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The Centers for Medicare &amp; Medicaid Services (CMS) recently released its proposed rules for the Hospital Inpatient Prospective Payment System (IPPS) for fiscal year (FY) 2019. As discussed below, the proposed rule focuses on promoting interoperability to reduce administrative burdens, increase efficiency and improve patient access while providing high-quality patient care. Comments on the proposed rule are due June 25, 2018.

Electronic Health Records (EHR) Program Update

CMS proposed significant changes to the Medicare and Medicaid Electronic Health Record (EHR) Programs. For starters, it renamed the program to Promoting Interoperability (PI) Programs to better reflect its focus on interoperability and improving patient access to health information. To maintain alignment across programs, CMS noted that the name change applies to the Merit-Based Incentive Payment System Advancing Care Information performance category.



Keeping increased interoperability and patient access in mind, CMS steered away from the threshold-based methodology currently in use and proposed a new performance-based scoring methodology to reduce burdens and provide more flexibility. Under the proposed scoring methodology, each measure will be scored based on the provider’s performance for that measure, except the Public Health and Clinical Data Exchange objection, and will contribute to the total PI score, with a provider receiving a maximum score of 100. A total score of 50 points or more satisfies the program requirement, enabling the provider to receive an incentive payment and/or avoid a payment penalty.

CMS also reinforced the requirement that, beginning in the 2019 reporting period, all eligible professionals and hospitals, and critical access hospitals must use the 2015 Edition Certified EHR Technology to demonstrate meaningful use for EHR reporting. The 2015 Edition, and specifically, the application programming interface functionality, simplifies the sharing of electronic health information between systems, making it easier for providers to satisfy the patient access requirement and further enhancing interoperability between systems.

Finally, CMS’s proposed rule modified the EHR reporting periods in 2019 and 2020 to new and returning providers attesting to meaningful use to a minimum of any continuous 90-day period during the calendar year.

Meaningful Measures Initiative for Quality Reporting 

As part of its “Meaningful Measures” framework, CMS proposes to remove several quality measures from the Hospital Inpatient Quality Reporting (Hospital IQR) Program over the next three program years. CMS developed this new initiative to recognize the measures that address the highest priorities for care improvement and individual outcomes. Under the new framework, CMS proposes to synchronize various quality reporting and value-based incentive programs so that provider measure submissions are not duplicative across the programs. For instance, CMS now proposes that the Hospital IQR Program include only measures that are not covered by another CMS quality program. To that end, CMS proposes that a quality measure may be removed from the Hospital IQR Program if “the costs associated with a measure outweigh the benefit of its continued use in the program.” In total, CMS proposes to remove 39 quality measures from the Hospital IQR Program by 2023 to reduce provider burden and duplicative measure submission.

Chimeric Antigen Receptor (CAR) T-cell Therapy

After much anticipation, CMS proposed to assign ICD-10-PCS procedure codes XW033C3 (Introduction of engineered autologous CAR-T immunotherapy into peripheral vein, percutaneous approach, new technology group 3) and XW043C3 (Introduction of engineered autologous CAR-T immunotherapy into central vein, percutaneous approach, new technology group 3) to existing MS-DRG 016, while proposing to rename MS-DRG 016 “Autologous Bone Marrow Transplant with CC/MCC or T-cell Immunotherapies” in order to reflect the addition of CAR T-cell immunotherapies. CMS invited public comments on alternative approaches for new technology add-on payments for FY 2019.

Update to Disproportionate Share Hospital (DSH) Payment Methodology and Additional Payment for Uncompensated Care 

In the proposed rule, CMS updates its estimation methodology for the three factors used to determine a DSH’s proportion of uncompensated care payments for FY 2019. Under this proposed rule, CMS will adopt the following policies:

(1) providers with multiple cost reports for the same fiscal year that do not equal 12 months of data will use the longest cost report and annualize Medicaid data; (2) providers with multiple cost reports beginning in the same fiscal year and one report that also spans the entirety of the following fiscal year, the cost report that spans both fiscal years should be used for the latter fiscal year where the provider has no cost report for that fiscal year; and (3) providers will utilize statistical trim methods with potentially irregular cost-to-charge ratios and uncompensated care costs reported on Worksheet S-10.

For FY 2019, CMS also proposes to use only data regarding low-income insured days for FY 2013 to determine the amount of uncompensated care payments for Puerto Rico hospitals, Indian Health Service and Tribal hospitals, and all-inclusive rate providers.

The proposed rule notes that CMS will continue using uninsured estimates produced by CMS’s Office of the Actuary in the calculation of the percentage of individuals who are uninsured, and incorporating data from Worksheet S-10 in the calculation of hospitals’ share of the aggregate amount of uncompensated care. CMS estimates total Medicare DSH uncompensated care payments for FY 2019 will increase payments overall by approximately 1.3 percent compared to the uncompensated care payments that will be distributed in FY 2018.

Improving Healthcare Pricing Transparency 

In keeping with CMS’s goal to improve the public accessibility of charge information, CMS proposes an update to its guidelines for FY 2019 that would require hospitals to list their current standard charges on the internet in a machine-readable format, and to update this information at least annually, or more often as appropriate.

CMS seeks public comment on related topics that influence pricing transparency and further its objective to facilitate consumer-friendly communication between providers and patients regarding charge information. The first topic concerns the defining and reporting of “standard charges” and the ideal mechanism to measure such charge information. The agency also seeks feedback on ways to increase patient use of charge and cost information in decision-making. Regarding the enforcement of price transparency requirements, the proposed rule solicits ideas for appropriate enforcement mechanisms and monitoring of hospital compliance. CMS also requests feedback on Medigap coverage and the challenges that providers face with providing information about out-of-pocket costs. CMS ultimately aims to improve patient awareness of the potential financial liability associated with healthcare services and enable patients to compare charges for similar services across hospitals in the healthcare industry.

Proposed Elimination of the “25-Percent Threshold Policy” Adjustment

In the proposed rule, CMS eliminates the per-discharge payment adjustment in the long-term care hospital (LTCH) prospective payment system (PPS) for discharges from an LTCH when the number originating from any single referring hospital is more than the applicable threshold for a given cost reporting period, known as the 25-percent threshold policy. CMS plans to eliminate the 25-percent threshold policy based on the belief that the specific regulatory framework of the policy is no longer an appropriate mechanism to prevent LTCHs from operating as a de facto unit of an IPPS hospital in violation of the statute.

The 25-percent threshold policy would have reduced the LTCH PPS payments for certain discharges for FY 2019, and this proposed rule, if finalized, would result in an increase in aggregate LTCH PPS payments for FY 2019. Based on FY 2017 claims data, CMS estimates its proposed elimination of the 25-percent threshold policy would increase aggregate LTCH PPS payments by approximately $36 million. CMS seeks public comment on this proposal to eliminate the 25-percent threshold policy in a budget-neutral manner and further reduce the unnecessary regulatory burden.

Proposed IPPS Rule Changes