Georgia Hospital Association FY 2014 IPPS/LTCH PPS Proposed Rule Quality Provisions 11 June 2013 © 2013 American Hospital Association

IPPS/LTCH PPS Proposed Rule Summary Comments due on June 25, 2013 AHA Regulatory Advisory available at www.aha.org Includes proposals for seven different quality reporting and payment programs Select headlines: HAC Reduction (penalty) Program - All of it Readmissions – Updated measures and expansion to 2 additional conditions in FY 2015 IQR – Electronic reporting option VBP – new measures and measure domain realignment © 2013 American Hospital Association 2

Hospital Acquired Conditions Beginning FY 2015, financial penalty for being in the top quartile of national HAC rates 1 percent reduction to Medicare payments for all discharges. Includes: Inpatient PPS, SCHs, and Indian Health Services Excludes: CAHs, LTCHs, cancer hospitals, IRFs, IPFs, © 2013 American Hospital Association 9

HAC Measures Domain 1, Option 1: Individual PSIs Domain 1, Option 2: Composite PSI Domain 2: HAI Measures Pressure ulcer (PSI 3)# * Volume of foreign object left in the body (PSI 5) Iatrogenic Pneumothorax rate (PSI 6)* Postoperative physiologic and metabolic derangement rate (PSI 10)# * Postoperative pulmonary embolism (PE) or deep vein thrombosis rate (DVT) (PSI 12) Accidental puncture and laceration rate (PSI 15) PSI-90 (Composite comprised of the following 8 PSIs): Pressure ulcer rate (PSI 3)# * Central venous catheter-related blood stream infection rate (PSI 7)# * Postoperative hip fracture rate (PSI 8)# * Postoperative pulmonary embolism (PE) or deep vein thrombosis rate (DVT) (PSI 12) Postoperative sepsis rate (PSI 13)# * Wound dehiscence rate (PSI 14)# * Central Line-associated Blood Stream Infection (CLABSI) (FY 2015 onward)% Catheter-associated Urinary Tract Infection (CAUTI) (FY 2015 onward)% Surgical Site Infection (SSI) (FY 2016 onward):% SSI Following Colon Surgery SSI Following Abdominal Hysterectomy Methicillin-resistant Staphylococcus aureus (MRSA) Bacteremia (FY 2017 onward) % Clostridium difficile (FY 2017 onward)% # = Not NQF-endorsed * = Not reviewed by the Measure Applications Partnership (MAP) %= Overlaps with finalize or proposed VBP measure © 2013 American Hospital Association 10

HAC: Scoring Methodology Performance on each measure split into quartiles…. …with hospitals then assigned points depending on the decile of performance on each measure Percentile above 75th percentile Number of Points Assigned for measure 1st -10th 1 11th – 20th 2 21st – 30th 3 31st – 40th 4 41st – 50th 5 51st – 60th 6 61st – 70th 7 71st – 80th 8 81st – 90th 9 91st – 100th 10   Top quartile scores then divided into deciles…   © 2013 American Hospital Association 11

HAC Reduction Program: Assigning Points © 2013 American Hospital Association 8

HAC Reduction Program: Areas of Concern and Analysis The measures Not all are NQF-endorsed, Not all reviewed by the MAP Scoring methodology Is it sufficient to blunt the effect of rarely occurring events? AHA conducting an analysis to determine spread of performance on measures, and impact to hospitals Double penalty (or conflicting signals about penalties) CAUTI and CLABSI in VBP and HAC © 2013 American Hospital Association 10

Hospital Readmissions Reduction Program: FY 2014 and 2015 Proposals Penalty increases to 2%, per statute Planned readmissions algorithm incorporated into existing measures to exclude planned readmissions Always excludes transplant surgery, OB delivery, maintenance chemotherapy and rehab Possible exclusion of non-acute readmits for planned procedures No exclusion for readmits for acute illness or complications FY 2015 Penalty increases to 3%, per statute Addition of two measures COPD readmissions Total hip/Total Knee readmissions   © 2013 American Hospital Association 11

Key HRRP problems remain… Measures do not exclude readmissions unrelated to the reason for initial admission in spite of the ACA statutory requirement No exclusions for patients with conditions requiring frequent inpatient hospitalizations (e.g.—burns, psychosis, ESRD, substance abuse) Poor measure reliability (i.e.—inadequate minimum case threshold to produce accurate measure results) No adjustments for socioeconomic factors beyond hospital control © 2013 American Hospital Association 12

Inpatient Quality Reporting OUT Aspirin prescribed at discharge for AMI Statin prescribed at discharge for AMI Angiotensin converting enzyme Inhibitors / angiotensin receptor blockers (ACEI/ARB drugs) for left ventricular systolic dysfunction Surgery patients with perioperative temperature management PN-3b – Blood culture performed in the emergency department prior to first antibiotic received in hospital HF-1 – Discharge instructions IMM-1 – Immunization for pneumonia (guidelines have changes) Participation in a systematic clinical database registry for stroke care (stroke measures render this unnecessary) IN 30-day risk standardized COPD readmission 30-day risk standardized COPD mortality 30-day risk standardized stroke readmission 30-day risk standardized stroke mortality AMI payment per episode of care Expand CAUTI and CLABSI to non-ICU areas This slide provides a list of the major IQR measurement changes for FY 2016. The “new” performance measures are for reporting in 2014, and will affect FY 2016 inpatient payment. CMS removes 8 measures. CMS cycles measures out of the program because they have “topped out,” lost NQF endorsement, or better measures become available. CMS adds 5 new measures, which are based on claims data (so hospitals do not need to abstract it). Some concerns include the following: Stroke mortality, stroke readmission and AMI payment per episode of care are not NQF-endorsed. Stroke mortality rates are not adjusted for stroke severity, leading to reporting inaccuracies AMI payment per episode is being proposed as a hospital measure, but the measure includes payments for a variety of services—physician, long-term care hospitals, SNFs, etc—that hospitals do not always control. In addition, CMS proposes to expand its CAUTI (urinary track) and CLABSI (blood stream) measures to areas beyond the ICU. These measures are likely to require additional effort for hospitals to collect and report. © 2013 American Hospital Association 16

Proposed IQR Electronic Reporting for FY 2016 Hospitals would receive credit for both the Medicare EHR Incentive program and IQR for reporting 1 quarter’s worth of data for 16 measures common to both programs Stroke, VTE, ED, early elective delivery Hospitals would have 2 different deadlines depending on whether they are in their first year of the Medicare EHR Incentive program Hospitals in 1st year of EHR Incentive: Jun. 1, 2014 Hospitals beyond 1st year of HER Incentive: Nov. 30, 2014 CMS strongly encourages hospital participation as a precursor to required electronic submission in the future © 2013 American Hospital Association 14

IQR Electronic Reporting: Concerns Substantial differences between EHR-based and manual abstraction methodologies, resulting in substantial variation in performance results Inadequate validation of measures reported via certified EHRs Timing of required electronic reporting CMS mentions required reporting may happen as soon as CY 2015 However, they also state they will use the results of the voluntary reporting to inform when they intend to require it. © 2013 American Hospital Association 15

Inpatient Quality Reporting (IQR): Validation Process Timing: Quarters shifted to allow for more timely determination of annual payment update Selection of measures: Will validate 12 process of care, and add MRSA and C Diff to HAI validation in FY 2016 Number of records: Will reduce the number of records validated per hospital for HAI measures Electronic submission of records selected for validation will be allowed © 2013 American Hospital Association 18

Value-Based Purchasing (VBP) FY 2016 and FY 2017 Measure Proposals Three clinical process measures removed for FY 2016 AMI-8a (primary PCI within 90 minutes of hospital arrival) – dropped due to being topped out; PN-3b (blood cultures performed in the emergency department prior to initial antibiotic received in hospital) – no longer NQF-endorsed HF-1 (discharge instructions – no longer NQF-endorsed Three new measures added for FY 2016 IMM-2 (Influenza Vaccination for inpatients 6 months and older); Catheter-associated urinary tract infections; and Surgical site infections Two new measure for FY 2017 Methicillin-resistant Staphylococcus aureus (MRSA) bacteremia Clostridium difficile (C Diff). © 2013 American Hospital Association 19

Proposed Domain Weighting for FY 2016 VBP Program Measure Domain FY 2013 Final FY 2014 Final FY 2015 Final FY 2016 Proposed Process 70% 45% 20% 10% Patient Experience 30% 25% Outcomes 0% 40% Efficiency © 2013 American Hospital Association 20

Proposed Realignment of Domain for FY 2017 VBP Program Weight Safety 15% Clinical Care: Clinical Care – Outcomes Clinical Care – Process 35% 25% Efficiency and Cost Reduction Patient and Caregiver Centered Experience of Care / Care Coordination CMS proposes a realignment of domains and measures within the domains to align with the National Quality Strategy priority areas Specific measures are remapped to the new domains As alternative, CMS proposes the same domains and weighting as the FY 2016 VBP program © 2013 American Hospital Association 21

VBP Disaster / Extraordinary Circumstances Waiver CMS proposes a waiver process for hospitals that have faced natural disasters or other extenuating circumstances CMS would have the authority to waive a hospital from the VBP program in the fiscal year during which a hospital’s performance period data is likely affected Hospitals would be required to submit a request within 30 days of the occurrence of the extraordinary circumstance, and simultaneously with the IQR waiver © 2013 American Hospital Association 22

Inpatient Psychiatric Facility Quality Reporting Program (IPFQR) IPFs and licensed psychiatric distinct part units reimbursed under the IPF PPS must report on quality measures to receive full annual payment update beginning in FY 2014 FY 2014 and FY 2015 program use the HBIPS measures from the Joint Commission Eligible institutions. Free-standing Psychiatric Hospitals, including government-operated Psychiatric Hospitals Licensed Distinct Part Psychiatric Units of acute care hospitals and critical access hospitals © 2013 American Hospital Association 23

IPFQR: FY 2016 Measurement Proposals Not yet NQF-endorsed (NQF review underway) SUB-1 – Alcohol Use Screening Percentage of patients 18 years of age and older who are screened for unhealthy alcohol use during an inpatient stay. SUB-4—Alcohol and Drug Use: Assessing Status after discharge Assesses whether discharged patients are contacted between 7 and 30 days after hospital discharge to collect information about their alcohol or drug use FUH – Follow up after Hospitalization for Mental Illness (NQF-endorsed) Assesses the percentage of discharges for patients hospitalized for mental health disorders who subsequently had outpatient treatment © 2013 American Hospital Association 24

PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) – FY 2015 and 2016 Proposals Submit quality measures for FY 2014 and beyond Compliance is tied to 2 percent of the annual update One new measure for FY 2015 Surgical Site Infection 13 new measures for FY 2016 Six SCIP measures Six clinical process / oncology care measures HCAHPS survey Disaster / extenuating circumstances waiver modeled on IQR waiver process © 2013 American Hospital Association 25

Long-Term Care Hospital Quality Reporting (LTCHQR) Submit quality measures for FY 2014 and beyond Compliance is tied to 2 percent of the annual update Measure FY 2014 FY 2015 FY 2016 FY 2017 FY 2018   Central-Line Associated Blood Stream Infection (CLABSI) X Catheter-Associated Urinary Tract Infection (CAUTI) Percent of nursing home residents with pressure ulcers that are new or worsened Percent of nursing home residents who were assessed and appropriately given the seasonal influenza vaccine -- Influenza vaccination coverage among healthcare personnel Methicillin-resistant Staphylococcus aureus (MRSA) bacteremia P Clostridium difficile (C Diff) Unplanned all-cause, all condition readmissions to LTCHs and acute care hospitals Percent of residents experiencing one or more falls with major injury (Long stay) X = Previously Finalized P = Proposed For those at the last round of RPBS we went over the basics of the VPB program and CMS’ proposed rule. Starts in 2013 with 1 percent of payments set aside for VBP. Only IPPS hospitals and doesn’t affect special payments. 26 © 2013 American Hospital Association

LTCHQR Proposals – Areas of Concern Proposed measures not ready to use in LTCHs The measures proposed for FY 2017 and FY 2018 received a “support direction” vote from the MAP MRSA and C Diff are NQF-endorsed but not fully tested in LTCHs Falls measure received NQF endorsement based on specifications and testing for nursing homes, not LTCHs Proposed readmissions measure modeled on hospitalwide all-cause, all-condition readmissions measure in the IQR, carrying with it all of the same problems © 2013 American Hospital Association 27

LTCHQR Proposals – Measure Updates Healthcare personnel flu vaccination measure: reporting periods changed so that they reflect a full flu season FY 2016: Oct. 1, 2014 – Mar. 31, 2015 (due May 15, 2016) FY 2017: Oct. 1, 2015 – Mar. 31, 2016 (due May 15, 2016) Patient flu vaccination measure Change in reporting timelines for FY 2016 and FY 2017 to reflect the implementation of LTCH CARE Tool (see the Regulatory Advisory) Public reporting to reflect flu season time periods, though data collection must take place for all specified periods © 2013 American Hospital Association

Proposed Readmission measure Why readmissions? CMS estimates readmissions to LTCHs and IPPS hospitals within 30 days of discharge is 26% What measure is CMS proposing? (See Measure Specifications) Returns within 30 days of LTCH discharge from the community or another care setting of lesser intensity (i.e.—SNFs, home health, Inpatient Rehab) to acute-care hospitals or LTCHs. Based on “all cause, all condition” because of variability in types of patients treated in LTCHs Small ‘N’ of patient types means unstable measure Uses 2 year time-period of data from inpatient claims and Medicare eligibility files © 2013 American Hospital Association 27

Proposed Readmission measure (2) Patients included Age: 18 years and older Discharged alive from LTCHs Had 12 months of Medicare Part A FFS coverage and 30 days post discharge Had IPPS hospital stay within the 30 days prior to LTCH stay Exclusions Transfers from LTCH to another LTCH or IPPS hospital “Planned readmissions” within 30 days Exclusions for labor/delivery, cancer treatment, transplant already in IPPS measure LTCH measure includes several additional planned procedures (e.g.—amputations, select colorectal procedures, removal of feeding/tracheostomy tubes) © 2013 American Hospital Association 27

LTCHQR Proposals Housekeeping items Proposing a reconsideration process for annual payment update determination (modeled on the IQR) Proposing a disaster / extraordinary circumstances waiver process (modeled on the IQR) © 2013 American Hospital Association 28