Medicare Program; Hospital Inpatient Value-Based Purchasing Program, 26490-26547 [2011-10568]

Agencies

• Centers for Medicare & Medicaid Services
• DEPARTMENT OF HEALTH AND HUMAN SERVICES

[Federal Register Volume 76, Number 88 (Friday, May 6, 2011)]
[Rules and Regulations]
[Pages 26490-26547]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-10568]



[[Page 26489]]

Vol. 76

Friday,

No. 88

May 6, 2011

Part V





Department of Health and Human Services





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Centers for Medicare & Medicaid Services



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42 CFR Parts 422 and 480



 Medicare Program; Hospital Inpatient Value-Based Purchasing Program; 
Final Rule

Federal Register / Vol. 76, No. 88 / Friday, May 6, 2011 / Rules and 
Regulations

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 422 and 480

[CMS-3239-F]
RIN 0938-AQ55


Medicare Program; Hospital Inpatient Value-Based Purchasing 
Program

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

ACTION: Final rule.

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SUMMARY: This final rule implements a Hospital Inpatient Value-Based 
Purchasing program (Hospital VBP program or the program) under section 
1886(o) of the Social Security Act (the Act), under which value-based 
incentive payments will be made in a fiscal year to hospitals that meet 
performance standards with respect to a performance period for the 
fiscal year involved. The program will apply to payments for discharges 
occurring on or after October 1, 2012, in accordance with section 
1886(o) (as added by section 3001(a) of the Patient Protection and 
Affordable Care Act, as amended by the Health Care and Education 
Reconciliation Act of 2010 (collectively known as the Affordable Care 
Act)). Scoring in the Hospital VBP program will be based on whether a 
hospital meets or exceeds the performance standards established with 
respect to the measures. By adopting this program, we will reward 
hospitals based on actual quality performance on measures, rather than 
simply reporting data for those measures.

DATES: Effective Date: These regulations are effective on July 1, 2011.

FOR FURTHER INFORMATION CONTACT: Allison Lee, (410) 786-8691.

Table of Contents

I. Background
    A. Overview
    B. Hospital Inpatient Quality Data Reporting Under Section 
501(b) of Public Law 108-173
    C. Hospital Inpatient Quality Reporting Under Section 5001(a) of 
Public Law 109-171
    D. 2007 Report to Congress: Plan To Implement a Medicare 
Hospital Value-Based Purchasing Program
    E. Provisions of the Affordable Care Act
II. Provisions of the Final Rule and Response to Comments
    A. Overview of the Proposed Rule
    B. Overview of the Hospital Value-Based Purchasing Program
    C. Performance Period
    D. Measures
    E. Performance Standards
    F. Methodology for Calculating the Total Performance Score
    G. Applicability of the Value-Based Purchasing Program to 
Hospitals
    H. The Exchange Function
    I. Hospital Notification and Review Procedures
    J. Reconsideration and Appeal Procedures
    K. FY 2013 Validation Requirements for Hospital Value-Based 
Purchasing
    L. Additional Information
    M. QIO Quality Data Access
III. Collection of Information Requirements
IV. Economic Analyses
    A. Regulatory Impact Analysis
    B. Regulatory Flexibility Act Analysis
    C. Unfunded Mandates Reform Act Analysis
V. Federalism Analysis

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:

ACM Appropriate Care Model
AHRQ Agency for Healthcare Research and Quality
AMI Acute Myocardial Infarction
CCN CMS Certification number
CLABSI Central line-associated bloodstream infections
CMMI Center for Medicare and Medicaid Innovation
CMS Centers for Medicare & Medicaid Services
CV Coefficient of variation
DRA Deficit Reduction Act of 2005
DRG Diagnosis-Related Group
EHR Electronic Health Record
EKG Electrocardiogram
FISMA Federal Information Security and Management Act
HAC Hospital acquired conditions
HAI Healthcare-associated infections
HCAHPS Hospital Consumer Assessment of Healthcare Providers and 
Systems
HF Heart Failure
HIPAA Health Insurance Portability and Accountability Act
HOP QDRP Hospital Outpatient Quality Data Reporting Program
IPPS Inpatient prospective payment systems
IQI Inpatient Quality Indicator
IQR Inpatient Quality Reporting
MMA Medicare Prescription Drug, Improvement and Modernization Act of 
2003
NQF National Quality Forum
PMA Patient-mix adjustment
PN Pneumonia
POA Present on Admission
PQRI Physician Quality Reporting Initiative
PRRB Provider Reimbursement Review Board
PSI Patient Safety Indicator
QIO Quality Improvement Organization
QRS Quality Review Study
RFA Regulatory Flexibility Act
RHQDAPU Reporting Hospital Quality Data for the Annual Payment 
Update Program
RIA Regulatory Impact Analysis
SCIP Surgical Care Improvement
SDPS Standard Data Processing System
SES Socioeconomic status
SSI Surgical site infections
VBP Value-Based Purchasing

I. Background

A. Overview

    The Centers for Medicare & Medicaid Services (CMS) promotes higher 
quality and more efficient health care for Medicare beneficiaries. In 
recent years, we have undertaken a number of initiatives to lay the 
foundation for rewarding health care providers and suppliers for the 
quality of care they provide by tying a portion of their Medicare 
payments to their performance on quality measures. These initiatives, 
which include demonstration projects and quality reporting programs, 
have been applied to various health care settings, including 
physicians' offices, ambulatory care facilities, hospitals, nursing 
homes, home health agencies, and dialysis facilities. The overarching 
goal of these initiatives is to transform Medicare from a passive payer 
of claims to an active purchaser of quality health care for its 
beneficiaries.
    This effort is supported by our adoption of an increasing number of 
widely-agreed upon quality measures for purposes of our existing 
quality reporting programs. We have worked with stakeholders to define 
measures of quality in almost every setting. These measures assess 
structural aspects of care, clinical processes, patient experiences 
with care, and, increasingly, outcomes.
    We have implemented quality measure reporting programs that apply 
to various settings of care. With regard to hospital inpatient 
services, we implemented the Hospital IQR program. In addition, we have 
implemented quality reporting programs for hospital outpatient services 
through the Hospital Outpatient Quality Reporting program (HOQR), 
formerly known as the Hospital Outpatient Quality Data Reporting 
Program (HOP QDRP), and for physicians and other eligible professionals 
through the Physician Quality Reporting System (formerly referred to as 
the Physician Quality Reporting Initiative or PQRI). We have also 
implemented quality reporting programs for home health agencies and 
skilled nursing facilities based on conditions of participation, and an 
end-stage renal disease quality incentive program that links payment to 
performance.
    This new program will necessarily be a fluid model, subject to 
change as knowledge, measures and tools evolve. We view the Hospital 
VBP program under section 1886(o) as the next step

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in promoting higher quality care for Medicare beneficiaries and 
transforming Medicare into an active purchaser of quality health care 
for its beneficiaries.
    In developing this rule as well as other value-based quality 
initiatives, CMS applied the following principles for the development 
and use of measures and scoring methodologies.
Purpose
    CMS views value-based purchasing as an important step toward 
revamping how care and services are paid for, moving increasingly 
toward rewarding better value, outcomes, and innovations instead of 
merely volume.
Use of Measures
     Public reporting and value-based payment systems should 
rely on a mix of standards, process, outcomes, and patient experience 
measures, including measures of care transitions and changes in patient 
functional status. Across all programs, CMS seeks to move as quickly as 
possible to using primarily outcome and patient experience measures.
     To the extent possible and recognizing differences in 
payment system maturity and statutory authorities, measures should be 
aligned across Medicare's and Medicaid's public reporting and payment 
systems. CMS also seeks to develop a focused core-set of measures 
appropriate to each specific provider category that reflects the level 
of care and the most important areas of service furnished by that 
provider.
     The collection of information should minimize the burden 
on providers to the extent possible. As part of that effort, CMS will 
continuously seek to align its measures with the adoption of meaningful 
use standards for health information technology (HIT).
     To the extent practicable, measures used by CMS should be 
nationally endorsed by a multi-stakeholder organization. Measures 
should also be aligned with best practices among other payers and the 
needs of the end users of the measures.
Scoring Methodology
     Providers should be scored on their overall achievement 
relative to national or other appropriate benchmarks. In addition, 
scoring methodologies should consider improvement as an independent 
goal.
     Measures or measurement domains need not be given equal 
weight, but over time, scoring methodologies should be weighted more 
heavily towards outcome, patient experience, and functional status 
measures.
     Scoring methodologies should be reliable, as 
straightforward as possible, and stable over time and enable consumers, 
providers, and payers to make meaningful distinctions among providers' 
performance.
    Comment: A number of commenters expressed their general support for 
these principles. One commenter provided additional remarks on the 
principles and made a number of comments on the interactions between 
the principles, including risk adjustment, measure reliability, patient 
experience of care measures, and measure endorsement. For example, this 
commenter expressed agreement with our stated principle that public 
reporting and value-based payment systems should rely on a mix of 
standards, processes, outcome and payment experience measures. In 
supporting this principle, the commenter related that health and health 
care are complex, which requires a multifaceted accountability 
framework. This commenter also supported our statement that scoring 
methodologies should be reliable, as straightforward as possible, and 
stable over time. The commenter further remarked that VBP relies on the 
support of consumers in the marketplace to drive improvement, and that 
consumers must understand the measures and how they are used in order 
to make informed decisions.
    Response: We appreciate the comments and input on these principles, 
and will keep them in mind as we continue to enhance, develop and 
implement the Hospital VBP program, other quality reporting programs, 
and other value-based incentive programs.
    Comment: A number of commenters stated that CMS must ensure that 
value-based purchasing programs foster the development of innovative, 
quality care and provide an adequate level of reimbursement for 
innovative medical technologies. One commenter reiterated that value-
based purchasing programs should not place the provision of lower cost 
services and products in conflict with what is best for the patient.
    Response: We agree that value-based purchasing programs should not 
hinder innovation and should result in improved patient care. We 
believe that the Hospital VBP program will drive improvements in the 
quality of care for Medicare beneficiaries, including the provision of 
innovative technologies, because of its financial incentives for 
providers to provide high-quality, patient-centered care coupled with 
high levels of patient satisfaction. We note that our measure 
development and selection activities take into account national 
priorities, including those established by the National Priorities 
Partnership and the Department of Health and Human Services, as well as 
other widely accepted criteria established in the medical literature. 
We will continue to seek to align all of our quality initiatives to 
promote high-quality care and continued innovation. We intend to 
monitor this program over time for unintended consequences.
    Comment: One commenter requested that CMS extend the 60-day comment 
period.
    Response: We decline to extend the comment period. Based on the 
volume and depth of comments we received in response to the Hospital 
Inpatient VBP proposed rule, we believe that commenters had ample 
opportunity to submit meaningful comments on our proposals and did so. 
Specifically, we received comments discussing a wide range of issues on 
nearly every aspect of that proposed rule, including its potential 
impact on the health care system, the provision of high-quality medical 
care and effects on patient satisfaction. We received comments from a 
wide range of stakeholders, including hospitals, health care providers, 
professional associations, trade groups, advocacy organizations, 
Medicare beneficiaries, private citizens, and others. We have had a 
sufficient opportunity to consider the issues raised by the commenters 
and have taken their comments into account in developing this final 
rule.
    Comment: One commenter stated that ``the specific process for how 
the agency proposes to achieve `transparency' is not described or 
attained,'' and that the proposed rule did not offer sufficient 
information and disclosure of the ``methods and data the agency 
proposes to use'' in developing the Hospital VBP program.
    Response: We disagree. We believe that we have been transparent in 
making public our goals for the Hospital VBP program and numerous 
documents that informed our rulemaking on this program, including the 
2007 Report to Congress, Congressional testimony and public listening 
session transcripts. We also believe that the proposed rule contains 
detailed information regarding the data and analyses we considered in 
developing our proposals.
    However, because we seek to ensure that the continued development 
of the Hospital VBP program take place in as transparent a manner as 
possible, we will make available additional information regarding our 
analyses, study results, and methods and will inform the public 
accordingly.
    We have addressed specific issues relating to the use of measures, 
scoring

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methodology, and other aspects of the Hospital VBP program below.

B. Hospital Inpatient Quality Data Reporting Under Section 501(b) of 
Public Law 108-173

    Section 501(b) of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (MMA), Public Law 108-173, added section 
1886(b)(3)(B)(vii) to the Act. This section established the original 
authority for the Hospital IQR program and revised the mechanism used 
to update the standardized amount for inpatient hospital operating 
costs. Specifically, section 1886(b)(3)(B)(vii)(I) of the Act provided 
for a reduction of 0.4 percentage points to the applicable percentage 
increase (sometimes referred to at that time as the market basket 
update) for FY 2005 through FY 2007 for a subsection (d) hospital if 
the hospital did not submit data on a set of 10 quality indicators 
established by the Secretary as of November 1, 2003. It also provided 
that any reduction applied only to the fiscal year involved, and would 
not be taken into account in computing the applicable percentage 
increase for a subsequent fiscal year. The statute thereby established 
an incentive for many subsection (d) hospitals to submit data on the 
quality measures established by the Secretary.
    We implemented section 1886(b)(3)(B)(vii) of the Act in the FY 2005 
IPPS final rule (69 FR 49078) and codified the applicable percentage 
increase change in Sec.  412.64(d) of our regulations. We adopted 
additional requirements for the Hospital IQR program in the FY 2006 
IPPS final rule (70 FR 47420).

C. Hospital Inpatient Quality Reporting Under Section 5001(a) of Public 
Law 109-171

1. Change in the Reduction to the Applicable Percentage Increase
    Section 5001(a) of the Deficit Reduction Act of 2005 (DRA), Public 
Law 109-171, further amended section 1886(b)(3)(B) of the Act to, among 
other things, revise the mechanism used to update the standardized 
amount for hospital inpatient operating costs by adding a new section 
1886(b)(3)(B)(viii) to the Act. Specifically, sections 
1886(b)(3)(B)(viii)(I) and (II) of the Act, as added by the DRA, 
provided in part that the applicable percentage increase for FY 2007 
and each subsequent fiscal year shall be reduced by 2.0 percentage 
points for a subsection (d) hospital that does not submit quality data 
in a form and manner and at a time specified by the Secretary. Section 
1886(b)(3)(B)(viii)(I) of the Act also provided that any reduction in a 
hospital's applicable percentage increase will apply only with respect 
to the fiscal year involved, and will not be taken into account for 
computing the applicable percentage increase for a subsequent fiscal 
year.
    In the FY 2007 IPPS final rule (71 FR 48045), we amended our 
regulations at Sec.  412.64(d)(2) to reflect the 2.0 percentage point 
reduction required under the DRA.
2. Selection of Quality Measures
    Section 1886(b)(3)(B)(viii)(V) of the Act, before it was amended by 
section 3001(a)(2)(B) of the Affordable Care Act, required that, 
effective for payments beginning FY 2008, the Secretary add other 
measures that reflect consensus among affected parties, and to the 
extent feasible and practicable, have been set forth by one or more 
national consensus building entities. The National Quality Forum (NQF) 
is a voluntary consensus standard-setting organization with a diverse 
representation of consumer, purchaser, provider, academic, clinical, 
and other health care stakeholder organizations. The NQF was 
established to standardize health care quality measurement and 
reporting through its consensus development process. We have generally 
adopted NQF-endorsed measures for purposes of the Hospital IQR program. 
However, we believe that consensus among affected parties also can be 
reflected by other means, including consensus achieved during the 
measure development process, consensus shown through broad acceptance 
and use of measures, and consensus achieved through public comment.
    Section 1886(b)(3)(B)(viii)(VI) of the Act authorizes the Secretary 
to replace any quality measures or indicators in appropriate cases, 
such as when all hospitals are effectively in compliance with a 
measure, or the measures or indicators have been subsequently shown to 
not represent the best clinical practice. We interpreted this provision 
to give us broad discretion to replace measures that are no longer 
appropriate for the Hospital IQR program.
    We adopted 45 measures under the Hospital IQR program for the FY 
2011 payment determination. Of these measures, 27 are chart-abstracted 
process of care measures, which assess the quality of care furnished by 
hospitals in connection with four topics: Acute Myocardial Infarction 
(AMI); Heart Failure (HF); Pneumonia (PN); and Surgical Care 
Improvement (SCIP) (75 FR 50182). Fifteen of the measures are claims-
based measures, which assess the quality of care furnished by hospitals 
on the following topics: 30-day mortality and 30-day readmission rates 
for Medicare patients diagnosed with AMI, HF, or PN; Patient Safety 
Indicators/Inpatient Quality Indicators/Composite Measures; and Patient 
Safety Indicators/Nursing Sensitive Care. Three of the measures are 
structural measures that assess hospital participation in cardiac 
surgery, stroke care, and nursing sensitive care systemic databases. 
Finally, the Hospital Consumer Assessment of Healthcare Providers and 
Systems (HCAHPS) patient experience of care survey is included as a 
measure for the FY 2011 payment determination.
    The technical specifications for the Hospital IQR program measures, 
or links to Web sites hosting technical specifications, are contained 
in the CMS/The Joint Commission Specifications Manual for National 
Hospital Inpatient Quality Measures (Specifications Manual). This 
Specifications Manual is posted on the CMS QualityNet Web site at 
https://www.QualityNet.org/. We maintain the technical specifications 
by updating this Specifications Manual semiannually, or more frequently 
in unusual cases, and include detailed instructions and calculation 
algorithms for hospitals to use when collecting and submitting data on 
required measures. These semiannual updates are accompanied by 
notifications to users, providing sufficient time before the effective 
date of the change in order to allow users to incorporate changes and 
updates to the specifications into data collection systems.
3. Public Display of Quality Measures
    Section 1886(b)(3)(B)(viii)(VII) of the Act, as amended by section 
3001(a)(2)(C) of the Affordable Care Act, requires that the Secretary 
establish procedures for making information regarding measures 
submitted under the Hospital IQR program available to the public after 
ensuring a hospital has the opportunity to review its data. To meet 
this requirement, we display most Hospital IQR program data on the 
Hospital Compare Web site, https://www.hospitalcompare.hhs.gov, after a 
30-day preview period. An interactive Web tool, this Web site assists 
beneficiaries by providing information on hospital quality of care to 
those who need to select a hospital. It further serves to encourage 
beneficiaries to work with their doctors and hospitals to discuss the 
quality of care hospitals provide to patients, thereby providing an 
additional incentive to hospitals to improve the quality of care that 
they

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furnish. The Hospital Compare Web site currently makes public 
information on a wide range of measures, including clinical process of 
care measures, risk adjusted outcome measures, the HCAHPS patient 
experience of care survey, and structural measures. However, data that 
we believe is not suitable for inclusion on Hospital Compare because it 
is not salient or will not be fully understood by beneficiaries, as 
well as data for which there are unresolved display or design issues, 
may be made available on other CMS Web sites that are not intended to 
be used as an interactive Web tool, such as https://www.cms.hhs.gov/HospitalQualityInits/. In such circumstances, affected parties are 
notified via CMS listservs, CMS e-mail blasts, national provider calls, 
and QualityNet announcements regarding the release of preview reports 
followed by the posting of data on a Web site other than Hospital 
Compare.

D. 2007 Report to Congress: Plan To Implement a Medicare Hospital 
Value-Based Purchasing Program

    Section 5001(b) of the DRA required the Secretary to develop a plan 
to implement a value-based purchasing program for subsection (d) 
hospitals. In developing the plan, we were required to consider the on-
going development, selection, and modification process for measures of 
quality and efficiency in hospital inpatient settings; the reporting, 
collection, and validation of quality data; the structure, size, and 
sources of funding of value-based payment adjustments; and the 
disclosure of information on hospital performance.
    On November 21, 2007, we submitted the Report to Congress: Plan to 
Implement a Medicare Hospital Value-Based Purchasing Program, which is 
available on the CMS Web site. The report discusses options for a plan 
to implement a Medicare hospital value-based purchasing program that 
builds on the Hospital IQR program. We recommended replacing the 
Hospital IQR program with a new program that would include both a 
public reporting requirement and financial incentives for better 
performance. We also recommended that a hospital value-based purchasing 
program be implemented in a manner that would not increase Medicare 
spending.
    To calculate a hospital's total performance score under the plan, 
we analyzed a potential performance scoring model that incorporated 
measures from different quality ``domains,'' including clinical process 
of care and patient experience of care. We examined ways to translate 
that score into an incentive payment by making a portion of the base 
DRG payment contingent on performance. We analyzed criteria for 
selecting performance measures and considered a potential phased 
approach to transition from Hospital IQR to value-based purchasing. In 
addition, we examined redesigning the current data transmission process 
and validation infrastructure, including making enhancements to the 
Hospital Compare Web site, as well as an approach to monitor the impact 
of value-based purchasing.

E. Provisions of the Affordable Care Act

    Section 3001(a) of the Affordable Care Act added a new section 
1886(o) to the Act, which requires the Secretary to establish a 
hospital value-based purchasing program under which value-based 
incentive payments are made in a fiscal year to hospitals meeting 
performance standards established for a performance period for such 
fiscal year. Both the performance standards and the performance period 
for a fiscal year are to be established by the Secretary. Section 
1886(o)(1)(B) of the Act directs the Secretary to begin making value-
based incentive payments under the Hospital VBP program to hospitals 
for discharges occurring on or after October 1, 2012. These incentive 
payments will be funded for FY 2013 through a reduction to FY 2013 base 
operating DRG payments for each discharge of 1.0 percent, as required 
by section 1886(o)(7). Section 1886(o)(1)(C) provides that the Hospital 
VBP program applies to subsection (d) hospitals (as defined in section 
1886(d)(1)(B)), but excludes from the definition of the term 
``hospital,'' with respect to a fiscal year: (1) A hospital that is 
subject to the payment reduction under section 1886(b)(3)(B)(viii)(I) 
for such fiscal year; (2) a hospital for which, during the performance 
period for the fiscal year, the Secretary cited deficiencies that pose 
immediate jeopardy to the health and safety of patients; and (3) a 
hospital for which there is not a minimum number (as determined by the 
Secretary) of applicable measures for the performance period for the 
fiscal year involved, or for which there is not a minimum number (as 
determined by the Secretary) of cases for the applicable measures for 
the performance period for such fiscal year.

II. Provisions of the Final Rule and Response to Comments

A. Overview of the January 7, 2011 Hospital Inpatient VBP Program 
Proposed Rule

    On January 7, 2011, we issued a proposed rule that proposes to 
implement a Hospital VBP program under section 1886(o) of the Act (76 
FR 2454, January 13, 2011). Specifically, we proposed to initially 
adopt for the FY 2013 Hospital VBP program 18 measures that we have 
already adopted for the Hospital IQR program, categorized into two 
domains, as follows: 17 of the measures would be clinical process of 
care measures, which we would group into a clinical process of care 
domain, and 1 measure would be the HCAHPS survey, which would fall 
under a patient experience of care domain. With respect to the clinical 
process of care and HCAHPS measures, we proposed to use a three-quarter 
performance period from July 1, 2011 through March 31, 2012 for the FY 
2013 Hospital VBP payment determination. We proposed to determine 
whether hospitals meet the performance standards for the selected 
measures by comparing their performance during the performance period 
to their performance during a three-quarter baseline period of July 1, 
2009 through March 31, 2010. We also proposed to initially adopt for 
the FY 2014 Hospital VBP program three outcome measures. With respect 
to the outcome measures, we proposed to use an 18-month performance 
period from July 1, 2011 to December 31, 2012. Furthermore, for these 
outcome measures, we proposed to establish performance standards and to 
determine whether hospitals meet those standards by comparing their 
performance during the performance period to their performance during a 
baseline period of July 1, 2008 to December 31, 2009.
    We also proposed to adopt 8 Hospital Acquired Condition measures 
and 9 AHRQ Patient Safety Indicator and Inpatient Quality Indicator 
outcome measures. We further proposed to begin the performance period 
for each of these proposed measures 1 year after we included the 
measure on the Hospital Compare Web site.
    In general, we proposed to implement a methodology for assessing 
the total performance of each hospital based on performance standards, 
under which we would score each hospital based on achievement and 
improvement ranges for each applicable measure. Additionally, we 
proposed to calculate a total performance score for each hospital by 
combining the greater of the

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hospital's achievement or improvement points for each measure to 
determine a score for each domain, multiplying each domain score by a 
proposed weight (clinical process of care: 70 percent, patient 
experience of care: 30 percent), and adding together the weighted 
domain scores. We proposed to convert each hospital's Total Performance 
Score into a value-based incentive payment utilizing a linear exchange 
function.
    We provided a 60-day public comment period in which we received 
approximately 319 timely comments from hospitals, health care 
facilities, advocacy organizations, researchers, patients, and other 
individuals and organizations. Summaries of the public comments, as 
well as our responses to those comments, are set forth below.
    Comment: A number of commenters requested clarification on the 
interaction between the Hospital IQR program and the Hospital VBP 
program. Commenters specifically requested that we explain more fully 
how the penalties under the two programs will interact, as well as 
clarify if we intend to continue the Hospital IQR program in the 
future.
    Response: The Affordable Care Act did not repeal section 
1886(b)(3)(B)(viii), the statutory authority for the Hospital IQR 
program, and that program will continue to exist side-by-side with the 
Hospital VBP program. However, we note that beginning in FY 2015, the 
reduction to the applicable percentage increase under the Hospital IQR 
program changes from a straight 2.0 percentage point reduction to a 
reduction equal to ``one quarter of such applicable percentage 
increase'' (determined without regard to several other applicable 
statutory reductions).
    We also note that under section 1886(o)(1)(C)(I), hospitals that 
are subject to the Hospital IQR program payment reduction for a fiscal 
year are excluded from the definition of ``hospital'' for purposes of 
the Hospital VBP program for that fiscal year. We interpret this 
provision to mean that a hospital that does not meet the requirements 
of the Hospital IQR program with respect to a fiscal year and, as a 
result, will receive a reduction to the applicable percentage increase 
for that fiscal year, will not be subject to the reduction to its base 
operating DRG payment amount under the Hospital VBP program for that 
fiscal year or be eligible to receive a value-based incentive payment 
for that fiscal year.
    Comment: Some commenters requested that CMS delay implementation of 
the Hospital VBP program. A number of commenters urged CMS to adopt the 
implementation calendar discussed in 2007 Report to Congress, in which 
the first performance period would begin April 1, 2013.
    Response: We are statutorily required to begin making value-based 
incentive payments under the Hospital VBP program to hospitals for 
discharges occurring on or after October 1, 2012 under section 
1886(o)(1)(B) of the Act. Thus, the first performance period must begin 
before April 1, 2013, which is the time suggested by the commenters. As 
we stated in the proposed rule, in determining what performance period 
to propose to adopt, we were cognizant that hospitals submit data on 
the chart abstracted measures adopted for the Hospital IQR Program on a 
quarterly basis, and for that reason, we believed that the performance 
period should commence at the beginning of a quarter. We also 
recognized that we needed to balance the length of the performance 
period for collecting measure data with the need to undertake the 
rulemaking process in order to establish the performance period and 
provide the public with an opportunity to meaningfully comment on that 
proposal. With these considerations in mind, we proposed July 1, 2011 
as the start of the performance period.
    Comment: Some commenters requested additional information on how we 
will educate consumers about the Hospital VBP program.
    Response: We understand how crucial it is to communicate clearly 
and consistently with all stakeholders in order to provide accurate and 
timely information about the Hospital VBP program. We believe that 
communicating in a way that promotes transparency and understanding of 
the Hospital VBP program will help reduce confusion and 
misunderstanding while enhancing the program's success.
    To this end, we will be undertaking an extensive outreach and 
education campaign to ensure that all stakeholders understand how the 
Hospital VBP program works. In addition to providing information on 
www.cms.gov and www.medicare.gov, as well as through other existing 
mechanisms that we use to communicate with the public such as 
newsletters, e-mail blasts, listserv communications, special forums, 
and webinars, an important element of this campaign will be a new 
Hospital VBP page on https://www.cms.gov. In addition, as required under 
sections 1886(o)(10)(A) and (B), hospital specific and aggregate 
information for the Hospital VBP program will be made available on the 
Hospital Compare Web site.
    Comment: One commenter stated that the Hospital VBP program 
statutory authority overlaps with other provisions of the Affordable 
Care Act and asked CMS to address the various incentives created by the 
Affordable Care Act, how it intends to differentiate among separate 
policies, and how it will ensure that incentives will not overlap or be 
duplicative. The commenter specifically cited efforts to increase 
productivity and efficiency through Accountable Care Organizations, 
market basket reductions for productivity, penalties related to 
hospital-acquired conditions, and payment reductions for readmissions.
    Response: While there may be specific areas of overlap addressed by 
the various statutory provisions and policies, the legislative 
requirements, programs, and policies cited by the commenter represent 
interrelated but distinct areas of efforts to improve quality in the 
Medicare program. We will continue to monitor the interactions between 
the policies cited by the commenter and will continue discussions with 
stakeholders on this topic.
    Comment: One commenter stated that all purchaser/payer value-based 
strategies and programs should be supported and encouraged through the 
Center for Medicare and Medicaid Innovation (CMMI).
    Response: Created by the Affordable Care Act and launched on 
November 16, 2010, the CMMI will examine new ways of delivering health 
care and paying health care providers that can save money for Medicare 
and Medicaid while improving the quality of care. CMMI will consult a 
diverse group of stakeholders including hospitals, doctors, consumers, 
payers, States, employers, advocates, relevant federal agencies and 
others to obtain direct input and build partnerships for its upcoming 
work. We agree that CMMI is an important contributor in developing 
innovative strategies for value-based purchasing programs, and look 
forward to continuing to leverage the Center's resources and expertise 
in future years of the Hospital VBP program.
    Comment: One commenter suggested that we establish a ``Pay to 
Share'' pool under which funding would be provided to enable higher-
rated hospitals to instruct lower-rated hospitals on best practices.
    Response: While we appreciate the comment, we do not believe we 
have the statutory authority under the Act to implement such a program 
at this time.

C. Performance Period

    Section 1886(o)(4) of the Act requires the Secretary to establish a 
performance period for a fiscal year that begins and ends prior to the 
beginning of such

[[Page 26495]]

fiscal year. In considering various performance periods that could 
apply for purposes of the fiscal year 2013 payment adjustments, we 
recognized that hospitals submit data on the chart-abstracted measures 
adopted for the Hospital IQR program on a quarterly basis, and for that 
reason, we proposed that the performance period commence at the 
beginning of a quarter. We also recognized that we must balance the 
length of the period for collecting measure data with the need to 
undertake the rulemaking process in order to propose a performance 
period and provide the public with an opportunity to meaningfully 
comment on that proposal. With these considerations in mind, we 
concluded that July 1, 2011 is the earliest date that the performance 
period could begin.
    Therefore, we proposed to use the fourth quarter of FY 2011 (July 
1, 2011 through September 30, 2011) and the first and second quarters 
of FY 2012 (October 1, 2011 through March 31, 2012) as the performance 
period for the clinical process of care and HCAHPS measures we proposed 
to initially adopt for the FY 2013 Hospital VBP program. Under the 
proposed approach, hospitals would be scored based on how well they 
perform on the clinical process of care and patient experience measures 
during this performance period. For the three mortality outcome 
measures currently specified for the Hospital IQR program for the FY 
2011 payment determination (MORT-30-AMI, MORT-30-HF, MORT-30-PN) that 
we proposed to adopt for the FY 2014 Hospital VBP program payment 
determination, we proposed to establish a performance period of July 1, 
2011 to December 31, 2012. We also proposed to begin the performance 
period for the 8 proposed HAC measures and 9 proposed AHRQ Patient 
Safety Indicator (PSI) and Inpatient Quality Indicator (IQI) outcome 
measures 1 year after those measures were included on the Hospital 
Compare Web site. The proposed HAC and AHRQ measures were included on 
Hospital Compare on March 3, 2011.
    Comment: A number of commenters requested that we adopt a 12-month 
performance period for the proposed mortality measures rather than the 
proposed 18-month performance period. Some were concerned that seasonal 
fluctuations in mortality rates would impact the measure rates if an 
18-month performance period were used instead of a 12-month period.
    Response: We proposed to use an 18-month performance period (July 
1, 2011 through December 31, 2012) for the three proposed mortality 
measures in order to be able to increase the reliability of the measure 
rates by including more cases. However, in response to the commenters' 
concern about how the use of a period that is not equal to a year (or 
multiple years) could introduce seasonal fluctuations into the measure 
rates, we conducted additional reliability analyses on the hospital-
level risk standardized mortality rates for the proposed 30-day 
mortality measures using 12 months, 18 months, and 24 months, and have 
concluded that 12 months of data provides moderate to high reliability 
for the Heart Failure and Pneumonia 30-day mortality measures, and is 
sufficiently reliable for the AMI 30-day mortality measure. Therefore, 
we are finalizing a 12-month performance period of July 1, 2011 to June 
30, 2012 for the three proposed 30-day mortality measures for the FY 
2014 Hospital VBP payment determination.
    Comment: Some commenters expressed concern about the proposed 
baseline period for the FY 2014 mortality outcome measures. Commenters 
noted that the proposed 18-month baseline period would lead to data 
overlap during each program year.
    Response: For the reasons noted above, we are finalizing a 12-month 
performance period of July 1, 2011 to June 30, 2012 for the three 
proposed 30-day mortality measures for the FY 2014 Hospital VBP payment 
determination. In accordance with our proposal that hospital 
performance should be evaluated based on how well hospitals performed 
during the same quarters in a baseline period, we are finalizing a 12-
month baseline period for the mortality outcomes measures' performance 
standards calculations from July 1, 2009 to June 30, 2010. We believe 
that this change will address commenters' concerns about seasonal 
fluctuations in the data or overlap between program years.
    Comment: Some comments requested that we require 2-3 years' worth 
of data for outcome measures to ensure that the measures do not result 
in any unintended consequences.
    Response: As noted above, our reliability analyses for the proposed 
30-day mortality measures indicate that using 12-months of data yields 
sufficient reliability (moderate to high) for the HF, PN and AMI 30-day 
mortality measures. We believe this time frame will enable us to 
calculate the measures using reliable data. CMS will monitor this 
policy to ensure that negative consequences do not occur as a result of 
the shortened performance period and, if indicated, would consider 
proposing to lengthen the performance period for future program years.
    Comment: Many commenters generally supported our performance period 
proposals given the statutory deadlines.
    Response: We thank commenters for their support.
    Comment: Some commenters suggested that we use 12-month performance 
periods for all measures as soon as possible.
    Response: We anticipate proposing to use a full year as the 
performance period for all measures in the future.
    After considering the public comments, we are finalizing a 
performance period of July 1, 2011 through March 31, 2012 that will 
apply to the clinical process of care and patient experience measures 
for the FY 2013 Hospital VBP program. With respect to the FY 2014 
Hospital VBP program, we are finalizing a 12-month performance period 
of July 1, 2011 through June 30, 2012 that will apply to the three 30-
day mortality measures (AMI, HF, PN) that we are finalizing below. We 
are also finalizing our proposal to adopt a performance period that 
begins 1 year after any HAC and/or AHRQ measures that are specified for 
the Hospital IQR program are included on Hospital Compare, and in 
accordance with that finalized policy, the performance period for the 8 
finalized HAC measures and 2 finalized AHRQ measures (discussed below) 
will begin on March 3, 2012. We intend to propose the end performance 
period date for the 8 finalized HAC measures and 2 finalized AHRQ 
measures in the CY 2012 Outpatient Prospective Payment System proposed 
rule.

D. Measures

    Section 1886(o)(2)(A) of the Act requires the Secretary to select 
for the Hospital VBP program measures, other than readmission measures, 
from the measures specified for the Hospital IQR program. Section 
1886(o)(2)(B)(i) of the Act requires the Secretary to ensure that the 
selected measures for FY 2013 include measures on the following 
specified conditions or topics: AMI; HF; PN; surgeries, as measured by 
the Surgical Care Improvement Project (SCIP); HAIs; and the HCAHPS 
survey. Section 1886(o)(2)(C)(i) of the Act provides that the Secretary 
may not select a measure with respect to a performance period for a 
fiscal year unless the measure has been specified under section 
1886(b)(3)(B)(viii) of the Act and included on the Hospital Compare Web 
site for at least 1 year prior to the beginning of the performance 
period. Section 1886(o)(2)(C)(ii) of the Act provides that a measure 
selected under section

[[Page 26496]]

1886(o)(2)(A) of the Act shall not apply to a hospital if the hospital 
does not furnish services appropriate to the measure.
    In the FY 2011 IPPS/RY 2011 LTCHPPS Final Rule (75 FR 50188), we 
stated that in future expansions and updates to the Hospital IQR 
program measure set, we will be taking into consideration several 
important goals. These goals include: (1) Expanding the types of 
measures beyond process of care measures to include an increased number 
of outcome measures, efficiency measures, and patients' experience of 
care measures; (2) expanding the scope of hospital services to which 
the measures apply; (3) considering the burden on hospitals in 
collecting chart-abstracted data; (4) harmonizing the measures used in 
the Hospital IQR program with other CMS quality programs to align 
incentives and promote coordinated efforts to improve quality; (5) 
seeking to use measures based on alternative sources of data that do 
not require chart abstraction or that utilize data already being 
reported by many hospitals, such as data that hospitals report to 
clinical data registries, or all payer claims databases; and (6) 
weighing the relevance and utility of the measures compared to the 
burden on hospitals in submitting data under the Hospital IQR program.
    In addition, we stated in the proposed rule our belief that we must 
act with all speed and deliberateness to expand the pool of measures 
used in the Hospital VBP program. This goal is supported by at least 
two Federal reports documenting that tens of thousands of patients do 
not receive safe care in the nation's hospitals. For this reason, we 
proposed to adopt measures for the Hospital VBP program relevant to 
improving care, particularly as these measures are directed toward 
improving patient safety, as quickly as possible. We believe that speed 
of implementation is a critical factor in the success and effectiveness 
of this program.
    The Hospital VBP program that we proposed to implement has been 
developed with the focused intention to motivate all subsection (d) 
hospitals to which the program applies to take immediate action to 
improve the quality of care they furnish to their patients. Because we 
view as urgent the necessity to improve the quality of care furnished 
by these hospitals, and because we believe that hospitalized patients 
in the United States currently face patient safety risks on a daily 
basis, we proposed to adopt an initial measure set for the Hospital VBP 
program. However, we also proposed to add additional measures to the 
Hospital VBP program in the future in such a way that their performance 
period would begin immediately after they are displayed on Hospital 
Compare for a period of time of at least one year, but without the 
necessity of notice and comment rulemaking. We proposed this because of 
the urgency to improve the quality of hospital care, and in order to 
minimize any delay to take substantive action in favor of patient 
safety.
    We stated that for the Hospital IQR Program, we give priority to 
quality measures that assess performance on: (a) Conditions that result 
in the greatest mortality and morbidity in the Medicare population; (b) 
conditions that are high volume and high cost for the Medicare program; 
and (c) conditions for which wide cost and treatment variations have 
been reported, despite established clinical guidelines. In addition, we 
stated that we seek to select measures that address the six quality 
aims of effective, safe, timely, efficient, patient centered, and 
equitable healthcare. Current and long term priority topics include: 
Prevention and population health; safety; chronic conditions; high cost 
and high volume conditions; elimination of health disparities; 
healthcare-associated infections and other adverse healthcare outcomes; 
improved care coordination; improved efficiency; improved patient and 
family experience of care; effective management of acute and chronic 
episodes of care; reduced unwarranted geographic variation in quality 
and efficiency; and adoption and use of interoperable health 
information technology.
    We also stated that these criteria, priorities, and goals are 
consistent with section 1886(b)(3)(B)(viii)(X) of the Act, as added by 
section 3001(a)(2)(D) of the Affordable Care Act, which requires the 
Secretary, to the extent practicable and with input from consensus 
organizations and other stakeholders, to take steps to ensure that the 
Hospital IQR program measures are coordinated and aligned with quality 
measures applicable to physicians and other providers of services and 
suppliers under Medicare.
    As discussed in the Hospital Inpatient VBP Program proposed rule 
(76 FR 2459), to determine which measures to propose to initially adopt 
for the FY 2013 Hospital VBP program, we examined whether any of the 
eligible Hospital IQR measures should be excluded from the Hospital VBP 
program measure set because hospital performance on them is ``topped 
out,'' meaning that all but a few hospitals have achieved a similarly 
high level of performance on them. We stated our belief that measuring 
hospital performance on topped-out measures would have no meaningful 
effect on a hospital's total performance score.
    We also stated that scoring a topped-out measure for purposes of 
the Hospital VBP program would present a number of challenges. First, 
as discussed below, we proposed that the benchmark performance standard 
for all measures would be performance at the mean of the top decile of 
hospital performance during the baseline period. We noted in the 
Hospital Inpatient VBP Program proposed rule that, when applied to a 
topped-out measure, this proposed benchmark would be statistically 
indistinguishable from the highest attainable score for the measure 
and, in our view, could lead to unintended consequences as hospitals 
strive to meet the benchmark. Examples of unintended consequences could 
include, but would not be limited to, inappropriate delivery of a 
service to some patients (such as delivery of antibiotics to patients 
without a confirmed diagnosis of pneumonia), unduly conservative 
decisions on whether to exclude some patients from the measure 
denominator, and a focus on meeting the benchmark at the expense of 
actual improvements in quality or patient outcomes. Second, we stated 
that we have found that for topped-out measures, it is significantly 
more difficult to differentiate among hospitals performing above the 
median. Third, because a measure cannot be applied to a hospital unless 
the hospital furnishes services appropriate to the measure, we stated 
our belief that data reporting under the Hospital VBP program would not 
be the same for all hospitals. To the extent that a hospital could 
report a higher proportion of topped-out measures, for which its scores 
would likely be high, we stated that we believed such a hospital would 
be unfairly advantaged in the determination of its Total Performance 
Score.
    To determine whether an eligible Hospital IQR measure is topped 
out, we initially focused on the top distribution of hospital 
performance on each measure and noted if their 75th and 90th 
percentiles were statistically indistinguishable. Based on our 
analysis, we identified 7 topped-out measures: AMI-1 Aspirin at 
Arrival; AMI-5 Beta Blocker at Discharge; AMI-3 ACEI or ARB at 
Discharge; AMI-4 Smoking Cessation; HF-4 Smoking Cessation; PN-4 
Smoking Cessation; and SCIP-Inf-6 Surgery Patients with Appropriate 
Hair Removal. We then observed that two of these measures identified as 
topped out (AMI-3 ACEI or

[[Page 26497]]

ARB at Discharge and HF-4 Smoking Cessation) had significantly lower 
mean scores than the others, which led us to question whether our 
analysis was too focused on the top ends of distributions and whether 
additional criteria that could account for the entire distribution 
might be more appropriate. To address this, we analyzed the truncated 
coefficient of variation (CV) for each of the measures. The CV is a 
common statistic that expresses the standard deviation as a percentage 
of the sample mean in a way that is independent of the units of 
observation. Applied to this analysis, a large CV would indicate a 
broad distribution of individual hospital scores, with large and 
presumably meaningful differences between hospitals in relative 
performance. A small CV would indicate that the distribution of 
individual hospital scores is clustered tightly around the mean value, 
suggesting that it is not useful to draw distinctions between 
individual hospital performance scores. We used a modified version of 
the CV, namely a truncated CV, for each measure, in which the 5 percent 
of hospitals with the lowest scores, and the 5 percent of hospitals 
with highest scores were first truncated (set aside) before calculating 
the CV. This was done to avoid undue effects of the highest and lowest 
outlier hospitals, which if included, would tend to greatly widen the 
dispersion of the distribution and make the measure appear to be more 
reliable or discerning. For example, a measure for which most hospital 
scores are tightly clustered around the mean value (a small CV) might 
actually reflect a more robust dispersion if there were also a number 
of hospitals with extreme outlier values, which would greatly increase 
the perceived variance in the measure. Accordingly, the truncated CV 
was added as an additional criterion requiring that a topped-out 
measure also exhibit a truncated CV < 0.10. Using both the truncated CV 
and data showing whether hospital performance at the 75th and 90th 
percentiles was statistically indistinguishable, we reexamined the 
available measures and determined that the same seven measures continue 
to meet our proposed definition for being topped-out.
    Our analysis of the impact of including the topped-out measures 
discussed above indicated that their use would mask true performance 
differences among hospitals and, as a result, would fail to advance our 
priorities for the Hospital VBP program. We therefore proposed to not 
include these 7 topped-out measures (AMI-1 Aspirin at Arrival; AMI-5 
Beta Blocker at Discharge; AMI-3 ACEI or ARB at Discharge; AMI-4 
Smoking Cessation; HF-4 Smoking Cessation; PN-4 Smoking Cessation; and 
SCIP-Inf-6 Surgery Patients with Appropriate Hair Removal) in the list 
of measures we proposed to initially adopt for the FY 2013 Hospital VBP 
program. We sought comment on that proposal.
    We also examined and sought comment on whether the following 
outcome measures adopted for the Hospital IQR program were appropriate 
for inclusion in the FY 2013 Hospital VBP program. These measures are 
as follows: (1) AHRQ PSIs, IQIs and composite measures; (2) AHRQ PSI 
and nursing sensitive care measure; and (3) AMI, HF, and PN mortality 
measures (Medicare patients). We stated our belief that these outcome 
measures provide important information relating to treatment outcomes 
and patient safety. We also stated in the proposed rule that we believe 
that adding these outcome measures would significantly improve the 
correlation between patient outcomes and Hospital VBP performance. 
However, because under section 1886(o)(2)(C)(i) of the Act, we may only 
select measures if they have been included on Hospital Compare for a 
least 1 year prior to the beginning of the performance period, we 
stated that the AHRQ PSIs, IQIs and composite measures, and the AHRQ 
Nursing Sensitive Care measure were not yet eligible for inclusion in 
the FY 2013 Hospital VBP program. Although these measures are currently 
specified for the Hospital IQR program, we acknowledged that as of the 
time we issued the proposed rule, they did not meet the one year 
Hospital Compare inclusion requirement.
    We also considered whether the current publicly-reported 30-day 
mortality claims-based measures (Mort-30-AMI, Mort-30-HF, Mort-30-PN) 
should be included in the FY 2013 Hospital VBP program. The mortality 
measures assess hospital-specific, risk-standardized, all-cause 30-day 
mortality rates for patients hospitalized with a principal diagnosis of 
heart attack, heart failure, and pneumonia. All-cause mortality is 
defined for purposes of these measures as death from any cause within 
30 days after the index admission date, regardless of whether the 
patient died while still in the hospital or after discharge. The 
eligible clinical process of care measures we considered covered AMI, 
HF, PN, and surgeries as measured by the SCIP. Therefore, we believe 
that they meet the requirements of section 1886(o)(2)(B)(i)(I)(aa)-(dd) 
of the Act, which requires us to include measures covering these 
conditions or procedures. Section 1886(o)(2)(B)(i)(ee) of the Act also 
requires the Secretary to select for purposes of the FY 2013 Hospital 
VBP program measures that cover HAIs ``as measured by the prevention 
metrics and targets established in the HHS Action Plan to Prevent 
Healthcare-Associated Infections (or any successor plan) of the 
Department of Health and Human Services.'' The SCIP measures discussed 
above were developed to support practices that have demonstrated an 
ability to significantly reduce surgical complications such as HAIs. 
Compliance with the selected SCIP infection measures is also included 
as a targeted metric in the HHS Action Plan to Prevent Healthcare-
Associated Infections issued in 2009, available on the HHS Web site. As 
a result, we believe that the SCIP-Inf-1; SCIP-Inf-2; SCIP-Inf-3; and 
SCIP-Inf-4 measures we have adopted for the Hospital IQR program meet 
the requirement in section 1886(o)(2)(B)(i)(I)(ee); we proposed to 
adopt them for the FY 2013 Hospital VBP program and to categorize them 
under the HAI condition topic instead of under the SCIP condition 
topic.
    Under section 1886(o)(2)(B)(i)(II), the Secretary must select 
measures for the FY 2013 Hospital VBP program related to the HCAHPS 
survey. CMS partnered with AHRQ to develop HCAHPS. The HCAHPS survey is 
the first national, standardized, publicly reported survey of patients' 
experience of hospital care, and we proposed to adopt it for the FY 
2013 Hospital VBP program. HCAHPS, also known as the CAHPS[supreg] 
Hospital Survey, is a survey instrument and data collection methodology 
for measuring patients' perceptions of their hospital experience.
    The HCAHPS survey asks discharged patients 27 questions about their 
recent hospital stay that are used to measure the experience of 
patients across 10 dimensions in the Hospital IQR program. The survey 
contains 18 core questions about critical aspects of patients' hospital 
experiences (communication with nurses and doctors, the responsiveness 
of hospital staff, the cleanliness and quietness of the hospital 
environment, pain management, communication about medicines, discharge 
information, overall rating of the hospital, and whether they would 
recommend the hospital). The survey also includes four items to direct 
patients to relevant questions if a patient did not have a particular 
experience covered by the survey, such as taking new medications or 
needing medicine for pain. Three

[[Page 26498]]

items in the survey are used to adjust for the mix of patients across 
hospitals, and two items related to race and ethnicity support 
congressionally-mandated reports on disparities in health care.
    The HCAHPS survey is administered to a random sample of adult 
patients across medical conditions between 48 hours and 6 weeks after 
discharge; the survey is not restricted to Medicare beneficiaries. 
Hospitals must survey patients throughout each month of the year. The 
survey is available in official English, Spanish, Chinese, Russian and 
Vietnamese versions. The survey and its protocols for sampling, data 
collection and coding, and file submission can be found in the HCAHPS 
Quality Assurance Guidelines, Version 5.0, which is available on the 
official HCAHPS Web site, https://www.hcahpsonline.org.
    AHRQ carried out a rigorous, scientific process to develop and test 
the HCAHPS instrument. This process entailed multiple steps, including: 
A public call for measures; literature review; cognitive interviews; 
consumer focus groups; stakeholder input; a three-state pilot test; 
small-scale field tests; and soliciting public comments via several 
Federal Register notices. In May 2005, the HCAHPS survey was endorsed 
by the NQF, and in December 2005, the Federal Office of Management and 
Budget gave its final approval for the national implementation of 
HCAHPS for public reporting purposes. CMS adopted the entire HCAHPS 
survey as a measure in the Hospital IQR program in October 2006, and 
the first public reporting of HCAHPS results occurred in March 2008. 
The survey, its methodology, and the results it produces are in the 
public domain.
    As previously discussed, in determining what clinical process of 
care measures to propose, we analyzed the impact of including topped-
out measures and determined that their use would mask true performance 
differences among hospitals, thus failing to advance our quality 
priorities. As a result, we proposed to exclude 7 topped-out measures 
(AMI-1 Aspirin at Arrival; AMI-5 Beta Blocker at Discharge; AMI-3 ACEI 
or ARB at Discharge; AMI-4 Smoking Cessation; HF-4 Smoking Cessation; 
PN-4 Smoking Cessation; and SCIP-Inf-6 Surgery Patients with 
Appropriate Hair Removal) from the list of measures we proposed to 
initially adopt for the FY 2013 Hospital VBP program.
    We did not propose to adopt the current Hospital IQR structural 
measures because we believe that these measures require further 
development if they are to be used for the Hospital VBP program. 
Therefore, we solicited public comment on the possible utility of 
adopting structural measures for the Hospital VBP program measure set 
and how these measures might contribute to the improvement of patient 
safety and quality of care.
    Finally, we proposed to exclude the PN-5c measure from the Hospital 
VBP program. We do not believe that this measure is appropriate for 
inclusion because it could lead to inappropriate antibiotic use. We 
proposed retiring this measure, as well as several other measures that 
we will not adopt for the Hospital VBP program, from the Hospital IQR 
program in the FY 2012 IPPS/LTCH PPS proposed rule scheduled for 
publication on May 5, 2011.
    We proposed to initially select 17 clinical process of care 
measures and the HCAHPS measure for inclusion in the FY 2013 Hospital 
VBP program. The proposed list of initial measures is provided in Table 
1.

       Table 1--Proposed Measures for FY 2013 Hospital VBP Program
------------------------------------------------------------------------
            Measure ID                       Measure description
------------------------------------------------------------------------
                    Clinical Process of Care Measures
------------------------------------------------------------------------
                       Acute myocardial infarction
------------------------------------------------------------------------
AMI-2.............................  Aspirin Prescribed at Discharge.
AMI-7a............................  Fibrinolytic Therapy Received Within
                                     30 Minutes of Hospital Arrival.
AMI-8a............................  Primary PCI Received Within 90
                                     Minutes of Hospital Arrival.
------------------------------------------------------------------------
                              Heart Failure
------------------------------------------------------------------------
HF-1..............................  Discharge Instructions.
HF-2..............................  Evaluation of LVS Function.
HF-3..............................  ACEI or ARB for LVSD.
------------------------------------------------------------------------
                                Pneumonia
------------------------------------------------------------------------
PN-2..............................  Pneumococcal Vaccination.
PN-3b.............................  Blood Cultures Performed in the
                                     Emergency Department Prior to
                                     Initial Antibiotic Received in