Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System Policy Changes and Fiscal Year 2016 Rates; Revisions of Quality Reporting Requirements for Specific Providers, Including Changes Related to the Electronic Health Record Incentive Program

SUMMARY

We are proposing to revise the Medicare hospital inpatient prospective payment systems (IPPS) for operating and capital-related costs of acute care hospitals to implement changes arising from our continuing experience with these systems for FY 2016. Some of these changes implement certain statutory provisions contained in the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (collectively known as the Affordable Care Act), the Pathway for Sustainable Growth Reform (SGR) Act of 2013, the Protecting Access to Medicare Act of 2014, and other legislation. We also are addressing the update of the rate-of-increase limits for certain hospitals excluded from the IPPS that are paid on a reasonable cost basis subject to these limits for FY 2016. We also are proposing to update the payment policies and the annual payment rates for the Medicare prospective payment system (PPS) for inpatient hospital services provided by long-term care hospitals (LTCHs) for FY 2016 and implement certain statutory changes to the LTCH PPS under the Affordable Care Act and the Pathway for Sustainable Growth Rate (SGR) Reform Act of 2013 and the Protecting Access to Medicare Act of 2014. In addition, we are proposing to establish new requirements or to revise existing requirements for quality reporting by specific providers (acute care hospitals, PPS-exempt cancer hospitals, and LTCHs) that are participating in Medicare, including related proposals for eligible hospitals and critical access hospitals participating in the Medicare Electronic Health Record (EHR) Incentive Program. We also are proposing to update policies relating to the Hospital Value-Based Purchasing (VBP) Program, the Hospital Readmissions Reduction Program, and the Hospital-Acquired Condition (HAC) Reduction Program.

 
CONTENT

Federal Register, Volume 80 Issue 83 (Thursday, April 30, 2015)

Federal Register Volume 80, Number 83 (Thursday, April 30, 2015)

Proposed Rules

Pages 24323-24689

From the Federal Register Online via the Government Publishing Office www.gpo.gov

FR Doc No: 2015-09245

Page 24323

Vol. 80

Thursday,

No. 83

April 30, 2015

Part II

Department of Health and Human Services

-----------------------------------------------------------------------

Centers for Medicare & Medicaid Services

-----------------------------------------------------------------------

42 CFR Part 412

Office of the Secretary

-----------------------------------------------------------------------

45 CFR Part 170

Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System Policy Changes and Fiscal Year 2016 Rates; Revisions of Quality Reporting Requirements for Specific Providers, Including Changes Related to the Electronic Health Record Incentive Program; Proposed Rule

Page 24324

-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 412

Office of the Secretary

45 CFR Part 170

CMS-1632-P

RIN-0938-AS41

Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System Policy Changes and Fiscal Year 2016 Rates; Revisions of Quality Reporting Requirements for Specific Providers, Including Changes Related to the Electronic Health Record Incentive Program

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

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: We are proposing to revise the Medicare hospital inpatient prospective payment systems (IPPS) for operating and capital-related costs of acute care hospitals to implement changes arising from our continuing experience with these systems for FY 2016. Some of these changes implement certain statutory provisions contained in the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (collectively known as the Affordable Care Act), the Pathway for Sustainable Growth Reform (SGR) Act of 2013, the Protecting Access to Medicare Act of 2014, and other legislation. We also are addressing the update of the rate-of-increase limits for certain hospitals excluded from the IPPS that are paid on a reasonable cost basis subject to these limits for FY 2016.

We also are proposing to update the payment policies and the annual payment rates for the Medicare prospective payment system (PPS) for inpatient hospital services provided by long-term care hospitals (LTCHs) for FY 2016 and implement certain statutory changes to the LTCH PPS under the Affordable Care Act and the Pathway for Sustainable Growth Rate (SGR) Reform Act of 2013 and the Protecting Access to Medicare Act of 2014.

In addition, we are proposing to establish new requirements or to revise existing requirements for quality reporting by specific providers (acute care hospitals, PPS-exempt cancer hospitals, and LTCHs) that are participating in Medicare, including related proposals for eligible hospitals and critical access hospitals participating in the Medicare Electronic Health Record (EHR) Incentive Program. We also are proposing to update policies relating to the Hospital Value-Based Purchasing (VBP) Program, the Hospital Readmissions Reduction Program, and the Hospital-Acquired Condition (HAC) Reduction Program.

DATES: Comment Period: To be assured consideration, comments on all sections of this proposed rule must be received at one of the addresses provided in the ADDRESSES section no later than 5 p.m. EST on June 29, 2015.

ADDRESSES: In commenting, please refer to file code CMS-1632-P. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission.

You may submit comments in one of four ways (no duplicates, please):

1. Electronically. You may (and we encourage you to) submit electronic comments on this regulation to http://www.regulations.gov. Follow the instructions under the ``submit a comment'' tab.

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-1632-P, P.O. Box 8013, Baltimore, MD 21244-1850.

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 via express or overnight mail to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1632-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.

4. By hand or courier. If you prefer, you may deliver (by hand or courier) your written comments before the close of the comment period to either of the following addresses:

  1. For delivery in Washington, DC--Centers for Medicare & Medicaid Services, Department of Health and Human Services, Room 445-G, Hubert H. Humphrey Building, 200 Independence Avenue SW., Washington, DC 20201.

    (Because access to the interior of the Hubert H. Humphrey Building is not readily available to persons without Federal Government identification, commenters are encouraged to leave their comments in the CMS drop slots located in the main lobby of the building. A stamp-

    in clock is available for persons wishing to retain a proof of filing by stamping in and retaining an extra copy of the comments being filed.)

  2. For delivery in Baltimore, MD--Centers for Medicare & Medicaid Services, Department of Health and Human Services, 7500 Security Boulevard, Baltimore, MD 21244-1850.

    If you intend to deliver your comments to the Baltimore address, please call the telephone number (410) 786-7195 in advance to schedule your arrival with one of our staff members.

    Comments mailed to the addresses indicated as appropriate for hand or courier delivery may be delayed and received after the comment period.

    For information on viewing public comments, we refer readers to the beginning of the SUPPLEMENTARY INFORMATION section.

    FOR FURTHER INFORMATION CONTACT:

    Ing-Jye Cheng, (410) 786-4548 and Donald Thompson, (410) 786-4487, Operating Prospective Payment, MS-DRGs, Deficit Reduction Act Hospital-

    Acquired Acquired Conditions--Present on Admission (DRA HAC-POA) Program, Hospital-Acquired Conditions Reduction Program, Hospital Readmission Reductions Program, Wage Index, New Medical Service and Technology Add-On Payments, Hospital Geographic Reclassifications, Graduate Medical Education, Capital Prospective Payment, Excluded Hospitals, and Medicare Disproportionate Share Hospital (DSH) Issues.

    Michele Hudson, (410) 786-4487, Long-Term Care Hospital Prospective Payment System and MS-LTC-DRG Relative Weights Issues.

    Siddhartha Mazumdar, (410) 786-6673, Rural Community Hospital Demonstration Program Issues.

    Cindy Tourison, (410) 786-1093, Hospital Inpatient Quality Reporting and Hospital Value-Based Purchasing--Program Administration, Validation, and Reconsideration Issues.

    Pierre Yong, (410) 786-8896, Hospital Inpatient Quality Reporting--

    Measures Issues Except Hospital Consumer Assessment of Healthcare Providers and Systems Issues.

    Elizabeth Goldstein, (410) 786-6665, Hospital Inpatient Quality Reporting--Hospital Consumer Assessment of Healthcare Providers and Systems Measures Issues.

    Mary Pratt, (410) 786-6867, LTCH Quality Data Reporting Issues.

    Kim Spalding Bush, (410) 786-3232, Hospital Value-Based Purchasing Efficiency Measures Issues.

    James Poyer, (410) 786-2261, PPS-Exempt Cancer Hospital Quality Reporting Issues.

    Page 24325

    Deborah Krauss, (410) 786-5264, and Alexandra Mugge, (410-786-

    4457), EHR Incentive Program Clinical Quality Measure Related Issues.

    Elizabeth Myers, (410) 786-4751, EHR Incentive Program Nonclinical Quality Measure Related Issues.

    Lauren Wu, (202) 690-7151, Certified EHR Technology Related Issues.

    Kellie Shannon, (410) 786-0416, Simplified Cost Allocation Methodology Issues.

    SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All public 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 public comments received before the close of the comment period on the following Web site as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that Web site to view public comments.

    Electronic Access

    This Federal Register document is also available from the Federal Register online database through Federal Digital System (FDsys), a service of the U.S. Government Publishing Office. This database can be accessed via the Internet at: http://www.gpo.gov/fdsys.

    Tables Available Only Through the Internet on the CMS Web site

    In the past, a majority of the tables referred to throughout this preamble and in the Addendum to the proposed rule and the final rule were published in the Federal Register as part of the annual proposed and final rules. However, beginning in FY 2012, some of the IPPS tables and LTCH PPS tables are no longer published in the Federal Register. Instead, these tables are generally only available through the Internet. The IPPS tables for this proposed rule are available through the Internet on the CMS Web site at: http://www.cms.hhs.gov/Medicare/medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. Click on the link on the left side of the screen titled, ``FY 2016 IPPS Proposed Rule Home Page'' or ``Acute Inpatient--Files for Download''. The LTCH PPS tables for this FY 2016 proposed rule are available through the Internet on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/LongTermCareHospitalPPS/index.html under the list item for Regulation Number CMS-1632-P. For further details on the contents of the tables referenced in this proposed rule, we refer readers to section VI. of the Addendum to this proposed rule.

    Readers who experience any problems accessing any of the tables that are posted on the CMS Web sites identified above should contact Michael Treitel at (410) 786-4552.

    Acronyms

    3M 3M Health Information System

    AAMC Association of American Medical Colleges

    ACGME Accreditation Council for Graduate Medical Education

    ACoS American College of Surgeons

    AHA American Hospital Association

    AHIC American Health Information Community

    AHIMA American Health Information Management Association

    AHRQ Agency for Healthcare Research and Quality

    AJCC American Joint Committee on Cancer

    ALOS Average length of stay

    ALTHA Acute Long Term Hospital Association

    AMA American Medical Association

    AMGA American Medical Group Association

    AMI Acute myocardial infarction

    AOA American Osteopathic Association

    APR DRG All Patient Refined Diagnosis Related Group System

    APRN Advanced practice registered nurse

    ARRA American Recovery and Reinvestment Act of 2009, Public Law 111-

    5

    ASCA Administrative Simplification Compliance Act of 2002, Public Law 107-105

    ASITN American Society of Interventional and Therapeutic Neuroradiology

    ASPE Assistant Secretary for Planning and Evaluation DHHS

    ATRA American Taxpayer Relief Act of 2012, Public Law 112-240

    BBA Balanced Budget Act of 1997, Public Law 105-33

    BBRA Medicare, Medicaid, and SCHIP State Children's Health Insurance Program Balanced Budget Refinement Act of 1999, Public Law 106-113

    BIPA Medicare, Medicaid, and SCHIP State Children's Health Insurance Program Benefits Improvement and Protection Act of 2000, Public Law 106-554

    BLS Bureau of Labor Statistics

    CABG Coronary artery bypass graft surgery

    CAH Critical access hospital

    CARE Medicare Continuity Assessment Record & Evaluation Instrument

    CART CMS Abstraction & Reporting Tool

    CAUTI Catheter-associated urinary tract infection

    CBSAs Core-based statistical areas

    CC Complication or comorbidity

    CCN CMS Certification Number

    CCR Cost-to-charge ratio

    CDAC Medicare Clinical Data Abstraction Center

    CDAD Clostridium difficile-associated disease

    CDC Center for Disease Control and Prevention

    CERT Comprehensive error rate testing

    CDI Clostridium difficile (C. difficile)

    CFR Code of Federal Regulations

    CLABSI Central line-associated bloodstream infection

    CIPI Capital input price index

    CMI Case-mix index

    CMS Centers for Medicare & Medicaid Services

    CMSA Consolidated Metropolitan Statistical Area

    COBRA Consolidated Omnibus Reconciliation Act of 1985, Public Law 99-272

    COLA Cost-of-living adjustment

    COPD Chronis obstructive pulmonary disease

    CPI Consumer price index

    CQM Clinical quality measure

    CY Calendar year

    DACA Data Accuracy and Completeness Acknowledgement

    DPP Disproportionate patient percentage

    DRA Deficit Reduction Act of 2005, Public Law 109-171

    DRG Diagnosis-related group

    DSH Disproportionate share hospital

    EBRT External Bean Radiotherapy

    ECI Employment cost index

    eCQM Electronic clinical quality measure

    EDB Medicare Enrollment Database

    EHR Electronic health record

    EMR Electronic medical record

    EMTALA Emergency Medical Treatment and Labor Act of 1986, Public Law 99-272

    EP Eligible professional

    FAH Federation of American Hospitals

    FDA Food and Drug Administration

    FFY Federal fiscal year

    FPL Federal poverty line

    FQHC Federally qualified health center

    FR Federal Register

    FTE Full-time equivalent

    FY Fiscal year

    GAF Geographic Adjustment Factor

    GME Graduate medical education

    HAC Hospital-acquired condition

    HAI Healthcare-associated infection

    HCAHPS Hospital Consumer Assessment of Healthcare Providers and Systems

    HCFA Health Care Financing Administration

    HCO High-cost outlier

    HCP Healthcare personnel

    HCRIS Hospital Cost Report Information System

    HHA Home health agency

    HHS Department of Health and Human Services

    HICAN Health Insurance Claims Account Number

    HIPAA Health Insurance Portability and Accountability Act of 1996, Public Law 104-191

    HIPC Health Information Policy Council

    HIS Health information system

    HIT Health information technology

    HMO Health maintenance organization

    HPMP Hospital Payment Monitoring Program

    HSA Health savings account

    HSCRC Maryland Health Services Cost Review Commission

    HSRV Hospital-specific relative value

    HSRVcc Hospital-specific relative value cost center

    Page 24326

    HQA Hospital Quality Alliance

    HQI Hospital Quality Initiative

    HwH Hospital-within-hospital

    IBR Intern- and Resident-to-Bed Ratio

    ICD-9-CM International Classification of Diseases, Ninth Revision, Clinical Modification

    ICD-10-CM International Classification of Diseases, Tenth Revision, Clinical Modification

    ICD-10-PCS International Classification of Diseases, Tenth Revision, Procedure Coding System

    ICR Information collection requirement

    ICU Intensive care unit

    IGI IHS Global Insight, Inc.

    IHS Indian Health Service

    IME Indirect medical education

    I-O Input-Output

    IOM Institute of Medicine

    IPF Inpatient psychiatric facility

    IPFQR Inpatient Psychiatric Facility Quality Reporting Program

    IPPS Acute care hospital inpatient prospective payment system

    IRF Inpatient rehabilitation facility

    IQR Inpatient Quality Reporting

    LAMCs Large area metropolitan counties

    LOS Length of stay

    LTC-DRG Long-term care diagnosis-related group

    LTCH Long-term care hospital

    LTCH QRP Long-Term Care Hospital Quality Reporting Program

    MAC Medicare Administrative Contractor

    MAP Measure Application Partnership

    MCC Major complication or comorbidity

    MCE Medicare Code Editor

    MCO Managed care organization

    MDC Major diagnostic category

    MDH Medicare-dependent, small rural hospital

    MedPAC Medicare Payment Advisory Commission

    MedPAR Medicare Provider Analysis and Review File

    MEI Medicare Economic Index

    MGCRB Medicare Geographic Classification Review Board

    MIEA-TRHCA Medicare Improvements and Extension Act, Division B of the Tax Relief and Health Care Act of 2006, Public Law 109-432

    MIPPA Medicare Improvements for Patients and Providers Act of 2008, Public Law 110-275

    MMA Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Public Law 108-173

    MMEA Medicare and Medicaid Extenders Act of 2010, Public Law 111-309

    MMSEA Medicare, Medicaid, and SCHIP Extension Act of 2007, Public Law 110-173

    MRHFP Medicare Rural Hospital Flexibility Program

    MRSA Methicillin-resistant Staphylococcus aureus

    MSA Metropolitan Statistical Area

    MS-DRG Medicare severity diagnosis-related group

    MS-LTC-DRG Medicare severity long-term care diagnosis-related group

    MU Meaningful Use EHR Incentive Program

    NAICS North American Industrial Classification System

    NALTH National Association of Long Term Hospitals

    NCD National coverage determination

    NCHS National Center for Health Statistics

    NCQA National Committee for Quality Assurance

    NCVHS National Committee on Vital and Health Statistics

    NECMA New England County Metropolitan Areas

    NHSN National Healthcare Safety Network

    NQF National Quality Forum

    NQS National Quality Strategy

    NTIS National Technical Information Service

    NTTAA National Technology Transfer and Advancement Act of 1991, Public Law 104-113

    NUBC National Uniform Billing Code

    NVHRI National Voluntary Hospital Reporting Initiative

    OACT CMS Office of the Actuary

    OBRA 86 Omnibus Budget Reconciliation Act of 1986, Public Law 99-509

    OES Occupational employment statistics

    OIG Office of the Inspector General

    OMB Executive Office of Management and Budget

    ONC Office of the National Coordinator for Health Information Technology

    OPM U.S. Office of Personnel Management

    OQR Hospital Outpatient Quality Reporting

    O.R. Operating room

    OSCAR Online Survey Certification and Reporting System

    PAC Postacute care

    PAMA Protecting Access to Medicare Act of 2014, Public Law 113-93

    PCH PPS-exempt cancer hospital

    PCHQR PPS-exempt cancer hospital quality reporting

    PMSAs Primary metropolitan statistical areas

    POA Present on admission

    PPI Producer price index

    PPS Prospective payment system

    PRM Provider Reimbursement Manual

    ProPAC Prospective Payment Assessment Commission

    PRRB Provider Reimbursement Review Board

    PRTFs Psychiatric residential treatment facilities

    PSF Provider-Specific File

    PSI Patient safety indicator

    PS&R Provider Statistical and Reimbursement System

    PQRS Physician Quality Reporting System

    QIG Quality Improvement Group CMS

    QRDA Quality Reporting Data Architecture

    RFA Regulatory Flexibility Act, Public Law 96-354

    RHC Rural health clinic

    RHQDAPU Reporting hospital quality data for annual payment update

    RNHCI Religious nonmedical health care institution

    RPL Rehabilitation psychiatric long-term care (hospital)

    RRC Rural referral center

    RSMR Risk-standardized mortality rate

    RSRR Risk-standard readmission rate

    RTI Research Triangle Institute, International

    RUCAs Rural-urban commuting area codes

    RY Rate year

    SAF Standard Analytic File

    SCH Sole community hospital

    SCHIP State Child Health Insurance Program

    SCIP Surgical Care Improvement Project

    SFY State fiscal year

    SGR Sustainable Growth Rate

    SIC Standard Industrial Classification

    SNF Skilled nursing facility

    SOCs Standard occupational classifications

    SOM State Operations Manual

    SSI Surgical site infection

    SSI Supplemental Security Income

    SSO Short-stay outlier

    SUD Substance use disorder

    TEFRA Tax Equity and Fiscal Responsibility Act of 1982, Public Law 97-248

    TEP Technical expert panel

    THA/TKA Total hip arthroplasty/Total knee arthroplasty

    TMA TMA Transitional Medical Assistance, Abstinence Education, and QI Qualifying Individuals Programs Extension Act of 2007, Public Law 110-90

    TPS Total Performance Score

    UHDDS Uniform hospital discharge data set

    UMRA Unfunded Mandate Reform Act, Public Law 104-4

    VBP Hospital Value Based Purchasing Program

    VTE Venous thromboembolism

    Table of Contents

    I. Executive Summary and Background

    A. Executive Summary

    1. Purpose and Legal Authority

    2. Summary of the Major Provisions

    3. Summary of Costs and Benefits

    B. Summary

    1. Acute Care Hospital Inpatient Prospective Payment System (IPPS)

    2. Hospitals and Hospital Units Excluded From the IPPS

    3. Long-Term Care Hospital Prospective Payment System (LTCH PPS)

    4. Critical Access Hospitals (CAHs)

    5. Payments for Graduate Medical Education (GME)

    C. Summary of Provisions of Recent Legislation Discussed in This Proposed Rule

    1. Patient Protection and Affordable Care Act (Pub. L. 111-148) and the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152)

    2. American Taxpayer Relief Act of 2012 (Pub. L. 112-240)

    3. Pathway for Sustainable Growth Rate (SGR) Reform Act of 2013 (Pub. L. 113-67)

    4. Protecting Access to Medicare Act of 2014 (Pub. L. 113-93)

    D. Summary of the Major Provisions of this Proposed Rule

    II. Proposed Changes to Medicare Severity Diagnosis-Related Group (MS-DRG) Classifications and Relative Weights

    A. Background

    B. MS-DRG Reclassifications

    C. Adoption of the MS-DRGs in FY 2008

    D. Proposed FY 2016 MS-DRG Documentation and Coding Adjustment

    1. Background on the Prospective MS-DRG Documentation and Coding Adjustments

    Page 24327

    for FY 2008 and FY 2009 Authorized by Public Law 110-90

    2. Adjustment to the Average Standardized Amounts Required by Public Law 110-90

  3. Prospective Adjustment Required by Section 7(b)(1)(A) of Public Law 110-90

  4. Recoupment or Repayment Adjustments in FYs 2010 Through 2012 Required by Section 7(b)(1)(B) Public Law 110-90

    3. Retrospective Evaluation of FY 2008 and FY 2009 Claims Data

    4. Prospective Adjustments for FY 2008 and FY 2009 Authorized by Section 7(b)(1)(A) of Public Law 110-90

    5. Recoupment or Repayment Adjustment Authorized by Section 7(b)(1)(B) of Public Law 110-90

    6. Proposed Recoupment or Repayment Adjustment Authorized by Section 631 of the American Taxpayer Relief Act of 2012 (ATRA)

    E. Refinement of the MS-DRG Relative Weight Calculation

    1. Background

    2. Discussion for FY 2016 and Request for Comments on Nonstandard Cost Center Codes

    F. Proposed Adjustment to MS-DRGs for Preventable Hospital-

    Acquired Conditions (HACs), Including Infections, for FY 2016

    1. Background

    2. HAC Selection

    3. Present on Admission (POA) Indicator Reporting

    4. HACs and POA Reporting in Preparation for Transition to ICD-

    10-CM and ICD-10-PCS

    5. Proposed Changes to the HAC Program for FY 2016

    6. RTI Program Evaluation

    7. RTI Report on Evidence-Based Guidelines

    G. Proposed Changes to Specific MS-DRG Classifications

    1. Discussion of Changes to Coding System and Basis for MS-DRG Updates

  5. Conversion of MS-DRGs to the International Classification of Diseases, 10th Edition (ICD-10)

  6. Basis for Proposed FY 2016 MS-DRG Updates

    2. MDC 1 (Diseases and Disorders of the Nervous System): Endovascular Embolization (Coiling) Procedures

    3. MDC 5 (Diseases and Disorders of the Circulatory System)

  7. Adding Severity Levels to MS-DRGs 245 Through 251

  8. Percutaneous Intracardiac Procedures

  9. Zilversupreg PTX Drug-Eluting Peripheral Stent (ZPTXsupreg)

  10. Percutaneous Mitral Valve Repair System--Proposed Revision of ICD-10-PCS Version 32 Logic

  11. Major Cardiovascular Procedures: Zenithsupreg Fenestrated Abdominal Aortic Aneurysm (AAA) Endovascular Graft

    4. MDC 8 (Diseases and Disorders of the Musculoskeletal System and Connective Tissue)

  12. Revision of Hip or Knee Replacement: Proposed Revision of ICD-10 Version 32 Logic

  13. Spinal Fusion

    5. MDC 14 (Pregnancy, Childbirth and the Puerperium): MS-DRG 775 (Vaginal Delivery With Complicating Diagnosis)

    6. MDC 21 (Injuries, Poisoning and Toxic Effects of Drugs): CroFab Antivenin Drug

    7. MDC 22 (Burns): Additional Severity of Illness Level for MS-

    DRG 927 (Extensive Burns or Full Thickness Burns With Mechanical Ventilation 96 Hours With Skin Graft)

    8. Proposed Medicare Code Editor (MCE) Changes

    9. Proposed Changes to Surgical Hierarchies

    10. Proposed Changes to the MS-DRG Diagnosis Codes for FY 2016

  14. Major Complications or Comorbidities (MCCs) and Complications or Comorbidities (CCs) Severity Levels for FY 2016

  15. Coronary Atherosclerosis Due to Calcified Coronary Lesion

  16. Hydronephrosis

    11. Proposed Complications or Comorbidity (CC) Exclusions List for FY 2016

  17. Background

  18. Proposed CC Exclusions List for FY 2016

    12. Review of Procedure Codes in MS-DRGs 981 Through 983, 984 Through 986, and 987 Through 989

  19. Moving Procedure Codes From MS-DRGs 981 Through 983 or MS-

    DRGs 987 Through 989 Into MDCs

  20. Reassignment of Procedures Among MS-DRGs 981 Through 983, 984 through 986, and 987 Through 989

  21. Adding Diagnosis or Procedure Codes to MDCs

    13. Proposed Changes to the ICD-9-CM Coding System in FY 2016

  22. ICD-10 Coordination and Maintenance Committee

  23. Code Freeze

    14. Other Proposed Policy Change: Recalled/Replaced Devices

    H. Recalibration of the Proposed FY 2016 MS-DRG Relative Weights

    1. Data Sources for Developing the Proposed Relative Weights

    2. Methodology for Calculation of the Proposed Relative Weights

    3. Development of Proposed National Average CCRs

    4. Solicitation of Public Comments on Expanding the Bundled Payments for Care Improvement (BPCI) Initiative

  24. Background

  25. Considerations for Potential Model Expansion

    I. Proposed Add-On Payments for New Services and Technologies

    1. Background

    2. Public Input Before Publication of a Notice of Proposed Rulemaking on Add-On Payments

    3. Implementation of ICD-10-PCS Section ``X'' Codes for Certain New Medical Services and Technologies for FY 2016

    4. Proposed FY 2016 Status of Technologies Approved for FY 2015 Add-On Payments

  26. Glucarpidase (Voraxazesupreg)

  27. Zenithsupreg Fenestrated Abdominal Aortic Aneurysm (AAA) Endovascular Graft

  28. KcentraTM

  29. Argussupreg II Retinal Prosthesis System

  30. ZilversupregPTXsupreg Drug-Eluting Peripheral Stent

  31. CardioMEMSTM HF (Heart Failure) Monitoring System

  32. MitraClipsupreg System

  33. Responsive Neurostimulator (RNSsupreg System)

    5. FY 2016 Applications for New Technology Add-On Payments

  34. Angel Medical Guardiansupreg Ischemia Monitoring Device

  35. Blinatumomab (BLINCYTOTM)

  36. Ceftazidime Avibactam (AVYCAZ)

  37. DIAMONDBACKsupreg 360 Coronary Orbital Atherectomy System

  38. CRESEMBAsupreg (Isavuconazonium)

  39. Idarucizumab

  40. LUTONIXsupreg Drug Coated Balloon (DCB) Percutaneous Transluminal Angioplasty (PTA) and IN.PACTTMAdmiralTM Pacliaxel Coated Percutaneous Transluminal Angioplasty (PTA) Balloon Catheter

  41. VERASENSETM Knee Balancer System (VKS)

  42. WATCHMANsupreg Left Atrial Appendage Closure Technology

    III. Proposed Changes to the Hospital Wage Index for Acute Care Hospitals

    A. Background

    1. Legislative Authority

    2. Core-Based Statistical Areas (CBSAs) for the Hospital Wage Index

    B. Worksheet S-3 Wage Data for the Proposed FY 2016 Wage Index

    1. Included Categories of Costs

    2. Excluded Categories of Costs

    3. Use of Wage Index Data by Suppliers and Providers Other Than Acute Care Hospitals Under the IPPS

    C. Verification of Worksheet S-3 Wage Data

    D. Method for Computing the Proposed FY 2016 Unadjusted Wage Index

    E. Proposed Occupational Mix Adjustment to the Proposed FY 2016 Wage Index

    1. Development of Data for the Proposed FY 2016 Occupational Mix Adjustment Based on the 2013 Medicare Wage Index Occupational Mix Survey

    2. New 2013 Occupational Mix Survey Data for the Proposed FY 2016 Wage Index

    3. Calculation of the Proposed Occupational Mix Adjustment for FY 2016

    F. Analysis and Implementation of the Proposed Occupational Mix Adjustment and the Proposed FY 2016 Occupational Mix Adjusted Wage Index

    G. Transitional Wage Indexes

    1. Background

    2. Transition for Hospitals in Urban Areas That Became Rural

    3. Transition for Hospitals Deemed Urban Under Section 1886(d)(8)(B) of the Act Where the Urban Area Became Rural Under the New OMB Delineations

    4. Expiring Transition for Hospitals That Experience a Decrease in Wage Index under the New OMB Delineations

    5. Budget Neutrality

    H. Proposed Application of the Rural, Imputed, and Frontier Floors

    1. Proposed Rural Floor

    Page 24328

    2. Proposed Imputed Floor for FY 2016

    3. Proposed State Frontier Floor

    I. Proposed FY 2016 Wage Index Tables

    J. Revisions to the Wage Index Based on Hospital Redesignations and Reclassifications

    1. General Policies and Effects of Reclassification and Redesignation

    2. FY 2016 MGCRB Reclassifications and Redesignation Issues

  43. FY 2016 Reclassification Requests and Approvals

  44. Applications for Reclassifications for FY 2017

    3. Redesignations of Hospitals Under Section 1886(d)(8)(B) of the Act (Lugar)

    4. Waiving Lugar Redesignation for the Out-Migration Adjustment

    K. Proposed Out-Migration Adjustment Based on Commuting Patterns of Hospital Employees

    1. Background

    2. New Data Source for the Proposed FY 2016 Out-Migration Adjustment

    3. Proposed FY 2016 Out-Migration Adjustment

    4. Use of Out-Migration Data Applied for FY 2014 or FY 2015 for 3 Years

    L. Process for Requests for Wage Index Data Corrections

    M. Labor-Related Share for the Proposed FY 2016 Wage Index

    N. Proposed Changes to 3-Year Average for the FY 2017 Wage Index Pension Costs and Proposed Change to Wage Index Timeline Regarding Pension Costs for FY 2017 and Subsequent Years

    O. Clarification of Allocation of Pension Costs for the Wage Index

    IV. Other Decisions and Proposed Changes to the IPPS for Operating Costs and Indirect Medical Education (IME) Costs

    A. Proposed Changes in the Inpatient Hospital Updates for FY 2016 (Sec. Sec. 412.64(d) and 412.211(c))

    1. Proposed FY 2016 Inpatient Hospital Update

    2. Proposed FY 2016 Puerto Rico Hospital Update

    B. Rural Referral Centers (RRCs): Proposed Annual Updates to Case-Mix Index (CMI) and Discharge Criteria (Sec. 412.96)

    1. Case-Mix Index (CMI)

    2. Discharges

    C. Indirect Medical Education (IME) Payment Adjustment for FY 2016 (Sec. 412.105)

    D. Proposed FY 2016 Payment Adjustment for Medicare Disproportionate Share Hospitals (DSHs) (Sec. 412.106)

    1. Background

    2. Impact on Medicare DSH Payment Adjustment of the Continued Implementation of New OMB Labor Market Area Delineations

    3. Payment Adjustment Methodology for Medicare Disproportionate Share Hospitals (DSHs) Under Section 3133 of the Affordable Care Act

  45. General Discussion

  46. Eligibility for Empirically Justified Medicare DSH Payments and Uncompensated Care Payments

  47. Empirically Justified Medicare DSH Payments

  48. Uncompensated Care Payments

    E. Hospital Readmissions Reduction Program: Proposed Changes for FY 2016 Through FY 2017 (Sec. Sec. 412.150 Through 412.154)

    1. Statutory Basis for the Hospital Readmissions Reduction Program

    2. Regulatory Background

    3. Overview of Proposed Policies Changes for the FY 2016 and FY 2017 Hospital Readmissions Reduction Program

    4. Proposed Refinement of Hospital 30-Day, All Cause, Risk-

    Standardized Readmission Rate (RSSR) Following Pneumonia Hospitalization Measure Cohort (NQF #0506) for FY 2017 Payment Determination and Subsequent Years

  49. Background

  50. Overview of Measure Cohort Change

  51. Risk Adjustment

  52. Anticipated Effect of Refinement of Hospital 30-Day, All-

    Cause, Risk-Standardized Readmission Rate (RSSR) Following Pneumonia Hospitalization Measure (NQF #0506) Cohort

  53. Calculating the Excess Readmissions Ratio

    5. Maintenance of Technical Specifications for Quality Measures

    6. Floor Adjustment Factor for FY 2016 (Sec. 412.154(c)(2))

    7. Proposed Applicable Period for FY 2016

    8. Proposed Calculation of Aggregate Payments for Excess Readmissions for FY 2016

  54. Background

  55. Proposed Calculation of Aggregate Payments for Excess Readmissions for FY 2016

    9. Proposed Extraordinary Circumstances Exception Policy for the Hospital Readmissions Reduction Program Beginning FY 2016 and for Subsequent Years

  56. Background

  57. Requests for an Extraordinary Circumstances Exception

    F. Hospital Value-Based Purchasing (VBP) Program: Proposed Policy Changes for the FY 2018 Program Year and Subsequent Years

    1. Background

  58. Statutory Background and Overview of Past Program Years

  59. FY 2016 Program Year Payment Details

    2. Proposed Retention, Removal, Expansion, and Updating of Quality Measures for FY 2018 Program Year

  60. Retention of Previously Adopted Hospital VBP Program Measures for the FY 2018 Program Year

  61. Proposed Removal of Two Measures

  62. Proposed New Measure for the FY 2018 Program Year: 3-Item Care Transition Measure (CTM-3) (NQF #0228)

  63. Proposed Removal of Clinical Care--Process Subdomain for the FY 2018 Program Year and Subsequent Years

  64. NHSN Measures Standard Population Data

  65. Summary of Previously Adopted and Newly Proposed Measures for the FY 2018 Program Year

    3. Previously Adopted and Newly Proposed Measures for the FY 2019, FY 2021, and Subsequent Program Years

  66. Intent To Propose in Future Rulemaking To Include Selected Ward (Non-Intensive Care Unit (ICU)) Locations in Certain NHSN Measures Beginning With the FY 2019 Program Year

  67. Proposed New Measure for the FY 2021 Program Year: Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate Following Chronic Obstructive Pulmonary Disease (COPD) Hospitalization (NQF #1893)

  68. Summary of Previously Adopted and Newly Proposed Measures for the FY 2019 and FY 2021 and Subsequent Program Years

    4. Possible Measure Topics for Future Program Years

    5. Previously Adopted and Newly Proposed Baseline and Performance Periods for the FY 2018 Program Year

  69. Background

  70. Proposed Baseline and Performance Periods for the Patient and Caregiver-Centered Experience of Care/Care Coordination Domain for the FY 2018 Program Year

  71. Proposed Baseline and Performance Periods for NHSN Measures and PC-01 in the Safety Domain for the FY 2018 Program Year

  72. Proposed Baseline and Performance Periods for the Efficiency and Cost Reduction Domain for the FY 2018 Program Year

  73. Summary of Previously Finalized and Newly Proposed Baseline and Performance Periods for the FY 2018 Program Year

    6. Previously Adopted and Newly Proposed Baseline and Performance Periods for Future Program Years

  74. Previously Adopted Baseline and Performance Periods for the FY 2019 Program

  75. Proposed Baseline and Performance Periods for the PSI-90 Measure in the Safety Domain in the FY 2020 Program Years

  76. Proposed Baseline and Performance Periods for the Clinical Care Domain for the FY 2021 Program Year

    7. Proposed Performance Standards for the Hospital VBP Program

  77. Background

  78. Technical Updates

  79. Proposed Performance Standards for the FY 2018 Program Year

  80. Previously Adopted Performance Standards for Certain Measures for the FY 2019 Program Year

  81. Previously Adopted and Newly Proposed Performance Standards for Certain Measures for the FY 2020 Program Year

  82. Proposed Performance Standards for Certain Measures for the FY 2021 Program Year

    8. Proposed FY 2018 Program Year Scoring Methodology

  83. Proposed Domain Weighting for the FY 2018 Program Year for Hospitals That Receive a Score on All Domains

  84. Proposed Domain Weighting for the FY 2018 Program Year for Hospitals Receiving Scores on Fewer Than Four Domains

    Page 24329

    G. Proposed Changes to the Hospital-Acquired Condition (HAC) Reduction Program

    1. Background

    2. Statutory Basis for the HAC Reduction Program

    3. Overview of Previous HAC Reduction Program Rulemaking

    4. Implementation of the HAC Reduction Program for FY 2016

    5. Proposed Changes for Implementation of the HAC Reduction Program for FY 2017

  85. Proposed Applicable Time Period for the FY 2017 HAC Reduction Program

  86. Proposed Narrative Rule Used in Calculation of the Domain 2 Score for the FY 2017 HAC Reduction Program

  87. Proposed Domain 1 and Domain 2 Weights for the FY 2017 HAC Reduction Program

    6. Proposed Measure Refinements for the FY 2018 HAC Reduction Program

  88. Proposal To Include Select Ward (Non-Intensive Care Unit (ICU)) Locations in Certain CDC NHSN Measures Beginning in the FY 2018 Program Year

  89. Update to CDC NHSN Measures Standard Population Data

    7. Maintenance of Technical Specifications for Quality Measures

    8. Proposed Extraordinary Circumstances Exception Policy for the HAC Reduction Program Beginning in FY 2016 and for Subsequent Years

  90. Background

  91. Requests for an Extraordinary Circumstances Exception

    H. Proposed Elimination of Simplified Cost Allocation Methodology

    1. Background

    2. Proposed Changes

    I. Rural Community Hospital Demonstration Program

    1. Background

    2. Proposed FY 2016 Budget Neutrality Offset Amount

    J. Proposed Changes to MS-DRGs Subject to the Postacute Care Transfer Policy (Sec. 412.4)

    1. Background

    2. Proposed Changes to the Postacute Care Transfer MS-DRGs

    K. Short Inpatient Hospital Stays

    V. Proposed Changes to the IPPS for Capital-Related Costs

    A. Overview

    B. Additional Provisions

    1. Exception Payments

    2. New Hospitals

    3. Hospitals Located in Puerto Rico

    C. Proposed Annual Update for FY 2016

    VI. Proposed Changes for Hospitals Excluded From the IPPS

    VII. Proposed Changes to the Long-Term Care Hospital Prospective Payment System (LTCH PPS) for FY 2016

    A. Background of the LTCH PPS

    1. Legislative and Regulatory Authority

    2. Criteria for Classification as an LTCH

  92. Classification as an LTCH

  93. Hospitals Excluded From the LTCH PPS

    3. Limitation on Charges to Beneficiaries

    4. Administrative Simplification Compliance Act (ASCA) and Health Insurance Portability and Accountability Act (HIPAA) Compliance

    B. Proposed Application of Site Neutral Payment Rate (Proposed New Sec. 412.522)

    1. Overview

    2. Proposed Application of the Site Neutral Payment Rate Under the LTCH PPS

    3. Criteria for Exclusion From the Site Neutral Payment Rate

  94. Statutory Provisions

  95. Proposed Implementation of Criterion for a Principal Diagnosis Relating to a Psychiatric Diagnosis or to Rehabilitation

  96. Proposed Addition of Definition of ``Subsection (d) Hospital'' to LTCH Regulations

  97. Proposed Interpretation of ``Immediately Preceded'' by a Subsection (d) Hospital Discharge

  98. Proposed Implementation of Intensive Care Unit (ICU) Criterion

  99. Proposed Implementation of the Ventilator Criterion

    4. Proposed Determination of the Site Neutral Payment Rate (Proposed New Sec. 412.522(c))

  100. General

  101. Proposed Blended Payment Rate for FY 2016 and FY 2017

  102. Proposed LTCH PPS Standard Federal Payment Rate

    5. Proposed Application of Certain Exiting LTCH PPS Payment Adjustments to Payments Made Under the Site Neutral Payment Rate

    6. Proposals Relating to the LTCH Discharge Payment Percentage

    7. Additional LTCH PPS Policy Considerations Related to the Implementation of the Site Neutral Payment Rate Required by Section 1206(a) of Public Law 113-67

  103. MS-LTC-DRG Relative Payment Weights

  104. High-Cost Outliers

  105. Limitation on Charges to Beneficiaries

    C. Proposed Medicare Severity Long-Term Care Diagnosis-Related Group (MS-LTC-DRG) Classifications and Relative Weights for FY 2016

    1. Background

    2. Patient Classifications into MS-LTC-DRGs

  106. Background

  107. Proposed Changes to the MS-LTC-DRGs for FY 2016

    3. Development of the Proposed FY 2016 MS-LTC-DRG Relative Weights

  108. General Overview of the Development of the MS-LTC-DRG Relative Weights

  109. Development of the Proposed MS-LTC-DRG Relative Weights for FY 2016

  110. Data

  111. Hospital-Specific Relative Value (HSRV) Methodology

  112. Treatment of Severity Levels in Developing the Proposed MS-

    LTC-DRG Relative Weights

  113. Proposed Low-Volume MS-LTC-DRGs

  114. Steps for Determining the Proposed FY 2016 MS-LTC-DRG Relative Weights

    D. Proposed Changes to the LTCH PPS Standard Payment Rates for FY 2016

    1. Overview of Development of the LTCH PPS Standard Federal Payment Rates

    2. Proposed FY 2016 LTCH PPS Annual Market Basket Update

  115. Overview

  116. Proposed Revision of Certain Market Basket Updates as Required by the Affordable Care Act

  117. Proposed Adjustment to the Annual Update to the LTCH PPS Standard Federal Rate Under the Long-Term Care Hospital Quality Reporting Program (LTCH QRP)

  118. Proposed Market Basket Under the LTCH PPS for FY 2016

  119. Proposed Annual Market Basket Update for LTCHs for FY 2016

    E. Moratoria on the Establishment of LTCHs and LTCH Satellite Facilities and on the Increase in Number of Beds in Existing LTCHs and LTCH Satellite Facilities

    F. Proposed Changes to Average Length of Stay Criterion Under Public Law 113-67 (Sec. 412.23)

    VIII. Proposed Quality Data Reporting Requirements for Specific Providers and Suppliers for FY 2016

    A. Hospital Inpatient Quality Reporting (IQR) Program

    1. Background

  120. History of the Hospital IQR Program

  121. Maintenance of Technical Specifications for Quality Measures

  122. Public Display of Quality Measures

    2. Process for Retaining Previously Adopted Hospital IQR Program Measures for Subsequent Payment Determinations

    3. Removal and Suspension of Hospital IQR Program Measures

  123. Considerations in Removing Quality Measures From the Hospital IQR Program

  124. Proposed Removal of Hospital IQR Program Measures for the FY 2018 Payment Determination and Subsequent Years

    4. Previously Adopted Hospital IQR Program Measures for the FY 2017 Payment Determination and Subsequent Years

  125. Background

  126. NHSN Measures Standard Population Data

    5. Expansion and Updating of Quality Measures

    6. Proposed Refinements of Existing Measures in the Hospital IQR Program

  127. Proposed Refinement of Hospital 30-Day, All-Cause, Risk-

    Standardized Mortality Rate (RSMR) Following Pneumonia Hospitalization (NQF #0468) Measure Cohort

  128. Proposed Refinement of Hospital 30-Day, All-Cause, Risk-

    Standardized Readmission Rate (RSRR) Following Pneumonia Hospitalization (NQF #0468) Measure Cohort

    7. Proposed Additional Hospital IQR Program Measures for the FY 2018 Payment Determination and Subsequent Years

  129. Hospital Survey on Patient Safety Culture

  130. Clinical Episode-Based Payment Measures

  131. Hospital-Level, Risk-Standardized Payment Associated With a 90-Day Episode-of-Care for Elective Primary Total Hip Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA)

    Page 24330

  132. Excess Days in Acute Care After Hospitalization for Acute Myocardial Infarction

  133. Excess Days in Acute Care After Hospitalization for Heart Failure

  134. Summary of Previously Adopted and Proposed Hospital IQR Program Measure Set for the FY 2018 Payment Determination and Subsequent Years

    8. Electronic Clinical Quality Measures

  135. Previously Adopted Voluntarily Reported Electronic Clinical Quality Measures for the FY 2017 Payment Determination

  136. Clarification of the Venous Thromboembolism (VTE) Prophylaxis (STK-01) Measure (NQF #0434)

  137. Proposed Requirements for Hospitals To Report Electronic Clinical Quality Measures for the FY 2018 Payment Determination and Subsequent Years

    9. Future Considerations for Electronically Specified Measures: Consideration To Implement a New Type of Measure That Utilizes Core Clinical Data Elements

  138. Background

  139. Overview of Core Clinical Data Elements

  140. Core Clinical Data Elements Development

  141. Core Clinical Data Elements Feasibility Testing Using Readmission and Mortality Models

  142. Use of Core Clinical Data Elements in Hospital Quality Measures for the Hospital IQR Program

  143. Content Exchange Standard Considerations for Core Clinical Data Elements

    10. Form, Manner, and Timing of Quality Data Submission

  144. Background

  145. Procedural Requirements for the FY 2018 Payment Determination and Subsequent Years

  146. Data Submission Requirements for Chart-Abstracted Measures

  147. Alignment of the Medicare EHR Incentive Program Reporting for Eligible Hospitals and CAHs With the Hospital IQR Program

  148. Sampling and Case Thresholds for the FY 2018 Payment Determination and Subsequent Years

  149. HCAHPS Requirements for the FY 2018 Payment Determination and Subsequent Years

  150. Data Submission Requirements for Structural Measures for the FY 2018 Payment Determination and Subsequent Years

  151. Data Submission and Reporting Requirements for Healthcare-

    Associated Infection (HAI) Measures Reported via NHSN

    11. Proposed Modifications to the Existing Processes for Validation of Hospital IQR Program Data

  152. Background

  153. Proposed Modifications to the Existing Processes for Validation of Chart-Abstracted Hospital IQR Program Data

    12. Data Accuracy and Completeness Acknowledgement Requirements for the FY 2018 Payment Determination and Subsequent Years

    13. Public Display Requirements for the FY 2018 Payment Determination and Subsequent Years

    14. Reconsideration and Appeal Procedures for the FY 2018 Payment Determination and Subsequent Years

    15. Hospital IQR Program Extraordinary Circumstances Extensions or Exemptions

    B. PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program

    1. Statutory Authority

    2. Proposed Removal of Six Surgical Care Improvement Project (SCIP) Measures From the PCHQR Program Beginning With Fourth Quarter (Q4) 2015 Discharges and for Subsequent Years

    3. Proposed New Quality Measures Beginning With the FY 2018 Program

  154. Considerations in the Selection of Quality Measures

  155. Summary of Proposed New Measures

  156. CDC NHSN Facility-Wide Inpatient Hospital-Onset Clostridium difficile (C. difficile) Infection (CDI) Outcome Measure (NQF #1717)

  157. CDC NHSN Facility-Wide Inpatient Hospital-Onset Methicillin-

    Resistant Staphylococcus Aureus (MSRA) Bacteremia Outcome Measure (NQF #1716)

  158. CDC NHSN Influenza Vaccination Coverage Among Healthcare Personnel (HCP) Measure (NQF #0431) (CDC NHSN HCP Measure)

    4. Possible New Quality Measure Topics for Future Years

    5. Maintenance of Technical Specifications for Quality Measures

    6. Public Display Requirements

  159. Background

  160. Proposed Additional Public Display Requirements

    7. Form, Manner, and Timing of Data Submission

  161. Background

  162. Reporting Requirements for the Proposed New Measures: CDC NHSN CDI (NQF #1717), CDC NHSN MRSA (NQF #1716), and CDC NHSN HCP (NQF #0431) Measures

    C. Long-Term Care Hospital Quality Reporting Program (LTCH QRP)

    1. Background and Statutory Authority

    2. General Considerations Used for Selection, Resource Use, and Other Quality Measures for the LTCH QRP

    3. Policy for Retention of LTCH QRP Measures Adopted for Previous Payment Determinations

    4. Policy for Adopting Changes to LTCH QRP Measures

    5. Previously Adopted Quality Measures

  163. Previously Adopted Quality Measures for the FY 2015 and FY 2016 Payment Determinations and Subsequent Years

  164. Previously Adopted Quality Measures for the FY 2017 and FY 2018 Payment Determinations and Subsequent Years

    6. Previously Adopted LTCH QRP Quality Measures for the FY 2018 Payment Determinations and Subsequent Years

  165. Proposal To Reflect NQF Endorsement: All-Cause Unplanned Readmission Measure for 30 Days Post-Discharge From LTCHs (NQF #2512)

  166. Proposal To Address the IMPACT Act of 2014: Quality Measure Addressing the Domain of Skin Integrity and Changes in Skin Integrity: Percent of Residents or Patients With Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678)

  167. Proposal To Address the IMPACT Act of 2014: Quality Measure Addressing the Domain of Incidence of Major Falls: Application of Percent of Residents Experiencing One or More Falls With Major Injury (Long Stay) (NQF #0674)

  168. Proposal To Address the IMPACT Act of 2014: Quality Measure Addressing the Domain of Functional Status, Cognitive Function, and Changes in Function and Cognitive Function: Application of Percent of LTCH Patients With an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631; Under NQF Review)

    7. LTCH QRP Quality Measures for the FY 2019 Payment Determination and Subsequent Years

    8. LTCH QRP Quality Measures and Concepts Under Consideration for Future Years

    9. Form, Manner, and Timing of Quality Data Submission for the FY 2016 Payment Determinations and Subsequent Years

  169. Background

  170. Proposed Timing for New LTCHs To Begin Reporting Data to CMS for the FY 2017 Payment Determinations and Subsequent Years

  171. Proposed Revisions to Previously Adopted Data Submission Timelines Under the LTCH QRP for the FY 2017 and FY 2018 Payment Determinations and Subsequent Years and Proposed Data Collection and Data Submission Timelines for Quality Measures Proposed in This Proposed Rule

    10. Previously Adopted LTCH QRP Data Completion Thresholds for the FY 2016 Payment Determination and Subsequent Years

    11. Future LTCH QRP Data Validation Process

    12. Proposed Public Display of Quality Measure Data for the LTCH QRP

    13. Previously Adopted and Proposed LTCH QRP Reconsideration and Appeals Procedures for the FY 2017 Payment Determination and Subsequent Years

    14. Previously Adopted and Proposed LTCH QRP Submission Exception and Extension Requirements for the FY 2017 Payment Determination and Subsequent Years

    D. Clinical Quality Measurement for Eligible Hospitals and Critical Access Hospitals Participating in the EHR Incentive Programs in 2016

    1. Background

    2. CQM Reporting for the Medicare and Medicaid EHR Incentive Programs in 2016

  172. Background

  173. Proposed CQM Reporting Period for the Medicare and Medicaid EHR Incentive Programs for CY 2016

  174. CQM Form and Method for the Medicare EHR Incentive Programs for 2016

    3. Certified EHR Technology for CQMs for the EHR Incentive Programs in 2016

    Page 24331

  175. Edition of Certified EHR Technology Requirements for 2016

  176. ``CQM--Report'' Certification Criterion in ONC's 2015 Edition Proposed Rule

    4. CQM Development and Certification Cycle

    IX. MedPAC Recommendations

    X. Other Required Information

    A. Requests for Data From the Public

    B. Collection of Information Requirements

    1. Statutory Requirement for Solicitation of Comments

    2. ICRs for Add-On Payments for New Services and Technologies

    3. ICRs for the Proposed Occupational Mix Adjustment to the Proposed FY 2016 Wage Index (Hospital Wage Index Occupational Mix Survey)

    4. Hospital Applications for Geographic Reclassifications by the MGCRB

    5. ICRs for the Hospital Inpatient Quality Reporting (IQR) Program

    6. ICRs for PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program

    7. ICRs for Hospital Value-Based Purchasing (VBP) Program

    8. ICRs for the Long-Term Care Hospital Quality Reporting Program (LTCHQR)

    C. Response to Comments

    Regulation Text

    Addendum--Proposed Schedule of Standardized Amounts, Update Factors, and Rate-of-Increase Percentages Effective With Cost Reporting Periods Beginning on or After October 1, 2015 and Proposed Payment Rates for LTCHs Effective With Discharges Occurring on or After October 1, 2015

    I. Summary and Background

    II. Proposed Changes to the Prospective Payment Rates for Hospital Inpatient Operating Costs for Acute Care Hospitals for FY 2016

    A. Calculation of the Adjusted Standardized Amount

    B. Adjustments for Area Wage Levels and Cost-of-Living

    C. Proposed MS-DRG Relative Weights

    D. Calculation of the Prospective Payment Rates

    III. Proposed Changes to Payment Rates for Acute Care Hospital Inpatient Capital-Related Costs for FY 2016

    A. Determination of Federal Hospital Inpatient Capital-Related Prospective Payment Rate Update

    B. Calculation of the Proposed Inpatient Capital-Related Prospective Payments for FY 2016

    C. Capital Input Price Index

    IV. Proposed Changes to Payment Rates for Excluded Hospitals: Rate-of-Increase Percentages for FY 2016

    V. Proposed Updates to the Payment Rates for the LTCH PPS for FY 2016

    A. Proposed LTCH PPS Standard Federal Rate for FY 2016

    1. Background

    2. Development of the Proposed FY 2016 LTCH PPS Standard Federal Rate

    B. Proposed Adjustment for Area Wage Levels Under the LTCH PPS Standard Federal Payment Rate for FY 2016

    1. Background

    2. Proposed Geographic Classifications (Labor Market Areas) for the LTCH PPS Standard Federal Payment Rate

    3. Proposed Labor-Related Share for the LTCH PPS Standard Federal Payment Rate

    4. Proposed Wage Index for FY 2016 for the LTCH PPS Standard Federal Payment Rate

    5. Proposed Budget Neutrality Adjustment for Proposed Changes to the LTCH PPS Standard Federal Payment Rate Area Wage Level Adjustment

    C. Proposed LTCH PPS Cost-of-Living Adjustment (COLA) for LTCHs Located in Alaska and Hawaii

    D. Proposed Adjustment for LTCH PPS High-Cost Outlier (HCO) Cases

    1. Overview

    2. Determining Proposed LTCH CCRs Under the LTCH PPS

    3. Proposed High-Cost Outlier Payments for LTCH PPS Standard Federal Payment Rate Cases

    4. Proposed High-Cost Outlier Payments for Site Neutral Payment Rate Cases

    E. Proposed Update to the IPPS Comparable/Equivalent Amounts To Reflect the Statutory Changes to the IPPS DSH Payment Adjustment Methodology

    F. Computing the Proposed Adjusted LTCH PPS Federal Prospective Payments for FY 2016

    VI. Tables Referenced in This Proposed Rule and Available Through the Internet on the CMS Web site

    Appendix A--Economic Analyses

    I. Regulatory Impact Analysis

    A. Introduction

    B. Need

    C. Objectives of the IPPS

    D. Limitations of Our Analysis

    E. Hospitals Included in and Excluded From the IPPS

    F. Effects on Hospitals and Hospital Units Excluded From the IPPS

    G. Quantitative Effects of the Proposed Policy Changes Under the IPPS for Operating Costs

    1. Basis and Methodology of Estimates

    2. Analysis of Table I

    3. Impact Analysis of Table II

    H. Effects of Other Proposed Policy Changes

    1. Effects of Proposed Policy on MS-DRGs for Preventable HACs, Including Infections

    2. Effects of Proposed Policy Relating to New Medical Service and Technology Add-On Payments

    3. Effects of Proposed Changes in Medicare DSH Payments for FY 2016

    4. Effects of Proposed Reductions Under the Hospital Readmissions Reduction Program

    5. Effects of Proposed Changes Under the FY 2016 Hospital Value-

    Based Purchasing (VBP) Program

    6. Effects of Proposed Changes to the HAC Reduction Program for FY 2016

    7. Effects of Proposed Elimination of the Simplified Cost Allocation Methodology

    8. Effects of Implementation of Rural Community Hospital Demonstration Program

    9. Effects of Proposed Changes to List of MS-DRGs Subject to Postacute Care Transfer and DRG Special Pay Policy

    I. Effects of Proposed Changes in the Capital IPPS

    1. General Considerations

    2. Results

    J. Effects of Proposed Payment Rate Changes and Proposed Policy Changes Under the LTCH PPS

    1. Introduction and General Considerations

    2. Impact on Rural Hospitals

    3. Anticipated Effects of Proposed LTCH PPS Payment Rate Changes and Proposed Policy Changes

    4. Effect on the Medicare Program

    5. Effect on Medicare Beneficiaries

    K. Effects of Proposed Requirements for Hospital Inpatient Quality Reporting (IQR) Program

    L. Effects of Proposed Requirements for the PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program for FY 2016

    M. Effects of Proposed Requirements for the LTCH Quality Reporting Program (LTCH QRP) for FY 2016 Through FY 2020

    N. Effects of Proposed Changes to Clinical Quality Measurement for Eligible Hospitals and Critical Access Hospitals Participating in the EHR Incentive Programs in 2016

    II. Alternatives Considered

    III. Overall Conclusion

    A. Acute Care Hospitals

    B. LTCHs

    IV. Accounting Statements and Tables

    A. Acute Care Hospitals

    B. LTCHs

    V. Regulatory Flexibility Act (RFA) Analysis

    VI. Impact on Small Rural Hospitals

    VII. Unfunded Mandate Reform Act (UMRA) Analysis

    VIII. Executive Order 12866

    Appendix B: Recommendation of Update Factors for Operating Cost Rates of Payment for Inpatient Hospital Services

    I. Background

    II. Proposed Inpatient Hospital Updates for FY 2016

    A. Proposed FY 2016 Inpatient Hospital Update

    B. Proposed Update for SCHs for FY 2016

    C. Proposed FY 2016 Puerto Rico Hospital Update

    D. Proposed Update for Hospitals Excluded From the IPPS for FY 2016

    E. Proposed Update for LTCHs for FY 2016

    III. Secretary's Recommendation

    IV. MedPAC Recommendation for Assessing Payment Adequacy and Updating Payments in Traditional Medicare

    I. Executive Summary and Background

    A. Executive Summary

    1. Purpose and Legal Authority

    This proposed rule would make payment and policy changes under the Medicare inpatient prospective payment systems (IPPS) for operating and capital-related costs of acute care hospitals as well as for certain hospitals and hospital units excluded from the IPPS. In addition, it would make payment and policy changes for inpatient hospital services provided by long-term care hospitals (LTCHs) under the long-term care hospital prospective payment

    Page 24332

    system (LTCH PPS). It also would make policy changes to programs associated with Medicare IPPS hospitals, IPPS-excluded hospitals, and LTCHs.

    Under various statutory authorities, we are proposing to make changes to the Medicare IPPS, to the LTCH PPS, and to other related payment methodologies and programs for FY 2016 and subsequent fiscal years. These statutory authorities include, but are not limited to, the following:

    Section 1886(d) of the Social Security Act (the Act), which sets forth a system of payment for the operating costs of acute care hospital inpatient stays under Medicare Part A (Hospital Insurance) based on prospectively set rates. Section 1886(g) of the Act requires that, instead of paying for capital-related costs of inpatient hospital services on a reasonable cost basis, the Secretary use a prospective payment system (PPS).

    Section 1886(d)(1)(B) of the Act, which specifies that certain hospitals and hospital units are excluded from the IPPS. These hospitals and units are: Rehabilitation hospitals and units; LTCHs; psychiatric hospitals and units; children's hospitals; cancer hospitals; and short-term acute care hospitals located in the Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa. Religious nonmedical health care institutions (RNHCIs) are also excluded from the IPPS.

    Sections 123(a) and (c) of Public Law 106-113 and section 307(b)(1) of Public Law 106-554 (as codified under section 1886(m)(1) of the Act), which provide for the development and implementation of a prospective payment system for payment for inpatient hospital services of long-term care hospitals (LTCHs) described in section 1886(d)(1)(B)(iv) of the Act.

    Sections 1814(l), 1820, and 1834(g) of the Act, which specify that payments are made to critical access hospitals (CAHs) (that is, rural hospitals or facilities that meet certain statutory requirements) for inpatient and outpatient services and that these payments are generally based on 101 percent of reasonable cost.

    Section 1866(k) of the Act, as added by section 3005 of the Affordable Care Act, which establishes a quality reporting program for hospitals described in section 1886(d)(1)(B)(v) of the Act, referred to as ``PPS-Exempt Cancer Hospitals.''

    Section 1886(d)(4)(D) of the Act, which addresses certain hospital-acquired conditions (HACs), including infections. Section 1886(d)(4)(D) of the Act specifies that, by October 1, 2007, the Secretary was required to select, in consultation with the Centers for Disease Control and Prevention (CDC), at least two conditions that: (a) Are high cost, high volume, or both; (b) are assigned to a higher paying MS-DRG when present as a secondary diagnosis (that is, conditions under the MS-DRG system that are complications or comorbidities (CCs) or major complications or comorbidities (MCCs); and (c) could reasonably have been prevented through the application of evidence-based guidelines. Section 1886(d)(4)(D) of the Act also specifies that the list of conditions may be revised, again in consultation with CDC, from time to time as long as the list contains at least two conditions. Section 1886(d)(4)(D)(iii) of the Act requires that hospitals, effective with discharges occurring on or after October 1, 2007, submit information on Medicare claims specifying whether diagnoses were present on admission (POA). Section 1886(d)(4)(D)(i) of the Act specifies that effective for discharges occurring on or after October 1, 2008, Medicare no longer assigns an inpatient hospital discharge to a higher paying MS-DRG if a selected condition is not POA.

    Section 1886(a)(4) of the Act, which specifies that costs of approved educational activities are excluded from the operating costs of inpatient hospital services. Hospitals with approved graduate medical education (GME) programs are paid for the direct costs of GME in accordance with section 1886(h) of the Act. A payment for indirect medical education (IME) is made under section 1886(d)(5)(B) of the Act.

    Section 1886(b)(3)(B)(viii) of the Act, which requires the Secretary to reduce the applicable percentage increase in payments to a subsection (d) hospital for a fiscal year if the hospital does not submit data on measures in a form and manner, and at a time, specified by the Secretary.

    Section 1886(o) of the Act, which requires the Secretary to establish a Hospital Value-Based Purchasing (VBP) Program under which value-based incentive payments are made in a fiscal year to hospitals meeting performance standards established for a performance period for such fiscal year.

    Section 1886(p) of the Act, as added by section 3008 of the Affordable Care Act, which establishes an adjustment to hospital payments for hospital-acquired conditions (HACs), or a Hospital-

    Acquired Condition (HAC) Reduction Program, under which payments to applicable hospitals are adjusted to provide an incentive to reduce hospital-acquired conditions.

    Section 1886(q) of the Act, as added by section 3025 of the Affordable Care Act and amended by section 10309 of the Affordable Care Act, which establishes the ``Hospital Readmissions Reduction Program'' effective for discharges from an ``applicable hospital'' beginning on or after October 1, 2012, under which payments to those hospitals under section 1886(d) of the Act will be reduced to account for certain excess readmissions.

    Section 1886(r) of the Act, as added by section 3133 of the Affordable Care Act, which provides for a reduction to disproportionate share hospital payments under section 1886(d)(5)(F) of the Act and for a new uncompensated care payment to eligible hospitals. Specifically, section 1886(r) of the Act now requires that, for fiscal year 2014 and each subsequent fiscal year, subsection (d) hospitals that would otherwise receive a disproportionate share hospital payment made under section 1886(d)(5)(F) of the Act will receive two separate payments: (1) 25 percent of the amount they previously would have received under section 1886(d)(5)(F) of the Act for DSH (``the empirically justified amount''), and (2) an additional payment for the DSH hospital's proportion of uncompensated care, determined as the product of three factors. These three factors are: (1) 75 percent of the payments that would otherwise be made under section 1886(d)(5)(F) of the Act; (2) 1 minus the percent change in the percent of individuals under the age of 65 who are uninsured (minus 0.1 percentage points for FY 2014, and minus 0.2 percentage points for FY 2015 through FY 2017); and (3) a hospital's uncompensated care amount relative to the uncompensated care amount of all DSH hospitals expressed as a percentage.

    Section 1886(m)(6) of the Act, as added by section 1206(a)(1) of the Pathway for SGR Reform Act of 2013 (Pub. L. 113-67), which provided for the establishment of patient criteria for payment under the LTCH PPS for implementation beginning in FY 2016.

    Section 1206(b)(1) of the Pathway for SGR Reform Act of 2013, which further amended section 114(c) of the MMSEA, as amended by section 4302(a) of the ARRA and sections 3106(c) and 10312(a) of the Affordable Care Act, by retroactively reestablishing and extending the statutory moratorium on the full implementation of the 25-percent threshold payment adjustment policy under the LTCH PPS so that the policy will be in effect for 9 years (except for ``grandfathered'' hospital-within-hospitals (HwHs), which are permanently exempt from this policy); and section 1206(b)(2) (as amended by section 112(b) of Pub. L. 113-93), which together further amended section 114(d)

    Page 24333

    of the MMSEA, as amended by section 4302(a) of the ARRA and sections 3106(c) and 10312(a) of the Affordable Care Act to establish a new moratoria (subject to certain defined exceptions) on the development of new LTCHs and LTCH satellite facilities and a new moratorium on increases in the number of beds in existing LTCHs and LTCH satellite facilities beginning January 1, 2015 and ending on September 30, 2017; and section 1206(d), which instructs the Secretary to evaluate payments to LTCHs classified under section 1886(b)(1)(C)(iv)(II) of the Act and to adjust payment rates in FY 2015 or FY 2016 under the LTCH PPS, as appropriate, based upon the evaluation findings.

    Section 1886(m)(5)(D)(iv) of the Act, as added by section 1206 (c) of the Pathway for SGR Reform Act of 2013, which provides for the establishment, no later than October 1, 2015, of a functional status quality measure under the LTCH QRP for change in mobility among inpatients requiring ventilator support.

    Section 1899B of the Act, as added by the Improving Medicare Post-Acute Care Transformation Act of 2014 (the IMPACT Act of 2014), which imposes new data reporting requirements for certain postacute care providers, including LTCHs.

    2. Summary of the Major Provisions

  177. MS-DRG Documentation and Coding Adjustment

    Section 631 of the American Taxpayer Relief Act (ATRA, Pub. L. 112-

    240) amended section 7(b)(1)(B) of Public Law 110-90 to require the Secretary to make a recoupment adjustment to the standardized amount of Medicare payments to acute care hospitals to account for changes in MS-

    DRG documentation and coding that do not reflect real changes in case-

    mix, totaling $11 billion over a 4-year period of FYs 2014, 2015, 2016, and 2017. This adjustment represents the amount of the increase in aggregate payments as a result of not completing the prospective adjustment authorized under section 7(b)(1)(A) of Public Law 110-90 until FY 2013. Prior to the ATRA, this amount could not have been recovered under Public Law 110-90.

    While our actuaries estimated that a -9.3 percent adjustment to the standardized amount would be necessary if CMS were to fully recover the $11 billion recoupment required by section 631 of the ATRA in one year, it is often our practice to delay or phase in rate adjustments over more than one year, in order to moderate the effects on rates in any one year. Therefore, consistent with the policies that we have adopted in many similar cases, we made a -0.8 percent recoupment adjustment to the standardized amount in FY 2014 and FY 2015. We are proposing to make an additional -0.8 percent recoupment adjustment to the standardized amount in FY 2016.

  178. Reduction of Hospital Payments for Excess Readmissions

    We are proposing changes in policies to the Hospital Readmissions Reduction Program, which is established under section 1886(q) of the Act, as added by section 3025 of the Affordable Care Act. The Hospital Readmissions Reduction Program requires a reduction to a hospital's base operating DRG payment to account for excess readmissions of selected applicable conditions. For FYs 2013 and 2014, these conditions are acute myocardial infarction, heart failure, and pneumonia. For FY 2014, we established additional exclusions to the three existing readmission measures (that is, the excess readmission ratio) to account for additional planned readmissions. We also established additional readmissions measures, chronic obstructive pulmonary disease (COPD), and total hip arthroplasty and total knee arthroplasty (THA/TKA), to be used in the Hospital Readmissions Reduction Program for FY 2015 and future years. We expanded the readmissions measures for FY 2017 and future years by adding a measure of patients readmitted following coronary artery bypass graft (CABG) surgery.

    In this proposed rule, we are proposing a refinement to the pneumonia readmissions measure, which would expand the measure cohort for the FY 2017 payment determination and subsequent years. In addition, we are proposing to adopt an extraordinary circumstance exception policy that would align with existing extraordinary circumstance exception policies for other IPPS quality reporting and payment programs and would allow hospitals that experience an extraordinary circumstance (such as a hurricane or flood) to request a waiver for use of data from the affected time period.

  179. Hospital Value-Based Purchasing (VBP) Program

    Section 1886(o) of the Act requires the Secretary to establish a Hospital VBP Program under which value-based incentive payments are made in a fiscal year to hospitals based on their performance on measures established for a performance period for such fiscal year.

    For FY 2016, we are proposing to adopt one additional measure beginning with the FY 2018 program year and one measure beginning with the FY 2021 program year. We also are proposing to remove two measures beginning with the FY 2018 program year. In addition, we are proposing to move one measure to the Safety domain and to remove the Clinical Care--Process subdomain and rename the Clinical Care--Outcomes subdomain as the Clinical Care domain. Finally, we are signaling our intent to propose in future rulemaking to expand one measure and to update the standard population data we use to calculate several measures beginning with the FY 2019 program year.

  180. Hospital-Acquired Condition (HAC) Reduction Program

    Section 1886(p) of the Act, as added under section 3008(a) of the Affordable Care Act, establishes an incentive to hospitals to reduce the incidence of hospital-acquired conditions by requiring the Secretary to make an adjustment to payments to applicable hospitals effective for discharges beginning on October 1, 2014 and for subsequent program years. This 1-percent payment reduction applies to a hospital whose ranking is in the top quartile (25 percent) of all applicable hospitals, relative to the national average, of conditions acquired during the applicable period and on all of the hospital's discharges for the specified fiscal year. The amount of payment shall be equal to 99 percent of the amount of payment that would otherwise apply to such discharges under section 1886(d) or 1814(b)(3) of the Act, as applicable.

    In this proposed rule, we are proposing three changes to existing Hospital-Acquired Condition Reduction Program policies: (1) An expansion to the population covered by the central line-associated bloodstream infection (CLABSI) and catheter-associated urinary tract infection (CAUTI) measures to include patients in select nonintensive care unit sites within a hospital; (2) an adjustment to the relative contribution of each domain to the Total HAC Score which is used to determine if a hospital will receive the payment adjustment; and (3) a policy that would align with existing extraordinary circumstance exception policies for other IPPS quality reporting and payment programs and would allow hospitals to request a waiver for use of data from the affected time period.

    Page 24334

  181. DSH Payment Adjustment and Additional Payment for Uncompensated Care

    Section 3133 of the Affordable Care Act modified the Medicare disproportionate share hospital (DSH) payment methodology beginning in FY 2014. Under section 1886(r) of the Act, which was added by section 3133 of the Affordable Care Act, starting in FY 2014, DSHs will receive 25 percent of the amount they previously would have received under the current statutory formula for Medicare DSH payments in section 1886(d)(5)(F) of the Act. The remaining amount, equal to 75 percent of what otherwise would have been paid as Medicare DSH payments, will be paid as additional payments after the amount is reduced for changes in the percentage of individuals that are uninsured. Each Medicare DSH hospital will receive an additional payment based on its share of the total amount of uncompensated care for all Medicare DSH hospitals for a given time period.

    In this proposed rule, we are proposing to update our estimates of the three factors used to determine uncompensated care payments for FY 2016. We are proposing to continue to use the methodology we established in FY 2015 to calculate the uncompensated care payment amounts for merged hospitals such that we combine uncompensated care data for the hospitals that have undergone a merger in order to calculate their relative share of uncompensated care. We also are proposing a change to the time period of the data used to calculate the uncompensated care payment amounts to be distributed.

  182. Proposed Changes to the LTCH PPS

    Under the current LTCH PPS, all discharges are paid under the LTCH PPS standard Federal payment rate. In this proposed rule, we are proposing to implement section 1206 of the Pathways for SGR Reform Act, which requires the establishment of an alternative site neutral payment rate for Medicare inpatient discharges from an LTCH that fail to meet certain statutory defined criteria, beginning with LTCH discharges occurring in cost reporting periods beginning on or after October 1, 2015. We include proposals regarding the application of the site neutral payment rate and the criteria for exclusion from the site neutral payment rate, as well as proposals on a number of methodological and implementation issues, such as the criterion for a principal diagnosis relating to a psychiatric diagnosis or to rehabilitation, the intensive care unit (ICU) criterion, the ventilator criterion, the definition of ``immediately preceded'' by a subsection (d) hospital discharge, limitation on beneficiary charges in the context of the new site neutral payment rate, and the transitional blended payment rate methodology for FY 2016 and FY 2017.

    In addition, we are proposing changes to address certain statutory requirements related to an LTCH's average length of stay criterion and discharge payment percentage. We also are providing technical clarifications relating to our FY 2015 implementation of the new statutory moratoria on the establishment of new LTCHs and LTCH satellite facilities (subject to certain defined exceptions) and on bed increases in existing LTCHs and LTCH satellite facilities as well as proposing a technical revision to the regulations to more clearly reflect our established policies.

  183. Hospital Inpatient Quality Reporting (IQR) Program

    Under section 1886(b)(3)(B)(viii) of the Act, hospitals are required to report data on measures selected by the Secretary for the Hospital IQR Program in order to receive the full annual percentage increase in payments. In past years, we have established measures for reporting data and the process for submittal and validation of the data.

    In this proposed rule, we are proposing to update considerations for measure removal and retention. In addition, we are proposing to remove nine measures for the FY 2018 payment determination and subsequent years: Six of these measures are ``topped-out'' and two of the measures are suspended. However, we are retaining the electronic version of six of these measures. We also are proposing to refine two previously adopted measures as well as for the FY 2018 payment determination and subsequent years and add eight new measures: Seven new claims-based measures and one structural measure.

    Further, for the FY 2018 payment determination, we are proposing to require hospitals to report 16 of the 28 electronic clinical quality measures under the Hospital IQR Program that align with the Medicare EHR Incentive Program and span 3 different NQS domains. We also are proposing to require that hospitals submit two quarters (Q3 and Q4) of data within 2 months following the last discharge date of the quarter. We are proposing to delay and footnote public reporting of electronic clinical quality measure data submitted by hospitals for the CY 2016/FY 2018 payment determination.

    We are proposing to align the reporting and submission timelines for the electronic submission of clinical quality measures for the Medicare EHR Incentive Program for eligible hospitals and critical access hospitals (CAHs) with the reporting and submission timelines for the Hospital IQR Program. Lastly, ONC is proposing a 2015 Edition certification criterion for ``CQMs--report'' as part of the proposed 2015 Edition of certification criteria that would require a certified Health IT Module to enable a user to electronically create a data file for transmission of clinical quality measurement data. This proposed certification criterion would apply to eligible professionals, eligible hospitals, and CAHs.

  184. Long-Term Care Quality Reporting Program (LTCH QRP)

    Section 3004(a) of the Affordable Care Act amended section 1886(m)(5) of the Act to require the Secretary to establish the Long-

    Term Care Hospital Quality Reporting Program (LTCH QRP). This program applies to all hospitals certified by Medicare as LTCHs. Beginning with the FY 2014 payment determination and subsequent years, the Secretary is required to reduce any annual update to the standard Federal rate for discharges occurring during such fiscal year by 2 percentage points for any LTCH that does not comply with the requirements established by the Secretary.

    The IMPACT Act of 2014 amended the Act in ways that affect the LTCH QRP. Specifically, section 2(a) of the IMPACT Act of 2014 added section 1899B of the Act, and section 2(c)(3) of the IMPACT Act of 2014 amended section 1886(m)(5) of the Act. Under section 1899B(a)(1) of the Act, the Secretary must require post-acute care (PAC) providers (defined in section 1899B(a)(2)(A) of the Act to include HHAs, SNFs, IRFs, and LTCHs) to submit standardized patient assessment data in accordance with section 1899B(b) of the Act, data on quality measures required under section 1899B(c)(1) of the Act, and data on resource use and other measures required under section 1899B(d)(1) of the Act. The Act also sets out specified application dates for each of the measures. The Secretary must specify the quality, resource use, and other measures not later than the applicable specified application date defined in section 1899B(a)(2)(E) of the Act.

    In this proposed rule, we are proposing three previously finalized quality measures: One measure proposal establishes the newly NQF-

    endorsed status of that quality measure; two other

    Page 24335

    measure proposals are for the purpose of establishing the cross-setting use of the previously finalized quality measures, in order to satisfy the IMPACT Act of 2014 requirement of adopting quality measures under the domains of skin integrity and falls with major injury. We are proposing to adopt an ``application of'' a fourth previously finalized LTCH functional status measure in order to meet the requirement of the IMPACT Act of 2014 to adopt a cross-setting measure under the domain of functional status, such as self-care or mobility. All four measure proposals effect the FY 2018 annual payment update determination and beyond.

    In addition, we are proposing to publicly report LTCH quality data beginning in fall 2016, on a CMS Web site, such as Hospital Compare. We are proposing to initially publicly report quality data on four quality measures.

    Finally, we are proposing to lengthen our quarterly data submission deadlines from 45 days to 135 days beyond the end of each calendar year quarter beginning with quarter four (4) 2015 quality data. We are proposing this change in order to align with other quality reporting programs, and to allow an appropriate amount of time for LTCHs to review and correct quality data prior to the public posting of that data.

    3. Summary of Costs and Benefits

    Adjustment for MS-DRG Documentation and Coding Changes. We are proposing to make a -0.8 percent recoupment adjustment to the standardized amount for FY 2016 to implement, in part, the requirement of section 631 of the ATRA that the Secretary make an adjustment totaling $11 billion over a 4-year period of FYs 2014, 2015, 2016, and 2017. This proposed recoupment adjustment represents the amount of the increase in aggregate payments as a result of not completing the prospective adjustment authorized under section 7(b)(1)(A) of Public Law 110-90 until FY 2013. Prior to the ATRA, this amount could not have been recovered under Public Law 110-90.

    While our actuaries estimated that a -9.3 percent recoupment adjustment to the standardized amount would be necessary if CMS were to fully recover the $11 billion recoupment required by section 631 of the ATRA in FY 2014, it is often our practice to delay or phase in rate adjustments over more than one year, in order to moderate the effects on rates in any one year. Therefore, consistent with the policies that we have adopted in many similar cases and the adjustment we made for FY 2014, we are proposing to make a -0.8 percent recoupment adjustment to the standardized amount in FY 2016. Considering the -0.8 percent adjustments made in FY 2014 and FY 2015, we estimate that the combined impact of the proposed adjustment for FY 2016 and leaving the FY 2014 and FY 2015 adjustments in place would be to recover up to $3 billion in FY 2016. Combined with the effects of the -0.8 percent adjustments implemented in FY 2014 and FY 2015, we estimate that the proposed FY 2016 -0.8 percent adjustment would result in the recovery of a total of approximately $6 billion of the $11 billion in overpayments required to be recovered by section 631 of the ATRA.

    Proposed Changes to the Hospital Readmissions Reduction Program. We are proposing a refinement to the pneumonia readmissions measure, which would expand the measure cohort for the FY 2017 payment determination and subsequent years. In addition, we are proposing to adopt an extraordinary circumstance exception policy that would align with existing extraordinary circumstance exception policies for other IPPS quality reporting and payment programs and would allow hospitals that experience an extraordinary circumstance (such as a hurricane or flood) to request a waiver for use of data from the affected time period. These proposed changes would not significantly impact the program in FY 2016, but could impact future years, depending on actual experience.

    Value-Based Incentive Payments under the Hospital VBP Program. We estimate that there would be no net financial impact to the Hospital VBP Program for the FY 2016 program year in the aggregate because, by law, the amount available for value-based incentive payments under the program in a given year must be equal to the total amount of base operating MS-DRG payment amount reductions for that year, as estimated by the Secretary. The estimated amount of base operating MS-DRG payment amount reductions for the FY 2016 program year and, therefore, the estimated amount available for value-based incentive payments for FY 2016 discharges is approximately $1.5 billion. We believe that the program benefits will be seen in improved patient outcomes, safety, and in the patient's experience of care. However, we cannot estimate these benefits in actual dollar and patient terms.

    Proposed Changes to the HAC Reduction Program for FY 2016. We are proposing three changes to existing HAC Reduction Program policies: (1) An expansion to the population covered by the central line-associated bloodstream infection (CLABSI) and catheter-associated urinary tract infection (CAUTI) measures to include patients in select nonintensive care unit sites within a hospital; (2) an adjustment to the relative contribution of each domain to the Total HAC Score that is used to determine if a hospital will receive the payment adjustment; and (3) a policy that would align with existing extraordinary circumstance exception policies for other IPPS quality reporting and payment programs and would allow hospitals to request a waiver for use of data from the affected period. While hospitals in the top quartile of HAC scores will continue to have their HAC Reduction Program payment adjustment applied, as required by law, because a hospital's Total HAC score and its ranking in comparison to other hospitals in any given year depend on several different factors, any significant impact due to the proposed changes, including which hospitals receive the adjustment, would depend on actual experience.

    Medicare DSH Payment Adjustment and Additional Payment for Uncompensated Care. Under section 1886(r) of the Act (as added by section 3313 of the Affordable Care Act), disproportionate share hospital payments to hospitals under section 1886(d)(5)(F) of the Act are reduced and an additional payment for uncompensated care is made to eligible hospitals beginning in FY 2014. Hospitals that receive Medicare DSH payments will receive 25 percent of the amount they previously would have received under the current statutory formula for Medicare DSH payments in section 1886(d)(5)(F) of the Act. The remainder, equal to an estimate of 75 percent of what otherwise would have been paid as Medicare DSH payments, will be the basis for determining the additional payments for uncompensated care after the amount is reduced for changes in the percentage of individuals that are uninsured and additional statutory adjustments. Each hospital that receives Medicare DSH payments will receive an additional payment for uncompensated care based on its share of the total uncompensated care amount reported by Medicare DSHs. The reduction to Medicare DSH payments is not budget neutral.

    For FY 2016, we are proposing to provide that the 75 percent of what otherwise would have been paid for Medicare DSH is adjusted to approximately 63.69 percent of the amount to reflect changes in the percentage of individuals that are uninsured and additional statutory adjustments. In other words,

    Page 24336

    approximately 47.76 percent (the product of 75 percent and 63.69 percent) of our estimate of Medicare DSH payments prior to the application of section 3133 of the Affordable Care Act is available to make additional payment to hospitals for their relative share of the total amount of uncompensated care. We project that Medicare DSH payments and additional payments for uncompensated care made for FY 2016 would reduce payments overall by approximately 1 percent as compared to the Medicare DSH payments and uncompensated care payments distributed in FY 2015. The additional payments have redistributive effects based on a hospital's uncompensated care amount relative to the uncompensated care amount for all hospitals that are estimated to receive Medicare DSH payments, and the proposed payment amount is not directly tied to a hospital's number of discharges.

    Proposed Update to the LTCH PPS Payment Rates and Other Payment Factors. Based on the best available data for the 418 LTCHs in our data base, we estimate that the proposed changes to the payment rates and factors that we are presenting in the preamble and Addendum of this proposed rule, including the proposed application of the new site neutral payment rate required by section 1886(m)(6)(A) of the Act, the proposed update to the LTCH PPS standard Federal rate for FY 2016, and the proposed changes to short-stay outlier and high-cost outlier payments would result in an estimated decrease in payments from FY 2015 of approximately $251 million (or 4.6 percent).

    Hospital Inpatient Quality Reporting (IQR) Program. In this proposed rule, we are proposing to remove nine measures for the FY 2018 payment determination and subsequent years. We are proposing to add eight measures to the hospital IQR Program for the FY 2018 payment determination and subsequent years. We also are proposing to require hospitals to report 16 of the 28 Hospital IQR Program electronic clinical quality measures that align with the Medicare EHR Incentive Program and span three different NQS domains. We estimate that our proposals for the adoption and removal of measures will result in total hospital costs of $169 million across 3,300 IPPS hospitals.

    Changes in LTCH Payments Related to the LTCH QRP Proposals. We believe that the increase in costs to LTCHs related to our LTCH QRP proposals in this proposed rule is zero. We refer readers to sections VIII.C. of the preamble of this proposed rule for detailed discussion of the proposals.

    B. Summary

    1. Acute Care Hospital Inpatient Prospective Payment System (IPPS)

    Section 1886(d) of the Social Security Act (the Act) sets forth a system of payment for the operating costs of acute care hospital inpatient stays under Medicare Part A (Hospital Insurance) based on prospectively set rates. Section 1886(g) of the Act requires the Secretary to use a prospective payment system (PPS) to pay for the capital-related costs of inpatient hospital services for these ``subsection (d) hospitals.'' Under these PPSs, Medicare payment for hospital inpatient operating and capital-related costs is made at predetermined, specific rates for each hospital discharge. Discharges are classified according to a list of diagnosis-related groups (DRGs).

    The base payment rate is comprised of a standardized amount that is divided into a labor-related share and a nonlabor-related share. The labor-related share is adjusted by the wage index applicable to the area where the hospital is located. If the hospital is located in Alaska or Hawaii, the nonlabor-related share is adjusted by a cost-of-

    living adjustment factor. This base payment rate is multiplied by the DRG relative weight.

    If the hospital treats a high percentage of certain low-income patients, it receives a percentage add-on payment applied to the DRG-

    adjusted base payment rate. This add-on payment, known as the disproportionate share hospital (DSH) adjustment, provides for a percentage increase in Medicare payments to hospitals that qualify under either of two statutory formulas designed to identify hospitals that serve a disproportionate share of low-income patients. For qualifying hospitals, the amount of this adjustment varies based on the outcome of the statutory calculations. The Affordable Care Act revised the Medicare DSH payment methodology and provides for a new additional Medicare payment that considers the amount of uncompensated care beginning on October 1, 2013.

    If the hospital is an approved teaching hospital, it receives a percentage add-on payment for each case paid under the IPPS, known as the indirect medical education (IME) adjustment. This percentage varies, depending on the ratio of residents to beds.

    Additional payments may be made for cases that involve new technologies or medical services that have been approved for special add-on payments. To qualify, a new technology or medical service must demonstrate that it is a substantial clinical improvement over technologies or services otherwise available, and that, absent an add-

    on payment, it would be inadequately paid under the regular DRG payment.

    The costs incurred by the hospital for a case are evaluated to determine whether the hospital is eligible for an additional payment as an outlier case. This additional payment is designed to protect the hospital from large financial losses due to unusually expensive cases. Any eligible outlier payment is added to the DRG-adjusted base payment rate, plus any DSH, IME, and new technology or medical service add-on adjustments.

    Although payments to most hospitals under the IPPS are made on the basis of the standardized amounts, some categories of hospitals are paid in whole or in part based on their hospital-specific rate, which is determined from their costs in a base year. For example, sole community hospitals (SCHs) receive the higher of a hospital-specific rate based on their costs in a base year (the highest of FY 1982, FY 1987, FY 1996, or FY 2006) or the IPPS Federal rate based on the standardized amount. (We note that the statutory provision for Medicare payments to MDHs expired on March 31, 2015, under current law.) SCHs are the sole source of care in their areas. Specifically, section 1886(d)(5)(D)(iii) of the Act defines an SCH as a hospital that is located more than 35 road miles from another hospital or that, by reason of factors such as isolated location, weather conditions, travel conditions, or absence of other like hospitals (as determined by the Secretary), is the sole source of hospital inpatient services reasonably available to Medicare beneficiaries. In addition, certain rural hospitals previously designated by the Secretary as essential access community hospitals are considered SCHs.

    Section 1886(g) of the Act requires the Secretary to pay for the capital-related costs of inpatient hospital services ``in accordance with a prospective payment system established by the Secretary.'' The basic methodology for determining capital prospective payments is set forth in our regulations at 42 CFR 412.308 and 412.312. Under the capital IPPS, payments are adjusted by the same DRG for the case as they are under the operating IPPS. Capital IPPS payments are also adjusted for IME and DSH, similar to the adjustments made under the operating IPPS. In addition, hospitals may receive outlier payments for those cases that have unusually high costs.

    The existing regulations governing payments to hospitals under the IPPS

    Page 24337

    are located in 42 CFR part 412, subparts A through M.

    2. Hospitals and Hospital Units Excluded From the IPPS

    Under section 1886(d)(1)(B) of the Act, as amended, certain hospitals and hospital units are excluded from the IPPS. These hospitals and units are: Rehabilitation hospitals and units; long-term care hospitals (LTCHs); psychiatric hospitals and units; children's hospitals; certain cancer hospitals; and short-term acute care hospitals located in Guam, the U.S. Virgin Islands, the Northern Mariana Islands, and American Samoa. Religious nonmedical health care institutions (RNHCIs) are also excluded from the IPPS. Various sections of the Balanced Budget Act of 1997 (BBA, Pub. L. 105-33), the Medicare, Medicaid and SCHIP State Children's Health Insurance Program Balanced Budget Refinement Act of 1999 (BBRA, Pub. L. 106-113), and the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA, Pub. L. 106-554) provide for the implementation of PPSs for rehabilitation hospitals and units (referred to as inpatient rehabilitation facilities (IRFs)), LTCHs, and psychiatric hospitals and units (referred to as inpatient psychiatric facilities (IPFs)). (We note that the annual updates to the LTCH PPS are now included as part of the IPPS annual update document. Updates to the IRF PPS and IPF PPS are issued as separate documents.) Children's hospitals, certain cancer hospitals, short-term acute care hospitals located in Guam, the U.S. Virgin Islands, the Northern Mariana Islands, and American Samoa, and RNHCIs continue to be paid solely under a reasonable cost-based system subject to a rate-of-increase ceiling on inpatient operating costs, as updated annually by the percentage increase in the IPPS operating market basket.

    The existing regulations governing payments to excluded hospitals and hospital units are located in 42 CFR parts 412 and 413.

    3. Long-Term Care Hospital Prospective Payment System (LTCH PPS)

    The Medicare prospective payment system (PPS) for LTCHs applies to hospitals described in section 1886(d)(1)(B)(iv) of the Act effective for cost reporting periods beginning on or after October 1, 2002. The LTCH PPS was established under the authority of section 123 of the BBRA and section 307(b) of the BIPA (as codified under section 1886(m)(1) of the Act). During the 5-year (optional) transition period, a LTCH's payment under the PPS was based on an increasing proportion of the LTCH Federal rate with a corresponding decreasing proportion based on reasonable cost principles. Effective for cost reporting periods beginning on or after October 1, 2006, all LTCHs are paid 100 percent of the Federal rate. Section 1206(a) of Public Law 113-67 established the site neutral payment rate under the LTCH PPS. Under this statute, based on a rolling effective date that is linked to the date on which a given LTCH's Federal FY 2016 cost reporting period begins, LTCHs will be paid for LTCH discharges at the new site neutral payment rate unless the discharge meets the patient criteria for payment at the LTCH PPS standard Federal rate. The existing regulations governing payment under the LTCH PPS are located in 42 CFR part 412, subpart O. Beginning with FY 2009, annual updates to the LTCH PPS are published in the same documents that update the IPPS (73 FR 26797 through 26798).

    4. Critical Access Hospitals (CAHs)

    Under sections 1814(l), 1820, and 1834(g) of the Act, payments made to critical access hospitals (CAHs) (that is, rural hospitals or facilities that meet certain statutory requirements) for inpatient and outpatient services are generally based on 101 percent of reasonable cost. Reasonable cost is determined under the provisions of section 1861(v)(1)(A) of the Act and existing regulations under 42 CFR part 413.

    5. Payments for Graduate Medical Education (GME)

    Under section 1886(a)(4) of the Act, costs of approved educational activities are excluded from the operating costs of inpatient hospital services. Hospitals with approved graduate medical education (GME) programs are paid for the direct costs of GME in accordance with section 1886(h) of the Act. The amount of payment for direct GME costs for a cost reporting period is based on the hospital's number of residents in that period and the hospital's costs per resident in a base year. The existing regulations governing payments to the various types of hospitals are located in 42 CFR part 413.

    C. Summary of Provisions of Recent Legislation Discussed in This Proposed Rule

    The American Taxpayer Relief Act of 2012 (ATRA) (Pub. L. 112-240), enacted on January 2, 2013, made a number of changes that affect the IPPS. We announced changes related to certain IPPS provisions for FY 2013 in accordance with sections 605 and 606 of Public Law 112-240 in a notice that appeared in the Federal Register on March 7, 2013 (78 FR 14689).

    The Pathway for Sustainable Growth Rate (SGR) Reform Act of 2013 (Pub. L. 113-67), enacted on December 26, 2013, also made a number of changes that affect the IPPS and the LTCH PPS. We implemented changes related to the low-volume hospital payment adjustment and MDH provisions for FY 2014 in accordance with sections 1105 and 1106 of Public Law 113-67 in an interim final rule with comment period that appeared in the Federal Register on March 18, 2014 (79 FR 15022).

    The Protecting Access to Medicare Act of 2014 (Pub. L. 113-93), enacted on April 1, 2014, also made a number of changes that affect the IPPS and LTCH PPS.

    The Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act of 2014) (Pub. L. 113-185), enacted on October 6, 2014, made a number of changes that affect the Long-Term Care Quality Reporting Program (LTCH QRP).

    1. American Taxpayer Relief Act of 2012 (ATRA) (Pub. L. 112-240)

    In this proposed rule, we are proposing to make policy changes to implement section 631 of the American Taxpayer Relief Act of 2012, which amended section 7(b)(1)(B) of Public Law 110-90 and requires a recoupment adjustment to the standardized amounts under section 1886(d) of the Act based upon the Secretary's estimates for discharges occurring in FY 2014 through FY 2017 to fully offset $11 billion (which represents the amount of the increase in aggregate payments from FYs 2008 through 2013 for which an adjustment was not previously applied).

    2. Pathway for Sustainable Growth Rate (SGR) Reform Act of 2013 (Pub. L. 113-67)

    In this proposed rule, we are proposing to make policy changes to implement and discuss the need for future policy changes to carry out provisions under section 1206 of the Pathway for SGR Reform Act of 2013. These include:

    Section 1206(a), which provides for the establishment of patient criteria for exclusion from the new ``site neutral'' payment rate under the LTCH PPS, beginning in FY 2016.

    Section 1206(a)(3), which requires changes to the LTCH average length of stay criterion.

    Section 1206(b)(1), which further amended section 114(c) of the MMSEA, as amended by section 4302(a) of the ARRA and sections 3106(c) and

    Page 24338

    10312(a) of the Affordable Care Act by retroactively reestablishing, and extending, the statutory moratorium on the full implementation of the 25-percent threshold payment adjustment policy under the LTCH PPS so that the policy will be in effect for 9 years (except for grandfathered hospitals-within-hospitals (HwHs), which it permanently exempted from this policy).

    Section 1206(b)(2), which amended section 114(d) of the MMSEA, as amended by section 4302(a) of the ARRA and sections 3106(c) and 10312(a) of the Affordable Care Act to establish new moratoria (subject to certain defined exceptions) on the development of new LTCHs and LTCH satellite facilities and a new moratorium on increases in the number of beds in existing LTCHs and LTCH satellite facilities.

    3. Protecting Access to Medicare Act of 2014 (Pub. L. 113-93)

    In this proposed rule, we are proposing to make policy changes to implement, or making conforming changes to regulations in accordance with, the following provisions (or portions of the following provisions) of the Protecting Access to Medicare Act of 2014 that are applicable to the IPPS and the LTCH PPS for FY 2016:

    Section 112, which makes certain changes to Medicare LTCH provisions, including modifications to the statutory moratoria on the establishment of new LTCHs and LTCH satellite facilities.

    Section 212, which prohibits the Secretary from requiring implementation of ICD-10 code sets before October 1, 2015.

    4. Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act of 2014) (Pub. L. 113-185)

    In this proposed rule, we are proposing to implement portions of section 2 of the IMPACT Act of 2014, which, in part, requires LTCHs, among other postacute care providers, to report standardized patient assessment data, data on quality measures, and data on resource use and other measures.

    D. Summary of the Major Provisions of This Proposed Rule

    In this proposed rule, we set forth proposed changes to the Medicare IPPS for operating costs and for capital-related costs of acute care hospitals for FY 2016. We also set forth proposed changes relating to payments to certain hospitals that continue to be excluded from the IPPS and paid on a reasonable cost basis. In addition, in this proposed rule, we set forth proposed changes to the payment rates, factors, and other payment rate policies under the LTCH PPS for FY 2016.

    Below is a summary of the major changes that we are proposing to make:

    1. Proposed Changes to MS-DRG Classifications and Recalibrations of Relative Weights

    In section II. of the preamble of this proposed rule, we include--

    Proposed changes to MS-DRG classifications based on our yearly review, including a discussion of the conversion of MS-DRGs to ICD-10 and the implementation of the ICD-10-CM and ICD-10-PCS systems.

    Proposed application of the documentation and coding adjustment for FY 2016 resulting from implementation of the MS-DRG system.

    Proposed recalibrations of the MS-DRG relative weights.

    Proposed changes to hospital-acquired conditions (HACs) and a discussion of HACs, including infections, that would be subject to the statutorily required adjustment in MS-DRG payments for FY 2016.

    A discussion of the FY 2016 status of new technologies approved for add-on payments for FY 2015 and a presentation of our evaluation and analysis of the FY 2016 applicants for add-on payments for high-cost new medical services and technologies (including public input, as directed by Pub. L. 108-173, obtained in a town hall meeting).

    2. Proposed Changes to the Hospital Wage Index for Acute Care Hospitals

    In section III. of the preamble to this proposed rule, we are proposing revisions to the wage index for acute care hospitals and the annual update of the wage data. Specific issues addressed included the following:

    The proposed FY 2016 wage index update using wage data from cost reporting periods beginning in FY 2012.

    Calculation of the proposed occupational mix adjustment for FY 2016 based on the 2013 Occupational Mix Survey.

    Analysis and implementation of the proposed FY 2016 occupational mix adjustment to the wage index for acute care hospitals.

    Proposed application of the rural floor, the proposed imputed rural floor, and the proposed frontier State floor.

    Transitional wage indexes relating to the continued use of the revised OMB labor market area delineations based on 2010 Decennial Census data.

    Proposed revisions to the wage index for acute care hospitals based on hospital redesignations and reclassifications.

    The proposed out-migration adjustment to the wage index for acute care hospitals for FY 2016 based on commuting patterns of hospital employees who reside in a county and work in a different area with a higher wage index. Beginning in FY 2016, we are proposing new out-migration adjustments based on commuting patterns obtained from 2010 Decennial Census data.

    The timetable for reviewing and verifying the wage data used to compute the proposed FY 2016 hospital wage index.

    Determination of the labor-related share for the proposed FY 2016 wage index.

    Proposed changes to the 3-year average pension policy and proposed changes to the wage index timetable regarding pension cost for FY 2017 and subsequent years.

    Clarification of the allocation of pension costs for the wage index.

    3. Other Decisions and Proposed Changes to the IPPS for Operating Costs and Indirect Medical Education (IME) Costs

    In section IV. of the preamble of this proposed rule, we discuss proposed changes or clarifications of a number of the provisions of the regulations in 42 CFR parts 412 and 413, including the following:

    Proposed changes to the inpatient hospital updates for FY 2016, including the adjustment for hospitals that are not meaningful EHR users under section 1886(b)(3)(B)(ix) of the Act.

    The proposed updated national and regional case-mix values and discharges for purposes of determining RRC status.

    The statutorily required IME adjustment factor for FY 2016.

    Proposal for determining Medicare DSH payments and the additional payments for uncompensated care for FY 2016.

    Proposed changes to the measures and payment adjustments under the Hospital Readmissions Reduction Program.

    Proposed changes to the requirements and provision of value-based incentive payments under the Hospital Value-Based Purchasing Program.

    Proposed requirements for payment adjustments to hospitals under the HAC Reduction Program for FY 2016.

    Proposed elimination of the election by hospitals to use the simplified cost allocation methodology for Medicare cost reports.

    Discussion of the Rural Community Hospital Demonstration Program and a proposal for making a budget neutrality

    Page 24339

    adjustment for the demonstration program.

    Proposed changes in postacute care transfer policies as a result of proposed new MS-DRGs.

    A statement of our intent to discuss issues related to short inpatient hospital stays, long outpatient stays with observation services, and the related -0.2 percent IPPS payment adjustment in the CY 2016 hospital outpatient prospective payment system proposed rule that will be published this summer.

    4. Proposed FY 2016 Policy Governing the IPPS for Capital-Related Costs

    In section V. of the preamble to this proposed rule, we discuss the proposed payment policy requirements for capital-related costs and capital payments to hospitals for FY 2016.

    5. Proposed Changes to the Payment Rates for Certain Excluded Hospitals: Rate-of-Increase Percentages

    In section VI. of the preamble of this proposed rule, we discuss proposed changes to payments to certain excluded hospitals for FY 2016.

    6. Proposed Changes to the LTCH PPS

    In section VII. of the preamble of this proposed rule, we set forth--

    Proposed changes to the LTCH PPS Federal payment rates, factors, and other payment rate policies under the LTCH PPS for FY 2016.

    Proposals to implement section 1206(a)(1) of the Pathway for SGR Reform Act, which established the site neutral payment rate as the default means of paying for discharges in LTCH cost reporting periods beginning on or after October 1, 2015.

    Provisions to make technical clarifications regarding the moratoria on the establishment of new LTCHs and LTCH satellite facilities and on bed increases in existing LTCHs and LTCH satellite facilities that were established by section 1206(b)(2) of the Pathway for SGR Reform, as amended, as well as a proposal to make a technical revision to the regulations to more clearly reflect our established policies.

    Proposal to revise the average length of stay criterion for LTCHs to implement section 1206(a)(3) of the Pathway for SGR Reform Act.

    7. Proposed Changes Relating to Quality Data Reporting for Specific Providers and Suppliers

    In section VIII. of the preamble of this proposed rule, we address--

    Proposed requirements for the Hospital Inpatient Quality Reporting (IQR) Program as a condition for receiving the full applicable percentage increase.

    Proposed changes to the requirements for the quality reporting program for PPS-exempt cancer hospitals (PCHQR Program).

    Proposed changes to the requirements under the LTCH Quality Reporting Program (LTCH QRP).

    Proposed changes to align the reporting and submission timelines for the electronic submission of clinical quality measures for the Medicare Electronic Health Record (EHR) Incentive Program for eligible hospitals and CAHs with the reporting and submission of timelines for the Hospital IQR Program, including a proposal to establish in regulations an EHR technology certification criterion for reporting clinical quality measures.

    8. Determining Prospective Payment Operating and Capital Rates and Rate-of-Increase Limits for Acute Care Hospitals

    In the Addendum to this proposed rule, we set forth proposed changes to the amounts and factors for determining the proposed FY 2016 prospective payment rates for operating costs and capital-related costs for acute care hospitals. We also are proposing to establish the threshold amounts for outlier cases. In addition, we address the update factors for determining the rate-of-increase limits for cost reporting periods beginning in FY 2016 for certain hospitals excluded from the IPPS.

    9. Determining Standard Federal Payment Rates for LTCHs

    In the Addendum to this proposed rule, we set forth proposed changes to the amounts and factors for determining the proposed FY 2016 LTCH PPS standard Federal payment rate. We are proposing to establish the adjustments for wage levels, the labor-related share, the cost-of-

    living adjustment, and high-cost outliers, including the fixed-loss amount, and the LTCH cost-to-charge ratios (CCRs) under the LTCH PPS.

    10. Impact Analysis

    In Appendix A of this proposed rule, we set forth an analysis of the impact that the proposed changes would have on affected acute care hospitals, LTCHs, and PCHs.

    11. Recommendation of Update Factors for Operating Cost Rates of Payment for Hospital Inpatient Services

    In Appendix B of this proposed rule, as required by sections 1886(e)(4) and (e)(5) of the Act, we provide our recommendations of the appropriate percentage changes for FY 2016 for the following:

    A single average standardized amount for all areas for hospital inpatient services paid under the IPPS for operating costs of acute care hospitals (and hospital-specific rates applicable to SCHs).

    Target rate-of-increase limits to the allowable operating costs of hospital inpatient services furnished by certain hospitals excluded from the IPPS.

    The standard Federal payment rate for hospital inpatient services furnished by LTCHs.

    12. Discussion of Medicare Payment Advisory Commission Recommendations

    Under section 1805(b) of the Act, MedPAC is required to submit a report to Congress, no later than March 15 of each year, in which MedPAC reviews and makes recommendations on Medicare payment policies. MedPAC's March 2015 recommendations concerning hospital inpatient payment policies address the update factor for hospital inpatient operating costs and capital-related costs for hospitals under the IPPS. We address these recommendations in Appendix B of the proposed rule. For further information relating specifically to the MedPAC March 2015 report or to obtain a copy of the report, contact MedPAC at (202) 220-

    3700 or visit MedPAC's Web site at: http://www.medpac.gov.

    II. Proposed Changes to Medicare Severity Diagnosis-Related Group (MS-

    DRG) Classifications and Relative Weights

    A. Background

    Section 1886(d) of the Act specifies that the Secretary shall establish a classification system (referred to as diagnosis-related groups (DRGs)) for inpatient discharges and adjust payments under the IPPS based on appropriate weighting factors assigned to each DRG. Therefore, under the IPPS, Medicare pays for inpatient hospital services on a rate per discharge basis that varies according to the DRG to which a beneficiary's stay is assigned. The formula used to calculate payment for a specific case multiplies an individual hospital's payment rate per case by the weight of the DRG to which the case is assigned. Each DRG weight represents the average resources required to care for cases in that particular DRG, relative to the average resources used to treat cases in all DRGs.

    Congress recognized that it would be necessary to recalculate the DRG relative weights periodically to account for changes in resource consumption. Accordingly, section 1886(d)(4)(C) of the Act requires that the Secretary

    Page 24340

    adjust the DRG classifications and relative weights at least annually. These adjustments are made to reflect changes in treatment patterns, technology, and any other factors that may change the relative use of hospital resources.

    B. MS-DRG Reclassifications

    For general information about the MS-DRG system, including yearly reviews and changes to the MS-DRGs, we refer readers to the previous discussions in the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43764 through 43766), the FY 2011 IPPS/LTCH PPS final rule (75 FR 50053 through 50055), the FY 2012 IPPS/LTCH PPS final rule (76 FR 51485 through 51487), the FY 2013 IPPS/LTCH PPS final rule (77 FR 53273), the FY 2014 IPPS/LTCH PPS final rule (78 FR 50512), and the FY 2015 IPPS/

    LTCH PPS final rule (79 FR 49871).

    C. Adoption of the MS-DRGs in FY 2008

    For information on the adoption of the MS-DRGs in FY 2008, we refer readers to the FY 2008 IPPS final rule with comment period (72 FR 47140 through 47189).

    D. Proposed FY 2016 MS-DRG Documentation and Coding Adjustment

    1. Background on the Prospective MS-DRG Documentation and Coding Adjustments for FY 2008 and FY 2009 Authorized by Public Law 110-90

    In the FY 2008 IPPS final rule with comment period (72 FR 47140 through 47189), we adopted the MS-DRG patient classification system for the IPPS, effective October 1, 2007, to better recognize severity of illness in Medicare payment rates for acute care hospitals. The adoption of the MS-DRG system resulted in the expansion of the number of DRGs from 538 in FY 2007 to 745 in FY 2008. (Currently, for FY 2015, there are 775 MS-DRGs.) By increasing the number of MS-DRGs and more fully taking into account patient severity of illness in Medicare payment rates for acute care hospitals, MS-DRGs encourage hospitals to improve their documentation and coding of patient diagnoses.

    In the FY 2008 IPPS final rule with comment period (72 FR 47175 through 47186), we indicated that the adoption of the MS-DRGs had the potential to lead to increases in aggregate payments without a corresponding increase in actual patient severity of illness due to the incentives for additional documentation and coding. In that final rule with comment period, we exercised our authority under section 1886(d)(3)(A)(vi) of the Act, which authorizes us to maintain budget neutrality by adjusting the national standardized amount, to eliminate the estimated effect of changes in coding or classification that do not reflect real changes in case-mix. Our actuaries estimated that maintaining budget neutrality required an adjustment of -4.8 percent to the national standardized amount. We provided for phasing in this -4.8 percent adjustment over 3 years. Specifically, we established prospective documentation and coding adjustments of -1.2 percent for FY 2008, -1.8 percent for FY 2009, and -1.8 percent for FY 2010.

    On September 29, 2007, Congress enacted the TMA Transitional Medical Assistance, Abstinence Education, and QI Qualifying Individuals Programs Extension Act of 2007 (Pub. L. 110-90). Section 7(a) of Public Law 110-90 reduced the documentation and coding adjustment made as a result of the MS-DRG system that we adopted in the FY 2008 IPPS final rule with comment period to -0.6 percent for FY 2008 and -0.9 percent for FY 2009, and we finalized the FY 2008 adjustment through rulemaking, effective October 1, 2007 (72 FR 66886).

    For FY 2009, section 7(a) of Public Law 110-90 required a documentation and coding adjustment of -0.9 percent, and we finalized that adjustment through rulemaking effective October 1, 2008 (73 FR 48447). The documentation and coding adjustments established in the FY 2008 IPPS final rule with comment period, which reflected the amendments made by section 7(a) of Public Law 110-90, are cumulative. As a result, the -0.9 percent documentation and coding adjustment for FY 2009 was in addition to the -0.6 percent adjustment for FY 2008, yielding a combined effect of -1.5 percent.

    2. Adjustment to the Average Standardized Amounts Required by Public Law 110-90

  185. Prospective Adjustment Required by Section 7(b)(1)(A) of Public Law 110-90

    Section 7(b)(1)(A) of Public Law 110-90 requires that, if the Secretary determines that implementation of the MS-DRG system resulted in changes in documentation and coding that did not reflect real changes in case-mix for discharges occurring during FY 2008 or FY 2009 that are different than the prospective documentation and coding adjustments applied under section 7(a) of Public Law 110-90, the Secretary shall make an appropriate adjustment under section 1886(d)(3)(A)(vi) of the Act. Section 1886(d)(3)(A)(vi) of the Act authorizes adjustments to the average standardized amounts for subsequent fiscal years in order to eliminate the effect of such coding or classification changes. These adjustments are intended to ensure that future annual aggregate IPPS payments are the same as the payments that otherwise would have been made had the prospective adjustments for documentation and coding applied in FY 2008 and FY 2009 reflected the change that occurred in those years.

  186. Recoupment or Repayment Adjustments in FYs 2010 Through 2012 Required by Section 7(b)(1)(B) Public Law 110-90

    If, based on a retroactive evaluation of claims data, the Secretary determines that implementation of the MS-DRG system resulted in changes in documentation and coding that did not reflect real changes in case-

    mix for discharges occurring during FY 2008 or FY 2009 that are different from the prospective documentation and coding adjustments applied under section 7(a) of Public Law 110-90, section 7(b)(1)(B) of Public Law 110-90 requires the Secretary to make an additional adjustment to the standardized amounts under section 1886(d) of the Act. This adjustment must offset the estimated increase or decrease in aggregate payments for FYs 2008 and 2009 (including interest) resulting from the difference between the estimated actual documentation and coding effect and the documentation and coding adjustment applied under section 7(a) of Public Law 110-90. This adjustment is in addition to making an appropriate adjustment to the standardized amounts under section 1886(d)(3)(A)(vi) of the Act as required by section 7(b)(1)(A) of Public Law 110-90. That is, these adjustments are intended to recoup (or repay, in the case of underpayments) spending in excess of (or less than) spending that would have occurred had the prospective adjustments for changes in documentation and coding applied in FY 2008 and FY 2009 matched the changes that occurred in those years. Public Law 110-90 requires that the Secretary only make these recoupment or repayment adjustments for discharges occurring during FYs 2010, 2011, and 2012.

    3. Retrospective Evaluation of FY 2008 and FY 2009 Claims Data

    In order to implement the requirements of section 7 of Public Law 110-90, we performed a retrospective evaluation of the FY 2008 data for claims paid through December 2008 using the methodology first described in

    Page 24341

    the FY 2009 IPPS/LTCH PPS final rule (73 FR 43768 and 43775) and later discussed in the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43768 through 43772). We performed the same analysis for FY 2009 claims data using the same methodology as we did for FY 2008 claims (75 FR 50057 through 50068). The results of the analysis for the FY 2011 IPPS/LTCH PPS proposed and final rules, and subsequent evaluations in FY 2012, supported that the 5.4 percent estimate accurately reflected the FY 2009 increases in documentation and coding under the MS-DRG system. We were persuaded by both MedPAC's analysis (as discussed in the FY 2011 IPPS/LTCH PPS final rule (75 FR 50064 through 50065)) and our own review of the methodologies recommended by various commenters that the methodology we employed to determine the required documentation and coding adjustments was sound.

    As in prior years, the FY 2008, FY 2009, and FY 2010 MedPAR files are available to the public to allow independent analysis of the FY 2008 and FY 2009 documentation and coding effects. Interested individuals may still order these files through the CMS Web site at: http://www.cms.gov/Research-Statistics-Data-and-Systems/Files-for-Order/LimitedDataSets/ by clicking on MedPAR Limited Data Set (LDS)-

    Hospital (National). This CMS Web page describes the file and provides directions and further detailed instructions for how to order.

    Persons placing an order must send the following: A Letter of Request, the LDS Data Use Agreement and Research Protocol (refer to the Web site for further instructions), the LDS Form, and a check (refer to the Web site for the required payment amount) to:

    Mailing address if using the U.S. Postal Service: Centers for Medicare & Medicaid Services, RDDC Account, Accounting Division, P.O. Box 7520, Baltimore, MD 21207-0520.

    Mailing address if using express mail: Centers for Medicare & Medicaid Services, OFM/Division of Accounting-RDDC, 7500 Security Boulevard, C3-07-11, Baltimore, MD 21244-1850.

    4. Prospective Adjustments for FY 2008 and FY 2009 Authorized by Section 7(b)(1)(A) of Public Law 110-90

    In the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43767 through 43777), we opted to delay the implementation of any documentation and coding adjustment until a full analysis of case-mix changes based on FY 2009 claims data could be completed. We refer readers to the FY 2010 IPPS/RY LTCH PPS final rule for a detailed description of our proposal, responses to comments, and finalized policy. After analysis of the FY 2009 claims data for the FY 2011 IPPS/

    LTCH PPS final rule (75 FR 50057 through 50073), we found a total prospective documentation and coding effect of 5.4 percent. After accounting for the -0.6 percent and the -0.9 percent documentation and coding adjustments in FYs 2008 and 2009, we found a remaining documentation and coding effect of 3.9 percent. As we have discussed, an additional cumulative adjustment of -3.9 percent would be necessary to meet the requirements of section 7(b)(1)(A) of Public Law 110-90 to make an adjustment to the average standardized amounts in order to eliminate the full effect of the documentation and coding changes that do not reflect real changes in case-mix on future payments. Unlike section 7(b)(1)(B) of Public Law 110-90, section 7(b)(1)(A) does not specify when we must apply the prospective adjustment, but merely requires us to make an ``appropriate'' adjustment. Therefore, as we stated in the FY 2011 IPPS/LTCH PPS final rule (75 FR 50061), we believed the law provided some discretion as to the manner in which we applied the prospective adjustment of -3.9 percent. As we discussed extensively in the FY 2011 IPPS/LTCH PPS final rule, it has been our practice to moderate payment adjustments when necessary to mitigate the effects of significant downward adjustments on hospitals, to avoid what could be widespread, disruptive effects of such adjustments on hospitals. Therefore, we stated that we believed it was appropriate to not implement the -3.9 percent prospective adjustment in FY 2011 because we finalized a -2.9 percent recoupment adjustment for that fiscal year. Accordingly, we did not propose a prospective adjustment under section 7(b)(1)(A) of Public Law 110-90 for FY 2011 (75 FR 23868 through 23870). We noted that, as a result, payments in FY 2011 (and in each future fiscal year until we implemented the requisite adjustment) would be higher than they would have been if we had implemented an adjustment under section 7(b)(1)(A) of Public Law 110-90.

    In the FY 2012 IPPS/LTCH PPS final rule (76 FR 51489 and 51497), we indicated that, because further delay of this prospective adjustment would result in a continued accrual of unrecoverable overpayments, it was imperative that we implement a prospective adjustment for FY 2012, while recognizing CMS' continued desire to mitigate the effects of any significant downward adjustments to hospitals. Therefore, we implemented a -2.0 percent prospective adjustment to the standardized amount instead of the full -3.9 percent.

    In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53274 through 53276), we completed the prospective portion of the adjustment required under section 7(b)(1)(A) of Public Law 110-90 by finalizing a -1.9 percent adjustment to the standardized amount for FY 2013. We stated that this adjustment would remove the remaining effect of the documentation and coding changes that do not reflect real changes in case-mix that occurred in FY 2008 and FY 2009. We believed that it was imperative to implement the full remaining adjustment, as any further delay would result in an overstated standardized amount in FY 2013 and any future fiscal years until a full adjustment was made.

    We noted again that delaying full implementation of the prospective portion of the adjustment required under section 7(b)(1)(A) of Public Law 110-90 until FY 2013 resulted in payments in FY 2010 through FY 2012 being overstated. These overpayments could not be recovered by CMS because section 7(b)(1)(B) of Public Law 110-90 limited recoupments to overpayments made in FY 2008 and FY 2009.

    5. Recoupment or Repayment Adjustment Authorized by Section 7(b)(1)(B) of Public Law 110-90

    Section 7(b)(1)(B) of Public Law 110-90 requires the Secretary to make an adjustment to the standardized amounts under section 1886(d) of the Act to offset the estimated increase or decrease in aggregate payments for FY 2008 and FY 2009 (including interest) resulting from the difference between the estimated actual documentation and coding effect and the documentation and coding adjustments applied under section 7(a) of Public Law 110-90. This determination must be based on a retrospective evaluation of claims data. Our actuaries estimated that there was a 5.8 percentage point difference resulting in an increase in aggregate payments of approximately $6.9 billion. Therefore, as discussed in the FY 2011 IPPS/LTCH PPS final rule (75 FR 50062 through 50067), we determined that an aggregate adjustment of -5.8 percent in FYs 2011 and 2012 would be necessary in order to meet the requirements of section 7(b)(1)(B) of Public Law 110-90 to adjust the standardized amounts for discharges occurring in FYs 2010, 2011, and/or 2012 to offset the estimated amount of the increase in aggregate payments (including interest) in FYs 2008 and 2009.

    Page 24342

    It is often our practice to phase in payment rate adjustments over more than one year in order to moderate the effect on payment rates in any one year. Therefore, consistent with the policies that we have adopted in many similar cases, in the FY 2011 IPPS/LTCH PPS final rule, we made an adjustment to the standardized amount of -2.9 percent, representing approximately one-half of the aggregate adjustment required under section 7(b)(1)(B) of Public Law 110-90, for FY 2011. An adjustment of this magnitude allowed us to moderate the effects on hospitals in one year while simultaneously making it possible to implement the entire adjustment within the timeframe required under section 7(b)(1)(B) of Public Law 110-90 (that is, no later than FY 2012). For FY 2012, in accordance with the timeframes set forth by section 7(b)(1)(B) of Public Law 110-90, and consistent with the discussion in the FY 2011 IPPS/LTCH PPS final rule, we completed the recoupment adjustment by implementing the remaining -2.9 percent adjustment, in addition to removing the effect of the -2.9 percent adjustment to the standardized amount finalized for FY 2011 (76 FR 51489 and 51498). Because these adjustments, in effect, balanced out, there was no year-to-year change in the standardized amount due to this recoupment adjustment for FY 2012. In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53276), we made a final 2.9 percent adjustment to the standardized amount, completing the recoupment portion of section 7(b)(1)(B) of Public Law 110-90. We note that with this positive adjustment, according to our estimates, all overpayments made in FY 2008 and FY 2009 have been fully recaptured with appropriate interest, and the standardized amount has been returned to the appropriate baseline.

    6. Proposed Recoupment or Repayment Adjustment Authorized by Section 631 of the American Taxpayer Relief Act of 2012 (ATRA)

    Section 631 of the ATRA amended section 7(b)(1)(B) of Public Law 110-90 to require the Secretary to make a recoupment adjustment or adjustments totaling $11 billion by FY 2017. This adjustment represents the amount of the increase in aggregate payments as a result of not completing the prospective adjustment authorized under section 7(b)(1)(A) of Public Law 110-90 until FY 2013. As discussed earlier, this delay in implementation resulted in overstated payment rates in FYs 2010, 2011, and 2012. The resulting overpayments could not have been recovered under Public Law 110-90.

    Similar to the adjustments authorized under section 7(b)(1)(B) of Public Law 110-90, the adjustment required under section 631 of the ATRA is a one-time recoupment of a prior overpayment, not a permanent reduction to payment rates. Therefore, any adjustment made to reduce payment rates in one year would eventually be offset by a positive adjustment, once the necessary amount of overpayment is recovered.

    As we stated in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50515 through 50517), our actuaries estimate that a -9.3 percent adjustment to the standardized amount would be necessary if CMS were to fully recover the $11 billion recoupment required by section 631 of the ATRA in FY 2014. It is often our practice to phase in payment rate adjustments over more than one year, in order to moderate the effect on payment rates in any one year. Therefore, consistent with the policies that we have adopted in many similar cases, and after consideration of the public comments we received, in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50515 through 50517), we implemented a -0.8 percent recoupment adjustment to the standardized amount in FY 2014. We stated that if adjustments of approximately -0.8 percent are implemented in FYs 2014, 2015, 2016, and 2017, using standard inflation factors, we estimate that the entire $11 billion will be accounted for by the end of the statutory 4-year timeline. As estimates of any future adjustments are subject to slight variations in total savings, we did not provide for specific adjustments for FYs 2015, 2016, or 2017 at that time. We stated that we believed that this level of adjustment for FY 2014 was a reasonable and fair approach that satisfies the requirements of the statute while mitigating extreme annual fluctuations in payment rates.

    Consistent with the approach discussed in the FY 2014 IPPS/LTCH PPS final rule for recouping the $11 billion required by section 631 of the ATRA, in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49873 through 49874), we implemented an additional -0.8 percent recoupment adjustment to the standardized amount for FY 2015. We estimated that this level of adjustment, combined with leaving the -0.8 percent adjustment made for FY 2014 in place, will recover up to $2 billion in FY 2015. When combined with the approximately $1 billion adjustment made in FY 2014, we estimated that approximately $8 billion would be left to recover under section 631 of the ATRA.

    Consistent with the approach discussed in the FY 2014 IPPS/LTCH PPS final rule for recouping the $11 billion required by section 631 of the ATRA, in this FY 2016 IPPS/LTCH PPS proposed rule, we are proposing to implement a -0.8 percent recoupment adjustment to the standardized amount for FY 2016. Considering the -0.8 percent adjustments made in FY 2014 and FY 2015, we estimate that the combined impact of the proposed adjustment for FY 2016 and leaving the FY 2014 and FY 2015 adjustments in place would be to recover up to $3 billion in FY 2016. Combined with the effects of the -0.8 percent adjustments implemented in FY 2014 and FY 2015, we estimate that the proposed FY 2016 -0.8 percent adjustment would result in the recovery of a total of approximately $6 billion of the $11 billion in overpayments required to be recovered by section 631 of the ATRA.

    As we explained in the FY 2014 IPPS/LTCH PPS final rule, estimates of any future adjustments are subject to slight variations in total savings. Therefore, we have not yet addressed the specific amount of the final adjustment required under section 631 of the ATRA for FY 2017. We continue to believe that the proposed -0.8 percent adjustment for FY 2016 is a reasonable and fair approach that will help satisfy the requirements of the statute while mitigating extreme annual fluctuations in payment rates. In addition, we again note that this proposed -0.8 percent recoupment adjustment for FY 2016, the respective -0.8 percent adjustments made in FY 2014 and FY 2015, and any future adjustment made under this authority, will be eventually offset by an equivalent positive adjustment once the full $11 billion recoupment requirement has been realized.

    E. Refinement of the MS-DRG Relative Weight Calculation

    1. Background

    Beginning in FY 2007, we implemented relative weights for DRGs based on cost report data instead of charge information. We refer readers to the FY 2007 IPPS final rule (71 FR 47882) for a detailed discussion of our final policy for calculating the cost-based DRG relative weights and to the FY 2008 IPPS final rule with comment period (72 FR 47199) for information on how we blended relative weights based on the CMS DRGs and MS-DRGs.

    As we implemented cost-based relative weights, some public commenters raised concerns about potential bias in the weights due to ``charge compression,'' which is the practice of applying a higher percentage charge markup over costs to lower cost items and services, and a lower

    Page 24343

    percentage charge markup over costs to higher cost items and services. As a result, the cost-based weights would undervalue high-cost items and overvalue low-cost items if a single cost-to-charge ratio (CCR) is applied to items of widely varying costs in the same cost center. To address this concern, in August 2006, we awarded a contract to the Research Triangle Institute, International (RTI) to study the effects of charge compression in calculating the relative weights and to consider methods to reduce the variation in the CCRs across services within cost centers. For a detailed summary of RTI's findings, recommendations, and public comments that we received on the report, we refer readers to the FY 2009 IPPS/LTCH PPS final rule (73 FR 48452 through 48453). In addition, we refer readers to RTI's July 2008 final report titled ``Refining Cost to Charge Ratios for Calculating APC and MS-DRG Relative Payment Weights'' (http://www.rti.org/reports/cms/HHSM-500-2005-0029I/PDF/Refining_Cost_to_Charge_Ratios_200807_Final.pdf).

    In the FY 2009 IPPS final rule (73 FR 48458 through 48467), in response to the RTI's recommendations concerning cost report refinements, we discussed our decision to pursue changes to the cost report to split the cost center for Medical Supplies Charged to Patients into one line for ``Medical Supplies Charged to Patients'' and another line for ``Implantable Devices Charged to Patients.'' We acknowledged, as RTI had found, that charge compression occurs in several cost centers that exist on the Medicare cost report. However, as we stated in the FY 2009 IPPS final rule, we focused on the CCR for Medical Supplies and Equipment because RTI found that the largest impact on the MS-DRG relative weights could result from correcting charge compression for devices and implants. In determining the items that should be reported in these respective cost centers, we adopted the commenters' recommendations that hospitals should use revenue codes established by the AHA's National Uniform Billing Committee to determine the items that should be reported in the ``Medical Supplies Charged to Patients'' and the ``Implantable Devices Charged to Patients'' cost centers. Accordingly, a new subscripted line for ``Implantable Devices Charged to Patients'' was created in July 2009. This new subscripted cost center has been available for use for cost reporting periods beginning on or after May 1, 2009.

    As we discussed in the FY 2009 IPPS final rule (73 FR 48458) and in the CY 2009 OPPS/ASC final rule with comment period (73 FR 68519 through 68527), in addition to the findings regarding implantable devices, RTI also found that the costs and charges of computed tomography (CT) scans, magnetic resonance imaging (MRI), and cardiac catheterization differ significantly from the costs and charges of other services included in the standard associated cost center. RTI also concluded that both the IPPS and the OPPS relative weights would better estimate the costs of those services if CMS were to add standard cost centers for CT scans, MRIs, and cardiac catheterization in order for hospitals to report separately the costs and charges for those services and in order for CMS to calculate unique CCRs to estimate the costs from charges on claims data. In the FY 2011 IPPS/LTCH PPS final rule (75 FR 50075 through 50080), we finalized our proposal to create standard cost centers for CT scans, MRIs, and cardiac catheterization, and to require that hospitals report the costs and charges for these services under new cost centers on the revised Medicare cost report Form CMS-2552-10. (We refer readers to the FY 2011 IPPS/LTCH PPS final rule (75 FR 50075 through 50080) for a detailed discussion of the reasons for the creation of standard cost centers for CT scans, MRIs, and cardiac catheterization.) The new standard cost centers for CT scans, MRIs, and cardiac catheterization are effective for cost reporting periods beginning on or after May 1, 2010, on the revised cost report Form CMS-2552-10.

    In the FY 2009 IPPS final rule (73 FR 48468), we stated that, due to what is typically a 3-year lag between the reporting of cost report data and the availability for use in ratesetting, we anticipated that we might be able to use data from the new ``Implantable Devices Charged to Patients'' cost center to develop a CCR for ``Implantable Devices Charged to Patients'' in the FY 2012 or FY 2013 IPPS rulemaking cycle. However, as noted in the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43782), due to delays in the issuance of the revised cost report Form CMS 2552-10, we determined that a new CCR for ``Implantable Devices Charged to Patients'' might not be available before FY 2013. Similarly, when we finalized the decision in the FY 2011 IPPS/LTCH PPS final rule to add new cost centers for CT scans, MRIs, and cardiac catheterization, we explained that data from any new cost centers that may be created will not be available until at least 3 years after they are first used (75 FR 50077). In preparation for the FY 2012 IPPS/LTCH PPS rulemaking, we checked the availability of data in the ``Implantable Devices Charged to Patients'' cost center on the FY 2009 cost reports, but we did not believe that there was a sufficient amount of data from which to generate a meaningful analysis in this particular situation. Therefore, we did not propose to use data from the ``Implantable Devices Charged to Patients'' cost center to create a distinct CCR for ``Implantable Devices Charged to Patients'' for use in calculating the MS-DRG relative weights for FY 2012. We indicated that we would reassess the availability of data for the ``Implantable Devices Charged to Patients'' cost center for the FY 2013 IPPS/LTCH PPS rulemaking cycle and, if appropriate, we would propose to create a distinct CCR at that time.

    During the development of the FY 2013 IPPS/LTCH PPS proposed and final rules, hospitals were still in the process of transitioning from the previous cost report Form CMS-2552-96 to the new cost report Form CMS-2552-10. Therefore, we were able to access only those cost reports in the FY 2010 HCRIS with fiscal year begin dates on or after October 1, 2009, and before May 1, 2010; that is, those cost reports on Form CMS-2552-96. Data from the Form CMS-2552-10 cost reports were not available because cost reports filed on the Form CMS-2552-10 were not accessible in the HCRIS. Further complicating matters was that, due to additional unforeseen technical difficulties, the corresponding information regarding charges for implantable devices on hospital claims was not yet available to us in the MedPAR file. Without the breakout in the MedPAR file of charges associated with implantable devices to correspond to the costs of implantable devices on the cost report, we believed that we had no choice but to continue computing the relative weights with the current CCR that combines the costs and charges for supplies and implantable devices. We stated in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53281 through 53283) that when we do have the necessary data for supplies and implantable devices on the claims in the MedPAR file to create distinct CCRs for the respective cost centers for supplies and implantable devices, we hoped that we would also have data for an analysis of creating distinct CCRs for CT scans, MRIs, and cardiac catheterization, which could then be finalized through rulemaking. In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53281), we stated that, prior to proposing to create these

    Page 24344

    CCRs, we would first thoroughly analyze and determine the impacts of the data, and that distinct CCRs for these new cost centers would be used in the calculation of the relative weights only if they were first finalized through rulemaking.

    At the time of the development of the FY 2014 IPPS/LTCH PPS proposed rule (78 FR 27506 through 27507), we had a substantial number of hospitals completing all, or some, of these new cost centers on the FY 2011 Medicare cost reports, compared to prior years. We stated that we believed that the analytic findings described using the FY 2011 cost report data and FY 2012 claims data supported our original decision to break out and create new cost centers for implantable devices, MRIs, CT scans, and cardiac catheterization, and we saw no reason to further delay proposing to implement the CCRs of each of these cost centers. Therefore, beginning in FY 2014, we proposed a policy to calculate the MS-DRG relative weights using 19 CCRs, creating distinct CCRs from cost report data for implantable devices, MRIs, CT scans, and cardiac catheterization.

    We refer readers to the FY 2014 IPPS/LTCH PPS proposed rule (78 FR 27507 through 27509) and final rule (78 FR 50518 through 50523) in which we presented data analyses using distinct CCRs for implantable devices, MRIs, CT scans, and cardiac catheterization. The FY 2014 IPPS/

    LTCH PPS final rule also set forth our responses to public comments we received on our proposal to implement these CCRs. As explained in more detail in the FY 2014 IPPS/LTCH PPS final rule, we finalized our proposal to use 19 CCRs to calculate MS-DRG relative weights beginning in FY 2014--the then existing 15 cost centers and the 4 new CCRs for implantable devices, MRIs, CT scans, and cardiac catheterization. Therefore, beginning in FY 2014, we calculate the IPPS MS-DRG relative weights using 19 CCRs, creating distinct CCRs for implantable devices, MRIs, CT scans, and cardiac catheterization.

    2. Discussion for FY 2016 and Request for Comments on Nonstandard Cost Center Codes

    Consistent with the policy established beginning for FY 2014, we calculated the proposed MS-DRG relative weights for FY 2016 using two data sources: The MedPAR file as the claims data source and the HCRIS as the cost report data source. We adjusted the charges from the claims to costs by applying the 19 national average CCRs developed from the cost reports. The description of the calculation of the proposed 19 CCRs and the proposed MS-DRG relative weights for FY 2016 is included in section II.H.3. of the preamble of this proposed rule.

    In preparing to calculate the 19 national average CCRs developed from the cost reports, we reviewed the HCRIS data and noticed inconsistencies in hospitals' cost reporting and use of nonstandard cost center codes. In addition, we discovered that hospitals typically report the nonstandard codes with standard cost centers that are different from the standard cost centers to which CMS maps and ``rolls up'' each nonstandard code in compiling the HCRIS. We are concerned that inconsistencies in hospitals' use of nonstandard codes, coupled with differences in the way hospitals and CMS map these nonstandard codes to standard lines, may have implications for the calculation of the 19 CCRs and the aspects of the IPPS that rely on the CCRs (for example, the calculation of the MS-DRG relative weights).

    The Medicare cost report Form CMS-2552-10, Worksheet A, includes preprinted cost center codes that reflect the standard cost center descriptions by category (General Service, Routine, and Ancillary) used in most hospitals. Each preprinted standard cost center is assigned a unique 5-digit code. The preprinted 5-digit codes provide standardized meaning for data analysis, and are automatically coded by CMS-approved cost report software. To accommodate hospitals that have additional cost centers that are sufficiently different from the preprinted standard cost centers, CMS identified additional cost centers known as ``nonstandard'' cost centers. Each nonstandard cost center must be labeled appropriately and reported under a specific standard cost center. For example, under the standard cost center ``Electrocardiology'' with its 5-digit code of 06900, there are six nonstandard cost centers (for EKG and EEG, Electromyography, Cardiopulmonary, Stress Test, Cardiology, and Holter Monitor), each with a unique 5-digit code.

    The instructions for the Medicare cost report Form CMS-2552-10 explain the purpose and requirements related to the standard and nonstandard cost centers. Specifically, in CMS Pub. 15-2, Chapter 40, Section 4013, the instructions for Worksheet A of Form CMS-2552-10 state:

    ``Cost center coding is a methodology for standardizing the meaning of cost center labels as used by health care providers on the Medicare cost report. Form CMS-2552-10 provides for preprinted cost center descriptions on Worksheet A. In addition, a space is provided for a cost center code. The preprinted cost center labels are automatically coded by CMS approved cost reporting software. These cost center descriptions are hereafter referred to as the standard cost centers. Additionally, nonstandard cost center descriptions have been identified through analysis of frequently used labels.

    The use of this coding methodology allows providers to continue to use labels for cost centers that have meaning within the individual institution. The five digit cost center codes that are associated with each provider label in their electronic file provide standardized meaning for data analysis. You are required to compare any added or changed label to the descriptions offered on the standard or nonstandard cost center tables. A description of cost center coding and the table of cost center codes are in Sec. 4095, Table 5.''

    Section 4095 of CMS Pub. 15-2 (pages 40-805 and 40-806) further provides that:

    ``Both the standard and nonstandard cost center descriptions along with their cost center codes are shown on Table 5. . . . Cost center codes may only be used in designated lines in accordance with the classification of the cost center(s), i.e., lines 1 through 23 may only contain cost center codes within the general service cost center category of both standard and nonstandard coding. For example, in the general service cost center category for Operation of Plant cost, line 7 and subscripts thereof should only contain cost center codes of 00700-00719 and nonstandard cost center codes. This logic must hold true for all other cost center categories, i.e., ancillary, inpatient routine, outpatient, other reimbursable, special purpose, and non- reimbursable cost centers.''

    Table 5 of Section 4095, Chapter 40, of CMS Pub. 15-2 (pages 40-807 through 40-810) lists the electronic reporting specifications for each standard cost center, its 5-digit code, and, separately, the nonstandard cost center descriptions and their 5-digit codes. While the nonstandard codes are categorized by General Service Cost Centers, Inpatient Routine Service Cost Centers, and Ancillary Service Cost Centers, among others, Table 5 does not map the nonstandard cost centers and codes to specific standard cost centers. In addition, the CMS-approved cost reporting software does not restrict the use of nonstandard codes to specific standard cost centers. Furthermore, the softwares do not prevent hospitals from manually entering in a name for a nonstandard cost center code that may

    Page 24345

    be different from the name that CMS assigned to that nonstandard cost center code. For example, Table 5 specifies that the 5-digit code for the Ancillary Service nonstandard cost center ``Acupuncture'' is 03020. When CMS creates the HCRIS SAS files, CMS maps all codes 03020 to standard line 53, ``Anesthesiology''.\1\ However, a review of the December 31, 2014 update of the FY 2013 HCRIS SAS files, from which the proposed 19 CCRs for FY 2016 are calculated, reveals that, of the 3,172 times that nonstandard code 03020 is reported by hospitals, it is called ``Acupuncture'' only 122 times. Instead, hospitals use various names for nonstandard code 03020, such as ``Cardiopulmonary,'' ``Sleep Lab,'' ``Diabetes Center,'' or ``Wound Care''.

    ---------------------------------------------------------------------------

    \1\ To view how CMS rolls up the codes to create the HCRIS SAS files, we refer readers to http://www.cms.gov/Research-Statistics-Data-and-Systems/Downloadable-Public-Use-Files/Cost-Reports/Hospital-2010-form.html. On this page, click on ``Hospital-2010-

    SAS.ZIP (SAS datasets and documentation)'', and from the zip file, choose the Excel spreadsheet ``2552-10 SAS FILE RECORD LAYOUT AND CROSSWALK TO 96.xlsx''. The second tab of this spreadsheet is ``NEW ROLLUPS'', and shows the standard and nonstandard 5-digit codes (columns B and C) that CMS rolls up to each standard line (column G).

    ---------------------------------------------------------------------------

    As noted above, the Ancillary Service standard cost center for ``Anesthesiology'', line 53 of Worksheet A and subsequent worksheets of the Medicare cost report Form CMS-2552-10 (and its associated nonstandard cost center code 03020 ``Acupuncture'') is an example of a cost center that is subject to inconsistent reporting. Our review of the FY 2013 HCRIS as-submitted cost reports from which the proposed 19 CCRs for FY 2016 are calculated revealed that, regardless of the actual name hospitals assigned to nonstandard code 03020 (for example, ``Acupuncture'' or otherwise), hospitals reported this code almost 100 percent of the time on standard line 76, ``Other Ancillary,'' and never on standard line 53, ``Anesthesiology.'' Yet, as noted above, CMS (and previously HCFA, under earlier versions of the Medicare cost report), in creating the HCRIS database, has had the longstanding practice of mapping and rolling up all instances of nonstandard code 03020 to standard line 53, ``Anesthesiology,'' not to standard line 76, ``Other Ancillary. Therefore, the version of the HCRIS SAS files created by CMS, which CMS uses for ratesetting purposes, may differ somewhat from the as-submitted cost reports of hospitals because CMS moves various nonstandard cost centers based on cost center codes, not cost center descriptions, from the standard cost centers in which hospitals report them and places them in different standard cost centers based on CMS' roll-up specifications.

    We are highlighting the discrepancy in the reporting of nonstandard code 03020 ``Acupuncture'' because the placement of nonstandard code 03020 and its related costs and charges seem to have the most significant implications for the calculation of one of the 19 CCRs, the Anesthesia CCR. As stated in section II.H.3. of the preamble of this proposed rule, the proposed FY 2016 CCR for Anesthesia is 0.108. We calculated this proposed CCR based on the December 31, 2014 update of the FY 2013 HCRIS, with the nonstandard cost center codes of 03020 through 03029 rolled up to standard line 53, ``Anesthesiology.'' That is, under the CMS' HCRIS specifications, we roll up the following 5-

    digit codes to standard line 53, ``Anesthesiology'': \2\ standard codes for ``Anesthesiology'' 05300 through 05329; and nonstandard codes for ``Acupuncture '' 03020 through 03029. For simulation purposes, we also created a version of the December 31, 2014 update of the FY 2013 HCRIS which retains nonstandard codes 03020 through 03029 on standard line 76, ``Other Ancillary,'' where hospitals actually reported these codes on their as-submitted FY 2013 cost reports. When all reported uses of nonstandard codes 03020 through 03029 remain on standard line 76, ``Other Ancillary,'' we calculated that the Anesthesia CCR would be 0.084 (instead of 0.108 as proposed in section II.H.3. of the preamble of this proposed rule). We also looked at the effect on the other 18 CCRs. In the version of HCRIS we created for simulation purposes, by keeping the nonstandard cost center codes in standard line 76, ``Other Ancillary,'' where hospitals typically report them, rather than remapping them according to CMS specifications, two other CCRs also are affected, although not quite as significantly as the Anesthesia CCR. Currently, as proposed in section II.H.3. of the preamble of this proposed rule, the proposed FY 2016 Cardiology CCR is 0.119, but when all cardiology-related nonstandard codes are rolled up to standard line 76, ``Other Ancillary'', and not to standard line 69, ``Electrocardiology'' as under CMS' usual practice, the Cardiology CCR would be 0.113. In addition, as proposed in section II.H.3. of the preamble of this proposed rule, the proposed FY 2016 Radiology CCR is 0.159, but when all radiology-related nonstandard codes are rolled up to standard line 76, ``Other Ancillary'', and not to standard lines 54 (Radiology--Diagnostic), 55 (Radiology--Therapeutic), and 56 (Radioisotope) as under CMS' usual practice, the Radiology CCR would be 0.161. Most notably, the CCR that is most impacted is the ``Other Services'' CCR. Currently, as proposed in section II.H.3. of the preamble of this proposed rule, the ``Other Services'' CCR is 0.367. However, if all nonstandard cost center codes would remain in line 76, ``Other Ancillary'' as hospitals have reported them in their FY 2013 as-submitted cost reports, instead of CMS applying its usual practice of rolling up these lines to the applicable ``Electrocardiology'' and ``Radiology'' standard cost centers, among others, the ``Other Services'' CCR would be 0.291. We note that we observed minimal or no differences in the remaining 15 CCRs, when their associated nonstandard cost centers were rolled up to their specific standard cost centers, versus being rolled up to the standard line 76, ``Other Ancillary.''

    ---------------------------------------------------------------------------

    \2\ Ibid.

    ---------------------------------------------------------------------------

    The differences in these CCRs computed from the HCRIS that was compiled by applying CMS' current rollup procedures of assigning nonstandard codes to specific standard cost centers, as compared to following hospitals' general practice of reporting nonstandard codes ``en masse'' on line 76, ``Other Ancillary,'' have implications for the aspects of the IPPS that rely on the CCRs (for example, the calculation of the MS-DRG relative weights). Some questions that arise are whether CMS' procedures for mapping and rolling up nonstandard cost centers to specific standard cost centers should be updated or whether hospital reporting practices are imprecise, or whether there is a combination of both. CMS' rollup procedures were developed many years ago based on historical analysis of hospitals' cost reporting practices and health care services furnished. It may be that it would be appropriate for CMS to reevaluate its rollup procedures based on hospitals' more current cost reporting practices and contemporary health care services provided. However, one factor complicating the determination of the most accurate standard cost centers to which each respective nonstandard cost center should be mapped is hospitals' own inconsistent reporting practices. For example, it may be determined that CMS should no longer be mapping and rolling up nonstandard cost center ``Acupuncture'' and its associated 5-digit codes 03020 through 03029 to standard cost center line 53, ``Anesthesiology.'' However, determining which other standard line

    Page 24346

    ``Acupuncture'' and its associated 5-digit codes 03020 through 03029 should be mapped is unclear, given that, as mentioned above, out of the 3,172 times that codes 03020 through 03029 were reported in the FY 2013 HCRIS file, hospitals called these codes ``Acupuncture'' only 122 times, and instead called these codes a variety of other names (such as Cardiopulmonary, Sleep Lab, Wound Care, Diabetes Center, among others). Therefore, without being able to determine the true nature of the services that were actually provided, it is difficult to know which standard cost center to map these services. That is, the question arises as to whether the service provided was acupuncture because a hospital reported code 03020, or whether the service provided was cardiopulmonary, which was the name a hospital assigned to code 03020. Furthermore, if the service provided was in fact cardiopulmonary, then, as Table 5 of Section 4095 of CMS Pub. 15-2 indicates, the correct nonstandard code for cardiopulmonary is 03160, not 03020. A related question would then be, if the hospital provided cardiopulmonary services, which are clearly related to cardiology, why did the hospital report those costs and charges on line 76, ``Other Ancillary,'' instead of subscripting standard line 69, ``Electrocardiology,'' and reporting the cardiopulmonary costs and charges there.

    In summary, we believe that the differences between the standard cost centers to which CMS assigns nonstandard codes when CMS rolls up cost report data to create the HCRIS SAS database, and the standard cost centers to which hospitals tend to assign and use nonstandard codes, coupled with the inconsistencies found in hospitals' use and naming of the nonstandard codes, have implications for the aspects of the IPPS that rely on the CCRs. For example, we have explained above and provided examples of how the CCRs used to calculate the MS-DRG relative weights could change, based on where certain nonstandard codes are reported and rolled up in the cost reports. However, before considering changes to our longstanding practices, we are interested in receiving public comments from stakeholders as to how to improve the use of nonstandard cost center codes. One option might be for CMS to allow only certain nonstandard codes to be used with certain standard cost centers, meaning that CMS might require that the CMS-approved cost reporting softwares ``lock in'' those nonstandard codes with their assigned standard cost centers. For example, if a hospital wishes to subscript a standard cost center, the cost reporting software might allow the hospital to choose only from a predetermined set of nonstandard codes. Therefore, for example, if a hospital wished to report Cardiopulmonary costs and charges on its cost report, the only place that the hospital could do that under this approach would be from a drop down list of cardiology-related services on standard line 69, ``Electrocardiology,'' and not on another line (not even line 76, ``Other Ancillary''). Some flexibility could be maintained, but within certain limits, in consideration of unique services that hospitals might provide.

    In the interim, while we seek public comments on this issue, we have proposed 19 CCRs for FY 2016 (listed in section II.H.3. of the preamble of this proposed rule) that were calculated from the December 31, 2014 update of the FY 2013 HCRIS, created in accordance with CMS' current longstanding procedures for mapping and rolling up nonstandard cost center codes. As we did with the FY 2015 IPPS/LTCH PPS final rule, we are providing the version of the HCRIS from which we calculated these proposed 19 CCRs on the FY 2016 IPPS Proposed Rule Home Page at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2016-IPPS-Proposed-Rule-Home-Page.html.\3\

    ---------------------------------------------------------------------------

    \3\ Ibid.

    ---------------------------------------------------------------------------

    F. Proposed Adjustment to MS-DRGs for Preventable Hospital-Acquired Conditions (HACs), Including Infections for FY 2016

    1. Background

    Section 1886(d)(4)(D) of the Act addresses certain hospital-

    acquired conditions (HACs), including infections. This provision is part of an array of Medicare tools that we are using to promote increased quality and efficiency of care. Under the IPPS, hospitals are encouraged to treat patients efficiently because they receive the same DRG payment for stays that vary in length and in the services provided, which gives hospitals an incentive to avoid unnecessary costs in the delivery of care. In some cases, conditions acquired in the hospital do not generate higher payments than the hospital would otherwise receive for cases without these conditions. To this extent, the IPPS encourages hospitals to avoid complications.

    However, the treatment of these conditions can generate higher Medicare payments in two ways. First, if a hospital incurs exceptionally high costs treating a patient, the hospital stay may generate an outlier payment. However, because the outlier payment methodology requires that hospitals experience large losses on outlier cases before outlier payments are made, hospitals have an incentive to prevent outliers. Second, under the MS-DRG system that took effect in FY 2008 and that has been refined through rulemaking in subsequent years, certain conditions can generate higher payments even if the outlier payment requirements are not met. Under the MS-DRG system, there are currently 261 sets of MS-DRGs that are split into 2 or 3 subgroups based on the presence or absence of a complication or comorbidity (CC) or a major complication or comorbidity (MCC). The presence of a CC or an MCC generally results in a higher payment.

    Section 1886(d)(4)(D) of the Act specifies that, by October 1, 2007, the Secretary was required to select, in consultation with the Centers for Disease Control and Prevention (CDC), at least two conditions that: (a) Are high cost, high volume, or both; (b) are assigned to a higher paying MS-DRG when present as a secondary diagnosis (that is, conditions under the MS-DRG system that are CCs or MCCs); and (c) could reasonably have been prevented through the application of evidence-based guidelines. Section 1886(d)(4)(D) of the Act also specifies that the list of conditions may be revised, again in consultation with the CDC, from time to time as long as the list contains at least two conditions.

    Effective for discharges occurring on or after October 1, 2008, under the authority of section 1886(d)(4)(D) of the Act, Medicare no longer assigns an inpatient hospital discharge to a higher paying MS-

    DRG if a selected condition is not present on admission (POA). Thus, if a selected condition that was not POA manifests during the hospital stay, it is considered a HAC and the case is paid as though the secondary diagnosis was not present. However, even if a HAC manifests during the hospital stay, if any nonselected CC or MCC appears on the claim, the claim will be paid at the higher MS-DRG rate. In addition, Medicare continues to assign a discharge to a higher paying MS-DRG if a selected condition is POA. When a HAC is not POA, payment can be affected in a manner shown in the diagram below.

    Page 24347

    GRAPHIC TIFF OMITTED TP30AP15.000

    2. HAC Selection

    Beginning in FY 2007, we have set forth proposals, and solicited and responded to public comments, to implement section 1886(d)(4)(D) of the Act through the IPPS annual rulemaking process. For specific policies addressed in each rulemaking cycle, including a detailed discussion of the collaborative interdepartmental process and public input regarding selected and potential candidate HACs, we refer readers to the following rules: The FY 2007 IPPS proposed rule (71 FR 24100) and final rule (71 FR 48051 through 48053); the FY 2008 IPPS proposed rule (72 FR 24716 through 24726) and final rule with comment period (72 FR 47200 through 47218); the FY 2009 IPPS proposed rule (73 FR 23547) and final rule (73 FR 48471); the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule (74 FR 24106) and final rule (74 FR 43782); the FY 2011 IPPS/LTCH PPS proposed rule (75 FR 23880) and final rule (75 FR 50080); the FY 2012 IPPS/LTCH PPS proposed rule (76 FR 25810 through 25816) and final rule (76 FR 51504 through 51522); the FY 2013 IPPS/LTCH PPS proposed rule (77 FR 27892 through 27898) and final rule (77 FR 53283 through 53303); the FY 2014 IPPS/LTCH PPS proposed rule (78 FR 27509 through 27512) and final rule (78 FR 50523 through 50527), and the FY 2015 IPPS/LTCH PPS proposed rule (79 FR 28000 through 28003) and final rule (79 FR 49876 through 49880). A complete list of the 11 current categories of HACs is included on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalAcqCond/Hospital-Acquired_Conditions.html.

    3. Present on Admission (POA) Indicator Reporting

    Collection of POA indicator data is necessary to identify which conditions were acquired during hospitalization for the HAC payment provision as well as for broader public health uses of Medicare data. In previous rulemaking, we provided both CMS and CDC Web site resources that are available to hospitals for assistance in this reporting effort. For detailed information regarding these sites and materials, including the application and use of POA indicators, we refer the reader to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51506 through 51507).

    Currently, as we have discussed in the prior rulemaking cited under section II.I.2. of the preamble of this proposed rule, the POA indicator reporting requirement only applies to IPPS hospitals and Maryland hospitals because they are subject to this HAC provision. Non-

    IPPS hospitals, including CAHs, LTCHs, IRFs, IPFs, cancer hospitals, children's hospitals, RNHCIs, and the Department of Veterans Affairs/

    Department of Defense hospitals, are exempt from POA reporting.

    There are currently four POA indicator reporting options, ``Y'', ``W'', ``N'', and ``U'', as defined by the ICD-9-CM Official Guidelines for Coding and Reporting. We note that prior to January 1, 2011, we also used a POA indicator reporting option ``1''. However, beginning on or after January 1, 2011, hospitals were required to begin reporting POA indicators using the 5010 electronic transmittal standards format. The 5010 format removes the need to report a POA indicator of ``1'' for codes that are exempt from POA reporting. We issued CMS instructions on this reporting change as a One-Time Notification, Pub. No. 100-20, Transmittal No. 756, Change Request 7024, effective on August 13, 2010, which can be located at the following link on the CMS Web site: http://www.cms.gov/manuals/downloads/Pub100_20.pdf. The current POA indicators and their descriptors are shown in the chart below:

    ------------------------------------------------------------------------

    Indicator Descriptor

    ------------------------------------------------------------------------

    Y................. Indicates that the condition was present on

    admission.

    W................. Affirms that the hospital has determined that, based

    on data and clinical judgment, it is not possible

    to document when the onset of the condition

    occurred.

    N................. Indicates that the condition was not present on

    admission.

    U................. Indicates that the documentation is insufficient to

    determine if the condition was present at the time

    of admission.

    ------------------------------------------------------------------------

    Page 24348

    Under the HAC payment policy, we treat HACs coded with ``Y'' and ``W'' indicators as POA and allow the condition on its own to cause an increased payment at the CC and MCC level. We treat HACs coded with ``N'' and ``U'' indicators as Not Present on Admission (NPOA) and do not allow the condition on its own to cause an increased payment at the CC and MCC level. We refer readers to the following rules for a detailed discussion of POA indicator reporting: the FY 2009 IPPS proposed rule (73 FR 23559) and final rule (73 FR 48486 through 48487); the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule (74 FR 24106) and final rule (74 FR 43784 through 43785); the FY 2011 IPPS/LTCH PPS proposed rule (75 FR 23881 through 23882) and final rule (75 FR 50081 through 50082); the FY 2012 IPPS/LTCH PPS proposed rule (76 FR 25812 through 25813) and final rule (76 FR 51506 through 51507); the FY 2013 IPPS/

    LTCH PPS proposed rule (77 FR 27893 through 27894) and final rule (77 FR 53284 through 53285); the FY 2014 IPPS/LTCH PPS proposed rule (78 FR 27510 through 27511) and final rule (78 FR 50524 through 50525), and the FY 2015 IPPS/LTCH PPS proposed rule (79 FR 28001 through 28002) and final rule (79 FR 49877 through 49878).

    In addition, as discussed previously in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53324), the 5010 format allows the reporting and, effective January 1, 2011, the processing of up to 25 diagnoses and 25 procedure codes. As such, it is necessary to report a valid POA indicator for each diagnosis code, including the principal diagnosis and all secondary diagnoses up to 25.

    4. HACs and POA Reporting in Preparation for Transition to ICD-10-CM and ICD-10-PCS

    In the FY 2012 IPPS/LTCH PPS final rule (76 FR 51506 and 51507), in preparation for the transition to the ICD-10-CM and ICD-10-PCS code sets, we indicated that further information regarding the use of the POA indicator with the ICD-10-CM/ICD-10-PCS classifications as they pertain to the HAC policy would be discussed in future rulemaking.

    At the March 5, 2012 and the September 19, 2012 meetings of the ICD-9-CM Coordination and Maintenance Committee, an announcement was made with regard to the availability of the ICD-9-CM HAC list translation to ICD-10-CM and ICD-10-PCS code sets. Participants were informed that the list of the ICD-9-CM selected HACs had been translated into codes using the ICD-10-CM and ICD-10-PCS classification system. It was recommended that the public review this list of ICD-10-

    CM/ICD-10-PCS code translations of the selected HACs available on the CMS Web site at: http://www.cms.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html. We encouraged the public to submit comments on these translations through the HACs Web page using the CMS ICD-10-CM/PCS HAC Translation Feedback Mailbox that was set up for this purpose under the Related Links section titled ``CMS HAC Feedback.'' We also encouraged readers to review the educational materials and draft code sets available for ICD-10-CM/PCS on the CMS Web site at: http://www.cms.gov/ICD10/. Lastly, we provided information regarding the ICD-

    10 MS-DRG Conversion Project on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalAcqCond/icd10_hacs.html.

    In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50525), we stated that the final HAC list translation from ICD-9-CM to ICD-10-CM/ICD-10-

    PCS would be subject to formal rulemaking. We again encouraged readers to review the educational materials and updated draft code sets available for ICD-10-CM/ICD-10-PCS on the CMS Web site at: http://www.cms.gov/ICD10/. In addition, we stated that the draft ICD-10-CM Coding Guidelines could be viewed on the CDC Web site at: http://www.cdc.gov/nchs/icd/icd10cm.htm.

    However, prior to engaging in rulemaking for the FY 2015 HAC program, on April 1, 2014, the Protecting Access to Medicare Act of 2014 (PAMA) (Pub. L. 113-93) was enacted, which specified that the Secretary may not adopt ICD-10 prior to October 1, 2015. Accordingly, the U.S. Department of Health and Human Services released a final rule in the Federal Register on August 4, 2014 (79 FR 45128 through 45134) that included a new compliance date that requires the use of ICD-10 beginning October 1, 2015. The August 4, 2014 final rule is available for viewing on the Internet at: http://www.gpo.gov/fdsys/pkg/FR-2014-08-04/pdf/2014-18347.pdf. That final rule also requires HIPAA covered entities to continue to use ICD-9-CM through September 30, 2015. Further information of the ICD-10 rules can be found on the Web site at: http://www.cms.gov/Medicare/Coding/ICD10/Statute_Regulations.html.

    As described in section II.F.5. of the preamble of this proposed rule, we are proposing the HAC list translation from ICD-9-CM to ICD-

    10-CM/ICD-10-PCS in this FY 2016 IPPS/LTCH PPS proposed rule.

    5. Proposed Changes to the HAC Program for FY 2016

    As discussed in section II.G. 1. a. of the preamble of this proposed rule, for FY 2016, we are proposing the ICD-10 MS-DRGs Version 33 as the replacement logic for the ICD-9-CM MS-DRGs Version 32. As part of our DRA HAC update for FY 2016, we are proposing that the ICD-

    10-CM/PCS Version 33 HAC list replace the ICD-9-CM Version 32 HAC list. We are soliciting public comments on how well the ICD-10-CM/PCS Version 32 HAC list replicates the ICD-9-CM Version 32 HAC list.

    CMS prepared the ICD-10 MS-DRGs Version 32 based on the FY 2015 MS-

    DRGs (Version 32) that we finalized in the FY 2015 IPPS/LTCH PPS final rule. In November 2014, we posted a Definitions Manual of the ICD-10 MS-DRGs Version 32 on the ICD-10 MS-DRG Conversion Project Web site at: http://www.cms.hhs.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html. The HAC code list translations from ICD-9-CM to ICD-10-

    CM/PCS are located in Appendix I of the ICD-10-CM/PCS MS-DRG Version 32 Definitions Manual. The link to this Manual (available in both text and HTML formats) is located in the Downloads section of the ICD-10 MS-DRG Conversion Project Web site.

    With respect to the current categories of the HACs, we are not proposing to add or remove any categories in this FY 2016 IPPS/LTCH PPS proposed rule. However, as described more fully in section III.F.7, of the preamble of this proposed rule, we will continue to monitor contemporary evidence-based guidelines for selected, candidate, and previously considered HACs that provide specific recommendations for the prevention of the corresponding conditions in the acute hospital setting and may use this information to inform future rulemaking. We also continue to encourage public dialogue about refinements to the HAC list through written stakeholder comments. We refer readers to section II.F.6. of the FY 2008 IPPS final rule with comment period (72 FR 47202 through 47218) and to section II.F.7. of the FY 2009 IPPS final rule (73 FR 48774 through 48491) for detailed discussion supporting our determination regarding each of the current conditions. We also refer readers to the FY 2013 IPPS/LTCH PPS proposed rule (77 FR 27892 through 27898) and final rule (77 FR 53285 through 53292) for the HAC policy for FY 2013, the FY 2014 IPPS/LTCH PPS proposed rule (78 FR 27509 through 27512) and final rule (78 FR 50523

    Page 24349

    through 50527) for the HAC policy for FY 2014, and the FY 2015 IPPS/

    LTCH PPS proposed rule (79 FR 28000 through 28003) and final rule (79 FR 49876 through 49880) for the HAC policy for FY 2015.

    In summary, we are proposing that the ICD-10-CM/PCS Version 33 HAC list replace the ICD-9-CM Version 32 HAC list and are seeking public comments on how well the ICD-10-CM/PCS Version 32 HAC list replicates the ICD-9-CM Version 32 HAC list.

    6. RTI Program Evaluation

    On September 30, 2009, a contract was awarded to RTI to evaluate the impact of the Hospital-Acquired Condition-Present on Admission (HAC-POA) provisions on the changes in the incidence of selected conditions, effects on Medicare payments, impacts on coding accuracy, unintended consequences, and infection and event rates. This was an intra-agency project with funding and technical support from CMS, OPHS, AHRQ, and CDC. The evaluation also examined the implementation of the program and evaluated additional conditions for future selection. The contract with RTI ended on November 30, 2012. Summary reports of RTI's analysis of the FYs 2009, 2010, and 2011 MedPAR data files for the HAC-

    POA program evaluation were included in the FY 2011 IPPS/LTCH PPS final rule (75 FR 50085 through 50101), the FY 2012 IPPS/LTCH PPS final rule (76 FR 51512 through 51522), and the FY 2013 IPPS/LTCH PPS final rule (77 FR 53292 through 53302). Summary and detailed data also were made publicly available on the CMS Web site at: http://www.cms.gov/HospitalAcqCond/01_Overview.asp and the RTI Web site at: http://www.rti.org/reports/cms/.

    In addition to the evaluation of HAC and POA MedPAR claims data, RTI also conducted analyses on readmissions due to HACs, the incremental costs of HACs to the health care system, a study of spillover effects and unintended consequences, as well as an updated analysis of the evidence-based guidelines for selected and previously considered HACs. Reports on these analyses have been made publicly available on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalAcqCond/index.html.

    7. RTI Reports on Evidence-Based Guidelines

    The RTI program evaluation included a report that provided references for all evidence-based guidelines available for each of the selected, candidate, and previously considered HACs that provided specific recommendations for the prevention of the corresponding conditions. Guidelines were primarily identified using the AHRQ National Guidelines Clearing House (NGCH) and the CDC, along with relevant professional societies. Guidelines published in the United States were used, if available. In the absence of U.S. guidelines for a specific condition, international guidelines were included.

    RTI prepared a final report to summarize its findings regarding these guidelines. This report is titled ``Evidence-Based Guidelines for Selected, Candidate, and Previously Considered Hospital-Acquired Conditions'' and can be found on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalAcqCond/Downloads/Evidence-Based-Guidelines.pdf.

    Subsequent to this final report, RTI was awarded a new Evidence-

    Based Guidelines Monitoring contract. Under this monitoring contract, RTI annually provides a summary report of the contemporary evidence-

    based guidelines for selected, candidate, and previously considered HACs that provide specific recommendations for the prevention of the corresponding conditions in the acute care hospital setting. We received RTI's 2014 report and made it available to the public on the CMS Hospital-Acquired Conditions Web page in the ``Downloads'' section at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalAcqCond/index.html?redirect=/HospitalAcqCond/.

    Once we receive RTI's 2015 report in the late spring or early summer, we will make it available to the public at this same link as the 2014 report.

    G. Proposed Changes to Specific MS-DRG Classifications

    1. Discussion of Changes to Coding System and Basis for MS-DRG Updates

  187. Conversion of MS-DRGs to the International Classification of Diseases, 10th Revision (ICD-10)

    Providers use the code sets under the ICD-9-CM coding system to report diagnoses and procedures for Medicare hospital inpatient services under the MS-DRG system. A later coding edition, the ICD-10 coding system, includes the International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM) for diagnosis coding and the International Classification of Diseases, 10th Revision, Procedure Coding System (ICD-10-PCS) for inpatient hospital procedure coding, as well as the Official ICD-10-CM and ICD-10-PCS Guidelines for Coding and Reporting. The ICD-10 coding system was initially adopted for transactions conducted on or after October 1, 2013, as described in the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Administrative Simplification: Modifications to Medical Data Code Set Standards to Adopt ICD-10-CM and ICD-10-PCS Final Rule published in the Federal Register on January 16, 2009 (74 FR 3328 through 3362) (hereinafter referred to as the ``ICD-10-CM and ICD-10-PCS final rule''). However, the Secretary of Health and Human Services issued a final rule that delayed the compliance date for ICD-10 from October 1, 2013, to October 1, 2014. That final rule, entitled ``Administrative Simplification: Adoption of a Standard for a Unique Health Plan Identifier; Addition to the National Provider Identifier Requirements; and a Change to the Compliance Date for ICD-10-CM and ICD-10-PCS Medical Data Code Sets,'' CMS-0040-F, was published in the Federal Register on September 5, 2012 (77 FR 54664) and is available for viewing on the Internet at: http://www.gpo.gov/fdsys/pkg/FR-2012-09-05/pdf/2012-21238.pdf. On April 1, 2014, the Protecting Access to Medicare Act of 2014 (PAMA) (Pub. L. 113-93) was enacted, which specified that the Secretary may not adopt ICD-10 prior to October 1, 2015. Accordingly, the U.S. Department of Health and Human Services released a final rule in the Federal Register on August 4, 2014 (79 FR 45128 through 45134) that included a new compliance date that requires the use of ICD-10 beginning October 1, 2015. The August 4, 2014 final rule is available for viewing on the Internet at: http://www.gpo.gov/fdsys/pkg/FR-2014-08-04/pdf/2014-18347.pdf. That final rule also requires HIPAA covered entities to continue to use ICD-9-CM through September 30, 2015.

    The anticipated move to ICD-10 necessitated the development of an ICD-10-CM/ICD-10-PCS version of the MS-DRGs. CMS began a project to convert the ICD-9-CM-based MS-DRGs to ICD-10 MS-DRGs. In response to the FY 2011 IPPS/LTCH PPS proposed rule, we received public comments on the creation of the ICD-10 version of the MS-DRGs, which will be implemented at the same time as ICD-10 (75 FR 50127 and 50128). While we did not propose an ICD-10 version of the MS-DRGs in the FY 2011 IPPS/LTCH PPS proposed rule, we noted that we have been actively involved in converting current MS-DRGs from ICD-9-CM codes to ICD-10 codes and sharing this

    Page 24350

    information through the ICD-10 (previously ICD-9-CM) Coordination and Maintenance Committee. We undertook this early conversion project to assist other payers and providers in understanding how to implement their own conversion projects. We posted ICD-10 MS-DRGs based on Version 26.0 (FY 2009) of the MS-DRGs. We also posted a paper that describes how CMS went about completing this project and suggestions for other payers and providers to follow. Information on the ICD-10 MS-

    DRG conversion project can be found on the ICD-10 MS-DRG Conversion Project Web site at: http://www.cms.hhs.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html. We have continued to keep the public updated on our maintenance efforts for ICD-10-CM and ICD-10-PCS coding systems, as well as the General Equivalence Mappings that assist in conversion through the ICD-10 (previously ICD-9-CM) Coordination and Maintenance Committee. Information on these committee meetings can be found on the CMS Web site at: http://www.cms.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/index.html.

    During FY 2011, we developed and posted Version 28 of the ICD-10 MS-DRGs based on the FY 2011 MS-DRGs (Version 28) that we finalized in the FY 2011 IPPS/LTCH PPS final rule on the CMS Web site. This ICD-10 MS-DRGs Version 28 also included the CC Exclusion List and the ICD-10 version of the hospital-acquired conditions (HACs), which was not posted with Version 26. We also discussed this update at the September 15-16, 2010 and the March 9-10, 2011 meetings of the ICD-9-CM Coordination and Maintenance Committee. The minutes of these two meetings are posted on the CMS Web site at: http://www.cms.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/index.html.

    We reviewed public comments on the ICD-10 MS-DRGs Version 28 and made updates as a result of these comments. We called the updated version the ICD-10 MS-DRGs Version 28-R1. We posted a Definitions Manual of ICD-10 MS-DRGs Version 28-R1 on our ICD-10 MS-DRG Conversion Project Web site. To make the review of Version 28-R1 updates easier for the public, we also made available pilot software on a CD-ROM that could be ordered through the National Technical Information Service (NTIS). A link to the NTIS ordering page was provided on the CMS ICD-10 MS-DRGs Web page. We stated that we believed that, by providing the ICD-10 MS-DRGs Version 28-R1 Pilot Software (distributed on CD-ROM), the public would be able to more easily review and provide feedback on updates to the ICD-10 MS-DRGs. We discussed the updated ICD-10 MS-DRGs Version 28-R1 at the September 14, 2011 ICD-9-CM Coordination and Maintenance Committee meeting. We encouraged the public to continue to review and provide comments on the ICD-10 MS-DRGs so that CMS could continue to update the system.

    In FY 2012, we prepared the ICD-10 MS-DRGs Version 29, based on the FY 2012 MS-DRGs (Version 29) that we finalized in the FY 2012 IPPS/LTCH PPS final rule. We posted a Definitions Manual of ICD-10 MS-DRGs Version 29 on our ICD-10 MS-DRG Conversion Project Web site. We also prepared a document that describes changes made from Version 28 to Version 29 to facilitate a review. The ICD-10 MS-DRGs Version 29 was discussed at the ICD-9-CM Coordination and Maintenance Committee meeting on March 5, 2012. Information was provided on the types of updates made. Once again, the public was encouraged to review and comment on the most recent update to the ICD-10 MS-DRGs.

    CMS prepared the ICD-10 MS-DRGs Version 30 based on the FY 2013 MS-

    DRGs (Version 30) that we finalized in the FY 2013 IPPS/LTCH PPS final rule. We posted a Definitions Manual of the ICD-10 MS-DRGs Version 30 on our ICD-10 MS-DRG Conversion Project Web site. We also prepared a document that describes changes made from Version 29 to Version 30 to facilitate a review. We produced mainframe and computer software for Version 30, which was made available to the public in February 2013. Information on ordering the mainframe and computer software through NTIS was posted on the ICD-10 MS-DRG Conversion Project Web site. The ICD-10 MS-DRGs Version 30 computer software facilitated additional review of the ICD-10 MS-DRGs conversion.

    We provided information on a study conducted on the impact of converting MS-DRGs to ICD-10. Information on this study is summarized in a paper entitled ``Impact of the Transition to ICD-10 on Medicare Inpatient Hospital Payments.'' This paper was posted on the CMS ICD-10 MS-DRGs Conversion Project Web site and was distributed and discussed at the September 15, 2010 ICD-9-CM Coordination and Maintenance Committee meeting. The paper described CMS' approach to the conversion of the MS-DRGs from ICD-9-CM codes to ICD-10 codes. The study was undertaken using the ICD-9-CM MS-DRGs Version 27 (FY 2010), which was converted to the ICD-10 MS-DRGs Version 27. The study estimated the impact on aggregate payment to hospitals and the distribution of payments across hospitals. The impact of the conversion from ICD-9-CM to ICD-10 on Medicare MS-DRG hospital payments was estimated using FY 2009 Medicare claims data. The study found a hospital payment increase of 0.05 percent using the ICD-10 MS-DRGs Version 27.

    CMS provided an overview of this hospital payment impact study at the March 5, 2012 ICD-9-CM Coordination and Maintenance Committee meeting. This presentation followed presentations on the creation of ICD-10 MS-DRGs Version 29. A summary report of this meeting can be found on the CMS Web site at: http://www.cms.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/index.html. At the March 2012 meeting, CMS announced that it would produce an update on this impact study based on an updated version of the ICD-10 MS-DRGs. This update of the impact study was presented at the March 5, 2013 ICD-9-CM Coordination and Maintenance Committee meeting. The study found that moving from an ICD-

    9-CM-based system to an ICD-10 MS-DRG replicated system would lead to DRG reassignments on only 1 percent of the 10 million MedPAR sample records used in the study. Ninety-nine percent of the records did not shift to another MS-DRG when using an ICD-10 MS-DRG system. For the 1 percent of the records that shifted, 45 percent of the shifts were to a higher weighted MS-DRG, while 55 percent of the shifts were to lower weighted MS-DRGs. The net impact across all MS-DRGs was a reduction by 4/10000 or minus 4 pennies per $100. The updated paper is posted on the CMS Web site at: http://www.cms.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html under the ``Downloads'' section. Information on the March 5, 2013 ICD-9-CM Coordination and Maintenance Committee meeting can be found on the CMS Web site at: http://www.cms.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/ICD-9-CM-C-and-M-Meeting-Materials.html. This update of the impact paper and the ICD-

    10 MS-DRG Version 30 software provided additional information to the public who were evaluating the conversion of the MS-DRGs to ICD-10 MS-

    DRGs.

    CMS prepared the ICD-10 MS-DRGs Version 31.0 based on the FY 2014 MS-DRGs (Version 31) that we finalized in the FY 2014 IPPS/LTCH PPS final rule. In November 2013, we posted a

    Page 24351

    Definitions Manual of the ICD-10 MS-DRGs Version 31 on the ICD-10 MS-

    DRG Conversion Project Web site at: http://www.cms.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html. We also prepared a document that described changes made from Version 30 to Version 31 to facilitate a review. We produced mainframe and computer software for Version 31, which was made available to the public in December 2013. Information on ordering the mainframe and computer software through NTIS was posted on the CMS Web site at: http://www.cms.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html under the ``Related Links'' section. This ICD-10 MS-DRGs Version 31 computer software facilitated additional review of the ICD-10 MS-DRGs conversion. We encouraged the public to submit to CMS any comments on areas where they believed the ICD-10 MS-DRGs did not accurately reflect grouping logic found in the ICD-9-CM MS-DRGs Version 31.

    We reviewed public comments received and developed an update of ICD-10 MS-DRGs Version 31, which we called ICD-10 MS-DRGs Version 31.0-

    R. We made available a Definitions Manual of the ICD-10 MS-DRGs Version 31.0-R on the ICD-10 MS-DRG Conversion Project Web site at: http://www.cms.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html. We also prepared a document that describes changes made from Version 31 to Version 31-R to facilitate a review. We will continue to share ICD-10-MS-DRG conversion activities with the public through this Web site.

    CMS prepared the ICD-10 MS-DRGs Version 32 based on the FY 2015 MS-

    DRGs (Version 32) that we finalized in the FY 2015 IPPS/LTCH PPS final rule. In November 2014, we made available a Definitions Manual of the ICD-10 MS-DRGs Version 32 on the ICD-10 MS-DRG Conversion Project Web site at: http://www.cms.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html. We also prepared a document that described changes made from Version 31-R to Version 32 to facilitate a review. We produced mainframe and computer software for Version 32, which was made available to the public in January 2015. Information on ordering the mainframe and computer software through NTIS was made available on the CMS Web site at: http://www.cms.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html under the ``Related Links'' section. This ICD-10 MS-DRGs Version 32 computer software facilitated additional review of the ICD-10 MS-DRGs conversion. We encouraged the public to submit to CMS any comments on areas where they believed the ICD-10 MS-

    DRGs did not accurately reflect grouping logic found in the ICD-9-CM MS-DRGs Version 32. We discuss five requests from the public to update the ICD-10 MS-DRGs Version 32 to better replicate the ICD-9-CM MS-DRGs in section II.G.3., 4., and 5. of the preamble of this proposed rule. Therefore, we are proposing to implement the MS-DRG code logic in the ICD-10 MS-DRGs Version 32 along with any finalized updates to the ICD-

    10 MS-DRGs Version 32 for the final ICD-10 MS-DRGs Version 33. In this FY 2016 IPPS/LTCH PPS proposed rule, we are proposing the ICD-10 MS-

    DRGs Version 33 as the replacement logic for the ICD-9-CM based MS-DRGs Version 32 as part of the proposed MS-DRG updates for FY 2016. We are inviting public comments on how well the ICD-10 MS-DRGs Version 32 replicates the logic of the MS-DRGs Version 32 based on ICD-9-CM codes.

  188. Basis for Proposed FY 2016 MS-DRG Updates

    CMS encourages input from our stakeholders concerning the annual IPPS updates when that input is made available to us by December 7 of the year prior to the next annual proposed rule update. For example, to be considered for any updates or changes in FY 2016, comments and suggestions should have been submitted by December 7, 2014. The comments that were submitted in a timely manner for FY 2016 are discussed below in this section.

    Following are the changes we are proposing to the MS-DRGs for FY 2016. We are inviting public comment on each of the MS-DRG classification proposed changes described below, as well as our proposals to maintain certain existing MS-DRG classifications, which also are discussed below. In some cases, we are proposing changes to the MS-DRG classifications based on our analysis of claims data. In other cases, we are proposing to maintain the existing MS-DRG classification based on our analysis of claims data. For this FY 2016 proposed rule, our MS-DRG analysis is based on claims data from the December 2014 update of the FY 2014 MedPAR file, which contains hospital bills received through September 30, 2014, for discharges occurring through September 30, 2014. In our discussion of the proposed MS-DRG reclassification changes that follows, we refer to our analysis of claims data from the ``December 2014 update of the FY 2014 MedPAR file.''

    As explained in previous rulemaking (76 FR 51487), in deciding whether to propose to make further modification to the MS-DRGs for particular circumstances brought to our attention, we consider whether the resource consumption and clinical characteristics of the patients with a given set of conditions are significantly different than the remaining patients in the MS-DRG. We evaluate patient care costs using average costs and lengths of stay and rely on the judgment of our clinical advisors to decide whether patients are clinically distinct or similar to other patients in the MS-DRG. In evaluating resource costs, we consider both the absolute and percentage differences in average costs between the cases we select for review and the remainder of cases in the MS-DRG. We also consider variation in costs within these groups; that is, whether observed average differences are consistent across patients or attributable to cases that are extreme in terms of costs or length of stay, or both. Further, we consider the number of patients who will have a given set of characteristics and generally prefer not to create a new MS-DRG unless it would include a substantial number of cases.

    In our examination of the claims data, we apply the following criteria established in FY 2008 (72 FR 47169) to determine if the creation of a new complication or comorbidity (CC) or major complication or comorbidity (MCC) subgroup within a base MS-DRG is warranted:

    A reduction in variance of costs of at least 3 percent.

    At least 5 percent of the patients in the MS-DRG fall within the CC or MCC subgroup.

    At least 500 cases are in the CC or MCC subgroup.

    There is at least a 20-percent difference in average costs between subgroups.

    There is a $2,000 difference in average costs between subgroups.

    In order to warrant creation of a CC or MCC subgroup within a base MS-DRG, the subgroup must meet all five of the criteria.

    2. MDC 1 (Diseases and Disorders of the Nervous System): Endovascular Embolization (Coiling) Procedures

    We received a request again this year to change the MS-DRG assignment for endovascular embolization (coiling) procedures. This topic was discussed previously in the FY 2015 IPPS/LTCH PPS proposed rule (79 FR 28005 through 28006) and in the FY 2015

    Page 24352

    IPPS/LTCH PPS final rule (79 FR 49883 through 49886). For FY 2015, we did not change the MS-DRG assignment for endovascular embolization (coiling) procedures.

    After issuance of the FY 2015 IPPS/LTCH PPS final rule, we received a modified request from the commenter asking that CMS consider establishing four new MS-DRGs:

    Recommended MS-DRG XXX (Endovascular Intracranial Embolization Procedures with Principal Diagnosis of Hemorrhage);

    Recommended MS-DRG XXX (Endovascular Intracranial Embolization Procedures without Principal Diagnosis of Hemorrhage with MCC);

    Recommended MS-DRG XXX (Endovascular Intracranial Embolization Procedures without Principal Diagnosis of Hemorrhage with CC); and

    Recommended MS-DRG XXX (Endovascular Intracranial Embolization Procedures without Principal Diagnosis of Hemorrhage without CC/MCC).

    The requestor stated that these new suggested MS-DRGs will promote clinical cohesiveness and resource comparability. The requestor stated that endovascular intracranial and endovascular embolization procedures are not similar to the open craniotomy procedures with which they are currently grouped. The requestor asserted that the differences in costs between endovascular intracranial procedures and open craniotomy procedures are great, reflecting, for instance, the use of an operating suite versus interventional vascular catheterization lab suite, intensive care and other costs.

    In conjunction with the recommended new MS-DRGs, the requestor recommended that the following ICD-9-CM codes, which include endovascular embolization procedures and additional intracranial procedures, be removed from MS-DRG 020 (Intracranial Vascular Procedures with Principal Diagnosis of Hemorrhage with MCC); MS-DRG 021 (Intracranial Vascular Procedures with Principal Diagnosis of Hemorrhage with CC); MS-DRG 022 (Intracranial Vascular Procedures with Principal Diagnosis of Hemorrhage without CC/MCC); MS-DRG 023 (Craniotomy with Major Device Implant/Acute Complex CNS Principal Diagnosis with MCC or Chemo Implant); MS-DRG 024 (Craniotomy with Major Device Implant/Acute Complex CNS Principal Diagnosis without MCC); MS-

    DRG 025 (Craniotomy & Endovascular Intracranial Procedures with MCC); MS-DRG 026 (Craniotomy & Endovascular Intracranial Procedures with CC); and MS-DRG 027 (Craniotomy & Endovascular Intracranial Procedures without CC/MCC):

    00.62 (Percutaneous angioplasty of intracranial vessel);

    39.72 (Endovascular (total) embolization or occlusion of head and neck vessels);

    39.74 (Endovascular removal of obstruction from head and neck vessel(s));

    39.75 (Endovascular embolization or occlusion of vessel(s) of head or neck using bare coils);

    39.76 (Endovascular embolization or occlusion of vessel(s) of head or neck using bioactive coils); and

    39.79 (Other endovascular procedures on other vessels).

    The requestor asked that the four new requested MS-DRGs be created using these procedure codes. The requestor suggested that the first requested new MS-DRG would be MS-DRG XXX (Endovascular Intracranial Embolization Procedures with Principal Diagnosis of Hemorrhage). The principal diagnoses for hemorrhage would include the same hemorrhage codes in the current MS-DRGs 020, 021, and 022, which are as follows:

    094.87 (Syphilitic ruptured cerebral aneurysm);

    430 (Subarachnoid hemorrhage);

    431 (Intracerebral hemorrhage);

    432.0 (Nontraumatic extradural hemorrhage);

    432.1 (Subdural hemorrhage); and

    432.9 (Unspecified intracranial hemorrhage).

    For this first new requested MS-DRG, the requestor suggested that only the following endovascular embolization procedure codes would be assigned:

    39.72 (Endovascular (total) embolization or occlusion of head and neck vessels);

    39.75 (Endovascular embolization or occlusion of vessel(s) of head or neck using bare coils); and

    39.76 (Endovascular embolization or occlusion of vessel(s) of head or neck using bioactive coils).

    The requestor recommended that the three additional new MS-DRGs would consist of a new base MS-DRG subdivided into three severity levels as follows:

    Recommended MS-DRG XXX (Endovascular Intracranial Embolization Procedures without Principal Diagnosis of Hemorrhage with MCC);

    Recommended MS-DRG XXX (Endovascular Intracranial Embolization Procedures without Principal Diagnosis of Hemorrhage with CC); and

    Recommended MS-DRG XXX (Endovascular Intracranial Embolization Procedures without Principal Diagnosis of Hemorrhage without CC/MCC).

    The requestor suggested that these three new recommended MS-DRGs would have endovascular embolization procedures as well as additional percutaneous and endovascular procedures as listed below:

    00.62 (Percutaneous angioplasty of intracranial vessel);

    39.72 (Endovascular (total) embolization or occlusion of head and neck vessels);

    39.74 (Endovascular removal of obstruction from head and neck vessel(s));

    39.75 (Endovascular embolization or occlusion of vessel(s) of head or neck using bare coils);

    39.76 (Endovascular embolization or occlusion of vessel(s) of head or neck using bioactive coils); and

    39.79 (Other endovascular procedures on other vessels).

    ICD-10-PCS provides the following more detailed codes for endovascular embolization, which are assigned to MS-DRGs 020, 021, 022, 023, 024, 025, 026, and 027 in the ICD-10 MS-DRGs Version 32:

    ICD-10-PCS Codes for Endovascular Embolization Assigned to MS-DRGs 020 Through 027 in ICD-10 MS-DRGs Version 32

    ----------------------------------------------------------------------------------------------------------------

    ICD-10-PCS code Code description

    ----------------------------------------------------------------------------------------------------------------

    03LG3BZ..................................... Occlusion of intracranial artery with bioactive intraluminal

    device, percutaneous approach.

    03LG3DZ..................................... Occlusion of intracranial artery with intraluminal device,

    percutaneous approach.

    03LG4BZ..................................... Occlusion of intracranial artery with bioactive intraluminal

    device, percutaneous endoscopic approach.

    03LG4DZ..................................... Occlusion of intracranial artery with intraluminal device,

    percutaneous endoscopic approach.

    03LH3BZ..................................... Occlusion of right common carotid artery with bioactive

    intraluminal device, percutaneous approach.

    03LH3DZ..................................... Occlusion of right common carotid artery with intraluminal device,

    percutaneous approach.

    03LH4BZ..................................... Occlusion of right common carotid artery with bioactive

    intraluminal device, percutaneous endoscopic approach.

    03LH4DZ..................................... Occlusion of right common carotid artery with intraluminal device,

    percutaneous endoscopic approach.

    Page 24353

    03LJ3BZ..................................... Occlusion of left common carotid artery with bioactive

    intraluminal device, percutaneous approach.

    03LJ3DZ..................................... Occlusion of left common carotid artery with intraluminal device,

    percutaneous approach.

    03LJ4BZ..................................... Occlusion of left common carotid artery with bioactive

    intraluminal device, percutaneous endoscopic approach.

    03LJ4DZ..................................... Occlusion of left common carotid artery with intraluminal device,

    percutaneous endoscopic approach.

    03LK3BZ..................................... Occlusion of right internal carotid artery with bioactive

    intraluminal device, percutaneous approach.

    03LK3DZ..................................... Occlusion of right internal carotid artery with intraluminal

    device, percutaneous approach.

    03LK4BZ..................................... Occlusion of right internal carotid artery with bioactive

    intraluminal device, percutaneous endoscopic approach.

    03LK4DZ..................................... Occlusion of right internal carotid artery with intraluminal

    device, percutaneous endoscopic approach.

    03LL3BZ..................................... Occlusion of left internal carotid artery with bioactive

    intraluminal device, percutaneous approach.

    03LL3DZ..................................... Occlusion of left internal carotid artery with intraluminal

    device, percutaneous approach.

    03LL4BZ..................................... Occlusion of left internal carotid artery with bioactive

    intraluminal device, percutaneous endoscopic approach.

    03LL4DZ..................................... Occlusion of left internal carotid artery with intraluminal

    device, percutaneous endoscopic approach.

    03LM3BZ..................................... Occlusion of right external carotid artery with bioactive

    intraluminal device, percutaneous approach.

    03LM3DZ..................................... Occlusion of right external carotid artery with intraluminal

    device, percutaneous approach.

    03LM4BZ..................................... Occlusion of right external carotid artery with bioactive

    intraluminal device, percutaneous endoscopic approach.

    03LM4DZ..................................... Occlusion of right external carotid artery with intraluminal

    device, percutaneous endoscopic approach.

    03LN3BZ..................................... Occlusion of left external carotid artery with bioactive

    intraluminal device, percutaneous approach.

    03LN3DZ..................................... Occlusion of left external carotid artery with intraluminal

    device, percutaneous approach.

    03LN4BZ..................................... Occlusion of left external carotid artery with bioactive

    intraluminal device, percutaneous endoscopic approach.

    03LN4DZ..................................... Occlusion of left external carotid artery with intraluminal

    device, percutaneous endoscopic approach.

    03LP3BZ..................................... Occlusion of right vertebral artery with bioactive intraluminal

    device, percutaneous approach.

    03LP3DZ..................................... Occlusion of right vertebral artery with intraluminal device,

    percutaneous approach.

    03LP4BZ..................................... Occlusion of right vertebral artery with bioactive intraluminal

    device, percutaneous endoscopic approach.

    03LP4DZ..................................... Occlusion of right vertebral artery with intraluminal device,

    percutaneous endoscopic approach.

    03LQ3BZ..................................... Occlusion of left vertebral artery with bioactive intraluminal

    device, percutaneous approach.

    03LQ3DZ..................................... Occlusion of left vertebral artery with intraluminal device,

    percutaneous approach.

    03LQ4BZ..................................... Occlusion of left vertebral artery with bioactive intraluminal

    device, percutaneous endoscopic approach.

    03LQ4DZ..................................... Occlusion of left vertebral artery with intraluminal device,

    percutaneous endoscopic approach.

    03LR3DZ..................................... Occlusion of face artery with intraluminal device, percutaneous

    approach.

    03LR4DZ..................................... Occlusion of face artery with intraluminal device, percutaneous

    endoscopic approach.

    03LS3DZ..................................... Occlusion of right temporal artery with intraluminal device,

    percutaneous approach.

    03LS4DZ..................................... Occlusion of right temporal artery with intraluminal device,

    percutaneous endoscopic approach.

    03LT3DZ..................................... Occlusion of left temporal artery with intraluminal device,

    percutaneous approach.

    03LT4DZ..................................... Occlusion of left temporal artery with intraluminal device,

    percutaneous endoscopic approach.

    03VG3BZ..................................... Restriction of intracranial artery with bioactive intraluminal

    device, percutaneous approach.

    03VG3DZ..................................... Restriction of intracranial artery with intraluminal device,

    percutaneous approach.

    03VG4BZ..................................... Restriction of intracranial artery with bioactive intraluminal

    device, percutaneous endoscopic approach.

    03VG4DZ..................................... Restriction of intracranial artery with intraluminal device,

    percutaneous endoscopic approach.

    03VH3BZ..................................... Restriction of right common carotid artery with bioactive

    intraluminal device, percutaneous approach.

    03VH3DZ..................................... Restriction of right common carotid artery with intraluminal

    device, percutaneous approach.

    03VH4BZ..................................... Restriction of right common carotid artery with bioactive

    intraluminal device, percutaneous endoscopic approach.

    03VH4DZ..................................... Restriction of right common carotid artery with intraluminal

    device, percutaneous endoscopic approach.

    03VJ3BZ..................................... Restriction of left common carotid artery with bioactive

    intraluminal device, percutaneous approach.

    03VJ3DZ..................................... Restriction of left common carotid artery with intraluminal

    device, percutaneous approach.

    03VJ4BZ..................................... Restriction of left common carotid artery with bioactive

    intraluminal device, percutaneous endoscopic approach.

    03VJ4DZ..................................... Restriction of left common carotid artery with intraluminal

    device, percutaneous endoscopic approach.

    03VK3BZ..................................... Restriction of right internal carotid artery with bioactive

    intraluminal device, percutaneous approach.

    03VK3DZ..................................... Restriction of right internal carotid artery with intraluminal

    device, percutaneous approach.

    03VK4BZ..................................... Restriction of right internal carotid artery with bioactive

    intraluminal device, percutaneous endoscopic approach.

    03VK4DZ..................................... Restriction of right internal carotid artery with intraluminal

    device, percutaneous endoscopic approach.

    03VL3BZ..................................... Restriction of left internal carotid artery with bioactive

    intraluminal device, percutaneous approach.

    03VL3DZ..................................... Restriction of left internal carotid artery with intraluminal

    device, percutaneous approach.

    03VL4BZ..................................... Restriction of left internal carotid artery with bioactive

    intraluminal device, percutaneous endoscopic approach.

    03VL4DZ..................................... Restriction of left internal carotid artery with intraluminal

    device, percutaneous endoscopic approach.

    03VM3BZ..................................... Restriction of right external carotid artery with bioactive

    intraluminal device, percutaneous approach.

    03VM3DZ..................................... Restriction of right external carotid artery with intraluminal

    device, percutaneous approach.

    03VM4BZ..................................... Restriction of right external carotid artery with bioactive

    intraluminal device, percutaneous endoscopic approach.

    03VM4DZ..................................... Restriction of right external carotid artery with intraluminal

    device, percutaneous endoscopic approach.

    03VN3BZ..................................... Restriction of left external carotid artery with bioactive

    intraluminal device, percutaneous approach.

    03VN3DZ..................................... Restriction of left external carotid artery with intraluminal

    device, percutaneous approach.

    03VN4BZ..................................... Restriction of left external carotid artery with bioactive

    intraluminal device, percutaneous endoscopic approach.

    03VN4DZ..................................... Restriction of left external carotid artery with intraluminal

    device, percutaneous endoscopic approach.

    03VP3BZ..................................... Restriction of right vertebral artery with bioactive intraluminal

    device, percutaneous approach.

    03VP3DZ..................................... Restriction of right vertebral artery with intraluminal device,

    percutaneous approach.

    03VP4BZ..................................... Restriction of right vertebral artery with bioactive intraluminal

    device, percutaneous endoscopic approach.

    03VP4DZ..................................... Restriction of right vertebral artery with intraluminal device,

    percutaneous endoscopic approach.

    03VQ3BZ..................................... Restriction of left vertebral artery with bioactive intraluminal

    device, percutaneous approach.

    03VQ3DZ..................................... Restriction of left vertebral artery with intraluminal device,

    percutaneous approach.

    03VQ4BZ..................................... Restriction of left vertebral artery with bioactive intraluminal

    device, percutaneous endoscopic approach.

    03VQ4DZ..................................... Restriction of left vertebral artery with intraluminal device,

    percutaneous endoscopic approach.

    03VR3DZ..................................... Restriction of face artery with intraluminal device, percutaneous

    approach.

    Page 24354

    03VR4DZ..................................... Restriction of face artery with intraluminal device, percutaneous

    endoscopic approach.

    03VS3DZ..................................... Restriction of right temporal artery with intraluminal device,

    percutaneous approach.

    03VS4DZ..................................... Restriction of right temporal artery with intraluminal device,

    percutaneous endoscopic approach.

    03VT3DZ..................................... Restriction of left temporal artery with intraluminal device,

    percutaneous approach.

    03VT4DZ..................................... Restriction of left temporal artery with intraluminal device,

    percutaneous endoscopic approach.

    03VU3DZ..................................... Restriction of right thyroid artery with intraluminal device,

    percutaneous approach.

    03VU4DZ..................................... Restriction of right thyroid artery with intraluminal device,

    percutaneous endoscopic approach.

    03VV3DZ..................................... Restriction of left thyroid artery with intraluminal device,

    percutaneous approach.

    03VV4DZ..................................... Restriction of left thyroid artery with intraluminal device,

    percutaneous endoscopic approach.

    ----------------------------------------------------------------------------------------------------------------

    For this FY 2016 IPPS/LTCH PPS proposed rule request, we first examined claims data on all intracranial vascular procedure cases with a principal diagnosis of hemorrhage reported in MS-DRGs 020, 021, and 022 from the December 2014 update of the FY 2014 MedPAR file. The table below shows our findings. We found a total of 1,755 cases with an average length of stay ranging from 8.28 days to 16.84 days and average costs ranging from $36,998 to $71,665 in MS-DRGs 020, 021, and 022.

    Intracranial Vascular Procedures With Principal Diagnosis of Hemorrhage

    ----------------------------------------------------------------------------------------------------------------

    Number of Average

    MS-DRG cases length of stay Average costs

    ----------------------------------------------------------------------------------------------------------------

    MS-DRG 020 (with MCC)--All cases................................ 1,285 16.84 $71,655

    MS-DRG 021 (with CC)--All cases................................. 372 13.82 52,143

    MS-DRG 022 (without CC/MCC)--All cases.......................... 98 8.28 36,998

    ----------------------------------------------------------------------------------------------------------------

    Next, we examined claims data on the first part of the request, which was to create a new MS-DRG for endovascular intracranial embolization procedure cases with a principal diagnosis of hemorrhage that are currently reported in MS-DRGs 020, 021, and 022. Our findings for the first part of this multi-part request are shown in the table below.

    Endovascular Intracranial Embolization Procedures With Principal Diagnosis of Hemorrhage

    ----------------------------------------------------------------------------------------------------------------

    Number of Average length

    MS-DRG cases of stay Average costs

    ----------------------------------------------------------------------------------------------------------------

    Requested New Combined MS-DRG................................ 1,275 15.6 $67,831

    ----------------------------------------------------------------------------------------------------------------

    The requestor suggested that this new requested base MS-DRG would not be subdivided by severity levels. Using the requested code logic, cases with a principal diagnosis of hemorrhage and procedure codes 39.72 (Endovascular (total) embolization or occlusion of head and neck vessels), 39.75 (Endovascular embolization or occlusion of vessel(s) of head or neck using bare coils), and 39.76 (Endovascular embolization or occlusion of vessel(s) of head or neck using bioactive coils) would be moved out of MS-DRGs 020, 021, and 022 and into a single new MS-DRG with no severity levels.

    As can be seen in the table above, the average costs for the new requested combined MS-DRG would be $67,831. The average costs for current MS-DRGs 020, 021, and 022 were $71,655, $52,143, and $36,998, respectively. Based on these findings, if we established this requested new MS-DRG, payments for those cases at the highest severity level (MS-

    DRG 020, which had average costs of $71,655) would be reduced. We believe that maintaining the current MS-DRG assignment for these types of procedures is appropriate. Our clinical advisors state that the current grouping of procedures within MS-DRGs 020, 021, and 022 reflects patients who are unique in terms of utilization and complexity based on the three severity levels, which are specifically designed to capture clinical differences in these patients, and these factors support maintaining the current structure. Therefore, we are not proposing to move cases with a principal diagnosis of hemorrhage and procedure codes 39.72, 39.75, and 39.76 out of MS-DRGs 020, 021, and 022 and create a new base MS-DRG. We are inviting public comments on this proposal.

    As discussed previously, the requestor also recommended the creation of a new set of MS-DRGs for endovascular intracranial embolization procedures without a principal diagnosis of hemorrhage with MCC, with CC, and without CC/MCC. For these new requested MS-DRGs, the requestor suggested assignment of endovascular embolization procedures as well as certain other percutaneous and endovascular procedures. The complete list of endovascular intracranial embolization procedures developed by the requestor is as follows:

    00.62 (Percutaneous angioplasty of intracranial vessel);

    39.72 (Endovascular (total) embolization or occlusion of head and neck vessels);

    39.74 (Endovascular removal of obstruction from head and neck vessel(s));

    39.75 (Endovascular embolization or occlusion of vessel(s) of head or neck using bare coils);

    Page 24355

    39.76 (Endovascular embolization or occlusion of vessel(s) of head or neck using bioactive coils); and

    39.79 (Other endovascular procedures on other vessels)

    The following table shows our findings from examination of claims data on endovascular intracranial procedures without a principal diagnosis of hemorrhage reported in MS-DRGs 023 through 027 from the December 2014 update of the FY 2014 MedPAR file.

    Endovascular Intracranial Procedures Without Principal Diagnosis of Hemorrhage

    ----------------------------------------------------------------------------------------------------------------

    Number of Average

    MS-DRG cases length of stay Average costs

    ----------------------------------------------------------------------------------------------------------------

    MS-DRG 023--All cases........................................... 5,615 10.96 $37,784

    MS-DRG 023--Cases with endovascular intracranial procedure 1,510 8.88 39,666

    without diagnosis of hemorrhage................................

    MS-DRG 024--All cases........................................... 1,848 5.93 26,195

    MS-DRG 024--Cases with endovascular intracranial procedure 867 5.80 27,975

    without diagnosis of hemorrhage................................

    MS-DRG 025--All cases........................................... 16,949 9.35 29,970

    MS-DRG 025--Cases with endovascular intracranial procedure 650 8.52 44,082

    without diagnosis of hemorrhage................................

    MS-DRG 026--All cases........................................... 8,075 6.09 21,414

    MS-DRG 026--Cases with endovascular intracranial procedure 778 3.07 26,594

    without diagnosis of hemorrhage................................

    MS-DRG 027--All cases........................................... 9,883 3.15 16,613

    MS-DRG 027--Cases with endovascular intracranial procedure 1,793 1.66 22,244

    without diagnosis of hemorrhage................................

    ----------------------------------------------------------------------------------------------------------------

    As can be seen from this table, if we created a new set of MS-DRGs recommended by the requester, most of the cases would have to be moved out of MS-DRGs 023 and 027. The 1,510 cases that would have to be moved out of MS-DRG 023 have average costs of $39,666 compared to average costs of $37,784 for all cases in MS-DRG 023. The average costs for these cases are not significantly different from the average costs for all cases in MS-DRG 023. The average length of stay for the cases with endovascular intracranial procedure without a diagnosis of hemorrhage in MS-DRG 023 is 8.88 compared to 10.96 days for all cases in MS-DRG 023. We believe that these data support the current MS-DRG assignment for MS-DRG 023. The 1,793 cases that would have to be moved out of MS-

    DRG 027 have average costs of $22,244 compared to the average costs of $16,613 for all cases in MS-DRG 027. While the average costs for these cases are higher than for all cases in MS-DRG 027, one would expect some procedures within an MS-DRG to have higher average costs and other procedures to have lower average costs than the overall average costs. Cases within the MS-DRGs describing endovascular intracranial procedures are grouped together based on similar clinical and resource criteria. Some cases will have average costs that are higher than the overall average costs for cases in the MS-DRG, while other cases will have lower average costs. These differences in average costs are found within all MS-DRGs. The average length of stay of MS-DRG 027 cases with endovascular intracranial procedure without a diagnosis of hemorrhage is 1.66 days as compared to 3.15 days for all cases in MS-DRG 027. Therefore, while the average costs are higher for the cases with endovascular intracranial procedure without a diagnosis of hemorrhage than for all cases in MS-DRG 027, the length of stay is shorter.

    The 867 cases that would have to be moved out of MS-DRG 024 have average costs of $27,975 compared to average costs for all cases in MS-

    DRG 024 of $26,195. The average costs for these cases are not significantly different than the average costs for all cases in MS-DRG 024. The average length of stay for the 867 cases that would have to be moved out of MS-DRG 024 is 5.80 compared to 5.93 for all cases in MS-

    DRG 024. Therefore, the lengths of stay for the cases also are quite similar in MS-DRG 024. We have determined that these data findings support maintaining the current MS-DRG assignment of these procedures in MS-DRG 024.

    MS-DRGs 025 and 026 show the smallest number of cases that would have to be moved to the requested new MS-DRGs, but these cases have larger differences in average costs. The average costs of cases that would have to be moved out of MS-DRG 025 are $44,082 compared to $29,970 for all cases in MS-DRG 025. The average length of stay for the MS-DRG 025 cases with endovascular intracranial procedure without a diagnosis of hemorrhage is 8.52 days as compared to 9.35 days for all cases in MS-DRG 025. Therefore, the lengths of stay are similar for cases in MS-DRG 025. The average costs of cases that would have to be moved out of MS-DRG 026 are $26,594 compared to $21,414 for all cases. The average length of stay for cases that would have to be moved out of MS-DRG 026 is 3.07 days compared to 6.09 days for all cases in MS-DRG 026, or almost half as long as for all cases in MS-DRG 026. As stated earlier, the average costs for cases that would be moved out of MS-DRGs 023, 024, 025, 026, and 027 under this request are higher than the average costs for all cases in these MS-DRGs, with most of the cases coming out of MS-DRGs 023 and 027. The average costs for these particular cases in MS-DRG 023 are not significantly different from the average costs for all cases in MS-DRG 023. In addition, while the average costs are higher for the cases with a endovascular intracranial procedure without a diagnosis of hemorrhage than for all cases in MS-

    DRG 027, the length of stay is shorter. We have determined that the overall data do not support making the requested MS-DRG updates to MS-

    DRGs 023, 024, 025, 026, and 027 and creating three new MS-DRGs. Therefore, we are not proposing to make changes to the current structure for MS-DRGs 023 through 027.

    In summary, our clinical advisors reviewed each aspect of this multi-part request and advised us that the endovascular embolization procedures are appropriately assigned to MS-DRGs 020 through 027. They do not support removing the procedures (procedure codes 39.72, 39.75, and 39.76) from MS-DRGs 020, 021, and 022 and creating a single MS-DRG for endovascular intracranial embolization procedures

    Page 24356

    with a principal diagnosis of hemorrhage with no severity levels. Our clinical advisors stated that the current MS-DRG grouping of three severity levels captures differences in clinical severity, average costs, and length of stay for these patients appropriately. Our clinical advisors also recommended maintaining the current MS-DRG assignments for endovascular embolization and other percutaneous and endovascular procedures within MS-DRGs 023 through 027. They stated that these procedures are all clinically similar to others in these MS-

    DRGs. In addition, they stated that the surgical techniques are all designed to correct the same clinical problem, and they advised against moving a select number of those procedures out of MS-DRGs 023 through 027.

    Based on the findings from our data analysis and the recommendations from our clinical advisors, we are not proposing to create the four new MS-DRGs for endovascular intracranial embolization and other endovascular procedures recommended by the requestor. We are proposing to maintain the current MS-DRG structure for MS-DRGs 020 through 027.

    We are inviting public comments on these two proposals.

    3. MDC 5 (Diseases and Disorders of the Circulatory System)

  189. Adding Severity Levels to MS-DRGs 245 Through 251

    During the comment period for the FY 2015 IPPS/LTCH PPS proposed rule, we received a comment that recommended establishing severity levels for MS-DRG 245 (AICD Generator Procedures) and including additional severity levels for MS-DRG 246 (Percutaneous Cardiovascular Procedure with Drug-Eluting Stent with MCC or 4 Vessels/Stents); MS-

    DRG 247 (Percutaneous Cardiovascular Procedure with Drug-Eluting Stent without MCC); MS-DRG 248 (Percutaneous Cardiovascular Procedure with Non-Drug-Eluting Stent with MCC or 4 Vessels/Stents); MS-DRG 249 (Percutaneous Cardiovascular Procedure with Non-Drug-Eluting Stent without MCC); MS-DRG 250 (Percutaneous Cardiovascular Procedure without Coronary Artery Stent with MCC); and MS-DRG 251 (Percutaneous Cardiovascular Procedure without Coronary Artery Stent without MCC).

    We considered this public comment to be outside of the scope of the FY 2015 IPPS/LTCH PPS proposed rule. Therefore, we did not address this comment in the FY 2015 IPPS/LTCH PPS final rule. However, we indicated that we would consider the public comment for possible proposals in future rulemaking as part of our annual review process.

    For this FY 2016 IPPS/LTCH PPS proposed rule, we received a separate, but related, request involving most of these same MS-DRGs. Therefore, for this proposed rule, we conducted a simultaneous analysis of claims data to address both the FY 2015 public comment request and the related FY 2016 request. We discuss both of these requests below.

  190. Percutaneous Intracardiac Procedures

    We received a request to remove the cardiac ablation and other specified cardiovascular procedures from the following MS-DRGs, and to create new MS-DRGs to classify these procedures:

    MS-DRG 246 (Percutaneous Cardiovascular Procedure with Drug-Eluting Stent with MCC or 4 Vessels/Stents);

    MS-DRG 247 (Percutaneous Cardiovascular Procedure with Drug-Eluting Stent without MCC);

    MS-DRG 248 (Percutaneous Cardiovascular Procedure with Non-Drug-Eluting Stent with MCC or 4 Vessels/Stents);

    MS-DRG 249 (Percutaneous Cardiovascular Procedure with Non-Drug-Eluting Stent without MCC);

    MS-DRG 250 (Percutaneous Cardiovascular Procedure without Coronary Artery Stent with MCC); and

    MS-DRG 251 (Percutaneous Cardiovascular Procedure without Coronary Artery Stent without MCC).

    The commenter stated that, historically, the MS-DRGs listed above appropriately reflected the differential cost of percutaneous transluminal coronary angioplasty (PTCA) procedures with and without stents. The commenter noted that PTCA procedures with drug eluting stents were previously paid the highest, followed by PTCA procedures with bare metal stents and PTCA procedures with no stents, respectively. However, the commenter believed that, in recent years, the opposite has begun to occur and cases reporting a PTCA procedure without a stent are being paid more than cases reporting a PTCA procedure with a stent. The commenter further noted that cardiac ablation procedures and PTCA procedures without stents are currently assigned to the same MS-DRGs, notwithstanding that the procedures have different clinical objectives and patient diagnoses. The commenter indicated that cardiac ablation procedures are performed on patients with multiple distinct cardiac arrhythmias to alter electrical conduction systems of the heart, and PTCA procedures are performed on patients with coronary atherosclerosis to open blocked coronary arteries. The commenter also noted that cardiac ablation procedures are performed in the heart chambers by cardiac electrophysiologists, require significantly more resources, and require longer periods of time to complete. Conversely, PTCA procedures are performed in the coronary vessels by interventional cardiologists, require the use of less equipment, and require a shorter period of time to complete. Therefore, the commenter suggested that CMS create new MS-DRGs for percutaneous intracardiac procedures to help improve clinical homogeneity by differentiating percutaneous intracardiac procedures (performed within the heart chambers) from percutaneous intracoronary procedures (performed within the coronary vessels). The commenter further believed that creating new MS-DRGs for these procedures would also better reflect the resource cost of specialized equipment used for more complex structures of electrical conduction systems when performing cardiac ablation procedures.

    The following ICD-9-CM procedure codes identify and describe the cardiac ablation procedures and the other percutaneous intracardiac procedures that are currently classified under MS-DRGs 246 through 251 and that the commenter recommended that CMS assign to the newly created MS-DRGs:

    35.52 (Repair of atrial septal defect with prosthesis, closed technique);

    35.96 (Percutaneous balloon valvuloplasty);

    35.97 (Percutaneous mitral valve repair with implant);

    37.26 (Catheter based invasive electrophysiologic testing);

    37.27 (Cardiac mapping);

    37.34 (Excision or destruction of other lesion or tissue of heart, endovascular approach);

    37.36 (Excision, destruction, or exclusion of left atrial appendage (LAA)); and

    37.90 (Insertion of left atrial appendage device).

    There are a number of ICD-10-PCS code translations that provide more detailed and specific information for each of the ICD-9-CM procedure codes listed above that also are currently classified under MS-DRGs 246 through 251 based on the GROUPER Version 32 ICD-10 MS-DRGs. The comparable ICD-10-PCS code translations for ICD-9-CM procedure code 35.52 are shown in the following table.

    Page 24357

    ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 35.52

    ----------------------------------------------------------------------------------------------------------------

    ICD-10-PCS code Code description

    ----------------------------------------------------------------------------------------------------------------

    02U53JZ..................................... Supplement atrial septum with synthetic substitute, percutaneous

    approach.

    02U54JZ..................................... Supplement atrial septum with synthetic substitute, percutaneous

    endoscopic approach.

    ----------------------------------------------------------------------------------------------------------------

    The comparable ICD-10-PCS code translations for ICD-9-CM procedure code 35.96 are shown in the following table.

    ICD-10-PCS Translations for ICD-9-CM Procedure Code 35.96

    ----------------------------------------------------------------------------------------------------------------

    ICD-10-PCS code Code description

    ----------------------------------------------------------------------------------------------------------------

    027F34Z..................................... Dilation of aortic valve with drug-eluting intraluminal device,

    percutaneous approach.

    027F3DZ..................................... Dilation of aortic valve with intraluminal device, percutaneous

    approach.

    027F3ZZ..................................... Dilation of aortic valve, percutaneous approach.

    027F44Z..................................... Dilation of aortic valve with drug-eluting intraluminal device,

    percutaneous endoscopic approach.

    027F4DZ..................................... Dilation of aortic valve with intraluminal device, percutaneous

    endoscopic approach.

    027F4ZZ..................................... Dilation of aortic valve, percutaneous endoscopic approach.

    027G34Z..................................... Dilation of mitral valve with drug-eluting intraluminal device,

    percutaneous approach.

    027G3DZ..................................... Dilation of mitral valve with intraluminal device, percutaneous

    approach.

    027G3ZZ..................................... Dilation of mitral valve, percutaneous approach.

    027G44Z..................................... Dilation of mitral valve with drug-eluting intraluminal device,

    percutaneous endoscopic approach.

    027G4DZ..................................... Dilation of mitral valve with intraluminal device, percutaneous

    endoscopic approach.

    027G4ZZ..................................... Dilation of mitral valve, percutaneous endoscopic approach.

    027H34Z..................................... Dilation of pulmonary valve with drug-eluting intraluminal device,

    percutaneous approach.

    027H3DZ..................................... Dilation of pulmonary valve with intraluminal device, percutaneous

    approach.

    027H3ZZ..................................... Dilation of pulmonary valve, percutaneous approach.

    027H44Z..................................... Dilation of pulmonary valve with drug-eluting intraluminal device,

    percutaneous endoscopic approach.

    027H4DZ..................................... Dilation of pulmonary valve with intraluminal device, percutaneous

    endoscopic approach.

    027H4ZZ..................................... Dilation of pulmonary valve, percutaneous endoscopic approach.

    027J34Z..................................... Dilation of tricuspid valve with drug-eluting intraluminal device,

    percutaneous approach.

    027J3DZ..................................... Dilation of tricuspid valve with intraluminal device, percutaneous

    approach.

    027J3ZZ..................................... Dilation of tricuspid valve, percutaneous approach.

    027J44Z..................................... Dilation of tricuspid valve with drug-eluting intraluminal device,

    percutaneous endoscopic approach.

    027J4DZ..................................... Dilation of tricuspid valve with intraluminal device, percutaneous

    endoscopic approach.

    027J4ZZ..................................... Dilation of tricuspid valve, percutaneous endoscopic approach.

    ----------------------------------------------------------------------------------------------------------------

    The ICD-10-PCS code translation for ICD-9-CM procedure code 35.97 is 02UG3JZ (Supplement mitral valve with synthetic substitute, percutaneous approach.).

    The ICD-10-PCS code translation for ICD-9-CM procedure code 37.26 is 4A023FZ (Measurement of cardiac rhythm, percutaneous approach.).

    The comparable ICD-10-PCS code translations for ICD-9-CM procedure code 37.27 are shown in the following table.

    ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 37.27

    ----------------------------------------------------------------------------------------------------------------

    ICD-10-PCS code Code description

    ----------------------------------------------------------------------------------------------------------------

    02K83ZZ..................................... Map conduction mechanism, percutaneous approach.

    02K84ZZ..................................... Map conduction mechanism, percutaneous endoscopic approach.

    ----------------------------------------------------------------------------------------------------------------

    The comparable ICD-10-PCS code translations for ICD-9-CM procedure code 37.34 are shown in the following table:

    ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 37.34

    ----------------------------------------------------------------------------------------------------------------

    ICD-10-PCS code Code description

    ----------------------------------------------------------------------------------------------------------------

    02553ZZ..................................... Destruction of atrial septum, percutaneous approach.

    02563ZZ..................................... Destruction of right atrium, percutaneous approach.

    02573ZZ..................................... Destruction of left atrium, percutaneous approach.

    02583ZZ..................................... Destruction of conduction mechanism, percutaneous approach.

    02593ZZ..................................... Destruction of chordae tendineae, percutaneous approach.

    025F3ZZ..................................... Destruction of aortic valve, percutaneous approach.

    025G3ZZ..................................... Destruction of mitral valve, percutaneous approach.

    025H3ZZ..................................... Destruction of pulmonary valve, percutaneous approach.

    025J3ZZ..................................... Destruction of tricuspid valve, percutaneous approach.

    025K3ZZ..................................... Destruction of right ventricle, percutaneous approach.

    025L3ZZ..................................... Destruction of left ventricle, percutaneous approach.

    Page 24358

    025M3ZZ..................................... Destruction of ventricular septum, percutaneous approach.

    02B53ZZ..................................... Excision of atrial septum, percutaneous approach.

    02B63ZZ..................................... Excision of right atrium, percutaneous approach.

    02B73ZZ..................................... Excision of left atrium, percutaneous approach.

    02B83ZZ..................................... Excision of conduction mechanism, percutaneous approach.

    02B93ZZ..................................... Excision of chordae tendineae, percutaneous approach.

    02BF3ZZ..................................... Excision of aortic valve, percutaneous approach.

    02BG3ZZ..................................... Excision of mitral valve, percutaneous approach.

    02BH3ZZ..................................... Excision of pulmonary valve, percutaneous approach.

    02BJ3ZZ..................................... Excision of tricuspid valve, percutaneous approach.

    02BM3ZZ..................................... Excision of ventricular septum, percutaneous approach.

    02T83ZZ..................................... Resection of conduction mechanism, percutaneous approach.

    ----------------------------------------------------------------------------------------------------------------

    The comparable ICD-10-PCS code translations for ICD-9-CM procedure code 37.36 are shown in the following table:

    ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 37.36

    ----------------------------------------------------------------------------------------------------------------

    ICD-10-PCS code Code description

    ----------------------------------------------------------------------------------------------------------------

    02573ZK..................................... Destruction of left atrial appendage, percutaneous approach.

    02574ZK..................................... Destruction of left atrial appendage, percutaneous endoscopic

    approach.

    02B73ZK..................................... Excision of left atrial appendage, percutaneous approach.

    02B74ZK..................................... Excision of left atrial appendage, percutaneous endoscopic

    approach.

    02L73ZK..................................... Occlusion of left atrial appendage, percutaneous approach.

    02L74ZK..................................... Occlusion of left atrial appendage, percutaneous endoscopic

    approach.

    ----------------------------------------------------------------------------------------------------------------

    The comparable ICD-10-PCS code translations for ICD-9-CM procedure code 37.90 are shown in the following table:

    ICD-10-PCS Code Translations for ICD-9-CM Procedure Code 37.90

    ----------------------------------------------------------------------------------------------------------------

    ICD-10-PCS code Code description

    ----------------------------------------------------------------------------------------------------------------

    02L73CK..................................... Occlusion of left atrial appendage with extraluminal device,

    percutaneous approach.

    02L73DK..................................... Occlusion of left atrial appendage with intraluminal device,

    percutaneous approach.

    02L74CK..................................... Occlusion of left atrial appendage with extraluminal device,

    percutaneous endoscopic approach.

    02L74DK..................................... Occlusion of left atrial appendage with intraluminal device,

    percutaneous endoscopic approach.

    ----------------------------------------------------------------------------------------------------------------

    The ICD-10-PCS code translations listed above, along with their respective MS-DRG assignments, can be found in the ICD-10 MS-DRGs Version 32 Definitions Manual posted on the CMS Web site at: http://www.cms.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html.

    As mentioned earlier, we received a separate, but related, request to add severity levels to MS-DRGs 246 through 251. We address this request at the end of this section.

    To address the first of these separate, but related, requests, we reviewed claims data for MS-DRGs 246 through 251 from the December 2014 update of the FY 2014 MedPAR file. Our findings are shown in the following table:

    Percutaneous Cardiovascular MS-DRGs With and Without Stents

    ----------------------------------------------------------------------------------------------------------------

    Average

    MS-DRG Number of length of Average costs

    cases stay

    ----------------------------------------------------------------------------------------------------------------

    MS-DRG 246--All cases........................................... 30,617 5.52 $23,855

    MS-DRG 246--Cases with procedure codes 35.52, 35.96, 35.97, 244 9.69 $34.099

    37.26, 37.27, 37.34, 37.36, and 37.90..........................

    MS-DRG 247--All cases........................................... 79,639 2.69 $15,671

    MS-DRG 247--Cases with procedure codes 35.52, 35.96, 35.97, 260 5.20 $25,797

    37.26, 37.27, 37.34, 37.36, and 37.90..........................

    MS-DRG 248--All cases........................................... 9,310 6.37 $22,504

    MS-DRG 248 -Cases with procedure codes 35.52, 35.96, 35.97, 125 10.76 $33,521

    37.26, 37.27, 37.34, 37.36, and 37.90..........................

    MS-DRG 249--All cases........................................... 16,273 3.08 $14,066

    MS-DRG 249--Cases with procedure codes 35.52, 35.96, 35.97, 81 5.12 $23,710

    37.26, 37.27, 37.34, 37.36, and 37.90..........................

    MS-DRG 250--All cases........................................... 9,275 7.07 $22,902

    Page 24359

    MS-DRG 250- Cases with procedure codes 35.52, 35.96, 35.97, 5,826 7.90 $24,841

    37.26, 37.27, 37.34, 37.36, and 37.90..........................

    MS-DRG 251--All cases........................................... 20,945 3.25 $15,757

    MS-DRG 251--Cases with procedure codes 35.52, 35.96, 35.97, 14,436 3.39 $17,290

    37.26, 37.27, 37.34, 37.36, and 37.90..........................

    ----------------------------------------------------------------------------------------------------------------

    As shown in the table above, there were a total of 30,617 cases in MS-DRG 246, with an average length of stay of 5.52 days and average costs of $23,855. For cases reporting a percutaneous intracardiac procedure in MS-DRG 246 (ICD-9-CM procedure codes 35.52, 35.96, 35.97, 37.26, 37.27, 37.34, 37.36, and 37.90), there were a total of 244 cases, with an average length of stay of 9.69 days and average costs of $34,099. For MS-DRGs 247 through 251, a similar pattern was identified; the data reflected that the average costs are higher and the average length of stay is greater for cases reporting a percutaneous intracardiac procedure in comparison to the average costs and average length of stay for all of the cases in their respective MS-DRGs.

    As reflected in the following table, a further analysis of the data showed that percutaneous intracardiac procedures represent a total of 20,972 cases in MS-DRGs 246 through 251, with a greater average length of stay (4.79 days versus 3.62 days) and higher average costs ($19,810 versus $17,532) in comparison to all of the remaining cases in MS-DRGs 246 through 251.

    Summary of Percutaneous Cardiovascular DRGs With and Without Stents

    ----------------------------------------------------------------------------------------------------------------

    Average

    MS-DRG Number of length of Average costs

    cases stay

    ----------------------------------------------------------------------------------------------------------------

    MS-DRGs 246 through 251--Cases with procedure codes 35.52, 20,972 4.79 $19,810

    35.96, 35.97, 37.26, 37.27, 37.34, 37.36, and 37.90............

    MS-DRGs 246 through 251--Cases without procedure codes 35.52, 145,087 3.62 17,532

    35.96, 35.97, 37.26, 37.27, 37.34, 37.36, and 37.90............

    ----------------------------------------------------------------------------------------------------------------

    The results of these data analyses support removing procedures performed within the heart chambers using intracardiac techniques from MS-DRGs 246 through 251, and assigning these procedures to separate MS-

    DRGs. The results of these data analyses also support subdividing these MS-DRGs using the ``with MCC'' and ``without MCC'' severity levels based on the application of the criteria established in the FY 2008 IPPS final rule (72 FR 47169), and described in section II.G.1.b. of the preamble of this proposed rule, that must be met to warrant the creation of a CC or an MCC subgroup within a base MS-DRG. Our clinical advisors also agree that this differentiation would improve the clinical homogeneity of these MS-DRGs by separating percutaneous intracardiac procedures (performed within the heart chambers) from percutaneous intracoronary procedures (performed within the coronary vessels). In addition, we believe that creating these new MS-DRGs would better reflect the resource cost of specialized equipment used to perform more complex structures of electrical conduction systems during cardiac ablation procedures. Therefore, for FY 2016, we are proposing to create two new MS-DRGs to classify percutaneous intracardiac procedures. S