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No. 150
August 5, 2015
Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
42 CFR Part 412
Medicare Program; Inpatient Psychiatric Facilities Prospective Payment
System—Update for Fiscal Year Beginning October 1, 2015 (FY 2016);
Final Rule
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Federal Register / Vol. 80, No. 150 / Wednesday, August 5, 2015 / Rules and Regulations
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Centers for Medicare & Medicaid
Services
42 CFR Part 412
[CMS–1627–F]
RIN 0938–AS47
Medicare Program; Inpatient
Psychiatric Facilities Prospective
Payment System—Update for Fiscal
Year Beginning October 1, 2015 (FY
2016)
Centers for Medicare &
Medicaid Services (CMS), HHS.
ACTION: Final rule.
AGENCY:
This final rule updates the
prospective payment rates for Medicare
inpatient hospital services provided by
inpatient psychiatric facilities (IPFs)
(which are freestanding IPFs and
psychiatric units of an acute care
hospital or critical access hospital).
These changes are applicable to IPF
discharges occurring during fiscal year
(FY) 2016 (October 1, 2015 through
September 30, 2016). This final rule also
implements: a new 2012-based IPF
market basket; an updated IPF laborrelated share; a transition to new Core
Based Statistical Area (CBSA)
designations in the FY 2016 IPF
Prospective Payment System (PPS) wage
index; a phase-out of the rural
adjustment for IPF providers whose
status changes from rural to urban as a
result of the wage index CBSA changes;
and new quality measures and reporting
requirements under the IPF quality
reporting program. This final rule also
reminds IPFs of the October 1, 2015
implementation of the International
Classification of Diseases, 10th
Revision, Clinical Modification (ICD–
10–CM), and updates providers on the
status of IPF PPS refinements.
DATES: These regulations are effective
October 1, 2015.
FOR FURTHER INFORMATION CONTACT:
Katherine Lucas or Jana Lindquist, (410)
786–7723, for general information.
Hudson Osgood, (410) 786–7897 or
Bridget Dickensheets, (410) 786–8670,
for information regarding the market
basket and labor-related share.
Theresa Bean, (410) 786–2287, for
information regarding the regulatory
impact analysis. Rebecca Kliman, (410)
786–9723, or Jeffrey Buck, (410) 786–
0407, for information regarding the
inpatient psychiatric facility quality
reporting program.
SUPPLEMENTARY INFORMATION:
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SUMMARY:
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Availability of Certain Tables
Exclusively Through the Internet on the
CMS Web site
In the past, tables setting forth the
Wage Index for Urban Areas Based on
CBSA Labor Market Areas and the Wage
Index Based on CBSA Labor Market
Areas for Rural Areas were published in
the Federal Register as an Addendum to
the annual PPS rulemaking (that is, the
PPS proposed and final rules or, when
applicable, the current update notice).
However, beginning in FY 2015, these
wage index tables are no longer
published in the Federal Register.
Instead, these tables are available
exclusively through the Internet. The
wage index tables for this final rule are
available exclusively through the
Internet on the CMS Web site at http://
www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/
InpatientPsychFacilPPS/
WageIndex.html.
To assist readers in referencing
sections contained in this document, we
are providing the following table of
contents.
Table of Contents
I. Executive Summary
A. Purpose
B. Summary of the Major Provisions
C. Summary of Impacts
II. Background
A. Overview of the Legislative
Requirements for the IPF PPS
B. Overview of the IPF PPS
C. Annual Requirements for Updating the
IPF PPS
III. Provisions of the Final Rule and
Responses to Comments
A. Market Basket for the IPF PPS
1. Background
2. Overview of the 2012-Based IPF Market
Basket
3. Creating an IPF-Specific Market Basket
a. Development of Cost Categories and
Weights
i. Medicare Cost Reports
ii. Final Major Cost Category Computation
iii. Derivation of the Detailed Operating
Cost Weights
iv. Derivation of the Detailed Capital Cost
Weights
v. 2012-Based IPF Market Basket Cost
Categories and Weights
b. Selection of Price Proxies
i. Price Proxies for the Operating Portion of
the 2012-Based IPF Market Basket
ii. Price Proxies for the Capital Portion of
the 2012-Based IPF Market Basket
iii. Summary of Price Proxies of the 2012Based IPF Market Basket
4. FY 2016 Market Basket Update
5. Productivity Adjustment
6. Labor-Related Share
B. Updates to the IPF PPS Rates for FY
2016 (Beginning October 1, 2015)
1. Determining the Standardized BudgetNeutral Federal Per Diem Base Rate
2. FY 2016 Update of the Federal Per Diem
Base Rate and Electroconvulsive
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Therapy (ECT) Payment per Treatment
C. Updates to the IPF PPS Patient-Level
Adjustment Factors
1. Overview of the IPF PPS Adjustment
Factors
2. IPF–PPS Patient-Level Adjustments
a. MS–DRG Assignment
b. Payment for Comorbid Conditions
3. Patient Age Adjustments
4. Variable Per Diem Adjustments
D. Updates to the IPF PPS Facility-Level
Adjustments
1. Wage Index Adjustment
a. Background
b. Wage Index for FY 2016
c. OMB Bulletins and Transitional Wage
Index
d. Adjustment for Rural Location and The
Phase Out the Rural Adjustment for IPFs
Losing Their Rural Adjustment Due to
CBSA Changes
e. Budget Neutrality Adjustment
2. Teaching Adjustment
3. Cost of Living Adjustment for IPFs
Located in Alaska and Hawaii
4. Adjustment for IPFs With a Qualifying
Emergency Department (ED)
E. Other Payment Adjustments and
Policies
1. Outlier Payment Overview
2. Update to the Outlier Fixed Dollar Loss
Threshold Amount
3. Update to IPF Cost-to-Charge Ratio
Ceilings
IV. Other Payment Policy Issues
A. ICD–10–CM and ICD–10–PCS
Implementation
B. Status of Future IPF PPS Refinements
V. Inpatient Psychiatric Facilities Quality
Reporting (IPFQR) Program
A. Background
1. Statutory Authority
2. Covered Entities
3. Considerations in Selecting Quality
Measures
B. Retention of IPFQR Program Measures
Adopted in Previous Payment
Determinations
C. Removal of HBIPS–4 From the IPFQR
Program Measure Set for the FY 2017
Payment Determination and Subsequent
Years
D. New Quality Measures for the FY 2018
Payment Determination and Subsequent
Years
1. TOB–3 Tobacco Use Treatment Provided
or Offered at Discharge and the Subset
Measure TOB–3a Tobacco Use Treatment
at Discharge (NQF # 1656)
2. SUB–2 Alcohol Use Brief Intervention
Provided or Offered and SUB–2a Alcohol
Use Brief Intervention (NQF # 1663)
3. Transition Record With Specified
Elements Received by Discharged
Patients (Discharges From an Inpatient
Facility to Home/Self Care or Any Other
Site of Care) (NQF #0647) and Removal
of HBIPS–6
4. Timely Transmission of Transition
Record (Discharges From an Inpatient
Facility to Home/Self Care or Any Other
Site of Care) (NQF # 0648) and Removal
of HBIPS–7
5. Screening for Metabolic Disorders
6. Summary of Measures for the FY 2018
Payment Determination and Subsequent
Years
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E. Possible IPFQR Program Measures and
Topics for Future Consideration
F. Changes to Reporting Requirements
1. Changes to Reporting by Age and
Quarter for the FY 2017 Payment
Determination and Subsequent Years
2. Changes to Aggregate Population Count
Reporting for the FY 2017 Payment
Determination and Subsequent Years
3. Changes to Sampling Requirements for
FY 2018 Payment Determination and
Subsequent Years
G. Public Display and Review
Requirements
H. Form, Manner, and Timing of Quality
Data Submission
1. Procedural and Submission
Requirements
2. Change to the Reporting Periods and
Submission Timeframes
3. Population and Sampling
4. Data Accuracy and Completeness
Acknowledgement (DACA)
Requirements
I. Reconsideration and Appeals Procedures
J. Exceptions to Quality Reporting
Requirements
VI. Provisions of the Final Regulations
VII. Collection of Information Requirements
A. Wage Estimates
B. ICRs Regarding the Inpatient Psychiatric
Quality Reporting (IPFQR) Program
1. Changes in Time Required To ChartAbstract Data Based on Reporting
Requirements
2. Estimated Burden of IPFQR Program
C. Summary of Annual Burden Estimates
D. ICRs Regarding the Hospital and Health
Care Complex Cost Report (CMS–2552–
10)
E. Submission of PRA-Related Comments
VIII. Regulatory Impact Analysis
A. Statement of Need
B. Overall Impact
C. Anticipated Effects
1. Budgetary Impact
2. Impact on Providers
3. Results
4. Effects of Updates to the IPFQR Program
5. Effect on Beneficiaries
D. Alternatives Considered
E. Accounting Statement
Regulations Text
Addendum—FY 2016 Rates and Adjustment
Factors
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Acronyms
Because of the many terms to which
we refer by acronym in this final rule,
we are listing the acronyms used and
their corresponding meanings in
alphabetical order below:
ADC Average Daily Census
AHA American Hospital Association
AHE Average Hourly Earning
BBRA Medicare, Medicaid and SCHIP
[State Children’s Health Insurance
Program] Balanced Budget Refinement Act
of 1999 (Pub. L. 106–113)
BEA Bureau of Economic Analysis
BLS Bureau of Labor Statistics
CAH Critical Access Hospital
CBSA Core-Based Statistical Area
CCR Cost-to-Charge Ratio
CPI Consumer Price Index
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CPI–U Consumer Price Index for all Urban
Consumers
DRGs Diagnosis-Related Groups
ECI Employment Cost Index
ESRD End State Renal Disease
FR Federal Register
FTE Full-time equivalent
FY Federal Fiscal Year (October 1 through
September 30)
GDP Gross Domestic Product
GME Graduate Medical Education
HHA Home Health Agency
HBIPS Hospital Based Inpatient Psychiatric
Services
ICD–9–CM International Classification of
Diseases, 9th Revision, Clinical
Modification
ICD–10–CM International Classification of
Diseases, 10th Revision, Clinical
Modification
ICD–10–PCS International Classification of
Diseases, 10th Revision, Procedure Coding
System
IGI IHS Global Insight, Inc.
I–O Input—Output
IPFs Inpatient Psychiatric Facilities
IPFQR Inpatient Psychiatric Facilities
Quality Reporting
IPPS Inpatient Prospective Payment System
IRFs Inpatient Rehabilitation Facilities
LOS Length of Stay
LTCHs Long-Term Care Hospitals
MAC Medicare Administrative Contractor
MedPAR Medicare Provider Analysis and
Review File
MFP Multifactor Productivity
MMA Medicare Prescription Drug,
Improvement, and Modernization Act of
2003
MSA Metropolitan Statistical Area
NAICS North American Industry
Classification System
NQF National Quality Forum
OES Occupational Employment Statistics
OMB Office of Management and Budget
OPPS Outpatient Prospective Payment
System
PLI Professional Liability Insurance
PPI Producer Price Index
PPS Prospective Payment System
RPL Rehabilitation, Psychiatric, and LongTerm Care
RY Rate Year (July 1 through June 30)
SCHIP State Children’s Health Insurance
Program
SNF Skilled Nursing Facility
SOC Standard Occupational Classification
TEFRA Tax Equity and Fiscal
Responsibility Act of 1982 (Pub. L. 97–248)
I. Executive Summary
A. Purpose
This final rule updates the
prospective payment rates for Medicare
inpatient hospital services provided by
inpatient psychiatric facilities (IPFs) for
discharges occurring during the FY 2016
(October 1, 2015 through September 30,
2016). For the Inpatient Psychiatric
Facility Quality Reporting (IPFQR)
Program, it also changes certain
measures collected under the program
and modifies reporting requirements for
certain program measures.
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B. Summary of the Major Provisions
In this final rule, we updated the IPF
Prospective Payment System (PPS), as
specified in 42 CFR 412.428. The
updates include the following:
• Effective for the FY 2016 IPF PPS
update, we adopted a 2012-based IPF
market basket. However, we revised the
proposed 2012-based IPF market basket
based on public comments. Specifically,
we revised the methodology for
calculating the Wages and Salaries and
the Employee Benefits cost weights. The
final 2012-based IPF market basket
resulted in a labor-related share of 75.2
percent for FY 2016.
• We adjusted the 2012-based IPF
market basket update (currently
estimated to be 2.4 percent) by a
reduction for economy-wide
productivity (currently estimated to be
0.5 percent) as required by section
1886(s)(2)(A)(i) of the Social Security
Act (the Act), and further reduced by 0.2
percentage point as required by section
1886(s)(2)(A)(ii) of the Act, resulting in
an estimated market basket update of
1.7 percent.
• We updated the IPF PPS per diem
rate from $728.31 to $743.73. Providers
that failed to report quality data for FY
2016 payment will receive a final FY
2016 per diem rate of $729.10.
• We updated the electroconvulsive
therapy (ECT) payment per treatment
from $313.55 to $320.19. Providers that
failed to report quality data for FY 2016
payment will receive a FY 2016 ECT
payment per treatment of $313.89.
• We adopted new Office of
Management and Budget (OMB) CoreBased Statistical Area (CBSA)
delineations for the FY 2016 IPF PPS
wage index and future IPF PPS wage
indices. We implemented these CBSA
changes using a 1-year transition with a
blended wage index for all providers,
consisting of a blend of fifty percent of
the FY 2016 IPF wage index using the
current OMB delineations and fifty
percent of the FY 2016 IPF wage index
using the revised OMB delineations.
• We phased out the rural adjustment
for the 37 rural IPFs that will be redesignated as urban IPFs due to the
OMB CBSA changes. Specifically, we
phased out the 17 percent rural
adjustment for these 37 providers over
3 years (two-thirds of the adjustment
given in FY 2016, one-third of the
adjustment given in FY 2017, and no
rural adjustment thereafter).
• We used the updated labor-related
share of 75.2 percent (based on the final
2012-based IPF market basket) and
CBSA rural and urban wage indices for
FY 2016, and established a wage index
budget-neutrality adjustment of 1.0041.
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• We updated the fixed dollar loss
threshold amount from $8,755 to $9,580
in order to maintain estimated outlier
payments at 2 percent of total estimated
aggregate IPF PPS payments.
• We finalized that the national urban
and rural cost-to-charge ratio (CCR)
ceilings for FY 2016 will be 1.7339 and
1.9041, respectively, and the national
median CCR will be 0.4650 for urban
IPFs and 0.6220 for rural IPFs. The
national median CCR is applied to new
IPFs that have not yet submitted their
first Medicare cost report, to IPFs for
which the CCR calculation data are
inaccurate or incomplete, and to IPFs
whose overall CCR exceeds 3 standard
deviations above the national geometric
mean.
• We note that IPF PPS patient-level
and facility-level adjustments, other
than those mentioned above, remain the
same as in FY 2015.
In addition:
• We remind providers that
International Classification of Diseases,
10th Revision, Clinical Modification/
Procedure Coding System (ICD–10–CM/
PCS) will be implemented on October 1,
2015.
• As we continue our analysis for
future IPF PPS refinements, we find,
from preliminary analysis of 2012 to
2013 data, that over 20 percent of IPF
stays reported no ancillary costs, such
as laboratory and drug costs, in their
cost reports, or laboratory or drug
charges on their claims. Because we
• Timely Transmission of Transition
Record (Discharges from an Inpatient
Facility to Home/Self Care or Any Other
Site of Care) (NQF #0648); and
• Screening for Metabolic Disorders.
We removed HBIPS–4 Patients
Discharged on Multiple Antipsychotic
Medications, beginning with the FY
2017 payment determination. We also
removed the Hospital Based Inpatient
Psychiatric Services (HBIPS)–6 PostDischarge Continuing Care Plan (NQF
#0557) and HBIPS–7 Post-Discharge
Continuing Care Plan Transmitted to the
Next Level of Care Provider Upon
Discharge (NQF #0558) measures,
beginning with the FY 2018 payment
determination.
Second, we made several changes
regarding how facilities report data for
IPFQR Program measures:
• Beginning with the FY 2017
payment determination, we are
requiring that measures be reported as a
single yearly count rather than by
quarter and age.
• Beginning with the FY 2017
payment determination, we are
requiring that aggregate population
counts be reported as a single yearly
number rather than by quarter.
• Beginning with the FY 2018
payment determination, we will allow
uniform sampling for certain measures.
C. Summary of Impacts
Provision description
Total transfers
FY 2016 IPF PPS payment rate update ..................................................
The overall economic impact of this final rule is an estimated $75 million in increased payments to IPFs during FY 2016.
Provision description
Costs
New quality reporting program requirements ...........................................
The total costs beginning in FY 2016 for IPFs as a result of the final
new quality reporting requirements are estimated to be $6.31 million.
II. Background
A. Overview of the Legislative
Requirements for the IPF PPS
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expect that most patients requiring
hospitalization for active psychiatric
treatment will need drugs and
laboratory services, we remind
providers that the IPF PPS per diem
payment rate includes the cost of all
ancillary services, including drugs and
laboratory services. We pay only the IPF
for services furnished to a Medicare
beneficiary who is an inpatient of that
IPF, except for certain professional
services, and payments are considered
to be payments in full for all inpatient
hospital services provided directly or
under arrangement (see 42 CFR
412.404(d)), as specified in 42 CFR
409.10.
For the IPFQR Program, we are
adopting several new measures and data
submission requirements for the IPFQR
Program. First, we adopted five new
measures beginning with the FY 2018
payment determination:
• TOB–3—Tobacco Use Treatment
Provided or Offered at Discharge and
the subset measure TOB–3a Tobacco
Use Treatment at Discharge (National
Quality Forum (NQF) #1656);
• SUB–2—Alcohol Use Brief
Intervention Provided or Offered and
the subset measure SUB–2a Alcohol Use
Brief Intervention (NQF #1663);
• Transition Record with Specified
Elements Received by Discharged
Patients (Discharges from an Inpatient
Facility to Home/Self Care or Any Other
Site of Care) (NQF) #0647);
Section 124 of the Medicare,
Medicaid, and SCHIP (State Children’s
Health Insurance Program) Balanced
Budget Refinement Act of 1999 (BBRA)
(Pub. L. 106–113) required the
establishment and implementation of an
IPF PPS. Specifically, section 124 of the
BBRA mandated that the Secretary of
the Department Health and Human
Services (the Secretary) develop a per
diem PPS for inpatient hospital services
furnished in psychiatric hospitals and
psychiatric units including an adequate
patient classification system that reflects
the differences in patient resource use
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and costs among psychiatric hospitals
and psychiatric units.
Section 405(g)(2) of the Medicare
Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA) (Pub.
L. 108–173) extended the IPF PPS to
distinct part psychiatric units of critical
access hospitals (CAHs).
Section 3401(f) of the Patient
Protection and Affordable Care Act
(Pub. L. 111–148) as amended by
section 10319(e) of that Act and by
section 1105(d) of the Health Care and
Education Reconciliation Act of 2010
(Pub. L. 111–152) (hereafter referred to
as ‘‘the Affordable Care Act’’) added
subsection (s) to section 1886 of the Act.
Section 1886(s)(1) of the Act titled
‘‘Reference to Establishment and
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Implementation of System’’ refers to
section 124 of the BBRA, which relates
to the establishment of the IPF PPS.
Section 1886(s)(2)(A)(i) of the Act
requires the application of the
productivity adjustment described in
section 1886(b)(3)(B)(xi)(II) of the Act to
the IPF PPS for the Rate Year (RY)
beginning in 2012 (that is, a RY that
coincides with a FY) and each
subsequent RY. For the RY beginning in
2015 (that is, FY 2016), the current
estimate of the productivity adjustment
is equal to 0.5 percent, which we are
implementing in this FY 2016 final rule.
Section 1886(s)(2)(A)(ii) of the Act
requires the application of an ‘‘other
adjustment’’ that reduces any update to
an IPF PPS base rate by percentages
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specified in section 1886(s)(3) of the Act
for the RY beginning in 2010 through
the RY beginning in 2019. For the RY
beginning in 2015 (that is, FY 2016),
section 1886(s)(3)(D) of the Act requires
the reduction to be 0.2 percentage point.
We are implementing that reduction in
this FY 2016 IPF PPS final rule.
Section 1886(s)(4) of the Act requires
the establishment of a quality data
reporting program for the IPF PPS
beginning in RY 2014.
To implement and periodically
update these provisions, we have
published various proposed and final
rules in the Federal Register. For more
information regarding these rules, see
the CMS Web site at http://
www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/
InpatientPsychFacilPPS/
index.html?redirect=/
InpatientPsychFacilPPS/.
B. Overview of the IPF PPS
The November 2004 IPF PPS final
rule (69 FR 66922) established the IPF
PPS, as required by section 124 of the
BBRA and codified at subpart N of part
412 of the Medicare regulations. The
November 2004 IPF PPS final rule set
forth the per diem federal rates for the
implementation year (the 18-month
period from January 1, 2005 through
June 30, 2006), and provided payment
for the inpatient operating and capital
costs to IPFs for covered psychiatric
services they furnish (that is, routine,
ancillary, and capital costs, but not costs
of approved educational activities, bad
debts, and other services or items that
are outside the scope of the IPF PPS).
Covered psychiatric services include
services for which benefits are provided
under the fee-for-service Part A
(Hospital Insurance Program) of the
Medicare program.
The IPF PPS established the federal
per diem base rate for each patient day
in an IPF derived from the national
average daily routine operating,
ancillary, and capital costs in IPFs in FY
2002. The average per diem cost was
updated to the midpoint of the first year
under the IPF PPS, standardized to
account for the overall positive effects of
the IPF PPS payment adjustments, and
adjusted for budget-neutrality.
The federal per diem payment under
the IPF PPS is comprised of the federal
per diem base rate described above and
certain patient- and facility-level
payment adjustments that were found in
the regression analysis to be associated
with statistically significant per diem
cost differences.
The patient-level adjustments include
age, Diagnosis-Related Group (DRG)
assignment, comorbidities, and variable
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per diem adjustments to reflect higher
per diem costs in the early days of an
IPF stay. Facility-level adjustments
include adjustments for the IPF’s wage
index, rural location, teaching status, a
cost-of-living adjustment for IPFs
located in Alaska and Hawaii, and the
presence of a qualifying emergency
department (ED).
The IPF PPS provides additional
payment policies for: Outlier cases;
interrupted stays; and a per treatment
adjustment for patients who undergo
electroconvulsive therapy (ECT). During
the IPF PPS mandatory 3-year transition
period, stop-loss payments were also
provided; however, since the transition
ended in 2008, these payments are no
longer available.
A complete discussion of the
regression analysis that established the
IPF PPS adjustment factors appears in
the November 2004 IPF PPS final rule
(69 FR 66933 through 66936).
Section 124 of the BBRA did not
specify an annual rate update strategy
for the IPF PPS and was broadly written
to give the Secretary discretion in
establishing an update methodology.
Therefore, in the November 2004 IPF
PPS final rule, we implemented the IPF
PPS using the following update strategy:
• Calculate the final federal per diem
base rate to be budget-neutral for the 18month period of January 1, 2005
through June 30, 2006.
• Use a July 1 through June 30 annual
update cycle.
• Allow the IPF PPS first update to be
effective for discharges on or after July
1, 2006 through June 30, 2007.
In RY 2012, we proposed and
finalized switching the IPF PPS
payment rate update from a rate year
that begins on July 1 and ends on June
30 to one that coincides with the federal
fiscal year that begins October 1 and
ends on September 30. In order to
transition from one timeframe to
another, the RY 2012 IPF PPS covered
a 15-month period from July 1, 2011
through September 30, 2012. Therefore,
the update cycle for FY 2016 will be
October 1, 2015 through September 30,
2016. For further discussion of the 15month market basket update for RY
2012 and changing the payment rate
update period to coincide with a FY
period, we refer readers to the RY 2012
IPF PPS proposed rule (76 FR 4998) and
the RY 2012 IPF PPS final rule (76 FR
26432).
C. Annual Requirements for Updating
the IPF PPS
In November 2004, we implemented
the IPF PPS in a final rule that appeared
in the November 15, 2004 Federal
Register (69 FR 66922). In developing
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the IPF PPS, to ensure that the IPF PPS
is able to account adequately for each
IPF’s case-mix, we performed an
extensive regression analysis of the
relationship between the per diem costs
and certain patient and facility
characteristics to determine those
characteristics associated with
statistically significant cost differences
on a per diem basis. For characteristics
with statistically significant cost
differences, we used the regression
coefficients of those variables to
determine the size of the corresponding
payment adjustments.
In that final rule, we explained that
we believe it is important to delay
updating the adjustment factors derived
from the regression analysis until we
have IPF PPS data that include as much
information as possible regarding the
patient-level characteristics of the
population that each IPF serves.
Therefore, we indicated that we did not
intend to update the regression analysis
and the patient- and facility-level
adjustments until we complete that
analysis. Until that analysis is complete,
we stated our intention to publish a
notice in the Federal Register each
spring to update the IPF PPS (71 FR
27041). We have begun the necessary
analysis to make refinements to the IPF
PPS using more current data to set the
adjustment factors; however, we did not
make any refinements in this final rule.
Rather, as explained in section V.B. of
this final rule, we expect that in future
rulemaking we will be ready to propose
potential refinements.
In the May 6, 2011 IPF PPS final rule
(76 FR 26432), we changed the payment
rate update period to a RY that
coincides with a FY update. Therefore,
update notices are now published in the
Federal Register in the summer to be
effective on October 1. When proposing
changes in IPF payment policy, a
proposed rule would be issued in the
spring and the final rule in the summer
in order to be effective on October 1. For
further discussion on changing the IPF
PPS payment rate update period to a RY
that coincides with a FY, see the IPF
PPS final rule published in the Federal
Register on May 6, 2011 (76 FR 26434
through 26435). For a detailed list of
updates to the IPF PPS, see 42 CFR
412.428.
Our most recent IPF PPS annual
update occurred in an August 6, 2014,
Federal Register final rule (79 FR
45938) (hereinafter referred to as the
August 2014 IPF PPS final rule) updated
the IPF PPS payment rates for FY 2015.
That rule updated the IPF PPS per diem
payment rates that were published in
the August 2013 IPF PPS notice (78 FR
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46734) in accordance with our
established policies.
III. Provisions of the Final Rule and
Responses to Comments
On May 1, 2015 we published a
proposed rule in the Federal Register
(80 FR 25012) entitled Medicare
Program; Inpatient Psychiatric Facilities
Prospective Payment System—Update
for Fiscal Year Beginning October 1,
2015 (FY 2016). The May 1, 2015
proposed rule (herein referred to as the
FY 2016 IPF PPS proposed rule)
proposed updates to the prospective
payment rates for Medicare inpatient
hospital services provided by inpatient
psychiatric facilities. In addition to the
updates, we proposed to: Adopt a 2012based IPF market basket and update the
labor-related share; adopt new OMB
CBSA delineations for the FY 2016 IPF
Wage Index; and phase out the rural
adjustment for 37 rural providers that
would become urban providers as a
result of the new CBSA delineations.
Additionally, the proposed rule
reminded providers of the October 1,
2015 implementation of the
International Classification of Diseases,
10th Revision, Clinical Modification
(ICD–10–CM/PCS) for the IPF PPS,
updated providers on the status of IPF
PPS refinements, and proposed new
quality reporting requirements for the
IPFQR Program.
We received a total of 76 comments
on these proposals from 51 providers,
12 industry groups or associations, 6
industry consultants, 4 advocacy
groups, 1 independent congressional
agency, and 2 anonymous sources. Of
the 76 comments, 12 focused on
payment policies, and 73 focused on the
quality reporting proposals. A summary
of the proposals, the comments, and our
responses follows.
A. Market Basket for the IPF PPS
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1. Background
The input price index that was used
to develop the IPF PPS was the
Excluded Hospital with Capital market
basket. This market basket was based on
1997 Medicare cost reports for Medicare
participating inpatient rehabilitation
facilities (IRFs), IPFs, long-term care
hospitals (LTCHs), cancer hospitals, and
children’s hospitals. Although ‘‘market
basket’’ technically describes the mix of
goods and services used in providing
health care at a given point in time, this
term is also commonly used to denote
the input price index (that is, cost
category weights and price proxies)
derived from that market basket.
Accordingly, the term ‘‘market basket,’’
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as used in this document, refers to an
input price index.
Beginning with the May 2006 IPF PPS
final rule (71 FR 27046 through 27054),
IPF PPS payments were updated using
a 2002–based rehabilitation, psychiatric,
and long-term care (RPL) market basket
reflecting the operating and capital cost
structures for freestanding IRFs,
freestanding IPFs, and LTCHs. Cancer
and children’s hospitals were excluded
from the RPL market basket because
their payments are based entirely on
reasonable costs subject to rate-ofincrease limits established under the
authority of section 1886(b) of the Act
and not through a PPS. Also, the 2002
cost structures for cancer and children’s
hospitals are noticeably different than
the cost structures of freestanding IRFs,
freestanding IPFs, and LTCHs. See the
May 2006 IPF PPS final rule (71 FR
27046 through 27054) for a complete
discussion of the 2002–based RPL
market basket.
In the May 1, 2009 IPF PPS notice (74
FR 20376), we expressed our interest in
exploring the possibility of creating a
stand-alone IPF market basket that
reflects the cost structures of only IPF
providers. One available option was to
combine the Medicare cost report data
from freestanding IPF providers with
Medicare cost report data from hospitalbased IPF providers. We indicated that
an examination of the Medicare cost
report data comparing freestanding IPFs
and hospital-based IPFs showed
differences between cost levels and cost
structures. At that time, we were unable
to fully understand these differences
even after reviewing explanatory
variables such as geographic variation,
case mix (including DRG, comorbidity,
and age), urban or rural status, teaching
status, and presence of a qualifying
emergency department. As a result, we
continued to research ways to reconcile
the differences and solicited public
comment for additional information that
might help us to better understand the
reasons for the variations in costs and
cost structures, as indicated by the
Medicare cost report data (74 FR 20376).
We summarized the public comments
we received and our responses in the
April 2010 IPF PPS notice (75 FR 23111
through 23113). Despite receiving
comments from the public on this issue,
we were still unable to sufficiently
reconcile the observed differences in
costs and cost structures between
hospital-based and freestanding IPFs,
and, therefore, we did not believe it to
be appropriate at that time to
incorporate data from hospital-based
IPFs with those of freestanding IPFs to
create a stand-alone IPF market basket.
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Beginning with the RY 2012 IPF PPS
final rule (76 FR 26432), IPF PPS
payments were updated using a 2008based RPL market basket reflecting the
operating and capital cost structures for
freestanding IRFs, freestanding IPFs,
and LTCHs. The major changes for RY
2012 included: Updating the base year
from FY 2002 to FY 2008; using a more
specific composite chemical price
proxy; breaking the professional fees
cost category into two separate
categories (Labor-related and Nonlaborrelated); and adding two additional cost
categories (Administrative and Facilities
Support Services and Financial
Services), which were previously
included in the residual All Other
Services cost categories. The RY 2012
IPF PPS proposed rule (76 FR 4998) and
RY 2012 final rule (76 FR 26432)
contain a complete discussion of the
development of the 2008-based RPL
market basket.
In the FY 2016 IPF PPS proposed rule,
we proposed to create a 2012-based IPF
market basket, using Medicare cost
report data for both freestanding and
hospital-based IPFs.
We received several general
comments on the creation of an IPF
market basket.
Comment: One commenter supported
CMS’ use of an IPF-specific market
basket, but recommended that CMS
develop separate update percentages for
freestanding units and hospital-based
units. They stated patients treated in
hospital-based units have more complex
medical conditions and require more
resources compared to freestanding
facilities. They believe combining these
two facilities for the purpose of
establishing one market basket rate
update could result in underpayments
for Medicare patients treated in
hospital-based facilities.
Response: We appreciate the
commenter’s support of an IPF-specific
market basket. However, we respectfully
disagree with their recommendation to
develop two specific market basket
update percentages for hospital-based
and freestanding units. The regression
analysis from which the IPF PPS base
rate payment (and related adjustments)
was derived reflects data from both
freestanding and hospital-based
providers. As a result, we believe it is
appropriate to update those rates with a
market basket based on data from both
types of providers. Moreover, we do not
believe we have a large enough sample
size to create a freestanding-specific IPF
market basket. Finally, the IPF PPS
already provides patient-level
adjustments, including certain principal
diagnoses and comorbidities that reflect
the higher costs and resources
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associated with more medically
complex patients.
Comment: One commenter stated
their appreciation of the discussion in
the proposed rule regarding the progress
that CMS has made in the development
of an IPF-specific market basket. They
support CMS’ efforts to ensure that the
IPF payment system is updated to
reflect current costs and resource use.
Response: We appreciate the
commenter’s support for the proposed
2012-based IPF market basket.
Comment: One commenter did not
support the adoption of the stand-alone
IPF market basket. They stated they still
have major reservations about its
accuracy. They urged CMS to publicly
release the detailed data files that
support the proposed IPF-specific
market basket and to distinguish cost
factors in order to ‘‘evaluate the
materiality of the consolidation effect on
the market basket’’ and to allow time for
the industry to gain a clearer
understanding of the proposal, and the
consolidation of the IPF provider types
in order to enable commenters’
informed response to the proposal.
Response: We appreciate the
commenter’s concern for the adoption of
the 2012-based IPF market basket.
However, we disagree with delaying the
IPF-specific market basket. We believe
we provided a clear description of the
proposal and a sufficiently detailed data
file to enable informed comment.
All of the data used to develop the
proposed IPF-market basket are
publically available. The Medicare cost
reports used to develop the major cost
weights are publically available on the
CMS Web site (http://www.cms.gov/
Research-Statistics-Data-and-Systems/
Downloadable-Public-Use-Files/CostReports/Cost-Reports-by-FiscalYear.html under facility type ‘‘Hospital2010’’). The Bureau of Labor Statistics
(BLS) Occupational Employment
Statistics (http://www.bls.gov/oes/#data)
and BLS price indices (http://
www.bls.gov/cpi/#data, http://
www.bls.gov/ppi/#data, and http://
www.bls.gov/ncs/ect/#data) are
publically available. The last data
source used was the Bureau of
Economic Analysis 2007 Benchmark
Input-Output (I–O) data which is also
publically available (http://
www.bea.gov/industry/io_annual.htm
under ‘‘ ‘Use Tables/Before
Redefinitions/Purchaser Value’ for
North American Industry Classification
System (NAICS) 622000 Hospitals’’).
In addition, we also provided in the
proposed rule a detailed description of
the methodologies (including items
such as Medicare Cost Report line items
or BLS series codes) used to produce the
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proposed 2012-based IPF market basket
using the aforementioned data. We
believe these methodology descriptions
allowed for informed public comments
and evaluation of the materiality of the
‘‘consolidation effect’’ (which we
interpret to be the inclusion of
freestanding and hospital-based IPF
Medicare cost report data). We did
receive several comments on our
detailed methodology, which we used to
further evaluate our methodology. In
fact, in this final rule, we are adopting
changes to the Wages and Salaries and
Employee Benefits costs methodologies
based on these detailed public
comments. A more thorough description
of the methodological changes is
provided below.
After consideration of the public
comments, we are finalizing the creation
and adoption of a 2012-based IPF
market basket with a modification to the
Wages and Salaries and Employee
Benefits cost methodologies based on
public comments. We believe that the
use of the 2012-based IPF market basket
to update IPF PPS payments is a
technical improvement as it is based on
Medicare Cost Report data from both
freestanding and hospital-based IPFs.
Furthermore, the 2012-based IPF market
basket does not include costs from
either IRF or LTCH providers, which are
included in the current 2008-based RPL
market basket.
In the following discussion, we
provide an overview of the market
basket and describe the methodologies
used to determine the operating and
capital portions of the 2012-based IPF
market basket. For each proposed
methodology, we indicate whether we
received any public comments. We
include responses for each comment.
We then provide the methodology we
are finalizing for the 2012-based IPF
market basket.
2. Overview of the 2012-Based IPF
Market Basket
The 2012-based IPF market basket is
a fixed-weight, Laspeyres-type price
index. A Laspeyres price index
measures the change in price, over time,
of the same mix of goods and services
purchased in the base period. Any
changes in the quantity or mix of goods
and services (that is, intensity)
purchased over time relative to a base
period are not measured.
The index itself is constructed in 3
steps. First, a base period is selected (in
this final rule, the base period is FY
2012) and total base period
expenditures are estimated for a set of
mutually exclusive and exhaustive
spending categories with the proportion
of total costs that each category
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represents being calculated. These
proportions are called cost or
expenditure weights. Second, each
expenditure category is matched to an
appropriate price or wage variable,
referred to as a price proxy. In nearly
every instance, these price proxies are
derived from publicly available
statistical series that are published on a
consistent schedule (preferably at least
on a quarterly basis). Finally, the
expenditure weight for each cost
category is multiplied by the level of its
respective price proxy. The sum of these
products (that is, the expenditure
weights multiplied by their price levels)
for all cost categories yields the
composite index level of the market
basket in a given period. Repeating this
step for other periods produces a series
of market basket levels over time.
Dividing an index level for a given
period by an index level for an earlier
period produces a rate of growth in the
input price index over that timeframe.
As noted above, the market basket is
described as a fixed-weight index
because it represents the change in price
over time of a constant mix (quantity
and intensity) of goods and services
needed to furnish IPF services. The
effects on total expenditures resulting
from changes in the mix of goods and
services purchased subsequent to the
base period are not measured. For
example, an IPF hiring more nurses to
accommodate the needs of patients will
increase the volume of goods and
services purchased by the IPF, but
would not be factored into the price
change measured by a fixed-weight IPF
market basket. Only when the index is
rebased will changes in the quantity and
intensity be captured, with those
changes being reflected in the cost
weights. Therefore, we rebase the
market basket periodically so that the
cost weights reflect recent changes in
the mix of goods and services that IPFs
purchase (facility inputs) to furnish
inpatient care between base periods.
3. Creating an IPF-Specific Market
Basket
As discussed in section III.A.1. of this
final rule, over the last several years we
have been exploring the possibility of
creating a stand-alone, or IPF-specific,
market basket that reflects the cost
structures of only IPF providers. The
major cost weights for the 2008-based
RPL market basket were calculated
using Medicare cost report data for
freestanding facilities only. We used
freestanding facilities due to concerns
regarding our ability to incorporate
Medicare cost report data for hospitalbased providers. In the FY 2015 IPF PPS
final rule (79 FR 45941), we presented
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several of these concerns (as stated
below) but explained that we would
continue to research the possibility of
creating an IPF-specific market basket to
update IPF PPS payments.
Since the FY 2015 IPF PPS final rule,
we have performed additional research
on the Medicare cost report data
available for hospital-based IPFs and
evaluated these concerns. We
subsequently concluded from this
research that Medicare cost report data
for both hospital-based IPFs and
freestanding IPFs can be used to
calculate the major market basket cost
weights for a stand-alone IPF market
basket. We developed a detailed
methodology to derive market basket
cost weights that are representative of
the universe of IPF providers. We
believe the use of this final IPF market
basket is a technical improvement over
the RPL market basket that is currently
used to update IPF PPS payments. As a
result, in this FY 2016 IPF PPS final
rule, we are finalizing a 2012-based IPF
market basket that reflects data for both
freestanding and hospital-based IPFs.
Below we discuss our prior concerns
and provide reasons for why we now
feel it is appropriate to create a standalone IPF market basket using Medicare
cost report data for both hospital-based
and freestanding IPFs.
One concern we discussed in the FY
2015 IPF PPS final rule (79 FR 45941)
about using the hospital-based IPF
Medicare cost report data was the cost
level differences for hospital-based IPFs
relative to freestanding IPFs were not
readily explained by the specific
characteristics of the individual
providers and the patients that they
serve (for example, characteristics
related to case mix, urban/rural status,
teaching status, or presence of a
qualified emergency department). To
address this concern, we used
regression analysis to evaluate the effect
of including hospital-based IPF
Medicare cost report data in the
calculation of cost distributions. A more
detailed description of these regression
models can be found in the FY 2015 IPF
final rule (79 FR 45941). Based on this
analysis, we concluded that the
inclusion of those IPF providers with
unexplained variability in costs did not
significantly impact the cost weights
and, therefore, should not be a major
cause of concern.
Another concern regarding the
incorporation of hospital-based IPF data
into the calculation of the market basket
cost weights was the complexity of the
Medicare cost report data for these
providers. The freestanding IPFs
independently submit a Medicare cost
report for their facilities, making it
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relatively straightforward to obtain the
cost categories necessary to determine
the major market basket cost weights.
However, Medicare cost report data
submitted for a hospital-based IPF are
embedded in the Medicare cost report
submitted for the entire hospital facility
in which the IPF is located. In order to
use Medicare cost report data from these
providers, we needed to determine the
appropriate adjustments to apply to the
data to ensure that the cost weights we
obtained would represent only the
hospital-based IPF (not the hospital as a
whole). Over the past year, we worked
to develop detailed methodologies to
calculate the major cost weights for both
freestanding and hospital-based IPFs.
We also evaluated the differences in
cost weights for hospital-based and
freestanding IPFs and found the most
significant differences occurred for
wages and salaries and pharmaceutical
costs. Specifically, the hospital-based
IPF wages and salaries cost weights tend
to be lower than those of freestanding
IPFs while hospital-based IPF
pharmaceutical cost weights tend to be
higher than those of freestanding IPFs.
Our methodology for deriving costs for
each of these categories can be found in
section III.A.3.a.i. of this final rule. We
will continue to monitor these cost
shares during our on-going research to
ensure that the differences are
explainable.
In summary, our research over the
past year allowed us to evaluate the
appropriateness of including hospitalbased IPF data in the calculation of the
major cost weights for an IPF market
basket. In the proposed rule, we
proposed methodologies to create a
stand-alone IPF market basket that
reflects the cost structure of the universe
of IPF providers. We described our
methodologies and the resulting cost
weights in section III.A.3.a.i. of the FY
2016 IPF proposed rule (80 FR 25017)
and solicited public comments on these
proposals. In the sections below, we
summarize and respond to comments
we received on these proposed
methodologies.
a. Development of Cost Categories and
Weights
i. Medicare Cost Reports
We proposed a 2012-based IPF market
basket that consisted of seven major cost
categories derived from the FY 2012
Medicare cost reports (CMS Form 2552–
10) for freestanding and hospital-based
IPFs. These categories were Wages and
Salaries, Employee Benefits, Contract
Labor, Pharmaceuticals, Professional
Liability Insurance (PLI), Capital, and a
residual. The residual reflects all
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remaining costs that are not captured in
the other six cost categories. The FY
2012 cost reports include providers
whose cost report begin date is on or
between October 1, 2011, and
September 30, 2012. We choose to use
FY 2012 as the base year because we
believe that the Medicare cost reports
for this year represent the most recent,
complete set of Medicare cost report
data available for IPFs at the time of
rulemaking.
Prior Medicare cost report data used
to develop the RPL market basket
showed large differences between some
providers’ Medicare length of stay (LOS)
and total facility LOS. Since our goal is
to measure cost weights that are
reflective of case mix and practice
patterns associated with providing
services to Medicare beneficiaries, we
proposed to limit our selection of
Medicare cost reports used in the 2012based IPF market basket to those
facilities that had a Medicare LOS that
was within a comparable range of their
total facility average LOS. For
freestanding IPFs, we proposed to use
the Medicare days and discharges from
line 14, columns 6 and 13, Worksheet
S–3, Part I to determine the Medicare
LOS and the total facility days and
discharges from line 14, columns 8 and
15, to determine the facility LOS
(consistent with the RPL market basket
method). For hospital-based IPFs, we
proposed to use the Medicare days and
discharges from line 16, columns 6 and
13, of Worksheet S–3, Part I to
determine the Medicare LOS and the
total facility days and discharges from
line 16, columns 8 and 15, to determine
the facility LOS. To derive the 2012based IPF market basket, for those IPFs
with an average facility LOS of greater
than or equal to 15 days, we proposed
to include IPFs where the Medicare LOS
is within 50 percent (higher or lower) of
the average facility LOS. For those IPFs
whose average facility LOS is less than
15 days, we proposed to include IPFs
where the Medicare LOS is within 95
percent (higher or lower) of the facility
LOS.
Applying these trims resulted in IPF
Medicare cost reports with an average
Medicare LOS of 12 days, average
facility LOS of 10 days, and Medicare
utilization (as measured by Medicare
inpatient IPF days as a percentage of
total facility days) of 30 percent. Those
providers that were excluded from the
2012-based IPF market basket have an
average Medicare LOS of 22 days,
average facility LOS of 49 days, and a
Medicare utilization of 5 percent. Of
those Medicare cost reports excluded
from the proposed 2012-based IPF
market basket, about 70 percent were
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freestanding providers whereas
freestanding providers represent about
30 percent of all IPFs.
We did not receive any specific
comments on our proposed LOS edit
methodology.
Final Decision: We are finalizing the
LOS edit methodology as proposed.
We applied this LOS trim to first
obtain a set of cost reports for facilities
that have a Medicare LOS within a
comparable range of their total facility
LOS. Using the resulting set of FY 2012
Medicare cost reports for freestanding
IPFs and hospital-based IPFs, we
calculated costs for the six major cost
categories (Wages and Salaries,
Employee Benefits, Contract Labor,
Professional Liability Insurance,
Pharmaceuticals, and Capital).
Similar to the 2008-based RPL market
basket major cost weights, the 2012based IPF market basket cost weights
reflect Medicare allowable costs
(routine, ancillary and capital costs) that
are eligible for inclusion under the IPF
PPS payments. We proposed to define
Medicare allowable costs for
freestanding facilities as cost centers
(CMS Form 2552–10): 30 through 35, 50
through 76 (excluding 52 and 75), 90
through 91, and 93. We proposed to
define Medicare allowable costs for
hospital-based facilities as cost centers
(CMS Form 2552–10): 40, 50 through 76
(excluding 52 and 75), 90 through 91,
and 93. For freestanding IPFs, we
proposed that total Medicare allowable
costs would be equal to the total costs
as reported on Worksheet B, part I,
column 26. For hospital-based IPFs, we
proposed that total Medicare allowable
costs would be equal to total costs for
the IPF inpatient unit after the
allocation of overhead costs (Worksheet
B, part I, column 26, line 40) and a
portion of total ancillary costs. We also
proposed to calculate the portion of
ancillary costs attributable to the
hospital-based IPF for a given ancillary
cost center by multiplying total facility
ancillary costs for the specific cost
center (as reported on Worksheet B, Part
I, column 26) by the ratio of IPF
Medicare ancillary costs for the cost
center (as reported on Worksheet D–3,
column 3 for IPF subproviders) to total
Medicare ancillary costs for the cost
center (equal to the sum of Worksheet
D–3, column 3 for all relevant PPS (that
is, Inpatient Prospective Payment
System (IPPS), IRF, IPF and Skilled
Nursing Facility (SNF))).
We did not receive any specific
comments on our methodology for
calculating total costs.
Final Decision: We are finalizing our
methodology for calculating total costs
as proposed.
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Below we provide a description of the
methodologies used to derive costs for
the six major cost categories.
Wages and Salaries Costs
For freestanding IPFs, we proposed to
derive Wages and Salaries costs as the
sum of routine inpatient salaries,
ancillary salaries, and a proportion of
overhead (or general service cost center)
salaries as reported on Worksheet A,
column 1. Since overhead salary costs
are attributable to the entire IPF, we
proposed to only include the proportion
attributable to the Medicare allowable
cost centers. We estimated the
proportion of overhead salaries that are
attributed to Medicare allowable costs
centers by multiplying the ratio of
Medicare allowable salaries to total
salaries (Worksheet A, column 1, line
200) times total overhead salaries. A
similar methodology was used to derive
Wages and Salaries costs in the 2008based RPL market basket.
For hospital-based IPFs, we proposed
to derive Wages and Salaries costs as the
sum of routine inpatient wages and
salaries (Worksheet A, column 1, line
40) and a portion of salary costs
attributable to total facility ancillary and
overhead cost centers as these cost
centers are shared with the entire
facility. We proposed to calculate the
portion of ancillary salaries attributable
to the hospital-based IPF for a given
ancillary cost center by multiplying
total facility ancillary salary costs for
the specific cost center (as reported on
Worksheet A, column 1) by the ratio of
IPF Medicare ancillary costs for the cost
center (as reported on Worksheet D–3,
column 3 for IPF subproviders) to total
Medicare ancillary costs for the cost
center (equal to the sum of Worksheet
D–3, column 3 for all relevant PPS units
(that is, IPPS, IRF, IPF and SNF)). For
example, if hospital-based IPF Medicare
laboratory costs represent 10 percent of
the total Medicare laboratory costs for
the entire facility, then 10 percent of
total facility laboratory salaries (as
reported in Worksheet A, column 1, line
60) would be attributable to the
hospital-based IPF. We believe it is
appropriate to use only a portion of the
ancillary costs in the market basket cost
weight calculations since the hospitalbased IPF only utilizes a portion of the
facility’s ancillary services. We believe
the ratio of reported IPF Medicare costs
to reported total Medicare costs
provides a reasonable estimate of the
ancillary services utilized, and costs
incurred, by the hospital-based IPF.
We proposed to calculate the portion
of overhead salary costs attributable to
hospital-based IPFs by multiplying the
total overhead costs attributable to the
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46659
hospital-based IPF (sum of columns 4
through18 on Worksheet B, part I, line
40) by the ratio of total facility overhead
salaries (as reported on Worksheet A,
column 1, lines 4 through 18) to total
facility overhead costs (as reported on
Worksheet A, column 7, lines 4 through
18). This methodology assumes the
proportion of total costs related to
salaries for the overhead cost center is
similar for all inpatient units (that is,
acute inpatient or inpatient psychiatric).
Since the 2008-based RPL market basket
did not include hospital-based
providers, this proposed methodology
cannot be compared to the derivation of
Wages and Salaries costs in the 2008based RPL market basket.
We received several comments on our
methodology for deriving Wages and
Salaries costs. These comments led to
changes to our proposed methodology.
We discuss these changes below.
Comment: Several commenters
questioned the methodology we used to
calculate the Wages and Salaries cost
weight stating there was a risk of
overstating the labor-related share. They
encouraged CMS to utilize a more
accurate calculation for the ancillary
cost centers in order to mitigate the risk
of overstating labor-related share costs.
One commenter stated that our
methodology for deriving hospital-based
IPF ancillary salary costs for a specific
cost center using salary costs from
Worksheet A, column 1 multiplied by
the ratio of IPF Medicare ancillary costs
for the cost center (as reported on
Worksheet D–3, column 3 for IPF
subproviders) to total Medicare
ancillary costs for the cost center (equal
to the sum of Worksheet D–3, column 3
for all relevant PPS units (that is, IPPS,
IRF, IPF and SNF)) results in an
overstatement of ancillary salary costs.
Specifically, the commenter stated that
the most accurate calculation would be
to divide costs on Worksheet D–3,
column 3 for the IPF subprovider by
total costs on Worksheet C, column 5 for
the hospital, and to apply this
percentage to salary costs from
Worksheet A, column 1. The commenter
requested that we clarify how this
ancillary salary calculation is used in
determining the 74.9 percent laborrelated share of the payment, and
correct it as needed.
Response: The proposed labor-related
share of 74.9 percent is equal to the sum
of the relative importance of moving
averages of the Wages and Salaries,
Employee Benefits, Contract Labor,
Labor-Related Services cost categories,
and a portion of the relative importance
moving average of the Capital-Related
cost category. For a detailed description
of how these cost categories were
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derived, please see the IPF proposed
rule (80 FR 25017).
Based on the commenter’s request, we
reviewed our proposed methodology for
calculating Wages and Salaries costs for
hospital-based IPFs (including the
ancillary wages and salaries costs
mentioned by the commenter). As stated
in the proposed rule, the Wages and
Salaries costs for hospital-based IPFs are
derived by summing routine inpatient
salary costs for the hospital-based IPF
(from Worksheet A, column 1, line 40),
ancillary salaries, and overhead salaries.
The methodology for calculating
ancillary salaries (as the commenter
noted) is calculated as ancillary salary
costs for a specific cost center using
salary costs from Worksheet A, column
1 multiplied by the ratio of IPF
Medicare ancillary costs for the cost
center (as reported on Worksheet D–3,
column 3 for IPF subproviders) to total
Medicare ancillary costs for the cost
center (equal to the sum of Worksheet
D–3, column 3 for all relevant PPS units
(that is, IPPS, IRF, IPF and SNF)).
We respectfully disagree with the
commenter’s suggestion to use total
costs on Worksheet C, column 5 as the
denominator in the ratio above. We note
that Worksheet D–3 represents Medicare
IPF costs for ancillary services while
Worksheet C, column 5 represents total
ancillary costs for all payers. Our
methodology for deriving all cost
weights (for both freestanding and
hospital-based providers) is based on
Medicare-allowable costs (that is total
costs for all patients for those cost
centers that are Medicare-allowable
under the IPF PPS). For example, the
Contract Labor cost weight is based on
contract labor costs reported on
Worksheet S3, part V, for all hospitalbased IPF patients; it is not specific to
Medicare patients as that data is not
reported on the Medicare cost report.
The commenter’s suggestion to use
Worksheet C, column 5, would be
inappropriate as the numerator would
be based on Medicare patients
(Worksheet D–3) and the denominator
would be for all patients (Worksheet C),
which would understate the proportion
of ancillary salary costs that are
attributable to all hospital-based IPF
patients. Since the ancillary salary cost
weight, in aggregate, is lower than the
hospital-based IPF routine inpatient
salary cost weight, this would lead to a
higher Wages and Salaries cost weight
relative to the proposed rule, and it
would be calculated inconsistently with
the other market basket cost weights
(such as the Contract Labor cost weight).
We believe using Medicare costs
(Worksheet D–3) to determine the
proportion of ancillary wages and
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salaries (and also total ancillary costs)
that are attributable to the hospitalbased IPF is a reasonable approach.
Comment: Several commenters stated
that they had not conducted their own
analysis of the CMS proposed 2012based IPF market basket, but they were
aware of an analysis of the proposed IRF
market basket. That analysis, prepared
by Dobson DaVanzo,1 was submitted to
CMS as part of the FY 2016 IRF PPS
rulemaking record. These commenters
encouraged CMS to review Dobson
DaVanzo findings to determine if CMS
needs to take corrective measures before
finalizing the IPF-specific market
basket, as the same methodologies in the
IRF market basket methodology could
exist in the IPF methodology.
Response: We appreciate the
commenters’ request to review the
consultants’ report on the methodology
used to develop the IRF-specific market
basket. As the commenter stated, the
methodology used to develop the IPF
major cost weights using the Medicare
cost report data for the 2012-based IPF
market basket is similar to the
methodology used in the proposed
2012-based IRF market basket. The only
difference is the use of IPF-specific
Medicare cost report data to calculate
the major cost weights.
Based on these comments, we
reviewed the Dobson DaVanzo IRF
report submitted by commenters on the
IRF proposed rule. This report stated on
page four that our proposed
methodology for calculating hospitalbased IRF wages and salaries was
flawed as it disregards overhead wages
and salaries associated with the
ancillary departments. Our proposed
methodology for the 2012-based IRF
market basket was identical to our
proposed methodology for the 2012based IPF market basket. Our proposed
methodology for the 2012-based IPF
market basket included overhead wages
and salaries attributable to the hospitalbased IPF routine inpatient unit only.
Therefore, we are revising our
methodology for calculating the Wages
and Salaries costs for hospital-based
IPFs to account for the omission of the
overhead wages and salaries attributable
to the ancillary departments.
For this final rule, we calculated the
overhead salaries attributable to each
ancillary department by first calculating
total noncapital overhead costs
1 ‘‘Analysis of CMS Proposed Inpatient
Rehabilitation Facility Specific Market Basket’’,
submitted to HealthSouth Corporation by Dobson
DaVanzo, May 22, 2015. The public reference for
this comment letter is: CMS–2015–0053–0004, and
can be retrieved from the following link: http://
www.regulations.gov/#!documentDetail;D=CMS2015-0053-0004.
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attributable to the specific ancillary
department (Worksheet B, part I,
columns 4–18 less Worksheet B, part II,
columns 4–18). We then identified the
portion of the total noncapital overhead
costs for each ancillary cost center that
is attributable to the hospital-based IPF
by multiplying by the ratio of IPF
Medicare ancillary costs for the cost
center (as reported on Worksheet D–3,
column 3 for hospital-based IPFs) to
total Medicare ancillary costs for the
cost center (equal to the sum of
Worksheet D–3, column 3 for all
relevant PPS units (that is, IPPS, IRF,
IPF and SNF)). Finally, we identified
the portion of these noncapital overhead
costs attributable to Wages and Salaries
by multiplying these costs by an
‘‘overhead ratio’’, which is defined as
the ratio of total facility overhead
salaries (as reported on Worksheet A,
column 1, lines 4–18) to total noncapital
overhead costs (as reported on
Worksheet A, column 1 & 2, lines 4–18)
for all ancillary departments. This
methodology is almost identical to the
methodology suggested in the Dobson
DaVanzo report with slight
modifications, which are further
discussed below.
Therefore, based on public comment,
we are finalizing our methodology for
calculating Wages and Salaries costs for
hospital-based IPFs as the sum of
routine inpatient salary costs for the
hospital-based IPF (from Worksheet A,
column 1, line 40), ancillary salaries,
and overhead salaries attributable to the
routine inpatient unit for the hospitalbased IPF and ancillary departments.
During our review of the methodology
to derive Wages and Salaries costs and
the inclusion of overhead wages and
salaries attributable to the ancillary
department, we also found that the
overhead ratios (used in the calculation
of overhead wages and salaries
attributable to the routine inpatient unit
for the hospital-based IPF) (Worksheet
A, column 1 divided by Worksheet A,
column 7) by cost center showed that
many providers reported data for these
columns that resulted in a ratio that
exceeded 100 percent. One possible
explanation for the overhead ratio
exceeding 100 percent is that Worksheet
A, column 7 reflects reclassifications
and adjustments while column 1 does
not. However, when we calculated an
alternative overhead ratio by defining
overhead salaries using Worksheet S–3,
part II column 4, which reflects
reclassifications, and total facility
noncapital overhead costs using
Worksheet A, column 7, we also found
that many providers still had overhead
ratios that exceeded 100 percent. An
overhead ratio exceeding 100 percent
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would suggest that wages and salaries
costs are greater than total costs, which
shows that the data we originally
proposed to use results in an
indisputable error to the allocation of
overhead costs to wages and salaries.
When we instead used an overhead ratio
equal to the ratio of total facility
overhead salaries (as reported on
Worksheet A, column 1, lines 4–18) to
total facility noncapital overhead costs
(as reported on Worksheet A, column 1
and 2, lines 4–18), the impacts of any
potential misreporting is minimized.
Therefore, based on the comment, and
in order to address the error, we are
revising the overhead ratio used to
determine the proportion of overhead
salaries attributable to the hospitalbased IPF routine inpatient department.
The revised overhead ratio is equal to
the ratio of total facility overhead
salaries (as reported on Worksheet A,
column 1, lines 4–18) to total facility
noncapital overhead costs (as reported
on Worksheet A, column 1 and 2, lines
4–18). This is now consistent with the
overhead ratio we are using to
determine overhead wages and salaries
attributable to ancillary departments as
described above.
In addition, our review of the
methodology for Wages and Salaries
costs also found that our proposed
methodology for calculating overhead
wages and salaries attributable to the
hospital-based IPF routine inpatient
department were calculated using total
(operating and capital) overhead costs
attributable to the hospital-based IPF
(sum of columns 4–18 on Worksheet B,
part I, line 40). The proposed
methodology resulted in a portion of
overhead capital costs to be allocated to
wages and salaries costs which is
incorrect and inconsistent with the
Medicare cost report instructions.
The Medicare cost report instructions
define capital-related costs as
‘‘depreciation, leases and rentals for the
use of facilities and/or equipment, and
interest incurred in acquiring land or
depreciable assets used for patient care,
insurance on depreciable assets used for
patient care and taxes on land or
depreciable assets used for patient
care.’’ 2 The instructions also state that
providers should exclude the following
from capital-related costs: ‘‘costs
incurred for the repair or maintenance
of equipment or facilities, amounts
included in rentals or lease payments
for repair and/or maintenance
agreements. * * *’’ Based on this
2 See the Medicare cost report instructions at
https://www.cms.gov/Regulations-and-Guidance/
Guidance/Manuals/Paper-Based-Manuals-Items/
CMS021935.html, Chapter, 40, Page 40–259 to 40–
260..
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definition of capital costs as reported on
the Medicare cost report, we concluded
that capital costs do not include direct
wages and salaries costs and that it
would be erroneous to allocate a portion
of capital costs to overhead wages and
salaries.
Therefore, we are revising the
methodology to reflect operating costs
(that is the sum of Worksheet B, part I,
line 40, columns 4–18 less Worksheet B,
part II, line 40, columns 4–18).
We are finalizing our methodology for
calculating hospital-based IPF Wages
and Salaries costs as described above.
We discuss the effect of the changes to
the proposed methodology on the
market basket cost weight in section
III.A.3.i. of this final rule.
We did not receive any comments on
our proposed methodology for
calculating the freestanding IPF Wages
and Salaries costs and therefore, we are
finalizing the methodology for
calculating the freestanding IPF Wages
and Salaries costs as proposed.
Employee Benefits Costs
Effective with our implementation of
CMS Form 2552–10, we began
collecting Employee Benefits and
Contract Labor data on Worksheet S–3,
Part V. Previously, with CMS Form
2540–96, Employee Benefits and
Contract Labor data were reported on
Worksheet S–3, part II, which was
applicable to only IPPS providers and,
therefore, these data were not available
for the derivation of the RPL market
basket. Due to the lack of such data, the
Employee Benefits cost weight for the
2008-based RPL market basket was
derived by multiplying the 2008-based
RPL market basket Wages and Salaries
cost weight by the ratio of the IPPS
hospital market basket Employee
Benefits cost weight to the IPPS hospital
market basket Wages and Salaries cost
weight. Similarly, the Contract Labor
cost weight for the 2008-based RPL
market basket was derived by
multiplying the 2008-based RPL market
basket Wages and Salaries cost weight
by the ratio of the IPPS hospital market
basket Contract Labor cost weight to the
IPPS hospital market basket Wages and
Salaries cost weight.
For FY 2012 Medicare cost report
data, while there were providers that
did report data on Worksheet S–3, part
V, many providers did not complete this
worksheet. However, we believe we had
a large enough sample to enable us to
produce reasonable Employee Benefits
cost weights. We continue to encourage
all providers to report these data on the
Medicare cost report.
For freestanding IPFs, Employee
Benefits costs are equal to the data
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46661
reported on Worksheet S–3, Part V, line
2, column 2.
For hospital-based IPFs, we calculate
total benefits as the sum of benefit costs
reported on Worksheet S–3 Part V, line
3, column 2, and a portion of ancillary
benefits and overhead benefits for the
total facility. We proposed that ancillary
benefits attributable to the hospitalbased IPF would be calculated by
multiplying ancillary wages and salaries
for the hospital-based IPF as determined
in the derivation of Wages and Salaries
for the hospital-based IPF by the ratio of
total facility benefits to total facility
wages and salaries. Similarly, we
proposed that overhead benefits
attributable to the hospital-based IPF
would be calculated by multiplying
overhead wages and salaries for the
hospital-based IPF as determined in the
derivation of Wages and Salaries for the
hospital-based IPF by the ratio of total
facility benefits to total facility wages
and salaries.
Based on the comment above
regarding the omission of overhead
Wages and Salaries attributable to the
ancillary departments, we are revising
our methodology for calculating
Employee Benefits costs for hospitalbased IPFs to include overhead
employee benefits attributable to the
ancillary departments. Our proposed
methodology included Employee
Benefits attributable to hospital-based
IPF routine inpatient unit only. We are
estimating overhead employee benefits
attributable to the ancillary departments
using the same general methodology
used to calculate routine inpatient
overhead benefits and ancillary
employee benefits attributable to the
hospital-based IPF unit.
Overhead employee benefits
attributable to the ancillary departments
are calculated by multiplying overhead
wages and salaries attributable to the
ancillary departments by the ratio of
total facility benefits to total facility
wages and salaries. Therefore, based on
public comments, total employee
benefits for hospital-based IPFs are now
equal to the sum of benefit costs
reported on Worksheet S–3 Part V, line
3, column 2; a portion of ancillary
benefits; and a portion of overhead
benefits attributable to the routine
inpatient unit and ancillary
departments.
In addition, our methodology to
calculate overhead benefits attributable
to the hospital-based IPF is to multiply
overhead wages and salaries for the
hospital-based IPF routine inpatient
unit (as determined in the derivation of
Wages and Salaries for the hospitalbased IPF) by the ratio of total facility
benefits to total facility wages and
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salaries. Therefore, our changes to the
overhead wages and salaries for the
hospital-based IPF routine inpatient
unit discussed above would result in
changes to the overhead employee
benefits attributable to the hospitalbased IPF routine inpatient unit. The
effect of these methodology changes on
the Employee Benefits cost weight are
discussed in more detail in section
III.A.3.a.ii below.
We received one comment specific to
our proposed methodology for
calculating Employee Benefits costs.
Comment: Two commenters
encouraged CMS to review the Dobson/
DaVanzo report (referenced above),
which noted our proposal to change the
methodology for determining Employee
Benefits costs from the methodology
used to determine the Employee
Benefits cost weight for the 2008-based
RPL market basket. As discussed in the
proposed rule, under the RPL
methodology, we used data from IPPS
hospitals as a proxy for determining
these costs for RPL facilities. The
Dobson DaVanzo report noted the low
reporting of data on Worksheet S3, part
V, used in the Employee Benefit and
Contract Labor cost weight calculations.
They stated that CMS should consider
using IPPS data as a proxy for these
specific data elements as is done for the
RPL market basket.
Response: In the proposed rule (80 FR
25019), we noted that many providers
did not report Worksheet S–3, part V
data but that we believed we had a large
enough sample to produce a reasonable
Employee Benefits cost weight.
Specifically, we found that when we
recalculated the cost weight, after
weighting to reflect the characteristics of
the universe of IPF providers
(freestanding and hospital-based), it did
not have a material effect on the
resulting cost weight. We understand
the commenters’ concern for the
methodology change. However, we
believe that the use of employee benefit
costs reported by IPFs is a technical
improvement from the methodology
used for the 2008-based RPL market
basket. Specifically, this methodology
calculated the Employee Benefit cost
weight by multiplying the RPL market
basket Wages and Salaries cost weight
by the IPPS employee benefit ratio. The
IPPS employee benefit ratio was equal
to the 2006-based IPPS market basket
Employee Benefit cost weight divided
by the 2006-based IPPS market basket
Wages and Salaries cost weight. Using
the rebased and revised 2010- based
IPPS market basket, we calculate an
employee benefit ratio of 28 percent
compared to the 2012-based IPF market
basket with 26 percent. Much of this
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two-percentage-point difference is
attributable to the characteristics of the
IPF facilities as compared to the IPPS
hospitals. Approximately 20 percent of
total costs for IPFs are attributable to
for-profit facilities (80 percent are
attributable to nonprofit and
government facilities) while
approximately 10 percent of total costs
for IPPS hospitals are attributable to forprofit facilities (90 percent are
attributable to nonprofit and
government facilities). Both the IPF and
IPPS hospital data show that the
employee benefit ratio for for-profit
facilities is lower than the employee
benefit ratio for nonprofit/government
facilities (in the range of 6–7 percentage
points lower), thus IPFs’ higher
proportion of for-profit facilities
compared to IPPS hospitals leads to a
lower employee benefit ratio.
Final Decision: In conclusion, we
believe the use of Worksheet S–3, part
V data for IPFs is a technical
improvement from the methodology
used for the 2008-based RPL market
basket as we believe it better reflects the
cost structures of IPFs. We encourage
IPF providers to continue to report
Worksheet S–3, part V data and we will
continue to monitor the data as the
reporting improves. Therefore, after
consideration of public comments, we
are finalizing our proposed
methodology for calculating the
freestanding Employee benefit costs for
the 2012-based IPF market basket using
the Worksheet S–3, part V data as
proposed.
Also, as discussed above, we are now
capturing the proportion of overhead
employee benefits attributable to
ancillary departments in the hospitalbased IPF employee benefit costs, based
on public comments. Therefore, total
employee benefits for hospital-based
IPFs is equal to the sum of benefit costs
reported on Worksheet S–3 Part V, line
3, column 2; a portion of ancillary
benefits; and a portion of overhead
benefits attributable to both the routine
inpatient unit and ancillary
departments.
Contract Labor Costs
Similar to the RPL and IPPS market
baskets, Contract Labor costs are
primarily associated with direct patient
care services. Contract Labor costs for
other services such as accounting,
billing, and legal are calculated
separately using other government data
sources as described in section
III.A.3.a.i. of this final rule. As
discussed in this final rule in the
Employee Benefits section, we now
have data reported on Worksheet S–3,
Part V that we can use to derive the
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Contract Labor cost weight for the 2012based IPF market basket. For
freestanding IPFs, we proposed Contract
Labor costs would be based on data
reported on Worksheet S–3, part V,
column 1, line 2, and for hospital-based
IPFs Contract Labor costs are based on
line 3 of this same worksheet. As
previously noted, for FY 2012 Medicare
cost report data, while there were
providers that did report data on
Worksheet S–3, part V, many providers
did not complete this worksheet.
However, we believe we had a large
enough sample to enable us to produce
a reasonable Contract Labor cost weight.
We continue to encourage all providers
to report these data on the Medicare cost
report.
We received one comment on our
methodology for calculating Contract
Labor costs that was similar to the
comments we received regarding
Employee Benefits.
Comment: Two commenters
encouraged CMS to review the Dobson/
DaVanzo report (noted above), which
noted CMS’ proposal to change the
methodology for determining Contract
Labor cost weight from the methodology
used to derive the 2008-based RPL
market basket. Under the RPL
methodology, CMS used data from IPPS
hospitals as a proxy for determining
these costs for RPL facilities. The report
expressed concern for the low response
rate and its potential impact on the
contract labor cost weight.
Response: We appreciate and
understand the commenters’ concern for
the methodology change from the RPL
market basket. The RPL market basket
contract labor costs were calculated by
multiplying the RPL market basket
Wages and Salaries cost weight by the
IPPS contract labor ratio. The IPPS
contract labor ratio was equal to the
2006-based IPPS market basket Contract
Labor cost weight divided by the 2006based IPPS market basket Wages and
Salaries cost weight. We implemented
this methodology as the Medicare cost
report available at that time did not
capture contract labor costs for IPFs
while CMS Form 2552–10, used for the
2012-based IPF market basket, collects
contract labor costs data for freestanding
and hospital-based IPFs. As stated in the
proposed rule (80 FR 25019), we
believed we had a large enough sample
to produce a reasonable Contract Labor
cost weight as we found that when we
recalculated the cost weight after
weighting to reflect the characteristics
(by urban/rural and ownership type) of
the universe of IPF providers
(freestanding and hospital-based), it did
not have a material effect on the
resulting cost weight (less than 0.2
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percentage point). In addition, we
would note that the 2012-based IPF cost
report data produces a contract labor
ratio that is similar to the contract labor
ratio using the 2010-based IPPS market
basket with a contract labor ratio of 4
percent.
Final Decision: We are finalizing our
methodology for calculating Contract
Labor costs as proposed.
Pharmaceuticals Costs
For freestanding IPFs, we proposed to
calculate pharmaceuticals costs using
non-salary costs reported on Worksheet
A, column 7 less Worksheet A, column
1 for the pharmacy cost center (line 15)
and drugs charged to patients cost
center (line 73).
For hospital-based IPFs, we proposed
to calculate pharmaceuticals costs
causing a portion of the non-salary
pharmacy costs and a portion of the
non-salary drugs charged to patient
costs reported for the total facility. Nonsalary pharmacy costs attributable to the
hospital-based IPF are calculated by
multiplying total pharmacy costs
attributable to the hospital-based IPF (as
reported on Worksheet B, column 15,
line 40) by the ratio of total non-salary
pharmacy costs (Worksheet A, column
2, line 15) to total pharmacy costs (sum
of Worksheet A, column 1 and 2 for line
15) for the total facility. Non-salary
drugs charged to patient costs
attributable to the hospital-based IPF are
calculated by multiplying total nonsalary drugs charged to patient costs
(Worksheet B, part I, column 0, line 73
plus Worksheet B, part I, column 15,
line 73 less Worksheet A, column 1, line
73) for the total facility by the ratio of
Medicare drugs charged to patient
ancillary costs for the IPF unit (as
reported on Worksheet D–3 for IPF
subproviders, line 73, column 3) to total
Medicare drugs charged to patients
ancillary costs for the total facility
(equal to the sum of Worksheet D–3,
line 73, column 3, for all relevant PPS
(that is, IPPS, IRF, IPF and SNF)). We
did not receive any specific comments
on our proposed methodology for
calculating Pharmaceuticals costs for
freestanding and hospital-based IPFs.
Final Decision: We are finalizing our
methodology for calculating
Pharmaceuticals costs as proposed.
Professional Liability Insurance (PLI)
Costs
For freestanding IPFs, we proposed
that PLI costs (often referred to as
malpractice costs) are equal to
premiums, paid losses and selfinsurance costs reported on Worksheet
S–2, line 118, columns 1 through 3.
For hospital-based IPFs, we proposed
to assume that the PLI weight for the
total facility is similar to the hospitalbased IPF unit since the only data
reported on this worksheet is for the
entire facility. Therefore, hospital-based
IPF PLI costs are equal to total facility
PLI (as reported on Worksheet S–2, line
118, columns 1 through 3) divided by
total facility costs (as reported on
Worksheet A, line 200) times hospitalbased IPF Medicare allowable total
costs. We did not receive any specific
comments on our proposed
methodology for calculating PLI costs
for freestanding and hospital-based
IPFs.
Final Decision: We are finalizing our
methodology for calculating PLI costs as
proposed.
Capital Costs
For freestanding IPFs, capital costs are
equal to Medicare allowable capital
costs as reported on Worksheet B, Part
II, column 26.
For hospital-based IPFs, capital costs
are equal to IPF routine inpatient capital
costs (as reported on Worksheet B, part
II, column 26, line 40) and a portion of
IPF ancillary capital costs. We calculate
the portion of ancillary capital costs
attributable to the hospital-based IPF for
a given cost center by multiplying total
facility ancillary capital costs for the
specific ancillary cost center (as
reported on Worksheet B, Part II,
column 26) by the ratio of IPF Medicare
46663
ancillary costs for the cost center (as
reported on Worksheet D–3, column 3
for IPF subproviders) to total Medicare
ancillary costs for the cost center (equal
to the sum of Worksheet D–3, column 3
for all relevant PPS (that is, IPPS, IRF,
IPF and SNF)). We did not receive any
specific comments on our proposed
methodology for calculating Capitalrelated costs for freestanding and
hospital-based IPFs.
Final Decision: We are finalizing our
methodology for calculating Capitalrelated costs as proposed.
ii. Final Major Cost Category
Computation
After we derive costs for the six major
cost categories for each provider using
the Medicare cost report data as
described above, we proposed to trim
the data for outliers based on the
following steps. First, we divide the
costs for each of the six categories by
total Medicare allowable costs
calculated for the provider to obtain cost
weights for the universe of IPF
providers. Next, we apply a mutually
exclusive top and bottom 5 percent trim
for each cost weight to remove outliers.
After the outliers have been removed,
we sum the costs for each category
across all remaining providers. We then
divide this by the sum of total Medicare
allowable costs across all remaining
providers to obtain a cost weight for the
proposed 2012-based IPF market basket
for the given category. Finally, we
calculate the residual ‘‘All Other’’ cost
weight that reflects all remaining costs
that are not captured in the six cost
categories listed above. See Table 1 for
the resulting cost weights for these
major cost categories that we obtain
from the Medicare cost reports. In Table
1, we provide the proposed cost
weights, as well as the final major cost
weights after implementing the
methodological changes to the
calculation of the Wages and Salaries
and Employee Benefits costs as
described above.
TABLE 1—MAJOR COST CATEGORIES AS DERIVED FROM MEDICARE COST REPORTS
Proposed 2012based IPF
(percent)
asabaliauskas on DSK5VPTVN1PROD with RULES
Major cost categories
Wages and Salaries ..................................................................................................
Employee Benefits 1 ...................................................................................................
Contract Labor 1 .........................................................................................................
Professional Liability Insurance (Malpractice) ...........................................................
Pharmaceuticals ........................................................................................................
Capital ........................................................................................................................
All Other .....................................................................................................................
Final 2012based IPF
(percent)
50.8
13.0
1.4
1.1
4.8
7.0
22.0
51.0
13.1
1.4
1.1
4.8
7.0
21.6
2008-Based
RPL
(percent)
47.4
12.3
2.6
0.8
6.5
8.4
22.0
Note: Total may not sum to 100 due to rounding.
1 Due to the lack of Medicare cost report data, the Employee Benefits and Contract Labor cost weights in the 2008-based RPL market basket
were based on the IPPS market basket.
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As discussed in section III.A.3.i of
this final rule, we made revisions to our
proposed methodology for calculating
Wages and Salaries costs for the IPF
market basket based on public
comments. The total effect of this
methodology change on the 2012-based
IPF market basket Wages and Salaries
aggregate cost weight (which reflects
freestanding and hospital-based IPFs) is
an increase of 0.2 percentage point from
the proposed 2012-based IPF market
basket Wages and Salaries cost weight of
51.0 percent. This net overall effect can
be broken down into two components
including: (1) The inclusion of overhead
wages and salaries attributable to the
ancillary departments for hospital-based
IPFs (resulting in an increase of 2.2
percentage points to the aggregate
Wages and Salaries cost weight) and (2)
our change in methodology for deriving
the overhead wages and salaries
attributable to the hospital-based IPF
routine inpatient unit (resulting in a
decrease of 1.9 percentage points to the
Wages and Salaries cost weight). The
Wages and Salaries cost weight obtained
directly from the Medicare cost reports
for the final 2012-based IPF market
basket is approximately 3 percentage
points higher than the Wages and
Salaries cost weight for the 2008-based
RPL market basket. This is the result of
freestanding IPFs having a larger
percentage of costs attributable to labor
than freestanding IRF and long-term
care hospitals. These latter facilities
were included in the 2008-based RPL
market basket.
Also as discussed in section
III.A.3.a.i. of this final rule, we made
revisions to our calculation of Employee
Benefits costs based on public comment.
The total effect of this methodology
change on the 2012-based IPF market
basket Employee Benefits aggregate cost
weight (which reflects freestanding and
hospital-based IPFs) is an increase of
about 0.1 percentage point from the
proposed 2012-based IPF market basket
Employee Benefits cost weight of 13.1
percent. This net overall effect can be
broken down into two components
including: (1) The inclusion of overhead
employee benefits attributable to the
ancillary departments (resulting in an
increase of 0.8 percentage point to the
aggregate Employee Benefits cost
weight) and (2) changes to the overhead
employee benefits attributable to the
hospital-based IPF routine inpatient
unit as a result of changes to the routine
overhead wages and salaries for the
hospital-based IPF (resulting in a
decrease of 0.7 percentage point to the
Employee Benefits cost weight).
As we did for the 2008-based RPL
market basket, we proposed to allocate
the Contract Labor cost weight to the
Wages and Salaries and Employee
Benefits cost weights based on their
relative proportions under the
assumption that contract labor costs are
comprised of both wages and salaries
and employee benefits. The Contract
Labor allocation proportion for Wages
and Salaries is equal to the Wages and
Salaries cost weight as a percent of the
sum of the Wages and Salaries cost
weight and the Employee Benefits cost
weight. For the proposed rule, this
rounded percentage was 80 percent;
therefore, we proposed to allocate 80
percent of the Contract Labor cost
weight to the Wages and Salaries cost
weight and 20 percent to the Employee
Benefits cost weight. Table 2 shows the
Wages and Salaries and Employee
Benefit cost weights after Contract Labor
cost weight allocation for both the
proposed 2012-based IPF market basket
and 2008-based RPL market basket. We
did not receive any public comments on
our methodology for allocating Contract
Labor to the Wages and Salaries and
Employee Benefits cost weights.
Final Decision: We are finalizing our
methodology for allocating Contract
Labor as proposed. For the final rule,
after making changes to the Wages and
Salaries and Employee Benefits cost
weights, the rounded percentage
remains 80 percent. Therefore, we are
finalizing our methodology as proposed
and allocating 80 percent of the Contract
Labor cost weight to the Wages and
Salaries cost weight and 20 percent to
the Employee Benefits cost weight.
TABLE 2—WAGES AND SALARIES AND EMPLOYEE BENEFITS COST WEIGHTS AFTER CONTRACT LABOR ALLOCATION
Proposed 2012based IPF
Major cost categories
asabaliauskas on DSK5VPTVN1PROD with RULES
Wages and Salaries ..................................................................................................
Employee Benefits .....................................................................................................
iii. Derivation of the Detailed Operating
Cost Weights
To further divide the ‘‘All Other’’
residual cost weight estimated from the
FY 2012 Medicare Cost Report data into
more detailed cost categories, we
proposed to use the 2007 Benchmark
Input-Output (I–O) ‘‘Use Tables/Before
Redefinitions/Purchaser Value’’ for
North American Industry Classification
System (NAICS) 622000 Hospitals,
published by the Bureau of Economic
Analysis (BEA). These data are publicly
available at http://www.bea.gov/
industry/io_annual.htm.
The BEA Benchmark I–O data are
scheduled for publication every 5 years
with the most recent data available for
2007. The 2007 Benchmark I–O data are
derived from the 2007 Economic Census
and are the building blocks for BEA’s
economic accounts. Thus, they
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51.9
13.3
represent the most comprehensive and
complete set of data on the economic
processes or mechanisms by which
output is produced and distributed.3
BEA also produces Annual I–O
estimates; however, while based on a
similar methodology, these estimates
reflect less comprehensive and less
detailed data sources and are subject to
revision when benchmark data becomes
available. Instead of using the less
detailed Annual I–O data, we proposed
to inflate the 2007 Benchmark I–O data
forward to 2012 by applying the annual
price changes from the respective price
proxies to the appropriate market basket
cost categories that are obtained from
the 2007 Benchmark I–O data. We
repeat this practice for each year. We
3 http://www.bea.gov/papers/pdf/IOmanual_
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Final 2012-based
IPF
52.1
13.4
2008-Based RPL
49.4
12.8
then calculated the cost shares that each
cost category represents of the inflated
2012 data. These resulting 2012 cost
shares are applied to the All Other
residual cost weight to obtain the
detailed cost weights for the 2012-based
IPF market basket. For example, the cost
for Food: Direct Purchases represents
6.5 percent of the sum of the ‘‘All
Other’’ 2007 Benchmark I–O Hospital
Expenditures inflated to 2012; therefore,
the Food: Direct Purchases cost weight
represents 6.5 percent of the 2012-based
IPF market basket’s ‘‘All Other’’ cost
category (21.6 percent), yielding a
‘‘final’’ Food: Direct Purchases cost
weight of 1.4 percent in the proposed
2012-based IPF market basket (0.065 *
21.6 percent = 1.4 percent).
Using this methodology, we proposed
to derive eighteen detailed IPF market
basket cost category weights from the
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2012-based IPF market basket residual
cost weight (21.6 percent). These
categories are: (1) Electricity, (2) Fuel,
Oil, and Gasoline (3) Water & Sewerage
(4) Food: Direct Purchases, (5) Food:
Contract Services, (6) Chemicals, (7)
Medical Instruments, (8) Rubber &
Plastics, (9) Paper and Printing
Products, (10) Miscellaneous Products,
(11) Professional Fees: Labor-related,
(12) Administrative and Facilities
Support Services, (13) Installation,
Maintenance, and Repair, (14) All Other
Labor-related Services, (15) Professional
Fees: Nonlabor-related, (16) Financial
Services, (17) Telephone Services, and
(18) All Other Nonlabor-related
Services. We did not receive any
specific comments on our proposed
methodology of deriving detailed
market basket cost category weights
using the BEA Benchmark I–O data.
Final Decision: We are finalizing our
methodology for deriving the detailed
market basket cost weights as proposed.
However, since the methodological
change to the derivation of Wages and
Salaries and Employee Benefits results
in a compensation cost weight that is
slightly higher than proposed, the
residual cost share weight is slightly
lower than proposed. Therefore, we are
finalizing the residual cost share weight
of 21.6 percent rather than the proposed
22.0 percent. We would note that the
residual All-Other cost weight was
calculated using three decimal places
and then rounded to a tenth of a
percentage point for presentation
purposes. Since this residual is used to
calculate the detailed cost category
weights using the BEA I–O data, these
detailed cost category weights would
also have slight revisions. These
revisions round to no more than 0.1
percentage point.
asabaliauskas on DSK5VPTVN1PROD with RULES
iv. Derivation of the Detailed Capital
Cost Weights
As described in section III.A.3.a.i. of
the proposed rule, we proposed a
Capital-Related cost weight of 7.0
percent as obtained from the FY 2012
Medicare cost reports for freestanding
and hospital-based IPF providers. We
proposed to separate this total CapitalRelated cost weight into more detailed
cost categories.
Using FY 2012 Medicare cost reports,
we are able to group Capital-Related
costs into the following categories:
Depreciation, Interest, Lease, and Other
Capital-Related costs. For each of these
categories, we proposed to determine
separately for hospital-based IPFs and
freestanding IPFs what proportion of
total capital-related costs the category
represent.
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For freestanding IPFs, we proposed to
derive the proportions for Depreciation,
Interest, Lease, and Other Capitalrelated costs using the data reported by
the IPF on Worksheet A–7, which is
similar to the methodology used for the
2008-based RPL market basket.
For hospital-based IPFs, data for these
four categories are not reported
separately for the subprovider;
therefore, we proposed to derive these
proportions using data reported on
Worksheet A–7 for the total facility. We
are assuming the cost shares for the
overall hospital are representative for
the hospital-based subprovider IPF unit.
For example, if depreciation costs make
up 60 percent of total capital costs for
the entire facility, we believe it is
reasonable to assume that the hospitalbased IPF will also have a 60 percent
proportion because it is a subprovider
unit contained within the total facility.
In order to combine each detailed
capital cost weight for freestanding and
hospital-based IPFs into a single capital
cost weight for the 2012-based IPF
market basket, we proposed to weight
together the shares for each of the
categories (Depreciation, Interest, Lease,
and Other Capital-related costs) based
on the share of total capital costs each
provider type represents of the total
capital costs for all IPFs for 2012.
Applying this methodology results in
proportions of total capital-related costs
for Depreciation, Interest, Lease and
Other Capital-related costs that are
representative of the universe of IPF
providers.
Next, we proposed to allocate lease
costs across each of the remaining
detailed capital-related cost categories
as was done in the 2008-based RPL
market basket. This will result in 3
primary capital-related cost categories
in the 2012-based IPF market basket:
Depreciation, Interest, and Other
Capital-Related costs. Lease costs are
unique in that they are not broken out
as a separate cost category in the 2012based IPF market basket, but rather we
proposed to proportionally distribute
these costs among the cost categories of
Depreciation, Interest, and Other
Capital-Related, reflecting the
assumption that the underlying cost
structure of leases is similar to that of
capital-related costs in general. As was
done under the 2008-based RPL market
basket, we proposed to assume that 10
percent of the lease costs as a proportion
of total capital-related costs represents
overhead and assign those costs to the
Other Capital-Related cost category
accordingly. We distributed the
remaining lease costs proportionally
across the 3 cost categories
(Depreciation, Interest, and Other
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46665
Capital-Related) based on the proportion
that these categories comprise of the
sum of the Depreciation, Interest, and
Other Capital-related cost categories
(excluding lease expenses). This is the
same methodology used for the 2008based RPL market basket. The allocation
of these lease expenses are shown in
Table 3 below.
Finally, we proposed to further divide
the Depreciation and Interest cost
categories. We proposed to separate
Depreciation into the following two
categories: (1) Building and Fixed
Equipment; and (2) Movable Equipment;
and proposing to separate Interest into
the following two categories: (1)
Government/Nonprofit; and (2) Forprofit.
To disaggregate the Depreciation cost
weight, we need to determine the
percent of total Depreciation costs for
IPFs that is attributable to Building and
Fixed Equipment, which we hereafter
refer to as the ‘‘fixed percentage.’’ For
the 2012-based IPF market basket, we
proposed to use slightly different
methods to obtain the fixed percentages
for hospital-based IPFs compared to
freestanding IPFs.
For freestanding IPFs, we proposed to
use depreciation data from Worksheet
A–7 of the FY 2012 Medicare cost
reports, similar to the methodology used
for the 2008-based RPL market basket.
However, for hospital-based IPFs, we
determined that the fixed percentage for
the entire facility may not be
representative of the IPF subprovider
unit due to the entire facility likely
employing more sophisticated movable
assets that are not utilized by the
hospital-based IPF. Therefore, for
hospital-based IPFs, we proposed to
calculate a fixed percentage using: (1)
Building and fixture capital costs
allocated to the subprovider unit as
reported on Worksheet B, part I line 40;
and (2) building and fixture capital costs
for the top five ancillary cost centers
utilized by hospital-based IPFs. We
proposed to then weight these two fixed
percentages (routine inpatient and
ancillary) using the proportion that each
capital cost type represents of total
capital costs in the proposed 2012-based
IPF market basket. We then proposed to
weight the fixed percentages for
hospital-based and freestanding IPFs
together using the proportion of total
capital costs each provider type
represents.
To disaggregate the Interest cost
weight, we need to determine the
percent of total interest costs for IPFs
that are attributable to government and
nonprofit facilities, which we hereafter
refer to as the ‘‘nonprofit percentage.’’
For the IPF market basket, we proposed
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to use interest costs data from
Worksheet A–7 of the FY 2012 Medicare
cost reports for both freestanding and
hospital-based IPFs, similar to the
methodology used for the 2008-based
RPL market basket. We determined the
percent of total interest costs that are
attributed to government and nonprofit
IPFs separately for hospital-based and
freestanding IPFs. We then proposed to
weight the nonprofit percentages for
hospital-based and freestanding IPFs
together using the proportion of total
capital costs each provider type
represents.
Table 3 provides the detailed capital
cost shares obtained from the Medicare
cost reports. Ultimately, these detailed
capital cost shares were applied to the
total Capital-Related cost weight
determined in section III.A.3.a.i. of the
proposed rule to split out the total
weight of 7.0 percent into more detailed
cost categories and weights. We did not
receive any specific comments on our
proposed methodology for calculating
the detailed capital cost weights for the
2012-based IPF market basket.
Final Decision: We are finalizing our
methodology for deriving the detailed
capital cost weights as proposed.
Therefore, the detailed capital cost
weights for the final 2012-based IPF
market basket contained in Table 3 are
unchanged from the proposed rule.
TABLE 3—DETAILED CAPITAL COST WEIGHTS FOR THE PROPOSED 2012-BASED IPF MARKET BASKET
Cost shares obtained
from Medicare cost
reports
(percent)
Depreciation .............................................................................................................................
Building and Fixed Equipment .................................................................................................
Movable Equipment .................................................................................................................
Interest .....................................................................................................................................
Government/Nonprofit ..............................................................................................................
For Profit ..................................................................................................................................
Lease .......................................................................................................................................
Other ........................................................................................................................................
v. 2012-Based IPF Market Basket Cost
Categories and Weights
As stated in section III.A.3.i of this
final rule, we are revising our
methodology for deriving Wages and
Salaries and Employee Benefit cost
weights based on public comments. The
methodological changes results in an
increase of the Wages and Salaries and
Employee Benefit cost weights of 0.2
percentage point and 0.1 percentage
point, respectively. As a result of these
methodology changes, the residual AllOther cost category was revised down
0.3 percentage point. Since this residual
is used to calculate the detailed cost
category weights using the BEA I–O
Proposed detailed capital cost shares after
allocation of lease expenses
(percent)
64
46
19
15
12
2
15
6
75
53
22
17
14
3
n/a
8
data, these cost category weights would
also have slight revisions. These
revisions round to no more than 0.1
percentage point.
Table 4 shows the cost categories and
weights for the proposed 2012-based IPF
market basket, final 2012-based IPF
market based on public comments, and
the 2008-based RPL market basket.
TABLE 4—2012-BASED IPF COST WEIGHTS COMPARED TO 2008-BASED RPL COST WEIGHTS
Proposed 2012based IPF cost
weight
asabaliauskas on DSK5VPTVN1PROD with RULES
Cost category
Total ...........................................................................................................................
Compensation .....................................................................................................
Wages and Salaries ....................................................................................
Employee Benefits ......................................................................................
Utilities ................................................................................................................
Electricity .....................................................................................................
Fuel, Oil, and Gasoline ...............................................................................
Water & Sewerage ......................................................................................
Professional Liability Insurance ..........................................................................
Malpractice ..................................................................................................
All Other Products and Services ........................................................................
All Other Products ..............................................................................................
Pharmaceuticals ..........................................................................................
Food: Direct Purchases ...............................................................................
Food: Contract Services ..............................................................................
Chemicals ....................................................................................................
Medical Instruments ....................................................................................
Rubber & Plastics ........................................................................................
Paper and Printing Products .......................................................................
Apparel ........................................................................................................
Machinery and Equipment ..........................................................................
Miscellaneous Products ..............................................................................
All Other Services ...............................................................................................
Labor-Related Services ......................................................................................
Professional Fees: Labor-related ................................................................
Administrative and Facilities Support Services ...........................................
Installation, Maintenance, and Repair .........................................................
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Final 2012-based
IPF cost weight
100.0
65.2
51.9
13.3
1.8
0.8
0.9
0.1
1.1
1.1
25.0
11.7
4.8
1.4
0.9
0.6
1.9
0.5
1.0
n/a
n/a
0.7
13.3
6.7
2.9
0.7
1.6
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100.0
65.5
52.1
13.4
1.7
0.8
0.9
0.1
1.1
1.1
24.6
11.5
4.8
1.4
0.9
0.6
1.9
0.5
0.9
n/a
n/a
0.6
13.1
6.6
2.9
0.7
1.6
05AUR2
2008-Based RPL
cost weight
100.0
62.3
49.4
12.8
1.6
1.1
0.4
0.1
0.8
0.8
27.0
15.6
6.5
3.0
0.4
1.1
1.8
1.1
1.0
0.2
0.1
0.3
11.4
4.7
2.1
0.4
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46667
TABLE 4—2012-BASED IPF COST WEIGHTS COMPARED TO 2008-BASED RPL COST WEIGHTS—Continued
Proposed 2012based IPF cost
weight
Cost category
All Other: Labor-related Services ................................................................
Nonlabor-Related Services .................................................................................
Professional Fees: Nonlabor-related ...........................................................
Financial services ......................................................................................................
Telephone Services ...................................................................................................
Postage ......................................................................................................................
All Other: Nonlabor-related Services .........................................................................
Capital-Related Costs .........................................................................................
Depreciation ........................................................................................................
Fixed Assets ................................................................................................
Movable Equipment .....................................................................................
Interest Costs .....................................................................................................
Government/Nonprofit .................................................................................
For Profit ......................................................................................................
Other Capital-Related Costs ..............................................................................
Other Capital-Related Costs .......................................................................
Final 2012-based
IPF cost weight
1.5
6.6
2.6
2.3
0.6
n/a
1.1
7.0
5.2
3.7
1.5
1.2
1.0
0.2
0.6
0.6
1.5
6.5
2.6
2.3
0.6
n/a
1.1
7.0
5.2
3.7
1.5
1.2
1.0
0.2
0.6
0.6
2008-Based RPL
cost weight
2.1
6.7
4.2
0.9
0.4
0.6
0.6
8.4
5.5
3.3
2.2
2.0
0.7
1.3
0.9
0.9
Note: Totals may not sum due to rounding.
We proposed that the 2012-based IPF
market basket does not include separate
cost categories for Apparel, Machinery &
Equipment, and Postage. Due to the
small weights associated with these
detailed categories and relatively stable
price growth in the applicable price
proxy, we proposed to include Apparel
and Machinery & Equipment in the
Miscellaneous Products cost category
and Postage in the All-Other Nonlaborrelated Services. We note that these
Machinery & Equipment expenses are
for equipment that is paid for in a given
year and not depreciated over the assets’
useful life. Depreciation expenses for
movable equipment are reflected in the
Capital-related costs of the 2012-based
IPF market basket. For the 2012-based
IPF market basket, we also proposed to
include a separate cost category for
Installation, Maintenance, and Repair.
We did not receive any public
comments on our proposed list of
detailed cost categories for the 2012based IPF market basket.
Final Decision: We are finalizing our
list of detailed cost categories as
proposed.
asabaliauskas on DSK5VPTVN1PROD with RULES
b. Selection of Price Proxies
After developing the cost weights for
the 2012-based IPF market basket, we
proposed to select the most appropriate
wage and price proxies currently
available to represent the rate of price
change for each expenditure category.
For the majority of the cost weights, we
base the price proxies on Bureau of
Labor Statistics (BLS) data and grouped
them into one of the following BLS
categories:
• Employment Cost Indexes.
Employment Cost Indexes (ECIs)
measure the rate of change in
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employment wage rates and employer
costs for employee benefits per hour
worked. These indexes are fixed-weight
indexes and strictly measure the change
in wage rates and employee benefits per
hour. ECIs are superior to Average
Hourly Earnings (AHE) as price proxies
for input price indexes because they are
not affected by shifts in occupation or
industry mix, and because they measure
pure price change and are available by
both occupational group and by
industry. The industry ECIs are based
on the North American Classification
System (NAICS) and the occupational
ECIs are based on the Standard
Occupational Classification System
(SOC).
• Producer Price Indexes. Producer
Price Indexes (PPIs) measure price
changes for goods sold in other than
retail markets. PPIs are used when the
purchases of goods or services are made
at the wholesale level.
• Consumer Price Indexes. Consumer
Price Indexes (CPIs) measure change in
the prices of final goods and services
bought by consumers. CPIs are only
used when the purchases are similar to
those of retail consumers rather than
purchases at the wholesale level, or if
no appropriate PPIs are available.
We evaluated the price proxies using
the criteria of reliability, timeliness,
availability, and relevance:
• Reliability. Reliability indicates that
the index is based on valid statistical
methods and has low sampling
variability. Widely accepted statistical
methods ensure that the data were
collected and aggregated in a way that
can be replicated. Low sampling
variability is desirable because it
indicates that the sample reflects the
typical members of the population.
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(Sampling variability is variation that
occurs by chance because only a sample
was surveyed rather than the entire
population.)
• Timeliness. Timeliness implies that
the proxy is published regularly,
preferably at least once a quarter. The
market baskets are updated quarterly
and, therefore, it is important for the
underlying price proxies to be up-todate, reflecting the most recent data
available. We believe that using proxies
that are published regularly (at least
quarterly, whenever possible) helps to
ensure that we are using the most recent
data available to update the market
basket. We strive to use publications
that are disseminated frequently,
because we believe that this is an
optimal way to stay abreast of the most
current data available.
• Availability. Availability means that
the proxy is publicly available. We
prefer that our proxies are publicly
available because this will help ensure
that our market basket updates are as
transparent to the public as possible. In
addition, this enables the public to be
able to obtain the price proxy data on
a regular basis.
• Relevance. Relevance means that
the proxy is applicable and
representative of the cost category
weight to which it is applied. The CPIs,
PPIs, and ECIs that we selected meet
these criteria. Therefore, we believe that
they continue to be the best measure of
price changes for the cost categories to
which they would be applied.
Table 6 lists all price proxies that we
proposed to use for the 2012-based IPF
market basket. Below is a detailed
explanation of the price proxies we are
finalizing for each cost category weight.
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i. Price Proxies for the Operating Portion
of the 2012-Based IPF Market Basket
Wages and Salaries
To measure wage price growth in the
proposed 2012-based IPF market basket,
we proposed to apply a proxy blend
based on six occupational subcategories
within the Wages and Salaries category,
which would reflect the IPF
occupational mix. There is not a
published wage proxy for IPF workers.
The 2008-based RPL market basket uses
the ECI for Wages and Salaries for All
Civilian workers in Hospitals (BLS
series code #CIU1026220000000I) to
proxy these expenses.
We proposed to use the National
Industry-Specific Occupational
Employment and Wage estimates for
North American Industrial
Classification System (NAICS) 622200,
Psychiatric & Substance Abuse
Hospitals, published by the BLS Office
of Occupational Employment Statistics
(OES), as the data source for the wage
cost shares in the wage proxy blend. We
used OES’ May 2012 data. Detailed
information on the methodology for the
national industry-specific occupational
employment and wage estimates survey
can be found athttp://www.bls.gov/oes/
current/oes_tec.htm.
Based on the OES data, there are six
wage subcategories: Management;
NonHealth Professional and Technical;
Health Professional and Technical;
Health Service; NonHealth Service; and
Clerical. Table 5 lists the 2012
occupational assignments for the six
wage subcategories.
TABLE 5—2012 OCCUPATIONAL ASSIGNMENTS FOR IPF WAGE BLEND
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2012 Occupational groupings
Group 1 ............................................................................................................
11–0000 ...........................................................................................................
Group 2 ............................................................................................................
13–0000 ...........................................................................................................
15–0000 ...........................................................................................................
17–0000 ...........................................................................................................
19–0000 ...........................................................................................................
23–0000 ...........................................................................................................
25–0000 ...........................................................................................................
27–0000 ...........................................................................................................
Group 3 ............................................................................................................
29–1021 ...........................................................................................................
29–1031 ...........................................................................................................
29–1051 ...........................................................................................................
29–1062 ...........................................................................................................
29–1063 ...........................................................................................................
29–1069 ...........................................................................................................
29–1071 ...........................................................................................................
29–1111 ...........................................................................................................
29–1122 ...........................................................................................................
29–1123 ...........................................................................................................
29–1125 ...........................................................................................................
29–1126 ...........................................................................................................
29–1127 ...........................................................................................................
29–1129 ...........................................................................................................
29–1199 ...........................................................................................................
Group 4 ............................................................................................................
21–0000 ...........................................................................................................
29–2011 ...........................................................................................................
29–2012 ...........................................................................................................
29–2021 ...........................................................................................................
29–2032 ...........................................................................................................
29–2034 ...........................................................................................................
29–2041 ...........................................................................................................
29–2051 ...........................................................................................................
29–2052 ...........................................................................................................
29–2054 ...........................................................................................................
29–2061 ...........................................................................................................
29–2071 ...........................................................................................................
29–2099 ...........................................................................................................
29–9012 ...........................................................................................................
29–9099 ...........................................................................................................
31–0000 ...........................................................................................................
Group 5 ............................................................................................................
33–0000 ...........................................................................................................
35–0000 ...........................................................................................................
37–0000 ...........................................................................................................
39–0000 ...........................................................................................................
41–0000 ...........................................................................................................
47–0000 ...........................................................................................................
49–0000 ...........................................................................................................
51–0000 ...........................................................................................................
53–0000 ...........................................................................................................
Group 6 ............................................................................................................
43–0000 ...........................................................................................................
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Management.
Management Occupations.
NonHealth Professional & Technical.
Business and Financial Operations Occupations.
Computer and Mathematical Science Occupations.
Architecture and Engineering Occupations.
Life, Physical, and Social Science Occupations.
Legal Occupations.
Education, Training, and Library Occupations.
Arts, Design, Entertainment, Sports, and Media Occupations.
Health Professional & Technical.
Dentists, General.
Dietitians and Nutritionists.
Pharmacists.
Family and General Practitioners.
Internists, General.
Physicians and Surgeons, All Other.
Physician Assistants.
Registered Nurses.
Occupational Therapists.
Physical Therapists.
Recreational Therapists.
Respiratory Therapists.
Speech-Language Pathologists.
Therapists, All Other.
Health Diagnosing and Treating Practitioners, All Other.
Health Service.
Community and Social Services Occupations.
Medical and Clinical Laboratory Technologists.
Medical and Clinical Laboratory Technicians.
Dental Hygienists.
Diagnostic Medical Sonographers.
Radiologic Technologists and Technicians.
Emergency Medical Technicians and Paramedics.
Dietetic Technicians.
Pharmacy Technicians.
Respiratory Therapy Technicians.
Licensed Practical and Licensed Vocational Nurses.
Medical Records and Health Information Technicians.
Health Technologists and Technicians, All Other.
Occupational Health and Safety Technicians.
Healthcare Practitioner and Technical Workers, All Other.
Healthcare Support Occupations.
NonHealth Service.
Protective Service Occupations.
Food Preparation and Serving Related Occupations.
Building and Grounds Cleaning and Maintenance Occupations.
Personal Care and Service Occupations.
Sales and Related Occupations.
Construction and Extraction Occupations.
Installation, Maintenance, and Repair Occupations.
Production Occupations.
Transportation and Material Moving Occupations.
Clerical.
Office and Administrative Support Occupations.
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calculated the proportion of each
group’s expenditures relative to the total
expenditures of all six groups. These
proportions, listed in Table 5, represent
the weights used in the wage proxy
blend. We then proposed to use the
published wage proxies in Table 6 for
Total expenditures by occupation
(that is, occupational assignment) were
calculated by taking the OES number of
employees multiplied by the OES
annual average salary. These
expenditures were aggregated based on
the six groups in Table 6. We next
46669
each of the six groups (that is, wage
subcategories) as we believe these six
price proxies are the most technically
appropriate indices available to measure
the price growth of the Wages and
Salaries cost category in the proposed
2012-based IPF market basket.
TABLE 6—2012-BASED IPF MARKET BASKET WAGE PROXY BLEND
Wage subcategory
Wage blend
weight
Health Service ...............
36.2
Health Professional and
Technical.
NonHealth Service ........
33.5
NonHealth Professional
and Technical.
Management .................
7.3
Clerical ..........................
6.7
Total .......................
100.0
Price proxy
BLS Series ID
ECI for Wages and Salaries for All Civilian workers in Healthcare and Social Assistance.
ECI for Wages and Salaries for All Civilian workers in Hospitals ...............
9.2
ECI for Wages and Salaries for Private Industry workers in Service Occupations.
ECI for Wages and Salaries for Private Industry workers in Professional,
Scientific, and Technical Services.
ECI for Wages and Salaries for Private Industry workers in Management,
Business, and Financial.
ECI for Wages and Salaries for Private Industry workers in Office and
Administrative Support.
7.1
A comparison of the yearly changes
from FY 2012 to FY 2015 for the 2012based IPF wage blend and the 2008-
based RPL wage proxy is shown in
Table 7. The average annual increase in
the two price proxies is similar, and in
CIU1026200000000I
CIU1026220000000I
CIU2020000300000I
CIU2025400000000I
CIU2020000110000I
CIU2020000220000I
no year is the difference greater than 0.4
percentage point.
TABLE 7—FISCAL YEAR GROWTH IN THE 2012-BASED IPF WAGE PROXY BLEND AND 2008-BASED RPL WAGE PROXY
2012
2012-based IPF Proposed Wage Proxy Blend .......................................................................
2008-based RPL Wage Proxy .................................................................................................
1.6
1.5
2013
2014
1.6
1.5
1.6
1.5
2015
2.1
1.7
Average
2012–2015
1.7
1.6
Source: IHS Global Insight, Inc., 2nd Quarter 2015 forecast with historical data through 4th Quarter 2014.
We did not receive any comments on
our proposed Wages and Salaries price
proxy methodology.
Final Decision: We are finalizing the
use a blended Wages and Salaries price
proxy as proposed.
Benefits
For measuring benefits price growth
in the 2012-based IPF market basket, we
proposed to apply a benefits proxy
blend based on the same six
subcategories and the same six blend
weights used in the wage proxy blend.
These subcategories and blend weights
are listed in Table 8.
We proposed that the applicable
benefit ECIs be identical in industry
definition to the wage blend ECIs
selected for each of the six
subcategories. These benefit ECIs, listed
in Table 8, are not publically available.
Therefore, we calculated ‘‘ECIs for Total
Benefits’’ using publically available
‘‘ECIs for Total Compensation’’ for each
subcategory and the relative importance
of wages within that subcategory’s total
compensation. This is the same benefits
ECI methodology we implemented in
our IPPS, SNF, HHA, RPL, LTCH, and
ESRD market baskets. We believe the six
price proxies listed in Table 8 are the
most technically appropriate indices to
measure the price growth of the Benefits
cost category in the 2012-based IPF
market basket.
The current 2008-based RPL market
basket uses the ECI for Benefits for All
Civilian Workers in Hospitals to proxy
Benefit expenses.
TABLE 8—2012-BASED IPF MARKET BASKET BENEFITS PROXY BLEND
Wage blend
weight
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Wage subcategory
Health Service ..........................................
Health Professional and Technical ...........
NonHealth Service ....................................
NonHealth Professional and Technical ....
36.2
33.5
9.2
7.3
Management .............................................
7.1
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Price proxy
ECI for Total Benefits for All Civilian workers in Healthcare and Social Assistance.
ECI for Total Benefits for All Civilian workers in Hospitals.
ECI for Total Benefits for Private Industry workers in Service Occupations.
ECI for Total Benefits for Private Industry workers in Professional, Scientific, and
Technical Services.
ECI for Total Benefits for Private Industry workers in Management, Business, and
Financial.
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TABLE 8—2012-BASED IPF MARKET BASKET BENEFITS PROXY BLEND—Continued
Wage blend
weight
Wage subcategory
Clerical ......................................................
6.7
Total ...................................................
100.0
A comparison of the yearly changes
from FY 2012 to FY 2015 for the 2012based IPF benefit proxy blend and the
Price proxy
ECI for Total Benefits for Private Industry workers in Office and Administrative Support.
2008-based RPL benefit proxy is shown
in Table 9. The average annual increase
in the two price proxies is similar, and
in no year is the difference greater than
0.4 percentage point.
TABLE 9—FISCAL YEAR GROWTH IN THE 2012-BASED IPF BENEFIT PROXY BLEND AND 2008-BASED RPL BENEFIT
PROXY
2012
2012-based IPF Proposed Benefit Proxy Blend ......................................................................
2008-based RPL Benefit Proxy ...............................................................................................
2013
2.5
2.1
1.9
1.8
2014
2.0
2.1
2015
2.0
2.0
Average
2012–2015
2.1
2.0
Source: IHS Global Insight, Inc., 2nd Quarter 2015 forecast with historical data through 1st Quarter 2015
We did not receive any comments on
our proposed methodology and use of a
blended wage proxy index.
Final Decision: We are finalizing our
proposal to use a blended wage proxy.
Electricity
We proposed to use the PPI for
Commercial Electric Power (BLS series
code #WPU0542) to measure the price
growth of this cost category. This is the
same price proxy used in the 2008based RPL market basket.
asabaliauskas on DSK5VPTVN1PROD with RULES
Fuel, Oil, and Gasoline
We proposed to change the proxy
used for the Fuel, Oil, and Gasoline cost
category. The 2008-based RPL market
basket uses the PPI for Petroleum
Refineries (BLS series code #PCU32411–
32411) to proxy these expenses.
For the 2012-based IPF market basket,
we proposed to use a blend of the PPI
for Petroleum Refineries and the PPI
Commodity for Natural Gas (BLS series
code #WPU0531). Our analysis of the
Bureau of Economic Analysis’ 2007
Benchmark Input-Output data (use table
before redefinitions, purchaser’s value
for NAICS 622000 [Hospitals]), shows
that Petroleum Refineries expenses
accounts for approximately 70 percent
and Natural Gas accounts for
approximately 30 percent of the Fuel,
Oil, and Gasoline expenses. Therefore,
we proposed to blend using 70 percent
of the PPI for Petroleum Refineries (BLS
series code #PCU32411–32411) and 30
percent of the PPI Commodity for
Natural Gas (BLS series code
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#WPU0531). We believe that these 2
price proxies are the most technically
appropriate indices available to measure
the price growth of the Fuel, Oil, and
Gasoline cost category in the 2012-based
IPF market basket.
Water and Sewerage
We proposed to use the CPI for Water
and Sewerage Maintenance (BLS series
code #CUUR0000SEHG01) to measure
the price growth of this cost category.
This is the same proxy used in the 2008based RPL market basket.
Professional Liability Insurance
We proposed to use the CMS Hospital
Professional Liability Index to measure
changes in professional liability
insurance (PLI) premiums. To generate
this index, we collect commercial
insurance premiums for a fixed level of
coverage while holding non-price
factors constant (such as a change in the
level of coverage). This is the same
proxy used in the 2008-based RPL
market basket.
Pharmaceuticals
We proposed to use the PPI for
Pharmaceuticals for Human Use,
Prescription (BLS series code
#WPUSI07003) to measure the price
growth of this cost category. This is the
same proxy used in the 2008-based RPL
market basket.
Food: Direct Purchases
We proposed to use the PPI for
Processed Foods and Feeds (BLS series
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code #WPU02) to measure the price
growth of this cost category. This is the
same proxy used in the 2008-based RPL
market basket.
Food: Contract Purchases
We proposed to use the CPI for Food
Away From Home (BLS series code
#CUUR0000SEFV) to measure the price
growth of this cost category. This is the
same proxy used in the 2008-based RPL
market basket.
Chemicals
We proposed to use a four part
blended PPI composed of the PPI for
Industrial Gas Manufacturing (BLS
series code PCU325120325120P), the
PPI for Other Basic Inorganic Chemical
Manufacturing (BLS series code
#PCU32518–32518), the PPI for Other
Basic Organic Chemical Manufacturing
(BLS series code #PCU32519–32519),
and the PPI for Soap and Cleaning
Compound Manufacturing (BLS series
code #PCU32561–32561). We updated
the blend weights using 2007
Benchmark I–O data which, compared
to 2002 Benchmark I–O data, is
weighted more toward organic chemical
products and weighted less toward
inorganic chemical products.
Table 10 shows the weights for each
of the four PPIs used to create the
blended PPI. These are the same four
proxies used in the 2008-based RPL
market basket; however, the blended PPI
weights in the 2008-based RPL market
baskets were based on 2002 Benchmark
I–O data.
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TABLE 10—BLENDED CHEMICAL PPI WEIGHTS
Proposed
2012-based
IPF weights
(percent)
Name
PPI
PPI
PPI
PPI
for
for
for
for
Industrial Gas Manufacturing ..................................................................................................
Other Basic Inorganic Chemical Manufacturing .....................................................................
Other Basic Organic Chemical Manufacturing ........................................................................
Soap and Cleaning Compound Manufacturing .......................................................................
Medical Instruments
We proposed to use a blend for the
Medical Instruments cost category. The
2007 Benchmark Input-Output data
shows an approximate 50/50 split
between Surgical and Medical
Instruments and Medical and Surgical
Appliances and Supplies for this cost
category. Therefore, we blended
composed of 50 percent of the
commodity-based PPI for Surgical and
Medical Instruments (BLS code
#WPU1562) and 50 percent of the
commodity-based PPI for Medical and
Surgical Appliances and Supplies (BLS
code #WPU1563). The 2008-based RPL
market basket uses the single, higher
level PPI for Medical, Surgical, and
Personal Aid Devices (BLS series code
#WPU156).
Rubber and Plastics
We proposed to use the PPI for
Rubber and Plastic Products (BLS series
code #WPU07) to measure price growth
of this cost category. This is the same
proxy used in the 2008-based RPL
market basket.
We proposed to use the ECI for Total
Compensation for Private Industry
workers in Office and Administrative
Support (BLS series code
#CIU2010000220000I) to measure the
price growth of this category. This is the
same proxy used in the 2008-based RPL
market basket.
Installation, Maintenance, and Repair
We proposed to use the ECI for Total
Compensation for Civilian workers in
Installation, Maintenance, and Repair
(BLS series code #CIU1010000430000I)
to measure the price growth of this new
cost category. Previously these costs
were included in the All Other: Laborrelated Services category and were
proxied by the ECI for Total
Compensation for Private Industry
workers in Service Occupations (BLS
series code #CIU2010000300000I). We
believe that this index better reflects the
price changes of labor associated with
maintenance-related services and its
incorporation represents a technical
improvement to the market basket.
All Other: Labor-Related Services
Paper and Printing Products
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Administrative and Facilities Support
Services
We proposed to use the PPI for
Converted Paper and Paperboard
Products (BLS series code #WPU0915)
to measure the price growth of this cost
category. This is the same proxy used in
the 2008-based RPL market basket.
We proposed to use the ECI for Total
Compensation for Private Industry
workers in Service Occupations (BLS
series code #CIU2010000300000I) to
measure the price growth of this cost
category. This is the same proxy used in
the 2008-based RPL market basket.
Miscellaneous Products
Professional Fees: Nonlabor-Related
We proposed to use the PPI for
Finished Goods Less Food and Energy
(BLS series code #WPUSOP3500) to
measure the price growth of this cost
category. This is the same proxy used in
the 2008-based RPL market basket.
We proposed to use the ECI for Total
Compensation for Private Industry
workers in Professional and Related
(BLS series code #CIU2010000120000I)
to measure the price growth of this
category. This is the same proxy used in
the 2008-based RPL market basket.
Professional Fees: Labor-Related
Financial Services
We proposed to use the ECI for Total
Compensation for Private Industry
workers in Professional and Related
(BLS series code #CIU2010000120000I)
to measure the price growth of this
category. This is the same proxy used in
the 2008-based RPL market basket.
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We proposed to use the ECI for Total
Compensation for Private Industry
workers in Financial Activities (BLS
series code #CIU201520A000000I) to
measure the price growth of this cost
category. This is the same proxy used in
the 2008-based RPL market basket.
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32
17
45
6
2008-Based
RPL weights
(percent)
35
25
30
10
NAICS
325120
325180
325190
325610
Telephone Services
We proposed to use the CPI for
Telephone Services (BLS series code
#CUUR0000SEED) to measure the price
growth of this cost category. This is the
same proxy used in the 2008-based RPL
market basket.
All Other: Nonlabor-Related Services
We proposed to use the CPI for All
Items Less Food and Energy (BLS series
code #CUUR0000SA0L1E) to measure
the price growth of this cost category.
This is the same proxy used in the 2008based RPL market basket.
We did not receive any public
comments on our proposed selection of
price proxies.
Final Decision: We are finalizing our
selection of price proxies as proposed.
ii. Price Proxies for the Capital Portion
of the 2012-Based IPF Market Basket
Capital Price Proxies Prior to Vintage
Weighting
We proposed to apply the same price
proxies to the detailed capital-related
cost categories as were applied in the
2008-based RPL market basket, which
are provided in Table 12 and described
below. We also proposed to continue to
vintage weight the capital price proxies
for Depreciation and Interest in order to
capture the long-term consumption of
capital. This vintage weighting method
is similar to the method used for the
2008-based RPL market basket and is
described below.
We proposed to proxy the
Depreciation: Building and Fixed
Equipment cost category by BEA’s
Chained Price Index for Nonresidential
Construction for Hospitals and Special
Care Facilities (BEA Table 5.4.4. Price
Indexes for Private Fixed Investment in
Structures by Type). We proposed to
proxy the Depreciation: Movable
Equipment cost category by the PPI for
Machinery and Equipment (BLS series
code #WPU11). We proposed to proxy
the Nonprofit Interest cost category by
the average yield on domestic municipal
bonds (Bond Buyer 20-bond index). We
proposed to proxy for the For-profit
Interest cost category by the average
yield on Moody’s Aaa bonds (Federal
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asabaliauskas on DSK5VPTVN1PROD with RULES
Reserve). We proposed to proxy the
Other Capital-Related cost category by
the CPI–U for Rent of Primary Residence
(BLS series code #CUUS0000SEHA). We
believe these are the most appropriate
proxies for IPF capital-related costs that
meet our selection criteria of relevance,
timeliness, availability, and reliability.
We did not receive any public
comments on our proposed selection of
price proxies for the capital-related
portion of the market basket.
Final Decision: We are finalizing our
selection of price proxies for the capitalrelated portion of the market basket as
proposed.
Vintage Weights for Price Proxies
Because capital is acquired and paid
for over time, capital-related expenses
in any given year are determined by
both past and present purchases of
physical and financial capital. The
vintage-weighted capital-related portion
of the 2012-based IPF market basket is
intended to capture the long-term
consumption of capital, using vintage
weights for depreciation (physical
capital) and interest (financial capital).
These vintage weights reflect the
proportion of capital-related purchases
attributable to each year of the expected
life of building and fixed equipment,
movable equipment, and interest. We
proposed to use vintage weights to
compute vintage-weighted price
changes associated with depreciation
and interest expenses.
Capital-related costs are inherently
complicated and are determined by
complex capital-related purchasing
decisions, over time, based on such
factors as interest rates and debt
financing. In addition, capital is
depreciated over time instead of being
consumed in the same period it is
purchased. By accounting for the
vintage nature of capital, we are able to
provide an accurate and stable annual
measure of price changes. Annual nonvintage price changes for capital are
unstable due to the volatility of interest
rate changes and, therefore, do not
reflect the actual annual price changes
for IPF capital-related costs. The capitalrelated component of the 2012-based
IPF market basket reflects the
underlying stability of the capitalrelated acquisition process.
To calculate the vintage weights for
depreciation and interest expenses, we
first need a time series of capital-related
purchases for building and fixed
equipment and movable equipment. We
found no single source that provides an
appropriate time series of capital-related
purchases by hospitals for all of the
above components of capital purchases.
The early Medicare cost reports did not
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have sufficient capital-related data to
meet this need. Data we obtained from
the American Hospital Association
(AHA) do not include annual capitalrelated purchases. However, the AHA
does provide a consistent database of
total expenses back to 1963.
Consequently, we proposed to use data
from the AHA Panel Survey and the
AHA Annual Survey to obtain a time
series of total expenses for hospitals. We
then proposed to use data from the AHA
Panel Survey supplemented with the
ratio of depreciation to total hospital
expenses obtained from the Medicare
cost reports to derive a trend of annual
depreciation expenses for 1963 through
2012. We proposed to separate these
depreciation expenses into annual
amounts of building and fixed
equipment depreciation and movable
equipment depreciation as determined
above. From these annual depreciation
amounts we derive annual end-of-year
book values for building and fixed
equipment and movable equipment
using the expected life for each type of
asset category. While data are not
available that are specific to IPFs, we
believe this information for all hospitals
serves as a reasonable alternative for the
pattern of depreciation for IPFs.
To continue to calculate the vintage
weights for depreciation and interest
expenses, we also need the expected
lives for Building and Fixed Equipment,
Movable Equipment, and Interest for the
2012-based IPF market basket. We
proposed to calculate the expected lives
using Medicare cost report data from
freestanding and hospital-based IPFs.
The expected life of any asset can be
determined by dividing the value of the
asset (excluding fully depreciated
assets) by its current year depreciation
amount. This calculation yields the
estimated expected life of an asset if the
rates of depreciation were to continue at
current year levels, assuming straightline depreciation. We proposed to
determine the expected life of building
and fixed equipment separately for
hospital-based IPFs and freestanding
IPFs and weight these expected lives
using the percent of total capital costs
each provider type represents. We
proposed to apply a similar method for
movable equipment. Using these
methods, we determined the average
expected life of building and fixed
equipment to be equal to 23 years, and
the average expected life of movable
equipment to be equal to 11 years. For
the expected life of interest, we believe
vintage weights for interest should
represent the average expected life of
building and fixed equipment because,
based on previous research described in
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the FY 1997 IPPS final rule (61 FR
46198), the expected life of hospital
debt instruments and the expected life
of buildings and fixed equipment are
similar. We note that for the 2008-based
RPL market basket, we used FY 2008
Medicare cost reports for IPPS hospitals
to determine the expected life of
building and fixed equipment and
movable equipment (76 FR 51763). The
2008-based RPL market basket was
based on an expected average life of
building and fixed equipment of 26
years and an expected average life of
movable equipment of 11 years, which
were both calculated using data for IPPS
hospitals.
Multiplying these expected lives by
the annual depreciation amounts results
in annual year-end asset costs for
building and fixed equipment and
movable equipment. We then calculate
a time series, beginning in 1964, of
annual capital purchases by subtracting
the previous year’s asset costs from the
current year’s asset costs.
For the building and fixed equipment
and movable equipment vintage
weights, we proposed to use the real
annual capital-related purchase
amounts for each asset type to capture
the actual amount of the physical
acquisition, net of the effect of price
inflation. These real annual capitalrelated purchase amounts are produced
by deflating the nominal annual
purchase amount by the associated price
proxy as provided above. For the
interest vintage weights, we proposed to
use the total nominal annual capitalrelated purchase amounts to capture the
value of the debt instrument (including,
but not limited to, mortgages and
bonds). Using these capital-related
purchase time series specific to each
asset type, we proposed to calculate the
vintage weights for building and fixed
equipment, for movable equipment, and
for interest.
The vintage weights for each asset
type are deemed to represent the
average purchase pattern of the asset
over its expected life (in the case of
building and fixed equipment and
interest, 23 years, and in the case of
movable equipment, 11 years). For each
asset type, we used the time series of
annual capital-related purchase
amounts available from 2012 back to
1964. These data allow us to derive
twenty-seven 23-year periods of capitalrelated purchases for building and fixed
equipment and interest, and thirty-nine
11-year periods of capital-related
purchases for movable equipment. For
each 23-year period for building and
fixed equipment and interest, or 11-year
period for movable equipment, we
calculate annual vintage weights by
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dividing the capital-related purchase
amount in any given year by the total
amount of purchases over the entire 23year or 11-year period. This calculation
is done for each year in the 23-year or
11-year period and for each of the
periods for which we have data. We
then calculate the average vintage
weight for a given year of the expected
life by taking the average of these
vintage weights across the multiple
periods of data.
We did not receive any public
comments on the proposed
methodology for calculating the vintage
weights for the 2012-based IPF market
basket.
46673
Final Decision: We are finalizing the
vintage weights as proposed.
The vintage weights for the capitalrelated portion of the 2008-based RPL
market basket and the 2012-based IPF
market basket are presented in Table 11
below.
TABLE 11—2008-BASED RPL MARKET BASKET AND 2012-BASED IPF MARKET BASKET VINTAGE WEIGHTS FOR CAPITALRELATED PRICE PROXIES
Building and fixed equipment
Year
2012-Based 23
years
1 ...........................
2 ...........................
3 ...........................
4 ...........................
5 ...........................
6 ...........................
7 ...........................
8 ...........................
9 ...........................
10 .........................
11 .........................
12 .........................
13 .........................
14 .........................
15 .........................
16 .........................
17 .........................
18 .........................
19 .........................
20 .........................
21 .........................
22 .........................
23 .........................
24 .........................
25 .........................
26 .........................
0.029
0.031
0.034
0.036
0.037
0.039
0.040
0.041
0.042
0.044
0.045
0.045
0.045
0.046
0.046
0.048
0.049
0.050
0.051
0.051
0.051
0.050
0.052
..............................
..............................
..............................
Total ..............
1.000
2008-Based 26
years
Movable equipment
Interest
2012-Based 11
years
2008-Based 11
years
2012-Based 23
years
2008-Based 26
years
0.021
0.023
0.025
0.027
0.028
0.030
0.031
0.033
0.035
0.037
0.039
0.041
0.042
0.043
0.044
0.045
0.046
0.047
0.047
0.045
0.045
0.045
0.046
0.046
0.045
0.046
0.069
0.073
0.077
0.083
0.087
0.091
0.096
0.100
0.103
0.107
0.114
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
0.071
0.075
0.080
0.083
0.085
0.089
0.092
0.098
0.103
0.109
0.116
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
0.017
0.019
0.022
0.024
0.026
0.028
0.030
0.032
0.035
0.038
0.040
0.042
0.044
0.046
0.048
0.053
0.057
0.060
0.063
0.066
0.067
0.069
0.073
..............................
..............................
..............................
0.010
0.012
0.014
0.016
0.018
0.020
0.021
0.024
0.026
0.029
0.033
0.035
0.038
0.041
0.043
0.046
0.049
0.052
0.053
0.053
0.055
0.056
0.060
0.063
0.064
0.068
1.000
1.000
1.000
1.000
1.000
Note: Numbers may not add to total due to rounding.
The process of creating vintageweighted price proxies requires
applying the vintage weights to the
price proxy index where the last applied
vintage weight in Table 11 is applied to
the most recent data point. We have
provided on the CMS Web site an
example of how the vintage weighting
price proxies are calculated, using
example vintage weights and example
price indices. The example can be found
at the following link: http://
www.cms.gov/Research-Statistics-Dataand-Systems/Statistics-Trends-andReports/MedicareProgramRatesStats/
MarketBasketResearch.html in the zip
file titled ‘‘Weight Calculations as
described in the IPPS FY 2010 Proposed
Rule.’’
iii. Summary of Price Proxies of the
2012-Based IPF Market Basket
As stated above, we did not receive
any public comments on our proposed
list of operating or capital price proxies.
Final Decision: We are finalizing the
list of operating and capital price
proxies as proposed.
Table 12 shows both the operating
and capital price proxies for the 2012based IPF Market Basket.
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TABLE 12—PRICE PROXIES FOR THE 2012-BASED IPF MARKET BASKET
Weight
(percent)
Cost description
Price proxies
Total ..........................................................
Compensation ....................................
Wages and Salaries ...................
Employee Benefits .....................
Utilities ...............................................
Electricity ....................................
Fuel, Oil, and Gasoline ...............
.......................................................................................................................................
.......................................................................................................................................
Blended Wages and Salaries Price Proxy ...................................................................
Blended Benefits Price Proxy ......................................................................................
.......................................................................................................................................
PPI for Commercial Electric Power .............................................................................
Blend of the PPI for Petroleum Refineries and PPI for Natural Gas ..........................
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100.0
65.5
52.1
13.4
1.7
0.8
0.9
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TABLE 12—PRICE PROXIES FOR THE 2012-BASED IPF MARKET BASKET—Continued
Cost description
Weight
(percent)
Price proxies
Water & Sewerage .....................
Professional Liability Insurance .........
Malpractice .................................
All Other Products and Services .......
All Other Products .............................
Pharmaceuticals .........................
Food: Direct Purchases ..............
Food: Contract Services .............
Chemicals ...................................
Medical Instruments ...................
Rubber & Plastics .......................
Paper and Printing Products ......
Miscellaneous Products ..............
All Other Services ..............................
Labor-Related Services .....................
Professional Fees: Labor-related
Administrative
and
Facilities
Support Services.
Installation, Maintenance, and
Repair.
All Other: Labor-related Services
Nonlabor-Related Services ................
Professional Fees: Nonlabor-related.
Financial services .......................
Telephone Services ....................
All Other: Nonlabor-related Services.
Capital-Related Costs ........................
Depreciation .......................................
Fixed Assets ...............................
Movable Equipment ....................
Interest Costs ....................................
Government/Nonprofit ................
For Profit .....................................
Other Capital-Related Costs ..............
CPI–U for Water and Sewerage Maintenance ............................................................
.......................................................................................................................................
CMS Hospital Professional Liability Insurance Premium Index ..................................
.......................................................................................................................................
.......................................................................................................................................
PPI for Pharmaceuticals for human use, prescription .................................................
PPI for Processed Foods and Feeds ..........................................................................
CPI–U for Food Away From Home ..............................................................................
Blend of Chemical PPIs ...............................................................................................
Blend of the PPI for Surgical and medical instruments and PPI for Medical and surgical appliances and supplies.
PPI for Rubber and Plastic Products ...........................................................................
PPI for Converted Paper and Paperboard Products ...................................................
PPI for Finished Goods Less Food and Energy ..........................................................
.......................................................................................................................................
.......................................................................................................................................
ECI for Total compensation for Private industry workers in Professional and related
ECI for Total compensation for Private industry workers in Office and administrative
support.
ECI for Total compensation for Civilian workers in Installation, maintenance, and repair.
ECI for Total compensation for Private industry workers in Service occupations ......
.......................................................................................................................................
ECI for Total compensation for Private industry workers in Professional and related
0.1
1.1
1.1
24.6
11.5
4.8
1.4
0.9
0.6
1.9
ECI for Total compensation for Private industry workers in Financial activities .........
CPI–U for Telephone Services ....................................................................................
CPI–U for All Items Less Food and Energy ................................................................
2.3
0.6
1.1
.......................................................................................................................................
.......................................................................................................................................
BEA chained price index for nonresidential construction for hospitals and special
care facilities—vintage weighted (23 years).
PPI for machinery and equipment—vintage weighted (11 years) ...............................
.......................................................................................................................................
Average yield on domestic municipal bonds (Bond Buyer 20 bonds)—vintage
weighted (23 years).
Average yield on Moody’s Aaa bonds—vintage weighted (23 years) .........................
CPI–U for Rent of primary residence ..........................................................................
7.0
5.2
3.7
0.5
0.9
0.6
13.1
6.6
2.9
0.7
1.6
1.5
6.5
2.6
1.5
1.2
1.0
0.2
0.6
Note: Totals may not sum to 100.0 percent due to rounding.
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4. FY 2016 Market Basket Update
For FY 2016 (that is, beginning
October 1, 2015 and ending September
30, 2016), we proposed to use an
estimate of the 2012-based IPF market
basket increase factor to update the IPF
PPS base payment rate. Consistent with
historical practice, we estimate the
market basket update for the IPF PPS
based on IHS Global Insight’s forecast.
IHS Global Insight (IGI), Inc. is a
nationally recognized economic and
financial forecasting firm that contracts
with CMS to forecast the components of
the market baskets and multifactor
productivity (MFP).
In the FY 2016 proposed rule, using
IGI’s first quarter 2015 forecast with
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historical data through the fourth
quarter of 2014, the projected proposed
2012-based IPF market basket increase
factor for FY 2016 was 2.7 percent. We
also proposed that if more recent data
are subsequently available (for example,
a more recent estimate of the market
basket) we would use such data, to
determine the FY 2016 update in the
final rule.
For this final rule, we are estimating
the market basket update for the IPF
PPS using the most recent available
data. Based on IGI’s second quarter 2015
forecast with historical data through the
first quarter of 2015, the final 2012based IPF market basket increase factor
for FY 2016 is 2.4 percent. For
comparison, the current 2008-based RPL
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market basket is projected to increase by
2.4 percent in FY 2016 based on IGI’s
second quarter 2015 forecast and the
proposed 2012-based IPF market basket
is projected to increase 2.4 percent in
FY 2016 based on IGI’s second quarter
2015 forecast.
Final Decision: We are finalizing our
methodology for determining the market
basket increase as proposed. Therefore,
consistent with our historical practice of
estimating market basket increases
based on the best available data, we are
finalizing a market basket increase
factor of 2.4 percent for FY 2016. Table
13 compares the final 2012-based IPF
market basket and the 2008-based RPL
market basket percent changes.
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46675
TABLE 13—2012-BASED IPF MARKET BASKET AND 2008-BASED RPL MARKET BASKET PERCENT CHANGES, FY 2010
THROUGH FY 2018
Final 2012-based
IPF market basket
index percent
change
Fiscal Year (FY)
Historical data:
FY 2010 ................................................................................................................................................
FY 2011 ................................................................................................................................................
FY 2012 ................................................................................................................................................
FY 2013 ................................................................................................................................................
FY 2014 ................................................................................................................................................
Average 2010–2014 .............................................................................................................................
Forecast:
FY 2015 ................................................................................................................................................
FY 2016 ................................................................................................................................................
FY 2017 ................................................................................................................................................
FY 2018 ................................................................................................................................................
Average 2015–2018 .............................................................................................................................
2008-Based RPL
market basket
index percent
change
2.0
2.2
1.9
2.0
1.9
2.0
2.2
2.5
2.2
2.1
1.8
2.2
1.9
2.4
2.9
3.0
2.6
2.0
2.4
2.9
3.1
2.6
Note: These market basket percent changes do not include any further adjustments as may be statutorily required.
Source: IHS Global Insight, Inc. 2nd quarter 2015 forecast.
For FY 2016, the 2012-based IPF
market basket update (2.4 percent) is the
same as the 2008-based RPL market
basket (2.4 percent).
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5. Productivity Adjustment
Section 1886(s)(2)(A)(i) of the Act
requires the application of the
productivity adjustment described in
section 1886(b)(3)(B)(xi)(II) of the Act to
the IPF PPS for the RY beginning in
2012 (that is, a RY that coincides with
a FY) and each subsequent RY. The
statute defines the productivity
adjustment to be equal to the 10-year
moving average of changes in annual
economy-wide private nonfarm business
multifactor productivity (MFP) (as
projected by the Secretary for the 10year period ending with the applicable
FY, year, cost reporting period, or other
annual period) (the ‘‘MFP adjustment’’).
The Bureau of Labor Statistics (BLS)
publishes the official measure of private
non-farm business MFP. We refer
readers to the BLS Web site at http://
www.bls.gov/mfp for the BLS historical
published MFP data.
MFP is derived by subtracting the
contribution of labor and capital inputs
growth from output growth. The
projections of the components of MFP
are currently produced by IGI, a
nationally recognized economic
forecasting firm with which CMS
contracts to forecast the components of
the market baskets and MFP. As
described in the FY 2012 IPPS/LTCH
final rule (76 FR 51690 through 51692),
in order to generate a forecast of MFP,
IGI replicated the MFP measure
calculated by the BLS using a series of
proxy variables derived from IGI’s U.S.
macroeconomic models. In the FY 2012
rule, we identified each of the major
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MFP component series employed by the
BLS to measure MFP as well as
provided the corresponding concepts
determined to be the best available
proxies for the BLS series.
Beginning with the FY 2016
rulemaking cycle, the MFP adjustment
is calculated using a revised series
developed by IGI to proxy the aggregate
capital inputs. Specifically, IGI has
replaced the Real Effective Capital Stock
used for Full Employment GDP with a
forecast of BLS aggregate capital inputs
recently developed by IGI using a
regression model. This series provides a
better fit to the BLS capital inputs, as
measured by the differences between
the actual BLS capital input growth
rates and the estimated model growth
rates over the historical time period.
Therefore, we are using IGI’s most
recent forecast of the BLS capital inputs
series in the MFP calculations beginning
with the FY 2016 rulemaking cycle. A
complete description of the MFP
projection methodology is available on
our Web site at http://www.cms.gov/
Research-Statistics-Data-and-Systems/
Statistics-Trends-and-Reports/
MedicareProgramRatesStats/
MarketBasketResearch.html. Although
we discuss the IGI changes to the MFP
proxy series in this final rule, in the
future, when IGI makes changes to the
MFP methodology, we will announce
them on our Web site rather than in the
annual rulemaking.
In the FY 2016 proposed rule, using
IGI’s first quarter 2015 forecast, the MFP
adjustment for FY 2016 (the 10-year
moving average of MFP for the period
ending FY 2016) was projected to be 0.6
percent. Furthermore, we also proposed
that if more recent data are subsequently
available (for example, a more recent
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estimate of the market basket and MFP
adjustment), we would use such data to
determine the FY 2016 market basket
update and MFP adjustment in the final
rule. For this final rule, based on IGI’s
second quarter 2015 forecast with
historical data through the first quarter
of 2015, the MFP adjustment for FY
2016 (the 10-year moving average of
MFP for the period ending FY 2016) is
projected to be 0.5 percent.
Thus, in accordance with section
1886(s)(2)(A)(i) of the Act, we are
finalizing our proposal to base the FY
2016 market basket update, which is
used to determine the applicable
percentage increase for the IPF
payments, on the most recent estimate
of the final 2012-based IPF market
basket (estimated to be 2.4 percent
based on IGI’s second quarter 2015
forecast). We then reduced this
percentage increase by the current
estimate of the MFP adjustment for FY
2016 of 0.5 percentage point (the 10year moving average of MFP for the
period ending FY 2016 based on IGI’s
second quarter 2015 forecast).
Section 1886(s)(2)(A)(ii) of the Act
requires the application of an ‘‘other
adjustment’’ that reduces any update to
an IPF PPS base rate by percentages
specified in section 1886(s)(3) of the Act
for the RY beginning in 2010 through
the RY beginning in 2019. For the RY
beginning in 2015 (that is, FY 2016),
section 1886(s)(3)(D) of the Act requires
the reduction to be 0.2 percentage point.
We are implementing the productivity
adjustment and ‘‘other adjustment’’ in
this final rule.
6. Labor-Related Share
Due to variations in geographic wage
levels and other labor-related costs, we
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Federal Register / Vol. 80, No. 150 / Wednesday, August 5, 2015 / Rules and Regulations
believe that payment rates under the IPF
PPS should continue to be adjusted by
a geographic wage index, which would
apply to the labor-related portion of the
Federal per diem base rate (hereafter
referred to as the labor-related share).
The labor-related share is determined by
identifying the national average
proportion of total costs that are related
to, influenced by, or vary with the local
labor market. We continue to classify a
cost category as labor-related if the costs
are labor-intensive and vary with the
local labor market. As stated in the FY
2015 IPF PPS final rule (79 FR 45943),
the labor-related share was defined as
the sum of the relative importance of
Wages and Salaries, Employee Benefits,
Professional Fees: Labor- Related
Services, Administrative and Facilities
Support Services, All Other: Laborrelated Services, and a portion of the
Capital Costs from the 2008-based RPL
market basket.
Based on our definition of the laborrelated share and the cost categories in
the 2012-based IPF market basket, we
proposed to include in the labor-related
share the sum of the relative importance
of Wages and Salaries, Employee
Benefits, Professional Fees: LaborRelated, Administrative and Facilities
Support Services, Installation,
Maintenance, and Repair, All Other:
Labor-related Services, and a portion of
the Capital-Related cost weight from the
proposed 2012-based IPF market basket.
Comment: Several commenters
expressed concerns over the accuracy of
the labor-related share using the
proposed 2012-based IPF market basket,
particularly given the proposed increase
in the labor-related share of six
percentage points over the FY 2015
labor-related share using the 2008-based
RPL market basket. One commenter
stated that they anticipated that the IPF
labor costs would be higher than
possibly rehabilitation or long-term care
hospitals; however, a labor share of this
magnitude was not anticipated. They
further stated that CMS acknowledged
in the proposed rule that approximately
69 percent of the IPFs have a wage
index value less than 1.00 and would
face permanent payment reductions,
while the remaining IPFs in high-cost
areas will receive payment increases
due to the budget neutrality and costshifting that will occur if the proposed
labor-related share and proposed wage
indices are adopted.
Several other commenters stated there
is a potential to overstate the laborrelated share by multiplying the
ancillary salary cost reported on
worksheet A ‘‘by the ratio of IPF
Medicare ancillary costs for the cost
center.’’ They urged CMS to utilize a
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more accurate calculation for the
ancillary cost centers in order to
mitigate the risk of overstating laborrelated share costs.
Response: We appreciate the
commenters’ concern over the increase
in the FY 2016 labor-related share using
the proposed 2012-based IPF market
basket compared to the FY 2015 laborrelated share using the 2008-based RPL
market basket. As stated in the FY 2016
proposed rule (80 FR 25032), of the six
percentage-point difference in the laborrelated shares, three percentage points
are attributable to the higher Wages and
Salaries and Employee Benefits cost
weights in the 2012-based IPF market
basket compared to the 2008-based RPL
market basket, while two percentage
points are attributable to the higher
weight associated with the labor-related
services cost categories. Further, we
stated that the higher Wages and
Salaries cost weight in the 2012-based
IPF market basket relative to the 2008based RPL market basket is the result of
freestanding IPFs having a larger
percentage of costs attributable to labor
than freestanding IRFs and long-term
care hospitals. These latter facilities
were included in the 2008-based RPL
market basket.
The freestanding IPF Wages and
Salaries cost weight is approximately 10
percentage points higher than the
hospital-based IPF Wages and Salaries
cost weight. It is also about six
percentage points higher than the
freestanding IRF Wages and Salaries
cost weight, and 13 percentage points
higher than the LTCH Wages and
Salaries cost weight, all of which were
included in the 2008-based RPL market
basket. The methodology used to
develop the freestanding IPF Wages and
Salaries cost weight is similar to that
used in the 2008-based RPL market
basket, and we did not receive any
comments on our proposed
methodology outlined in the FY 2016
IPF PPS rule.
As stated in section III.A.3.a.i of this
final rule, we evaluated our
methodology for Wages and Salaries
cost weight, including that of ancillary
wages and salaries. Based on the
comments received, we are revising our
methodology for calculating the Wages
and Salaries cost weight and Employee
Benefits cost weight, resulting in an
increase in the cost weights of 0.2 and
0.1 percentage point, respectively.
Comment: One commenter stated they
had major reservations about the new
inclusion of the Installation,
Maintenance and Repair cost category in
the labor-related share, stating that it
adds an additional 1.6 percentage points
in non-health related labor costs to the
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IPF labor-related share. They further
stated that it is unclear why CMS
considers this additional category a
technical improvement to the IPF
market basket since CMS has never
recognized this cost category in its RPL
market basket computations in prior
years nor has CMS shown how this
additional cost category improves the
labor-related share computation. They
urged CMS not to adopt this change to
the labor-related share.
Response: We disagree with the
commenter’s claim that the Installation,
Maintenance and Repair category is a
new cost category in the labor-related
share. As stated in the proposed rule (80
FR 25027 and 25032), Installation,
Maintenance and Repair services costs
were previously included in the ‘‘All
Other’’ Labor-related Services cost
category in the 2008-based RPL market
basket, along with other services,
including but not limited to janitorial,
waste management, security, and dry
cleaning/laundry services. Also, as
stated in the proposed rule (80 FR
20527), we chose to create a separate
cost category for Installation,
Maintenance and Repair services in
order to proxy these costs by the ECI for
Total Compensation for Civilian
workers in Installation, Maintenance,
and Repair services. We believe this
price proxy better reflects the price
changes of labor associated with
maintenance-related services. In the
2008-based RPL market basket, these
services are proxied by the ECI for total
Compensation for Private Industry in
Service Occupations, which reflects
price growth associated with general
service occupations.
During our development of the 2012based IPF market basket using 2007
Benchmark I–O data, we decided to
aggregate detailed I–O NAICS data to
create a cost category specific to
Installation, Maintenance and Repair
services and to proxy these costs by a
more specific price index. A comparison
of the average historical growth rate
over the last 10 years showed that the
ECI for Total Compensation for Civilian
workers in Installation, Maintenance,
and Repair outpaced the ECI for total
Compensation for Private Industry in
Service Occupations by approximately
0.4 percentage point. We continue to
believe that the inclusion of this cost
category is a technical improvement to
the 2012-based IPF market basket as we
are able to proxy Installation,
Maintenance, and Repair services with
a price proxy that better reflects the
price changes of labor associated with
maintenance-related services. Because
Installation, Maintenance and Repair
services tend to be labor-intensive and
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are mostly performed at the facility
(and, therefore, unlikely to be purchased
in the national market), we continue to
believe that they meet our definition of
labor-related services and thus, should
be included in the labor-related share.
Similar to the 2008-based RPL market
basket, the 2012-based IPF market
basket includes two cost categories for
non-medical professional fees
(including but not limited to expenses
for legal, accounting, and engineering
services). These are Professional Fees:
Labor-related and Professional Fees:
Nonlabor-related. For the proposed
2012-based IPF market basket, we
estimated the labor-related percentage of
non-medical professional fees (and
assign these expenses to the
Professional Fees: Labor-related services
cost category) based on the same
method that was used to determine the
labor-related percentage of professional
fees in the 2008-based RPL market
basket.
To summarize, the professional
services survey found that hospitals
purchase the following proportion of
these four services outside of their local
labor market:
• 34 percent of accounting and
auditing services.
• 30 percent of engineering services.
• 33 percent of legal services.
• 42 percent of management
consulting services.
We proposed to apply each of these
percentages to the respective
Benchmark I–O cost category
underlying the professional fees cost
category to determine the Professional
Fees: Nonlabor-related costs. The
Professional Fees: Labor-related costs
were determined to be the difference
between the total costs for each
Benchmark I–O category and the
Professional Fees: Nonlabor-related
costs. This is the same methodology that
we used to separate the 2008-based RPL
market basket professional fees category
into Professional Fees: Labor-related
and Professional Fees: Nonlabor-related
cost categories. For more detail
regarding this methodology see the FY
2012 IPF final rule (76 FR 26445).
In addition to the professional
services listed above, we also proposed
to classify expenses under NAICS 55,
Management of Companies and
Enterprises, into the Professional Fees
cost category as was done in the 2008based RPL market basket. The NAICS 55
data are mostly comprised of corporate,
subsidiary, and regional managing
offices, or otherwise referred to as home
offices. Since many facilities are not
located in the same geographic area as
their home office, we analyzed data
from a variety of sources in order to
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determine what proportion of these
costs should be appropriately included
in the labor-related share. For the 2012based IPF market basket, we derived the
home office percentages using data for
both freestanding IPF providers and
hospital-based IPF providers. In the
2008-based RPL market basket, we used
the home office percentages based on
the data reported by freestanding IRFs,
IPFs, and LTCHs.
Using data primarily from the
Medicare cost reports and the Home
Office Medicare Records (HOMER)
database that provides the address
(including city and state) for home
offices, we were able to determine that
36 percent of the total number of
freestanding and hospital-based IPFs
that had home offices had those home
offices located in their respective local
labor markets—defined as being in the
same Metropolitan Statistical Area
(MSA).
The Medicare cost report requires
hospitals to report their home office
provider numbers. Using the HOMER
database to determine the home office
location for each home office provider
number, we compared the location of
the provider with the location of the
hospital’s home office. We then placed
providers into one of the following 2
groups:
• Group 1—Provider and home office
are located in different MSAs.
• Group 2—Provider and home office
are located in the same MSA.
We found that 64 percent of the
providers with home offices were
classified into Group 1 (that is, different
MSA) and, thus, these providers were
determined to not be located in the
same local labor market as their home
office. We found that 36 percent of all
providers with home offices were
classified into Group 2 (that is, the same
MSA). Given these results, we proposed
to classify 36 percent of these
Professional Fees costs into the
Professional Fees: Labor-related cost
category and the remaining 64 percent
into the Professional Fees: Nonlaborrelated Services cost category. This
methodology for apportioning the
Professional Fee expenses between
labor-related and nonlabor-related
categories is similar to the method used
in the 2008-based RPL market basket
(see 76 FR 26445).
We received one comment on our
methodology for determining the
Professional Fees: Labor-related and
Professional Fees: Nonlabor-related cost
weights.
Comment: One commenter pointed
out that CMS’s proposed FY 2016 laborrelated share of 74.9 percent is an 8.1
percent increase compared to the FY
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46677
2015 labor-related share of 69.294
percent, and disagreed with the logic
used to support this increase, stating
that CMS disproportionately
emphasizes professional fees and home
office costs in the calculations of the
labor-related share. The commenter
stated that of the 1,617 psychiatric
hospitals/units, 69.4 percent are IPF
units. The commenter then stated that
the majority of IPF unit salaries relate to
direct patient care (RNs, LPNs, Aides,
etc.) and are consistent with salaries in
the hospital acute care areas. The
commenter noted that the FY 2016 IPPS
proposed rule for acute care hospitals
indicates no changes to the labor-related
share for wage indexes less than 1.000
or wage indexes greater than 1.000 (the
labor-related share for IPPS hospitals is
69.6 percent). The commenter stated
that yet, in the FY 2016 IPF proposed
rule, CMS believes an 8.1 percent
increase is justified and indicative of
salary changes to almost 70 percent of
psychiatric providers. The commenter
stated that this change also negatively
impacts 64.4 percent of psychiatric
providers, all located in CMS’ Central/
South Atlantic Regions. The commenter
disagreed that East and West coast
provider costs have increased
significantly compared to the Midwest
and thus should bear the brunt of this
change.
The commenter further proposed that
CMS consider calculating labor-related
share percentages similar to those
calculated for IPPS, where CMS uses a
percentage for providers with a wage
index less than 1.00 and a percentage
for providers with a wage index greater
than 1.00.
Response: We respectfully disagree
with the commenter’s statement that we
are disproportionately emphasizing
professional fees and home office costs
in the calculations of the labor-related
share. The components of the laborrelated share are identical to those used
in the IPPS labor-related share,
including the inclusion of professional
fees and home office costs in the IPPS
labor-related share. (As stated above, we
note that the Installation, Maintenance,
and Repair services costs are included
in the All Other: Labor-related Services
in both the FY 2016 IPPS labor-related
share and FY 2015 IPF labor-related
share using the 2008-based RPL market
basket).
The differences in the IPF laborrelated share and IPPS labor-related
share are primarily attributable to the
Wages and Salaries, Employee Benefits,
and Contract Labor cost weights (the
sum of which is the Compensation cost
weight) which are based on IPF PPS and
IPPS Medicare cost report data,
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respectively. We note that the 2010based IPPS market basket cost weights
are based on costs as a percent of total
operating costs while the 2012-based
IPF market basket cost weights are based
on a percent of total costs (the sum of
operating costs and capital costs). The
2012-based IPF Compensation cost
weight as a percent of total operating
costs (after removing the capital cost
weight) is about 10 percentage points
higher than the 2010-based IPPS
Compensation cost weight whereas the
2012-based IPF market basket
Professional Fees: Labor-related share
cost weight as a percent of total
operating costs (after removing the
capital cost weight) is about two
percentage points lower than the 2010based IPPS market basket Professional
Fees: Labor-related share cost weight. In
addition, the 2012-based IPF
Professional Fees: Labor-related share
cost weight is about four percent of the
2012-based IPF Compensation cost
weight whereas the 2010-based IPPS
Professional Fees: Labor-related share
cost weight is about nine percent of the
2012-based IPPS Compensation cost
weight.
As the commenter stated, the
Professional Fees: Labor-related share
includes home office costs. As described
above, we determine the proportion of
the home office costs that are laborrelated by comparing the IPF provider’s
location (that is, MSA) to the location of
its home office (also, MSA). This is the
same methodology used in the 2008based RPL market basket and 2010based IPPS market basket. The 2012 IPF
Medicare cost report and Medicare
HOMER data found that 36 percent were
located in the same MSA (and thus were
allocated to the Professional Fees:
Labor-related share cost weight)
whereas the same analysis using 2010
IPPS Medicare cost report data and
Medicare HOMER data found this
percentage to be much higher with 62
percent.
We would further note that the
approximately three percentage point
difference between the IPF labor-related
share of 74.9 percent and the IPPS laborrelated share of 69.6 percent is
attributable to the IPF labor-related
share including a portion of capital-
related costs. The IPPS labor-related
share applies to the operating base
payment rate and therefore, does not
include a portion of capital-related
costs. IPPS has a separate capital base
payment rate and geographic adjustment
factor. The IPF PPS base payment rate
reflects both operating and capital costs
(similar to the IRF and SNF PPS);
therefore, the labor-related share also
reflects both costs.
We acknowledge the commenter’s
concern regarding an IPPS labor-related
share of 62 percent for wage indexes
less than 1.000 but there is no such
provision for IPFs. The 62 percent rule
is mandated by Section 403 of Public
Law 108–173, which amended section
1886(d)(3)(E) of the Act and is
applicable to IPPS hospitals operating
base payment rate only.
We would also note that the FY 2016
IPPS proposed rule did not include a
revision to the IPPS labor-related share.
The IPPS labor-related share was last
revised effective for FY 2014 when CMS
finalized their proposal to rebase and
revise the IPPS market basket as is now
being done for the FY 2016 IPF PPS
proposed rule.
Therefore, we disagree with the
commenters’ claim that we are
overemphasizing professional fees and
home office costs in the IPF laborrelated share and we continue to believe
a labor-related share based on the 2012based IPF market basket is appropriate.
Final Decision: We are finalizing our
methodology for determining the IPF
labor-related share based on the final
2012-based IPF market basket (reflecting
methodological revisions to the Wages
and Salaries and Employee Benefit cost
weights based on public comments as
described in section III.A.3.a.i in this
final rule).
Using this method and the IHS Global
Insight, Inc. 2nd quarter 2015 forecast
for the final 2012-based IPF market
basket, the IPF labor-related share for
FY 2016 is the sum of the FY 2016
relative importance of each labor-related
cost category. The relative importance
reflects the different rates of price
change for these cost categories between
the base year (FY 2012) and FY 2016.
Table 14 shows the FY 2016 laborrelated share using the final 2012-based
IPF market basket relative importance
and the FY 2015 labor-related share
using the 2008-based RPL market
basket.
The sum of the relative importance for
FY 2016 operating costs (Wages and
Salaries, Employee Benefits,
Professional Fees: Labor-related,
Administrative and Facilities Support
Services, Installation Maintenance &
Repair Services, and All Other: Laborrelated Services) is 72.1 percent, as
shown in Table 14. We specified the
labor-related share to one decimal place,
which is consistent with the IPPS laborrelated share (currently the Laborrelated share from the RPL market
basket is specified to 3 decimal places).
The portion of Capital that is
influenced by the local labor market is
estimated to be 46 percent, which is the
same percentage applied to the 2008based RPL market basket. Since the
relative importance for Capital-Related
Costs is 6.8 percent of the 2012-based
IPF market basket in FY 2016, we took
46 percent of 6.8 percent to determine
the labor-related share of Capital for
2016. The result will be 3.1 percent,
which we added to 72.1 percent for the
operating cost amount to determine the
total labor-related share for FY 2016.
The FY 2016 labor-related share using
the 2012-based IPF market basket is
about five percentage points higher than
the FY 2015 labor-related share using
the 2008-based RPL market basket. Of
the 5 percentage point difference in the
labor-related shares, three percentage
points are attributable to the higher
Wages and Salaries and Employee
Benefits cost weights in the 2012-based
IPF market basket compared to the
2008-based RPL market basket, while
two percentage points are attributable to
the higher weight associated with the
labor-related services cost categories.
Further, we stated that the higher Wages
and Salaries cost weight in the 2012based IPF market basket relative to the
2008-based RPL market basket is the
result of freestanding IPFs having a
larger percentage of costs attributable to
labor than freestanding IRFs and longterm care hospitals both of which were
included in the 2008-based RPL market
basket.
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TABLE 14—2016 IPF LABOR-RELATED SHARE
Wages and Salaries ................................................................................................................................................
Employee Benefits ...................................................................................................................................................
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FY 2016
Labor-related
share based
on 2012-based
IPF market
basket 1
FY 2015 Final
labor-related
share 2
51.9
13.5
48.271
12.936
Federal Register / Vol. 80, No. 150 / Wednesday, August 5, 2015 / Rules and Regulations
46679
TABLE 14—2016 IPF LABOR-RELATED SHARE—Continued
FY 2016
Labor-related
share based
on 2012-based
IPF market
basket 1
FY 2015 Final
labor-related
share 2
Professional Fees: Labor-related ............................................................................................................................
Administrative and Facilities Support Services .......................................................................................................
Installation, Maintenance and Repair ......................................................................................................................
All Other: Labor-related Services ............................................................................................................................
2.9
0.7
1.6
1.5
2.058
0.415
Subtotal .............................................................................................................................................................
Labor-related portion of capital (46%) .....................................................................................................................
72.1
3.1
65.741
3.553
Total LRS ..................................................................................................................................................
75.2
69.294
1 IHS
2.061
Global Insight, Inc. 2nd quarter 2015 forecast.
Register 79 FR 45943.
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2 Federal
In weighing the effects of the change
in the LRS, we considered whether to
recommend a 2-year transitional
implementation of the increase in the
LRS. We recognize that IPFs with wage
index values of less than one would be
adversely affected by an increased LRS,
as a larger share of the base rate will be
adjusted by the wage index value. About
69 percent of IPFs will have wage index
values of less than one using FY2015
CBSA data, and 30 percent of these
providers are rural. While the LRS will
be updated in a budget neutral manner
so that the overall impact on payments
is zero, there will still be distributional
effects on specific categories of IPFs. We
considered the distributional effects of
the multiple updates made in this final
rule, including the update to the full
LRS in FY 2016, and we found that the
negative impact of updating the LRS in
a single year, without a transition, was
relatively small, as shown in Table 28
in section VIII. of this final rule.
Additionally, we made two other
adjustments to benefit providers: A
transitional wage index and a phase-out
of the 17 percent rural adjustment for
the 37 IPFs that will change from rural
to urban status due to the new CBSA
delineations. As presented in section
III.A.6. of this final rule, we used the
2012-based IPF market basket relative
importance’s to determine the FY 2016
IPF LRS. We believe this is appropriate
as it is based on more recent, providerspecific data for IPFs. For all of these
reasons, we implemented the full LRS
in FY 2016.
Comment: We received three
comments, which asked that we phase
in the updated LRS over 2 years rather
than implementing it in a single year.
Commenters were concerned about the
effect of the increase in the LRS on
providers.
Response: We thank the commenters
for their suggestion, but we are not
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providing a transition to the updated
LRS. The 2012-based IPF market basket
improves the accuracy of the IPF PPS,
and the updated LRS is a more accurate
reflection of the IPF labor-related share.
Although in two other instances we are
providing a transition that will benefit
providers—a 1-year transitional wage
index and the 3-year transition of the
rural adjustment—in this case, we
believe the impact on those providers
that will be negatively affected by the
updated LRS is relatively small.
Furthermore, we have not typically
provided a transition in the IPF PPS
when the LRS has changed. For
example, in the May 6, 2011 IPF PPS
final rule, we rebased the RPL market
basket, and the LRS changed from
75.400 to 70.317. Although this decrease
in the LRS would have benefitted IPFs
with wage index values less than one,
but would have had a negative payment
effect on IPFs with wage index values
greater than one, we did not provide a
transition to this lower LRS. For all of
these reasons, we are implementing the
updated IPF-specific LRS of 75.2 in full
in FY 2016.
B. Updates to the IPF PPS for FY 2016
(Beginning October 1, 2015)
The IPF PPS is based on a
standardized Federal per diem base rate
calculated from the IPF average per
diem costs and adjusted for budgetneutrality in the implementation year.
The Federal per diem base rate is used
as the standard payment per day under
the IPF PPS and is adjusted by the
patient-level and facility-level
adjustments that are applicable to the
IPF stay. A detailed explanation of how
we calculated the average per diem cost
appears in the November 2004 IPF PPS
final rule (69 FR 66926).
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1. Determining the Standardized
Budget-Neutral Federal Per Diem Base
Rate
Section 124(a)(1) of the BBRA
required that we implement the IPF PPS
in a budget-neutral manner. In other
words, the amount of total payments
under the IPF PPS, including any
payment adjustments, must be projected
to be equal to the amount of total
payments that would have been made if
the IPF PPS were not implemented.
Therefore, we calculated the budgetneutrality factor by setting the total
estimated IPF PPS payments to be equal
to the total estimated payments that
would have been made under the Tax
Equity and Fiscal Responsibility Act of
1982 (TEFRA) (Pub. L. 97–248)
methodology had the IPF PPS not been
implemented. A step-by-step
description of the methodology used to
estimate payments under the TEFRA
payment system appears in the
November 2004 IPF PPS final rule (69
FR 66926).
Under the IPF PPS methodology, we
calculated the final Federal per diem
base rate to be budget-neutral during the
IPF PPS implementation period (that is,
the 18-month period from January 1,
2005 through June 30, 2006) using a July
1 update cycle. We updated the average
cost per day to the midpoint of the IPF
PPS implementation period (that is,
October 1, 2005), and this amount was
used in the payment model to establish
the budget-neutrality adjustment.
Next, we standardized the IPF PPS
Federal per diem base rate to account
for the overall positive effects of the IPF
PPS payment adjustment factors by
dividing total estimated payments under
the TEFRA payment system by
estimated payments under the IPF PPS.
Additional information concerning this
standardization can be found in the
November 2004 IPF PPS final rule (69
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FR 66932) and the RY 2006 IPF PPS
final rule (71 FR 27045). We then
reduced the standardized Federal per
diem base rate to account for the outlier
policy, the stop loss provision, and
anticipated behavioral changes. A
complete discussion of how we
calculated each component of the
budget-neutrality adjustment appears in
the November 2004 IPF PPS final rule
(69 FR 66932 through 66933) and in the
May 2006 IPF PPS final rule (71 FR
27044 through 27046). The final
standardized budget-neutral Federal per
diem base rate established for cost
reporting periods beginning on or after
January 1, 2005 was calculated to be
$575.95.
The Federal per diem base rate has
been updated in accordance with
applicable statutory requirements and
§ 412.428 through publication of annual
notices or proposed and final rules. A
detailed discussion on the standardized
budget-neutral Federal per diem base
rate and the electroconvulsive therapy
(ECT) payment per treatment appears in
the August 2013 IPF PPS update notice
(78 FR 46738 through 46739). These
documents are available on the CMS
Web site at http://www.cms.gov/
Medicare/Medicare-Fee-for-ServicePayment/InpatientPsychFacilPPS/
index.html.
year, the Secretary shall reduce any
annual update to a standard Federal rate
for discharges occurring during the rate
year by 2.0 percentage points for any
IPF that does not comply with the
quality data submission requirements
with respect to an applicable year.
Therefore, we will apply a 2.0
percentage point reduction to the
Federal per diem base rate and the ECT
payment per treatment as follows:
For IPFs that failed to submit quality
reporting data under the IPFQR
program, we will apply a ¥0.3 percent
annual update (that is, 1.7 percent
reduced by 2 percentage points, in
accordance with section
1886(s)(4)(A)(ii) of the Act) and the
wage index budget-neutrality factor of
1.0041 to the FY 2015 Federal per diem
base rate of $728.31, yielding a Federal
per diem base rate of $729.10 for FY
2016.
Similarly, we will apply the ¥0.3
percent annual update and the 1.0041
wage index budget-neutrality factor to
the FY 2015 ECT payment per treatment
of $313.55, yielding an ECT payment
per treatment of $313.89 for FY 2016.
2. FY 2016 Update of the Federal Per
Diem Base Rate and Electroconvulsive
Therapy (ECT) Payment Per Treatment
The current (that is, FY 2015) Federal
per diem base rate is $728.31 and the
ECT payment per treatment is $313.55.
For FY 2016, we applied an update of
1.7 percent (that is, the 2012-based IPF
market basket increase for FY 2016 of
2.4 percent less the productivity
adjustment of 0.5 percentage point, and
further reduced by the 0.2 percentage
point required under
section1886(s)(3)(D) of the Act), and the
wage index budget-neutrality factor of
1.0041 (as discussed in section III.D.1.e.
of this final rule) to the FY 2015 Federal
per diem base rate of $728.31, yielding
a Federal per diem base rate of $743.73
for FY 2016. Similarly, we applied the
1.7 percent payment update and the
1.0041 wage index budget-neutrality
factor to the FY 2015 ECT payment per
treatment, yielding an ECT payment per
treatment of $320.19 for FY 2016.
As noted above, section 1886(s)(4) of
the Act requires the establishment of a
quality data reporting program for the
IPF PPS beginning in RY 2015. We refer
readers to section V. of this final rule for
a discussion of the IPF Quality
Reporting Program. Section
1886(s)(4)(A)(i) of the Act requires that,
for RY 2014 and each subsequent rate
The IPF PPS payment adjustments
were derived from a regression analysis
of 100 percent of the FY 2002 MedPAR
data file, which contained 483,038
cases. For a more detailed description of
the data file used for the regression
analysis, see the November 2004 IPF
PPS final rule (69 FR 66935 through
66936). While we have since used more
recent claims data to simulate payments
to set the fixed dollar loss threshold
amount for the outlier policy and to
assess the impact of the IPF PPS
updates, we continue to use the
regression-derived adjustment factors
established in 2005 for FY 2016.
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C. Updates to the IPF PPS Patient-Level
Adjustment Factors
1. Overview of the IPF PPS Adjustment
Factors
2. IPF PPS Patient-Level Adjustments
The IPF PPS includes payment
adjustments for the following patientlevel characteristics: Medicare Severity
Diagnosis Related Groups (MS–DRGs)
assignment of the patient’s principal
diagnosis, selected comorbidities,
patient age, and the variable per diem
adjustments. We did not propose any
changes to the IPF PPS Patient-level
Adjustments.
a. MS–DRG Assignment
We believe it is important to maintain
the same diagnostic coding and DRG
classification for IPFs that are used
under the IPPS for providing psychiatric
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care. For this reason, when the IPF PPS
was implemented for cost reporting
periods beginning on or after January 1,
2005, we adopted the same diagnostic
code set (ICD–9–CM) and DRG patient
classification system (that is, the CMS
DRGs) that were utilized at the time
under the IPPS. In the May 2008 IPF
PPS notice (73 FR 25709), we discussed
CMS’ effort to better recognize resource
use and the severity of illness among
patients. CMS adopted the new MS–
DRGs for the IPPS in the FY 2008 IPPS
final rule with comment period (72 FR
47130). In the 2008 IPF PPS notice (73
FR 25716), we provided a crosswalk to
reflect changes that were made under
the IPF PPS to adopt the new MS–DRGs.
For a detailed description of the
mapping changes from the original DRG
adjustment categories to the current
MS–DRG adjustment categories, we
refer readers to the May 2008 IPF PPS
notice (73 FR 25714).
The IPF PPS includes payment
adjustments for designated psychiatric
DRGs assigned to the claim based on the
patient’s principal diagnosis. The DRG
adjustment factors were expressed
relative to the most frequently reported
psychiatric DRG in FY 2002, that is,
DRG 430 (psychoses). The coefficient
values and adjustment factors were
derived from the regression analysis.
Mapping the DRGs to the MS–DRGs
resulted in the current 17 IPF–MS–
DRGs, instead of the original 15 DRGs,
for which the IPF PPS provides an
adjustment.
For the FY 2016 update, we are not
making any changes to the IPF MS–DRG
adjustment factors. In FY 2015
rulemaking (79 FR 45945 through
45947), we proposed and finalized
conversions of the ICD–9–CM-based
MS–DRGs to ICD–10–CM/PCS-based
MS–DRGs, which will be implemented
on October 1, 2015. Further information
for the ICD–10–CM/PCS MS–DRG
conversion project can be found on the
CMS ICD–10–CM Web site at http://
www.cms.hhs.gov/Medicare/Coding/
ICD10/ICD-10-MS-DRG-ConversionProject.html.
For FY 2016, we will continue to
make a payment adjustment for
psychiatric diagnoses that group to one
of the existing 17 IPF–MS–DRGs listed
in the Addendum. Psychiatric principal
diagnoses that do not group to one of
the 17 designated DRGs will still receive
the Federal per diem base rate and all
other applicable adjustments, but the
payment would not include a DRG
adjustment.
As noted above, the diagnoses for
each IPF–MS–DRG will be updated on
October 1, 2015, using the ICD–10–CM/
PCS code sets.
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b. Payment for Comorbid Conditions
The intent of the comorbidity
adjustments is to recognize the
increased costs associated with
comorbid conditions by providing
additional payments for certain
concurrent medical or psychiatric
conditions that are expensive to treat. In
the May 2011 IPF PPS final rule (76 FR
26451 through 26452), we explained
that the IPF PPS includes 17
comorbidity categories and identified
the new, revised, and deleted ICD–9–
CM diagnosis codes that generate a
comorbid condition payment
adjustment under the IPF PPS for RY
2012 (76 FR 26451).
Comorbidities are specific patient
conditions that are secondary to the
patient’s principal diagnosis and that
require treatment during the stay.
Diagnoses that relate to an earlier
episode of care and have no bearing on
the current hospital stay are excluded
and must not be reported on IPF claims.
Comorbid conditions must exist at the
time of admission or develop
subsequently, and affect the treatment
received, length of stay (LOS), or both
treatment and LOS.
For each claim, an IPF may receive
only one comorbidity adjustment within
a comorbidity category, but it may
receive an adjustment for more than one
comorbidity category. Current billing
instructions for claims for discharges on
or after October 1, 2015 require IPFs to
enter the complete ICD–10–CM codes
for up to 24 additional diagnoses if they
co-exist at the time of admission, or
develop subsequently and impact the
treatment provided.
The comorbidity adjustments were
determined based on the regression
analysis using the diagnoses reported by
IPFs in FY 2002. The principal
diagnoses were used to establish the
DRG adjustments and were not
accounted for in establishing the
comorbidity category adjustments,
except where ICD–9–CM ‘‘code first’’
instructions apply. As we explained in
the May 2011 IPF PPS final rule (76 FR
265451), the ‘‘code first’’ rule applies
when a condition has both an
underlying etiology and a manifestation
due to the underlying etiology. For these
conditions, ICD–9–CM has a coding
convention that requires the underlying
conditions to be sequenced first
followed by the manifestation.
Whenever a combination exists, there is
a ‘‘use additional code’’ note at the
etiology code and a ‘‘code first’’ note at
the manifestation code.
The same principle holds for ICD–10–
CM as for ICD–9–CM. Whenever a
combination exists, there is a ‘‘use
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additional code’’ note in the ICD–10–
CM codebook pertaining to the etiology
code, and a ‘‘code first’’ code pertaining
to the manifestation code. In the FY
2015 IPF PPS final rule, we provided a
‘‘code first’’ table for reference that
highlights the same or similar
manifestation codes where the ‘‘code
first’’ instructions apply in ICD–10–CM
that were present in ICD–9–CM (79 FR
46009).
As noted previously, it is our policy
to maintain the same diagnostic coding
set for IPFs that is used under the IPPS
for providing the same psychiatric care.
The 17 comorbidity categories formerly
defined using ICD–9–CM codes were
converted to ICD–10–CM/PCS in the FY
2015 IPF PPS final rule (79 FR 45947 to
45955). The goal for converting the
comorbidity categories is referred to as
replication, meaning that the payment
adjustment for a given patient encounter
is the same after ICD–10–CM
implementation as it would be if the
same record had been coded in ICD–9–
CM and submitted prior to ICD–10–CM/
PCS implementation on October 1,
2015. All conversion efforts were made
with the intent of achieving this goal.
We did not propose any refinements
to the comorbidity adjustments, and
will continue to use the existing
adjustments in effect in FY 2015. The
FY 2016 comorbidity adjustments are
found in the Addendum to this final
rule.
Comment: We received one comment
suggesting that we change the
comorbidity adjustment to add a
number of infectious diseases which the
commenters felt increased IPF costs.
The commenter provided a listing of
ICD–10–CM codes for these conditions.
Response: Changes to the comorbidity
adjustment would occur as part of a
larger IPF PPS refinement, as the
comorbidity adjustment factors are
derived through a regression analysis,
which also includes other IPF PPS
adjustments (for example, the age
adjustment). We did not propose to
refine the IPF PPS in the FY 2016 IPF
PPS proposed rule, and therefore, this
comment is outside the scope of this
rule. However, we will consider the
comment when we undertake future
refinements.
3. Patient Age Adjustments
As explained in the November 2004
IPF PPS final rule (69 FR 66922), we
analyzed the impact of age on per diem
cost by examining the age variable (that
is, the range of ages) for payment
adjustments. In general, we found that
the cost per day increases with age. The
older age groups are more costly than
the under 45 age group, the differences
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46681
in per diem cost increase for each
successive age group, and the
differences are statistically significant.
We did not propose any changes to
the patient age adjustments; for FY
2016, we will continue to use the
patient age adjustments currently in
effect in FY 2015, as shown in the
Addendum to this final rule.
4. Variable Per Diem Adjustments
We explained in the November 2004
IPF PPS final rule (69 FR 66946) that the
regression analysis indicated that per
diem cost declines as the LOS increases.
The variable per diem adjustments to
the Federal per diem base rate account
for ancillary and administrative costs
that occur disproportionately in the first
days after admission to an IPF.
We used a regression analysis to
estimate the average differences in per
diem cost among stays of different
lengths. As a result of this analysis, we
established variable per diem
adjustments that begin on day 1 and
decline gradually until day 21 of a
patient’s stay. For day 22 and thereafter,
the variable per diem adjustment
remains the same each day for the
remainder of the stay. However, the
adjustment applied to day 1 depends
upon whether the IPF has a qualifying
emergency department (ED). If an IPF
has a qualifying ED, it receives a 1.31
adjustment factor for day 1 of each stay.
If an IPF does not have a qualifying ED,
it receives a 1.19 adjustment factor for
day 1 of the stay. The ED adjustment is
explained in more detail in section
III.D.4. of this final rule.
We did not propose any changes to
the variable per diem adjustment
factors; for FY 2016, we will continue to
use the variable per diem adjustment
factors currently in effect as shown in
the Addendum to this final rule. A
complete discussion of the variable per
diem adjustments appears in the
November 2004 IPF PPS final rule (69
FR 66946).
D. Updates to the IPF PPS Facility-Level
Adjustments
The IPF PPS includes facility-level
adjustments for the wage index, IPFs
located in rural areas, teaching IPFs,
cost of living adjustments for IPFs
located in Alaska and Hawaii, and IPFs
with a qualifying ED.
1. Wage Index Adjustment
a. Background
As discussed in the May 2006 IPF PPS
final rule (71 FR 27061) and in the May
2008 (73 FR 25719) and May 2009 IPF
PPS notices (74 FR 20373), in order to
provide an adjustment for geographic
wage levels, the labor-related portion of
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an IPF’s payment is adjusted using an
appropriate wage index. Currently, an
IPF’s geographic wage index value is
determined based on the actual location
of the IPF in an urban or rural area as
defined in § 412.64(b)(1)(ii)(A) and (C).
b. Wage Index for FY 2016
Since the inception of the IPF PPS, we
have used the pre-floor, pre-reclassified
acute care hospital wage index in
developing a wage index to be applied
to IPFs because there is not an IPFspecific wage index available. We
believe that IPFs generally compete in
the same labor markets as acute care
hospitals, so the pre-floor, prereclassified hospital wage index should
reflect IPF labor costs. As discussed in
the May 2006 IPF PPS final rule for FY
2007 (71 FR 27061 through 27067),
under the IPF PPS, the wage index is
calculated using the IPPS wage index
for the labor market area in which the
IPF is located, without taking into
account geographic reclassifications,
floors, and other adjustments made to
the wage index under the IPPS. For a
complete description of these IPPS wage
index adjustments, please see the CY
2013 IPPS/LTCH PPS final rule (77 FR
53365 through 53374). For FY 2016, we
will continue to apply the most recent
hospital wage index (that is, the FY
2015 pre-floor, pre-reclassified hospital
wage index, which is the most
appropriate index as it best reflects the
variation in local labor costs of IPFs in
the various geographic areas) using the
most recent hospital wage data (that is,
data from hospital cost reports for the
cost reporting period beginning during
FY 2011) without any geographic
reclassifications, floors, or other
adjustments. We apply the FY 2016 IPF
PPS wage index to payments beginning
October 1, 2015.
We apply the wage index adjustment
to the labor-related portion of the
federal rate, which we changed from
69.294 percent to 75.2 percent in FY
2016. This percentage reflects the laborrelated share of the 2012-based IPF
market basket for FY 2016 (see section
III.A.6. of this final rule).
c. OMB Bulletins and Transitional Wage
Index
OMB publishes bulletins regarding
CBSA changes, including changes to
CBSA numbers and titles. In the May
2006 IPF PPS final rule for RY 2007 (71
FR 27061 through 27067), we adopted
the changes discussed in the Office of
Management and Budget (OMB)
Bulletin No. 03–04 (June 6, 2003),
which announced revised definitions
for Metropolitan Statistical Areas
(MSAs), and the creation of
Micropolitan Statistical Areas and
Combined Statistical Areas. In adopting
the OMB CBSA geographic designations
in RY 2007, we did not provide a
separate transition for the CBSA-based
wage index since the IPF PPS was
already in a transition period from
TEFRA payments to PPS payments.
In the May 2008 IPF PPS notice, we
incorporated the CBSA nomenclature
changes published in the most recent
OMB bulletin that applies to the
hospital wage index used to determine
the current IPF PPS wage index and
stated that we expect to continue to do
the same for all the OMB CBSA
nomenclature changes in future IPF PPS
rules and notices, as necessary (73 FR
25721). The OMB bulletins may be
accessed online at http://
www.whitehouse.gov/omb/bulletins_
default/.
In accordance with our established
methodology, we have historically
adopted any CBSA changes that are
published in the OMB bulletin that
corresponds with the hospital wage
index used to determine the IPF PPS
wage index. For the FY 2015 IPF wage
index, we used the FY 2014 pre-floor,
pre-reclassified hospital wage index to
adjust the IPF PPS payments. On
February 28, 2013, OMB issued OMB
Bulletin No. 13–01, which established
revised delineations for Metropolitan
Statistical Areas, Micropolitan
Statistical Areas, and Combined
Statistical Areas, and provided guidance
on the use of the delineations of these
statistical areas. A copy of this bulletin
may be obtained at http://
www.whitehouse.gov/omb/bulletins_
default/. Because the FY 2014 pre-floor,
pre-reclassified hospital wage index was
finalized prior to the issuance of this
Bulletin, the FY 2015 IPF PPS wage
index, which was based on the FY 2014
pre-floor, pre-reclassified hospital wage
index, did not reflect OMB’s new area
delineations based on the 2010 Census.
According to OMB, ‘‘[t]his bulletin
provides the delineations of all
Metropolitan Statistical Areas,
Metropolitan Divisions, Micropolitan
Statistical Areas, Combined Statistical
Areas, and New England City and Town
Areas in the United States and Puerto
Rico based on the standards published
on June 28, 2010, in the Federal
Register (75 FR 37246 through 37252)
and Census Bureau data.’’ These OMB
Bulletin changes are reflected in the FY
2015 pre-floor, pre-reclassified hospital
wage index, upon which the FY 2016
IPPS PPS wage index is based. We have
adopted these new OMB CBSA
delineations in the FY 2016 IPF PPS
wage index.
We believe that the most current
CBSA delineations accurately reflect the
local economies and wage levels of the
areas where IPFs are located, and we
believe that it is important for the IPF
PPS to use the latest CBSA delineations
available in order to maintain an up-todate payment system that accurately
reflects the reality of population shifts
and labor market conditions.
In adopting these changes for the IPF
PPS, it was necessary to identify the
new labor market area delineation for
each county and facility in the country.
For example, there will be new CBSAs,
urban counties that would become rural,
rural counties that would become urban,
and existing CBSAs that would be split
apart. Because the wage index of urban
areas is typically higher than that of
rural areas, IPF facilities currently
located in rural counties that will
become urban, beginning October 1,
2015, will generally experience an
increase in their wage index values. We
identified 105 counties and 37 IPFs that
will move from rural to urban status due
to the new CBSA delineations beginning
in FY 2016, shown in Table 15.
TABLE 15—FY 2016 RURAL TO URBAN CBSA CROSSWALK
FY 2014 CBSA Delineations/FY 2015 data
FY 2015 CBSA Delineations/FY 2015 data
asabaliauskas on DSK5VPTVN1PROD with RULES
County name
CBSA
Baldwin County, Alabama.
Pickens County, Alabama.
Cochise County, Arizona.
VerDate Sep<11>2014
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Urban/Rural
Wage index
CBSA
Urban/Rural
Wage index
Change in
value
(percent)
1
RURAL ...........
0.6963
19300
URBAN ..........
0.7248
4.09
1
RURAL ...........
0.6963
46220
URBAN ..........
0.8337
19.73
3
RURAL ...........
0.9125
43420
URBAN ..........
0.8937
¥2.06
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46683
TABLE 15—FY 2016 RURAL TO URBAN CBSA CROSSWALK—Continued
FY 2014 CBSA Delineations/FY 2015 data
FY 2015 CBSA Delineations/FY 2015 data
County name
asabaliauskas on DSK5VPTVN1PROD with RULES
CBSA
Little River County, Arkansas.
Windham County, Connecticut.
Sussex County, Delaware.
Citrus County, Florida
Gulf County, Florida ....
Highlands County, Florida.
Sumter County, Florida
Walton County, Florida
Lincoln County, Georgia.
Morgan County, Georgia.
Peach County, Georgia
Pulaski County, Georgia.
Kalawao County, Hawaii.
Maui County, Hawaii ...
Butte County, Idaho ....
De Witt County, Illinois
Jackson County, Illinois
Williamson County, Illinois.
Scott County, Indiana ..
Union County, Indiana
Plymouth County, Iowa
Kingman County, Kansas.
Allen County, Kentucky
Butler County, Kentucky.
Acadia Parish, Louisiana.
Iberia Parish, Louisiana
St. James Parish, Louisiana.
Tangipahoa Parish,
Louisiana.
Vermilion Parish, Louisiana.
Webster Parish, Louisiana.
St. Marys County,
Maryland.
Worcester County,
Maryland.
Midland County, Michigan.
Montcalm County,
Michigan.
Fillmore County, Minnesota.
Le Sueur County, Minnesota.
Mille Lacs County, Minnesota.
Sibley County, Minnesota.
Benton County, Mississippi.
Yazoo County, Mississippi.
Golden Valley County,
Montana.
Hall County, Nebraska
VerDate Sep<11>2014
17:57 Aug 04, 2015
Urban/Rural
Wage index
CBSA
Urban/Rural
Wage index
Change in
value
(percent)
4
RURAL ...........
0.7311
45500
URBAN ..........
0.7362
0.70
7
RURAL ...........
1.1251
49340
URBAN ..........
1.1493
2.15
8
RURAL ...........
1.0261
41540
URBAN ..........
0.9289
¥9.47
10
10
10
RURAL ...........
RURAL ...........
RURAL ...........
0.8006
0.8006
0.8006
26140
37460
42700
URBAN ..........
URBAN ..........
URBAN ..........
0.7625
0.7906
0.7982
¥4.76
¥1.25
¥0.30
10
10
11
RURAL ...........
RURAL ...........
RURAL ...........
0.8006
0.8006
0.7425
45540
18880
12260
URBAN ..........
URBAN ..........
URBAN ..........
0.8095
0.8156
0.9225
1.11
1.87
24.24
11
RURAL ...........
0.7425
12060
URBAN ..........
0.9369
26.18
11
11
RURAL ...........
RURAL ...........
0.7425
0.7425
47580
47580
URBAN ..........
URBAN ..........
0.7542
0.7542
1.58
1.58
12
RURAL ...........
1.0741
27980
URBAN ..........
1.0561
¥1.68
12
13
14
14
14
RURAL
RURAL
RURAL
RURAL
RURAL
...........
...........
...........
...........
...........
1.0741
0.7398
0.8362
0.8362
0.8362
27980
26820
14010
16060
16060
URBAN
URBAN
URBAN
URBAN
URBAN
..........
..........
..........
..........
..........
1.0561
0.8933
0.9165
0.8324
0.8324
¥1.68
20.75
9.60
¥0.45
¥0.45
15
15
16
17
RURAL
RURAL
RURAL
RURAL
...........
...........
...........
...........
0.8416
0.8416
0.8451
0.7806
31140
17140
43580
48620
URBAN
URBAN
URBAN
URBAN
..........
..........
..........
..........
0.8605
0.9473
0.8915
0.8472
2.25
12.56
5.49
8.53
18
18
RURAL ...........
RURAL ...........
0.7744
0.7744
14540
14540
URBAN ..........
URBAN ..........
0.8410
0.8410
8.60
8.60
19
RURAL ...........
0.7580
29180
URBAN ..........
0.7869
3.81
19
19
RURAL ...........
RURAL ...........
0.7580
0.7580
29180
35380
URBAN ..........
URBAN ..........
0.7869
0.8821
3.81
16.37
19
RURAL ...........
0.7580
25220
URBAN ..........
0.9452
24.70
19
RURAL ...........
0.7580
29180
URBAN ..........
0.7869
3.81
19
RURAL ...........
0.7580
43340
URBAN ..........
0.8325
9.83
21
RURAL ...........
0.8554
15680
URBAN ..........
0.8593
0.46
21
RURAL ...........
0.8554
41540
URBAN ..........
0.9289
8.59
23
RURAL ...........
0.8207
33220
URBAN ..........
0.7935
¥3.31
23
RURAL ...........
0.8207
24340
URBAN ..........
0.8799
7.21
24
RURAL ...........
0.9124
40340
URBAN ..........
1.1398
24.92
24
RURAL ...........
0.9124
33460
URBAN ..........
1.1196
22.71
24
RURAL ...........
0.9124
33460
URBAN ..........
1.1196
22.71
24
RURAL ...........
0.9124
33460
URBAN ..........
1.1196
22.71
25
RURAL ...........
0.7589
32820
URBAN ..........
0.8991
18.47
25
RURAL ...........
0.7589
27140
URBAN ..........
0.7891
3.98
27
RURAL ...........
0.9024
13740
URBAN ..........
0.8686
¥3.75
28
RURAL ...........
0.8924
24260
URBAN ..........
0.9219
3.31
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TABLE 15—FY 2016 RURAL TO URBAN CBSA CROSSWALK—Continued
FY 2014 CBSA Delineations/FY 2015 data
FY 2015 CBSA Delineations/FY 2015 data
County name
asabaliauskas on DSK5VPTVN1PROD with RULES
CBSA
Hamilton County, Nebraska.
Howard County, Nebraska.
Merrick County, Nebraska.
Jefferson County, New
York.
Yates County, New
York.
Craven County, North
Carolina.
Davidson County,
North Carolina.
Gates County, North
Carolina.
Iredell County, North
Carolina.
Jones County, North
Carolina.
Lincoln County, North
Carolina.
Pamlico County, North
Carolina.
Rowan County, North
Carolina.
Oliver County, North
Dakota.
Sioux County, North
Dakota.
Hocking County, Ohio
Perry County, Ohio ......
Cotton County, Oklahoma.
Josephine County, Oregon.
Linn County, Oregon ...
Adams County, Pennsylvania.
Columbia County,
Pennsylvania.
Franklin County, Pennsylvania.
Monroe County, Pennsylvania.
Montour County, Pennsylvania.
Utuado Municipio,
Puerto Rico.
Beaufort County, South
Carolina.
Chester County, South
Carolina.
Jasper County, South
Carolina.
Lancaster County,
South Carolina.
Union County, South
Carolina.
Custer County, South
Dakota.
Campbell County, Tennessee.
Crockett County, Tennessee.
Maury County, Tennessee.
Morgan County, Tennessee.
VerDate Sep<11>2014
17:57 Aug 04, 2015
Urban/Rural
Wage index
CBSA
Urban/Rural
Wage index
Change in
value
(percent)
28
RURAL ...........
0.8924
24260
URBAN ..........
0.9219
3.31
28
RURAL ...........
0.8924
24260
URBAN ..........
0.9219
3.31
28
RURAL ...........
0.8924
24260
URBAN ..........
0.9219
3.31
33
RURAL ...........
0.8208
48060
URBAN ..........
0.8386
2.17
33
RURAL ...........
0.8208
40380
URBAN ..........
0.8750
6.60
34
RURAL ...........
0.7995
35100
URBAN ..........
0.8994
12.50
34
RURAL ...........
0.7995
49180
URBAN ..........
0.8679
8.56
34
RURAL ...........
0.7995
47260
URBAN ..........
0.9223
15.36
34
RURAL ...........
0.7995
16740
URBAN ..........
0.9073
13.48
34
RURAL ...........
0.7995
35100
URBAN ..........
0.8994
12.50
34
RURAL ...........
0.7995
16740
URBAN ..........
0.9073
13.48
34
RURAL ...........
0.7995
35100
URBAN ..........
0.8994
12.50
34
RURAL ...........
0.7995
16740
URBAN ..........
0.9073
13.48
35
RURAL ...........
0.7099
13900
URBAN ..........
0.7216
1.65
35
RURAL ...........
0.7099
13900
URBAN ..........
0.7216
1.65
36
36
37
RURAL ...........
RURAL ...........
RURAL ...........
0.8329
0.8329
0.7799
18140
18140
30020
URBAN ..........
URBAN ..........
URBAN ..........
0.9539
0.9539
0.7918
14.53
14.53
1.53
38
RURAL ...........
1.0083
24420
URBAN ..........
1.0086
0.03
38
39
RURAL ...........
RURAL ...........
1.0083
0.8719
10540
23900
URBAN ..........
URBAN ..........
1.0879
1.0104
7.89
15.88
39
RURAL ...........
0.8719
14100
URBAN ..........
0.9347
7.20
39
RURAL ...........
0.8719
16540
URBAN ..........
1.0957
25.67
39
RURAL ...........
0.8719
20700
URBAN ..........
0.9372
7.49
39
RURAL ...........
0.8719
14100
URBAN ..........
0.9347
7.20
40
RURAL ...........
0.4047
10380
URBAN ..........
0.3586
¥11.39
42
RURAL ...........
0.8374
25940
URBAN ..........
0.8708
3.99
42
RURAL ...........
0.8374
16740
URBAN ..........
0.9073
8.35
42
RURAL ...........
0.8374
25940
URBAN ..........
0.8708
3.99
42
RURAL ...........
0.8374
16740
URBAN ..........
0.9073
8.35
42
RURAL ...........
0.8374
43900
URBAN ..........
0.8277
¥1.16
43
RURAL ...........
0.8312
39660
URBAN ..........
0.8989
8.14
44
RURAL ...........
0.7365
28940
URBAN ..........
0.7015
¥4.75
44
RURAL ...........
0.7365
27180
URBAN ..........
0.7747
5.19
44
RURAL ...........
0.7365
34980
URBAN ..........
0.8969
21.78
44
RURAL ...........
0.7365
28940
URBAN ..........
0.7015
¥4.75
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TABLE 15—FY 2016 RURAL TO URBAN CBSA CROSSWALK—Continued
FY 2014 CBSA Delineations/FY 2015 data
FY 2015 CBSA Delineations/FY 2015 data
County name
CBSA
Roane County, Tennessee.
Falls County, Texas ....
Hood County, Texas ...
Hudspeth County,
Texas.
Lynn County, Texas ....
Martin County, Texas ..
Newton County, Texas
Oldham County, Texas
Somervell County,
Texas.
Box Elder County, Utah
Augusta County, Virginia.
Buckingham County,
Virginia.
Culpeper County, Virginia.
Floyd County, Virginia
Rappahannock County,
Virginia.
Staunton City County,
Virginia.
Waynesboro City
County, Virginia.
Columbia County,
Washington.
Pend Oreille County,
Washington.
Stevens County, Washington.
Walla Walla County,
Washington.
Fayette County, West
Virginia.
Raleigh County, West
Virginia.
Green County, Wisconsin.
Urban/Rural
Wage index
CBSA
Urban/Rural
Wage index
Change in
value
(percent)
44
RURAL ...........
0.7365
28940
URBAN ..........
0.7015
¥4.75
45
45
45
RURAL ...........
RURAL ...........
RURAL ...........
0.7855
0.7855
0.7855
47380
23104
21340
URBAN ..........
URBAN ..........
URBAN ..........
0.8137
0.9386
0.8139
3.59
19.49
3.62
45
45
45
45
45
RURAL
RURAL
RURAL
RURAL
RURAL
...........
...........
...........
...........
...........
0.7855
0.7855
0.7855
0.7855
0.7855
31180
33260
13140
11100
23104
URBAN
URBAN
URBAN
URBAN
URBAN
..........
..........
..........
..........
..........
0.8830
0.8940
0.8508
0.8277
0.9386
12.41
13.81
8.31
5.37
19.49
46
49
RURAL ...........
RURAL ...........
0.8891
0.7674
36260
44420
URBAN ..........
URBAN ..........
0.9225
0.8326
3.76
8.50
49
RURAL ...........
0.7674
16820
URBAN ..........
0.9053
17.97
49
RURAL ...........
0.7674
47894
URBAN ..........
1.0403
35.56
49
49
RURAL ...........
RURAL ...........
0.7674
0.7674
13980
47894
URBAN ..........
URBAN ..........
0.8473
1.0403
10.41
35.56
49
RURAL ...........
0.7674
44420
URBAN ..........
0.8326
8.50
49
RURAL ...........
0.7674
44420
URBAN ..........
0.8326
8.50
50
RURAL ...........
1.0892
47460
URBAN ..........
1.0934
0.39
50
RURAL ...........
1.0892
44060
URBAN ..........
1.1425
4.89
50
RURAL ...........
1.0892
44060
URBAN ..........
1.1425
4.89
50
RURAL ...........
1.0892
47460
URBAN ..........
1.0934
0.39
51
RURAL ...........
0.7410
13220
URBAN ..........
0.8024
8.29
51
RURAL ...........
0.7410
13220
URBAN ..........
0.8024
8.29
52
RURAL ...........
0.9041
31540
URBAN ..........
1.1130
23.11
The wage index values of rural areas
are typically lower than that of urban
areas. Therefore, IPFs located in a
county that is currently designated as
urban under the IPF PPS wage index
that will become rural when we adopt
the new CBSA delineations may
experience a decrease in their wage
index values. We identified 38 counties
and four IPFs that will move from urban
to rural status due to the new CBSA
delineations beginning in FY 2016. Our
use of updated data for this final rule
increased the number of counties and
the number of IPFs that changed status
from urban to rural from 37 to 38, and
three to four, respectively. Table 16
shows the CBSA delineations and the
urban wage index values for FY 2015
based on existing CBSA delineations,
compared with the proposed CBSA
delineations and wage index values for
FY 2016 based on the new OMB CBSA
delineations. Table 16 also shows the
percentage change in these values for
those counties that will change from
urban to rural, beginning in FY 2016,
when we adopt the new CBSA
delineations.
TABLE 16—FY 2016 URBAN TO RURAL CBSA CROSSWALK
FY 2014 CBSA Delineations/FY 2015 data
FY 2015 CBSA Delineations/FY 2015 data
County name
asabaliauskas on DSK5VPTVN1PROD with RULES
CBSA
Greene County, Alabama.
Franklin County, Arkansas.
Power County, Idaho ...
Franklin County, Indiana.
Gibson County, Indiana
VerDate Sep<11>2014
17:57 Aug 04, 2015
Urban/Rural
Wage index
CBSA
Urban/Rural
Wage index
Change in
value
(percent)
46220
URBAN ..........
0.8387
1
RURAL ...........
0.6914
¥17.56
22900
URBAN ..........
0.7593
4
RURAL ...........
0.7311
¥3.71
38540
17140
URBAN ..........
URBAN ..........
0.9672
0.9473
13
15
RURAL ...........
RURAL ...........
0.7398
0.8416
¥23.51
¥11.16
21780
URBAN ..........
0.8537
15
RURAL ...........
0.8416
¥1.42
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Federal Register / Vol. 80, No. 150 / Wednesday, August 5, 2015 / Rules and Regulations
TABLE 16—FY 2016 URBAN TO RURAL CBSA CROSSWALK—Continued
FY 2014 CBSA Delineations/FY 2015 data
FY 2015 CBSA Delineations/FY 2015 data
County name
CBSA
asabaliauskas on DSK5VPTVN1PROD with RULES
Greene County, Indiana.
Tipton County, Indiana
Franklin County, Kansas.
Geary County, Kansas
Nelson County, Kentucky.
Webster County, Kentucky.
Franklin County, Massachusetts.
Ionia County, Michigan
Newaygo County,
Michigan.
George County, Mississippi.
Stone County, Mississippi.
Crawford County, Missouri.
Howard County, Missouri.
Washington County,
Missouri.
Anson County, North
Carolina.
Greene County, North
Carolina.
Erie County, Ohio ........
Ottawa County, Ohio ...
Preble County, Ohio ....
Washington County,
Ohio.
Stewart County, Tennessee.
Calhoun County, Texas
Delta County, Texas ....
San Jacinto County,
Texas.
Summit County, Utah ..
Cumberland County,
Virginia.
Danville City County,
Virginia.
King And Queen County, Virginia.
Louisa County, Virginia
Pittsylvania County,
Virginia.
Surry County, Virginia
Morgan County, West
Virginia.
Pleasants County,
West Virginia.
Urban/Rural
17:57 Aug 04, 2015
CBSA
Urban/Rural
Wage index
14020
URBAN ..........
0.9062
15
RURAL ...........
0.8416
¥7.13
29020
28140
URBAN ..........
URBAN ..........
0.8990
0.9419
15
17
RURAL ...........
RURAL ...........
0.8416
0.7779
¥6.38
¥17.41
31740
31140
URBAN ..........
URBAN ..........
0.8406
0.8593
17
18
RURAL ...........
RURAL ...........
0.7779
0.7748
¥7.46
¥9.83
21780
URBAN ..........
0.8537
18
RURAL ...........
0.7748
¥9.24
44140
URBAN ..........
1.0271
22
RURAL ...........
1.1553
12.48
24340
24340
URBAN ..........
URBAN ..........
0.8965
0.8965
23
23
RURAL ...........
RURAL ...........
0.8288
0.8288
¥7.55
¥7.55
37700
URBAN ..........
0.7396
25
RURAL ...........
0.7570
2.35
25060
URBAN ..........
0.8179
25
RURAL ...........
0.7570
¥7.45
41180
URBAN ..........
0.9366
26
RURAL ...........
0.7725
¥17.52
17860
URBAN ..........
0.8319
26
RURAL ...........
0.7725
¥7.14
41180
URBAN ..........
0.9366
26
RURAL ...........
0.7725
¥17.52
16740
URBAN ..........
0.9230
34
RURAL ...........
0.7899
¥14.42
24780
URBAN ..........
0.9371
34
RURAL ...........
0.7899
¥15.71
41780
45780
19380
37620
URBAN
URBAN
URBAN
URBAN
..........
..........
..........
..........
0.7784
0.9129
0.8938
0.8186
36
36
36
36
RURAL
RURAL
RURAL
RURAL
...........
...........
...........
...........
0.8348
0.8348
0.8348
0.8348
7.25
¥8.56
¥6.60
1.98
17300
URBAN ..........
0.7526
44
RURAL ...........
0.7277
¥3.31
47020
19124
26420
URBAN ..........
URBAN ..........
URBAN ..........
0.8473
0.9703
0.9734
45
45
45
RURAL ...........
RURAL ...........
RURAL ...........
0.7847
0.7847
0.7847
¥7.39
¥19.13
¥19.39
41620
40060
URBAN ..........
URBAN ..........
0.9512
0.9625
46
49
RURAL ...........
RURAL ...........
0.9005
0.7554
¥5.33
¥21.52
19260
URBAN ..........
0.7963
49
RURAL ...........
0.7554
¥5.14
40060
URBAN ..........
0.9625
49
RURAL ...........
0.7554
¥21.52
40060
19260
URBAN ..........
URBAN ..........
0.9625
0.7963
49
49
RURAL ...........
RURAL ...........
0.7554
0.7554
¥21.52
¥5.14
47260
25180
URBAN ..........
URBAN ..........
0.9223
0.9080
49
51
RURAL ...........
RURAL ...........
0.7554
0.7274
¥18.10
¥19.89
37620
URBAN ..........
0.8186
51
RURAL ...........
0.7274
¥11.14
We note that IPFs in some urban
CBSAs will experience a change in their
wage index values even though they
remain urban because an urban CBSA’s
boundaries and/or the counties
included in that CBSA can change.
Table 17 shows those counties that
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value
(percent)
Jkt 235001
would experience a change in their
wage index value in FY 2016 due to the
new OMB CBSAs. Table 17 shows the
urban CBSA delineations and wage
index values for FY 2015 based on
existing CBSA delineations, compared
with the urban CBSA delineations and
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wage index values for FY 2016 based on
the new OMB delineations, and the
percentage change in these values, for
counties that will remain urban even
though the CBSA boundaries and/or
counties included in that CBSA will
change.
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46687
TABLE 17—FY 2015 URBAN TO A DIFFERENT FY 2016 URBAN CBSA CROSSWALK
FY 2014 CBSA Delineations/FY 2015 data
FY 2015 CBSA Delineations/FY 2015 data
County name
asabaliauskas on DSK5VPTVN1PROD with RULES
CBSA
Flagler County, Florida
De Kalb County, Illinois
Kane County, Illinois ...
Madison County, Indiana.
Meade County, Kentucky.
Essex County, Massachusetts.
Ottawa County, Michigan.
Jackson County, Mississippi.
Bergen County, New
Jersey.
Hudson County, New
Jersey.
Middlesex County, New
Jersey.
Monmouth County,
New Jersey.
Ocean County, New
Jersey.
Passaic County, New
Jersey.
Somerset County, New
Jersey.
Bronx County, New
York.
Dutchess County, New
York.
Kings County, New
York.
New York County, New
York.
Orange County, New
York.
Putnam County, New
York.
Queens County, New
York.
Richmond County, New
York.
Rockland County, New
York.
Westchester County,
New York.
Brunswick County,
North Carolina.
Bucks County, Pennsylvania.
Chester County, Pennsylvania.
Montgomery County,
Pennsylvania.
Arecibo Municipio,
Puerto Rico.
Camuy Municipio,
Puerto Rico.
Ceiba Municipio, Puerto Rico.
Fajardo Municipio,
Puerto Rico.
Guanica Municipio,
Puerto Rico.
Guayanilla Municipio,
Puerto Rico.
Hatillo Municipio, Puerto Rico.
VerDate Sep<11>2014
17:57 Aug 04, 2015
Urban/Rural
Wage index
CBSA
Urban/Rural
Wage index
Change in
value
(percent)
37380
16974
16974
11300
URBAN
URBAN
URBAN
URBAN
..........
..........
..........
..........
0.8462
1.0412
1.0412
1.0078
19660
20994
20994
26900
URBAN
URBAN
URBAN
URBAN
..........
..........
..........
..........
0.8376
1.0299
1.0299
1.0133
¥1.02
¥1.09
¥1.09
0.55
31140
URBAN ..........
0.8593
21060
URBAN ..........
0.7701
¥10.38
37764
URBAN ..........
1.0769
15764
URBAN ..........
1.1159
3.62
26100
URBAN ..........
0.8136
24340
URBAN ..........
0.8799
8.15
37700
URBAN ..........
0.7396
25060
URBAN ..........
0.7896
6.76
35644
URBAN ..........
1.3110
35614
URBAN ..........
1.2837
¥2.08
35644
URBAN ..........
1.3110
35614
URBAN ..........
1.2837
¥2.08
20764
URBAN ..........
1.0989
35614
URBAN ..........
1.2837
16.82
20764
URBAN ..........
1.0989
35614
URBAN ..........
1.2837
16.82
20764
URBAN ..........
1.0989
35614
URBAN ..........
1.2837
16.82
35644
URBAN ..........
1.3110
35614
URBAN ..........
1.2837
¥2.08
20764
URBAN ..........
1.0989
35084
URBAN ..........
1.1233
2.22
35644
URBAN ..........
1.3110
35614
URBAN ..........
1.2837
¥2.08
39100
URBAN ..........
1.1533
20524
URBAN ..........
1.1345
¥1.63
35644
URBAN ..........
1.3110
35614
URBAN ..........
1.2837
¥2.08
35644
URBAN ..........
1.3110
35614
URBAN ..........
1.2837
¥2.08
39100
URBAN ..........
1.1533
35614
URBAN ..........
1.2837
11.31
35644
URBAN ..........
1.3110
20524
URBAN ..........
1.1345
¥13.46
35644
URBAN ..........
1.3110
35614
URBAN ..........
1.2837
¥2.08
35644
URBAN ..........
1.3110
35614
URBAN ..........
1.2837
¥2.08
35644
URBAN ..........
1.3110
35614
URBAN ..........
1.2837
¥2.08
35644
URBAN ..........
1.3110
35614
URBAN ..........
1.2837
¥2.08
48900
URBAN ..........
0.8867
34820
URBAN ..........
0.8620
¥2.79
37964
URBAN ..........
1.0837
33874
URBAN ..........
1.0157
¥6.27
37964
URBAN ..........
1.0837
33874
URBAN ..........
1.0157
¥6.27
37964
URBAN ..........
1.0837
33874
URBAN ..........
1.0157
¥6.27
41980
URBAN ..........
0.4449
11640
URBAN ..........
0.4213
¥5.30
41980
URBAN ..........
0.4449
11640
URBAN ..........
0.4213
¥5.30
21940
URBAN ..........
0.3669
41980
URBAN ..........
0.4438
20.96
21940
URBAN ..........
0.3669
41980
URBAN ..........
0.4438
20.96
49500
URBAN ..........
0.3375
38660
URBAN ..........
0.4154
23.08
49500
URBAN ..........
0.3375
38660
URBAN ..........
0.4154
23.08
41980
URBAN ..........
0.4449
11640
URBAN ..........
0.4213
¥5.30
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Federal Register / Vol. 80, No. 150 / Wednesday, August 5, 2015 / Rules and Regulations
TABLE 17—FY 2015 URBAN TO A DIFFERENT FY 2016 URBAN CBSA CROSSWALK—Continued
FY 2014 CBSA Delineations/FY 2015 data
FY 2015 CBSA Delineations/FY 2015 data
County name
CBSA
Luquillo Municipio,
Puerto Rico.
Penuelas Municipio,
Puerto Rico.
Quebradillas Municipio,
Puerto Rico.
Yauco Municipio, Puerto Rico.
Anderson County,
South Carolina.
Grainger County, Tennessee.
Lincoln County, West
Virginia.
Putnam County, West
Virginia.
Urban/Rural
Wage index
CBSA
Urban/Rural
Wage index
Change in
value
(percent)
21940
URBAN ..........
0.3669
41980
URBAN ..........
0.4438
20.96
49500
URBAN ..........
0.3375
38660
URBAN ..........
0.4154
23.08
41980
URBAN ..........
0.4449
11640
URBAN ..........
0.4213
¥5.30
49500
URBAN ..........
0.3375
38660
URBAN ..........
0.4154
23.08
11340
URBAN ..........
0.8744
24860
URBAN ..........
0.9161
4.77
34100
URBAN ..........
0.6983
28940
URBAN ..........
0.7015
0.46
16620
URBAN ..........
0.7988
26580
URBAN ..........
0.8846
10.74
16620
URBAN ..........
0.7988
26580
URBAN ..........
0.8846
10.74
Likewise, IPFs currently located in a
rural area may remain rural under the
new CBSA delineations but experience
a change in their rural wage index value
due to implementation of the new CBSA
delineations. Table 18 shows the FY
2015 CBSA delineations and rural
statewide wage index values, compared
with the FY 2016 CBSA delineations
and rural statewide wage index values,
and the percentage change in these
values, for those rural areas that will
change.
TABLE 18—FY 2016 CHANGES TO THE STATEWIDE RURAL WAGE INDEX CROSSWALK
FY 2014 CBSA Delineations/FY 2015 data
FY 2015 CBSA Delineations/FY 2015 data
County name
CBSA
asabaliauskas on DSK5VPTVN1PROD with RULES
ALABAMA ....................
ARIZONA .....................
CONNECTICUT ..........
FLORIDA .....................
GEORGIA ....................
HAWAII ........................
ILLINOIS ......................
KANSAS ......................
KENTUCKY .................
LOUISIANA .................
MARYLAND .................
MASSACHUSETTS .....
MICHIGAN ...................
MISSISSIPPI ...............
NEBRASKA .................
NEW YORK .................
NORTH CAROLINA ....
OHIO ...........................
OREGON .....................
PENNSYLVANIA .........
SOUTH CAROLINA ....
TENNESSEE ...............
TEXAS .........................
UTAH ...........................
VIRGINIA .....................
WASHINGTON ............
WEST VIRGINIA .........
WISCONSIN ................
Urban/Rural
1
3
7
10
11
12
14
17
18
19
21
22
23
25
28
33
34
36
38
39
42
44
45
46
49
50
51
52
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
While we believe that the new CBSA
delineations will result in wage index
values that are more representative of
the actual costs of labor in a given area,
we also recognize that use of the new
CBSA delineations will result in
reduced payments to some IPFs and
VerDate Sep<11>2014
17:57 Aug 04, 2015
Jkt 235001
Wage index
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
0.6963
0.9125
1.1251
0.8006
0.7425
1.0741
0.8362
0.7806
0.7744
0.7580
0.8554
1.3920
0.8207
0.7589
0.8924
0.8208
0.7995
0.8329
1.0083
0.8719
0.8374
0.7365
0.7855
0.8891
0.7674
1.0892
0.7410
0.9041
CBSA
Urban/Rural
1
3
7
10
11
12
14
17
18
19
21
22
23
25
28
33
34
36
38
39
42
44
45
46
49
50
51
52
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
RURAL
increased payments to other IPFs, due to
changes in wage index values.
Approximately 23.3 percent of IPFs will
experience a decrease in wage index
values due to CBSA changes, while 12.3
percent of IPFs will experience an
increase in wage index values due to
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...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
Wage index
0.6914
0.9219
1.1295
0.8371
0.7439
1.0872
0.8369
0.7779
0.7748
0.7108
0.8746
1.1553
0.8288
0.7570
0.8877
0.8192
0.7899
0.8348
0.9949
0.8083
0.8370
0.7277
0.7847
0.9005
0.7554
1.0877
0.7274
0.9087
Change in
value
(percent)
¥0.70
1.03
0.39
4.56
0.19
1.22
0.08
¥0.35
0.05
¥6.23
2.24
¥17.00
0.99
¥0.25
¥0.53
¥0.19
¥1.20
0.23
¥1.33
¥7.29
¥0.05
¥1.19
¥0.10
1.28
¥1.56
¥0.14
¥1.84
0.51
CBSA changes. The remaining 64.4
percent of IPFs will experience no
change in their wage index values.
While the wage index CBSA changes
will be implemented in a budget-neutral
fashion, the distributional effects of
these CBSA changes appear to affect
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rural IPFs in particular; column 5 in
Table 29 in section VIII. of this final rule
shows that rural providers overall are
anticipated to experience payment
reductions of 0.2 percent, with for-profit
rural psychiatric hospitals anticipated to
experience the greatest reduction of 0.5
percent.
We believe that it will be appropriate
to provide for a transition period to
mitigate any negative impacts on
facilities that experience reduced
payments as a result of our adopting the
new OMB CBSA delineations.
Therefore, we are implementing these
CBSA changes using a 1-year transition
with a blended wage index for all
providers. For FY 2016, the wage index
for each provider will consist of a blend
of 50 percent of the FY 2016 IPF wage
index using the current OMB
delineations and 50 percent of the FY
2016 IPF wage index using the new
OMB delineations. This results in an
average of the two values. The FY 2017
IPF PPS wage index and subsequent IPF
PPS wage indices will be based solely
on the new OMB CBSA delineations.
We believe a 1-year transition strikes an
appropriate balance between ensuring
that IPF PPS payments are as accurate
and stable as possible while giving IPFs
time to adjust to the new CBSA
delineations. The final FY 2016 IPF PPS
transitional wage index is located on the
CMS Web site at http://www.cms.gov/
Medicare/Medicare-Fee-for-ServicePayment/InpatientPsychFacilPPS/
WageIndex.html.
Comment: We received one comment
on the proposed transitional wage
index, supporting the new OMB
delineations, but stating that a 2-year
transition was too short given the
impact on providers. This commenter
asked for 3-year transition instead of a
2-year transition.
Response: We appreciate the
commenter’s support for the new OMB
delineations, but note that we proposed
a 1-year transition, not a 2-year
transition. We believe that our proposed
1-year transition is sufficient to allow
providers to adjust to changes resulting
from the new OMB delineations. A 1year transition is also consistent with
how the new OMB delineations have
been handled in other Medicare
benefits. Therefore, we are
implementing the FY 2016 IPF PPS
Wage Index as proposed, with a 1-year
transition.
d. Adjustment for Rural Location and
Phase Out the Rural Adjustment for IPFs
Losing Their Rural Adjustment Due to
CBSA Changes
In the November 2004 IPF PPS final
rule, we provided a 17 percent payment
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adjustment for IPFs located in a rural
area. This adjustment was based on the
regression analysis, which indicated
that the per diem cost of rural facilities
was 17 percent higher than that of urban
facilities after accounting for the
influence of the other variables included
in the regression. For FY 2016, we will
continue to apply a 17 percent payment
adjustment for IPFs located in a rural
area as defined at § 412.64(b)(1)(ii)(C). A
complete discussion of the adjustment
for rural locations appears in the
November 2004 IPF PPS final rule (69
FR 66954).
As noted in section III.D.1.c. of this
final rule, we are adopting OMB updates
to CBSA delineations. Adoption of the
updated CBSAs will change the status of
37 IPF providers currently designated as
‘‘rural’’ to ‘‘urban’’ for FY 2016 and
subsequent fiscal years. As such, these
37 newly urban providers will no longer
receive the 17 percent rural adjustment.
While 34 of these 37 rural IPFs that
will be designated as urban under the
new CBSA delineations will experience
an increase in their wage index value,
all 37 of these IPFs will lose the 17
percent rural adjustment. Consistent
with the transition policy adopted for
Inpatient Rehabilitation Facilities (IRFs)
in FY 2006 (70 FR 47923 through
47927), we considered the
appropriateness of applying a 3-year
phase-out of the rural adjustment for
IPFs located in rural counties that will
become urban under the new OMB
delineations, given the potentially
significant payment impacts for these
IPFs. We believe that a phase-out of the
rural adjustment transition period for
these 37 IPFs specifically is appropriate
because we expect these IPFs will
experience a steeper and more abrupt
reduction in their payments compared
to other IPFs.
Therefore, in addition to the 1-year
wage index transition policy noted
above, we are finalizing a budget-neutral
3-year phase-out of the rural adjustment
for existing FY 2015 rural IPFs that will
become urban in FY 2016 and that
experience a loss in payments due to
changes from the new CBSA
delineations. Accordingly, the
incremental steps needed to reduce the
impact of the loss of the FY 2015 rural
adjustment of 17 percent will be taken
over FYs 2016, 2017 and 2018. This
policy will allow rural IPFs that will be
classified as urban in FY 2016 to receive
two-thirds of the 2015 rural adjustment
for FY 2016, as well as the blended
wage index. For FY 2017, these IPFs
will receive the full FY 2017 wage index
and one-third of the FY 2015 rural
adjustment. For FY 2018, these IPFs will
receive the full FY 2018 wage index
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without a rural adjustment. We believe
a 3-year budget-neutral phase-out of the
rural adjustment for IPFs that transition
from rural to urban status under the new
CBSA delineations will best accomplish
the goals of mitigating the loss of the
rural adjustment for existing FY 2015
rural IPFs. The purpose of the gradual
phase-out of the rural adjustment for
these providers is to alleviate the
significant payment implications for
existing rural IPFs that may need time
to adjust to the loss of their FY 2015
rural payment adjustment or that
experience a reduction in payments
solely because of this re-designation. As
stated, this policy is specifically for
rural IPFs that become urban in FY
2016. We are not implementing a
transition policy for urban IPFs that
become rural in FY 2016 because these
IPFs will receive the full rural
adjustment of 17 percent beginning
October 1, 2015.
For the reasons discussed, we are
implementing a 3-year budget-neutral
phase-out of the rural adjustment for the
IPFs that during FY 2015 were
designated as rural and for FY 2016 are
designated as urban under the new
CBSA system. This is in addition to our
implementation of a 1-year blended
wage index for all IPFs. We believe that
the incremental reduction of the FY
2015 rural adjustment will be
appropriate to mitigate a significant
reduction in payment. We considered
alternative timeframes for phasing out
the rural adjustment for IPFs which will
transition from rural to urban status in
FY 2016, but believe that a 3-year
budget-neutral phase-out of the rural
adjustment will appropriately mitigate
the adverse payment impacts for
existing FY 2015 rural IPFs that will be
designated as urban IPFs in FY 2016,
while also ensuring that payment rates
for these providers are set accurately
and appropriately.
Comment: We received one comment
asking that we phase out the rural
adjustment for the 37 affected providers
over 4 years rather than 3 years. This
commenter was concerned that affected
providers would be significantly
impacted by the loss of the rural
adjustment.
Response: We appreciate the
commenter’s request, but as noted
above, we considered alternate
timeframes for phasing out the rural
adjustment. We believe that a 3-year
phase-out balances the need for us to
pay accurately and appropriately with
sufficient time for providers to adjust to,
and to mitigate the adverse payment
effect. A 3-year phase-out is also
consistent with the policy we followed
in FY 2006 for Inpatient Rehabilitation
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Facilities. As such, we are finalizing the
rural adjustment phase-out for these 37
IPFs as proposed, with a 3-year phase
out.
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e. Budget Neutrality Adjustment
Changes to the wage index are made
in a budget-neutral manner so that
updates do not increase expenditures.
Therefore, for FY 2016, we will
continue to apply a budget-neutrality
adjustment in accordance with our
existing budget-neutrality policy. This
policy requires us to estimate the total
amount of IPF PPS payments for FY
2016 using the labor-related share and
the wage indices from FY 2015 divided
by the total estimated IPF PPS payments
for FY 2016 using the labor-related
share and wage indices from FY 2016.
The estimated payments are based on
FY 2014 IPF claims, inflated to the
appropriate FY. This quotient is the
wage index budget-neutrality factor, and
it is applied in the update of the Federal
per diem base rate for FY 2016 in
addition to the market basket described
in section III.A. of this final rule. The
final wage index budget-neutrality
factor for FY 2016 is 1.0041. We
received no comments on the wage
index budget-neutrality factor for FY
2016.
2. Teaching Adjustment
In the November 2004 IPF PPS final
rule, we implemented regulations at
§ 412.424(d)(1)(iii) to establish a facilitylevel adjustment for IPFs that are, or are
part of, teaching hospitals. The teaching
adjustment accounts for the higher
indirect operating costs experienced by
hospitals that participate in graduate
medical education (GME) programs. The
payment adjustments are made based on
the ratio of the number of full-time
equivalent (FTE) interns and residents
training in the IPF and the IPF’s average
daily census (ADC).
Medicare makes direct GME payments
(for direct costs such as resident and
teaching physician salaries, and other
direct teaching costs) to all teaching
hospitals including those paid under a
PPS, and those paid under the TEFRA
rate-of-increase limits. These direct
GME payments are made separately
from payments for hospital operating
costs and are not part of the IPF PPS.
The direct GME payments do not
address the estimated higher indirect
operating costs teaching hospitals may
face.
The results of the regression analysis
of FY 2002 IPF data established the
basis for the payment adjustments
included in the November 2004 IPF PPS
final rule. The results showed that the
indirect teaching cost variable is
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significant in explaining the higher
costs of IPFs that have teaching
programs. We calculated the teaching
adjustment based on the IPF’s ‘‘teaching
variable,’’ which is one plus the ratio of
the number of FTE residents training in
the IPF (subject to limitations described
below) to the IPF’s ADC.
We established the teaching
adjustment in a manner that limited the
incentives for IPFs to add FTE residents
for the purpose of increasing their
teaching adjustment. We imposed a cap
on the number of FTE residents that
may be counted for purposes of
calculating the teaching adjustment. The
cap limits the number of FTE residents
that teaching IPFs may count for the
purpose of calculating the IPF PPS
teaching adjustment, not the number of
residents teaching institutions can hire
or train. We calculated the number of
FTE residents that trained in the IPF
during a ‘‘base year’’ and used that FTE
resident number as the cap. An IPF’s
FTE resident cap is ultimately
determined based on the final
settlement of the IPF’s most recent cost
report filed before November 15, 2004
(that is, the publication date of the IPF
PPS final rule). A complete discussion
on the temporary adjustment to the FTE
cap to reflect residents added due to
hospital closure and by residency
program appears in the January 27, 2011
IPF PPS proposed rule (76 FR 5018
through 5020) and the May 6, 2011 IPF
PPS final rule (76 FR 26453 through
26456).
In the regression analysis, the
logarithm of the teaching variable had a
coefficient value of 0.5150. We
converted this cost effect to a teaching
payment adjustment by treating the
regression coefficient as an exponent
and raising the teaching variable to a
power equal to the coefficient value. We
note that the coefficient value of 0.5150
was based on the regression analysis
holding all other components of the
payment system constant. A complete
discussion of how the teaching
adjustment was calculated appears in
the November 2004 IPF PPS final rule
(69 FR 66954 through 66957) and the
May 2008 IPF PPS notice (73 FR 25721).
As with other adjustment factors
derived through the regression analysis,
we do not plan to rerun the teaching
adjustment factors in the regression
analysis until we more fully analyze IPF
PPS data. Therefore, in this final rule,
for FY 2016, we will continue to retain
the coefficient value of 0.5150 for the
teaching adjustment to the Federal per
diem base rate.
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3. Cost of Living Adjustment for IPFs
Located in Alaska and Hawaii
The IPF PPS includes a payment
adjustment for IPFs located in Alaska
and Hawaii based upon the county in
which the IPF is located. As we
explained in the November 2004 IPF
PPS final rule, the FY 2002 data
demonstrated that IPFs in Alaska and
Hawaii had per diem costs that were
disproportionately higher than other
IPFs. Other Medicare PPSs (for example,
the IPPS and LTCH PPS) adopted a cost
of living adjustment (COLA) to account
for the cost differential of care furnished
in Alaska and Hawaii.
We analyzed the effect of applying a
COLA to payments for IPFs located in
Alaska and Hawaii. The results of our
analysis demonstrated that a COLA for
IPFs located in Alaska and Hawaii
would improve payment equity for
these facilities. As a result of this
analysis, we provided a COLA in the
November 2004 IPF PPS final rule.
A COLA for IPFs located in Alaska
and Hawaii is made by multiplying the
nonlabor-related portion of the Federal
per diem base rate by the applicable
COLA factor based on the COLA area in
which the IPF is located.
The COLA factors are published on
the Office of Personnel Management
(OPM) Web site (http://www.opm.gov/
oca/cola/rates.asp).
We note that the COLA areas for
Alaska are not defined by county as are
the COLA areas for Hawaii. In 5 CFR
591.207, the OPM established the
following COLA areas:
• City of Anchorage, and 80-kilometer
(50-mile) radius by road, as measured
from the Federal courthouse;
• City of Fairbanks, and 80-kilometer
(50-mile) radius by road, as measured
from the Federal courthouse;
• City of Juneau, and 80-kilometer
(50-mile) radius by road, as measured
from the Federal courthouse;
• Rest of the State of Alaska.
As stated in the November 2004 IPF
PPS final rule, we update the COLA
factors according to updates established
by the OPM. However, sections 1911
through 1919 of the Nonforeign Area
Retirement Equity Assurance Act, as
contained in subtitle B of title XIX of the
National Defense Authorization Act
(NDAA) for Fiscal Year 2010 (Pub. L.
111–84, October 28, 2009), transitions
the Alaska and Hawaii COLAs to
locality pay. Under section 1914 of
NDAA, locality pay is being phased in
over a 3-year period beginning in
January 2010, with COLA rates frozen as
of the date of enactment, October 28,
2009, and then proportionately reduced
to reflect the phase-in of locality pay.
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When we published the proposed
COLA factors in the January 2011 IPF
PPS proposed rule (76 FR 4998), we
inadvertently selected the FY 2010
COLA rates which had been reduced to
account for the phase-in of locality pay.
We did not intend to propose the
reduced COLA rates because that would
have understated the adjustment. Since
the 2009 COLA rates did not reflect the
phase-in of locality pay, we finalized
the FY 2009 COLA rates for RY 2010
through RY 2014.
In the FY 2013 IPPS/LTCH final rule
(77 FR 53700 through 53701), we
established a methodology for FY 2014
to update the COLA factors for Alaska
and Hawaii. Under that methodology,
we use a comparison of the growth in
the Consumer Price Indices (CPIs) in
Anchorage, Alaska and Honolulu,
Hawaii relative to the growth in the
overall CPI as published by the Bureau
of Labor Statistics (BLS) to update the
COLA factors for all areas in Alaska and
Hawaii, respectively. As discussed in
the FY 2013 IPPS/LTCH proposed rule
(77 FR 28145), because BLS publishes
CPI data for only Anchorage, Alaska and
Honolulu, Hawaii, our methodology for
updating the COLA factors uses a
comparison of the growth in the CPIs for
those cities relative to the growth in the
overall CPI to update the COLA factors
for all areas in Alaska and Hawaii,
respectively. We believe that the relative
price differences between these cities
and the United States (as measured by
the CPIs mentioned above) are generally
appropriate proxies for the relative price
differences between the ‘‘other areas’’ of
Alaska and Hawaii and the United
States.
The CPIs for ‘‘All Items’’ that BLS
publishes for Anchorage, Alaska,
Honolulu, Hawaii, and for the average
U.S. city are based on a different mix of
commodities and services than is
reflected in the nonlabor-related share
of the IPPS market basket. As such,
under the methodology we established
to update the COLA factors, we
calculated a ‘‘reweighted CPI’’ using the
CPI for commodities and the CPI for
services for each of the geographic areas
to mirror the composition of the IPPS
market basket nonlabor-related share.
The current composition of BLS’ CPI for
‘‘All Items’’ for all of the respective
areas is approximately 40 percent
commodities and 60 percent services.
However, the nonlabor-related share of
the IPPS market basket is comprised of
60 percent commodities and 40 percent
services. Therefore, under the
methodology established for FY 2014 in
the FY 2013 IPPS/LTCH PPS final rule,
we created reweighted indexes for
Anchorage, Alaska, Honolulu, Hawaii,
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and the average U.S. city using the
respective CPI commodities index and
CPI services index and applying the
approximate 60/40 weights from the
IPPS market basket. This approach is
appropriate because we would continue
to make a COLA for hospitals located in
Alaska and Hawaii by multiplying the
nonlabor-related portion of the
standardized amount by a COLA factor.
Under the COLA factor update
methodology established in the FY 2014
IPPS/LTCH final rule, we adjust
payments made to hospitals located in
Alaska and Hawaii by incorporating a
25-percent cap on the CPI-updated
COLA factors. We note that OPM’s
COLA factors were calculated with a
statutorily mandated cap of 25 percent,
and since at least 1984, we have
exercised our discretionary authority to
adjust Alaska and Hawaii payments by
incorporating this cap. In keeping with
this historical policy, we continue to
use such a cap because our CPI-updated
COLA factors use the 2009 OPM COLA
factors as a basis.
In FY 2015 IPF PPS rulemaking, we
adopted the same methodology for the
COLA factors applied under the IPPS
because IPFs are hospitals with a similar
mix of commodities and services. We
think it is appropriate to have a
consistent policy approach with that of
other hospitals in Alaska and Hawaii.
Therefore, in the FY 2015 IPF PPS final
rule, we adopted the cost of living
adjustment factors shown in the
Addendum for IPFs located in Alaska
and Hawaii. Under IPPS COLA policy,
the COLA updates are determined every
four years, when the IPPS market basket
is rebased. Since the IPPS COLA factors
were last updated in FY 2014, they are
not scheduled to be updated again until
FY 2018. As such, we will continue
using the existing IPF PPS COLA factors
in effect in FY 2015 for FY 2016. The
IPF PPS COLA factors for FY 2016 are
shown in the Addendum of this final
rule.
4. Adjustment for IPFs With a
Qualifying Emergency Department (ED)
The IPF PPS includes a facility-level
adjustment for IPFs with qualifying EDs.
We provide an adjustment to the
Federal per diem base rate to account
for the costs associated with
maintaining a full-service ED. The
adjustment is intended to account for
ED costs incurred by a freestanding
psychiatric hospital with a qualifying
ED or a distinct part psychiatric unit of
an acute care hospital or a CAH, for
preadmission services otherwise
payable under the Medicare Outpatient
Prospective Payment System (OPPS),
furnished to a beneficiary on the date of
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the beneficiary’s admission to the
hospital and during the day
immediately preceding the date of
admission to the IPF (see § 413.40(c)(2)),
and the overhead cost of maintaining
the ED. This payment is a facility-level
adjustment that applies to all IPF
admissions (with one exception
described below), regardless of whether
a particular patient receives
preadmission services in the hospital’s
ED.
The ED adjustment is incorporated
into the variable per diem adjustment
for the first day of each stay for IPFs
with a qualifying ED. That is, IPFs with
a qualifying ED receive an adjustment
factor of 1.31 as the variable per diem
adjustment for day 1 of each stay. If an
IPF does not have a qualifying ED, it
receives an adjustment factor of 1.19 as
the variable per diem adjustment for day
1 of each patient stay.
The ED adjustment is made on every
qualifying claim except as described
below. As specified in
§ 412.424(d)(1)(v)(B), the ED adjustment
is not made when a patient is
discharged from an acute care hospital
or CAH and admitted to the same
hospital’s or CAH’s psychiatric unit. We
clarified in the November 2004 IPF PPS
final rule (69 FR 66960) that an ED
adjustment is not made in this case
because the costs associated with ED
services are reflected in the DRG
payment to the acute care hospital or
through the reasonable cost payment
made to the CAH.
Therefore, when patients are
discharged from an acute care hospital
or CAH and admitted to the same
hospital or CAH’s psychiatric unit, the
IPF receives the 1.19 adjustment factor
as the variable per diem adjustment for
the first day of the patient’s stay in the
IPF.
We did not propose any changes to
the ED adjustment. For FY 2016, we will
continue to retain the 1.31 adjustment
factor for IPFs with qualifying EDs. A
complete discussion of the steps
involved in the calculation of the ED
adjustment factor appears in the
November 2004 IPF PPS final rule (69
FR 66959 through 66960) and the May
2006 IPF PPS final rule (71 FR 27070
through 27072).
E. Other Payment Adjustments and
Policies
1. Outlier Payment Overview
The IPF PPS includes an outlier
adjustment to promote access to IPF
care for those patients who require
expensive care and to limit the financial
risk of IPFs treating unusually costly
patients. In the November 2004 IPF PPS
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final rule, we implemented regulations
at § 412.424(d)(3)(i) to provide a percase payment for IPF stays that are
extraordinarily costly. Providing
additional payments to IPFs for
extremely costly cases strongly
improves the accuracy of the IPF PPS in
determining resource costs at the patient
and facility level. These additional
payments reduce the financial losses
that would otherwise be incurred in
treating patients who require more
costly care and, therefore, reduce the
incentives for IPFs to under-serve these
patients.
We make outlier payments for
discharges in which an IPF’s estimated
total cost for a case exceeds a fixed
dollar loss threshold amount
(multiplied by the IPF’s facility-level
adjustments) plus the Federal per diem
payment amount for the case.
In instances when the case qualifies
for an outlier payment, we pay 80
percent of the difference between the
estimated cost for the case and the
adjusted threshold amount for days 1
through 9 of the stay (consistent with
the median LOS for IPFs in FY 2002),
and 60 percent of the difference for day
10 and thereafter. We established the 80
percent and 60 percent loss sharing
ratios because we were concerned that
a single ratio established at 80 percent
(like other Medicare PPSs) might
provide an incentive under the IPF per
diem payment system to increase LOS
in order to receive additional payments.
After establishing the loss sharing
ratios, we determined the current FY
2015 fixed dollar loss threshold amount
through payment simulations designed
to compute a dollar loss beyond which
payments are estimated to meet the 2
percent outlier spending target. Each
year when we update the IPF PPS, we
simulate payments using the latest
available data to compute the fixed
dollar loss threshold so that outlier
payments represent 2 percent of total
projected IPF PPS payments.
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2. Update to the Outlier Fixed Dollar
Loss Threshold Amount
In accordance with the update
methodology described in § 412.428(d),
we are updating the fixed dollar loss
threshold amount used under the IPF
PPS outlier policy. Based on the
regression analysis and payment
simulations used to develop the IPF
PPS, we established a 2 percent outlier
policy which strikes an appropriate
balance between protecting IPFs from
extraordinarily costly cases while
ensuring the adequacy of the Federal
per diem base rate for all other cases
that are not outlier cases.
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Based on an analysis of the latest
available data (that is, the March 2015
update of FY 2014 IPF claims) and rate
increases, we believe it is necessary to
update the fixed dollar loss threshold
amount in order to maintain an outlier
percentage that equals 2 percent of total
estimated IPF PPS payments. To update
the IPF outlier threshold amount for FY
2016, we used FY 2014 claims data and
the same methodology that we used to
set the initial outlier threshold amount
in the May 2006 IPF PPS final rule (71
FR 27072 and 27073), which is also the
same methodology that we used to
update the outlier threshold amounts for
years 2008 through 2015. Based on an
analysis of these updated data, we
estimate that IPF outlier payments as a
percentage of total estimated payments
are approximately 2.2 percent in FY
2015. Therefore, we will update the
outlier threshold amount to $9,580 to
maintain estimated outlier payments at
2 percent of total estimated aggregate
IPF payments for FY 2016.
Comment: One commenter wrote that
the increase in the outlier threshold
would result in significant losses for
hospitals with a high percentage of
outlier cases, and suggested that CMS
transition to the higher threshold over 2
years.
Response: Our longstanding policy is
to maintain a 2 percent outlier
threshold, which would not be possible
if we transitioned to the FY 2016 outlier
threshold. We note that when we
reanalyzed the outlier data for this final
rule using the March 2015 update of the
2014 MedPAR claims, the final outlier
threshold was lower than the proposed
outlier threshold ($9,825).
3. Update to IPF Cost-to-Charge Ratio
Ceilings
Under the IPF PPS, an outlier
payment is made if an IPF’s cost for a
stay exceeds a fixed dollar loss
threshold amount plus the IPF PPS
amount. In order to establish an IPF’s
cost for a particular case, we multiply
the IPF’s reported charges on the
discharge bill by its overall cost-tocharge ratio (CCR). This approach to
determining an IPF’s cost is consistent
with the approach used under the IPPS
and other PPSs. In the June 2003 IPPS
final rule (68 FR 34494), we
implemented changes to the IPPS policy
used to determine CCRs for acute care
hospitals because we became aware that
payment vulnerabilities resulted in
inappropriate outlier payments. Under
the IPPS, we established a statistical
measure of accuracy for CCRs in order
to ensure that aberrant CCR data did not
result in inappropriate outlier
payments.
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As we indicated in the November
2004 IPF PPS final rule (69 FR 66961),
because we believe that the IPF outlier
policy is susceptible to the same
payment vulnerabilities as the IPPS, we
adopted a method to ensure the
statistical accuracy of CCRs under the
IPF PPS. Specifically, we adopted the
following procedure in the November
2004 IPF PPS final rule: We calculated
2 national ceilings, one for IPFs located
in rural areas and one for IPFs located
in urban areas. We computed the
ceilings by first calculating the national
average and the standard deviation of
the CCR for both urban and rural IPFs
using the most recent CCRs entered in
the CY 2015 Provider Specific File.
To determine the rural and urban
ceilings, we multiplied each of the
standard deviations by 3 and added the
result to the appropriate national CCR
average (either rural or urban). The
upper threshold CCR for IPFs in FY
2016 is 1.9041 for rural IPFs, and 1.7339
for urban IPFs, based on CBSA-based
geographic designations. If an IPF’s CCR
is above the applicable ceiling, the ratio
is considered statistically inaccurate,
and we assign the appropriate national
(either rural or urban) median CCR to
the IPF.
We apply the national CCRs to the
following situations:
• New IPFs that have not yet
submitted their first Medicare cost
report. We continue to use these
national CCRs until the facility’s actual
CCR can be computed using the first
tentatively or final settled cost report.
• IPFs whose overall CCR is in excess
of 3 standard deviations above the
corresponding national geometric mean
(that is, above the ceiling).
• Other IPFs for which the MAC
obtains inaccurate or incomplete data
with which to calculate a CCR.
We did not propose any changes to
the application of the national CCRs or
to the procedures for updating the CCR
ceilings in FY 2016. However, we are
updating the FY 2016 national median
and ceiling CCRs for urban and rural
IPFs based on the CCRs entered in the
latest available IPF PPS Provider
Specific File. Specifically, for FY 2016,
and to be used in each of the 3
situations listed above, using the most
recent CCRs entered in the CY 2015
Provider Specific File we estimate the
national median CCR of 0.6220 for rural
IPFs and the national median CCR of
0.4650 for urban IPFs. These
calculations are based on the IPF’s
location (either urban or rural) using the
CBSA-based geographic designations.
A complete discussion regarding the
national median CCRs appears in the
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November 2004 IPF PPS final rule (69
FR 66961 through 66964).
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IV. Other Payment Policy Issues
A. ICD–10–CM and ICD–10–PCS
Implementation
We remind IPF providers that we are
implementing the International
Classification of Diseases, 10th
Revision, Clinical Modification (ICD–
10–CM) as the HIPAA designated code
set for reporting diseases, injuries,
impairments, other health related
problems, their manifestations, and
causes of injury as of October 1, 2015.
Below is a brief history of key activities
leading to the October 1, 2015
implementation date.
In the Standards for Electronic
Transactions final rule, published in the
Federal Register on August 17, 2000 (65
FR 50312), the Department adopted the
International Classification of Diseases,
9th Revision, Clinical Modification
(ICD–9–CM) as the HIPAA designated
code set for reporting diseases, injuries,
impairments, other health related
problems, their manifestations, and
causes of injury. Therefore, on January
1, 2005 when the IPF PPS began, we
used ICD–9–CM as the designated code
set for the IPF PPS. IPF claims with a
principal diagnosis included in Chapter
Five of the ICD–9–CM are paid the
Federal per diem base rate and all other
applicable adjustments, including any
applicable DRG adjustment.
Together with the rest of the
healthcare industry, we were scheduled
to implement the 10th revision of the
ICD coding scheme, that is, ICD–10–CM,
on October 1, 2014. Hence, in the FY
2014 IPF PPS final rule (78 FR 46741–
46742), we finalized a policy that ICD–
10–CM codes will be used in IPF PPS.
On April 1, 2014, the Protecting
Access to Medicare Act of 2014 (PAMA)
(Pub. L. 113–93) was enacted. Section
212 of PAMA, titled ‘‘Delay in
Transition from ICD–9 to ICD–10 Code
Sets,’’ provided that ‘‘[t]he Secretary of
Health and Human Services may not,
prior to October 1, 2015, adopt ICD–10
code sets as the standard for code sets
under section 1173(c) of the Social
Security Act (42 U.S.C. 1320d-2(c)) and
section 162.1002 of title 45, Code of
Federal Regulations.’’ On May 1, 2014,
the Secretary announced that HHS
expected to issue an interim final rule
that would require use of ICD–10–CM
beginning October 1, 2015 and would
continue to require use of ICD–9–CM
through September 30, 2015. This
announcement is available on the CMS
Web site at http://cms.gov/Medicare/
Coding/ICD10/index.html. HHS
finalized the new compliance date of
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October 1, 2015 for ICD–10–CM and
ICD–10–PCS in an August 4, 2014 final
rule titled ‘‘Administrative
Simplification: Change to the
Compliance Date for the International
Classification of Diseases, 10th Revision
(ICD–10–CM and ICD–10–PCS)’’ (79 FR
45128). This rule also requires HIPAA
covered entities to continue to use the
ICD–9–CM code set through September
30, 2015. Therefore, beginning October
1, 2015, we require use of the ICD–10–
CM and ICD–10–PCS codes for reporting
the MS–DRG and comorbidity
adjustment factors for IPF services.
Every year, changes to the ICD–10–
CM and the ICD–10–PCS coding system
will be addressed in the IPPS proposed
and final rules. The changes to the
codes are effective October 1 of each
year and must be used by acute care
hospitals as well as other providers to
report diagnostic and procedure
information. The IPF PPS has always
incorporated ICD–9–CM coding changes
made in the annual IPPS update and
will continue to do so for the ICD–10–
CM and ICD–10–PCS coding changes.
We will continue to publish coding
changes in a Transmittal/Change
Request, similar to how coding changes
are announced by the IPPS and LTCH
PPS. The coding changes relevant to the
IPF PPS are also published in the IPF
PPS proposed and final rules, or in IPF
PPS update notices.
In § 412.428(e), we indicate that we
will publish information pertaining to
the annual update for the IPF PPS,
which includes describing the ICD–9–
CM coding changes and DRG
classification changes discussed in the
annual update to the hospital IPPS
regulations. Because ICD–10–CM will be
implemented on October 1, 2015, we
need to update the regulation language
at § 412.428(e) to refer to ICD–10–CM,
rather than ICD–9–CM. Therefore, we
are revising § 412.428(e) to state that the
information we will publish annually in
the Federal Register to describe IPF PPS
updates would describe the ICD–10–CM
coding changes and DRG classification
changes discussed in the annual update
to the hospital inpatient prospective
payment system regulations.
In the FY 2015 IPF PPS final rule (79
FR 45945 through 46946), the MS–DRGs
were converted so that the MS–DRG
assignment logic uses ICD–10–CM/PCS
codes directly. When an IPF submits a
claim for discharges, the ICD–10–CM/
PCS diagnosis and procedure codes will
be assigned to the correct MS–DRG. In
the FY 2015 IPF PPS final rule, we also
identified the ICD–10–CM/PCS codes
that are eligible for comorbidity
payment adjustments under the IPF PPS
(79 FR 45947 through 45955).
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The ICD–10–CM guidelines are
updated each year along with the ICD–
10–CM code set. To find the annual
coding guidelines, go to CDC’s Web site
at http://www.cdc.gov/nchs/icd/
icd10cm.htm or the annual ICD–10–CM
updates posted on the CMS ICD–10 Web
site at http://www.cms.gov/Medicare/
Coding/ICD10/index.html.
We received no comments on the
proposed revision to the regulation text
at § 412.428(e), and are implementing it
as proposed. We received 2 comments
on ICD–10–CM/PCS issues.
Comment: One commenter asked that
CMS remain receptive to comments
related to ICD–10–CM/PCS and
conversion issues as health care staff
become more familiar with the new
coding. The other commenter was
pleased that CMS had provided end-toend testing, but noted that while claims
submission was fairly seamless,
receiving a remittance was less
consistent. This commenter suggested
that CMS allow IPFs to submit a larger
number of varied claims and that we
complete additional testing on the
Medicare Administrative Contractor’s
ability to issue remittances timely.
Response: We thank the commenters
for their thoughts and suggestions.
While these comments are outside the
scope of this rule, we have shared them
with the areas within CMS that handle
ICD–10–CM/PCS conversion and endto-end testing.
B. Status of Future IPF PPS Refinements
For RY 2012, we identified several
areas of concern for future refinement,
and we invited comments on these
issues in our RY 2012 proposed and
final rules. For further discussion of
these issues and to review the public
comments, we refer readers to the RY
2012 IPF PPS proposed rule (76 FR
4998) and final rule (76 FR 26432).
We have delayed making refinements
to the IPF PPS until we have completed
a thorough analysis of IPF PPS data on
which to base those refinements.
Specifically, we will delay updating the
adjustment factors derived from the
regression analysis until we have IPF
PPS data that include as much
information as possible regarding the
patient-level characteristics of the
population that each IPF serves. We
have begun the necessary analysis to
better understand IPF industry practices
so that we may refine the IPF PPS in the
future, as appropriate.
IPF Covered Services
The IPF PPS established the Federal
per diem base rate for each patient day
in an IPF from the national average
routine operating, ancillary, and capital
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costs. Preliminary analysis reveals that
in 2012 to 2013, over 20 percent of IPF
stays show no reported ancillary costs,
such as laboratory and drug costs, in
cost reports or charges on claims. The
majority of these stays with zero
ancillary costs or charges were in forprofit, free-standing IPF hospitals. We
would expect that patients admitted to
an IPF would undergo laboratory testing
as part of the admission history and
physical. We would also expect that
most patients requiring hospitalization
for active psychiatric treatment would
need drugs. Therefore, we were
surprised when the analysis showed
such a large number of stays reporting
no laboratory services and no drugs
were provided throughout the
hospitalization. Until further analysis is
completed, we can only surmise that the
stays did not require ancillaries and
therefore, were not provided, or that the
ancillary services were separately billed.
We remind the industry that we pay
only the inpatient psychiatric facility for
services furnished to a Medicare
beneficiary who is an inpatient of that
inpatient psychiatric facility, except for
certain professional services, and that
payments made under this subpart are
payments in full for all inpatient
hospital services, provided directly or
under arrangement (see 42 CFR
412.404(d)), as specified in 42 CFR
409.10.
The covered services specified in
§ 409.10(a), which apply to IPFs,
include the following: bed and board;
nursing services and other related
services; use of hospital or CAH
facilities; medical social services; drugs,
biologicals, supplies, appliances, and
equipment; certain other diagnostic or
therapeutic services; medical or surgical
services provided by certain interns or
residents-in-training; and transportation
services, including transport by
ambulance.
Only the professional services listed
in § 409.10(b) can be separately billed
for a Medicare beneficiary who is an
inpatient at an IPF, including services of
physicians, physician assistants, nurse
practitioners, clinical nurse specialists,
certified nurse mid-wives, anesthetists,
and qualified psychologists. (See
§ 409.10(b) for specifics on how these
professions and services are defined.
These regulations are available online at
the electronic Code of Federal
Regulations, at http://www.ecfr.gov/cgibin/text-idx?c=ecfr&tpl=%2Findex.tpl.)
Ancillary costs such as laboratory
costs and drugs are already included in
the Medicare IPF PPS per diem payment
and should not be unbundled and billed
separately to Medicare. We expect that
the IPF would be recording the cost of
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all drugs provided to its Medicare
patients on its Medicare cost reports,
and reporting charges for those drugs on
its Medicare claims. We expect that
when an IPF contracts with an outside
laboratory to provide services to its
Medicare inpatients, the IPF would
instruct the laboratory to bill the IPF
and not to bill Medicare.
Similarly, drugs provided to IPF
Medicare inpatients where Medicare is
the primary payer should not be billed
to Part D or to other insurers.
We are continuing to analyze claims
and cost report data that do not include
ancillary charges or costs, and will be
sharing our findings with the Center for
Program Integrity and the Office of
Financial Management for further
investigation, as the results warrant. Our
refinement analysis is dependent on
recent precise data for costs, including
ancillary costs. We will continue to
collect these data until an accurate
refinement analysis can be performed.
Therefore, we are not making
refinements in this final rule. Once we
have gathered timely and accurate data,
we will analyze that data with the
expectation of a refinement update in
future rulemaking. We invite comments
on this issue of zero ancillary costs to
better understand industry practices.
Comment: We received two comments
on this section, with one commenter
asking that CMS engage stakeholders in
the policy development process for
refinements, and that CMS consider any
changes carefully, to preserve access to
IPF services for vulnerable beneficiaries.
A second commenter was concerned
that CMS lacks accurate cost data for
refinements, particularly if unbundling
is occurring with ancillary costs. This
commenter also cited findings by the
Medicare Payment Advisory
Commission which also noted concerns
about limited IPF data, and which
suggested CMS consider using an
assessment tool with IPF patients for
future refinements. This commenter
suggested that CMS examine the tools
already in use in IPFs to gauge their
effectiveness in explaining differences
in patient needs and their ability to add
data collection at minimal cost to
providers.
Response: We thank the commenters
for their comments, and will consider
them as we undertake IPF refinements
in future rulemaking.
V. Inpatient Psychiatric Facilities
Quality Reporting (IPFQR) Program
A. Background
1. Statutory Authority
Section 1886(s)(4) of the Act, as added
and amended by sections 3401(f) and
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10322(a) of the Affordable Care Act,
requires the Secretary to implement a
quality reporting program for inpatient
psychiatric hospitals and psychiatric
units. Section 1886(s)(4)(A)(i) of the Act
requires that, for FY 2014 4 and each
subsequent fiscal year, the Secretary
must reduce any annual update to a
standard federal rate for discharges
occurring during the fiscal year by 2.0
percentage points for any inpatient
psychiatric hospital or psychiatric unit
that does not comply with quality data
submission requirements with respect to
an applicable fiscal year.
As provided in section
1886(s)(4)(A)(ii) of the Act, the
application of the reduction for failure
to report under section 1886(s)(4)(A)(i)
of the Act may result in an annual
update of less than 0.0 percent for a
fiscal year, and may result in payment
rates under section 1886(s)(1) of the Act
being less than the payment rates for the
preceding year. In addition, section
1886(s)(4)(B) of the Act requires that the
application of the reduction to a
standard Federal rate update be
noncumulative across fiscal years. Thus,
any reduction applied under section
1886(s)(4)(A) of the Act will apply only
with respect to the fiscal year rate
involved and the Secretary may not take
into account the reduction in computing
the payment amount under the system
described in section 1886(s)(1) of the
Act for subsequent years.
Section 1886(s)(4)(C) of the Act
requires that, for FY 2014 (October 1,
2013, through September 30, 2014) and
each subsequent year, each psychiatric
hospital and psychiatric unit must
submit to the Secretary data on quality
measures as specified by the Secretary.
The data must be submitted in a form
and manner and at a time specified by
the Secretary. Under section
1886(s)(4)(D)(i) of the Act, unless the
4 The statute uses the term ‘‘rate year’’ (RY).
However, beginning with the annual update of the
inpatient psychiatric facility prospective payment
system (IPF PPS) that took effect on July 1, 2011
(RY 2012), we aligned the IPF PPS update with the
annual update of the ICD–9–CM codes, effective on
October 1 of each year. This change allowed for
annual payment updates and the ICD–9–CM coding
update to occur on the same schedule and appear
in the same Federal Register document, promoting
administrative efficiency. To reflect the change to
the annual payment rate update cycle, we revised
the regulations at 42 CFR 412.402 to specify that,
beginning October 1, 2012, the RY update period
would be the 12-month period from October 1
through September 30, which we refer to as a
‘‘fiscal year’’ (FY) (76 FR 26435). Therefore, with
respect to the IPFQR Program, the terms ‘‘rate year’’,
as used in the statute, and ‘‘fiscal year’’ as used in
the regulation, both refer to the period from October
1 through September 30. For more information
regarding this terminology change, we refer readers
to section III. of the RY 2012 IPF PPS final rule (76
FR 26434 through 26435).
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exception of subclause (ii) applies,
measures selected for the quality
reporting program must have been
endorsed by the entity with a contract
under section 1890(a) of the Act. The
National Quality Forum (NQF) currently
holds this contract.
Section 1886(s)(4)(D)(ii) of the Act
provides an exception to the
requirement for NQF endorsement of
measures: In the case of a specified area
or medical topic determined appropriate
by the Secretary for which a feasible and
practical measure has not been endorsed
by the entity with a contract under
section 1890(a) of the Act, the Secretary
may specify a measure that is not so
endorsed as long as due consideration is
given to measures that have been
endorsed or adopted by a consensus
organization identified by the Secretary.
Pursuant to section 1886(s)(4)(D)(iii) of
the Act, the Secretary must publish the
measures applicable to the FY 2014
IPFQR Program no later than October 1,
2012.
Section 1886(s)(4)(E) of the Act
requires the Secretary to establish
procedures for making public the data
submitted by inpatient psychiatric
hospitals and psychiatric units under
the IPFQR Program. These procedures
must ensure that a facility has the
opportunity to review its data prior to
the data being made public. The
Secretary must report quality measures
that relate to services furnished by the
psychiatric hospitals and units on the
CMS Web site.
2. Covered Entities
In the FY 2013 IPPS/LTCH PPS final
rule (77 FR 53645), we established that
the IPFQR Program’s quality reporting
requirements cover those psychiatric
hospitals and psychiatric units paid
under Medicare’s IPF PPS (42 CFR
412.404(b)). Generally, psychiatric
hospitals and psychiatric units within
acute care and critical access hospitals
that treat Medicare patients are paid
under the IPF PPS. Consistent with
prior rules, we continue to use the term
‘‘inpatient psychiatric facility’’ (IPF) to
refer to both inpatient psychiatric
hospitals and psychiatric units. This
usage follows the terminology in our IPF
PPS regulations at § 412.402. For more
information on covered entities, we
refer readers to the FY 2013 IPPS/LTCH
PPS final rule (77 FR 53645).
3. Considerations in Selecting Quality
Measures
Our objective in selecting quality
measures is to balance the need for
information on the full spectrum of care
delivery and the need to minimize the
burden of data collection and reporting.
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We have focused on measures that
evaluate critical processes of care that
have significant impact on patient
outcomes and support CMS and HHS
priorities for improved quality and
efficiency of care provided by IPFs. We
refer readers to section 4.a. of the FY
2013 IPPS/LTCH PPS final rule (77 FR
53645 through 53646) for a detailed
discussion of the considerations taken
into account in selecting quality
measures.
Before being proposed for inclusion in
the IPFQR Program, measures are placed
on a list of measures under
consideration, which is published
annually by December 1 on behalf of
CMS by the NQF. In compliance with
section 1890A(a)(2) of the Act, measures
proposed for the IPFQR Program were
included in 2 publicly available
documents: ‘‘List of Measures under
Consideration for December 1, 2013,’’
and ‘‘List of Measures under
Consideration for December 1, 2014’’
(http://www.qualityforum.org/Setting_
Priorities/Partnership/Measure_
Applications_Partnership.aspx). The
Measure Applications Partnership
(MAP), a multi-stakeholder group
convened by the NQF, reviews the
measures under consideration for the
IPFQR Program, among other Federal
programs, and provides input on those
measures to the Secretary. The MAP’s
2014 and 2015 recommendations for
quality measures under consideration
are captured in the following
documents: ‘‘MAP Pre-Rulemaking
Report: 2014 Recommendations on
Measures for More than 20 Federal
Programs’’ (http://
www.qualityforum.org/Publications/
2014/01/MAP_Pre-Rulemaking_Report_
_2014_Recommendations_on_
Measures_for_More_than_20_Federal_
Programs.aspx) and ‘‘Process and
Approach for MAP Pre-Rulemaking
Deliberations 2015’’ (http://
www.qualityforum.org/Publications/
2015/01/Process_and_Approach_for_
MAP_Pre-Rulemaking_Deliberations_
2015.aspx.) We considered the input
and recommendations provided by the
MAP in selecting all measures for the
IPFQR Program, including those
discussed below.
B. Retention of IPFQR Program
Measures Adopted in Previous Payment
Determinations
Since the inception of the IPFQR
Program in FY 2013, we have adopted
a total of 14 mandatory measures. In the
FY 2013 IPPS/LTCH PPS final rule (77
FR 53646 through 53652), we adopted
six chart-abstracted IPF quality
measures for the FY 2014 payment
determination and subsequent years. In
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the FY 2014 IPPS/LTCH PPS final rule
(78 FR 50889 through 50895), we added
2 measures for the FY 2016 payment
determination and subsequent years. In
the FY 2015 IPF PPS final rule (79 FR
45963 through 45974), we finalized the
addition of 2 new measures to the
IPFQR Program to those already adopted
for the FY 2016 payment determination
and subsequent years, and finalized four
quality measures for the FY 2017
payment determination and subsequent
years.
C. Removal of HBIPS–4 From the IPFQR
Program Measure Set for the FY 2017
Payment Determination and Subsequent
Years
We first adopted HBIPS–4 Patients
Discharged on Multiple Antipsychotic
Medications in the FY 2013 IPPS/LTCH
PPS final rule (77 FR 53649 through
53650). We refer readers to that rule for
a detailed discussion of the measure. At
the time we adopted the measure, it was
NQF-endorsed and intended for use in
conjunction with HBIPS–5 Patients
Discharged on Multiple Antipsychotic
Medications with Appropriate
Justification. However, the NQF
removed its endorsement of HBIPS–4 in
January 2014. The NQF’s Behavioral
Health Steering Committee, in its May
2014 Technical Expert Panel Report,
found that current evidence indicated
that HBIPS–4 ‘‘does not allow for the
distinction of differences in providers
. . . .’’ 5 Moreover, the Steering
Committee noted that HBIPS–4 ‘‘is not
a measure of quality of patient care . . .
and there is insufficient evidence to
warrant the endorsement of this
measure given the use of HBIPS–5,
which addresses patients discharged on
multiple antipsychotic medications
with appropriate justification.’’ 6 For
these reasons, the Steering Committee
did not re-endorse HBIPS–4.
As we stated in the FY 2013 IPPS/
LTCH PPS final rule, we originally
proposed HBIPS–4, in part, because
HBIPS–4 and HBIPS–5 were intended to
be reported as a set (77 FR 53649).
However, as discussed above, the NQF
no longer believes HBIPS–4 is necessary
in that set, and we agree. As we stated
in the proposed rule, we have the
authority to maintain measures that are
not NQF-endorsed under section
1886(s)(4)(D)(ii) of the Act. However,
based on the loss of NQF endorsement
and because providers must still submit
data for HBIPS–5, which we believe
5 Behavioral Health Endorsement Maintenance
2014, Phase 2, Technical Report, 67, (May 9, 2014).
Available at http://www.qualityforum.org/
Publications/2014/05/Behavioral_Health_
Endorsement_Maintenance_2014_-_Phase_II.aspx.
6 Ibid.
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sufficiently includes the information
HBIPS–4 was intended to collect, we
stated our belief that removal of HBIPS–
4 from the IPFQR Program is warranted.
We noted that the data collection period
for FY 2016 has ended and providers are
required to submit this data. Therefore,
we stated that FY 2017 is the first year
that we will be able to remove this
measure from the program, and we
proposed to remove HBIPS–4 beginning
with the FY 2017 payment
determination.
We welcomed public comments on
this proposal. The comments received
and our responses are outlined below.
Comment: Many commenters
supported the removal of HBIPS–4,
noting that it is no longer NQF-endorsed
and is not risk-adjusted, the use of a
measure for the sake of documentation
does not lead to improved care or
provide actionable information and only
increases burden, and HBIPS–5 details
the quality of care for those receiving
multiple antipsychotic medications. A
few commenters, however, did not
support CMS’ removal of HBIPS–4,
stating that the practice of prescribing
more than one antipsychotic medication
is a major contributor to high-dose
prescribing, which increases the
potential of adverse side effects and
healthcare costs, and HBIPS–4 and
HBIPS–5 are paired and, therefore,
HBIPS–5 is less meaningful without
HBIPS–4.
Response: As stated above, although
HBIPS–4 and HBIPS–5 were originally
paired, the NQF no longer believes that
HBIPS–4 is necessary to that set and has
removed endorsement of HBIPS–4,
stating that HBIPS–4 ‘‘does not allow for
the distinction of differences in
providers . . . .’’ 7 Moreover, the
Steering Committee noted that HBIPS–
4 ‘‘is not a measure of quality of patient
care . . . and there is insufficient
evidence to warrant the endorsement of
this measure given the use of HBIPS–5.
. . .’’ 8 We agree and believe that
HBIPS–5 is sufficient without HBIPS–4
and that HBIPS–4 should be removed
from the IPFQR Program measure set as
it increases burden without concomitant
benefit.
Comment: Some commenters
supported CMS’ removal of HBIPS–4
but contended that problems remain
with HBIPS–5 because IPFs are not
always able to obtain a thorough history
about patients and do not know,
therefore, whether there is adequate
justification for patients to be on more
than one antipsychotic. Commenters
recommended that CMS work with the
measure developer and other
stakeholders to determine if HBIPS–5
should include additional exclusions,
such as patients for whom an IPF was
unable to obtain records due to an
inability to contact previous or current
providers or patients for whom a
caregiver wishes to be on multiple
antipsychotics.
Response: We have not proposed to
change HBIPS–5, and, therefore, will
not be altering it in the final rule (77 FR
53650). We will, however, continue to
monitor these issues in future years of
the IPFQR Program.
For the reasons stated above, and as
displayed in Table 19, we are finalizing
our proposal to remove HBIPS–4:
Patients Discharged on Multiple
Antipsychotic Medications beginning
with the FY 2017 payment
determination.
TABLE 19—IPFQR PROGRAM MEASURE TO BE REMOVED FOR THE FY 2017 PAYMENT DETERMINATION AND
SUBSEQUENT YEARS
NQF #
Measure ID
N/A ..........................
HBIPS–4 ................................................
Patients Discharged on Multiple Antipsychotic Medications.
individuals and society. Smokingattributable health care expenditures are
estimated at $96 billion per year in
direct medical expenses and $97 billion
in lost productivity.13
Strong and consistent evidence
demonstrates that timely tobacco
dependence interventions for patients
using tobacco can significantly reduce
the risk of developing a tobacco-related
disease, as well as provide improved
health outcomes for those already
suffering from a tobacco-related
Tobacco use is one of the greatest
contributors of morbidity and mortality
in the United States, accounting for
more than 435,000 deaths annually.9
Smoking is a known cause of multiple
cancers, heart disease, stroke,
complications of pregnancy, chronic
obstructive pulmonary disease, other
respiratory problems, poorer wound
healing, and many other diseases.10 This
health issue has significant implications
for persons with mental illness and
substance use disorders. Tobacco use is
much higher among people with coexisting mental health conditions than
for the general population.11 One study
has estimated that these individuals are
twice as likely to smoke as the rest of
the population.12 Tobacco use also
creates a heavy financial cost to both
7 Behavioral Health Endorsement Maintenance
2014, Phase 2, Technical Report, 67, (May 9, 2014).
Available at http://www.qualityforum.org/
Publications/2014/05/Behavioral_Health_
Endorsement_Maintenance_2014_-_Phase_II.aspx.
8 Ibid.
9 Centers for Disease Control and Prevention.
Annual Smoking-Attributable Mortality, Years of
Potential Life Lost, and Productivity Losses—
United States, 2000–2004.’’ Morb Mortal Wkly Rep.
2008. 57(45): 1226–1228. Available at: http://
www.cdc.gov/mmwr/preview/mmwrhtml/mm57
45a3.htm.
10 U.S. Department of Health and Human
Services. ‘‘The health consequences of smoking: A
report of the Surgeon General.’’ Atlanta, GA, U.S.
Department of Health and Human Services, Centers
for Disease Control and Prevention, National Center
for Chronic Disease Prevention and Health
Promotion, Office on Smoking and Health, 2004.
11 Fiore, Michael C., Goplerud, Eric, Shroeder,
Steven A. (2010). The Joint Commission’s New
Tobacco Cessation Measures—Will Hospitals Do the
Right Thing? N Engl J Med 2012; 366:1172–1174.
Available at http://www.nejm.org/doi/full/10.1056/
nejmp1115176.
12 Lasser K., Boyd J.W., Woolhandler S.,
Himmelstein, D.U., McCormick D., Bor D.H..
Smoking and mental illness: A population-based
prevalence study. JAMA. 2000; 284(20):2606–2610.
13 Centers for Disease Control and Prevention.
‘‘Best Practices for Comprehensive Tobacco Control
Programs—2007.’’ Atlanta, GA, Department of
Health and Human Services, Centers for Disease
Control and Prevention, National Center for Chronic
Disease Prevention and Health Promotion, Office on
Smoking and Health, 2007.
D. New Quality Measures for the FY
2018 Payment Determination and
Subsequent Years
In the FY 2016 IPF PPS proposed rule,
we proposed to add five new measures
to the IPFQR Program for the FY 2018
payment determination and subsequent
years (80 FR 25047). The sections below
outline our rationale for proposing these
measures.
1. TOB–3 Tobacco Use Treatment
Provided or Offered at Discharge and
the Subset Measure TOB–3a Tobacco
Use Treatment at Discharge (NQF
#1656)
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disease.14 Even a minimal intervention
has been shown to result in cessation.15
Research discloses that tobacco users
hospitalized with psychiatric illnesses
who enter into smoking-cessation
treatment can successfully overcome
their tobacco dependence; 16 however,
‘‘studies show that many hospitals do
not consistently provide cessation
services to their patients.’’ 17 Evidence
also suggests that tobacco cessation
treatment does not increase, and may
even decrease, the risk of rehospitalization for tobacco users
hospitalized with psychiatric
illnesses.18 Research further
demonstrates that effective tobacco
cessation support across the care
continuum can be provided with only
minimal additional provider effort and
without harm to the mental health
recovery process.19
TOB–3 (NQF #1656) is a chartabstracted measure that identifies those
patients 18 years of age and older who
have used tobacco products within 30
days of admission and who ‘‘were
referred to or refused evidence-based
outpatient counseling AND received or
refused a prescription for FDA-approved
cessation medication upon
discharge.’’ 20 TOB–3a is a subset of
TOB–3 and identifies those IPF
‘‘patients who were referred to
evidence-based outpatient counseling
AND received a prescription for FDAapproved cessation medication upon
discharge as well as those who were
referred to outpatient counseling and
had reason for not receiving a
prescription for medication.’’ 21
14 U.S. Department of Health and Human
Services. ‘‘The health consequences of smoking: a
report of the Surgeon General.’’ Atlanta, GA, U.S.
Department of Health and Human Services, Centers
for Disease Control and Prevention, National Center
for Chronic Disease Prevention and Health
Promotion, Office on Smoking and Health, 2004.
15 Fiore M.C., Jae
´ n C.R., Baker T.B., et al. Treating
Tobacco Use and Dependence: 2008 Update.
Clinical Practice Guideline. Rockville, MD: U.S.
Department of Health and Human Services. Public
Health Service. May 2008, available at http://
www.ncbi.nlm.nih.gov/books/NBK63952.
16 Prochaska, J.J., et al. ‘‘Efficacy of Initiating
Tobacco Dependence Treatment in Inpatient
Psychiatry: A Randomized Controlled Trial.’’ Am.
J. Pub. Health. 2013 August 15; e1–e9.
17 Fiore, Michael C., Goplerud, Eric, Shroeder,
Steven A. (2010). The Joint Commission’s New
Tobacco Cessation Measures—Will Hospitals Do the
Right Thing? N Engl J Med 2012; 366:1172–1174,
available at http://www.nejm.org/doi/full/10.1056/
nejmp1115176.
18 Prochaska, JJ, et al. ‘‘Efficacy of Initiating
Tobacco Dependence Treatment in Inpatient
Psychiatry: A Randomized Controlled Trial.’’ Am.
J. Pub. Health. 2013 August 15; e1–e9.
19 Ibid.
20 TOB–3 and TOB–3a Measure Specifications,
available at http://www.jointcommission.org/assets/
1/6/HIQR_Jan2015_v4_4a_1_EXE.zip.
21 Ibid.
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Providers must report this measure set
as ‘‘an overall rate which includes all
patients to whom tobacco treatment was
provided, or offered and refused, at the
time of hospital discharge (TOB–3), and
a second rate, a subset of the first, which
includes only those patients who
received tobacco use treatment at
discharge. (TOB–3a).’’ 22 For more
information on the measure
specifications, we refer readers to the
Specifications Manual for National
Hospital Inpatient Quality Measures at
https://www.qualitynet.org/dcs/Content
Server?c=Page&pagename=Qnet
Public%2FPage%2FQnet
Tier4&cid=1228773989482.Providing
counseling and recommending cessation
medication are core strategies of the
Treating Tobacco Use and Dependence
Guidelines.23 For the reasons stated
above, we stated that we believe that
adoption of the TOB–3/TOB–3a
measure set, which assesses IPFs’
offering of these tobacco use cessation
treatments to IPF patients, will result in
better overall health outcomes for IPF
patients.
Furthermore, we noted that the
adoption of this measure set will
strengthen related measures already in
place in the IPFQR Program. Currently,
the IPFQR Program includes 2 other
tobacco cessation measures: (1) Tobacco
Use Screening (TOB–1), a chartabstracted measure that assesses
hospitalized patients who are screened
within the first 3 days of admission for
tobacco use (cigarettes, smokeless
tobacco, pipe, and cigar) within the
previous 30 days; and (2) Tobacco Use
Treatment Provided or Offered (TOB–2),
which includes the subset, Tobacco Use
Treatment (TOB–2a). TOB–2/TOB–2a is
a chart-abstracted measure set reported
as an overall rate that includes all
patients to whom tobacco use treatment
was provided, or offered and refused,
and a second rate, a subset of the first,
which includes only those patients who
received tobacco use treatment. TOB–1
and TOB–2/TOB–2a provide a picture of
care given during the hospital stay. In
contrast, TOB–3/TOB–3a present the
care given at discharge. Together, these
3 measures/measure sets present a
broader picture of the entire episode of
care. We noted that if the TOB–3/TOB–
3a measure set is adopted, the IPFQR
22 TOB–3 and TOB–3a Measure Specifications,
available at https://www.qualitynet.org/dcs/Content
Server?c=Page&pagename=QnetPublic%2F
Page%2FQnetTier4&cid=1228773989482.
23 See Fiore MC, Jae
´ n CR, Baker TB, et al. Treating
Tobacco Use and Dependence: 2008 Update.
Clinical Practice Guideline. Rockville, MD: U.S.
Department of Health and Human Services. Public
Health Service. May 2008. Available at http://
www.ncbi.nlm.nih.gov/books/NBK63952. The
specific strategy is further specified in Strategy 4A.
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Program’s measure set will showcase
both the facility’s practice of screening
patients for tobacco use and the
outcomes of a facility’s practice of
offering opportunities to stop during the
course of the stay and upon discharge.
Further, we stated that the adoption of
TOB–3/TOB–3a could alert IPFs to gaps
in treatment for smoking cessation
intervention at discharge if rates for
these measures are low. We noted our
belief that this knowledge will support
the development of quality
improvement plans and better engage
patients in treatment.
We also stated our belief that public
reporting of this information will
provide consumers and other
stakeholders with useful information in
choosing among different facilities for
patients who use tobacco products. In
addition, we observed that this measure
set promotes the National Quality
Strategy priority of Effective Prevention
and Treatment, particularly with respect
to the leading causes of mortality,
starting with cardiovascular disease. As
noted above, tobacco use is one of the
greatest contributors of morbidity and
mortality in the United States, 24
contributing to various forms of
cardiovascular disease, among many
other conditions. 25 ‘‘Tobacco use
remains the chief preventable cause of
illness and death in our society.’’ 26
Cessation interventions can significantly
reduce the risk of developing tobaccorelated disease, 27 leading to decreases
in cardiovascular disease, among other
diseases, and, ultimately, mortality. We
noted our belief that encouraging
intervention would promote effective
treatment of tobacco use, and may
contribute to prevention of the many
24 Centers for Disease Control and Prevention.
Annual Smoking-Attributable Mortality, Years of
Potential Life Lost, and Productivity Losses—
United States, 2000–2004.’’ Morb Mortal Wkly Rep.
2008. 57(45): 1226–1228. Available at: http://
www.cdc.gov/mmwr/preview/mmwrhtml/mm
5745a3.htm.
25 U.S. Department of Health and Human
Services. ‘‘The health consequences of smoking: A
report of the Surgeon General.’’ Atlanta, GA, U.S.
Department of Health and Human Services, Centers
for Disease Control and Prevention, National Center
for Chronic Disease Prevention and Health
Promotion, Office on Smoking and Health, 2004.
26 Fiore, Michael C., Goplerud, Eric, Shroeder,
Steven A. (2010). The Joint Commission’s New
Tobacco Cessation Measures—Will Hospitals Do the
Right Thing? N Engl J Med 2012; 366:1172–1174.
Available at: http://www.nejm.org/doi/full/10.1056/
nejmp1115176.
27 U.S. Department of Health and Human
Services. ‘‘The health consequences of smoking: A
report of the Surgeon General.’’ Atlanta, GA, U.S.
Department of Health and Human Services, Centers
for Disease Control and Prevention, National Center
for Chronic Disease Prevention and Health
Promotion, Office on Smoking and Health, 2004.
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diseases that are associated with tobacco
use.
For these reasons, we included TOB–
3/TOB–3a in our ‘‘List of Measures
under Consideration for December 1,
2014.’’ The MAP provided input on the
measure set and supported its inclusion
in the IPFQR Program in its report
‘‘Process and Approach for MAP PreRulemaking Deliberations 2015’’
available at http://
www.qualityforum.org/WorkArea/link
it.aspx?LinkIdentifier=id&Item
ID=78711. Moreover, this measure set is
NQF-endorsed for the IPF setting in
conformity with the statutory criteria for
measure selection under section
1886(s)(4)(D)(i) of the Act.
For these reasons, we proposed to
adopt TOB–3/3a for the FY 2018
payment determination and subsequent
years. We welcomed public comments
on this proposal. The comments we
received and our responses are set forth
below.
Comment: Comments submitted from
a consumer perspective strongly
recommended adopting TOB–3/3a given
the prevalence of tobacco use among
those with mental illness, noting that
rates are 2 to 4 times higher than the
overall adult population in the United
States. These commenters noted that
tobacco use is the leading cause of
premature disease and death in the
United States, is a primary driver of
hospitalizations for cancers, stroke,
cardiovascular and respiratory disease,
causes complications in pregnancy and
newborns, and interferes with recovery
and healing. These commenters also
noted that hospitalizations are an ideal
time to initiate cessation because most
hospitals are smoke-free or tobacco-free
environments, patients may be more
likely to quit if the reason for
hospitalization is caused or made worse
by smoking, and patients may be more
likely to continue cessation medications
if they are given them during
hospitalizations with a positive effect.
They also pointed out that HHS has
stated that hospitalizations present an
unequaled opportunity to promote
tobacco cessation, urging evidencebased interventions. Despite these facts,
commenters noted that most hospitals
have not placed a high priority on
cessation efforts, specifically at
discharge, thus presenting an
opportunity for incorporation of
cessation strategies into discharge
planning and sustained participation in
cessation treatment after patients reenter
communities. Supporters of the measure
also noted that, together with TOB–1
and TOB–2/2a, TOB–3/3a provides a
comprehensive picture of tobacco use
treatment around all episodes of
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inpatient psychiatric care. Finally, these
commenters stated that, although the
measure is chart-abstracted, the
abstraction can be done at the same time
the facility is abstracting data for TOB–
1 and TOB–2/2a, thereby not
substantively increasing burden.
Response: We thank commenters for
their support.
Comment: Many commenters
recommended that CMS not adopt
TOB–3/3a because, they said the
measure is a population health measure
not created for IPFs and, therefore, does
not address quality of psychiatric care.
In addition, commenters stated that
tobacco cessation is not a primary
treatment goal for the majority of
patients and may even be
contraindicated if a practitioner believes
the patient should focus on modifying a
different behavior. These commenters
also asserted that, when needed, IPFs
already use appropriate screening tools.
Commenters underscored that measures
should be directly related to the reasons
that patients seek or require IPF
services. One commenter stated that this
measure should not be adopted because
5 measures in the area of tobacco
cessation are excessive. Other
commenters stated that the measure is
redundant given TOB–1 and TOB–2/2a.
One commenter contended that the
measure will show no differentiation in
providers, rendering it meaningless to
consumers. Finally, one commenter
suggested that it may be operationally
difficult for IPFs to comply with TOB–
3/3a because IPFs may have to modify
discharge procedures in order to manage
offering and providing medications or
counseling for heavy smokers, and
suggested, therefore, that the measure be
delayed until the FY 2019 payment
determination.
Response: As we stated in the FY
2014 IPPS/LTCH PPS final rule (79 FR
45972), we disagree with commenters
that maintain that tobacco cessation
measures do not provide meaningful
information regarding quality of care at
IPFs. We continue to believe that
reporting this information will provide
meaningful distinctions between IPFs
and that tobacco cessation treatment is
an essential step for IPF patients,
specifically because of the prevalence of
tobacco use in this community. Tobacco
use is the leading preventable cause of
premature morbidity and mortality in
the United States,28 affects people with
28 Centers for Disease Control and Prevention.
Annual Smoking-Attributable Mortality, Years of
Potential Life Lost, and Productivity Losses—
United States, 2000–2004.’’ Morb Mortal Wkly Rep.
2008. 57(45): 1226–1228. Available at: http://
www.cdc.gov/mmwr/preview/mmwrhtml/
mm5745a3.htm.
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co-existing mental health conditions at
a much higher rate than for the general
population,29 and is associated with
estimated costs of $96 billion per year
in direct medical expenses and $97
billion in lost productivity. 30 These
figures are supported by recent studies,
including those provided by the U.S.
Surgeon General.31 Furthermore, we
disagree that measures must be created
for IPFs or specifically for the IPF
population to be indicative of quality
care. We believe that limiting the
program to only measures or conditions
that specifically apply to the psychiatric
population creates a false demarcation
between nonpsychiatric and psychiatric
care. In our opinion, IPFs should be
considering the overall health of the
patient throughout the length of his/her
episode of care, in addition to the
patient’s psychiatric condition. Finally,
although some IPFs may currently use
appropriate screening tools, as asserted
by commenters, these rates may not be
publicly reported; a major goal of the
IPFQR Program is to provide the public
with information upon which to choose
providers. Since, as discussed above,
tobacco use is high among the IPFpopulation, we believe that publicly
reporting this data will facilitate patient
choice.
Additionally, we do not believe that
TOB–3/3a is redundant, excessive or
unnecessary. TOB–3/3a rounds out the
tobacco measures we have previously
adopted by showcasing the facility’s
practice of screening patients for
tobacco use and the outcomes of a
facility’s practice of offering
opportunities to stop during the course
29 Fiore, Michael C., Goplerud, Eric, Shroeder,
Steven A. (2010). The Joint Commission’s New
Tobacco Cessation Measures—Will Hospitals Do the
Right Thing? N Engl J Med 2012; 366:1172–1174.
Available at http://www.nejm.org/doi/full/10.1056/
nejmp1115176.
30 Centers for Disease Control and Prevention.
‘‘Best Practices for Comprehensive Tobacco Control
Programs—2007.’’ Atlanta, GA, Department of
Health and Human Services, Centers for Disease
Control and Prevention, National Center for Chronic
Disease Prevention and Health Promotion, Office on
Smoking and Health, 2007.
31 U.S. Department of Health and Human
Services. The Health Consequences of Smoking—50
Years of Progress: A Report of the Surgeon General.
Atlanta, GA: U.S. Department of Health and Human
Services, Centers for Disease Control and
Prevention, National Center for Chronic Disease
Prevention and Health Promotion, Office on
Smoking and Health, 2014. Available at http://
www.cdc.gov/tobacco/data_statistics/sgr/50thanniversary/index.htm. CDC. Vital Signs: Current
cigarette smoking among adults aged ≥18 years with
mental illness—United States, 2009–2011. MMWR
2013;62(05):81–87. Available at http://
www.cdc.gov/mmwr/preview/mmwrhtml/
mm6205a2.htm?s_cid=mm6205a2_w. Xu X, Bishop
EE, Kennedy SM, Simpson SA, Pechacek TF.
Annual healthcare spending attributable to cigarette
smoking: an update. Am J Prev Med
2015;48(3):326–333.
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of the stay (TOB -1/2/2a) and upon
discharge (TOB–3/3a), thus
encompassing the entire episode of care.
Furthermore, we are unaware of a
situation in which tobacco cessation
measures, which could lead to a
decrease in disease and even premature
death, would be contraindicated. As we
state above, we believe the provider
should be considering the overall health
of the patient.
Finally, we understand that the
measure may require some facilities to
change their existing discharge
procedures for the purpose of improving
their performance on the measure, and
that such changes may take longer to
accomplish than the time available
before measure data is collected.
However, because we already require
TOB–1/2/2a, we believe these changes
will be minimal. In addition, if facilities
have low measure rates, these low
measure rates help signal important
quality improvement and operational
gaps and encourage IPFs to close these
gaps, with the goal of higher measure
rates in the future.
Comment: Several commenters
recommended changes to this measure.
One commenter recommended that
CMS change the measure specifications
to include minors since these
individuals would also benefit from
smoking cessation. Another commenter
noted that the current specification
require an appointment made by the
healthcare provider for ongoing
evidence-based counseling with
clinicians, and IPFs may not be able to
arrange a specific date for outpatient
appointments. This commenter asked
CMS to modify the measure to allow
hospitals to arrange a referral without a
specific appointment date. Other
commenters stated that the measure
should exclude patients who were
screened but later decided they did not
wish to receive treatment, asserting that
informed consent is a hallmark of
medical delivery, and, as specified, the
measure is a measure of patient
cooperation rather than provider
quality; one commenter suggested,
instead, capturing a rate of ‘‘patient
refusal after treatment was offered.’’
Response: When feasible and
practicable, we believe it is important to
implement measures as they are
specified, especially once such
measures are NQF-endorsed. As such,
we do not believe we should make the
suggested modifications to the measure.
We encourage commenters to suggest
these changes to the measure’s steward,
The Joint Commission, so that the
measure can be properly specified,
tested, and endorsed for these changes.
Furthermore, we believe that patient
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compliance is indicative of quality care.
That is, we maintain that it is important
that providers understand gaps in
patient compliance so that they can
modify their actions and policy to
systematically encourage such
compliance.
Comment: One commenter requested
that the measure be refined so that
‘‘referral to evidence-based outpatient
counseling’’ specifies that ‘‘referral to
evidence-based tobacco cessation
interventions’’ may include outpatient
counseling, community resources, or
telephonic counseling services. Another
commenter maintained that the measure
should be inclusive of behavioral
healthcare treatment approaches that
meet the intent of ‘‘outpatient
counseling.’’ Another commenter
expressed concern with the availability
of outpatient counseling services,
particularly in rural areas, noting that
many patients may not feel comfortable
having a referral made from a
psychiatric facility.
Response: As specified, the measure
does not state examples of what
‘‘referral to evidence-based outpatient
counseling’’ should include. We believe
it is important to give providers
flexibility in prescribing interventions
to best fit the needs of the patient;
telephonic counseling services or other
types of community resources may meet
the requirements for the measure and
provide additional opportunities for
outpatient counseling in rural areas if
they provide evidence-based tobacco
cessation counseling on an outpatient
basis. Finally, upon discharge, many
patients are referred to outpatient
providers; we do not believe this
measure presents unique issues to
discharge referrals and believe that
providers should adhere to
confidentiality laws and requirements
in all of these situations.
Comment: One commenter stated that
because of its limited resources as a
community mental health center, it
would likely face reduced payment as a
result of this measure, and, therefore,
urged us not to adopt it.
Response: As we stated above, the
IPFQR Program does not penalize
facilities for low measure rates; facilities
are only penalized if they fail to report
these data.
Comment: Many commenters
recommended that CMS review the TOB
measures to see if they are effective and
appropriate in the IPF setting and
should continue to be required for the
IPFQR Program.
Response: We continuously evaluate
whether our measures are effective and
appropriate for the IPFQR Program.
Furthermore, as stated above, this
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measure is endorsed for all inpatient
settings, which is inclusive of the IPFsetting. We will continue to do so for
the TOB measure set.
Comment: One commenter noted that
several states do not provide financial
support for prescription medication for
tobacco use treatment, which may
translate to high costs for the patient,
and recommended that the measure
track patients who are unable to accept
treatment due to costs.
Response: We thank the commenter
for this suggestion, and we will consider
it for future years of the IPFQR Program.
For the reasons stated above, we are
finalizing our proposal to adopt TOB–3
Tobacco Use Treatment Provided or
Offered at Discharge and the subset
measure TOB–3a Tobacco Use
Treatment at Discharge (NQF #1656) for
the FY 2018 payment determination and
subsequent years.
2. SUB–2 Alcohol Use Brief Intervention
Provided or Offered and SUB–2a
Alcohol Use Brief Intervention (NQF
#1663)
Individuals with mental health
conditions experience substance use
disorders (SUDs) at a much higher rate
than the general population. Individuals
with the most serious mental illnesses
have the highest rates of SUDs. Cooccurring SUDs often go undiagnosed
and, without treatment, contribute to a
longer persistence of disorders, poorer
treatment outcomes, lower rates of
medication adherence, and greater
impairments to functioning.
Substance abuse, particularly alcohol
abuse, is a significant problem in the
elderly. Alcohol use disorders are the
most prevalent type of addictive
disorder in individuals ages 65 and
over.32 Roughly 6 percent of the elderly
are considered to be heavy users of
alcohol.33 Alcohol abuse is often
associated with depression and
contributes to the etiology of many
serious medical conditions, including
liver disease and cardiovascular disease.
For these reasons, it is important to
assess IPFs’ efforts to offer alcohol abuse
treatment to those patients who screen
positive for alcohol abuse.
SUB–2 includes ‘‘[p]atients 18 years
of age and older who screened positive
for unhealthy alcohol use who received
or refused a brief intervention during
32 Ross, S. (2005). Alcohol Use Disorders in the
Elderly. Primary Psychiatry, 12(1):32–40.
33 AL Mirand and JW Welte. Alcohol
consumption among the elderly in a general
population, Erie County, New York. Am J Public
Health. 1996 July; 86(7): 978–984.
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the hospital 34 stay.’’ 35 SUB–2a includes
‘‘[p]atients who received the brief
intervention during the hospital
stay.’’ 36 The measure set is chartabstracted and ‘‘is reported as an overall
rate which includes all patients to
whom a brief intervention was
provided, or offered and refused, and a
second rate, a subset of the first, which
includes only those patients who
received a brief intervention.’’ 37 For
more information on the measure
specifications, we refer readers to the
Specifications Manual for National
Hospital Inpatient Quality Measures at
https://www.qualitynet.org/dcs/
ContentServer?c=Page&pagename
=QnetPublic%2FPage%2FQnetTier4
&cid=1228773989482.
We stated our belief that the addition
of the SUB–2/SUB–2a measure set to the
related existing substance abuse
measure in the IPFQR Program will
improve the overall quality of care that
patients receive in IPF settings, as well
as overall patient health outcomes. We
previously adopted the SUB–1 measure
(Alcohol Use Screening (SUB–1) (NQF
#1661)) (78 FR 50890 through 50892).
SUB–1 assesses ‘‘hospitalized patients
18 years of age and older who are
screened during the hospital stay using
a validated screening questionnaire for
unhealthy alcohol use.’’ SUB–1 alone
does not provide a full picture of an
IPF’s response to this screening.
However, when linked to SUB–2/SUB–
2a, the IPF measure set depicts the rate
at which patients are screened for
potential alcohol abuse and the rate at
which those who screen positive accept
the offered interventions. Further, the
adoption of SUB–2/SUB 2a could alert
IPFs to gaps in treatment for
interventions if rates are low, which
supports the development of quality
improvement plans and better patient
engagement in treatment. In addition,
data for the SUB–2/SUB–2a measure set,
in combination with the SUB–1
measure, would afford consumers useful
information in choosing among different
facilities, particularly for patients who
may require assistance with unhealthy
alcohol use.
34 Although the measure refers to ‘‘hospitals,’’ the
measure is specified for all in-patient settings.
https://www.qualitynet.org/dcs/ContentServer?c=
Page&pagename=QnetPublic%2FPage%2
FQnetTier4&cid=1228773989482.
35 SUB–2 and SUB–2a Measure Specifications,
available at https://www.qualitynet.org/dcs/
ContentServer?c=Page&pagename=QnetPublic%2
FPage%2FQnetTier4&cid=1228773989482.
36 Ibid.
37 SUB–2 and SUB–2a Measure Specifications,
available at https://www.qualitynet.org/dcs/
ContentServer?c=Page&pagename=
QnetPublic%2FPage%2FQnetTier4&cid=
1228773989482.
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Additionally, we stated our belief that
this measure set promotes the National
Quality Strategy priority of Effective
Prevention and Treatment for the
leading causes of mortality, starting
with cardiovascular disease. As noted
above, alcohol use disorders are the
most prevalent type of addictive
disorder in individuals ages 65 and
over 38 and contribute to serious medical
conditions, including cardiovascular
disease and liver disease. We noted that
encouraging interventions would
promote treatment of unhealthy alcohol
use and may contribute to prevention of
the many diseases that are associated
with alcohol abuse, including
cardiovascular disease.
For these reasons, we included the
SUB–2/SUB–2a measure set in our ‘‘List
of Measures under Consideration for
December 1, 2014.’’ The MAP provided
input on the measure set and supported
its inclusion in the IPFQR Program in its
report ‘‘Process and Approach for MAP
Pre-Rulemaking Deliberations 2015’’
available at http://
www.qualityforum.org/WorkArea/
linkit.aspx?LinkIdentifier=id&ItemID=
78711. Moreover, this measure set is
NQF-endorsed for the IPF setting, in
conformity with the statutory criteria for
measure selection under section
1886(s)(4)(D)(i) of the Act.
Therefore, we proposed to adopt
SUB–2/2a for the FY 2018 payment
determination and subsequent years. We
welcomed public comments on this
proposal. The comments we received
and our responses are set forth below.
Comment: Comments submitted from
a consumer perspective supported the
measure since alcohol use may be a
contributing factor to the mental health
of patients. Commenters noted that
mental health and substance abuse
treatment have historically been
provided separately and not in a
coordinated fashion and the measure
could serve as a catalyst for coordinated,
integrated responses. Furthermore, these
commenters stated that the addition of
these measures will complement SUB–
1.
Response: We thank commenters for
their support.
Comment: Many commenters
recommended that CMS not adopt SUB–
2/2a because, they submitted, the
measure is a population screening
measure neither created for IPFs nor
systematically tested in the IPF setting,
and, therefore, does not address quality
of psychiatric care. Specifically,
38 Stephen Ross. Alcohol Use Disorders in the
Elderly. Psychiatry Weekly (no date). Available at:
http://www.psychweekly.com/aspx/article/
ArticleDetail.aspx?articleid=19.
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commenters stated that this measure
penalizes providers for a patient’s
refusal to receive treatment, and is
therefore a measure of patient
cooperation rather than provider
quality. In addition, commenters
asserted that measures should be
directly related to reasons that patients
seek or require IPF services to focus
providers on optimal care and
recommended measures specific to
evidence-based practices. Finally,
commenters noted that IPFs already
perform an in-depth assessment of
patients’ alcohol and substance abuse
history, and current use and patients
with such disorders are treated through
a multi-disciplinary and multi-model
plan, so the measure is not necessary,
and the measure will show no
differentiation in providers, rendering it
meaningless to consumers.
Response: As we stated in the FY
2014 IPPS/LTCH PPS final rule (78 FR
50891), although the SUB measures
were developed using all
hospitalizations in general acute care,
we believe that SUB–2 is equally
applicable to freestanding IPFs and
psychiatric units within acute care
facilities because risky alcohol use is an
area of high comorbidity for populations
hospitalized in all of these settings.
Furthermore, we disagree that measures
must be created for IPFs or specifically
for the IPF population to be indicative
of quality care. We believe that limiting
the program to only measures or
conditions that specifically apply to the
psychiatric population creates a false
demarcation between nonpsychiatric
and psychiatric care. In our opinion,
IPFs should be considering the overall
health of the patient throughout the
length of his/her episode of care, in
addition to the patient’s psychiatric
condition. Furthermore, we believe that
patient compliance is indicative of
quality care. That is, we maintain that
it is important that providers
understand gaps in patient compliance
so that they can modify their actions
and policy to systematically encourage
such compliance. Additionally,
although we believe that the measure
will differentiate between providers, we
will monitor measure rates to assure the
measure provides meaningful
information to consumers by
differentiating care among IPFs. Finally,
although some IPFs may currently use
appropriate screening tools and provide
cessation treatment, as asserted by
commenters, these rates may not be
publicly reported; a major goal of the
IPFQR Program is to provide the public
with information upon which to choose
providers. Since, as discussed above,
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alcohol use is high among the IPFpopulation, we believe that publicly
reporting this data will facilitate patient
choice.
Comment: Several commenters stated
that the measure should not be adopted
because it does not go far enough,
stating the measure separates alcohol
use from other substances when
psychiatric patients are routinely
screened for all substance use issues.
Response: As we stated in the FY
2014 IPPS/LTCH PPS final rule (78 FR
58092), we recognize that this measure
only assesses alcohol use and that
screening for risky use/abuse of other
substances would also be desirable. We
believe the SUB measure set to be an
important first step in this area, and we
intend to consider the incorporation of
other substance use measures into the
program in the future.
Comment: Many commenters urged
CMS to modify this measure to include
more than a ‘‘brief’’ intervention since
patients who demonstrate behaviors
sufficient to warrant involuntary
inpatient commitment and are dually
diagnosed with substance abuse or
dependence require more intensive than
‘‘brief’’ substance use treatments. One
commenter stated that ‘‘brief
intervention’’ needs further definition
and clarification to suggest or require
brief intervention structures supported
by evidence, such as the FRAMES
(feedback, responsibility, advice, menu
of options, empathy, and self-efficacy)
structure. Other commenters submitted
that there is no evidence supporting the
efficacy of brief interventions for
individuals that have alcohol or other
substance use.
Response: We disagree with the
commenters regarding the efficacy of
brief interventions, specifically as they
are defined by the measure. In 2014,
during the measures maintenance
process, the NQF’s Behavioral Health
Steering Committee stated that ‘‘in order
to receive credit for the brief
intervention there must be a bedside
discussion with the patient focusing on
increasing the patient’s understanding
of the impact of substance use on his or
her health and motivating the patient to
change risky behaviors. The
intervention should include feedback
concerning the quantity and frequency
of alcohol consumed by the patient in
comparison with national norms, a
discussion of negative physical,
emotional, and occupational
consequences, and a discussion of the
overall severity of the problem. The
brief intervention may be given by a
variety of healthcare professionals such
as physician, nurse, certified addictions
counselor, psychologist, social worker,
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or health educator with training in brief
intervention.’’ 39 We understand that for
heavy users of alcohol, brief
intervention may not be enough, but
these brief interventions, we believe, are
an important first-step to cessation.
Furthermore, if providers believe that
additional cessation strategies are
warranted, we highly encourage using
them. In addition, as described, the
FRAMES structure would satisfy the
requirements for ‘‘brief intervention,’’
and we believe that the provider
community could use this framework.
We note, however, that such structure is
not required as long as the provider
meets the elements discussed above.
Comment: One commenter expressed
concern that the measure set does not
exclude cases when treatment was
offered but refused. This commenter
requested that CMS report the measure
as the percentage of patients who were
offered treatment and refused, or retitle
the measure to ‘‘patients who were
offered alcohol use intervention and
accepted.’’ This commenter also
requested that CMS allow clinicians to
determine whether a patient’s cognitive
impairment in the first three days of
admission prevented screening because
some patients are alert and oriented but
impaired cognitively so as to not allow
screening for substance abuse.
Response: When feasible and
practicable, we believe it is important to
implement measures as they are
specified, especially where, as here, the
measure set is NQF-endorsed. As such,
we do not believe we should make the
suggested modifications to the measure.
We encourage the commenter to suggest
these changes to the measure’s steward,
The Joint Commission, so that the
measure can be properly specified,
tested, and endorsed for these changes.
In addition, the measure set is
bifurcated specifically to delineate
patients that refuse or do not otherwise
receive treatment. SUB–2 measures
‘‘[p]atients 18 years of age and older
who screened positive for unhealthy
alcohol use who received or refused a
brief intervention during the hospital 40
stay,’’ 41 but SUB–2a only includes
‘‘[p]atients who received the brief
intervention during the hospital
39 http://www.qualityforum.org/WorkArea/
linkit.aspx?LinkIdentifier=id&ItemID=76540.
40 Although the measure refers to ‘‘hospitals,’’ the
measure is specified for all in-patient settings.
https://www.qualitynet.org/dcs/
ContentServer?c=Page&pagename=QnetPublic
%2FPage%2FQnetTier4&cid=1228773989482.
41 SUB–2 and SUB–2a Measure Specifications,
available at https://www.qualitynet.org/dcs/
ContentServer?c=Page&pagename=Qnet
Public%2FPage%2FQnetTier4&cid=12287
73989482.
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46701
stay.’’ 42 Thus, the measure rates that
will be published on Hospital Compare
will allow the public to derive rates of
patient refusal. As stated above,
however, we believe that patient
compliance is indicative of quality care.
That is, we maintain that it is important
that providers understand gaps in
patient compliance so that they can
modify their actions and policy to
systematically encourage such
compliance.
Comment: One commenter stated that
because of its limited resources as a
community mental health center, it
would likely face reduced payment as a
result of this measure, and, therefore,
urged us not to adopt it.
Response: As we stated above, the
IPFQR Program does not penalize
facilities for low measure rates; facilities
are only penalized if they fail to report
these data.
Comment: One commenter noted that
individuals screening positive for
alcohol dependency may need both
brief interventions and further
assessment or referral to specialty
treatment and, therefore, suggested an
additional quality measure that assesses
patients who were defined as alcohol
dependent and referred to a substance
use disorder specialist for assessment.
Another commenter urged CMS to adopt
SUB–3/3a to complement SUB–1/2/2a,
noting that co-occurring substance use
disorders are prevalent in many patients
with psychiatric diagnoses and SUB–3/
3a will ensure that patients continue to
receive treatment after discharge.
Another commenter encouraged CMS to
consider additional non-alcohol
substance abuse disorder measures,
specifically the use of opioids.
Response: We thank the commenters
for these suggestions and will consider
them for future years of the program.
For the reasons stated above, we are
finalizing our proposal to adopt SUB–2
Alcohol Use Brief Intervention Provided
or Offered and SUB–2a Alcohol Use
Brief Intervention (NQF #1663) for the
FY 2018 payment determination and
subsequent years.
3. Transition Record With Specified
Elements Received by Discharged
Patients (Discharges From an Inpatient
Facility to Home/Self Care or Any Other
Site of Care) (NQF #0647) and Removal
of HBIPS–6
Effective and timely communication
of a patient’s clinical status and other
relevant information at the time of
discharge from an inpatient facility is
essential for supporting appropriate
continuity of care. Establishment of an
42 Ibid.
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effective transition from one treatment
setting to another is enhanced by
providing patients and their caregivers
with sufficient information regarding
treatment during hospitalization.
Receiving discharge instructions can
assist the patient in understanding how
to maintain and enhance his/her care
when discharged to home or any other
site, and studies have shown that
readmissions can be prevented by
providing detailed, personalized
information to patients pre-discharge.43
The Transition Record with Specified
Elements Received by Discharged
Patients (Discharges from an Inpatient
Facility to Home/Self Care or Any other
Site of Care) measure is a chartabstracted measure that captures the
‘‘[p]ercentage of patients, regardless of
age, discharged from an inpatient
facility to home or other site of care, or
their caregiver(s), who received a
transition record (and with whom a
review of all included information was
documented) at the time of
discharge.’’ 44 At a minimum, the
transition record should include:
• Reason for inpatient admission;
• Major procedures and tests
performed during inpatient stay and
summary of results;
• Principal diagnosis at discharge;
• Current medication list;
• Studies pending at discharge;
• Patient instructions;
• Advance directive or surrogate
decision maker documented or reason
for not providing advance care plan;
• 24-hour/7-day contact information,
including physician for emergencies
related to inpatient stay;
• Contact information for obtaining
results of studies pending at discharge;
• Plan for follow-up care; and
• Primary physician, other health
care professional, or site designated for
follow-up care.45
The measure was developed by the
American Medical Association–
convened Physician Consortium for
Performance Improvement (AMAconvened PCPI), ‘‘a national, physicianled initiative dedicated to improving
patient health and safety.’’ 46 For more
43 Jack BW, Chetty VK, Anthony D, et al. A
reengineered hospital discharge program to
decrease rehospitalization. Ann Intern Med 2009;
150:178–187.
44 Transition Record with Specified Elements
Received by Discharged Patients (Discharges from
an Inpatient Facility to Home/Self Care or Any
Other Site of Care) Measure Specifications.
Available at http://www.qualityforum.org/Qps/
0647.
45 Ibid.
46 See http://www.ama-assn.org/ama/pub/
physician-resources/physician-consortium-perfo
rmance-improvement/about-pcpi.page? The AMA–
PCPI ‘‘is nationally recognized for measure
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information on this measure, including
its specifications, we refer the readers to
the AMA-convened PCPI list of
measures at http://
www.qualityforum.org/Qps/0647.
The Transition Record with Specified
Elements Received by Discharged
Patients (Discharges from an Inpatient
Facility to Home/Self Care or Any other
Site of Care) measure seeks to prevent
gaps in care transitions caused by the
patient receiving inadequate or
insufficient information that lead to
avoidable adverse events and cost CMS
approximately $15 billion due to
avoidable patient readmissions.47
We stated our belief that public
reporting of this measure will afford
patients and their families or caregivers
useful information in choosing among
different facilities and will promote the
National Quality Strategy priority of
Communication and Care Coordination.
As articulated by HHS, ‘‘Care
coordination is a conscious effort to
ensure that all key information needed
to make clinical decisions is available to
patients and providers. It is defined as
the deliberate organization of patient
care activities between 2 or more
participants involved in a patient’s care
to facilitate appropriate delivery of
health care services.’’ 48 This measure
will promote appropriate care
coordination by specifying that patients
discharged from an inpatient facility
receive relevant and meaningful
transition information. This measure
also promotes Person and Family
Engagement, ‘‘a set of behaviors by
patients, family members, and health
professionals and a set of organizational
policies and procedures that foster both
the inclusion of patients and family
members as active members of the
health care team and collaborative
partnerships with providers and
provider organizations.’’ 49 This
measure will inform patients of their
status at discharge, empowering them to
become active members in their care.
Additionally, the inclusion in this
measure of an advance care plan will
development, specification and testing of measures,
and enabling use of measures in electronic health
records (EHRs) . . . [the organization] develops,
tests, implements and disseminates evidence-based
measures that reflect the best practices and best
interest of medicine . . .’’
47 Medicare Payment Advisory Commission.
Promoting Greater Efficiency in Medicare. June
2007. Available at: http://www.medpac.gov/
documents/reports/Jun07_EntireReport.pdf.
48 US DHHS. ‘‘National Healthcare Disparities
Report 2013.’’ Available at: http://www.ahrq.gov/
research/findings/nhqrdr/nhdr13/chap7.html.
49 Guide to Patient and Family Engagement:
Environmental Scan Report. May 2012. Agency for
Healthcare Research and Quality. Rockville, MD.
Available at: http://www.ahrq.gov/research/
findings/final-reports/ptfamilyscan/ptfamily1.html.
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support open communication of the
patient’s, and his/her caregiver’s/
surrogate’s, wishes, resulting in
improved patient-provider
communication.
For these reasons, we included this
measure in our ‘‘List of Measures under
Consideration for December 1, 2014.’’
The MAP provided input on the
measure and supported its inclusion in
the IPFQR Program in its report
‘‘Process and Approach for MAP PreRulemaking Deliberations 2015’’
available at http://www.quality
forum.org/WorkArea/linkit.aspx?Link
Identifier=id&ItemID=78711. In
addition, the MAP had previously
suggested this measure as one that could
fill a gap in communication between the
provider and patient at discharge 50 and
recommended that the measure be used
for dual eligible patients (that is,
patients with both Medicare and
Medicaid coverage), who comprise a
significant beneficiary population
served within IPFs.51 Moreover, this
measure set is NQF-endorsed for the IPF
setting, in conformity with the statutory
criteria for measure selection under
section 1886(s)(4)(D)(i) of the Act.
We proposed that, if this measure is
finalized, it would replace the existing
HBIPS–6 Post-Discharge Continuing
Care Plan measure.52 We stated our
belief that the Transition Record with
Specified Elements Received by
Discharged Patients (Discharges from an
Inpatient Facility to Home/Self Care or
Any Other Site of Care) measure is a
more effective and robust measure than
HBIPS–6 for use in the IPF setting.
Specifically, HBIPS–6 requires
discharge plans to only have 4
components:
• Reason for hospitalization;
• Principal diagnosis;
• Discharge medications; and
• Next level of care
recommendations.53
In contrast, the Transition Record with
Specified Elements Received by
Discharged Patients (Discharges from an
Inpatient Facility to Home/Self Care or
Any Other Site of Care) measure
requires additional elements, including
those described below, which are
intended to improve quality of care,
50 http://www.qualityforum.org/Publications/
2012/10/MAP_Families_of_Measures.aspx.
51 http://www.qualityforum.org/Publications/
2014/08/2014_Input_on_Quality_Measures_for_
Dual_Eligible_Beneficiaries.aspx.
52 In the FY 2013 IPPS/LTCH PPS final rule, we
adopted HBIPS–6, beginning with the FY 2014
payment determination (77 FR 53650–53651). We
refer readers to that rule for a detailed discussion
of this measure.
53 See https://manual.jointcommission.org/
releases/TJC2014A1/.
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decrease costs, and increase beneficiary
engagement.
First, this measure requires the
provider to communicate both studies
pending at discharge as well as contact
information so that patients or their
families can obtain the results of those
studies. Approximately 40 percent of
discharged patients have test results that
are pending and about a quarter of such
test results require further action that, if
not taken in a timely manner, could
result in potentially avoidable negative
outcomes.54 HBIPS–6 does not require
providers to specify studies pending at
discharge.
Second, the transition record is also
required to contain a list of major
procedures and tests that were
performed during the hospitalization
and summary results. HBIPS–6 does not
include this requirement. We believe it
is important for a patient to understand
which tests were performed on him/her
and for what purpose, understanding
the outcome and consequences of these
tests. This knowledge may serve to
empower patients to seek additional
care or follow-up when necessary,
reducing the risk of avoidable
consequences and readmissions.
Third, the transition record in this
measure is required to include patient
instructions while HBIPS–6 has no such
requirement. Without instructions, the
patient may not take the necessary steps
for recovery, leading to complications
and/or readmissions.
Fourth, this measure requires both of
the following: (1) 24-hour/7-day contact
information including physicians for
emergencies related to inpatient stay;
and (2) the primary physician, other
health care professional, or sites
designated for follow-up care. HBIPS–6
does not have these requirements.
Again, this information can lead to
reduced complications and an increased
likelihood of appropriate follow-up
care, resulting in reduced readmissions.
Finally, the elements required for the
transition record measure are far better
aligned than HBIPS–6 with the elements
required in the Summary of Care record
required by the Electronic Health
Record (EHR) Incentive Program for
eligible hospitals and critical access
hospitals and with the guidance on
discharge planning provided by the
Medicare Learning Network available at
https://www.cms.gov/Outreach-andEducation/Medicare-Learning-NetworkMLN/MLNProducts/Downloads/
54 Kripalani S, LeFevre F, Phillips CO, et al.
Deficits in communication and information transfer
between hospital based and primary care
physicians: implications for patient safety and
continuity of care. JAMA 2007;297(8):831–841.
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Discharge-Planning-Booklet-ICN
908184.pdf.
In summary, we stated our belief that
the Transition Record with Specified
Elements Received by Discharged
Patients (Discharges from an Inpatient
Facility to Home/Self Care or Any Other
Site of Care) measure is more robust
than HBIPS–6 because it includes these
and other elements that are currently
absent from HBIPS–6. Therefore, we
proposed to adopt the Transition Record
with Specified Elements Received by
Discharged Patients (Discharges from an
Inpatient Facility to Home/Self Care or
Any Other Site of Care) measure for the
FY 2018 payment determination and
subsequent years, and to remove
HBIPS–6. We welcomed public
comments on these proposals. The
comments we received and our
responses are set forth below.
Comment: Many comments submitted
from a consumer perspective supported
the adoption of this measure, stating
that the transition from inpatient to
home/self-care or any other site is
extremely critical; the measure supports
patient engagement, and patient
activation, and provides patients with
necessary documentation for follow-up
care. Commenters also stated that,
unlike HBIPS–6, because this measure is
not limited to the inpatient psychiatric
setting, it decreases the separation
between psychiatric and nonpsychiatric
care.
Response: We thank the commenters
for their support.
Comment: Many commenters
recommended that CMS not replace
HBIPS–6 with the Transition Record
with Specified Elements Received by
Discharged Patients (Discharges from an
Inpatient Facility to Home/Self Care or
Any Other Site of Care) measure for
several reasons. First, commenters
asserted that HBIPS–6 is widely-used
and fully operational, was developed
with the input of IPFs, and fully tested
in the IPF-setting, whereas the proposed
measure does not appear to be widely
used or have benchmarking data
available. One commenter specifically
submitted that the measure was
developed for use at the individualclinician level rather than at the facilitylevel. Commenters stated that most IPFs
have been reporting HBIPS data for over
eight years, allowing them to
understand trends and performance
gaps, and believed that removing
HBIPS–6 could upset quality
improvement efforts currently in place.
Commenters also stated that continually
revising the measures does not provide
reliable data on which to base decisions
about patient care and evaluate care
improvement over time.
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46703
Second, commenters contended that
HBIPS–6 better addresses the core
elements of the proposed measure and
requires more stringent documentation
of medications, noting that, although the
proposed measure requires more
information, it is the practice of IPFs to
include all relevant information in the
continuing care plan, and, if needed,
hospitals communicate additional
elements to the next level care provider.
Commenters further stated that the new
elements required by this measure are
not germane to the vast majority of
psychiatric patients, commenting that
the rule mainly cites articles that did
not necessarily study psychiatric
patients, and that the new elements are
primarily based on medical models
rather than psychiatric care.
Third, commenters contended that
retiring HBIPS–6 will increase burden
on IPFs because of the 7 additional
elements required by the proposed
measure and because IPFs will still be
required to abstract data for HBIPS–6 for
The Joint Commission.
Finally, some commenters stated that
the measure is duplicative of, and
sometimes misaligned with, the
requirements of Medicare’s Conditions
of Participation. Commenters believed
that the Conditions of Participation
meet the goals of promoting care
coordination by specifying that patients
discharged from an inpatient facility
receive relevant and meaningful
transition information and the results
are publicly reported.
Commenters suggested that, if CMS
wishes to require transition elements in
addition to HBIPS–6, CMS either allow
hospitals more time to operationalize
the measure, implementing the measure
beginning with the FY 2019 payment
determination, or that CMS work with
The Joint Commission to revise HBIPS–
6 to include additional elements.
Response: We agree with commenters
that there may be some increase in
burden due to the removal of HBIPS–6
and the adoption of the Transition
Record with Specified Elements
Received by Discharged Patients
(Discharges from an Inpatient Facility to
Home/Self Care or Any Other Site of
Care) measure, since HBIPS–6 requires
4 elements while the Transition Record
with Specified Elements Received by
Discharged Patients (Discharges from an
Inpatient Facility to Home/Self Care or
Any Other Site of Care) measure
requires 11 elements. However, we
believe that this burden will be
significantly mitigated by the overlap in
the two measures; the 4 elements
required by HBIPS–6 satisfy 4 of the 11
elements for the new measure. We
clarify in this final rule that, if the IPF
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meets the documentation requirements
of HBIPS–6, it also meets the
documentation requirements for the
following elements for the Transition
Record with Specified Elements
Received by Discharged Patients
(Discharges from an Inpatient Facility to
Home/Self Care or Any Other Site of
Care) measure: (1) Reason for
hospitalization; (2) principal diagnosis;
(3) discharge medications; and (4) next
level of care recommendations.
Therefore a hospital could abstract data
for and comply with HBIPS–6 by also
complying with and abstracting data for
the Transition Record with Specified
Elements Received by Discharged
Patients (Discharges from an Inpatient
Facility to Home/Self Care or Any Other
Site of Care) measure. Furthermore, if it
is currently the practice of IPFs to
include all relevant information in the
continuing care plan, as some
commenters assert, we do not
understand how the measure would
substantially increase burden. In
addition, for the reasons stated above,
we believe the additional elements in
the new transition measure are
indicative of quality care, leading to a
decrease in re-hospitalizations and an
increase in patient safety. We also do
not agree that replacing this measure
will upset quality improvement efforts
begun by HBIPS–6. If IPFs have already
begun quality improvement in this area,
we believe it will continue and even
surpass the current state because the
proposed measure is even more robust,
requiring 7 additional elements.
Therefore, we believe that the benefit of
the removal of HBIPS–6 and the
adoption of the Transition Record with
Specified Elements Received by
Discharged Patients (Discharges from an
Inpatient Facility to Home/Self Care or
Any Other Site of Care) measure
outweighs any associated burden and
furthers the goals of the IPFQR Program.
In addition, the measure is endorsed at
the facility-level, not the clinical-level,
and was developed with a broad range
of inpatient settings in mind that did
not specifically exclude IPFs; the
measure developer is considering
explicitly including the IPF-setting in
the next round of measure maintenance
so that the measure is endorsed not only
for all inpatient settings, but explicitly
states that it is endorsed for the IPFsetting.
Furthermore, we disagree that the
Conditions of Participation are
duplicative of or misaligned with this
measure. To the extent that the measure
and Conditions of Participation overlap,
they are aligned in their requirements.
Furthermore, this measure requires
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elements in addition to those of the
Conditions of Participation, increasing
the quality of care delivered to patients.
To clarify, although HBIPS–6 requires
documentation in the medical record of
discharge medications, dosage, and
indication for use or that no
medications were prescribed at
discharge, the new measure requires
documentation of all medications to be
taken by patient after discharge,
including all continued and new
medications. We believe that it is
important that patients understand all
medications that they should be taking,
even those not specifically prescribed at
discharge. Thus, we believe that this
new measure is actually more robust
than HBIPS–6.
Additionally, as we have stated
previously, we disagree that measures
must be created for IPFs or specifically
for the IPF population to be indicative
of quality care. Many issues concerning
service quality are not specific to a
particular setting. We believe that the
content of transition records is one such
issue. Further, we believe that limiting
the program to only measures or
conditions that specifically apply to the
psychiatric population creates a false
demarcation between nonpsychiatric
and psychiatric care.
Finally, although we believe this
measure to be a critical indicator of
quality care, we understand that with
the additional elements required it may
take providers time to change their
operations to begin collecting this data.
Therefore, we will only require IPFs to
report the last two quarters of data for
this measure for the FY 2018 payment
determination; that is, providers will
only be required to report data for July
1, 2016–December 31, 2016. Beginning
with the FY 2019 payment
determination, IPFs will be required to
report all four quarters of data or will
face a payment reduction.
Comment: Some commenters asserted
that patients have expressed frustration
with the length of discharge
instructions, and the number of
elements required by this measure may
overwhelm the patient, causing the
patient or caregiver to lose interest and
disregard the important information.
Commenters also stated that some of
this information could be
misinterpreted if the patient reviews the
information after discharge and not in
the presence of a clinician. One
commenter specifically contended that
‘‘patient instructions’’ should not be
included in the record because they will
become lost in the packet of information
and many patients are discharged to
places, such as a group home,
residential care, or jail, where they are
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not able to keep such a large amount of
information, putting their
confidentiality at risk. Another
commenter stated its belief that the
requirements in the measure for patients
to receive and understand their
transition records is burdensome
because the timeframe for collection
does not allow enough time for
hospitals to modify the language in their
current systems to account for health
literacy. Therefore, some commenters
requested that the measure be limited to
items necessary for the transition period
to the next follow-up care visit and be
tailored to psychiatric patient’s ability
to comprehend. Other commenters,
however, specifically noted that the
measure will enhance the likelihood
that patients will have the information
they need to effectively manage their
own care (or for their caregiver to
understand and assist with managing
the patient’s care).
Response: We agree that the measure
will help, rather than harm, patients.
We are committed to patient
engagement and believe that the more
that patients know about their condition
and treatment, the more empowered
they become in their care and their
follow-up treatment. If facilities believe
that certain items in the record need to
be explained, we believe it is incumbent
upon them to become partners in care
with patients and sufficiently explain
these details. Although such changes
may present additional burden to
facilities, we believe that this burden is
far outweighed by the benefit of
fostering an involved and empowered
patient population. Additionally, we do
not believe that this measure presents
confidentiality issues for patients. Once
a patient receives his or her record, the
disposition of the information is up to
the patient. Thus, as with all discharge
records, a patients may choose to do
with the information as they so choose
without raising confidentiality
concerns.
Comment: Some commenters
supported the measure because it more
closely aligns with existing summary of
care document requirements for EHRs,
but some commenters stated that,
psychiatric hospitals are not eligible for
the EHR Incentive Program and the
majority of organizations to which IPFs
discharge patients do not have
electronic records. Other commenters
stated their belief that this measure
would require providers to modify their
EHRs.
Response: Nothing in this measure
requires a facility to use an EHR. While
we recognize that psychiatric hospitals
are not eligible for the EHR Incentive
Program, we believe that, whenever
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possible, the goals of the agency should
be aligned to foster streamlined
processes and procedures across
providers and care settings.
Furthermore, we are not aware of any
specific EHR changes that would need
to be made to accommodate this
measure, and, when the record is
transmitted to a next-level provider per
the measure discussed below, the
‘‘transition record may be transmitted to
the facility or physician or other health
care professional designated for followup care via fax, secure email, or mutual
access to an electronic health record
(EHR).’’ 55
Comment: Some commenters
maintained that CMS inappropriately
compared HBIPS–6 with the proposed
measure when the HBIPS–6 transition
plan is not required to go to the patient.
Response: We believe comparing
these measures was appropriate because
both concern practices around
documentation of the care provided
during the inpatient stay. In fact, the
requirements for patient communication
in the measure is an important reason
for choosing it to replace HBIPS–6,
which does not require the
documentation to go to the patient. As
we discuss above, we believe it is vital
to provide this information to enhance
patient engagement.
Comment: Commenters expressed
concern that the Transition Record with
Specified Elements Received by
Discharged Patients (Discharges from an
Inpatient Facility to Home/Self Care or
Any Other Site of Care) measure is not
stratified by age, which limits the
usefulness of the data, given the
variation across populations.
Response: As stated above, when
feasible and practicable, we believe it is
important to implement measures as
they are specified especially where, as
here, the measure is NQF-endorsed. As
such, this measure is not specified to be
reported by age. Furthermore, we
believe that presenting the measure as
an aggregate number rather than
stratified by age will allow greater rather
than less insight into these data because,
as further explained in section V.F.1. of
this final rule, the resultant number of
cases is often too small to allow public
reporting when data are stratified by
age.
Comment: Comments submitted from
a consumer perspective recommended
that CMS consider adding the following
additional elements to the existing
transition measure: (1) Information on
55 Timely Transmission of Transition Record
(Discharged from Inpatient Facility to Home/Self
Care or Any Other Site of Care), available at http://
www.ama-assn.sorg/apps/listserv/x-check/
qmeasure.cgi?submit=PCPI.
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locations and contacts for community
services and support group meetings; (2)
recommendations for additional, nonmedication mental health treatments; (3)
recommendations for relevant physical
health suggested appointments and
clinical references; (4) patient surveys
evaluating the quality of mental health
care received; (5) information about side
effects from medications and potential
warning signs of adverse medication
interactions; (6) information about
follow-up care for alcohol or substance
use treatment; and (7) documented
coordination between inpatient and
outpatient providers. Another
commenter stated that the measure
should exclude patients discharged in
less than 24 hours because collecting
the required information takes at least
this amount of time. The same
commenter also submitted that patients
discharged to another acute facility
should be excluded from the measure
since such a discharge is always
accompanied by an appropriate
transition record. Another commenter
stated that additional exclusions should
be added, including patient refusal and
unplanned discharges, noting that more
than 6 percent of discharges fall in these
categories. One commenter noted that
‘‘medication indications’’ is missing
from the proposed measure, but appears
in HBIPS–6, and questions why CMS
believes this is no longer a necessary
element, noting that such an omission is
welcome because of the burden in
documenting this information. Other
commenters, however, stated that this
more stringent documentation of
medications is necessary.
Response: As stated above, when
feasible and practicable, we believe it is
important to implement measures as
they are specified, especially once such
measures are NQF-endorsed. As such,
we do not believe we should make the
suggested modifications to the measure.
We encourage the commenters to
suggest these changes to the measure’s
steward, the AMA-convened PCPI, so
that the measure can be properly
specified, tested, and endorsed for these
changes.
Comment: Some commenters stated
that this measure was either the same as
or similar to a measure previously
adopted by the Hospital OQR Program
that was subsequently removed because
hospitals raised concerns about
potential privacy issues related to
releasing certain elements of the record
to family members or caregivers.
Commenters asked if the measure had
been revised to address these issues and
if IPFs will be constrained by state laws,
and, if so, since state laws differ from
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46705
state-to-state, how the measure can be
implemented nationwide.
Response: We believe the commenters
stating that the measure is the same as
a measure adopted by the Hospital OQR
Program are incorrect. The Hospital
OQR Program adopted and finalized
NQF #0649 Transition Record with
Specified Elements Received by
Discharged Patients (Emergency
Department Discharges to Ambulatory
Care [Home/Self Care] or Home Health
Care). Although this measure is also
stewarded by the AMA–PCPI and
requires a transition record, it is not the
same as NQF #0647, which we
proposed. The measures differ in
regards to the location from which the
patient is discharged; specifically, NQF
#0649 measures discharges from the
emergency department, while NQF
#0647 measures discharges from an
inpatient facility. We believe that this
difference is critical because the
circumstances surrounding discharge
from an emergency department are
typically not planned; that is, a patient
is discharged the same day he/she
arrives with the individual that brought
him/her to the emergency room, whom
a patient may or may not feel
comfortable sharing information. Those
discharged from an inpatient setting
usually have advanced notice and can
plan accordingly. Thus, we do not
believe, and neither does the AMA–
PCPI, that NQF #0647 raises any of the
privacy concerns articulated by the
Hospital OQR Program for #0649.
Comment: Commenters requested
clarification on several elements of the
discharge plan: (1) What needs to be
transmitted to satisfy the advanced
directive requirement and who is a
‘‘surrogate decision maker’’; (2) what is
defined as a ‘‘major procedure’’; (3)
which tests should be included in the
transition record; and (4) what is ‘‘24
hour, 7-day a week contact
information.’’ Another commenter
requested that CMS clarify whether
psychiatric patients undergo major
procedures and tests during their stay,
and, if so, the most common procedures
and tests. Another commenter requested
CMS to opine if Indiana’s Physician
Order for Scope Treatment document
would satisfy the advance directive
element. Another commenter stated that
psychiatric patients are often not in the
best position to formulate an advanced
care plan.
Response: According to the measure
steward, the AMA-convened PCPI, to
satisfy the ‘‘advance directive or
surrogate decision maker documented
or reason for not providing advance care
plan’’ element, the IPF need only
document whether the patient has an
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advance directive or surrogate decision
maker or a reason he/she does not have
one. No additional documentation need
be transmitted and a patient need not
create an advance directive to satisfy the
measure. A ‘‘surrogate decision maker’’
is an individual that the patient has
designated to make decisions for him/
her. Again, per the measure
specifications, the patient need not
necessarily have a surrogate decision
maker, but the IPF should document
why he or she does not in the absence
of one.
The AMA–PCPI has also clarified that
‘‘major procedure’’ and ‘‘tests’’ are
intentionally not defined to allow
flexibility for providers; therefore, we
cannot quantify which procedures or
tests are major. If a provider believes a
procedure to be ‘‘major’’ or a test
important enough to be included, it
should be included in the transition
record.
Regarding the ‘‘24 hour, 7-day a week
contact information,’’ IPFs need only
provide a number where a patient can
contact the facility with questions. This
number need not connect the patient to
his/her specific doctor, although it may
do so.
For the reasons stated above, we are
finalizing our proposal to adopt
Transition Record with Specified
Elements Received by Discharged
Patients (Discharges from an Inpatient
Facility to Home/Self Care or Any Other
Site of Care) and remove HPIBS–6: PostDischarge Continuing Care Plan for the
FY 2018 payment determination and
subsequent years with one modification.
For the FY 2018 payment
determination, we will only require IPFs
to report data on this measure for the
last two quarters of the reporting period
(July 1, 2016–December 1, 2016).
Beginning with the FY 2019 payment
determination, IPFs will be required to
report all four quarters of data.
4. Timely Transmission of Transition
Record (Discharges From an Inpatient
Facility to Home/Self Care or Any Other
Site of Care) (NQF #0648) and Removal
of HBIPS–7
The literature shows infrequent
communication between hospital
physicians and primary care
practitioners and that the availability of
discharge summaries at the patient’s
first post-discharge visit with the
primary care practitioner is low, which
affects the quality of care provided to
patients.56 The Timely Transmission of
56 Kripalani S, LeFevre F, Phillips CO, et al.
Deficits in communication and information transfer
between hospital based and primary care
physicians: Implications for patient safety and
continuity of care. JAMA 2007;297(8):831–841.
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Transition Record (Discharges from an
Inpatient Facility to Home/Self Care or
Any Other Site of Care) measure (NQF
#0648) is a chart-abstracted measure
developed by AMA-convened PCPI to
narrow gaps in care transition that result
in adverse health outcomes for patients
and cost CMS about $15 billion due to
readmissions,57 as discussed above.
This measure captures the ‘‘[p]ercentage
of patients, regardless of age, discharged
from an inpatient facility to home or any
other site of care for whom a transition
record was transmitted to the facility or
primary physician or other health care
professional designated for follow-up
care within 24 hours of discharge.’’ 58
For more information on this measure,
including its specifications, we refer the
readers to http://www.qualityforum.org/
Qps/0648.
We stated our belief that public
reporting of this measure will afford
consumers, and their families or
caregivers, useful information in
choosing among different facilities
because it communicates how quickly a
summary of the patient’s record will be
transmitted to his or her other treating
facilities and physicians, improving
care, as outlined above. We further
believe that this measure will promote
the National Quality Strategy priority of
Communication and Care Coordination.
As discussed above, according to HHS,
‘‘Care coordination is a conscious effort
to ensure that all key information
needed to make clinical decisions is
available to patients and providers. It is
defined as the deliberate organization of
patient care activities between 2 or more
participants involved in a patient’s care
to facilitate appropriate delivery of
health care services.’’ 59 This measure
enables a patient’s primary care
physician or other healthcare
practitioner to timely receive a
transition record of the inpatient
hospitalization.
For these reasons, we included this
measure in our ‘‘List of Measures under
Consideration for December 1, 2014.’’
The MAP provided input on the
measure and supported its inclusion in
the IPFQR Program (http://
www.qualityforum.org/WorkArea/link
it.aspx?LinkIdentifier=id&Item
ID=78711). In addition, the MAP had
57 Medicare Payment Advisory Commission.
Promoting Greater Efficiency in Medicare. June
2007. Available at: http://www.medpac.gov/
documents/reports/Jun07_EntireReport.pdf.
58 Timely Transmission of Transition Record
(Discharged from Inpatient Facility to Home/Self
Care or Any Other Site of Care), available at http://
www.ama-assn.sorg/apps/listserv/x-check/
qmeasure.cgi?submit=PCPI.
59 US DHHS. ‘‘National Healthcare Disparities
Report 2013.’’ Available at: http://www.ahrq.gov/
research/findings/nhqrdr/nhdr13/chap7.html.
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previously suggested this measure as
one that could fill a gap in
communication 60 and recommended
that the measure be used for dual
eligible patients (that is, patients with
both Medicare and Medicaid coverage),
who comprise a significant beneficiary
population served within IPFs.61
Moreover, this measure set is NQFendorsed for the IPF setting, in
conformity with the statutory criteria for
measure selection under section
1886(s)(4)(D)(i) of the Act.
We proposed that if we finalized this
measure, it would replace the existing
HBIPS–7: Post Discharge Continuing
Care Plan Transmitted to the Next Level
of Care Provider Upon Discharge
measure.62 HBIPS–7 requires that the
continuing care plan be transmitted to
the next care provider no later than the
fifth day post discharge.63 The Timely
Transmission of Transition Record
(Discharges from an Inpatient Facility to
Home/Self Care or Any Other Site of
Care) measure requires transmission to
the next level of care within 24 hours
of discharge. More timely
communication of vital information
regarding the inpatient hospitalization
results in better care, reduction of
systemic medical errors, and improved
patient outcomes. Studies show that the
risks of re-hospitalization are lower
when primary care providers have
access to patients’ post-discharge
records at the first post-discharge
visit,64 65 which may be within a day (or
days) of discharge. Critically, the
availability of the discharge record to
the next level provider within 24 hours
after discharge supports more effective
care coordination and patient safety,
since a delay in communication can
result in medication or treatment errors.
Thus, we stated our belief that replacing
HBIPS–7 with the Timely Transmission
of Transition Record (Discharges from
an Inpatient Facility to Home/Self Care
60 http://www.qualityforum.org/Publications/
2012/10/MAP_Families_of_Measures.aspx.
61 http://www.qualityforum.org/Publications/
2014/08/2014_Input_on_Quality_Measures_for_
Dual_Eligible_Beneficiaries.aspx.
62 In the FY 2013 IPPS/LTCH PPS final rule, we
adopted HBIPS–7 Post Discharge Continuing Care
Plan Transmitted to the Next Level of Care Provider
Upon Discharge, beginning with the FY 2014
payment determination (77 FR 53651–53652). We
refer readers to that rule for a detailed discussion
of this measure.
63 https://manual.jointcommission.org/releases/
TJC2014A1/.
64 van Walraven C, Seth R, Austin PC, Laupacis
A. (2002). Effect of discharge summary availability
during postdischarge visits on hospital readmission.
Journal of General Internal Medicine 17:186–192.
65 Jack BW, Chetty VK, Anthony D, et al. (2009).
A reengineered hospital discharge program to
decrease rehospitalization. Ann Intern
Med.150(3),178–187.
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or Any Other Site of Care) measure
would increase the quality of care
provided to patients, reduce avoidable
readmissions, and increase patient
safety.
Therefore we proposed to replace
HBIPS–7 with the Timely Transmission
of Transition Record (Discharges from
an Inpatient Facility to Home/Self Care
or Any Other Site of Care) measure
beginning with the FY 2018 payment
determination. We welcomed public
comments on these proposals. The
comments we received and our
responses are set forth below.
Comment: Comments submitted from
a consumer perspective strongly
supported the adoption of this measure,
specifically the 24-hour requirement,
since lack of coordinated care has led to
high rates of re-hospitalization, arrests,
homelessness, and other negative
consequences, and the measure will
ensure that there is only a potential 24hour gap between discharge and the
next level of care. Commenters
maintained that the measure would
promote safe and effective care and
communication and care coordination
efforts of the National Quality Strategy.
Commenters also stated that the
measure more closely aligns with
existing summary of care document
requirements for EHRs, and is
applicable to more settings than HBIPS–
7, decreasing the separation between
psychiatric and nonpsychiatric care.
Response: We thank the commenters
for their support, and agree that
psychiatric and nonpsychiatric care
should be considered as a whole in
treating a patient.
Comment: Many commenters
recommended that CMS not replace
HBIPS–7 with the Timely Transmission
of Transition Record (Discharges from
an Inpatient Facility to Home/Self Care
or Any Other Site of Care) measure for
several reasons. First, commenters
submitted that HBIPS–7 is widely-used
and fully operational, was developed
with the input of IPFs, and fully tested
in the IPF setting, whereas the proposed
measure does not appear to be widely
used or have benchmarking data
available. One commenter specifically
maintained that the measure was
developed for use at the individual
clinician level rather than at the facility
level. Other commenters stated that
most IPFs have been reporting HBIPS
data for over 8 years, allowing them to
understand trends and performance
gaps, and believed that removing
HBIPS–7 could upset quality
improvement efforts currently in place.
Commenters also stated that any
comparative data may not be
meaningful since national comparative
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rates would include settings other than
IPFs. Many commenters specifically
noted that room for improvement in
HBIPS–7 remains, with a compliance
rate of only 44 percent for the two-thirds
of psychiatric facilities that began using
this measure as a result of the IPFQR
Program. Commenters recommended
that CMS refrain from changing
measures in the same domain to allow
time for providers to change and
stabilize their procedures.
Second, commenters expressed
concern that the 24-hour window for
transmission does not improve the
quality of data submitted to the next
level of care provider, is in conflict with
other documentation requirements, such
as the allowable time for the discharge
summary to be completed, focuses on
how quickly the documentation is
completed rather than the quality of
data transmitted, and is nearly
impossible for providers to meet. Some
commenters noted that the 24-hour
timeframe is not necessary because most
patients are not seen by an outpatient
provider within 24 hours of discharge
and most communication is done
through fax, necessitating a longer
timeframe to ensure control over who
receives the data and compliance with
confidentiality requirements.
Third, commenters contended that
HBIPS–7 better addresses the core
elements of the proposed measure and
requires more stringent documentation
of medications, noting that, although the
proposed measure requires more
information, it is the practice of IPFs to
include all relevant information in the
continuing care plan. In addition,
commenters stated that the new
elements are primarily based on medical
models rather than psychiatric care and
focus on areas not important in the
psychiatric population.
Finally, commenters asserted that
removing HBIPS–7 will increase burden
on IPFs because IPFs will still be
required to abstract data for this
measure for The Joint Commission.
Commenters suggested that, if we
wish to require transition elements in
addition to HBIPS–7, we either allow
hospitals more time to operationalize
the measure, implementing it beginning
with the FY 2019 payment
determination, or that CMS work with
The Joint Commission to revise HBIPS–
7 to include additional elements.
Response: Although we agree that
there may be some increase in burden
due to the removal of HBIPS–7 and the
adoption of the Timely Transmission of
Transition Record (Discharges from an
Inpatient Facility to Home/Self Care or
Any Other Site of Care) measure, we
note that the primary difference
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between the two measures is in the
timing of transmission; HBIPS–7
requires transmission to the next-level
care provider within 5 days of
discharge, while the Timely
Transmission of Transition Record
(Discharges from an Inpatient Facility to
Home/Self Care or Any Other Site of
Care) measure requires the same within
24-hours of discharge. Thus, by
transmitting the transition record within
24 hours, the provider satisfies both the
Timely Transmission of Transition
Record (Discharges from an Inpatient
Facility to Home/Self Care or Any Other
Site of Care) measure and HBIPS–7.
Therefore a hospital could abstract data
for and comply with HBIPS–7 by also
complying with and abstracting data for
the Timely Transmission of Transition
Record (Discharges from an Inpatient
Facility to Home/Self Care or Any Other
Site of Care) measure. Furthermore,
although we believe that high-quality
data is important, we note that the point
of this measure is timeliness. As we
explain above, studies show that the
risks of re-hospitalization are lower
when primary care providers have
access to patients’ post-discharge
records at the first post-discharge
visit,66 67 which may be within a day (or
days) of discharge. Additionally, the
AMA–PCPI maintains, and we agree,
that studies have documented the
prevalence of communication gaps and
discontinuities in care for patients after
discharge and the significant effect of
these lapses on hospital readmissions
and other indicators of the quality of
transitional care.68 Therefore, we
believe that the 24-hour window is
critical to quality improvement and that
the benefit of the removal of HBIPS–7
and the adoption of the Timely
Transmission of Transition Record
(Discharges from an Inpatient Facility to
Home/Self Care or Any Other Site of
Care) measure outweighs any associated
burden and further the goals of the
IPFQR Program. Furthermore, we do not
agree with commenters that it is
‘‘impossible’’ for providers to meet the
24-hour transmission requirement; the
NQF specifically reviews a measure for
feasibility and has endorsed this
measure. Thus, we believe this measure
66 van Walraven C, Seth R, Austin PC, Laupacis
A. (2002). Effect of discharge summary availability
during postdischarge visits on hospital readmission.
Journal of General Internal Medicine 17:186–192.
67 Jack BW, Chetty VK, Anthony D, et al. (2009).
A reengineered hospital discharge program to
decrease rehospitalization. Ann Intern Med.
150(3),178–187.
68 Kripalani S, LeFevre F, Phillips CO, et al.
Deficits in communication and information transfer
between hospital based and primary care
physicians: implications for patient safety and
continuity of care. JAMA 2007;297(8):831–841.
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can be implemented. In addition,
although some patients are not seen in
24-hours, some are, and we believe that
their records should be available to the
next-level provider. Finally, as
explained below, we do not believe this
measure presents any confidentiality
issues.
Additionally, we note that the
additional elements that commenters
state are required by this measure are
actually required by the measure we are
adopting above, NQF #0647. In
addition, the need for ‘‘more stringent
documentation of medications,’’ is
found in the measure we are removing
above, HBIPS–6. We discuss any issues
associated with the measures in that
section. We believe the only additional
burden when comparing this measure to
HBIPS–7 is the decreased timeline. In
addition, the measure was developed
with a broad range of inpatient settings
in mind and did not specifically
exclude IPFs; the measure developer is
considering explicitly including the IPFsetting in the next round of measure
maintenance so that the measure is
endorsed not only for all inpatient
settings, but explicitly states that it is
endorsed for the IPF-setting.
We do not agree that replacing this
measure will upset quality improvement
efforts begun by HBIPS–7. If IPFs have
already begun quality improvement in
this area, we believe it will continue
and even surpass the current state
because the proposed measure is even
more robust. We also disagree that the
data may not be meaningful because,
when posted on Hospital Compare, the
data will include all IPFs participating
in the IPFQR Program, thus allowing
consumers to meaningfully compare the
quality of care provided by each IPF
participating in the program.
Finally, although we believe this
measure to be a critical indicator of
quality care, we understand that the
change from requiring the document
within 5 days of discharge to within 24
hours may initially prove operationally
difficult for providers. Therefore, we
will only require IPFs to report the last
two quarters of data for this measure for
the FY 2018 payment determination;
that is, providers will only be required
to report data for July 1, 2016–December
31, 2016. Beginning with the FY 2019
payment determination, IPFs will be
required to report all four quarters of
data or will face a payment reduction.
Comment: Some commenters noted
that it could be problematic to
implement this measure if a patient is
discharged on a weekend. Commenters
noted that some of the discharge
planning resources such as social
workers and case managers are not
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present to support the inpatient
discharge process and many offices are
closed on Saturday and Sunday. One
commenter noted that some providers
turn off their fax machines on
weekends. Other commenters stated that
24 hours is not realistic even on
weekdays because EHRs across systems
are not yet a reality, and the measure
may require providers to modify their
EHRs. One commenter also noted that
some community mental health clinics
may not be able to receive the transition
document, noting that quality care may
not be improved if the next-level care
provider is overloaded or unable to
provide the necessary care. Commenters
requested that CMS amend the measure
to allow more time for transmission,
with one commenter urging that 3 days
is a more reasonable timeline.
Response: As stated above, we believe
that the 24-hour window is critical to
this measure. Furthermore, we note that
the measure only requires transmission
of the record, not receipt of the record.
The ‘‘transition record may be
transmitted to the facility or physician
or other health care professional
designated for follow-up care via fax,
secure email, or mutual access to an
electronic health record (EHR).’’ 69
Thus, the measure can be satisfied even
if an office is closed. Finally, we are not
aware of any specific EHR changes that
would need to be made to accommodate
this measure, because the measure need
not be transmitted as an EHR.
Comment: Commenters expressed
concern that the Timely Transmission of
Transition Record (Discharges from an
Inpatient Facility to Home/Self Care or
Any Other Site of Care) measure is not
stratified by age, which limits the
usefulness of the data, given the
variation across populations.
Response: As stated above, when
feasible and practicable, we believe it is
important to implement measures as
they are specified, especially where, as
here, such measures are NQF-endorsed.
This measure is not specified to be
reported by age. Furthermore, we
believe that presenting the measure as
an aggregate number rather than
stratified by age will allow greater rather
than less insight into these data because,
as further explained in section V.F.1. of
this final rule, the resultant number of
cases is often too small to allow public
reporting when data are stratified by
age.
Comment: One commenter stated that
this measure violates HIPAA because
69 Timely Transmission of Transition Record
(Discharged from Inpatient Facility to Home/Self
Care or Any Other Site of Care), available at
http://www.ama-assn.sorg/apps/listserv/x-check/
qmeasure.cgi?submit=PCPI.
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patients have no control over how the
next-level provider will use the
discharge record and noted that the
same measure was suspended from the
Hospital OQR Program for privacy
concerns.
Response: Neither we nor the measure
developer are aware of any provision of
HIPAA that this measure would violate.
Furthermore, we believe the commenter
is incorrect. The Hospital OQR Program
adopted and finalized NQF #0649
Transition Record with Specified
Elements Received by Discharged
Patients (Emergency Department
Discharges to Ambulatory Care [Home/
Self Care] or Home Health Care).
Although this measure, NQF #0648, is
also stewarded by the AMA–PCPI and
requires a transition record, it is not the
same as NQF #0649. The measures
differ in regards to the location from
which the patient is discharged;
specifically, NQF #0649 measures
discharges from the emergency
department, while NQF #0648 measures
discharges from an inpatient facility. We
believe that this difference is critical
because the circumstances surrounding
discharge from an emergency
department are typically not planned;
that is, a patient is discharged the same
day he/she arrives with the individual
that brought him/her to the emergency
room, whom a patient may or may not
feel comfortable sharing information.
Those discharged from an inpatient
setting usually have advanced notice
and can plan accordingly. Thus, we do
not believe, and neither does the AMA–
PCPI, that NQF #0648 raises any of the
privacy concerns articulated by the
Hospital OQR Program for #0649.
Comment: One commenter stated that
many patients do not have follow-up
care, and, therefore, suggested that the
measure should specify that the record
be provided to family members or other
caregivers when appropriate.
Response: We note that we are
adopting the Transition Record with
Specified Elements Received by
Discharged Patients (Discharges from an
Inpatient Facility to Home/Self Care or
Any Other Site of Care) measure above,
which requires transmission of the
transition record to the patient. We
believe this measure will allow family
members and caregivers the opportunity
to understand the discharge information
if the patient wishes to share such
information.
For the reasons stated above, we are
finalizing our proposal to adopt the
Timely Transmission of Transition
Record (Discharges from an Inpatient
Facility to Home/Self Care or Any Other
Site of Care) measure and remove
HBIPS–7: Post Discharge Continuing
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Care Plan Transmitted to the Next Level
of Care Provider Upon Discharge for the
FY 2018 payment determination and
subsequent years with one modification.
For the FY 2018 payment
determination, we will only require IPFs
to report data for this measure for the
last two quarters of the reporting period
(July 1, 2016–December 1, 2016).
Beginning with the FY 2019 payment
determination, IPFs will be required to
report all four quarters of data.
asabaliauskas on DSK5VPTVN1PROD with RULES
5. Screening for Metabolic Disorders
Studies show that both second
generation antipsychotics (SGAs) and
antipsychotics increase the risk of
metabolic syndrome.70 Metabolic
syndrome involves a cluster of
conditions that occur together,
including excess body fat around the
waist, high blood sugar, high
cholesterol, and high blood pressure,
and increases the risk of coronary artery
disease, stroke, and type 2 diabetes.
Recognizing this problem, in February
2004, the American Diabetes
Association (ADA), the American
Psychiatric Association (APA), the
American Association of Clinical
Endocrinologists, and the North
American Association for the Study of
Obesity released a consensus statement
finding that the use of SGAs ‘‘have been
associated with reports of dramatic
weight gain, diabetes (even acute
metabolic decompensation, for example,
diabetic ketoacidosis [DKA]), and an
atherogenic lipid profile (increased LDL
cholesterol and triglyceride levels and
decreased HDL cholesterol) . . . [and]
[s]ubsequent drug surveillance and
retrospective database analyses suggest
that there is an association between
specific SGAs and both diabetes and
obesity.’’ 71 SGAs also have an effect on
serum lipids and could result in
dyslipidemia.72 Given these concerns,
the group recommended that ‘‘baseline
screening measures be obtained before,
or as soon as clinically feasible after, the
initiation of any antipsychotic
medication,’’ including body mass
index (BMI), blood pressure, fasting
plasma glucose, and fasting lipid
70 The American Diabetes Association, APA, the
American Association of Clinical Endocrinologists,
and the North American Association for the Study
of Obesity (2004). Consensus development
conference on antipsychotic drugs and obesity and
diabetes. Diabetes Care, 27, 596–601. Marder,
Stephen R., M.D., et al. Physical Health Monitoring
of Patients with Schizophrenia. Am J Psychiatry.
2004 Aug;161(8):1334–49.
71 The American Diabetes Association, APA, the
American Association of Clinical Endocrinologists,
and the North American Association for the Study
of Obesity (2004). Consensus development
conference on antipsychotic drugs and obesity and
diabetes. Diabetes Care, 27, 596–601.
72 Ibid.
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profile.73 Although the consensus
statement specifically discussed the
issues with SGAs, the ADA also
emphasized that ‘‘all patients receiving
antipsychotic medications [should] be
screened’’ 74 and subsequent studies
have found that ‘‘[i]n schizophrenic
patients, the level of lipid profile had
been increased in both atypical and
conventional antipsychotic users’’ 75
Numerous other organizations have
also made similar recommendations.76
For example, the National Association
of State Mental Health Program
Directors Medical Directors Council
notes, ‘‘the second generation
antipsychotic medications have become
more highly associated with weight
gain, diabetes, dyslipidemia, insulin
resistance, and the metabolic
syndrome.’’ They recommend the same
screening as the consensus statement
(BMI, blood pressure, fasting plasma
glucose, and fasting lipid profile) and
emphasize that this screening is ‘‘the
standard of care for the general
population.’’ 77 Likewise, the Mount
Sinai Conference,78 convened in 2002,
recommended that, for every patient
with schizophrenia, ‘‘regardless of the
antipsychotic prescribed,’’ mental
health providers should, among other
things: (1) Monitor and chart BMI; (2)
measure plasma glucose levels (fasting
73 Ibid.
74 The American Diabetes Association (2006).
Antipsychotic Medications and the Risk of Diabetes
and Cardiovascular Disease. Available at: http://
professional.diabetes.org/admin/UserFiles/file/CE/
AntiPsych%20Meds/Professional%20Tool
%20%231(1).pdf (emphasis added).
75 Roohafsza, H, Khani, A, Afshar, H,
Garakyaraghi, A, Ghodsi, B. Lipid profile in
antipsychotic drug users: A comparative study.
ARYA Atheroscler. May 2013; 9(3): 198–202
(emphasis added).
76 De Hert, M., Dekker, J.M. & Wood, D. (2009).
Cardiovascular disease and diabetes in people with
severe mental illness. Position statement from the
European Psychiatric Association (EPA), supported
by the European Association for the Study of
Diabetes (EASD) and the European Society of
Cardiology (ESC). Eur Psychiatry, 24, 412–424;
Zolnierek, C.D. (2009). Non-psychiatric
hospitalization of people with mental illnesses: A
systematic review. Journal of Advanced Nursing,
65(8), 1570–1583.
77 National Association of State Mental Health
Program Directors Medical Directors Council
(2006). Morbidity and mortality in people with
serious mental illness. Available at: http://
www.nasmhpd.org/docs/publications/MDCdocs/
Mortality%20and%20Morbidity%20Final%20
Report%208.18.08.pdf.
78 The Mount Sinai Conference was conferred to
‘‘focus on specific questions regarding the
pharmacotherapy of schizophrenia . . . Participants
in the conference were selected based on their
knowledge of and contributions to the literature in
this area . . . Also in attendance [were] various
groups concerned with improving
psychopharmacology in routine practice settings.’’
Marder, Stephen R., M.D., et al. Physical Health
Monitoring of Patients with Schizophrenia. Am J
Psychiatry. 2004 Aug;161(8):1334–49.
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46709
or HbA1c); and (3) obtain a lipid
profile.79
Despite these consensus statements
and guidelines, many of which are over
a decade old, screening for metabolic
syndrome remains low and there
appears to be disagreement regarding
where the responsibility for this
screening lies.80 Studies show a
systematic lack of metabolic risk
monitoring of patients who have been
prescribed antipsychotics.81 Screening
for metabolic syndrome may reduce the
risk of preventable adverse events and
improve the physical health status of
the patient. Therefore, we stated our
belief that it is necessary to include a
measure of metabolic syndrome
screening in the IPFQR Program.
The Screening for Metabolic Disorders
measure is a chart-abstracted measure
developed by CMS and defined as a
percentage of discharges from an IPF for
which a structured metabolic screening
for 4 elements was completed in the
past year. The denominator includes IPF
patients discharged with one or more
routinely scheduled antipsychotic
medications during the measurement
period. The numerator is the total
number of patients who received a
metabolic screening either prior to, or
during, the index IPF stay. The
screening must contain four tests: (1)
BMI; (2) blood pressure; (3) glucose or
HbA1c; and (4) a lipid panel—which
includes total cholesterol (TC),
triglycerides (TG), high density
lipoprotein (HDL), and low density
lipoprotein (LDL–C) levels. The
screening must have been completed at
least once in the 12 months prior to the
patient’s date of discharge. Screenings
can be conducted either at the reporting
facility or another facility for which
records are available to the reporting
facility. The following patients are
excluded from the measure: (1) Patients
for whom a screening could not be
completed within the stay due to the
patient’s enduring unstable medical or
79 Marder, Stephen R., M.D., et al. Physical Health
Monitoring of Patients with Schizophrenia. Am J
Psychiatry. 2004 Aug;161(8):1334–49.
80 See e.g., Brooks, Megan. ‘‘Metabolic Screening
in Antipsychotic Users: Whose Job Is It?’’ Medscape
Medical News. 8 May 2012. Available at http://
www.medscape.com/viewarticle/763468. Mittal D,
Li C, Viverito K, Williams JS, Landes RD, Thapa PB,
Owen R. Monitoring for metabolic side effects
among outpatients with dementia receiving
antipsychotics. Psychiatr Serv. 2014 Sep
1;65(9):1147–53.
81 Nasrallah, H. A, MD (2012). There is no excuse
for failing to provide metabolic monitoring for
patients receiving antipsychotics. Current
Psychiatry, 4 (citing Mitchell AJ, Delaffon V,
Vancampfort D, et al. Guideline concordant
monitoring of metabolic risk in people treated with
antipsychotic medication: Systematic review and
meta-analysis of screening practices. Psychol Med.
2012;42(1):125–147.)
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psychological condition; and (2)
patients with a length of stay equal to
or greater than 365 days, or less than 3
days. In section V.F.3. of this final rule,
we finalize a sampling methodology for
this and certain other measures.
Testing of this measure demonstrated
that performance on the metabolic
screening measure was low, on average,
across the tested IPFs. The measure’s
average performance rate of 42 percent
signals a strong opportunity for
improvement. During testing, the
metabolic screening measure also
demonstrated nontrivial variation in
performance among IPFs (6.2–98.6
percent). In addition, it demonstrated
near-perfect agreement between chart
abstractors (kappa of 0.93 for the
measure numerator).82
We included the Screening for
Metabolic Disorders measure (then
titled ‘‘IPF Metabolic Screening’’) in our
‘‘Measures Under Consideration List’’ in
December 2013. The MAP did not
recommend this measure, noting, ‘‘a
different NQF-endorsed measure better
addresses the needs of the program.’’ 83
However, the different NQF-endorsed
measure was not identified by the MAP,
and we stated that we are unaware of
any screening measures for metabolic
syndrome that are NQF-endorsed. We
noted that, when presented to the MAP,
the denominator for this measure was
the ‘‘total number of psychiatric
inpatients admitted during the
measurement period.’’ Based on testing
and further feedback on the measure, we
revised the measure by reducing its
application to only those patients on
antipsychotic medication; the
denominator for the measure is now
‘‘IPF patients discharged with one or
more routinely scheduled antipsychotic
medications during the measurement
period.’’ We stated our belief that this
change was appropriate because, as
discussed above, the patients most at
risk for metabolic syndrome are those
receiving antipsychotics, and the APA
and other consensus organizations
recommend this screening for patients
on antipsychotics. Furthermore, we
stated our belief that we, by limiting the
application of the measure only to those
receiving antipsychotics, have reduced
82 Development of Quality Measures for Inpatient
Psychiatric Facilities. February 2015. U.S.
Department of Health and Human Services,
Assistant Secretary for Planning and Evaluation,
Office of Disability, Aging, and Long-term Care
Policy. Page xi, at http://aspe.hhs.gov/daltcp/
reports/2015/ipf.cfm.
83 MAP 2014 Recommendations on Measures for
More than 20 Federal Programs, 179, at http://
www.qualityforum.org/Publications/2014/01/MAP_
Pre-Rulemaking_Report__2014_Recommendations_
on_Measures_for_More_than_20_Federal_
Programs.aspx.
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provider burden, both in terms of
possible changes in practice that might
result from the measure, as well as the
direct burden resulting from its
collection and reporting.
We also stated our belief that this
measure promotes the National Quality
Strategy priority of Making Care Safer,
which seeks to reduce risk that is
caused by the delivery of healthcare. As
discussed above, antipsychotics have
been shown to be related to metabolic
syndrome. The Screening for Metabolic
Disorders measure is aimed at the
prevention and treatment of serious side
effects of these drugs.
Section 1886(s)(4)(D)(ii) of the Act
authorizes the Secretary to specify a
measure that is not endorsed by NQF as
long as due consideration is given to
measures that have been endorsed or
adopted by a consensus organization
identified by the Secretary. We have
been unable to identify any measures
addressing screening for metabolic
syndrome for the IPF setting that have
been endorsed by the NQF or adopted
by any other consensus organization.
We stated our belief that the proposed
measure for the Screening for Metabolic
Disorders meets the measure selection
exception requirement under section
1886(s)(4)(D)(ii) of the Act.
For the reasons stated above, we
proposed to adopt the Screening for
Metabolic Disorders measure beginning
with the FY 2018 payment
determination. We welcomed public
comments on this proposal. The
comments we received and our
responses are set forth below.
Comment: Comments submitted from
a consumer perspective supported this
measure, noting that it is imperative to
treat co-occurring conditions.
Furthermore, these commenters noted
that this measure has some potential to
connect the ‘‘physical health care
provider to the psychiatric services
provider’’, and metabolic screening is an
important area of follow-up that will
improve patient outcomes. These
commenters also made the following
recommendations: (1) The measure
should also include reviewing the
results of the screening with the patient;
(2) the measure should require further
cardiovascular disease testing be
performed if the screening indicates that
it is warranted; (3) the measure should
refer patients to the appropriate
cardiovascular specialist, if needed; (4)
the measure should include all patients
receiving mental health treatment; (5)
individuals for whom a screening
cannot be completed within the stay
‘‘due to the patient’s enduring unstable
medical or psychological condition’’
should not be discharged until such a
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screening can occur since these
individuals are arguably at greatest risk
and their conditions should be
stabilized before discharged; (6) for
individuals excluded because of a
length of stay of less than 3 days, the
need for screening should be clearly
identified as part of the discharge
planning record so that this takes place
on an outpatient basis; and (7) the
rationale for excluding individuals who
are hospitalized for 365 days or more be
explained or removed.
Response: We thank commenters for
their support and will address each of
these recommendations in turn. First,
we agree with the importance of the
processes of care described by the
commenters (that is, recommendations
1–4). However, the current measure, as
specified and tested, addresses only the
screening for metabolic abnormalities.
We believe that this measure is an
important first step in metabolic
screening, and we will consider
additional measures that address any
necessary follow-up care in future years.
Furthermore, we believe that other
measures we are adopting, Transition
Record with Specified Elements
Received by Discharged Patients
(Discharges from an Inpatient Facility to
Home/Self Care or Any Other Site of
Care) and Timely Transmission of
Transition Record (Discharges from an
Inpatient Facility to Home/Self Care or
Any Other Site of Care), address the
communication of specific information
to the next care provider, such as major
procedures and tests performed during
inpatient stay and summary of results.
The exclusion ‘‘due to the patient’s
enduring unstable medical or
psychological condition’’ is harmonized
with other screening measures
developed by the Joint Commission for
the IPF setting. This exclusion was
reviewed and supported by a Technical
Expert Panel and an Expert
Workgroup.84 Additionally, during the
testing of this measure, the exclusion
applied to only one patient (0.2% of
sample) indicating that the exclusion
would be rare and only applied in the
most severe cases where screening
could not be conducted. Therefore, we
will retain the exclusion and further
evaluate the frequency of the exclusion
with data from implementation.
84 Health Services Advisory Group. Inpatient
Psychiatric Facility Outcome and Process Measure
Development and Maintenance: Screening of
Metabolic Disorders Measure Workgroup. Tampa,
FL; 2015. Available at: http://www.cms.gov/
Medicare/Quality-Initiatives-Patient-AssessmentInstruments/MMS/Downloads/InpatientPsychiatric-Facility-IPF-Outcome-and-ProcessMeasure-Development-and-Maintenance.zip.
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Patients with stays of fewer than 3
days were excluded from the metabolic
screening measure based on the
rationale that IPFs could not be
expected to complete all metabolic
screening tests (or verify that they were
completed elsewhere within the
previous 12 months) within that short
time period. Therefore, we believe that
we should retain this exclusion as
specified.
Finally, as noted above, the screening
must have been completed at least once
in the 12 months prior to the patient’s
date of discharge. Thus, an IPF need
only consider the past 12 months of
records for a patient after that patient is
discharged. Since this lookback is one
year, we do not believe we should
include patients who have been at the
facility for more than one year.
Furthermore, based on our testing of
this measure, we believe this exclusion
will be negligible, applying to less than
1.5 percent of the population. Therefore,
we will retain the exclusion and further
evaluate the frequency of the exclusion
with data from implementation.
Comment: One commenter suggested
that the ADA Consensus guidelines
recommended a lipid profile every 5
years while the Screening for Metabolic
Disorders measure requires a lipid
profile every year, creating unnecessary
costs. This commenter recommended
that the measure be changed to require
lipid panels every 5 years.
Response: The ADA Consensus
guidelines from 2004 recommended that
‘‘in those with normal lipid profile,
repeat testing should be performed at 5year intervals or more frequently if
clinically indicated.85 More recent
recommendations, however, indicate
yearly monitoring is preferred
throughout treatment.86 87 88 Therefore,
to ensure appropriate screening and
monitoring for patients on routinely
scheduled antipsychotic medication(s),
85 American Diabetes Association, American
Psychological Association, American Association of
Clinical Endocrinologists, North American
Association for the Study of Obesity. Consensus
development conference on antipsychotic drugs
and obesity and diabetes. Diabetes Care.
2004;27(596–601).
86 American Diabetes Association, American
Psychological Association, American Association of
Clinical Endocrinologists, North American
Association for the Study of Obesity. Consensus
development conference on antipsychotic drugs
and obesity and diabetes. Diabetes Care.
2004;27(596–601).
87 National Institute for Health and Care
Excellence (NICE). Bipolar disorder: The
assessment and management of bipolar disorder in
adults, children and young people in primary and
secondary care. London, UK 2014.
88 National Institute for Health and Care
Excellence (NICE). Psychosis and schizophrenia in
adults: Treatment and management. London, UK
2014.
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we believe that IPFs need to obtain
either documentation of metabolic
screening performed in the past 12
months or conduct the lipid panel
testing prior to a patient’s discharge
from the facility.
Comment: Some commenters stated
that the purpose of the ADA Consensus
guidelines is to ensure long-term
monitoring rather than annual screening
and suggested that, as such, monitoring
should be done in an outpatient rather
than inpatient setting. One commenter
suggested that the measure should be
modified so that IPFs are required to
communicate any baseline or ongoing
screening tests with the outpatient
provider who is assuming the
management of medications at
discharge.
Response: Although we agree that
long-term metabolic monitoring of
psychiatric patients is important,
studies indicate that 40 percent to 80
percent of patients fail to find outpatient
treatment after discharge from the
inpatient setting.89 In addition, studies
find consistently low adherence rates to
metabolic screening guidelines.90 91
These studies are confirmed by
empirical analysis of calendar year 2012
and 2013 Medicare claims data, which
indicated that only 53.8 percent of
patients discharged from an IPF with at
least two prescription claims for
antipsychotic medications had at least
one lipid panel annually in the
outpatient setting.92 Therefore, although
we agree that the long-term monitoring
for individuals is appropriate in the
outpatient setting, we believe that the
inpatient setting represents a clear
opportunity to screen patients. We do
believe it is important to convey test
results to the next-level care provider,
and we believe that the additional
measures that we are adopting,
Transition Record with Specified
Elements Received by Discharged
Patients (Discharges from an Inpatient
89 Cuffel B, Held M, Goldman W. Predictive
Models and the Effectiveness of Strategies for
Improving Outpatient Follow-up Under Managed
Care. Psychiatric Services. 2002 November; 53 (11):
1438–1443.
90 Cohn T. Metabolic Monitoring for Patients on
Antipsychotic Medications. Psychiatric Times.
December 2013.
91 Rodday AM, Parsons SK, Mankiw C, et al.
Child and Adolescent Psychiatrists’ Reported
Monitoring Behaviors for Second-Generation
Antipsychotics. J. Child Adolesc. Psychopharmacol.
2015.
92 Health Services Advisory Group. Inpatient
Psychiatric Facility Outcome and Process Measure
Development and Maintenance: Screening of
Metabolic Disorders Measure Workgroup. Tampa,
FL; 2015. Available at: http://www.cms.gov/
Medicare/Quality-Initiatives-Patient-AssessmentInstruments/MMS/Downloads/InpatientPsychiatric-Facility-IPF-Outcome-and-ProcessMeasure-Development-and-Maintenance.zip.
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Facility to Home/Self Care or Any Other
Site of Care) and Timely Transmission
of Transition Record (Discharges from
an Inpatient Facility to Home/Self Care
or Any Other Site of Care), should
facilitate the communication of such
information.
Comment: Many commenters
recommended that CMS not adopt the
Screening for Metabolic Disorders
measure at the present time, but, instead
suggested that CMS propose the
measure after it has been tested and
NQF-endorsed with full specifications
available. Some commenters questioned
why CMS did not take the measure
through the NQF-endorsement process,
arguing that premature adoption may
cause discrepancies between what the
IPFQR Program implements and what
NQF ultimately endorses. One
commenter urged us to share the
measure with the IPF TEP and other
stakeholders. One commenter stated
that the TEP convened to evaluate the
measure made several important
recommendations to amend the measure
and recommended that, if the measure
is adopted, it should include these
recommendations. Another commenter
noted that the measure was only tested
among six facilities.
Response: The measure has been
finalized for NQF submission and will
be submitted during the next call for
behavioral health measures, which is
expected in calendar year 2016. The
measure specifications were evaluated
by two separate Technical Expert Panels
and an Expert Workgroup. The
recommendations from these experts
have been incorporated into the
measure definitions. Although we agree
that NQF endorsement of a measure is
preferred, we are permitted to include a
measure that has not been NQFendorsed under section 1886(s)(4)(D)(ii)
of the Act. Under that section, the
Secretary is authorized to specify a
measure that is not endorsed by the
NQF as long as due consideration is
given to measures that have been
endorsed or adopted by a consensus
organization identified by the Secretary.
We attempted to find available measures
that had been endorsed or adopted by a
consensus organization and found no
other feasible and practical measures on
the topic of metabolic screening for
patients taking antipsychotics in the IPF
setting. We believe that this area is
important, specifically because of the
gaps in treatment, and we believe it is
important to implement a measure of
metabolic screening as soon as possible.
We acknowledge that testing for this
measure occurred in six facilities;
however the facilities selected represent
a variety of facility types from across the
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country. These facilities are diverse in
both structure and size. Three of the
IPFs selected are private psychiatric
units with fewer than 50 patient beds,
two are public freestanding facilities
with over 100 beds, and one is a private
freestanding facility with 400 beds. In
addition, the six IPFs were
geographically distributed by region
including Mid-Atlantic, Northeast,
Midwest, South, and West.93 Therefore,
we believe this testing was adequate to
evaluate the measure.
Comment: Many commenters
expressed concern that the measure
adds significant burden for providers.
Specifically, they suggested that IPFs
involved in measure testing verified that
chart-abstraction of this measure was
more intensive than the other screening
measures; they also expressed concern
that the additional lab tests required by
this measure may not be fully
reimbursed by CMS, stating that most
lab tests cost between $30 and $50. One
commenter noted that, because the
measure allows screenings at another
facility, the measures may increase
burden not only to the immediate
facility, but potentially to other
facilities.
Response: In testing the measure, the
abstraction time for this measure did not
exceed 20 minutes for any given
discharge, which is only slightly more
time (5 minutes more) than the
measures previously adopted by this
program (79 FR 45979). Furthermore,
the CMS-convened Screening of
Metabolic Disorders Measure
Workgroup reviewed this measure and
the majority of members indicated that
the costs of any duplicate testing would
have minimal unintended
consequences.94 Finally, we believe that
transmitting records between providers
for the purpose of improving patient
care is an essential component of
effective care coordination and
communication of previously delivered
care, and, therefore, the benefits of such
communication outweigh any
associated burden.
93 Blair R, Liu J, Rosenau M, et al. Development
of Quality Measures for Inpatient Psychiatric
Facilities: Final Report. 2015; Washington, DC:
Office of the Assistant Secretary for Planning and
Evaluation, U.S. Department of Health & Human
Services 2015. Available at: http://aspe.hhs.gov/
daltcp/reports/2015/ipf.cfm. Accessed April 21,
2015.
94 Health Services Advisory Group. Inpatient
Psychiatric Facility Outcome and Process Measure
Development and Maintenance: Screening of
Metabolic Disorders Measure Workgroup. Tampa,
FL; 2015. Available at: http://www.cms.gov/
Medicare/Quality-Initiatives-Patient-AssessmentInstruments/MMS/Downloads/InpatientPsychiatric-Facility-IPF-Outcome-and-ProcessMeasure-Development-and-Maintenance.zip.
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Comment: Many commenters stated
that they could not comment on the
measure without full specifications,
noting that many issues remained
unclear, including: (1) If the measure
allows for patient refusal of a screening;
(2) how the measure addresses ‘‘fasting’’
bloodwork protocols; (3) how the
measure addresses patients with
changes in antipsychotic medication; (4)
how the measure avoids unnecessary
testing requirements for patients
previously screened but whose records
are unobtainable within a reasonable
period of time; (5) how screening
records ‘‘available to the reporting
facility’’ from another facility is defined;
(6) if the measure identified all
appropriate patient exclusions; (7) if
there are potential medical necessity
issues that need to be addressed; (8) the
actionability of the measure during a
short-term hospitalization; (9) if the
public reporting of a screening measure
rate a measure of quality that will help
the public differentiate among facilities;
and (10) if the measure reflects an
appropriate application of various
practice guidelines from the perspective
of the guideline developers.
Response: We agree with commenters
that elements in the measure need to be
clarified. We will take each of these
issues in turn.
First, as stated above, we believe that
patient compliance is indicative of
quality care. That is, we maintain that
it is important that providers
understand gaps in patient compliance
so that they can modify their actions
and policy to systematically encourage
patients to receive appropriate tests. We
encourage providers to educate patients
about the importance of these
screenings, and we, therefore, will not
exclude patients who refuse the
screening.
Second, the emphasis in this measure
is on the screening itself rather than the
associated measure values. Clinical
judgments about the best methods for
conducting and interpreting the testing,
including whether to use fasting glucose
or an HbA1c test, are left to the facility.
Third, since all antipsychotic
medication regimens require regular
monitoring,95 96 we will not distinguish
between patients whose antipsychotic
95 National Institute for Health and Care
Excellence (NICE). Bipolar disorder: The
assessment and management of bipolar disorder in
adults, children and young people in primary and
secondary care. London, UK 2014.
96 National Institute for Health and Care
Excellence (NICE). Psychosis and schizophrenia in
adults: Treatment and management. London, UK
2014.
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regimens have changed during the
inpatient stay.
Fourth, we agree that avoiding
unnecessary testing requirements is an
important consideration. But, as stated
above, 40 percent to 80 percent of
psychiatric patients fail to receive
outpatient treatment,97 and an analysis
conducted of calendar year 2012 and
2013 claims data indicated that a little
over half of patients taking
antipsychotics had a lipid panel
conducted annually in the outpatient
setting.98 Therefore, we believe it is
important to conduct this testing in the
inpatient setting, even if some
duplication may result because the
testing conducted in another setting was
not obtainable.
Fifth, we believe that there are
potentially multiple sources available to
facilities to obtain testing results
conducted by other providers and the
phrase ‘‘available to the reporting
facility’’ is not meant to limit the
method of obtaining numerical lab
results within the previous 12 months of
the index discharge for evidence of
screening. To fulfill the measure
requirements, evidence of screening
includes presence/absence of each
screening element, based on the chart
review and documentation of lab results
(numeric values) in the medical record.
Sixth, we believe the measure
incorporates all appropriate patient
exclusions taking into consideration the
comments provided by the TEPs and
Screening of Metabolic Disorders
Measure Workgroup.
Seventh, we believe it is important to
treat the whole patient by addressing
both the mental and the physical needs
of patients in the IPF and guideline
recommendations indicate yearly
monitoring is preferred throughout
treatment for patients taking
antipsychotic medications.99 100 101
97 Cuffel B, Held M, Goldman W. Predictive
Models and the Effectiveness of Strategies for
Improving Outpatient Follow-up Under Managed
Care. Psychiatric Services. 2002 November; 53 (11):
1438–1443.
98 Health Services Advisory Group. Inpatient
Psychiatric Facility Outcome and Process Measure
Development and Maintenance: Screening of
Metabolic Disorders Measure Workgroup. Tampa,
FL; 2015. Available at: http://www.cms.gov/
Medicare/Quality-Initiatives-Patient-AssessmentInstruments/MMS/Downloads/InpatientPsychiatric-Facility-IPF-Outcome-and-ProcessMeasure-Development-and-Maintenance.zip.
99 American Diabetes Association, American
Psychological Association, American Association of
Clinical Endocrinologists, North American
Association for the Study of Obesity. Consensus
development conference on antipsychotic drugs
and obesity and diabetes. Diabetes Care.
2004;27(596–601).
100 National Institute for Health and Care
Excellence (NICE). Bipolar disorder: The
assessment and management of bipolar disorder in
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Eighth, we believe that even shortterm hospitalizations provide an
opportunity for providing the best
quality care for patients. As we state
above, the inpatient setting represents a
clear opportunity to screen patients and
may be the only opportunity some
patients have for this screening. We
recognize, however, that obtaining the
records or conducting the screening of
very short-stay patients might be too
difficult for the IPF, and therefore,
patients with lengths of stay of less than
3 days is an exclusion in the measure.
Ninth, we believe a vital component
of the CMS quality reporting programs
is the public reporting of the
information to inform patients and
caregivers of differences in quality
across providers. We believe that this
measure will inform patients and
caregivers of the quality of care in IPFs
in terms of the screening for metabolic
disorders among patients taking
antipsychotic medications. Among the
six test facilities, there was an average
performance score of 41.5 percent, with
a wide range of performance from 6.2
percent to 98.6 percent.102
Tenth, the measure is aligned with
clinical practice guidelines for patients
taking antipsychotic
medications.103 104 105.
We recognize it may take time for
providers to review and understand
these clarifications and changes to the
measure. Therefore, we will only
require IPFs to report the last two
quarters of data for this measure for the
FY 2018 payment determination; that is,
providers will only be required to report
data for this measure for July 1, 2016–
December 31, 2016. Beginning with the
FY 2019 payment determination, IPFs
will be required to report all four
quarters of data or will face a payment
reduction.
Comment: Many commenters noted
that, although the measure allows IPFs
to obtain data from outside sources,
because of the cost of doing so, most
would complete the testing themselves,
unnecessarily increasing costs and
leading to an overutilization of tests.
One commenter stated its belief that it
will be difficult to determine the
patients that were on one antipsychotic
medication in the past year and
suggested, instead, that the measure be
limited to the four antipsychotic
medications that contribute to metabolic
disorders, Clozaril, Seroquel, Zyprexa,
and Risperdal, indicating that these
medications should have a metabolic
screening every 3 months, which would
be easier to monitor.
Response: The Screening of Metabolic
Disorders Measure Workgroup reviewed
this measure and the majority of
members indicated that the costs of any
duplicate testing would have minimal
unintended consequences based on data
that only about half of the patients
discharged from an IPF had at least one
annual screening.106 Furthermore,
studies suggest that antipsychotic-
46713
induced weight gain occurs in all
diagnostic groups and is common in
both first and second generation
antipsychotics.107 108 109 110 Generally,
guidelines recommending monitoring
do not distinguish their
recommendations based on first or
second generation
antipsychotics.111 112 113 Therefore,
although it may be less burdensome to
monitor the four antipsychotics the
commenter suggested above, based on
the heightened risk of metabolic
disorders in this population, we believe
this measure should apply to all
patients on any antipsychotic regimen.
For the reasons stated above, we are
finalizing our proposal to adopt the
Screening for Metabolic Disorders
measure for the FY 2018 payment
determination and subsequent years
with one modification. For the FY 2018
payment determination, we will only
require IPFs to report data for this
measure for the last two quarters of the
reporting period (July 1, 2016–December
1, 2016). Beginning with the FY 2019
payment determination, IPFs will be
required to report all four quarters of
data.
6. Summary of Measures for the FY
2018 Payment Determination and
Subsequent Years
The measures that we are adopting for
the IPFQR Program for the FY 2018
payment determination and subsequent
years are set forth in Table 20.
TABLE 20—NEW IPFQR PROGRAM MEASURES FOR THE FY 2018 PAYMENT DETERMINATION AND SUBSEQUENT YEARS
National Quality Strategy Priority
NQF #
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Effective Prevention and Treatment .....................
adults, children and young people in primary and
secondary care. London, UK2014.
101 National Institute for Health and Care
Excellence (NICE). Psychosis and schizophrenia in
adults: Treatment and management. London,
UK2014.
102 Blair R, Liu J, Rosenau M, et al. Development
of Quality Measures for Inpatient Psychiatric
Facilities: Final Report. 2015; Washington, DC:
Office of the Assistant Secretary for Planning and
Evaluation, U.S. Department of Health & Human
Services 2015. Available at: http://aspe.hhs.gov/
daltcp/reports/2015/ipf.cfm. Accessed April 21,
2015.
103 American Diabetes Association, American
Psychological Association, American Association of
Clinical Endocrinologists, North American
Association for the Study of Obesity. Consensus
development conference on antipsychotic drugs
and obesity and diabetes. Diabetes Care.
2004;27(596–601).
104 National Institute for Health and Care
Excellence (NICE). Bipolar disorder: The
assessment and management of bipolar disorder in
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1656
Measure ID
Measure
TOB–3 and TOB–3a .....
Tobacco Use Treatment Provided or Offered at
Discharge and the subset measure Tobacco
Use Treatment at Discharge.
adults, children and young people in primary and
secondary care. London, UK2014.
105 National Institute for Health and Care
Excellence (NICE). Psychosis and schizophrenia in
adults: Treatment and management. London, UK
2014.
106 Health Services Advisory Group. Inpatient
Psychiatric Facility Outcome and Process Measure
Development and Maintenance: Screening of
Metabolic Disorders Measure Workgroup. Tampa,
FL: Health Services Advisory Group; 2015.
Available at: http://www.cms.gov/Medicare/
Quality-Initiatives-Patient-Assessment-Instruments/
MMS/Downloads/Inpatient-Psychiatric-Facility-IPFOutcome-and-Process-Measure-Development-andMaintenance.zip.
107 Musil R, Obermeier M, Russ P, Hamerle M.
Weight gain and antipsychotics: A drug safety
review. Expert Opin Drug Saf. 2015;14(1):73–96.
108 Chiliza B, Asmal L, Oosthuizen P, et al.
Changes in body mass and metabolic profiles in
patients with first-episode schizophrenia treated for
12 months with a first-generation antipsychotic.
Eur. Psychiatry. 2015;30(2):277–283.
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109 Alvarez-Jimenez M, Gonzalez-Blanch C,
Crespo-Facorro B, et al. Antipsychotic-induced
weight gain in chronic and first-episode psychotic
disorders: A systematic critical reappraisal. CNS
Drugs. 2008;22(7):547–562.
110 Strassnig M, Miewald J, Keshavan M, Ganguli
R. Weight gain in newly diagnosed first-episode
psychosis patients and healthy comparisons: Oneyear analysis. Schizophr. Res. 2007;93(1–3):90–98.
111 National Institute for Health and Care
Excellence (NICE). Psychosis and schizophrenia in
adults: Treatment and management. 2014; http://
www.nice.org.uk/guidance/cg178. Accessed CG
178.
112 National Institute for Health and Care
Excellence (NICE). Bipolar disorder: the assessment
and management of bipolar disorder in adults,
children and young people in primary and
secondary care. 2014; http://www.nice.org.uk/
guidance/cg185. Accessed CG 185.
113 Marder SR, Essock SM, Miller AL, et al.
Physical health monitoring of patients with
schizophrenia. Am. J. Psychiatry. 2004;161(8):1334–
1349.
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TABLE 20—NEW IPFQR PROGRAM MEASURES FOR THE FY 2018 PAYMENT DETERMINATION AND SUBSEQUENT YEARS—
Continued
National Quality Strategy Priority
NQF #
Measure ID
Measure
Alcohol Use Brief Intervention Provided or Offered and SUB–2a Alcohol Use Brief Intervention.
Transition Record with Specified Elements Received by Discharged Patients (Discharges
from an Inpatient Facility to Home/Self Care or
Any Other Site of Care).
Timely Transmission of Transition Record (Discharges from an Inpatient Facility to Home/
Self Care or Any Other Site of Care).
Screening for Metabolic Disorders.
Effective Prevention and Treatment .....................
1663
SUB–2 and SUB–2a .....
Communication and Care Coordination; Person
and Family Engagement.
0647
N/A ................................
Communication and Care Coordination ................
0648
N/A ................................
Making Care Safer ................................................
N/A
N/A ................................
The measures that we are removing
beginning with the FY 2018 payment
determination are set forth in Table 21.
TABLE 21—IPFQR PROGRAM MEASURES TO BE REMOVED FOR THE FY 2018 PAYMENT DETERMINATION AND
SUBSEQUENT YEARS
NQF #
Measure ID
Measure
0557 ...................
0558 ...................
HBIPS–6 .................................
HBIPS–7 .................................
Post-Discharge Continuing Care Plan.
Post Discharge Continuing Care Plan Transmitted to the Next Level of Care Provider Upon
Discharge.
Therefore, the number of measures for
the FY 2018 IPFQR Program and
subsequent years will total 16, as set
forth in Table 22.
TABLE 22—MEASURES FOR FY 2018 PAYMENT DETERMINATION AND SUBSEQUENT YEARS
NQF #
Measure ID
Measure
0640 ...................
0641 ...................
0560 ...................
HBIPS–2 ..................................................
HBIPS–3 ..................................................
HBIPS–5 ..................................................
0576 ...................
1661 ...................
1663 ...................
FUH .........................................................
SUB–1 .....................................................
SUB–2 and SUB–2a ...............................
1651 ...................
1654 ...................
1656 ...................
TOB–1 .....................................................
TOB–2 .....................................................
TOB–2a ...................................................
TOB–3 and TOB–3a ...............................
Hours of Physical Restraint Use.
Hours of Seclusion Use.
Patients Discharged on Multiple Antipsychotic Medications with Appropriate Justification.
Follow-up After Hospitalization for Mental Illness.
Alcohol Use Screening.
Alcohol Use Brief Intervention Provided or Offered and SUB–2a Alcohol Use Brief
Intervention.*
Tobacco Use Screening.
Tobacco Use Treatment Provided or Offered and Tobacco Use Treatment.
1659 ...................
0647 ...................
IMM–2 ......................................................
N/A ...........................................................
0648 ...................
N/A ...........................................................
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
.....................
.....................
.....................
.....................
...........................................................
...........................................................
...........................................................
...........................................................
Tobacco Use Treatment Provided or Offered at Discharge and the subset measure Tobacco Use Treatment at Discharge.*
Influenza Immunization.
Transition Record with Specified Elements Received by Discharged Patients (Discharges from an Inpatient Facility to Home/Self Care or Any Other Site of
Care).*
Timely Transmission of Transition Record (Discharges from an Inpatient Facility
to Home/Self Care or Any Other Site of Care).*
Screening for Metabolic Disorders.*
Influenza Vaccination Coverage Among Healthcare Personnel.
Assessment of Patient Experience of Care.
Use of an Electronic Health Record.
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* New measures finalized for the FY 2018 payment determination and future years.
E. Possible IPFQR Program Measures
and Topics for Future Consideration
As we have previously indicated (79
FR 45974 through 45975), we seek to
develop a comprehensive set of quality
measures to be available for widespread
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use for informed decision-making and
quality improvement in the IPF setting.
Therefore, through future rulemaking,
we intend to propose new measures for
development or adoption that will help
further our goals of achieving better
health care and improved health for
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Medicare beneficiaries who obtain
inpatient psychiatric services through
the widespread dissemination and use
of quality information.
We are developing a 30-day
psychiatric readmission measure that is
similar to the readmission measures
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currently in use in other CMS quality
reporting programs, such as the Hospital
Inpatient Quality Reporting Program. In
the future, we intend to develop a
measure set that effectively assesses IPF
quality across the range of services and
diagnoses, encompasses all of the goals
of the CMS quality strategy, addresses
measure gaps identified by the MAP and
others, and minimizes collection and
reporting burden. We may also propose
the removal of some measures in the
future.
We welcomed public comments on
possible new measures. The comments
we received and our responses are set
forth below.
Comment: One commenter expressed
concern that CMS proposed timeintensive, chart-abstracted measures
without discussing a future goal of
working toward electronic submission
of these measures.
Response: We agree that moving to
electronic clinical quality measures is
important and will ultimately reduce
burden. At this time, we are not
operationally able to implement
electronic clinical quality measure
reporting and not all of our measures are
electronically specified. However, we
continue to work toward transitioning to
electronic clinical quality measures in
the future.
Comment: Commenters urged the
program not to burden providers with
too many process measures and to move
toward the use of outcome measures
since these measures are more
meaningful to patients and can have a
greater impact on provider behavior.
Some commenters specifically
supported a readmissions measure,
noting that such measure should focus
on readmissions that are clinically
related to the index admission and
potentially preventable by the IPF.
Commenters expressed concern that the
IPF population is complex, with
patients often having multiple comorbid
mental health, substance abuse, and
other medical conditions, and
outpatient compliance is challenging.
Therefore, commenters suggested that
CMS adjust the measure for
sociodemographic variables and work to
ensure that the readmissions measure is
adequately adjusted for case mix and
provider type in order to more
accurately capture and report
readmission rates in an unbiased way,
particularly for those hospitals that treat
the most vulnerable patients. One
commenter cautioned that a
readmission measure can be gamed if it
does not include all readmissions to the
acute care system within a specified
window. Another commenter noted that
to accurately risk adjust a readmissions
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measure, the program may need to
collect patient assessment data.
Commenters also encouraged us to
adopt a readmission measure only if it
is NQF-endorsed for the IPF setting and
has broad stakeholder support that
considers important components of
measures, including reliability, validity,
feasibility of implementation, and
stakeholders’ and clinicians’ input.
Several commenters questioned whether
the measure could be adequately riskadjusted using claims and suggested a
thorough NQF review to determine if
claims-based measures can be
accurately risk-adjusted for mental
health patients. Another commenter
encouraged us to ensure the measure
does not incentivize facilities to deny
admissions to meet the quality
measurement.
Response: When appropriate, we
strive to move toward measures of
outcome and will consider these
measures for future years of the
program. Specifically, we believe a
measure of readmissions to be important
and will consider these important issues
raised by commenters as we move
forward with developing such a
measure.
Comment: One commenter
recommended including psychiatric
patients in the HCAHPS survey rather
than creating a survey just for the IPF
population, noting that the HCAHPS
survey is applicable to IPF patients,
these patients can answer the questions
in the HCAHPS survey, and creating a
new survey would be overly
burdensome. Other commenters,
however, recommended developing a
patient experience of care measure
specified for psychiatric patients.
Response: We thank the commenters
for their recommendations. We believe
that patient and family engagement
measures are important, and we will
consider this suggestion in the future.
Comment: Commenters recommended
the following measures for future
consideration: (1) Number of hours
before the individual was seen by a
psychiatrist; (2) number of hours before
the individual was transferred to a
facility where he/she would receive
appropriate treatment; (3) readmission
to the same IPF within 30 days of
discharge; (4) improved functioning or
stabilization of functioning as measures
through clinical assessment, patient
self-assessment, or discharge to lower
level of care; (5) receiving best practices
specific to the conditions noted in the
treatment plan as well as acuity of
illness; (6) scheduled appointment for
aftercare within 7 days of discharge,
controlling for urban/rural area and type
of provider, at minimum; (7)
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46715
documentation of follow-up mental
health services in the community within
14 days of discharge; (8) reduced
payment rates for readmissions to
psychiatric hospitals after discharge; (9)
a change score on a standardized
measure of psychiatric functioning to
demonstrate the impact of
hospitalization on a patient admitted to
the IPF; and (10) length of stay.
Response: We thank the commenters
for their recommendations and will
consider them in the future.
Comment: One commenter
encouraged CMS to consider adding
staff-level related measures, specifically
NQF #0205: Nursing Hours per Patient
Day, since nursing and staff time
contribute to a large amount of IPF costs
and freestanding locations have a larger
percentage of labor costs than IRFs or
LTCHs.
Response: We thank the commenter
for its recommendation and will
consider such measures in the future.
Comment: Some commenters
recommended CMS include HBIPS–1 in
future years of the program since the
measure will increase compliance with
admission screening and will not
increase burden to providers that report
data to The Joint Commission.
Response: We thank the commenters
for their recommendation and will
consider it in the future.
F. Changes to Reporting Requirements
We are making the following changes
to our reporting requirements for FY
2017 and subsequent years:
• Requiring that measures be reported
as a single yearly count rather than by
quarter and age; and
• Requiring that aggregate population
counts be reported as a single yearly
number rather than by quarter.
For FY 2018 and subsequent years we
are also making one change, allowing
uniform sampling requirements for
certain measures.
1. Changes to Reporting by Age and
Quarter for the FY 2017 Payment
Determination and Subsequent Years
In the FY 2013 IPPS/LTCH PPS final
rule (77 FR 53655 through 53656), we
finalized our policy that IPFs must
submit data for chart-abstracted
measures to the Web-Based Measures
Tool on an annual basis aggregated by
quarter. We also finalized our policy
that IPFs must submit data as required
by The Joint Commission, which calls
for IPFs to submit data for measures by
age group. Since then, we have learned
that obtaining data for each quarter and
by age is burdensome to providers and
the resultant number of cases is often
too small to allow public reporting. That
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is, we do not report data on Hospital
Compare for measures with fewer than
11 cases; reporting by age and quarter
often causes the number of cases to fall
below 11. For example, for HBIPS–5, in
Quarter 2 of 2013, only 5.75 percent of
the data were reportable. Likewise, in
Quarter 3 and Quarter 4 of 2013, for
HBIPS–5, only 5.5 percent of the data
were reportable.
Therefore, beginning with the FY
2017 payment determination, we
proposed to require facilities to report
data for chart-abstracted measures to the
Web-Based Measures Tool on an
aggregate basis by year, rather than by
quarter, and to discontinue the
requirement for reporting by age group.
We proposed to require IPFs to report a
single aggregate measure rate for each
measure annually for each payment
determination.
We stated our belief that this change
will reduce provider burden because
IPFs would report a single rate for each
measure. In addition, we stated that we
do not believe that quarterly data or data
stratified by age are necessary for
quality improvement activities. We are
able to differentiate, and the public is
able to view on Hospital Compare, those
IPFs that perform well on measures
from those for which quality
improvement activities may be
necessary based on an annual aggregate
rate submission. We noted, however,
that in the future, if our evolving
measures set, quality improvement
goals, and experience with the program
indicate a change is needed, we may
reevaluate and reinstate the requirement
for quarterly reporting.
We welcomed public comments on
this proposal. The comments we
received and our responses are set forth
below.
Comment: Many commenters
supported this proposal, noting that
IPFs will more easily be able to comply
with reporting aggregate population as a
single yearly count rather than by
quarter and by age, and the proposal
will improve the usability of the public
display data.
Response: We thank commenters for
their support.
Comment: Many commenters did not
support the proposal, stating that
submitting data by year rather than
quarter will not decrease burden since
it requires the same number of
abstractions, is contrary to the national
desire to have more current data, would
reduce the ability of consumers to know
if there are lower measure rates for
certain age groups, and would decrease
the ability to monitor trends over the
year and by age. Other commenters
suggested that we continue to work to
improve the report format for consumers
and consider allowing providers to
report on a quarterly basis without
segregating the measure by age so that
we can publicly report data closer to
real time. Many commenters requested
that we convene TEPs to identify the
best ways to reduce reporting burden.
Response: We believe that reporting
data yearly and no longer reporting by
age will be easier for IPFs because it will
decrease the number of values reported
from 16 numbers (that is, four age
groups multiplied by four quarters) to 1
number for every measure, leading to an
aggregate decrease of 210 values per
year. Furthermore, although the public
will no longer be able to view data by
age, we believe that submitting and
reporting data as an aggregate number
will increase rather than decrease the
ability to monitor trends, since, as we
explain above, doing so will increase
the number of cases that are reported
and that we are, therefore, able to report
on Hospital Compare. Finally, although
we are not operationally able to
implement them at this time, we will
continue to consider commenters’
suggestions to modify our reporting
structures to allow more consumerfriendly interfaces and real-time data
entry and viewing. We will also
consider the suggestion that we convene
TEPs to identify ways to reduce
provider burden.
Comment: Some commenters
contended that this change in
methodology will only affect HBIPS–5,
and stated that changing a methodology
to improve reporting on one measure is
ineffective, specifically because the
change will not reduce provider burden
since providers will still be required to
submit this data to The Joint
Commission by age and quarter. These
commenters stated that it may be more
effective and efficient to report HBIPS–
5 by year rather than changing the data
collection methodology.
Response: We do not agree that the
reporting change is limited to HBIPS–5.
Although the example provided in the
proposed rule only includes HBIPS–5,
we believe that, as we collect more data,
specifically data on measures that we
adopted last year and for which we will
be collecting data this summer, values
that do not meet minimum reporting
thresholds as a result of age and quarter
stratification will exist across measures.
Additionally, although we acknowledge
that many IPFs may report data to The
Joint Commission by age and quarter,
we believe the burden required to
aggregate these numbers is minimal.
For the reasons stated above, we are
finalizing our proposal to require
facilities to report data for chartabstracted measures to the Web-Based
Measures Tool on an aggregate basis by
year, rather than by quarter, and to
discontinue the requirement for
reporting by age group beginning with
the FY 2017 payment determination. In
Table 23, we set forth the quality
reporting and submission timelines for
the FY 2017 payment determination and
subsequent years for all the measures
except FUH and the Influenza
Vaccination Coverage among Healthcare
Personnel measures.
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TABLE 23—QUALITY REPORTING PERIODS AND TIMEFRAMES FOR THE FY 2017 PAYMENT DETERMINATION AND
SUBSEQUENT YEARS
Payment determination
(FY)
Reporting period for services provided
2017 ....................................................................
January 1, 2015–December 31, 2015 .............
In Table 24, we set forth the quality
reporting and submission timelines for
the FY 2018 payment determination and
subsequent years for all the measures
except FUH and the Influenza
Vaccination Coverage among Healthcare
Personnel measures. We note that FUH
is claims-based, and therefore does not
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require additional data submission. The
Influenza Vaccination Coverage among
Healthcare Personnel measure is
reported to the Centers for Disease
Control and Prevention’s National
Healthcare Safety Network, and we refer
readers to the FY 2015 IPF PPS final
rule for more information on the
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Data submission timeframe
July 1, 2016–August 15, 2016.
reporting timeline for this measure (79
FR 45969). In addition, we note that, as
finalized above, for the Transition
Record with Specified Elements
Received by Discharged Patients
(Discharges from an Inpatient Facility to
Home/Self Care or Any Other Site of
Care), Timely Transmission of
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Transition Record (Discharges from an
Inpatient Facility to Home/Self Care or
Any Other Site of Care), and Screening
for Metabolic Disorders measures, we
are only requiring facilities to report
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data for July 1, 2016–December 31, 2016
for the FY 2018 payment determination.
TABLE 24—QUALITY REPORTING PERIODS AND TIMEFRAMES FOR THE FY 2018 PAYMENT DETERMINATION AND
SUBSEQUENT YEARS
Payment determination
(FY)
Reporting period for services provided
2018 .....................................
For All Measures Except NQF #0647, NQF #0648,
and Screening for Metabolic Disorders.
For NQF #0647, NQF #0648, and Screening for Metabolic Disorders.
2. Changes to Aggregate Population
Count Reporting for the FY 2017
Payment Determination and Subsequent
Years
In the FY 2015 IPF PPS final rule (79
FR 45973), we finalized our policy that
IPFs must submit aggregate population
counts for Medicare and non-Medicare
discharges by age group, diagnostic
group, and quarter, and sample size
counts for measures for which sampling
is performed. In section V.F.1. of this
final rule, we finalized our proposal to
only require measure reporting as an
annual aggregate rate, rather than by
quarter. Likewise, beginning with the
FY 2017 payment determination, we
proposed to require non-measure data to
be reported as an aggregate, yearly count
rather than by quarter. We welcomed
public comments on this proposal. The
comments we received and our
responses are set forth below.
Comment: Some commenters
supported this proposal.
Response: We thank commenters for
their support.
Comment: Some commenters stated
that aggregating data increases the
possibility of human error and
suggested that we allow patient-level
reporting in the same way it is
submitted to The Joint Commission.
Commenter suggested that CMS
convene TEPs to identify the best ways
to reduce reporting burden in the future.
Response: To our knowledge, The
Joint Commission does not require
reporting non-measure data as required
by the IPFQR Program. Thus, it is
Data submission timeframe
January 1, 2016–December 31, 2016.
July 1, 2016–December
31, 2016.
unclear to us what commenters mean in
suggesting that we allow patient-level
reporting in the same way as The Joint
Commission. Additionally, we do not
agree that adding together 4 numbers
rather than reporting these numbers
separately will increase human error by
any noticeable margin, specifically since
facilities were already required to
manually submit these data.
Furthermore, as stated above, we are
finalizing our proposal to require
facilities to report data for chartabstracted measures to the Web-Based
Measures Tool on an aggregate basis by
year, rather than by quarter, and to
discontinue the requirement for
reporting by age group beginning with
the FY 2017 payment determination. We
believe it is important to collect nonmeasure data similarly to how measure
data is collected. Finally, we will
consider convening TEPs to identify
ways to reduce provider burden in the
future.
For the reasons stated above, we are
finalizing our proposal to require
facilities to report non-measure data as
an aggregate, yearly count rather than by
quarter beginning with the FY 2017
payment determination.
3. Changes to Sampling Requirements
for the FY 2018 Payment Determination
and Subsequent Years
Measure specifications for the
measures that we have adopted allow
sampling for some measures; however,
for other measures, IPFs must report
data for all discharges/patients. In
addition, the sampling requirements
July 1, 2017–August 15,
2017.
sometimes vary by measure. In response
to these policies, in the FY 2014 IPPS/
LTCH PPS final rule, some commenters
noted that different sampling
requirements in the measures could
increase burden on facilities because
these differences will require IPFs to
have varying policies and procedures in
place for each measure (78 FR 50901).
Although we stated our belief that the
importance of these measures and of
gathering information for all discharges/
patients outweighs the burden of
various sampling requirements, we now
believe that the additional measures in
this final rule tip the balance of benefit
and burden. Therefore, and for the
reasons provided below, we proposed to
allow a uniform sampling methodology
both for measures that require sampling
and for certain other measures.
Specifically, we proposed to allow The
Joint Commission/CMS Global Initial
Patient Population sampling in Section
2.9_Global Initial Patient Population
found at https://www.qualitynet.org/
dcs/ContentServer?c=Page&page
name=QnetPublic%2FPage%2FQnet
Tier4&cid=1228773989482. We stated
our belief that this will allow IPFs to
take one, global sample for all measures
specified in Table 25, thereby
decreasing burden on these facilities
and streamlining policies and
procedures.
In our current measure set, the
measures for which we proposed to
allow The Joint Commission/CMS
Global sampling included those
outlined in Table 25.
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TABLE 25—MEASURES TO WHICH SAMPLING APPLIES
NQF #
Measure ID
Measure
0560 .................
1661 .................
1663 .................
HBIPS–5 ..................................
SUB–1 .....................................
SUB–2 and SUB–2a ...............
1651 .................
1654 .................
TOB–1 .....................................
TOB–2 .....................................
TOB–2a
Patients Discharged on Multiple Antipsychotic Medications with Appropriate Justification.
Alcohol Use Screening.
Alcohol Use Brief Intervention Provided or Offered and SUB–2a Alcohol Use Brief Intervention.
Tobacco Use Screening.
Tobacco Use Treatment Provided or Offered and Tobacco Use Treatment.
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TABLE 25—MEASURES TO WHICH SAMPLING APPLIES—Continued
NQF #
Measure ID
Measure
1656 .................
TOB–3 and TOB–3a ...............
1659 .................
0647 .................
IMM–2 .....................................
N/A ..........................................
0648 .................
N/A ..........................................
N/A ...................
N/A ..........................................
Tobacco Use Treatment Provided or Offered at Discharge and the subset measure Tobacco
Use Treatment at Discharge.
Influenza Immunization.
Transition Record with Specified Elements Received by Discharged Patients (Discharges
from an Inpatient Facility to Home/Self Care or Any Other Site of Care).
Timely Transmission of Transition Record (Discharges from an Inpatient Facility to Home/
Self Care or Any Other Site of Care).
Screening for Metabolic Disorders.
In section V.F.1. of this final rule, we
are finalizing our proposal to require
reporting on measures as a yearly count
rather than by quarter. Because The
Joint Commission/CMS Global sampling
guidelines specify sampling by quarter,
we proposed to modify their sampling
guidelines by multiplying the ‘‘number
of cases in the initial patient
population’’ and the ‘‘number of cases
to be sampled’’ by 4. In addition, since
we require all IPFs to report data on all
chart-abstracted measures even when
the population size for a given measure
is small or zero (78 FR 50901), we have
modified the table to require reporting
regardless of the number of cases. Thus,
we proposed the following sampling
guidelines for the measures above:
TABLE 26—NUMBER OF RECORDS
REQUIRED TO BE SAMPLED
Number of
cases in initial
patient
population
Number of records to be
sampled
≥6,117. ............
3,057–6,116 ....
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609–3,056 .......
0–608 ..............
1,224.
20% of initial patient population.
609.
All cases.
We stated our belief that this will
simplify processes and procedures for
IPFs because uniform requirements will
promote streamlined procedures and
reporting. We also stated our belief that
the proposal will decrease burden by
allowing IPFs to identify a single, initial
patient population for all of the
measures specified in Table 25 from
which to calculate the sample size.
Furthermore, we stated that we do not
believe this approach will reduce
quality improvement. Sampling
calculations ensure that enough data are
represented in the sample to determine
accurate measure rates. Therefore, even
with sampling, we stated that we
believe that CMS, IPFs, and the public
would be able to differentiate those IPFs
who perform well on measures from
those who do not.
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Therefore, we proposed to allow The
Joint Commission/CMS Global Initial
Patient Population sampling, with
limited methodology changes as
described above, for the measures in
Table 25 beginning with the FY 2018
payment determination. We welcomed
public comments on this proposal. The
comments we received and our
responses are set forth below.
Comment: Many commenters
supported this proposal, stating that it
would make the abstraction process less
burdensome for providers.
Response: We thank commenters for
their support.
Comment: Some commenters
suggested that changing the sampling
requirements for HBIPS measures
increases burden for providers since
IPFs are required to submit HBIPS data
to The Joint Commission using the
HBIPS sampling methodology and
suggested aligning the sampling
methodology with the HBIPS
methodology. These commenters also
noted that misalignment between CMS
and The Joint Commission may result in
consumer confusion since both publicly
report data.
Response: We do not agree that this
proposal increases burden. Most of our
measures (IMM–2, TOB–1, TOB–2/2a,
and SUB–1) currently require sampling
per The Joint Commission/CMS Global
Initial Patient Population guidelines.
Only HBIPS–5 is required to be reported
to The Joint Commission using a
different sampling methodology.
Therefore, we believe that, overall,
allowing uniform sampling for the
measures discussed in Table 25 will
greatly decrease burden, specifically
because some of these measures (the
transition and metabolic screening
measures) currently do not allow
sampling at all. In addition, we note
that, if providers believe using this
optional sampling is too burdensome,
we are not requiring them to do so.
We appreciate the comment that the
public may be confused if numbers are
reported differently in different
programs. We note, however, that this
confusion would be limited to HBIPS–
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5, the only measure that uses a different
sampling methodology from The Joint
Commission/CMS Global Initial Patient
Population sampling, and we believe,
even in this case, the public can
understand that reporting requirements,
and their results, vary by program and
organization.
Comment: Commenters stated that the
sampling tables were developed by The
Joint Commission to ensure that most
healthcare organizations would be able
to obtain a sample size large enough to
distinguish meaningful differences from
the national average, and adopting a
uniform methodology could cause oversampling for measures with large
populations and under-sampling for
those with small populations, affecting
the ability of providers to monitor
measures where their patient
populations are heterogeneous.
Response: We will monitor the results
of this proposal to see if it causes the
inability to distinguish meaningful
differences between providers and will
make appropriate adjustments if we
believe this is the case.
Comment: One commenter noted that
the HBIPS measure set and the SUB and
TOB measure sets use different
population criteria for sampling and
asked CMS to clarify its proposal.
Response: As we explained in the
proposed rule (80 FR 25056), we
proposed to allow IPFs to use The Joint
Commission/CMS Global Initial Patient
Population guidelines for the measures
in Table 25, which includes these
measures. Thus, for both sampling and
population purposes, IPFs may use The
Joint Commission/CMS Global Initial
Patient Population guidelines found at
https://www.qualitynet.org/dcs/Content
Server?c=Page&pagename=Qnet
Public%2FPage%2FQnet
Tier4&cid=1228773989482.
Comment: Many commenters
suggested that CMS convene TEPs to
identify the best ways to reduce
reporting burden.
Response: We will also consider
convening a TEP to discuss ways to
diminish provider burden in the future.
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For the reasons stated above, we are
finalizing our proposal to allow The
Joint Commission/CMS Global Initial
Patient Population sampling for the
measures in Table 25 beginning with the
FY 2018 payment determination.
G. Public Display and Review
Requirements
We did not propose any changes to
the public display and review
requirements for the FY 2018 payment
determination and subsequent years and
refer readers to the FY 2014 IPPS/LTCH
PPS final rule (78 FR 50897 through
50898) for more information.
H. Form, Manner, and Timing of Quality
Data Submission
1. Procedural and Submission
Requirements
We did not propose any changes to
the procedural and submission
requirements for the FY 2018 payment
determination and subsequent years and
refer readers to the FY 2014 IPPS/LTCH
PPS final rule (77 FR 50898 through
50899) for more information on these
previously finalized requirements.
2. Change to the Reporting Periods and
Submission Timeframes
In the FY 2014 IPPS/LTCH PPS final
rule (78 FR 50901), we finalized
requirements for reporting periods and
submission timeframes for the IPFQR
Program measures. We are making one
change to these requirements, as
discussed above in section V.F.1. of this
final rule. Specifically, we are no longer
requiring that measure rates be reported
quarterly and by age; we will only
require an aggregate, yearly number
beginning with the FY 2017 payment
determination.
3. Population and Sampling
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In the FY 2013 IPPS/LTCH PPS final
rule (77 FR 53657 through 53658) and
FY 2014 IPPS/LTCH PPS final rule (78
FR 58901 through 58902), we finalized
policies for population, sampling, and
minimum case thresholds. We are
making one change to these policies, as
discussed above in section V.F.3. of this
final rule. Specifically, we will allow
uniform sampling on certain measures
beginning with the FY 2018 payment
determination.
4. Data Accuracy and Completeness
Acknowledgement (DACA)
Requirements
We did not propose any changes to
the DACA requirements and refer
readers to the FY 2013 IPPS/LTCH PPS
final rule (77 FR 53658) for more
information on these requirements.
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I. Reconsideration and Appeals
Procedures
In the FY 2013 IPPS/LTCH PPS final
rule (77 FR 53658 through 53660), we
adopted a reconsideration process, later
codified at § 412.434, by which IPFs can
request a reconsideration of their
payment update reduction if an IPF
believes that its annual payment update
has been incorrectly reduced for failure
to meet all IPFQR Program
requirements. We did not propose any
changes to the Reconsideration and
Appeals Procedure and refer readers to
the FY 2013 IPPS/LTCH PPS final rule
(77 FR 53658 through 53660) and the FY
2014 IPPS/LTCH PPS final rule (78 FR
50953) for further details on the
reconsideration process.
J. Exceptions to Quality Reporting
Requirements
We did not propose any changes to
the exceptions to quality reporting
requirements and refer readers to the FY
2013 IPPS/LTCH PPS final rule (77 FR
53659 through 53660), where we
initially finalized the policy as ‘‘Waivers
from Quality Reporting,’’ and the FY
2015 IPF PPS final rule (79 FR 45978),
where we re-named the policy as
‘‘Exceptions to Quality Reporting
Requirements’’ for more information.
VI. Provisions of the Final Regulations
For the most part, this final rule
incorporates the provisions of the
proposed rule. Those provisions of this
final rule that differ from the proposed
rule are as follows:
• Effective for FY 2016 IPF PPS
update, we adopted a 2012-based IPFmarket basket. However, we revised the
proposed 2012-based IPF market basket
based on public comments. Specifically,
we revised the methodology for
calculating the Wages and Salaries and
the Employee Benefits cost weights.
• We adopted an updated FY 2016
LRS of 75.2 percent, which increased
from the proposed LRS of 74.9 percent
largely due to the methodological
changes made to the 2012-based IPF
market basket based on public
comments. We are implementing the
LRS as proposed, in full in FY 2016.
• Effective for FY 2016 IPF PPS
update, we adopted a 2012-based IPF
market basket. We adjusted the 2012based IPF market basket update for FY
2016 (currently estimated to be 2.4
percent) by a reduction for economywide productivity (currently estimated
to be 0.5 percentage point) as required
by section 1886(s)(2)(A)(i) of the Social
Security Act (the Act), and further
reduced by 0.2 percentage point as
required by section 1886(s)(2)(A)(ii) of
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46719
the Act, resulting in a final estimated
market basket update of 1.7 percent.
• We updated the IPF per diem rate
from $728.31 to $743.73. Providers that
failed to report quality data for FY 2016
payment will receive a final FY 2016
per diem rate of $729.10.
• We updated the electroconvulsive
therapy (ECT) payment per treatment
from $313.55 to $320.19. Providers that
failed to report quality data for FY 2016
payment would receive a FY 2016 ECT
payment per treatment of $313.89.
• We updated the fixed dollar loss
threshold amount from $8,755 to $9,580
in order to maintain outlier payments
that are 2 percent of total estimated IPF
PPS payments.
• We finalized that the national urban
and rural cost-to-charge ratio (CCR)
ceilings for FY 2016 will be 1.7339 and
1.9041, respectively, and the national
median CCR will be 0.4650 for urban
IPFs and 0.6220 for rural IPFs.
All other payment policy proposals
are being implemented as proposed. We
are implementing the IPF Quality
Reporting Program proposals as
proposed, except for the following
changes: Due to concerns with the
timeline required to operationalize the
Transition Record with Specified
Elements Received by Discharged
Patients, Timely Transmission of
Transition Record, and Screening for
Metabolic Disorders measures, we are
only requiring that facilities report the
last two quarters of data for the first year
of public reporting. That is, for the FY
2018 payment determination, facilities
must only report data from July 1, 2016–
December 1, 2016 for these measures.
Beginning with the FY 2019 payment
determination, IPFs must report all four
quarters of data or face a payment
reduction.
VII. Collection of Information
Requirements
Under the Paperwork Reduction Act
of 1995 (PRA), we are required to
publish a 60-day notice in the Federal
Register and solicit public comment
before a collection of information
requirement is submitted to the Office of
Management and Budget (OMB) for
review and approval.
To fairly evaluate whether an
information collection should be
approved by OMB, PRA section
3506(c)(2)(A) requires that we solicit
comment on the following issues:
• The need for the information
collection and its usefulness in carrying
out the proper functions of our agency.
• The accuracy of our burden
estimates.
• The quality, utility, and clarity of
the information to be collected.
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• Our effort to minimize the
information collection burden on the
affected public, including the use of
automated collection techniques.
In our May 1, 2015, proposed rule, we
solicited public comment on each of the
section 3506(c)(2)(A)-required issues for
the following information collection
requirements (ICRs). While comments
were received on the proposed rule,
none of those comments were related to
the PRA or to the ICRs. All of this final
rule’s information collection
requirements and burden estimates are
unchanged from what was set out in the
proposed rule.
A. Wage Estimates
We estimate that reporting data for the
IPFQR Program measures can be
accomplished by staff with a mean
hourly wage of $16.42 per hour.114
Under OMB Circular A–76, in
calculating direct labor, agencies should
not only include salaries and wages, but
also ‘‘other entitlements’’ such as fringe
benefits.115 This Circular provides that
the civilian position full fringe benefit
cost factor is 36.25 percent. Therefore,
using these assumptions, we estimate an
hourly labor cost of $22.37 ($16.42 base
salary + $5.95 fringe). The following
table presents the mean hourly wage,
the cost of fringe benefits (calculated at
36.25 percent of salary), and the
adjusted hourly wage.
TABLE 27—OCCUPATIONAL EMPLOYMENT AND WAGE ESTIMATES
Occupation title
Occupation code
Mean hourly wage
($/hour)
Fringe benefit
(at 36.25% in $/hour)
Adjusted hourly wage
($/hour)
Medical Records and Health Information
Technician ....................................................
29–2071
16.42
5.95
22.37
The BLS is ‘‘the principal Federal
agency responsible for measuring labor
market activity, working conditions, and
price changes in the economy.’’ 116
Acting as an independent agency, the
Bureau provides objective information
for not only the government, but also for
the public. The Bureau’s National
Occupational Employment and Wage
Estimates describes Medical Records
and Health Information Technicians as
those responsible for organizing and
managing health information data.
Therefore, we believe it is reasonable to
assume that these individuals would be
tasked with abstracting clinical data for
these measures. In addition, the
Hospital IQR Program uses this wage to
calculate its burden estimates.
asabaliauskas on DSK5VPTVN1PROD with RULES
B. ICRs Regarding the Inpatient
Psychiatric Facility Quality Reporting
(IPFQR) Program
We refer readers to the FY 2015 IPF
PPS final rule (79 FR 45978 through
45980) for a detailed discussion of the
burden for the program requirements
that we have previously adopted.
Below, we discuss only the changes in
burden resulting from the provisions in
this final rule. Although we are
finalizing provisions that impact both
the FY 2017 and FY 2018 payment
determinations, all of these new
elements begin to apply to facilities in
FY 2016. For example, data collection
for the measures begins in FY 2016, and
the changes to the reporting
requirements take effect beginning with
reporting that is required in the summer
of FY 2016. For purposes of calculating
burden, we will attribute the costs to the
114 http://www.bls.gov/ooh/healthcare/medicalrecords-and-health-information-technicians.html.
115 http://www.whitehouse.gov/omb/circulars_
a076_a76_incl_tech_correction.
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year in which these costs begin; for the
purposes of all of the provisions in this
final rule, that year is FY 2016.
1. Changes in Time Required To ChartAbstract Data Based on Reporting
Requirements
As discussed in section V.F. of this
final rule, we are finalizing the
following 3 changes regarding how
facilities should report data for IPFQR
Program measures: (1) Beginning with
the FY 2017 payment determination,
measures must be reported as a single
yearly count rather than by quarter and
age; (2) beginning with the FY 2017
payment determination, aggregate
population counts must be reported as
a single yearly number rather than by
quarter; and (3) beginning with the FY
2018 payment determination, uniform
sampling is allowed for certain
measures.
We believe that these changes will
lead to a decrease in burden since
facilities are required to enter one
aggregate number for both the
numerator and denominator for each
measure and will be allowed to pull one
sample used to calculate the measures
specified in Table 25 of this final rule.
Consequently, we believe that the time
required to chart-abstract data for these
measures would be reduced by 20
percent. Previously, we estimated 15
minutes to chart-abstract data for each
case (79 FR 45979). Because of our
proposed changes to sampling and
reporting data, we are revising the figure
and now estimate 12 minutes (0.20 × 15
minutes), a change of ¥3 minutes or
¥0.05 hour.
116 http://www.bls.gov/bls/infohome.htm.
117 In
the FY 2015 IPF PPS final rule we estimated
1,626 IPFs and are adjusting that estimate by ¥9
to account for more recent data.
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2. Estimated Burden of IPFQR Program
In section V. of this final rule, we are
finalizing our proposal to adopt the
following 5 measures:
• TOB–3—Tobacco Use Treatment
Provided or Offered at Discharge and
the subset measure TOB–3a Tobacco
Use Treatment at Discharge (National
Quality Forum (NQF) #1656);
• SUB–2—Alcohol Use Brief
Intervention Provided or Offered and
the subset measure SUB–2a Alcohol Use
Brief Intervention (NQF #1663);
• Transition Record with Specified
Elements Received by Discharged
Patients (Discharges from an Inpatient
Facility to Home/Self Care or Any Other
Site of Care) (NQF #0647);
• Timely Transmission of Transition
Record (Discharges from an Inpatient
Facility to Home/Self Care or Any Other
Site of Care) (NQF #0648); and
• Screening for Metabolic Disorders.
In the same section, we are also
finalizing our proposal to remove the
following 3 measures:
• HBIPS–4: Patients Discharged on
Multiple Antipsychotic Medications;
• HBIPS–6: Post-Discharge
Continuing Care Plan (NQF #0557); and
• HBIPS–7: Post-Discharge
Continuing Care Plan Transmitted to the
Next Level of Care Provider Upon
Discharge (NQF #0558).
We believe that approximately
1,617 117 IPFs will participate in the
IPFQR Program for requirements
occurring in FY 2016 and subsequent
years. Based on data from CY 2013, we
believe that each facility will submit
measure data on approximately 431 118
cases per year. Although we note that,
118 In the FY 2015 IPF PPS final rule we estimated
556 cases per year and are adjusting that estimate
by ¥125 to account for more recent data.
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as finalized in section V. of this final
rule, for the Transition Record with
Specified Elements Received by
Discharged Patients (Discharges from an
Inpatient Facility to Home/Self Care or
Any Other Site of Care), Timely
Transmission of Transition Record
(Discharges from an Inpatient Facility to
Home/Self Care or Any Other Site of
Care), and the Screening for Metabolic
Disorders measures, we are only
requiring facilities to report data for two
quarters for the FY 2018 payment
determination, we believe it is best to
estimate the burden for the full year of
reporting as this will be the requirement
going forward. Therefore, we estimate
that adopting 5 measures and removing
3 measures (for a net result of 2
measures) will result in an increase in
burden of 172.4 hours per facility (2
measures × (431 cases/measure × 0.20
hours/case)) or 278,770.80 hours across
all IPFs (172.4 hours/facility × 1,617
facilities). The increase in costs is
approximately $3,856.59 per IPF
($22.37/hour × 172.4 hours) or
$6,236,102.80 across all IPFs
(278,770.80 hours × $22.37/hour).
Consistent with our estimates in the
FY 2015 IPF PPS final rule (79 FR
45979), we believe the estimated burden
for training personnel on this final rule’s
revised data collection and submission
requirements is 2 hours per facility or
3,234 hours (2 hours/facility × 1,617
facilities) across all IPFs. Therefore, the
cost for this training is $44.74 ($22.37/
hour × 2 hours) for each IPF or
$72,344.58 ($22.37/hour × 3,234 hours)
for all facilities.
Finally, IPFs must submit to CMS
aggregate population counts for
Medicare and non-Medicare discharges
by age group, and diagnostic group, and
sample size counts for measures for
which sampling is performed. As noted
above, we are adopting 5 new measures
beginning with the FY 2018 payment
determination. However, because, as
further described above, we are
eliminating reporting this non-measure
data by quarter for all measures, we
believe that the addition of 5 measures
leads to a net negligible change in
burden associated with non-measure
data collection.
C. Summary of Annual Burden
Estimates
TABLE 28—ANNUAL RECORDKEEPING AND REPORTING REQUIREMENTS UNDER OMB CONTROL NUMBER 0938–1171
[CMS–10432]
Labor cost
of reporting
($/hour)
V.C. ...................
Remove HBIPS–4
1,617
862 (431 cases/yr
x 2 measures).
0.20
278,770.80
22.37
6,236,102.80
V. ......................
Remove HBIPS–6
and HBIPS–7.
Add NQF #1656,
#1663, #0647,
#0648, and
Screening for
Metabolic Disorders.
Training ...............
........................
1 ..........................
2
3,234
........................
72,344.58
.............................
1,617
863 ......................
2.2
282,004.8
22.37
6,308,447.38
V. ......................
Total ...........
D. ICRs Regarding the Hospital and
Health Care Complex Cost Report
(CMS–2552–10)
This rule would not impose any new
or revised collection of information
requirements associated with CMS–
2552–10 (as discussed under preamble
section III.A.3.a.i.). Consequently, the
cost report does not require additional
OMB review under the authority of the
Paperwork Reduction Act of 1995 (44
U.S.C. 3501 et seq.). The report’s
information collection requirements and
burden estimates are approved by OMB
under control number 0938–0052.
E. Submission of PRA-Related
Comments
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Total annual
burden
(hours)
Proposed action
Respondents
We submitted a copy of this final rule
to OMB for its review of the rule’s
information collection and
recordkeeping requirements. The
requirements are not effective until they
have been approved by the OMB.
To obtain copies of the supporting
statement and any related forms for the
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Responses
(per respondent)
Burden per
response
(hours)*
Preamble section(s)
proposed collections discussed above,
please visit CMS’ Web site at
www.cms.hhs.gov/Paperwork@
cms.hhs.gov, or call the Reports
Clearance Office at 410–786–1326.
We invite public comments on these
potential information collection
requirements. If you wish to comment,
please identify the rule (CMS–1627–F)
and submit your comments to the OMB
desk officer via one of the following
transmissions:
Mail: OMB, Office of Information and
Regulatory Affairs, Attention: CMS Desk
Officer, Fax Number: 202–395–5806 or,
Email: [email protected],
ICR-related comments are due August
31, 2015.
VIII. Regulatory Impact Analysis
A. Statement of Need
This final rule updates the
prospective payment rates for Medicare
inpatient hospital services provided by
IPFs for discharges occurring during FY
2016 (October 1, 2015, through
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Total cost
($)
September 30, 2016). We are applying
the final 2012-based IPF market basket
increase of 2.4 percent, less the
productivity adjustment of 0.5
percentage point as required by
1886(s)(2)(A)(i) of the Act, and further
reduced by 0.2 percentage point as
required by sections 1886(s)(2)(A)(ii)
and 1886(s)(3)(D) of the Act. In this final
rule, we are adopting a 2012-based IPF
market basket and updating the IPF
labor-related share; adopting new OMB
CBSA delineations for the FY 2016 IPF
Wage Index; and phasing out the rural
adjustment for 37 rural providers which
will become urban providers as a result
of the new CBSA delineations.
Additionally, this rule reminds
providers of the October 1, 2015
implementation of the International
Classification of Diseases, 10th
Revision, Clinical Modification (ICD–
10–CM/PCS) for the IPF prospective
payment system, updates providers on
the status of IPF PPS refinements, and
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finalizes new quality reporting
requirements for the IPFQR Program.
B. Overall Impact
We have examined the impact of this
final rule as required by Executive
Order 12866 on Regulatory Planning
and Review (September 30, 1993),
Executive Order 13563 on Improving
Regulation and Regulatory Review
(January 18, 2011), the Regulatory
Flexibility Act (RFA) (September 19,
1980, Pub. L. 96–354), section 1102(b) of
the Social Security Act, section 202 of
the Unfunded Mandates Reform Act of
1995 (March 22, 1995; Pub. L. 104–4),
Executive Order 13132 on Federalism
(August 4, 1999) and the Congressional
Review Act (5 U.S.C. 804(2)).
Executive Orders 12866 and 13563
direct agencies to assess all costs and
benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). A regulatory impact analysis
(RIA) must be prepared for a major rules
with economically significant effects
($100 million or more in any 1 year).
This final rule is not designated as
economically ‘‘significant’’ under
section 3(f)(1) of Executive Order 12866.
We estimate that the total impact of
these changes for FY 2016 payments
compared to FY 2015 payments will be
a net increase of approximately $75
million. This reflects an $85 million
increase from the update to the payment
rates, as well as a $10 million decrease
as a result of the update to the outlier
threshold amount. Outlier payments are
estimated to decrease from 2.2 percent
in FY 2015 to 2.0 percent of total
estimated IPF payments in FY 2016.
The RFA requires agencies to analyze
options for regulatory relief of small
entities if a rule has a significant impact
on a substantial number of small
entities. For purposes of the RFA, small
entities include small businesses,
nonprofit organizations, and small
governmental jurisdictions. Most IPFs
and most other providers and suppliers
are small entities, either by nonprofit
status or having revenues of $7.5
million to $38.5 million or less in any
1 year, depending on industry
classification (for details, refer to the
SBA Small Business Size Standards
found at http://www.sba.gov/sites/
default/files/files/Size_Standards_
Table.pdf), or being nonprofit
organizations that are not dominant in
their markets.
Because we lack data on individual
hospital receipts, we cannot determine
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the number of small proprietary IPFs or
the proportion of IPFs’ revenue derived
from Medicare payments. Therefore, we
assume that all IPFs are considered
small entities. The Department of Health
and Human Services generally uses a
revenue impact of 3 to 5 percent as a
significance threshold under the RFA.
As shown in Table 29, we estimate
that the overall revenue impact of this
final rule on all IPFs is to increase
Medicare payments by approximately
1.5 percent. As a result, since the
estimated impact of this final rule is a
net increase in revenue across almost all
categories of IPFs, the Secretary has
determined that this final rule will have
a positive revenue impact on a
substantial number of small entities.
MACs are not considered to be small
entities. Individuals and States are not
included in the definition of a small
entity.
In addition, section 1102(b) of the
Social Security Act requires us to
prepare a regulatory impact analysis if
a rule may have a significant impact on
the operations of a substantial number
of small rural hospitals. This analysis
must conform to the provisions of
section 604 of the RFA. For purposes of
section 1102(b) of the Act, we define a
small rural hospital as a hospital that is
located outside of a metropolitan
statistical area and has fewer than 100
beds. As discussed in detail below, the
rates and policies set forth in this final
rule would not have an adverse impact
on the rural hospitals based on the data
of the 277 rural units and 65 rural
hospitals in our database of 1,617 IPFs
for which data were available.
Therefore, the Secretary has determined
that this final rule would not have a
significant impact on the operations of
a substantial number of small rural
hospitals.
Section 202 of the Unfunded
Mandates Reform Act of 1995 (UMRA)
also requires that agencies assess
anticipated costs and benefits before
issuing any rule whose mandates
require spending in any 1 year of $100
million in 1995 dollars, updated
annually for inflation. In 2015, that
threshold is approximately $144
million. This final rule will not impose
spending costs on state, local, or tribal
governments in the aggregate, or by the
private sector, of $144 million or more.
Executive Order 13132 establishes
certain requirements that an agency
must meet when it promulgates a
proposed rule (and subsequent final
rule) that imposes substantial direct
requirement costs on state and local
governments, preempts state law, or
otherwise has Federalism implications.
As stated above, this final rule would
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not have a substantial effect on state and
local governments.
C. Anticipated Effects
We discuss the historical background
of the IPF PPS and the impact of this
final rule on the Federal Medicare
budget and on IPFs.
1. Budgetary Impact
As discussed in the November 2004
and May 2006 IPF PPS final rules, we
applied a budget neutrality factor to the
Federal per diem base rate and ECT
payment per treatment to ensure that
total estimated payments under the IPF
PPS in the implementation period
would equal the amount that would
have been paid if the IPF PPS had not
been implemented. The budget
neutrality factor includes the following
components: Outlier adjustment, stoploss adjustment, and the behavioral
offset. As discussed in the May 2008 IPF
PPS notice (73 FR 25711), the stop-loss
adjustment is no longer applicable
under the IPF PPS.
As discussed in section III.D.1.e. of
this final rule, we are using the wage
index and labor-related share in a
budget neutral manner by applying a
wage index budget neutrality factor to
the Federal per diem base rate and ECT
payment per treatment. Therefore, the
budgetary impact to the Medicare
program of this final rule will be due to
the final market basket update for FY
2016 of 2.4 percent (see section III.A.4.
of this final rule) less the productivity
adjustment of 0.5 percentage point
required by section 1886(s)(2)(A)(i) of
the Act; further reduced by the ‘‘other
adjustment’’ of 0.2 percentage point
under sections 1886(s)(2)(A)(ii) and
1886(s)(3)(D) of the Act; and the update
to the outlier fixed dollar loss threshold
amount.
We estimate that the FY 2016 impact
will be a net increase of $75 million in
payments to IPF providers. This reflects
an estimated $85 million increase from
the update to the payment rates and a
$10 million decrease due to the update
to the outlier threshold amount to set
total estimated outlier payments at 2.0
percent of total estimated payments in
FY 2016. This estimate does not include
the implementation of the required 2
percentage point reduction of the
market basket increase factor for any IPF
that fails to meet the IPF quality
reporting requirements (as discussed in
section VIII.C.4. below).
2. Impact on Providers
To understand the impact of the
changes to the IPF PPS on providers,
discussed in this final rule, it is
necessary to compare estimated
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payments under the IPF PPS rates and
factors for FY 2016 versus those under
FY 2015. We determined the percent
change of estimated FY 2016 IPF PPS
payments to FY 2015 IPF PPS payments
for each category of IPFs. In addition,
for each category of IPFs, we have
included the estimated percent change
in payments resulting from the update
to the outlier fixed dollar loss threshold
amount; the updated wage index data;
the changes to wage index CBSAs; the
changes to rural adjustment payments
resulting from changes in rural or urban
status, due to CBSA changes; the final
labor-related share; and the final market
basket update for FY 2016, as adjusted
by the productivity adjustment
according to section 1886(s)(2)(A)(i),
and the ‘‘other adjustment’’ according to
sections 1886(s)(2)(A)(ii) and
1886(s)(3)(D) of the Act.
To illustrate the impacts of the FY
2016 changes in this final rule, our
analysis begins with a FY 2015 baseline
simulation model based on FY 2014 IPF
payments inflated to the midpoint of FY
2015 using IHS Global Insight Inc.’s
most recent forecast of the market basket
update (see section III.A.4. of this final
rule); the estimated outlier payments in
FY 2015; the CBSA delineations for IPFs
based on OMB’s MSA definitions after
June 2003; the FY 2014 pre-floor, prereclassified hospital wage index; the FY
2015 labor-related share; and the FY
2015 percentage amount of the rural
adjustment. During the simulation, total
outlier payments are maintained at 2
percent of total estimated IPF PPS
payments.
Each of the following changes is
added incrementally to this baseline
model in order for us to isolate the
effects of each change:
• The update to the outlier fixed
dollar loss threshold amount;
• The FY 2015 pre-floor, prereclassified hospital wage index without
the revised OMB delineations;
• The FY 2015 updated CBSA
delineations, based on OMB’s February
28, 2013 Bulletin No. 13–01, as
described in section III.D.1.c. of this
final rule, with the final blended FY
2016 IPF wage index;
46723
• The FY 2016 rural adjustment,
accounting for changes to rural or urban
status due to the updated CBSA
delineations, including the phase-out of
the rural adjustment for the IPFs
changing from rural to urban status, as
described in section III.D.1.d;
• The final FY 2016 labor-related
share;
• The final market basket update for
FY 2016 of 2.4 percent less the
productivity adjustment of 0.5
percentage point reduction in
accordance with section 1886(s)(2)(A)(i)
of the Act and further reduced by the
‘‘other adjustment’’ of 0.2 percentage
point in accordance with sections
1886(s)(2)(A)(ii) and 1886(s)(3)(D) of the
Act.
Our final comparison illustrates the
percent change in payments from FY
2015 (that is, October 1, 2014, to
September 30, 2015) to FY 2016 (that is,
October 1, 2015, to September 30, 2016)
including all the changes in this final
rule.
TABLE 29—IPF IMPACT FOR FY 2016
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[Percent change in columns 3–9]
Facility by type
Number
of IPFs
Outlier
Wage
index 1
CBSA 2
Change
in rural
adjustment 3
Laborrelated
share
(75.2) 4
IPF market
basket
update 5
Total percent
change 6
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
All Facilities ..................................
Total Urban ...........................
Total Rural ............................
Urban unit .............................
Urban hospital .......................
Rural unit ..............................
Rural hospital ........................
CBSA Change:
Urban to Urban .....................
Rural to Rural .......................
Urban to Rural ......................
Rural to Urban ......................
By Type of Ownership:
Freestanding IPFs:
Urban Psychiatric Hospitals:
Government ...................
Non-Profit .......................
For-Profit ........................
Rural Psychiatric Hospitals:
Government ...................
Non-Profit .......................
For-Profit ........................
IPF Units:
Urban:
Government ...................
Non-Profit .......................
For-Profit ........................
Rural:
Government ...................
Non-Profit .......................
For-Profit ........................
By Teaching Status:
Non-teaching .........................
Less than 10% interns and
residents to beds ...............
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1,617
1,275
342
845
430
277
65
¥0.2
¥0.2
¥0.2
¥0.3
¥0.1
¥0.2
¥0.1
0.0
0.0
0.1
0.0
0.0
0.1
0.1
0.0
0.0
¥0.2
0.0
0.1
¥0.2
¥0.3
0.0
0.0
0.2
0.0
0.0
0.2
0.2
0.0
0.2
¥1.1
0.2
0.1
¥1.1
¥1.0
1.7
1.7
1.7
1.7
1.7
1.7
1.7
1.5
1.7
0.4
1.6
1.8
0.3
0.5
1,238
338
4
37
¥0.2
¥0.2
¥0.7
¥0.1
0.0
0.0
2.4
0.1
0.0
¥0.2
¥0.2
2.8
0.1
0.1
13.2
¥4.1
0.2
¥1.1
¥0.9
¥0.9
1.7
1.7
1.7
1.7
1.7
0.2
15.7
¥0.7
125
102
203
¥0.2
¥0.1
0.0
0.1
0.4
¥0.3
0.0
0.1
0.1
0.0
0.0
0.0
0.1
0.4
0.0
1.7
1.7
1.7
1.7
2.5
1.4
35
11
19
¥0.1
¥0.4
0.0
0.2
¥0.6
0.1
¥0.1
0.0
¥0.5
0.4
0.1
0.1
¥0.8
¥0.3
¥1.3
1.7
1.7
1.7
1.2
0.4
¥0.1
128
547
170
¥0.5
¥0.3
¥0.2
¥0.2
0.2
¥0.3
¥0.1
0.0
0.0
0.0
¥0.1
0.0
0.3
0.3
0.0
1.7
1.7
1.7
1.3
1.8
1.3
70
143
64
¥0.2
¥0.2
¥0.3
¥0.1
0.2
0.0
¥0.3
¥0.2
¥0.2
0.0
0.3
0.2
¥1.4
¥1.0
¥1.3
1.7
1.7
1.7
¥0.3
0.7
0.2
1,427
¥0.2
0.0
0.0
0.0
¥0.1
1.7
1.4
103
¥0.3
0.2
¥0.1
0.0
0.5
1.7
2.0
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TABLE 29—IPF IMPACT FOR FY 2016—Continued
[Percent change in columns 3–9]
Facility by type
Number
of IPFs
Outlier
Wage
index 1
CBSA 2
Change
in rural
adjustment 3
Laborrelated
share
(75.2) 4
IPF market
basket
update 5
Total percent
change 6
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
10% to 30% interns and residents to beds ....................
More than 30% interns and
residents to beds ...............
By Region:
New England ........................
Mid-Atlantic ...........................
South Atlantic ........................
East North Central ................
East South Central ...............
West North Central ...............
West South Central ..............
Mountain ...............................
Pacific ...................................
By Bed Size:
Psychiatric Hospitals:
Beds: 0–24 ............................
Beds: 25–49 ..........................
Beds: 50–75 ..........................
Beds: 76+ ..............................
Psychiatric Units:
Beds: 0–24 ............................
Beds: 25–49 ..........................
Beds: 50–75 ..........................
Beds: 76+ ..............................
61
¥0.5
0.4
¥0.1
0.1
0.5
1.7
2.1
26
¥0.5
0.5
0.0
0.1
0.9
1.7
2.7
108
242
240
259
160
140
243
102
123
¥0.3
¥0.2
¥0.1
¥0.2
¥0.2
¥0.3
¥0.2
¥0.2
¥0.3
0.8
0.2
¥0.3
0.0
¥0.6
0.0
¥0.5
0.4
0.5
0.0
¥0.1
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
¥0.1
0.1
¥0.1
0.0
¥0.1
0.1
0.1
0.8
0.6
¥0.4
¥0.2
¥1.1
¥0.4
¥0.8
0.2
1.4
1.7
1.7
1.7
1.7
1.7
1.7
1.7
1.7
1.7
3.1
2.2
0.7
1.4
¥0.2
1.2
0.2
2.2
3.4
81
74
87
253
¥0.1
¥0.1
¥0.1
0.0
0.0
¥0.3
0.0
0.0
0.2
0.3
0.0
0.0
¥0.3
¥0.1
0.1
0.0
¥0.7
¥0.1
0.0
0.1
1.7
1.7
1.7
1.7
0.7
1.4
1.6
1.8
667
294
105
56
¥0.3
¥0.3
¥0.2
¥0.3
0.0
0.0
0.1
¥0.1
0.0
0.1
0.0
¥0.2
0.0
0.0
0.0
0.1
¥0.3
0.0
0.2
0.5
1.7
1.7
1.7
1.7
1.0
1.5
1.8
1.7
1 Includes
a FY 2016 IPF wage index, current CBSA delineations, and a labor-related share of 0.69294.
a 50/50 FY 2016 blended IPF wage index, new CBSA delineations, and a labor-related share of 0.69294.
a 50/50 FY 2016 blended IPF wage index, new CBSA delineations, a labor-related share of 0.69294, and a rural adjustment. Providers changing from urban to rural status will receive a 17 percent rural adjustment, and providers changing from rural to urban status will receive 2/3 of the 17 percent rural adjustment in FY 2016. For those changing from urban to rural status, the total impact shown is affected by
outlier threshold increasing, which results in smaller outlier payments as part of total payments. For those changing from rural to urban status,
the outlier threshold is being lowered by 2/3 of 17 percent, which results in more providers being eligible for outlier payments, increasing the
outlier portion of their total payments.
4 Includes a 50/50 FY 2016 blended IPF wage index, new CBSA delineations, a labor-related share of 0.752, and a rural adjustment.
5 This column reflects the payment update impact of the 2012-based IPF market basket update of 2.4 percent, a 0.5 percentage point reduction for the productivity adjustment as required by section 1886(s)(2)(A)(i) of the Act, and a 0.2 percentage point reduction in accordance with
sections 1886(s)(2)(A)(ii) and 1886(s)(3)(D) of the Act.
6 Percent changes in estimated payments from FY 2015 to FY 2016 include all of the changes presented in this final rule. The products of
these impacts may be different from the percentage changes shown due to rounding effects.
2 Includes
3 Includes
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3. Results
Table 29 displays the results of our
analysis. The table groups IPFs into the
categories listed below based on
characteristics provided in the Provider
of Services (POS) file, the IPF provider
specific file, and cost report data from
HCRIS:
• Facility Type
• Location
• Teaching Status Adjustment
• Census Region
• Size
The top row of the table shows the
overall impact on the 1,617 IPFs
included in this analysis.
In column 3, we present the effects of
the update to the outlier fixed dollar
loss threshold amount. We estimate that
IPF outlier payments as a percentage of
total IPF payments are 2.2 percent in FY
2015. Thus, we are adjusting the outlier
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threshold amount in this final rule to set
total estimated outlier payments equal
to 2 percent of total payments in FY
2016. The estimated change in total IPF
payments for FY 2016, therefore,
includes an approximate 0.2 percent
decrease in payments because the
outlier portion of total payments is
expected to decrease from
approximately 2.2 percent to 2.0
percent.
The overall impact of this outlier
adjustment update (as shown in column
3 of Table 26), across all hospital
groups, is to decrease total estimated
payments to IPFs by 0.2 percent. The
largest decrease in payments is
estimated to reflect a 0.7 percent
decrease in payments for IPFs that
change from urban to rural status under
the new CBSA delineations.
In column 4, we present the effects of
the budget-neutral final update to the
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IPF wage index. This represents the
effect of using the most recent wage data
available without taking into account
the revised OMB delineations, which
are presented separately in the next
column. That is, the impact represented
in this column is solely that of updating
from the FY 2015 IPF wage index to the
FY 2016 IPF wage index without any
changes to the OMB delineations. We
note that there is no projected change in
aggregate payments to IPFs, as indicated
in the first row of column 4. However,
there will be distributional effects
among different categories of IPFs. For
example, we estimate the largest
increase in payments to be 2.4 percent
for IPFs changing from urban to rural
status, and the largest decrease in
payments to be 0.6 percent for rural
non-profit freestanding IPFs and IPFs in
the East South Central region.
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In column 5, we present the effects of
the new OMB delineations and the
finalized transition to the new
delineations using the transitional IPF
wage index. The FY 2016 IPF final
transitional wage index is a blended
wage index using 50 percent of the IPF’s
FY 2016 wage index based on the new
OMB delineations and 50 percent of the
IPF’s FY 2016 wage index based on the
OMB delineations used in FY 2015. In
the aggregate, since these final updates
to the wage index are applied in a
budget-neutral manner, we do not
estimate that these final updates would
affect overall estimated payments to
IPFs. However, we estimate that these
final updates would have distributional
effects. We estimate the largest increase
in payments would be 2.8 percent for
IPFs changing from rural to urban status
and the largest decrease in payments
would be 0.5 percent for rural for-profit
freestanding IPFs.
In column 6, we present the effects of
the changes to the rural adjustment
under the new CBSA delineations. Four
urban IPFs would be newly designated
as rural IPFs and would now receive a
full 17 percent rural adjustment. We
estimate that the largest increase in
payments would be to these four newly
rural IPFs. Note that each column’s
simulations include both regular and
outlier payments; as regular payments
increase, outlier payments decrease to
maintain outlier payments at 2 percent
of total payments. As such, the increase
to total IPF payments is estimated to be
13.2 percent. There are also 37 rural
IPFs which would be newly designated
as urban IPFs, where we finalized a
phase-out of their rural adjustment over
3 years. These 37 newly urban providers
will receive 2⁄3 of the 17 percent rural
adjustment in FY 2016, 1⁄3 of the 17
percent rural adjustment in FY 2017,
and no rural adjustment for FY 2018
and subsequent years. As the regular
payments for these 37 providers
decrease, their outlier payments
increase to maintain outlier payments at
2 percent of total payments. We estimate
that the largest decrease in payments
would be 4.1 percent for these 37 newly
urban providers.
In column 7, we present the estimated
effects of the final labor-related share.
The final update to the IPF labor-related
share is made in a budget-neutral
manner and therefore will not affect
total estimated IPF PPS payments.
However, it will affect the estimated
distribution of payments among
providers. For example, we estimate the
largest increase in payments will be 1.4
percent to IPFs in the Pacific region. We
estimate the largest decrease in
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payments will be 1.4 percent to rural
IPF governmental units.
In column 8, we present the estimated
effects of the update to the IPF PPS
payment rates of 1.7 percent, which are
based on the 2012-based IPF market
basket update of 2.4 percent, less the
productivity adjustment of 0.5
percentage point in accordance with
section 1886(s)(2)(A)(i), and further
reduced by 0.2 percentage point in
accordance with section
1886(s)(2)(A)(ii) and 1886(s)(3)(D).
Finally, column 9 compares our
estimates of the total changes reflected
in this final rule for FY 2016 to the
payments for FY 2015 (without these
changes). This column reflects all
finalized FY 2016 changes relative to FY
2015. The average estimated increase for
all IPFs is approximately 1.5 percent.
This estimated net increase includes the
effects of the final 2.4 percent market
basket update reduced by the
productivity adjustment of 0.5
percentage point, as required by section
1886(s)(2)(A)(i)of the Act and further
reduced by the ‘‘other adjustment’’ of
0.2 percentage point, as required by
sections 1886(s)(2)(A)(ii) and
1886(s)(3)(D) of the Act. It also includes
the overall estimated 0.2 percent
decrease in estimated IPF outlier
payments as a percent of total payments
from the update to the outlier fixed
dollar loss threshold amount. Since we
are making the updates noted in
columns 4 through 7 in a budget-neutral
manner, they will not affect total
estimated IPF payments in the
aggregate. However, they will affect the
estimated distribution of payments
among providers.
Overall, urban IPFs are estimated to
experience a 1.7 percent increase in
payments in FY 2016 and rural IPFs are
estimated to experience a 0.4 percent
increase in payments in FY 2016. The
largest estimated decrease in payments
is 0.7 percent for rural IPFs that
transition to urban status as a result of
the new OMB delineations. As noted
previously, we are finalizing our
proposal to mitigate the effects of the
loss of the rural adjustment to these 37
providers by phasing the adjustment out
over 3 years. The largest payment
increase is estimated at 15.7 percent for
IPFs that transition from urban to rural
status (thereby gaining the 17 percent
rural adjustment), followed by a 3.4
percent increase for IPFs in the Pacific
region.
4. Effects of Updates to the IPFQR
Program
As discussed in section V. of this final
rule and in accordance with section
1886(s)(4)(A)(i) of the Act, we will
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46725
implement a 2 percentage point
reduction in the FY 2018 market basket
update for IPFs that have failed to
comply with the IPFQR Program
requirements for FY 2018, including
reporting on the required measures. In
section V. of this final rule, we discuss
how the 2 percentage point reduction
will be applied. For FY 2015, of the
1,725 IPFs eligible for the IPFQR
Program, 31 IPFs (1.8 percent) did not
receive the full market basket update
because of the IPFQR Program; 10 of
these IPFs chose not to participate and
21 did not meet the requirements of the
program. We anticipate that even fewer
IPFs would receive the reduction for FY
2016 as IPFs become more familiar with
the requirements. Thus, we estimate
that this policy will have a negligible
impact on overall IPF payments for FY
2016.
Based on the proposals we finalized
in this rule, we estimate a total increase
in burden of 174.4 hours per IPF or
282,004.80 hours across all IPFs,
resulting in a total increase in financial
burden of $3,901.33 per IPF or
$6,308,447.38 across all IPFs. As
discussed in section VII. of this final
rule, we will attribute the costs
associated with the finalized proposals
to the year in which these costs begin;
for the purposes of all the changes made
in this final rule, that year is FY 2016.
Further information on these estimates
can be found in section VII. of this final
rule.
We intend to closely monitor the
effects of this quality reporting program
on IPFs and help facilitate successful
reporting outcomes through ongoing
stakeholder education, national
trainings, and a technical help desk.
5. Effect on Beneficiaries
Under the IPF PPS, IPFs will receive
payment based on the average resources
consumed by patients for each day. We
do not expect changes in the quality of
care or access to services for Medicare
beneficiaries under the FY 2016 IPF
PPS, but we continue to expect that
paying prospectively for IPF services
would enhance the efficiency of the
Medicare program.
D. Alternatives Considered
The statute does not specify an update
strategy for the IPF PPS and is broadly
written to give the Secretary discretion
in establishing an update methodology.
Therefore, we are updating the IPF PPS
using the methodology published in the
November 2004 IPF PPS final rule, but
implementing a 2012-based IPF market
basket with some methodological
changes to the calculations of Wages
and Salaries and Employee Benefit
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Federal Register / Vol. 80, No. 150 / Wednesday, August 5, 2015 / Rules and Regulations
costs, based on public comments;
finalizing the updated labor-related
share as proposed; finalizing a
transitional wage index to implement
new OMB CBSA designations as
proposed; and implementing a phaseout of the rural adjustment as proposed
for the 37 providers changing from rural
to urban status as a result of the updated
OMB CBSA delineations used in the FY
2016 IPF PPS transitional wage index.
We considered implementing the new
OMB designations for the FY 2016 IPF
PPS wage index without a blend, but
wanted to mitigate any negative effects
of CBSA changes on IPFs. Additionally,
we considered abruptly ending the rural
adjustment for the 37 IPF providers
which changed from rural to urban
status as a result of the OMB CBSA
changes. However, we wanted to
provide relief from the effects of OMB’s
new CBSA delineations to the 37
providers which changed from rural to
urban status. We also considered
whether to allow a phase-in of the
updated LRS, but decided that the
impact of full implementation did not
warrant a phase-in, especially given that
we are also implementing a transitional
wage index and a phase-out of the rural
adjustment for those IPFs which
changed status from rural to urban
under the new CBSAs. Additionally, for
the IPFQR program, alternatives were
not considered because the program, as
designed, best achieves quality
reporting goals for the inpatient
psychiatric care setting, while
minimizing associated reporting
burdens on IPFs. Section V. of this final
rule discusses other benefits and
objectives of the program.
E. Accounting Statement
As required by OMB Circular A–4
(available at http://www.whitehouse.
gov/omb/circulars_a004_a-4), in Table
30 below, we have prepared an
accounting statement showing the
classification of the expenditures
associated with the provisions
implemented in this final rule. The
costs for data submission presented in
Table 30 are calculated in section VI,
which also discusses the benefits of data
collection. This table provides our best
estimate of the increase in Medicare
payments under the IPF PPS as a result
of the changes presented in this final
rule and based on the data for 1,617
IPFs in our database. Furthermore, we
present the estimated costs associated
with updating the IPFQR program. The
increases in Medicare payments are
classified as Federal transfers to IPF
Medicare providers.
TABLE 30—ACCOUNTING STATEMENT: CLASSIFICATION OF ESTIMATED EXPENDITURES
Change in Estimated Transfers from FY 2015 IPF PPS to FY 2016 IPF PPS:
Category
Transfers
Annualized Monetized Transfers ..............................................................
From Whom to Whom? ............................................................................
$75 million.
Federal Government to IPF Medicare Providers.
FY 2016 Costs to Updating the Quality Reporting Program for IPFs:
Category
Costs
Annualized Monetized Costs for IPFs to Submit Data (Quality Reporting Program).
In accordance with the provisions of
Executive Order 12866, this final rule
was reviewed by the Office of
Management and Budget.
List of Subjects in 42 CFR Part 412
Administrative practice and
procedure, Health facilities, Medicare,
Puerto Rico, Reporting and
recordkeeping requirements.
For the reasons set forth in the
preamble, the Centers for Medicare and
Medicaid Services amends 42 CFR
chapter IV as set forth below:
PART 412—PROSPECTIVE PAYMENT
SYSTEMS FOR INPATIENT HOSPITAL
SERVICES
1. The authority citation for part 412
continues to read as follows:
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■
Authority: Secs. 1102 and 1871 of the
Social Security Act (42 U.S.C. 1302 and
1395hh), sec. 124 of Pub. L. 106–113 (113
Stat. 1501A–332), sec. 1206 of Pub. L. 113–
67, and sec. 112 of Pub. L. 113–93.
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$6.31 million.
2. Section 412.428 is amended by
revising paragraph (e) to read as follows:
■
Addendum—FY 2016 Final Rates and
Adjustment Factors
§ 412.428 Publication of Updates to the
inpatient psychiatric facility prospective
payment system.
*
*
*
*
*
(e) Describe the ICD–10–CM coding
changes and DRG classification changes
discussed in the annual update to the
hospital inpatient prospective payment
system regulations.
*
*
*
*
*
Dated: July 27, 2015.
Andrew M. Slavitt,
Acting Administrator, Centers for Medicare
& Medicaid Services.
Dated: July 27, 2015.
Sylvia M. Burwell,
Secretary, Department of Health & Human
Services.
PER DIEM RATE
Federal Per Diem Base Rate .......
Labor Share (0.752) .....................
Non-Labor Share (0.248) .............
PER DIEM RATE APPLYING THE 2
PERCENTAGE POINT REDUCTION
Federal Per Diem Base Rate .......
Labor Share (0.752) .....................
Non-Labor Share (0.248) .............
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$729.10
548.28
180.82
Fixed Dollar Loss Threshold Amount:
$9,580.
Wage Index Budget-Neutrality Factor:
1.0041.
Note: The following addendum will
not publish in the Code of Federal
Regulations.
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46727
FACILITY ADJUSTMENTS
Rural Adjustment Factor ....................................................................................................................................
Teaching Adjustment Factor ..............................................................................................................................
Wage Index ........................................................................................................................................................
COST OF LIVING ADJUSTMENTS
(COLAS)
PATIENT ADJUSTMENTS—Continued
Cost of living adjustment factor
Area
Alaska:
City of Anchorage and 80kilometer (50-mile) radius by road ...................
City of Fairbanks and 80kilometer (50-mile) radius by road ...................
City of Juneau and 80-kilometer (50-mile) radius by
road ................................
Rest of Alaska ...................
Hawaii:
City and County of Honolulu .................................
County of Hawaii ...............
County of Kauai .................
County of Maui and County of Kalawao .................
....................
1.23
1.23
1.25
1.25
1.19
1.25
1.25
$320.19
VARIABLE PER DIEM ADJUSTMENTS—
Continued
Adjustment
factor
313.89
VARIABLE PER DIEM ADJUSTMENTS
Adjustment
factor
1.23
PATIENT ADJUSTMENTS
ECT—Per Treatment ................
ECT—Per Treatment Applying
the 2 Percentage Point Reduction ...................................
1.17.
0.5150.
Pre-reclass Hospital Wage Index
(FY2015).
Day 1—Facility Without a
Qualifying Emergency Department ................................
Day 1—Facility With a Qualifying Emergency Department
Day 2 ........................................
Day 3 ........................................
Day 4 ........................................
Day 5 ........................................
Day 6 ........................................
Day 7 ........................................
Day 8 ........................................
Day 9 ........................................
Day 10 ......................................
Day 11 ......................................
Day 12 ......................................
Day 13 ......................................
Day 14 ......................................
Day 15 ......................................
Day 16 ......................................
Day 17 ......................................
Day 18 ......................................
Day 19 ......................................
Day 20 ......................................
Day 21 ......................................
After Day 21 .............................
0.97
0.97
0.96
0.95
0.95
0.95
0.92
1.19
1.31
1.12
1.08
1.05
1.04
1.02
1.01
1.01
1.00
1.00
0.99
0.99
0.99
0.99
0.98
AGE ADJUSTMENTS
Age
(in years)
Adjustment
factor
Under 45 ...................................
45 and under 50 .......................
50 and under 55 .......................
55 and under 60 .......................
60 and under 65 .......................
65 and under 70 .......................
70 and under 75 .......................
75 and under 80 .......................
80 and over ..............................
1.00
1.01
1.02
1.04
1.07
1.10
1.13
1.15
1.17
DRG ADJUSTMENTS
MS–DRG
056
057
080
081
876
880
881
882
883
884
885
886
887
894
895
896
897
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
Degenerative nervous system disorders w MCC ......................................................................................................
Degenerative nervous system disorders w/o MCC ...................................................................................................
Nontraumatic stupor & coma w MCC ........................................................................................................................
Nontraumatic stupor & coma w/o MCC .....................................................................................................................
O.R. procedure w principal diagnoses of mental illness ...........................................................................................
Acute adjustment reaction & psychosocial dysfunction .............................................................................................
Depressive neuroses .................................................................................................................................................
Neuroses except depressive .....................................................................................................................................
Disorders of personality & impulse control ................................................................................................................
Organic disturbances & mental retardation ...............................................................................................................
Psychoses ..................................................................................................................................................................
Behavioral & developmental disorders ......................................................................................................................
Other mental disorder diagnoses ..............................................................................................................................
Alcohol/drug abuse or dependence, left AMA ...........................................................................................................
Alcohol/drug abuse or dependence w rehabilitation therapy ....................................................................................
Alcohol/drug abuse or dependence w/o rehabilitation therapy w MCC ....................................................................
Alcohol/drug abuse or dependence w/o rehabilitation therapy w/o MCC .................................................................
COMORBIDITY ADJUSTMENTS
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Comorbidity
COMORBIDITY ADJUSTMENTS—
Continued
Adjustment
factor
Developmental Disabilities .......
Coagulation Factor Deficit ........
Tracheostomy ...........................
Eating and Conduct Disorders
Infectious Diseases ..................
Renal Failure, Acute .................
Renal Failure, Chronic ..............
Oncology Treatment .................
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1.04
1.13
1.06
1.12
1.07
1.11
1.11
1.07
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Uncontrolled Diabetes Mellitus
Severe Protein Malnutrition ......
Drug/Alcohol Induced Mental
Disorders ...............................
Cardiac Conditions ...................
Gangrene ..................................
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1.05
1.07
1.22
1.05
0.99
1.02
1.02
1.03
1.00
0.99
0.92
0.97
1.02
0.88
COMORBIDITY ADJUSTMENTS—
Continued
Adjustment
factor
Comorbidity
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Adjustment
factor
MS–DRG Descriptions
1.05
1.13
1.03
1.11
1.10
Comorbidity
Chronic Obstructive Pulmonary
Disease .................................
Artificial Openings—Digestive &
Urinary ...................................
Severe Musculoskeletal & Connective Tissue Diseases .......
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05AUR2
Adjustment
factor
1.12
1.08
1.09
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COMORBIDITY ADJUSTMENTS—
Continued
Comorbidity
Adjustment
factor
Poisoning ..................................
1.11
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| File Type | application/pdf |
| File Modified | 2015-12-15 |
| File Created | 2015-12-15 |