FY 2017 IPPS Final Rule Reflects Changes to Quality Reporting Requirements

Added on Aug 23, 2016

FY 2017 IPPS Final Rule Reflects Changes to Quality Reporting Requirements
From Industry Edge August 2016

In its recently released fiscal year (FY) 2017 IPPS final rule, which applies to approximately 3,330 acute care hospitals and 430 long-term care hospitals for discharges occurring on or after October 1, the Centers for Medicare & Medicaid Services (CMS) finalized changes to several quality initiatives and reversed the agency’s 0.2% payment reduction instituted along with the Two-Midnight rule in the FY 2014 rule.

Under the final rule, payment rates will increase by 0.95% in FY 2017 compared to FY 2016 for hospitals that participate in the Hospital Inpatient Quality Reporting (Hospital IQR) program and are meaningful electronic health record (EHR) users.

In the rule, CMS created two adjustments to reverse the effects of the 0.2% cut it instituted along with the Two-Midnight rule, including a permanent adjustment of approximately 0.2% to remove the cut for FYs 2017 and onward, and a temporary adjustment of 0.6% to address the retroactive impacts of this cut for FYs 2014, 2015 and 2016.

CMS finalized five changes to the Hospital-Acquired Condition Reduction Program in this rule, as well as updates to the IQR program, changes to the Hospital Readmissions Reduction Program and updates to the Hospital Value-Based Purchasing Program.

Based on feedback to the proposed rule, CMS reduced requirements for reporting electronic clinical quality measures (eCQMs) as part of the IQR program. Originally, CMS proposed requiring hospitals to submit data on all 15 eCQMs, but it finalized a policy requiring hospitals to report four quarters’ worth of data on an annual basis for eight of the available eCQMs.

As part of the Notice of Observation Treatment and Implication for Care Eligibility (NOTICE) Act, CMS created the Medicare Outpatient Observation Notice (MOON), a standardized notice hospitals are required to give to Medicare patients receiving observation services on an outpatient basis for more than 24 hours, no later than 36 hours after the observation services are initiated. Hospitals must give a verbal explanation of the MOON to patients and obtain a signature to acknowledge receipt and understanding of the notice.