Premier submits IPPS comments Last Updated: June 8, 2017
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Premier submitted comments today on the fiscal year (FY) 2018 Medicare inpatient prospective payment system (PPS) proposed rule, offering recommendations on various policies and payment adjustments proposed by the agency

Premier focuses its comments on CMS’ proposed policies on Medicare disproportionate share hospital (DSH) payment reductions, the Hospital Readmission Reduction Program, along with CMS requests for information on physician-owned hospitals, eliminating inappropriate Medicare payment differentials, and opportunities for CMS to reduce burden, improve quality and decrease costs.

Highlights of Premier’s comments include:

Medicare disproportionate share hospital (DSH) payment reductions: In commenting on CMS’ methodology for determining uncompensated care payments, Premier supports using the worksheet S-10 data but CMS should delay adoption of the S-10 for one additional year until FY 2019 to give it time to audit and adjust the data before use. Specifically, CMS should further revise the instructions associated with the Worksheet S-10 to ensure additional clarity. CMS should implement a fatal edit to ensure the S-10 is complete and instruct the Medicare Administrative Contractors (MACs) to audit negative, missing or suspicious values. Furthermore, CMS should issue FAQs and provide educational events to ensure that the cost reports are filled out properly and comparably to ensure that hospital data are consistently reported for use in calculating Factor 3.

Hospital Readmission Reduction Penalty: Premier generally supports the following CMS proposals to account for socioeconomic status (SES) of patients served by the hospital, in accordance with the 21st Century Cures Act, by assessing penalties based on a hospital’s performance relative to other hospitals with a similar proportion of patients who are dually eligible for Medicare and full-benefit Medicaid:

  • Define the proportion of full-benefit dual eligible beneficiaries as the proportion of dual eligible patients among all Medicare FFS and Medicare Advantage stays;
  • Use the State Medicare Modernization Act (MMA) file of dual eligibility to calculate the percentage of duals that correspond with the 3-year measurement period;
  • Stratify hospitals into five peer groups though Premier suggests exploring other models for assigning peer groups using continuous variables;
  • Compare each hospital’s performance to the median excess readmissions ratio of their peer group.

Premier also recommends that CMS quickly explore using additional social risk factors, such as income, race, payor type, marital status and education, when assigning hospitals to peer groups. In response to accounting for social risk factors across all the quality and payment programs, Premier encourages CMS to consider both measure-level and program-level risk stratification or adjustment using a broad range of social risk factors.

Hospital Value-Based Purchasing Program: Premier supports removing the current PSI-90 measure but recommends that CMS delay inclusion of modified PSI 90 measure until after the measure has been publicly reported. Premier also opposes adding a pneumonia episode-of-care payment measure because the measures overlap with Medicare Spending per beneficiary.

Quality measure reporting: Premier supports removing the current pain management questions in the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) but requests that CMS make field test results publicly available before proposing new pain management questions. Similarly, CMS supports incorporating stroke severity into the risk adjustment of the stroke morality measure but requests additional testing before proposing the measure for inclusion. Finally, Premier supports reducing the number of required eCQMs from eight to six, reducing the amount of required eCQM data that needs to be submitted and voluntary reporting of the Hybrid Hospital-Wide Readmissions measure.

Survey and certification requirements: The Premier healthcare alliance supports CMS’ efforts to be fully transparent with regard to survey results and plans of correction; however, we believe additional consideration is needed before making this information publicly available.

Physician-owned hospitals: Premier opposes the possible repeal of the moratorium on physician-owned hospitals, which would allow full building and bed expansion of physician-owned hospitals. Data show that self-referral to physician-owned hospitals leads to more profitable cases being steered to these hospitals. This diverts essential resources from community hospitals, which depend on a mix of cases and patients to provide the full range of services needed in their communities, including emergency, trauma and behavioral healthcare services that physician-owned hospitals do not provide. Removing or weakening the current restrictions on physician-owned hospitals would be a great disservice to patients, taxpayers, employers and community hospitals.

Medicare payment differentials: Premier would strongly oppose any efforts that try to equalize Medicare payment for inpatient and outpatient services that solely focus on reducing inpatient payments. The two-midnight rule was intended to address payment differentials through criteria for when the patient is admitted to the hospital as an inpatient, rather than a change in how Medicare pays for inpatient and outpatient services.

Reducing burden, improving quality and decreasing cost: Premier provides a number of suggestions in response to CMS’ Request for Information to obtain feedback on positive solutions to better achieve transparency, flexibility, program simplification and innovation such as:

  • Supplying sufficient technical information when proposing new payment models to allow stakeholders to realistically evaluate payment impact;
  • Providing more time to implement new payment models;
  • Developing APMs and Advanced APMs that are voluntary and allowing providers sufficient time to put systems in place to monitor the health of populations prior to the models’ implementation;
  • Providing additional flexibility to ACOs (e.g. waivers) and aligning payment rules across APM models (e.g. clear guidelines on attribution and model precedence);
  • Matching quality measures to the clinical focus of each payment model;
  • Using facile measure submission methods and a manageable number of measures; and
  • Holding recovery audit contractors financially accountable for incorrect denials of Medicare payment.