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Daily Rules, Proposed Rules, and Notices of the Federal Government

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 412, 413, 424, and 476

[CMS-1588-F]

RIN 0938-AR12

Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Fiscal Year 2013 Rates; Hospitals' Resident Caps for Graduate Medical Education Payment Purposes; Quality Reporting Requirements for Specific Providers and for Ambulatory Surgical Centers

AGENCY: Centers for Medicare and Medicaid Services (CMS), HHS.
ACTION: Final rule.
SUMMARY: We are updating the payment policies and the annual payment rates for the Medicare prospective payment system (PPS) for inpatient hospital services provided by long-term care hospitals (LTCHs) and implementing certain statutory changes made by the Affordable Care Act. Generally, these changes will be applicable to discharges occurring on or after October 1, 2012, unless otherwise specified in this final rule.

In addition, we are implementing changes relating to determining a hospital's full-time equivalent (FTE) resident cap for the purpose of graduate medical education (GME) and indirect medical education (IME) payments. We are establishing new requirements or revised requirements for quality reporting by specific providers (acute care hospitals, PPS-exempt cancer hospitals, LTCHs, and inpatient psychiatric facilities (IPFs)) that are participating in Medicare. We also are establishing new administrative, data completeness, and extraordinary circumstance waivers or extension requests requirements, as well as a reconsideration process, for quality reporting by ambulatory surgical centers (ASCs) that are participating in Medicare.

We are establishing requirements for the Hospital Value-Based Purchasing (VBP) Program and the Hospital Readmissions Reduction Program.

DATES: Effective date:This final rule is effective on October 1, 2012.
FOR FURTHER INFORMATION CONTACT:

Tzvi Hefter, (410) 786-4487, and Ing-Jye Cheng, (410) 786-4548, Operating Prospective Payment, MS-DRGs, Hospital Acquired Conditions (HAC), Wage Index, New Medical Service and Technology Add-On Payments, Hospital Geographic Reclassifications, Graduate Medical Education, Capital Prospective Payment, Excluded Hospitals, Medicare Disproportionate Share Hospital (DSH), and Postacute Care Transfer Issues. Michele Hudson, (410) 786-4487, and Judith Richter, (410) 786-2590, Long-Term Care Hospital Prospective Payment System and MS-LTC-DRG Relative Weights Issues. Bridget Dickensheets, (410) 786-8670, Market Basket for LTCHs Issues. Siddhartha Mazumdar, (410) 786-6673, Rural Community Hospital Demonstration Program Issues. James Poyer, (410) 786-2261, Hospital Inpatient Quality Reporting and Hospital Value-Based Purchasing--Program Administration, Validation, and Reconsideration Issues. Shaheen Halim, (410) 786-0641, Hospital Inpatient Quality Reporting--Measures Issues Except Hospital Consumer Assessment of Healthcare Providers and Systems Issues; and Readmission Measures for Hospitals Issues. Elizabeth Goldstein, (410) 786-6665, Hospital Inpatient Quality Reporting--Hospital Consumer Assessment of Healthcare Providers and Systems Measures Issues. Mary Pratt, (410) 786-6867, LTCH Quality Data Reporting Issues. Kim Spalding Bush, (410) 786-3232, Hospital Value-Based Purchasing Efficiency Measures Issues. James Poyer, (410) 786-2261, and Barbara Choo, (410) 786-4449, Inpatient Psychiatric Facility Quality Reporting Issues and PPS-Exempt Cancer Hospital Quality Reporting Issues. Anita Bhatia, (410) 786-7236, Ambulatory Surgical Center Quality Reporting (ASCQR) Program Issues.

SUPPLEMENTARY INFORMATION:

Electronic Access

ThisFederal Registerdocument is also available from theFederal Registeronline database through the U.S. Government Printing Office Web page at:http://www.gpo.gov/fdsys/browse/collection.action?collectionCode=FR. Free public access is available on a Wide Area Information Server (WAIS) through the Internet and via asynchronous dial-in. Internet users can access the database by using the World Wide Web (the Superintendent of Documents' home Web page address), by using local WAIS client software, or by telnet toswais.access.gpo.gov, then login as guest (no password required). Dial-in users should use communications software and modem to call (202) 512-1661; type swais, then login as guest (no password required).

Tables Available Only Through the Internet on the CMS Web Site

In the past, a majority of the tables referred to throughout this preamble and in the Addendum to this final rule were published in theFederal Registeras part of the annual proposed and final rules. However, beginning in FY 2012, some of the IPPS tables and LTCH PPS tables are no longer published in theFederal Register. Instead, these tables will be available only through the Internet. The IPPS tables for this final rule are available only through the Internet on the CMS Web site at:http://www.cms.hhs.gov/Medicare/medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. Click on the link on the left side of the screen titled, “FY 2013 IPPS Final Rule Home Page” or “Acute Inpatient—Files for Download”. The LTCH PPS tables for this FY 2013 final rule are available only through the Internet on the CMS Web site at:http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/LongTermCareHospitalPPS/index.htmlunder the list item for Regulation Number CMS-1588-F. For complete details on the availability of the tables referenced in this final rule, we refer readers to section VI. of the Addendum to this final rule.

Readers who experience any problems accessing any of the tables that are posted on the CMS Web sites identified above should contact Nisha Bhat at (410) 786-4487.

Acronyms 3M3M Health Information System AAMCAssociation of American Medical Colleges ACGMEAccreditation Council for Graduate Medical Education AHAAmerican Hospital Association AHICAmerican Health Information Community AHIMAAmerican Health Information Management Association AHRQAgency for Healthcare Research and Quality ALOSAverage length of stay ALTHAAcute Long Term Hospital Association AMAAmerican Medical Association AMGAAmerican Medical Group Association AOAAmerican Osteopathic Association APR DRGAll Patient Refined Diagnosis Related Group System ARRAAmerican Recovery and Reinvestment Act of 2009, Public Law 111-5 ASCAmbulatory Surgical Center ASCAAdministrative Simplification Compliance Act of 2002, Public Law 107-105 ASCQRAmbulatory Surgical Center Quality Reporting ASITNAmerican Society of Interventional and Therapeutic Neuroradiology BBABalanced Budget Act of 1997, Public Law 105-33 BBRAMedicare, Medicaid, and SCHIP [State Children's Health Insurance Program] Balanced Budget Refinement Act of 1999, Public Law 106-113 BIPAMedicare, Medicaid, and SCHIP [State Children's Health Insurance Program] Benefits Improvement and Protection Act of 2000, Public Law 106-554 BLSBureau of Labor Statistics CAHCritical access hospital CARE[Medicare] Continuity Assessment Record & Evaluation [Instrument] CARTCMS Abstraction & Reporting Tool CBSAsCore-based statistical areas CCComplication or comorbidity CCRCost-to-charge ratio CDAC[Medicare] Clinical Data Abstraction Center CDADClostridium difficile-associated disease CDCCenter for Disease Control and Prevention CIPICapital input price index CMICase-mix index CMSCenters for Medicare & Medicaid Services CMSAConsolidated Metropolitan Statistical Area COBRAConsolidated Omnibus Reconciliation Act of 1985, Public Law 99-272 COLACost-of-living adjustment CoP[Hospital] condition of participation CPIConsumer price index CRNACertified Registered Nurse Anesthetist CYCalendar year DPPDisproportionate patient percentage DRADeficit Reduction Act of 2005, Public Law 109-171 DRGDiagnosis-related group DSHDisproportionate share hospital ECIEmployment cost index EDB[Medicare] Enrollment Database EHRElectronic health record EMRElectronic medical record FAHFederation of Hospitals FDAFood and Drug Administration FFYFederal fiscal year FQHCFederally qualified health center FTEFull-time equivalent FYFiscal year GAAPGenerally Accepted Accounting Principles GAFGeographic Adjustment Factor GMEGraduate medical education HACsHospital-acquired conditions HCAHPSHospital Consumer Assessment of Healthcare Providers and Systems HCFAHealth Care Financing Administration HCOHigh-cost outlier HCRISHospital Cost Report Information System HHAHome health agency HHSDepartment of Health and Human Services HICANHealth Insurance Claims Account Number HIPAAHealth Insurance Portability and Accountability Act of 1996, Public Law 104-191 HIPCHealth Information Policy Council HISHealth information system HITHealth information technology HMOHealth maintenance organization HPMPHospital Payment Monitoring Program HSAHealth savings account HSCRC[Maryland] Health Services Cost Review Commission HSRVHospital-specific relative value HSRVccHospital-specific relative value cost center HQAHospital Quality Alliance HQIHospital Quality Initiative ICD-9-CMInternational Classification of Diseases, Ninth Revision, Clinical Modification ICD-10-CMInternational Classification of Diseases, Tenth Revision, Clinical Modification ICD-10-PCSInternational Classification of Diseases, Tenth Revision, Procedure Coding System ICRInformation collection requirement IGIIHS Global Insight, Inc. IHSIndian Health Service IMEIndirect medical education I-OInput-Output IOMInstitute of Medicine IPFInpatient psychiatric facility IPPS[Acute care hospital] inpatient prospective payment system IRFInpatient rehabilitation facility IQRInpatient Quality Reporting LAMCsLarge area metropolitan counties LOSLength of stay LTC-DRGLong-term care diagnosis-related group LTCHLong-term care hospital LTCHQRLong-Term Care Hospital Quality Reporting MAMedicare Advantage MACMedicare Administrative Contractor MCCMajor complication or comorbidity MCEMedicare Code Editor MCOManaged care organization MCVMajor cardiovascular condition MDCMajor diagnostic category MDHMedicare-dependent, small rural hospital MedPACMedicare Payment Advisory Commission MedPARMedicare Provider Analysis and Review File MEIMedicare Economic Index MGCRBMedicare Geographic Classification Review Board MIEA-TRHCAMedicare Improvements and Extension Act, Division B of the Tax Relief and Health Care Act of 2006, Public Law 109-432 MIPPAMedicare Improvements for Patients and Providers Act of 2008, Public Law 110-275 MMAMedicare Prescription Drug, Improvement, and Modernization Act of 2003, Public Law 108-173 MMEAMedicare and Medicaid Extenders Act of 2010, Public Law 111-309 MMSEAMedicare, Medicaid, and SCHIP Extension Act of 2007, Public Law 110-173 MRHFPMedicare Rural Hospital Flexibility Program MRSAMethicillin-resistantStaphylococcus aureus MSAMetropolitan Statistical Area MS-DRGMedicare severity diagnosis-related group MS-LTC-DRGMedicare severity long-term care diagnosis-related group NAICSNorth American Industrial Classification System NALTHNational Association of Long Term Hospitals NCDNational coverage determination NCHSNational Center for Health Statistics NCQANational Committee for Quality Assurance NCVHSNational Committee on Vital and Health Statistics NECMANew England County Metropolitan Areas NHSNNational Healthcare Safety Network NQFNational Quality Forum NTISNational Technical Information Service NTTAANational Technology Transfer and Advancement Act of 1991 (Pub. L. 104-113) NVHRINational Voluntary Hospital Reporting Initiative OACT[CMS'] Office of the Actuary OBRA 86Omnibus Budget Reconciliation Act of 1986, Public Law 99-509 OESOccupational employment statistics OIGOffice of the Inspector General OMBExecutive Office of Management and Budget OPMU.S. Office of Personnel Management O.R.Operating room OSCAROnline Survey Certification and Reporting [System] PCHPPS-exempt cancer hospital PCHQRPPS-exempt cancer hospital quality reporting PMSAsPrimary metropolitan statistical areas POAPresent on admission PPIProducer price index PPSProspective payment system PRMProvider Reimbursement Manual ProPACProspective Payment Assessment Commission PRRBProvider Reimbursement Review Board PRTFsPsychiatric residential treatment facilities PSFProvider-Specific File PS&RProvider Statistical and Reimbursement (System) QIGQuality Improvement Group, CMS QIOQuality Improvement Organization RCEReasonable compensation equivalent RHCRural health clinic RHQDAPUReporting hospital quality data for annual payment update RNHCIReligious nonmedical health care institution RPLRehabilitation psychiatric long-term care (hospital) RRCRural referral center RTIResearch Triangle Institute, International RUCAsRural-urban commuting area codes RYRate year SAFStandard Analytic File SCHSole community hospital SFYState fiscal year SICStandard Industrial Classification SNFSkilled nursing facility SOCsStandard occupational classifications SOMState Operations Manual SSOShort-stay outlier TEFRATax Equity and Fiscal Responsibility Act of 1982, Public Law 97-248 TEPTechnical expert panel TMATMA [Transitional Medical Assistance], Abstinence Education, and QI [Qualifying Individuals] Programs Extension Act of 2007, Public Law 110-90 TPSTotal Performance Score UHDDSUniform hospital discharge data set Table of Contents I. Executive Summary and Background A. Executive Summary 1. Purpose and Legal Authority 2. Summary of the Major Provisions 3. Summary of Costs and Benefits B. Summary 1. Acute Care Hospital Inpatient Prospective Payment System (IPPS) 2. Hospitals and Hospital Units Excluded From the IPPS 3. Long-Term Care Hospital Prospective Payment System (LTCH PPS) 4. Critical Access Hospitals (CAHs) 5. Payments for Graduate Medical Education (GME) C. Provisions of the Patient Protection and Affordable Care Act (Pub. L. 111-148) and the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152) Applicable to FY 2013 D. Issuance of a Notice of Proposed Rulemaking II. Changes to Medicare Severity Diagnosis-Related Group (MS-DRG) Classifications and Relative Weights A. Background B. MS-DRG Reclassifications C. Adoption of the MS-DRGs in FY 2008 D. FY 2013 MS-DRG Documentation and Coding Adjustment, Including the Applicability to the Hospital-Specific Rates and the Puerto Rico-Specific Standardized Amount 1. Background on the Prospective MS-DRG Documentation and Coding Adjustments for FY 2008 and FY 2009 Authorized by Public Law 110-90 2. Prospective Adjustment to the Average Standardized Amounts Required by Section 7(b)(1)(A) of Public Law 110-90 3. Recoupment or Repayment Adjustments in FYs 2010 through 2012 Required by Public Law 110-90 4. Retrospective Evaluation of FY 2008 and FY 2009 Claims Data 5. Prospective Adjustment for FY 2008 and FY 2009 Authorized by Section 7(b)(1)(A) of Public Law 110-90 and Section 1886(d)(3)(vi) of the Act 6. Recoupment or Repayment Adjustment Authorized by Section 7(b)(1)(B) of Public Law 110-90 7. Background on the Application of the Documentation and Coding Adjustment to the Hospital-Specific Rates 8. Documentation and Coding Adjustment to the Hospital-Specific Rates for FY 2011 and Subsequent Fiscal Years 9. Application of the Documentation and Coding Adjustment to the Puerto Rico-Specific Standardized Amount a. Background b. Documentation and Coding Adjustment to the Puerto Rico-Specific Standard Amount 10. Prospective Adjustments for FY 2010 Documentation and Coding Effect E. Refinement of the MS-DRG Relative Weight Calculation 1. Background 2. Summary of Policy Discussions in FY 2012 3. Discussion for FY 2013 F. Preventable Hospital-Acquired Conditions (HACs), Including Infections 1. Background 2. HAC Selection 3. Present on Admission (POA) Indicator Reporting 4. HACs and POA Reporting in ICD-10-CM and ICD-10-PCS 5. Changes to the HAC Policy for FY 2013 a. Additional Diagnosis Codes to Existing HACs b. New Candidate HAC Condition: Surgical Site Infection (SSI) Following Cardiac Implantable Electronic Device (CIED) Procedures c. New Candidate HAC Condition: Iatrogenic Pneumothorax With Venous Catheterization 6. RTI Program Evaluation Summary a. RTI Analysis of FY 2011 POA Indicator Reporting Across Medicare Discharges b. RTI Analysis of FY 2011 POA Indicator Reporting of Current HACs c. RTI Analysis of FY 2011 Frequency of Discharges and POA Indicator Reporting for Current HACs d. RTI Analysis of Circumstances When Application of HAC Provisions Would Not Result in MS-DRG Reassignment for Current HACs e. RTI Analysis of Coding Changes for HAC-Associated Secondary Diagnoses for Current HACs f. RTI Analysis of Estimated Net Savings for Current HACs g. Previously Considered Candidate HACs—RTI Analysis of Frequency of Discharges and POA Indicator Reporting h. Current and Previously Considered Candidate HACs—RTI Report on Evidence-Based Guidelines i. Proposals Regarding Current HACs and Previously Considered Candidate HACs G. Changes to Specific MS-DRG Classifications 1. Pre-Major Diagnostic Categories (Pre-MDCs) a. Ventricular Assist Device b. Allogeneic Bone Marrow Transplant 2. MDC 4 (Diseases and Disorders of the Ear, Nose, Mouth and Throat): Influenza With Pneumonia 3. MDC 5 (Diseases and Disorders of the Circulatory System) a. Percutaneous Mitral Valve Repair With Implant b. Endovascular Implantation of Branching or Fenestrated Grafts in Aorta 4. MDC 10 (Endocrine, Nutritional, and Metabolic Diseases and Disorders): Disorders of Porphyrin Metabolism 5. Medicare Code Editor (MCE) Changes a. MCE New Length of Stay Edit for Continuous Invasive Mechanical Ventilation for 96 Consecutive Hours or More b. Sleeve Gastrectomy Procedure for Morbid Obesity 6. Surgical Hierarchies 7. Complications or Comorbidity (CC) Exclusions List a. Background b. CC Exclusions List for FY 2013 (1) No Revisions Based on Changes to the ICD-9-CM Diagnosis Codes for FY 2013 (2) Suggested Changes to MS-DRG Severity Levels for Diagnosis Codes for FY 2013 (A) Protein-Calorie Malnutrition (B) Antineoplastic Chemotherapy Induced Anemia (C) Cardiomyopathy and Congestive Heart Failure, Unspecified (D) Chronic Total Occlusion of Artery of the Extremities (E) Acute Kidney Failure With Other Specified Pathological Lesion in Kidney (F) Pressure Ulcer, Unstageable 8. Review of Procedure Codes in MS-DRGs 981 Through 983, 984 Through 986, and 987 Through 989 a. Moving Procedure Codes From MS-DRGs 981 Through 983 or MS-DRGs 987 Through 989 Into MDCs b. Reassignment of Procedures Among MS-DRGs 981 Through 983, 984 Through 986, and 987 Through 989 c. Adding Diagnosis or Procedure Codes to MDCs 9. Changes to the ICD-9-CM Coding System, Including Discussion of the Replacement of the ICD-9-CM System With the ICD-10-CM and ICD-10-PCS Systems in FY 2014 a. ICD-9-CM Coding System b. Code Freeze c. Processing of 25 Diagnosis Codes and 25 Procedure Codes on Hospital Inpatient Claims d. ICD-10 MS-DRGs 10. Public Comments on Issues Not Addressed in the Proposed Rule H. Recalibration of MS-DRG Weights 1. Data Sources for Developing the Proposed Weights 2. Methodology for Calculation of the Proposed Relative Weights 3. Development of National Average CCRs 4. Bundled Payments for Care Improvement (BPCI) Initiative a. Background b. Treatment of Data from Hospitals Participating in the BPCI Initiative I. Add-On Payments for New Services and Technologies 1. Background 2. Public Input Before Publication of a Notice of Proposed Rulemaking on Add-On Payments 3. FY 2013 Status of Technology Approved for FY 2012 Add-On Payments: AutoLaser Interstitial Thermal Therapy (AutoLITTTM) 4. FY 2013 Applications for New Technology Add-On Payments a. Glucarpidase (Trade Brand Voraxaze®) b. DIFICIDTM(Fidaxomicin) Tablets c. Zilver® PTX® Drug-Eluting Stent d. Zenith® Fenestrated Abdominal Aortic Aneurysm (AAA) Endovascular Graft III. Changes to the Hospital Wage Index for Acute Care Hospitals A. Background B. Core-Based Statistical Areas for the Hospital Wage Index C. Worksheet S-3 Wage Data for the FY 2013 Wage Index 1. Included Categories of Costs 2. Excluded Categories of Costs 3. Use of Wage Index Data by Providers Other Than Acute Care Hospitals Under the IPPS D. Verification of Worksheet S-3 Wage Data E. Method for Computing the FY 2013 Unadjusted Wage Index F. Occupational Mix Adjustment to the FY 2013 Wage Index 1. Development of Data for the FY 2013 Occupational Mix Adjustment Based on the 2010 Occupational Mix Survey 2. Calculation of the Occupational Mix Adjustment for FY 2013 G. Analysis and Implementation of the Occupational Mix Adjustment and the FY 2013 Occupational Mix Adjusted Wage Index 1. Analysis of the Occupational Mix Adjustment and the Occupational Mix Adjusted Wage Index 2. Application of the Rural, Imputed, and Frontier Floors a. Rural Floor b. Imputed Floor and Proposal for an Alternative, Temporary Methodology for Computing the Imputed Floor c. Frontier Floor 3. FY 2013 Wage Index Tables H. Revisions to the Wage Index Based on Hospital Redesignations and Reclassifications 1. General Policies and Effects of Reclassification/Redesignation 2. FY 2013 MGCRB Reclassifications a. FY 2013 Reclassification Requirements and Approvals b. Applications for Reclassifications for FY 2014 3. Redesignations of Hospitals Under Section 1886(d)(8)(B) of the Act 4. Reclassifications Under Section 1886(d)(8)(B) of the Act 5. Reclassifications Under Section 508 of Public Law 108-173 6. Waiving Lugar Redesignation for the Out-Migration Adjustment 7. Cancellation of Acquired Rural Status Due to MDH Expiration I. FY 2013 Wage Index Adjustment Based on Commuting Patterns of Hospital Employees J. Process for Requests for Wage Index Data Corrections K. Labor-Related Share for the FY 2013 Wage Index IV. Other Decisions and Changes to the IPPS for Operating Costs and Graduate Medical Education (GME) Costs A. Hospital Readmission Reduction Program 1. Statutory Basis for the Hospital Readmissions Reduction Program 2. Overview 3. FY 2013 Proposed and Final Policies for the Hospital Readmissions Reduction Program a. Overview b. Base Operating DRG Payment Amount, Including Special Rules for SCHs and MDHs and Hospitals Paid Under Section 1814 of the Act c. Adjustment Factor (Both the Ratio and Floor Adjustment Factor) d. Aggregate Payments for Excess Readmissions and Aggregate Payment for All Discharges e. Applicable Hospital 4. Limitations on Review 5. Reporting Hospital-Specific Information, Including Opportunity To Review and Submit Corrections B. Sole Community Hospitals (SCHs) (§ 412.92) 1. Background 2. Reporting Requirement and Clarification of Duration of Classification for Hospitals Incorrectly Classified as Sole Community Hospitals 3. Change to Effective Date of Classification for MDHs Applying for SCH Status Upon the Expiration of the MDH Program C. Rural Referral Centers (RRCs): Annual Update to Case-Mix Index (CMI) and Discharge Criteria (§ 412.96) 1. Case-Mix Index (CMI) 2. Discharges D. Payment Adjustment for Low-Volume Hospitals (§ 412.101) 1. Expiration of the Affordable Care Act Provision for FYs 2011 and 2012 2. Background 3. Affordable Care Act Provisions for FYs 2011 and 2012 4. Payment Adjustment for FY 2013 and Subsequent Years E. Indirect Medical Education (IME) Adjustment (§ 412.105) 1. IME Adjustment Factor for FY 2013 2. Timely Filing Requirements under Fee-for-Service Medicare a. IME and Direct GME b. Nursing and Allied Health Education c. Disproportionate Share Hospital (DSH) Payments d. Summary of Public Comments, Our Responses, and Final Policies 3. Other Related Policy Changes F. Payment Adjustment for Medicare Disproportionate Share Hospitals (DSHs) and Indirect Medical Education (IME) (§§ 412.105 and 412.106) 1. Background 2. Policy Change Relating to Treatment of Labor and Delivery Beds in the Calculation of the Medicare DSH Payment Adjustment and the IME Payment Adjustment G. Expiration of the Medicare-Dependent, Small Rural Hospital (MDH) Program (§ 412.108) H. Changes in the Inpatient Hospital Update 1. FY 2013 Inpatient Hospital Update 2. FY 2013 Puerto Rico Hospital Update I. Payment for Graduate Medical Education (GME) and Indirect Medical Education (IME) Costs (§§ 412.105, 413.75 through 413.83) 1. Background 2. Teaching Hospitals: Change in New Program Growth from 3 Years to 5 Years 3. Policies and Clarifications Related to 5-Year Period Following Implementation of Reductions and Increases to Hospitals' FTE Resident Caps for GME Payment Purposes Under Section 5503 of the Affordable Care Act 4. Preservation of Resident Cap Positions From Closed Hospitals (Section 5506 of the Affordable Care Act) a. Background b. Change in Amount of Time Provided for Submitting Applications Under Section 5506 of the Affordable Care Act c. Change to the Ranking Criteria Under Section 5506 d. Effective Dates of Slots Awarded Under Section 5506 e. Clarification of Relationship Between Ranking Criteria One, Two, and Three f. Modifications to the Section 5506 CMS Evaluation Form 5. Notice of Closure of Teaching Hospitals and Opportunity to Apply for Available Slots a. Background b. Notice of Closure of Teaching Hospitals c. Application Process for Available Resident Slots J. Changes to the Reporting Requirements for Pension Costs for Medicare Cost-Finding Purposes K. Rural Community Hospital Demonstration Program 1. Background 2. Budget Neutrality Offset Amount for FY 2013 L. Hospital Routine Services Furnished Under Arrangements M. Technical Change V. Changes to the IPPS for Capital-Related Costs A. Overview B. Additional Provisions 1. Exception Payments 2. New Hospitals 3. Hospitals Located in Puerto Rico C. Prospective Adjustment for the FY 2010 Documentation and Coding Effect 1. Background
2. Prospective Adjustment for the Effect of Documentation and Coding in FY 2010 3. Documentation and Coding Adjustment to the Puerto Rico-Specific Capital Rate D. Changes for Annual Update for FY 2013 VI. Changes for Hospitals Excluded From the IPPS A. Excluded Hospitals B. Report of Adjustment (Exceptions) Payments VII. Changes to the Long-Term Care Hospital Prospective Payment System (LTCH PPS) for FY 2013 A. Background of the LTCH PPS 1. Legislative and Regulatory Authority 2. Criteria for Classification as a LTCH a. Classification as a LTCH b. Hospitals Excluded From the LTCH PPS 3. Limitation on Charges to Beneficiaries 4. Administrative Simplification Compliance Act (ASCA) and Health Insurance Portability and Accountability Act (HIPAA) Compliance B. Medicare Severity Long-Term Care Diagnosis-Related Group (MS-LTC-DRG) Classifications and Relative Weights for FY 2013 1. Background 2. Patient Classifications into MS-LTC-DRGs a. Background b. Changes to the MS-LTC-DRGs for FY 2013 3. Development of the FY 2013 MS-LTC-DRG Relative Weights a. General Overview of the Development of the MS-LTC-DRG Relative Weights b. Development of the MS-LTC-DRG Relative Weights for FY 2013 c. Data d. Hospital-Specific Relative Value (HSRV) Methodology e. Treatment of Severity Levels in Developing the MS-LTC-DRG Relative Weights f. Low-Volume MS-LTC-DRGs g. Steps for Determining the FY 2013 MS-LTC-DRG Relative Weights C. Use of a LTCH-Specific Market Basket Under the LTCH PPS 1. Background 2. Overview of the FY 2009-Based LTCH-Specific Market Basket 3. Development of a LTCH-Specific Market Basket a. Development of Cost Categories b. Cost Category Computation c. Selection of Price Proxies d. Methodology for the Capital Portion of the FY 2009-Based LTCH-Specific Market Basket e. FY 2013 Market Basket for LTCHs f. FY 2013 Labor-Related Share D. Changes to the LTCH Payment Rates for FY 2013 and Other Changes to the LTCH PPS for FY 2013 1. Overview of Development of the LTCH Payment Rates 2. FY 2013 LTCH PPS Annual Market Basket Update a. Overview b. Revision of Certain Market Basket Updates as Required by the Affordable Care Act c. Market Basket Under the LTCH PPS for FY 2013 d. Annual Market Basket Update for LTCHs for FY 2013 3. LTCH PPS Cost-of-Living Adjustment (COLA) for LTCHs Located in Alaska and Hawaii E. Expiration of Certain Payment Rules for LTCH Services and the Moratorium on the Establishment of Certain Hospitals and Facilities and the Increase in Number of Beds in LTCHs and LTCH Satellite Facilities 1. Background 2. The 25-Percent Payment Adjustment Threshold 3. The “IPPS Comparable Per Diem Amount” Payment Option for Very Short Stays Under the Short-Stay Outlier (SSO) Policy 4. One-Time Prospective Adjustment to the Standard Federal Rate Under § 412.523(d)(3) a. Overview b. Data Used to Estimate Aggregate FY 2003 TEFRA Payments c. Data Used to Estimate Aggregate FY 2003 LTCH PPS Payments d. Methodology to Evaluate Whether a One-Time Prospective Adjustment Under § 412.523(d)(3) is Warranted e. Methodology to Estimate FY 2003 LTCH Payments Under the TEFRA Payment System f. Methodology to Estimate FY 2003 LTCH PPS Payments g. Methodology for Calculating the One-Time Prospective Adjustment Under § 412.523(d)(3) h. Public Comments and CMS' Responses i. Final Policy Regarding the One-Time Prospective Adjustment Under § 412.523(d)(3) VIII. Quality Data Reporting Requirements for Specific Providers and Suppliers A. Hospital Inpatient Quality Reporting (IQR) Program 1. Background a. History of Measures Adopted for the Hospital IQR Program b. Maintenance of Technical Specifications for Quality Measures c. Public Display of Quality Measures 2. Removal and Suspension of Hospital IQR Program Measures a. Considerations in Removing Quality Measures From the Hospital IQR Program b. Hospital IQR Program Measures Removed in Previous Rulemakings c. Removal of Hospital IQR Program Measures for the FY 2015 Payment Determination and Subsequent Years (1) Removal of One Chart-Abstracted Measure (2) Removal of 16 Claims-Based Measures d. Suspension of Data Collection for the FY 2014 Payment Determination and Subsequent Years 3. Measures for the FY 2015 and FY 2016 Hospital IQR Program Payment Determinations a. Additional Considerations in Expanding and Updating Quality Measures Under the Hospital IQR Program b. Hospital IQR Program Measures for the FY 2015 Payment Determination and Subsequent Years (1) Process for Retention of Hospital IQR Program Measures Adopted in Previous Payment Determinations (2) Additional Hospital IQR Program Measures for FY 2015 Payment Determination and Subsequent Years c. Hospital IQR Program Quality Measures for the FY 2016 Payment Determination and Subsequent Years 4. Possible New Quality Measures and Measure Topics for Future Years 5. Form, Manner, and Timing of Quality Data Submission a. Background b. Procedural Requirements for the FY 2015 Payment Determination and Subsequent Years c. Data Submission Requirements for Chart-Abstracted Measures d. Sampling and Case Thresholds Beginning With the FY 2015 Payment Determination e. HCAHPS Requirements for the FY 2014, FY 2015, and FY 2016 Payment Determinations f. Data Submission Requirements for Structural Measures g. Data Submission and Reporting Requirements for Healthcare-Associated Infection (HAI) Measures Reported via NHSN 6. Supplements to the Chart Validation Process for the Hospital IQR Program for the FY 2015 Payment Determination and Subsequent Years a. Separate Processes for Sampling and Scoring for Chart-Abstracted Clinical Process of Care and HAI Measures (1) Background and Rationale (2) Selection and Sampling of Clinical Process of Care Measures for Validation (3) Selection and Sampling of HAI Measures for Validation (4) Validation Scoring for Chart-Abstract Clinical Process of Care and HAI Measures (5) Criteria to Evaluate Whether a Score Passes or Fails b. Number and Manner of Selection for Hospitals Included in the Base Annual Validation Random Sample c. Targeting Criteria for Selection of Supplemental Hospitals for Validation 7. Data Accuracy and Completeness Acknowledgement Requirements for the FY 2015 Payment Determination and Subsequent Years 8. Public Display Requirements for the FY 2015 Payment Determination and Subsequent Years 9. Reconsideration and Appeal Procedures for the FY 2015 Payment Determination 10. Hospital IQR Program Disaster Extensions or Waivers 11. Electronic Health Records (EHRs) a. Background b. HITECH Act EHR Provisions B. PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program 1. Statutory Authority 2. Covered Entities 3. Quality Measures for PCHs for FY 2014 Program and Subsequent Program Years a. Considerations in the Selection of the Quality Measures b. PCHQR Program Quality Measures for FY 2014 Program and Subsequent Program Years (1) CDC/NHSN-Based Healthcare-Associated Infection (HAI) Measures (2) Cancer-Specific Measures 4. Possible New Quality Measure Topics for Future Years 5. Maintenance of Technical Specifications for Quality Measures 6. Public Display Requirements for the FY 2014 Program and Subsequent Program Years 7. Form, Manner, and Timing of Data Submission for FY 2014 Program and Subsequent Program Years a. Background b. Procedural Requirements for FY 2014 Program and Subsequent Program Years c. Reporting Mechanisms for FY 2014 Program and Subsequent Program Years (1) Reporting Mechanism for the HAI Measures (2) Reporting Mechanism for the Cancer-Specific Measures d. Data Submission Timelines for FY 2014 Program and Subsequent Program Years e. Data Accuracy and Completeness Acknowledgement (DACA) Requirements for the FY 2014 Program and Subsequent Program Years C. Hospital Value-Based Purchasing (VBP) Program 1. Statutory Background 2. Overview of the FY 2013 Hospital VBP Program 3. FY 2014 Hospital VBP Program Measures 4. Other Previously Finalized Requirements for the Hospital VBP Program 5. Hospital VBP Payment Adjustment Calculation Methodology a. Definitions of the Term “Base Operating DRG Payment Amount” for Purposes of the Hospital VBP Program b. Calculating the Funding Amount for Value-Based Incentive Payments Each Year c. Methodology To Calculate the Value-Based Incentive Payment Adjustment Factor d. Timing of the Base Operating DRG Payment Amount Reduction and Value-Based Incentive Payment Adjustment for FY 2013 and Future Hospital VBP Program Years e. Process for Reducing the Base Operating DRG Payment Amount and Applying the Value-Based Incentive Payment Adjustment for FY 2013 6. Review and Corrections Processes a. Background b. Review and Corrections Process for Claims-Based Measure Rates c. Review and Corrections Process for Condition-Specific Scores, Domain-Specific Scores, and Total Performance Scores 7. Appeal Process Under the Hospital VBP Program a. Background b. Appeal Process 8. Measures for the FY 2015 Hospital VBP Program a. Relationship Between the National Strategy and the Hospital VBP Program b. FY 2015 Measures c. General Process for Hospital VBP Program Measure Adoption for Future Program Years 9. Measures and Domains for the FY 2016 Hospital VBP Program a. FY 2016 Measures b. Quality Measure Domains for the FY 2016 Hospital VBP Program 10. Performance Periods and Baseline Periods for the FY 2015 Hospital VBP Program a. Clinical Process of Care Domain Performance Period and Baseline Periods for FY 2015 b. Patient Experience of Care Domain Performance Period and Baseline Period for FY 2015 c. Efficiency Domain Measure Performance Period and Baseline Period for FY 2015 d. Outcome Domain Performance Periods for FY 2015 (1) Mortality Measures (2) AHRQ PSI Composite Measure (3) CLABSI Measure e. Performance Periods for FY 2016 Measures 11. Performance Standards for the Hospital VBP Program for FY 2015 and FY 2016 a. Background b. Performance Standards for the FY 2015 Hospital VBP Program Measures c. Performance Standards for FY 2016 Hospital VBP Program Measures d. Adopting Performance Periods and Standards for Future Program Years 12. FY 2015 Hospital VBP Program Scoring Methodology a. General Hospital VBP Program Scoring Methodology b. Domain Weighting for the FY 2015 Hospital VBP Program for Hospitals That Receive a Score on all Four Proposed Domains c. Domain Weighting for Hospitals Receiving Scores on Fewer Than Four Domains 13. Applicability of the Hospital VBP Program to Hospitals a. Background b. Exemption Request Process for Maryland Hospitals 14. Minimum Numbers of Cases and Measures for the FY 2015 Program a. Background b. Minimum Numbers of Cases and Measures for the FY 2015 Outcome Domain c. Medicare Spending Per Beneficiary Measure Case Minimum 15. Immediate Jeopardy Citations D. Long-Term Care Hospital Quality Reporting (LTCHQR) Program 1. Statutory History 2. LTCH Program Measures for the FY 2014 Payment Determination and Subsequent Fiscal Years Payment Determinations a. Process for Retention of LTCHQR Program Measures Adopted in Previous Payment Determinations b. Process for Adopting Changes to LTCHQR Program Measures 3. CLABSI, CAUTI, AND Pressure Ulcer Measures 4. LTCHQR Program Quality Measures for the FY 2016 Payment Determinations and Subsequent Fiscal Years Payment Determinations a. Considerations in Updating and Expanding Quality Measures Under the LTCHQR Program for FY 2016 and Subsequent Payment Update Determinations b. New LTCHQR Program Quality Measures Beginning With the FY 2016 Payment Determination (1) Quality Measure #1 for the FY 2016 Payment Determination and Subsequent Fiscal Years Payment Determinations: Percent of Nursing Home Residents who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine (Short-Stay) (NQF #0680) (2) LTCH Quality Measure #2 for the FY 2016 Payment Determination and Subsequent Fiscal Years Payment Determinations: Percentage of Residents or Patients who Were Assessed and Appropriately Given the Pneumococcal Vaccine (Short-Stay) (NQF #0682) (3) LTCH Quality Measure #3 for the FY 2016 Payment Determination and Subsequent Fiscal Years Payment Determinations: Influenza Vaccination Coverage Among Healthcare Personnel (NQF #0431) (4) LTCH Quality Measure #4 for the FY 2016 Payment Determination and Subsequent Fiscal Years Payment Determinations: Ventilator Bundle (Application of NQF #0302) (5) LTCH Quality Measure #5 for the FY 2016 Payment Determination and Subsequent Fiscal Years Payment Determinations: Restraint Rate per 1,000 Patient Days 5. Timeline for Data Submission Under the LTCHQR Program for the FY 2015 Payment Determination 6. Timeline for Data Submission Under the LTCHQR Program for the FY 2016 Payment Determination 7. Public Display of Data Quality Measures E. Quality Reporting Requirements Under the Ambulatory Surgical Centers Quality Reporting (ASCQR) Program 1. Background 2. Requirements for Reporting Under the ASCQR Program a. Administrative Requirements (1) Requirements Regarding QualityNet Account and Administrator for the CYs 2014 and 2015 Payment Determinations (2) Requirements Regarding Participation Status for the CY 2014 Payment Determination and Subsequent Payment Determination Years b. Requirements Regarding Form, Manner, and Timing for Claims-Based Measures for CYs 2014 and 2015 Payment Determinations (1) Background (2) Minimum Threshold for Claims-Based Measures Using QDCs c. ASCQR Program Validation of Claims-Based and Structural Measures 3. Extraordinary Circumstances Extension or Waiver for the CY 2014 Payment Determination and Subsequent Payment Determination Years 4. ASCQR Program Reconsideration Procedures for the CY 2014 PaymentDetermination and Subsequent Payment Determination Years F. Inpatient Psychiatric Facilities Quality Reporting (IPFQR) Program 1. Statutory Authority 2. Application of the Payment Update Reduction for Failure To Report for FY 2014 Payment Determination and Subsequent Years 3. Covered Entities 4. Quality Measures a. Considerations in Selecting Quality Measures b. Quality Measures Beginning With FY 2014 Payment Determination and Subsequent Years (1) HBIPS-2 (Hours of Physical Restraint Use) (2) HBIPS-3 (Hours of Seclusion Use) (3) HBIPS-4 (Patients Discharged on Multiple Antipsychotic Medications) (4) HBIPS-5 (Patients Discharged on Multiple Antipsychotic Medications With Appropriate Justification) (5) HBIPS-6 (Post Discharge Continuing Care Plan Created) (6) HBIPS-7 (Post Discharge Continuing Care Plan Transmitted to the Next Level of Care Provider Upon Discharge) c. Maintenance of Technical Specifications for Quality Measures 5. Possible New Quality Measures for Future Years 6. Public Display Requirements for the FY 2014 Payment Determination and Subsequent Years 7. Form, Manner, and Timing of Quality Data Submission for the FY 2014 Payment Determination and Subsequent Years a. Background b. Procedural Requirements for the FY 2014 Payment Determination and Subsequent Years c. Reporting and Submission Requirements for the FY 2014 Payment Determination d. Reporting and Submission Requirements for the FY 2015 and FY 2016 Payment Determinations e. Population, Sampling, and Minimum Case Threshold for FY 2014 and Subsequent Years f. Data Accuracy and Completeness Acknowledgement Requirements for the FY 2014 Payment Determination and Subsequent Years 8. Reconsideration and Appeals Procedure for the FY 2014 Payment Determination and Subsequent Years 9. Waivers From Quality Reporting Requirements for the FY 2014 Payment Determination and Subsequent Years 10. Electronic Health Records (EHRs) IX. MedPAC Recommendations and Other Related Reports and Studies for the IPPS and LTCH PPS A. MedPAC Recommendations for the IPPS for FY 2013 B. Studies and Reports on Reforming the Hospital Wage Index 1. Secretary's Report to Congress on Wage Index Reform 2. Institute of Medicine (IOM) Study on Medicare's Approach to Measuring Geographic Variations in Hospitals' Wage Costs X. Quality Improvement Organization (QIO) Regulation Changes Relating to Provider and Practitioner Medical Record Deadlines and Claim Denials XI. Other Required Information A. Requests for Data From the Public B. Collection of Information Requirements 1. Statutory Requirement for Solicitation of Comments 2. ICRs for Add-On Payments for New Services and Technologies 3. ICRs for the Occupational Mix Adjustment to the FY 2013 Index (Hospital Wage Index Occupational Mix Survey) 4. Hospital Applications for Geographic Reclassifications by the MGCRB 5. ICRs for Application for GME Resident Slots 6. ICRs for the Hospital Inpatient Quality Reporting (IQR) Program 7. ICRs for PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program 8. ICRs for Hospital Value-Based Purchasing (VBP) Program 9. ICRs for the Long-Term Care Hospital Quality Reporting (LTCHQR) Program 10. ICRs for the Ambulatory Surgical Center (ASC) Quality Reporting Program 11. ICRs for the Inpatient Psychiatric Facilities Quality Reporting (IPFQR) Program Regulation Text Addendum—Schedule of Standardized Amounts, Update Factors, and Rate-of-Increase Percentages Effective With Cost Reporting Periods Beginning on or After October 1, 2012 and Payment Rates for LTCHs Effective With Discharges Occurring on or After October 1, 2012 I. Summary and Background II. Changes to the Prospective Payment Rates for Hospital Inpatient Operating Costs for Acute Care Hospitals for FY 2013 A. Calculation of the Adjusted Standardized Amount B. Adjustments for Area Wage Levels and Cost-of-Living C. Calculation of the Prospective Payment Rates III. Changes to Payment Rates for Acute Care Hospital Inpatient Capital-Related Costs for FY 2013 A. Determination of Federal Hospital Inpatient Capital-Related Prospective Payment Rate Update B. Calculation of the Inpatient Capital-Related Prospective Payments for FY 2013 C. Capital Input Price Index IV. Changes to Payment Rates for Excluded Hospitals: Rate-of-Increase Percentages for FY 2013 V. Changes to the Payment Rates for the LTCH PPS for FY 2013 A. LTCH PPS Standard Federal Rate for FY 2013 B. Adjustment for Area Wage Levels Under the LTCH PPS for FY 2013 1. Background 2. Geographic Classifications/Labor Market Area Definitions 3. LTCH PPS Labor-Related Share 4. LTCH PPS Wage Index for FY 2013 5. Budget Neutrality Adjustment for Changes to the Area Wage Level Adjustment C. LTCH PPS Cost-of-Living Adjustment for LTCHs Located in Alaska and Hawaii D. Adjustment for LTCH PPS High-Cost Outlier (HCO) Cases E. Computing the Adjusted LTCH PPS Federal Prospective Payments for FY 2013 VI. Tables Referenced in this Final Rulemaking and Available Through the Internet on the CMS Web Site Appendix A—Economic Analyses I. Regulatory Impact Analysis A. Introduction B. Need C. Objectives of the IPPS D. Limitations of Our Analysis E. Hospitals Included in and Excluded From the IPPS F. Effects on Hospitals and Hospital Units Excluded From the IPPS G. Quantitative Effects of the Policy Changes Under the IPPS for Operating Costs 1. Basis and Methodology of Estimates 2. Analysis of Table I 3. Impact Analysis of Table II H. Effects of Other Policy Changes 1. Effects of Policy on HACs, Including Infections<