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Second Opinion

Learn about policy issues important to medical schools and teaching hospitals, with Executive Vice President Atul Grover, M.D., Ph.D.

Washington Highlights

AAMC Submits Comment Letter on IPPS FY 2018 Proposed Rule

June 16, 2017—The AAMC June 13 submitted a comment letter on the Centers for Medicare and Medicaid Services (CMS) Inpatient Prospective Payment System (IPPS) fiscal year (FY) 2018 proposed rule. The rule outlined changes to the calculation of uncompensated care (UC) payments and proposals to hospital quality programs. The proposed rule also addressed documentation and coding adjustment, payment differential between inpatient and outpatient, electronic health record (EHR) incentive program, and labor-related share rebasing [see Washington Highlights, April 21]. 

CMS proposed to change the calculation of hospital uncompensated care payments beginning in FY 2018. The AAMC is concerned about the significant financial loss that some hospitals would experience if CMS moved to the use of Worksheet S-10 data in the distribution of UC payments (Factor 3). AAMC analysis of Worksheet S-10 data shows questionable values of uncompensated care costs, which indicate that the data continue to lack accuracy, consistency and completeness. 

To mitigate the impact of flawed S-10 data, the AAMC urges CMS to undertake additional steps to validate the data and to limit the proportion of Factor 3 affected by Worksheet S-10 until the data are audited and reliable. The AAMC’s letter asks CMS to take additional steps to ensure that the methodology to distribute uncompensated care payments will not create financial hardships on teaching hospitals and hospitals that care for a higher proportion of Medicaid patients. 

The AAMC included comments in support of CMS’ proposals to implement the requirements of the 21st Century Cures Act (P.L. 114-255) in the Medicare Hospital Readmission Reduction Program (HRRP). Beginning in FY 2019, a hospital’s payment penalties under the HRRP would be adjusted to account for the proportion of dual-eligible patients served. The AAMC also supports the agency’s request for feedback on accounting for social risk factors in the hospital reporting and performance programs. Regarding specific measure recommendations, the AAMC notes that CMS should not finalize inclusion of the proposed pneumonia episode-of-care payments measure and the modified PSI-90 composite in the Value Based Purchasing program. 

The AAMC also provided comments on the following topics in the IPPS proposed rule:

  • Documentation and Coding: In the FY 2017 final rule, CMS adopted an additional 0.7 percent payment cut to IPPS rates, because its analysis indicated that the actual amount recouped was lower than its original estimates. The AAMC urges CMS to restore the additional 0.7 percent documentation and coding payment cuts in FY 2018 using its “exceptions and adjustments” authority under statute. 

  • Payment Differential for Inpatient and Outpatient Services: Site-neutral proposals would pay hospitals the same amount for similar procedures performed in the outpatient setting.  The AAMC strongly recommends that clinical judgment should determine whether to admit a patient as an inpatient or perform a procedure in the outpatient setting.  

  • EHR Incentive Program: CMS proposes to modify the EHR reporting period for 2018 for all participants – new and returning – attesting to CMS or to a State Medicaid agency to a minimum of any continuous 90-day period within calendar year 2018. The applicable incentive payment year and payment adjustment years for the 2018 EHR reporting period, as well as attestation deadlines and other related program requirements, would remain the same. The AAMC supports the proposal and encourages CMS to finalize the change to the reporting period.

  • Labor-Related Share Rebasing: The Department of Health and Human Services (HHS) periodically estimates the proportion of payments that are labor-related. In the FY 2018 IPPS, CMS has proposed to rebase the labor-related share. The AAMC cannot replicate or verify the labor share estimate included in the FY 2018 IPPS. The association requests that CMS release additional information on how it determined the rebasing and the data used in that rebasing process that will better enable stakeholders to verify CMS’s estimate. 

  • Public Posting of Accreditation Organization Reports: CMS proposes to require Accrediting Organizations (AOs) to post final accreditation survey reports and acceptable plans of corrections (PoCs) on their websites. The AAMC notes that the long form hospital survey reports are not an accurate or fair depiction of hospital quality. The AAMC requests that CMS instead convene a stakeholder group of patients, hospitals, AOs, and other relevant bodies to develop methods to display meaningful information in the future.

Contact:

Mary Mullaney
Director, Hospital Payment Policies
Telephone: 202-909-2084
Email: mmullaney@aamc.org

Scott Wetzel, M.P.P.
Lead, Quality Reporting
Telephone: 202-828-0495
Email: swetzel@aamc.org

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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.


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For More Information

Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806
Email: jkleinman@aamc.org