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Blog | Medicare Payment and Reimbursement

IPPS FY23 proposed rule: Tweaks are in store for Medicare's quality-reporting and pay-for-performance programs

Blog | Medicare Payment and Reimbursement

IPPS FY23 proposed rule: Tweaks are in store for Medicare's quality-reporting and pay-for-performance programs

Temporary modifications to two pay-for-performance programs would ensure hospitals don’t face penalties amid the COVID-19 pandemic.

The FY23 proposed rule for hospital inpatient payments includes changes to Medicare’s pay-for-reporting and pay-for-performance programs.

Changes to the Hospital Inpatient Quality Reporting (IQR) Program would include the addition of 10 measures. Those that would take effect the soonest include:

  • Hospital-Level Risk-Standardized Complication Rate Following Elective Primary THA/TKA (NQF #1550) (FY24 payment determination based on 2019-22 admissions)
  • Medicare Spending Per Beneficiary (NQF #2158) (FY24 payment determination)
  • Hospital Commitment to Health Equity (CY23 reporting period)

The equity measure is part of the Biden administration's efforts to make health equity a strategic centerpiece of federal healthcare programs. To fulfill IQR obligations, hospitals would have to attest to their efforts at improving health equity in five domains: "Equity is a Strategic Priority," Data Collection, Data Analysis, Quality Improvement and Leadership Engagement.

Two IQR measures would debut on a voluntary basis in CY23 and then become mandatory in CY24 as part of federal initiatives to address the social determinants of health: Screening for Social Drivers of Health and the Screen Positive Rate for Social Drivers of Health.

The proposed changes also include refinements to two current IQR measures starting in the FY24 payment determination period:

  • Hospital-Level Risk-Standardized Payment Associated with an Episode of Care for Primary Elective THA and/or TKA (NQF #3474), which would be expanded to include 26 mechanical complication ICD-10 codes
  • Excess Days in Acute Care After Hospitalization for Acute Myocardial Infarction (NQF #2881), for which the minimum case count would be expanded from 25 to 50

Other IQR changes would affect electronic clinical quality measures (eCQMs), including increasing the submission requirement to successfully complete eCQM validation from 75% to 100% of the requested medical records. That proposal would not affect finalized policies with respect to validation of chart-abstracted measures.

The proposed rule also calls for amending the Medicare and Medicaid conditions of participation to require that providers continue reporting information pertaining to COVID-19 and seasonal influenza after expiration of the public health emergency. Among the data elements would be COVID-19 suspected and actual cases, deaths, available supplies and capacity, and administration of vaccines and therapeutics.

The requirement would extend through April 30, 2024, unless HHS establishes an earlier ending date. The reporting would be done electronically and in a standardized format.

Promoting Interoperability Program

Changes to the electronic health record (EHR) incentive program for 2023 would include mandatory reporting of the Electronic Prescribing Objective’s Query of Prescription Drug Monitoring Program Measure, which also would be expanded to include Schedule II, III and IV drugs.

The Electronic Prescribing Objective also would be part of a shuffle of the overall program’s 100-point scale, with the objective’s assigned point tally increasing from 10 to 20. Likewise, points associated with the Public Health and Clinical Data Exchange Objective would increase from 10 to 25.

Points would be reduced from 40 to 30 for the Health Information Exchange Objective and from 40 to 25 for the Provide Patients Electronic Access to Their Health Information Objective.

The Public Health and Clinical Data Exchange Objective also would undergo changes that include requiring participating organizations to report on their level of “active engagement,” which refers to sending designated data to a public health agency or clinical data registry; and reducing the "active engagement" levels — for which submission previously had been voluntary — from three to two by combining the completed registration to submit data and the testing and validation options.

Pay-for-performance programs

CMS proposed to suppress or refine certain measures in several programs and to ensure that hospitals won’t face penalties in the Hospital Value-Based Purchasing (VBP) Program and the Hospital-Acquired Condition (HAC) Reduction Program. That policy initially was implemented in FY22 as a way to mitigate the impact of the COVID-19 pandemic on performance in the programs.

“We appreciate [the] proposal not to penalize hospitals for nonrepresentative performance,” Stacey Hughes, executive vice president with the American Hospital Association, said in a written statement.

VBP Program. The suppression policy in FY23 would affect the HCAHPS and five Hospital-Acquired Infection (HAI) measures. Scores would be calculated only in the Clinical Outcomes and the Efficiency and Cost Reduction domains, and hospitals would not receive a total performance score.

With no total score on which to base the payment adjustment, hospitals would receive a value-incentive payment that matches the 2% reduction to their base operating DRG payment amount.

HAC Reduction Program. Hospitals wouldn’t be penalized in FY23, with CMS proposing to exclude the CMS PSI 90 Measure, which reflects patient safety indicators, and the five CDC National Healthcare Safety Network HAI measures from the calculation of total scores. Performance on HAI measures would be included in hospital-specific reports, with the information also available through HHS’s Care Compare tool and Provider Data Catalog.

Hospital Readmissions Reduction Program. The Hospital 30-Day, All-Cause, Risk-Standardized Readmission Rate Following Pneumonia Hospitalization Measure (NQF #0506) already had been suppressed for FY23. The new proposal is to resume that measure for FY24 while modifying it to exclude patients diagnosed with COVID-19 from the measure’s denominator.

About the Author

Nick Hut

is a senior editor with HFMA, Westchester, Ill. (nhut@hfma.org).

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