CMS’ Inpatient Payment Proposal Would Align Quality Measurement

April 20, 2015 in News

On Friday, CMS issued its inpatient prospective payment system proposed rule for fiscal year 2016, which among other things, seeks to better align hospital reporting requirements under the meaningful use program and the Medicare Inpatient Quality Reporting program, Politico‘s “Morning eHealth” reports.

Under the 2009 economic stimulus package, providers who demonstrate meaningful use of certified electronic health records can qualify for Medicaid and Medicare incentive payments (Gold et al., “Morning eHealth,” Politico, 4/20).

Proposed Rule Details

The proposed rule — which would affect about 3,400 acute-care facilities — adjusts for things such as productivity improvement, coding changes and market conditions in the region in which the hospital is located (CMS fact sheet, 4/17).

Overall, the proposed rule would increase FY 2016 Medicare operating payments by 1.1% to acute-care hospitals that were meaningful users of EHRs and submitted data on quality metrics. The percentage is a slight decline from last year’s 1.4% raise.

According to CMS, hospitals that do not participate in quality reporting programs will face a 25% reduction in the market-based update for FY 2016, while organizations that have not yet attested to meaningful use will see a 50% decline in the update (Frieden, MedPage Today, 4/18).

CMS also proposed altering its quality reporting program by adding eight new measures for the FY 2018 payment determination. In addition, CMS proposed removing nine reporting measures from the program.

After accounting for increases and cuts to IPPS payment policies, the proposed rule is expected to increase hospital operating payments by 0.3% (CMS fact sheet, 4/17). As a result, the proposal would increase acute-care hospital payments by $120 million in FY 2016, compared with FY 2015 (Dickson, Modern Healthcare, 4/17).

Meanwhile, CMS is seeking public comment on:

  • The type of data hospitals need to participate in Medicare’s bundled payment program, such as real-time information as opposed to monthly claims data updates; and
  • How to include facilities that are ineligible for the meaningful use program — such as nursing homes, long-term care hospitals, rehab facilities and home health agencies — in care coordination models (“Morning eHealth,” Politico, 4/20).

CMS will accept comments on the proposed rule from April 30 to June 16 and is expected to issue a final rule Aug. 1 (Modern Healthcare, 4/17).


CMS wrote, “Electronic clinical quality measure collection does not require hospital staff time to find and pull paper medical records and manually review them to abstract data elements used in measure calculation.” In addition, the agency noted that it believes the use of certified EHRs among ineligible facilities “can effectively and efficiently help providers improve internal care delivery practices, support the exchange of important information across care partners and during transitions of care, and could enable the reporting of electronically specified clinical quality measures” (“Morning eHealth,” Politico, 4/20).

American Hospital Association Executive Vice President Rick Pollack said the proposed rule “will make it even more challenging for hospitals to deliver care patients and communities expect” (AHA News, 4/17). 

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