[Federal Register Volume 83, Number 89 (Tuesday, May 8, 2018)]
[Proposed Rules]
[Pages 21104-21138]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-09069]



[[Page 21103]]

Vol. 83

Tuesday,

No. 89

May 8, 2018

Part V





Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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42 CFR Part 412





Medicare Program; FY 2019 Inpatient Psychiatric Facilities Prospective 
Payment System and Quality Reporting Updates for Fiscal Year Beginning 
October 1, 2018 (FY 2019); Proposed Rule

Federal Register / Vol. 83 , No. 89 / Tuesday, May 8, 2018 / Proposed 
Rules

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 412

[CMS-1690-P]
RIN 0938-AT32


Medicare Program; FY 2019 Inpatient Psychiatric Facilities 
Prospective Payment System and Quality Reporting Updates for Fiscal 
Year Beginning October 1, 2018 (FY 2019)

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would update the prospective payment rates 
for Medicare inpatient hospital services provided by inpatient 
psychiatric facilities (IPFs), which include psychiatric hospitals and 
excluded psychiatric units of an acute care hospital or critical access 
hospital. These changes would be effective for IPF discharges occurring 
during the fiscal year (FY) beginning October 1, 2018 through September 
30, 2019 (FY 2019). This rule also proposes to update the IPF labor-
related share, to update the IPF wage index for FY 2019, update the 
International Classification of Diseases 10th Revision, Clinical 
Modification (ICD-10-CM) codes for FY 2019, make technical corrections 
to the IPF regulations, and update quality measures and reporting 
requirements under the Inpatient Psychiatric Facility Quality Reporting 
(IPFQR) Program. In addition, it would update providers on the status 
of IPF PPS refinements. Finally, this proposed rule includes a Request 
for Information related to health information technology.

DATES: Comment Date: To be assured consideration, comments must be 
received at one of the addresses provided in the ADDRESSES section, no 
later than 5 p.m. on June 26, 2018.

ADDRESSES: In commenting, refer to file code CMS-1690-P. Because of 
staff and resource limitations, we cannot accept comments by facsimile 
(FAX) transmission.
    Comments, including mass comment submissions, must be submitted in 
one of the following three ways (please choose only one of the ways 
listed):
    1. Electronically. You may submit electronic comments on this 
regulation to http://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-1690-P, P.O. Box 8010, 
Baltimore, MD 21244-8010.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-1690-P, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT:
    The IPF Payment Policy mailbox at IPFPaymentPol[email protected] for 
general information.
    Mollie Knight (410) 786-7948 or Hudson Osgood (410) 786-7897, for 
information regarding the market basket update or the labor related 
share.
    Theresa Bean (410) 786-2287 or James Hardesty (410) 786-2629, for 
information regarding the regulatory impact analysis.
    James Poyer (410) 786-2261 or Jeffrey Buck (410) 786-0407, for 
information regarding the inpatient psychiatric facility quality 
reporting program.
    Scott Cooper (410) 786-9465, for information regarding the health 
information technology Request for Information.

SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments 
received before the close of the comment period are available for 
viewing by the public, including any personally identifiable or 
confidential business information that is included in a comment. We 
post all comments received before the close of the comment period on 
the following website as soon as possible after they have been 
received: http://www.regulations.gov. Follow the search instructions on 
that website to view public comments.

Availability of Certain Tables Exclusively Through the internet on the 
CMS Website

    Tables setting forth the fiscal year (FY) 2019 Wage Index for Urban 
Areas Based on Core-Based Statistical Area (CBSA) Labor Market Areas 
and the FY 2019 Wage Index Based on CBSA Labor Market Areas for Rural 
Areas are available exclusively through the internet, on the CMS 
website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/IPFPPS/WageIndex.html.
    In addition, tables showing the complete listing of ICD-10 Clinical 
Modification (CM) and Procedure Coding System (PCS) codes underlying 
the FY 2019 Inpatient Psychiatric Facilities (IPF) Prospective Payment 
System (PPS) for comorbidity adjustment, code first, and 
electroconvulsive therapy (ECT) are available online at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientPsychFacilPPS/tools.html. Addenda B-1 to B-4 to this proposed 
rule show the tables of the ICD-10-CM/PCS codes, which affect FY 2019 
IPF PPS comorbidity categories, code first, and non-specific codes with 
regards to laterality.

I. Executive Summary

A. Purpose

    This proposed rule would update the prospective payment rates, the 
outlier threshold, and the wage index for Medicare inpatient hospital 
services provided by Inpatient Psychiatric Facilities (IPFs) for 
discharges occurring during the Fiscal Year (FY) beginning October 1, 
2018 through September 30, 2019. Additionally, this proposed rule would 
make technical corrections to the IPF regulations and would propose 
updates to the Inpatient Psychiatric Facilities Quality Reporting 
(IPFQR) Program.

B. Summary of the Major Provisions

1. Inpatient Psychiatric Facilities Prospective Payment System (IPF 
PPS)
    In this proposed rule, we would update the IPF PPS, as specified in 
42 CFR 412.428. The proposed updates include the following:
     For FY 2019, we would adjust the 2012-based IPF market 
basket update (currently estimated to be 2.8 percent) by a reduction 
for economy-wide productivity (currently estimated to be 0.8 percentage 
point) as required by section 1886(s)(2)(A)(i) of the Social Security 
Act (the Act). We would further reduce the 2012-based IPF market basket 
update by 0.75 percentage point as required by section 
1886(s)(2)(A)(ii) of the Act, resulting in a proposed estimated IPF 
payment rate update of 1.25 percent for FY 2019.
     The 2012-based IPF market basket would result in a labor-
related share of 74.8 percent for FY 2019.
     We propose to update the IPF PPS federal per diem base 
rate from $771.35 to $782.01.
     We propose that providers who failed to report quality 
data for FY 2019 payment would receive a FY 2019 federal per diem base 
rate of $766.56.

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     We propose to update the electroconvulsive therapy (ECT) 
payment per treatment from $332.08 to $336.67. We propose that 
providers who failed to report quality data for FY 2019 payment would 
receive a FY 2019 ECT payment per treatment of $330.02.
     We propose an updated labor-related share of 74.8 percent 
(based on the 2012-based IPF market basket) and core base statistical 
area (CBSA) rural and urban wage indices for FY 2019, and propose a 
wage index budget-neutrality adjustment of 1.0013.
     We propose to update the fixed dollar loss threshold 
amount from $11,425 to $12,935 to maintain estimated outlier payments 
at 2 percent of total estimated aggregate IPF PPS payments.
     We propose minor technical corrections to IPF regulations.
2. Inpatient Psychiatric Facility Quality Reporting (IPFQR) Program
    We are making several proposals related to measures and one 
proposal related to data submission for the IPFQR Program. 
Specifically, we are proposing to remove eight (8) measures beginning 
with the FY 2020 payment determination.
    1. Influenza Vaccination Coverage Among Healthcare Personnel (NQF 
#0431);
    2. Alcohol Use Screening, SUB-1 (NQF #1661);
    3. Assessment of Patient Experience of Care;
    4. Use of an Electronic Health Record;
    5. Tobacco Use Screening, TOB-1 (NQF #1651);
    6. Hours of Physical Restraint Use (NQF #0640);
    7. Hours of Seclusion Use (NQF #0641); and
    8. Tobacco Use Treatment Provided or Offered at Discharge and 
Tobacco Use
    Treatment at Discharge, TOB-3 and TOB-3a (NQF #1656).
    In addition, we are proposing to no longer require facilities to 
submit the sample size count for measures for which sampling is 
performed beginning with the FY 2020 Payment Determination (that is, 
data reported during summer of CY 2019).
3. Summary of Impacts

------------------------------------------------------------------------
       Provision description         Total transfers and cost reductions
------------------------------------------------------------------------
FY 2019 IPF PPS payment update....  The overall economic impact of this
                                     proposed rule is an estimated $50
                                     million in increased payments to
                                     IPFs during FY 2019.
Updated quality reporting program   The total reduction in costs
 (IPFQR) Program requirements.       beginning in FY 2018 calculated in
                                     2018 dollars for IPFs as a result
                                     of the proposed updates to quality
                                     reporting requirements is estimated
                                     to be $68.1 million.
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II. Background

A. Overview of the Legislative Requirements

    Section 124 of the Medicare, Medicaid, and State Children's Health 
Insurance Program Balanced Budget Refinement Act of 1999 (BBRA) (Pub. 
L. 106-113) required the establishment and implementation of an IPF 
PPS. Specifically, section 124 of the BBRA mandated that the Secretary 
of the Department of Health and Human Services (the Secretary) develop 
a per diem PPS for inpatient hospital services furnished in psychiatric 
hospitals and excluded psychiatric units including an adequate patient 
classification system that reflects the differences in patient resource 
use and costs among psychiatric hospitals and excluded psychiatric 
units. ``Excluded'' psychiatric unit mean a psychiatric unit in an 
acute care hospital that is excluded from the Inpatient Prospective 
Payment System (IPPS), or a psychiatric unit in a Critical Access 
Hospital (CAH) that is excluded from the CAH payment system. These 
excluded psychiatric units would be paid under the IPF PPS.
    Section 405(g)(2) of the Medicare Prescription Drug, Improvement, 
and Modernization Act of 2003 (MMA) (Pub. L. 108-173) extended the IPF 
PPS to psychiatric distinct part units of CAHs.
    Sections 3401(f) and 10322 of the Patient Protection and Affordable 
Care Act (Pub. L. 111-148) as amended by section 10319(e) of that Act 
and by section 1105(d) of the Health Care and Education Reconciliation 
Act of 2010 (Pub. L. 111-152) (hereafter referred to jointly as ``the 
Affordable Care Act'') added subsection (s) to section 1886 of the 
Social Security Act (the Act).
    Section 1886(s)(1) of the Act titled ``Reference to Establishment 
and Implementation of System,'' refers to section 124 of the BBRA, 
which relates to the establishment of the IPF PPS.
    Section 1886(s)(2)(A)(i) of the Act requires the application of the 
productivity adjustment described in section 1886(b)(3)(B)(xi)(II) of 
the Act to the IPF PPS for the rate year (RY) beginning in 2012 (that 
is, a RY that coincides with a fiscal year (FY)) and each subsequent 
RY. As noted in our FY 2018 IPF PPS notice, published in the Federal 
Register on August 7, 2017 (82 FR 36771 through 36789), for the RY 
beginning in 2017, the productivity adjustment currently in place is 
equal to 0.6 percentage point.
    Section 1886(s)(2)(A)(ii) of the Act requires the application of an 
``other adjustment'' that reduces any update to an IPF PPS base rate by 
percentages specified in section 1886(s)(3) of the Act for the RY 
beginning in 2010 through the RY beginning in 2019. As noted in the FY 
2018 IPF PPS notice, for the RY beginning in 2017, section 
1886(s)(3)(D) of the Act requires that the reduction currently in place 
be equal to 0.75 percentage point.
    Sections 1886(s)(4)(A) and 1886(s)(4)(B) of the Act require that 
for RY 2014 and each subsequent rate year, IPFs that fail to report 
required quality data with respect to such a RY shall have their annual 
update to a standard federal rate for discharges reduced by 2.0 
percentage points. This may result in an annual update being less than 
0.0 for a RY, and may result in payment rates for the upcoming rate 
year being less than such payment rates for the preceding rate year. 
Any reduction for failure to report required quality data shall apply 
only to the RY involved, and the Secretary shall not take into account 
such reduction in computing the payment amount for a subsequent RY. 
Please see section II.B of this proposed rule for an explanation of the 
IPF RY. More information about the specifics of the current IPFQR 
Program is available in the FY 2018 IPPS/Long-Term Care Hospital (LTCH) 
PPS final rule (82 FR 38461 through 38474).
    To implement and periodically update these provisions, we have 
published various proposed and final rules and notices in the Federal 
Register. For more information regarding these documents, see the 
Center for Medicare & Medicaid (CMS) website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientPsychFacilPPS/index.html?redirect=/InpatientPsychFacilPPS/.

B. Overview of the IPF PPS

    The November 2004 IPF PPS final rule (69 FR 66922) established the 
IPF

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PPS, as required by section 124 of the BBRA and codified at 42 CFR part 
412, subpart N. The November 2004 IPF PPS final rule set forth the 
federal per diem base rate for the implementation year (the 18-month 
period from January 1, 2005 through June 30, 2006), and provided 
payment for the inpatient operating and capital costs to IPFs for 
covered psychiatric services they furnish (that is, routine, ancillary, 
and capital costs, but not costs of approved educational activities, 
bad debts, and other services or items that are outside the scope of 
the IPF PPS). Covered psychiatric services include services for which 
benefits are provided under the fee-for-service Part A (Hospital 
Insurance Program) of the Medicare program.
    The IPF PPS established the federal per diem base rate for each 
patient day in an IPF derived from the national average daily routine 
operating, ancillary, and capital costs in IPFs in FY 2002. The average 
per diem cost was updated to the midpoint of the first year under the 
IPF PPS, standardized to account for the overall positive effects of 
the IPF PPS payment adjustments, and adjusted for budget-neutrality.
    The federal per diem payment under the IPF PPS is comprised of the 
federal per diem base rate described previously and certain patient- 
and facility-level payment adjustments that were found in the 
regression analysis to be associated with statistically significant per 
diem cost differences.
    The patient-level adjustments include age, Diagnosis-Related Group 
(DRG) assignment, and comorbidities; additionally, there are variable 
per diem adjustments to reflect higher per diem costs at the beginning 
of a patient's IPF stay. Facility-level adjustments include adjustments 
for the IPF's wage index, rural location, teaching status, a cost-of-
living adjustment for IPFs located in Alaska and Hawaii, and an 
adjustment for the presence of a qualifying emergency department (ED).
    The IPF PPS provides additional payment policies for outlier cases, 
interrupted stays, and a per treatment payment for patients who undergo 
electroconvulsive therapy (ECT). During the IPF PPS mandatory 3-year 
transition period, stop-loss payments were also provided; however, 
since the transition ended as of January 1, 2008, these payments are no 
longer available.
    A complete discussion of the regression analysis that established 
the IPF PPS adjustment factors can be found in the November 2004 IPF 
PPS final rule (69 FR 66933 through 66936).
    Section 124 of the BBRA did not specify an annual rate update 
strategy for the IPF PPS and was broadly written to give the Secretary 
discretion in establishing an update methodology. Therefore, in the 
November 2004 IPF PPS final rule, we implemented the IPF PPS using the 
following update strategy:
     Calculate the final federal per diem base rate to be 
budget-neutral for the 18-month period of January 1, 2005 through June 
30, 2006.
     Use a July 1 through June 30 annual update cycle.
     Allow the IPF PPS first update to be effective for 
discharges on or after July 1, 2006 through June 30, 2007.
    In RY 2012, we proposed and finalized switching the IPF PPS payment 
rate update from a RY that begins on July 1 and ends on June 30, to one 
that coincides with the federal FY that begins October 1 and ends on 
September 30. In order to transition from one timeframe to another, the 
RY 2012 IPF PPS covered a 15-month period from July 1, 2011 through 
September 30, 2012. Therefore, the IPF RY has been equivalent to the 
October 1 through September 30 federal FY since RY 2013. For further 
discussion of the 15-month market basket update for RY 2012 and 
changing the payment rate update period to coincide with a FY period, 
we refer readers to the RY 2012 IPF PPS proposed rule (76 FR 4998) and 
the RY 2012 IPF PPS final rule (76 FR 26432).

C. Annual Requirements for Updating the IPF PPS

    In November 2004, we implemented the IPF PPS in a final rule that 
published on November 15, 2004 in the Federal Register (69 FR 66922). 
In developing the IPF PPS, and to ensure that the IPF PPS is able to 
account adequately for each IPF's case-mix, we performed an extensive 
regression analysis of the relationship between the per diem costs and 
certain patient and facility characteristics to determine those 
characteristics associated with statistically significant cost 
differences on a per diem basis. For characteristics with statistically 
significant cost differences, we used the regression coefficients of 
those variables to determine the size of the corresponding payment 
adjustments.
    In that final rule, we explained the reasons for delaying an update 
to the adjustment factors, derived from the regression analysis, 
including waiting until we have IPF PPS data that yields as much 
information as possible regarding the patient-level characteristics of 
the population that each IPF serves. We indicated that we did not 
intend to update the regression analysis and the patient-level and 
facility-level adjustments until we complete that analysis. Until that 
analysis is complete, we stated our intention to publish a notice in 
the Federal Register each spring to update the IPF PPS (69 FR 66966).
    On May 6, 2011, we published a final rule in the Federal Register 
titled, ``Inpatient Psychiatric Facilities Prospective Payment System--
Update for Rate Year Beginning July 1, 2011 (RY 2012)'' (76 FR 26432), 
which changed the payment rate update period to a RY that coincides 
with a FY update. Therefore, final rules are now published in the 
Federal Register in the summer to be effective on October 1. When 
proposing changes in IPF payment policy, a proposed rule would be 
issued in the spring and the final rule in the summer to be effective 
on October 1. For further discussion on changing the IPF PPS payment 
rate update period to a RY that coincides with a FY, we refer readers 
to our RY 2012 IPF PPS final rule (76 FR 26434 through 26435). For a 
detailed list of updates to the IPF PPS, we refer readers to our 
regulations at 42 CFR 412.428.
    Our most recent IPF PPS annual update was published in a notice 
with comment period on August 7, 2017 in the Federal Register titled, 
``Medicare Program; FY 2018 Inpatient Psychiatric Facilities 
Prospective Payment System--Rate Update'' (82 FR 36771), which updated 
the IPF PPS payment rates for FY 2018. That notice with comment period 
updated the IPF PPS federal per diem base rates that were published in 
the FY 2017 IPF PPS notice (81 FR 50502) in accordance with our 
established policies.

III. Provisions of the FY 2019 IPF PPS Proposed Rule

A. Proposed Update to the FY 2019 Market Basket for the IPF PPS

1. Background
    The input price index that was used to develop the IPF PPS was the 
``Excluded Hospital with Capital'' market basket. This market basket 
was based on 1997 Medicare cost reports for Medicare participating 
inpatient rehabilitation facilities (IRFs), IPFs, LTCHs, cancer 
hospitals, and children's hospitals. Although ``market basket'' 
technically describes the mix of goods and services used in providing 
health care at a given point in time, this term is also commonly used 
to denote the input price index (that is, cost category weights and 
price proxies) derived from that market basket. Accordingly, the term 
market basket, as used in this document, refers to an input price 
index.

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    Since the IPF PPS inception, the market basket used to update IPF 
PPS payments has been rebased and revised to reflect more recent data 
on IPF cost structures. We last rebased and revised the IPF market 
basket in the FY 2016 IPF PPS rule, where we adopted a 2012-based IPF 
market basket, using Medicare cost report data for both Medicare 
participating psychiatric hospitals and excluded psychiatric units. We 
refer readers to the FY 2016 IPF PPS final rule for a detailed 
discussion of the 2012-based IPF PPS Market Basket and its development 
(80 FR 46656 through 46679). The FY 2016 IPS PPS final rule also 
includes references to the historical market baskets used to update IPF 
PPS payments since PPS implementation.
2. Proposed FY 2019 IPF Market Basket Update
    For FY 2019 (beginning October 1, 2018 and ending September 30, 
2019), we propose to use an estimate of the 2012-based IPF market 
basket increase factor to update the IPF PPS base payment rate. 
Consistent with historical practice, we propose to estimate the market 
basket update for the IPF PPS based on IHS Global, Inc.'s (IGI) 
forecast. IGI is a nationally recognized economic and financial 
forecasting firm that contracts with the CMS to forecast the components 
of the market baskets and multifactor productivity (MFP). Based on 
IGI's first quarter 2018 forecast with historical data through the 
fourth quarter of 2017, the 2012-based IPF market basket increase 
factor for FY 2019 is 2.8 percent.
    Section 1886(s)(2)(A)(i) of the Act requires the application of the 
productivity adjustment described in section 1886(b)(3)(B)(xi)(II) of 
the Act to the IPF PPS for the RY beginning in 2012 (a RY that 
coincides with a FY) and each subsequent RY. For this FY 2019 IPF PPS 
proposed rule, based on IGI's first quarter 2018 forecast, the proposed 
MFP adjustment for FY 2019 (the 10-year moving average of MFP for the 
period ending FY 2019) is projected to be 0.8 percent. We reduced the 
2.8 percent IPF market basket update by this 0.8 percentage point 
productivity adjustment, as mandated by the Act. For more information 
on the productivity adjustment, we refer reader to the discussion in 
the FY 2016 IPF PPS final rule (80 FR 46675).
    In addition, for FY 2019 the 2012-based IPF PPS market basket 
update is further reduced by 0.75 percentage point as required by 
sections 1886(s)(2)(A)(ii) and 1886(s)(3)(E) of the Act. This results 
in a proposed estimated FY 2019 IPF PPS payment rate update of 1.25 
percent (2.8 -0.8 -0.75 = 1.25). We are also proposing that if more 
recent data subsequently become available, we would use such data, if 
appropriate, to determine the FY 2019 IPF market basket update and MFP 
adjustment for the final rule.
3. Proposed IPF Labor-Related Share
    Due to variations in geographic wage levels and other labor-related 
costs, we believe that payment rates under the IPF PPS should continue 
to be adjusted by a geographic wage index, which would apply to the 
labor-related portion of the federal per diem base rate (hereafter 
referred to as the labor-related share).
    The labor-related share is determined by identifying the national 
average proportion of total costs that are related to, influenced by, 
or vary with the local labor market. We continue to classify a cost 
category as labor-related if the costs are labor-intensive and vary 
with the local labor market.
    Based on our definition of the labor-related share and the cost 
categories in the 2012-based IPF market basket, we are proposing to 
continue to include in the labor-related share the sum of the relative 
importance of Wages and Salaries; Employee Benefits; Professional Fees: 
Labor-Related; Administrative and Facilities Support Services; 
Installation, Maintenance, and Repair; All Other: Labor-related 
Services; and a portion (46 percent) of the Capital-Related cost weight 
from the 2012-based IPF market basket. The relative importance reflects 
the different rates of price change for these cost categories between 
the base year (FY 2012) and FY 2019. Using IGI's first quarter 2018 
forecast for the 2012-based IPF market basket, the proposed IPF labor-
related share for FY 2019 is the sum of the FY 2019 relative importance 
of each labor-related cost category. For more information on the labor-
related share and its calculation, we refer readers to the FY 2016 IPF 
PPS final rule (80 FR 46676 through 46679). For FY 2019, the proposed 
update to the labor-related share based on IGI's first quarter 2018 
forecast of the 2012-based IPF PPS market basket is 74.8 percent. We 
are also proposing that if more recent data subsequently become 
available, we would use such data, if appropriate, to determine the FY 
2019 labor-related share for the final rule.

B. Proposed Updates to the IPF PPS Rates for FY Beginning October 1, 
2018

    The IPF PPS is based on a standardized federal per diem base rate 
calculated from the IPF average per diem costs and adjusted for budget-
neutrality in the implementation year. The federal per diem base rate 
is used as the standard payment per day under the IPF PPS and is 
adjusted by the patient-level and facility-level adjustments that are 
applicable to the IPF stay. A detailed explanation of how we calculated 
the average per diem cost appears in the November 2004 IPF PPS final 
rule (69 FR 66926).
1. Determining the Standardized Budget-Neutral Federal Per Diem Base 
Rate
    Section 124(a)(1) of the BBRA required that we implement the IPF 
PPS in a budget-neutral manner. In other words, the amount of total 
payments under the IPF PPS, including any payment adjustments, must be 
projected to be equal to the amount of total payments that would have 
been made if the IPF PPS were not implemented. Therefore, we calculated 
the budget-neutrality factor by setting the total estimated IPF PPS 
payments to be equal to the total estimated payments that would have 
been made under the Tax Equity and Fiscal Responsibility Act of 1982 
(TEFRA) (Pub. L. 97-248) methodology had the IPF PPS not been 
implemented. A step-by-step description of the methodology used to 
estimate payments under the TEFRA payment system appears in the 
November 2004 IPF PPS final rule (69 FR 66926).
    Under the IPF PPS methodology, we calculated the final federal per 
diem base rate to be budget-neutral during the IPF PPS implementation 
period (that is, the 18-month period from January 1, 2005 through June 
30, 2006) using a July 1 update cycle. We updated the average cost per 
day to the midpoint of the IPF PPS implementation period (October 1, 
2005), and this amount was used in the payment model to establish the 
budget-neutrality adjustment.
    Next, we standardized the IPF PPS federal per diem base rate to 
account for the overall positive effects of the IPF PPS payment 
adjustment factors by dividing total estimated payments under the TEFRA 
payment system by estimated payments under the IPF PPS. Additional 
information concerning this standardization can be found in the 
November 2004 IPF PPS final rule (69 FR 66932) and the RY 2006 IPF PPS 
final rule (71 FR 27045). We then reduced the standardized federal per 
diem base rate to account for the outlier policy, the stop loss 
provision, and anticipated behavioral changes. A complete discussion of 
how we calculated each component of the budget-neutrality adjustment 
appears in the November 2004 IPF PPS final rule (69 FR 66932 through 
66933) and in the RY 2007 IPF PPS final rule (71 FR 27044

[[Page 21108]]

through 27046). The final standardized budget-neutral federal per diem 
base rate established for cost reporting periods beginning on or after 
January 1, 2005 was calculated to be $575.95.
    The federal per diem base rate has been updated in accordance with 
applicable statutory requirements and Sec.  412.428 through publication 
of annual notices or proposed and final rules. A detailed discussion on 
the standardized budget-neutral federal per diem base rate and the 
electroconvulsive therapy (ECT) payment per treatment appears in the FY 
2014 IPF PPS update notice (78 FR 46738 through 46739). These documents 
are available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientPsychFacilPPS/index.html.
    IPFs must include a valid procedure code for ECT services provided 
to IPF beneficiaries in order to bill for ECT services, as described in 
our Medicare Claims Processing Manual, Chapter 3, Section 190.7.3 
(available at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c03.pdf.) There were no changes to the ECT 
procedure codes used on IPF claims as a result of the preliminary 
update to the ICD-10-PCS code set for FY 2019.
2. Proposed Update of the Federal Per Diem Base Rate and 
Electroconvulsive Therapy Payment Per Treatment
    The current (FY 2018) federal per diem base rate is $771.35 and the 
ECT payment per treatment is $332.08. For the proposed FY 2019 federal 
per diem base rate, we applied the proposed payment rate update of 1.25 
percent (that is, the 2012-based IPF market basket increase for FY 2019 
of 2.8 percent less the productivity adjustment of 0.8 percentage 
point, and further reduced by the 0.75 percentage point required under 
section 1886(s)(3)(E) of the Act), and the proposed wage index budget-
neutrality factor of 1.0013 (as discussed in section III.D.1.e of this 
proposed rule) to the FY 2018 federal per diem base rate of $771.35, 
yielding a proposed federal per diem base rate of $782.01 for FY 2019. 
Similarly, we applied the proposed 1.25 percent payment rate update and 
the proposed 1.0013 wage index budget-neutrality factor to the FY 2018 
ECT payment per treatment, yielding a proposed ECT payment per 
treatment of $336.67 for FY 2019.
    Section 1886(s)(4)(A)(i) of the Act requires that for RY 2014 and 
each subsequent RY, in the case of an IPF that fails to report required 
quality data with respect to such rate year, the Secretary shall reduce 
any annual update to a standard federal rate for discharges during the 
RY by 2.0 percentage points. Therefore, we are applying a 2.0 
percentage point reduction to the proposed federal per diem base rate 
and the proposed ECT payment per treatment as follows:
     For IPFs that fail requirements under the Inpatient 
Psychiatric Facilities Quality Reporting (IPFQR) Program, we would 
apply a -0.75 percent payment rate update (that is, the IPF market 
basket increase for FY 2019 of 2.8 percent less the productivity 
adjustment of 0.8 percentage point, further reduced by the 0.75 
percentage point for a proposed update of 1.25 percent, and further 
reduced by 2 percentage points in accordance with section 
1886(s)(4)(A)(ii) of the Act, which results in a negative update 
percentage) and the proposed wage index budget-neutrality factor of 
1.0013 to the FY 2018 federal per diem base rate of $771.35, yielding a 
federal per diem base rate of $766.56 for FY 2019.
     For IPFs that fail to meet requirements under the IPFQR 
Program, we would apply the proposed -0.75 percent annual payment rate 
update and the proposed 1.0013 wage index budget-neutrality factor to 
the FY 2018 ECT payment per treatment of $332.08, yielding a proposed 
ECT payment per treatment of $330.02 for FY 2019.

C. Proposed Updates to the IPF PPS Patient-Level Adjustment Factors

1. Overview of the IPF PPS Adjustment Factors
    The IPF PPS payment adjustments were derived from a regression 
analysis of 100 percent of the FY 2002 Medicare Provider and Analysis 
Review (MedPAR) data file, which contained 483,038 cases. For a more 
detailed description of the data file used for the regression analysis, 
see the November 2004 IPF PPS final rule (69 FR 66935 through 66936). 
We propose to continue to use the existing regression-derived 
adjustment factors established in 2005 for FY 2019. However, we have 
used more recent claims data to simulate payments to propose the 
outlier fixed dollar loss threshold amount and to assess the impact of 
the IPF PPS updates.
2. IPF PPS Patient-Level Adjustments
    The IPF PPS includes payment adjustments for the following patient-
level characteristics: Medicare Severity Diagnosis Related Groups (MS-
DRGs) assignment of the patient's principal diagnosis, selected 
comorbidities, patient age, and the variable per diem adjustments.
a. Proposed Update to MS-DRG Assignment
    We believe it is important to maintain the same diagnostic coding 
and Diagnosis Related Group (DRG) classification for IPFs that are used 
under the Inpatient Prospective Payment System (IPPS) for providing 
psychiatric care. For this reason, when the IPF PPS was implemented for 
cost reporting periods beginning on or after January 1, 2005, we 
adopted the same diagnostic code set (ICD-9-CM) and DRG patient 
classification system (MS-DRGs) that were utilized at the time under 
the IPPS. In the RY 2009 IPF PPS notice (73 FR 25709), we discussed 
CMS' effort to better recognize resource use and the severity of 
illness among patients. CMS adopted the new MS-DRGs for the IPPS in the 
FY 2008 IPPS final rule with comment period (72 FR 47130). In the RY 
2009 IPF PPS notice (73 FR 25716), we provided a crosswalk to reflect 
changes that were made under the IPF PPS to adopt the new MS-DRGs. For 
a detailed description of the mapping changes from the original DRG 
adjustment categories to the current MS-DRG adjustment categories, we 
refer readers to the RY 2009 IPF PPS notice (73 FR 25714).
    The IPF PPS includes payment adjustments for designated psychiatric 
DRGs assigned to the claim based on the patient's principal diagnosis. 
The DRG adjustment factors were expressed relative to the most 
frequently reported psychiatric DRG in FY 2002, that is, DRG 430 
(psychoses). The coefficient values and adjustment factors were derived 
from the regression analysis. Mapping the DRGs to the MS-DRGs resulted 
in the current 17 IPF MS-DRGs, instead of the original 15 DRGs, for 
which the IPF PPS provides an adjustment. For FY 2019, we are not 
proposing any changes to the IPF MS-DRG adjustment factors but propose 
to maintain the existing IPF MS-DRG adjustment factors.
    In the FY 2015 IPF PPS final rule published August 6, 2014 in the 
Federal Register titled, ``Inpatient Psychiatric Facilities Prospective 
Payment System--Update for FY Beginning October 1, 2014 (FY 2015)'' (79 
FR 45945 through 45947), we finalized conversions of the ICD-9-CM-based 
MS-DRGs to ICD-10-CM/PCS-based MS-DRGs, which were implemented on 
October 1, 2015. Further information on the ICD-10-CM/PCS MS-DRG 
conversion project can be found on the CMS ICD-10-CM website at https:/
/www.cms.gov/Medicare/Coding/ICD10/

[[Page 21109]]

ICD-10-MS-DRG-Conversion-Project.html.
    For FY 2019, we propose to continue to make the existing payment 
adjustment for psychiatric diagnoses that group to one of the existing 
17 IPF MS-DRGs listed in Addendum A. Addendum A is available on our 
website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientPsychFacilPPS/tools.html. Psychiatric principal 
diagnoses that do not group to one of the 17 designated MS-DRGs would 
still receive the federal per diem base rate and all other applicable 
adjustments, but the payment would not include an MS-DRG adjustment.
    The diagnoses for each IPF MS-DRG will be updated as of October 1, 
2018, using the final IPPS FY 2019 ICD-10-CM/PCS code sets. The FY 2019 
IPPS proposed rule includes tables of the changes to the ICD-10-CM/PCS 
code sets which underlie the FY 2019 IPF MS-DRGs. Both the FY 2019 IPPS 
proposed rule and the tables of changes to the ICD-10-CM/PCS code sets 
which underlie the FY 2019 MS-DRGs are available on the IPPS website at 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html.
Code First
    As discussed in the ICD-10-CM Official Guidelines for Coding and 
Reporting, certain conditions have both an underlying etiology and 
multiple body system manifestations due to the underlying etiology. For 
such conditions, the ICD-10-CM has a coding convention that requires 
the underlying condition be sequenced first followed by the 
manifestation. Wherever such a combination exists, there is a ``use 
additional code'' note at the etiology code, and a ``code first'' note 
at the manifestation code. These instructional notes indicate the 
proper sequencing order of the codes (etiology followed by 
manifestation). In accordance with the ICD-10-CM Official Guidelines 
for Coding and Reporting, when a primary (psychiatric) diagnosis code 
has a ``code first'' note, the provider would follow the instructions 
in the ICD-10-CM text. The submitted claim goes through the CMS 
processing system, which will identify the primary diagnosis code as 
non-psychiatric and search the secondary codes for a psychiatric code 
to assign a DRG code for adjustment. The system will continue to search 
the secondary codes for those that are appropriate for comorbidity 
adjustment.
    For more information on the code first policy, see our November 
2004 IPF PPS final rule (69 FR 66945). In the FY 2015 IPF PPS final 
rule, we provided a code first table for reference that highlights the 
same or similar manifestation codes where the code first instructions 
apply in ICD-10-CM that were present in ICD-9-CM (79 FR 46009). In the 
FY 2019 update to the ICD-10-CM/PCS code sets, there were no changes 
from the FY 2018 ICD-10-CM/PCS code sets that affect the IPF code first 
policy. The Code First list is shown in Addendum B-2 on our website at 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientPsychFacilPPS/tools.html.
b. Proposed Payment for Comorbid Conditions
    The intent of the comorbidity adjustments is to recognize the 
increased costs associated with comorbid conditions by providing 
additional payments for certain existing medical or psychiatric 
conditions that are expensive to treat. In our RY 2012 IPF PPS final 
rule (76 FR 26451 through 26452), we explained that the IPF PPS 
includes 17 comorbidity categories and identified the new, revised, and 
deleted ICD-9-CM diagnosis codes that generate a comorbid condition 
payment adjustment under the IPF PPS for RY 2012 (76 FR 26451).
    Comorbidities are specific patient conditions that are secondary to 
the patient's principal diagnosis and that require treatment during the 
stay. Diagnoses that relate to an earlier episode of care and have no 
bearing on the current hospital stay are excluded and must not be 
reported on IPF claims. Comorbid conditions must exist at the time of 
admission or develop subsequently, and affect the treatment received, 
length of stay (LOS), or both treatment and LOS.
    For each claim, an IPF may receive only one comorbidity adjustment 
within a comorbidity category, but it may receive an adjustment for 
more than one comorbidity category. Current billing instructions for 
discharge claims, on or after October 1, 2015, require IPFs to enter 
the complete ICD-10-CM codes for up to 24 additional diagnoses if they 
co-exist at the time of admission, or develop subsequently and impact 
the treatment provided.
    The comorbidity adjustments were determined based on the regression 
analysis using the diagnoses reported by IPFs in FY 2002. The principal 
diagnoses were used to establish the DRG adjustments and were not 
accounted for in establishing the comorbidity category adjustments, 
except where ICD-9-CM code first instructions applied. In a code first 
situation, the submitted claim goes through the CMS processing system, 
which will identify the principal diagnosis code as non-psychiatric and 
search the secondary codes for a psychiatric code to assign an MS-DRG 
code for adjustment. The system will continue to search the secondary 
codes for those that are appropriate for comorbidity adjustment.
    As noted previously, it is our policy to maintain the same 
diagnostic coding set for IPFs that is used under the IPPS for 
providing the same psychiatric care. The 17 comorbidity categories 
formerly defined using ICD-9-CM codes were converted to ICD-10-CM/PCS 
in our FY 2015 IPF PPS final rule (79 FR 45947 through 45955). The goal 
for converting the comorbidity categories is referred to as 
replication, meaning that the payment adjustment for a given patient 
encounter is the same after ICD-10-CM implementation as it would be if 
the same record had been coded in ICD-9-CM and submitted prior to ICD-
10-CM/PCS implementation on October 1, 2015. All conversion efforts 
were made with the intent of achieving this goal. For FY 2019, we 
propose to use the same comorbidity adjustment factors in effect in FY 
2018, which are found in Addendum A, available on our website at 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientPsychFacilPPS/tools.html.
    We have updated the ICD-10-CM/PCS codes which are associated with 
the existing IPF PPS comorbidity categories, based upon the preliminary 
FY 2019 update to the ICD-10-CM/PCS code set. The FY 2019 ICD-10-CM/PCS 
updates included ICD-10-CM/PCS codes added to the Drug and/or Alcohol 
Abuse, Gangrene, Oncology Treatment, and Poisoning comorbidity 
categories, and codes deleted from the Oncology Treatment comorbidity 
category. These updates are detailed in Addendum B-3 of this proposed 
rule, which is available on our website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientPsychFacilPPS/tools.html.
    In accordance with the policy established in the FY 2015 IPF PPS 
final rule (79 FR 45949 through 45952), we reviewed all FY 2019 ICD-10-
CM codes to remove site unspecified codes from the FY 2019 ICD-10-CM/
PCS codes in instances where more specific codes are available. As we 
stated in the FY 2015 IPF PPS final rule, we believe that specific 
diagnosis codes that narrowly identify anatomical sites where disease, 
injury, or condition exist should be used when coding patients' 
diagnoses whenever these codes are available. We finalized that we 
would remove site

[[Page 21110]]

unspecified codes from the IPF PPS ICD-10-CM/PCS codes in instances in 
which more specific codes are available, as the clinician should be 
able to identify a more specific diagnosis based on clinical assessment 
at the medical encounter. Therefore, we are proposing to remove 3 site 
unspecified codes from the list of Oncology Treatment Diagnosis codes. 
See Addendum B-4 to this proposed rule for a listing of the 3 ICD-10-
CM/PCS site unspecified codes proposed to be removed. Addendum B-4 is 
available on our website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientPsychFacilPPS/tools.html.
c. Proposed Patient Age Adjustments
    As explained in the November 2004 IPF PPS final rule (69 FR 66922), 
we analyzed the impact of age on per diem cost by examining the age 
variable (range of ages) for payment adjustments. In general, we found 
that the cost per day increases with age. The older age groups are more 
costly than the under 45 age group, the differences in per diem cost 
increase for each successive age group, and the differences are 
statistically significant. For FY 2019, we propose to continue to use 
the patient age adjustments currently in effect in FY 2018, as shown in 
Addendum A of this proposed rule (see https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientPsychFacilPPS/tools.html).
d. Proposed Variable per Diem Adjustments
    We explained in the November 2004 IPF PPS final rule (69 FR 66946) 
that the regression analysis indicated that per diem cost declines as 
the length of stay (LOS) increases. The variable per diem adjustments 
to the federal per diem base rate account for ancillary and 
administrative costs that occur disproportionately in the first days 
after admission to an IPF. We used a regression analysis to estimate 
the average differences in per diem cost among stays of different 
lengths. As a result of this analysis, we established variable per diem 
adjustments that begin on day 1 and decline gradually until day 21 of a 
patient's stay. For day 22 and thereafter, the variable per diem 
adjustment remains the same each day for the remainder of the stay. 
However, the adjustment applied to day 1 depends upon whether the IPF 
has a qualifying ED. If an IPF has a qualifying ED, it receives a 1.31 
adjustment factor for day 1 of each stay. If an IPF does not have a 
qualifying ED, it receives a 1.19 adjustment factor for day 1 of the 
stay. The ED adjustment is explained in more detail in section III.D.4 
of this proposed rule.
    For FY 2019, we propose to continue to use the variable per diem 
adjustment factors currently in effect as shown in Addendum A of this 
proposed rule (available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientPsychFacilPPS/tools.html). A complete 
discussion of the variable per diem adjustments appears in the November 
2004 IPF PPS final rule (69 FR 66946).

D. Proposed Updates to the IPF PPS Facility-Level Adjustments

    The IPF PPS includes facility-level adjustments for the wage index, 
IPFs located in rural areas, teaching IPFs, cost of living adjustments 
for IPFs located in Alaska and Hawaii, and IPFs with a qualifying ED.
1. Wage Index Adjustment
a. Background
    As discussed in our RY 2007 IPF PPS final rule (71 FR 27061) and in 
our RY 2009 IPF PPS (73 FR 25719) and RY 2010 IPF PPS notices (74 FR 
20373), in order to provide an adjustment for geographic wage levels, 
the labor-related portion of an IPF's payment is adjusted using an 
appropriate wage index. Currently, an IPF's geographic wage index value 
is determined based on the actual location of the IPF in an urban or 
rural area, as defined in Sec.  412.64(b)(1)(ii)(A) and (C).
b. Updated Wage Index for FY 2019
    Since the inception of the IPF PPS, we have used the pre-floor, 
pre-reclassified acute care hospital wage index in developing a wage 
index to be applied to IPFs, because there is not an IPF-specific wage 
index available. We believe that IPFs compete in the same labor markets 
as acute care hospitals, so the pre-floor, pre-reclassified hospital 
wage index should reflect IPF labor costs. As discussed in our RY 2007 
IPF PPS final rule (71 FR 27061 through 27067), for RY 2007, under the 
IPF PPS, the wage index is calculated using the IPPS wage index for the 
labor market area in which the IPF is located, without taking into 
account geographic reclassifications, floors, and other adjustments 
made to the wage index under the IPPS. For a complete description of 
these IPPS wage index adjustments, we refer readers to the FY 2013 
IPPS/LTCH PPS final rule (77 FR 53365 through 53374). For FY 2019, we 
propose to continue to apply the most recent hospital wage index (the 
FY 2018 pre-floor, pre-reclassified hospital wage index, which is the 
most appropriate index as it best reflects the variation in local labor 
costs of IPFs in the various geographic areas) using the most recent 
hospital wage data (data from hospital cost reports for the cost 
reporting period beginning during FY 2014) without any geographic 
reclassifications, floors, or other adjustments. We would apply the FY 
2019 IPF wage index to payments beginning October 1, 2018.
    We would apply the wage index adjustment to the labor-related 
portion of the federal rate, which is proposed to change from 75.0 
percent in FY 2018 to 74.8 percent in FY 2019. This percentage reflects 
the labor-related share of the 2012-based IPF market basket for FY 2019 
(see section III.A.3 of this proposed rule).
c. Office of Management and Budget Bulletins
    Office of Management and Budget (OMB) publishes bulletins regarding 
Core-Based Statistical Area (CBSA) changes, including changes to CBSA 
numbers and titles. In the RY 2007 IPF PPS final rule (71 FR 27061 
through 27067), we adopted the changes discussed in the OMB Bulletin 
No. 03-04 (June 6, 2003), which announced revised definitions for 
Metropolitan Statistical Areas (MSAs), and the creation of Micropolitan 
Statistical Areas and Combined Statistical Areas. In adopting the OMB 
CBSA geographic designations in RY 2007, we did not provide a separate 
transition for the CBSA-based wage index since the IPF PPS was already 
in a transition period from TEFRA payments to PPS payments.
    In the RY 2009 IPF PPS notice, we incorporated the CBSA 
nomenclature changes published in the most recent OMB bulletin that 
applies to the hospital wage index used to determine the current IPF 
wage index and stated that we expect to continue to do the same for all 
the OMB CBSA nomenclature changes in future IPF PPS rules and notices, 
as necessary (73 FR 25721). The OMB bulletins may be accessed online at 
https://www.whitehouse.gov/omb/bulletins/.
    In accordance with our established methodology, we have 
historically adopted any CBSA changes that are published in the OMB 
bulletin that corresponds with the hospital wage index used to 
determine the IPF wage index. For the FY 2015 IPF wage index, we used 
the FY 2014 pre-floor, pre-reclassified hospital wage index to adjust 
the IPF PPS payments. On February 28, 2013, OMB issued OMB Bulletin No. 
13-01, which established revised delineations for MSAs, Micropolitan 
Statistical Areas, and Combined Statistical Areas, and

[[Page 21111]]

provided guidance on the use of the delineations of these statistical 
areas. A copy of this bulletin may be obtained at https://www.whitehouse.gov/omb/bulletins/.
    Because the FY 2014 pre-floor, pre-reclassified hospital wage index 
was finalized before the issuance of this Bulletin, the FY 2015 IPF 
wage index, which was based on the FY 2014 pre-floor, pre-reclassified 
hospital wage index, did not reflect OMB's new area delineations based 
on the 2010 Census. According to OMB, ``[t]his bulletin provides the 
delineations of all Metropolitan Statistical Areas, Metropolitan 
Divisions, Micropolitan Statistical Areas, Combined Statistical Areas, 
and New England City and Town Areas in the United States and Puerto 
Rico based on the standards published on June 28, 2010, in the Federal 
Register (75 FR 37246 through 37252) and Census Bureau data.'' These 
OMB Bulletin changes are reflected in the FY 2015 pre-floor, pre-
reclassified hospital wage index, upon which the FY 2016 IPF wage index 
was based. We adopted these new OMB CBSA delineations in the FY 2016 
IPF wage index and subsequent IPF wage indexes.
    Generally, OMB issues major revisions to statistical areas every 10 
years, based on the results of the decennial census. However, OMB 
occasionally issues minor updates and revisions to statistical areas in 
the years between the decennial censuses. On July 15, 2015, OMB issued 
OMB Bulletin No. 15-01, which provides minor updates to, and 
supersedes, OMB Bulletin No. 13-01 that was issued on February 28, 
2013. The attachment to OMB Bulletin No. 15-01 provides detailed 
information on the update to statistical areas since February 28, 2013. 
The updates provided in the attachment to OMB Bulletin No. 15-01 are 
based on the application of the 2010 Standards for Delineating 
Metropolitan and Micropolitan Statistical Areas to Census Bureau 
population estimates for July 1, 2012 and July 1, 2013. The complete 
list of statistical areas incorporating these changes is provided in 
OMB Bulletin No. 15-01. A copy of this bulletin may be obtained at 
https://www.whitehouse.gov/omb/bulletins/.
    OMB Bulletin No. 15-01 establishes revised delineations for the 
Nation's Metropolitan Statistical Areas, Micropolitan Statistical 
Areas, and Combined Statistical Areas. The bulletin also provides 
delineations of Metropolitan Divisions as well as delineations of New 
England City and Town Areas.
    In accordance with our longstanding policy, the IPF PPS continues 
to use the latest labor market area delineations available as soon as 
is reasonably possible to maintain a more accurate and up-to-date 
payment system that reflects the reality of population shifts and labor 
market conditions. As discussed in the FY 2017 IPPS/LTCH PPS final rule 
(81 FR 56913), the updated labor market area definitions from OMB 
Bulletin 15-01 were implemented under the IPPS beginning on October 1, 
2016 (FY 2017). Therefore, we implemented these revisions for the IPF 
PPS beginning October 1, 2017 (FY 2018), consistent with our historical 
practice of modeling IPF PPS adoption of the labor market area 
delineations after IPPS adoption of these delineations.
    In summary, the FY 2018 pre-floor, pre-reclassified hospital wage 
index, which is proposed to be used to determine the FY 2019 IPF wage 
index, has no changes to its OMB designations and already includes 
changes adopted in previous FYs.
    The proposed FY 2019 IPF wage index is located on the CMS website 
at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientPsychFacilPPS/WageIndex.html.
d. Proposed Adjustment for Rural Location
    In the November 2004 IPF PPS final rule, we provided a 17 percent 
payment adjustment for IPFs located in a rural area. This adjustment 
was based on the regression analysis, which indicated that the per diem 
cost of rural facilities was 17 percent higher than that of urban 
facilities after accounting for the influence of the other variables 
included in the regression. For FY 2019, we propose to continue to 
apply a 17 percent payment adjustment for IPFs located in a rural area 
as defined at Sec.  412.64(b)(1)(ii)(C). A complete discussion of the 
adjustment for rural locations appears in the November 2004 IPF PPS 
final rule (69 FR 66954).
e. Proposed Budget Neutrality Adjustment
    Changes to the wage index are made in a budget-neutral manner so 
that updates do not increase expenditures. Therefore, for FY 2019, we 
propose to continue to apply a budget-neutrality adjustment in 
accordance with our existing budget-neutrality policy. This policy 
requires us to update the wage index in such a way that total estimated 
payments to IPFs for FY 2019 are the same with or without the changes 
(that is, in a budget-neutral manner) by applying a budget neutrality 
factor to the IPF PPS rates. We use the following steps to ensure that 
the rates reflect the update to the wage indexes (based on the FY 2014 
hospital cost report data) and the labor-related share in a budget-
neutral manner:
    Step 1. Simulate estimated IPF PPS payments, using the FY 2018 IPF 
wage index values (available on the CMS website) and labor-related 
share (as published in the FY 2018 IPF PPS notice with comment period 
(82 FR 35771)).
    Step 2. Simulate estimated IPF PPS payments using the proposed FY 
2019 IPF wage index values (available on the CMS website) and proposed 
FY 2019 labor-related share (based on the latest available data as 
discussed previously).
    Step 3. Divide the amount calculated in step 1 by the amount 
calculated in step 2. The resulting quotient is the proposed FY 2019 
budget-neutral wage adjustment factor of 1.0013.
    Step 4. Apply the FY 2019 budget-neutral wage adjustment factor 
from step 3 to the FY 2018 IPF PPS federal per diem base rate after the 
application of the market basket update described in section III.A.2 of 
this proposed rule, to determine the FY 2019 IPF PPS federal per diem 
base rate.
2. Proposed Teaching Adjustment
    In the November 2004 IPF PPS final rule, we implemented regulations 
at Sec.  412.424(d)(1)(iii) to establish a facility-level adjustment 
for IPFs that are, or are part of teaching hospitals. The teaching 
adjustment accounts for the higher indirect operating costs experienced 
by hospitals that participate in graduate medical education (GME) 
programs. The payment adjustments are made based on the ratio of the 
number of full-time equivalent (FTE) interns and residents training in 
the IPF and the IPF's average daily census (ADC).
    Medicare makes direct GME payments (for direct costs such as 
resident and teaching physician salaries, and other direct teaching 
costs) to all teaching hospitals including those paid under a PPS, and 
those paid under the TEFRA rate-of-increase limits. These direct GME 
payments are made separately from payments for hospital operating costs 
and are not part of the IPF PPS. The direct GME payments do not address 
the estimated higher indirect operating costs teaching hospitals may 
face.
    The results of the regression analysis of FY 2002 IPF data 
established the basis for the payment adjustments included in the 
November 2004 IPF PPS final rule. The results showed that the indirect 
teaching cost variable is significant in explaining the higher costs of 
IPFs that have teaching

[[Page 21112]]

programs. We calculated the teaching adjustment based on the IPF's 
``teaching variable,'' which is one plus the ratio of the number of FTE 
residents training in the IPF (subject to limitations described in this 
section of this proposed rule to the IPF's ADC).
    We established the teaching adjustment in a manner that limited the 
incentives for IPFs to add FTE residents for the purpose of increasing 
their teaching adjustment. We imposed a cap on the number of FTE 
residents that may be counted for purposes of calculating the teaching 
adjustment. The cap limits the number of FTE residents that teaching 
IPFs may count for the purpose of calculating the IPF PPS teaching 
adjustment, not the number of residents teaching institutions can hire 
or train. We calculated the number of FTE residents that trained in the 
IPF during a ``base year'' and used that FTE resident number as the 
cap. An IPF's FTE resident cap is ultimately determined based on the 
final settlement of the IPF's most recent cost report filed before 
November 15, 2004 (publication date of the IPF PPS final rule). A 
complete discussion of the temporary adjustment to the FTE cap to 
reflect residents added due to hospital closure and by residency 
program appears in the RY 2012 IPF PPS proposed rule (76 FR 5018 
through 5020) and the RY 2012 IPF PPS final rule (76 FR 26453 through 
26456).
    In the regression analysis, the logarithm of the teaching variable 
had a coefficient value of 0.5150. We converted this cost effect to a 
teaching payment adjustment by treating the regression coefficient as 
an exponent and raising the teaching variable to a power equal to the 
coefficient value. We note that the coefficient value of 0.5150 was 
based on the regression analysis holding all other components of the 
payment system constant. A complete discussion of how the teaching 
adjustment was calculated appears in the November 2004 IPF PPS final 
rule (69 FR 66954 through 66957) and the RY 2009 IPF PPS notice (73 FR 
25721). As with other adjustment factors derived through the regression 
analysis, we do not plan to rerun the teaching adjustment factors in 
the regression analysis until we more fully analyze IPF PPS data. 
Therefore, in this FY 2019 proposed rule, we propose to continue to 
retain the coefficient value of 0.5150 for the teaching adjustment to 
the federal per diem base rate.
3. Proposed Cost of Living Adjustment for IPFs Located in Alaska and 
Hawaii
    The IPF PPS includes a payment adjustment for IPFs located in 
Alaska and Hawaii based upon the county in which the IPF is located. As 
we explained in the November 2004 IPF PPS final rule, the FY 2002 data 
demonstrated that IPFs in Alaska and Hawaii had per diem costs that 
were disproportionately higher than other IPFs. Other Medicare 
prospective payment systems (for example: The IPPS and LTCH PPS) 
adopted a cost of living adjustment (COLA) to account for the cost 
differential of care furnished in Alaska and Hawaii.
    We analyzed the effect of applying a COLA to payments for IPFs 
located in Alaska and Hawaii. The results of our analysis demonstrated 
that a COLA for IPFs located in Alaska and Hawaii would improve payment 
equity for these facilities. As a result of this analysis, we provided 
a COLA in the November 2004 IPF PPS final rule.
    A COLA for IPFs located in Alaska and Hawaii is made by multiplying 
the non-labor-related portion of the federal per diem base rate by the 
applicable COLA factor based on the COLA area in which the IPF is 
located.
    The COLA factors through 2009 (before being reduced by locality 
payments) are published on the Office of Personnel Management (OPM) 
website (https://www.opm.gov/oca/cola/rates.asp).
    We note that the COLA areas for Alaska are not defined by county as 
are the COLA areas for Hawaii. In 5 CFR 591.207, the OPM established 
the following COLA areas:
     City of Anchorage, and 80-kilometer (50-mile) radius by 
road, as measured from the federal courthouse.
     City of Fairbanks, and 80-kilometer (50-mile) radius by 
road, as measured from the federal courthouse.
     City of Juneau, and 80-kilometer (50-mile) radius by road, 
as measured from the federal courthouse.
     Rest of the State of Alaska.
    As stated in the November 2004 IPF PPS final rule, we update the 
COLA factors according to updates established by the OPM. However, 
sections 1911 through 1919 of the Nonforeign Area Retirement Equity 
Assurance Act, as contained in subtitle B of title XIX of the National 
Defense Authorization Act (NDAA) for FY 2010 (Pub. L. 111-84, October 
28, 2009), transitions the Alaska and Hawaii COLAs to locality pay. 
Under section 1914 of NDAA, locality pay was phased in over a 3-year 
period beginning in January 2010, with COLA rates frozen as of the date 
of enactment, October 28, 2009, and then proportionately reduced to 
reflect the phase-in of locality pay.
    When we published the proposed COLA factors in the RY 2012 IPF PPS 
proposed rule (76 FR 4998), we inadvertently selected the FY 2010 COLA 
rates, which had been reduced to account for the phase-in of locality 
pay. We did not intend to propose the reduced COLA rates because that 
would have understated the adjustment. Since the 2009 COLA rates did 
not reflect the phase-in of locality pay, we finalized the FY 2009 COLA 
rates for RY 2010 through RY 2014.
    In the FY 2013 IPPS/LTCH final rule (77 FR 53700 through 53701), we 
established a new methodology to update the COLA factors for Alaska and 
Hawaii, and adopted this methodology for the IPF PPS in the FY 2015 IPF 
final rule (79 FR 45958 through 45960). We adopted this new COLA 
methodology for the IPF PPS because IPFs are hospitals with a similar 
mix of commodities and services. We think it is appropriate to have a 
consistent policy approach with that of other hospitals in Alaska and 
Hawaii. Therefore, the IPF COLAs for FY 2015 through FY 2017 were the 
same as those applied under the IPPS in those years. As finalized in 
the FY 2013 IPPS/LTCH PPS final rule (77 FR 53700 and 53701), the COLA 
updates are determined every 4 years, when the IPPS market basket 
labor-related share is updated during rebasing. Because the labor-
related share of the IPPS market basket was updated for FY 2018, the 
COLA factors were updated in FY 2018 IPPS/LTCH rulemaking (82 FR 
38529). As such, we also updated the IPF PPS COLA factors for FY 2018 
(82 FR 36780 through 36782) to reflect the updated COLA factors 
finalized in the FY 2018 IPPS/LTCH rulemaking.
    For FY 2019, we propose to continue to use the COLA factors 
established for the IPF PPS in FY 2018 to adjust the nonlabor-related 
portion of the per diem amount for IPFs located in Alaska and Hawaii. 
These factors are shown in Table 1. For comparison purposes, we also 
are showing the FY 2015 through FY 2017 COLA factors.

[[Page 21113]]



 Table 1--Comparison of IPF PPS Cost-of-Living Adjustment Factors: IPFs
                      Located in Alaska and Hawaii
------------------------------------------------------------------------
                                              FY 2015      FY 2018  and
                  Area                     through 2017       FY 2019
------------------------------------------------------------------------
Alaska:
    City of Anchorage and 80-kilometer              1.23            1.25
     (50-mile) radius by road...........
    City of Fairbanks and 80-kilometer              1.23            1.25
     (50-mile) radius by road...........
    City of Juneau and 80-kilometer (50-            1.23            1.25
     mile) radius by road...............
    Rest of Alaska......................            1.25            1.25
Hawaii:
    City and County of Honolulu.........            1.25            1.25
    County of Hawaii....................            1.19            1.21
    County of Kauai.....................            1.25            1.25
    County of Maui and County of Kalawao            1.25            1.25
------------------------------------------------------------------------

    The proposed IPF PPS COLA factors for FY 2019 are shown in Addendum 
A of this proposed rule, available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientPsychFacilPPS/tools.html.
4. Proposed Adjustment for IPFs With a Qualifying Emergency Department 
(ED)
    The IPF PPS includes a facility-level adjustment for IPFs with 
qualifying EDs. We provide an adjustment to the federal per diem base 
rate to account for the costs associated with maintaining a full-
service ED. The adjustment is intended to account for ED costs incurred 
by a psychiatric hospital with a qualifying ED or an excluded 
psychiatric unit of an acute care hospital or a CAH, for preadmission 
services otherwise payable under the Medicare Hospital Outpatient 
Prospective Payment System (OPPS), furnished to a beneficiary on the 
date of the beneficiary's admission to the hospital and during the day 
immediately preceding the date of admission to the IPF (see Sec.  
413.40(c)(2)), and the overhead cost of maintaining the ED. This 
payment is a facility-level adjustment that applies to all IPF 
admissions (with one exception described below), regardless of whether 
a particular patient receives preadmission services in the hospital's 
ED.
    The ED adjustment is incorporated into the variable per diem 
adjustment for the first day of each stay for IPFs with a qualifying 
ED. Those IPFs with a qualifying ED receive an adjustment factor of 
1.31 as the variable per diem adjustment for day 1 of each patient 
stay. If an IPF does not have a qualifying ED, it receives an 
adjustment factor of 1.19 as the variable per diem adjustment for day 1 
of each patient stay.
    The ED adjustment is made on every qualifying claim except as 
described in this section of the proposed rule. As specified in Sec.  
412.424(d)(1)(v)(B), the ED adjustment is not made when a patient is 
discharged from an acute care hospital or CAH and admitted to the same 
hospital's or CAH's excluded psychiatric unit. We clarified in the 
November 2004 IPF PPS final rule (69 FR 66960) that an ED adjustment is 
not made in this case because the costs associated with ED services are 
reflected in the DRG payment to the acute care hospital or through the 
reasonable cost payment made to the CAH.
    Therefore, when patients are discharged from an acute care hospital 
or CAH and admitted to the same hospital's or CAH's excluded 
psychiatric unit, the IPF receives the 1.19 adjustment factor as the 
variable per diem adjustment for the first day of the patient's stay in 
the IPF. For FY 2019, we propose to continue to retain the 1.31 
adjustment factor for IPFs with qualifying EDs. A complete discussion 
of the steps involved in the calculation of the ED adjustment factor in 
our November 2004 IPF PPS final rule (69 FR 66959 through 66960) and 
the RY 2007 IPF PPS final rule (71 FR 27070 through 27072).

E. Proposed Other Payment Adjustments and Policies

1. Outlier Payment Overview
    The IPF PPS includes an outlier adjustment to promote access to IPF 
care for those patients who require expensive care and to limit the 
financial risk of IPFs treating unusually costly patients. In the 
November 2004 IPF PPS final rule, we implemented regulations at Sec.  
412.424(d)(3)(i) to provide a per-case payment for IPF stays that are 
extraordinarily costly. Providing additional payments to IPFs for 
extremely costly cases strongly improves the accuracy of the IPF PPS in 
determining resource costs at the patient and facility level. These 
additional payments reduce the financial losses that would otherwise be 
incurred in treating patients who require more costly care and; 
therefore, reduce the incentives for IPFs to under-serve these 
patients.
    We make outlier payments for discharges in which an IPF's estimated 
total cost for a case exceeds a fixed dollar loss threshold amount 
(multiplied by the IPF's facility-level adjustments) plus the federal 
per diem payment amount for the case.
    In instances when the case qualifies for an outlier payment, we pay 
80 percent of the difference between the estimated cost for the case 
and the adjusted threshold amount for days 1 through 9 of the stay 
(consistent with the median LOS for IPFs in FY 2002), and 60 percent of 
the difference for day 10 and thereafter. We established the 80 percent 
and 60 percent loss sharing ratios because we were concerned that a 
single ratio established at 80 percent (like other Medicare PPSs) might 
provide an incentive under the IPF per diem payment system to increase 
LOS in order to receive additional payments.
    After establishing the loss sharing ratios, we determined the 
current fixed dollar loss threshold amount through payment simulations 
designed to compute a dollar loss beyond which payments are estimated 
to meet the 2 percent outlier spending target. Each year when we update 
the IPF PPS, we simulate payments using the latest available data to 
compute the fixed dollar loss threshold so that outlier payments 
represent 2 percent of total projected IPF PPS payments.
2. Proposed Update to the Outlier Fixed Dollar Loss Threshold Amount
    In accordance with the update methodology described in Sec.  
412.428(d), we are proposing to update the fixed dollar loss threshold 
amount used under the IPF PPS outlier policy. Based on the regression 
analysis and payment simulations used to develop the IPF PPS, we 
established a 2 percent outlier policy, which strikes an appropriate 
balance between protecting IPFs from extraordinarily costly cases while 
ensuring the adequacy of the federal per diem base rate for all other 
cases that are not outlier cases.

[[Page 21114]]

    Based on an analysis of the latest available data (the December 
2017 update of FY 2017 IPF claims) and rate increases, we believe it is 
necessary to update the fixed dollar loss threshold amount to maintain 
an outlier percentage that equals 2 percent of total estimated IPF PPS 
payments. We propose to update the IPF outlier threshold amount for FY 
2019 using FY 2017 claims data and the same methodology that we used to 
set the initial outlier threshold amount in the RY 2007 IPF PPS final 
rule (71 FR 27072 and 27073), which is also the same methodology that 
we used to update the outlier threshold amounts for years 2008 through 
2018. Based on an analysis of these updated data, we estimate that IPF 
outlier payments as a percentage of total estimated payments are 
approximately 2.27 percent in FY 2018. Therefore, we propose to update 
the outlier threshold amount to $12,935 to maintain estimated outlier 
payments at 2 percent of total estimated aggregate IPF payments for FY 
2019.
3. Proposed Update to IPF Cost-to-Charge Ratio Ceilings
    Under the IPF PPS, an outlier payment is made if an IPF's cost for 
a stay exceeds a fixed dollar loss threshold amount plus the IPF PPS 
amount. In order to establish an IPF's cost for a particular case, we 
multiply the IPF's reported charges on the discharge bill by its 
overall cost-to-charge ratio (CCR). This approach to determining an 
IPF's cost is consistent with the approach used under the IPPS and 
other PPSs. In the FY 2004 IPPS final rule (68 FR 34494), we 
implemented changes to the IPPS policy used to determine CCRs for acute 
care hospitals, because we became aware that payment vulnerabilities 
resulted in inappropriate outlier payments. Under the IPPS, we 
established a statistical measure of accuracy for CCRs to ensure that 
aberrant CCR data did not result in inappropriate outlier payments.
    As we indicated in the November 2004 IPF PPS final rule (69 FR 
66961), we believe that the IPF outlier policy is susceptible to the 
same payment vulnerabilities as the IPPS; therefore, we adopted a 
method to ensure the statistical accuracy of CCRs under the IPF PPS. 
Specifically, we adopted the following procedure in the November 2004 
IPF PPS final rule:
     Calculated two national ceilings, one for IPFs located in 
rural areas and one for IPFs located in urban areas.
     Computed the ceilings by first calculating the national 
average and the standard deviation of the CCR for both urban and rural 
IPFs using the most recent CCRs entered in the CY 2018 Provider 
Specific File.
    For FY 2019, we propose to continue to follow this methodology.
    To determine the proposed rural and urban ceilings, we multiplied 
each of the standard deviations by 3 and added the result to the 
appropriate national CCR average (either rural or urban). The proposed 
upper threshold CCR for IPFs in FY 2019 is 2.0255 for rural IPFs, and 
1.7550 for urban IPFs, based on CBSA-based geographic designations. If 
an IPF's CCR is above the applicable ceiling, the ratio is considered 
statistically inaccurate, and we assign the appropriate national 
(either rural or urban) median CCR to the IPF.
    We apply the national CCRs to the following situations:
     New IPFs that have not yet submitted their first Medicare 
cost report. We continue to use these national CCRs until the 
facility's actual CCR can be computed using the first tentatively or 
final settled cost report.
     IPFs whose overall CCR is in excess of three standard 
deviations above the corresponding national geometric mean (that is, 
above the ceiling).
     Other IPFs for which the Medicare Administrative 
Contractor (MAC) obtains inaccurate or incomplete data with which to 
calculate a CCR.
    We propose to continue to update the FY 2019 national median and 
ceiling CCRs for urban and rural IPFs based on the CCRs entered in the 
latest available IPF PPS Provider Specific File. Specifically, for FY 
2019, to be used in each of the three situations listed previously, 
using the most recent CCRs entered in the CY 2018 Provider Specific 
File, we propose an estimated national median CCR of 0.5870 for rural 
IPFs and a national median CCR of 0.4395 for urban IPFs. These 
calculations are based on the IPF's location (either urban or rural) 
using the CBSA-based geographic designations.
    A complete discussion regarding the national median CCRs appears in 
the November 2004 IPF PPS final rule (69 FR 66961 through 66964).

IV. Proposed Technical Corrections to the IPF Regulations

    We are proposing to make minor technical corrections to the IPF 
payment regulations at Sec.  412.27(a), Sec.  412.402 and Sec.  412.428 
to update, correct, or clarify existing regulations text. We note that 
these are technical corrections and they do not affect or change any 
existing policies.

Excluded Psychiatric Units: Additional Requirements (Sec.  412.27)

    At Sec.  412.27, we set forth additional requirements for excluded 
psychiatric units. In paragraph (a) we detail admission requirements 
and state that eligible patients must have a psychiatric principal 
diagnosis that is listed in the Fourth Edition of the American 
Psychiatric Association's Diagnostic and Statistical Manual (DSM) or 
Chapter Five (``Mental Disorders'') of the International Classification 
of Diseases, Ninth Revision, Clinical Modification. This language has 
been in place since 2006, but there have since been updates to the 
versions of these code sets.
    In a final rule published on September 5, 2012 (77 FR 54664), the 
Secretary of HHS adopted ICD-10-CM and ICD-10-PCS, in place of ICD-9-
CM, as standard medical data code sets under the Health Insurance 
Portability and Accountability Act of 1996 (HIPAA). This change is 
reflected in the HIPAA regulations at 45 CFR 162.1002(c). In an August 
4, 2014 final rule (79 FR 45128), the Secretary set October 1, 2015 as 
the compliance date for HIPAA covered entities to use the ICD-10 code 
sets. Because we are required to use the HIPAA standards, in the FY 
2015 IPF PPS final rule published August 6, 2014 in the Federal 
Register titled, ``Inpatient Psychiatric Facilities Prospective Payment 
System--Update for FY Beginning October 1, 2014 (FY 2015)'' (79 FR 
45945 through 45947), we finalized conversions of the ICD-9-CM-based 
MS-DRGs to ICD-10-CM/PCS-based MS-DRGs. However, we neglected to make a 
conforming change to Sec.  412.27(a). Therefore, we are proposing to 
correct Sec.  412.27(a) to state that eligible patients must have a 
psychiatric principal diagnosis that is listed in ICD-10-CM.
    The proposed revision to Sec.  412.27(a) would simply continue our 
longstanding policy of recognizing psychiatric diagnoses that are DSM 
diagnosis codes. We note that the DSM diagnosis codes map to ICD-10-CM 
codes, but the mapping is not exclusive to chapter 5 of the ICD-10-CM, 
as it was with ICD-9-CM; rather, they map to other chapters in ICD-10-
CM as well. Therefore, the proposed correction to Sec.  412.27(a) would 
no longer reference the DSM and would not specifically mention chapter 
5 of ICD-10-CM.

Definitions (Sec.  412.402)

    At Sec.  412.402, there is a typographical error in the definition 
of ``Principal Diagnosis.'' We inadvertently repeat the language that a 
principal diagnosis is

[[Page 21115]]

also referred to as a primary diagnosis. We propose to correct this 
error by removing the duplicate language.

Publication of Changes to the Inpatient Psychiatric Facility 
Prospective Payment System (Sec.  412.428)

    In the FY 2016 IPF PPS regulations, we proposed and finalized an 
IPF-specific market basket for updating the annual IPF payment rates 
(80 FR 46656 through 46679). This new IPF-specific market basket 
replaced the Rehabilitation, Psychiatric, and Long-Term Care (RPL) 
market basket, which had been in place for discharges occurring from 
July 1, 2006 through September 30, 2015. However, in our FY 2016 IPF 
PPS final rule, we did not update the regulations text at Sec.  412.428 
to reflect the adoption of the IPF-specific market basket. Therefore, 
we propose to update Sec.  412.428 to indicate that the use of the RPL 
market basket ended as of September 30, 2015, and that the IPF market 
basket was implemented for use in updating IPF PPS payment rates for 
discharges occurring on or after October 1, 2015. In addition, we 
propose to make other technical changes to this section for 
clarification and consistency.
    We solicit public comments on these technical corrections and 
request that when commenting on this section to reference ``proposed 
technical corrections.''

V. Update on IPF PPS Refinements and Comment Solicitation

    For RY 2012, we identified several areas of concern for future 
refinement, and we invited comments on these issues in the RY 2012 IPF 
PPS proposed and final rules. For further discussion of these issues 
and to review the public comments, we refer readers to the RY 2012 IPF 
PPS proposed rule (76 FR 4998) and final rule (76 FR 26432).
    We have delayed making refinements to the IPF PPS until we have 
completed a thorough analysis of IPF PPS data on which to base those 
refinements. Specifically, we will delay updating the adjustment 
factors derived from the regression analysis until we have IPF PPS data 
that include as much information as possible regarding the patient-
level characteristics of the population that each IPF serves. We have 
begun and will continue the necessary analysis to better understand IPF 
industry practices so that we may refine the IPF PPS in the future, as 
appropriate. Our preliminary analysis has also revealed variation in 
cost and claim data, particularly related to labor costs, drugs costs, 
and laboratory services. Some providers have very low labor costs, or 
very low or missing drug or laboratory costs or charges, relative to 
other providers. We are soliciting comments about differences in the 
IPF labor mix, differences in IPF patient mix, and differences in 
provision of drugs and laboratory services. We anticipate that these 
comments will better inform our refinement process.
    As we noted in the FY 2016 IPF PPS final rule (80 FR 46693 through 
46694), our preliminary analysis of 2012 to 2013 IPF data found that 
over 20 percent of IPF stays reported no ancillary costs, such as 
laboratory and drug costs, in their cost reports, or laboratory or drug 
charges on their claims. Because we expect that most patients requiring 
hospitalization for active psychiatric treatment will need drugs and 
laboratory services, we again remind providers that the IPF PPS federal 
per diem base rate includes the cost of all ancillary services, 
including drugs and laboratory services. On November 17, 2017, we 
issued Transmittal 12, which made changes to the hospital cost report 
form CMS-2552-10, and included cost report Level I edit 10710S, 
effective for cost reporting periods ending on or after August 31, 
2017. Edit 10710S now requires that cost reports from psychiatric 
hospitals include certain ancillary costs, or the cost report will be 
rejected. On January 30, 2018, we issued Transmittal 13, which changed 
the implementation date for Transmittal 12 to be for cost reporting 
periods ending on or after September 30, 2017. For details, we refer 
readers to see these Transmittals, which are available on the CMS 
website at https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/index.html.
    We pay only the IPF for services furnished to a Medicare 
beneficiary who is an inpatient of that IPF (except for certain 
professional services), and payments are considered to be payments in 
full for all inpatient hospital services provided directly or under 
arrangement (see 42 CFR 412.404(d)), as specified in 42 CFR 409.10.
    We will continue to analyze data from claims and cost reports that 
do not include ancillary charges or costs, and will be sharing our 
findings with CMS Office of the Center for Program Integrity and CMS 
Office of Financial Management for further investigation, as the 
results warrant. Our refinement analysis is dependent on recent precise 
data for costs, including ancillary costs. We will continue to collect 
these data and analyze them for both timeliness and accuracy with the 
expectation that these data will be used in a future refinement. It is 
currently our intent to explore proposing refinements to the 
adjustments in future rulemaking. Since we are not proposing 
refinements in this rule, for FY 2019 we will continue to use the 
existing adjustment factors.

VI. Inpatient Psychiatric Facilities Quality Reporting (IPFQR) Program

A. Background and Statutory Authority

    Section 1886(s)(4) of the Act, requires the Secretary to implement 
a quality reporting program for inpatient psychiatric hospitals and 
psychiatric units. Section 1886(s)(4)(A)(i) of the Act requires that, 
for FY 2014 \1\ and each subsequent FY, the Secretary must reduce any 
annual update to a standard federal rate for discharges occurring 
during the FY by 2.0 percentage points in the case of a psychiatric 
hospital or psychiatric unit that does not comply with quality data 
submission requirements with respect to an applicable FY.
---------------------------------------------------------------------------

    \1\ The statute uses the term ``rate year'' (RY). However, 
beginning with the annual update of the inpatient psychiatric 
facility prospective payment system (IPF PPS) that took effect on 
July 1, 2011 (RY 2012), we aligned the IPF PPS update with the 
annual update of the ICD codes, effective on October 1 of each year. 
This change allowed for annual payment updates and the ICD coding 
update to occur on the same schedule and appear in the same Federal 
Register document, promoting administrative efficiency. To reflect 
the change to the annual payment rate update cycle, we revised the 
regulations at 42 CFR 412.402 to specify that, beginning October 1, 
2012, the RY update period would be the 12-month period from October 
1 through September 30, which we refer to as a ``fiscal year'' (FY) 
(76 FR 26435). Therefore, with respect to the IPFQR Program, the 
terms ``rate year,'' as used in the statute, and ``fiscal year'' as 
used in the regulation, both refer to the period from October 1 
through September 30. For more information regarding this 
terminology change, we refer readers to section III. of the RY 2012 
IPF PPS final rule (76 FR 26434 through 26435).
---------------------------------------------------------------------------

    As provided in section 1886(s)(4)(A)(ii) of the Act, the 
application of the reduction for failure to report under section 
1886(s)(4)(A)(i) of the Act may result in an annual update of less than 
0.0 percent for a FY, and may result in payment rates under section 
1886(s)(1) of the Act being less than the payment rates for the 
preceding year. In addition, section 1886(s)(4)(B) of the Act requires 
that the application of the reduction to a standard federal rate update 
be noncumulative across FYs. Thus, any reduction applied under section 
1886(s)(4)(A) of the Act will apply only with respect to the FY rate 
involved and the Secretary may not take into account the reduction in 
computing the payment amount under the system described in section 
1886(s)(1) of the Act for subsequent years.
    Section 1886(s)(4)(C) of the Act requires that, for FY 2014 and 
each subsequent year, each psychiatric hospital and psychiatric unit 
must

[[Page 21116]]

submit to the Secretary data on quality measures as specified by the 
Secretary. The data must be submitted in a form and manner and at a 
time specified by the Secretary. Under section 1886(s)(4)(D)(i) of the 
Act, unless the exception of subclause (ii) applies, measures selected 
for the quality reporting program must have been endorsed by the entity 
with a contract under section 1890(a) of the Act. The National Quality 
Forum (NQF) currently holds this contract.
    Section 1886(s)(4)(D)(ii) of the Act provides an exception to the 
requirement for NQF endorsement of measures: In the case of a specified 
area or medical topic determined appropriate by the Secretary for which 
a feasible and practical measure has not been endorsed by the entity 
with a contract under section 1890(a) of the Act, the Secretary may 
specify a measure that is not so endorsed as long as due consideration 
is given to measures that have been endorsed or adopted by a consensus 
organization identified by the Secretary.
    Section 1886(s)(4)(E) of the Act requires the Secretary to 
establish procedures for making public the data submitted by inpatient 
psychiatric hospitals and psychiatric units under the IPFQR Program. 
These procedures must ensure that an inpatient psychiatric facility or 
unit has the opportunity to review its data before the data are made 
public. The Secretary must report quality measures that relate to 
services furnished in inpatient settings and psychiatric hospitals and 
units on the CMS website.

B. Covered Entities

    In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53645), we 
established that the IPFQR Program's quality reporting requirements 
cover those psychiatric hospitals and psychiatric units paid under 
Medicare's IPF PPS (Sec.  412.404(b)). Generally, psychiatric hospitals 
and psychiatric units within acute care and critical access hospitals 
that treat Medicare patients are paid under the IPF PPS. Consistent 
with previous regulations, we continue to use the term ``inpatient 
psychiatric facility'' (IPF) to refer to both inpatient psychiatric 
hospitals and psychiatric units. This usage follows the terminology in 
our IPF PPS regulations at Sec.  412.402. For more information on 
covered entities, we refer readers to the FY 2013 IPPS/LTCH PPS final 
rule (77 FR 53645).

C. Previously Finalized Measures and Administrative Procedures

    The current IPFQR Program includes 18 measures. For more 
information on these measures, we refer readers to the following final 
rules:
     The FY 2013 IPPS/LTCH PPS final rule (77 FR 53646 through 
53652);
     The FY 2014 IPPS/LTCH PPS final rule (78 FR 50889 through 
50897);
     The FY 2015 IPF PPS final rule (79 FR 45963 through 
45975);
     The FY 2016 IPF PPS final rule (80 FR 46695 through 
46714); and
     The FY 2017 IPPS/LTCH PPS final rule (81 FR 57238 through 
57247).
    For more information on previously adopted procedural requirements, 
we refer readers to the following rules:
     The FY 2013 IPPS/LTCH PPS final rule (77 FR 53653 through 
53660);
     The FY 2014 IPPS/LTCH PPS final rule (78 FR 50897 through 
50903;
     The FY 2015 IPF PPS final rule (79 FR 45975 through 
45978);
     The FY 2016 IPF PPS final rule (80 FR 46715 through 
46719);
     The FY 2017 IPPS/LTCH PPS final rule (81 FR 57248 through 
57249); and
     The FY 2018 IPPS/LTCH PPS final rule (82 FR 38471 through 
38474).

D. Accounting for Social Risk Factors

    In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38462 through 
38463), we discussed the importance of improving beneficiary outcomes 
including reducing health disparities. We also discussed our commitment 
to ensuring that medically complex patients, as well as those with 
social risk factors, receive excellent care. We discussed how studies 
show that social risk factors, such as being near or below the poverty 
level as determined by HHS, belonging to a racial or ethnic minority 
group, or living with a disability, can be associated with poor health 
outcomes and how some of this disparity is related to the quality of 
health care.\2\ Among our core objectives, we aim to improve health 
outcomes, attain health equity for all beneficiaries, and ensure that 
complex patients as well as those with social risk factors receive 
excellent care. Within this context, reports by the Office of the 
Assistant Secretary for Planning and Evaluation (ASPE) and the National 
Academy of Medicine have examined the influence of social risk factors 
in CMS value-based purchasing programs.\3\ As we noted in the FY 2018 
IPPS/LTCH PPS final rule (82 FR 38404), ASPE's report to Congress found 
that, in the context of value-based purchasing programs, dual 
eligibility was the most powerful predictor of poor health care 
outcomes among those social risk factors that they examined and tested. 
In addition, as we noted in the FY 2018 IPPS/LTCH PPS final rule (82 FR 
38241), the National Quality Forum (NQF) undertook a 2-year trial 
period in which certain new measures and measures undergoing 
maintenance review have been assessed to determine if risk adjustment 
for social risk factors is appropriate for these measures.\4\ The trial 
period ended in April 2017 and a final report is available at: http://www.qualityforum.org/SES_Trial_Period.aspx. The trial concluded that 
``measures with a conceptual basis for adjustment generally did not 
demonstrate an empirical relationship'' between social risk factors and 
the outcomes measured. This discrepancy may be explained in part by the 
methods used for adjustment and the limited availability of robust data 
on social risk factors. NQF has extended the socioeconomic status (SES) 
trial,\5\ allowing further examination of social risk factors in 
outcome measures.
---------------------------------------------------------------------------

    \2\ See, for example United States Department of Health and 
Human Services. ``Healthy People 2020: Disparities. 2014.'' 
Available at: http://www.healthypeople.gov/2020/about/foundation-health-measures/Disparities; or National Academies of Sciences, 
Engineering, and Medicine. Accounting for Social Risk Factors in 
Medicare Payment: Identifying Social Risk Factors. Washington, DC: 
National Academies of Sciences, Engineering, and Medicine 2016.
    \3\ Department of Health and Human Services Office of the 
Assistant Secretary for Planning and Evaluation (ASPE), ``Report to 
Congress: Social Risk Factors and Performance Under Medicare's 
Value-Based Purchasing Programs.'' December 2016. Available at: 
https://aspe.hhs.gov/pdf-report/report-congress-social-risk-factors-and-performance-under-medicares-value-based-purchasing-programs.
    \4\ Available at: http://www.qualityforum.org/SES_Trial_Period.aspx.
    \5\ Available at: http://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=86357.
---------------------------------------------------------------------------

    In the FY 2018 and CY 2018 proposed rules for our quality reporting 
and value-based purchasing programs, we solicited feedback on which 
social risk factors provide the most valuable information to 
stakeholders and the methodology for illuminating differences in 
outcomes rates among patient groups within a hospital or provider that 
would also allow for a comparison of those differences, or disparities, 
across providers. Feedback we received across our quality reporting 
programs included encouraging CMS to explore whether factors that could 
be used to stratify or risk adjust the measures (beyond dual 
eligibility); considering the full range of differences in patient 
backgrounds that might affect outcomes; exploring risk adjustment 
approaches; and to offer careful consideration of what type of 
information display would be most useful to the public. We also sought 
public comment on confidential reporting and future public reporting of

[[Page 21117]]

some of our measures stratified by patient dual eligibility. In 
general, commenters stated that stratified measures could serve as 
tools for hospitals to identify gaps in outcomes for different groups 
of patients, improve the quality of health care for all patients, and 
empower consumers to make informed decisions about health care. 
Commenters encouraged us to stratify measures by other social risk 
factors such as age, income, and educational attainment. With regard to 
value-based purchasing programs, commenters also cautioned to balance 
fair and equitable payment while avoiding payment penalties that mask 
health disparities or discourage the provision of care to more 
medically complex patients. Commenters also noted that value-based 
payment program measure selection, domain weighting, performance 
scoring, and payment methodology must account for social risk.
    As a next step, we are considering options to improve health 
disparities among patient groups within and across hospitals by 
increasing the transparency of disparities as shown by quality 
measures. We also are considering how this work applies to other CMS 
quality programs in the future. We refer readers to the FY 2018 IPPS/
LTCH PPS final rule (82 FR 38403 through 38409) and the FY 2019 IPPS/
LTCH PPS Proposed Rule published in the May 7, 2018 Federal Register 
for more details, where we discuss the potential stratification of 
certain Hospital IQR Program outcome measures. Furthermore, we continue 
to consider options to address equity and disparities in our value-
based purchasing programs.
    We plan to continue working with ASPE, the public, and other key 
stakeholders on this important issue to identify policy solutions that 
achieve the goals of attaining health equity for all beneficiaries and 
minimizing unintended consequences.

E. Improving Patient Outcomes and Reducing Burden Through Meaningful 
Measures

    Regulatory reform and reducing regulatory burden are high 
priorities for CMS. To reduce the regulatory burden on the healthcare 
industry, lower health care costs, and enhance patient care, in October 
2017, we launched the Meaningful Measures Initiative.\6\ This 
initiative is one component of our agency-wide Patients Over Paperwork 
Initiative,\7\ which is aimed at evaluating and streamlining 
regulations with a goal to reduce unnecessary cost and burden, increase 
efficiencies, and improve beneficiary experience. The Meaningful 
Measures Initiative is aimed at identifying the highest priority areas 
for quality measurement and quality improvement in order to assess the 
core quality of care issues that are most vital to advancing our work 
to improve patient outcomes. The Meaningful Measures Initiative 
represents a new approach to quality measures that fosters operational 
efficiencies, and will reduce costs including collection and reporting 
burden while producing quality measurement that is more focused on 
meaningful outcomes.
---------------------------------------------------------------------------

    \6\ Meaningful Measures web page: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/MMF/General-info-Sub-Page.html.
    \7\ Remarks by Administrator Seema Verma at the Health Care 
Payment Learning and Action Network (LAN) Fall Summit, as prepared 
for delivery on October 30, 2017. Available at: https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2017-Fact-Sheet-items/2017-10-30.html.
---------------------------------------------------------------------------

    The Meaningful Measures Framework has the following objectives:
     Address high-impact measure areas that safeguard public 
health;
     Patient-centered and meaningful to patients;
     Outcome-based where possible;
     Fulfill each program's statutory requirements;
     Minimize the level of burden for health care providers 
(for example, through a preference for EHR-based measures where 
possible, such as electronic clinical quality measures);
     Significant opportunity for improvement;
     Address measure needs for population based payment through 
alternative payment models and,
     Align across programs and/or with other payers.
    In order to achieve these objectives, we have identified 19 
Meaningful Measures areas and mapped them to six overarching quality 
priorities as shown in Table 2:

   Table 2--Mapping of Meaningful Measures Areas to Quality Priorities
------------------------------------------------------------------------
            Quality priority                 Meaningful measure area
------------------------------------------------------------------------
Making Care Safer by Reducing Harm       Healthcare-Associated
 Caused in the Delivery of Care.          Infections.
                                         Preventable Healthcare Harm.
Strengthen Person and Family Engagement  Care is Personalized and
 as Partners in Their Care.               Aligned with Patient's Goals.
                                         End of Life Care according to
                                          Preferences.
                                         Patient's Experience of Care.
                                         Patient Reported Functional
                                          Outcomes.
Promote Effective Communication and      Medication Management.
 Coordination of Care.                   Admissions and Readmissions to
                                          Hospitals.
                                         Transfer of Health Information
                                          and Interoperability.
Promote Effective Prevention and         Preventive Care.
 Treatment of Chronic Disease.           Management of Chronic
                                          Conditions.
                                         Prevention, Treatment, and
                                          Management of Mental Health.
                                         Prevention and Treatment of
                                          Opioid and Substance Use
                                          Disorders.
                                         Risk Adjusted Mortality.
Work with Communities to Promote Best    Equity of Care.
 Practices of Healthy Living.            Community Engagement.
Make Care Affordable...................  Appropriate Use of Healthcare.
                                         Patient-focused Episode of
                                          Care.
                                         Risk Adjusted Total Cost of
                                          Care.
------------------------------------------------------------------------

    By including Meaningful Measures in our programs, we believe that 
we can also address the following cross-cutting measure considerations:
     Eliminating disparities;
     Tracking measurable outcomes and impact;
     Safeguarding public health;
     Achieving cost savings;
     Improving access for rural communities; and,
     Reducing burden.

[[Page 21118]]

    We believe that the Meaningful Measures Initiative will improve 
outcomes for patients, families, and health care providers while 
reducing burden and costs for clinicians and providers, as well as 
promoting operational efficiencies.

F. Proposed Removal or Retention of IPFQR Program Measures

1. Considerations for Removing or Retaining Measures
    In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38463 through 
38465), we finalized our proposals to adopt considerations for removing 
or retaining measures within the IPFQR Program. In that final rule, we 
finalized: (1) Measure removal factors; (2) criteria for determining 
when a measure is ``topped-out;'' and (3) measure retention factors.
    Specifically, the measure removal factors we adopted are:
     Factor 1. Measure performance among IPFs is so high and 
unvarying that meaningful distinctions and improvements in performance 
can no longer be made (``topped-out'' measures);
     Factor 2. Measure does not align with current clinical 
guidelines or practice;
     Factor 3. Measure can be replaced by a more broadly 
applicable measure (across settings or populations) or a measure that 
is more proximal in time to desired patient outcomes for the particular 
topic;
     Factor 4. Measure performance or improvement does not 
result in better patient outcomes;
     Factor 5. Measure can be replaced by a measure that is 
more strongly associated with desired patient outcomes for the 
particular topic;
     Factor 6. Measure collection or public reporting leads to 
negative unintended consequences other than patient harm; and
     Factor 7. Measure is not feasible to implement as 
specified.
    The ``topped out'' criteria that we adopted are that a measure is 
``topped-out'' if there is statistically indistinguishable performance 
at the 75th and 90th percentiles and the truncated coefficient of 
variation is less than or equal to 0.10.
    The measure retention factors that we adopted are:
     Measure aligns with other CMS and HHS policy goals, such 
as those delineated in the National Quality Strategy or CMS Quality 
Strategy;
     Measure aligns with other CMS programs, including other 
quality reporting programs; and
     Measure supports efforts to move IPFs towards reporting 
electronic measures.
    We are not proposing any changes to these previously finalized 
measure removal or retention factors, or our criteria for determining 
when a measure is topped-out. However, we are proposing to add an 
additional measure removal factor. This is discussed in more detail 
below.
a. Proposed New Removal Factor
    We are proposing to adopt the following additional factor to 
consider when evaluating measures for removal from the IPFQR Program 
measure set: Factor 8, the costs associated with a measure outweigh the 
benefit of its continued use in the program.
    As we discussed in section VI.E. of the preamble of this proposed 
rule on our new Meaningful Measures Initiative,'' we are engaging in 
efforts to ensure that the IPFQR Program measure set continues to 
promote improved health outcomes for beneficiaries while minimizing the 
overall costs associated with the program. We believe these costs are 
multi-faceted and include not only the burden associated with 
reporting, but also the costs associated with implementing and 
maintaining the program. We have identified several different types of 
costs, including, but not limited to: (1) Provider and clinician 
information collection burden and related cost and burden associated 
with the submitting/reporting of quality measures to CMS; (2) the 
provider and clinician cost associated with complying with other IPFQR 
programmatic requirements; (3) the provider and clinician cost 
associated with participating in multiple quality programs, and 
tracking multiple similar or duplicative measures within or across 
those programs; (4) the CMS cost associated with the program oversight 
of the measure, including maintenance and public display; and/or (5) 
the provider and clinician cost associated with compliance to other 
federal and/or State regulations (if applicable). For example, it may 
be needlessly costly and/or of limited benefit to retain or maintain a 
measure which our analyses show no longer meaningfully supports program 
objectives (for example, informing beneficiary choice or payment 
scoring). It may also be costly for health care providers to track 
confidential feedback preview reports, and publicly reported 
information on a measure where we use the measure in more than one 
program. CMS may also have to expend unnecessary resources to maintain 
the specifications for the measure, as well as the tools needed to 
collect, validate, analyze, and publicly report the measure data. 
Furthermore, beneficiaries may find it confusing to see public 
reporting on the same measure in different programs.
    When these costs outweigh the evidence supporting the continued use 
of a measure in the IPFQR Program, we believe it may be appropriate to 
remove the measure from the program. Although we recognize that one of 
the main goals of the IPFQR Program is to improve beneficiary outcomes 
by incentivizing health care providers to focus on specific care issues 
and making public data related to those issues, we also recognize that 
those goals can have limited utility where, for example, the publicly 
reported data are of limited use because they cannot be easily 
interpreted by beneficiaries to influence their choice of providers. In 
these cases, removing the measure from the IPFQR Program may better 
accommodate the costs of program administration and compliance without 
sacrificing improved health outcomes and beneficiary choice.
    We are proposing that we would remove measures based on this factor 
on a case-by-case basis. We might, for example, decide to retain a 
measure that is burdensome for health care providers to report if we 
conclude that the benefit to beneficiaries justifies the reporting 
burden. Our goal is to move the program forward in the least burdensome 
manner possible, while maintaining a parsimonious set of meaningful 
quality measures and continuing to incentivize improvement in the 
quality of care provided to patients.
    We are soliciting public comments on our proposal to adopt an 
additional measure removal factor, ``the costs associated with a 
measure outweigh the benefit of its continued use in the program,'' 
effective upon publication of the FY 2019 IPF PPS Final Rule. We refer 
readers to section VI.F.2.a of the preamble of this proposed rule where 
we are proposing to remove five measures based on this proposed removal 
factor.
2. Proposed Measures for Removal
    In this proposed rule, we are proposing to remove eight measures 
from the IPFQR Program. We developed these proposals after conducting 
an overall review of the program under the Framework associated with 
our new Meaningful Measures Initiative, which is discussed in more 
detail in section VI.E. of this proposed rule. We believe that the 
Framework will allow IPFs and patients to continue to obtain meaningful 
information about IPF performance and incentivize quality

[[Page 21119]]

improvement, while streamlining the measure sets to reduce program 
complexity so that the costs do not outweigh the benefits of improving 
beneficiary care. In addition, we note that in the FY 2018 IPPS/LTCH 
PPS final rule (82 FR 38464), several commenters requested that we 
evaluate the current measures in the IPFQR Program using the removal 
and retention factors that we finalized in that rule.
    In evaluating the IPFQR Program measure set under our Meaningful 
Measures Framework and according to our measure removal and retention 
factors, we identified eight measures which we believe are appropriate 
to propose for removal from the IPFQR Program for the FY 2020 program 
year and subsequent years. First, we identified five measures for which 
the costs associated with each measure outweighs the benefit of its 
continued use in the program, under new measure removal Factor 8 
proposed for adoption in section VI.F.1.a of this proposed rule. We 
note that if the proposed removal factor is not finalized, removal of 
these measures would not be finalized. Second, we identified three 
measures that meet our topped-out criteria. These proposals are 
discussed in more detail below.
a. Proposed Removal of Measures in Which Costs Outweigh Benefits
i. Proposed Removal of Influenza Vaccination Coverage Among Healthcare 
Personnel (NQF #0431)
    We are proposing to remove the Influenza Vaccination Coverage Among 
Healthcare Personnel (NQF #0431) measure from the IPFQR Program 
beginning with FY 2020 payment determination under our proposed measure 
removal Factor 8, the costs associated with a measure outweigh the 
benefit of its continued use in the program. We initially adopted the 
Influenza Vaccination Coverage Among Healthcare Personnel measure 
because we recognize that influenza immunization is an important public 
health issue, especially for vulnerable patients who may have limited 
access to the healthcare system, such as patients in IPFs. We are 
proposing to remove the Influenza Vaccination Coverage Among Healthcare 
Personnel (NQF #0431) measure, a National Healthcare Safety Network 
(NHSN) measure, based on the proposed removal factor: The costs 
associated with a measure outweigh the benefit of its continued use in 
the program.
    We adopted the Influenza Vaccination Coverage Among Healthcare 
Personnel measure (NQF #0431) in in the FY 2015 IPF PPS final rule (79 
FR 45968 through 45970) due to public health concerns regarding 
influenza virus infection among the IPF population. We believe that the 
Influenza Vaccination Coverage Among Healthcare Personnel (NQF #0431) 
addresses this public health concern by assessing influenza vaccination 
in the IPF among healthcare personnel (HCP), who can serve as vectors 
for influenza transmission. We also adopted Influenza Immunization 
(IMM-2, NQF #1659) in the FY 2015 IPF PPS final rule (79 FR 45967 
through 45968) to address the same public health concern of influenza 
virus infection in the IPF patient population by assessing patient 
screening for and provision of influenza vaccinations.
    The information collection burden for the Influenza Vaccination 
Coverage Among Healthcare Personnel (NQF #0431) measure is less than 
for measures that require chart abstraction of patient data because 
influenza vaccination among healthcare personnel can be calculated 
through review of records maintained in administrative systems and 
because facilities have fewer healthcare personnel than patients and 
therefore the measure does not require review of as many records; 
however, this measure does still pose some information collection 
burden on facilities due to the requirement to identify personnel who 
have been vaccinated against influenza, and the reason that 
unvaccinated personnel have not been vaccinated.
    Furthermore, as we stated in section VI.F.1.a of this proposed 
rule, costs are multi-faceted and include not only the burden 
associated with reporting, but also the costs associated with 
implementing and maintaining the program. For example, it may be costly 
for health care providers to maintain general administrative knowledge 
to report these measures. Additionally, CMS must expend resources in 
maintaining information collection systems, analyzing reported data, 
and providing public reporting of the collected information. In our 
analysis of the IPFQR Program measure set, we recognized that some 
facilities face challenges with the administrative requirements of the 
NHSN for reporting the Influenza Vaccination Coverage Among Healthcare 
Personnel measure (NQF #0431). These administrative requirements (which 
are unique to the NHSN) include annually completing NHSN system user 
authentication. Enrolling in NHSN is a five-step process that the CDC 
estimates takes an average of 263 minutes per facility.\8\
---------------------------------------------------------------------------

    \8\ https://www.cdc.gov/nhsn/ipfs/enroll.html (the estimates for 
time to complete are 2 hours 45 minutes for step 1, 10 minutes for 
step 2, 16 minutes for step 3a, 35 minutes for step 3b, 32 minutes 
for step 4, and 5 minutes for step 5; totaling 263 minutes).
---------------------------------------------------------------------------

    Furthermore, submission via NHSN requires the system security 
administrator of participating facilities to re-consent electronically, 
ensure that contact information is kept current, ensure that the IPF 
has an active facility administrator account, keep Secure Access 
Management Service (SAMS) credentials active by logging in 
approximately every 2 months and changing their password, create a 
monthly reporting plan, and ensure that the facility's CCN information 
is up-to date. Unlike acute care hospitals which participate in other 
quality reporting programs which may require NHSN reporting, such as 
the Hospital IQR Program and HAC Reduction Program, IPFs are only 
required to participate in NHSN to submit data for this one measure. 
This may unduly disadvantage smaller IPFs, specifically those that are 
not part of larger hospital systems, because these IPFs do not have 
NHSN access for other quality reporting or value-based payment 
programs. It is our goal to ensure that the IPFQR Program is equitable 
to all providers and this measure may disproportionately affect small, 
independent IPFs. Especially for these small, independent IPFs, the 
incremental costs of this measure over the rest of the IPFQR Program 
measure set are significant because of the requirements of NHSN 
participation. As a result, we believe that the costs and burdens 
associated with this chart-abstracted measure outweigh the benefit of 
its continued use in the program.
    We continue to believe that the Influenza Vaccination Coverage 
Among Healthcare Personnel (NQF #0431) measure provides the benefit of 
protecting IPF patients against influenza; however, we believe that 
these benefits are offset by other efforts to reduce influenza 
infection among IPF patients, such as numerous healthcare employer 
requirements for healthcare personnel to be vaccinated against 
influenza.\9\
---------------------------------------------------------------------------

    \9\ CDC, Influenza Vaccination Information for Health Care 
Workers, Accessed at https://www.cdc.gov/flu/healthcareworkers.htm.
---------------------------------------------------------------------------

    We also believe that by continuing to include the Influenza 
Immunization (IMM-2, NQF #1659) measure in the IPFQR program, the 
measure set remains responsive to the public health concern of 
influenza infection within the IPF population by collecting data on

[[Page 21120]]

rates of influenza immunization among IPF patients. Further, we believe 
that while the Influenza Immunization (IMM-2, NQF #1659) measure has 
information collection burden associated with chart abstracting data, 
this measure is less costly than the NHSN Participation required for 
the Influenza Vaccination Coverage Among Healthcare Personnel (NQF 
#0431) in the IPF context.
    We wish to minimize the level of cost of our programs for 
providers, as discussed under the Meaningful Measures Initiative in 
section VI.E. of this proposed rule. In our assessment of the IPFQR 
measure set, we prioritized measures that align with this Framework, as 
the most important to the IPF population. Our assessment concluded that 
while the Influenza Vaccination Coverage Among Healthcare Personnel 
(NQF #0431) measure continues to provide benefits, these benefits are 
diminished by other efforts and are outweighed by the significant costs 
of reporting this measure.
    For these reasons, we are proposing to remove the Influenza 
Vaccination Coverage Among Healthcare Personnel (NQF #0431) measure 
from the IPFQR Program for the FY 2020 payment determination and 
subsequent years.
    We solicit public comments on this proposal.
ii. Proposed Removal of Alcohol Use Screening Measure (NQF #1661)
    We are proposing to remove the Alcohol Use Screening, SUB-1 (NQF 
#1661) measure from the IPFQR Program beginning with the FY 2020 
payment determination under our proposed measure removal Factor 8, the 
costs associated with a measure outweigh the benefit of its continued 
use in the program. We adopted the Alcohol Use Screening (SUB-1, NQF 
#1661) measure in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50890 
through 50892) because we believe it is important to address the common 
comorbidity of alcohol use among IPF patients. This measure requires 
facilities to chart-abstract measure data on a sample of IPF patient 
records, in accordance with established sampling policies (FY 2016 IPF 
PPS final rule, 80 FR 46717 through 46719). We have previously stated 
our intent to move away from chart-abstracted measures in order to 
reduce information collection burden in other CMS quality programs (78 
FR 50808; 79 FR 50242; 80 FR 49693).
    When we introduced the measure to the IPFQR Program, the benefits 
of this measure were high, because facility performance was not 
consistent and therefore the measure provided a means of distinguishing 
facility performance and incentivized facilities to improve rates of 
screening for this common comorbidity.
    Now, data collected for the FY 2016 through FY 2018 payment 
determinations show high levels of measure performance, as indicated in 
Table 3.

                             Table 3--Performance Analysis for Alcohol Use Screening
----------------------------------------------------------------------------------------------------------------
                                                                                                     Truncated
                                                                       75th            90th       coefficient of
              Year                     Mean           Median        percentile      percentile       variation
                                                                                                       (TCV)
----------------------------------------------------------------------------------------------------------------
2014 (FY 2016 Payment                       74.8            86.8            97.0             100             .32
 Determination).................
2015 (FY 2017 Payment                       88.5            97.5            99.6             100             .13
 Determination).................
2016 (FY 2018 Payment                       92.4            98.4            99.7             100             .07
 Determination).................
----------------------------------------------------------------------------------------------------------------

    These data further show that there is little room for improvement 
in the Alcohol Use Screening Measure (NQF #1661) measure, and that the 
benefit from the measure has greatly diminished. Based on these data, 
we believe that IPFs routinely provide alcohol use screening, and that 
IPFs will continue to provide alcohol use screening to patients because 
it has become an embedded part of their clinical workflows. Therefore, 
we believe that this measure no longer meaningfully supports the 
program objectives of informing beneficiary choice and driving 
improvement in IPF screening for alcohol use.
    Furthermore, as we stated in section VI.F.1.a of this proposed 
rule, costs are multi-faceted and include not only the burden 
associated with reporting, but also the costs associated with 
implementing and maintaining the program. For example, it may be costly 
for health care providers to maintain general administrative knowledge 
to report these measures. Additionally, CMS must expend resources in 
maintaining information collection systems, analyzing reported data, 
and providing public reporting of the collected information. Here, IPF 
information collection burden and related costs associated with 
reporting this measure to CMS is high because the measure is a chart-
abstracted measure. Furthermore, CMS incurs costs associated with the 
program oversight of the measure for public display. As a result, we 
believe that the costs and burdens associated with this chart-
abstracted measure outweigh the benefit of its continued use in the 
program.
    Therefore, we are proposing to remove the Alcohol Use Screening 
measure (SUB-1, NQF #1661) from the IPFQR Program beginning with the FY 
2020 payment determination.
    We solicit public comments on this proposal.
iii. Proposed Removal of the Assessment of Patient Experience of Care 
Measure and Use of an Electronic Health Record (EHR) Measure
    We are proposing to remove two measures: (1) Assessment of Patient 
Experience of Care measure; and (2) Use of an EHR measure from the 
IPFQR Program beginning with the FY 2020 payment determination under 
our proposed measure removal Factor 8, the costs associated with a 
measure outweigh the benefit of its continued use in the program.
    We adopted the Assessment of Patient Experience of Care measure as 
a voluntary information collection in the FY 2014 IPPS/LTCH PPS final 
rule (78 FR 50896 through 50897) and adopted it as a measure for the 
IPFQR Program in the FY 2015 IPF PPS final rule (79 FR 45964 through 
45965). The Assessment of Patient Experience of Care measure collects 
data on whether each facility administers a patient experience of care 
survey. However, it does not provide data on the results of this 
survey, or the percentage of patients to whom the survey was 
administered. The measure was adopted in part to inform potential 
future development of patient experience of care measures. We believe 
that we have now collected sufficient information to inform development 
of such a measure and, therefore, the

[[Page 21121]]

benefit of collecting this measure has been significantly reduced.
    Similarly, we adopted the Use of an EHR measure in the FY 2015 IPF 
PPS final rule (79 FR 45965 through 45967) because of evidence 
demonstrating the positive of effects of EHRs on multiple aspects of 
medical care. The Use of an EHR measure requires facilities to select 
between the following three statements:
     The facility most commonly used paper documents or other 
forms of information exchange (for example, email) not involving the 
transfer of health information using EHR technology at times of 
transitions in care;
     The facility most commonly exchanged health information 
using non-certified EHR technology (that is, not certified under the 
ONC HIT Certification Program) at times of transitions in care; and
     The facility most commonly exchanged health information 
using certified EHR technology (certified under the ONC HIT 
Certification Program) at times of transitions in care.
    The measure then requires the facility to provide a ``yes'' or 
``no'' answer to the following question: ``Did the transfers of health 
information at times of transitions in care include the exchange of 
interoperable health information with a health information service 
provider (HISP)?''
    As discussed in section VI.E of the preamble of this proposed rule, 
one of the goals of the Meaningful Measures Initiative is to reduce 
costs associated with payment policy, quality measures, documentation 
requirements, conditions of participation, and health information 
technology. Another goal of the Meaningful Measures Initiative is to 
utilize measures that are ``outcome-based where possible.'' As shown 
above, the Use of an EHR measure is a structural measure that tracks 
facility-level use of EHR technology, but does not directly measure 
patient outcomes. Furthermore, performance on this measure has remained 
relatively static for the past two program years. We believe that we 
have now collected sufficient data to inform potential future 
development of measures that more directly target the aspects of 
medical care addressed using EHRs (for example, care coordination, care 
transitions, and care provided to individual patients).
    While some of the intended objectives of both the Assessment of 
Patient Experience of Care measure and Use of an EHR measure have been 
met, keeping both measures in the IPFQR Program's measure set creates 
administrative cost to hospitals associated with reporting these 
measures. We believe that removing these measures would alleviate some 
administrative cost. While the information collection burden associated 
with these measures is relatively low, as we stated in section VI.F.1.a 
of this proposed rule, costs are multi-faceted and include not only the 
burden associated with reporting, but also the costs associated with 
implementing and maintaining the program. For example, it may be costly 
for health care providers to maintain general administrative knowledge 
to report these measures. Additionally, CMS must expend resources in 
maintaining information collection systems, analyzing reported data, 
and providing public reporting of the collected information. In light 
of the fact that the benefits for both the Assessment of Patient 
Experience of Care measure and Use of an EHR measure have been 
significantly reduced, the costs of these measures now outweigh their 
benefits.
    Therefore, beginning with the FY 2020 payment determination and 
subsequent years, we are proposing to remove from the IPFQR Program: 
(1) Assessment of Patient Experience of Care; and (2) Use of an EHR.
    We solicit public comments on this proposal.
iv. Proposed Removal of Tobacco Use Treatment Provided or Offered at 
Discharge (TOB-3 and TOB-3a, NQF #1656) Measure
    We are proposing to remove the Tobacco Use Treatment Provided or 
Offered at Discharge and Tobacco Use Treatment at Discharge (TOB-3 and 
TOB-3a, NQF #1656) from the IPFQR Program beginning with the FY 2020 
payment determination under our proposed measure removal Factor 8, the 
costs associated with a measure outweigh the benefit of its continued 
use in the program.
    Tobacco Use Treatment Provided or Offered at Discharge and Tobacco 
Use Treatment at Discharge (TOB-3 and TOB-3a, NQF #1656) measures 
whether patients were referred to or refused evidence-based outpatient 
counseling and received or refused a prescription for FDA-approved 
cessation medication upon discharge and also identifies those IPF 
patients who were referred to evidence-based outpatient counseling and 
received a prescription for FDA-approved cessation medication upon 
discharge. This measure requires facilities to chart-abstract measure 
data on a sample of IPF patient records, in accordance with established 
sampling policies (FY 2016 IPF PPS final rule, 80 FR 46717 through 
46719). When we introduced the measure to the IPFQR Program, the 
benefits of this measure were great, because facility performance was 
not consistent and the measure provided a means of distinguishing 
facility performance and incentivizing facilities to improve rates of 
providing treatment for this common comorbidity.
    However, we believe the benefit of keeping the Tobacco Use 
Treatment Provided or Offered at Discharge (TOB-3 and TOB-3a, NQF 
#1656) measure in the IPFQR Program has now become limited because the 
same measure data is captured in the data elements required by the 
Transition Record with Specified Elements Received by Discharged 
Patients (Discharges from an Inpatient Facility to Home/Self Care or 
Any Other Site of Care) (NQF #0647) measure, which was more recently 
added to the IPFQR Program (80 FR 46701 through 46706) . The transition 
record created to meet the requirements for inclusion in the numerator 
of the Transition Record with Specified Elements Received by Discharged 
Patients (Discharges from an Inpatient Facility to Home/Self Care or 
Any Other Site of Care (NQF #0647) includes elements on major 
procedures and tests performed during inpatient stay, summary of 
results, a current medication list, and post-discharge patient 
instructions. To meet the inclusion criteria for the numerator of this 
measure, the post-discharge patient instructions must provide 
information on all recommended actions for the patient after discharge. 
These post-discharge patient instructions would include tobacco use 
treatment, if appropriate, and therefore, would capture the same 
information as the numerator of the Tobacco Use Treatment Provided or 
Offered at Discharge (TOB-3 and TOB-3a, NQF #1656) measure. 
Additionally, because the transition record created to meet the 
requirements for inclusion in the numerator of Transition Record with 
Specified Elements Received by Discharged Patients (Discharges from an 
Inpatient Facility to Home/Self Care or Any Other Site of Care (NQF 
#0647) must include a current medication list, this medication list 
would capture a prescription for an FDA approved cessation medication 
at discharge, if appropriate, the second element of tobacco use 
treatment measured by the Tobacco Use Treatment Provided or Offered at 
Discharge (TOB-3 and TOB-3a, NQF #1656) measure.
    Furthermore, as we stated in section VI.F.1.a of this proposed 
rule, costs are multi-faceted and include not only the burden 
associated with reporting, but also the costs associated with 
implementing and maintaining the program. For example, it may be costly

[[Page 21122]]

for health care providers to maintain general administrative knowledge 
to report these measures. Additionally, CMS must expend resources in 
maintaining information collection systems, analyzing reported data, 
and providing public reporting of the collected information. For this 
measure, provider and clinician information collection burden and 
related cost and burden associated with the submitting of quality 
measures to CMS is high because it is a chart-abstracted measure. 
Additionally, CMS incurs costs associated with the program oversight of 
the measure, including public display.
    Therefore, we believe that the benefits provided by the Tobacco Use 
Treatment Provided or Offered at Discharge (TOB-3 and TOB-3a, NQF 
#1656) measure have been reduced to the point that they are now 
outweighed by the costs of the measure. As such, we are proposing to 
remove the Tobacco Use Treatment Provided or Offered at Discharge and 
Tobacco Use Treatment at Discharge (TOB-3 and TOB-3a, NQF #1656) 
measure from the IPFQR Program beginning with the FY 2020 payment 
determination and subsequent years.
    We solicit public comments on this proposal.
b. Proposed Removal of Topped-Out Measures
    In the FY 2018 IPPS/LTCH PPS final rule, we finalized criteria for 
evaluating whether measures within the IPFQR measure set are topped-out 
(82 FR 38463). We stated that a measure is topped-out if there is 
statistically indistinguishable performance at the 75th and 90th 
percentiles and the TCV is less than or equal to 0.10. Based on our 
analysis of IPFQR Program measure data for January 1, 2015 through 
December 31, 2015, IPF performance on the following three measures is 
topped-out.
i. Proposed Removal of the Tobacco Use Screening (TOB-1, NQF #1651) 
Measure
    We are proposing to remove the Tobacco Use Screening, TOB-1 (NQF 
#1651) measure from the IPFQR Program beginning with FY 2020 payment 
determination under our previously finalized measure removal Factor 1, 
measure performance among IPFs is so high and unvarying that meaningful 
distinctions and improvements in performance can no longer be made 
(``topped-out'' measures). Based on our analysis of IPFQR Program 
measure data for January 1, 2015 through December 31, 2015 (that is, FY 
2017 payment determination data), IPF performance on Tobacco Use 
Screening (TOB-1, NQF #1651) is statistically indistinguishable at the 
75th and 90th percentiles and the TCV is less than or equal to 0.10. 
This analysis is captured in Table 4:

                                             Table 4--Topped-Out Analysis Results for Tobacco Use Screening
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                75th            90th
                 Measure                        Mean           Median        percentile      percentile          TCV                 Topped-out
--------------------------------------------------------------------------------------------------------------------------------------------------------
TOB-1....................................           93.32           98.79             100             100           0.066  Yes.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The Tobacco Use Screening (TOB-1, NQF #1651) measure meets both of 
the statistical criteria for topped-out status. Our analysis shows that 
tobacco use screening is widely in practice and there is little room 
for improvement. We believe that IPFs will continue this practice even 
after the measure is removed because we believe that the high 
performance on this measure shows that this practice has become an 
embedded part of clinical workflows. Therefore, we believe that utility 
in the program is limited because measure performance among IPFs is so 
high and unvarying that meaningful distinctions and improvements in 
performance can no longer be made. Therefore, we are proposing to 
remove the Tobacco Use Screening (TOB-1) measure from the IPFQR Program 
beginning with the FY 2020 payment determination.
    We solicit public comments on this proposal.
ii. Proposed Removal of Hours of Physical Restraint Use (HBIPS-2, NQF 
#0640) and Hours of Seclusion Use (HBIPS-3, NQF #0641) Measures
    We are proposing to remove two measures: (1) Hours of Physical 
Restraint Use, HBIPS-2 (NQF #0640); and (2) Hours of Seclusion Use, 
HBIPS-3 (NQF #0641) from the IPFQR Program for the FY 2020 payment 
determination and subsequent years under our previously finalized 
measure removal Factor 1, measure performance among IPFs is so high and 
unvarying that meaningful distinctions and improvements in performance 
can no longer be made (``topped-out'' measures). Our finalized policy 
states that a measure is topped out if there is statistically 
indistinguishable performance at the 75th and 90th percentiles and the 
TCV is less than or equal to 0.10. This policy is designed to compare 
performance at the 75th and 90th percentile of top performing 
facilities. Because lower results are better for HBIPS-2 and HBIPS-3, 
the top performing facilities are those at the 25th and 10th 
percentile. Therefore, we evaluated the 25th and 10th percentile of 
measure results, which is equivalent to the 75th and 90th percentile of 
facility performance.
    Due to the design of these measures--that lower results are 
better--we could not apply the second criterion, a TCV that is less 
than or equal to 0.10. The coefficient of variation is calculated by 
dividing the standard deviation by the mean. Because the mean is near 
zero for these measures, this leads to division by a number near zero, 
which results in a large coefficient of variation, and therefore a 
large TCV. This means that for measures with a target performance of 
zero, the second topped-out criterion ``the truncated coefficient of 
variation is less than or equal to 0.10'' is not applicable. While 
different than our established topped-out criteria, we believe that our 
approach for evaluating data for these measures is appropriate because 
it applies the relevant criterion in a way that assesses performance 
among the top performing facilities.
    Our analysis for Hours of Physical Restraint Use (HBIPS-2, NQF 
#0640) is captured in Table 5:

[[Page 21123]]



                                        Table 5--Topped-Out Analysis Results for Hours of Physical Restraint Use
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          25th Percentile  10th Percentile
                                                                               measure          measure
                                                                           results  (75th   results  (90th
       Payment determination year              Mean           Median       Percentile  of   Percentile  of        TCV                Topped-out
                                                                              facility         facility
                                                                            performance)     performance)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2014....................................             2.2             0.0              0.0              0.0             N/A  Yes.
2015....................................             1.8             0.1              0.0              0.0             N/A  Yes.
2016....................................             0.9             0.1              0.0              0.0             N/A  Yes.
2017....................................             1.4             0.1              0.0              0.0             N/A  Yes.
2018....................................             0.6             0.1              0.0              0.0             N/A  Yes.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Our analysis for Hours of Seclusion Use (HBIPS-3, NQF #0641) is 
captured in Table 6:

                                             Table 6--Topped-Out Analysis Results for Hours of Seclusion Use
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          25th Percentile  10th Percentile
                                                                               measure          measure
                                                                           results  (75th   results  (90th
       Payment determination year              Mean           Median       Percentile  of   Percentile  of        TCV                Topped-out
                                                                              facility         facility
                                                                            performance)     performance)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2014....................................             0.8             0.0              0.0              0.0             N/A  Yes.
2015....................................             1.1             0.0              0.0              0.0             N/A  Yes.
2016....................................             0.5             0.0              0.0              0.0             N/A  Yes.
2017....................................             1.1             0.0              0.0              0.0             N/A  Yes.
2018....................................             0.4             0.0              0.0              0.0             N/A  Yes.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    We continue to believe that the use of physical restraints and 
seclusion as clinical interventions are important patient safety issues 
because of the severity of these interventions. However, we note that 
Hours of Physical Restraint Use (HBIPS-2) and Hours of Seclusion Use 
(HBIPS-3) have only been one element of the coordinated approach to 
minimizing the use of physical restraint and seclusion. They are not 
the primary method by which CMS monitors or assesses the 
appropriateness of their use. IPFs are subject to the Conditions of 
Participation concerning patient's rights, which include an extensive 
section on the use of seclusion and restraints (42 CFR 482.13(e), (f), 
and (g)). Unannounced surveys by state surveyors and surveys by CMS-
approved accreditation organizations (for example, The Joint Commission 
(TJC)) for deeming purposes are the primary means by which CMS enforces 
these provisions, which assess compliance with these requirements on a 
case-by-case basis. This focus on the appropriate use of these 
interventions has led to consistently high performance on these 
measures for several years. Our ``topped-out'' analyses of the measures 
shows that meaningful distinctions and improvements in performance can 
no longer be made through continued use of these measures in the IPFQR 
Program, and thus, utility in the program is limited. However, we 
believe that the continued monitoring of the use of seclusion and 
restraint by surveyors will continue to protect against patient harm 
related to inappropriate use of seclusion and restraint.
    Therefore, we are proposing to remove from the IPFQR Program 
beginning with the FY 2020 payment determination both: (1) Hours of 
Physical Restraint Use (HBIPS-2); and (2) Hours of Seclusion use 
(HBIPS-3).
    We solicit public comments on these proposals.

G. Previously Finalized and Proposed Measure Sets for the FY 2020 
Payment Determination and Subsequent Years

1. Previously Finalized Measures for the FY 2020 Payment Determination 
and Subsequent Years
    We previously finalized 18 measures for the FY 2020 payment 
determination and subsequent years. These measures are set forth in 
Table 7.

     Table 7--Previously Finalized Measures for the FY 2020 Payment
                   Determination and Subsequent Years
------------------------------------------------------------------------
         NQF #                Measure ID                Measure
------------------------------------------------------------------------
0640...................  HBIPS-2.............  Hours of Physical
                                                Restraint Use.
0641...................  HBIPS-3.............  Hours of Seclusion Use.
560....................  HBIPS-5.............  Patients Discharged on
                                                Multiple Antipsychotic
                                                Medications with
                                                Appropriate
                                                Justification.
576....................  FUH.................  Follow-up After
                                                Hospitalization for
                                                Mental Illness.
1661...................  SUB-1...............  Alcohol Use Screening.
1663...................  SUB-2 and SUB-2a....  Alcohol Use Brief
                                                Intervention Provided or
                                                Offered and SUB-2a
                                                Alcohol Use Brief
                                                Intervention.
1664...................  SUB-3 and SUB-3a....  Alcohol and Other Drug
                                                Use Disorder Treatment
                                                Provided or Offered at
                                                Discharge and SUB-3a
                                                Alcohol and Other Drug
                                                Use Disorder Treatment
                                                at Discharge.

[[Page 21124]]

 
1651...................  TOB-1...............  Tobacco Use Screening.
1654...................  TOB-2 and TOB-2a....  Tobacco Use Treatment
                                                Provided or Offered and
                                                TOB-2a Tobacco Use
                                                Treatment.
1656...................  TOB-3 and TOB-3a....  Tobacco Use Treatment
                                                Provided or Offered at
                                                Discharge and Tobacco
                                                Use Treatment at
                                                Discharge.
1659...................  IMM-2...............  Influenza Immunization.
0431...................  N/A.................  Influenza Vaccination
                                                Coverage Among
                                                Healthcare Personnel.
647....................  N/A.................  Transition Record with
                                                Specified Elements
                                                Received by Discharged
                                                Patients (Discharges
                                                from an Inpatient
                                                Facility to Home/Self
                                                Care or Any Other Site
                                                of Care).
648....................  N/A.................  Timely Transmission of
                                                Transition Record
                                                (Discharges from an
                                                Inpatient Facility to
                                                Home/Self Care or Any
                                                Other Site of Care).
N/A....................  N/A.................  Screening for Metabolic
                                                Disorders.
2860...................  N/A.................  Thirty-Day All-Cause
                                                Unplanned Readmission
                                                Following Psychiatric
                                                Hospitalization in an
                                                Inpatient Psychiatric
                                                Facility.
N/A....................  N/A.................  Assessment of Patient
                                                Experience of Care.
N/A....................  N/A.................  Use of an Electronic
                                                Health Record.
------------------------------------------------------------------------

2. Proposed Measure Set for the FY 2020 Payment Determination and 
Subsequent Years
    If our proposals to remove measures in section VI.F.2. of this rule 
are finalized as proposed, eight of the previously finalized measures 
described in Table 7 will be removed for the FY 2020 payment 
determination and subsequent years. The remaining ten measures are set 
forth in Table 8.

            Table 8--Proposed Measure Set for the FY 2020 Payment Determination and Subsequent Years
----------------------------------------------------------------------------------------------------------------
             NQF #                                 Measure ID                                Measure
----------------------------------------------------------------------------------------------------------------
560............................  HBIPS-5......................................  Patients Discharged on Multiple
                                                                                 Antipsychotic Medications with
                                                                                 Appropriate Justification.
576............................  FUH..........................................  Follow-up After Hospitalization
                                                                                 for Mental Illness.
1663...........................  SUB-2 and SUB-2a.............................  Alcohol Use Brief Intervention
                                                                                 Provided or Offered and SUB-2a
                                                                                 Alcohol Use Brief Intervention.
1664...........................  SUB-3 and SUB-3a.............................  Alcohol and Other Drug Use
                                                                                 Disorder Treatment Provided or
                                                                                 Offered at Discharge and SUB-3a
                                                                                 Alcohol and Other Drug Use
                                                                                 Disorder Treatment at
                                                                                 Discharge.
1654...........................  TOB-2 and TOB-2a.............................  Tobacco Use Treatment Provided
                                                                                 or Offered and TOB-2a Tobacco
                                                                                 Use Treatment.
1659...........................  IMM-2........................................  Influenza Immunization.
647............................  N/A..........................................  Transition Record with Specified
                                                                                 Elements Received by Discharged
                                                                                 Patients (Discharges from an
                                                                                 Inpatient Facility to Home/Self
                                                                                 Care or Any Other Site of
                                                                                 Care).
648............................  N/A..........................................  Timely Transmission of
                                                                                 Transition Record (Discharges
                                                                                 from an Inpatient Facility to
                                                                                 Home/Self Care or Any Other
                                                                                 Site of Care).
N/A............................  N/A..........................................  Screening for Metabolic
                                                                                 Disorders.
2860...........................  N/A..........................................  Thirty-Day All-Cause Unplanned
                                                                                 Readmission Following
                                                                                 Psychiatric Hospitalization in
                                                                                 an Inpatient Psychiatric
                                                                                 Facility.
----------------------------------------------------------------------------------------------------------------

H. Possible IPFQR Program Measures and Measure Topics for Future 
Consideration

    As we have previously indicated (79 FR 45974 through 45975), we 
seek to develop a comprehensive set of quality measures to be available 
for widespread use for informed decision-making and quality improvement 
in the IPF setting. We are considering development of process and 
outcomes measures related to treatment and management of depression. In 
our assessment of the current IPFQR measure set under the Meaningful 
Measures Initiative, described in section VI.E. of this proposed rule, 
we recognized the importance of developing a measure that fits into the 
meaningful measure areas of Prevention, Treatment, and Management of 
Mental Health and Patient Experience and Functional Outcomes, as we 
believe that the lack of such a measure is indicative of a gap in the 
current IPFQR Program measure set.
    Specifically, we are considering: (1) Future development and 
adoption of a process measure that measures administration of a 
standardized depression assessment instrument (for example, the Patient 
Health Questionnaire (PHQ)-9) \10\ at admission and discharge for 
patients admitted with depression; and (2) future development and 
adoption of a patient reported outcome measure, which assesses change 
in patient reported function based on the change in results on the 
standardized depression assessment instrument between admission and 
discharge.
---------------------------------------------------------------------------

    \10\ The PHQ-9 is publicly available at: http://www.phqscreeners.com/sites/g/files/g10016261/f/201412/PHQ-9_English.pdf.
---------------------------------------------------------------------------

    We ultimately wish to adopt a patient reported outcome measure 
related to treatment and management of depression; however, such a 
measure would require consistent administration of a standardized 
assessment instrument at admission and discharge. To ensure that 
facilities are consistently using a standardized assessment instrument, 
we believe that it may be necessary to first adopt a process measure 
that assesses facility administration of a standardized depression 
assessment, such as the PHQ-9, at both admission and discharge for 
adult inpatient admissions, thereby, encouraging facilities that do not 
currently consistently use such an instrument to use one. In the 
future, we could replace this measure with a patient reported outcome 
measure that

[[Page 21125]]

we would develop to compare the patient's responses to the standardized 
depression assessment instrument at admission with the patient's 
results on the same assessment instrument at discharge. We believe this 
potential future patient reported outcome measure for patients with 
depression would address the meaningful measure areas of Prevention, 
Treatment, and Management of Mental Health, and Patient Experience and 
Functional Outcomes.
    We solicit public comments on: (1) Future development and adoption 
of a process measure that measures the number of facilities that 
administer a standardized assessment instrument; (2) future development 
and adoption of an outcome measure related to treatment and management 
of depression; and (3) any other possible new measures or new measure 
topics.

I. Public Display and Review Requirements

    We refer readers to the FY 2013 IPPS/LTCH PPS final rule (77 FR 
53653 through 53654), the FY 2014 IPPS/LTCH PPS final rule (78 FR 50897 
through 50898), and the FY 2017 IPPS/LTCH PPS final rule (81 FR 57248 
through 57249). In this proposed rule, we are not proposing any changes 
to these policies. However, we note that in section VI.D of the 
preamble of this proposed rule, we discuss potential considerations to 
provide stratified data by patient dual eligibility status in IPF 
confidential feedback reports and considerations to make stratified 
data publicly available on the Hospital Compare website in the future.

J. Form, Manner, and Timing of Quality Data Submission for the FY 2020 
Payment Determination and Subsequent Years

1. Procedural Requirements for the FY 2020 Payment Determination and 
Subsequent Years
    We refer readers to the FY 2013 IPPS/LTCH PPS final rule (77 FR 
53654 through 53655), the FY 2014 IPPS/LTCH PPS final rule (78 FR 50898 
through 50899), and the FY 2018 IPPS/LTCH PPS final rule (82 FR 38471 
through 38472) for our previously finalized procedural requirements. In 
this proposed rule, we are not proposing any changes to these policies.
2. Data Submission Requirements for the FY 2020 Payment Determination 
and Subsequent Years
    We refer readers to the FY 2013 IPPS/LTCH PPS final rule (77 FR 
53655 through 53657), the FY 2014 IPPS/LTCH PPS final rule (78 FR 50899 
through 50900), and the FY 2018 IPPS/LTCH PPS final rule (82 FR 38472 
through 38473) for our previously finalized data submission 
requirements. In this proposed rule, we are not proposing any changes 
to the data submission requirements.
3. Reporting Requirements for the FY 2020 Payment Determination and 
Subsequent Years
    We refer readers to the FY 2013 IPPS/LTCH PPS final rule (77 FR 
53656 through 53657), the FY 2014 IPPS/LTCH PPS final rule (78 FR 50900 
through 50901), and the FY 2015 IPF PPS final rule (79 FR 45976 through 
45977 for our previously finalized reporting requirements. In this 
proposed rule, we are not proposing any changes to these policies; 
however, we are requesting public comment on our consideration to 
potentially require patient-level measure data in the future. This is 
discussed in more detail below.
    In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53655 through 
53656), we finalized that for the FY 2014 payment determination and 
subsequent years, IPFs must submit aggregated numerator and denominator 
data for all age groups for all measures on an annual basis, and that 
the data input forms on the QualityNet website for such submission will 
require aggregate data for each separate quarter. In the FY 2016 IPF 
PPS final rule (80 FR 46715 through 46717), we finalized that for the 
FY 2017 payment determination and subsequent years, facilities would 
only be required to report data for chart-abstracted measures on an 
aggregate basis by year, rather than by quarter. In addition, we 
finalized that facilities would no longer be required to report by age 
group.
    Although we are not proposing any changes to these requirements in 
this proposed rule, we recognize that reporting aggregate measure data 
increases the possibility of human error, such as making typographical 
errors while entering data, which cannot be detected by CMS or by data 
submission systems. Unlike patient-level data reporting, aggregate 
measure data reporting does not allow for data accuracy validation (77 
FR 53655 through 53656). Therefore, the ability to detect error is 
lower for aggregate measure data reporting than for patient-level data 
reporting. For this reason, we are considering requiring patient-level 
data reporting (that is, data regarding each patient included in a 
measure and whether the patient was included in each the numerator and 
denominator of the measure) of IPFQR Program measure data in the 
future. We note that in the FY 2013 IPPS/LTCH PPS final rule, we 
previously indicated that we would consider requiring patient-level 
data in the future and that we would use notice and comment rulemaking 
to establish any requirements (77 FR 53656).
    In this proposed rule, while we are not proposing any changes to 
the reporting requirements, we are soliciting public comments on the 
consideration for requiring patient-level measure data in the future.
4. Quality Measure Sampling Requirements
    In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53657 through 
53658), we finalized that participating IPFs must meet specific 
population, sample size, and minimum reporting case threshold 
requirements for individual measures as specified in TJC's 
Specifications Manual \11\ for the FY 2014 payment determination and 
subsequent years. The Specifications Manual is updated at least twice a 
year (and may be updated more often as necessary), and IPFs must follow 
the requirements in the most recent manual. We finalized that the 
target population for the measures includes all patients, not solely 
Medicare beneficiaries, to improve quality of care. We believe it is 
important to require IPFs to submit measures on all patients because 
quality improvement is of industry-wide importance and should not be 
focused exclusively on a certain subset of patients. We noted that the 
Specifications Manual gives IPFs the option of sampling their data 
quarterly or monthly. We also finalized our policy that IPFs that have 
no data to report for a given measure must enter zero for the 
population and sample counts. For example, an IPF that has no hours of 
physical restraint use (HBIPS-2) to report for a given quarter is still 
required to submit a zero for its quarterly aggregate population for 
HBIPS-2 in order to meet the reporting requirement. We note that at the 
time we finalized this policy, the only measures in the IPFQR Program 
were HBIPS measures (77 FR 53652).
---------------------------------------------------------------------------

    \11\ https://manual.jointcommission.org/releases/TJC2017B2/.
---------------------------------------------------------------------------

    In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50901 through 
50902), we stated that for the existing HBIPS measures, we continue to 
apply our finalized policies for population, sampling, and minimum case 
threshold as discussed above. However, in that rule, we finalized a new 
policy for new measures. For new measures finalized for the FY 2016 
payment determination and subsequent years, we finalized that

[[Page 21126]]

IPFs must follow sampling and population requirements as specified by 
the appropriate measure steward (78 FR 50901 through 50902).
    In that rule, we also made clear that the Follow-Up After 
Hospitalization for Mental Illness (FUH, NQF #0576) measure is not 
eligible for sampling because CMS calculates the measure using 
administrative claims data, and sampling is not applicable to claims-
based measures. We finalized that IPFs must follow the population 
requirements outlined at: http://www.ncqa.org/portals/0/Follow-Up%20After%20Hospitalization%20for%20Mental%20Illness.pdf.
    In the FY 2014 IPPS/LTCH PPS final rule, some commenters noted that 
different sampling requirements in the measures could increase burden 
on facilities because these differences will require IPFs to have 
varying policies and procedures in place for each measure (78 FR 
50901). Therefore, in the FY 2016 IPF PPS final rule (80 FR 46717 
through 46719), in order to provide facilities greater flexibility, we 
expanded our sampling policy to allow sampling either through: (1) 
Previously finalized requirements for individual measures as discussed 
above; or (2) through the use of a uniform sampling methodology 
beginning with the FY 2018 payment determination. We finalized a 
uniform sampling methodology that could be applied to both measures 
that allow sampling and for certain other measures (specifically 
measures not previously included in TJC's Specifications Manuals, such 
as Screening for Metabolic Disorders, Patients Discharged on Multiple 
Antipsychotic Medications with Appropriate Justification, HBIPS-5). 
Specifically, we finalized use of The Joint Commission/CMS Global 
Initial Patient Population sampling methodology found at: https://www.qualitynet.org/dcs/BlobServer?blobkey=id&blobnocache=true&blobwhere=1228890321190&blobheader=multipart%2Foctet-stream&blobheadername1=Content-Disposition&blobheadervalue1=attachment%3Bfilename%3D2+9_Global_v4_4.pdf&blobcol=urldata&blobtable=MungoBlobs. This uniform sampling 
methodology allows IPFs to utilize one sampling methodology and apply 
it to all IPFQR Program measures for which sampling is allowed. The 
Joint Commission/CMS Global Initial Patient Population sampling 
methodology, as developed, ensures that enough data are represented in 
the sample to determine accurate measure rates (80 FR 46718).
    Therefore currently, IPFs can choose from two options to sample 
quality measures: (1) Sampling and population requirements as specified 
by the appropriate measure steward; or (2) a uniform sampling 
methodology (that is, The Joint Commission/CMS Global Initial Patient 
Population methodology). These population and sampling options 
currently apply to the following measures in the IPFQR Program measure 
set:
     Patients Discharged on Multiple Antipsychotic Medications 
with Appropriate Justification (HBIPS-5, NQF #0560).
     Alcohol Use Screening (SUB-1, NQF #1661) (Proposed for 
removal in this rule).
     Alcohol Use Screening and Brief Intervention Provided or 
Offered and Alcohol Use Brief Intervention (SUB-2 and SUB-2a, NQF 
#1663).
     Alcohol & Other Drug Use Disorder Treatment Provided or 
Offered at Discharge and Alcohol & Other Drug Use Disorder Treatment at 
Discharge (SUB-3 and SUB-3a, NQF #1664).
     Tobacco Use Screening (TOB-1, NQF #1651) (Proposed for 
removal in this rule).
     Tobacco Use Treatment Provided or Offered and Tobacco Use 
Treatment Provided (TOB-2 and TOB-2a, NQF #1654).
     Tobacco Use Treatment Provided or Offered at Discharge and 
Tobacco Use Treatment at Discharge (TOB-3 and TOB-3a, NQF #1656) 
(Proposed for removal in this rule).
     Influenza Immunization (IMM-2, NQF #1659).
     Transition Record with Specified Elements Received by 
Discharged Patients (Discharges from an Inpatient Facility to Home/Self 
Care or Any Other Site of Care) (NQF #0647).
     Timely Transmission of Transition Record (Discharges from 
an Inpatient Facility to Home/Self Care or Any Other Site of Care) (NQF 
#0648).
     Screening for Metabolic Disorders.
    We are not proposing any changes to our quality measure sampling 
policies.
5. Non-Measure Data Collection
    In the FY 2015 IPF PPS final rule (79 FR 45973), we finalized that 
IPFs must submit aggregate population counts for Medicare and non-
Medicare discharges by age group, diagnostic group, and quarter for the 
FY 2017 payment determination and subsequent years. We also finalized 
that IPFs must report the sample size counts (that is, number of 
patients included in the sample) for measures for which sampling is 
performed. Because these data (that is, (1) the aggregate population 
counts for Medicare and non-Medicare discharges by age group, 
diagnostic group, and quarter, as well as (2) sample size count for 
sampled measures) relate to the IPF's entire patient population, rather 
than the IPF's performance on specific measures, we refer to this data 
collectively as ``non-measure data.'' When adopting this requirement we 
expressed our belief that it is vital for IPFs to accurately determine 
and submit this non-measure data to CMS in order for CMS to assess 
IPFs' data reporting completeness for their total population, both 
Medicare and non-Medicare (79 FR 45973). We also stated that in 
addition to helping to better assess the quality and completeness of 
measure data, we expected that this information would improve our 
ability to assess the relevance and impact of potential future 
measures.
    In the FY 2016 IPF PPS final rule (80 FR 46717), we finalized a 
change to the frequency with which we collect this non-measure data, 
such that beginning with the FY 2017 payment determination and 
subsequent years, we require non-measure data to be submitted as an 
aggregate, yearly count rather than by quarter. Therefore, there are 
currently five components to the non-measure data that facilities are 
required to submit on an annual basis: (1) Total annual discharges; (2) 
annual discharges stratified by age; (3) annual discharges stratified 
by diagnostic category; (4) annual discharges stratified by Medicare 
versus non-Medicare payer; (5) the sample size counts for measures for 
which sampling is performed.
    However, the requirement to submit the sample size counts has 
created confusion for some facilities (for example, for facilities that 
used more than one sampling methodology such as applying the global 
sample to some measures and measure specific sampling procedures to 
others). Therefore, in an effort to reduce confusion and information 
collection burden, in line with our Meaningful Measures and Patients 
over Paperwork Initiatives, in this proposed rule we are proposing to 
no longer require facilities to report the sample size counts for 
measures for which sampling is performed (that is, item (5) listed 
above) beginning with the FY 2020 payment determination and subsequent 
years.
    Our data indicate that most facilities avail themselves of the 
global sampling option (as discussed in section VI.J.4 above). We 
believe that for most facilities which use sampling, the size of the 
global sample can be compiled by other means, since information on the 
global sample size can still be inferred from the denominator values 
that are

[[Page 21127]]

already reported as part of measure data submission. This is because 
for measures in which the denominator represents the entire patient 
population (except for any denominator exclusions) the denominator is a 
good approximation for the global sample size count. Any denominator 
exclusions represent only a small proportion of the patient population 
and would not significantly affect the global sample size 
approximation. Since the global sample applies to all measures for 
which sampling is performed, the global sample size is consistent 
across all measures for which sampling is performed, and therefore, can 
be inferred from the denominator of any measure for which the 
denominator represents the entire patient population (such as the 
Transition Record with Specified Elements Received by Discharged 
Patients (Discharges from an Inpatient Facility to Home/Self Care or 
Any Other Site of Care) (NQF #0647) measure). We note that this 
proposal does not in any way change or affect our requirements 
concerning quality measure sampling outlined in section VI.J.4 above 
and would only change the information that IPFs report to CMS on the 
size of samples used.
    Therefore, we are proposing to no longer require facilities to 
report sample size counts for measures for which sampling is performed 
as discussed above for the FY 2020 payment determination and subsequent 
years.
    We solicit public comments on this proposal.
6. Data Accuracy and Completeness Acknowledgement (DACA) Requirements
    We refer readers to the FY 2013 IPPS/LTCH PPS final rule (77 FR 
53658) for our previously finalized DACA requirements. In this proposed 
rule, we are not proposing any changes to the DACA requirements.

K. Reconsideration and Appeals Procedures

    We refer readers to the FY 2013 IPPS/LTCH PPS final rule (77 FR 
53658 through 53659) and the FY 2014 IPPS/LTCH PPS final rule (78 FR 
50903) for our previously finalized reconsideration and appeals 
procedures. In this proposed rule, we are not proposing any changes to 
these procedures.

L. Extraordinary Circumstances Exceptions (ECE) Policy

    We refer readers to the FY 2013 IPPS/LTCH PPS final rule (77 FR 
53659 through 53660), the FY 2014 IPPS/LTCH PPS final rule (78 FR 
50903), the FY 2015 IPF PPS final rule (79 FR 45978), and the FY 2018 
IPPS/LTCH PPS final rule (82 FR 38473 through 38474) for our previously 
finalized ECE policies. In this proposed rule, we are not proposing any 
changes to these policies.

VII. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995 (PRA), we are required to 
publish a 60-day notice in the Federal Register and solicit public 
comment before a collection of information requirement is submitted to 
the Office of Management and Budget (OMB) for review and approval.
    To fairly evaluate whether an information collection should be 
approved by OMB, PRA section 3506(c)(2)(A) requires that we solicit 
comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our burden estimates.
     The quality, utility, and clarity of the information to be 
collected.
     Our effort to minimize the information collection burden 
on the affected public, including the use of automated collection 
techniques.
    We are soliciting public comment on each of the section 
3506(c)(2)(A)-required issues for the following information collection 
requirements (ICRs).

A. Collection of Information Requirements for the IPFQR Program

1. Wage Estimates
    Consistent with the FY 2017 IPPS/LTCH PPS final rule (81 FR 57265 
through 57266) and our FY 2016 IPF PPS final rule (80 FR 46720), to 
derive average costs, we used data from the United States Bureau of 
Labor Statistics (BLS) National Occupational Employment and Wage 
Estimates for all salary estimates (in this case the May 2016 
report).\12\ The BLS is ``the principal Federal agency responsible for 
measuring labor market activity, working conditions, and price changes 
in the economy.'' \13\ Acting as an independent agency, the BLS 
provides objective information for not only the government, but also 
for the public. The BLS describes Medical Records and Health 
Information Technicians as those responsible for organizing and 
managing health information data. We believe it is reasonable to assume 
that these individuals would be tasked with abstracting clinical data 
for these measures. The most recent data from the BLS reflects a median 
hourly wage of $18.29 for a Medical Records and Health Information 
Technician.\14\ We note that we have already incorporated this updated 
wage data into other quality reporting programs, for example the 
Hospital Inpatient Quality Reporting (IQR) Program uses this wage to 
calculate its burden estimates (82 FR 38501). Therefore, we are 
updating our wage estimate to reflect this hourly wage for the IPFQR 
Program.
---------------------------------------------------------------------------

    \12\ http://www.bls.gov/oes/current/oes_nat.htm.
    \13\ http://www.bls.gov/bls/infohome.htm.
    \14\ https://www.bls.gov/oes/current/oes292071.htm.
---------------------------------------------------------------------------

    Table 9 presents the median hourly wage, the cost of fringe 
benefits and overhead (calculated at 100 percent of salary), and the 
adjusted hourly wage.

                          Table 9--National Occupational Employment and Wage Estimates
----------------------------------------------------------------------------------------------------------------
                                                                                Fringe benefits      Adjusted
              Occupation title                Occupation code   Median hourly     and overhead   hourly wage  ($/
                                                                 wage  ($/hr)        ($/hr)            hr)
----------------------------------------------------------------------------------------------------------------
Medical Records and Health Information               29-2071           $18.29           $18.29           $36.58
 Technician.................................
----------------------------------------------------------------------------------------------------------------

    Under OMB Circular A-76, in calculating direct labor, agencies 
should not only include salaries and wages, but also ``other 
entitlements'' such as fringe benefits.\15\ As indicated in Table 9 and 
consistent with our past approach, we have chosen to calculate the cost 
of overhead at 100 percent of the median hourly wage (81 FR 57266). 
This is necessarily a rough adjustment, both because fringe benefits 
and overhead costs vary significantly from employer to employer, and 
methods of estimating these costs vary widely from study to study. 
Nonetheless, there is no practical

[[Page 21128]]

alternative and we believe that doubling the hourly wage to estimate 
total cost is a reasonably accurate estimation method.
---------------------------------------------------------------------------

    \15\ http://www.whitehouse.gov/omb/circulars_a076_a76_incl_tech_correction.
---------------------------------------------------------------------------

2. Proposed ICRs Regarding the IPFQR Program
    For a detailed discussion of the information collection burden for 
the program requirements that we have previously adopted, we refer 
readers to the currently approved burden estimates under the OMB 
control number 0938-1171 (CMS-10432) and the following rules:
     The FY 2013 IPPS/LTCH PPS final rule (77 FR 53673);
     The FY 2014 IPPS/LTCH PPS final rule (78 FR 50964);
     The FY 2015 IPF PPS final rule (79 FR 45978 through 
45980);
     The FY 2016 IPF PPS final rule (80 FR 46720 through 
46721);
     The FY 2017 IPPS/LTCH PPS final rule (81 FR 57265 through 
57266); and
     The FY 2018 IPPS/LTCH PPS final rule (82 FR 38507 through 
38508).
    The following requirements and burden estimates will be submitted 
to OMB for approval under control number 0938-1171 (CMS-10432). We are 
soliciting public comments for the information collection in its 
entirety, that is, both for this rule's proposed changes and for the 
requirements and burden that are currently approved by OMB under the 
0938-1171 control number.
    We discuss only the changes in burden resulting from the provisions 
in this proposed rule. In section VI. of this proposed rule, we propose 
provisions that impact the FY 2020 payment determination. All of these 
proposals apply to data collected in CY 2018 and reported in FY 2019. 
For purposes of calculating burden, we will attribute the costs 
associated with the proposals to the FY in which these costs begin; for 
the purposes of all of the provisions in this proposed rule, that year 
is FY 2018.
a. Estimated Change in Information Collection Burden Due to Proposed 
Adoption of a New Measure Removal Factor
    In section VI.F.1. of this preamble, we proposed to adopt a new 
measure removal factor, ``the costs associated with a measure outweigh 
the benefit of its continued use in the program.'' As discussed in the 
FY 2018 IPPS/LTCH PPS final rule (82 FR 38507 through 38508), the 
adoption of measure removal or retention factors does not affect the 
data submission requirements for IPFs. These factors are intended to 
improve transparency of our measure review and evaluation process, and 
have no effect on the data collection or submission requirements for 
IPFs. Therefore, we do not believe there will be any change of burden 
associated with the proposal to adopt the new measure removal factor.
b. Estimated Change in Information Collection Burden Due to Proposed 
Removal of Eight Measures
    In section VI.F.2. of this preamble, we are proposing to remove the 
following eight measures for FY 2020 payment determination and 
subsequent years:
     Influenza Vaccination Coverage Among Healthcare Personnel 
(NQF #0431);
     SUB-1--Alcohol Use Screening (NQF #1661);
     Assessment of Patient Experience of Care;
     Use of an Electronic Health Record;
     TOB-1--Tobacco Use Screening (NQF #1651);
     Hospital-Based Inpatient Psychiatric Services (HBIPS)-2--
Hours of Physical Restraint Use (NQF #0640);
     HBIPS-3--Hours of Seclusion Use (NQF #0641); and
     TOB-3--Tobacco Use Treatment Provided or Offered at 
Discharge and the subset measure TOB-3a Tobacco Use Treatment at 
Discharge (NQF #1656).
    For the FY 2020 payment determination, CY 2018 data would be 
reported during the summer of CY 2019. Therefore, for the FY 2020 
payment determination proposals, we are correlating the burden 
reduction to the FY 2018 burden calculation. We believe that 
approximately 1,734 \16\ IPFs will participate in the IPFQR Program for 
requirements occurring in FY 2018 and subsequent years. Based on data 
from CY 2017, we believe that each IPF will submit measure data based 
on approximately 1,213 \17\ discharges per year.
---------------------------------------------------------------------------

    \16\ In the FY 2017 IPPS/LTCH PPS final rule we estimated 1,684 
IPFs and are adjusting that estimate by +50 to account for more 
recent data.
    \17\ In the FY 2017 IPPS/LTCH PPS final rule we estimated 848 
discharges per year and are adjusting that estimate by +365 to 
account for more recent data.
---------------------------------------------------------------------------

i. Chart-Abstracted Measures Estimated Information Collection Burden
    We have previously estimated that the reporting burden for chart-
abstracted measures is 15 minutes (0.25 hours) per measure per case (81 
FR 57265). We continue to use that time estimate to calculate the 
burden pertaining to this proposed rule. Of the measures we are 
proposing to remove from the program, the following five are chart-
abstracted:
     Hours of Physical Restraint Use (HBIPS-2, NQF #0640).
     Hours of Seclusion Use (HBIPS-3, NQF #0641).
     Alcohol Use Screening (SUB-1, NQF #1661).
     Tobacco Use Screening (TOB-1, NQF #1651).
     Tobacco Use Treatment Provided or Offered at Discharge and 
Tobacco Use Treatment at Discharge (TOB-3 and TOB-3a, NQF #1656).
    The first two measures, Hours of Seclusion Use (NQF #0641) and 
Hours of Physical Restraint Use (NQF #0640) require abstraction for all 
discharges. We estimate that removing these two measures would result 
in a decrease in burden of 606.5 hours per IPF (2 measures x 1,213 
cases/measure x 0.25 hours/case) or 1,051,671 hours across all IPFs 
(606.5 hours/IPF x 1,734 IPF). The decrease in costs is approximately 
$22,185.77 per IPF ($36.58/hour x 606.5 hours) or $38,470,125.18 across 
all IPFs ($22,185.77/IPF x 1,734 IPFs).
    The remaining three measures, Alcohol Use Screening (NQF #1661), 
Tobacco Use Screening (NQF #1651), and Tobacco Use Treatment Provided 
or Offered at Discharge and Tobacco Use Treatment at Discharge (NQF 
#1656), fall under our previously finalized ``global sample,'' (80 FR 
46717 through 46718). Under the global sample, we allow facilities to 
apply the same sampling methodology to all measures eligible for 
sampling. In the FY 2016 IPF PPS final rule (80 FR 46718), we finalized 
that facilities with between 609 and 3,056 cases and choose to 
participate in the global sample would be required to report data for 
609 cases. Because most facilities choose to apply the global sample, 
rather than abstracting data for all patients or applying measure 
specific sampling methodologies, we believe that the number of cases 
under the global sample is a good approximation of facility burden 
associated with these measures. Therefore, for the average IPF 
discharge rate of 1,213 discharges, the global sample requires 
abstraction of 609 records. We estimate that removing these three 
measures would result in a decrease in burden of 456.75 hours per IPF 
(3 measures x 609 cases/measure x 0.25 hours/case) or 792,004.5 hours 
across all IPFs (456.75 hours/IPF x 1,734 IPFs). The decrease in costs 
is approximately $16,707.92 per IPF ($36.58/hour x 456.75 hours) or 
$28,971,524.61 across all IPFs ($16,707.92/IPF x 1,734 IPFs).
ii. NHSN Measure Estimated Information Collection Burden
    We have previously estimated that the reporting burden for the 
Influenza Vaccination Coverage Among

[[Page 21129]]

Healthcare Personnel (NQF #0431) is 15 minutes (0.25 hours) per measure 
per case and that the average IPF will report on 40 cases per year (79 
FR 45979). Therefore, we estimate that removing this measure will 
result in a decrease in burden of 10 hours per IPF (40 cases x 0.25 
hours/case) or 17,340 hours across all IPFs (40 cases x 0.25 hours/case 
x 1,734 IPFs). The decrease in costs is approximately $365.80 per IPF 
(10 hours x $36.58/hour) or $634,297.20 across all IPFs ($365.80/IPF x 
1,734 IPFs).
    We also anticipate cost reduction unrelated to the information 
collection burden associated with these proposals, and refer readers to 
section IX.C.5.b for a discussion of these costs.
iii. Attestation Measures Estimated Information Collection Burden
    We have previously estimated that the Assessment of Patient 
Experience of Care measure and the Use of an Electronic Health Record 
(EHR) measure have no measurable information collection burden because 
both of these measures require only attestation (79 FR 45979). 
Therefore, we do not anticipate a reduction in IPF information 
collection burden associated with the removal of these measures. 
However, we anticipate cost reduction unrelated to the information 
collection burden associated with these proposals, and refer readers to 
section IX.C.5.b for a discussion.
    The information collection burden reduction associated with the 
proposed removal of these eight measures would be 1,861,016 hours at a 
cost of $68,075,947 (total) or $39,259 (per IPF) as summarized in Table 
10.

   Table 10--Total Information Collection Burden Reduction Associated With Proposed Removal of Eight Measures
----------------------------------------------------------------------------------------------------------------
                                                  Hourly burden   Total hourly     Cost burden      Total cost
                   Measure(s)                     reduction per      burden       reduction per       burden
                                                       IPF          reduction          IPF          reduction
----------------------------------------------------------------------------------------------------------------
 (1) Hours of Seclusion Use (NQF #0641)           606.5    1,051,671.00      $22,185.77   $38,470,125.18
 (2) Hours of Physical Restraint Use
 (NQF #0640).
 (3) Alcohol Use Screening (NQF #1661).           606.5    1,051,671.00       22,185.77    38,470,125.18
 (4) Tobacco Use Screening (NQF #1651).
 (5) Tobacco Use Treatment Provided or
 Offered at Discharge and Tobacco Use Treatment
 at Discharge (NQF #1656).
(6) Influenza Vaccination Coverage Among                     10          17,340          365.80       634,297.20
 Healthcare Personnel (NQF #0431)..............
 (7) Remove Assessment of Patient                     0               0               0                0
 Experience of Care............................
 (8) Use of an Electronic Health Record
 (EHR)
                                                ----------------------------------------------------------------
    Total Burden Reduction.....................        1,073.25     1,861,015.5       39,259.49    68,075,946.99
----------------------------------------------------------------------------------------------------------------

    We solicit public comments on the burden reduction estimate of 
$68,075,946.99 across all IPFs related to our proposals to remove eight 
measures from the IPFQR program.
c. Estimated Change in Information Collection Burden Due to Proposed 
Removal of Sample Size Count Requirement
    In section VI.J.4. of this proposed rule, we are proposing to 
remove the requirement to report the sample size count for measures for 
which sampling is performed beginning with the FY 2020 payment 
determination and subsequent years (that is, data collected during CY 
2018 and reported during summer of CY 2019). Previously, we estimated 
that the total burden of reporting non-measure data to be 2.5 hours per 
IPF (79 FR 45979 through 45980). As discussed in section VI.J.5, the 
non-measure data encompasses five reporting requirements: (1) Total 
annual discharges; (2) annual discharges stratified by age; (3) annual 
discharges stratified by diagnostic category; (4) annual discharges 
stratified by Medicare versus non-Medicare payer; and (5) the sample 
size count for measures for which sampling is performed.
    We estimate that, because the sample size count is one-fifth of the 
non-measure data collection, removing this requirement will reduce the 
non-measure collection burden by one-fifth, (that is, 20 percent) or 
0.5 hours per facility (0.20 x 2.5 hours). This results in a reduction 
of information collection burden of 867 hours across all IPFs (0.5 
hours per IPF x 1,734 IPFs). The decrease in costs is approximately 
$18.29 per IPF (0.5 hours x $36.58/hour) or $31,714.86 across all IPFs 
($18.29 per IPF x 1,734 IPFs).
    We solicit public comments on the information collection burden 
reduction estimate of 867 hours and $31,714.86 across all IPFs related 
to our proposal to no longer require facilities to report sample size 
counts beginning with the FY 2020 payment determination.
d. Summary of Annual Information Collection Burden Estimates for 
Proposed Requirements
    If our proposals to adopt a new measure removal factor, to remove 
eight measures from the IPFQR Program, and to no longer require IPFs to 
the size of the global sample if they apply the global sampling 
methodology are finalized, we estimate that burden would be reduced by 
a total of 1,861,882.50 hours or $68,107,661.85, as described in Table 
11.

                                    Table 11--Proposed Reduction in Total IPFQR Program Information Collection Burden
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                          Labor cost of
 Preamble section(s)    Proposed action    Respondents       Responses (per      Burden per response     Total annual     reporting ($/   Total cost ($)
                                                              respondent)             (hours) *         burden (hours)         hr)
--------------------------------------------------------------------------------------------------------------------------------------------------------
VI.F.2...............  Remove Hours of            1,734  1,213 per measure....  0.25.................  1,051,671.00 (2            36.58   $38,470,125.18
                        Seclusion Use                                                                   measures x
                        and Hours of                                                                    1,213 cases x
                        Physical                                                                        0.25 hr/case x
                        Restraint Use.                                                                  1,734 IPFs).

[[Page 21130]]

 
VI.F.2...............  Remove Alcohol             1,734  609 per measure......  0.25.................  792,004.50 (3              36.58    28,971,524.61
                        Use Screening,                                                                  measures x 609
                        Tobacco Use                                                                     cases x 0.25 hr/
                        Screening, and                                                                  case x 1,734
                        Tobacco Use                                                                     IPFs).
                        Treatment
                        Provided or
                        Offered at
                        Discharge and
                        Tobacco Use
                        Treatment at
                        Discharge.
VI.F.2...............  Remove Influenza           1,734  40...................  0.25.................  17,340 (1                  36.58       634,297.20
                        Vaccination                                                                     measure x 40
                        Coverage Among                                                                  cases x 0.25 hr/
                        Healthcare                                                                      case x 1,734
                        Personnel.                                                                      IPFs).
VI.F.2...............  Remove                     1,734  1....................  0....................  0...............           36.58                0
                        Assessment of
                        Patient
                        Experience of
                        Care and Use of
                        an Electronic
                        Health Record
                        (EHR).
--------------------------------------------------------------------------------------------------------------------------------------------------------
  Subtotal (removing 8 measures).......           1,734  4,294................  Varies...............  1,861,016.......           36.58    68,075,946.99
--------------------------------------------------------------------------------------------------------------------------------------------------------
VI.F.1...............  Adopt a new                  N/A  N/A..................  N/A..................  0...............             N/A                0
                        measure removal
                        factor.
VI.J.4...............  No longer                  1,734  1....................  0.5..................  867.............           36.58        31,714.86
                        require
                        reporting of
                        sample size
                        counts.
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Total..............................            1734  4,295................  Varies...............  1,861,882.50....           36.58    68,107,661.85
--------------------------------------------------------------------------------------------------------------------------------------------------------

3. Submission of PRA-Related Comments
    We have submitted a copy of this proposed rule to OMB for its 
review of the rule's information collection and recordkeeping 
requirements. The requirements are not effective until they have been 
approved by OMB. However, we note that the currently approved 
information collection expires July 31, 2019.
    We solicit public comments on these information collection 
requirements. If you wish to comment, identify the rule (CMS-1690-P) 
and, where applicable, the preamble section, and the ICR section. See 
the DATES and ADDRESSES sections of this proposed rule for the comment 
due date and for additional instructions.

VIII. Response to Comments

    Because of the large number of public comments we normally receive 
on Federal Register documents, we are not able to acknowledge or 
respond to them individually. We will consider all comments we receive 
by the date and time specified in the DATES section of this preamble, 
and, when we proceed with a subsequent document, we will respond to the 
comments in the preamble to that document.

IX. Regulatory Impact Analysis

A. Statement of Need

    This rule proposes updates to the prospective payment rates for 
Medicare inpatient hospital services provided by IPFs for discharges 
occurring during FY 2019 (October 1, 2018 through September 30, 2019). 
We propose to apply the 2012-based IPF market basket increase of 2.8 
percent, less the productivity adjustment of 0.8 percentage point as 
required by 1886(s)(2)(A)(i) of the Act, and further reduced by 0.75 
percentage point as required by sections 1886(s)(2)(A)(ii) and 
1886(s)(3)(E) of the Act, for a proposed total FY 2019 payment rate 
update of 1.25 percent. In this proposed rule, we are proposing updates 
to the IPF labor-related share and updating the IPF wage index for FY 
2019. We are also proposing minor technical corrections to three IPF 
regulations, and proposing updates to the IPF Quality Reporting 
Program. Finally, we have included a Request for Information on 
Promoting Interoperability and Electronic Healthcare Information 
Exchange through Possible Revisions to the CMS Patient Health and 
Safety Requirements for Hospitals and Other Medicare- and Medicaid-
Participating Providers and Suppliers.

B. Overall Impact

    We have examined the impacts of this proposed rule as required by 
Executive Order 12866 on Regulatory Planning and Review (September 30, 
1993), Executive Order 13563 on Improving Regulation and Regulatory 
Review (January 18, 2011), the Regulatory Flexibility Act (RFA) 
(September 19, 1980, Pub. L. 96 354), section 1102(b) of the Social 
Security Act, section 202 of the Unfunded Mandates Reform Act of 1995 
(March 22, 1995; Pub. L. 104-4), Executive Order 13132 on Federalism 
(August 4, 1999), the Congressional Review Act (5 U.S.C. 804(2)) and 
Executive Order 13771 on Reducing Regulation and Controlling Regulatory 
Costs (January 30, 2017).
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Section 
3(f) of Executive Order 12866 defines a ``significant regulatory 
action'' as an action that is likely to result in a rule: (1) Having an 
annual effect on the economy of $100 million or more in any 1 year, or 
adversely and materially affecting a sector of the economy, 
productivity, competition,

[[Page 21131]]

jobs, the environment, public health or safety, or state, local or 
tribal governments or communities (also referred to as ``economically 
significant''); (2) creating a serious inconsistency or otherwise 
interfering with an action taken or planned by another agency; (3) 
materially altering the budgetary impacts of entitlement grants, user 
fees, or loan programs or the rights and obligations of recipients 
thereof; or (4) raising novel legal or policy issues arising out of 
legal mandates, the President's priorities, or the principles set forth 
in the Executive Order.
    A regulatory impact analysis (RIA) must be prepared for major rules 
with economically significant effects ($100 million or more in any 1 
year). This proposed rule is not economically significant under 
Executive Order 12866.
    We estimate that the total impact of these proposed changes for FY 
2019 payments compared to FY 2018 payments will be a net increase of 
approximately $50 million. This reflects a $60 million increase from 
the update to the payment rates ($plus;$130 million from the first 
quarter 2018 IGI forecast of the 2012-based IPF market basket of 2.8 
percent, -$40 million for the productivity adjustment of 0.8 percentage 
point, and -$30 million for the other adjustment of 0.75 percentage 
point), as well as a $10 million decrease as a result of the update to 
the outlier threshold amount. Outlier payments are estimated to 
decrease from 2.27 percent in FY 2018 to 2.00 percent of total 
estimated IPF payments in FY 2019. We also estimate a total decrease in 
burden of 1,073.75 hours per IPF or 1,861,882.5 hours across all IPFs, 
resulting in a total decrease in financial burden of $39,277.78 per IPF 
or $68,107,661.85 across all IPFs.

C. Anticipated Effects

    In this section, we discuss the historical background of the IPF 
PPS and the impact of this proposed rule on the Federal Medicare budget 
and on IPFs.
1. Budgetary Impact
    As discussed in the November 2004 and RY 2007 IPF PPS final rules, 
we applied a budget neutrality factor to the federal per diem base rate 
and ECT payment per treatment to ensure that total estimated payments 
under the IPF PPS in the implementation period would equal the amount 
that would have been paid if the IPF PPS had not been implemented. The 
budget neutrality factor includes the following components: outlier 
adjustment, stop-loss adjustment, and the behavioral offset. As 
discussed in the RY 2009 IPF PPS notice (73 FR 25711), the stop-loss 
adjustment is no longer applicable under the IPF PPS.
    As discussed in section III.D.1 of this proposed rule, we are using 
the wage index and labor-related share in a budget neutral manner by 
applying a wage index budget neutrality factor to the federal per diem 
base rate and ECT payment per treatment. Therefore, the budgetary 
impact to the Medicare program of this proposed rule will be due to the 
market basket update for FY 2019 of 2.8 percent (see section III.A.2 of 
this proposed rule) less the productivity adjustment of 0.8 percentage 
point required by section 1886(s)(2)(A)(i) of the Act; further reduced 
by the ``other adjustment'' of 0.75 percentage point under sections 
1886(s)(2)(A)(ii) and 1886(s)(3)(E) of the Act; and the update to the 
outlier fixed dollar loss threshold amount.
    We estimate that the FY 2019 impact will be a net increase of $50 
million in payments to IPF providers. This reflects an estimated $60 
million increase from the update to the payment rates and a $10 million 
decrease due to the update to the outlier threshold amount to set total 
estimated outlier payments at 2.0 percent of total estimated payments 
in FY 2019. This estimate does not include the implementation of the 
required 2.0 percentage point reduction of the market basket increase 
factor for any IPF that fails to meet the IPF quality reporting 
requirements (as discussed in section VI.A. of this proposed rule).
    The RFA requires agencies to analyze options for regulatory relief 
of small entities if a rule has a significant impact on a substantial 
number of small entities. For purposes of the RFA, small entities 
include small businesses, nonprofit organizations, and small 
governmental jurisdictions. Most IPFs and most other providers and 
suppliers are small entities, either by nonprofit status or having 
revenues of $7.5 million to $38.5 million or less in any 1 year, 
depending on industry classification (for details, refer to the SBA 
Small Business Size Standards found at http://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf). Individuals and states 
are not included in the definition of a small entity.
    Because we lack data on individual hospital receipts, we cannot 
determine the number of small proprietary IPFs or the proportion of 
IPFs' revenue derived from Medicare payments. Therefore, we assume that 
all IPFs are considered small entities.
    The Department of Health and Human Services generally uses a 
revenue impact of 3 to 5 percent as a significance threshold under the 
RFA. As shown in Table 12, we estimate that the overall revenue impact 
of this proposed rule on all IPFs is to increase estimated Medicare 
payments by approximately 0.98 percent. As a result, since the 
estimated impact of this proposed rule is a net increase in revenue 
across almost all categories of IPFs, the Secretary has determined that 
this proposed rule will have a positive revenue impact on a substantial 
number of small entities.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a rule may have a significant impact on 
the operations of a substantial number of small rural hospitals. This 
analysis must conform to the provisions of section 603 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside of a metropolitan 
statistical area and has fewer than 100 beds. As discussed in section 
IX.C.1. of this proposed rule, the rates and policies set forth in this 
proposed rule will not have an adverse impact on the rural hospitals 
based on the data of the 272 rural excluded psychiatric units and 67 
rural psychiatric hospitals in our database of 1,636 IPFs for which 
data were available. Therefore, the Secretary has determined that this 
proposed rule will not have a significant impact on the operations of a 
substantial number of small rural hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule whose mandates require spending in any 1 year of $100 
million in 1995 dollars, updated annually for inflation. Currently, 
that threshold is approximately $148 million. This proposed rule does 
not impose spending costs on state, local, or tribal governments in the 
aggregate, or by the private sector of $148 million or more.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on state 
and local governments, preempts state law, or otherwise has Federalism 
implications. This proposed rule will not have a substantial effect on 
state and local governments.

[[Page 21132]]

2. Impact on Providers
    To show the impact on providers of the changes to the IPF PPS 
discussed in this proposed rule, we compare estimated payments under 
the IPF PPS rates and factors for FY 2019 versus those under FY 2018. 
We determined the percent change of estimated FY 2019 IPF PPS payments 
compared to FY 2018 IPF PPS payments for each category of IPFs. In 
addition, for each category of IPFs, we have included the estimated 
percent change in payments resulting from the update to the outlier 
fixed dollar loss threshold amount; the updated wage index data 
including the updated labor-related share; and the market basket update 
for FY 2019, as adjusted by the productivity adjustment according to 
section 1886(s)(2)(A)(i) of the Act, and the ``other adjustment'' 
according to sections 1886(s)(2)(A)(ii) and 1886(s)(3)(E) of the Act.
    To illustrate the impacts of the FY 2019 changes in proposed rule, 
our analysis begins with a FY 2018 baseline simulation model based on 
FY 2017 IPF payments inflated to the midpoint of FY 2018 using IHS 
Global Inc.'s most recent forecast of the market basket update (see 
section III.A.2. of this proposed rule); the estimated outlier payments 
in FY 2018; the FY 2017 pre-floor, pre-reclassified hospital wage 
index; the FY 2018 labor-related share; and the FY 2018 percentage 
amount of the rural adjustment. During the simulation, total outlier 
payments are maintained at 2 percent of total estimated IPF PPS 
payments.
    Each of the following changes is added incrementally to this 
baseline model in order for us to isolate the effects of each change:
     The proposed update to the outlier fixed dollar loss 
threshold amount.
     The FY 2018 pre-floor, pre-reclassified hospital wage 
index and the proposed FY 2019 labor-related share.
     The proposed market basket update for FY 2019 of 2.8 
percent less the productivity adjustment of 0.8 percentage point in 
accordance with section 1886(s)(2)(A)(i) of the Act and further reduced 
by the ``other adjustment'' of 0.75 percentage point in accordance with 
sections 1886(s)(2)(A)(ii) and 1886(s)(3)(E) of the Act, for a proposed 
payment rate update of 1.25 percent.
    Our final column comparison in Table 12 illustrates the percent 
change in payments from FY 2018 (that is, October 1, 2017, to September 
30, 2018) to FY 2019 (that is, October 1, 2018, to September 30, 2019) 
including all the changes in this proposed rule.

                                        Table 12--IPF Impacts for FY 2019
                                     [Percent change in columns 3 through 6]
----------------------------------------------------------------------------------------------------------------
                                                                     CBSA wage
        Facility by type             Number of        Outlier        index and    Payment update   Total percent
                                    facilities                      labor share         \1\         change \2\
(1)                                          (2)             (3)             (4)             (5)             (6)
----------------------------------------------------------------------------------------------------------------
All Facilities..................           1,636           -0.27            0.00            1.25            0.98
    Total Urban.................           1,297           -0.27            0.04            1.25            1.02
    Total Rural.................             339           -0.28           -0.26            1.25            0.70
    Urban unit..................             826           -0.40            0.05            1.25            0.90
    Urban hospital..............             471           -0.10            0.03            1.25            1.18
    Rural unit..................             272           -0.36           -0.23            1.25            0.66
    Rural hospital..............              67           -0.08           -0.36            1.25            0.81
By Type of Ownership:
Freestanding IPFs:
    Urban Psychiatric Hospitals:
        Government..............             126           -0.37            0.10            1.25            0.98
        Non-Profit..............              93           -0.10            0.08            1.25            1.23
        For-Profit..............             252           -0.05            0.00            1.25            1.20
    Rural Psychiatric Hospitals:
        Government..............              32           -0.20            0.49            1.25            1.53
        Non-Profit..............              16           -0.10           -0.23            1.25            0.91
        For-Profit..............              19           -0.01           -0.81            1.25            0.43
IPF Units:
Urban:
        Government..............             117           -0.68            0.02            1.25            0.57
        Non-Profit..............             537           -0.38            0.05            1.25            0.91
        For-Profit..............             172           -0.26            0.08            1.25            1.07
    Rural:
        Government..............              71           -0.45           -0.12            1.25            0.68
        Non-Profit..............             144           -0.32           -0.28            1.25            0.64
        For-Profit..............              57           -0.33           -0.22            1.25            0.69
By Teaching Status:
    Non-teaching................           1,444           -0.23            0.03            1.25            1.04
    Less than 10% interns and                111           -0.40           -0.12            1.25            0.72
     residents to beds..........
    10% to 30% interns and                    60           -0.69           -0.12            1.25            0.43
     residents to beds..........
    More than 30% interns and                 21           -0.34           -0.31            1.25            0.60
     residents to beds..........
By Region:
    New England.................             106           -0.28           -0.04            1.25            0.92
    Mid-Atlantic................             234           -0.34            0.05            1.25            0.96
    South Atlantic..............             247           -0.15           -0.05            1.25            1.06
    East North Central..........             271           -0.23           -0.19            1.25            0.82
    East South Central..........             163           -0.30           -0.09            1.25            0.86
    West North Central..........             132           -0.43            0.36            1.25            1.18
    West South Central..........             245           -0.25            0.10            1.25            1.10
    Mountain....................             107           -0.15            0.07            1.25            1.17
    Pacific.....................             131           -0.37            0.01            1.25            0.89

[[Page 21133]]

 
By Bed Size:
    Psychiatric Hospitals
        Beds: 0-24..............              87           -0.16           -0.33            1.25            0.76
        Beds: 25-49.............              77           -0.06            0.03            1.25            1.21
        Beds: 50-75.............              87           -0.25           -0.36            1.25            0.63
        Beds: 76+...............             287           -0.06            0.12            1.25            1.31
    Psychiatric Units
        Beds: 0-24..............             633           -0.43            0.02            1.25            0.84
        Beds: 25-49.............             290           -0.37            0.16            1.25            1.04
        Beds: 50-75.............             115           -0.36           -0.10            1.25            0.78
        Beds: 76+...............              60           -0.39           -0.19            1.25            0.66
----------------------------------------------------------------------------------------------------------------
\1\ This column reflects the payment update impact of the IPF market basket update for FY 2019 of 2.8 percent, a
  0.8 percentage point reduction for the productivity adjustment as required by section 1886(s)(2)(A)(i) of the
  Act, and a 0.75 percentage point reduction in accordance with sections 1886(s)(2)(A)(ii) and 1886(s)(3)(E) of
  the Act.
\2\ Percent changes in estimated payments from FY 2018 to FY 2019 include all of the changes presented in this
  proposed rule. Note, the products of these impacts may be different from the percentage changes shown here due
  to rounding effects.

3. Impact Results
    Table 12 displays the results of our analysis. The table groups 
IPFs into the categories listed here based on characteristics provided 
in the Provider of Services (POS) file, the IPF provider specific file, 
and cost report data from the Healthcare Cost Report Information 
System:
     Facility Type.
     Location.
     Teaching Status Adjustment.
     Census Region.
     Size.
    The top row of the table shows the overall impact on the 1,636 IPFs 
included in this analysis. In column 3, we present the effects of the 
update to the outlier fixed dollar loss threshold amount. We estimate 
that IPF outlier payments as a percentage of total IPF payments are 
2.27 percent in FY 2018. Thus, we are adjusting the outlier threshold 
amount in this proposed rule to set total estimated outlier payments 
equal to 2.00 percent of total payments in FY 2019. The estimated 
change in total IPF payments for FY 2019, therefore, includes an 
approximate 0.27 percent decrease in payments because the outlier 
portion of total payments is expected to decrease from approximately 
2.27 percent to 2.0 percent.
    The overall impact of this outlier adjustment update (as shown in 
column 3 of Table 12), across all hospital groups, is to decrease total 
estimated payments to IPFs by 0.27 percent. The largest decrease in 
payments is estimated to be a 0.69 percent decrease in payments for 
teaching hospitals with 10 to 30 percent interns and residents to beds.
    In column 4, we present the effects of the budget-neutral update to 
the IPF wage index and the Labor-Related Share (LRS). This represents 
the effect of using the most recent wage data available and taking into 
account the updated OMB delineations. That is, the impact represented 
in this column reflects the update from the FY 2018 IPF wage index to 
the proposed FY 2019 IPF wage index, which includes the LRS update from 
75.0 percent in FY 2018 to 74.8 percent in FY 2019. We note that there 
is no projected change in aggregate payments to IPFs, as indicated in 
the first row of column 4, however, there will be distributional 
effects among different categories of IPFs. For example, we estimate 
the largest increase in payments to be 0.49 percent for rural 
government psychiatric hospitals, and the largest decrease in payments 
to be 0.81 percent for for-profit rural psychiatric hospitals.
    In column 5, we present the estimated effects of the proposed 
update to the IPF PPS payment rates of 1.25 percent, which are based on 
the 2012-based IPF market basket update of 2.8 percent, less the 
productivity adjustment of 0.8 percentage point in accordance with 
section 1886(s)(2)(A)(i) of the Act, and further reduced by 0.75 
percentage point in accordance with sections 1886(s)(2)(A)(ii) and 
1886(s)(3)(E) of the Act.
    Finally, column 6 compares our estimates of the total proposed 
changes reflected in this proposed rule for FY 2019 to the estimates 
for FY 2018 (without these changes). The average estimated increase for 
all IPFs is approximately 0.98 percent. This estimated net increase 
includes the effects of the proposed 2.8 percent market basket update 
reduced by the productivity adjustment of 0.8 percentage point, as 
required by section 1886(s)(2)(A)(i) of the Act and further reduced by 
the ``other adjustment'' of 0.75 percentage point, as required by 
sections 1886(s)(2)(A)(ii) and 1886(s)(3)(E) of the Act. It also 
includes the overall estimated 0.27 percent decrease in estimated IPF 
outlier payments as a percent of total payments from the proposed 
update to the outlier fixed dollar loss threshold amount.
    IPF payments are estimated to increase by 1.02 percent in urban 
areas and 0.70 percent in rural areas. Overall, IPFs are estimated to 
experience a net increase in payments as a result of the updates in 
this proposed rule. The largest payment increase is estimated at 1.53 
percent for rural government psychiatric hospitals.
4. Effect on Beneficiaries
    Under the IPF PPS, IPFs will receive payment based on the average 
resources consumed by patients for each day. We do not expect changes 
in the quality of care or access to services for Medicare beneficiaries 
under the FY 2019 IPF PPS, but we continue to expect that paying 
prospectively for IPF services will enhance the efficiency of the 
Medicare program.
5. Effects of Updates to the IPFQR Program
    As discussed in section VI. of this proposed rule and in accordance 
with section 1886(s)(4)(A)(i) of the Act, we will implement a 2 
percentage point

[[Page 21134]]

reduction in the FY 2020 annual update to the standard Federal rate for 
IPFs that have failed to comply with the IPFQR Program requirements for 
FY 2020. In section VI. of this proposed rule, we discuss how the 2 
percentage point reduction will be applied. For FY 2018, of the 1,758 
IPFs eligible for the IPFQR Program, 59 IPFs (3.4 percent) did not 
receive the full market basket update for failure to meet program 
requirements; of those 59, 24 chose not to participate in the program. 
We anticipate that even fewer IPFs would receive the reduction for FY 
2020 as IPFs become more familiar with the requirements. Thus, we 
estimate that the policy to apply a 2 percentage point reduction to the 
annual update for the IPFs that have failed to comply with IPFQR 
Program requirements will have a negligible impact on overall IPF 
payments for FY 2020.
a. Effects Related to Information Collection Burden
    Based on the proposals made in this rule, we estimate the total 
decrease in information collection burden to be 1,073.75 hours per IPF 
or 1,861,882.5 hours across all IPFs, resulting in a total decrease in 
financial burden of $39,277.78 per IPF or $68,107,661.85 across all 
IPFs. As discussed in section VII. of this proposed rule, we will 
attribute the savings associated with the proposals to the year in 
which these savings begin; for the purposes of all the proposals in 
this proposed rule, that year is FY 2018. Further information on these 
estimates can be found in section VII. of this proposed rule.
b. Effects other than Burden related to Information Collection
    As stated in section VI.F.1.a and VII.A of the preamble of this 
rule, we anticipate that in addition to the reduction in information 
collection burden discussed above, there will be unrelated cost 
reduction associated with some of our proposals. One example of this 
cost reduction is that IPFs will no longer have to register with and 
maintain accounts with NHSN. Because of the administrative complexity 
of NHSN participation, we believe this will be a substantial reduction 
in costs. Furthermore, we believe that costs related to reviewing and 
tracking measure information in feedback reports will be reduced.
    In addition to reducing costs to providers, we believe that our 
proposed policies may simplify use of IPFQR Program data for 
beneficiaries. For example, by no longer reporting data on both the 
Transition Record with Specified Elements Received by Discharged 
Patients (Discharges from an Inpatient Facility to Home/Self Care or 
Any Other Site of Care) (NQF #0647) and the Tobacco Use Treatment 
Provided or Offered at Discharge and Tobacco Use Treatment at Discharge 
(NQF #1656), beneficiaries will still be able to identify IPFs that 
provide high quality discharge information with less data to analyze 
and evaluate.
    Finally, we believe that by no longer maintaining data submission 
mechanisms, public reporting infrastructure, and program materials for 
measures which are no longer providing significant benefit, we will be 
able to better utilize CMS's resources to support quality reporting and 
quality improvement initiatives among IPFs.
    We intend to closely monitor the effects of this quality reporting 
program on IPFs and help facilitate successful reporting outcomes 
through ongoing stakeholder education, national trainings, and a 
technical help desk.
6. Regulatory Review Costs
    If regulations impose administrative costs on private entities, 
such as the time needed to read and interpret this proposed rule, we 
should estimate the cost associated with regulatory review. Due to the 
uncertainty involved with accurately quantifying the number of entities 
that will review the proposed rule, we assume that the total number of 
unique commenters on the most recent IPF proposed rule from FY 2016 
will be the number of reviewers of this proposed rule. We acknowledge 
that this assumption may understate or overstate the costs of reviewing 
this proposed rule. It is possible that not all commenters reviewed the 
FY 2016 IPF proposed rule in detail, and it is also possible that some 
reviewers chose not to comment on that proposed rule. For these reasons 
we thought that the number of past commenters would be a fair estimate 
of the number of reviewers of this proposed rule. We welcome any 
comments on the approach in estimating the number of entities which 
will review this proposed rule.
    We also recognize that different types of entities are in many 
cases affected by mutually exclusive sections of this proposed rule; 
therefore, for the purposes of our estimate, we assume that each 
reviewer reads approximately 50 percent of the proposed rule. We 
solicit public comments on this assumption.
    Using the mean (average) wage information from the BLS for medical 
and health service managers (Code 11-9111), we estimate that the cost 
of reviewing this proposed rule is $105.16 per hour, including overhead 
and fringe benefits (https://www.bls.gov/oes/2016/may/oes_nat.htm). 
Assuming an average reading speed of 250 words per minute, we estimate 
that it would take approximately 1.10 hours for the staff to review 
half of this proposed rule. For each IPF that reviews the proposed 
rule, the estimated cost is $115.68 (1.10 hours x $105.16). Therefore, 
we estimate that the total cost of reviewing this proposed rule is 
$8,791.68 ($115.68 x 76 reviewers).

D. Alternatives Considered

    The statute does not specify an update strategy for the IPF PPS and 
is broadly written to give the Secretary discretion in establishing an 
update methodology. Therefore, we are updating the IPF PPS using the 
methodology published in the November 2004 IPF PPS final rule; applying 
the proposed FY 2019 2012-based IPF PPS market basket update of 2.8 
percent, reduced by the statutorily required multifactor productivity 
adjustment of 0.8 percentage point and the other adjustment of 0.75 
percentage point, along with the proposed wage index budget neutrality 
adjustment to update the payment rates; proposing a FY 2019 IPF wage 
index which is fully based upon the latest OMB CBSA designations; and 
proposing changes to the IPF Quality Reporting Program.

E. Accounting Statement

    As required by OMB Circular A-4 (available at www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A4/a-4.pdf), in Table 13, we 
have prepared an accounting statement showing the classification of the 
expenditures associated with the proposed updates to the IPF wage index 
and payment rates in this proposed rule. Table 13 provides our best 
estimate of the increase in Medicare payments under the IPF PPS as a 
result of the changes presented in this proposed rule and based on the 
data for 1,636 IPFs in our database.

[[Page 21135]]



Table 13--Accounting Statement: Classification of Estimated Expenditures
------------------------------------------------------------------------
 
------------------------------------------------------------------------
  Change in Estimated Impacts from FY 2018 IPF PPS to FY 2019 IPF PPS:
------------------------------------------------------------------------
                Category                              Costs
------------------------------------------------------------------------
Annualized Monetized Costs.............  -$68.1 million.
------------------------------------------------------------------------
                Category                            Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers.........  $50 million.
From Whom to Whom?.....................  Federal Government to IPF
                                          Medicare Providers.
------------------------------------------------------------------------

F. Regulatory Reform Analysis Under Executive Order 13771

    Executive Order 13771, titled Reducing Regulation and Controlling 
Regulatory Costs, was issued on January 30, 2017 and requires that the 
costs associated with significant new regulations ``shall, to the 
extent permitted by law, be offset by the elimination of existing costs 
associated with at least two prior regulations.'' This proposed rule, 
if finalized, is considered an Executive Order 13771 deregulatory 
action. We estimate that this rule generates $59 million in annualized 
cost savings, discounted at 7 percent relative to year 2016, over a 
perpetual time horizon. This $59 million is equal to the estimated 
$68.1 million in annual cost savings which would begin in 2018, 
discounted to 2016 for Executive Order 13771 accounting purposes using 
a 7 percent discount rate. Details on the estimated costs of this rule 
can be found in the preceding and subsequent analyses.

G. Conclusion

    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.

X. Request for Information on Promoting Interoperability and Electronic 
Healthcare Information Exchange Through Possible Revisions to the CMS 
Patient Health and Safety Requirements for Hospitals and Other 
Medicare- and Medicaid-Participating Providers and Suppliers

    Currently, Medicare- and Medicaid-participating providers and 
suppliers are at varying stages of adoption of health information 
technology (health IT). Many hospitals have adopted electronic health 
records (EHRs), and CMS has provided incentive payments to eligible 
hospitals, critical access hospitals (CAHs), and eligible professionals 
who have demonstrated meaningful use of certified EHR technology 
(CEHRT) under the Medicare EHR Incentive Program. As of 2015, 96 
percent of Medicare- and Medicaid-participating non-Federal acute care 
hospitals had adopted certified EHRs with the capability to 
electronically export a summary of clinical care.\18\ While both 
adoption of EHRs and electronic exchange of information have grown 
substantially among hospitals, significant obstacles to exchanging 
electronic health information across the continuum of care persist. 
Routine electronic transfer of information post-discharge has not been 
achieved by providers and suppliers in many localities and regions 
throughout the nation.
---------------------------------------------------------------------------

    \18\ These statistics can be accessed at https://dashboard.healthit.gov/quickstats/pages/FIG-Hospital-EHR-Adoption.php.
---------------------------------------------------------------------------

    CMS is firmly committed to the use of certified health IT and 
interoperable EHR systems for electronic healthcare information 
exchange to effectively help hospitals and other Medicare-and Medicaid-
participating providers and suppliers improve internal care delivery 
practices, support the exchange of important information across care 
team members during transitions of care, and enable reporting of 
electronically specified clinical quality measures (eCQMs). The Office 
of the National Coordinator for Health Information Technology (ONC) 
acts as the principal federal entity charged with coordination of 
nationwide efforts to implement and use health information technology 
and the electronic exchange of health information on behalf of the 
Department of Health and Human Services.
    In 2015, ONC finalized the 2015 Edition health IT certification 
criteria (2015 Edition), the most recent criteria for health IT to be 
certified to under the ONC Health IT Certification Program. The 2015 
Edition facilitates greater interoperability for several clinical 
health information purposes and enables health information exchange 
through new and enhanced certification criteria, standards, and 
implementation specifications. CMS requires eligible hospitals and CAHs 
in the Medicare and Medicaid EHR Incentive Programs and eligible 
clinicians in the Quality Payment Program (QPP) to use EHR technology 
certified to the 2015 Edition beginning in CY 2019.
    In addition, several important initiatives will be implemented over 
the next several years to provide hospitals and other participating 
providers and suppliers with access to robust infrastructure that will 
enable routine electronic exchange of health information. Section 4003 
of the 21st Century Cures Act (Pub. L. 114-255), enacted in 2016, and 
amending section 3000 of the Public Health Service Act (42 U.S.C. 
300jj), requires HHS to take steps to advance the electronic exchange 
of health information and interoperability for participating providers 
and suppliers in various settings across the care continuum. 
Specifically, Congress directed that ONC ``. . .for the purpose of 
ensuring full network-to-network exchange of health information, 
convene public-private and public-public partnerships to build 
consensus and develop or support a trusted exchange framework, 
including a common agreement among health information networks 
nationally.'' In January 2018, ONC released a draft version of its 
proposal for the Trusted Exchange Framework and Common Agreement,\19\ 
which outlines principles and minimum terms and conditions for trusted 
exchange to enable interoperability across disparate health information 
networks (HINs). The Trusted Exchange Framework (TEF) is focused on 
achieving the following four important outcomes in the long-term:
---------------------------------------------------------------------------

    \19\ The draft version of the trusted Exchange Framework may be 
accessed at https://beta.healthit.gov/topic/interoperability/trusted-exchange-framework-and-common-agreement).
---------------------------------------------------------------------------

     Professional care providers, who deliver care across the 
continuum, can access health information about their patients, 
regardless of where the patient received care.
     Patients can find all of their health information from 
across the care continuum, even if they do not remember the name of the 
professional care provider they saw.

[[Page 21136]]

     Professional care providers and health systems, as well as 
public and private health care organizations and public and private 
payer organizations accountable for managing benefits and the health of 
populations, can receive necessary and appropriate information on 
groups of individuals without having to access one record at a time, 
allowing them to analyze population health trends, outcomes, and costs; 
identify at-risk populations; and track progress on quality improvement 
initiatives.
     The health IT community has open and accessible 
application programming interfaces (APIs) to encourage entrepreneurial, 
user-focused innovation that will make health information more 
accessible and improve EHR usability.
    ONC will revise the draft TEF based on public comment and 
ultimately release a final version of the TEF that will subsequently be 
available for adoption by HINs and their participants seeking to 
participate in nationwide health information exchange. The goal for 
stakeholders that participate in, or serve as, a HIN is to ensure that 
participants will have the ability to seamlessly share and receive a 
core set of data from other network participants in accordance with a 
set of permitted purposes and applicable privacy and security 
requirements. Broad adoption of this framework and its associated 
exchange standards is intended to both achieve the outcomes described 
above while creating an environment more conducive to innovation.
    In light of the widespread adoption of EHRs along with the 
increasing availability of health information exchange infrastructure 
predominantly among hospitals, we are interested in hearing from 
stakeholders on how we could use the CMS health and safety standards 
that are required for providers and suppliers participating in the 
Medicare and Medicaid programs (that is, the Conditions of 
Participation (CoPs), Conditions for Coverage (CfCs), and Requirements 
for Participation (RfPs) for Long-Term Care Facilities to further 
advance electronic exchange of information that supports safe, 
effective transitions of care between hospitals and community 
providers. Specifically, CMS might consider revisions to the current 
CMS CoPs for hospitals such as: Requiring that hospitals transferring 
medically necessary information to another facility upon a patient 
transfer or discharge do so electronically; requiring that hospitals 
electronically send required discharge information to a community 
provider via electronic means if possible and if a community provider 
can be identified; and requiring that hospitals make certain 
information available to patients or a specified third-party 
application (for example, required discharge instructions) via 
electronic means if requested.
    On November 3, 2015, we published a proposed rule (80 FR 68126) to 
implement the provisions of the IMPACT Act and to revise the discharge 
planning CoP requirements that hospitals (including Short-Term Acute-
Care Hospitals, Long-Term Care Hospitals (LTCHs), Inpatient 
Rehabilitation Hospitals (IRFs), Inpatient Psychiatric Hospitals 
(IPFs), Children's Hospitals, and Cancer Hospitals), critical access 
hospitals (CAHs), and home health agencies (HHAs) must meet in order to 
participate in the Medicare and Medicaid programs. This proposed rule 
has not been finalized yet. However, several of the proposed 
requirements directly address the issue of communication between 
providers and between providers and patients, as well as the issue of 
interoperability:
     Hospitals and CAHs would be required to transfer certain 
necessary medical information and a copy of the discharge instructions 
and discharge summary to the patient's practitioner, if the 
practitioner is known and has been clearly identified;
     Hospitals and CAHs would be required to send certain 
necessary medical information to the receiving facility/post-acute care 
providers, at the time of discharge; and
     Hospitals, CAHs and HHAs, would need to comply with the 
IMPACT Act requirements that would require hospitals, CAHs, and certain 
post-acute care providers to use data on quality measures and data on 
resource use measures to assist patients during the discharge planning 
process, while taking into account the patient's goals of care and 
treatment preferences.
    We published another proposed rule (81 FR 39448), on June 16, 2016, 
that updated a number of CoP requirements that hospitals and CAH must 
meet in order to participate in the Medicare and Medicaid programs. 
This proposed rule has not been finalized yet. One of the proposed 
hospital CoP revisions in that rule directly addresses the issues of 
communication between providers and patients, patient access to their 
medical records, and interoperability. We proposed that patients have 
the right to access their medical records, upon an oral or written 
request, in the form and format requested by such patients, if it is 
readily producible in such form and format (including in an electronic 
form or format when such medical records are maintained 
electronically); or, if not, in a readable hard copy form or such other 
form and format as agreed to by the facility and the individual, 
including current medical records, within a reasonable time frame. The 
hospital must not frustrate the legitimate efforts of individuals to 
gain access to their own medical records and must actively seek to meet 
these requests as quickly as its record keeping system permits.
    We also published a final rule (81 FR 68688), on October 4, 2016, 
that revised the requirements that LTC facilities must meet to 
participate in the Medicare and Medicaid programs, where we made a 
number of revisions based on the importance of effective communication 
between providers during transitions of care, such as transfers and 
discharges of residents to other facilities or providers, or to home. 
Among these revisions was a requirement that the transferring LTC 
facility must provide all necessary information to the resident's 
receiving provider, whether it is an acute care hospital, a LTC 
hospital, a psychiatric facility, another LTC facility, a hospice, home 
health agency, or another community-based provider or practitioner. We 
specified that necessary information must include the following:
     Contact information of the practitioner responsible for 
the care of the resident;
     Resident representative information including contact 
information;
     Advance directive information;
     Special instructions or precautions for ongoing care;
     The resident's comprehensive care plan goals; and
     All other necessary information, including a copy of the 
resident's discharge or transfer summary and any other documentation to 
ensure a safe and effective transition of care.
    We note that the discharge summary mentioned above must include 
reconciliation of the resident's medications, as well as a 
recapitulation of the resident's stay, a final summary of the 
resident's status, and the post-discharge plan of care. And in the 
preamble to the rule, we encouraged LTC facilities to electronically 
exchange this information if possible and to identify opportunities to 
streamline the collection and exchange of resident information by using 
information that the facility is already capturing electronically.
    Additionally, we specifically invite stakeholder feedback on the 
following questions regarding possible new or revised CoPs/CfCs/RfPs 
for interoperability and electronic exchange of health information:

[[Page 21137]]

     If CMS were to propose a new CoP/CfC/RfP standard to 
require electronic exchange of medically necessary information, would 
this help to reduce information blocking as defined in section 4004 of 
the 21st Century Cures Act?
     Should CMS propose new CoPs/CfCs/RfPs for hospitals and 
other participating providers and suppliers to ensure a patient's or 
resident's (or his or her caregiver's or representative's) right and 
ability to electronically access his or her health information without 
undue burden? Would existing portals or other electronic means 
currently in use by many hospitals satisfy such a requirement regarding 
patient/resident access as well as interoperability?
     Are new or revised CMS CoPs/CfCs/RfPs for interoperability 
and electronic exchange of health information necessary to ensure 
patients/residents and their treating providers routinely receive 
relevant electronic health information from hospitals on a timely basis 
or will this be achieved in the next few years through existing 
Medicare and Medicaid policies, HIPAA, and implementation of relevant 
policies in the 21st Century Cures Act?
     What would be a reasonable implementation timeframe for 
compliance with new or revised CMS CoPs/CfCs/RfPs for interoperability 
and electronic exchange of health information if CMS were to propose 
and finalize such requirements? Should these requirements have delayed 
implementation dates for specific participating providers and 
suppliers, or types of participating providers and suppliers (for 
example, participating providers and suppliers that are not eligible 
for the Medicare and Medicaid EHR Incentive Programs)?
     Do stakeholders believe that new or revised CMS CoPs/CfCs/
RfPs for interoperability and electronic exchange of health information 
would help improve routine electronic transfer of health information as 
well as overall patient/resident care and safety?
     Under new or revised CoPs/CfCs/RfPs, should non-electronic 
forms of sharing Medically necessary information (for example, printed 
copies of patient/resident discharge/transfer summaries shared directly 
with the patient/resident or with the receiving provider or supplier, 
either directly transferred with the patient/resident or by mail or fax 
to the receiving provider or supplier) be permitted to continue if the 
receiving provider, supplier, or patient/resident cannot receive the 
information electronically?
     Are there any other operational or legal considerations 
(for example, HIPAA), obstacles, or barriers that hospitals and other 
providers and suppliers would face in implementing changes to meet new 
or revised interoperability and health information exchange 
requirements under new or revised CMS CoPs/CfCs/RfPs if they are 
proposed and finalized in the future?
     What types of exceptions, if any, to meeting new or 
revised interoperability and health information exchange requirements, 
should be allowed under new or revised CMS CoPs/CfCs/RfPs if they are 
proposed and finalized in the future? Should exceptions under the QPP 
including CEHRT hardship or small practices be extended to new 
requirements? Would extending such exceptions impact the effectiveness 
of these requirements?
    We would also like to directly address the issue of communication 
between hospitals (as well as the other providers and suppliers across 
the continuum of patient care) and their patients and caregivers. 
MyHealthEData is a government-wide initiative aimed at breaking down 
barriers that contribute to preventing patients from being able to 
access and control their medical records. Privacy and security of 
patient data will be at the center of all CMS efforts in this area. CMS 
must protect the confidentiality of patient data, and CMS is completely 
aligned with the Department of Veterans Affairs (VA), the National 
Institutes of Health (NIH), ONC, and the rest of the federal 
government, on this objective.
    While some Medicare beneficiaries have had, for quite some time, 
the ability to download their Medicare claims information, in pdf or 
Excel formats, through the CMS Blue Button platform, the information 
was provided without any context or other information that would help 
beneficiaries understand what the data was really telling them. For 
beneficiaries, their claims information is useless if it is either too 
hard to obtain or, as was the case with the information provided 
through previous versions of Blue Button, hard to understand. In an 
effort to fully contribute to the federal government's MyHealthEData 
initiative, CMS developed and launched the new Blue Button 2.0, which 
represents a major step toward giving patients meaningful control of 
their health information in an easy-to-access and understandable way. 
Blue Button 2.0 is a developer-friendly, standards-based API that 
enables Medicare beneficiaries to connect their claims data to secure 
applications, services, and research programs they trust. The 
possibilities for better care through Blue Button 2.0 data are 
exciting, and might include enabling the creation of health dashboards 
for Medicare beneficiaries to view their health information in a single 
portal, or allowing beneficiaries to share complete medication lists 
with their doctors to prevent dangerous drug interactions.
    To fully understand all of these health IT interoperability issues, 
initiatives, and innovations through the lens of its regulatory 
authority, CMS invites members of the public to submit their ideas on 
how best to accomplish the goal of fully interoperable health IT and 
EHR systems for Medicare- and Medicaid-participating providers and 
suppliers, as well as how best to further contribute to and advance the 
MyHealthEData initiative for patients. We are particularly interested 
in identifying fundamental barriers to interoperability and health 
information exchange, including those specific barriers that prevent 
patients from being able to access and control their medical records. 
We also welcome the public's ideas and innovative thoughts on 
addressing these barriers and ultimately removing or reducing them in 
an effective way, specifically through revisions to the current CMS 
CoPs, CfCs, and RfPs for hospitals and other participating providers 
and suppliers. We have received stakeholder input through recent CMS 
Listening Sessions on the need to address health IT adoption and 
interoperability among providers that were not eligible for the 
Medicare and Medicaid EHR Incentives program, including long-term and 
post-acute care providers, behavioral health providers, clinical 
laboratories and social service providers, and we would also welcome 
specific input on how to encourage adoption of certified health IT and 
interoperability among these types of providers and suppliers as well.
    We note that this is a Request for Information only. Respondents 
are encouraged to provide complete but concise and organized responses, 
including any relevant data and specific examples. However, respondents 
are not required to address every issue or respond to every question 
discussed in this Request for Information to have their responses 
considered. In accordance with the implementing regulations of the 
Paperwork Reduction Act at 5 CFR 1320.3(h)(4), all responses will be 
considered provided they contain information CMS can use to identify 
and contact the commenter, if needed.
    This Request for Information is issued solely for information and 
planning purposes; it does not constitute a Request for Proposal (RFP), 
applications, proposal abstracts, or quotations. This Request for 
Information

[[Page 21138]]

does not commit the U.S. Government to contract for any supplies or 
services or make a grant award. Further, CMS is not seeking proposals 
through this Request for Information and will not accept unsolicited 
proposals. Responders are advised that the U.S. Government will not pay 
for any information or administrative costs incurred in response to 
this Request for Information; all costs associated with responding to 
this Request for Information will be solely at the interested party's 
expense.
    We note that not responding to this Request for Information does 
not preclude participation in any future procurement, if conducted. It 
is the responsibility of the potential responders to monitor this 
Request for Information announcement for additional information 
pertaining to this request. In addition, we note that CMS will not 
respond to questions about the policy issues raised in this Request for 
Information. CMS will not respond to comment submissions in response to 
this Request for Information in the FY 2019 IPPS/LTCH PPS final rule. 
Rather, CMS will actively consider all input as we develop future 
regulatory proposals or future subregulatory policy guidance. CMS may 
or may not choose to contact individual responders. Such communications 
would be for the sole purpose of clarifying statements in the 
responders' written responses. Contractor support personnel may be used 
to review responses to this Request for Information. Responses to this 
notice are not offers and cannot be accepted by the Government to form 
a binding contract or issue a grant. Information obtained as a result 
of this Request for Information may be used by the Government for 
program planning on a nonattribution basis. Respondents should not 
include any information that might be considered proprietary or 
confidential.
    This Request for Information should not be construed as a 
commitment or authorization to incur cost for which reimbursement would 
be required or sought. All submissions become U.S. Government property 
and will not be returned. CMS may publically post the public comments 
received, or a summary of those public comments.

List of Subjects in 42 CFR Part 412

    Administrative practice and procedure, Health facilities, Medicare, 
Puerto Rico, and Reporting and recordkeeping requirements.

    For reasons stated in the preamble of this document, the Centers 
for Medicare & Medicaid Services proposes to amend 42 CFR chapter IV as 
set forth below:

PART 412--PROSPECTIVE PAYMENT SYSTEMS FOR INPATIENT HOSPITAL 
SERVICES

0
1. The authority citation for part 412 continues to read as follows:

    Authority:  Secs. 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1395hh); sec. 124 of Pub. L. 106-113 (113 Stat. 
1501A-332); sec. 1206 of Pub. L. 113-67; sec. 112 of Pub. L. 113-93; 
sec. 231 of Pub. L. 114-113; and secs. 15004, 15006, 15007, 15008, 
15009, and 15010 of Pub. L. 114-255.

0
2. Section 412.27 is amended by revising paragraph (a) to read as 
follows:


Sec.  412.27   Excluded psychiatric units: Additional requirements.

* * * * *
    (a) Admit only patients whose admission to the unit is required for 
active treatment, of an intensity that can be provided appropriately 
only in an inpatient hospital setting, of a psychiatric principal 
diagnosis that is listed in the International Classification of 
Diseases, Tenth Revision, Clinical Modification.
* * * * *
0
3. Section 412.402 is amended by revising the definition of ``Principal 
diagnosis'' to read as follows:


Sec.  412.402   Definitions.

* * * * *
    Principal diagnosis means the condition established after study to 
be chiefly responsible for occasioning the admission of the patient to 
the inpatient psychiatric facility. Principal diagnosis is also 
referred to as the primary diagnosis.
* * * * *
0
4. Section 412.428 is amended by revising the section heading, the 
introductory text, and paragraphs (a) and (b) to read as follows:


Sec.  412.428   Publication of changes to the inpatient psychiatric 
facility prospective payment system.

    CMS will issue annually in the Federal Register information 
pertaining to changes to the inpatient psychiatric facility prospective 
payment system. This information includes:
    (a) A description of the methodology and data used to calculate the 
federal per diem base payment amount for the subsequent fiscal year.
    (b)(1) For discharges occurring on or after January 1, 2005 but 
before July 1, 2006, the update, described in Sec.  412.424(a)(2)(iii), 
for the federal portion of the inpatient psychiatric facility's 
payments is based on the 1997-based excluded hospital with capital 
market basket under the applicable percentage increase methodology 
described in section 1886(b)(3)(B)(ii) of the Act for each year.
    (2)(i) For discharges occurring on or after July 1, 2006 but before 
October 1, 2015, the update for the federal portion of the inpatient 
psychiatric facility's payment is based on the rehabilitation, 
psychiatric, and long-term care market basket.
    (ii) For discharges occurring on or after October 1, 2015, the 
update of the inpatient psychiatric facility's payment is based on the 
inpatient psychiatric facility market basket.
    (3) For discharges occurring on or after January 1, 2005 but before 
October 1, 2005, the update, described in Sec.  412.424(a)(2)(iii), for 
the reasonable cost portion of the inpatient psychiatric facility's 
payment is based on the 1997-based excluded hospital with capital 
market basket under the updated methodology described in section 
1886(b)(3)(B)(ii) of the Act for each year.
    (4) For discharges occurring on or after October 1, 2005 but before 
July 1, 2008, the update for the reasonable cost portion of the 
inpatient psychiatric facility's payment is based on the 2002-based 
excluded hospital market basket.
* * * * *

    Dated: April 16, 2018.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
    Dated: April 17, 2018.
Alex M. Azar II,
Secretary, Department of Health and Human Services.
[FR Doc. 2018-09069 Filed 4-27-18; 4:15 pm]
 BILLING CODE 4120-01-P