2010 urban hospitals, including CAHs, that have reclassified as rural will be made eligible for CRNA cost-based reimbursement.
  • Hospitals, including CAHs, located in Lugar counties will not be made eligible for CRNA cost-based reimbursement.
critical access hospitals cahs
Critical Access Hospitals (CAHs)
  • Once a CAH elects to receive payments under Method II, it will remain until terminated in writing
  • Reinforces 101% of costs for all outpatient services regardless of billing method
  • Clarifies when provider taxes are allowable
    • Medicare contractors will make case-by-case determinations as to whether a reduction is necessary to account for payments associated with the assessed tax.
practical implications to think about
Practical implications to think about?
  • Payment cuts due to behavioral offset in FY 11 forward
  • Payment cuts due to PPACA market basket reduction
  • Increase in payments due “low-cost counties” bonus?
  • Increase in payments due to reversed AWI policies?
  • Additional burden associated with new quality measures reporting requirements
  • Additional resources to support data submisison to CDC’s NHSN?
  • Staff/systems/costs to test EHR submission of measures?
  • Increase in DSH payments?
  • Increase in payments for CRNA services?
  • Compliance with changes to cost-reporting changes?
contact information
Contact information

Danielle A. Lloyd, MPH

Senior Director, Reimbursement Policy

Premier Inc.

444 N. Capitol St, NW, Suite 625

Washington, DC 20001-1511

Phone: 202.879.8002

Fax: 202.393.0864

E-mail: danielle_lloyd@premierinc.com

Web site: http://www.premierinc.com/