Medicare Program; Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2017, 24177-24227 [2016-09397]

Download as PDF Vol. 81 Monday, No. 79 April 25, 2016 Part II Department of Health and Human Services asabaliauskas on DSK3SPTVN1PROD with PROPOSALS Centers for Medicare & Medicaid Services 42 CFR Part 412 Medicare Program; Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2017; Proposed Rule VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 PO 00000 Frm 00001 Fmt 4717 Sfmt 4717 E:\FR\FM\25APP2.SGM 25APP2 24178 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Medicare & Medicaid Services 42 CFR Part 412 [CMS–1647–P] RIN 0938–AS78 Medicare Program; Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2017 Centers for Medicare & Medicaid Services (CMS), HHS. ACTION: Proposed rule. AGENCY: This proposed rule would update the prospective payment rates for inpatient rehabilitation facilities (IRFs) for federal fiscal year (FY) 2017 as required by the statute. As required by section 1886(j)(5) of the Act, this rule includes the classification and weighting factors for the IRF prospective payment system’s (IRF PPS’s) case-mix groups and a description of the methodologies and data used in computing the prospective payment rates for FY 2017. We are also proposing to revise and update quality measures and reporting requirements under the IRF quality reporting program (QRP). DATES: To be assured consideration, comments must be received at one of the addresses provided below, not later than 5 p.m. on June 20, 2016. ADDRESSES: In commenting, please refer to file code CMS–1647–P. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission. You may submit comments in one of four ways (please choose only one of the ways listed): 1. Electronically. You may submit electronic comments on this regulation to https://www.regulations.gov. Follow the ‘‘Submit a comment’’ instructions. 2. By regular mail. You may mail written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS–1647–P, P.O. Box 8016, Baltimore, MD 21244–8016. Please allow sufficient time for mailed comments to be received before the close of the comment period. 3. By express or overnight mail. You may send written comments to the following address ONLY: Centers for asabaliauskas on DSK3SPTVN1PROD with PROPOSALS SUMMARY: VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS–1647–P, Mail Stop C4–26–05, 7500 Security Boulevard, Baltimore, MD 21244–1850. 4. By hand or courier. Alternatively, you may deliver (by hand or courier) your written comments ONLY to the following addresses prior to the close of the comment period: a. For delivery in Washington, DC— Centers for Medicare & Medicaid Services, Department of Health and Human Services, Room 445–G, Hubert H. Humphrey Building, 200 Independence Avenue SW., Washington, DC 20201 (Because access to the interior of the Hubert H. Humphrey Building is not readily available to persons without Federal government identification, commenters are encouraged to leave their comments in the CMS drop slots located in the main lobby of the building. A stamp-in clock is available for persons wishing to retain a proof of filing by stamping in and retaining an extra copy of the comments being filed.) b. For delivery in Baltimore, MD— Centers for Medicare & Medicaid Services, Department of Health and Human Services, 7500 Security Boulevard, Baltimore, MD 21244– 1850 If you intend to deliver your comments to the Baltimore address, please call telephone number (410) 786– 7195 in advance to schedule your arrival with one of our staff members. Comments erroneously mailed to the addresses indicated as appropriate for hand or courier delivery may be delayed and received after the comment period. For information on viewing public comments, see the beginning of the SUPPLEMENTARY INFORMATION section. FOR FURTHER INFORMATION CONTACT: Gwendolyn Johnson, (410) 786–6954, for general information. Christine Grose, (410) 786–1362, for information about the quality reporting program. Kadie Derby, (410) 786–0468, or Susanne Seagrave, (410) 786–0044, for information about the payment policies and payment rates. SUPPLEMENTARY INFORMATION: The IRF PPS Addenda along with other supporting documents and tables referenced in this proposed rule are available through the Internet on the CMS Web site at https:// www.cms.hhs.gov/Medicare/Medicare- PO 00000 Frm 00002 Fmt 4701 Sfmt 4702 Fee-for-Service-Payment/ InpatientRehabFacPPS/. Inspection of Public Comments: All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following Web site as soon as possible after they have been received: https:// www.regulations.gov. Follow the search instructions on that Web site to view public comments. Comments received timely will also be available for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, at the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view public comments, phone 1–800–743–3951. Executive Summary A. Purpose This proposed rule would update the prospective payment rates for IRFs for FY 2017 (that is, for discharges occurring on or after October 1, 2016, and on or before September 30, 2017) as required under section 1886(j)(3)(C) of the Social Security Act (the Act). As required by section 1886(j)(5) of the Act, this rule includes the classification and weighting factors for the IRF PPS’s casemix groups and a description of the methodologies and data used in computing the prospective payment rates for FY 2017. This proposed rule also proposes revisions and updates to the quality measures and reporting requirements under the IRF QRP. B. Summary of Major Provisions In this proposed rule, we use the methods described in the FY 2016 IRF PPS final rule (80 FR 47036) to propose updates to the federal prospective payment rates for FY 2017 using updated FY 2015 IRF claims and the most recent available IRF cost report data, which is FY 2014 IRF cost report data. We are also proposing to revise and update quality measures and reporting requirements under the IRF QRP. C. Summary of Impacts E:\FR\FM\25APP2.SGM 25APP2 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules 24179 Provision description Transfers FY 2017 IRF PPS payment rate update .................................................. The overall economic impact of this proposed rule is an estimated $125 million in increased payments from the Federal government to IRFs during FY 2017. Provision description Costs New quality reporting program requirements ........................................... The total costs in FY 2017 for IRFs as a result of the proposed new quality reporting requirements are estimated to be $5,231,398.17. To assist readers in referencing sections contained in this document, we are providing the following Table of Contents. asabaliauskas on DSK3SPTVN1PROD with PROPOSALS Table of Contents I. Background A. Historical Overview of the IRF PPS B. Provisions of the Affordable Care Act Affecting the IRF PPS in FY 2012 and Beyond C. Operational Overview of the Current IRF PPS D. Advancing Health Information Exchange II. Summary of Provisions of the Proposed Rule III. Proposed Update to the Case-Mix Group (CMG) Relative Weights and Average Length of Stay Values for FY 2017 IV. Facility-Level Adjustment Factors V. Proposed FY 2017 IRF PPS Payment Update A. Background B. Proposed FY 2017 Market Basket Update and Productivity Adjustment C. Proposed Labor-Related Share for FY 2017 D. Proposed Wage Adjustment E. Description of the Proposed IRF Standard Payment Conversion Factor and Payment Rates for FY 2017 F. Example of the Methodology for Adjusting the Proposed Federal Prospective Payment Rates VI. Proposed Update to Payments for HighCost Outliers under the IRF PPS A. Proposed Update to the Outlier Threshold Amount for FY 2017 B. Proposed Update to the IRF Cost-toCharge Ratio Ceiling and Urban/Rural Averages VII. Proposed Revisions and Updates to the IRF Quality Reporting Program (QRP) A. Background and Statutory Authority B. General Considerations Used for Selection of Quality, Resource Use, and Other Measures for the IRF QRP C. Policy for Retention of IRF QRP Measures Adopted for Previous Payment Determinations D. Policy for Adopting Changes to IRF QRP Measures E. Quality Measures Previously Finalized for and Currently Used in the IRF QRP F. IRF QRP Quality, Resource Use and Other Measures Proposed for the FY 2018 Payment Determination and Subsequent Years G. IRF QRP Quality Measure Proposed for the FY 2020 Payment Determination and Subsequent Years VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 H. IRF QRP Quality Measures and Measure Concepts under Consideration for Future Years I. Proposed Form, Manner, and Timing of Quality Data Submission for the FY 2018 Payment Determination and Subsequent Years J. IRF QRP Data Completion Thresholds for the FY 2016 Payment Determination and Subsequent Years K. IRF QRP Data Validation Process for the FY 2016 Payment Determination and Subsequent Years L. Previously Adopted and Codified IRF QRP Submission Exception and Extension Policies M. Previously Adopted and Finalized IRF QRP Reconsideration and Appeals Procedures N. Public Display of Measure Data for the IRF QRP & Procedures for the Opportunity to Review and Correct Data and Information O. Mechanism for Providing Feedback Reports to IRFs P. Proposed Method for Applying the Reduction to the FY 2017 IRF Increase Factor for IRFs That Fail to Meet the Quality Reporting Requirements VIII. Collection of Information Requirements A. Statutory Requirement for Solicitation of Comments B. Collection of Information Requirements for Updates Related to the IRF QRP IX. Response to Public Comments X. Regulatory Impact Analysis A. Statement of Need B. Overall Impacts C. Detailed Economic Analysis D. Alternatives Considered E. Accounting Statement F. Conclusion Acronyms, Abbreviations, and Short Forms Because of the many terms to which we refer by acronym, abbreviation, or short form in this final rule, we are listing the acronyms, abbreviation, and short forms used and their corresponding terms in alphabetical order. The Act The Social Security Act ADC Average Daily Census ADE Adverse Drug Events The Affordable Care Act Patient Protection and Affordable Care Act (Pub. L. 111–148, enacted on March 23, 2010) AHRQ Agency for Healthcare Research and Quality APU Annual Payment Update PO 00000 Frm 00003 Fmt 4701 Sfmt 4702 ASAP Assessment Submission and Processing ASCA The Administrative Simplification Compliance Act of 2002 (Pub. L. 107–105, enacted on December 27, 2002) ASPE Office of the Assistant Secretary for Planning and Evaluation BLS U.S. Bureau of Labor Statistics CAH Critical Access Hospitals CASPER Certification and Survey Provider Enhanced Reports CAUTI Catheter-Associated Urinary Tract Infection CBSA Core-Based Statistical Area CCR Cost-to-Charge Ratio CDC The Centers for Disease Control and Prevention CDI Clostridium difficile Infection CFR Code of Federal Regulations CMG Case-Mix Group CMS Centers for Medicare & Medicaid Services COA Care for Older Adults CY Calendar year DSH Disproportionate Share Hospital DSH PP Disproportionate Share Patient Percentage eCQMs Electronically Specified Clinical Quality Measures ESRD End-Stage Renal Disease FFS Fee-for-Service FR Federal Register FY Federal Fiscal Year GPCI Geographic Practice Cost Index HAI Healthcare Associated Infection HCC Hierarchical Condition Category HHA Home Health Agencies HCP Home Care Personnel HHS U.S. Department of Health & Human Services HIPAA Health Insurance Portability and Accountability Act of 1996 (Pub. L. 104– 191, enacted on August 21, 1996) Hospital VBP Hospital Value-Based Purchasing Program (also HVBP) IGI IHS Global Insight IMPACT Act Improving Medicare PostAcute Care Transformation Act of 2014 (Pub. L. 113–185, enacted on October 6, 2014) IME Indirect Medical Education IPF Inpatient Psychiatric Facility IPPS Inpatient prospective payment system IQR Inpatient Quality Reporting Program IRF Inpatient Rehabilitation Facility IRF-PAI Inpatient Rehabilitation FacilityPatient Assessment Instrument IRF PPS Inpatient Rehabilitation Facility Prospective Payment System IRF QRP Inpatient Rehabilitation Facility Quality Reporting Program IRVEN Inpatient Rehabilitation Validation and Entry E:\FR\FM\25APP2.SGM 25APP2 24180 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules LIP Low-Income Percentage IVS Influenza Vaccination Season LTCH Long-Term Care Hospital MA (Medicare Part C) Medicare Advantage MAC Medicare Administrative Contractor MAP Measures Application Partnership MedPAC Medicare Payment Advisory Commission MFP Multifactor Productivity MMSEA Medicare, Medicaid, and SCHIP Extension Act of 2007 (Pub. L. 110–173, enacted on December 29, 2007) MRSA Methicillin-Resistant Staphylococcus aureus MSPB Medicare Spending Per Beneficiary MUC Measures Under Consideration NHSN National Healthcare Safety Network NQF National Quality Forum OMB Office of Management and Budget ONC Office of the National Coordinator for Health Information Technology OPPS/ASC Outpatient Prospective Payment System/Ambulatory Surgical Center PAC Post-Acute Care PAC/LTC Post-Acute Care/Long-Term Care PAI Patient Assessment Instrument PPR Potentially Preventable Readmissions PPS Prospective Payment System PRA Paperwork Reduction Act of 1995 (Pub. L. 104–13, enacted on May 22, 1995) QIES Quality Improvement Evaluation System QM Quality Measure QRP Quality Reporting Program RIA Regulatory Impact Analysis RIC Rehabilitation Impairment Category RFA Regulatory Flexibility Act (Pub. L. 96– 354, enacted on September 19, 1980) RN Registered Nurse RPL Rehabilitation, Psychiatric, and LongTerm Care market basket RSRR Risk-standardized readmission rate SIR Standardized Infection Ratio SNF Skilled Nursing Facilities SRR Standardized Risk Ratio SSI Supplemental Security Income TEP Technical Expert Panel asabaliauskas on DSK3SPTVN1PROD with PROPOSALS I. Background A. Historical Overview of the IRF PPS Section 1886(j) of the Act provides for the implementation of a per-discharge prospective payment system (PPS) for inpatient rehabilitation hospitals and inpatient rehabilitation units of a hospital (collectively, hereinafter referred to as IRFs). Payments under the IRF PPS encompass inpatient operating and capital costs of furnishing covered rehabilitation services (that is, routine, ancillary, and capital costs), but not direct graduate medical education costs, costs of approved nursing and allied health education activities, bad debts, and other services or items outside the scope of the IRF PPS. Although a complete discussion of the IRF PPS provisions appears in the original FY 2002 IRF PPS final rule (66 FR 41316) and the FY 2006 IRF PPS final rule (70 FR 47880), we are providing below a general description of the IRF PPS for FYs 2002 through 2016. VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 Under the IRF PPS from FY 2002 through FY 2005 the federal prospective payment rates were computed across 100 distinct case-mix groups (CMGs), as described in the FY 2002 IRF PPS final rule (66 FR 41316). We constructed 95 CMGs using rehabilitation impairment categories (RICs), functional status (both motor and cognitive), and age (in some cases, cognitive status and age may not be a factor in defining a CMG). In addition, we constructed five special CMGs to account for very short stays and for patients who expire in the IRF. For each of the CMGs, we developed relative weighting factors to account for a patient’s clinical characteristics and expected resource needs. Thus, the weighting factors accounted for the relative difference in resource use across all CMGs. Within each CMG, we created tiers based on the estimated effects that certain comorbidities would have on resource use. We established the federal PPS rates using a standardized payment conversion factor (formerly referred to as the budget-neutral conversion factor). For a detailed discussion of the budgetneutral conversion factor, please refer to our FY 2004 IRF PPS final rule (68 FR 45684 through 45685). In the FY 2006 IRF PPS final rule (70 FR 47880), we discussed in detail the methodology for determining the standard payment conversion factor. We applied the relative weighting factors to the standard payment conversion factor to compute the unadjusted federal prospective payment rates under the IRF PPS from FYs 2002 through 2005. Within the structure of the payment system, we then made adjustments to account for interrupted stays, transfers, short stays, and deaths. Finally, we applied the applicable adjustments to account for geographic variations in wages (wage index), the percentage of low-income patients, location in a rural area (if applicable), and outlier payments (if applicable) to the IRFs’ unadjusted federal prospective payment rates. For cost reporting periods that began on or after January 1, 2002, and before October 1, 2002, we determined the final prospective payment amounts using the transition methodology prescribed in section 1886(j)(1) of the Act. Under this provision, IRFs transitioning into the PPS were paid a blend of the federal IRF PPS rate and the payment that the IRFs would have received had the IRF PPS not been implemented. This provision also allowed IRFs to elect to bypass this blended payment and immediately be paid 100 percent of the federal IRF PPS rate. The transition methodology PO 00000 Frm 00004 Fmt 4701 Sfmt 4702 expired as of cost reporting periods beginning on or after October 1, 2002 (FY 2003), and payments for all IRFs now consist of 100 percent of the federal IRF PPS rate. We established a CMS Web site as a primary information resource for the IRF PPS which is available at https:// www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/InpatientRehab FacPPS/. The Web site may be accessed to download or view publications, software, data specifications, educational materials, and other information pertinent to the IRF PPS. Section 1886(j) of the Act confers broad statutory authority upon the Secretary to propose refinements to the IRF PPS. In the FY 2006 IRF PPS final rule (70 FR 47880) and in correcting amendments to the FY 2006 IRF PPS final rule (70 FR 57166) that we published on September 30, 2005, we finalized a number of refinements to the IRF PPS case-mix classification system (the CMGs and the corresponding relative weights) and the case-level and facility-level adjustments. These refinements included the adoption of the Office of Management and Budget’s (OMB) Core-Based Statistical Area (CBSA) market definitions, modifications to the CMGs, tier comorbidities, and CMG relative weights, implementation of a new teaching status adjustment for IRFs, revision and rebasing of the market basket index used to update IRF payments, and updates to the rural, lowincome percentage (LIP), and high-cost outlier adjustments. Beginning with the FY 2006 IRF PPS final rule (70 FR 47908 through 47917), the market basket index used to update IRF payments was a market basket reflecting the operating and capital cost structures for freestanding IRFs, freestanding inpatient psychiatric facilities (IPFs), and longterm care hospitals (LTCHs) (hereinafter referred to as the rehabilitation, psychiatric, and long-term care (RPL) market basket). Any reference to the FY 2006 IRF PPS final rule in this final rule also includes the provisions effective in the correcting amendments. For a detailed discussion of the final key policy changes for FY 2006, please refer to the FY 2006 IRF PPS final rule (70 FR 47880 and 70 FR 57166). In the FY 2007 IRF PPS final rule (71 FR 48354), we further refined the IRF PPS case-mix classification system (the CMG relative weights) and the caselevel adjustments, to ensure that IRF PPS payments would continue to reflect as accurately as possible the costs of care. For a detailed discussion of the FY 2007 policy revisions, please refer to the E:\FR\FM\25APP2.SGM 25APP2 asabaliauskas on DSK3SPTVN1PROD with PROPOSALS Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules FY 2007 IRF PPS final rule (71 FR 48354). In the FY 2008 IRF PPS final rule (72 FR 44284), we updated the federal prospective payment rates and the outlier threshold, revised the IRF wage index policy, and clarified how we determine high-cost outlier payments for transfer cases. For more information on the policy changes implemented for FY 2008, please refer to the FY 2008 IRF PPS final rule (72 FR 44284), in which we published the final FY 2008 IRF federal prospective payment rates. After publication of the FY 2008 IRF PPS final rule (72 FR 44284), section 115 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Pub. L. 110–173, enacted on December 29, 2007) (MMSEA), amended section 1886(j)(3)(C) of the Act to apply a zero percent increase factor for FYs 2008 and 2009, effective for IRF discharges occurring on or after April 1, 2008. Section 1886(j)(3)(C) of the Act required the Secretary to develop an increase factor to update the IRF federal prospective payment rates for each FY. Based on the legislative change to the increase factor, we revised the FY 2008 federal prospective payment rates for IRF discharges occurring on or after April 1, 2008. Thus, the final FY 2008 IRF federal prospective payment rates that were published in the FY 2008 IRF PPS final rule (72 FR 44284) were effective for discharges occurring on or after October 1, 2007, and on or before March 31, 2008; and the revised FY 2008 IRF federal prospective payment rates were effective for discharges occurring on or after April 1, 2008, and on or before September 30, 2008. The revised FY 2008 federal prospective payment rates are available on the CMS Web site at https://www.cms.gov/ Medicare/Medicare-Fee-for-ServicePayment/InpatientRehabFacPPS/DataFiles.html. In the FY 2009 IRF PPS final rule (73 FR 46370), we updated the CMG relative weights, the average length of stay values, and the outlier threshold; clarified IRF wage index policies regarding the treatment of ‘‘New England deemed’’ counties and multicampus hospitals; and revised the regulation text in response to section 115 of the MMSEA to set the IRF compliance percentage at 60 percent (the ‘‘60 percent rule’’) and continue the practice of including comorbidities in the calculation of compliance percentages. We also applied a zero percent market basket increase factor for FY 2009 in accordance with section 115 of the MMSEA. For more information on the policy changes implemented for FY 2009, please refer to the FY 2009 IRF VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 PPS final rule (73 FR 46370), in which we published the final FY 2009 IRF federal prospective payment rates. In the FY 2010 IRF PPS final rule (74 FR 39762) and in correcting amendments to the FY 2010 IRF PPS final rule (74 FR 50712) that we published on October 1, 2009, we updated the federal prospective payment rates, the CMG relative weights, the average length of stay values, the rural, LIP, teaching status adjustment factors, and the outlier threshold; implemented new IRF coverage requirements for determining whether an IRF claim is reasonable and necessary; and revised the regulation text to require IRFs to submit patient assessments on Medicare Advantage (MA) (formerly called Medicare Part C) patients for use in the 60 percent rule calculations. Any reference to the FY 2010 IRF PPS final rule in this final rule also includes the provisions effective in the correcting amendments. For more information on the policy changes implemented for FY 2010, please refer to the FY 2010 IRF PPS final rule (74 FR 39762 and 74 FR 50712), in which we published the final FY 2010 IRF federal prospective payment rates. After publication of the FY 2010 IRF PPS final rule (74 FR 39762), section 3401(d) of the Patient Protection and Affordable Care Act (Pub. L. 111–148, enacted on March 23, 2010), as amended by section 10319 of the same Act and by section 1105 of the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111–152, enacted on March 30, 2010) (collectively, hereinafter referred to as ‘‘The Affordable Care Act’’), amended section 1886(j)(3)(C) of the Act and added section 1886(j)(3)(D) of the Act. Section 1886(j)(3)(C) of the Act requires the Secretary to estimate a multifactor productivity adjustment to the market basket increase factor, and to apply other adjustments as defined by the Act. The productivity adjustment applies to FYs from 2012 forward. The other adjustments apply to FYs 2010 to 2019. Sections 1886(j)(3)(C)(ii)(II) and 1886(j)(3)(D)(i) of the Act defined the adjustments that were to be applied to the market basket increase factors in FYs 2010 and 2011. Under these provisions, the Secretary was required to reduce the market basket increase factor in FY 2010 by a 0.25 percentage point adjustment. Notwithstanding this provision, in accordance with section 3401(p) of the Affordable Care Act, the adjusted FY 2010 rate was only to be applied to discharges occurring on or after April 1, 2010. Based on the selfimplementing legislative changes to section 1886(j)(3) of the Act, we PO 00000 Frm 00005 Fmt 4701 Sfmt 4702 24181 adjusted the FY 2010 federal prospective payment rates as required, and applied these rates to IRF discharges occurring on or after April 1, 2010, and on or before September 30, 2010. Thus, the final FY 2010 IRF federal prospective payment rates that were published in the FY 2010 IRF PPS final rule (74 FR 39762) were used for discharges occurring on or after October 1, 2009, and on or before March 31, 2010, and the adjusted FY 2010 IRF federal prospective payment rates applied to discharges occurring on or after April 1, 2010, and on or before September 30, 2010. The adjusted FY 2010 federal prospective payment rates are available on the CMS Web site at https://www.cms.gov/Medicare/ Medicare-Fee-for-Service-Payment/ InpatientRehabFacPPS/Data-Files.html. In addition, sections 1886(j)(3)(C) and (D) of the Act also affected the FY 2010 IRF outlier threshold amount because they required an adjustment to the FY 2010 RPL market basket increase factor, which changed the standard payment conversion factor for FY 2010. Specifically, the original FY 2010 IRF outlier threshold amount was determined based on the original estimated FY 2010 RPL market basket increase factor of 2.5 percent and the standard payment conversion factor of $13,661. However, as adjusted, the IRF prospective payments are based on the adjusted RPL market basket increase factor of 2.25 percent and the revised standard payment conversion factor of $13,627. To maintain estimated outlier payments for FY 2010 equal to the established standard of 3 percent of total estimated IRF PPS payments for FY 2010, we revised the IRF outlier threshold amount for FY 2010 for discharges occurring on or after April 1, 2010, and on or before September 30, 2010. The revised IRF outlier threshold amount for FY 2010 was $10,721. Sections 1886(j)(3)(C)(ii)(II) and 1886(j)(3)(D)(i) of the Act also required the Secretary to reduce the market basket increase factor in FY 2011 by a 0.25 percentage point adjustment. The FY 2011 IRF PPS notice (75 FR 42836) and the correcting amendments to the FY 2011 IRF PPS notice (75 FR 70013) described the required adjustments to the FY 2011 and FY 2010 IRF PPS federal prospective payment rates and outlier threshold amount for IRF discharges occurring on or after April 1, 2010, and on or before September 30, 2011. It also updated the FY 2011 federal prospective payment rates, the CMG relative weights, and the average length of stay values. Any reference to the FY 2011 IRF PPS notice in this final rule also includes the provisions E:\FR\FM\25APP2.SGM 25APP2 asabaliauskas on DSK3SPTVN1PROD with PROPOSALS 24182 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules effective in the correcting amendments. For more information on the FY 2010 and FY 2011 adjustments or the updates for FY 2011, please refer to the FY 2011 IRF PPS notice (75 FR 42836 and 75 FR 70013). In the FY 2012 IRF PPS final rule (76 FR 47836), we updated the IRF federal prospective payment rates, rebased and revised the RPL market basket, and established a new quality reporting program for IRFs in accordance with section 1886(j)(7) of the Act. We also revised regulation text for the purpose of updating and providing greater clarity. For more information on the policy changes implemented for FY 2012, please refer to the FY 2012 IRF PPS final rule (76 FR 47836), in which we published the final FY 2012 IRF federal prospective payment rates. The FY 2013 IRF PPS notice (77 FR 44618) described the required adjustments to the FY 2013 federal prospective payment rates and outlier threshold amount for IRF discharges occurring on or after October 1, 2012, and on or before September 30, 2013. It also updated the FY 2013 federal prospective payment rates, the CMG relative weights, and the average length of stay values. For more information on the updates for FY 2013, please refer to the FY 2013 IRF PPS notice (77 FR 44618). In the FY 2014 IRF PPS final rule (78 FR 47860), we updated the federal prospective payment rates, the CMG relative weights, and the outlier threshold amount. We also updated the facility-level adjustment factors using an enhanced estimation methodology, revised the list of diagnosis codes that count toward an IRF’s 60 percent rule compliance calculation to determine ‘‘presumptive compliance,’’ revised sections of the Inpatient Rehabilitation Facility-Patient Assessment Instrument (IRF–PAI), revised requirements for acute care hospitals that have IRF units, clarified the IRF regulation text regarding limitation of review, updated references to previously changed sections in the regulations text, and revised and updated quality measures and reporting requirements under the IRF quality reporting program. For more information on the policy changes implemented for FY 2014, please refer to the FY 2014 IRF PPS final rule (78 FR 47860), in which we published the final FY 2014 IRF federal prospective payment rates. In the FY 2015 IRF PPS final rule (79 FR 45872), we updated the federal prospective payment rates, the CMG relative weights, and the outlier threshold amount. We also further revised the list of diagnosis codes that VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 count toward an IRF’s 60 percent rule compliance calculation to determine ‘‘presumptive compliance,’’ revised sections of the IRF–PAI, and revised and updated quality measures and reporting requirements under the IRF quality reporting program. For more information on the policy changes implemented for FY 2015, please refer to the FY 2015 IRF PPS final rule (79 FR 45872) and the FY 2015 IRF PPS correction notice (79 FR 59121). In the FY 2016 IRF PPS final rule (80 FR 47036), we updated the federal prospective payment rates, the CMG relative weights, and the outlier threshold amount. We also adopted an IRF-specific market basket that reflects the cost structures of only IRF providers, a blended one-year transition wage index based on the adoption of new OMB area delineations, a 3-year phase-out of the rural adjustment for certain IRFs due to the new OMB area delineations, and revisions and updates to the IRF QRP. For more information on the policy changes implemented for FY 2016, please refer to the FY 2016 IRF PPS final rule (80 FR 47036). B. Provisions of the Affordable Care Act Affecting the IRF PPS in FY 2012 and Beyond The Affordable Care Act included several provisions that affect the IRF PPS in FYs 2012 and beyond. In addition to what was previously discussed, section 3401(d) of the Affordable Care Act also added section 1886(j)(3)(C)(ii)(I) (providing for a ‘‘productivity adjustment’’ for fiscal year 2012 and each subsequent fiscal year). The productivity adjustment for FY 2017 is discussed in section V.B. of this proposed rule. Section 3401(d) of the Affordable Care Act requires an additional 0.75 percentage point adjustment to the IRF increase factor for FY 2017, as discussed in section V.B. of this proposed rule. Section 1886(j)(3)(C)(ii)(II) of the Act notes that the application of these adjustments to the market basket update may result in an update that is less than 0.0 for a fiscal year and in payment rates for a fiscal year being less than such payment rates for the preceding fiscal year. Section 3004(b) of the Affordable Care Act also addressed the IRF PPS program. It reassigned the previously designated section 1886(j)(7) of the Act to section 1886(j)(8) and inserted a new section 1886(j)(7), which contains requirements for the Secretary to establish a quality reporting program for IRFs. Under that program, data must be submitted in a form and manner and at a time specified by the Secretary. Beginning in FY 2014, section PO 00000 Frm 00006 Fmt 4701 Sfmt 4702 1886(j)(7)(A)(i) of the Act requires the application of a 2 percentage point reduction of the applicable market basket increase factor for IRFs that fail to comply with the quality data submission requirements. Application of the 2 percentage point reduction may result in an update that is less than 0.0 for a fiscal year and in payment rates for a fiscal year being less than such payment rates for the preceding fiscal year. Reporting-based reductions to the market basket increase factor will not be cumulative; they will only apply for the FY involved. Under section 1886(j)(7)(D)(i) and (ii) of the Act, the Secretary is generally required to select quality measures for the IRF quality reporting program from those that have been endorsed by the consensus-based entity which holds a performance measurement contract under section 1890(a) of the Act. This contract is currently held by the National Quality Forum (NQF). So long as due consideration is given to measures that have been endorsed or adopted by a consensus-based organization, section 1886(j)(7)(D)(ii) of the Act authorizes the Secretary to select non-endorsed measures for specified areas or medical topics when there are no feasible or practical endorsed measure(s). Section 1886(j)(7)(E) of the Act requires the Secretary to establish procedures for making the IRF PPS quality reporting data available to the public. In so doing, the Secretary must ensure that IRFs have the opportunity to review any such data prior to its release to the public. C. Operational Overview of the Current IRF PPS As described in the FY 2002 IRF PPS final rule, upon the admission and discharge of a Medicare Part A Fee-forService (FFS) patient, the IRF is required to complete the appropriate sections of a patient assessment instrument (PAI), designated as the IRF– PAI. In addition, beginning with IRF discharges occurring on or after October 1, 2009, the IRF is also required to complete the appropriate sections of the IRF–PAI upon the admission and discharge of each Medicare Advantage (MA) (formerly called Medicare Part C) patient, as described in the FY 2010 IRF PPS final rule. All required data must be electronically encoded into the IRF–PAI software product. Generally, the software product includes patient classification programming called the Grouper software. The Grouper software uses specific IRF–PAI data elements to classify (or group) patients into distinct E:\FR\FM\25APP2.SGM 25APP2 asabaliauskas on DSK3SPTVN1PROD with PROPOSALS Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules CMGs and account for the existence of any relevant comorbidities. The Grouper software produces a 5character CMG number. The first character is an alphabetic character that indicates the comorbidity tier. The last 4 characters are numeric characters that represent the distinct CMG number. Free downloads of the Inpatient Rehabilitation Validation and Entry (IRVEN) software product, including the Grouper software, are available on the CMS Web site at https://www.cms.gov/ Medicare/Medicare-Fee-for-ServicePayment/InpatientRehabFacPPS/ Software.html. Once a Medicare FFS Part A patient is discharged, the IRF submits a Medicare claim as a Health Insurance Portability and Accountability Act of 1996 (Pub. L. 104–191, enacted on August 21, 1996) (HIPAA) compliant electronic claim or, if the Administrative Simplification Compliance Act of 2002 (Pub. L. 107– 105, enacted on December 27, 2002) (ASCA) permits, a paper claim (a UB– 04 or a CMS–1450 as appropriate) using the five-character CMG number and sends it to the appropriate Medicare Administrative Contractor (MAC). In addition, once a Medicare Advantage patient is discharged, in accordance with the Medicare Claims Processing Manual, chapter 3, section 20.3 (Pub. 100–04), hospitals (including IRFs) must submit an informational-only bill (Type of Bill (TOB) 111), which includes Condition Code 04 to their MAC. This will ensure that the Medicare Advantage days are included in the hospital’s Supplemental Security Income (SSI) ratio (used in calculating the IRF lowincome percentage adjustment) for fiscal year 2007 and beyond. Claims submitted to Medicare must comply with both ASCA and HIPAA. Section 3 of the ASCA amends section 1862(a) of the Act by adding paragraph (22), which requires the Medicare program, subject to section 1862(h) of the Act, to deny payment under Part A or Part B for any expenses for items or services ‘‘for which a claim is submitted other than in an electronic form specified by the Secretary.’’ Section 1862(h) of the Act, in turn, provides that the Secretary shall waive such denial in situations in which there is no method available for the submission of claims in an electronic form or the entity submitting the claim is a small provider. In addition, the Secretary also has the authority to waive such denial ‘‘in such unusual cases as the Secretary finds appropriate.’’ For more information, see the ‘‘Medicare Program; Electronic Submission of Medicare Claims’’ final rule (70 FR 71008). Our instructions for VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 the limited number of Medicare claims submitted on paper are available at https://www.cms.gov/manuals/ downloads/clm104c25.pdf. Section 3 of the ASCA operates in the context of the administrative simplification provisions of HIPAA, which include, among others, the requirements for transaction standards and code sets codified in 45 CFR, parts 160 and 162, subparts A and I through R (generally known as the Transactions Rule). The Transactions Rule requires covered entities, including covered health care providers, to conduct covered electronic transactions according to the applicable transaction standards. (See the CMS program claim memoranda at https://www.cms.gov/ ElectronicBillingEDITrans/ and listed in the addenda to the Medicare Intermediary Manual, Part 3, section 3600). The MAC processes the claim through its software system. This software system includes pricing programming called the ‘‘Pricer’’ software. The Pricer software uses the CMG number, along with other specific claim data elements and provider-specific data, to adjust the IRF’s prospective payment for interrupted stays, transfers, short stays, and deaths, and then applies the applicable adjustments to account for the IRF’s wage index, percentage of lowincome patients, rural location, and outlier payments. For discharges occurring on or after October 1, 2005, the IRF PPS payment also reflects the teaching status adjustment that became effective as of FY 2006, as discussed in the FY 2006 IRF PPS final rule (70 FR 47880). D. Advancing Health Information Exchange The Department of Health & Human Services (HHS) has a number of initiatives designed to encourage and support the adoption of health information technology and to promote nationwide health information exchange to improve health care. As discussed in the August 2013 Statement ‘‘Principles and Strategies for Accelerating Health Information Exchange’’ (available at https://www.healthit.gov/sites/default/ files/acceleratinghieprinciples_ strategy.pdf). HHS believes that all individuals, their families, their healthcare and social service providers, and payers should have consistent and timely access to health information in a standardized format that can be securely exchanged between the patient, providers, and others involved in the individual’s care. Health IT that facilitates the secure, efficient, and effective sharing and use of health- PO 00000 Frm 00007 Fmt 4701 Sfmt 4702 24183 related information when and where it is needed is an important tool for settings across the continuum of care, including inpatient rehabilitation facilities. The effective adoption and use of health information exchange and health IT tools will be essential as IRFs seek to improve quality and lower costs through value-based care. The Office of the National Coordinator for Health Information Technology (ONC) has released a document entitled ‘‘Connecting Health and Care for the Nation: A Shared Nationwide Interoperability Roadmap’’ (available at https://www.healthit.gov/ sites/default/files/hie-interoperability/ nationwide-interoperability-roadmapfinal-version-1.0.pdf). In the near term, the Roadmap focuses on actions that will enable individuals and providers across the care continuum to send, receive, find, and use a common set of electronic clinical information at the nationwide level by the end of 2017. The Roadmap’s goals also align with the Improving Medicare Post-Acute Care Transformation Act of 2014 (Pub. L. 113–185) (IMPACT Act), which requires assessment data to be standardized and interoperable to allow for exchange of the data. The Roadmap identifies four critical pathways that health IT stakeholders should focus on now in order to create a foundation for long-term success: (1) Improve technical standards and implementation guidance for priority data domains and associated elements; (2) rapidly shift and align federal, state, and commercial payment policies from FFS to value-based models to stimulate the demand for interoperability; (3) clarify and align federal and state privacy and security requirements that enable interoperability; and (4) align and promote the use of consistent policies and business practices that support interoperability, in coordination with stakeholders. In addition, ONC has released the final version of the 2016 Interoperability Standards Advisory (available at https://www.healthit.gov/ standards-advisory/2016), which provides a list of the best available standards and implementation specifications to enable priority health information exchange functions. Providers, payers, and vendors are encouraged to take these ‘‘best available standards’’ into account as they implement interoperable health information exchange across the continuum of care, including care settings such as inpatient rehabilitation facilities. We encourage stakeholders to utilize health information exchange and certified health IT to effectively and E:\FR\FM\25APP2.SGM 25APP2 24184 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules efficiently help providers improve internal care delivery practices, engage patients in their care, support management of care across the continuum, enable the reporting of electronically specified clinical quality measures (eCQMs), and improve efficiencies and reduce unnecessary costs. As adoption of certified health IT increases and interoperability standards continue to mature, HHS will seek to reinforce standards through relevant policies and programs. asabaliauskas on DSK3SPTVN1PROD with PROPOSALS II. Summary of Provisions of the Proposed Rule In this proposed rule, we propose to update the IRF federal prospective payment rates for FY 2017 and to revise and update quality measures and reporting requirements under the IRF QRP. The proposed updates to the IRF federal prospective payment rates for FY 2017 are as follows: • Update the FY 2017 IRF PPS relative weights and average length of stay values using the most current and complete Medicare claims and cost report data in a budget-neutral manner, as discussed in section III of this proposed rule. • Describe the continued use of FY 2014 facility-level adjustment factors as discussed in section IV of this proposed rule. • Update the FY 2017 IRF PPS payment rates by the proposed market basket increase factor, based upon the most current data available, with a 0.75 percentage point reduction as required by sections 1886(j)(3)(C)(ii)(II) and 1886(j)(3)(D)(v) of the Act and a proposed productivity adjustment required by section 1886(j)(3)(C)(ii)(I) of the Act, as described in section V of this proposed rule. • Update the FY 2017 IRF PPS payment rates by the FY 2017 wage index and the labor-related share in a budget-neutral manner, as discussed in section V of this proposed rule. • Describe the calculation of the IRF standard payment conversion factor for FY 2017, as discussed in section V of this proposed rule. • Update the outlier threshold amount for FY 2017, as discussed in section VI of this proposed rule. • Update the cost-to-charge ratio (CCR) ceiling and urban/rural average CCRs for FY 2017, as discussed in section VI of this proposed rule. • Describe proposed revisions and updates to quality measures and reporting requirements under the quality reporting program for IRFs in VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 accordance with section 1886(j)(7) of the Act, as discussed in section VII of this proposed rule. III. Proposed Update to the Case-Mix Group (CMG) Relative Weights and Average Length of Stay Values for FY 2017 As specified in § 412.620(b)(1), we calculate a relative weight for each CMG that is proportional to the resources needed by an average inpatient rehabilitation case in that CMG. For example, cases in a CMG with a relative weight of 2, on average, will cost twice as much as cases in a CMG with a relative weight of 1. Relative weights account for the variance in cost per discharge due to the variance in resource utilization among the payment groups, and their use helps to ensure that IRF PPS payments support beneficiary access to care, as well as provider efficiency. In this proposed rule, we propose to update the CMG relative weights and average length of stay values for FY 2017. As required by statute, we always use the most recent available data to update the CMG relative weights and average lengths of stay. For FY 2017, we propose to use the FY 2015 IRF claims and FY 2014 IRF cost report data. These data are the most current and complete data available at this time. Currently, only a small portion of the FY 2015 IRF cost report data are available for analysis, but the majority of the FY 2015 IRF claims data are available for analysis. In this proposed rule, we propose to apply these data using the same methodologies that we have used to update the CMG relative weights and average length of stay values each fiscal year since we implemented an update to the methodology to use the more detailed CCR data from the cost reports of IRF subprovider units of primary acute care hospitals, instead of CCR data from the associated primary care hospitals, to calculate IRFs’ average costs per case, as discussed in the FY 2009 IRF PPS final rule (73 FR 46372). In calculating the CMG relative weights, we use a hospital-specific relative value method to estimate operating (routine and ancillary services) and capital costs of IRFs. The process used to calculate the CMG relative weights for this proposed rule is as follows: Step 1. We estimate the effects that comorbidities have on costs. Step 2. We adjust the cost of each Medicare discharge (case) to reflect the effects found in the first step. PO 00000 Frm 00008 Fmt 4701 Sfmt 4702 Step 3. We use the adjusted costs from the second step to calculate CMG relative weights, using the hospitalspecific relative value method. Step 4. We normalize the FY 2017 CMG relative weights to the same average CMG relative weight from the CMG relative weights implemented in the FY 2016 IRF PPS final rule (80 FR 47036). Consistent with the methodology that we have used to update the IRF classification system in each instance in the past, we propose to update the CMG relative weights for FY 2017 in such a way that total estimated aggregate payments to IRFs for FY 2017 are the same with or without the changes (that is, in a budget-neutral manner) by applying a budget neutrality factor to the standard payment amount. To calculate the appropriate budget neutrality factor for use in updating the FY 2017 CMG relative weights, we use the following steps: Step 1. Calculate the estimated total amount of IRF PPS payments for FY 2017 (with no changes to the CMG relative weights). Step 2. Calculate the estimated total amount of IRF PPS payments for FY 2017 by applying the proposed changes to the CMG relative weights (as discussed in this proposed rule). Step 3. Divide the amount calculated in step 1 by the amount calculated in step 2 to determine the budget neutrality factor (0.9990) that would maintain the same total estimated aggregate payments in FY 2017 with and without the proposed changes to the CMG relative weights. Step 4. Apply the budget neutrality factor (0.9990) to the FY 2016 IRF PPS standard payment amount after the application of the budget-neutral wage adjustment factor. In section V.E. of this proposed rule, we discuss the proposed use of the existing methodology to calculate the proposed standard payment conversion factor for FY 2017. In Table 1, ‘‘Proposed Relative Weights and Average Length of Stay Values for Case-Mix Groups,’’ we present the CMGs, the comorbidity tiers, the corresponding relative weights, and the average length of stay values for each CMG and tier for FY 2017. The average length of stay for each CMG is used to determine when an IRF discharge meets the definition of a short-stay transfer, which results in a per diem case level adjustment. E:\FR\FM\25APP2.SGM 25APP2 24185 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules TABLE 1—PROPOSED RELATIVE WEIGHTS AND AVERAGE LENGTH OF STAY VALUES FOR CASE-MIX GROUPS CMG Description (M=motor, C=cognitive, A=age) CMG 0101 ......... 0102 ......... 0103 ......... 0104 0105 0106 0107 0108 0109 ......... ......... ......... ......... ......... ......... 0110 ......... 0201 ......... 0202 ......... 0203 ......... 0204 ......... 0205 ......... 0206 ......... 0207 ......... 0301 ......... 0302 ......... 0303 ......... 0304 ......... 0401 ......... 0402 ......... 0403 ......... 0404 ......... 0405 ......... 0501 ......... 0502 ......... 0503 ......... 0504 ......... 0505 ......... 0506 ......... 0601 ......... 0602 ......... 0603 ......... 0604 ......... 0701 ......... 0702 ......... asabaliauskas on DSK3SPTVN1PROD with PROPOSALS 0703 ......... 0704 ......... 0801 ......... 0802 ......... 0803 ......... 0804 ......... Stroke M>51.05 .......................... Stroke M>44.45 and M<51.05 and C>18.5. Stroke M>44.45 and M<51.05 and C<18.5. Stroke M>38.85 and M<44.45 ... Stroke M>34.25 and M<38.85 ... Stroke M>30.05 and M<34.25 ... Stroke M>26.15 and M<30.05 ... Stroke M<26.15 and A>84.5 ...... Stroke M>22.35 and M<26.15 and A<84.5. Stroke M<22.35 and A<84.5 ...... Traumatic brain injury M>53.35 and C>23.5. Traumatic brain injury M>44.25 and M<53.35 and C>23.5. Traumatic brain injury M>44.25 and C<23.5. Traumatic brain injury M>40.65 and M<44.25. Traumatic brain injury M>28.75 and M<40.65. Traumatic brain injury M>22.05 and M<28.75. Traumatic brain injury M<22.05 Non-traumatic brain injury M>41.05. Non-traumatic brain injury M>35.05 and M<41.05. Non-traumatic brain injury M>26.15 and M<35.05. Non-traumatic brain injury M<26.15. Traumatic spinal cord injury M>48.45. Traumatic spinal cord injury M>30.35 and M<48.45. Traumatic spinal cord injury M>16.05 and M<30.35. Traumatic spinal cord injury M<16.05 and A>63.5. Traumatic spinal cord injury M<16.05 and A<63.5. Non-traumatic spinal cord injury M>51.35. Non-traumatic spinal cord injury M>40.15 and M<51.35. Non-traumatic spinal cord injury M>31.25 and M<40.15. Non-traumatic spinal cord injury M>29.25 and M<31.25. Non-traumatic spinal cord injury M>23.75 and M<29.25. Non-traumatic spinal cord injury M<23.75. Neurological M>47.75 ................ Neurological M>37.35 and M<47.75. Neurological M>25.85 and M<37.35. Neurological M<25.85 ................ Fracture of lower extremity M>42.15. Fracture of lower extremity M>34.15 and M<42.15. Fracture of lower extremity M>28.15 and M<34.15. Fracture of lower extremity M<28.15. Replacement of lower extremity joint M>49.55. Replacement of lower extremity joint M>37.05 and M<49.55. Replacement of lower extremity joint M>28.65 and M<37.05 and A>83.5. Replacement of lower extremity joint M>28.65 and M<37.05 and A<83.5. VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 Relative weight Tier 1 Tier 2 Tier 3 Average length of stay None Tier 1 Tier 2 Tier 3 None 0.8007 1.0117 0.7158 0.9044 0.6527 0.8247 0.6228 0.7869 8 11 9 12 9 10 8 10 1.1804 1.0552 0.9622 0.9181 11 13 12 12 1.2603 1.4562 1.6306 1.8168 2.2856 2.0579 1.1266 1.3018 1.4576 1.6241 2.0432 1.8396 1.0274 1.1871 1.3293 1.4811 1.8632 1.6776 0.9803 1.1327 1.2683 1.4132 1.7779 1.6007 12 14 16 17 21 19 12 15 16 19 22 20 12 14 15 17 21 18 12 14 15 17 20 19 2.7293 0.7826 2.4398 0.6402 2.2249 0.5775 2.1230 0.5385 29 8 27 8 24 8 24 7 1.0939 0.8948 0.8072 0.7527 12 10 9 10 1.2187 0.9969 0.8993 0.8385 11 12 11 11 1.3419 1.0977 0.9902 0.9233 16 13 12 11 1.6233 1.3279 1.1979 1.1170 14 15 14 13 1.9247 1.5744 1.4202 1.3243 19 18 16 15 2.5314 1.1417 2.0708 0.9423 1.8680 0.8561 1.7418 0.8003 31 10 23 11 20 10 19 10 1.4064 1.1608 1.0546 0.9858 13 13 12 12 1.6478 1.3600 1.2356 1.1550 15 15 14 14 2.1328 1.7604 1.5993 1.4949 21 20 17 16 0.9816 0.8589 0.7927 0.7201 11 11 10 9 1.4090 1.2330 1.1379 1.0337 14 14 14 13 2.2221 1.9445 1.7946 1.6303 21 21 20 19 3.8903 3.4042 3.1418 2.8541 47 37 34 32 3.4259 2.9979 2.7668 2.5134 47 33 28 28 0.8605 0.6793 0.6459 0.5815 9 8 7 8 1.1607 0.9162 0.8712 0.7843 11 11 10 10 1.4538 1.1476 1.0912 0.9824 14 13 13 12 1.7071 1.3475 1.2813 1.1535 19 16 14 14 1.9596 1.5468 1.4708 1.3242 20 17 17 16 2.7126 2.1412 2.0360 1.8330 28 24 22 21 1.0371 1.3356 0.8203 1.0563 0.7581 0.9762 0.6940 0.8936 10 12 9 12 9 11 9 11 1.6450 1.3010 1.2023 1.1007 14 14 13 13 2.1787 1.0013 1.7232 0.8151 1.5924 0.7777 1.4578 0.7065 20 10 18 9 16 9 16 9 1.2773 1.0398 0.9921 0.9013 12 12 12 11 1.5395 1.2533 1.1958 1.0863 15 14 14 13 1.9955 1.6245 1.5500 1.4081 18 18 17 16 0.7944 0.6410 0.5920 0.5443 8 8 7 7 1.0351 0.8353 0.7714 0.7093 11 10 9 9 1.3845 1.1173 1.0318 0.9488 13 13 12 12 1.2461 1.0055 0.9286 0.8539 12 12 11 10 PO 00000 Frm 00009 Fmt 4701 Sfmt 4702 E:\FR\FM\25APP2.SGM 25APP2 24186 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules TABLE 1—PROPOSED RELATIVE WEIGHTS AND AVERAGE LENGTH OF STAY VALUES FOR CASE-MIX GROUPS—Continued CMG Description (M=motor, C=cognitive, A=age) CMG 0805 ......... 0806 ......... 0901 ......... 0902 ......... 0903 ......... 0904 ......... 1001 ......... 1002 ......... 1003 ......... 1101 ......... 1102 ......... 1201 ......... 1202 ......... 1203 ......... 1301 ......... 1302 ......... 1303 ......... 1401 1402 1403 1404 1501 1502 ......... ......... ......... ......... ......... ......... 1503 ......... 1504 ......... 1601 ......... 1602 ......... 1603 ......... 1701 ......... 1702 ......... 1703 ......... 1704 ......... 1801 ......... 1802 ......... 1803 ......... asabaliauskas on DSK3SPTVN1PROD with PROPOSALS 1901 ......... 1902 ......... 1903 ......... 2001 ......... 2002 ......... 2003 ......... 2004 ......... 2101 ......... 5001 ......... 5101 ......... 5102 ......... Replacement of lower extremity joint M>22.05 and M<28.65. Replacement of lower extremity joint M<22.05. Other orthopedic M>44.75 ......... Other orthopedic M>34.35 and M<44.75. Other orthopedic M>24.15 and M<34.35. Other orthopedic M<24.15 ......... Amputation, lower extremity M>47.65. Amputation, lower extremity M>36.25 and M<47.65. Amputation, lower extremity M<36.25. Amputation, non-lower extremity M>36.35. Amputation, non-lower extremity M<36.35. Osteoarthritis M>37.65 ............... Osteoarthritis M>30.75 and M<37.65. Osteoarthritis M<30.75 ............... Rheumatoid, other arthritis M>36.35. Rheumatoid, other arthritis M>26.15 and M<36.35. Rheumatoid, other arthritis M<26.15. Cardiac M>48.85 ........................ Cardiac M>38.55 and M<48.85 Cardiac M>31.15 and M<38.55 Cardiac M<31.15 ........................ Pulmonary M>49.25 ................... Pulmonary M>39.05 and M<49.25. Pulmonary M>29.15 and M<39.05. Pulmonary M<29.15 ................... Pain syndrome M>37.15 ............ Pain syndrome M>26.75 and M<37.15. Pain syndrome M<26.75 ............ Major multiple trauma without brain or spinal cord injury M>39.25. Major multiple trauma without brain or spinal cord injury M>31.05 and M<39.25. Major multiple trauma without brain or spinal cord injury M>25.55 and M<31.05. Major multiple trauma without brain or spinal cord injury M<25.55. Major multiple trauma with brain or spinal cord injury M>40.85. Major multiple trauma with brain or spinal cord injury M>23.05 and M<40.85. Major multiple trauma with brain or spinal cord injury M<23.05. Guillian Barre M>35.95 .............. Guillian Barre M>18.05 and M<35.95. Guillian Barre M<18.05 .............. Miscellaneous M>49.15 ............. Miscellaneous M>38.75 and M<49.15. Miscellaneous M>27.85 and M<38.75. Miscellaneous M<27.85 ............. Burns M>0 .................................. Short-stay cases, length of stay is 3 days or fewer. Expired, orthopedic, length of stay is 13 days or fewer. Expired, orthopedic, length of stay is 14 days or more. VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 Relative weight Tier 1 Tier 2 Tier 3 Average length of stay None Tier 1 Tier 2 Tier 3 None 1.4829 1.1966 1.1051 1.0162 15 13 12 12 1.7995 1.4521 1.3410 1.2331 16 16 15 14 0.9866 1.2620 0.7948 1.0166 0.7350 0.9402 0.6689 0.8556 11 12 10 12 9 11 8 10 1.5866 1.2780 1.1819 1.0757 15 15 13 13 2.0099 1.0742 1.6190 0.9500 1.4973 0.8207 1.3627 0.7414 18 11 18 11 16 10 16 9 1.3925 1.2314 1.0639 0.9611 14 15 12 12 1.9643 1.7371 1.5008 1.3558 18 19 17 16 1.3216 1.1917 0.9756 0.8848 12 12 10 11 1.8958 1.7094 1.3994 1.2692 17 16 16 14 1.0418 1.2108 1.0235 1.1895 0.9300 1.0808 0.8239 0.9576 10 12 11 13 11 12 10 11 1.5410 1.1826 1.5140 0.9291 1.3756 0.8691 1.2187 0.8014 14 13 17 10 15 10 14 10 1.6264 1.2778 1.1954 1.1021 14 15 13 13 2.0043 1.5746 1.4731 1.3582 16 20 15 15 0.8643 1.1810 1.4079 1.7799 1.0124 1.2770 0.7307 0.9985 1.1903 1.5048 0.8580 1.0823 0.6621 0.9047 1.0785 1.3635 0.7912 0.9980 0.6007 0.8208 0.9785 1.2371 0.7466 0.9418 9 11 13 17 10 11 8 11 13 16 9 11 8 10 12 15 9 11 8 10 11 14 8 10 1.5560 1.3187 1.2160 1.1475 15 14 12 12 1.9351 0.9845 1.2824 1.6400 0.8935 1.1639 1.5123 0.8304 1.0817 1.4271 0.7671 0.9993 19 9 12 17 9 13 15 10 12 14 9 12 1.6089 1.1329 1.4602 0.9223 1.3571 0.8471 1.2537 0.7644 13 16 17 10 15 10 14 10 1.4266 1.1614 1.0667 0.9626 13 14 13 12 1.7041 1.3873 1.2743 1.1498 16 16 14 14 2.1883 1.7815 1.6363 1.4766 22 19 18 17 1.3252 1.0733 0.9440 0.8290 15 13 12 10 1.8549 1.5023 1.3214 1.1604 17 17 15 14 2.8949 2.3447 2.0623 1.8110 31 27 21 20 1.1743 2.1344 1.0503 1.9090 0.9267 1.6843 0.9127 1.6589 13 19 13 22 11 19 11 19 3.4585 0.9216 1.2117 3.0934 0.7549 0.9926 2.7292 0.6924 0.9103 2.6881 0.6268 0.8241 50 9 12 31 9 11 32 8 11 28 8 10 1.5152 1.2412 1.1383 1.0305 14 14 13 12 1.9423 1.6749 .................... 1.5911 1.6749 .................... 1.4591 1.4953 .................... 1.3210 1.3672 0.1586 19 24 .................... 17 18 .................... 16 16 .................... 15 17 2 .................... .................... .................... 0.6791 .................... .................... .................... 7 .................... .................... .................... 1.4216 .................... .................... .................... 17 PO 00000 Frm 00010 Fmt 4701 Sfmt 4702 E:\FR\FM\25APP2.SGM 25APP2 24187 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules TABLE 1—PROPOSED RELATIVE WEIGHTS AND AVERAGE LENGTH OF STAY VALUES FOR CASE-MIX GROUPS—Continued 5103 ......... 5104 ......... Relative weight CMG Description (M=motor, C=cognitive, A=age) CMG Expired, of stay Expired, of stay not orthopedic, length is 15 days or fewer. not orthopedic, length is 16 days or more. Tier 1 Tier 2 Tier 3 .................... .................... .................... .................... .................... .................... Generally, updates to the CMG relative weights result in some increases and some decreases to the CMG relative weight values. Table 2 shows how we estimate that the application of the proposed revisions for FY 2017 would affect particular CMG relative weight values, which would affect the overall distribution of payments within CMGs and tiers. Note that, because we propose to implement the CMG relative weight revisions in a budget-neutral manner (as previously described), total estimated aggregate payments to IRFs for FY 2017 would not be affected as a result of the proposed CMG relative weight revisions. However, the proposed revisions would affect the distribution of payments within CMGs and tiers. TABLE 2—DISTRIBUTIONAL EFFECTS OF THE PROPOSED CHANGES TO THE CMG RELATIVE WEIGHTS [FY 2016 Values compared with FY 2017 values] Tier 1 Tier 2 Tier 3 0.8033 .................... .................... .................... 8 2.1360 .................... .................... .................... 21 discharges) were classified into this CMG and tier. The largest decrease in a CMG relative weight value affecting the largest number of IRF cases would be a 1.4 percent decrease in the CMG relative weight for CMG 0110—Stroke, with a motor score less than 22.35 and age less than 84.5 -in the ‘‘no comorbidity’’ tier. In the FY 2015 IRF claims data, this change would have affected 13,587 cases (3.5 percent of all IRF cases). The proposed changes in the average length of stay values for FY 2017, compared with the FY 2016 average length of stay values, are small and do not show any particular trends in IRF length of stay patterns. We invite public comment on our proposed updates to the CMG relative weights and average length of stay values for FY 2017. IV. Facility-Level Adjustment Factors Section 1886(j)(3)(A)(v) of the Act confers broad authority upon the Secretary to adjust the per unit payment rate by such factors as the Secretary determines are necessary to properly Increased by 15% or more .............. 0 0.0 reflect variations in necessary costs of Increased by betreatment among rehabilitation tween 5% and facilities. Under this authority, we 15% ................... 797 0.2 currently adjust the federal prospective Changed by less payment amount associated with a CMG than 5% ............. 391,183 99.5 to account for facility-level Decreased by becharacteristics such as an IRF’s LIP, tween 5% and 15% ................... 1,237 0.3 teaching status, and location in a rural area, if applicable, as described in Decreased by 15% or more .............. 14 0.0 § 412.624(e). Based on the substantive changes to As Table 2 shows, 99.5 percent of all the facility-level adjustment factors that IRF cases are in CMGs and tiers that were adopted in the FY 2014 final rule would experience less than a 5 percent (78 FR 47860, 47868 through 47872), in change (either increase or decrease) in the FY 2015 final rule (79 FR 45872, the CMG relative weight value as a 45882 through 45883), we froze the result of the proposed revisions for FY facility-level adjustment factors at the 2017. The largest estimated increase in FY 2014 levels for FY 2015 and all the proposed CMG relative weight subsequent years (unless and until we values that affects the largest number of propose to update them again through IRF discharges would be a 0.1 percent future notice-and-comment rulemaking). increase in the CMG relative weight For FY 2017, we will continue to hold value for CMG 0704—Fracture of lower the adjustment factors at the FY 2014 extremity, with a motor score less than levels as we continue to monitor the 28.15-in the ‘‘no comorbidity’’ tier. In most current IRF claims data available the FY 2015 claims data, 18,696 IRF and continue to evaluate and monitor discharges (4.8 percent of all IRF the effects of the FY 2014 changes. Percentage change asabaliauskas on DSK3SPTVN1PROD with PROPOSALS Average length of stay None VerDate Sep<11>2014 Number of cases affected 19:36 Apr 22, 2016 Percentage of cases affected Jkt 238001 PO 00000 Frm 00011 Fmt 4701 Sfmt 4702 None V. Proposed FY 2017 IRF PPS Payment Update A. Background Section 1886(j)(3)(C) of the Act requires the Secretary to establish an increase factor that reflects changes over time in the prices of an appropriate mix of goods and services included in the covered IRF services, which is referred to as a market basket index. According to section 1886(j)(3)(A)(i) of the Act, the increase factor shall be used to update the IRF federal prospective payment rates for each FY. Section 1886(j)(3)(C)(ii)(I) of the Act requires the application of a productivity adjustment, as described below. In addition, sections 1886(j)(3)(C)(ii)(II) and 1886(j)(3)(D)(v) of the Act require the application of a 0.75 percentage point reduction to the market basket increase factor for FY 2017. Thus, in this proposed rule, we propose to update the IRF PPS payments for FY 2017 by a market basket increase factor as required by section 1886(j)(3)(C) of the Act, with a productivity adjustment as required by section 1886(j)(3)(C)(ii)(I) of the Act, and a 0.75 percentage point reduction as required by sections 1886(j)(3)(C)(ii)(II) and 1886(j)(3)(D)(v) of the Act. For FY 2015, IRF PPS payments were updated using the 2008-based RPL market basket. Beginning with the FY 2016 IRF PPS, we created and adopted a stand-alone IRF market basket, which was referred to as the 2012-based IRF market basket, reflecting the operating and capital cost structures for freestanding IRFs and hospital-based IRFs. The general structure of the 2012based IRF market basket is similar to the 2008-based RPL market basket; however, we made several notable changes. In developing the 2012-based IRF market basket, we derived cost weights from Medicare cost report data for both freestanding and hospital-based IRFs (the 2008-based RPL market basket was based on freestanding data only), incorporated the 2007 Input-Output data from the Bureau of Economic Analysis (the 2008-based RPL market basket was based on the 2002 InputOutput data); used new price proxy blends for two cost categories (Fuel, Oil, E:\FR\FM\25APP2.SGM 25APP2 24188 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules asabaliauskas on DSK3SPTVN1PROD with PROPOSALS and Gasoline and Medical Instruments); added one additional cost category (Installation, Maintenance, and Repair), which was previously included in the residual All Other Services: LaborRelated cost category of the 2008-based RPL market basket; and eliminated three cost categories (Apparel, Machinery & Equipment, and Postage). The FY 2016 IRF PPS final rule (80 FR 47046 through 47068) contains a complete discussion of the development of the 2012-based IRF market basket. B. Proposed FY 2017 Market Basket Update and Productivity Adjustment For FY 2017, we are proposing to use the same methodology described in the FY 2016 IRF PPS final rule (80 FR 47066) to compute the FY 2017 market basket increase factor to update the IRF PPS base payment rate. Consistent with historical practice, we are proposing to estimate the market basket update for the IRF PPS based on IHS Global Insight’s forecast using the most recent available data. IHS Global Insight (IGI), Inc. is a nationally recognized economic and financial forecasting firm with which CMS contracts to forecast the components of the market baskets and multifactor productivity (MFP). Based on IGI’s first quarter 2016 forecast with historical data through the fourth quarter of 2015, the projected 2012-based IRF market basket increase factor for FY 2017 would be 2.7 percent. Therefore, consistent with our historical practice of estimating market basket increases based on the best available data, we are proposing a market basket increase factor of 2.7 percent for FY 2017. We are also proposing that if more recent data are subsequently available (for example, a more recent estimate of the market basket update), we would use such data to determine the FY 2017 update in the final rule. According to section 1886(j)(3)(C)(i) of the Act, the Secretary shall establish an increase factor based on an appropriate percentage increase in a market basket of goods and services. Section 1886(j)(3)(C)(ii) of the Act then requires that, after establishing the increase factor for a FY, the Secretary shall reduce such increase factor for FY 2012 and each subsequent FY, by the productivity adjustment described in section 1886(b)(3)(B)(xi)(II) of the Act. Section 1886(b)(3)(B)(xi)(II) of the Act sets forth the definition of this productivity adjustment. The statute defines the productivity adjustment to be equal to the 10-year moving average of changes in annual economy-wide private nonfarm business MFP (as projected by the Secretary for the 10year period ending with the applicable VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 FY, year, cost reporting period, or other annual period) (the ‘‘MFP adjustment’’). The BLS publishes the official measure of private nonfarm business MFP. Please see https://www.bls.gov/mfp for the BLS historical published MFP data. A complete description of the MFP projection methodology is available on the CMS Web site at https:// www.cms.gov/Research-Statistics-Dataand-Systems/Statistics-Trends-andReports/MedicareProgramRatesStats/ MarketBasketResearch.html. Using IGI’s first quarter 2016 forecast, the MFP adjustment for FY 2017 (the 10-year moving average of MFP for the period ending FY 2017) is currently projected to be 0.5 percent. Thus, in accordance with section 1886(j)(3)(C) of the Act, we are proposing to base the FY 2017 market basket update, which is used to determine the applicable percentage increase for the IRF payments, on the most recent estimate of the 2012-based IRF market basket. We are proposing to then reduce this percentage increase by the most up-todate estimate of the MFP adjustment for FY 2017 of 0.5 percentage point (the 10year moving average of MFP for the period ending FY 2017 based on IGI’s first quarter 2016 forecast). Following application of the MFP, we are proposing to further reduce the applicable percentage increase by 0.75 percentage point, as required by sections 1886(j)(3)(C)(ii)(II) and 1886(j)(3)(D)(v) of the Act. Therefore, the estimate of the FY 2017 IRF update for the proposed rule is 1.45 percent (2.7 percent market basket update, less 0.5 percentage point MFP adjustment, less 0.75 percentage point legislative adjustment). Furthermore, we propose that if more recent data are subsequently available (for example, a more recent estimate of the market basket update and MFP adjustment), we would use such data to determine the FY 2017 market basket update and MFP adjustment in the final rule. For FY 2017, the Medicare Payment Advisory Commission (MedPAC) recommends that a 0-percent update be applied to IRF PPS payment rates. As discussed, and in accordance with sections 1886(j)(3)(C) and 1886(j)(3)(D) of the Act, the Secretary is proposing to update the IRF PPS payment rates for FY 2017 by an adjusted market basket increase factor of 1.45 percent, as section 1886(j)(3)(C) of the Act does not provide the Secretary with the authority to apply a different update factor to IRF PPS payment rates for FY 2017. PO 00000 Frm 00012 Fmt 4701 Sfmt 4702 C. Proposed Labor-Related Share for FY 2017 Section 1886(j)(6) of the Act specifies that the Secretary is to adjust the proportion (as estimated by the Secretary from time to time) of rehabilitation facilities’ costs which are attributable to wages and wage-related costs of the prospective payment rates computed under section 1886(j)(3) for area differences in wage levels by a factor (established by the Secretary) reflecting the relative hospital wage level in the geographic area of the rehabilitation facility compared to the national average wage level for such facilities. 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. Based on our definition of the laborrelated share and the cost categories in the 2012-based IRF market basket, we propose to include in the labor-related share for FY 2017 the sum of the FY 2017 relative importance of Wages and Salaries, Employee Benefits, Professional Fees: Labor- Related, Administrative and Facilities Support Services, Installation, Maintenance, and Repair, All Other: Labor-related Services, and a portion of the CapitalRelated cost weight from the 2012-based IRF market basket. For more details regarding the methodology for determining specific cost categories for inclusion in the 2012-based IRF laborrelated share, see the FY 2016 IRF final rule (80 FR 47066 through 47068). Using this proposed method and the IHS Global Insight, Inc. first quarter 2016 forecast for the 2012-based IRF market basket, the proposed IRF laborrelated share for FY 2017 is the sum of the FY 2017 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 2017. The sum of the relative importance for FY 2017 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) using the 2012-based IRF market basket is 67.1 percent, as shown in Table 3. We propose that the portion of Capital that is influenced by the local labor market is estimated to be 46 percent. Since the relative importance for E:\FR\FM\25APP2.SGM 25APP2 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules Capital-Related Costs is 8.4 percent of the 2012-based IRF market basket in FY 2017, we propose to take 46 percent of 8.4 percent to determine the laborrelated share of Capital for FY 2017. The result would be 3.9 percent, which we propose to add to 67.1 percent for the operating cost amount to determine the total proposed labor-related share for FY 2017. Thus, the labor-related share that we are proposing to use for IRF PPS in FY 2017 would be 71.0 percent. By comparison, the FY 2016 labor-related share under the 2012-based IRF market 24189 basket was also 71.0 percent. Furthermore, we propose that if more recent data are subsequently available (for example, a more recent estimate of the labor-related share), we would use such data to determine the FY 2017 IRF labor-related share in the final rule. TABLE 3—IRF LABOR-RELATED SHARE FY 2017 proposed labor-related share 1 FY 2016 final labor related share 2 Wages and Salaries ................................................................................................................................ Employee Benefits ................................................................................................................................... Professional Fees: Labor-related ............................................................................................................ Administrative and Facilities Support Services ....................................................................................... Installation, Maintenance, and Repair ..................................................................................................... All Other: Labor-related Services ............................................................................................................ 47.7 11.4 3.5 0.8 1.9 1.8 47.6 11.4 3.5 0.8 2.0 1.8 Subtotal ............................................................................................................................................. Labor-related portion of capital (46%) ..................................................................................................... 67.1 3.9 67.1 3.9 Total Labor-Related Share ........................................................................................................ 71.0 71.0 1 Based on the 2012-based IRF Market Basket, IHS Global Insight, Inc. 1st quarter 2016 forecast. Register 80 FR 47068. 2 Federal D. Proposed Wage Adjustment asabaliauskas on DSK3SPTVN1PROD with PROPOSALS 1. Background Section 1886(j)(6) of the Act requires the Secretary to adjust the proportion of rehabilitation facilities’ costs attributable to wages and wage-related costs (as estimated by the Secretary from time to time) by a factor (established by the Secretary) reflecting the relative hospital wage level in the geographic area of the rehabilitation facility compared to the national average wage level for those facilities. The Secretary is required to update the IRF PPS wage index on the basis of information available to the Secretary on the wages and wage-related costs to furnish rehabilitation services. Any adjustment or updates made under section 1886(j)(6) of the Act for a FY are made in a budget-neutral manner. For FY 2017, we propose to maintain the policies and methodologies described in the FY 2016 IRF PPS final rule (80 FR 47036, 47068 through 47075) related to the labor market area definitions and the wage index methodology for areas with wage data. Thus, we propose to use the CBSA labor market area definitions and the FY 2016 pre-reclassification and pre-floor hospital wage index data. The current statistical areas which were implemented in FY 2016 are based on OMB standards published on February 28, 2013, in OMB Bulletin No. 13–01. For FY 2017, we are continuing to use the new OMB delineations that we adopted beginning with FY 2016. In accordance with section 1886(d)(3)(E) of VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 the Act, the FY 2016 pre-reclassification and pre-floor hospital wage index is based on data submitted for hospital cost reporting periods beginning on or after October 1, 2011, and before October 1, 2012 (that is, FY 2012 cost report data). The labor market designations made by the OMB include some geographic areas where there are no hospitals and, thus, no hospital wage index data on which to base the calculation of the IRF PPS wage index. We propose to continue to use the same methodology discussed in the FY 2008 IRF PPS final rule (72 FR 44299) to address those geographic areas where there are no hospitals and, thus, no hospital wage index data on which to base the calculation for the FY 2017 IRF PPS wage index. OMB delineations issued on February 28, 2013, in OMB Bulletin No. 13–01. OMB Bulletin No. 13–01 established revised delineations for Metropolitan Statistical Areas, Micropolitan Statistical Areas, and Combined Statistical Areas in the United States and Puerto Rico, and provided guidance on the use of the delineations of these statistical areas based on new standards published on June 28, 2010, in the Federal Register (75 FR 37246 through 37252). A copy of this bulletin may be obtained at https://www.whitehouse.gov/ sites/default/files/omb/bulletins/2013/b13-01.pdf. For FY 2017, we are continuing to use the new OMB delineations that we adopted beginning with FY 2016 to calculate the area wage indexes and the transition periods, which we discuss below. 2. Update 3. Transition Period The wage index used for the IRF PPS is calculated using the prereclassification and pre-floor acute care hospital wage index data and is assigned to the IRF on the basis of the labor market area in which the IRF is geographically located. IRF labor market areas are delineated based on the CBSAs established by the OMB. In the FY 2016 IRF PPS final rule (80 FR 47036, 47068), we established an IRF wage index based on FY 2011 acute care hospital wage data to adjust the FY 2016 IRF payment rates. We also adopted the revised CBSAs set forth by OMB. The current CBSA delineations (which were implemented for the IRF PPS beginning with FY 2016) are based on revised In FY 2016, we applied a 1-year blended wage index for all IRF providers to mitigate the impact of the wage index change due to the implementation of the revised CBSA delineations. In FY 2016, all IRF providers received a blended wage index using 50 percent of their FY 2016 wage index based on the revised OMB CBSA delineations and 50 percent of their FY 2016 wage index based on the OMB delineations used in FY 2015. We propose to maintain the policy established in FY 2016 IRF PPS final rule related to the blended one-year transition wage index (80 FR 47036, 47073 through 47074). This 1-year blended wage index became effective on PO 00000 Frm 00013 Fmt 4701 Sfmt 4702 E:\FR\FM\25APP2.SGM 25APP2 24190 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules October 1, 2015, and expires on September 30, 2016. For FY 2016, in addition to the blended wage index, we also adopted a 3-year budget neutral phase out of the rural adjustment for FY 2015 rural IRFs that became urban in FY 2016 under the revised CBSA delineations. In FY 2016, IRFs that were designated as rural in FY 2015 and became designated as urban in FY 2016 received two-thirds of the 2015 rural adjustment of 14.9 percent. FY 2017 represents the second year of the 3-year phase out of the rural adjustment, in which these same IRFs will receive one-third of the 2015 rural adjustment of 14.9 percent, as finalized in the FY 2016 IRF PPS final rule (80 FR 47036, 47073 through 47074). For FY 2017, the proposed wage index will be based solely on the previously adopted revised CBSA delineations and their respective wage index (rather than on a blended wage index). We are not proposing any additional wage index transition adjustments for IRF providers due to the adoption of the new OMB delineations in FY 2016, but will continue the 3-year phase out of the rural adjustments for IRF providers that changed from rural to urban status that was finalized in the FY 2016 IFR PPS final rule (80 FR 47036, 47073 through 47074). For a full discussion of our implementation of the new OMB labor market area delineations for the FY 2016 wage index, please refer to the FY 2016 IRF PPS final rule (80 FR 47036, 47068 through 47076). We are not proposing any changes to this policy in this proposed rule. For FY 2017, 19 IRFs that were designated as rural in FY 2015 and became designated as urban in FY 2016 will receive the proposed FY 2017 wage index (based solely on the revised CBSA delineations) and one-third of the FY 2015 rural adjustment of 14.9 percent (80 FR 47036, 47073 through 47076). The proposed wage index applicable to FY 2017 is available on the CMS Web site at https://www.cms.gov/Medicare/ Medicare-Fee-for-Service-Payment/ InpatientRehabFacPPS/Data-Files.html. Table A is for urban areas, and Table B is for rural areas. To calculate the wage-adjusted facility payment for the payment rates set forth in this proposed rule, we multiply the unadjusted federal payment rate for IRFs by the FY 2017 labor-related share based on the 2012-based IRF market basket (71.0 percent) to determine the labor-related portion of the standard payment amount. A full discussion of the calculation of the labor-related share is located in section V.C of this proposed rule. We then multiply the labor-related portion by the applicable IRF wage index from the tables in the addendum to this proposed rule. These tables are available through the Internet on the CMS Web site at https:// www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/InpatientRehab FacPPS/Data-Files.html. Adjustments or updates to the IRF wage index made under section 1886(j)(6) of the Act must be made in a budget-neutral manner. We propose to calculate a budget-neutral wage adjustment factor as established in the FY 2004 IRF PPS final rule (68 FR 45689), codified at § 412.624(e)(1), as described in the steps below. We propose to use the listed steps to ensure that the FY 2017 IRF standard payment conversion factor reflects the proposed update to the wage indexes (based on the FY 2012 hospital cost report data) and the labor-related share in a budgetneutral manner: Step 1. Determine the total amount of the estimated FY 2016 IRF PPS payments, using the FY 2016 standard payment conversion factor and the labor-related share and the wage indexes from FY 2016 (as published in the FY 2016 IRF PPS final rule (80 FR 47036)). Step 2. Calculate the total amount of estimated IRF PPS payments using the proposed FY 2017 standard payment conversion factor and the proposed FY 2017 labor-related share and CBSA urban and rural wage indexes. Step 3. Divide the amount calculated in step 1 by the amount calculated in step 2. The resulting quotient is the proposed FY 2017 budget-neutral wage adjustment factor of 0.9992. Step 4. Apply the proposed FY 2017 budget-neutral wage adjustment factor from step 3 to the FY 2016 IRF PPS standard payment conversion factor after the application of the adjusted market basket update to determine the proposed FY 2017 standard payment conversion factor. We discuss the calculation of the proposed standard payment conversion factor for FY 2017 in section V.E of this proposed rule. We invite public comment on the proposed IRF wage adjustment for FY 2017. E. Description of the Proposed IRF Standard Payment Conversion Factor and Payment Rates for FY 2017 To calculate the proposed standard payment conversion factor for FY 2017, as illustrated in Table 4, we begin by applying the proposed adjusted market basket increase factor for FY 2017 that was adjusted in accordance with sections 1886(j)(3)(C) and (D) of the Act, to the standard payment conversion factor for FY 2016 ($15,478). Applying the proposed 1.45 percent adjusted market basket increase for FY 2017 to the standard payment conversion factor for FY 2016 of $15,478 yields a standard payment amount of $15,702. Then, we apply the proposed budget neutrality factor for the FY 2017 wage index and labor-related share of 0.9992, which results in a proposed standard payment amount of $15,690. We next apply the proposed budget neutrality factors for the revised CMG relative weights of 0.9990, which results in the proposed standard payment conversion factor of $15,674 for FY 2017. TABLE 4—CALCULATIONS TO DETERMINE THE PROPOSED FY 2017 STANDARD PAYMENT CONVERSION FACTOR asabaliauskas on DSK3SPTVN1PROD with PROPOSALS Explanation for adjustment Calculations Standard Payment Conversion Factor for FY 2016 ...................................................................................................................... Market Basket Increase Factor for FY 2017 (2.7 percent), reduced by 0.5 percentage point for the productivity adjustment as required by section 1886(j)(3)(C)(ii)(I) of the Act, and reduced by 0.75 percentage point in accordance with paragraphs 1886(j)(3)(C) and (D) of the Act ................................................................................................................................................. Budget Neutrality Factor for the Wage Index and Labor-Related Share ...................................................................................... Budget Neutrality Factor for the Revisions to the CMG Relative Weights ................................................................................... Proposed FY 2017 Standard Payment Conversion Factor ........................................................................................................... We invite public comment on the proposed FY 2017 standard payment conversion factor. VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 After the application of the proposed CMG relative weights described in section III of this proposed rule to the PO 00000 Frm 00014 Fmt 4701 Sfmt 4702 $15,478 × 1.0145 × 0.9992 × 0.9990 = $15,674 proposed FY 2017 standard payment conversion factor ($15,674), the resulting proposed unadjusted IRF E:\FR\FM\25APP2.SGM 25APP2 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules 24191 prospective payment rates for FY 2017 are shown in Table 5. TABLE 5—PROPOSED FY 2017 PAYMENT RATES Payment rate tier 1 asabaliauskas on DSK3SPTVN1PROD with PROPOSALS CMG 0101 0102 0103 0104 0105 0106 0107 0108 0109 0110 0201 0202 0203 0204 0205 0206 0207 0301 0302 0303 0304 0401 0402 0403 0404 0405 0501 0502 0503 0504 0505 0506 0601 0602 0603 0604 0701 0702 0703 0704 0801 0802 0803 0804 0805 0806 0901 0902 0903 0904 1001 1002 1003 1101 1102 1201 1202 1203 1301 1302 1303 1401 1402 1403 1404 1501 1502 1503 ......................................................................................... ......................................................................................... ......................................................................................... ......................................................................................... ......................................................................................... ......................................................................................... 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VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 PO 00000 Frm 00015 $12,550.17 15,857.39 18,501.59 19,753.94 22,824.48 25,558.02 28,476.52 35,824.49 32,255.52 42,779.05 12,266.47 17,145.79 19,101.90 21,032.94 25,443.60 30,167.75 39,677.16 17,895.01 22,043.91 25,827.62 33,429.51 15,385.60 22,084.67 34,829.20 60,976.56 53,697.56 13,487.48 18,192.81 22,786.86 26,757.09 30,714.77 42,517.29 16,255.51 20,934.19 25,783.73 34,148.94 15,694.38 20,020.40 24,130.12 31,277.47 12,451.43 16,224.16 21,700.65 19,531.37 23,242.97 28,205.36 15,463.97 19,780.59 24,868.37 31,503.17 16,837.01 21,826.05 30,788.44 20,714.76 29,714.77 16,329.17 18,978.08 24,153.63 18,536.07 25,492.19 31,415.40 13,547.04 18,510.99 22,067.42 27,898.15 15,868.36 20,015.70 24,388.74 Fmt 4701 Sfmt 4702 Payment rate tier 2 Payment rate tier 3 $11,219.45 14,175.57 16,539.20 17,658.33 20,404.41 22,846.42 25,456.14 32,025.12 28,833.89 38,241.43 10,034.49 14,025.10 15,625.41 17,205.35 20,813.50 24,677.15 32,457.72 14,769.61 18,194.38 21,316.64 27,592.51 13,462.40 19,326.04 30,478.09 53,357.43 46,989.08 10,647.35 14,360.52 17,987.48 21,120.72 24,244.54 33,561.17 12,857.38 16,556.45 20,391.87 27,009.44 12,775.88 16,297.83 19,644.22 25,462.41 10,047.03 13,092.49 17,512.56 15,760.21 18,755.51 22,760.22 12,457.70 15,934.19 20,031.37 25,376.21 14,890.30 19,300.96 27,227.31 18,678.71 26,793.14 16,042.34 18,644.22 23,730.44 14,562.71 20,028.24 24,680.28 11,452.99 15,650.49 18,656.76 23,586.24 13,448.29 16,963.97 20,669.30 E:\FR\FM\25APP2.SGM $10,230.42 12,926.35 15,081.52 16,103.47 18,606.61 20,835.45 23,214.76 29,203.80 26,294.70 34,873.08 9,051.74 12,652.05 14,095.63 15,520.39 18,775.88 22,260.21 29,279.03 13,418.51 16,529.80 19,366.79 25,067.43 12,424.78 17,835.44 28,128.56 49,244.57 43,366.82 10,123.84 13,655.19 17,103.47 20,083.10 23,053.32 31,912.26 11,882.46 15,300.96 18,844.85 24,959.28 12,189.67 15,550.18 18,742.97 24,294.70 9,279.01 12,090.92 16,172.43 14,554.88 17,321.34 21,018.83 11,520.39 14,736.69 18,525.10 23,468.68 12,863.65 16,675.57 23,523.54 15,291.55 21,934.20 14,576.82 16,940.46 21,561.15 13,622.27 18,736.70 23,089.37 10,377.76 14,180.27 16,904.41 21,371.50 12,401.27 15,642.65 19,059.58 25APP2 Payment rate no comorbidity $9,761.77 12,333.87 14,390.30 15,365.22 17,753.94 19,879.33 22,150.50 27,866.80 25,089.37 33,275.90 8,440.45 11,797.82 13,142.65 14,471.80 17,507.86 20,757.08 27,300.97 12,543.90 15,451.43 18,103.47 23,431.06 11,286.85 16,202.21 25,553.32 44,735.16 39,395.03 9,114.43 12,293.12 15,398.14 18,079.96 20,755.51 28,730.44 10,877.76 14,006.29 17,252.37 22,849.56 11,073.68 14,126.98 17,026.67 22,070.56 8,531.36 11,117.57 14,871.49 13,384.03 15,927.92 19,327.61 10,484.34 13,410.67 16,860.52 21,358.96 11,620.70 15,064.28 21,250.81 13,868.36 19,893.44 12,913.81 15,009.42 19,101.90 12,561.14 17,274.32 21,288.43 9,415.37 12,865.22 15,337.01 19,390.31 11,702.21 14,761.77 17,985.92 24192 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules TABLE 5—PROPOSED FY 2017 PAYMENT RATES—Continued Payment rate tier 1 CMG 1504 1601 1602 1603 1701 1702 1703 1704 1801 1802 1803 1901 1902 1903 2001 2002 2003 2004 2101 5001 5101 5102 5103 5104 ......................................................................................... ......................................................................................... ......................................................................................... ......................................................................................... ......................................................................................... ......................................................................................... ......................................................................................... ......................................................................................... ......................................................................................... ......................................................................................... ......................................................................................... ......................................................................................... ......................................................................................... ......................................................................................... ......................................................................................... ......................................................................................... ......................................................................................... ......................................................................................... ......................................................................................... ......................................................................................... ......................................................................................... ......................................................................................... ......................................................................................... ......................................................................................... F. Example of the Methodology for Adjusting the Proposed Federal Prospective Payment Rates Table 6 illustrates the methodology for adjusting the proposed federal prospective payments (as described in sections V.A. through V.F. of this proposed rule). The following examples are based on two hypothetical Medicare beneficiaries, both classified into CMG 0110 (without comorbidities). The proposed unadjusted federal prospective payment rate for CMG 0110 (without comorbidities) appears in Table 5. Example: One beneficiary is in Facility A, an IRF located in rural Spencer County, Indiana, and another beneficiary is in Facility B, an IRF located in urban Harrison County, Indiana. Facility A, a rural non-teaching hospital has a Disproportionate Share Hospital (DSH) percentage of 5 percent (which would result in a LIP adjustment of 1.0156), a wage index of 0.8297, and a rural adjustment of 14.9 percent. Facility B, an urban teaching hospital, has a DSH percentage of 15 percent Payment rate tier 2 Payment rate tier 3 30,330.76 15,431.05 20,100.34 25,217.90 17,757.07 22,360.53 26,710.06 34,299.41 20,771.18 29,073.70 45,374.66 18,405.98 33,454.59 54,208.53 14,445.16 18,992.19 23,749.24 30,443.61 26,252.38 .............................. .............................. .............................. .............................. .............................. 25,705.36 14,004.72 18,242.97 22,887.17 14,456.13 18,203.78 21,744.54 27,923.23 16,822.90 23,547.05 36,750.83 16,462.40 29,921.67 48,485.95 11,832.30 15,558.01 19,454.57 24,938.90 26,252.38 .............................. .............................. .............................. .............................. .............................. 23,703.79 13,015.69 16,954.57 21,271.19 13,277.45 16,719.46 19,973.38 25,647.37 14,796.26 20,711.62 32,324.49 14,525.10 26,399.72 42,777.48 10,852.68 14,268.04 17,841.71 22,869.93 23,437.33 .............................. .............................. .............................. .............................. .............................. (which would result in a LIP adjustment of 1.0454 percent), a wage index of 0.8756, and a teaching status adjustment of 0.0784. To calculate each IRF’s labor and nonlabor portion of the federal prospective payment, we begin by taking the unadjusted federal prospective payment rate for CMG 0110 (without comorbidities) from Table 5. Then, we multiply the labor-related share for FY 2017 (71.0 percent) described in section V.E. of this proposed rule by the proposed unadjusted federal prospective payment rate. To determine the non-labor portion of the proposed federal prospective payment rate, we subtract the labor portion of the proposed federal payment from the proposed unadjusted federal prospective payment. To compute the proposed wageadjusted federal prospective payment, we multiply the labor portion of the proposed federal payment by the appropriate proposed wage index located in tables A and B. These tables are available on CMS Web site at https:// Payment rate no comorbidity 22,368.37 12,023.53 15,663.03 19,650.49 11,981.21 15,087.79 18,021.97 23,144.23 12,993.75 18,188.11 28,385.61 14,305.66 26,001.60 42,133.28 9,824.46 12,916.94 16,152.06 20,705.35 21,429.49 2,485.90 10,644.21 22,282.16 12,590.92 33,479.66 www.cms.hhs.gov/Medicare/MedicareFee-for-Service-Payment/ InpatientRehabFacPPS/. The resulting figure is the wage-adjusted labor amount. Next, we compute the proposed wage-adjusted federal payment by adding the wage-adjusted labor amount to the non-labor portion. Adjusting the proposed wage-adjusted federal payment by the facility-level adjustments involves several steps. First, we take the wage-adjusted federal prospective payment and multiply it by the appropriate rural and LIP adjustments (if applicable). Second, to determine the appropriate amount of additional payment for the teaching status adjustment (if applicable), we multiply the teaching status adjustment (0.0784, in this example) by the wageadjusted and rural-adjusted amount (if applicable). Finally, we add the additional teaching status payments (if applicable) to the wage, rural, and LIPadjusted federal prospective payment rates. Table 6 illustrates the components of the adjusted payment calculation. asabaliauskas on DSK3SPTVN1PROD with PROPOSALS TABLE 6—EXAMPLE OF COMPUTING THE IRF FY 2017 FEDERAL PROSPECTIVE PAYMENT Rural Facility A (Spencer Co., IN) Steps 1. 2. 3. 4. 5. 6. 7. Unadjusted Federal Prospective Payment .......................................................................... Labor Share ......................................................................................................................... Labor Portion of Federal Payment ...................................................................................... CBSA-Based Wage Index (shown in the Addendum, Tables A and B) ............................. Wage-Adjusted Amount ....................................................................................................... Non-Labor Amount .............................................................................................................. Wage-Adjusted Federal Payment ....................................................................................... VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 PO 00000 Frm 00016 Fmt 4701 Sfmt 4702 E:\FR\FM\25APP2.SGM $33,275.90 × 0.710 = $23,625.89 × 0.8297 = $19,602.40 + $9,650.01 = $29,252.41 25APP2 Urban Facility B (Harrison Co., IN) $33,275.90 × 0.710 = $23,625.89 × 0.8756 = $20,686.83 + $9,650.01 = $30,336.84 24193 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules TABLE 6—EXAMPLE OF COMPUTING THE IRF FY 2017 FEDERAL PROSPECTIVE PAYMENT—Continued Rural Facility A (Spencer Co., IN) Steps × 1.149 = $33,611.02 × 1.0156 = $34,135.35 $33,611.02 ×0 = $0.00 + $34,135.35 = $34,135.35 8. Rural Adjustment ................................................................................................................. 9. Wage- and Rural-Adjusted Federal Payment ..................................................................... 10. LIP Adjustment .................................................................................................................. 11. FY 2017 Wage-, Rural- and LIP-Adjusted Federal Prospective Payment Rate ............... 12. FY 2017 Wage- and Rural-Adjusted Federal Prospective Payment ................................ 13. Teaching Status Adjustment ............................................................................................. 14. Teaching Status Adjustment Amount ................................................................................ 15. FY 2017 Wage-, Rural-, and LIP-Adjusted Federal Prospective Payment Rate .............. 16. Total FY 2017 Adjusted Federal Prospective Payment .................................................... Thus, the proposed adjusted payment for Facility A would be $34,135.35, and the proposed adjusted payment for Facility B would be $34,092.54. asabaliauskas on DSK3SPTVN1PROD with PROPOSALS VI. Proposed Update to Payments for High-Cost Outliers Under the IRF PPS A. Proposed Update to the Outlier Threshold Amount for FY 2017 Section 1886(j)(4) of the Act provides the Secretary with the authority to make payments in addition to the basic IRF prospective payments for cases incurring extraordinarily high costs. A case qualifies for an outlier payment if the estimated cost of the case exceeds the adjusted outlier threshold. We calculate the adjusted outlier threshold by adding the IRF PPS payment for the case (that is, the CMG payment adjusted by all of the relevant facility-level adjustments) and the adjusted threshold amount (also adjusted by all of the relevant facility-level adjustments). Then, we calculate the estimated cost of a case by multiplying the IRF’s overall CCR by the Medicare allowable covered charge. If the estimated cost of the case is higher than the adjusted outlier threshold, we make an outlier payment for the case equal to 80 percent of the difference between the estimated cost of the case and the outlier threshold. In the FY 2002 IRF PPS final rule (66 FR 41362 through 41363), we discussed our rationale for setting the outlier threshold amount for the IRF PPS so that estimated outlier payments would equal 3 percent of total estimated payments. For the 2002 IRF PPS final rule, we analyzed various outlier policies using 3, 4, and 5 percent of the total estimated payments, and we concluded that an outlier policy set at 3 percent of total estimated payments would optimize the extent to which we could reduce the financial risk to IRFs of caring for high-cost patients, while still providing for adequate payments for all other (non-high cost outlier) cases. Subsequently, we updated the IRF outlier threshold amount in the FYs VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 2006 through 2016 IRF PPS final rules and the FY 2011 and FY 2013 notices (70 FR 47880, 71 FR 48354, 72 FR 44284, 73 FR 46370, 74 FR 39762, 75 FR 42836, 76 FR 47836, 76 FR 59256, and 77 FR 44618, 78 FR 47860, 79 FR 45872, 80 FR 47036, respectively) to maintain estimated outlier payments at 3 percent of total estimated payments. We also stated in the FY 2009 final rule (73 FR 46370 at 46385) that we would continue to analyze the estimated outlier payments for subsequent years and adjust the outlier threshold amount as appropriate to maintain the 3 percent target. To update the IRF outlier threshold amount for FY 2017, we propose to use FY 2015 claims data and the same methodology that we used to set the initial outlier threshold amount in the FY 2002 IRF PPS final rule (66 FR 41316 and 41362 through 41363), which is also the same methodology that we used to update the outlier threshold amounts for FYs 2006 through 2016. Based on an analysis of the preliminary data used for the proposed rule, we estimated that IRF outlier payments as a percentage of total estimated payments would be approximately 2.8 percent in FY 2016. Therefore, we propose to update the outlier threshold amount from $8,658 for FY 2016 to $8,301 for FY 2017 to maintain estimated outlier payments at approximately 3 percent of total estimated aggregate IRF payments for FY 2017. We invite public comment on the proposed update to the FY 2017 outlier threshold amount to maintain estimated outlier payments at approximately 3 percent of total estimated IRF payments. B. Proposed Update to the IRF Cost-ToCharge Ratio Ceiling and Urban/Rural Averages In accordance with the methodology stated in the FY 2004 IRF PPS final rule (68 FR 45674, 45692 through 45694), we propose to apply a ceiling to IRFs’ CCRs. Using the methodology described in that final rule, we propose to update the national urban and rural CCRs for IRFs, PO 00000 Frm 00017 Fmt 4701 Sfmt 4702 Urban Facility B (Harrison Co., IN) × 1.000 = $30,336.84 × 1.0454 = $31,714.13 $30,336.84 × 0.0784 = $2,378.41 + $31,714.13 = $34,092.54 as well as the national CCR ceiling for FY 2017, based on analysis of the most recent data that is available. We apply the national urban and rural CCRs in the following situations: • New IRFs that have not yet submitted their first Medicare cost report. • IRFs whose overall CCR is in excess of the national CCR ceiling for FY 2017, as discussed below. • Other IRFs for which accurate data to calculate an overall CCR are not available. Specifically, for FY 2017, we propose to estimate a national average CCR of 0.562 for rural IRFs, which we calculated by taking an average of the CCRs for all rural IRFs using their most recently submitted cost report data. Similarly, we propose to estimate a national average CCR of 0.435 for urban IRFs, which we calculated by taking an average of the CCRs for all urban IRFs using their most recently submitted cost report data. We apply weights to both of these averages using the IRFs’ estimated costs, meaning that the CCRs of IRFs with higher costs factor more heavily into the averages than the CCRs of IRFs with lower costs. For this proposed rule, we have used the most recent available cost report data (FY 2014). This includes all IRFs whose cost reporting periods begin on or after October 1, 2013, and before October 1, 2014. If, for any IRF, the FY 2014 cost report was missing or had an ‘‘as submitted’’ status, we used data from a previous fiscal year’s (that is, FY 2004 through FY 2013) settled cost report for that IRF. We do not use cost report data from before FY 2004 for any IRF because changes in IRF utilization since FY 2004 resulting from the 60 percent rule and IRF medical review activities suggest that these older data do not adequately reflect the current cost of care. In accordance with past practice, we propose to set the national CCR ceiling at 3 standard deviations above the mean CCR. Using this method, the proposed national CCR ceiling would be 1.36 for FY 2017. This means that, if an E:\FR\FM\25APP2.SGM 25APP2 24194 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules individual IRF’s CCR exceeds this proposed ceiling of 1.36 for FY 2017, we would replace the IRF’s CCR with the appropriate proposed national average CCR (either rural or urban, depending on the geographic location of the IRF). We calculated the proposed national CCR ceiling by: Step 1. Taking the national average CCR (weighted by each IRF’s total costs, as previously discussed) of all IRFs for which we have sufficient cost report data (both rural and urban IRFs combined). Step 2. Estimating the standard deviation of the national average CCR computed in step 1. Step 3. Multiplying the standard deviation of the national average CCR computed in step 2 by a factor of 3 to compute a statistically significant reliable ceiling. Step 4. Adding the result from step 3 to the national average CCR of all IRFs for which we have sufficient cost report data, from step 1. The proposed national average rural and urban CCRs and the proposed national CCR ceiling in this section will be updated in the final rule if more recent data becomes available to use in these analyses. We invite public comment on the proposed update to the IRF CCR ceiling and the urban/rural averages for FY 2017. VII. Proposed Revisions and Updates to the IRF Quality Reporting Program (QRP) asabaliauskas on DSK3SPTVN1PROD with PROPOSALS A. Background and Statutory Authority We seek to promote higher quality and more efficient health care for Medicare beneficiaries, and our efforts are furthered by QRPs coupled with public reporting of that information. Section 3004(b) of the Affordable Care Act amended section 1886(j)(7) of the Act, requiring the Secretary to establish the IRF QRP. This program applies to freestanding IRFs, as well as IRF units affiliated with either acute care facilities or critical access hospitals (CAHs). Beginning with the FY 2014 payment determination and subsequent years, the Secretary is required to reduce any annual update to the standard federal rate for discharges occurring during such fiscal year by 2 percentage points for any IRF that does not comply with the requirements established by the Secretary. Section 1886(j)(7) of the Act requires that for the FY 2014 payment determination and subsequent years, each IRF submit data on quality measures specified by the Secretary in a form and manner, and at a time, specified by the Secretary. For more VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 information on the statutory history of the IRF QRP, please refer to the FY 2015 IRF PPS final rule (79 FR 45908). The Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act) imposed new data reporting requirements for certain PAC providers, including IRFs. For information on the statutory background of the IMPACT Act, please refer to the FY 2016 IRF PPS final rule (80 FR 47080 through 47083). In the FY 2016 IRF PPS final rule, we reviewed general activities and finalized the general timeline and sequencing of such activities that would occur under the IRF QRP. For further information, please refer to the FY 2016 IRF PPS final rule (80 FR 40708 through 47128). In addition, we established our approach for identifying cross-cutting measures and process for the adoption of measures, including the application and purpose of the Measures Application Partnership (MAP) and the notice-andcomment rulemaking process (80 FR 47080 through 47084). For information on these topics, please refer to the FY 2016 IRF PPS final rule (80 FR 47080). B. General Considerations Used for Selection of Quality, Resource Use, and Other Measures for the IRF QRP For a detailed discussion of the considerations we use for the selection of IRF QRP quality measures, such as alignment with the CMS Quality Strategy,1 which incorporates the 3 broad aims of the National Quality Strategy,2 please refer to the FY 2015 IRF PPS final rule (79 FR 45911) and the FY 2016 IRF PPS final rule (80 FR 47083 through 47084). Overall, we strive to promote high quality and efficiency in the delivery of health care to the beneficiaries we serve. Performance improvement leading to the highestquality health care requires continuous evaluation to identify and address performance gaps and reduce the unintended consequences that may arise in treating a large, vulnerable, and aging population. QRPs, coupled with public reporting of quality information, are critical to the advancement of health care quality improvement efforts. Valid, reliable, relevant quality measures are fundamental to the effectiveness of our QRPs. Therefore, selection of quality measures is a priority for us in all of our QRPs. In this proposed rule, we propose to adopt for the IRF QRP one measure that 1 https://www.cms.gov/Medicare/QualityInitiatives-Patient-Assessment-Instruments/ QualityInitiativesGenInfo/CMS-QualityStrategy.html. 2 https://www.ahrq.gov/workingforquality/nqs/ nqs2011annlrpt.htm. PO 00000 Frm 00018 Fmt 4701 Sfmt 4702 we are specifying under section 1899B(c)(1) of the Act to meet the Medication Reconciliation domain, that is, Drug Regimen Review Conducted with Follow-Up for Identified IssuesPost Acute Care Inpatient Rehabilitation Facility Quality Reporting Program. Further, we are proposing to adopt for the IRF QRP, three measures to meet the resource use and other measure domains identified in section 1899B(d)(1) of the Act. These include: (1) Total Estimated Medicare Spending per Beneficiary: Medicare Spending Per Beneficiary-Post Acute Care Inpatient Rehabilitation Facility Quality Reporting Program; (2) Discharge to Community: Discharge to CommunityPost Acute Care Inpatient Rehabilitation Facility Quality Reporting Program, and (3) Measures to reflect all-condition risk-adjusted potentially preventable hospital readmission rates: Potentially Preventable 30-Day Post-Discharge Readmission Measure for Inpatient Rehabilitation Facility Quality Reporting Program. Also, we are proposing an additional measure: (4) Potentially Preventable Within Stay Readmission Measure for Inpatient Rehabilitation Facilities. In our selection and specification of measures, we employ a transparent process in which we seek input from stakeholders and national experts and engage in a process that allows for prerulemaking input on each measure, as required by section 1890A of the Act. To meet this requirement, we provided the following opportunities for stakeholder input: Our measure development contractor convened technical expert panel (TEPs) that included stakeholder experts and patient representatives on July 29, 2015, for the Drug Regimen Review Conducted with Follow-Up for Identified Issues measures; on August 25, 2015, September 25, 2015, and October 5, 2015, for the Discharge to Community measures; on August 12 and 13, 2015, and October 14, 2015, for the Potentially Preventable 30-Day PostDischarge Readmission Measures and Potentially Preventable Within Stay Readmission Measure for IRFs; and on October 29 and 30, 2015, for the Medicare Spending per Beneficiary (MSPB) measures. In addition, we released draft quality measure specifications for public comment for the Drug Regimen Review Conducted with Follow-Up for Identified Issues measures from September 18, 2015, to October 6, 2015; for the Discharge to Community measures from November 9, 2015, to December 8, 2015; for the Potentially Preventable 30-Day PostDischarge Readmission Measure for E:\FR\FM\25APP2.SGM 25APP2 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules IRFs and Potentially Preventable Within Stay Readmission Measure for IRFs from November 2, 2015 to December 1, 2015; and for the MSPB measures from January 13, 2016 to February 5, 2016. We implemented a public mailbox, PACQualityInitiative@cms.hhs.gov, for the submission of public comments. This PAC mailbox is accessible on our post-acute care quality initiatives Web site at https://www.cms.gov/Medicare/ Quality-Initiatives-Patient-AssessmentInstruments/Post-Acute-Care-QualityInitiatives/IMPACT-Act-of-2014-andCross-Setting-Measures.html. Additionally, we sought public input from the MAP Post-Acute Care, LongTerm Care Workgroup during the annual in-person meeting held December 14 and 15, 2015. The MAP is composed of multi-stakeholder groups convened by the NQF, our current contractor under section 1890(a) of the Act, tasked to provide input on the selection of quality and efficiency measures described in section 1890(b)(7)(B) of the Act. The MAP reviewed each IMPACT Act-related measure, as well as other quality measures proposed in this rule for use in the IRF QRP. For more information on the MAP’s recommendations, please refer to the MAP 2016 Final Recommendations to HHS and CMS public report at https:// www.qualityforum.org/Publications/ 2016/02/MAP_2016_Considerations_ for_Implementing_Measures_in_ Federal_Programs_-_PAC-LTC.aspx. For measures that do not have NQF endorsement, or which are not fully supported by the MAP for use in the IRF QRP, we are proposing for the IRF QRP for the purposes of satisfying the measure domains required under the IMPACT Act, measures that closely align with the national priorities identified in the National Quality Strategy (https://www.ahrq.gov/ workingforquality/) and for which the MAP supports the measure concept. Further discussion as to the importance and high-priority status of these proposed measures in the IRF setting is included under each quality measure proposal in this proposed rule. C. Policy for Retention of IRF QRP Measures Adopted for Previous Payment Determinations In the CY 2013 Hospital Outpatient Prospective Payment System/ Ambulatory Surgical Center (OPPS/ ASC) Payment Systems and Quality Reporting Programs final rule (77 FR 68500 through 68507), we adopted a policy that would allow any quality measure adopted for use in the IRF QRP to remain in effect until the measure was actively removed, suspended, or replaced, when we initially adopt a measure for the IRF QRP for a payment determination. For the purpose of streamlining the rulemaking process, when we initially adopt a measure for the IRF QRP for a payment determination, this measure will also be adopted for all subsequent years or until we propose to remove, suspend, or replace the measure. For further information on how measures are considered for removal, suspension, or replacement, please refer to the CY 2013 OPPS/ASC final rule (77 FR 68500). 24195 We are not proposing any changes to the policy for retaining IRF QRP measures adopted for previous payment determinations. D. Policy for Adopting Changes to IRF QRP Measures In the CY 2013 OPPS/ASC final rule (77 FR 68500 through 68507), we adopted a subregulatory process to incorporate NQF updates to IRF quality measure specifications that do not substantively change the nature of the measure. Substantive changes will be proposed and finalized through rulemaking. For further information on what constitutes a substantive versus a nonsubstantive change and the subregulatory process for nonsubstantive changes, please refer to the CY 2013 OPPS/ASC final rule (77 FR 68500). We are not proposing any changes to the policy for adopting changes to IRF QRP measures. E. Quality Measures Previously Finalized for and Currently Used in the IRF QRP A history of the IRF QRP quality measures adopted for the FY 2014 payment determinations and subsequent years is presented in Table 7. The year in which each quality measure was first adopted and implemented, and then subsequently re-proposed or revised, if applicable, is displayed. The initial and subsequent annual payment determination years are also shown in Table 7. For more information on a particular measure, please refer to the IRF PPS final rule and associated page numbers referenced in the Table 7. TABLE 7—QUALITY MEASURES PREVIOUSLY FINALIZED FOR AND CURRENTLY USED IN THE IRF QUALITY REPORTING PROGRAM Final rule Data collection start date National Healthcare Safety Network (NHSN) Catheter-Associated Urinary Tract Infection (CAUTI) Outcome Measure (NQF #0138). asabaliauskas on DSK3SPTVN1PROD with PROPOSALS Measure title Adopted an application of the measure in FY 2012 IRF PPS Final Rule (76 FR 47874 through 47886). October 1, 2012 ..... FY 2014 and subsequent years. Adopted the NQF-endorsed version and expanded measure (with standardized infection ratio) in CY 2013 OPPS/ASC Final Rule (77 FR 68504 through 68505). Adopted application of measure in FY 2012 IRF PPS final rule (76 FR 47876 through 47878). Adopted a non-risk-adjusted application of the NQF-endorsed version in CY 2013 OPPS/ASC Final Rule (77 FR 68500 through 68507). Adopted the risk adjusted, NQF-endorsed version in FY 2014 IRF PPS Final Rule (78 FR 47911 through 47912). January 1, 2013 ..... FY 2015 and subsequent years. October 1, 2012 ..... FY 2014 and subsequent years. January 1, 2013 ..... FY 2015 and subsequent years. October 1, 2014 ..... FY 2017 and subsequent years. Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678). VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 PO 00000 Frm 00019 Fmt 4701 Sfmt 4702 E:\FR\FM\25APP2.SGM Annual payment determination: initial and subsequent APU years 25APP2 24196 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules TABLE 7—QUALITY MEASURES PREVIOUSLY FINALIZED FOR AND CURRENTLY USED IN THE IRF QUALITY REPORTING PROGRAM—Continued Final rule Data collection start date Adopted in the FY 2016 IRF PPS final rule (80 FR 47089 through 47096) to fulfill IMPACT Act requirements. Adopted in FY 2014 IRF PPS final rule (78 FR 47906 through 47911). October 1, 2015 ..... FY 2018 and subsequent years. October 1, 2014 ..... FY 2017 and subsequent years. Adopted in FY 2014 IRF PPS final rule (78 FR 47905 through 47906). Adopted in FY 2014 IRF PPS final rule (78 FR 47906 through 47910). October 1, 2014 ..... FY 2016 and subsequent years. N/A .......................... FY 2017 and subsequent years. Adopted the NQF-endorsed version in FY 2016 IRF PPS final rule (80 FR 47087 through 47089). Adopted in the FY 2015 IRF PPS final rule (79 FR 45911 through 45913). N/A .......................... FY 2018 and subsequent years. January 1, 2015 ..... FY 2017 and subsequent years. Adopted in the FY 2015 IRF PPS final rule (79 FR 45913 through 45914). January 1, 2015 ..... FY 2017 and subsequent years. Adopted an application of the measure in FY 2016 IRF PPS Final Rule (80 FR 47096 through 47100). Adopted an application of the measure in the FY 2016 IRF PPS final rule (80 FR 47100 through 47111). October 1, 2016 ..... FY 2018 and subsequent years. October 1, 2016 ..... FY 2018 and subsequent years. Adopted in the FY 2016 IRF PPS final rule (80 FR 47111 through 47117). October 1, 2016 ..... FY 2018 and subsequent years. Adopted in the FY 2016 IRF PPS final rule (80 FR 47117 through 47118). October 1, 2016 ..... FY 2018 and subsequent years. Adopted in the FY 2016 IRF PPS final rule (80 FR 47118 through 47119). October 1, 2016 ..... FY 2018 and subsequent years. Adopted in the FY 2016 IRF PPS final rule (80 FR 47119 through 47120). October 1, 2016 ..... FY 2018 and subsequent years. Measure title Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine (Short Stay) (NQF #0680). Influenza Vaccination Coverage among Healthcare Personnel (NQF #0431). All-Cause Unplanned Readmission Measure for 30 Days Post Discharge from Inpatient Rehabilitation Facilities (NQF #2502). National Healthcare Safety Network (NHSN) Facility-Wide Inpatient Hospital-Onset Methicillin-Resistant Staphylococcus aureus (MRSA) Bacteremia Outcome Measure (NQF #1716). National Healthcare Safety Network (NHSN) Facility-Wide Inpatient Hospital-Onset Clostridium difficile Infection (CDI) Outcome Measure (NQF #1717). Application of Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay) (NQF #0674). Application of Percent of Long-Term Care Hospital Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631). IRF Functional Outcome Measure: Change in Self-Care for Medical Rehabilitation Patients (NQF #2633)*. IRF Functional outcome Measure: Change in Mobility Score for Medical Rehabilitation (NQF #2634)*. IRF Functional Outcome Measure: Discharge Self-Care Score for Medical Rehabilitation Patients (NQF #2635). IRF Functional Outcome Measure: Discharge Mobility Score for Medical Rehabilitation Patients (NQF #2636). Annual payment determination: initial and subsequent APU years * These measures were under review at NQF when they were finalized for use in the IRF QRP. These measures are now NQF-endorsed. asabaliauskas on DSK3SPTVN1PROD with PROPOSALS F. IRF QRP Quality, Resource Use and Other Measures Proposed for the FY 2018 Payment Determination and Subsequent Years For the FY 2018 payment determinations and subsequent years, in addition to the quality measures we are retaining under our policy described in section VII.C. of this proposed rule, we are proposing four new measures. Three of these measures proposed were developed to meet the requirements of IMPACT Act. They are: (1) MSPB–PAC IRF QRP, (2) Discharge to Community–PAC IRF QRP, and VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 (3) Potentially Preventable 30-Day Post-Discharge Readmission Measure for IRF QRP. The fourth measure to be proposed is: (4) Potentially Preventable Within Stay Readmission Measure for IRFs. The measures are described in more detail below. For the risk-adjustment of the resource use and other measures, we understand the important role that sociodemographic status plays in the care of patients. However, we continue to have concerns about holding providers to different standards for the outcomes of their patients of diverse sociodemographic status because we do not want to mask potential disparities or minimize incentives to improve the PO 00000 Frm 00020 Fmt 4701 Sfmt 4702 outcomes of disadvantaged populations. We routinely monitor the impact of sociodemographic status on providers’ results on our measures. The NQF is currently undertaking a two-year trial period in which new measures and measures undergoing maintenance review will be assessed to determine if risk-adjusting for sociodemographic factors is appropriate. For two years, NQF will conduct a trial of temporarily allowing inclusion of sociodemographic factors in the riskadjustment approach for some performance measures. At the conclusion of the trial, NQF will issue recommendations on future permanent inclusion of sociodemographic factors. During the trial, measure developers are E:\FR\FM\25APP2.SGM 25APP2 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules asabaliauskas on DSK3SPTVN1PROD with PROPOSALS expected to submit information such as analyses and interpretations as well as performance scores with and without sociodemographic factors in the risk adjustment model. Furthermore, the Office of the Assistant Secretary for Planning and Evaluation (ASPE) is conducting research to examine the impact of sociodemographic status on quality measures, resource use, and other measures under the Medicare program as directed by the IMPACT Act. We will closely examine the findings of the ASPE reports and related Secretarial recommendations and consider how they apply to our quality programs at such time as they are available. We are inviting public comment on how socioeconomic and demographic factors should be used in risk adjustment for the resource use measures. 1. Proposal To Address the IMPACT Act Domain of Resource Use and Other Measures: Total Estimated MSPB–PAC IRF QRP We are proposing an MSPB–PAC IRF QRP measure for inclusion in the IRF QRP for the FY 2018 payment determination and subsequent years. Section 1899B(d)(1)(A) of the Act requires the Secretary to specify resource use measures, including total estimated MSPB, on which PAC providers consisting of Skilled Nursing Facilities (SNFs), IRFs, Long-Term Care Hospitals (LTCHs), and Home Health Agencies (HHAs) are required to submit necessary data specified by the Secretary. Rising Medicare expenditures for post-acute care as well as wide variation in spending for these services underlines the importance of measuring resource use for providers rendering these services. Between 2001 and 2013, Medicare PAC spending grew at an annual rate of 6.1 percent and doubled to $59.4 billion, while payments to inpatient hospitals grew at an annual rate of 1.7 percent over this same period.3 A study commissioned by the Institute of Medicine discovered that variation in PAC spending explains 73 percent of variation in total Medicare spending across the United States.4 We reviewed the NQF’s consensusendorsed measures and were unable to identify any NQF-endorsed resource use measures for PAC settings. As such, we are proposing this MSPB–PAC IRF 3 MedPAC, ‘‘A Data Book: Health Care Spending and the Medicare Program,’’ (2015). 114 4 Institute of Medicine, ‘‘Variation in Health Care Spending: Target Decision Making, Not Geography,’’ (Washington, DC: National Academies 2013). 2. VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 measure under the Secretary’s authority to specify non-NQF-endorsed measures under section 1899B(e)(2)(B). Given the current lack of resource use measures for PAC settings, our proposed MSPB– PAC IRF QRP measure has the potential to provide valuable information to IRF providers on their relative Medicare spending in delivering services to approximately 338,000 Medicare beneficiaries.5 The proposed MSPB–PAC IRF episode-based measure will provide actionable and transparent information to support IRF providers’ efforts to promote care coordination and deliver high quality care at a lower cost to Medicare. The MSPB–PAC IRF QRP measure holds IRF providers accountable for the Medicare payments within an ‘‘episode of care’’ (episode), which includes the period during which a patient is directly under the IRF’s care, as well as a defined period after the end of the IRF treatment, which may be reflective of and influenced by the services furnished by the IRF. MSPB– PAC IRF QRP episodes, constructed according to the methodology described below, have high levels of Medicare spending with substantial variation. In FY 2013 and FY 2014, Medicare FFS beneficiaries experienced 613,089 MSPB–PAC IRF QPR episodes triggered by admission to an IRF. The mean payment-standardized, risk-adjusted episode spending for these episodes is $30,370. There is substantial variation in the Medicare payments for these MSPB–PAC IRF QRP episodes—ranging from approximately $15,059 at the 5th percentile to approximately $55,912 at the 95th percentile. This variation is partially driven by variation in payments occurring following IRF treatment. Evaluating Medicare payments during an episode creates a continuum of accountability between providers and has the potential to improve posttreatment care planning and coordination. While some stakeholders throughout the measure development process supported the measures and believe that measuring Medicare spending was critical for improving efficiency, others believed that resource use measures did not reflect quality of care in that they do not take into account patient outcomes or experience beyond those observable in claims data. However, IRFs involved in the provision of high quality PAC care as well as appropriate discharge planning and post-discharge care coordination would be expected to perform well on this 5 Figures for 2013. MedPAC, ‘‘Medicare Payment Policy,’’ Report to the Congress (2015). xvii–xviii. PO 00000 Frm 00021 Fmt 4701 Sfmt 4702 24197 measure since beneficiaries would likely experience fewer costly adverse events (for example, avoidable hospitalizations, infections, and emergency room usage). Further, it is important that the cost of care be explicitly measured so that, in conjunction with other quality measures, we can recognize providers that are involved in the provision of high quality care at lower cost. We have undertaken development of MSPB–PAC measures for each of the four PAC settings. We are proposing an LTCH-specific MSPB–PAC measure in the FY 2017 IPPS/LTCH proposed rule published elsewhere in this issue of the Federal Register and a SNF-specific MSBP–PAC measure in the FY 2017 SNF PPS proposed rule published elsewhere in this issue of the Federal Register. We intend to propose a HHAspecific MSBP–PAC measure through future notice-and-comment rulemaking. The four setting-specific MSPB–PAC measures are closely aligned in terms of episode construction and measure calculation. Each of the MSPB–PAC measures assess Medicare Part A and Part B spending during an episode, and the numerator and denominator are defined similarly for each of the MSPB– PAC measures. However, developing setting-specific measures allows us to account for differences between settings in payment policy, the types of data available, and the underlying health characteristics of beneficiaries. For example, we are proposing to use the IRF setting-specific rehabilitation impairment categories (RICs) in the MSPB–PAC IRF QRP risk adjustment model, as detailed below. The MSPB–PAC measures mirror the general construction of the inpatient prospective payment system (IPPS) hospital MSPB measure that was finalized in the FY 2012 IPPS/LTCH PPS Final Rule (76 FR 51618 through 51627). It was endorsed by the NQF on December 6, 2013, and has been used in the Hospital Value-Based Purchasing (VBP) Program (NQF #2158) since FY 2015.6 The hospital MSPB measure was originally established under the authority of section 1886(o)(2)(B)(ii) of the Act. The hospital MSPB measure evaluates hospitals’ Medicare spending relative to the Medicare spending for the national median hospital during a hospital MSPB episode. It assesses Medicare Part A and Part B payments for services performed by hospitals and other healthcare providers during a 6 QualityNet, ‘‘Measure Methodology Reports: Medicare Spending Per Beneficiary (MSPB) Measure,’’ (2015). https://www.qualitynet.org/dcs/ ContentServer?pagename=QnetPublic%2FPage%2 FQnetTier3&cid=1228772053996. E:\FR\FM\25APP2.SGM 25APP2 asabaliauskas on DSK3SPTVN1PROD with PROPOSALS 24198 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules hospital MSPB episode, which is comprised of the periods immediately prior to, during, and following a patient’s hospital stay.7 8 Similarly, the MSPB–PAC measures assess all Medicare Part A and Part B payments for FFS claims with a start date during the episode window (which, as discussed below, is the time period which Medicare FFS Part A and Part B services are counted towards the MSPB– PAC IRF QRP episode). However, there are differences between the MSPB–PAC measures, as proposed, and the hospital MSPB measure to reflect differences in payment policies and the nature of care provided in each PAC setting. For example, the MSPB–PAC measures exclude a limited set of services (for example, clinically unrelated services) provided to a beneficiary during the episode window while the hospital MSPB measure does not exclude any services.9 MSPB–PAC episodes may begin within 30 days of discharge from an inpatient hospital as part of a patient’s trajectory from an acute to a PAC setting. An IRF stay beginning within 30 days of discharge from an inpatient hospital will be included once in the hospital’s MSPB measure, and once in the IRF provider’s MSPB–PAC measure. Aligning the hospital MSPB and MSPB– PAC measures in this way creates continuous accountability and aligns incentives to improve care planning and coordination across inpatient and PAC settings. We have sought and considered the input of stakeholders throughout the measure development process for the MSPB–PAC measures. We convened a TEP consisting of 12 panelists with combined expertise in all of the PAC settings on October 29 and 30, 2015 in Baltimore, Maryland. A follow-up email survey was sent to TEP members on November 18, 2015 to which 7 responses were received by December 8, 2015. The MSPB–PAC TEP Summary Report is available at https:// www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/Post-Acute-Care-QualityInitiatives/IMPACT-Act-of-2014/ IMPACT-Act-Downloads-andVideos.html. The measures were also presented to the NQF-convened MAP 7 QualityNet, ‘‘Measure Methodology Reports: Medicare Spending Per Beneficiary (MSPB) Measure,’’ (2015). https://www.qualitynet.org/dcs/ ContentServer?pagename=Qnet Public%2FPage%2FQnetTier3&cid=122877 2053996. 8 FY 2012 IPPS/LTCH PPS final rule (76 FR 51619). 9 FY 2012 IPPS/LTCH PPS Final Rule (76 FR 51620). VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 Post-Acute Care/Long-Term Care (PAC/ LTC) Workgroup on December 15, 2015. As the MSPB–PAC measures were under development, there were three voting options for members: (1) Encourage continued development, (2) do not encourage further consideration, and (3) insufficient information.10 The MAP PAC/LTC workgroup voted to ‘‘encourage continued development’’ for each of the MSPB–PAC measures.11 The MAP PAC/LTC workgroup’s vote of ‘‘encourage continued development’’ was affirmed by the MAP Coordinating Committee on January 26, 2016.12 The MAP’s concerns about the MSPB–PAC measures, as outlined in their final report ‘‘MAP 2016 Considerations for Implementing Measures in Federal Programs: Post-Acute Care and LongTerm Care’’ and Spreadsheet of Final Recommendations, were taken into consideration during the measure development process and are discussed as part of our responses to public comments, described below.13 14 Since the MAP’s review and recommendation of continued development, we have continued to refine risk adjustment models and conduct measure testing for the IMPACT Act measures in compliance with the MAP’s recommendations. The proposed IMPACT Act measures are both consistent with the information submitted to the MAP and support the scientific acceptability of these measures for use in quality reporting programs. In addition, a public comment period, accompanied by draft measures specifications, was originally open from January 13 to 27, 2016 and twice extended to January 29 and February 5. 10 National Quality Forum, Measure Applications Partnership, ‘‘Process and Approach for MAP PreRulemaking Deliberations, 2015–2016’’ (February 2016) https://www.qualityforum.org/WorkArea/ linkit.aspx?LinkIdentifier=id&ItemID=81693. 11 National Quality Forum, Measure Applications Partnership Post-Acute Care/Long-Term Care Workgroup, ‘‘Meeting Transcript—Day 2 of 2’’ (December 15, 2015) 104–106 https:// www.qualityforum.org/WorkArea/linkit.aspx?Link Identifier=id&ItemID=81470. 12 National Quality Forum, Measure Applications Partnership, ‘‘Meeting Transcript—Day 1 of 2’’ (January 26, 2016) 231–232 https:// www.qualityforum.org/WorkArea/linkit.aspx?Link Identifier=id&ItemID=81637. 13 National Quality Forum, Measure Applications Partnership, ‘‘MAP 2016 Considerations for Implementing Measures in Federal Programs: PostAcute Care and Long-Term Care’’ Final Report, (February 2016) https://www.qualityforum.org/ Publications/2016/02/MAP_2016_Considerations_ for_Implementing_Measures_in_Federal_Programs_ -_PAC-LTC.aspx. 14 National Quality Forum, Measure Applications Partnership, ‘‘Spreadsheet of MAP 2016 Final Recommendations’’ (February 1, 2016) https:// www.qualityforum.org/WorkArea/linkit.aspx?Link Identifier=id&ItemID=81593. PO 00000 Frm 00022 Fmt 4701 Sfmt 4702 A total of 45 comments on the MSPB– PAC measures were received during this 3.5 week period. Also, the comments received covered each of the MAP’s concerns as outlined in their Final Recommendations.15 The MSPB–PAC Public Comment Summary Report is available at https://www.cms.gov/ Medicare/Quality-Initiatives-PatientAssessment-Instruments/Post-AcuteCare-Quality-Initiatives/IMPACT-Act-of2014/IMPACT-Act-Downloads-andVideos.html and contains the public comments (summarized and verbatim), along with our responses including statistical analyses. If finalized, the MSPB–PAC IRF QRP measure, along with the other MSPB–PAC measures, as applicable, will be submitted for NQF endorsement. To calculate the MSPB–PAC IRF QRP measure for each IRF provider, we first define the construction of the MSPB– PAC IRF QRP episode, including the length of the episode window as well as the services included in the episode. Next, we apply the methodology for the measure calculation. The specifications are discussed further below. More detailed specifications for the proposed MSPB–PAC measures, including the MSPB–PAC IRF QRP measure in this proposed rule, are available at https:// www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/Post-Acute-Care-QualityInitiatives/IMPACT-Act-of-2014/ IMPACT-Act-Downloads-andVideos.html. a. Episode Construction An MSPB–PAC IRF QRP episode begins at the episode trigger, which is defined as the patient’s admission to an IRF. This admitting facility is the attributed provider, for whom the MSPB–PAC IRF QRP measure is calculated. The episode window is the time period during which Medicare FFS Part A and Part B services are counted towards the MSPB–PAC IRF QRP episode. Because Medicare FFS claims are already reported to the Medicare program for payment purposes, IRF providers will not be required to report any additional data to CMS for calculation of this measure. Thus, there will be no additional data collection burden from the implementation of this measure. The episode window is comprised of a treatment period and an associated services period. The treatment period begins at the trigger (that is, on the day 15 National Quality Forum, Measure Applications Partnership, ‘‘Spreadsheet of MAP 2016 Final Recommendations’’ (February 1, 2016) https:// www.qualityforum.org/WorkArea/linkit.aspx?Link Identifier=id&ItemID=81593. E:\FR\FM\25APP2.SGM 25APP2 asabaliauskas on DSK3SPTVN1PROD with PROPOSALS Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules of admission to the IRF) and ends on the day of discharge from that IRF. Readmissions to the same facility occurring within 7 or fewer days do not trigger a new episode, and instead are included in the treatment period of the original episode. When two sequential stays at the same IRF occur within 7 or fewer days of one another, the treatment period ends on the day of discharge for the latest IRF stay. The treatment period includes those services that are provided directly or reasonably managed by the IRF provider that are directly related to the beneficiary’s care plan. The associated services period is the time during which Medicare Part A and Part B services (with certain exclusions) are counted towards the episode. The associated services period begins at the episode trigger and ends 30 days after the end of the treatment period. The distinction between the treatment period and the associated services period is important because clinical exclusions of services may differ for each period. Certain services are excluded from the MSPB–PAC IRF QRP episodes because they are clinically unrelated to IRF care, and/or because IRF providers may have limited influence over certain Medicare services delivered by other providers during the episode window. These limited servicelevel exclusions are not counted towards a given IRF provider’s Medicare spending to ensure that beneficiaries with certain conditions and complex care needs receive the necessary care. Certain services that have been determined by clinicians to be outside of the control of an IRF provider include planned hospital admissions, management of certain preexisting chronic conditions (for example, dialysis for end-stage renal disease (ESRD), and enzyme treatments for genetic conditions), treatment for preexisting cancers, organ transplants, and preventive screenings (for example, colonoscopy and mammograms). Exclusion of such services from the MSPB–PAC IRF QRP episode ensures that facilities do not have disincentives to treat patients with certain conditions or complex care needs. An MSPB–PAC episode may begin during the associated services period of an MSPB–PAC IRF QRP episode in the 30 days post-treatment. One possible scenario occurs where an IRF provider discharges a beneficiary who is then admitted to a HHA within 30 days. The HHA claim would be included once as an associated service for the attributed provider of the first MSPB–PAC IRF QRP episode and once as a treatment service for the attributed provider of the VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 second MSPB–PAC HHA episode. As in the case of overlap between hospital and PAC episodes discussed earlier, this overlap is necessary to ensure continuous accountability between providers throughout a beneficiary’s trajectory of care, as both providers share incentives to deliver high quality care at a lower cost to Medicare. Even within the IRF setting, one MSPB–PAC IRF QRP episode may begin in the associated services period of another MSPB–PAC IRF QRP episode in the 30 days post-treatment. The second IRF claim would be included once as an associated service for the attributed IRF provider of the first MSPB–PAC IRF QRP episode and once as a treatment service for the attributed IRF provider of the second MSPB–PAC IRF QRP episode. Again, this ensures that IRF providers have the same incentives throughout both MSPB–PAC IRF QRP episodes to deliver quality care and engage in patient-focused care planning and coordination. If the second MSPB– PAC IRF QRP episode were excluded from the second IRF provider’s MSPB– PAC IRF QRP measure, that provider would not share the same incentives as the first IRF provider of the first MSPB– PAC IRF QRP episode. The MSPB–PAC IRF QRP measure is designed to benchmark the resource use of each attributed provider against what their spending is expected to be as predicted through risk adjustment. As discussed further below, the measure takes the ratio of observed spending to expected spending for each episode and then takes the average of those ratios across all of the attributed provider’s episodes. The measure is not a simple sum of all costs across a provider’s episodes, thus mitigating concerns about double counting. b. Measure Calculation Medicare payments for Part A and Part B claims for services included in MSPB–PAC IRF QRP episodes, defined according to the methodology previously discussed, are used to calculate the MSPB–PAC IRF QRP measure. Measure calculation involves determination of the episode exclusions, the approach for standardizing payments for geographic payment differences, the methodology for risk adjustment of episode spending to account for differences in patient case mix, and the specifications for the measure numerator and denominator. (1) Exclusion Criteria In addition to service-level exclusions that remove some payments from individual episodes, we exclude certain episodes in their entirety from the PO 00000 Frm 00023 Fmt 4701 Sfmt 4702 24199 MSPB–PAC IRF QRP measure to ensure that the MSPB–PAC IRF QRP measure accurately reflects resource use and facilitates fair and meaningful comparisons between IRF providers. The proposed episode-level exclusions are as follows: • Any episode that is triggered by an IRF claim outside the 50 states, DC, Puerto Rico, and U.S. territories. • Any episode where the claim(s) constituting the attributed IRF provider’s treatment have a standard allowed amount of zero or where the standard allowed amount cannot be calculated. • Any episode in which a beneficiary is not enrolled in Medicare FFS for the entirety of a 90-day lookback period (that is, a 90-day period prior to the episode trigger) plus episode window (including where a beneficiary dies), or is enrolled in Part C for any part of the lookback period plus episode window. • Any episode in which a beneficiary has a primary payer other than Medicare for any part of the 90-day lookback period plus episode window. • Any episode where the claim(s) constituting the attributed IRF provider’s treatment include at least one related condition code indicating that it is not a prospective payment system bill. (2) Standardization and Risk Adjustment Section 1899B(d)(2)(C) of the Act requires that the MSPB–PAC measures are adjusted for the factors described under section 1886(o)(2)(B)(ii) of the Act, which include adjustment for factors such as age, sex, race, severity of illness, and other factors that the Secretary determines appropriate. Medicare payments included in the MSPB–PAC IRF QRP measure are payment-standardized and riskadjusted. Payment standardization removes sources of payment variation not directly related to clinical decisions and facilitates comparisons of resource use across geographic areas. We propose to use the same payment standardization methodology as that used in the NQF-endorsed hospital MSPB measure. This methodology removes geographic payment differences, such as wage index and geographic practice cost index (GPCI), incentive payment adjustments, and other add-on payments that support broader Medicare program goals including indirect graduate medical education (IME) and hospitals serving a E:\FR\FM\25APP2.SGM 25APP2 24200 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules asabaliauskas on DSK3SPTVN1PROD with PROPOSALS disproportionate share of uninsured patients.16 Risk adjustment uses patient claims history to account for case-mix variation and other factors that affect resource use but are beyond the influence of the attributed IRF provider. To assist with risk adjustment for MSPB–PAC IRF QRP episodes, we create mutually exclusive and exhaustive clinical case mix categories using the most recent institutional claim in the 60 days prior to the start of the MSPB–PAC IRF QRP episode. The beneficiaries in these clinical case mix categories have a greater degree of clinical similarity than the overall IRF patient population, and allow us to more accurately estimate Medicare spending. Our proposed MSPB–PAC IRF QRP model, adapted for the IRF setting from the NQF-endorsed hospital MSPB measure uses a regression framework with a 90-day hierarchical condition category (HCC) lookback period and covariates including the clinical case mix categories, HCC indicators, age brackets, indicators for originally disabled, ESRD enrollment, and long-term care status, and selected interactions of these covariates where sample size and predictive ability make them appropriate. We sought and considered public comment regarding the treatment of hospice services occurring within the MSPB–PAC IRF QRP episode window. Given the comments received, we propose to include the Medicare spending for hospice services but risk adjust for them, such that MSPB–PAC IRF QRP episodes with hospice are compared to a benchmark reflecting other MSPB–PAC IRF QRP episodes with hospice. We believe that this provides a balance between the measure’s intent of evaluating Medicare spending and ensuring that providers do not have incentives against the appropriate use of hospice services in a patient-centered continuum of care. We are proposing to use RICs in response to commenters’ concerns about the risk adjustment approach for the MSPB–PAC IRF QRP measure. Commenters suggested the use of case mix groups (CMGs); however, we 16 QualityNet, ‘‘CMS Price (Payment) Standardization—Detailed Methods’’ (Revised May 2015) https://qualitynet.org/dcs/ContentServer?c= Page&pagename=QnetPublic%2FPage%2 FQnetTier4&cid=1228772057350. VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 believe that the use of RICs may be more appropriate given that the other covariates incorporated in the model partially account for factors in CMGs (for example, age and certain HCC indicators). RICs do not account for functional status as CMGs do, as the functional status information in CMGs is based on the IRF–PAI. Given the move toward standardized data that was mandated by the IMPACT Act, we have chosen to defer risk adjustment for functional status until standardized data become available. We are seeking comment on whether the use of CMGs would still be appropriate to include in the MSPB–PAC IRF QRP risk adjustment model. We understand the important role that sociodemographic factors, beyond age, play in the care of patients. However, we continue to have concerns about holding providers to different standards for the outcomes of their patients of diverse sociodemographic status because we do not want to mask potential disparities or minimize incentives to improve the outcomes of disadvantaged populations. We routinely monitor the impact of sociodemographic status on providers’ results on our measures. The NQF is currently undertaking a two-year trial period in which new measures and measures undergoing maintenance review will be assessed to determine if risk-adjusting for sociodemographic factors is appropriate. For two years, NQF will conduct a trial of temporarily allowing inclusion of sociodemographic factors in the riskadjustment approach for some performance measures. At the conclusion of the trial, NQF will issue recommendations on future permanent inclusion of sociodemographic factors. During the trial, measure developers are expected to submit information such as analyses and interpretations as well as performance scores with and without sociodemographic factors in the risk adjustment model. Furthermore, ASPE is conducting research to examine the impact of sociodemographic status on quality measures, resource use, and other measures under the Medicare program as required under the IMPACT Act. We will closely examine the findings of the ASPE reports and related Secretarial recommendations and consider how PO 00000 Frm 00024 Fmt 4701 Sfmt 4702 they apply to our quality programs at such time as they are available. While we conducted analyses on the impact of age by sex on the performance of the MSPB–PAC IRF QRP riskadjustment model, we are not proposing to adjust the MSPB–PAC IRF QRP measure for socioeconomic and demographic factors at this time. As this MSPB–PAC IRF QRP measure will be submitted for NQF endorsement, we prefer to await the results of this trial and study before deciding whether to risk adjust for socioeconomic and demographic factors. We will monitor the results of the trial, studies, and recommendations. We are inviting public comment on how socioeconomic and demographic factors should be used in risk adjustment for the MSPB–PAC IRF QRP measure. (3) Measure Numerator and Denominator The MPSB–PAC IRF QRP measure is a payment-standardized, risk-adjusted ratio that compares a given IRF provider’s Medicare spending against the Medicare spending of other IRF providers within a performance period. Similar to the hospital MSPB measure, the ratio allows for ease of comparison over time as it obviates the need to adjust for inflation or policy changes. The MSPB–PAC IRF QRP measure is calculated as the ratio of the MSPB–PAC Amount for each IRF provider divided by the episode-weighted median MSPB– PAC Amount across all IRF providers. To calculate the MSPB–PAC Amount for each IRF provider, one calculates the average of the ratio of the standardized episode spending over the expected episode spending (as predicted in risk adjustment), and then multiplies this quantity by the average episode spending level across all IRF providers nationally. The denominator for an IRF provider’s MSPB–PAC IRF QRP measure is the episode-weighted national median of the MSPB–PAC Amounts across all IRF providers. An MSPB–PAC IRF QRP measure of less than 1 indicates that a given IRF provider’s Medicare spending is less than that of the national median IRF provider during a performance period. Mathematically, this is represented in equation (A) below: E:\FR\FM\25APP2.SGM 25APP2 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules c. Data Sources The MSPB–PAC IRF QRP resource use measure is an administrative claimsbased measure. It uses Medicare Part A and Part B claims from FFS beneficiaries and Medicare eligibility files. d. Cohort The measure cohort includes Medicare FFS beneficiaries with an IRF treatment period ending during the data collection period. asabaliauskas on DSK3SPTVN1PROD with PROPOSALS e. Reporting If this proposed measure is finalized, we intend to provide initial confidential feedback to providers, prior to public reporting of this measure, based on Medicare FFS claims data from discharges in CY 2015 and 2016. We intend to publicly report this measure using claims data from discharges in CY 2016 and 2017. We propose a minimum of 20 episodes for reporting and inclusion in the IRF QRP. For the reliability calculation, as described in the measure specifications identified and for which a link has been provided above, we used two years of data (FY 2013 and FY 2014) to increase the statistical reliability of this measure. The reliability results support the 20 episode case minimum, and 99.74 percent of IRF providers had moderate or high reliability (above 0.4). We invite public comment on our proposal to adopt the MSPB–PAC IRF QRP measure for the IRF QRP. 2. Proposal To Address the IMPACT Act Domain of Resource Use and Other Measures: Discharge to Community-Post Acute Care (PAC) Inpatient Rehabilitation Facility Quality Reporting Program Sections 1899B(d)(1)(B) and 1899B(a)(2)(E)(ii) of the Act require the Secretary to specify a measure to VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 address the domain of discharge to community by SNFs, LTCHs, and IRFs by October 1, 2016, and HHAs by January 1, 2017. We are proposing to adopt the measure, Discharge to Community-PAC IRF QRP, for the IRF QRP for the FY 2018 payment determination and subsequent years as a Medicare FFS claims-based measure to meet this requirement. This proposed measure assesses successful discharge to the community from an IRF setting, with successful discharge to the community including no unplanned rehospitalizations and no death in the 31 days following discharge from the IRF. Specifically, this proposed measure reports an IRF’s riskstandardized rate of Medicare FFS patients who are discharged to the community following an IRF stay, and do not have an unplanned readmission to an acute care hospital or LTCH in the 31 days following discharge to community, and who remain alive during the 31 days following discharge to community. The term ‘‘community’’, for this measure, is defined as home/ self-care, with or without home health services, based on Patient Discharge Status Codes 01, 06, 81, and 86 on the Medicare FFS claim.17 18 This measure is conceptualized uniformly across the PAC settings, in terms of the definition of the discharge to community outcome, the approach to risk adjustment, and the measure calculation. Discharge to a community setting is an important health care outcome for many patients for whom the overall goals of post-acute care include optimizing functional improvement, returning to a previous level of independence, and avoiding institutionalization. Returning to the community is also an important outcome for many patients who are not expected to make functional 17 Further description of patient discharge status codes can be found, for example, at the following Web page: https://med.noridianmedicare.com/web/ jea/topics/claim-submission/patient-status-codes. 18 This definition is not intended to suggest that board and care homes, assisted living facilities, or other settings included in the definition of ‘‘community’’ for the purpose of this measure are the most integrated setting for any particular individual or group of individuals under the Americans with Disabilities Act (ADA) and Section 504. PO 00000 Frm 00025 Fmt 4701 Sfmt 4702 improvement during their IRF stay, and for patients who may be expected to decline functionally due to their medical condition. The discharge to community outcome offers a multidimensional view of preparation for community life, including the cognitive, physical, and psychosocial elements involved in a discharge to the community.19 20 In addition to being an important outcome from a patient and family perspective, patients discharged to community settings, on average, incur lower costs over the recovery episode, compared with those discharged to institutional settings.21 22 Given the high costs of care in institutional settings, encouraging IRFs to prepare patients for discharge to community, when clinically appropriate, may have costsaving implications for the Medicare program.23 Also, providers have discovered that successful discharge to community was a major driver of their ability to achieve savings, where capitated payments for post-acute care were in place.24 For patients who require long-term care due to persistent disability, discharge to community could result in lower long-term care 19 El-Solh AA, Saltzman SK, Ramadan FH, Naughton BJ. Validity of an artificial neural network in predicting discharge destination from a postacute geriatric rehabilitation unit. Archives of physical medicine and rehabilitation. 2000;81(10):1388–1393. 20 Tanwir S, Montgomery K, Chari V, Nesathurai S. Stroke rehabilitation: Availability of a family member as caregiver and discharge destination. European journal of physical and rehabilitation medicine. 2014;50(3):355–362. 21 Dobrez D, Heinemann AW, Deutsch A, Manheim L, Mallinson T. Impact of Medicare’s prospective payment system for inpatient rehabilitation facilities on stroke patient outcomes. American journal of physical medicine & rehabilitation/Association of Academic Physiatrists. 2010;89(3):198–204. 22 Gage B, Morley M, Spain P, Ingber M. Examining Post Acute Care Relationships in an Integrated Hospital System. Final Report. RTI International;2009. 23 Ibid. 24 Doran JP, Zabinski SJ. Bundled payment initiatives for Medicare and non-Medicare total joint arthroplasty patients at a community hospital: Bundles in the real world. The journal of arthroplasty. 2015;30(3):353–355. E:\FR\FM\25APP2.SGM 25APP2 EP25AP16.000</GPH> Where: • Yij = attributed standardized spending for episode i and provider j • Yij = expected standardized spending for episode i and provider j, as predicted from risk adjustment • nj = number of episodes for provider j • n = total number of episodes nationally • i ∈ {Ij} = all episodes i in the set of episodes attributed to provider j. 24201 24202 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules asabaliauskas on DSK3SPTVN1PROD with PROPOSALS costs for Medicaid and for patients’ outof-pocket expenditures.25 Analyses conducted for ASPE on PAC episodes, using a 5 percent sample of 2006 Medicare claims, revealed that relatively high average, unadjusted Medicare payments are associated with discharge to institutional settings from IRFs, SNFs, LTCHs or HHAs, as compared with payments associated with discharge to community settings.26 Average, unadjusted Medicare payments associated with discharge to community settings ranged from $0 to $4,017 for IRF discharges, $0 to $3,544 for SNF discharges, $0 to $4,706 for LTCH discharges, and $0 to $992 for HHA discharges. In contrast, payments associated with discharge to noncommunity settings were considerably higher, ranging from $11,847 to $25,364 for IRF discharges, $9,305 to $29,118 for SNF discharges, $12,465 to $18,205 for LTCH discharges, and $7,981 to $35,192 for HHA discharges.27 Measuring and comparing facilitylevel discharge to community rates is expected to help differentiate among facilities with varying performance in this important domain, and to help avoid disparities in care across patient groups. Variation in discharge to community rates has been reported within and across post-acute settings; across a variety of facility-level characteristics, such as geographic location (for example, regional location, urban or rural location), ownership (for example, for-profit or nonprofit), and freestanding or hospital-based units; and across patient-level characteristics, such as race and gender.28 29 30 31 32 33 25 Newcomer RJ, Ko M, Kang T, Harrington C, Hulett D, Bindman AB. Health Care Expenditures After Initiating Long-term Services and Supports in the Community Versus in a Nursing Facility. Medical Care. 2016;54(3):221–228. 26 Gage B, Morley M, Spain P, Ingber M. Examining Post Acute Care Relationships in an Integrated Hospital System. Final Report. RTI International;2009. 27 Ibid. 28 Reistetter TA, Karmarkar AM, Graham JE, et al. Regional variation in stroke rehabilitation outcomes. Archives of physical medicine and rehabilitation. 2014;95(1):29–38. 29 El-Solh AA, Saltzman SK, Ramadan FH, Naughton BJ. Validity of an artificial neural network in predicting discharge destination from a postacute geriatric rehabilitation unit. Archives of physical medicine and rehabilitation. 2000;81(10):1388–1393. 30 March 2015 Report to the Congress: Medicare Payment Policy. Medicare Payment Advisory Commission;2015. 31 Bhandari VK, Kushel M, Price L, Schillinger D. Racial disparities in outcomes of inpatient stroke rehabilitation. Archives of physical medicine and rehabilitation. 2005;86(11):2081–2086. 32 Chang PF, Ostir GV, Kuo YF, Granger CV, Ottenbacher KJ. Ethnic differences in discharge destination among older patients with traumatic brain injury. Archives of physical medicine and rehabilitation. 2008;89(2):231–236. VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 Discharge to community rates in the IRF setting have been reported to range from about 60 to 80 percent.34 35 36 37 38 39 Longer-term studies show that rates of discharge to community from IRFs have decreased over time as IRF length of stay has decreased.40 41 In the IRF Medicare FFS population, using CY 2013 national claims data, we discovered that approximately 69 percent of patients were discharged to the community. Greater variation in discharge to community rates is seen in the SNF setting, with rates ranging from 31 to 65 percent.42 43 44 45 A multi-center 33 Berges IM, Kuo YF, Ostir GV, Granger CV, Graham JE, Ottenbacher KJ. Gender and ethnic differences in rehabilitation outcomes after hipreplacement surgery. American journal of physical medicine & rehabilitation/Association of Academic Physiatrists. 2008;87(7):567–572. 34 Galloway RV, Granger CV, Karmarkar AM, et al. The Uniform Data System for Medical Rehabilitation: Report of patients with debility discharged from inpatient rehabilitation programs in 2000–2010. American journal of physical medicine & rehabilitation/Association of Academic Physiatrists. 2013;92(1):14–27. 35 Morley MA, Coots LA, Forgues AL, Gage BJ. Inpatient rehabilitation utilization for Medicare beneficiaries with multiple sclerosis. Archives of physical medicine and rehabilitation. 2012;93(8):1377–1383. 36 Reistetter TA, Graham JE, Deutsch A, Granger CV, Markello S, Ottenbacher KJ. Utility of functional status for classifying community versus institutional discharges after inpatient rehabilitation for stroke. Archives of physical medicine and rehabilitation. 2010;91(3):345–350. 37 Gagnon D, Nadeau S, Tam V. Clinical and administrative outcomes during publicly-funded inpatient stroke rehabilitation based on a case-mix group classification model. Journal of rehabilitation medicine. 2005;37(1):45–52. 38 DaVanzo J, El-Gamil A, Li J, Shimer M, Manolov N, Dobson A. Assessment of patient outcomes of rehabilitative care provided in inpatient rehabilitation facilities (IRFs) and after discharge. Vienna, VA: Dobson DaVanzo & Associates, LLC;2014. 39 Kushner DS, Peters KM, Johnson-Greene D. Evaluating Siebens Domain Management Model for Inpatient Rehabilitation to Increase Functional Independence and Discharge Rate to Home in Geriatric Patients. Archives of physical medicine and rehabilitation. 2015;96(7):1310–1318. 40 Galloway RV, Granger CV, Karmarkar AM, et al. The Uniform Data System for Medical Rehabilitation: Report of patients with debility discharged from inpatient rehabilitation programs in 2000–2010. American journal of physical medicine & rehabilitation/Association of Academic Physiatrists. 2013;92(1):14–27. 41 Mallinson T, Deutsch A, Bateman J, et al. Comparison of discharge functional status after rehabilitation in skilled nursing, home health, and medical rehabilitation settings for patients after hip fracture repair. Archives of physical medicine and rehabilitation. 2014;95(2):209–217. 42 El-Solh AA, Saltzman SK, Ramadan FH, Naughton BJ. Validity of an artificial neural network in predicting discharge destination from a postacute geriatric rehabilitation unit. Archives of physical medicine and rehabilitation. 2000;81(10):1388–1393. 43 Hall RK, Toles M, Massing M, et al. Utilization of acute care among patients with ESRD discharged home from skilled nursing facilities. Clinical journal of the American Society of Nephrology: CJASN. 2015;10(3):428–434. PO 00000 Frm 00026 Fmt 4701 Sfmt 4702 study of 23 LTCHs demonstrated that 28.8 percent of 1,061 patients who were ventilator-dependent on admission were discharged to home.46 A single-center study revealed that 31 percent of LTCH hemodialysis patients were discharged to home.47 One study noted that 64 percent of beneficiaries who were discharged from the home health episode did not use any other acute or post-acute services paid by Medicare in the 30 days after discharge.48 However, significant numbers of patients were admitted to hospitals (29 percent) and lesser numbers to SNFs (7.6 percent), IRFs (1.5 percent), home health (7.2 percent) or hospice (3.3 percent).49 Discharge to community is an actionable health care outcome, as targeted interventions have been shown to successfully increase discharge to community rates in a variety of postacute settings.50 51 52 53 Many of these interventions involve discharge planning or specific rehabilitation strategies, such as addressing discharge barriers and improving medical and functional status.54 55 56 57 The 44 Stearns SC, Dalton K, Holmes GM, Seagrave SM. Using propensity stratification to compare patient outcomes in hospital-based versus freestanding skilled-nursing facilities. Medical care research and review: MCRR. 2006;63(5):599–622. 45 Wodchis WP, Teare GF, Naglie G, et al. Skilled nursing facility rehabilitation and discharge to home after stroke. Archives of physical medicine and rehabilitation. 2005;86(3):442–448. 46 Scheinhorn DJ, Hassenpflug MS, Votto JJ, et al. Post-ICU mechanical ventilation at 23 long-term care hospitals: a multicenter outcomes study. Chest. 2007;131(1):85–93. 47 Thakar CV, Quate-Operacz M, Leonard AC, Eckman MH. Outcomes of hemodialysis patients in a long-term care hospital setting: A single-center study. American journal of kidney diseases: The official journal of the National Kidney Foundation. 2010;55(2):300–306. 48 Wolff JL, Meadow A, Weiss CO, Boyd CM, Leff B. Medicare home health patients’ transitions through acute and post-acute care settings. Medical care. 2008;46(11):1188–1193. 49 Ibid. 50 Kushner DS, Peters KM, Johnson-Greene D. Evaluating Siebens Domain Management Model for Inpatient Rehabilitation to Increase Functional Independence and Discharge Rate to Home in Geriatric Patients. Archives of physical medicine and rehabilitation. 2015;96(7):1310–1318. 51 Wodchis WP, Teare GF, Naglie G, et al. Skilled nursing facility rehabilitation and discharge to home after stroke. Archives of physical medicine and rehabilitation. 2005;86(3):442–448. 52 Berkowitz RE, Jones RN, Rieder R, et al. Improving disposition outcomes for patients in a geriatric skilled nursing facility. Journal of the American Geriatrics Society. 2011;59(6):1130–1136. 53 Kushner DS, Peters KM, Johnson-Greene D. Evaluating use of the Siebens Domain Management Model during inpatient rehabilitation to increase functional independence and discharge rate to home in stroke patients. PM & R: The journal of injury, function, and rehabilitation. 2015;7(4):354– 364. 54 Kushner DS, Peters KM, Johnson-Greene D. Evaluating Siebens Domain Management Model for Inpatient Rehabilitation to Increase Functional E:\FR\FM\25APP2.SGM 25APP2 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules asabaliauskas on DSK3SPTVN1PROD with PROPOSALS effectiveness of these interventions suggests that improvement in discharge to community rates among post-acute care patients is possible through modifying provider-led processes and interventions. A TEP convened by our measure development contractor was strongly supportive of the importance of measuring discharge to community outcomes, and implementing the proposed measure, Discharge to Community-PAC IRF QRP in the IRF QRP. The panel provided input on the technical specifications of this proposed measure, including the feasibility of implementing the measure, as well as the overall measure reliability and validity. A summary of the TEP proceedings is available on the PAC Quality Initiatives Downloads and Videos Web site at: https:// www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/Post-Acute-Care-QualityInitiatives/IMPACT-Act-of-2014/ IMPACT-Act-Downloads-andVideos.html. We also solicited stakeholder feedback on the development of this measure through a public comment period held from November 9, 2015, through December 8, 2015. Several stakeholders and organizations, including the MedPAC, among others, supported this measure for implementation. The public comment summary report for the proposed measure is available on the CMS Web site at: https://www.cms.gov/Medicare/ Quality-Initiatives-Patient-AssessmentInstruments/Post-Acute-Care-QualityInitiatives/IMPACT-Act-of-2014/ IMPACT-Act-Downloads-andVideos.html. The NQF-convened MAP met on December 14 and 15, 2015, and provided input on the use of this proposed Discharge to Community-PAC IRF QRP measure in the IRF QRP. The MAP encouraged continued development of the proposed measure to meet the mandate of the IMPACT Act. Independence and Discharge Rate to Home in Geriatric Patients. Archives of physical medicine and rehabilitation. 2015;96(7):1310–1318. 55 Wodchis WP, Teare GF, Naglie G, et al. Skilled nursing facility rehabilitation and discharge to home after stroke. Archives of physical medicine and rehabilitation. 2005;86(3):442–448. 56 Berkowitz RE, Jones RN, Rieder R, et al. Improving disposition outcomes for patients in a geriatric skilled nursing facility. Journal of the American Geriatrics Society. 2011;59(6):1130–1136. 57 Kushner DS, Peters KM, Johnson-Greene D. Evaluating use of the Siebens Domain Management Model during inpatient rehabilitation to increase functional independence and discharge rate to home in stroke patients. PM & R: The journal of injury, function, and rehabilitation. 2015;7(4):354– 364. VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 The MAP supported the alignment of this proposed measure across PAC settings, using standardized claims data. More information about the MAP’s recommendations for this measure is available at: https:// www.qualityforum.org/Publications/ 2016/02/MAP_2016_Considerations_ for_Implementing_Measures_in_ Federal_Programs_-_PAC-LTC.aspx. Since the MAP’s review and recommendation of continued development, we have continued to refine risk-adjustment models and conduct measure testing for this measure, as recommended by the MAP. This proposed measure is consistent with the information submitted to the MAP and is scientifically acceptable for current specification in the IRF QRP. As discussed with the MAP, we fully anticipate that additional analyses will continue as we submit this measure to the ongoing measure maintenance process. We reviewed the NQF’s consensusendorsed measures and were unable to identify any NQF-endorsed resource use or other measures for post-acute care focused on discharge to community. In addition, we are unaware of any other post-acute care measures for discharge to community that have been endorsed or adopted by other consensus organizations. Therefore, we are proposing the measure, Discharge to Community-PAC IRF QRP, under the Secretary’s authority to specify nonNQF-endorsed measures under section 1899B(e)(2)(B) of the Act. We are proposing to use data from the Medicare FFS claims and Medicare eligibility files to calculate this proposed measure. We are proposing to use data from the ‘‘Patient Discharge Status Code’’ on Medicare FFS claims to determine whether a patient was discharged to a community setting for calculation of this proposed measure. In all PAC settings, we tested the accuracy of determining discharge to a community setting using the ‘‘Patient Discharge Status Code’’ on the PAC claim by examining whether discharge to community coding based on PAC claim data agreed with discharge to community coding based on PAC assessment data. We found excellent agreement between the two data sources in all PAC settings, ranging from 94.6 percent to 98.8 percent. Specifically, in the IRF setting, using 2013 data, we found 98.8 percent agreement in coding of community and non-community discharges when comparing discharge status codes on claims and the Discharge to Living Setting (item 44A) codes on the IRF–PAI. We further examined the accuracy of the ‘‘Patient PO 00000 Frm 00027 Fmt 4701 Sfmt 4702 24203 Discharge Status Code’’ on the PAC claim by assessing how frequently discharges to an acute care hospital were confirmed by follow-up acute care claims. We discovered that 88 percent to 91 percent of IRF, LTCH, and SNF claims with acute care discharge status codes were followed by an acute care claim on the day of, or day after, PAC discharge. We believe these data support the use of the claims ‘‘Patient Discharge Status Code’’ for determining discharge to a community setting for this measure. In addition, this measure can feasibly be implemented in the IRF QRP because all data used for measure calculation are derived from Medicare FFS claims and eligibility files, which are already available to CMS. Based on the evidence discussed above, we are proposing to adopt the measure, Discharge to Community-PAC IRF QRP, for the IRF QRP for FY 2018 payment determination and subsequent years. This proposed measure is calculated using 2 years of data. We are proposing a minimum of 25 eligible stays in a given IRF for public reporting of the proposed measure for that IRF. Since Medicare FFS claims data are already reported to the Medicare program for payment purposes, and Medicare eligibility files are also available, IRFs will not be required to report any additional data to CMS for calculation of this measure. The proposed measure denominator is the risk-adjusted expected number of discharges to community. The proposed measure numerator is the risk-adjusted estimate of the number of patients who are discharged to the community, do not have an unplanned readmission to an acute care hospital or LTCH in the 31day post-discharge observation window, and who remain alive during the postdischarge observation window. The measure is risk-adjusted for variables such as age and sex, principal diagnosis, comorbidities, ESRD status, and dialysis, among other variables. For technical information about this proposed measure, including information about the measure calculation, risk adjustment, and denominator exclusions, we refer readers to the document titled, Proposed Measure Specifications for Measures Proposed in the FY 2017 IRF QRP proposed rule, available at: https:// www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/IRF-Quality-Reporting/IRFQuality-Reporting-Program-MeasuresInformation-.html. If this proposed measure is finalized, we intend to provide initial confidential feedback to IRFs, prior to public reporting of this measure, based on E:\FR\FM\25APP2.SGM 25APP2 24204 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules asabaliauskas on DSK3SPTVN1PROD with PROPOSALS Medicare FFS claims data from discharges in CY 2015 and 2016. We intend to publicly report this measure using claims data from discharges in CY 2016 and 2017. We plan to submit this proposed measure to the NQF for consideration for endorsement. We are inviting public comment on our proposal to adopt the measure, Discharge to Community-PAC IRF QRP, for the IRF QRP. 3. Proposal To Address the IMPACT Act Domain of Resource Use and Other Measures: Potentially Preventable 30Day Post-Discharge Readmission Measure for Inpatient Rehabilitation Facility Quality Reporting Program Sections 1899B(a)(2)(E)(ii) and 1899B(d)(1)(C) of the Act require the Secretary to specify measures to address the domain of all-condition riskadjusted potentially preventable hospital readmission rates by SNFs, LTCHs, and IRFs by October 1, 2016, and HHAs by January 1, 2017. We are proposing the measure Potentially Preventable 30-Day Post-Discharge Readmission Measure for IRF QRP as a Medicare FFS claims-based measure to meet this requirement for the FY 2018 payment determination and subsequent years. The proposed measure assesses the facility-level risk-standardized rate of unplanned, potentially preventable hospital readmissions for Medicare FFS beneficiaries in the 30 days post IRF discharge. The IRF admission must have occurred within up to 30 days of discharge from a prior proximal hospital stay which is defined as an inpatient admission to an acute care hospital (including IPPS, CAH, or a psychiatric hospital). Hospital readmissions include readmissions to a short-stay acute-care hospital or an LTCH, with a diagnosis considered to be unplanned and potentially preventable. This proposed measure is claims-based, requiring no additional data collection or submission burden for IRFs. Because the measure denominator is based on IRF admissions, each Medicare beneficiary may be included in the measure multiple times within the measurement period. Readmissions counted in this measure are identified by examining Medicare FFS claims data for readmissions to either acute care hospitals (IPPS or CAH) or LTCHs that occur during a 30-day window beginning two days after IRF discharge. This measure is conceptualized uniformly across the PAC settings, in terms of the measure definition, the approach to risk adjustment, and the measure calculation. Our approach for defining potentially preventable VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 hospital readmissions is described in more detail below. Hospital readmissions among the Medicare population, including beneficiaries that utilize PAC, are common, costly, and often preventable.58 59 MedPAC and a study by Jencks et al. estimated that 17 to 20 percent of Medicare beneficiaries discharged from the hospital were readmitted within 30 days. MedPAC found that more than 75 percent of 30day and 15-day readmissions and 84 percent of 7-day readmissions were considered ‘‘potentially preventable.’’60 In addition, MedPAC calculated that annual Medicare spending on potentially preventable readmissions would be $12 billion for 30-day, $8 billion for 15-day, and $5 billion for 7day readmissions.61 For hospital readmissions from one post-acute care setting, SNFs, MedPAC deemed 76 percent of these readmissions as ‘‘potentially avoidable’’—associated with $12 billion in Medicare expenditures.62 Mor et al. analyzed 2006 Medicare claims and SNF assessment data (Minimum Data Set), and reported a 23.5 percent readmission rate from SNFs, associated with $4.3 billion in expenditures.63 Fewer studies have investigated potentially preventable readmission rates from the remaining post-acute care settings. We have addressed the high rates of hospital readmissions in the acute care setting as well as in PAC. For example, we developed the following measure: All-Cause Unplanned Readmission Measure for 30 Days Post-Discharge from IRFs (NQF #2502), as well as similar measures for other PAC providers (NQF #2512 for LTCHs and NQF #2510 for SNFs).64 These measures are endorsed by the NQF, and the NQF58 Friedman, B., and Basu, J.: The rate and cost of hospital readmissions for preventable conditions. Med. Care Res. Rev. 61(2):225–240, 2004. doi:10.1177/1077558704263799. 59 Jencks, S.F., Williams, M.V., and Coleman, E.A.: Rehospitalizations among patients in the Medicare Fee-for-Service Program. N. Engl. J. Med. 360(14):1418–1428, 2009. doi:10.1016/ j.jvs.2009.05.045. 60 MedPAC: Payment policy for inpatient readmissions, in Report to the Congress: Promoting Greater Efficiency in Medicare. Washington, DC, pp. 103–120, 2007. Available from https:// www.medpac.gov/documents/reports/Jun07_ EntireReport.pdf. 61 Ibid. 62 Ibid. 63 Mor, V., Intrator, O., Feng, Z., et al.: The revolving door of rehospitalization from skilled nursing facilities. Health Aff. 29(1):57–64, 2010. doi:10.1377/hlthaff.2009.0629. 64 National Quality Forum: All-Cause Admissions and Readmissions Measures. pp. 1–319, April 2015. Available from https://www.qualityforum.org/ Publications/2015/04/All-Cause_Admissions_and_ Readmissions_Measures_-_Final_Report.aspx. PO 00000 Frm 00028 Fmt 4701 Sfmt 4702 endorsed IRF measure (NQF #2502) was adopted into the IRF QRP in the FY 2016 IRF PPS final rule (80 FR 47087 through 47089). Note that these NQFendorsed measures assess all-cause unplanned readmissions. Several general methods and algorithms have been developed to assess potentially avoidable or preventable hospitalizations and readmissions for the Medicare population. These include the Agency for Healthcare Research and Quality’s (AHRQ’s) Prevention Quality Indicators, approaches developed by MedPAC, and proprietary approaches, such as the 3MTM algorithm for Potentially Preventable Readmissions.65 66 67 Recent work led by Kramer et al. for MedPAC identified 13 conditions for which readmissions were deemed as potentially preventable among SNF and IRF populations.68 69 Although much of the existing literature addresses hospital readmissions more broadly and potentially avoidable hospitalizations for specific settings like long-term care, these findings are relevant to the development of potentially preventable readmission measures for PAC.70 71 72 Potentially Preventable Readmission Measure Definition: We conducted a 65 Goldfield, N.I., McCullough, E.C., Hughes, J.S., et al.: Identifying potentially preventable readmissions. Health Care Finan. Rev. 30(1):75–91, 2008. Available from https://www.ncbi.nlm.nih.gov/ pmc/articles/PMC4195042/. 66 National Quality Forum: Prevention Quality Indicators Overview. 2008. 67 MedPAC: Online Appendix C: Medicare Ambulatory Care Indicators for the Elderly. pp. 1– 12, prepared for Chapter 4, 2011. Available from https://www.medpac.gov/documents/reports/Mar11_ Ch04_APPENDIX.pdf?sfvrsn=0. 68 Kramer, A., Lin, M., Fish, R., et al.: Development of Inpatient Rehabilitation Facility Quality Measures: Potentially Avoidable Readmissions, Community Discharge, and Functional Improvement. pp. 1–42, 2015. Available from https://www.medpac.gov/documents/ contractor-reports/development-of-inpatientrehabilitation-facility-quality-measures-potentiallyavoidable-readmissions-community-discharge-andfunctional-improvement.pdf?sfvrsn=0. 69 Kramer, A., Lin, M., Fish, R., et al.: Development of Potentially Avoidable Readmission and Functional Outcome SNF Quality Measures. pp. 1–75, 2014. Available from https:// www.medpac.gov/documents/contractor-reports/ mar14_snfqualitymeasures_ contractor.pdf?sfvrsn=0. 70 Allaudeen, N., Vidyarthi, A., Maselli, J., et al.: Redefining readmission risk factors for general medicine patients. J. Hosp. Med. 6(2):54–60, 2011. doi:10.1002/jhm.805. 71 4 Gao, J., Moran, E., Li, Y.-F., et al.: Predicting potentially avoidable hospitalizations. Med. Care 52(2):164–171, 2014. doi:10.1097/ MLR.0000000000000041. 72 Walsh, E.G., Wiener, J.M., Haber, S., et al.: Potentially avoidable hospitalizations of dually eligible Medicare and Medicaid beneficiaries from nursing facility and home-and community-based services waiver programs. J. Am. Geriatr. Soc. 60(5):821–829, 2012. doi:10.1111/j.1532– 5415.2012.03920.x. E:\FR\FM\25APP2.SGM 25APP2 asabaliauskas on DSK3SPTVN1PROD with PROPOSALS Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules comprehensive environmental scan, analyzed claims data, and obtained input from a TEP to develop a definition and list of conditions for which hospital readmissions are potentially preventable. The Ambulatory Care Sensitive Conditions and Prevention Quality Indicators, developed by AHRQ, served as the starting point in this work. For patients in the 30-day post-PAC discharge period, a potentially preventable readmission refers to a readmission for which the probability of occurrence could be minimized with adequately planned, explained, and implemented post-discharge instructions, including the establishment of appropriate follow-up ambulatory care. Our list of PPR conditions is categorized by 3 clinical rationale groupings: • Inadequate management of chronic conditions; • Inadequate management of infections; and • Inadequate management of other unplanned events. Additional details regarding the definition for potentially preventable readmissions are available in the document titled, Proposed Measure Specifications for Measures Proposed in the FY 2017 IRF QRP proposed rule, available at https://www.cms.gov/ Medicare/Quality-Initiatives-PatientAssessment-Instruments/IRF-QualityReporting/IRF-Quality-ReportingProgram-Measures-Information-.html. This proposed measure focuses on readmissions that are potentially preventable and also unplanned. Similar to the All-Cause Unplanned Readmission Measure for 30 Days PostDischarge from IRFs (NQF #2502), this proposed measure uses the current version of the CMS Planned Readmission Algorithm as the main component for identifying planned readmissions. A complete description of the CMS Planned Readmission Algorithm, which includes lists of planned diagnoses and procedures, can be found on the CMS Web site at https:// www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/HospitalQualityInits/ Measure-Methodology.html. In addition to the CMS Planned Readmission Algorithm, this proposed measure incorporates procedures that are considered planned in post-acute care settings, as identified in consultation with TEPs. Full details on the planned readmissions criteria used, including the CMS Planned Readmission Algorithm and additional procedures considered planned for post-acute care, can be found in the document titled, Proposed Measure Specifications for VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 Measures Proposed in the FY 2017 IRF QRP proposed rule, available at https:// www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/IRF-Quality-Reporting/IRFQuality-Reporting-Program-MeasuresInformation-.html. The proposed measure, Potentially Preventable 30-Day Post-Discharge Readmission Measure for IRF QRP, assesses potentially preventable readmission rates while accounting for patient demographics, principal diagnosis in the prior hospital stay, comorbidities, and other patient factors. While estimating the predictive power of patient characteristics, the model also estimates a facility-specific effect, common to patients treated in each facility. This proposed measure is calculated for each IRF based on the ratio of the predicted number of riskadjusted, unplanned, potentially preventable hospital readmissions that occur within 30 days after an IRF discharge, including the estimated facility effect, to the estimated predicted number of risk-adjusted, unplanned inpatient hospital readmissions for the same patients treated at the average IRF. A ratio above 1.0 indicates a higher than expected readmission rate (worse) while a ratio below 1.0 indicates a lower than expected readmission rate (better). This ratio is referred to as the standardized risk ratio (SRR). The SRR is then multiplied by the overall national raw rate of potentially preventable readmissions for all IRF stays. The resulting rate is the risk-standardized readmission rate (RSRR) of potentially preventable readmissions. An eligible IRF stay is followed until: (1) The 30-day post-discharge period ends; or (2) the patient is readmitted to an acute care hospital (IPPS or CAH) or LTCH. If the readmission is unplanned and potentially preventable, it is counted as a readmission in the measure calculation. If the readmission is planned, the readmission is not counted in the measure rate. This measure is risk adjusted. The risk adjustment modeling estimates the effects of patient characteristics, comorbidities, and select health care variables on the probability of readmission. More specifically, the riskadjustment model for IRFs accounts for demographic characteristics (age, sex, original reason for Medicare entitlement), principal diagnosis during the prior proximal hospital stay, body system specific surgical indicators, IRF case-mix groups which capture motor function, comorbidities, and number of acute care hospitalizations in the preceding 365 days. PO 00000 Frm 00029 Fmt 4701 Sfmt 4702 24205 The proposed measure is calculated using 2 consecutive calendar years of FFS claims data, to ensure the statistical reliability of this measure for facilities. In addition, we are proposing a minimum of 25 eligible stays for public reporting of the proposed measure. A TEP convened by our measure contractor provided recommendations on the technical specifications of this proposed measure, including the development of an approach to define potentially preventable hospital readmission for PAC. Details from the TEP meetings, including TEP members’ ratings of conditions proposed as being potentially preventable, are available in the TEP summary report available on the CMS Web site at: https:// www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/Post-Acute-Care-QualityInitiatives/IMPACT-Act-of-2014/ IMPACT-Act-Downloads-andVideos.html. We also solicited stakeholder feedback on the development of this measure through a public comment period held from November 2 through December 1, 2015. Comments on the measure varied, with some commenters supportive of the proposed measure, while others either were not in favor of the measure, or suggested potential modifications to the measure specifications, such as including standardized function data. A summary of the public comments is also available on the CMS Web site at: https://www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/Post-Acute-Care-QualityInitiatives/IMPACT-Act-of-2014/ IMPACT-Act-Downloads-andVideos.html. The MAP encouraged continued development of the proposed measure. Specifically, the MAP stressed the need to promote shared accountability and ensure effective care transitions. More information about the MAP’s recommendations for this measure is available at: https:// www.qualityforum.org/Publications/ 2016/02/MAP_2016_Considerations _for_Implementing_Measures_ in_Federal_Programs_-_PAC-LTC.aspx. At the time, the risk-adjustment model was still under development. Following completion of that development work, we were able to test for measure validity and reliability as identified in the measure specifications document provided above. Testing results are within range for similar outcome measures finalized in public reporting and value-based purchasing programs, including the All-Cause Unplanned Readmission Measure for 30 Days Post E:\FR\FM\25APP2.SGM 25APP2 24206 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules asabaliauskas on DSK3SPTVN1PROD with PROPOSALS Discharge from IRFs (NQF #2502) adopted into the IRF QRP. We reviewed the NQF’s consensus endorsed measures and were unable to identify any NQF-endorsed measures focused on potentially preventable hospital readmissions. We are unaware of any other measures for this IMPACT Act domain that have been endorsed or adopted by other consensus organizations. Therefore, we are proposing the Potentially Preventable 30-Day Post-Discharge Readmission Measure for IRF QRP, under the Secretary’s authority to specify nonNQF-endorsed measures under section 1899B(e)(2)(B) of the Act, for the IRF QRP for the FY 2018 payment determination and subsequent years, given the evidence previously discussed above. We plan to submit the proposed measure to the NQF for consideration of endorsement. If this proposed measure is finalized, we intend to provide initial confidential feedback to providers, prior to public reporting of this proposed measure, based on 2 calendar years of data from discharges in CY 2015 and 2016. We intend to publicly report this proposed measure using data from CY 2016 and 2017. We are inviting public comment on our proposal to adopt the measure, Potentially Preventable 30-Day PostDischarge Readmission Measure for IRF QRP. 4. Potentially Preventable Within Stay Readmission Measure for Inpatient Rehabilitation Facilities In addition to the measure proposed in section VII.F.3. of the proposed rule, Potentially Preventable 30-Day PostDischarge Readmission Measure for IRF QRP, we are proposing the Potentially Preventable Within Stay Readmission Measure for IRFs for the FY 2018 payment determination and subsequent years. This measure is similar to the Potentially Preventable 30-Day PostDischarge Readmission Measure for IRF QRP; however, the readmission window for this proposed measure focuses on potentially preventable hospital readmissions that take place during the IRF stay as opposed to during the 30day post-discharge period. The two proposed PPR measures are intended to function in tandem, covering readmissions during the IRF stay and for 30 days following discharge from the IRF. Our proposal for two PPR measures for use in the IRF QRP will enable us to assess different aspects of care and care coordination. The proposed within stay measure focuses on the care transition into inpatient rehabilitation as well as the care provided during the VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 IRF stay, whereas the 30-day post-IRF discharge measure focuses on transitions from the IRF into lessintensive levels of care or the community. Similar to the Potentially Preventable 30-Day Post-Discharge Readmission Measure for IRF QRP proposed measure for IRFs, this measure assesses the facility-level risk-standardized rate of unplanned, potentially preventable hospital readmissions during the IRF stay. Hospital readmissions include readmissions to a short-stay acute-care hospital or an LTCH, with a diagnosis considered to be unplanned and potentially preventable. This Medicare FFS measure is claims-based, requiring no additional data collection or submission burden for IRFs. As described in section VII.F.3. of this proposed rule, we developed the approach for defining PPR measure based on a comprehensive environmental scan, analysis of claims data, and TEP input. Also, we obtained public comment. The definition for PPRs differs by readmission window. For the withinIRF stay window, PPRs should be avoidable with sufficient medical monitoring and appropriate patient treatment. The list of PPR conditions for the Potentially Preventable Within Stay Readmission Measure for IRFs are categorized by 4 clinical rationale groupings: • Inadequate management of chronic conditions; • Inadequate management of infections; • Inadequate management of other unplanned events; and • Inadequate injury prevention. Additional details regarding the definition for PPRs are available in our document titled, Proposed Measure Specifications for Measures Proposed in the FY 2017 IRF QRP proposed rule which can be found at https:// www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/IRF-Quality-Reporting/IRFQuality-Reporting-Program-MeasuresInformation-.html. Refer to section VII.F of this proposed rule for the relevant background and details that are also relevant for this measure. This proposed measure defines planned readmissions in the same manner as described in section VII.F.3 of this proposed rule, for the Potentially Preventable 30-Day PostDischarge Readmission Measure for IRF QRP. In addition, similar to the Potentially Preventable 30-Day PostDischarge Readmission Measure for IRF QRP proposed measure, this proposed measure uses the same risk-adjustment PO 00000 Frm 00030 Fmt 4701 Sfmt 4702 and statistical approach as described in section VII.F.3 of this proposed rule. Note the full methodology is detailed in the document titled, Proposed Measure Specifications for Measures Proposed in the FY 2017 IRF QRP proposed rule, at https://www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/IRF-Quality-Reporting/IRFQuality-Reporting-Program-MeasuresInformation-.html. This measure is also based on 2 consecutive calendar years of Medicare FFS claims data. A TEP convened by our measure contractor provided recommendations on the technical specifications of this proposed measure, including the development of an approach to define potentially preventable hospital readmission for PAC. Details from the TEP meetings, including TEP members’ ratings of conditions proposed as being potentially preventable, are available in the TEP Summary Report available on the CMS Web site at: https:// www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/Post-Acute-Care-QualityInitiatives/IMPACT-Act-of-2014/ IMPACT-Act-Downloads-andVideos.html. We also solicited stakeholder feedback on the development of this measure through a public comment period held from November 2 through December 1, 2015. Comments on this and other PAC measures of PPR measures varied, with some commenters supportive of the proposed measure, while others either were not in favor of the measure, or suggested potential modifications to the measure specifications, such as including standardized function data. A summary of our public comment period is also available on the CMS Web site at: https://www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/Post-Acute-Care-QualityInitiatives/IMPACT-Act-of-2014/ IMPACT-Act-Downloads-andVideos.html. The MAP encouraged continued development of the proposed measure. Specifically, the MAP stressed the need to promote shared accountability and ensure effective care transitions. More information about the MAP’s recommendations for this measure is available at: https:// www.qualityforum.org/Publications/ 2016/02/MAP_2016_Considerations _for_Implementing_Measures_in_ Federal_Programs_-_PAC-LTC.aspx. At the time, the risk-adjustment model was still under development. Following completion of that development work, we were able to test for measure validity and reliability as described in the measure specifications document E:\FR\FM\25APP2.SGM 25APP2 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules provided above. Testing results are within range for similar outcome measures finalized in public reporting and value-based purchasing programs, including the All-Cause Unplanned Readmission Measure for 30 Days PostDischarge from IRFs (NQF #2502) that we previously adopted into the IRF QRP. We plan to submit the proposed measure to the NQF for consideration of endorsement. If this proposed measure is finalized, we intend to provide initial confidential feedback to providers, prior to public reporting of this proposed measure, based on 2 calendar years of claims data from discharges in 2015 and 2016. We propose a minimum of 25 eligible stays in a given IRF for public reporting of the proposed measure for that IRF. We intend to publicly report this proposed measure using claims data from calendar years 2016 and 2017. We are inviting public comment on our proposal to adopt this measure, Potentially Preventable Within Stay Readmission Measure for IRFs. asabaliauskas on DSK3SPTVN1PROD with PROPOSALS G. IRF QRP Quality Measure Proposed for the FY 2020 Payment Determination and Subsequent Years In addition to the measures we are retaining as described in section VII.E. of this proposed rule under our policy described in section VII.C. of this proposed rule and the new quality measures proposed in section VII.F of this proposed rule for the FY 2018 payment determinations and subsequent years, we are proposing one new quality measure to meet the requirements of the IMPACT Act for the FY 2020 payment determination and subsequent years. The proposed measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC IRF QRP, addresses the IMPACT Act quality domain of Medication Reconciliation. 1. Quality Measure Addressing the IMPACT Act Domain of Medication Reconciliation: Drug Regimen Review Conducted With Follow-Up for Identified Issues-Post Acute Care IRF QRP Sections 1899B(a)(2)(E)(i)(III) and 1899B(c)(1)(C) of the Act, as added by the IMPACT Act, require the Secretary to specify a quality measure to address the quality domain of medication reconciliation by October 1, 2018 for IRFs, LTCHs and SNFs by January 1, 2017 for HHAs. We are proposing to adopt the quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues–PAC IRF QRP, for the IRF QRP as a patientassessment based, cross-setting quality measure to meet the IMPACT Act VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 requirements with data collection beginning October 1, 2018 for the FY 2020 payment determinations and subsequent years. This proposed measure assesses whether PAC providers were responsive to potential or actual clinically significant medication issue(s) when such issues were identified. Specifically, the proposed quality measure reports the percentage of patient stays in which a drug regimen review was conducted at the time of admission and timely follow-up with a physician occurred each time potential clinically significant medication issues were identified throughout that stay. For this proposed quality measure, drug regimen review is defined as the review of all medications or drugs the patient is taking to identify any potential clinically significant medication issues. The proposed quality measure utilizes both the processes of medication reconciliation and a drug regimen review, in the event an actual or potential medication issue occurred. The proposed measure informs whether the PAC facility identified and addressed each clinically significant medication issue and if the facility responded or addressed the medication issue in a timely manner. Of note, drug regimen review in PAC settings is generally considered to include medication reconciliation and review of the patient’s drug regimen to identify potential clinically significant medication issues.73 This measure is applied uniformly across the PAC settings. Medication reconciliation is a process of reviewing an individual’s complete and current medication list. Medication reconciliation is a recognized process for reducing the occurrence of medication discrepancies that may lead to Adverse Drug Events (ADEs).74 Medication discrepancies occur when there is conflicting information documented in the medical records. The World Health Organization regards medication reconciliation as a standard operating protocol necessary to reduce the potential for ADEs that cause harm to patients. Medication reconciliation is an important patient safety process that addresses medication accuracy during transitions in patient care and in identifying preventable ADEs.75 The Joint Commission added medication reconciliation to its list of National 73 Institute of Medicine. Preventing Medication Errors. Washington DC: National Academies Press; 2006. 74 Ibid. 75 Leotsakos A., et al. Standardization in patient safety: The WHO High 5s project. Int J Qual Health Care. 2014:26(2):109–116. PO 00000 Frm 00031 Fmt 4701 Sfmt 4702 24207 Patient Safety Goals (2005), suggesting that medication reconciliation is an integral component of medication safety.76 The Society of Hospital Medicine published a statement in agreement of the Joint Commission’s emphasis and value of medication reconciliation as a patient safety goal.77 There is universal agreement that medication reconciliation directly addresses patient safety issues that can result from medication miscommunication and unavailable or incorrect information.78 79 80 The performance of timely medication reconciliation is valuable to the process of drug regimen review. Preventing and responding to ADEs is of critical importance as ADEs account for significant increases in health services utilization and costs 81 82 83 including subsequent emergency room visits and re-hospitalizations.84 Annual health care costs in the United States are estimated at $3.5 billion, resulting in 7,000 deaths annually.85 86 Medication errors include the duplication of medications, delivery of an incorrect drug, inappropriate drug omissions, or errors in the dosage, route, frequency, and duration of medications. 76 The Joint Commission. 2016 Long Term Care: National Patient Safety Goals Medicare/Medicaid Certification-based Option. (NPSG.03.06.01). 77 Greenwald, J.L., Halasyamani, L., Greene, J., LaCivita, C., et al. (2010). Making inpatient medication reconciliation patient centered, clinically relevant and implementable: A consensus statement on key principles and necessary first steps. Journal of Hospital Medicine, 5(8), 477–485. 78 Leotsakos A., et al. Standardization in patient safety: The WHO High 5s project. Int J Qual Health Care. 2014:26(2):109–116. 79 The Joint Commission. 2016 Long Term Care: National Patient Safety Goals Medicare/Medicaid Certification-based Option. (NPSG.03.06.01). 80 IHI. Medication Reconciliation to Prevent Adverse Drug Events [Internet]. Cambridge, MA: Institute for Healthcare Improvement; [cited 2016 Jan 11]. Available from: https://www.ihi.org/topics/ adesmedicationreconciliation/Pages/default.aspx. 81 Institute of Medicine. Preventing Medication Errors. Washington DC: National Academies Press; 2006. 82 Jha A.K., Kuperman G.J., Rittenberg E., et al. Identifying hospital admissions due to adverse drug events using a computer-based monitor. Pharmacoepidemiol Drug Saf. 2001;10(2):113–119. 83 Hohl C.M., Nosyk B., Kuramoto L., et al. Outcomes of emergency department patients presenting with adverse drug events. Ann Emerg Med. 2011;58:270–279. 84 Kohn L.T., Corrigan J.M., Donaldson M.S. To Err Is Human: Building a Safer Health System Washington, DC: National Academies Press; 1999. 85 Greenwald, J.L., Halasyamani, L., Greene, J., LaCivita, C., et al. (2010). Making inpatient medication reconciliation patient centered, clinically relevant and implementable: A consensus statement on key principles and necessary first steps. Journal of Hospital Medicine, 5(8), 477–485. 86 Phillips, David P.; Christenfeld, Nicholas; and Glynn, Laura M. Increase in US Medication-Error Deaths between 1983 and 1993. The Lancet. 351:643–644, 1998. E:\FR\FM\25APP2.SGM 25APP2 24208 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules asabaliauskas on DSK3SPTVN1PROD with PROPOSALS Medication errors are one of the most common types of medical error and can occur at any point in the process of ordering and delivering a medication. Medication errors have the potential to result in an ADE.87 88 89 90 91 92 Inappropriately prescribed medications are also considered a major healthcare concern in the United States for the elderly population, with costs of roughly $7.2 billion annually.93 There is strong evidence that medication discrepancies occur during transfers from acute care facilities to post-acute care facilities. Discrepancies occur when there is conflicting information documented in the medial records. Almost one-third of medication discrepancies have the potential to cause patient harm.94 An estimated 50 percent of patients experienced a clinically important medication error after hospital discharge in an analysis of two tertiary care academic hospitals.95 Medication reconciliation has been identified as an area for improvement during transfer from the acute care facility to the receiving post-acute care facility. PAC facilities report gaps in medication information between the acute care hospital and the receiving post-acute-care setting when performing medication reconciliation.96 97 Hospital 87 Institute of Medicine. To err is human: Building a safer health system. Washington, DC: National Academies Press; 2000. 88 Lesar, T.S., Briceland, L., Stein, D.S. Factors related to errors in medication prescribing. JAMA. 1997:277(4): 312–317. 89 Bond, C.A., Raehl, C.L., & Franke, T. Clinical pharmacy services, hospital pharmacy staffing, and medication errors in United States hospitals. Pharmacotherapy. 2002:22(2): 134–147. 90 Bates, D.W., Cullen D.J., Laird, N., Petersen, L.A., Small, S.D., et al. Incidence of adverse drug events and potential adverse drug events. Implications for prevention. JAMA. 1995:274(1): 29–34. 91 Barker, K.N., Flynn, E.A., Pepper, G.A., Bates, D.W., & Mikeal, R.L. Medication errors observed in 36 health care facilities. JAMA. 2002: 162(16):1897– 1903. 92 Bates, D.W., Boyle, D.L., Vander, Vliet M.B., Schneider, J., & Leape, L. Relationship between medication errors and adverse drug events. J Gen Intern Med. 1995:10(4): 199–205. 93 Fu, Alex Z., et al. ‘‘Potentially inappropriate medication use and healthcare expenditures in the US community-dwelling elderly.’’ Medical care 45.5 (2007): 472–476. 94 Wong, Jacqueline D., et al. ‘‘Medication reconciliation at hospital discharge: Evaluating discrepancies.’’ Annals of Pharmacotherapy 42.10 (2008): 1373–1379. 95 Kripalani, S., Roumie, C.L., Dalal, A.K., et al. Effect of a pharmacist intervention on clinically important medication errors after hospital discharge: A randomized controlled trial. Ann Intern Med. 2012:157(1):1–10. 96 Gandara, Esteban, et al. ‘‘Communication and information deficits in patients discharged to rehabilitation facilities: An evaluation of five acute care hospitals.’’ Journal of Hospital Medicine 4.8 (2009): E28–E33. 97 Gandara, Esteban, et al. ‘‘Deficits in discharge documentation in patients transferred to VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 discharge has been identified as a particularly high risk time point, with evidence that medication reconciliation identifies high levels of discrepancy.98 99 100 101 102 103 Also, there is evidence that medication reconciliation discrepancies occur throughout the patient stay.104 105 For older patients, who may have multiple comorbid conditions and thus multiple medications, transitions between acute and post-acute care settings can be further complicated,106 and medication reconciliation and patient knowledge (medication literacy) can be inadequate post-discharge.107 The proposed quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC IRF QRP, provides an important component of care coordination for PAC settings and would affect a large proportion of the Medicare population who transfer from hospitals into PAC services each year. For example, in 2013, 1.7 million rehabilitation facilities on anticoagulation: Results of a system wide evaluation.’’ Joint Commission Journal on Quality and Patient Safety 34.8 (2008): 460–463. 98 Coleman, E.A., Smith, J.D., Raha, D., Min, S.J. Post hospital medication discrepancies: Prevalence and contributing factors. Arch Intern Med. 2005 165(16):1842–1847. 99 Wong, J.D., Bajcar, J.M., Wong, G.G., et al. Medication reconciliation at hospital discharge: Evaluating discrepancies. Ann Pharmacother. 2008 42(10):1373–1379. 100 Hawes, E.M., Maxwell, W.D., White, S.F., Mangun, J., Lin, F.C. Impact of an outpatient pharmacist intervention on medication discrepancies and health care resource utilization in post hospitalization care transitions. Journal of Primary Care & Community Health. 2014; 5(1):14– 18. 101 Foust, J.B., Naylor, M.D., Bixby, M.B., Ratcliffe, S.J. Medication problems occurring at hospital discharge among older adults with heart failure. Research in Gerontological Nursing. 2012, 5(1): 25–33. 102 Pherson, E.C., Shermock, K.M., Efird, L.E., et al. Development and implementation of a post discharge home-based medication management service. Am J Health Syst Pharm. 2014; 71(18): 1576–1583. 103 Pronovosta, P., Weasta, B., Scwarza, M., et al. Medication reconciliation: A practical tool to reduce the risk of medication errors. J Crit Care. 2003; 18(4): 201–205. 104 Bates, D.W., Cullen, D.J., Laird, N., Petersen, L.A., Small SD, et al. Incidence of adverse drug events and potential adverse drug events. Implications for prevention. JAMA. 1995:274(1): 29–34. 105 Himmel, W., M. Tabache, and M.M. Kochen. ‘‘What happens to long-term medication when general practice patients are referred to hospital?.’’ European journal of clinical pharmacology 50.4 (1996): 253–257. 106 Chhabra, P.T., et al. (2012). ‘‘Medication reconciliation during the transition to and from long-term care settings: A systematic review.’’ Res Social Adm Pharm 8(1): 60–75. 107 Kripalani, S., Roumie, C.L., Dalal, A.K., et al. Effect of a pharmacist intervention on clinically important medication errors after hospital discharge: A randomized controlled trial. Ann Intern Med. 2012:157(1):1–10. PO 00000 Frm 00032 Fmt 4701 Sfmt 4702 Medicare FFS beneficiaries had SNF stays, 338,000 beneficiaries had IRF stays, and 122,000 beneficiaries had LTCH stays.108 A TEP convened by our measure development contractor provided input on the technical specifications of this proposed quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC IRF QRP, including components of reliability, validity, and the feasibility of implementing the measure across PAC settings. The TEP supported the measure’s implementation across PAC settings and was supportive of our plans to standardize this measure for crosssetting development. A summary of the TEP proceedings is available on the PAC Quality Initiatives Downloads and Video Web site at https://www.cms.gov/ Medicare/Quality-Initiatives-PatientAssessment-Instruments/Post-AcuteCare-Quality-Initiatives/IMPACT-Act-of2014/IMPACT-Act-Downloads-andVideos.html. We solicited stakeholder feedback on the development of this measure by means of a public comment period held from September 18 through October 6, 2015. Through public comments submitted by several stakeholders and organizations, we received support for implementation of this proposed measure. The public comment summary report for the proposed measure is available on the CMS Web site at: https://www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/Post-Acute-Care-QualityInitiatives/IMPACT-Act-of-2014/ IMPACT-Act-Downloads-andVideos.html. The NQF-convened MAP met on December 14 and 15, 2015, and provided input on the use of this proposed measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC IRF QRP. The MAP encouraged continued development of the proposed quality measure to meet the mandate added by the IMPACT Act. The MAP agreed with the measure gaps identified by CMS, including medication reconciliation, and stressed that medication reconciliation be present as an ongoing process. More information about the MAPs recommendations for this measure is available at: https:// www.qualityforum.org/Publications/ 2016/02/MAP_2016_Considerations_ for_Implementing_Measures_in_ Federal_Programs_-_PAC-LTC.aspx. 108 March 2015 Report to the Congress: Medicare Payment Policy. Medicare Payment Advisory Commission; 2015. E:\FR\FM\25APP2.SGM 25APP2 asabaliauskas on DSK3SPTVN1PROD with PROPOSALS Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules Since the MAP’s review and recommendation of continued development, we have continued to refine this proposed measure in compliance with the MAP’s recommendations. The proposed measure is both consistent with the information submitted to the MAP and support its scientific acceptability for use in quality reporting programs. Therefore, we are proposing this measure for implementation in the IRF QRP as required by the IMPACT Act. We reviewed the NQF’s endorsed measures and identified one NQFendorsed cross-setting and quality measure related to medication reconciliation, which applies to the SNF, LTCH, IRF, and HHA settings of care: Care for Older Adults (COA), (NQF #0553). The quality measure, Care for Older Adults (COA), (NQF #0553) assesses the percentage of adults 66 years and older who had a medication review. The Care for Older Adults (COA), (NQF #0553) measure requires at least one medication review conducted by a prescribing practitioner or clinical pharmacist during the measurement year and the presence of a medication list in the medical record. This is in contrast to the proposed quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC IRF QRP, which reports the percentage of patient stays in which a drug regimen review was conducted at the time of admission and that timely follow-up with a physician occurred each time one or more potential clinically significant medication issues were identified throughout that stay. After careful review of both quality measures, we have decided to propose the quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC IRF QRP for the following reasons: • The IMPACT Act requires the implementation of quality measures, using patient assessment data that are standardized and interoperable across PAC settings. The proposed quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC IRF QRP, employs three standardized patientassessment data elements for each of the four PAC settings so that data are standardized, interoperable, and comparable; whereas, the Care for Older Adults (COA), (NQF #0553) quality measure does not contain data elements that are standardized across all four PAC settings. • The proposed quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 IRF QRP, requires the identification of potential clinically significant medication issues at the beginning, during, and at the end of the patient’s stay to capture data on each patient’s complete PAC stay; whereas, the Care for Older Adults (COA), (NQF #0553) quality measure only requires annual documentation in the form of a medication list in the medical record of the target population. • The proposed quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC IRF QRP, includes identification of the potential clinically significant medication issues and communication with the physician (or physician designee) as well as resolution of the issue(s) within a rapid timeframe (by midnight of the next calendar day); whereas, the Care for Older Adults (COA), (NQF #0553) quality measure does not include any follow-up or timeframe in which the follow-up would need to occur. • The proposed quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC IRF QRP, does not have age exclusions; whereas, the Care for Older Adults (COA), (NQF #0553) quality measure limits the measure’s population to patients aged 66 and older. • The proposed quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC IRF QRP, would be reported to IRFs quarterly to facilitate internal quality monitoring and quality improvement in areas such as patient safety, care coordination, and patient satisfaction; whereas, the Care for Older Adults (COA), (NQF #0553) quality measure would not enable quarterly quality updates, and thus data comparisons within and across PAC providers would be difficult due to the limited data and scope of the data collected. Therefore, based on the evidence discussed above, we are proposing to adopt the quality measure entitled, Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC IRF QRP, for the IRF QRP for FY 2020 payment determination and subsequent years. We plan to submit the quality measure to the NQF for consideration for endorsement. The calculation of the proposed quality measure would be based on the data collection of three standardized items to be included in the IRF–PAI. The collection of data by means of the standardized items would be obtained at admission and discharge. For more information about the data submission required for this proposed measure, we PO 00000 Frm 00033 Fmt 4701 Sfmt 4702 24209 refer readers to section VII.I.c of this proposed rule. The standardized items used to calculate this proposed quality measure do not duplicate existing items currently used for data collection within the IRF–PAI. The proposed measure denominator is the number of patient stays with a discharge assessment during the reporting period. The proposed measure numerator is the number of stays in the denominator where the medical record contains documentation of a drug regimen review conducted at: (1) Admission and (2) discharge with a lookback through the entire patient stay with all potential clinically significant medication issues identified during the course of care and followed up with a physician or physician designee by midnight of the next calendar day. This measure is not risk adjusted. For technical information about this proposed measure, including information about the measure calculation and discussion pertaining to the standardized items used to calculate this measure, we refer readers to the document titled, Proposed Measure Specifications for Measures Proposed in the FY 2017 IRF QRP proposed rule available at https://www.cms.gov/ Medicare/Quality-Initiatives-PatientAssessment-Instruments/IRF-QualityReporting/IRF-Quality-ReportingProgram-Measures-Information-.html. Data for the proposed quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC IRF QRP, would be collected using the IRF–PAI with submission through the Quality Improvement Evaluation System (QIES) Assessment Submission and Processing (ASAP) system. We invite public comment on our proposal to adopt the quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC IRF QRP for the IRF QRP. H. IRF QRP Quality Measures and Measure Concepts Under Consideration for Future Years We invite comment on the importance, relevance, appropriateness, and applicability of each of the quality measures listed in Table 8 for future years in the IRF QRP. We are developing a measure related to the IMPACT Act domain, ‘‘Accurately communicating the existence of and providing for the transfer of health information and care preferences of an individual to the individual, family caregiver of the individual, and providers of services furnishing items and services to the individual, when the individual transitions.’’ We are considering the E:\FR\FM\25APP2.SGM 25APP2 24210 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules possibility of adding quality measures that rely on the patient’s perspective; that is, measures that include patientreported experience of care and health status data. We recently posted a ‘‘Request for Information to Aid in the Design and Development of a Survey Regarding Patient and Family Member Experiences with Care Received in Inpatient Rehabilitation Facilities’’ (80 FR 72725 through 72727). Also, we are considering a measure focused on pain that relies on the collection of patientreported pain data. Finally, we are considering a measure related to patient safety, Venous Thromboembolism Prophylaxis. TABLE 8—IRF QRP QUALITY MEASURES UNDER CONSIDERATION FOR FUTURE YEARS IMPACT Act Domain ....................... IMPACT Act Measure ..................... NQS Priority .................................... Measures ........................................ NQS Priority .................................... Measure .......................................... Accurately communicating the existence of and providing for the transfer of health information and care preferences of an individual to the individual, family caregiver of the individual, and providers of services furnishing items and services to the individual, when the individual transitions. • Transfer of health information and care preferences when an individual transitions. Patient- and Caregiver-Centered Care. • Patient Experience of Care. • Percent of Patients with Moderate to Severe Pain. Patient Safety. • Venous Thromboembolism Prophylaxis. I. Proposed Form, Manner, and Timing of Quality Data Submission for the FY 2018 Payment Determination and Subsequent Years 1. Background Section 1886(j)(7)(C) of the Act requires that, for the FY 2014 payment determination and subsequent years, each IRF submit to the Secretary data on quality measures specified by the Secretary. In addition, section 1886(j)(7)(F) of the Act requires that, for the fiscal year beginning on the specified application date, as defined in section 1899B(a)(2)(E) of the Act, and each subsequent year, each IRF submit to the Secretary data on measures specified by the Secretary under section 1899B of the Act. The data required under section 1886(j)(7)(C) and (F) of the Act must be submitted in a form and manner, and at a time, specified by the Secretary. As required by section 1886(j)(7)(A)(i) of the Act, for any IRF that does not submit data in accordance with section 1886(j)(7)(C) and (F) of the Act for a given fiscal year, the annual increase factor for payments for discharges occurring during the fiscal year must be reduced by 2 percentage points. a. Timeline for Data Submission Under the IRF QRP for the FY 2018, FY 2019 and Subsequent Year Payment Determinations Tables 9 through 17 represent our finalized data collection and data submission quarterly reporting periods, as well as the quarterly review and correction periods and submission deadlines for the quality measure data submitted via the IRF–PAI and the CDC/ NHSN affecting the FY 2018 and subsequent year payment determinations. We also provide in Table 17 our previously finalized claims-based measures for FY 2018 and subsequent years, although we note that, for claims-based measures, there is no corresponding quarterly-based data collection or submission reporting periods with quarterly-based review and correction deadline periods. Further, in the FY 2016 IRF PPS final rule (80 FR 47122 through 47123), we established that the IRF–PAI-based measures finalized for adoption into the IRF QRP would transition from reporting based on the fiscal year to an annual schedule consistent with the calendar year, with quarterly reporting periods followed by quarterly review and correction periods and submission deadlines, unless there is a clinical reason for an alternative data collection time frame. The pattern for annual, calendar year-based data reporting, in which we use 4 quarters of data, is illustrated in Table 9 and is in place for all Annual Payment Update (APU) years except for the measure in Table 10 for which the FY 2018 APU determination will be based on 5 calendar year quarters in order to transition this measure from FY to CY reporting. We also wish to clarify that payment determinations for the measures finalized for use in the IRF QRP that use the IRF–PAI or CDC NHSN data sources will subsequently use the quarterly data collection/submission and review, correction and submission deadlines described in Table 9 unless otherwise specified, as is with the measure NQF #0680: Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine. For this measure, we clarify in a subsequent discussion that the data collection and reporting periods span two consecutive years from July 1 through June 30th and we therefore separately illustrate those collection/ submission quarterly reporting periods and review and correction periods and submission deadlines for FY 2019 and subsequent years in Table 15. We also separately distinguish the reporting periods and data submission timeframes for the finalized measure Influenza Vaccination Coverage among Healthcare Personnel which spans two consecutive years in Table 16. asabaliauskas on DSK3SPTVN1PROD with PROPOSALS TABLE 9—ANNUAL QRP CY IRF–PAI & CDC/NHSN DATA COLLECTION/SUBMISSION REPORTING PERIODS AND DATA SUBMISSION/CORRECTION DEADLINES ** PAYMENT DETERMINATIONS ∧ Proposed CY data collection quarter Quarter Quarter Quarter Quarter 1 2 3 4 ................... ................... ................... ................... Data collection/submission quarterly reporting period January 1–March 31 * ......................... April 1–June 30 ................................... July 1–September 30 .......................... October 1–December 31 * ................... QRP quarterly review and correction periods data submission deadlines for payment determination ** April 1–August 15 * .............................. July 1–November 15 ........................... October 1–February 15 ....................... January 1–May 15 * ............................. Deadline: Deadline: Deadline: Deadline: August 15.* November 15. February 15. May 15.* * We refer readers to Table 16 for the annual data collection time frame for the measure, Influenza Vaccination Coverage among Healthcare Personnel. VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 PO 00000 Frm 00034 Fmt 4701 Sfmt 4702 E:\FR\FM\25APP2.SGM 25APP2 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules 24211 ** We note that the submission of IRF–PAI data must also adhere to the IRF PPS deadlines. ∧ We refer readers to Table 15 for the 12 month (July–June) data collection/submission quarterly reporting periods, review and correction periods and submission deadlines for APU determinations for the measure NQF #0680: Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine. TABLE 10—SUMMARY DETAILS ON DATA COLLECTION PERIOD AND DATA SUBMISSION TIMELINE FOR PREVIOUSLY ADOPTED QUALITY MEASURE AFFECTING THE FY 2018 PAYMENT DETERMINATION THAT WILL USE 5 CY QUARTERS IN ORDER TO TRANSITION FROM A FY TO A CY REPORTING CYCLE Submission method Data collection/submission quarterly reporting period(s) Quarterly review and correction periods data submission deadlines for payment determination * * * APU determination affected Finalized Measure: • NQF #0678 Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (80 FR 47122) IRF–PAI/QIES ASAP System CY CY CY CY CY 15 16 16 16 16 Q4—10/1/15–12/31/15 ............ Q1—1/1/16–3/31/16 ................ Q2—4/1/16–6/30/16 ................ Q3—7/1/16–9/30/16 ................ Q4—10/01/16–12/31/16 .......... 1/1/2016–5/15/16 deadline ................. 4/1/2016–8/15/16 deadline. 7/1/16–11/15/16 deadline. 10/1/16–2/15/17 deadline. 1/1/17–5/15/17 deadline. FY 2018. * We refer readers to the Table 9 for an illustration of the data collection/submission quarterly reporting periods and correction and submission deadlines. ** We note that the submission of IRF–PAI data must also adhere to the IRF PPS deadlines. TABLE 11—SUMMARY DETAILS ON DATA COLLECTION PERIOD AND DATA SUBMISSION TIMELINE FOR PREVIOUSLY ADOPTED IRF–PAI QUALITY MEASURE, NQF #0680 PERCENT OF RESIDENTS OR PATIENTS WHO WERE ASSESSED AND APPROPRIATELY GIVEN THE SEASONAL INFLUENZA VACCINE, AFFECTING THE FY 2018 PAYMENT DETERMINATION Submission method Data collection/submission quarterly reporting period(s) Quarterly review and correction periods data submission deadlines for payment determination * APU determination affected Finalized Measure: • NQF #0680 Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine (80 FR 47122) IRF–PAI/QIES ASAP System CY 15 Q4—10/1/15–12/31/15 ............ CY 16 Q1—1/1/16–3/31/16 ................ CY 16 Q2—4/1/16–6/30/16 ................ 1/1/2016–5/15/16 deadline ................. 4/1/2016–8/15/16 deadline. 7/1/16–11/15/16 deadline. FY 2018. * We note that the submission of IRF–PAI data must also adhere to the IRF PPS deadlines. TABLE 12—SUMMARY DETAILS ON DATA COLLECTION PERIOD AND DATA SUBMISSION TIMELINE FOR PREVIOUSLY ADOPTED QUALITY MEASURES AFFECTING THE FY 2018 PAYMENT DETERMINATION THAT WILL USE ONLY 1 CY QUARTER OF DATA INITIALLY FOR THE PURPOSE OF DETERMINING PROVIDER COMPLIANCE Submission method Data collection/submission quarterly reporting period(s) Quarterly review and correction periods data submission deadlines for payment determination * * * APU determination affected Finalized Measure: • NQF #0674 Application of Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay) (80 FR 47122) • NQF #2631 Application of Percent of Long-Term Care Hospital Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (80 FR 47122) • NQF #2633 IRF Functional Outcome Measure: Change in Self-Care Score for Medical Rehabilitation Patients (80 FR 47122) • NQF #2634 IRF Functional Outcome Measure: Change in Mobility Score for Medical Rehabilitation Patients (80 FR 47122) • NQF #2635 IRF Functional Outcome Measure: Discharge Self-Care Score for Medical Rehabilitation Patients (80 FR 47122) • NQF #2636 IRF Functional Outcome Measure: Discharge Mobility Score for Medical Rehabilitation Patients (80 FR 47122) IRF–PAI/QIES ASAP System CY 16 Q4—10/1/16–12/31/16 ............ 1/1/2017–5/15/17 ................................ FY 2018. asabaliauskas on DSK3SPTVN1PROD with PROPOSALS * We refer readers to the Table 9 for an illustration of the data collection/submission quarterly reporting periods and correction and submission deadlines, which will be followed for the above measures, for all payment determinations subsequent to that of FY 2018. ** We note that the submission of IRF–PAI data must also adhere to the IRF PPS deadlines. TABLE 13—SUMMARY DETAILS ON DATA COLLECTION PERIOD AND DATA SUBMISSION TIMELINE FOR PREVIOUSLY ADOPTED CDC/NHSN QUALITY MEASURES AFFECTING THE FY 2018 PAYMENT DETERMINATION AND SUBSEQUENT YEARS THAT WILL USE 4 CY QUARTERS * Submission method Data collection/submission quarterly reporting period(s) Quarterly review and correction periods data submission deadlines for payment determination Finalized Measure: VerDate Sep<11>2014 20:19 Apr 22, 2016 Jkt 238001 PO 00000 Frm 00035 Fmt 4701 Sfmt 4702 E:\FR\FM\25APP2.SGM 25APP2 APU determination affected 24212 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules TABLE 13—SUMMARY DETAILS ON DATA COLLECTION PERIOD AND DATA SUBMISSION TIMELINE FOR PREVIOUSLY ADOPTED CDC/NHSN QUALITY MEASURES AFFECTING THE FY 2018 PAYMENT DETERMINATION AND SUBSEQUENT YEARS THAT WILL USE 4 CY QUARTERS *—Continued Submission method Data collection/submission quarterly reporting period(s) Quarterly review and correction periods data submission deadlines for payment determination APU determination affected • NQF #0138 NHSN Catheter-Associated Urinary Tract Infection (CAUTI) Outcome Measure (80 FR 47122 through 47123) • NQF #1716 NHSN Facility-wide Inpatient Hospital-onset Methicillin-resistant Staphylococcus aureus (MRSA) Bacteremia Outcome Measure (80 FR 47122 through 47123) • NQF #1717 NHSN Facility-wide Inpatient Hospital-onset Clostridium difficile Infection (CDI) Outcome Measure (79 FR 45917) CDC/NHSN .............................. CY 16 Q1—1/1/16–3/31/16 and Q1 of subsequent Calendar Years. CY 16 Q2—4/1/16–6/30/16 and Q2 of subsequent Calendar Years. CY 16 Q3—7/1/16–9/30/16 and Q3 of subsequent Calendar Years. CY 16 Q4—10/1/16–12/31/16 and Q4 of subsequent Calendar Years. 4/1/2016–8/15/16 ** and 4/1–8/15 subsequent years. 7/1/16–11/15/16 **nand 7/1–11/15 subsequent years. 10/1/16–2/15/17 ** and 10/1–2/15 subsequent years. 1/1/17–5/15/17 ** and 1/1–5/15 subsequent years. of FY 2018 and subsequent years.** of of of * We refer readers to the Table 9 for an illustration of the data collection/submission quarterly reporting periods and correction and submission deadlines. ** As is illustrated in Table 9: Subsequent years follow the same CY Quarterly Data Collection/submission Quarterly Reporting Periods and Quarterly Review and Correction Periods Deadlines for Payment Determination in which every CY quarter is followed by approximately 135 days for IRFs to review and correct their data until midnight on the final submission deadline dates. TABLE 14—SUMMARY DETAILS ON DATA COLLECTION PERIOD AND DATA SUBMISSION TIMELINE FOR PREVIOUSLY ADOPTED IRF–PAI QUALITY MEASURES AFFECTING THE FY 2019 PAYMENT DETERMINATION AND SUBSEQUENT YEARS THAT WILL USE 4 CY QUARTERS Submission method Data collection/submission quarterly reporting period(s) Quarterly review and correction periods data submission deadlines for payment determination * * * APU determination affected Finalized Measure: • NQF #0678 Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (80 FR 47122) • NQF #0674 Application of Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay) (80 FR 47122) • NQF #2631 Application of Percent of Long-Term Care Hospital Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (80 FR 47122) • NQF #2633 IRF Functional Outcome Measure: Change in Self-Care Score for Medical Rehabilitation Patients (80 FR 47122) • NQF #2634 IRF Functional Outcome Measure: Change in Mobility Score for Medical Rehabilitation Patients (80 FR 47122) • NQF #2635 IRF Functional Outcome Measure: Discharge Self-Care Score for Medical Rehabilitation Patients (80 FR 47122) • NQF #2636 IRF Functional Outcome Measure: Discharge Mobility Score for Medical Rehabilitation Patients (80 FR 47122) IRF–PAI/QIES ASAP System CY 17 Q1—1/1/17–3/31/17 and Q1 of subsequent Calendar Years. CY 17 Q2—4/1/17–6/30/17 and Q2 of subsequent Calendar Years. CY 17 Q3—7/1/17–9/30/17 and Q3 of subsequent Calendar Years. CY 17 Q4—10/1/17–12/31/17 and Q4 of subsequent Calendar Years. 4/1/2017–8/15/17 *** and 4/1–8/15 subsequent years. 7/1/17–11/15/17 *** and 7/1–11/15 subsequent years. 10/1/17–2/15/18 *** and 10/1–1/15 subsequent years. 1/1/18–5/15/18 *** and 1/1–5/15 subsequent years. of FY 2019 and subsequent years.*** of of of asabaliauskas on DSK3SPTVN1PROD with PROPOSALS * We refer readers to the Table 9 for an illustration of the data collection/submission quarterly reporting periods and correction and submission deadlines. ** We note that the submission of IRF–PAI data must also adhere to the IRF PPS deadlines. *** As is illustrated in Table 9: Subsequent years follow the same CY Quarterly Data Collection/submission Quarterly Reporting Periods and Quarterly Review and Correction Periods) and Data Submission Deadlines for Payment Determination in which every CY quarter is followed by approximately 135 days for IRFs to review and correct their data until midnight on the final submission deadline dates. In the FY 2014 IRF PPS final rule, we adopted the Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine (Short Stay) (NQF #0680) measure for the FY 2017 payment determination and subsequent years (78 FR 47910 through 47911). In the FY 2014 IRF PPS final rule (78 FR 47917 through 47919), we finalized the data submission timelines and submission deadlines for the measures VerDate Sep<11>2014 20:28 Apr 22, 2016 Jkt 238001 for FY 2017 payment determination. Refer to the FY 2014 final rule for a more detailed discussion of these timelines and deadlines. We would like to clarify that this measure includes all patients in the IRF one or more days during the influenza vaccination season (IVS) (October 1 of any given CY through March 31 of the subsequent CY). This includes, for example, a patient is admitted September 15, 2015, and discharged PO 00000 Frm 00036 Fmt 4701 Sfmt 4702 April 1, 2016 (thus, the patient was in the IRF during the 2015–2016 influenza vaccination season). If a patient’s stay did not include one or more days in the IRF during the IVS, IRFs must also complete the influenza items. For example, if a patient was admitted after April 1, 2016, and discharged September 30, 2016, and the patient did not receive the influenza vaccine during the IVS, IRFs should code the reason the patient did not receive the influenza E:\FR\FM\25APP2.SGM 25APP2 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules vaccination as ‘‘patient was not in the facility during this year’s influenza vaccination season.’’ Further, we wish to clarify that the data submission timeline for this measure includes 4 calendar quarters and is based on the influenza season (July 1 through June 30 of the subsequent year), rather than on the calendar year. For the purposes of APU determination and for public reporting, data calculation and analysis uses data from an influenza vaccination season that is within the influenza season itself. While the influenza vaccination season is October 1 of a given year (or when the vaccine becomes available) through March 31 of the subsequent year, this timeframe rests within a greater time period of the influenza season which spans 12 months—that is July 1 of a given year through June 30 of the subsequent year. Thus for this measure, we utilize data from a timeframe of 12 months that mirrors the influenza season which is July 1 of a given year through June 30th of the subsequent year. Additionally, for the APU determination, we review data that has been submitted beginning on July 1 of the calendar year 2 years prior to the calendar year of the APU effective date and ending June 30 of the subsequent calendar year, one year prior to the calendar year of the APU effective date. For example, and as provided in Table 15 for the FY 2019 (October 1, 2018) APU determination, we review data submission beginning July 1 of 2016 through June 30th of June 2017 for the 2016/2017 influenza vaccination season, so as to capture all data that an IRF will have submitted with regard to the 2016/ 2017 Influenza season itself. We will use assessment data for that time period as well for public reporting. Further, because we enable the opportunity to review and correct data for all assessment based IRF–PAI measures within the IRF QRP, we continue to follow quarterly calendar data collection/submission quarterly reporting period(s) and their subsequent quarterly review and correction periods with data submission deadlines for public reporting and payment determinations. However, rather than using CY timeframe, these quarterly data collection/submission periods and their subsequent quarterly review and 24213 correction periods and submission deadlines begin with CY quarter 3, July 1, of a given year and end June 30th, CY quarter 2, of the following year. For further information on data collection for this measure, please refer to section 4 of the IRF–PAI training manual, which is available on the CMS IRF QRP Measures Information Web site at https://www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/IRF-Quality-Reporting/IRFQuality-Reporting-Program-MeasuresInformation-.html, under the downloads section. For further information on data submission of the IRF–PAI, please refer to the IRF–PAI Data Specifications Version 1.12.1 (FINAL)—in effect on October 1, 2015, available for download at https://www.cms.gov/Medicare/ Medicare-Fee-for-Service-Payment/ InpatientRehabFacPPS/Software.html. Refer to Table 15 for details about the quarterly data collection/submission and the review and correction deadlines for FY 2019 and subsequent years for NQF #0680 Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine. TABLE 15—SUMMARY DETAILS ON DATA COLLECTION PERIOD AND DATA SUBMISSION TIMELINE FOR PREVIOUSLY ADOPTED IRF–PAI QUALITY MEASURE, NQF #0680 PERCENT OF RESIDENTS OR PATIENTS WHO WERE ASSESSED AND APPROPRIATELY GIVEN THE SEASONAL INFLUENZA VACCINE, AFFECTING THE FY 2019 PAYMENT DETERMINATION AND SUBSEQUENT YEARS * Submission method Data collection/submission quarterly reporting period(s) Quarterly review and correction periods data submission deadlines for payment determination ** APU determination affected Finalized Measure: • NQF #0680 Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine (80 FR 47122) IRF–PAI/QIES ASAP System CY 16 Q3—7/1/16–9/30/16 and Q3 of subsequent Calendar Years. CY 16 Q4—10/1/16–12/31/16 and Q4 of subsequent Calendar Years. CY 17 Q1—1/1/17–3/31/17 and Q1 of subsequent Calendar Years. CY 17 Q2—4/1/17–6/30/17 and Q2 of subsequent Calendar Years. 10/1/16–2/15/17 ** and subsequent years. 1/1/17–5/15/17 ** and subsequent years. 4/1/17–8/15/17 ** and subsequent years. 7/1/17–11/15/17 ** and subsequent years. 10/1–2/15 of 1/1–5/15 of 4/1–8/15 FY 2019 and subsequent years.** of 7/1–11/15 of asabaliauskas on DSK3SPTVN1PROD with PROPOSALS * We note that the submission of IRF–PAI data must also adhere to the IRF PPS deadlines. ** As is illustrated in Table 9: Subsequent years follow the same CY Quarterly Data Collection/submission Quarterly Reporting Periods and Quarterly Review and Correction Periods (IRF–PAI) and Data Submission (CDC/NHSN) Deadlines for Payment Determination in which every CY quarter is followed by approximately 135 days for IRFs to review and correct their data until midnight on the final submission deadline dates. We finalized in the FY 2014 IRF PPS final rule (78 FR 47905 through 47906) that for FY 2018 and subsequent years IRFs would submit data on the quality measure Influenza Vaccination Coverage among Healthcare Personnel (NQF #0431) beginning with data submission starting October 1, 2015. To clarify that while the data collected by IRFs for this measure includes vaccination information for a flu vaccination season that begins October 1 (or when the VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 vaccine becomes available) of a given year through March 31 of the subsequent year, the CDC/NHSN system only allows for the submission of the corresponding data any time between October 1 of a given year until March 31 of the subsequent year; however, corrections can be made to such data until May 15th of that year. Quality data for this measure are only required to be submitted once per IVS (Oct 1 through March 31), but must be submitted prior PO 00000 Frm 00037 Fmt 4701 Sfmt 4702 to the May 15 deadline for the year in which the IVS ends; quarterly reporting is not required. For example, for FY 2018 payment determinations, while IRFs can begin immunizing their staff when the vaccine is available throughout the influenza vaccine season which ends on March 31, 2016, IRFs can only begin submitting the data for this measure via the CDC/NHSN system starting on October 1, 2015, and may do so up until May 15 of 2016. E:\FR\FM\25APP2.SGM 25APP2 24214 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules TABLE 16—SUMMARY DETAILS ON THE DATA SUBMISSION TIMELINE AND CORRECTION DEADLINE TIMELINE FOR THE PREVIOUSLY ADOPTED INFLUENZA VACCINATION COVERAGE AMONG HEALTHCARE PERSONNEL AFFECTING CY 2018 AND SUBSEQUENT YEARS Influenza vaccination coverage among healthcare personnel data submission quarters+ Data submission period CY QTR 4 through Subsequent CY QTR 1. 10/1/15–3/31/16 and 10/1–3/31 of subsequent years. Review and correction periods data submission (CDC/NHSN) deadlines for payment determination++ 4/1/16–5/15/16 and 4/1–5/15 of subsequent years. Deadline: May 15, 2016 and May 15 of subsequent years. + Data on this measure may be submitted via the CDC/NHSN system from October 1 of a given year through May 15 of the subsequent year. ++ A time period of April 1-May 15th is also allotted for the submission, review, and corrections. TABLE 17—FINALIZED IRF QRP CLAIMS-BASED MEASURE AFFECTING FY 2018 AND SUBSEQUENT YEARS Quality measure Data submission method Performance period NQF #2502 All-Cause Unplanned Readmission Measure for 30 Days Post-Discharge from Inpatient Rehabilitation Facilities (80 FR 47087 through 47089). Medicare FFS Claims ....................................... CY 2013 and 2014 for public reporting in 2016. CY 2014 and 2015 for public reporting in 2017. b. Proposed Timeline and Data Submission Mechanisms for the FY 2018 Payment Determination and Subsequent Years for the Proposed IRF QRP Resource Use and Other Measures Claims-Based Measures IRFs, and CYs 2016 and 2017 claims data for public reporting, We invite public comments on this proposal. Payment/InpatientRehabFacPPS/ IRFPAI.html. For the FY 2020 payment determinations, we propose to collect CY 2018 4th quarter data, that is beginning with discharges on October 1, 2018, through discharges on December 31, 2018, to remain consistent with the usual October release schedule for the IRF–PAI, to give IRFs sufficient time to update their systems so that they can comply with the new data reporting requirements, and to give us sufficient time to determine compliance for the FY 2020 program. The proposed use of 1 quarter of data for the initial year of assessment data reporting in the IRF QRP is consistent with the approach we used previously for the SNF, LTCH, and Hospice QRPs. Table 18 presents the proposed data collection period and data submission timelines for the new proposed IRF QRP Quality Measure for the FY 2020 Payment Determination. We invite public comments on this proposal. The MSPB PAC IRF QRP measure; Discharge to Community PAC IRF QRP measure; Potentially Preventable 30-Day Post-Discharge Readmission Measure for IRF QRP, and Potentially Preventable Within Stay Readmission Measure for IRFs, which we have proposed in this proposed rule, are Medicare FFS claimsbased measures. Because claims-based measures can be calculated based on data that are already reported to the Medicare program for payment purposes, no additional information collection will be required from IRFs. As discussed in section VII.F of this proposed rule, these measures will use 2 years of claims-based data beginning with CY 2015 and CY 2016 claims to inform confidential feedback reports for c. Proposed Timeline and Data Submission Mechanisms for the IRF QRP Quality Measure for the FY 2020 Payment Determination and Subsequent Years As discussed in section VII.F of this proposed rule, we propose that the data for the proposed quality measure, Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC IRF QRP, affecting FY 2020 payment determination and subsequent years, be collected by completing data elements that would be added to the IRF–PAI with submission through the QIES– ASAP system. Data collection would begin on October 1, 2018. More information on IRF reporting using the QIES–ASAP system is located at the Web site at https://www.cms.gov/ Medicare/Medicare-Fee-for-Service- TABLE 18—DETAILS ON THE PROPOSED DATA COLLECTION PERIOD AND DATA SUBMISSION TIMELINE FOR RESOURCE USE AND OTHER MEASURES AFFECTING THE FY 2020 PAYMENT DETERMINATION Quality measure asabaliauskas on DSK3SPTVN1PROD with PROPOSALS Drug Regimen Review Conducted with Follow-Up for Identified Issues PAC IRF QRP. Submission method IRF–PAI/QIES ASAP. Data collection period Data correction deadlines* CY 2018 Q4 10/1/18–12/31/18; Quarterly for each subsequent calendar year. 5/15/19 Quarterly approximately 135 days after the end of each quarter for subsequent years. APU determination affected FY 2020. * We note that the submission of IRF–PAI data must also adhere to the IRF PPS deadlines. Following the close of the reporting quarter, October 1, 2018, through December 31, 2018, for the FY 2020 payment determination, IRFs would have the already established additional 4.5 months to correct their quality data and that the final deadline for correcting VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 data for the FY 2020 payment determination would be May 15, 2019 for these measures. We further propose that for the FY 2021 payment determination and subsequent years, we will collect data using the calendar year reporting cycle as described in section PO 00000 Frm 00038 Fmt 4701 Sfmt 4702 VII.I.c of this proposed rule, and illustrated in Table 19. We invite public comments on this proposal. E:\FR\FM\25APP2.SGM 25APP2 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules 24215 TABLE 19—PROPOSED DATA COLLECTION PERIOD AND DATA CORRECTION DEADLINES* AFFECTING THE FY 2021 PAYMENT DETERMINATION AND SUBSEQUENT YEARS Quarter 1 ................................... January 1– March 31 ................ April 1– August 15. April 1–June 30 ......................... July 1– September 30 ............... Quarter 4 ................................... IRF–PAI/QIES ASAP. Proposed data collection period Proposed quarterly review and data correction periods * deadlines for payment determination Quarter 3 ................................... Drug Regimen Review Conducted with Follow-Up for Identified Issues PAC IRF QRP. Proposed CY data collection quarter Quarter 2 ................................... Quality measure Submission method October 1– December 31 ......... July 1–November 15. October 1– February 15. January 1– May 15. asabaliauskas on DSK3SPTVN1PROD with PROPOSALS * We note that the submission of IRF–PAI data must also adhere to the IRF PPS deadlines J. IRF QRP Data Completion Thresholds for the FY 2016 Payment Determination and Subsequent Years In the FY 2015 IRF PPS final rule (79 FR 45921 through 45923), we finalized IRF QRP thresholds for completeness of IRF data submissions. To ensure that IRFs are meeting an acceptable standard for completeness of submitted data, we finalized the policy that, beginning with the FY 2016 payment determination and for each subsequent year, IRFs must meet or exceed two separate data completeness thresholds: One threshold set at 95 percent for completion of quality measures data collected using the IRF–PAI submitted through the QIES and a second threshold set at 100 percent for quality measures data collected and submitted using the CDC NHSN. Additionally, we stated that we will apply the same thresholds to all measures adopted as the IRF QRP expands and IRFs begin reporting data on previously finalized measure sets. That is, as we finalize new measures through the regulatory process, IRFs will be held accountable for meeting the previously finalized data completion threshold requirements for each measure until such time that updated threshold requirements are proposed and finalized through a subsequent regulatory cycle. Further, we finalized the requirement that an IRF must meet or exceed both thresholds to avoid receiving a 2 percentage point reduction to their annual payment update for a given fiscal year, beginning with FY 2016 and for all subsequent payment updates. For a detailed discussion of the finalized IRF QRP data completion requirements, please refer to the FY 2015 IRF PPS final rule (79 FR 45921 through 45923). We propose to codify the IRF QRP Data Completion Thresholds at § 412.634. We VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 invite public comments on this proposal. K. IRF QRP Data Validation Process for the FY 2016 Payment Determination and Subsequent Years Validation is intended to provide added assurance of the accuracy of the data that will be reported to the public as required by sections 1886(j)(7)(E) and 1899B(g) of the Act. In the FY 2015 IRF PPS rule (79 FR 45923), we finalized, for the FY 2016 adjustments to the IRF PPS annual increase factor and subsequent years, a process to validate the data submitted for quality purposes. However, in the FY 2016 IRF PPS final rule (80 FR 47124), we finalized our decision to temporarily suspend the implementation of this policy. We are not proposing a data validation policy at this time, as we are developing a policy that could be applied to several PAC QRPs. We intend to propose a data validation policy through future rulemaking. L. Previously Adopted and Codified IRF QRP Submission Exception and Extension Policies Refer to § 412.634 for requirements pertaining to submission exception and extension for the FY 2017 payment determination and subsequent years. At this time, we are proposing to revise § 412.634 to change the timing for submission of these exception and extension requests from 30 days to 90 days from the date of the qualifying event which is preventing an IRF from submitting their quality data for the IRF QRP. We are proposing the increased time allotted for the submission of the requests from 30 to 90 days to be consistent with other quality reporting programs; for example, the Hospital Inpatient Quality Reporting (IQR) Program is also proposing to extend the PO 00000 Frm 00039 Fmt 4701 Sfmt 4702 deadline to 90 days in section VIII.A.15.a. of the FY 2017 IPPS/LTCH PPS proposed rule published elsewhere in this issue of the Federal Register. We believe that this increased time will assist providers experiencing an event in having the time needed to submit such a request. We believe that allowing only 30 days was insufficient. With the exception of this one change, we are not proposing any additional changes to the exception and extension policies for the IRF QRP at this time. We invite public comments on the proposal to revise § 412.634 to change the timing for submission of these exception and extension requests from 30 days to 90 days from the date of the qualifying event which is preventing an IRF from submitting their quality data for the IRF QRP. M. Previously Adopted and Finalized IRF QRP Reconsideration and Appeals Procedures Refer to § 412.634 for a summary of our finalized reconsideration and appeals procedures for the IRF QRP for FY 2017 payment determination and subsequent years. We are not proposing any changes to this policy. However, we wish to clarify that in order to notify IRFs found to be non-compliant with the reporting requirements set forth for a given payment determination, we may include the QIES mechanism in addition to US Mail, and we may elect to utilize the MACs to administer such notifications. N. Public Display of Measure Data for the IRF QRP & Procedures for the Opportunity To Review and Correct Data and Information 1. Public Display of Measures Section 1886(j)(7)(E) of the Act requires the Secretary to establish procedures for making the IRF QRP data E:\FR\FM\25APP2.SGM 25APP2 asabaliauskas on DSK3SPTVN1PROD with PROPOSALS 24216 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules available to the public. In the FY 2016 IRF PPS final rule (80 FR 47126 through 47127), we finalized our proposals to display performance data for the IRF QRP quality measures by Fall 2016 on a CMS Web site, such as the Hospital Compare, after a 30-day preview period, and to give providers an opportunity to review and correct data submitted to the QIES–ASAP system or to the CDC NHSN. The procedures for the opportunity to review and correct data are provided in the following section. In addition, we finalized the proposal to publish a list of IRFs that successfully meet the reporting requirements for the applicable payment determination on the IRF QRP Web site at https:// www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/IRF-Quality-Reporting/ Spotlights-Announcements.html. In the FY 2016 IRF PPS final rule, we finalized that we would update the list after the reconsideration requests are processed on an annual basis. Also, in the FY 2016 IRF PPS final rule (80 FR 47126 through 47127), we also finalized that the display of information for fall 2016 contains performance data on three quality measures: • Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678); • NHSN CAUTI Outcome Measure (NQF #0138); and • All-Cause Unplanned Readmission Measure for 30 Days Post-Discharge from IRFs (NQF #2502). The measures Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678) and NHSN CAUTI Outcome Measure (NQF #0138) are based on data collected beginning with the first quarter of 2015 or discharges beginning on January 1, 2015. With the exception of the All-Cause Unplanned Readmission Measure for 30 Days PostDischarge from IRFs (NQF #2502), rates are displayed based on 4 rolling quarters of data and would initially use discharges from January 1, 2015, through December 31, 2015 (CY 2015) for Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678) and data collected from January 1, 2015, through December 31, 2015 (CY 2015) for NHSN CAUTI Outcome Measure (NQF #0138). For the readmissions measure, data will be publicly report beginning with data collected for discharges beginning January 1, 2013, and rates would be displayed based on 2 consecutive years of data. For IRFs with fewer than 25 eligible cases, we propose to assign the IRF to a separate VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 category: ‘‘The number of cases is too small (fewer than 25) to reliably tell how well the IRF is performing.’’ If an IRF has fewer than 25 eligible cases, the IRF’s readmission rates and interval estimates will not be publicly reported for the measure. Calculations for all three measures are discussed in detail in the FY 2016 IRF PPS final rule (80 FR 47126 through 47127). Pending the availability of data, we are proposing to publicly report data in CY 2017 on 4 additional measures beginning with data collected on these measures for the first quarter of 2015, or discharges beginning on January 1, 2015: (1) Facility-wide Inpatient Hospital-onset Methicillin-resistant Staphylococcus aureus (MRSA) Bacteremia Outcome Measure (NQF #1716) ; (2) Facility-wide Inpatient Hospital-onset Clostridium difficile Infection (CDI) Outcome Measure (NQF #1717) and, beginning with the 2015–16 influenza vaccination season, these two measures; (3) Influenza Vaccination Coverage Among Healthcare Personnel (NQF #0431); and (4) Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine (NQF #0680). Standardized infection ratios (SIRs) for the Facility-wide Inpatient Hospitalonset Methicillin-resistant Staphylococcus aureus (MRSA) Bacteremia Outcome Measure (NQF #1716) and Facility-wide Inpatient Hospital-onset Clostridium difficile Infection (CDI) Outcome Measure (NQF #1717) would be displayed based on 4 rolling quarters of data and would initially use MRSA bacteremia and CDI events that occurred from January 1, 2015 through December 31, 2015 (CY 2015), for calculations. We are proposing that the display of these ratios would be updated quarterly. Rates for the Influenza Vaccination Coverage Among Healthcare Personnel (NQF #0431) would be displayed for personnel working in the reporting facility October 1, 2015 through March 31, 2016. Rates for the Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine (NQF #0680) would be displayed for patients in the IRF during the influenza vaccination season, from October 1, 2015, through March 31, 2016. We are proposing that the display of these rates would be updated annually for subsequent influenza vaccination seasons. Calculations for the MRSA and CDI Healthcare Associated Infection (HAI) measures adjust for differences in the PO 00000 Frm 00040 Fmt 4701 Sfmt 4702 characteristics of hospitals and patients using a SIR. The SIR is a summary measure that takes into account differences in the types of patients that a hospital treats. For a more detailed discussion of the SIR, please refer to the FY 2016 IRF PPS final rule (80 FR 47126 through 47127). The MRSA and CDI SIRs may take into account the laboratory methods, bed size of the hospital, and other facility-level factors. It compares the actual number of HAIs in a facility or state to a national benchmark based on previous years of reported data and adjusts the data based on several factors. A confidence interval with a lower and upper limit is displayed around each SIR to indicate that there is a high degree of confidence that the true value of the SIR lies within that interval. A SIR with a lower limit that is greater than 1.0 means that there were more HAIs in a facility or state than were predicted, and the facility is classified as ‘‘Worse than the U.S. National Benchmark.’’ If the SIR has an upper limit that is less than 1, the facility had fewer HAIs than were predicted and is classified as ‘‘Better than the U.S. National Benchmark.’’ If the confidence interval includes the value of 1, there is no statistical difference between the actual number of HAIs and the number predicted, and the facility is classified as ‘‘No Different than U.S. National Benchmark.’’ If the number of predicted infections is less than 1.0, the SIR and confidence interval are not calculated by CDC. Calculations for the Influenza Vaccination Coverage Among Healthcare Personnel (NQF #0431) are based on reported numbers of personnel who received an influenza vaccine at the reporting facility or who provided written documentation of influenza vaccination outside the reporting facility. The sum of these two numbers is divided by the total number of personnel working at the facility for at least 1 day from October 1 through March 31 of the following year, and the result is multiplied by 100 to produce a compliance percentage (vaccination coverage). No risk adjustment is applicable to these calculations. More information on these calculations and measure specifications is available at https://www.cdc.gov/nhsn/pdfs/hpsmanual/vaccination/4-hcp-vaccinationmodule.pdf. We propose that this data will be displayed on an annual basis and will include data submitted by IRFs for a specific, annual influenza vaccination season. A single compliance (vaccination coverage) percentage for all eligible healthcare personnel will be displayed for each facility. E:\FR\FM\25APP2.SGM 25APP2 asabaliauskas on DSK3SPTVN1PROD with PROPOSALS Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules We are inviting public comment on our proposal to begin publicly reporting in CY 2017 pending the availability of data on Facility-wide Inpatient Hospital-onset Methicillin-resistant Staphylococcus aureus (MRSA) Bacteremia Outcome Measure (NQF #1716); Facility-wide Inpatient Hospital-onset Clostridium difficile Infection (CDI) Outcome Measure (NQF #1716); and Influenza Vaccination Coverage Among Healthcare Personnel (NQF #0431). For the Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine (Short Stay) (NQF #0680), we propose to display rates annually based on the influenza season to avoid reporting for more than one influenza vaccination within a CY. For example, in 2017 we would display rates for the patient vaccination measure based on discharges starting on July 1, 2015, to June 30, 2016. This is proposed because it includes the entire influenza vaccination season (October 1, 2015, to March 31, 2016). Calculations for Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine (Short Stay) (NQF #0680) will be based on patients meeting any one of the following criteria: Patients who received the influenza vaccine during the influenza season, patients who were offered and declined the influenza vaccine, and patients who were ineligible for the influenza vaccine due to contraindication(s). The facility’s summary observed score will be calculated by combining the observed counts of all the criteria. This is consistent with the publicly reported patient influenza vaccination measure for Nursing Home Compare. Additionally, for the patient influenza measure, we will exclude IRFs with fewer than 20 stays in the measure denominator. For additional information on the specifications for this measure, please refer to the IRF Quality Reporting Measures Information Web page at https://www.cms.gov/ Medicare/Quality-Initiatives-PatientAssessment-Instruments/IRF-QualityReporting/IRF-Quality-ReportingProgram-Measures-Information-.html. We invite public comments on our proposal to begin publicly reporting the Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine (Short Stay) (NQF #0680) measure on discharges from July 1st of the previous calendar year to June 30th of the current calendar year. We invite comments on the public display of the measure VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine (NQF #0680) in 2017 pending the availability of data. Additionally, we are requesting public comments on whether to include, in the future, public display comparison rates based on CMS regions or US census regions for Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678); All-Cause Unplanned Readmission Measure for 30 Days PostDischarge from IRFs (NQF #2502); and Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine (Short Stay) (NQF #0680) for CY 2017 public display. 2. Procedures for the Opportunity To Review and Correct Data and Information Section 1899B(g) of the Act requires the Secretary to establish procedures for public reporting of IRFs’ performance, including the performance of individual IRFs, on quality measures specified under section 1899B(c)(1) of the Act and resource use and other measures specified under section 1899B(d)(1) of the Act (collectively, IMPACT Act measures) beginning not later than 2 years after the applicable specified application date under section 1899B(a)(2)(E) of the Act. Under section 1899B(g)(2) of the Act, the procedures must ensure, including through a process consistent with the process applied under section 1886(b)(3)(B)(viii)(VII) of the Act, which refers to public display and review requirements in the Hospital IQR Program, that each IRF has the opportunity to review and submit corrections to its data and information that are to be made public prior to the information being made public. In the FY 2016 IRF PPS final rule (80 FR 47126 through 47128), and as illustrated in Table 9 in section VII.I.a of this proposed rule, we finalized that once the provider has an opportunity to review and correct quarterly data related to measures submitted via the QIES– ASAP system or CDC NHSN, we would consider the provider to have been given the opportunity to review and correct this data. We wish to clarify that although the correction of data (including claims) can occur after the submission deadline, if such corrections are made after a particular quarter’s submission and correction deadline, such corrections will not be captured in the file that contains data for calculation of measures for public reporting purposes. To have publicly displayed PO 00000 Frm 00041 Fmt 4701 Sfmt 4702 24217 performance data that is based on accurate underlying data, it will be necessary for IRFs to review and correct this data before the quarterly submission and correction deadline. In this proposed rule, we are restating and proposing additional details surrounding procedures that would allow individual IRFs to review and correct their data and information on measures that are to be made public before those measure data are made public. For assessment-based measures, we propose a process by which we would provide each IRF with a confidential feedback report that would allow the IRF to review its performance on such measures and, during a review and correction period, to review and correct the data the IRF submitted to CMS via the CMS QIES–ASAP system for each such measure. In addition, during the review and correction period, the IRF would be able to request correction of any errors in the assessment-based measure rate calculations. We propose that these confidential feedback reports would be available to each IRF using the CASPER system. We refer to these reports as the IRF Quality Measure (QM) Reports. We propose to provide monthly updates to the data contained in these reports as data become available. We propose to provide the reports so that providers would be able to view their data and information at both the facility and patient level for its quality measures. The CASPER facility level QM Reports may contain information such as the numerator, denominator, facility rate, and national rate. The CASPER patientlevel QM Reports may contain individual patient information which will provide information related to which patients were included in the quality measures to identify any potential errors for those measures in which we receive patient-level data. Currently, we do not receive patientlevel data on the CDC measure data received via the NHSN system. In addition, we would make other reports available in the CASPER system, such as IRF–PAI assessment data submission reports and provider validation reports, which would disclose the IRFs data submission status providing details on all items submitted for a selected assessment and the status of records submitted. We refer providers to the CDC/NHSN system Web site for information on obtaining reports specific to NHSN submitted data at https://www.cdc.gov/nhsn/inpatientrehab/. Additional information regarding the content and availability of these confidential E:\FR\FM\25APP2.SGM 25APP2 asabaliauskas on DSK3SPTVN1PROD with PROPOSALS 24218 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules feedback reports would be provided on an ongoing basis on our Web site(s) at https://www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/IRF-Quality-Reporting/ index.html. As previously finalized in the FY 2016 IRF PPS final rule and illustrated in Table 10 in section VII.I.c of this proposed rule, IRFs would have approximately 4.5 months after the reporting quarter to correct any errors of their assessment-based data (that appear on the CASPER generated QM reports) and NHSN data used to calculate the measures. During the time of data submission for a given quarterly reporting period and up until the quarterly submission deadline, IRFs could review and perform corrections to errors in the assessment data used to calculate the measures and could request correction of measure calculations. However, as already established, once the quarterly submission deadline occurs, the data is ‘‘frozen’’ and calculated for public reporting and providers can no longer submit any corrections. We would encourage IRFs to submit timely assessment data during a given quarterly reporting period and review their data and information early during the review and correction period so that they can identify errors and resubmit data before the data submission deadline. As noted above, the assessment data would be populated into the confidential feedback reports, and we intend to update the reports monthly with all data that have been submitted and are available. We believe that the data collection/submission quarterly reporting periods plus 4.5 months to review correct and review the data is sufficient time for IRFs to submit, review and, where necessary, correct their data and information. These time frames and deadlines for review and correction of such measures and data satisfy the statutory requirement that IRFs be provided the opportunity to review and correct their data and information and are consistent with the informal process hospitals follow in the Hospital IQR Program. In FY 2016 IRF PPS final rule (80 FR 47126 through 47128), we finalized the data submission/correction and review period. Also, we afford IRFs a 30-day preview period prior to public display during which IRFs may preview the performance information on their measures that will be made public. We would like to clarify that we will provide the preview report using the CASPER system, with which IRFs are familiar. The CASPER preview reports inform providers of their performance VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 on each measure which will be publicly reported. Please note that the CASPER preview reports for the reporting quarter will be available after the 4.5 month correction period and the applicable data submission/correction deadline have passed and are refreshed on a quarterly basis for those measures publicly reported quarterly, and annually for those measure publicly reported annually. We propose to give IRFs 30 days to review the preview report beginning from the date on which they can access the report. As already finalized, corrections to the underlying data would not be permitted during this time; however, IRFs may ask for a correction to their measure calculations during the 30-day preview period. We are proposing that if it determines that the measure, as it is displayed in the preview report, contains a calculation error, we could suppress the data on the public reporting Web site, recalculate the measure and publish it at the time of the next scheduled public display date. This process would be consistent with informal processes used in the Hospital IQR Program. If finalized, we intend to utilize a subregulatory mechanism, such as our IRF QRP Web site, to provide more information about the preview reports, such as when they will be made available and explain the process for how and when providers may ask for a correction to their measure calculations. We invite public comment on these proposals to provide preview reports using the CASPER system, giving IRFs 30 days review the preview report and ask for a correction, and to use a subregulatory mechanism to explain the process for how and when providers may ask for a correction. In addition to assessment-based measures and CDC measure data received via the NHSN system, we have also proposed claims-based measures for the IRF QRP. The claims-based measures include those proposed to meet the requirements of the IMPACT Act as well as the All-Cause Unplanned Readmission Measure for 30 Days PostDischarge from IRFs (NQF #2502) which was finalized for public display in the FY 2016 IRF PPS final rule (80 FR 47126 through 47127). As noted in section VII.N.2., section 1899B(g)(2) of the Act requires prepublication provider review and correction procedures that are consistent with those followed in the Hospital IQR Program. Under the Hospital IQR Program’s informal procedures, for claims-based measures, we provide hospitals 30 days to preview their claims-based measures and data in a preview report containing aggregate PO 00000 Frm 00042 Fmt 4701 Sfmt 4702 hospital-level data. We propose to adopt a similar process for the IRF QRP. Prior to the public display of our claims-based measures, in alignment with the Hospital IQR, HAC and Hospital VBP Programs, we propose to make available through the CASPER system, a confidential preview report that will contain information pertaining to claims-based measure rate calculations, for example, facility and national rates. The data and information would be for feedback purposes only and could not be corrected. This information would be accompanied by additional confidential information based on the most recent administrative data available at the time we extract the claims data for purposes of calculating the measures. Because the claims-based measures are recalculated on an annual basis, these confidential CASPER QM reports for claims-based measures will be refreshed annually. As previously finalized in the FY 2016 IRF PPS final rule (80 FR 47126 through 47128), IRFs would have 30 days from the date the preview report is made available in which to review this information. The 30-day preview period is the only time when IRFs would be able to see claimsbased measures before they are publicly displayed. IRFs would not be able to make corrections to underlying claims data during this preview period, nor would they be able to add new claims to the data extract. However, IRFs may request that we correct our measure calculation if the IRF believes it is incorrect during the 30 day preview period. We propose that if we agree that the measure, as it is displayed in the preview report, contains a calculation error, we could suppress the data on the public reporting Web site, recalculate the measure, and publish it at the time of the next scheduled public display date. This process would be consistent with informal policies followed in the Hospital IQR Program. If finalized, we intend to utilize a subregulatory mechanism, such as our IRF QRP Web site, to explain the process for how and when providers may contest their measure calculations. The proposed claims-based measures—The MSPB–PAC IRF QRP measure; Discharge to Community— PAC, Potentially Preventable 30-Day Post-Discharge Readmission Measure for IRF QRP, and Potentially Preventable Within Stay Readmission Measure for IRFs—use Medicare administrative data from hospitalizations for Medicare FFS beneficiaries. Public reporting of data will be based on 2 consecutive calendar years of data, which is consistent with the specifications of the proposed measures. We propose to create data E:\FR\FM\25APP2.SGM 25APP2 asabaliauskas on DSK3SPTVN1PROD with PROPOSALS Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules extracts using claims data for the proposed claims-based measures—The MSPB–PAC IRF QRP measure; Discharge to Community—PAC, Potentially Preventable 30-Day PostDischarge Readmission Measure for IRF QRP, and Potentially Preventable Within Stay Readmission Measure for IRFs—at least 90 days after the last discharge date in the applicable period, which we will use for the calculations. For example, if the last discharge date in the applicable period for a measure is December 31, 2017, for data collection January 1, 2016, through December 31, 2017, we would create the data extract on approximately March 31, 2018, at the earliest, and use that data to calculate the claims-based measures for that applicable period. Since IRFs would not be able to submit corrections to the underlying claims snapshot nor add claims (for measures that use IRF claims) to this data set at the conclusion of the at least the 90-day period following the last date of discharge used in the applicable period, at that time we would consider IRF claims data to be complete for purposes of calculating the claims-based measures. We propose that beginning with data that will be publicly displayed in 2018, claims-based measures will be calculated using claims data at least 90 days after the last discharge date in the applicable period, at which time we would create a data extract or snapshot of the available claims data to use for the measures calculation. This timeframe allows us to balance the need to provide timely program information to IRFs with the need to calculate the claims-based measures using as complete a data set as possible. As noted, under this proposed procedure, during the 30-day preview period, IRFs would not be able to submit corrections to the underlying claims data or to add new claims to the data extract. This is for two reasons: First, for certain measures, the claims data used to calculate the measure is derived not from the IRF’s claims, but from the claims of another provider. For example, the proposed measure Potentially Preventable 30-Day PostDischarge Readmission Measure for IRF QRP uses claims data submitted by the hospital to which the patient was readmitted. The claims are not those of the IRF and, therefore, the IRF could not make corrections to them. Second, even where the claims used to calculate the measures are those of the IRF, it would VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 not be not possible to correct the data after it is extracted for the measures calculation. This is because it is necessary to take a static ‘‘snapshot’’ of the claims in order to perform the necessary measure calculations. We seek to have as complete a data set as possible. We recognize that the proposed at least 90-day ‘‘run-out’’ period when we would take the data extract to calculate the claims-based measures is less than the Medicare program’s current timely claims filing policy under which providers have up to 1 year from the date of discharge to submit claims. We considered a number of factors in determining that the proposed at least 90-day run-out period is appropriate to calculate the claimsbased measures. After the data extract is created, it takes several months to incorporate other data needed for the calculations (particularly in the case of risk-adjusted or episode-based measures). We then need to generate and check the calculations. Because several months lead time is necessary after acquiring the data to generate the claims-based calculations, if we were to delay our data extraction point to 12 months after the last date of the last discharge in the applicable period, we would not be able to deliver the calculations to IRFs sooner than 18 to 24 months after the last discharge. We believe this would create an unacceptably long delay both for IRFs and for us to deliver timely calculations to IRFs for quality improvement. We invite public comment on these proposals. O. Mechanism for Providing Feedback Reports to IRFs Section 1899B(f) of the Act requires the Secretary to provide confidential feedback reports to post-acute care providers on their performance to the measures specified under section 1899B(c)(1) and (d)(1) of the Act, beginning 1 year after the specified application date that applies to such measures and PAC providers. As discussed earlier, the reports we proposed to provide for use by IRFs to review their data and information would be confidential feedback reports that would enable IRFs to review their performance on the measures required under the IRF QRP. We propose that these confidential feedback reports would be available to each IRF using the CASPER system. Data contained within these CASPER reports would be PO 00000 Frm 00043 Fmt 4701 Sfmt 4702 24219 updated as previously described, on a monthly basis as the data become available except for our claims-based measures, which are only updated on an annual basis. We intend to provide detailed procedures to IRFs on how to obtain their confidential feedback CASPER reports on the IRF QRP Web site at https://www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/IRF-Quality-Reporting/ index.html. We propose to use the CMS QIES–ASAP system to provide quality measure reports in a manner consistent with how providers obtain various reports to date. The QIES–ASAP system is a confidential and secure system with access granted to providers, or their designees. We seek public comment on this proposal to satisfy the requirement to provide confidential feedback reports to IRFs. P. Proposed Method for Applying the Reduction to the FY 2017 IRF Increase Factor for IRFs That Fail To Meet the Quality Reporting Requirements As previously noted, section 1886(j)(7)(A)(i) of the Act requires the application of a 2-percentage point reduction of the applicable market basket increase factor for IRFs that fail to comply with the quality data submission requirements. In compliance with section 1886(j)(7)(A)(i) of the Act, we will apply a 2-percentage point reduction to the applicable FY 2017 market basket increase factor (1.45 percent) in calculating a proposed adjusted FY 2017 standard payment conversion factor to apply to payments for only those IRFs that failed to comply with the data submission requirements. As previously noted, application of the 2-percentage point reduction may result in an update that is less than 0.0 for a fiscal year and in payment rates for a fiscal year being less than such payment rates for the preceding fiscal year. Also, reporting-based reductions to the market basket increase factor will not be cumulative; they will only apply for the FY involved. Table 13 shows the calculation of the proposed adjusted FY 2017 standard payment conversion factor that will be used to compute IRF PPS payment rates for any IRF that failed to meet the quality reporting requirements for the applicable reporting period(s). E:\FR\FM\25APP2.SGM 25APP2 24220 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules TABLE 20—CALCULATIONS TO DETERMINE THE PROPOSED ADJUSTED FY 2017 STANDARD PAYMENT CONVERSION FACTOR FOR IRFS THAT FAILED TO MEET THE QUALITY REPORTING REQUIREMENT Explanation for adjustment Calculations Standard Payment Conversion Factor for FY 2016 .......................................................................................... Market Basket Increase Factor for FY 2017 (2.7 percent), reduced by 0.5 percentage point for the productivity adjustment as required by section 1886(j)(3)(C)(ii)(I) of the Act, reduced by 0.75 percentage point in accordance with sections 1886(j)(3)(C) and (D) of the Act and further reduced by 2 percentage points for IRFs that failed to meet the quality reporting requirement. Budget Neutrality Factor for the Wage Index and Labor-Related Share .......................................................... Budget Neutrality Factor for the Revisions to the CMG Relative Weights ....................................................... Proposed Adjusted FY 2017 Standard Payment Conversion Factor ................................................................ We invite public comment on the proposed method for applying the reduction to the FY 2017 IRF increase factor for IRFs that fail to meet the quality reporting requirements. VIII. Collection of Information Requirements asabaliauskas on DSK3SPTVN1PROD with PROPOSALS A. Statutory Requirement for Solicitation of Comments Under the Paperwork Reduction Act of 1995 (PRA), we are required to provide 60-day notice in the Federal Register and solicit public comment before a collection of information requirement is submitted to the OMB for review and approval. To fairly evaluate whether an information collection should be approved by OMB, section 3506(c)(2)(A) of the PRA 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 estimate of the information collection burden. • The quality, utility, and clarity of the information to be collected. • Recommendations to minimize the information collection burden on the affected public, including automated collection techniques. This proposed rule makes reference to associated information collections that are not discussed in the regulation text contained in this document. B. Collection of Information Requirements for Updates Related to the IRF QRP Failure to submit data required under section 1886(j)(7)(C) and (F) of the Act will result in the reduction of the annual update to the standard federal rate for discharges occurring during such fiscal year by 2 percentage points for any IRF that does not comply with the requirements established by the Secretary. At the time that this analysis was prepared, 91, or approximately 8 percent, of the 1166 active Medicarecertified IRFs did not receive the full annual percentage increase for the FY VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 2015 annual payment update determination. Information is not available to determine the precise number of IRFs that will not meet the requirements to receive the full annual percentage increase for the FY 2017 payment determination. We believe that the burden associated with the IRF QRP is the time and effort associated with data collection and reporting. As of February 1, 2016 there are approximately 1131 IRFs currently reporting quality data to CMS. In this proposed rule, we are proposing 5 measures. For the FY 2018 payment determinations and subsequent years, we are proposing four new measures: (1) MSPB–PAC IRF QRP; (2) Discharge to Community–PAC IRF QRP, and (3) Potentially Preventable 30-Day PostDischarge Readmission Measure for IRF QRP; (4) Potentially Preventable 30-Day Within Stay Readmission Measure for IRF QRP. These four measures are Medicare claims-based measures; because claims-based measures can be calculated based on data that are already reported to the Medicare program for payment purposes, we believe there will be no additional impact. For the FY 2020 payment determination and subsequent years, we are proposing one measure: Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC IRF QRP. Additionally we propose that data for this new measure will be collected and reported using the IRF– PAI (version effective October 1, 2018). Our burden calculations take into account all ‘‘new’’ items required on the IRF–PAI (version effective October 1, 2018) to support data collection and reporting for this proposed measure. The addition of the new items required to collect the newly proposed measure is for the purpose of achieving standardization of data elements. We estimate the additional elements for the newly proposed Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC IRF QRP measure will take 6 minutes of nursing/ clinical staff time to report data on PO 00000 Frm 00044 Fmt 4701 Sfmt 4702 $15,478 × 0.9945 × 0.9992 × 0.9990 = $15,365 admission and 4 minutes of nursing/ clinical staff time to report data on discharge, for a total of 10 minutes. We estimate that the additional IRF–PAI items we are proposing will be completed by Registered Nurses (RN) for approximately 75 percent of the time required, and Pharmacists for approximately 25 percent of the time required. Individual providers determine the staffing resources necessary. In accordance with OMB control number 0938–0842, we estimate 398,254 discharges from all IRFs annually, with an additional burden of 10 minutes. This would equate to 66,375.67 total hours or 58.69 hours per IRF. We believe this work will be completed by RNs (75 percent) and Pharmacists (25 percent). We obtained mean hourly wages for these staff from the U.S. Bureau of Labor Statistics’ May 2014 National Occupational Employment and Wage Estimates (https://www.bls.gov/oes/current/oes_ nat.htm), and to account for overhead and fringe benefits, we have doubled the mean hourly wage. Per the U.S. Bureau of Labor and Statistics, the mean hourly wage for a RN is $33.55. However, to account for overhead and fringe benefits, we have doubled the mean hourly wage, making it $67.10 for an RN. Per the U.S. Bureau of Labor and Statistics, the mean hourly wage for a pharmacist is $56.98. However, to account for overhead and fringe benefits, we have doubled the mean hourly wage, making it $113.96 for a pharmacist. Given these wages and time estimates, the total cost related to the newly proposed measures is estimated at $4,625.46 per IRF annually, or $5,231,398.17 for all IRFs annually. For the quality reporting during extraordinary circumstances, section VII.M of this proposed rule proposes to add a previously finalized process that IRFs may request an exception or extension from the FY 2019 payment determination and that of subsequent payment determinations. The request must be submitted by email within 90 E:\FR\FM\25APP2.SGM 25APP2 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules days from the date that the extraordinary circumstances occurred. While the preparation and submission of the request is an information collection, unlike the aforementioned temporary exemption of the data collection requirements for the new drug regimen review measure, the request is not expected to be submitted to OMB for formal review and approval since we estimate less than two requests (total) per year. Since we estimate fewer than 10 respondents annually, the information collection requirement and associated burden is not subject as stated in 5 CFR 1320.3(c) of the implementing regulations of the Paperwork Reduction Act of 1995. As discussed in section VII.N of this proposed rule, this rule proposes to add a previously finalized process that will enable IRFs to request reconsiderations of our initial non-compliance decision in the event that it believes that it was incorrectly identified as being subject to the 2-percentage point reduction to its annual increase factor due to noncompliance with the IRF QRP reporting requirements. While there is burden associated with filing a reconsideration request, 5 CFR 1320.4 of OMB’s implementing regulations for PRA excludes activities during the conduct of administrative actions such as reconsiderations. If you comment on these information collection and recordkeeping requirements, please submit your comments electronically as specified in the ADDRESSES section of this proposed rule. IX. Response to Public Comments Because of the large number of public comments we normally receive on Federal Register documents, we are not able to acknowledge or respond to them individually. We will consider all comments we receive by the date and time specified in the DATES section of this preamble, and, when we proceed with a subsequent document, we will respond to the comments in the preamble to that document. asabaliauskas on DSK3SPTVN1PROD with PROPOSALS X. Regulatory Impact Analysis A. Statement of Need This proposed rule updates the IRF prospective payment rates for FY 2017 as required under section 1886(j)(3)(C) of the Act. It responds to section 1886(j)(5) of the Act, which requires the Secretary to publish in the Federal Register on or before the August 1 that precedes the start of each fiscal year, the classification and weighting factors for the IRF PPS’s case-mix groups and a description of the methodology and data used in computing the prospective payment rates for that fiscal year. VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 This proposed rule also implements sections 1886(j)(3)(C) and (D) of the Act. Section 1886(j)(3)(C)(ii)(I) of the Act requires the Secretary to apply a multifactor productivity adjustment to the market basket increase factor, and to apply other adjustments as defined by the Act. The productivity adjustment applies to FYs from 2012 forward. The other adjustments apply to FYs 2010 through 2019. Furthermore, this proposed rule also adopts policy changes under the statutory discretion afforded to the Secretary under section 1886(j)(7) of the Act. Specifically, we propose to revise and update the quality measures and reporting requirements under the IRF quality reporting program. B. Overall Impacts We have examined the impacts of this proposed rule as required by Executive Order 12866 (September 30, 1993, Regulatory Planning and Review), Executive Order 13563 on Improving Regulation and Regulatory Review (January 18, 2011), the Regulatory Flexibility Act (September 19, 1980, Pub. L. 96–354) (RFA), section 1102(b) of the Act, section 202 of the Unfunded Mandates Reform Act of 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). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. A regulatory impact analysis (RIA) must be prepared for a major final rule with economically significant effects ($100 million or more in any 1 year). We estimate the total impact of the policy updates described in this proposed rule by comparing the estimated payments in FY 2017 with those in FY 2016. This analysis results in an estimated $125 million increase for FY 2017 IRF PPS payments. As a result, this proposed rule is designated as economically ‘‘significant’’ under section 3(f)(1) of Executive Order 12866, and hence a major rule under the Congressional Review Act. Also, the rule has been reviewed by OMB. The Regulatory Flexibility Act (RFA) requires agencies to analyze options for regulatory relief of small entities, if a PO 00000 Frm 00045 Fmt 4701 Sfmt 4702 24221 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 IRFs and most other providers and suppliers are small entities, either by having revenues of $7.5 million to $38.5 million or less in any 1 year depending on industry classification, or by being nonprofit organizations that are not dominant in their markets. (For details, see the Small Business Administration’s final rule that set forth size standards for health care industries, at 65 FR 69432 at https:// www.sba.gov/sites/default/files/files/ Size_Standards_Table.pdf, effective March 26, 2012 and updated on February 26, 2016.) Because we lack data on individual hospital receipts, we cannot determine the number of small proprietary IRFs or the proportion of IRFs’ revenue that is derived from Medicare payments. Therefore, we assume that all IRFs (an approximate total of 1,100 IRFs, of which approximately 60 percent are nonprofit facilities) are considered small entities and that Medicare payment constitutes the majority of their revenues. The HHS generally uses a revenue impact of 3 to 5 percent as a significance threshold under the RFA. As shown in Table 21, we estimate that the net revenue impact of this proposed rule on all IRFs is to increase estimated payments by approximately 1.6 percent. The rates and policies set forth in this proposed rule will not have a significant impact (not greater than 3 percent) on a substantial number of small entities. Medicare Administrative Contractors 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 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 in this section, the rates and policies set forth in this proposed rule will not have a significant impact (not greater than 3 percent) on a substantial number of rural hospitals based on the data of the 140 rural units and 11 rural hospitals in our database of 1,131 IRFs for which data were available. E:\FR\FM\25APP2.SGM 25APP2 24222 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules Section 202 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104–04, enacted on March 22, 1995) 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 2016, that threshold level is approximately $146 million. This proposed rule will not mandate spending costs on state, local, or tribal governments, in the aggregate, or by the private sector, of greater than $146 million. Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a final rule that imposes substantial direct requirement costs on state and local governments, preempts state law, or otherwise has federalism implications. As stated, this proposed rule will not have a substantial effect on state and local governments, preempt state law, or otherwise have a federalism implication. asabaliauskas on DSK3SPTVN1PROD with PROPOSALS C. Detailed Economic Analysis 1. Basis and Methodology of Estimates This proposed rule proposes updates to the IRF PPS rates contained in the FY 2016 IRF PPS final rule (80 FR 47036). Specifically, this proposed rule would update the CMG relative weights and average length of stay values, the wage index, and the outlier threshold for high-cost cases. This proposed rule would apply a MFP adjustment to the FY 2017 IRF market basket increase factor in accordance with section 1886(j)(3)(C)(ii)(I) of the Act, and a 0.75 percentage point reduction to the FY 2017 IRF market basket increase factor in accordance with sections 1886(j)(3)(C)(ii)(II) and (D)(v) of the Act. Further, this proposed rule contains proposed revisions to the IRF quality reporting requirements that are expected to result in some additional financial effects on IRFs. In addition, section VII of this proposed rule discusses the implementation of the required 2 percentage point reduction of the market basket increase factor for any IRF that fails to meet the IRF quality reporting requirements, in accordance with section 1886(j)(7) of the Act. We estimate that the impact of the changes and updates described in this proposed rule will be a net estimated increase of $125 million in payments to IRF providers. This estimate does not include the implementation of the required 2 percentage point reduction of the market basket increase factor for any IRF that fails to meet the IRF quality reporting requirements (as discussed in VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 section X.C.7. of this proposed rule). The impact analysis in Table 21 of this proposed rule represents the projected effects of the updates to IRF PPS payments for FY 2017 compared with the estimated IRF PPS payments in FY 2016. We determine the effects by estimating payments while holding all other payment variables constant. We use the best data available, but we do not attempt to predict behavioral responses to these changes, and we do not make adjustments for future changes in such variables as number of discharges or case-mix. We note that certain events may combine to limit the scope or accuracy of our impact analysis, because such an analysis is future-oriented and, thus, susceptible to forecasting errors because of other changes in the forecasted impact time period. Some examples could be legislative changes made by the Congress to the Medicare program that would impact program funding, or changes specifically related to IRFs. Although some of these changes may not necessarily be specific to the IRF PPS, the nature of the Medicare program is such that the changes may interact, and the complexity of the interaction of these changes could make it difficult to predict accurately the full scope of the impact upon IRFs. In updating the rates for FY 2017, we are proposing standard annual revisions described in this proposed rule (for example, the update to the wage and market basket indexes used to adjust the federal rates). We are also implementing a productivity adjustment to the FY 2017 IRF market basket increase factor in accordance with section 1886(j)(3)(C)(ii)(I) of the Act, and a 0.75 percentage point reduction to the FY 2017 IRF market basket increase factor in accordance with sections 1886(j)(3)(C)(ii)(II) and –(D)(v) of the Act. We estimate the total increase in payments to IRFs in FY 2017, relative to FY 2016, will be approximately $125 million. This estimate is derived from the application of the FY 2017 IRF market basket increase factor, as reduced by a productivity adjustment in accordance with section 1886(j)(3)(C)(ii)(I) of the Act, and a 0.75 percentage point reduction in accordance with sections 1886(j)(3)(C)(ii)(II) and (D)(v) of the Act, which yields an estimated increase in aggregate payments to IRFs of $110 million. Furthermore, there is an additional estimated $15 million increase in aggregate payments to IRFs due to the proposed update to the outlier threshold amount. Outlier payments are estimated to increase from approximately 2.8 percent in FY 2016 to PO 00000 Frm 00046 Fmt 4701 Sfmt 4702 3.0 percent in FY 2017. Therefore, summed together, we estimate that these updates will result in a net increase in estimated payments of $125 million from FY 2016 to FY 2017. The effects of the proposed updates that impact IRF PPS payment rates are shown in Table 21. The following proposed updates that affect the IRF PPS payment rates are discussed separately below: • The effects of the proposed update to the outlier threshold amount, from approximately 2.8 percent to 3.0 percent of total estimated payments for FY 2017, consistent with section 1886(j)(4) of the Act. • The effects of the proposed annual market basket update (using the IRF market basket) to IRF PPS payment rates, as required by section 1886(j)(3)(A)(i) and sections 1886(j)(3)(C) and (D) of the Act, including a productivity adjustment in accordance with section 1886(j)(3)(C)(i)(I) of the Act, and a 0.75 percentage point reduction in accordance with sections 1886(j)(3)(C)(ii)(II) and (D)(v) of the Act. • The effects of applying the proposed budget-neutral labor-related share and wage index adjustment, as required under section 1886(j)(6) of the Act. • The effects of the proposed budgetneutral changes to the CMG relative weights and average length of stay values, under the authority of section 1886(j)(2)(C)(i) of the Act. • The total change in estimated payments based on the proposed FY 2017 payment changes relative to the estimated FY 2016 payments. 2. Description of Table 21 Table 21 categorizes IRFs by geographic location, including urban or rural location, and location for CMS’s 9 Census divisions (as defined on the cost report) of the country. In addition, the table divides IRFs into those that are separate rehabilitation hospitals (otherwise called freestanding hospitals in this section), those that are rehabilitation units of a hospital (otherwise called hospital units in this section), rural or urban facilities, ownership (otherwise called for-profit, non-profit, and government), by teaching status, and by disproportionate share patient percentage (DSH PP). The top row of Table 21 shows the overall impact on the 1,131 IRFs included in the analysis. The next 12 rows of Table 21 contain IRFs categorized according to their geographic location, designation as E:\FR\FM\25APP2.SGM 25APP2 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules asabaliauskas on DSK3SPTVN1PROD with PROPOSALS either a freestanding hospital or a unit of a hospital, and by type of ownership; all urban, which is further divided into urban units of a hospital, urban freestanding hospitals, and by type of ownership; and all rural, which is further divided into rural units of a hospital, rural freestanding hospitals, and by type of ownership. There are 980 IRFs located in urban areas included in our analysis. Among these, there are 729 IRF units of hospitals located in urban areas and 251 freestanding IRF hospitals located in urban areas. There are 151 IRFs located in rural areas included in our analysis. Among these, there are 140 IRF units of hospitals located in rural areas and 11 freestanding IRF hospitals located in rural areas. There are 408 forprofit IRFs. Among these, there are 355 IRFs in urban areas and 53 IRFs in rural areas. There are 652 non-profit IRFs. Among these, there are 562 urban IRFs and 90 rural IRFs. There are 71 government-owned IRFs. Among these, there are 63 urban IRFs and 8 rural IRFs. The remaining four parts of Table 21 show IRFs grouped by their geographic location within a region, by teaching status, and by DSH PP. First, IRFs located in urban areas are categorized for their location within a particular one of the nine Census geographic regions. Second, IRFs located in rural areas are categorized for their location within a particular one of the nine Census geographic regions. In some cases, especially for rural IRFs located in the New England, Mountain, and Pacific VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 regions, the number of IRFs represented is small. IRFs are then grouped by teaching status, including non-teaching IRFs, IRFs with an intern and resident to average daily census (ADC) ratio less than 10 percent, IRFs with an intern and resident to ADC ratio greater than or equal to 10 percent and less than or equal to 19 percent, and IRFs with an intern and resident to ADC ratio greater than 19 percent. Finally, IRFs are grouped by DSH PP, including IRFs with zero DSH PP, IRFs with a DSH PP less than 5 percent, IRFs with a DSH PP between 5 and less than 10 percent, IRFs with a DSH PP between 10 and 20 percent, and IRFs with a DSH PP greater than 20 percent. The estimated impacts of each policy described in this proposed rule to the facility categories listed are shown in the columns of Table 21. The description of each column is as follows: • Column (1) shows the facility classification categories. • Column (2) shows the number of IRFs in each category in our FY 2016 analysis file. • Column (3) shows the number of cases in each category in our FY 2016 analysis file. • Column (4) shows the estimated effect of the proposed adjustment to the outlier threshold amount. • Column (5) shows the estimated effect of the proposed update to the IRF labor-related share and wage index, in a budget-neutral manner. PO 00000 Frm 00047 Fmt 4701 Sfmt 4702 24223 • Column (6) shows the estimated effect of the proposed update to the CMG relative weights and average length of stay values, in a budget-neutral manner. • Column (7) compares our estimates of the payments per discharge, incorporating all of the proposed policies reflected in this proposed rule for FY 2017 to our estimates of payments per discharge in FY 2016. The average estimated increase for all IRFs is approximately 1.6 percent. This estimated net increase includes the effects of the proposed IRF market basket increase factor for FY 2017 of 2.7 percent, reduced by a productivity adjustment of 0.5 percentage point in accordance with section 1886(j)(3)(C)(ii)(I) of the Act, and further reduced by 0.75 percentage point in accordance with sections 1886(j)(3)(C)(ii)(II) and (D)(v) of the Act. It also includes the approximate 0.2 percent overall increase in estimated IRF outlier payments from the proposed update to the outlier threshold amount. Since we are making the proposed updates to the IRF wage index and the CMG relative weights in a budgetneutral manner, they will not be expected to affect total estimated IRF payments in the aggregate. However, as described in more detail in each section, they will be expected to affect the estimated distribution of payments among providers. E:\FR\FM\25APP2.SGM 25APP2 24224 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules TABLE 21: IRF Impact Table for FY 2017 (Columns 4 through 7 in percentage) Facility Classification (1) Total Urban unit Rural unit Urban hospital Rural hospital Urban For-Profit Rural For-Profit Urban Non-Profit Rural Non-Profit Urban Govemment Rural Govemment Urban Rural Urban by region Urban New England Urban Middle Atlantic Urban South Atlantic Urban East North Central Urban East South Central Urban West North Central Urban West South Central Urban Mountain Urban Pacific Rural by region Rural New England Rural Middle Atlantic Rural South Atlantic Rural East North Central Rural East South Central Rural West North Central Rural West South Central Rural Mountain Rural Pacific Teaching status Non-teaching Resident to Ar::x::: less than 10"/o Resident to Ar::x::: 10%-19% Resident to Ar::x::: greater than 1 Number of Number of IRFs Cases (2) (3) 1,131 398,075 729 178,205 140 23,046 251 192,374 11 4,450 355 180,930 53 10,205 562 170,450 90 15,809 63 19,199 8 1,482 980 370,579 151 27,496 Outlier (4) 0.2 0.3 0.3 0.1 0.0 0.1 0.2 0.2 0.3 0.3 0.2 0.2 0.2 FY2017 CBSA wage index and laborshare (5) 0.0 0.0 -0.6 0.1 -1.6 -0.1 -0.9 0.3 -0.7 -0.4 -1.0 0.1 -0.8 CMG Weights (6) 0.0 0.0 0.0 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.0 Change (7) 1.6 1.8 1.1 1.5 -0.1 1.4 0.8 2.0 1.0 1.4 0.8 1.7 0.9 Total Percent 1 31 144 145 170 57 74 182 77 100 16,679 57,389 72,613 50,122 26,048 19,952 77,509 26,254 24,013 0.1 0.1 0.1 0.2 0.1 0.2 0.1 0.2 0.3 0.2 0.8 -0.1 -0.1 -0.5 -0.7 -0.1 0.0 0.4 0.0 0.0 0.0 0.1 -0.1 0.0 0.0 0.0 0.0 1.8 2.4 1.4 1.6 1.1 1.0 1.5 1.6 2.2 5 12 17 28 18 21 40 7 3 1,311 1,700 4,519 4,878 3,485 3,084 7,711 600 208 0.3 0.2 0.1 0.2 0.2 0.3 0.2 0.7 0.8 -1.5 -2.0 -0.5 0.1 -0.6 -0.5 -1.4 -0.4 0.2 0.0 0.2 0.0 0.0 0.0 0.0 0.1 0.0 -0.2 0.2 -0.2 1.1 1.7 1.1 1.3 0.3 1.7 2.3 1,024 62 36 9 355,155 28,619 12,780 1,521 0.2 0.2 0.3 0.1 0.0 -0.2 0.6 -0.4 0.0 0.0 0.0 -0.1 1.6 1.4 2.4 1.1 35 169 316 368 243 7,396 64,316 127,745 135,677 62,941 0.3 0.1 0.2 0.2 0.2 0.0 0.4 0.0 -0.2 0.0 0.0 0.0 0.0 0.0 0.0 1.7 2.0 1.6 1.4 1.7 Dis proportionate share patient (DSHPP) I percentage DSHPP~O% DSHPP<5% DSH PP 5%-10% DSH PP 10%-20"/o DSH PP greater than 20"/o This column includes the impact of the updates in columns (4), (5), and (6) above, and of the IRF market basket increase factor for FY 2017 (2.7 percent), reduced by 0.5 percentage point for the productivity adjustment as required by section 1886(j)(3)(C)(ii)(I) of the Act, and reduced by 0.75 percentage point in accordance with sections 1886(j)(3)(C)(ii)(II) and -(D)(v) of the Act. VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 PO 00000 Frm 00048 Fmt 4701 Sfmt 4725 E:\FR\FM\25APP2.SGM 25APP2 EP25AP16.013</GPH> asabaliauskas on DSK3SPTVN1PROD with PROPOSALS 1 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules 3. Impact of the Proposed Update to the Outlier Threshold Amount The estimated effects of the proposed update to the outlier threshold adjustment are presented in column 4 of Table 21. In the FY 2016 IRF PPS final rule (80 FR 47036), we used FY 2014 IRF claims data (the best, most complete data available at that time) to set the outlier threshold amount for FY 2016 so that estimated outlier payments would equal 3 percent of total estimated payments for FY 2016. For this proposed rule, we are using preliminary FY 2015 IRF claims data, and, based on that preliminary analysis, we estimate that IRF outlier payments as a percentage of total estimated IRF payments would be 2.8 percent in FY 2016. Thus, we propose to adjust the outlier threshold amount in this final rule to set total estimated outlier payments equal to 3 percent of total estimated payments in FY 2017. The estimated change in total IRF payments for FY 2017, therefore, includes an approximate 0.2 percent increase in payments because the estimated outlier portion of total payments is estimated to increase from approximately 2.8 percent to 3 percent. The impact of this proposed outlier adjustment update (as shown in column 4 of Table 21) is to increase estimated overall payments to IRFs by about 0.2 percent. We estimate the largest increase in payments from the update to the outlier threshold amount to be 0.8 percent for rural IRFs in the Pacific region. 4. Impact of the Proposed CBSA Wage Index and Labor-Related Share asabaliauskas on DSK3SPTVN1PROD with PROPOSALS In column 5 of Table 21, we present the effects of the proposed budgetneutral update of the wage index and labor-related share. The proposed changes to the wage index and the labor-related share are discussed together because the wage index is applied to the labor-related share portion of payments, so the proposed changes in the two have a combined effect on payments to providers. As discussed in section V.C. of this proposed rule, we are proposing to keep the labor-related share unchanged from FY 2016 to FY 2017 at 71.0 percent. 5. Impact of the Proposed Update to the CMG Relative Weights and Average Length of Stay Values. In column 6 of Table 21, we present the effects of the proposed budgetneutral update of the CMG relative weights and average length of stay values. In the aggregate, we do not estimate that these proposed updates VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 will affect overall estimated payments of IRFs. However, we do expect these updates to have small distributional effects. 6. Effects of Proposed Requirements for the IRF QRP for FY 2018 In accordance with section 1886(j)(7) of the Act, we will implement a 2 percentage point reduction in the FY 2018 increase factor for IRFs that have failed to report the required quality reporting data to us during the most recent IRF quality reporting period. In section VII.P of this proposed rule, we discuss the proposed method for applying the 2 percentage point reduction to IRFs that fail to meet the IRF QRP requirements. At the time that this analysis was prepared, 91, or approximately 8 percent, of the 1166 active Medicare-certified IRFs did not receive the full annual percentage increase for the FY 2015 annual payment update determination. Information is not available to determine the precise number of IRFs that will not meet the requirements to receive the full annual percentage increase for the FY 2017 payment determination. In section VII.L of this proposed rule, we discuss our proposal to suspend the previously finalized data accuracy validation policy for IRFs. While we cannot estimate the increase in the number of IRFs that will meet IRF QRP compliance standards at this time, we believe that this number will increase due to the temporary suspension of this policy. Thus, we estimate that the suspension of this policy will decrease impact on overall IRF payments, by increasing the rate of compliance, in addition to decreasing the cost of the IRF QRP to each IRF provider by approximately $47,320 per IRF, which was the estimated cost to each IRF provider to the implement the previously finalized policy. In section VII.F of this proposed rule, we are proposing four measures for the FY 2018 payment determinations and subsequent years: (1) MSPB–PAC IRF QRP; (2) Discharge to Community-PAC IRF QRP, and (3) Potentially Preventable 30-Day Post-Discharge Readmission Measure for IRF QRP; (4) Potentially Preventable Within Stay Readmission Measure IRFs. These four measures are Medicare claims-based measures; because claims-based measures can be calculated based on data that are already reported to the Medicare program for payment purposes, we believe there will be no additional impact. In section VII.G of this proposed rule, we are also proposing to adopt one measure for the FY 2020 payment PO 00000 Frm 00049 Fmt 4701 Sfmt 4702 24225 determination and subsequent years: Drug Regimen Review Conducted with Follow-Up for Identified Issues—PAC IRF QRP. Additionally, we propose that data for this measure will be collected and reported using the IRF–PAI (version effective October 1, 2018). While the reporting of data on quality measures is an information collection, we believe that the burden associated with modifications to the IRF–PAI discussed in this proposed rule fall under the PRA exceptions provided in 1899B(m) of the Act because they are required to achieve the standardization of patient assessment data. Section 1899B(m) of the Act provides that the PRA does not apply to section 1899B and the sections referenced in section 1899B(a)(2)(B) of the Act that require modification to achieve the standardization of patient assessment data. The requirement and burden will, however, be submitted to OMB for review and approval when the modifications to the IRF–PAI or other applicable PAC assessment instrument are not used to achieve the standardization of patient assessment data. The total cost related to the proposed measures is estimated at $4,625.46 per IRF annually, or $5,231,398.17 for all IRFs annually. We intend to continue to closely monitor the effects of this new quality reporting program on IRF providers and help perpetuate successful reporting outcomes through ongoing stakeholder education, national trainings, IRF provider announcements, Web site postings, CMS Open Door Forums, and general and technical help desks. D. Alternatives Considered The following is a discussion of the alternatives considered for the IRF PPS updates contained in this proposed rule. Section 1886(j)(3)(C) of the Act requires the Secretary to update the IRF PPS payment rates by an increase factor that reflects changes over time in the prices of an appropriate mix of goods and services included in the covered IRF services Thus, we did not consider alternatives to updating payments using the estimated IRF market basket increase factor for FY 2017. However, as noted previously in this proposed rule, section 1886(j)(3)(C)(ii)(I) of the Act requires the Secretary to apply a productivity adjustment to the market basket increase factor for FY 2017, and sections 1886(j)(3)(C)(ii)(II) and 1886(j)(3)(D)(v) of the Act require the Secretary to apply a 0.75 percentage point reduction to the market basket increase factor for FY 2017. Thus, in accordance with section 1886(j)(3)(C) of the Act, we propose to update the IRF E:\FR\FM\25APP2.SGM 25APP2 24226 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules federal prospective payments in this proposed rule by 1.45 percent (which equals the 2.7 percent estimated IRF market basket increase factor for FY 2017 reduced by a 0.5 percentage point productivity adjustment as required by section 1886(j)(3)(C)(ii)(I) of the Act and further reduced by 0.75 percentage point). We considered maintaining the existing CMG relative weights and average length of stay values for FY 2017. However, in light of recently available data and our desire to ensure that the CMG relative weights and average length of stay values are as reflective as possible of recent changes in IRF utilization and case mix, we believe that it is appropriate to propose to update the CMG relative weights and average length of stay values at this time to ensure that IRF PPS payments continue to reflect as accurately as possible the current costs of care in IRFs. We considered updating facility-level adjustment factors for FY 2017. However, as discussed in more detail in the FY 2015 final rule (79 FR 45872), we believe that freezing the facility-level adjustments at FY 2014 levels for FY 2015 and all subsequent years (unless and until the data indicate that they need to be further updated) will allow us an opportunity to monitor the effects of the substantial changes to the adjustment factors for FY 2014, and will allow IRFs time to adjust to the previous changes. We considered maintaining the existing outlier threshold amount for FY 2017. However, analysis of updated FY 2015 data indicates that estimated outlier payments would be lower than 3 percent of total estimated payments for FY 2017, by approximately 0.2 percent, unless we updated the outlier threshold amount. Consequently, we propose adjusting the outlier threshold amount in this proposed rule to reflect a 0.2 percent increase thereby setting the total outlier payments equal to 3 percent, instead of 2.8 percent, of aggregate estimated payments in FY 2017. E. Accounting Statement As required by OMB Circular A–4 (available at https:// www.whitehouse.gov/sites/default/files/ omb/assets/omb/circulars/a004/a4.pdf), in Table 22, we have prepared an accounting statement showing the classification of the expenditures associated with the provisions of this proposed rule. Table 22 provides our best estimate of the increase in Medicare payments under the IRF PPS as a result of the proposed updates presented in this proposed rule based on the data for 1,131 IRFs in our database. In addition, Table 22 presents the costs associated with the proposed new IRF quality reporting program for FY 2017. TABLE 22—ACCOUNTING STATEMENT: CLASSIFICATION OF ESTIMATED EXPENDITURES Category Transfers Change in Estimated Transfers from FY 2016 IRF PPS to FY 2017 IRF PPS: Annualized Monetized Transfers .............................................................. From Whom to Whom? ............................................................................ $125 million. Federal Government to IRF Medicare Providers. Category Costs FY 2017 Cost to Updating the Quality Reporting Program: Cost for IRFs to Submit Data for the Quality Reporting Program ........... asabaliauskas on DSK3SPTVN1PROD with PROPOSALS F. Conclusion Overall, the estimated payments per discharge for IRFs in FY 2017 are projected to increase by 1.6 percent, compared with the estimated payments in FY 2016, as reflected in column 7 of Table 21. IRF payments per discharge are estimated to increase by 1.7 percent in urban areas and 0.9 percent in rural areas, compared with estimated FY 2016 payments. Payments per discharge to rehabilitation units are estimated to increase 1.8 percent in urban areas and 1.1 percent in rural areas. Payments per discharge to freestanding rehabilitation hospitals are estimated to increase 1.5 percent in urban areas and decrease 0.1 percent in rural areas. Overall, IRFs are estimated to experience a net increase in payments as a result of the proposed policies in this proposed rule. The largest payment increase is estimated to be a 2.4 percent increase for urban IRFs located in the Middle Atlantic region. In accordance with the provisions of Executive Order 12866, this proposed VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 $5,231,398.17. 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 & Medicaid Services proposes to amend 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: ■ 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. 2. Section 412.634 is amended by revising paragraph (c)(2) and adding paragraph (f) to read as follows: ■ PO 00000 Frm 00050 Fmt 4701 Sfmt 4702 § 412.634 Requirements under the Inpatient Rehabilitation Facility (IRF) Quality Reporting Program (QRP). * * * * * (c) * * * (2) An IRF must request an exception or extension within 90 days of the date that the extraordinary circumstances occurred. * * * * * (f) Data completion thresholds. (1) IRFs must meet or exceed two separate data completeness thresholds: One threshold set at 95 percent for completion of quality measures data collected using the IRF–PAI submitted through the QIES and a second threshold set at 100 percent for quality measures data collected and submitted using the CDC NHSN. (2) These thresholds will apply to all measures adopted into IRF QRP. (3) An IRF must meet or exceed both thresholds to avoid receiving a 2 percentage point reduction to their annual payment update for a given fiscal year, beginning with FY 2016 and for all subsequent payment updates. E:\FR\FM\25APP2.SGM 25APP2 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Proposed Rules Dated: April 5, 2016. Andrew M. Slavitt, Acting Administrator, Centers for Medicare & Medicaid Services. Dated: April 14, 2016. Sylvia M. Burwell, Secretary, Department of Health and Human Services. [FR Doc. 2016–09397 Filed 4–21–16; 4:15 pm] asabaliauskas on DSK3SPTVN1PROD with PROPOSALS BILLING CODE 4120–01–P VerDate Sep<11>2014 19:36 Apr 22, 2016 Jkt 238001 PO 00000 Frm 00051 Fmt 4701 Sfmt 9990 E:\FR\FM\25APP2.SGM 25APP2 24227

Agencies

[Federal Register Volume 81, Number 79 (Monday, April 25, 2016)]
[Proposed Rules]
[Pages 24177-24227]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-09397]

[[Page 24177]]

Vol. 81

Monday,

No. 79

April 25, 2016

Part II

Department of Health and Human Services

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Centers for Medicare & Medicaid Services

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42 CFR Part 412

Medicare Program; Inpatient Rehabilitation Facility Prospective Payment
System for Federal Fiscal Year 2017; Proposed Rule

Federal Register / Vol. 81 , No. 79 / Monday, April 25, 2016 /
Proposed Rules

[[Page 24178]]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 412

[CMS-1647-P]
RIN 0938-AS78

Medicare Program; Inpatient Rehabilitation Facility Prospective
Payment System for Federal Fiscal Year 2017

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

ACTION: Proposed rule.

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SUMMARY: This proposed rule would update the prospective payment rates
for inpatient rehabilitation facilities (IRFs) for federal fiscal year
(FY) 2017 as required by the statute. As required by section 1886(j)(5)
of the Act, this rule includes the classification and weighting factors
for the IRF prospective payment system's (IRF PPS's) case-mix groups
and a description of the methodologies and data used in computing the
prospective payment rates for FY 2017. We are also proposing to revise
and update quality measures and reporting requirements under the IRF
quality reporting program (QRP).

DATES: To be assured consideration, comments must be received at one of
the addresses provided below, not later than 5 p.m. on June 20, 2016.

ADDRESSES: In commenting, please refer to file code CMS-1647-P. Because
of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
You may submit comments in one of four ways (please choose only one
of the ways listed):
1. Electronically. You may submit electronic comments on this
regulation to https://www.regulations.gov. Follow the ``Submit a
comment'' instructions.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-1647-P, P.O. Box 8016,
Baltimore, MD 21244-8016.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-1647-P, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
4. By hand or courier. Alternatively, you may deliver (by hand or
courier) your written comments ONLY to the following addresses prior to
the close of the comment period:

a. For delivery in Washington, DC--Centers for Medicare & Medicaid
Services, Department of Health and Human Services, Room 445-G, Hubert
H. Humphrey Building, 200 Independence Avenue SW., Washington, DC 20201

(Because access to the interior of the Hubert H. Humphrey Building
is not readily available to persons without Federal government
identification, commenters are encouraged to leave their comments in
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing
by stamping in and retaining an extra copy of the comments being
filed.)

b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid
Services, Department of Health and Human Services, 7500 Security
Boulevard, Baltimore, MD 21244-1850

If you intend to deliver your comments to the Baltimore address,
please call telephone number (410) 786-7195 in advance to schedule your
arrival with one of our staff members.
Comments erroneously mailed to the addresses indicated as
appropriate for hand or courier delivery may be delayed and received
after the comment period.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT:
Gwendolyn Johnson, (410) 786-6954, for general information.
Christine Grose, (410) 786-1362, for information about the quality
reporting program.
Kadie Derby, (410) 786-0468, or Susanne Seagrave, (410) 786-0044,
for information about the payment policies and payment rates.

SUPPLEMENTARY INFORMATION: The IRF PPS Addenda along with other
supporting documents and tables referenced in this proposed rule are
available through the Internet on the CMS Web site at https://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientRehabFacPPS/.
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post all comments
received before the close of the comment period on the following Web
site as soon as possible after they have been received: https://www.regulations.gov. Follow the search instructions on that Web site to
view public comments.
Comments received timely will also be available for public
inspection as they are received, generally beginning approximately 3
weeks after publication of a document, at the headquarters of the
Centers for Medicare & Medicaid Services, 7500 Security Boulevard,
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30
a.m. to 4 p.m. To schedule an appointment to view public comments,
phone 1-800-743-3951.

Executive Summary

A. Purpose

This proposed rule would update the prospective payment rates for
IRFs for FY 2017 (that is, for discharges occurring on or after October
1, 2016, and on or before September 30, 2017) as required under section
1886(j)(3)(C) of the Social Security Act (the Act). As required by
section 1886(j)(5) of the Act, this rule includes the classification
and weighting factors for the IRF PPS's case-mix groups and a
description of the methodologies and data used in computing the
prospective payment rates for FY 2017. This proposed rule also proposes
revisions and updates to the quality measures and reporting
requirements under the IRF QRP.

B. Summary of Major Provisions

In this proposed rule, we use the methods described in the FY 2016
IRF PPS final rule (80 FR 47036) to propose updates to the federal
prospective payment rates for FY 2017 using updated FY 2015 IRF claims
and the most recent available IRF cost report data, which is FY 2014
IRF cost report data. We are also proposing to revise and update
quality measures and reporting requirements under the IRF QRP.

C. Summary of Impacts

[[Page 24179]]

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------------------------------------------------------------------------
Provision description Transfers
------------------------------------------------------------------------
FY 2017 IRF PPS payment rate update.... The overall economic impact of
this proposed rule is an
estimated $125 million in
increased payments from the
Federal government to IRFs
during FY 2017.
------------------------------------------------------------------------
Provision description Costs
------------------------------------------------------------------------
New quality reporting program The total costs in FY 2017 for
requirements. IRFs as a result of the
proposed new quality reporting
requirements are estimated to
be $5,231,398.17.
------------------------------------------------------------------------

To assist readers in referencing sections contained in this
document, we are providing the following Table of Contents.

Table of Contents

I. Background
A. Historical Overview of the IRF PPS
B. Provisions of the Affordable Care Act Affecting the IRF PPS
in FY 2012 and Beyond
C. Operational Overview of the Current IRF PPS
D. Advancing Health Information Exchange
II. Summary of Provisions of the Proposed Rule
III. Proposed Update to the Case-Mix Group (CMG) Relative Weights
and Average Length of Stay Values for FY 2017
IV. Facility-Level Adjustment Factors
V. Proposed FY 2017 IRF PPS Payment Update
A. Background
B. Proposed FY 2017 Market Basket Update and Productivity
Adjustment
C. Proposed Labor-Related Share for FY 2017
D. Proposed Wage Adjustment
E. Description of the Proposed IRF Standard Payment Conversion
Factor and Payment Rates for FY 2017
F. Example of the Methodology for Adjusting the Proposed Federal
Prospective Payment Rates
VI. Proposed Update to Payments for High-Cost Outliers under the IRF
PPS
A. Proposed Update to the Outlier Threshold Amount for FY 2017
B. Proposed Update to the IRF Cost-to-Charge Ratio Ceiling and
Urban/Rural Averages
VII. Proposed Revisions and Updates to the IRF Quality Reporting
Program (QRP)
A. Background and Statutory Authority
B. General Considerations Used for Selection of Quality,
Resource Use, and Other Measures for the IRF QRP
C. Policy for Retention of IRF QRP Measures Adopted for Previous
Payment Determinations
D. Policy for Adopting Changes to IRF QRP Measures
E. Quality Measures Previously Finalized for and Currently Used
in the IRF QRP
F. IRF QRP Quality, Resource Use and Other Measures Proposed for
the FY 2018 Payment Determination and Subsequent Years
G. IRF QRP Quality Measure Proposed for the FY 2020 Payment
Determination and Subsequent Years
H. IRF QRP Quality Measures and Measure Concepts under
Consideration for Future Years
I. Proposed Form, Manner, and Timing of Quality Data Submission
for the FY 2018 Payment Determination and Subsequent Years
J. IRF QRP Data Completion Thresholds for the FY 2016 Payment
Determination and Subsequent Years
K. IRF QRP Data Validation Process for the FY 2016 Payment
Determination and Subsequent Years
L. Previously Adopted and Codified IRF QRP Submission Exception
and Extension Policies
M. Previously Adopted and Finalized IRF QRP Reconsideration and
Appeals Procedures
N. Public Display of Measure Data for the IRF QRP & Procedures
for the Opportunity to Review and Correct Data and Information
O. Mechanism for Providing Feedback Reports to IRFs
P. Proposed Method for Applying the Reduction to the FY 2017 IRF
Increase Factor for IRFs That Fail to Meet the Quality Reporting
Requirements
VIII. Collection of Information Requirements
A. Statutory Requirement for Solicitation of Comments
B. Collection of Information Requirements for Updates Related to
the IRF QRP
IX. Response to Public Comments
X. Regulatory Impact Analysis
A. Statement of Need
B. Overall Impacts
C. Detailed Economic Analysis
D. Alternatives Considered
E. Accounting Statement
F. Conclusion

Acronyms, Abbreviations, and Short Forms

Because of the many terms to which we refer by acronym,
abbreviation, or short form in this final rule, we are listing the
acronyms, abbreviation, and short forms used and their corresponding
terms in alphabetical order.

The Act The Social Security Act
ADC Average Daily Census
ADE Adverse Drug Events
The Affordable Care Act Patient Protection and Affordable Care Act
(Pub. L. 111-148, enacted on March 23, 2010)
AHRQ Agency for Healthcare Research and Quality
APU Annual Payment Update
ASAP Assessment Submission and Processing
ASCA The Administrative Simplification Compliance Act of 2002 (Pub.
L. 107-105, enacted on December 27, 2002)
ASPE Office of the Assistant Secretary for Planning and Evaluation
BLS U.S. Bureau of Labor Statistics
CAH Critical Access Hospitals
CASPER Certification and Survey Provider Enhanced Reports
CAUTI Catheter-Associated Urinary Tract Infection
CBSA Core-Based Statistical Area
CCR Cost-to-Charge Ratio
CDC The Centers for Disease Control and Prevention
CDI Clostridium difficile Infection
CFR Code of Federal Regulations
CMG Case-Mix Group
CMS Centers for Medicare & Medicaid Services
COA Care for Older Adults
CY Calendar year
DSH Disproportionate Share Hospital
DSH PP Disproportionate Share Patient Percentage
eCQMs Electronically Specified Clinical Quality Measures
ESRD End-Stage Renal Disease
FFS Fee-for-Service
FR Federal Register
FY Federal Fiscal Year
GPCI Geographic Practice Cost Index
HAI Healthcare Associated Infection
HCC Hierarchical Condition Category
HHA Home Health Agencies
HCP Home Care Personnel
HHS U.S. Department of Health & Human Services
HIPAA Health Insurance Portability and Accountability Act of 1996
(Pub. L. 104-191, enacted on August 21, 1996)
Hospital VBP Hospital Value-Based Purchasing Program (also HVBP)
IGI IHS Global Insight
IMPACT Act Improving Medicare Post-Acute Care Transformation Act of
2014 (Pub. L. 113-185, enacted on October 6, 2014)
IME Indirect Medical Education
IPF Inpatient Psychiatric Facility
IPPS Inpatient prospective payment system
IQR Inpatient Quality Reporting Program
IRF Inpatient Rehabilitation Facility
IRF-PAI Inpatient Rehabilitation Facility-Patient Assessment
Instrument
IRF PPS Inpatient Rehabilitation Facility Prospective Payment System
IRF QRP Inpatient Rehabilitation Facility Quality Reporting Program
IRVEN Inpatient Rehabilitation Validation and Entry

[[Page 24180]]

LIP Low-Income Percentage
IVS Influenza Vaccination Season
LTCH Long-Term Care Hospital
MA (Medicare Part C) Medicare Advantage
MAC Medicare Administrative Contractor
MAP Measures Application Partnership
MedPAC Medicare Payment Advisory Commission
MFP Multifactor Productivity
MMSEA Medicare, Medicaid, and SCHIP Extension Act of 2007 (Pub. L.
110-173, enacted on December 29, 2007)
MRSA Methicillin-Resistant Staphylococcus aureus
MSPB Medicare Spending Per Beneficiary
MUC Measures Under Consideration
NHSN National Healthcare Safety Network
NQF National Quality Forum
OMB Office of Management and Budget
ONC Office of the National Coordinator for Health Information
Technology
OPPS/ASC Outpatient Prospective Payment System/Ambulatory Surgical
Center
PAC Post-Acute Care
PAC/LTC Post-Acute Care/Long-Term Care
PAI Patient Assessment Instrument
PPR Potentially Preventable Readmissions
PPS Prospective Payment System
PRA Paperwork Reduction Act of 1995 (Pub. L. 104-13, enacted on May
22, 1995)
QIES Quality Improvement Evaluation System
QM Quality Measure
QRP Quality Reporting Program
RIA Regulatory Impact Analysis
RIC Rehabilitation Impairment Category
RFA Regulatory Flexibility Act (Pub. L. 96-354, enacted on September
19, 1980)
RN Registered Nurse
RPL Rehabilitation, Psychiatric, and Long-Term Care market basket
RSRR Risk-standardized readmission rate
SIR Standardized Infection Ratio
SNF Skilled Nursing Facilities
SRR Standardized Risk Ratio
SSI Supplemental Security Income
TEP Technical Expert Panel

I. Background

A. Historical Overview of the IRF PPS

Section 1886(j) of the Act provides for the implementation of a
per-discharge prospective payment system (PPS) for inpatient
rehabilitation hospitals and inpatient rehabilitation units of a
hospital (collectively, hereinafter referred to as IRFs). Payments
under the IRF PPS encompass inpatient operating and capital costs of
furnishing covered rehabilitation services (that is, routine,
ancillary, and capital costs), but not direct graduate medical
education costs, costs of approved nursing and allied health education
activities, bad debts, and other services or items outside the scope of
the IRF PPS. Although a complete discussion of the IRF PPS provisions
appears in the original FY 2002 IRF PPS final rule (66 FR 41316) and
the FY 2006 IRF PPS final rule (70 FR 47880), we are providing below a
general description of the IRF PPS for FYs 2002 through 2016.
Under the IRF PPS from FY 2002 through FY 2005 the federal
prospective payment rates were computed across 100 distinct case-mix
groups (CMGs), as described in the FY 2002 IRF PPS final rule (66 FR
41316). We constructed 95 CMGs using rehabilitation impairment
categories (RICs), functional status (both motor and cognitive), and
age (in some cases, cognitive status and age may not be a factor in
defining a CMG). In addition, we constructed five special CMGs to
account for very short stays and for patients who expire in the IRF.
For each of the CMGs, we developed relative weighting factors to
account for a patient's clinical characteristics and expected resource
needs. Thus, the weighting factors accounted for the relative
difference in resource use across all CMGs. Within each CMG, we created
tiers based on the estimated effects that certain comorbidities would
have on resource use.
We established the federal PPS rates using a standardized payment
conversion factor (formerly referred to as the budget-neutral
conversion factor). For a detailed discussion of the budget-neutral
conversion factor, please refer to our FY 2004 IRF PPS final rule (68
FR 45684 through 45685). In the FY 2006 IRF PPS final rule (70 FR
47880), we discussed in detail the methodology for determining the
standard payment conversion factor.
We applied the relative weighting factors to the standard payment
conversion factor to compute the unadjusted federal prospective payment
rates under the IRF PPS from FYs 2002 through 2005. Within the
structure of the payment system, we then made adjustments to account
for interrupted stays, transfers, short stays, and deaths. Finally, we
applied the applicable adjustments to account for geographic variations
in wages (wage index), the percentage of low-income patients, location
in a rural area (if applicable), and outlier payments (if applicable)
to the IRFs' unadjusted federal prospective payment rates.
For cost reporting periods that began on or after January 1, 2002,
and before October 1, 2002, we determined the final prospective payment
amounts using the transition methodology prescribed in section
1886(j)(1) of the Act. Under this provision, IRFs transitioning into
the PPS were paid a blend of the federal IRF PPS rate and the payment
that the IRFs would have received had the IRF PPS not been implemented.
This provision also allowed IRFs to elect to bypass this blended
payment and immediately be paid 100 percent of the federal IRF PPS
rate. The transition methodology expired as of cost reporting periods
beginning on or after October 1, 2002 (FY 2003), and payments for all
IRFs now consist of 100 percent of the federal IRF PPS rate.
We established a CMS Web site as a primary information resource for
the IRF PPS which is available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientRehabFacPPS/. The Web site
may be accessed to download or view publications, software, data
specifications, educational materials, and other information pertinent
to the IRF PPS.
Section 1886(j) of the Act confers broad statutory authority upon
the Secretary to propose refinements to the IRF PPS. In the FY 2006 IRF
PPS final rule (70 FR 47880) and in correcting amendments to the FY
2006 IRF PPS final rule (70 FR 57166) that we published on September
30, 2005, we finalized a number of refinements to the IRF PPS case-mix
classification system (the CMGs and the corresponding relative weights)
and the case-level and facility-level adjustments. These refinements
included the adoption of the Office of Management and Budget's (OMB)
Core-Based Statistical Area (CBSA) market definitions, modifications to
the CMGs, tier comorbidities, and CMG relative weights, implementation
of a new teaching status adjustment for IRFs, revision and rebasing of
the market basket index used to update IRF payments, and updates to the
rural, low-income percentage (LIP), and high-cost outlier adjustments.
Beginning with the FY 2006 IRF PPS final rule (70 FR 47908 through
47917), the market basket index used to update IRF payments was a
market basket reflecting the operating and capital cost structures for
freestanding IRFs, freestanding inpatient psychiatric facilities
(IPFs), and long-term care hospitals (LTCHs) (hereinafter referred to
as the rehabilitation, psychiatric, and long-term care (RPL) market
basket). Any reference to the FY 2006 IRF PPS final rule in this final
rule also includes the provisions effective in the correcting
amendments. For a detailed discussion of the final key policy changes
for FY 2006, please refer to the FY 2006 IRF PPS final rule (70 FR
47880 and 70 FR 57166).
In the FY 2007 IRF PPS final rule (71 FR 48354), we further refined
the IRF PPS case-mix classification system (the CMG relative weights)
and the case-level adjustments, to ensure that IRF PPS payments would
continue to reflect as accurately as possible the costs of care. For a
detailed discussion of the FY 2007 policy revisions, please refer to
the

[[Page 24181]]

FY 2007 IRF PPS final rule (71 FR 48354).
In the FY 2008 IRF PPS final rule (72 FR 44284), we updated the
federal prospective payment rates and the outlier threshold, revised
the IRF wage index policy, and clarified how we determine high-cost
outlier payments for transfer cases. For more information on the policy
changes implemented for FY 2008, please refer to the FY 2008 IRF PPS
final rule (72 FR 44284), in which we published the final FY 2008 IRF
federal prospective payment rates.
After publication of the FY 2008 IRF PPS final rule (72 FR 44284),
section 115 of the Medicare, Medicaid, and SCHIP Extension Act of 2007
(Pub. L. 110-173, enacted on December 29, 2007) (MMSEA), amended
section 1886(j)(3)(C) of the Act to apply a zero percent increase
factor for FYs 2008 and 2009, effective for IRF discharges occurring on
or after April 1, 2008. Section 1886(j)(3)(C) of the Act required the
Secretary to develop an increase factor to update the IRF federal
prospective payment rates for each FY. Based on the legislative change
to the increase factor, we revised the FY 2008 federal prospective
payment rates for IRF discharges occurring on or after April 1, 2008.
Thus, the final FY 2008 IRF federal prospective payment rates that were
published in the FY 2008 IRF PPS final rule (72 FR 44284) were
effective for discharges occurring on or after October 1, 2007, and on
or before March 31, 2008; and the revised FY 2008 IRF federal
prospective payment rates were effective for discharges occurring on or
after April 1, 2008, and on or before September 30, 2008. The revised
FY 2008 federal prospective payment rates are available on the CMS Web
site at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientRehabFacPPS/Data-Files.html.
In the FY 2009 IRF PPS final rule (73 FR 46370), we updated the CMG
relative weights, the average length of stay values, and the outlier
threshold; clarified IRF wage index policies regarding the treatment of
``New England deemed'' counties and multi-campus hospitals; and revised
the regulation text in response to section 115 of the MMSEA to set the
IRF compliance percentage at 60 percent (the ``60 percent rule'') and
continue the practice of including comorbidities in the calculation of
compliance percentages. We also applied a zero percent market basket
increase factor for FY 2009 in accordance with section 115 of the
MMSEA. For more information on the policy changes implemented for FY
2009, please refer to the FY 2009 IRF PPS final rule (73 FR 46370), in
which we published the final FY 2009 IRF federal prospective payment
rates.
In the FY 2010 IRF PPS final rule (74 FR 39762) and in correcting
amendments to the FY 2010 IRF PPS final rule (74 FR 50712) that we
published on October 1, 2009, we updated the federal prospective
payment rates, the CMG relative weights, the average length of stay
values, the rural, LIP, teaching status adjustment factors, and the
outlier threshold; implemented new IRF coverage requirements for
determining whether an IRF claim is reasonable and necessary; and
revised the regulation text to require IRFs to submit patient
assessments on Medicare Advantage (MA) (formerly called Medicare Part
C) patients for use in the 60 percent rule calculations. Any reference
to the FY 2010 IRF PPS final rule in this final rule also includes the
provisions effective in the correcting amendments. For more information
on the policy changes implemented for FY 2010, please refer to the FY
2010 IRF PPS final rule (74 FR 39762 and 74 FR 50712), in which we
published the final FY 2010 IRF federal prospective payment rates.
After publication of the FY 2010 IRF PPS final rule (74 FR 39762),
section 3401(d) of the Patient Protection and Affordable Care Act (Pub.
L. 111-148, enacted on March 23, 2010), as amended by section 10319 of
the same Act and by section 1105 of the Health Care and Education
Reconciliation Act of 2010 (Pub. L. 111-152, enacted on March 30, 2010)
(collectively, hereinafter referred to as ``The Affordable Care Act''),
amended section 1886(j)(3)(C) of the Act and added section
1886(j)(3)(D) of the Act. Section 1886(j)(3)(C) of the Act requires the
Secretary to estimate a multifactor productivity adjustment to the
market basket increase factor, and to apply other adjustments as
defined by the Act. The productivity adjustment applies to FYs from
2012 forward. The other adjustments apply to FYs 2010 to 2019.
Sections 1886(j)(3)(C)(ii)(II) and 1886(j)(3)(D)(i) of the Act
defined the adjustments that were to be applied to the market basket
increase factors in FYs 2010 and 2011. Under these provisions, the
Secretary was required to reduce the market basket increase factor in
FY 2010 by a 0.25 percentage point adjustment. Notwithstanding this
provision, in accordance with section 3401(p) of the Affordable Care
Act, the adjusted FY 2010 rate was only to be applied to discharges
occurring on or after April 1, 2010. Based on the self-implementing
legislative changes to section 1886(j)(3) of the Act, we adjusted the
FY 2010 federal prospective payment rates as required, and applied
these rates to IRF discharges occurring on or after April 1, 2010, and
on or before September 30, 2010. Thus, the final FY 2010 IRF federal
prospective payment rates that were published in the FY 2010 IRF PPS
final rule (74 FR 39762) were used for discharges occurring on or after
October 1, 2009, and on or before March 31, 2010, and the adjusted FY
2010 IRF federal prospective payment rates applied to discharges
occurring on or after April 1, 2010, and on or before September 30,
2010. The adjusted FY 2010 federal prospective payment rates are
available on the CMS Web site at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientRehabFacPPS/Data-Files.html.
In addition, sections 1886(j)(3)(C) and (D) of the Act also
affected the FY 2010 IRF outlier threshold amount because they required
an adjustment to the FY 2010 RPL market basket increase factor, which
changed the standard payment conversion factor for FY 2010.
Specifically, the original FY 2010 IRF outlier threshold amount was
determined based on the original estimated FY 2010 RPL market basket
increase factor of 2.5 percent and the standard payment conversion
factor of $13,661. However, as adjusted, the IRF prospective payments
are based on the adjusted RPL market basket increase factor of 2.25
percent and the revised standard payment conversion factor of $13,627.
To maintain estimated outlier payments for FY 2010 equal to the
established standard of 3 percent of total estimated IRF PPS payments
for FY 2010, we revised the IRF outlier threshold amount for FY 2010
for discharges occurring on or after April 1, 2010, and on or before
September 30, 2010. The revised IRF outlier threshold amount for FY
2010 was $10,721.
Sections 1886(j)(3)(C)(ii)(II) and 1886(j)(3)(D)(i) of the Act also
required the Secretary to reduce the market basket increase factor in
FY 2011 by a 0.25 percentage point adjustment. The FY 2011 IRF PPS
notice (75 FR 42836) and the correcting amendments to the FY 2011 IRF
PPS notice (75 FR 70013) described the required adjustments to the FY
2011 and FY 2010 IRF PPS federal prospective payment rates and outlier
threshold amount for IRF discharges occurring on or after April 1,
2010, and on or before September 30, 2011. It also updated the FY 2011
federal prospective payment rates, the CMG relative weights, and the
average length of stay values. Any reference to the FY 2011 IRF PPS
notice in this final rule also includes the provisions

[[Page 24182]]

effective in the correcting amendments. For more information on the FY
2010 and FY 2011 adjustments or the updates for FY 2011, please refer
to the FY 2011 IRF PPS notice (75 FR 42836 and 75 FR 70013).
In the FY 2012 IRF PPS final rule (76 FR 47836), we updated the IRF
federal prospective payment rates, rebased and revised the RPL market
basket, and established a new quality reporting program for IRFs in
accordance with section 1886(j)(7) of the Act. We also revised
regulation text for the purpose of updating and providing greater
clarity. For more information on the policy changes implemented for FY
2012, please refer to the FY 2012 IRF PPS final rule (76 FR 47836), in
which we published the final FY 2012 IRF federal prospective payment
rates.
The FY 2013 IRF PPS notice (77 FR 44618) described the required
adjustments to the FY 2013 federal prospective payment rates and
outlier threshold amount for IRF discharges occurring on or after
October 1, 2012, and on or before September 30, 2013. It also updated
the FY 2013 federal prospective payment rates, the CMG relative
weights, and the average length of stay values. For more information on
the updates for FY 2013, please refer to the FY 2013 IRF PPS notice (77
FR 44618).
In the FY 2014 IRF PPS final rule (78 FR 47860), we updated the
federal prospective payment rates, the CMG relative weights, and the
outlier threshold amount. We also updated the facility-level adjustment
factors using an enhanced estimation methodology, revised the list of
diagnosis codes that count toward an IRF's 60 percent rule compliance
calculation to determine ``presumptive compliance,'' revised sections
of the Inpatient Rehabilitation Facility-Patient Assessment Instrument
(IRF-PAI), revised requirements for acute care hospitals that have IRF
units, clarified the IRF regulation text regarding limitation of
review, updated references to previously changed sections in the
regulations text, and revised and updated quality measures and
reporting requirements under the IRF quality reporting program. For
more information on the policy changes implemented for FY 2014, please
refer to the FY 2014 IRF PPS final rule (78 FR 47860), in which we
published the final FY 2014 IRF federal prospective payment rates.
In the FY 2015 IRF PPS final rule (79 FR 45872), we updated the
federal prospective payment rates, the CMG relative weights, and the
outlier threshold amount. We also further revised the list of diagnosis
codes that count toward an IRF's 60 percent rule compliance calculation
to determine ``presumptive compliance,'' revised sections of the IRF-
PAI, and revised and updated quality measures and reporting
requirements under the IRF quality reporting program. For more
information on the policy changes implemented for FY 2015, please refer
to the FY 2015 IRF PPS final rule (79 FR 45872) and the FY 2015 IRF PPS
correction notice (79 FR 59121).
In the FY 2016 IRF PPS final rule (80 FR 47036), we updated the
federal prospective payment rates, the CMG relative weights, and the
outlier threshold amount. We also adopted an IRF-specific market basket
that reflects the cost structures of only IRF providers, a blended one-
year transition wage index based on the adoption of new OMB area
delineations, a 3-year phase-out of the rural adjustment for certain
IRFs due to the new OMB area delineations, and revisions and updates to
the IRF QRP. For more information on the policy changes implemented for
FY 2016, please refer to the FY 2016 IRF PPS final rule (80 FR 47036).

B. Provisions of the Affordable Care Act Affecting the IRF PPS in FY
2012 and Beyond

The Affordable Care Act included several provisions that affect the
IRF PPS in FYs 2012 and beyond. In addition to what was previously
discussed, section 3401(d) of the Affordable Care Act also added
section 1886(j)(3)(C)(ii)(I) (providing for a ``productivity
adjustment'' for fiscal year 2012 and each subsequent fiscal year). The
productivity adjustment for FY 2017 is discussed in section V.B. of
this proposed rule. Section 3401(d) of the Affordable Care Act requires
an additional 0.75 percentage point adjustment to the IRF increase
factor for FY 2017, as discussed in section V.B. of this proposed rule.
Section 1886(j)(3)(C)(ii)(II) of the Act notes that the application of
these adjustments to the market basket update may result in an update
that is less than 0.0 for a fiscal year and in payment rates for a
fiscal year being less than such payment rates for the preceding fiscal
year.
Section 3004(b) of the Affordable Care Act also addressed the IRF
PPS program. It reassigned the previously designated section 1886(j)(7)
of the Act to section 1886(j)(8) and inserted a new section 1886(j)(7),
which contains requirements for the Secretary to establish a quality
reporting program for IRFs. Under that program, data must be submitted
in a form and manner and at a time specified by the Secretary.
Beginning in FY 2014, section 1886(j)(7)(A)(i) of the Act requires the
application of a 2 percentage point reduction of the applicable market
basket increase factor for IRFs that fail to comply with the quality
data submission requirements. Application of the 2 percentage point
reduction may result in an update that is less than 0.0 for a fiscal
year and in payment rates for a fiscal year being less than such
payment rates for the preceding fiscal year. Reporting-based reductions
to the market basket increase factor will not be cumulative; they will
only apply for the FY involved.
Under section 1886(j)(7)(D)(i) and (ii) of the Act, the Secretary
is generally required to select quality measures for the IRF quality
reporting program from those that have been endorsed by the consensus-
based entity which holds a performance measurement contract under
section 1890(a) of the Act. This contract is currently held by the
National Quality Forum (NQF). So long as due consideration is given to
measures that have been endorsed or adopted by a consensus-based
organization, section 1886(j)(7)(D)(ii) of the Act authorizes the
Secretary to select non-endorsed measures for specified areas or
medical topics when there are no feasible or practical endorsed
measure(s).
Section 1886(j)(7)(E) of the Act requires the Secretary to
establish procedures for making the IRF PPS quality reporting data
available to the public. In so doing, the Secretary must ensure that
IRFs have the opportunity to review any such data prior to its release
to the public.

C. Operational Overview of the Current IRF PPS

As described in the FY 2002 IRF PPS final rule, upon the admission
and discharge of a Medicare Part A Fee-for-Service (FFS) patient, the
IRF is required to complete the appropriate sections of a patient
assessment instrument (PAI), designated as the IRF-PAI. In addition,
beginning with IRF discharges occurring on or after October 1, 2009,
the IRF is also required to complete the appropriate sections of the
IRF-PAI upon the admission and discharge of each Medicare Advantage
(MA) (formerly called Medicare Part C) patient, as described in the FY
2010 IRF PPS final rule. All required data must be electronically
encoded into the IRF-PAI software product. Generally, the software
product includes patient classification programming called the Grouper
software. The Grouper software uses specific IRF-PAI data elements to
classify (or group) patients into distinct

[[Page 24183]]

CMGs and account for the existence of any relevant comorbidities.
The Grouper software produces a 5-character CMG number. The first
character is an alphabetic character that indicates the comorbidity
tier. The last 4 characters are numeric characters that represent the
distinct CMG number. Free downloads of the Inpatient Rehabilitation
Validation and Entry (IRVEN) software product, including the Grouper
software, are available on the CMS Web site at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientRehabFacPPS/Software.html.
Once a Medicare FFS Part A patient is discharged, the IRF submits a
Medicare claim as a Health Insurance Portability and Accountability Act
of 1996 (Pub. L. 104-191, enacted on August 21, 1996) (HIPAA) compliant
electronic claim or, if the Administrative Simplification Compliance
Act of 2002 (Pub. L. 107-105, enacted on December 27, 2002) (ASCA)
permits, a paper claim (a UB-04 or a CMS-1450 as appropriate) using the
five-character CMG number and sends it to the appropriate Medicare
Administrative Contractor (MAC). In addition, once a Medicare Advantage
patient is discharged, in accordance with the Medicare Claims
Processing Manual, chapter 3, section 20.3 (Pub. 100-04), hospitals
(including IRFs) must submit an informational-only bill (Type of Bill
(TOB) 111), which includes Condition Code 04 to their MAC. This will
ensure that the Medicare Advantage days are included in the hospital's
Supplemental Security Income (SSI) ratio (used in calculating the IRF
low-income percentage adjustment) for fiscal year 2007 and beyond.
Claims submitted to Medicare must comply with both ASCA and HIPAA.
Section 3 of the ASCA amends section 1862(a) of the Act by adding
paragraph (22), which requires the Medicare program, subject to section
1862(h) of the Act, to deny payment under Part A or Part B for any
expenses for items or services ``for which a claim is submitted other
than in an electronic form specified by the Secretary.'' Section
1862(h) of the Act, in turn, provides that the Secretary shall waive
such denial in situations in which there is no method available for the
submission of claims in an electronic form or the entity submitting the
claim is a small provider. In addition, the Secretary also has the
authority to waive such denial ``in such unusual cases as the Secretary
finds appropriate.'' For more information, see the ``Medicare Program;
Electronic Submission of Medicare Claims'' final rule (70 FR 71008).
Our instructions for the limited number of Medicare claims submitted on
paper are available at https://www.cms.gov/manuals/downloads/clm104c25.pdf.
Section 3 of the ASCA operates in the context of the administrative
simplification provisions of HIPAA, which include, among others, the
requirements for transaction standards and code sets codified in 45
CFR, parts 160 and 162, subparts A and I through R (generally known as
the Transactions Rule). The Transactions Rule requires covered
entities, including covered health care providers, to conduct covered
electronic transactions according to the applicable transaction
standards. (See the CMS program claim memoranda at https://www.cms.gov/ElectronicBillingEDITrans/ and listed in the addenda to the Medicare
Intermediary Manual, Part 3, section 3600).
The MAC processes the claim through its software system. This
software system includes pricing programming called the ``Pricer''
software. The Pricer software uses the CMG number, along with other
specific claim data elements and provider-specific data, to adjust the
IRF's prospective payment for interrupted stays, transfers, short
stays, and deaths, and then applies the applicable adjustments to
account for the IRF's wage index, percentage of low-income patients,
rural location, and outlier payments. For discharges occurring on or
after October 1, 2005, the IRF PPS payment also reflects the teaching
status adjustment that became effective as of FY 2006, as discussed in
the FY 2006 IRF PPS final rule (70 FR 47880).

D. Advancing Health Information Exchange

The Department of Health & Human Services (HHS) has a number of
initiatives designed to encourage and support the adoption of health
information technology and to promote nationwide health information
exchange to improve health care. As discussed in the August 2013
Statement ``Principles and Strategies for Accelerating Health
Information Exchange'' (available at https://www.healthit.gov/sites/default/files/acceleratinghieprinciples_strategy.pdf). HHS believes
that all individuals, their families, their healthcare and social
service providers, and payers should have consistent and timely access
to health information in a standardized format that can be securely
exchanged between the patient, providers, and others involved in the
individual's care. Health IT that facilitates the secure, efficient,
and effective sharing and use of health-related information when and
where it is needed is an important tool for settings across the
continuum of care, including inpatient rehabilitation facilities. The
effective adoption and use of health information exchange and health IT
tools will be essential as IRFs seek to improve quality and lower costs
through value-based care.
The Office of the National Coordinator for Health Information
Technology (ONC) has released a document entitled ``Connecting Health
and Care for the Nation: A Shared Nationwide Interoperability Roadmap''
(available at https://www.healthit.gov/sites/default/files/hie-interoperability/nationwide-interoperability-roadmap-final-version-1.0.pdf). In the near term, the Roadmap focuses on actions that will
enable individuals and providers across the care continuum to send,
receive, find, and use a common set of electronic clinical information
at the nationwide level by the end of 2017. The Roadmap's goals also
align with the Improving Medicare Post-Acute Care Transformation Act of
2014 (Pub. L. 113-185) (IMPACT Act), which requires assessment data to
be standardized and interoperable to allow for exchange of the data.
The Roadmap identifies four critical pathways that health IT
stakeholders should focus on now in order to create a foundation for
long-term success: (1) Improve technical standards and implementation
guidance for priority data domains and associated elements; (2) rapidly
shift and align federal, state, and commercial payment policies from
FFS to value-based models to stimulate the demand for interoperability;
(3) clarify and align federal and state privacy and security
requirements that enable interoperability; and (4) align and promote
the use of consistent policies and business practices that support
interoperability, in coordination with stakeholders. In addition, ONC
has released the final version of the 2016 Interoperability Standards
Advisory (available at https://www.healthit.gov/standards-advisory/2016), which provides a list of the best available standards and
implementation specifications to enable priority health information
exchange functions. Providers, payers, and vendors are encouraged to
take these ``best available standards'' into account as they implement
interoperable health information exchange across the continuum of care,
including care settings such as inpatient rehabilitation facilities.
We encourage stakeholders to utilize health information exchange
and certified health IT to effectively and

[[Page 24184]]

efficiently help providers improve internal care delivery practices,
engage patients in their care, support management of care across the
continuum, enable the reporting of electronically specified clinical
quality measures (eCQMs), and improve efficiencies and reduce
unnecessary costs. As adoption of certified health IT increases and
interoperability standards continue to mature, HHS will seek to
reinforce standards through relevant policies and programs.

II. Summary of Provisions of the Proposed Rule

In this proposed rule, we propose to update the IRF federal
prospective payment rates for FY 2017 and to revise and update quality
measures and reporting requirements under the IRF QRP.
The proposed updates to the IRF federal prospective payment rates
for FY 2017 are as follows:
Update the FY 2017 IRF PPS relative weights and average
length of stay values using the most current and complete Medicare
claims and cost report data in a budget-neutral manner, as discussed in
section III of this proposed rule.
Describe the continued use of FY 2014 facility-level
adjustment factors as discussed in section IV of this proposed rule.
Update the FY 2017 IRF PPS payment rates by the proposed
market basket increase factor, based upon the most current data
available, with a 0.75 percentage point reduction as required by
sections 1886(j)(3)(C)(ii)(II) and 1886(j)(3)(D)(v) of the Act and a
proposed productivity adjustment required by section
1886(j)(3)(C)(ii)(I) of the Act, as described in section V of this
proposed rule.
Update the FY 2017 IRF PPS payment rates by the FY 2017
wage index and the labor-related share in a budget-neutral manner, as
discussed in section V of this proposed rule.
Describe the calculation of the IRF standard payment
conversion factor for FY 2017, as discussed in section V of this
proposed rule.
Update the outlier threshold amount for FY 2017, as
discussed in section VI of this proposed rule.
Update the cost-to-charge ratio (CCR) ceiling and urban/
rural average CCRs for FY 2017, as discussed in section VI of this
proposed rule.
Describe proposed revisions and updates to quality
measures and reporting requirements under the quality reporting program
for IRFs in accordance with section 1886(j)(7) of the Act, as discussed
in section VII of this proposed rule.

III. Proposed Update to the Case-Mix Group (CMG) Relative Weights and
Average Length of Stay Values for FY 2017

As specified in Sec. 412.620(b)(1), we calculate a relative weight
for each CMG that is proportional to the resources needed by an average
inpatient rehabilitation case in that CMG. For example, cases in a CMG
with a relative weight of 2, on average, will cost twice as much as
cases in a CMG with a relative weight of 1. Relative weights account
for the variance in cost per discharge due to the variance in resource
utilization among the payment groups, and their use helps to ensure
that IRF PPS payments support beneficiary access to care, as well as
provider efficiency.
In this proposed rule, we propose to update the CMG relative
weights and average length of stay values for FY 2017. As required by
statute, we always use the most recent available data to update the CMG
relative weights and average lengths of stay. For FY 2017, we propose
to use the FY 2015 IRF claims and FY 2014 IRF cost report data. These
data are the most current and complete data available at this time.
Currently, only a small portion of the FY 2015 IRF cost report data are
available for analysis, but the majority of the FY 2015 IRF claims data
are available for analysis.
In this proposed rule, we propose to apply these data using the
same methodologies that we have used to update the CMG relative weights
and average length of stay values each fiscal year since we implemented
an update to the methodology to use the more detailed CCR data from the
cost reports of IRF subprovider units of primary acute care hospitals,
instead of CCR data from the associated primary care hospitals, to
calculate IRFs' average costs per case, as discussed in the FY 2009 IRF
PPS final rule (73 FR 46372). In calculating the CMG relative weights,
we use a hospital-specific relative value method to estimate operating
(routine and ancillary services) and capital costs of IRFs. The process
used to calculate the CMG relative weights for this proposed rule is as
follows:
Step 1. We estimate the effects that comorbidities have on costs.
Step 2. We adjust the cost of each Medicare discharge (case) to
reflect the effects found in the first step.
Step 3. We use the adjusted costs from the second step to calculate
CMG relative weights, using the hospital-specific relative value
method.
Step 4. We normalize the FY 2017 CMG relative weights to the same
average CMG relative weight from the CMG relative weights implemented
in the FY 2016 IRF PPS final rule (80 FR 47036).
Consistent with the methodology that we have used to update the IRF
classification system in each instance in the past, we propose to
update the CMG relative weights for FY 2017 in such a way that total
estimated aggregate payments to IRFs for FY 2017 are the same with or
without the changes (that is, in a budget-neutral manner) by applying a
budget neutrality factor to the standard payment amount. To calculate
the appropriate budget neutrality factor for use in updating the FY
2017 CMG relative weights, we use the following steps:
Step 1. Calculate the estimated total amount of IRF PPS payments
for FY 2017 (with no changes to the CMG relative weights).
Step 2. Calculate the estimated total amount of IRF PPS payments
for FY 2017 by applying the proposed changes to the CMG relative
weights (as discussed in this proposed rule).
Step 3. Divide the amount calculated in step 1 by the amount
calculated in step 2 to determine the budget neutrality factor (0.9990)
that would maintain the same total estimated aggregate payments in FY
2017 with and without the proposed changes to the CMG relative weights.
Step 4. Apply the budget neutrality factor (0.9990) to the FY 2016
IRF PPS standard payment amount after the application of the budget-
neutral wage adjustment factor.
In section V.E. of this proposed rule, we discuss the proposed use
of the existing methodology to calculate the proposed standard payment
conversion factor for FY 2017.
In Table 1, ``Proposed Relative Weights and Average Length of Stay
Values for Case-Mix Groups,'' we present the CMGs, the comorbidity
tiers, the corresponding relative weights, and the average length of
stay values for each CMG and tier for FY 2017. The average length of
stay for each CMG is used to determine when an IRF discharge meets the
definition of a short-stay transfer, which results in a per diem case
level adjustment.

[[Page 24185]]

Table 1--Proposed Relative Weights and Average Length of Stay Values for Case-Mix Groups
--------------------------------------------------------------------------------------------------------------------------------------------------------
CMG Description Relative weight Average length of stay
CMG (M=motor, C=cognitive, -------------------------------------------------------------------------------------------------------
A=age) Tier 1 Tier 2 Tier 3 None Tier 1 Tier 2 Tier 3 None
--------------------------------------------------------------------------------------------------------------------------------------------------------
0101.................. Stroke M>51.05.......... 0.8007 0.7158 0.6527 0.6228 8 9 9 8
0102.................. Stroke M>44.45 and 1.0117 0.9044 0.8247 0.7869 11 12 10 10
M<51.05 and C>18.5.
0103.................. Stroke M>44.45 and 1.1804 1.0552 0.9622 0.9181 11 13 12 12
M<51.05 and C<18.5.
0104.................. Stroke M>38.85 and 1.2603 1.1266 1.0274 0.9803 12 12 12 12
M<44.45.
0105.................. Stroke M>34.25 and 1.4562 1.3018 1.1871 1.1327 14 15 14 14
M<38.85.
0106.................. Stroke M>30.05 and 1.6306 1.4576 1.3293 1.2683 16 16 15 15
M<34.25.
0107.................. Stroke M>26.15 and 1.8168 1.6241 1.4811 1.4132 17 19 17 17
M<30.05.
0108.................. Stroke M<26.15 and 2.2856 2.0432 1.8632 1.7779 21 22 21 20
A>84.5.
0109.................. Stroke M>22.35 and 2.0579 1.8396 1.6776 1.6007 19 20 18 19
M<26.15 and A<84.5.
0110.................. Stroke M<22.35 and 2.7293 2.4398 2.2249 2.1230 29 27 24 24
A<84.5.
0201.................. Traumatic brain injury 0.7826 0.6402 0.5775 0.5385 8 8 8 7
M>53.35 and C>23.5.
0202.................. Traumatic brain injury 1.0939 0.8948 0.8072 0.7527 12 10 9 10
M>44.25 and M<53.35 and
C>23.5.
0203.................. Traumatic brain injury 1.2187 0.9969 0.8993 0.8385 11 12 11 11
M>44.25 and C<23.5.
0204.................. Traumatic brain injury 1.3419 1.0977 0.9902 0.9233 16 13 12 11
M>40.65 and M<44.25.
0205.................. Traumatic brain injury 1.6233 1.3279 1.1979 1.1170 14 15 14 13
M>28.75 and M<40.65.
0206.................. Traumatic brain injury 1.9247 1.5744 1.4202 1.3243 19 18 16 15
M>22.05 and M<28.75.
0207.................. Traumatic brain injury 2.5314 2.0708 1.8680 1.7418 31 23 20 19
M<22.05.
0301.................. Non-traumatic brain 1.1417 0.9423 0.8561 0.8003 10 11 10 10
injury M>41.05.
0302.................. Non-traumatic brain 1.4064 1.1608 1.0546 0.9858 13 13 12 12
injury M>35.05 and
M<41.05.
0303.................. Non-traumatic brain 1.6478 1.3600 1.2356 1.1550 15 15 14 14
injury M>26.15 and
M<35.05.
0304.................. Non-traumatic brain 2.1328 1.7604 1.5993 1.4949 21 20 17 16
injury M<26.15.
0401.................. Traumatic spinal cord 0.9816 0.8589 0.7927 0.7201 11 11 10 9
injury M>48.45.
0402.................. Traumatic spinal cord 1.4090 1.2330 1.1379 1.0337 14 14 14 13
injury M>30.35 and
M<48.45.
0403.................. Traumatic spinal cord 2.2221 1.9445 1.7946 1.6303 21 21 20 19
injury M>16.05 and
M<30.35.
0404.................. Traumatic spinal cord 3.8903 3.4042 3.1418 2.8541 47 37 34 32
injury M<16.05 and
A>63.5.
0405.................. Traumatic spinal cord 3.4259 2.9979 2.7668 2.5134 47 33 28 28
injury M<16.05 and
A<63.5.
0501.................. Non-traumatic spinal 0.8605 0.6793 0.6459 0.5815 9 8 7 8
cord injury M>51.35.
0502.................. Non-traumatic spinal 1.1607 0.9162 0.8712 0.7843 11 11 10 10
cord injury M>40.15 and
M<51.35.
0503.................. Non-traumatic spinal 1.4538 1.1476 1.0912 0.9824 14 13 13 12
cord injury M>31.25 and
M<40.15.
0504.................. Non-traumatic spinal 1.7071 1.3475 1.2813 1.1535 19 16 14 14
cord injury M>29.25 and
M<31.25.
0505.................. Non-traumatic spinal 1.9596 1.5468 1.4708 1.3242 20 17 17 16
cord injury M>23.75 and
M<29.25.
0506.................. Non-traumatic spinal 2.7126 2.1412 2.0360 1.8330 28 24 22 21
cord injury M<23.75.
0601.................. Neurological M>47.75.... 1.0371 0.8203 0.7581 0.6940 10 9 9 9
0602.................. Neurological M>37.35 and 1.3356 1.0563 0.9762 0.8936 12 12 11 11
M<47.75.
0603.................. Neurological M>25.85 and 1.6450 1.3010 1.2023 1.1007 14 14 13 13
M<37.35.
0604.................. Neurological M<25.85.... 2.1787 1.7232 1.5924 1.4578 20 18 16 16
0701.................. Fracture of lower 1.0013 0.8151 0.7777 0.7065 10 9 9 9
extremity M>42.15.
0702.................. Fracture of lower 1.2773 1.0398 0.9921 0.9013 12 12 12 11
extremity M>34.15 and
M<42.15.
0703.................. Fracture of lower 1.5395 1.2533 1.1958 1.0863 15 14 14 13
extremity M>28.15 and
M<34.15.
0704.................. Fracture of lower 1.9955 1.6245 1.5500 1.4081 18 18 17 16
extremity M<28.15.
0801.................. Replacement of lower 0.7944 0.6410 0.5920 0.5443 8 8 7 7
extremity joint M>49.55.
0802.................. Replacement of lower 1.0351 0.8353 0.7714 0.7093 11 10 9 9
extremity joint M>37.05
and M<49.55.
0803.................. Replacement of lower 1.3845 1.1173 1.0318 0.9488 13 13 12 12
extremity joint M>28.65
and M<37.05 and A>83.5.
0804.................. Replacement of lower 1.2461 1.0055 0.9286 0.8539 12 12 11 10
extremity joint M>28.65
and M<37.05 and A<83.5.

[[Page 24186]]

0805.................. Replacement of lower 1.4829 1.1966 1.1051 1.0162 15 13 12 12
extremity joint M>22.05
and M<28.65.
0806.................. Replacement of lower 1.7995 1.4521 1.3410 1.2331 16 16 15 14
extremity joint M<22.05.
0901.................. Other orthopedic M>44.75 0.9866 0.7948 0.7350 0.6689 11 10 9 8
0902.................. Other orthopedic M>34.35 1.2620 1.0166 0.9402 0.8556 12 12 11 10
and M<44.75.
0903.................. Other orthopedic M>24.15 1.5866 1.2780 1.1819 1.0757 15 15 13 13
and M<34.35.
0904.................. Other orthopedic M<24.15 2.0099 1.6190 1.4973 1.3627 18 18 16 16
1001.................. Amputation, lower 1.0742 0.9500 0.8207 0.7414 11 11 10 9
extremity M>47.65.
1002.................. Amputation, lower 1.3925 1.2314 1.0639 0.9611 14 15 12 12
extremity M>36.25 and
M<47.65.
1003.................. Amputation, lower 1.9643 1.7371 1.5008 1.3558 18 19 17 16
extremity M<36.25.
1101.................. Amputation, non-lower 1.3216 1.1917 0.9756 0.8848 12 12 10 11
extremity M>36.35.
1102.................. Amputation, non-lower 1.8958 1.7094 1.3994 1.2692 17 16 16 14
extremity M<36.35.
1201.................. Osteoarthritis M>37.65.. 1.0418 1.0235 0.9300 0.8239 10 11 11 10
1202.................. Osteoarthritis M>30.75 1.2108 1.1895 1.0808 0.9576 12 13 12 11
and M<37.65.
1203.................. Osteoarthritis M<30.75.. 1.5410 1.5140 1.3756 1.2187 14 17 15 14
1301.................. Rheumatoid, other 1.1826 0.9291 0.8691 0.8014 13 10 10 10
arthritis M>36.35.
1302.................. Rheumatoid, other 1.6264 1.2778 1.1954 1.1021 14 15 13 13
arthritis M>26.15 and
M<36.35.
1303.................. Rheumatoid, other 2.0043 1.5746 1.4731 1.3582 16 20 15 15
arthritis M<26.15.
1401.................. Cardiac M>48.85......... 0.8643 0.7307 0.6621 0.6007 9 8 8 8
1402.................. Cardiac M>38.55 and 1.1810 0.9985 0.9047 0.8208 11 11 10 10
M<48.85.
1403.................. Cardiac M>31.15 and 1.4079 1.1903 1.0785 0.9785 13 13 12 11
M<38.55.
1404.................. Cardiac M<31.15......... 1.7799 1.5048 1.3635 1.2371 17 16 15 14
1501.................. Pulmonary M>49.25....... 1.0124 0.8580 0.7912 0.7466 10 9 9 8
1502.................. Pulmonary M>39.05 and 1.2770 1.0823 0.9980 0.9418 11 11 11 10
M<49.25.
1503.................. Pulmonary M>29.15 and 1.5560 1.3187 1.2160 1.1475 15 14 12 12
M<39.05.
1504.................. Pulmonary M<29.15....... 1.9351 1.6400 1.5123 1.4271 19 17 15 14
1601.................. Pain syndrome M>37.15... 0.9845 0.8935 0.8304 0.7671 9 9 10 9
1602.................. Pain syndrome M>26.75 1.2824 1.1639 1.0817 0.9993 12 13 12 12
and M<37.15.
1603.................. Pain syndrome M<26.75... 1.6089 1.4602 1.3571 1.2537 13 17 15 14
1701.................. Major multiple trauma 1.1329 0.9223 0.8471 0.7644 16 10 10 10
without brain or spinal
cord injury M>39.25.
1702.................. Major multiple trauma 1.4266 1.1614 1.0667 0.9626 13 14 13 12
without brain or spinal
cord injury M>31.05 and
M<39.25.
1703.................. Major multiple trauma 1.7041 1.3873 1.2743 1.1498 16 16 14 14
without brain or spinal
cord injury M>25.55 and
M<31.05.
1704.................. Major multiple trauma 2.1883 1.7815 1.6363 1.4766 22 19 18 17
without brain or spinal
cord injury M<25.55.
1801.................. Major multiple trauma 1.3252 1.0733 0.9440 0.8290 15 13 12 10
with brain or spinal
cord injury M>40.85.
1802.................. Major multiple trauma 1.8549 1.5023 1.3214 1.1604 17 17 15 14
with brain or spinal
cord injury M>23.05 and
M<40.85.
1803.................. Major multiple trauma 2.8949 2.3447 2.0623 1.8110 31 27 21 20
with brain or spinal
cord injury M<23.05.
1901.................. Guillian Barre M>35.95.. 1.1743 1.0503 0.9267 0.9127 13 13 11 11
1902.................. Guillian Barre M>18.05 2.1344 1.9090 1.6843 1.6589 19 22 19 19
and M<35.95.
1903.................. Guillian Barre M<18.05.. 3.4585 3.0934 2.7292 2.6881 50 31 32 28
2001.................. Miscellaneous M>49.15... 0.9216 0.7549 0.6924 0.6268 9 9 8 8
2002.................. Miscellaneous M>38.75 1.2117 0.9926 0.9103 0.8241 12 11 11 10
and M<49.15.
2003.................. Miscellaneous M>27.85 1.5152 1.2412 1.1383 1.0305 14 14 13 12
and M<38.75.
2004.................. Miscellaneous M<27.85... 1.9423 1.5911 1.4591 1.3210 19 17 16 15
2101.................. Burns M>0............... 1.6749 1.6749 1.4953 1.3672 24 18 16 17
5001.................. Short-stay cases, length ........... ........... ........... 0.1586 ........... ........... ........... 2
of stay is 3 days or
fewer.
5101.................. Expired, orthopedic, ........... ........... ........... 0.6791 ........... ........... ........... 7
length of stay is 13
days or fewer.
5102.................. Expired, orthopedic, ........... ........... ........... 1.4216 ........... ........... ........... 17
length of stay is 14
days or more.

[[Page 24187]]

5103.................. Expired, not orthopedic, ........... ........... ........... 0.8033 ........... ........... ........... 8
length of stay is 15
days or fewer.
5104.................. Expired, not orthopedic, ........... ........... ........... 2.1360 ........... ........... ........... 21
length of stay is 16
days or more.
--------------------------------------------------------------------------------------------------------------------------------------------------------

Generally, updates to the CMG relative weights result in some
increases and some decreases to the CMG relative weight values. Table 2
shows how we estimate that the application of the proposed revisions
for FY 2017 would affect particular CMG relative weight values, which
would affect the overall distribution of payments within CMGs and
tiers. Note that, because we propose to implement the CMG relative
weight revisions in a budget-neutral manner (as previously described),
total estimated aggregate payments to IRFs for FY 2017 would not be
affected as a result of the proposed CMG relative weight revisions.
However, the proposed revisions would affect the distribution of
payments within CMGs and tiers.

Table 2--Distributional Effects of the Proposed Changes to the CMG
Relative Weights
[FY 2016 Values compared with FY 2017 values]
------------------------------------------------------------------------
Number of Percentage
Percentage change cases of cases
affected affected
------------------------------------------------------------------------
Increased by 15% or more........................ 0 0.0
Increased by between 5% and 15%................. 797 0.2
Changed by less than 5%......................... 391,183 99.5
Decreased by between 5% and 15%................. 1,237 0.3
Decreased by 15% or more........................ 14 0.0
------------------------------------------------------------------------

As Table 2 shows, 99.5 percent of all IRF cases are in CMGs and
tiers that would experience less than a 5 percent change (either
increase or decrease) in the CMG relative weight value as a result of
the proposed revisions for FY 2017. The largest estimated increase in
the proposed CMG relative weight values that affects the largest number
of IRF discharges would be a 0.1 percent increase in the CMG relative
weight value for CMG 0704--Fracture of lower extremity, with a motor
score less than 28.15-in the ``no comorbidity'' tier. In the FY 2015
claims data, 18,696 IRF discharges (4.8 percent of all IRF discharges)
were classified into this CMG and tier.
The largest decrease in a CMG relative weight value affecting the
largest number of IRF cases would be a 1.4 percent decrease in the CMG
relative weight for CMG 0110--Stroke, with a motor score less than
22.35 and age less than 84.5 -in the ``no comorbidity'' tier. In the FY
2015 IRF claims data, this change would have affected 13,587 cases (3.5
percent of all IRF cases).
The proposed changes in the average length of stay values for FY
2017, compared with the FY 2016 average length of stay values, are
small and do not show any particular trends in IRF length of stay
patterns.
We invite public comment on our proposed updates to the CMG
relative weights and average length of stay values for FY 2017.

IV. Facility-Level Adjustment Factors

Section 1886(j)(3)(A)(v) of the Act confers broad authority upon
the Secretary to adjust the per unit payment rate by such factors as
the Secretary determines are necessary to properly reflect variations
in necessary costs of treatment among rehabilitation facilities. Under
this authority, we currently adjust the federal prospective payment
amount associated with a CMG to account for facility-level
characteristics such as an IRF's LIP, teaching status, and location in
a rural area, if applicable, as described in Sec. 412.624(e).
Based on the substantive changes to the facility-level adjustment
factors that were adopted in the FY 2014 final rule (78 FR 47860, 47868
through 47872), in the FY 2015 final rule (79 FR 45872, 45882 through
45883), we froze the facility-level adjustment factors at the FY 2014
levels for FY 2015 and all subsequent years (unless and until we
propose to update them again through future notice-and-comment
rulemaking). For FY 2017, we will continue to hold the adjustment
factors at the FY 2014 levels as we continue to monitor the most
current IRF claims data available and continue to evaluate and monitor
the effects of the FY 2014 changes.

V. Proposed FY 2017 IRF PPS Payment Update

A. Background

Section 1886(j)(3)(C) of the Act requires the Secretary to
establish an increase factor that reflects changes over time in the
prices of an appropriate mix of goods and services included in the
covered IRF services, which is referred to as a market basket index.
According to section 1886(j)(3)(A)(i) of the Act, the increase factor
shall be used to update the IRF federal prospective payment rates for
each FY. Section 1886(j)(3)(C)(ii)(I) of the Act requires the
application of a productivity adjustment, as described below. In
addition, sections 1886(j)(3)(C)(ii)(II) and 1886(j)(3)(D)(v) of the
Act require the application of a 0.75 percentage point reduction to the
market basket increase factor for FY 2017. Thus, in this proposed rule,
we propose to update the IRF PPS payments for FY 2017 by a market
basket increase factor as required by section 1886(j)(3)(C) of the Act,
with a productivity adjustment as required by section
1886(j)(3)(C)(ii)(I) of the Act, and a 0.75 percentage point reduction
as required by sections 1886(j)(3)(C)(ii)(II) and 1886(j)(3)(D)(v) of
the Act.
For FY 2015, IRF PPS payments were updated using the 2008-based RPL
market basket. Beginning with the FY 2016 IRF PPS, we created and
adopted a stand-alone IRF market basket, which was referred to as the
2012-based IRF market basket, reflecting the operating and capital cost
structures for freestanding IRFs and hospital-based IRFs. The general
structure of the 2012-based IRF market basket is similar to the 2008-
based RPL market basket; however, we made several notable changes. In
developing the 2012-based IRF market basket, we derived cost weights
from Medicare cost report data for both freestanding and hospital-based
IRFs (the 2008-based RPL market basket was based on freestanding data
only), incorporated the 2007 Input-Output data from the Bureau of
Economic Analysis (the 2008-based RPL market basket was based on the
2002 Input-Output data); used new price proxy blends for two cost
categories (Fuel, Oil,

[[Page 24188]]

and Gasoline and Medical Instruments); added one additional cost
category (Installation, Maintenance, and Repair), which was previously
included in the residual All Other Services: Labor-Related cost
category of the 2008-based RPL market basket; and eliminated three cost
categories (Apparel, Machinery & Equipment, and Postage). The FY 2016
IRF PPS final rule (80 FR 47046 through 47068) contains a complete
discussion of the development of the 2012-based IRF market basket.

B. Proposed FY 2017 Market Basket Update and Productivity Adjustment

For FY 2017, we are proposing to use the same methodology described
in the FY 2016 IRF PPS final rule (80 FR 47066) to compute the FY 2017
market basket increase factor to update the IRF PPS base payment rate.
Consistent with historical practice, we are proposing to estimate the
market basket update for the IRF PPS based on IHS Global Insight's
forecast using the most recent available data. IHS Global Insight
(IGI), Inc. is a nationally recognized economic and financial
forecasting firm with which CMS contracts to forecast the components of
the market baskets and multifactor productivity (MFP).
Based on IGI's first quarter 2016 forecast with historical data
through the fourth quarter of 2015, the projected 2012-based IRF market
basket increase factor for FY 2017 would be 2.7 percent. Therefore,
consistent with our historical practice of estimating market basket
increases based on the best available data, we are proposing a market
basket increase factor of 2.7 percent for FY 2017. We are also
proposing that if more recent data are subsequently available (for
example, a more recent estimate of the market basket update), we would
use such data to determine the FY 2017 update in the final rule.
According to section 1886(j)(3)(C)(i) of the Act, the Secretary
shall establish an increase factor based on an appropriate percentage
increase in a market basket of goods and services. Section
1886(j)(3)(C)(ii) of the Act then requires that, after establishing the
increase factor for a FY, the Secretary shall reduce such increase
factor for FY 2012 and each subsequent FY, by the productivity
adjustment described in section 1886(b)(3)(B)(xi)(II) of the Act.
Section 1886(b)(3)(B)(xi)(II) of the Act sets forth the definition of
this productivity adjustment. The statute defines the productivity
adjustment to be equal to the 10-year moving average of changes in
annual economy-wide private nonfarm business MFP (as projected by the
Secretary for the 10-year period ending with the applicable FY, year,
cost reporting period, or other annual period) (the ``MFP
adjustment''). The BLS publishes the official measure of private
nonfarm business MFP. Please see https://www.bls.gov/mfp for the BLS
historical published MFP data. A complete description of the MFP
projection methodology is available on the CMS Web site at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MedicareProgramRatesStats/MarketBasketResearch.html.
Using IGI's first quarter 2016 forecast, the MFP adjustment for FY
2017 (the 10-year moving average of MFP for the period ending FY 2017)
is currently projected to be 0.5 percent. Thus, in accordance with
section 1886(j)(3)(C) of the Act, we are proposing to base the FY 2017
market basket update, which is used to determine the applicable
percentage increase for the IRF payments, on the most recent estimate
of the 2012-based IRF market basket. We are proposing to then reduce
this percentage increase by the most up-to-date estimate of the MFP
adjustment for FY 2017 of 0.5 percentage point (the 10-year moving
average of MFP for the period ending FY 2017 based on IGI's first
quarter 2016 forecast). Following application of the MFP, we are
proposing to further reduce the applicable percentage increase by 0.75
percentage point, as required by sections 1886(j)(3)(C)(ii)(II) and
1886(j)(3)(D)(v) of the Act. Therefore, the estimate of the FY 2017 IRF
update for the proposed rule is 1.45 percent (2.7 percent market basket
update, less 0.5 percentage point MFP adjustment, less 0.75 percentage
point legislative adjustment). Furthermore, we propose that if more
recent data are subsequently available (for example, a more recent
estimate of the market basket update and MFP adjustment), we would use
such data to determine the FY 2017 market basket update and MFP
adjustment in the final rule.
For FY 2017, the Medicare Payment Advisory Commission (MedPAC)
recommends that a 0-percent update be applied to IRF PPS payment rates.
As discussed, and in accordance with sections 1886(j)(3)(C) and
1886(j)(3)(D) of the Act, the Secretary is proposing to update the IRF
PPS payment rates for FY 2017 by an adjusted market basket increase
factor of 1.45 percent, as section 1886(j)(3)(C) of the Act does not
provide the Secretary with the authority to apply a different update
factor to IRF PPS payment rates for FY 2017.

C. Proposed Labor-Related Share for FY 2017

Section 1886(j)(6) of the Act specifies that the Secretary is to
adjust the proportion (as estimated by the Secretary from time to time)
of rehabilitation facilities' costs which are attributable to wages and
wage-related costs of the prospective payment rates computed under
section 1886(j)(3) for area differences in wage levels by a factor
(established by the Secretary) reflecting the relative hospital wage
level in the geographic area of the rehabilitation facility compared to
the national average wage level for such facilities. 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.
Based on our definition of the labor-related share and the cost
categories in the 2012-based IRF market basket, we propose to include
in the labor-related share for FY 2017 the sum of the FY 2017 relative
importance of Wages and Salaries, Employee Benefits, Professional Fees:
Labor- Related, 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
2012-based IRF market basket. For more details regarding the
methodology for determining specific cost categories for inclusion in
the 2012-based IRF labor-related share, see the FY 2016 IRF final rule
(80 FR 47066 through 47068).
Using this proposed method and the IHS Global Insight, Inc. first
quarter 2016 forecast for the 2012-based IRF market basket, the
proposed IRF labor-related share for FY 2017 is the sum of the FY 2017
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 2017.
The sum of the relative importance for FY 2017 operating costs
(Wages and Salaries, Employee Benefits, Professional Fees: Labor-
related, Administrative and Facilities Support Services, Installation
Maintenance & Repair Services, and All Other: Labor-related Services)
using the 2012-based IRF market basket is 67.1 percent, as shown in
Table 3.
We propose that the portion of Capital that is influenced by the
local labor market is estimated to be 46 percent. Since the relative
importance for

[[Page 24189]]

Capital-Related Costs is 8.4 percent of the 2012-based IRF market
basket in FY 2017, we propose to take 46 percent of 8.4 percent to
determine the labor-related share of Capital for FY 2017. The result
would be 3.9 percent, which we propose to add to 67.1 percent for the
operating cost amount to determine the total proposed labor-related
share for FY 2017. Thus, the labor-related share that we are proposing
to use for IRF PPS in FY 2017 would be 71.0 percent. By comparison, the
FY 2016 labor-related share under the 2012-based IRF market basket was
also 71.0 percent. Furthermore, we propose that if more recent data are
subsequently available (for example, a more recent estimate of the
labor-related share), we would use such data to determine the FY 2017
IRF labor-related share in the final rule.

Table 3--IRF Labor-Related Share
------------------------------------------------------------------------
FY 2017 proposed FY 2016 final
labor-related labor related
share \1\ share \2\
------------------------------------------------------------------------
Wages and Salaries.............. 47.7 47.6
Employee Benefits............... 11.4 11.4
Professional Fees: Labor-related 3.5 3.5
Administrative and Facilities 0.8 0.8
Support Services...............
Installation, Maintenance, and 1.9 2.0
Repair.........................
All Other: Labor-related 1.8 1.8
Services.......................
---------------------------------------
Subtotal.................... 67.1 67.1
Labor-related portion of capital 3.9 3.9
(46%)..........................
---------------------------------------
Total Labor-Related 71.0 71.0
Share..................
------------------------------------------------------------------------
\1\ Based on the 2012-based IRF Market Basket, IHS Global Insight, Inc.
1st quarter 2016 forecast.
\2\ Federal Register 80 FR 47068.

D. Proposed Wage Adjustment

1. Background
Section 1886(j)(6) of the Act requires the Secretary to adjust the
proportion of rehabilitation facilities' costs attributable to wages
and wage-related costs (as estimated by the Secretary from time to
time) by a factor (established by the Secretary) reflecting the
relative hospital wage level in the geographic area of the
rehabilitation facility compared to the national average wage level for
those facilities. The Secretary is required to update the IRF PPS wage
index on the basis of information available to the Secretary on the
wages and wage-related costs to furnish rehabilitation services. Any
adjustment or updates made under section 1886(j)(6) of the Act for a FY
are made in a budget-neutral manner.
For FY 2017, we propose to maintain the policies and methodologies
described in the FY 2016 IRF PPS final rule (80 FR 47036, 47068 through
47075) related to the labor market area definitions and the wage index
methodology for areas with wage data. Thus, we propose to use the CBSA
labor market area definitions and the FY 2016 pre-reclassification and
pre-floor hospital wage index data. The current statistical areas which
were implemented in FY 2016 are based on OMB standards published on
February 28, 2013, in OMB Bulletin No. 13-01. For FY 2017, we are
continuing to use the new OMB delineations that we adopted beginning
with FY 2016. In accordance with section 1886(d)(3)(E) of the Act, the
FY 2016 pre-reclassification and pre-floor hospital wage index is based
on data submitted for hospital cost reporting periods beginning on or
after October 1, 2011, and before October 1, 2012 (that is, FY 2012
cost report data).
The labor market designations made by the OMB include some
geographic areas where there are no hospitals and, thus, no hospital
wage index data on which to base the calculation of the IRF PPS wage
index. We propose to continue to use the same methodology discussed in
the FY 2008 IRF PPS final rule (72 FR 44299) to address those
geographic areas where there are no hospitals and, thus, no hospital
wage index data on which to base the calculation for the FY 2017 IRF
PPS wage index.
2. Update
The wage index used for the IRF PPS is calculated using the pre-
reclassification and pre-floor acute care hospital wage index data and
is assigned to the IRF on the basis of the labor market area in which
the IRF is geographically located. IRF labor market areas are
delineated based on the CBSAs established by the OMB. In the FY 2016
IRF PPS final rule (80 FR 47036, 47068), we established an IRF wage
index based on FY 2011 acute care hospital wage data to adjust the FY
2016 IRF payment rates. We also adopted the revised CBSAs set forth by
OMB. The current CBSA delineations (which were implemented for the IRF
PPS beginning with FY 2016) are based on revised OMB delineations
issued on February 28, 2013, in OMB Bulletin No. 13-01. OMB Bulletin
No. 13-01 established revised delineations for Metropolitan Statistical
Areas, Micropolitan Statistical Areas, and Combined Statistical Areas
in the United States and Puerto Rico, and provided guidance on the use
of the delineations of these statistical areas based on new standards
published on June 28, 2010, in the Federal Register (75 FR 37246
through 37252). A copy of this bulletin may be obtained at https://www.whitehouse.gov/sites/default/files/omb/bulletins/2013/b-13-01.pdf.
For FY 2017, we are continuing to use the new OMB delineations that we
adopted beginning with FY 2016 to calculate the area wage indexes and
the transition periods, which we discuss below.
3. Transition Period
In FY 2016, we applied a 1-year blended wage index for all IRF
providers to mitigate the impact of the wage index change due to the
implementation of the revised CBSA delineations. In FY 2016, all IRF
providers received a blended wage index using 50 percent of their FY
2016 wage index based on the revised OMB CBSA delineations and 50
percent of their FY 2016 wage index based on the OMB delineations used
in FY 2015. We propose to maintain the policy established in FY 2016
IRF PPS final rule related to the blended one-year transition wage
index (80 FR 47036, 47073 through 47074). This 1-year blended wage
index became effective on

[[Page 24190]]

October 1, 2015, and expires on September 30, 2016.
For FY 2016, in addition to the blended wage index, we also adopted
a 3-year budget neutral phase out of the rural adjustment for FY 2015
rural IRFs that became urban in FY 2016 under the revised CBSA
delineations. In FY 2016, IRFs that were designated as rural in FY 2015
and became designated as urban in FY 2016 received two-thirds of the
2015 rural adjustment of 14.9 percent. FY 2017 represents the second
year of the 3-year phase out of the rural adjustment, in which these
same IRFs will receive one-third of the 2015 rural adjustment of 14.9
percent, as finalized in the FY 2016 IRF PPS final rule (80 FR 47036,
47073 through 47074).
For FY 2017, the proposed wage index will be based solely on the
previously adopted revised CBSA delineations and their respective wage
index (rather than on a blended wage index). We are not proposing any
additional wage index transition adjustments for IRF providers due to
the adoption of the new OMB delineations in FY 2016, but will continue
the 3-year phase out of the rural adjustments for IRF providers that
changed from rural to urban status that was finalized in the FY 2016
IFR PPS final rule (80 FR 47036, 47073 through 47074).
For a full discussion of our implementation of the new OMB labor
market area delineations for the FY 2016 wage index, please refer to
the FY 2016 IRF PPS final rule (80 FR 47036, 47068 through 47076). We
are not proposing any changes to this policy in this proposed rule. For
FY 2017, 19 IRFs that were designated as rural in FY 2015 and became
designated as urban in FY 2016 will receive the proposed FY 2017 wage
index (based solely on the revised CBSA delineations) and one-third of
the FY 2015 rural adjustment of 14.9 percent (80 FR 47036, 47073
through 47076). The proposed wage index applicable to FY 2017 is
available on the CMS Web site at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientRehabFacPPS/Data-Files.html. Table A
is for urban areas, and Table B is for rural areas.
To calculate the wage-adjusted facility payment for the payment
rates set forth in this proposed rule, we multiply the unadjusted
federal payment rate for IRFs by the FY 2017 labor-related share based
on the 2012-based IRF market basket (71.0 percent) to determine the
labor-related portion of the standard payment amount. A full discussion
of the calculation of the labor-related share is located in section V.C
of this proposed rule. We then multiply the labor-related portion by
the applicable IRF wage index from the tables in the addendum to this
proposed rule. These tables are available through the Internet on the
CMS Web site at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientRehabFacPPS/Data-Files.html.
Adjustments or updates to the IRF wage index made under section
1886(j)(6) of the Act must be made in a budget-neutral manner. We
propose to calculate a budget-neutral wage adjustment factor as
established in the FY 2004 IRF PPS final rule (68 FR 45689), codified
at Sec. 412.624(e)(1), as described in the steps below. We propose to
use the listed steps to ensure that the FY 2017 IRF standard payment
conversion factor reflects the proposed update to the wage indexes
(based on the FY 2012 hospital cost report data) and the labor-related
share in a budget-neutral manner:
Step 1. Determine the total amount of the estimated FY 2016 IRF PPS
payments, using the FY 2016 standard payment conversion factor and the
labor-related share and the wage indexes from FY 2016 (as published in
the FY 2016 IRF PPS final rule (80 FR 47036)).
Step 2. Calculate the total amount of estimated IRF PPS payments
using the proposed FY 2017 standard payment conversion factor and the
proposed FY 2017 labor-related share and CBSA urban and rural wage
indexes.
Step 3. Divide the amount calculated in step 1 by the amount
calculated in step 2. The resulting quotient is the proposed FY 2017
budget-neutral wage adjustment factor of 0.9992.
Step 4. Apply the proposed FY 2017 budget-neutral wage adjustment
factor from step 3 to the FY 2016 IRF PPS standard payment conversion
factor after the application of the adjusted market basket update to
determine the proposed FY 2017 standard payment conversion factor.
We discuss the calculation of the proposed standard payment
conversion factor for FY 2017 in section V.E of this proposed rule.
We invite public comment on the proposed IRF wage adjustment for FY
2017.

E. Description of the Proposed IRF Standard Payment Conversion Factor
and Payment Rates for FY 2017

To calculate the proposed standard payment conversion factor for FY
2017, as illustrated in Table 4, we begin by applying the proposed
adjusted market basket increase factor for FY 2017 that was adjusted in
accordance with sections 1886(j)(3)(C) and (D) of the Act, to the
standard payment conversion factor for FY 2016 ($15,478). Applying the
proposed 1.45 percent adjusted market basket increase for FY 2017 to
the standard payment conversion factor for FY 2016 of $15,478 yields a
standard payment amount of $15,702. Then, we apply the proposed budget
neutrality factor for the FY 2017 wage index and labor-related share of
0.9992, which results in a proposed standard payment amount of $15,690.
We next apply the proposed budget neutrality factors for the revised
CMG relative weights of 0.9990, which results in the proposed standard
payment conversion factor of $15,674 for FY 2017.

Table 4--Calculations To Determine the Proposed FY 2017 Standard Payment
Conversion Factor
------------------------------------------------------------------------
Explanation for adjustment Calculations
------------------------------------------------------------------------
Standard Payment Conversion Factor for FY 2016....... $15,478
Market Basket Increase Factor for FY 2017 (2.7 x 1.0145
percent), reduced by 0.5 percentage point for the
productivity adjustment as required by section
1886(j)(3)(C)(ii)(I) of the Act, and reduced by 0.75
percentage point in accordance with paragraphs
1886(j)(3)(C) and (D) of the Act....................
Budget Neutrality Factor for the Wage Index and Labor- x 0.9992
Related Share.......................................
Budget Neutrality Factor for the Revisions to the CMG x 0.9990
Relative Weights....................................
Proposed FY 2017 Standard Payment Conversion Factor.. = $15,674
------------------------------------------------------------------------

We invite public comment on the proposed FY 2017 standard payment
conversion factor.
After the application of the proposed CMG relative weights
described in section III of this proposed rule to the proposed FY 2017
standard payment conversion factor ($15,674), the resulting proposed
unadjusted IRF

[[Page 24191]]

prospective payment rates for FY 2017 are shown in Table 5.

Table 5--Proposed FY 2017 Payment Rates
----------------------------------------------------------------------------------------------------------------
Payment rate tier Payment rate tier Payment rate tier Payment rate no
CMG 1 2 3 comorbidity
----------------------------------------------------------------------------------------------------------------
0101................................ $12,550.17 $11,219.45 $10,230.42 $9,761.77
0102................................ 15,857.39 14,175.57 12,926.35 12,333.87
0103................................ 18,501.59 16,539.20 15,081.52 14,390.30
0104................................ 19,753.94 17,658.33 16,103.47 15,365.22
0105................................ 22,824.48 20,404.41 18,606.61 17,753.94
0106................................ 25,558.02 22,846.42 20,835.45 19,879.33
0107................................ 28,476.52 25,456.14 23,214.76 22,150.50
0108................................ 35,824.49 32,025.12 29,203.80 27,866.80
0109................................ 32,255.52 28,833.89 26,294.70 25,089.37
0110................................ 42,779.05 38,241.43 34,873.08 33,275.90
0201................................ 12,266.47 10,034.49 9,051.74 8,440.45
0202................................ 17,145.79 14,025.10 12,652.05 11,797.82
0203................................ 19,101.90 15,625.41 14,095.63 13,142.65
0204................................ 21,032.94 17,205.35 15,520.39 14,471.80
0205................................ 25,443.60 20,813.50 18,775.88 17,507.86
0206................................ 30,167.75 24,677.15 22,260.21 20,757.08
0207................................ 39,677.16 32,457.72 29,279.03 27,300.97
0301................................ 17,895.01 14,769.61 13,418.51 12,543.90
0302................................ 22,043.91 18,194.38 16,529.80 15,451.43
0303................................ 25,827.62 21,316.64 19,366.79 18,103.47
0304................................ 33,429.51 27,592.51 25,067.43 23,431.06
0401................................ 15,385.60 13,462.40 12,424.78 11,286.85
0402................................ 22,084.67 19,326.04 17,835.44 16,202.21
0403................................ 34,829.20 30,478.09 28,128.56 25,553.32
0404................................ 60,976.56 53,357.43 49,244.57 44,735.16
0405................................ 53,697.56 46,989.08 43,366.82 39,395.03
0501................................ 13,487.48 10,647.35 10,123.84 9,114.43
0502................................ 18,192.81 14,360.52 13,655.19 12,293.12
0503................................ 22,786.86 17,987.48 17,103.47 15,398.14
0504................................ 26,757.09 21,120.72 20,083.10 18,079.96
0505................................ 30,714.77 24,244.54 23,053.32 20,755.51
0506................................ 42,517.29 33,561.17 31,912.26 28,730.44
0601................................ 16,255.51 12,857.38 11,882.46 10,877.76
0602................................ 20,934.19 16,556.45 15,300.96 14,006.29
0603................................ 25,783.73 20,391.87 18,844.85 17,252.37
0604................................ 34,148.94 27,009.44 24,959.28 22,849.56
0701................................ 15,694.38 12,775.88 12,189.67 11,073.68
0702................................ 20,020.40 16,297.83 15,550.18 14,126.98
0703................................ 24,130.12 19,644.22 18,742.97 17,026.67
0704................................ 31,277.47 25,462.41 24,294.70 22,070.56
0801................................ 12,451.43 10,047.03 9,279.01 8,531.36
0802................................ 16,224.16 13,092.49 12,090.92 11,117.57
0803................................ 21,700.65 17,512.56 16,172.43 14,871.49
0804................................ 19,531.37 15,760.21 14,554.88 13,384.03
0805................................ 23,242.97 18,755.51 17,321.34 15,927.92
0806................................ 28,205.36 22,760.22 21,018.83 19,327.61
0901................................ 15,463.97 12,457.70 11,520.39 10,484.34
0902................................ 19,780.59 15,934.19 14,736.69 13,410.67
0903................................ 24,868.37 20,031.37 18,525.10 16,860.52
0904................................ 31,503.17 25,376.21 23,468.68 21,358.96
1001................................ 16,837.01 14,890.30 12,863.65 11,620.70
1002................................ 21,826.05 19,300.96 16,675.57 15,064.28
1003................................ 30,788.44 27,227.31 23,523.54 21,250.81
1101................................ 20,714.76 18,678.71 15,291.55 13,868.36
1102................................ 29,714.77 26,793.14 21,934.20 19,893.44
1201................................ 16,329.17 16,042.34 14,576.82 12,913.81
1202................................ 18,978.08 18,644.22 16,940.46 15,009.42
1203................................ 24,153.63 23,730.44 21,561.15 19,101.90
1301................................ 18,536.07 14,562.71 13,622.27 12,561.14
1302................................ 25,492.19 20,028.24 18,736.70 17,274.32
1303................................ 31,415.40 24,680.28 23,089.37 21,288.43
1401................................ 13,547.04 11,452.99 10,377.76 9,415.37
1402................................ 18,510.99 15,650.49 14,180.27 12,865.22
1403................................ 22,067.42 18,656.76 16,904.41 15,337.01
1404................................ 27,898.15 23,586.24 21,371.50 19,390.31
1501................................ 15,868.36 13,448.29 12,401.27 11,702.21
1502................................ 20,015.70 16,963.97 15,642.65 14,761.77
1503................................ 24,388.74 20,669.30 19,059.58 17,985.92

[[Page 24192]]

1504................................ 30,330.76 25,705.36 23,703.79 22,368.37
1601................................ 15,431.05 14,004.72 13,015.69 12,023.53
1602................................ 20,100.34 18,242.97 16,954.57 15,663.03
1603................................ 25,217.90 22,887.17 21,271.19 19,650.49
1701................................ 17,757.07 14,456.13 13,277.45 11,981.21
1702................................ 22,360.53 18,203.78 16,719.46 15,087.79
1703................................ 26,710.06 21,744.54 19,973.38 18,021.97
1704................................ 34,299.41 27,923.23 25,647.37 23,144.23
1801................................ 20,771.18 16,822.90 14,796.26 12,993.75
1802................................ 29,073.70 23,547.05 20,711.62 18,188.11
1803................................ 45,374.66 36,750.83 32,324.49 28,385.61
1901................................ 18,405.98 16,462.40 14,525.10 14,305.66
1902................................ 33,454.59 29,921.67 26,399.72 26,001.60
1903................................ 54,208.53 48,485.95 42,777.48 42,133.28
2001................................ 14,445.16 11,832.30 10,852.68 9,824.46
2002................................ 18,992.19 15,558.01 14,268.04 12,916.94
2003................................ 23,749.24 19,454.57 17,841.71 16,152.06
2004................................ 30,443.61 24,938.90 22,869.93 20,705.35
2101................................ 26,252.38 26,252.38 23,437.33 21,429.49
5001................................ ................. ................. ................. 2,485.90
5101................................ ................. ................. ................. 10,644.21
5102................................ ................. ................. ................. 22,282.16
5103................................ ................. ................. ................. 12,590.92
5104................................ ................. ................. ................. 33,479.66
----------------------------------------------------------------------------------------------------------------

F. Example of the Methodology for Adjusting the Proposed Federal
Prospective Payment Rates

Table 6 illustrates the methodology for adjusting the proposed
federal prospective payments (as described in sections V.A. through
V.F. of this proposed rule). The following examples are based on two
hypothetical Medicare beneficiaries, both classified into CMG 0110
(without comorbidities). The proposed unadjusted federal prospective
payment rate for CMG 0110 (without comorbidities) appears in Table 5.
Example: One beneficiary is in Facility A, an IRF located in rural
Spencer County, Indiana, and another beneficiary is in Facility B, an
IRF located in urban Harrison County, Indiana. Facility A, a rural non-
teaching hospital has a Disproportionate Share Hospital (DSH)
percentage of 5 percent (which would result in a LIP adjustment of
1.0156), a wage index of 0.8297, and a rural adjustment of 14.9
percent. Facility B, an urban teaching hospital, has a DSH percentage
of 15 percent (which would result in a LIP adjustment of 1.0454
percent), a wage index of 0.8756, and a teaching status adjustment of
0.0784.
To calculate each IRF's labor and non-labor portion of the federal
prospective payment, we begin by taking the unadjusted federal
prospective payment rate for CMG 0110 (without comorbidities) from
Table 5. Then, we multiply the labor-related share for FY 2017 (71.0
percent) described in section V.E. of this proposed rule by the
proposed unadjusted federal prospective payment rate. To determine the
non-labor portion of the proposed federal prospective payment rate, we
subtract the labor portion of the proposed federal payment from the
proposed unadjusted federal prospective payment.
To compute the proposed wage-adjusted federal prospective payment,
we multiply the labor portion of the proposed federal payment by the
appropriate proposed wage index located in tables A and B. These tables
are available on CMS Web site at https://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientRehabFacPPS/. The resulting
figure is the wage-adjusted labor amount. Next, we compute the proposed
wage-adjusted federal payment by adding the wage-adjusted labor amount
to the non-labor portion.
Adjusting the proposed wage-adjusted federal payment by the
facility-level adjustments involves several steps. First, we take the
wage-adjusted federal prospective payment and multiply it by the
appropriate rural and LIP adjustments (if applicable). Second, to
determine the appropriate amount of additional payment for the teaching
status adjustment (if applicable), we multiply the teaching status
adjustment (0.0784, in this example) by the wage-adjusted and rural-
adjusted amount (if applicable). Finally, we add the additional
teaching status payments (if applicable) to the wage, rural, and LIP-
adjusted federal prospective payment rates. Table 6 illustrates the
components of the adjusted payment calculation.

TABLE 6--Example of Computing the IRF FY 2017 Federal Prospective Payment
----------------------------------------------------------------------------------------------------------------
Rural Facility A Urban Facility B
Steps (Spencer Co., IN) (Harrison Co., IN)
----------------------------------------------------------------------------------------------------------------
1. Unadjusted Federal Prospective Payment..................... $33,275.90 $33,275.90
2. Labor Share................................................ x 0.710 x 0.710
3. Labor Portion of Federal Payment........................... = $23,625.89 = $23,625.89
4. CBSA-Based Wage Index (shown in the Addendum, Tables A and x 0.8297 x 0.8756
B)...........................................................
5. Wage-Adjusted Amount....................................... = $19,602.40 = $20,686.83
6. Non-Labor Amount........................................... + $9,650.01 + $9,650.01
7. Wage-Adjusted Federal Payment.............................. = $29,252.41 = $30,336.84

[[Page 24193]]

8. Rural Adjustment........................................... x 1.149 x 1.000
9. Wage- and Rural-Adjusted Federal Payment................... = $33,611.02 = $30,336.84
10. LIP Adjustment............................................ x 1.0156 x 1.0454
11. FY 2017 Wage-, Rural- and LIP-Adjusted Federal Prospective = $34,135.35 = $31,714.13
Payment Rate.................................................
12. FY 2017 Wage- and Rural-Adjusted Federal Prospective $33,611.02 $30,336.84
Payment......................................................
13. Teaching Status Adjustment................................ x 0 x 0.0784
14. Teaching Status Adjustment Amount......................... = $0.00 = $2,378.41
15. FY 2017 Wage-, Rural-, and LIP-Adjusted Federal + $34,135.35 + $31,714.13
Prospective Payment Rate.....................................
16. Total FY 2017 Adjusted Federal Prospective Payment........ = $34,135.35 = $34,092.54
----------------------------------------------------------------------------------------------------------------

Thus, the proposed adjusted payment for Facility A would be
$34,135.35, and the proposed adjusted payment for Facility B would be
$34,092.54.

VI. Proposed Update to Payments for High-Cost Outliers Under the IRF
PPS

A. Proposed Update to the Outlier Threshold Amount for FY 2017

Section 1886(j)(4) of the Act provides the Secretary with the
authority to make payments in addition to the basic IRF prospective
payments for cases incurring extraordinarily high costs. A case
qualifies for an outlier payment if the estimated cost of the case
exceeds the adjusted outlier threshold. We calculate the adjusted
outlier threshold by adding the IRF PPS payment for the case (that is,
the CMG payment adjusted by all of the relevant facility-level
adjustments) and the adjusted threshold amount (also adjusted by all of
the relevant facility-level adjustments). Then, we calculate the
estimated cost of a case by multiplying the IRF's overall CCR by the
Medicare allowable covered charge. If the estimated cost of the case is
higher than the adjusted outlier threshold, we make an outlier payment
for the case equal to 80 percent of the difference between the
estimated cost of the case and the outlier threshold.
In the FY 2002 IRF PPS final rule (66 FR 41362 through 41363), we
discussed our rationale for setting the outlier threshold amount for
the IRF PPS so that estimated outlier payments would equal 3 percent of
total estimated payments. For the 2002 IRF PPS final rule, we analyzed
various outlier policies using 3, 4, and 5 percent of the total
estimated payments, and we concluded that an outlier policy set at 3
percent of total estimated payments would optimize the extent to which
we could reduce the financial risk to IRFs of caring for high-cost
patients, while still providing for adequate payments for all other
(non-high cost outlier) cases.
Subsequently, we updated the IRF outlier threshold amount in the
FYs 2006 through 2016 IRF PPS final rules and the FY 2011 and FY 2013
notices (70 FR 47880, 71 FR 48354, 72 FR 44284, 73 FR 46370, 74 FR
39762, 75 FR 42836, 76 FR 47836, 76 FR 59256, and 77 FR 44618, 78 FR
47860, 79 FR 45872, 80 FR 47036, respectively) to maintain estimated
outlier payments at 3 percent of total estimated payments. We also
stated in the FY 2009 final rule (73 FR 46370 at 46385) that we would
continue to analyze the estimated outlier payments for subsequent years
and adjust the outlier threshold amount as appropriate to maintain the
3 percent target.
To update the IRF outlier threshold amount for FY 2017, we propose
to use FY 2015 claims data and the same methodology that we used to set
the initial outlier threshold amount in the FY 2002 IRF PPS final rule
(66 FR 41316 and 41362 through 41363), which is also the same
methodology that we used to update the outlier threshold amounts for
FYs 2006 through 2016. Based on an analysis of the preliminary data
used for the proposed rule, we estimated that IRF outlier payments as a
percentage of total estimated payments would be approximately 2.8
percent in FY 2016. Therefore, we propose to update the outlier
threshold amount from $8,658 for FY 2016 to $8,301 for FY 2017 to
maintain estimated outlier payments at approximately 3 percent of total
estimated aggregate IRF payments for FY 2017.
We invite public comment on the proposed update to the FY 2017
outlier threshold amount to maintain estimated outlier payments at
approximately 3 percent of total estimated IRF payments.

B. Proposed Update to the IRF Cost-To-Charge Ratio Ceiling and Urban/
Rural Averages

In accordance with the methodology stated in the FY 2004 IRF PPS
final rule (68 FR 45674, 45692 through 45694), we propose to apply a
ceiling to IRFs' CCRs. Using the methodology described in that final
rule, we propose to update the national urban and rural CCRs for IRFs,
as well as the national CCR ceiling for FY 2017, based on analysis of
the most recent data that is available. We apply the national urban and
rural CCRs in the following situations:
New IRFs that have not yet submitted their first Medicare
cost report.
IRFs whose overall CCR is in excess of the national CCR
ceiling for FY 2017, as discussed below.
Other IRFs for which accurate data to calculate an overall
CCR are not available.
Specifically, for FY 2017, we propose to estimate a national
average CCR of 0.562 for rural IRFs, which we calculated by taking an
average of the CCRs for all rural IRFs using their most recently
submitted cost report data. Similarly, we propose to estimate a
national average CCR of 0.435 for urban IRFs, which we calculated by
taking an average of the CCRs for all urban IRFs using their most
recently submitted cost report data. We apply weights to both of these
averages using the IRFs' estimated costs, meaning that the CCRs of IRFs
with higher costs factor more heavily into the averages than the CCRs
of IRFs with lower costs. For this proposed rule, we have used the most
recent available cost report data (FY 2014). This includes all IRFs
whose cost reporting periods begin on or after October 1, 2013, and
before October 1, 2014. If, for any IRF, the FY 2014 cost report was
missing or had an ``as submitted'' status, we used data from a previous
fiscal year's (that is, FY 2004 through FY 2013) settled cost report
for that IRF. We do not use cost report data from before FY 2004 for
any IRF because changes in IRF utilization since FY 2004 resulting from
the 60 percent rule and IRF medical review activities suggest that
these older data do not adequately reflect the current cost of care.
In accordance with past practice, we propose to set the national
CCR ceiling at 3 standard deviations above the mean CCR. Using this
method, the proposed national CCR ceiling would be 1.36 for FY 2017.
This means that, if an

[[Page 24194]]

individual IRF's CCR exceeds this proposed ceiling of 1.36 for FY 2017,
we would replace the IRF's CCR with the appropriate proposed national
average CCR (either rural or urban, depending on the geographic
location of the IRF). We calculated the proposed national CCR ceiling
by:
Step 1. Taking the national average CCR (weighted by each IRF's
total costs, as previously discussed) of all IRFs for which we have
sufficient cost report data (both rural and urban IRFs combined).
Step 2. Estimating the standard deviation of the national average
CCR computed in step 1.
Step 3. Multiplying the standard deviation of the national average
CCR computed in step 2 by a factor of 3 to compute a statistically
significant reliable ceiling.
Step 4. Adding the result from step 3 to the national average CCR
of all IRFs for which we have sufficient cost report data, from step 1.
The proposed national average rural and urban CCRs and the proposed
national CCR ceiling in this section will be updated in the final rule
if more recent data becomes available to use in these analyses.
We invite public comment on the proposed update to the IRF CCR
ceiling and the urban/rural averages for FY 2017.

VII. Proposed Revisions and Updates to the IRF Quality Reporting
Program (QRP)

A. Background and Statutory Authority

We seek to promote higher quality and more efficient health care
for Medicare beneficiaries, and our efforts are furthered by QRPs
coupled with public reporting of that information. Section 3004(b) of
the Affordable Care Act amended section 1886(j)(7) of the Act,
requiring the Secretary to establish the IRF QRP. This program applies
to freestanding IRFs, as well as IRF units affiliated with either acute
care facilities or critical access hospitals (CAHs). Beginning with the
FY 2014 payment determination and subsequent years, the Secretary is
required to reduce any annual update to the standard federal rate for
discharges occurring during such fiscal year by 2 percentage points for
any IRF that does not comply with the requirements established by the
Secretary. Section 1886(j)(7) of the Act requires that for the FY 2014
payment determination and subsequent years, each IRF submit data on
quality measures specified by the Secretary in a form and manner, and
at a time, specified by the Secretary. For more information on the
statutory history of the IRF QRP, please refer to the FY 2015 IRF PPS
final rule (79 FR 45908).
The Improving Medicare Post-Acute Care Transformation Act of 2014
(IMPACT Act) imposed new data reporting requirements for certain PAC
providers, including IRFs. For information on the statutory background
of the IMPACT Act, please refer to the FY 2016 IRF PPS final rule (80
FR 47080 through 47083).
In the FY 2016 IRF PPS final rule, we reviewed general activities
and finalized the general timeline and sequencing of such activities
that would occur under the IRF QRP. For further information, please
refer to the FY 2016 IRF PPS final rule (80 FR 40708 through 47128). In
addition, we established our approach for identifying cross-cutting
measures and process for the adoption of measures, including the
application and purpose of the Measures Application Partnership (MAP)
and the notice-and-comment rulemaking process (80 FR 47080 through
47084). For information on these topics, please refer to the FY 2016
IRF PPS final rule (80 FR 47080).

B. General Considerations Used for Selection of Quality, Resource Use,
and Other Measures for the IRF QRP

For a detailed discussion of the considerations we use for the
selection of IRF QRP quality measures, such as alignment with the CMS
Quality Strategy,\1\ which incorporates the 3 broad aims of the
National Quality Strategy,\2\ please refer to the FY 2015 IRF PPS final
rule (79 FR 45911) and the FY 2016 IRF PPS final rule (80 FR 47083
through 47084). Overall, we strive to promote high quality and
efficiency in the delivery of health care to the beneficiaries we
serve. Performance improvement leading to the highest-quality health
care requires continuous evaluation to identify and address performance
gaps and reduce the unintended consequences that may arise in treating
a large, vulnerable, and aging population. QRPs, coupled with public
reporting of quality information, are critical to the advancement of
health care quality improvement efforts. Valid, reliable, relevant
quality measures are fundamental to the effectiveness of our QRPs.
Therefore, selection of quality measures is a priority for us in all of
our QRPs.
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\1\ https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/CMS-Quality-Strategy.html.
\2\ https://www.ahrq.gov/workingforquality/nqs/nqs2011annlrpt.htm.
---------------------------------------------------------------------------

In this proposed rule, we propose to adopt for the IRF QRP one
measure that we are specifying under section 1899B(c)(1) of the Act to
meet the Medication Reconciliation domain, that is, Drug Regimen Review
Conducted with Follow-Up for Identified Issues-Post Acute Care
Inpatient Rehabilitation Facility Quality Reporting Program. Further,
we are proposing to adopt for the IRF QRP, three measures to meet the
resource use and other measure domains identified in section
1899B(d)(1) of the Act. These include: (1) Total Estimated Medicare
Spending per Beneficiary: Medicare Spending Per Beneficiary-Post Acute
Care Inpatient Rehabilitation Facility Quality Reporting Program; (2)
Discharge to Community: Discharge to Community-Post Acute Care
Inpatient Rehabilitation Facility Quality Reporting Program, and (3)
Measures to reflect all-condition risk-adjusted potentially preventable
hospital readmission rates: Potentially Preventable 30-Day Post-
Discharge Readmission Measure for Inpatient Rehabilitation Facility
Quality Reporting Program. Also, we are proposing an additional
measure: (4) Potentially Preventable Within Stay Readmission Measure
for Inpatient Rehabilitation Facilities.
In our selection and specification of measures, we employ a
transparent process in which we seek input from stakeholders and
national experts and engage in a process that allows for pre-rulemaking
input on each measure, as required by section 1890A of the Act. To meet
this requirement, we provided the following opportunities for
stakeholder input: Our measure development contractor convened
technical expert panel (TEPs) that included stakeholder experts and
patient representatives on July 29, 2015, for the Drug Regimen Review
Conducted with Follow-Up for Identified Issues measures; on August 25,
2015, September 25, 2015, and October 5, 2015, for the Discharge to
Community measures; on August 12 and 13, 2015, and October 14, 2015,
for the Potentially Preventable 30-Day Post-Discharge Readmission
Measures and Potentially Preventable Within Stay Readmission Measure
for IRFs; and on October 29 and 30, 2015, for the Medicare Spending per
Beneficiary (MSPB) measures. In addition, we released draft quality
measure specifications for public comment for the Drug Regimen Review
Conducted with Follow-Up for Identified Issues measures from September
18, 2015, to October 6, 2015; for the Discharge to Community measures
from November 9, 2015, to December 8, 2015; for the Potentially
Preventable 30-Day Post-Discharge Readmission Measure for

[[Page 24195]]

IRFs and Potentially Preventable Within Stay Readmission Measure for
IRFs from November 2, 2015 to December 1, 2015; and for the MSPB
measures from January 13, 2016 to February 5, 2016. We implemented a
public mailbox, PACQualityInitiative@cms.hhs.gov, for the submission of
public comments. This PAC mailbox is accessible on our post-acute care
quality initiatives Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014-and-Cross-Setting-Measures.html.
Additionally, we sought public input from the MAP Post-Acute Care,
Long-Term Care Workgroup during the annual in-person meeting held
December 14 and 15, 2015. The MAP is composed of multi-stakeholder
groups convened by the NQF, our current contractor under section
1890(a) of the Act, tasked to provide input on the selection of quality
and efficiency measures described in section 1890(b)(7)(B) of the Act.
The MAP reviewed each IMPACT Act-related measure, as well as other
quality measures proposed in this rule for use in the IRF QRP. For more
information on the MAP's recommendations, please refer to the MAP 2016
Final Recommendations to HHS and CMS public report at https://www.qualityforum.org/Publications/2016/02/MAP_2016_Considerations_for_Implementing_Measures_in_Federal_Programs_-_PAC-LTC.aspx.
For measures that do not have NQF endorsement, or which are not
fully supported by the MAP for use in the IRF QRP, we are proposing for
the IRF QRP for the purposes of satisfying the measure domains required
under the IMPACT Act, measures that closely align with the national
priorities identified in the National Quality Strategy (https://www.ahrq.gov/workingforquality/) and for which the MAP supports the
measure concept. Further discussion as to the importance and high-
priority status of these proposed measures in the IRF setting is
included under each quality measure proposal in this proposed rule.

C. Policy for Retention of IRF QRP Measures Adopted for Previous
Payment Determinations

In the CY 2013 Hospital Outpatient Prospective Payment System/
Ambulatory Surgical Center (OPPS/ASC) Payment Systems and Quality
Reporting Programs final rule (77 FR 68500 through 68507), we adopted a
policy that would allow any quality measure adopted for use in the IRF
QRP to remain in effect until the measure was actively removed,
suspended, or replaced, when we initially adopt a measure for the IRF
QRP for a payment determination. For the purpose of streamlining the
rulemaking process, when we initially adopt a measure for the IRF QRP
for a payment determination, this measure will also be adopted for all
subsequent years or until we propose to remove, suspend, or replace the
measure. For further information on how measures are considered for
removal, suspension, or replacement, please refer to the CY 2013 OPPS/
ASC final rule (77 FR 68500).
We are not proposing any changes to the policy for retaining IRF
QRP measures adopted for previous payment determinations.

D. Policy for Adopting Changes to IRF QRP Measures

In the CY 2013 OPPS/ASC final rule (77 FR 68500 through 68507), we
adopted a subregulatory process to incorporate NQF updates to IRF
quality measure specifications that do not substantively change the
nature of the measure. Substantive changes will be proposed and
finalized through rulemaking. For further information on what
constitutes a substantive versus a nonsubstantive change and the
subregulatory process for nonsubstantive changes, please refer to the
CY 2013 OPPS/ASC final rule (77 FR 68500). We are not proposing any
changes to the policy for adopting changes to IRF QRP measures.

E. Quality Measures Previously Finalized for and Currently Used in the
IRF QRP

A history of the IRF QRP quality measures adopted for the FY 2014
payment determinations and subsequent years is presented in Table 7.
The year in which each quality measure was first adopted and
implemented, and then subsequently re-proposed or revised, if
applicable, is displayed. The initial and subsequent annual payment
determination years are also shown in Table 7. For more information on
a particular measure, please refer to the IRF PPS final rule and
associated page numbers referenced in the Table 7.

Table 7--Quality Measures Previously Finalized for and Currently Used in the IRF Quality Reporting Program
----------------------------------------------------------------------------------------------------------------
Data collection Annual payment determination: initial and
Measure title Final rule start date subsequent APU years
----------------------------------------------------------------------------------------------------------------
National Healthcare Safety Adopted an October 1, 2012.. FY 2014 and subsequent years.
Network (NHSN) Catheter- application of
Associated Urinary Tract the measure in
Infection (CAUTI) Outcome FY 2012 IRF PPS
Measure (NQF #0138). Final Rule (76
FR 47874 through
47886).
Adopted the NQF- January 1, 2013.. FY 2015 and subsequent years.
endorsed version
and expanded
measure (with
standardized
infection ratio)
in CY 2013 OPPS/
ASC Final Rule
(77 FR 68504
through 68505).
Percent of Residents or Adopted October 1, 2012.. FY 2014 and subsequent years.
Patients with Pressure Ulcers application of
That Are New or Worsened measure in FY
(Short Stay) (NQF #0678). 2012 IRF PPS
final rule (76
FR 47876 through
47878).
Adopted a non- January 1, 2013.. FY 2015 and subsequent years.
risk-adjusted
application of
the NQF-endorsed
version in CY
2013 OPPS/ASC
Final Rule (77
FR 68500 through
68507).
Adopted the risk October 1, 2014.. FY 2017 and subsequent years.
adjusted, NQF-
endorsed version
in FY 2014 IRF
PPS Final Rule
(78 FR 47911
through 47912).

[[Page 24196]]

Adopted in the FY October 1, 2015.. FY 2018 and subsequent years.
2016 IRF PPS
final rule (80
FR 47089 through
47096) to
fulfill IMPACT
Act requirements.
Percent of Residents or Adopted in FY October 1, 2014.. FY 2017 and subsequent years.
Patients Who Were Assessed 2014 IRF PPS
and Appropriately Given the final rule (78
Seasonal Influenza Vaccine FR 47906 through
(Short Stay) (NQF #0680). 47911).
Influenza Vaccination Coverage Adopted in FY October 1, 2014.. FY 2016 and subsequent years.
among Healthcare Personnel 2014 IRF PPS
(NQF #0431). final rule (78
FR 47905 through
47906).
All-Cause Unplanned Adopted in FY N/A.............. FY 2017 and subsequent years.
Readmission Measure for 30 2014 IRF PPS
Days Post Discharge from final rule (78
Inpatient Rehabilitation FR 47906 through
Facilities (NQF #2502). 47910).
Adopted the NQF- N/A.............. FY 2018 and subsequent years.
endorsed version
in FY 2016 IRF
PPS final rule
(80 FR 47087
through 47089).
National Healthcare Safety Adopted in the FY January 1, 2015.. FY 2017 and subsequent years.
Network (NHSN) Facility-Wide 2015 IRF PPS
Inpatient Hospital-Onset final rule (79
Methicillin-Resistant FR 45911 through
Staphylococcus aureus (MRSA) 45913).
Bacteremia Outcome Measure
(NQF #1716).
National Healthcare Safety Adopted in the FY January 1, 2015.. FY 2017 and subsequent years.
Network (NHSN) Facility-Wide 2015 IRF PPS
Inpatient Hospital-Onset final rule (79
Clostridium difficile FR 45913 through
Infection (CDI) Outcome 45914).
Measure (NQF #1717).
Application of Percent of Adopted an October 1, 2016.. FY 2018 and subsequent years.
Residents Experiencing One or application of
More Falls with Major Injury the measure in
(Long Stay) (NQF #0674). FY 2016 IRF PPS
Final Rule (80
FR 47096 through
47100).
Application of Percent of Long- Adopted an October 1, 2016.. FY 2018 and subsequent years.
Term Care Hospital Patients application of
with an Admission and the measure in
Discharge Functional the FY 2016 IRF
Assessment and a Care Plan PPS final rule
That Addresses Function (NQF (80 FR 47100
#2631). through 47111).
IRF Functional Outcome Adopted in the FY October 1, 2016.. FY 2018 and subsequent years.
Measure: Change in Self-Care 2016 IRF PPS
for Medical Rehabilitation final rule (80
Patients (NQF #2633)*. FR 47111 through
47117).
IRF Functional outcome Adopted in the FY October 1, 2016.. FY 2018 and subsequent years.
Measure: Change in Mobility 2016 IRF PPS
Score for Medical final rule (80
Rehabilitation (NQF #2634)*. FR 47117 through
47118).
IRF Functional Outcome Adopted in the FY October 1, 2016.. FY 2018 and subsequent years.
Measure: Discharge Self-Care 2016 IRF PPS
Score for Medical final rule (80
Rehabilitation Patients (NQF FR 47118 through
#2635). 47119).
IRF Functional Outcome Adopted in the FY October 1, 2016.. FY 2018 and subsequent years.
Measure: Discharge Mobility 2016 IRF PPS
Score for Medical final rule (80
Rehabilitation Patients (NQF FR 47119 through
#2636). 47120).
----------------------------------------------------------------------------------------------------------------
* These measures were under review at NQF when they were finalized for use in the IRF QRP. These measures are
now NQF-endorsed.

F. IRF QRP Quality, Resource Use and Other Measures Proposed for the FY
2018 Payment Determination and Subsequent Years

For the FY 2018 payment determinations and subsequent years, in
addition to the quality measures we are retaining under our policy
described in section VII.C. of this proposed rule, we are proposing
four new measures. Three of these measures proposed were developed to
meet the requirements of IMPACT Act. They are:
(1) MSPB-PAC IRF QRP,
(2) Discharge to Community-PAC IRF QRP, and
(3) Potentially Preventable 30-Day Post-Discharge Readmission
Measure for IRF QRP.
The fourth measure to be proposed is: (4) Potentially Preventable
Within Stay Readmission Measure for IRFs. The measures are described in
more detail below.
For the risk-adjustment of the resource use and other measures, we
understand the important role that sociodemographic status plays in the
care of patients. However, we continue to have concerns about holding
providers to different standards for the outcomes of their patients of
diverse sociodemographic status because we do not want to mask
potential disparities or minimize incentives to improve the outcomes of
disadvantaged populations. We routinely monitor the impact of
sociodemographic status on providers' results on our measures.
The NQF is currently undertaking a two-year trial period in which
new measures and measures undergoing maintenance review will be
assessed to determine if risk-adjusting for sociodemographic factors is
appropriate. For two years, NQF will conduct a trial of temporarily
allowing inclusion of sociodemographic factors in the risk-adjustment
approach for some performance measures. At the conclusion of the trial,
NQF will issue recommendations on future permanent inclusion of
sociodemographic factors. During the trial, measure developers are

[[Page 24197]]

expected to submit information such as analyses and interpretations as
well as performance scores with and without sociodemographic factors in
the risk adjustment model.
Furthermore, the Office of the Assistant Secretary for Planning and
Evaluation (ASPE) is conducting research to examine the impact of
sociodemographic status on quality measures, resource use, and other
measures under the Medicare program as directed by the IMPACT Act. We
will closely examine the findings of the ASPE reports and related
Secretarial recommendations and consider how they apply to our quality
programs at such time as they are available.
We are inviting public comment on how socioeconomic and demographic
factors should be used in risk adjustment for the resource use
measures.
1. Proposal To Address the IMPACT Act Domain of Resource Use and Other
Measures: Total Estimated MSPB-PAC IRF QRP
We are proposing an MSPB-PAC IRF QRP measure for inclusion in the
IRF QRP for the FY 2018 payment determination and subsequent years.
Section 1899B(d)(1)(A) of the Act requires the Secretary to specify
resource use measures, including total estimated MSPB, on which PAC
providers consisting of Skilled Nursing Facilities (SNFs), IRFs, Long-
Term Care Hospitals (LTCHs), and Home Health Agencies (HHAs) are
required to submit necessary data specified by the Secretary.
Rising Medicare expenditures for post-acute care as well as wide
variation in spending for these services underlines the importance of
measuring resource use for providers rendering these services. Between
2001 and 2013, Medicare PAC spending grew at an annual rate of 6.1
percent and doubled to $59.4 billion, while payments to inpatient
hospitals grew at an annual rate of 1.7 percent over this same
period.\3\ A study commissioned by the Institute of Medicine discovered
that variation in PAC spending explains 73 percent of variation in
total Medicare spending across the United States.\4\
---------------------------------------------------------------------------

\3\ MedPAC, ``A Data Book: Health Care Spending and the Medicare
Program,'' (2015). 114
\4\ Institute of Medicine, ``Variation in Health Care Spending:
Target Decision Making, Not Geography,'' (Washington, DC: National
Academies 2013). 2.
---------------------------------------------------------------------------

We reviewed the NQF's consensus-endorsed measures and were unable
to identify any NQF-endorsed resource use measures for PAC settings. As
such, we are proposing this MSPB-PAC IRF measure under the Secretary's
authority to specify non-NQF-endorsed measures under section
1899B(e)(2)(B). Given the current lack of resource use measures for PAC
settings, our proposed MSPB-PAC IRF QRP measure has the potential to
provide valuable information to IRF providers on their relative
Medicare spending in delivering services to approximately 338,000
Medicare beneficiaries.\5\
---------------------------------------------------------------------------

\5\ Figures for 2013. MedPAC, ``Medicare Payment Policy,''
Report to the Congress (2015). xvii-xviii.
---------------------------------------------------------------------------

The proposed MSPB-PAC IRF episode-based measure will provide
actionable and transparent information to support IRF providers'
efforts to promote care coordination and deliver high quality care at a
lower cost to Medicare. The MSPB-PAC IRF QRP measure holds IRF
providers accountable for the Medicare payments within an ``episode of
care'' (episode), which includes the period during which a patient is
directly under the IRF's care, as well as a defined period after the
end of the IRF treatment, which may be reflective of and influenced by
the services furnished by the IRF. MSPB-PAC IRF QRP episodes,
constructed according to the methodology described below, have high
levels of Medicare spending with substantial variation. In FY 2013 and
FY 2014, Medicare FFS beneficiaries experienced 613,089 MSPB-PAC IRF
QPR episodes triggered by admission to an IRF. The mean payment-
standardized, risk-adjusted episode spending for these episodes is
$30,370. There is substantial variation in the Medicare payments for
these MSPB-PAC IRF QRP episodes--ranging from approximately $15,059 at
the 5th percentile to approximately $55,912 at the 95th percentile.
This variation is partially driven by variation in payments occurring
following IRF treatment.
Evaluating Medicare payments during an episode creates a continuum
of accountability between providers and has the potential to improve
post-treatment care planning and coordination. While some stakeholders
throughout the measure development process supported the measures and
believe that measuring Medicare spending was critical for improving
efficiency, others believed that resource use measures did not reflect
quality of care in that they do not take into account patient outcomes
or experience beyond those observable in claims data. However, IRFs
involved in the provision of high quality PAC care as well as
appropriate discharge planning and post-discharge care coordination
would be expected to perform well on this measure since beneficiaries
would likely experience fewer costly adverse events (for example,
avoidable hospitalizations, infections, and emergency room usage).
Further, it is important that the cost of care be explicitly measured
so that, in conjunction with other quality measures, we can recognize
providers that are involved in the provision of high quality care at
lower cost.
We have undertaken development of MSPB-PAC measures for each of the
four PAC settings. We are proposing an LTCH-specific MSPB-PAC measure
in the FY 2017 IPPS/LTCH proposed rule published elsewhere in this
issue of the Federal Register and a SNF-specific MSBP-PAC measure in
the FY 2017 SNF PPS proposed rule published elsewhere in this issue of
the Federal Register. We intend to propose a HHA-specific MSBP-PAC
measure through future notice-and-comment rulemaking. The four setting-
specific MSPB-PAC measures are closely aligned in terms of episode
construction and measure calculation. Each of the MSPB-PAC measures
assess Medicare Part A and Part B spending during an episode, and the
numerator and denominator are defined similarly for each of the MSPB-
PAC measures. However, developing setting-specific measures allows us
to account for differences between settings in payment policy, the
types of data available, and the underlying health characteristics of
beneficiaries. For example, we are proposing to use the IRF setting-
specific rehabilitation impairment categories (RICs) in the MSPB-PAC
IRF QRP risk adjustment model, as detailed below.
The MSPB-PAC measures mirror the general construction of the
inpatient prospective payment system (IPPS) hospital MSPB measure that
was finalized in the FY 2012 IPPS/LTCH PPS Final Rule (76 FR 51618
through 51627). It was endorsed by the NQF on December 6, 2013, and has
been used in the Hospital Value-Based Purchasing (VBP) Program (NQF
#2158) since FY 2015.\6\ The hospital MSPB measure was originally
established under the authority of section 1886(o)(2)(B)(ii) of the
Act. The hospital MSPB measure evaluates hospitals' Medicare spending
relative to the Medicare spending for the national median hospital
during a hospital MSPB episode. It assesses Medicare Part A and Part B
payments for services performed by hospitals and other healthcare
providers during a

[[Page 24198]]

hospital MSPB episode, which is comprised of the periods immediately
prior to, during, and following a patient's hospital
stay.^{7 8} Similarly, the MSPB-PAC measures assess all
Medicare Part A and Part B payments for FFS claims with a start date
during the episode window (which, as discussed below, is the time
period which Medicare FFS Part A and Part B services are counted
towards the MSPB-PAC IRF QRP episode). However, there are differences
between the MSPB-PAC measures, as proposed, and the hospital MSPB
measure to reflect differences in payment policies and the nature of
care provided in each PAC setting. For example, the MSPB-PAC measures
exclude a limited set of services (for example, clinically unrelated
services) provided to a beneficiary during the episode window while the
hospital MSPB measure does not exclude any services.\9\
---------------------------------------------------------------------------

\6\ QualityNet, ``Measure Methodology Reports: Medicare Spending
Per Beneficiary (MSPB) Measure,'' (2015). https://www.qualitynet.org/dcs/ContentServer?pagename=QnetPublic%2FPage%2FQnetTier3&cid=1228772053996.
\7\ QualityNet, ``Measure Methodology Reports: Medicare Spending
Per Beneficiary (MSPB) Measure,'' (2015). https://www.qualitynet.org/dcs/ContentServer?pagename=QnetPublic%2FPage%2FQnetTier3&cid=1228772053996.
\8\ FY 2012 IPPS/LTCH PPS final rule (76 FR 51619).
\9\ FY 2012 IPPS/LTCH PPS Final Rule (76 FR 51620).
---------------------------------------------------------------------------

MSPB-PAC episodes may begin within 30 days of discharge from an
inpatient hospital as part of a patient's trajectory from an acute to a
PAC setting. An IRF stay beginning within 30 days of discharge from an
inpatient hospital will be included once in the hospital's MSPB
measure, and once in the IRF provider's MSPB-PAC measure. Aligning the
hospital MSPB and MSPB-PAC measures in this way creates continuous
accountability and aligns incentives to improve care planning and
coordination across inpatient and PAC settings.
We have sought and considered the input of stakeholders throughout
the measure development process for the MSPB-PAC measures. We convened
a TEP consisting of 12 panelists with combined expertise in all of the
PAC settings on October 29 and 30, 2015 in Baltimore, Maryland. A
follow-up email survey was sent to TEP members on November 18, 2015 to
which 7 responses were received by December 8, 2015. The MSPB-PAC TEP
Summary Report is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
The measures were also presented to the NQF-convened MAP Post-Acute
Care/Long-Term Care (PAC/LTC) Workgroup on December 15, 2015. As the
MSPB-PAC measures were under development, there were three voting
options for members: (1) Encourage continued development, (2) do not
encourage further consideration, and (3) insufficient information.\10\
The MAP PAC/LTC workgroup voted to ``encourage continued development''
for each of the MSPB-PAC measures.\11\ The MAP PAC/LTC workgroup's vote
of ``encourage continued development'' was affirmed by the MAP
Coordinating Committee on January 26, 2016.\12\ The MAP's concerns
about the MSPB-PAC measures, as outlined in their final report ``MAP
2016 Considerations for Implementing Measures in Federal Programs:
Post-Acute Care and Long-Term Care'' and Spreadsheet of Final
Recommendations, were taken into consideration during the measure
development process and are discussed as part of our responses to
public comments, described below.^{13 14}
---------------------------------------------------------------------------

\10\ National Quality Forum, Measure Applications Partnership,
``Process and Approach for MAP Pre-Rulemaking Deliberations, 2015-
2016'' (February 2016) https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=81693.
\11\ National Quality Forum, Measure Applications Partnership
Post-Acute Care/Long-Term Care Workgroup, ``Meeting Transcript--Day
2 of 2'' (December 15, 2015) 104-106 https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=81470.
\12\ National Quality Forum, Measure Applications Partnership,
``Meeting Transcript--Day 1 of 2'' (January 26, 2016) 231-232 https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=81637.
\13\ National Quality Forum, Measure Applications Partnership,
``MAP 2016 Considerations for Implementing Measures in Federal
Programs: Post-Acute Care and Long-Term Care'' Final Report,
(February 2016) https://www.qualityforum.org/Publications/2016/02/MAP_2016_Considerations_for_Implementing_Measures_in_Federal_Programs_-_PAC-LTC.aspx.
\14\ National Quality Forum, Measure Applications Partnership,
``Spreadsheet of MAP 2016 Final Recommendations'' (February 1, 2016)
https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=81593.
---------------------------------------------------------------------------

Since the MAP's review and recommendation of continued development,
we have continued to refine risk adjustment models and conduct measure
testing for the IMPACT Act measures in compliance with the MAP's
recommendations. The proposed IMPACT Act measures are both consistent
with the information submitted to the MAP and support the scientific
acceptability of these measures for use in quality reporting programs.
In addition, a public comment period, accompanied by draft measures
specifications, was originally open from January 13 to 27, 2016 and
twice extended to January 29 and February 5. A total of 45 comments on
the MSPB-PAC measures were received during this 3.5 week period. Also,
the comments received covered each of the MAP's concerns as outlined in
their Final Recommendations.\15\ The MSPB-PAC Public Comment Summary
Report is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html and
contains the public comments (summarized and verbatim), along with our
responses including statistical analyses. If finalized, the MSPB-PAC
IRF QRP measure, along with the other MSPB-PAC measures, as applicable,
will be submitted for NQF endorsement.
---------------------------------------------------------------------------

\15\ National Quality Forum, Measure Applications Partnership,
``Spreadsheet of MAP 2016 Final Recommendations'' (February 1, 2016)
https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=81593.
---------------------------------------------------------------------------

To calculate the MSPB-PAC IRF QRP measure for each IRF provider, we
first define the construction of the MSPB-PAC IRF QRP episode,
including the length of the episode window as well as the services
included in the episode. Next, we apply the methodology for the measure
calculation. The specifications are discussed further below. More
detailed specifications for the proposed MSPB-PAC measures, including
the MSPB-PAC IRF QRP measure in this proposed rule, are available at
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
a. Episode Construction
An MSPB-PAC IRF QRP episode begins at the episode trigger, which is
defined as the patient's admission to an IRF. This admitting facility
is the attributed provider, for whom the MSPB-PAC IRF QRP measure is
calculated. The episode window is the time period during which Medicare
FFS Part A and Part B services are counted towards the MSPB-PAC IRF QRP
episode. Because Medicare FFS claims are already reported to the
Medicare program for payment purposes, IRF providers will not be
required to report any additional data to CMS for calculation of this
measure. Thus, there will be no additional data collection burden from
the implementation of this measure.
The episode window is comprised of a treatment period and an
associated services period. The treatment period begins at the trigger
(that is, on the day

[[Page 24199]]

of admission to the IRF) and ends on the day of discharge from that
IRF. Readmissions to the same facility occurring within 7 or fewer days
do not trigger a new episode, and instead are included in the treatment
period of the original episode. When two sequential stays at the same
IRF occur within 7 or fewer days of one another, the treatment period
ends on the day of discharge for the latest IRF stay. The treatment
period includes those services that are provided directly or reasonably
managed by the IRF provider that are directly related to the
beneficiary's care plan. The associated services period is the time
during which Medicare Part A and Part B services (with certain
exclusions) are counted towards the episode. The associated services
period begins at the episode trigger and ends 30 days after the end of
the treatment period. The distinction between the treatment period and
the associated services period is important because clinical exclusions
of services may differ for each period. Certain services are excluded
from the MSPB-PAC IRF QRP episodes because they are clinically
unrelated to IRF care, and/or because IRF providers may have limited
influence over certain Medicare services delivered by other providers
during the episode window. These limited service-level exclusions are
not counted towards a given IRF provider's Medicare spending to ensure
that beneficiaries with certain conditions and complex care needs
receive the necessary care. Certain services that have been determined
by clinicians to be outside of the control of an IRF provider include
planned hospital admissions, management of certain preexisting chronic
conditions (for example, dialysis for end-stage renal disease (ESRD),
and enzyme treatments for genetic conditions), treatment for
preexisting cancers, organ transplants, and preventive screenings (for
example, colonoscopy and mammograms). Exclusion of such services from
the MSPB-PAC IRF QRP episode ensures that facilities do not have
disincentives to treat patients with certain conditions or complex care
needs.
An MSPB-PAC episode may begin during the associated services period
of an MSPB-PAC IRF QRP episode in the 30 days post-treatment. One
possible scenario occurs where an IRF provider discharges a beneficiary
who is then admitted to a HHA within 30 days. The HHA claim would be
included once as an associated service for the attributed provider of
the first MSPB-PAC IRF QRP episode and once as a treatment service for
the attributed provider of the second MSPB-PAC HHA episode. As in the
case of overlap between hospital and PAC episodes discussed earlier,
this overlap is necessary to ensure continuous accountability between
providers throughout a beneficiary's trajectory of care, as both
providers share incentives to deliver high quality care at a lower cost
to Medicare. Even within the IRF setting, one MSPB-PAC IRF QRP episode
may begin in the associated services period of another MSPB-PAC IRF QRP
episode in the 30 days post-treatment. The second IRF claim would be
included once as an associated service for the attributed IRF provider
of the first MSPB-PAC IRF QRP episode and once as a treatment service
for the attributed IRF provider of the second MSPB-PAC IRF QRP episode.
Again, this ensures that IRF providers have the same incentives
throughout both MSPB-PAC IRF QRP episodes to deliver quality care and
engage in patient-focused care planning and coordination. If the second
MSPB-PAC IRF QRP episode were excluded from the second IRF provider's
MSPB-PAC IRF QRP measure, that provider would not share the same
incentives as the first IRF provider of the first MSPB-PAC IRF QRP
episode. The MSPB-PAC IRF QRP measure is designed to benchmark the
resource use of each attributed provider against what their spending is
expected to be as predicted through risk adjustment. As discussed
further below, the measure takes the ratio of observed spending to
expected spending for each episode and then takes the average of those
ratios across all of the attributed provider's episodes. The measure is
not a simple sum of all costs across a provider's episodes, thus
mitigating concerns about double counting.
b. Measure Calculation
Medicare payments for Part A and Part B claims for services
included in MSPB-PAC IRF QRP episodes, defined according to the
methodology previously discussed, are used to calculate the MSPB-PAC
IRF QRP measure. Measure calculation involves determination of the
episode exclusions, the approach for standardizing payments for
geographic payment differences, the methodology for risk adjustment of
episode spending to account for differences in patient case mix, and
the specifications for the measure numerator and denominator.
(1) Exclusion Criteria
In addition to service-level exclusions that remove some payments
from individual episodes, we exclude certain episodes in their entirety
from the MSPB-PAC IRF QRP measure to ensure that the MSPB-PAC IRF QRP
measure accurately reflects resource use and facilitates fair and
meaningful comparisons between IRF providers. The proposed episode-
level exclusions are as follows:
Any episode that is triggered by an IRF claim outside the
50 states, DC, Puerto Rico, and U.S. territories.
Any episode where the claim(s) constituting the attributed
IRF provider's treatment have a standard allowed amount of zero or
where the standard allowed amount cannot be calculated.
Any episode in which a beneficiary is not enrolled in
Medicare FFS for the entirety of a 90-day lookback period (that is, a
90-day period prior to the episode trigger) plus episode window
(including where a beneficiary dies), or is enrolled in Part C for any
part of the lookback period plus episode window.
Any episode in which a beneficiary has a primary payer
other than Medicare for any part of the 90-day lookback period plus
episode window.
Any episode where the claim(s) constituting the attributed
IRF provider's treatment include at least one related condition code
indicating that it is not a prospective payment system bill.
(2) Standardization and Risk Adjustment
Section 1899B(d)(2)(C) of the Act requires that the MSPB-PAC
measures are adjusted for the factors described under section
1886(o)(2)(B)(ii) of the Act, which include adjustment for factors such
as age, sex, race, severity of illness, and other factors that the
Secretary determines appropriate. Medicare payments included in the
MSPB-PAC IRF QRP measure are payment-standardized and risk-adjusted.
Payment standardization removes sources of payment variation not
directly related to clinical decisions and facilitates comparisons of
resource use across geographic areas. We propose to use the same
payment standardization methodology as that used in the NQF-endorsed
hospital MSPB measure. This methodology removes geographic payment
differences, such as wage index and geographic practice cost index
(GPCI), incentive payment adjustments, and other add-on payments that
support broader Medicare program goals including indirect graduate
medical education (IME) and hospitals serving a

[[Page 24200]]

disproportionate share of uninsured patients.\16\
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\16\ QualityNet, ``CMS Price (Payment) Standardization--Detailed
Methods'' (Revised May 2015) https://qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier4&cid=1228772057350.
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Risk adjustment uses patient claims history to account for case-mix
variation and other factors that affect resource use but are beyond the
influence of the attributed IRF provider. To assist with risk
adjustment for MSPB-PAC IRF QRP episodes, we create mutually exclusive
and exhaustive clinical case mix categories using the most recent
institutional claim in the 60 days prior to the start of the MSPB-PAC
IRF QRP episode. The beneficiaries in these clinical case mix
categories have a greater degree of clinical similarity than the
overall IRF patient population, and allow us to more accurately
estimate Medicare spending. Our proposed MSPB-PAC IRF QRP model,
adapted for the IRF setting from the NQF-endorsed hospital MSPB measure
uses a regression framework with a 90-day hierarchical condition
category (HCC) lookback period and covariates including the clinical
case mix categories, HCC indicators, age brackets, indicators for
originally disabled, ESRD enrollment, and long-term care status, and
selected interactions of these covariates where sample size and
predictive ability make them appropriate. We sought and considered
public comment regarding the treatment of hospice services occurring
within the MSPB-PAC IRF QRP episode window. Given the comments
received, we propose to include the Medicare spending for hospice
services but risk adjust for them, such that MSPB-PAC IRF QRP episodes
with hospice are compared to a benchmark reflecting other MSPB-PAC IRF
QRP episodes with hospice. We believe that this provides a balance
between the measure's intent of evaluating Medicare spending and
ensuring that providers do not have incentives against the appropriate
use of hospice services in a patient-centered continuum of care.
We are proposing to use RICs in response to commenters' concerns
about the risk adjustment approach for the MSPB-PAC IRF QRP measure.
Commenters suggested the use of case mix groups (CMGs); however, we
believe that the use of RICs may be more appropriate given that the
other covariates incorporated in the model partially account for
factors in CMGs (for example, age and certain HCC indicators). RICs do
not account for functional status as CMGs do, as the functional status
information in CMGs is based on the IRF-PAI. Given the move toward
standardized data that was mandated by the IMPACT Act, we have chosen
to defer risk adjustment for functional status until standardized data
become available. We are seeking comment on whether the use of CMGs
would still be appropriate to include in the MSPB-PAC IRF QRP risk
adjustment model.
We understand the important role that sociodemographic factors,
beyond age, play in the care of patients. However, we continue to have
concerns about holding providers to different standards for the
outcomes of their patients of diverse sociodemographic status because
we do not want to mask potential disparities or minimize incentives to
improve the outcomes of disadvantaged populations. We routinely monitor
the impact of sociodemographic status on providers' results on our
measures.
The NQF is currently undertaking a two-year trial period in which
new measures and measures undergoing maintenance review will be
assessed to determine if risk-adjusting for sociodemographic factors is
appropriate. For two years, NQF will conduct a trial of temporarily
allowing inclusion of sociodemographic factors in the risk-adjustment
approach for some performance measures. At the conclusion of the trial,
NQF will issue recommendations on future permanent inclusion of
sociodemographic factors. During the trial, measure developers are
expected to submit information such as analyses and interpretations as
well as performance scores with and without sociodemographic factors in
the risk adjustment model.
Furthermore, ASPE is conducting research to examine the impact of
sociodemographic status on quality measures, resource use, and other
measures under the Medicare program as required under the IMPACT Act.
We will closely examine the findings of the ASPE reports and related
Secretarial recommendations and consider how they apply to our quality
programs at such time as they are available.
While we conducted analyses on the impact of age by sex on the
performance of the MSPB-PAC IRF QRP risk-adjustment model, we are not
proposing to adjust the MSPB-PAC IRF QRP measure for socioeconomic and
demographic factors at this time. As this MSPB-PAC IRF QRP measure will
be submitted for NQF endorsement, we prefer to await the results of
this trial and study before deciding whether to risk adjust for
socioeconomic and demographic factors. We will monitor the results of
the trial, studies, and recommendations. We are inviting public comment
on how socioeconomic and demographic factors should be used in risk
adjustment for the MSPB-PAC IRF QRP measure.
(3) Measure Numerator and Denominator
The MPSB-PAC IRF QRP measure is a payment-standardized, risk-
adjusted ratio that compares a given IRF provider's Medicare spending
against the Medicare spending of other IRF providers within a
performance period. Similar to the hospital MSPB measure, the ratio
allows for ease of comparison over time as it obviates the need to
adjust for inflation or policy changes.
The MSPB-PAC IRF QRP measure is calculated as the ratio of the
MSPB-PAC Amount for each IRF provider divided by the episode-weighted
median MSPB-PAC Amount across all IRF providers. To calculate the MSPB-
PAC Amount for each IRF provider, one calculates the average of the
ratio of the standardized episode spending over the expected episode
spending (as predicted in risk adjustment), and then multiplies this
quantity by the average episode spending level across all IRF providers
nationally. The denominator for an IRF provider's MSPB-PAC IRF QRP
measure is the episode-weighted national median of the MSPB-PAC Amounts
across all IRF providers. An MSPB-PAC IRF QRP measure of less than 1
indicates that a given IRF provider's Medicare spending is less than
that of the national median IRF provider during a performance period.
Mathematically, this is represented in equation (A) below:

[[Page 24201]]

[GRAPHIC] [TIFF OMITTED] TP25AP16.000

Where:

Yij = attributed standardized spending for episode i and
provider j
Yij = expected standardized spending for episode i and
provider j, as predicted from risk adjustment
nj = number of episodes for provider j
n = total number of episodes nationally
i [isin] {Ij{time} = all episodes i in the set of episodes
attributed to provider j.
c. Data Sources
The MSPB-PAC IRF QRP resource use measure is an administrative
claims-based measure. It uses Medicare Part A and Part B claims from
FFS beneficiaries and Medicare eligibility files.
d. Cohort
The measure cohort includes Medicare FFS beneficiaries with an IRF
treatment period ending during the data collection period.
e. Reporting
If this proposed measure is finalized, we intend to provide initial
confidential feedback to providers, prior to public reporting of this
measure, based on Medicare FFS claims data from discharges in CY 2015
and 2016. We intend to publicly report this measure using claims data
from discharges in CY 2016 and 2017.
We propose a minimum of 20 episodes for reporting and inclusion in
the IRF QRP. For the reliability calculation, as described in the
measure specifications identified and for which a link has been
provided above, we used two years of data (FY 2013 and FY 2014) to
increase the statistical reliability of this measure. The reliability
results support the 20 episode case minimum, and 99.74 percent of IRF
providers had moderate or high reliability (above 0.4).
We invite public comment on our proposal to adopt the MSPB-PAC IRF
QRP measure for the IRF QRP.
2. Proposal To Address the IMPACT Act Domain of Resource Use and Other
Measures: Discharge to Community-Post Acute Care (PAC) Inpatient
Rehabilitation Facility Quality Reporting Program
Sections 1899B(d)(1)(B) and 1899B(a)(2)(E)(ii) of the Act require
the Secretary to specify a measure to address the domain of discharge
to community by SNFs, LTCHs, and IRFs by October 1, 2016, and HHAs by
January 1, 2017. We are proposing to adopt the measure, Discharge to
Community-PAC IRF QRP, for the IRF QRP for the FY 2018 payment
determination and subsequent years as a Medicare FFS claims-based
measure to meet this requirement.
This proposed measure assesses successful discharge to the
community from an IRF setting, with successful discharge to the
community including no unplanned rehospitalizations and no death in the
31 days following discharge from the IRF. Specifically, this proposed
measure reports an IRF's risk-standardized rate of Medicare FFS
patients who are discharged to the community following an IRF stay, and
do not have an unplanned readmission to an acute care hospital or LTCH
in the 31 days following discharge to community, and who remain alive
during the 31 days following discharge to community. The term
``community'', for this measure, is defined as home/self-care, with or
without home health services, based on Patient Discharge Status Codes
01, 06, 81, and 86 on the Medicare FFS claim.^{17 18} This
measure is conceptualized uniformly across the PAC settings, in terms
of the definition of the discharge to community outcome, the approach
to risk adjustment, and the measure calculation.
---------------------------------------------------------------------------

\17\ Further description of patient discharge status codes can
be found, for example, at the following Web page: https://med.noridianmedicare.com/web/jea/topics/claim-submission/patient-status-codes.
\18\ This definition is not intended to suggest that board and
care homes, assisted living facilities, or other settings included
in the definition of ``community'' for the purpose of this measure
are the most integrated setting for any particular individual or
group of individuals under the Americans with Disabilities Act (ADA)
and Section 504.
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Discharge to a community setting is an important health care
outcome for many patients for whom the overall goals of post-acute care
include optimizing functional improvement, returning to a previous
level of independence, and avoiding institutionalization. Returning to
the community is also an important outcome for many patients who are
not expected to make functional improvement during their IRF stay, and
for patients who may be expected to decline functionally due to their
medical condition. The discharge to community outcome offers a multi-
dimensional view of preparation for community life, including the
cognitive, physical, and psychosocial elements involved in a discharge
to the community.^{19 20}
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\19\ El-Solh AA, Saltzman SK, Ramadan FH, Naughton BJ. Validity
of an artificial neural network in predicting discharge destination
from a postacute geriatric rehabilitation unit. Archives of physical
medicine and rehabilitation. 2000;81(10):1388-1393.
\20\ Tanwir S, Montgomery K, Chari V, Nesathurai S. Stroke
rehabilitation: Availability of a family member as caregiver and
discharge destination. European journal of physical and
rehabilitation medicine. 2014;50(3):355-362.
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In addition to being an important outcome from a patient and family
perspective, patients discharged to community settings, on average,
incur lower costs over the recovery episode, compared with those
discharged to institutional settings.^{21 22} Given the high
costs of care in institutional settings, encouraging IRFs to prepare
patients for discharge to community, when clinically appropriate, may
have cost-saving implications for the Medicare program.\23\ Also,
providers have discovered that successful discharge to community was a
major driver of their ability to achieve savings, where capitated
payments for post-acute care were in place.\24\ For patients who
require long-term care due to persistent disability, discharge to
community could result in lower long-term care

[[Page 24202]]

costs for Medicaid and for patients' out-of-pocket expenditures.\25\
---------------------------------------------------------------------------

\21\ Dobrez D, Heinemann AW, Deutsch A, Manheim L, Mallinson T.
Impact of Medicare's prospective payment system for inpatient
rehabilitation facilities on stroke patient outcomes. American
journal of physical medicine & rehabilitation/Association of
Academic Physiatrists. 2010;89(3):198-204.
\22\ Gage B, Morley M, Spain P, Ingber M. Examining Post Acute
Care Relationships in an Integrated Hospital System. Final Report.
RTI International;2009.
\23\ Ibid.
\24\ Doran JP, Zabinski SJ. Bundled payment initiatives for
Medicare and non-Medicare total joint arthroplasty patients at a
community hospital: Bundles in the real world. The journal of
arthroplasty. 2015;30(3):353-355.
\25\ Newcomer RJ, Ko M, Kang T, Harrington C, Hulett D, Bindman
AB. Health Care Expenditures After Initiating Long-term Services and
Supports in the Community Versus in a Nursing Facility. Medical
Care. 2016;54(3):221-228.
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Analyses conducted for ASPE on PAC episodes, using a 5 percent
sample of 2006 Medicare claims, revealed that relatively high average,
unadjusted Medicare payments are associated with discharge to
institutional settings from IRFs, SNFs, LTCHs or HHAs, as compared with
payments associated with discharge to community settings.\26\ Average,
unadjusted Medicare payments associated with discharge to community
settings ranged from $0 to $4,017 for IRF discharges, $0 to $3,544 for
SNF discharges, $0 to $4,706 for LTCH discharges, and $0 to $992 for
HHA discharges. In contrast, payments associated with discharge to non-
community settings were considerably higher, ranging from $11,847 to
$25,364 for IRF discharges, $9,305 to $29,118 for SNF discharges,
$12,465 to $18,205 for LTCH discharges, and $7,981 to $35,192 for HHA
discharges.\27\
---------------------------------------------------------------------------

\26\ Gage B, Morley M, Spain P, Ingber M. Examining Post Acute
Care Relationships in an Integrated Hospital System. Final Report.
RTI International;2009.
\27\ Ibid.
---------------------------------------------------------------------------

Measuring and comparing facility-level discharge to community rates
is expected to help differentiate among facilities with varying
performance in this important domain, and to help avoid disparities in
care across patient groups. Variation in discharge to community rates
has been reported within and across post-acute settings; across a
variety of facility-level characteristics, such as geographic location
(for example, regional location, urban or rural location), ownership
(for example, for-profit or nonprofit), and freestanding or hospital-
based units; and across patient-level characteristics, such as race and
gender.^{28 29 30 31 32 33} Discharge to community rates in the
IRF setting have been reported to range from about 60 to 80
percent.^{34 35 36 37 38 39} Longer-term studies show that
rates of discharge to community from IRFs have decreased over time as
IRF length of stay has decreased.^{40 41} In the IRF Medicare
FFS population, using CY 2013 national claims data, we discovered that
approximately 69 percent of patients were discharged to the community.
Greater variation in discharge to community rates is seen in the SNF
setting, with rates ranging from 31 to 65
percent.^{42 43 44 45} A multi-center study of 23 LTCHs
demonstrated that 28.8 percent of 1,061 patients who were ventilator-
dependent on admission were discharged to home.\46\ A single-center
study revealed that 31 percent of LTCH hemodialysis patients were
discharged to home.\47\ One study noted that 64 percent of
beneficiaries who were discharged from the home health episode did not
use any other acute or post-acute services paid by Medicare in the 30
days after discharge.\48\ However, significant numbers of patients were
admitted to hospitals (29 percent) and lesser numbers to SNFs (7.6
percent), IRFs (1.5 percent), home health (7.2 percent) or hospice (3.3
percent).\49\
---------------------------------------------------------------------------

\28\ Reistetter TA, Karmarkar AM, Graham JE, et al. Regional
variation in stroke rehabilitation outcomes. Archives of physical
medicine and rehabilitation. 2014;95(1):29-38.
\29\ El-Solh AA, Saltzman SK, Ramadan FH, Naughton BJ. Validity
of an artificial neural network in predicting discharge destination
from a postacute geriatric rehabilitation unit. Archives of physical
medicine and rehabilitation. 2000;81(10):1388-1393.
\30\ March 2015 Report to the Congress: Medicare Payment Policy.
Medicare Payment Advisory Commission;2015.
\31\ Bhandari VK, Kushel M, Price L, Schillinger D. Racial
disparities in outcomes of inpatient stroke rehabilitation. Archives
of physical medicine and rehabilitation. 2005;86(11):2081-2086.
\32\ Chang PF, Ostir GV, Kuo YF, Granger CV, Ottenbacher KJ.
Ethnic differences in discharge destination among older patients
with traumatic brain injury. Archives of physical medicine and
rehabilitation. 2008;89(2):231-236.
\33\ Berges IM, Kuo YF, Ostir GV, Granger CV, Graham JE,
Ottenbacher KJ. Gender and ethnic differences in rehabilitation
outcomes after hip-replacement surgery. American journal of physical
medicine & rehabilitation/Association of Academic Physiatrists.
2008;87(7):567-572.
\34\ Galloway RV, Granger CV, Karmarkar AM, et al. The Uniform
Data System for Medical Rehabilitation: Report of patients with
debility discharged from inpatient rehabilitation programs in 2000-
2010. American journal of physical medicine & rehabilitation/
Association of Academic Physiatrists. 2013;92(1):14-27.
\35\ Morley MA, Coots LA, Forgues AL, Gage BJ. Inpatient
rehabilitation utilization for Medicare beneficiaries with multiple
sclerosis. Archives of physical medicine and rehabilitation.
2012;93(8):1377-1383.
\36\ Reistetter TA, Graham JE, Deutsch A, Granger CV, Markello
S, Ottenbacher KJ. Utility of functional status for classifying
community versus institutional discharges after inpatient
rehabilitation for stroke. Archives of physical medicine and
rehabilitation. 2010;91(3):345-350.
\37\ Gagnon D, Nadeau S, Tam V. Clinical and administrative
outcomes during publicly-funded inpatient stroke rehabilitation
based on a case-mix group classification model. Journal of
rehabilitation medicine. 2005;37(1):45-52.
\38\ DaVanzo J, El-Gamil A, Li J, Shimer M, Manolov N, Dobson A.
Assessment of patient outcomes of rehabilitative care provided in
inpatient rehabilitation facilities (IRFs) and after discharge.
Vienna, VA: Dobson DaVanzo & Associates, LLC;2014.
\39\ Kushner DS, Peters KM, Johnson-Greene D. Evaluating Siebens
Domain Management Model for Inpatient Rehabilitation to Increase
Functional Independence and Discharge Rate to Home in Geriatric
Patients. Archives of physical medicine and rehabilitation.
2015;96(7):1310-1318.
\40\ Galloway RV, Granger CV, Karmarkar AM, et al. The Uniform
Data System for Medical Rehabilitation: Report of patients with
debility discharged from inpatient rehabilitation programs in 2000-
2010. American journal of physical medicine & rehabilitation/
Association of Academic Physiatrists. 2013;92(1):14-27.
\41\ Mallinson T, Deutsch A, Bateman J, et al. Comparison of
discharge functional status after rehabilitation in skilled nursing,
home health, and medical rehabilitation settings for patients after
hip fracture repair. Archives of physical medicine and
rehabilitation. 2014;95(2):209-217.
\42\ El-Solh AA, Saltzman SK, Ramadan FH, Naughton BJ. Validity
of an artificial neural network in predicting discharge destination
from a postacute geriatric rehabilitation unit. Archives of physical
medicine and rehabilitation. 2000;81(10):1388-1393.
\43\ Hall RK, Toles M, Massing M, et al. Utilization of acute
care among patients with ESRD discharged home from skilled nursing
facilities. Clinical journal of the American Society of Nephrology:
CJASN. 2015;10(3):428-434.
\44\ Stearns SC, Dalton K, Holmes GM, Seagrave SM. Using
propensity stratification to compare patient outcomes in hospital-
based versus freestanding skilled-nursing facilities. Medical care
research and review: MCRR. 2006;63(5):599-622.
\45\ Wodchis WP, Teare GF, Naglie G, et al. Skilled nursing
facility rehabilitation and discharge to home after stroke. Archives
of physical medicine and rehabilitation. 2005;86(3):442-448.
\46\ Scheinhorn DJ, Hassenpflug MS, Votto JJ, et al. Post-ICU
mechanical ventilation at 23 long-term care hospitals: a multicenter
outcomes study. Chest. 2007;131(1):85-93.
\47\ Thakar CV, Quate-Operacz M, Leonard AC, Eckman MH. Outcomes
of hemodialysis patients in a long-term care hospital setting: A
single-center study. American journal of kidney diseases: The
official journal of the National Kidney Foundation. 2010;55(2):300-
306.
\48\ Wolff JL, Meadow A, Weiss CO, Boyd CM, Leff B. Medicare
home health patients' transitions through acute and post-acute care
settings. Medical care. 2008;46(11):1188-1193.
\49\ Ibid.
---------------------------------------------------------------------------

Discharge to community is an actionable health care outcome, as
targeted interventions have been shown to successfully increase
discharge to community rates in a variety of post-acute
settings.^{50 51 52 53} Many of these interventions involve
discharge planning or specific rehabilitation strategies, such as
addressing discharge barriers and improving medical and functional
status.^{54 55 56 57} The

[[Page 24203]]

effectiveness of these interventions suggests that improvement in
discharge to community rates among post-acute care patients is possible
through modifying provider-led processes and interventions.
---------------------------------------------------------------------------

\50\ Kushner DS, Peters KM, Johnson-Greene D. Evaluating Siebens
Domain Management Model for Inpatient Rehabilitation to Increase
Functional Independence and Discharge Rate to Home in Geriatric
Patients. Archives of physical medicine and rehabilitation.
2015;96(7):1310-1318.
\51\ Wodchis WP, Teare GF, Naglie G, et al. Skilled nursing
facility rehabilitation and discharge to home after stroke. Archives
of physical medicine and rehabilitation. 2005;86(3):442-448.
\52\ Berkowitz RE, Jones RN, Rieder R, et al. Improving
disposition outcomes for patients in a geriatric skilled nursing
facility. Journal of the American Geriatrics Society.
2011;59(6):1130-1136.
\53\ Kushner DS, Peters KM, Johnson-Greene D. Evaluating use of
the Siebens Domain Management Model during inpatient rehabilitation
to increase functional independence and discharge rate to home in
stroke patients. PM & R: The journal of injury, function, and
rehabilitation. 2015;7(4):354-364.
\54\ Kushner DS, Peters KM, Johnson-Greene D. Evaluating Siebens
Domain Management Model for Inpatient Rehabilitation to Increase
Functional Independence and Discharge Rate to Home in Geriatric
Patients. Archives of physical medicine and rehabilitation.
2015;96(7):1310-1318.
\55\ Wodchis WP, Teare GF, Naglie G, et al. Skilled nursing
facility rehabilitation and discharge to home after stroke. Archives
of physical medicine and rehabilitation. 2005;86(3):442-448.
\56\ Berkowitz RE, Jones RN, Rieder R, et al. Improving
disposition outcomes for patients in a geriatric skilled nursing
facility. Journal of the American Geriatrics Society.
2011;59(6):1130-1136.
\57\ Kushner DS, Peters KM, Johnson-Greene D. Evaluating use of
the Siebens Domain Management Model during inpatient rehabilitation
to increase functional independence and discharge rate to home in
stroke patients. PM & R: The journal of injury, function, and
rehabilitation. 2015;7(4):354-364.
---------------------------------------------------------------------------

A TEP convened by our measure development contractor was strongly
supportive of the importance of measuring discharge to community
outcomes, and implementing the proposed measure, Discharge to
Community-PAC IRF QRP in the IRF QRP. The panel provided input on the
technical specifications of this proposed measure, including the
feasibility of implementing the measure, as well as the overall measure
reliability and validity. A summary of the TEP proceedings is available
on the PAC Quality Initiatives Downloads and Videos Web site at:
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
We also solicited stakeholder feedback on the development of this
measure through a public comment period held from November 9, 2015,
through December 8, 2015. Several stakeholders and organizations,
including the MedPAC, among others, supported this measure for
implementation. The public comment summary report for the proposed
measure is available on the CMS Web site at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
The NQF-convened MAP met on December 14 and 15, 2015, and provided
input on the use of this proposed Discharge to Community-PAC IRF QRP
measure in the IRF QRP. The MAP encouraged continued development of the
proposed measure to meet the mandate of the IMPACT Act. The MAP
supported the alignment of this proposed measure across PAC settings,
using standardized claims data. More information about the MAP's
recommendations for this measure is available at: https://www.qualityforum.org/Publications/2016/02/MAP_2016_Considerations_for_Implementing_Measures_in_Federal_Programs_-_PAC-LTC.aspx.
Since the MAP's review and recommendation of continued development,
we have continued to refine risk-adjustment models and conduct measure
testing for this measure, as recommended by the MAP. This proposed
measure is consistent with the information submitted to the MAP and is
scientifically acceptable for current specification in the IRF QRP. As
discussed with the MAP, we fully anticipate that additional analyses
will continue as we submit this measure to the ongoing measure
maintenance process.
We reviewed the NQF's consensus-endorsed measures and were unable
to identify any NQF-endorsed resource use or other measures for post-
acute care focused on discharge to community. In addition, we are
unaware of any other post-acute care measures for discharge to
community that have been endorsed or adopted by other consensus
organizations. Therefore, we are proposing the measure, Discharge to
Community-PAC IRF QRP, under the Secretary's authority to specify non-
NQF-endorsed measures under section 1899B(e)(2)(B) of the Act.
We are proposing to use data from the Medicare FFS claims and
Medicare eligibility files to calculate this proposed measure. We are
proposing to use data from the ``Patient Discharge Status Code'' on
Medicare FFS claims to determine whether a patient was discharged to a
community setting for calculation of this proposed measure. In all PAC
settings, we tested the accuracy of determining discharge to a
community setting using the ``Patient Discharge Status Code'' on the
PAC claim by examining whether discharge to community coding based on
PAC claim data agreed with discharge to community coding based on PAC
assessment data. We found excellent agreement between the two data
sources in all PAC settings, ranging from 94.6 percent to 98.8 percent.
Specifically, in the IRF setting, using 2013 data, we found 98.8
percent agreement in coding of community and non-community discharges
when comparing discharge status codes on claims and the Discharge to
Living Setting (item 44A) codes on the IRF-PAI. We further examined the
accuracy of the ``Patient Discharge Status Code'' on the PAC claim by
assessing how frequently discharges to an acute care hospital were
confirmed by follow-up acute care claims. We discovered that 88 percent
to 91 percent of IRF, LTCH, and SNF claims with acute care discharge
status codes were followed by an acute care claim on the day of, or day
after, PAC discharge. We believe these data support the use of the
claims ``Patient Discharge Status Code'' for determining discharge to a
community setting for this measure. In addition, this measure can
feasibly be implemented in the IRF QRP because all data used for
measure calculation are derived from Medicare FFS claims and
eligibility files, which are already available to CMS.
Based on the evidence discussed above, we are proposing to adopt
the measure, Discharge to Community-PAC IRF QRP, for the IRF QRP for FY
2018 payment determination and subsequent years. This proposed measure
is calculated using 2 years of data. We are proposing a minimum of 25
eligible stays in a given IRF for public reporting of the proposed
measure for that IRF. Since Medicare FFS claims data are already
reported to the Medicare program for payment purposes, and Medicare
eligibility files are also available, IRFs will not be required to
report any additional data to CMS for calculation of this measure. The
proposed measure denominator is the risk-adjusted expected number of
discharges to community. The proposed measure numerator is the risk-
adjusted estimate of the number of patients who are discharged to the
community, do not have an unplanned readmission to an acute care
hospital or LTCH in the 31-day post-discharge observation window, and
who remain alive during the post-discharge observation window. The
measure is risk-adjusted for variables such as age and sex, principal
diagnosis, comorbidities, ESRD status, and dialysis, among other
variables. For technical information about this proposed measure,
including information about the measure calculation, risk adjustment,
and denominator exclusions, we refer readers to the document titled,
Proposed Measure Specifications for Measures Proposed in the FY 2017
IRF QRP proposed rule, available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/IRF-Quality-Reporting/IRF-Quality-Reporting-Program-Measures-Information-.html.
If this proposed measure is finalized, we intend to provide initial
confidential feedback to IRFs, prior to public reporting of this
measure, based on

[[Page 24204]]

Medicare FFS claims data from discharges in CY 2015 and 2016. We intend
to publicly report this measure using claims data from discharges in CY
2016 and 2017. We plan to submit this proposed measure to the NQF for
consideration for endorsement.
We are inviting public comment on our proposal to adopt the
measure, Discharge to Community-PAC IRF QRP, for the IRF QRP.
3. Proposal To Address the IMPACT Act Domain of Resource Use and Other
Measures: Potentially Preventable 30-Day Post-Discharge Readmission
Measure for Inpatient Rehabilitation Facility Quality Reporting Program
Sections 1899B(a)(2)(E)(ii) and 1899B(d)(1)(C) of the Act require
the Secretary to specify measures to address the domain of all-
condition risk-adjusted potentially preventable hospital readmission
rates by SNFs, LTCHs, and IRFs by October 1, 2016, and HHAs by January
1, 2017. We are proposing the measure Potentially Preventable 30-Day
Post-Discharge Readmission Measure for IRF QRP as a Medicare FFS
claims-based measure to meet this requirement for the FY 2018 payment
determination and subsequent years.
The proposed measure assesses the facility-level risk-standardized
rate of unplanned, potentially preventable hospital readmissions for
Medicare FFS beneficiaries in the 30 days post IRF discharge. The IRF
admission must have occurred within up to 30 days of discharge from a
prior proximal hospital stay which is defined as an inpatient admission
to an acute care hospital (including IPPS, CAH, or a psychiatric
hospital). Hospital readmissions include readmissions to a short-stay
acute-care hospital or an LTCH, with a diagnosis considered to be
unplanned and potentially preventable. This proposed measure is claims-
based, requiring no additional data collection or submission burden for
IRFs. Because the measure denominator is based on IRF admissions, each
Medicare beneficiary may be included in the measure multiple times
within the measurement period. Readmissions counted in this measure are
identified by examining Medicare FFS claims data for readmissions to
either acute care hospitals (IPPS or CAH) or LTCHs that occur during a
30-day window beginning two days after IRF discharge. This measure is
conceptualized uniformly across the PAC settings, in terms of the
measure definition, the approach to risk adjustment, and the measure
calculation. Our approach for defining potentially preventable hospital
readmissions is described in more detail below.
Hospital readmissions among the Medicare population, including
beneficiaries that utilize PAC, are common, costly, and often
preventable.^{58 59} MedPAC and a study by Jencks et al.
estimated that 17 to 20 percent of Medicare beneficiaries discharged
from the hospital were readmitted within 30 days. MedPAC found that
more than 75 percent of 30-day and 15-day readmissions and 84 percent
of 7-day readmissions were considered ``potentially preventable.''\60\
In addition, MedPAC calculated that annual Medicare spending on
potentially preventable readmissions would be $12 billion for 30-day,
$8 billion for 15-day, and $5 billion for 7-day readmissions.\61\ For
hospital readmissions from one post-acute care setting, SNFs, MedPAC
deemed 76 percent of these readmissions as ``potentially avoidable''--
associated with $12 billion in Medicare expenditures.\62\ Mor et al.
analyzed 2006 Medicare claims and SNF assessment data (Minimum Data
Set), and reported a 23.5 percent readmission rate from SNFs,
associated with $4.3 billion in expenditures.\63\ Fewer studies have
investigated potentially preventable readmission rates from the
remaining post-acute care settings.
---------------------------------------------------------------------------

\58\ Friedman, B., and Basu, J.: The rate and cost of hospital
readmissions for preventable conditions. Med. Care Res. Rev.
61(2):225-240, 2004. doi:10.1177/1077558704263799.
\59\ Jencks, S.F., Williams, M.V., and Coleman, E.A.:
Rehospitalizations among patients in the Medicare Fee-for-Service
Program. N. Engl. J. Med. 360(14):1418-1428, 2009. doi:10.1016/
j.jvs.2009.05.045.
\60\ MedPAC: Payment policy for inpatient readmissions, in
Report to the Congress: Promoting Greater Efficiency in Medicare.
Washington, DC, pp. 103-120, 2007. Available from https://www.medpac.gov/documents/reports/Jun07_EntireReport.pdf.
\61\ Ibid.
\62\ Ibid.
\63\ Mor, V., Intrator, O., Feng, Z., et al.: The revolving door
of rehospitalization from skilled nursing facilities. Health Aff.
29(1):57-64, 2010. doi:10.1377/hlthaff.2009.0629.
---------------------------------------------------------------------------

We have addressed the high rates of hospital readmissions in the
acute care setting as well as in PAC. For example, we developed the
following measure: All-Cause Unplanned Readmission Measure for 30 Days
Post-Discharge from IRFs (NQF #2502), as well as similar measures for
other PAC providers (NQF #2512 for LTCHs and NQF #2510 for SNFs).\64\
These measures are endorsed by the NQF, and the NQF-endorsed IRF
measure (NQF #2502) was adopted into the IRF QRP in the FY 2016 IRF PPS
final rule (80 FR 47087 through 47089). Note that these NQF-endorsed
measures assess all-cause unplanned readmissions.
---------------------------------------------------------------------------

\64\ National Quality Forum: All-Cause Admissions and
Readmissions Measures. pp. 1-319, April 2015. Available from https://www.qualityforum.org/Publications/2015/04/All-Cause_Admissions_and_Readmissions_Measures_-_Final_Report.aspx.
---------------------------------------------------------------------------

Several general methods and algorithms have been developed to
assess potentially avoidable or preventable hospitalizations and
readmissions for the Medicare population. These include the Agency for
Healthcare Research and Quality's (AHRQ's) Prevention Quality
Indicators, approaches developed by MedPAC, and proprietary approaches,
such as the 3M\TM\ algorithm for Potentially Preventable
Readmissions.^{65 66 67} Recent work led by Kramer et al. for
MedPAC identified 13 conditions for which readmissions were deemed as
potentially preventable among SNF and IRF populations.^{68 69}
Although much of the existing literature addresses hospital
readmissions more broadly and potentially avoidable hospitalizations
for specific settings like long-term care, these findings are relevant
to the development of potentially preventable readmission measures for
PAC.^{70 71 72}
---------------------------------------------------------------------------

\65\ Goldfield, N.I., McCullough, E.C., Hughes, J.S., et al.:
Identifying potentially preventable readmissions. Health Care Finan.
Rev. 30(1):75-91, 2008. Available from https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4195042/.
\66\ National Quality Forum: Prevention Quality Indicators
Overview. 2008.
\67\ MedPAC: Online Appendix C: Medicare Ambulatory Care
Indicators for the Elderly. pp. 1-12, prepared for Chapter 4, 2011.
Available from https://www.medpac.gov/documents/reports/Mar11_Ch04_APPENDIX.pdf?sfvrsn=0.
\68\ Kramer, A., Lin, M., Fish, R., et al.: Development of
Inpatient Rehabilitation Facility Quality Measures: Potentially
Avoidable Readmissions, Community Discharge, and Functional
Improvement. pp. 1-42, 2015. Available from https://www.medpac.gov/documents/contractor-reports/development-of-inpatient-rehabilitation-facility-quality-measures-potentially-avoidable-readmissions-community-discharge-and-functional-improvement.pdf?sfvrsn=0.
\69\ Kramer, A., Lin, M., Fish, R., et al.: Development of
Potentially Avoidable Readmission and Functional Outcome SNF Quality
Measures. pp. 1-75, 2014. Available from https://www.medpac.gov/documents/contractor-reports/mar14_snfqualitymeasures_contractor.pdf?sfvrsn=0.
\70\ Allaudeen, N., Vidyarthi, A., Maselli, J., et al.:
Redefining readmission risk factors for general medicine patients.
J. Hosp. Med. 6(2):54-60, 2011. doi:10.1002/jhm.805.
\71\ \4\ Gao, J., Moran, E., Li, Y.-F., et al.: Predicting
potentially avoidable hospitalizations. Med. Care 52(2):164-171,
2014. doi:10.1097/MLR.0000000000000041.
\72\ Walsh, E.G., Wiener, J.M., Haber, S., et al.: Potentially
avoidable hospitalizations of dually eligible Medicare and Medicaid
beneficiaries from nursing facility and home[hyphen]and
community[hyphen]based services waiver programs. J. Am. Geriatr.
Soc. 60(5):821-829, 2012. doi:10.1111/j.1532-5415.2012.03920.x.
---------------------------------------------------------------------------

Potentially Preventable Readmission Measure Definition: We
conducted a

[[Page 24205]]

comprehensive environmental scan, analyzed claims data, and obtained
input from a TEP to develop a definition and list of conditions for
which hospital readmissions are potentially preventable. The Ambulatory
Care Sensitive Conditions and Prevention Quality Indicators, developed
by AHRQ, served as the starting point in this work. For patients in the
30-day post-PAC discharge period, a potentially preventable readmission
refers to a readmission for which the probability of occurrence could
be minimized with adequately planned, explained, and implemented post-
discharge instructions, including the establishment of appropriate
follow-up ambulatory care. Our list of PPR conditions is categorized by
3 clinical rationale groupings:
Inadequate management of chronic conditions;
Inadequate management of infections; and
Inadequate management of other unplanned events.
Additional details regarding the definition for potentially
preventable readmissions are available in the document titled, Proposed
Measure Specifications for Measures Proposed in the FY 2017 IRF QRP
proposed rule, available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/IRF-Quality-Reporting/IRF-Quality-Reporting-Program-Measures-Information-.html.
This proposed measure focuses on readmissions that are potentially
preventable and also unplanned. Similar to the All-Cause Unplanned
Readmission Measure for 30 Days Post-Discharge from IRFs (NQF #2502),
this proposed measure uses the current version of the CMS Planned
Readmission Algorithm as the main component for identifying planned
readmissions. A complete description of the CMS Planned Readmission
Algorithm, which includes lists of planned diagnoses and procedures,
can be found on the CMS Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html. In addition to the CMS
Planned Readmission Algorithm, this proposed measure incorporates
procedures that are considered planned in post-acute care settings, as
identified in consultation with TEPs. Full details on the planned
readmissions criteria used, including the CMS Planned Readmission
Algorithm and additional procedures considered planned for post-acute
care, can be found in the document titled, Proposed Measure
Specifications for Measures Proposed in the FY 2017 IRF QRP proposed
rule, available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/IRF-Quality-Reporting/IRF-Quality-Reporting-Program-Measures-Information-.html.
The proposed measure, Potentially Preventable 30-Day Post-Discharge
Readmission Measure for IRF QRP, assesses potentially preventable
readmission rates while accounting for patient demographics, principal
diagnosis in the prior hospital stay, comorbidities, and other patient
factors. While estimating the predictive power of patient
characteristics, the model also estimates a facility-specific effect,
common to patients treated in each facility. This proposed measure is
calculated for each IRF based on the ratio of the predicted number of
risk-adjusted, unplanned, potentially preventable hospital readmissions
that occur within 30 days after an IRF discharge, including the
estimated facility effect, to the estimated predicted number of risk-
adjusted, unplanned inpatient hospital readmissions for the same
patients treated at the average IRF. A ratio above 1.0 indicates a
higher than expected readmission rate (worse) while a ratio below 1.0
indicates a lower than expected readmission rate (better). This ratio
is referred to as the standardized risk ratio (SRR). The SRR is then
multiplied by the overall national raw rate of potentially preventable
readmissions for all IRF stays. The resulting rate is the risk-
standardized readmission rate (RSRR) of potentially preventable
readmissions.
An eligible IRF stay is followed until: (1) The 30-day post-
discharge period ends; or (2) the patient is readmitted to an acute
care hospital (IPPS or CAH) or LTCH. If the readmission is unplanned
and potentially preventable, it is counted as a readmission in the
measure calculation. If the readmission is planned, the readmission is
not counted in the measure rate.
This measure is risk adjusted. The risk adjustment modeling
estimates the effects of patient characteristics, comorbidities, and
select health care variables on the probability of readmission. More
specifically, the risk-adjustment model for IRFs accounts for
demographic characteristics (age, sex, original reason for Medicare
entitlement), principal diagnosis during the prior proximal hospital
stay, body system specific surgical indicators, IRF case-mix groups
which capture motor function, comorbidities, and number of acute care
hospitalizations in the preceding 365 days.
The proposed measure is calculated using 2 consecutive calendar
years of FFS claims data, to ensure the statistical reliability of this
measure for facilities. In addition, we are proposing a minimum of 25
eligible stays for public reporting of the proposed measure.
A TEP convened by our measure contractor provided recommendations
on the technical specifications of this proposed measure, including the
development of an approach to define potentially preventable hospital
readmission for PAC. Details from the TEP meetings, including TEP
members' ratings of conditions proposed as being potentially
preventable, are available in the TEP summary report available on the
CMS Web site at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html. We also
solicited stakeholder feedback on the development of this measure
through a public comment period held from November 2 through December
1, 2015. Comments on the measure varied, with some commenters
supportive of the proposed measure, while others either were not in
favor of the measure, or suggested potential modifications to the
measure specifications, such as including standardized function data. A
summary of the public comments is also available on the CMS Web site
at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
The MAP encouraged continued development of the proposed measure.
Specifically, the MAP stressed the need to promote shared
accountability and ensure effective care transitions. More information
about the MAP's recommendations for this measure is available at:
https://www.qualityforum.org/Publications/2016/02/MAP_2016_Considerations_for_Implementing_Measures_in_Federal_Programs_-_PAC-LTC.aspx. At the time, the risk-adjustment model was still under
development. Following completion of that development work, we were
able to test for measure validity and reliability as identified in the
measure specifications document provided above. Testing results are
within range for similar outcome measures finalized in public reporting
and value-based purchasing programs, including the All-Cause Unplanned
Readmission Measure for 30 Days Post

[[Page 24206]]

Discharge from IRFs (NQF #2502) adopted into the IRF QRP.
We reviewed the NQF's consensus endorsed measures and were unable
to identify any NQF-endorsed measures focused on potentially
preventable hospital readmissions. We are unaware of any other measures
for this IMPACT Act domain that have been endorsed or adopted by other
consensus organizations. Therefore, we are proposing the Potentially
Preventable 30-Day Post-Discharge Readmission Measure for IRF QRP,
under the Secretary's authority to specify non-NQF-endorsed measures
under section 1899B(e)(2)(B) of the Act, for the IRF QRP for the FY
2018 payment determination and subsequent years, given the evidence
previously discussed above.
We plan to submit the proposed measure to the NQF for consideration
of endorsement. If this proposed measure is finalized, we intend to
provide initial confidential feedback to providers, prior to public
reporting of this proposed measure, based on 2 calendar years of data
from discharges in CY 2015 and 2016. We intend to publicly report this
proposed measure using data from CY 2016 and 2017.
We are inviting public comment on our proposal to adopt the
measure, Potentially Preventable 30-Day Post-Discharge Readmission
Measure for IRF QRP.
4. Potentially Preventable Within Stay Readmission Measure for
Inpatient Rehabilitation Facilities
In addition to the measure proposed in section VII.F.3. of the
proposed rule, Potentially Preventable 30-Day Post-Discharge
Readmission Measure for IRF QRP, we are proposing the Potentially
Preventable Within Stay Readmission Measure for IRFs for the FY 2018
payment determination and subsequent years. This measure is similar to
the Potentially Preventable 30-Day Post-Discharge Readmission Measure
for IRF QRP; however, the readmission window for this proposed measure
focuses on potentially preventable hospital readmissions that take
place during the IRF stay as opposed to during the 30-day post-
discharge period. The two proposed PPR measures are intended to
function in tandem, covering readmissions during the IRF stay and for
30 days following discharge from the IRF. Our proposal for two PPR
measures for use in the IRF QRP will enable us to assess different
aspects of care and care coordination. The proposed within stay measure
focuses on the care transition into inpatient rehabilitation as well as
the care provided during the IRF stay, whereas the 30-day post-IRF
discharge measure focuses on transitions from the IRF into less-
intensive levels of care or the community.
Similar to the Potentially Preventable 30-Day Post-Discharge
Readmission Measure for IRF QRP proposed measure for IRFs, this measure
assesses the facility-level risk-standardized rate of unplanned,
potentially preventable hospital readmissions during the IRF stay.
Hospital readmissions include readmissions to a short-stay acute-care
hospital or an LTCH, with a diagnosis considered to be unplanned and
potentially preventable. This Medicare FFS measure is claims-based,
requiring no additional data collection or submission burden for IRFs.
As described in section VII.F.3. of this proposed rule, we
developed the approach for defining PPR measure based on a
comprehensive environmental scan, analysis of claims data, and TEP
input. Also, we obtained public comment.
The definition for PPRs differs by readmission window. For the
within-IRF stay window, PPRs should be avoidable with sufficient
medical monitoring and appropriate patient treatment. The list of PPR
conditions for the Potentially Preventable Within Stay Readmission
Measure for IRFs are categorized by 4 clinical rationale groupings:
Inadequate management of chronic conditions;
Inadequate management of infections;
Inadequate management of other unplanned events; and
Inadequate injury prevention.
Additional details regarding the definition for PPRs are available
in our document titled, Proposed Measure Specifications for Measures
Proposed in the FY 2017 IRF QRP proposed rule which can be found at
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/IRF-Quality-Reporting/IRF-Quality-Reporting-Program-Measures-Information-.html.
Refer to section VII.F of this proposed rule for the relevant
background and details that are also relevant for this measure. This
proposed measure defines planned readmissions in the same manner as
described in section VII.F.3 of this proposed rule, for the Potentially
Preventable 30-Day Post-Discharge Readmission Measure for IRF QRP. In
addition, similar to the Potentially Preventable 30-Day Post-Discharge
Readmission Measure for IRF QRP proposed measure, this proposed measure
uses the same risk-adjustment and statistical approach as described in
section VII.F.3 of this proposed rule. Note the full methodology is
detailed in the document titled, Proposed Measure Specifications for
Measures Proposed in the FY 2017 IRF QRP proposed rule, at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/IRF-Quality-Reporting/IRF-Quality-Reporting-Program-Measures-Information-.html. This measure is also based on 2 consecutive
calendar years of Medicare FFS claims data.
A TEP convened by our measure contractor provided recommendations
on the technical specifications of this proposed measure, including the
development of an approach to define potentially preventable hospital
readmission for PAC. Details from the TEP meetings, including TEP
members' ratings of conditions proposed as being potentially
preventable, are available in the TEP Summary Report available on the
CMS Web site at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html. We also
solicited stakeholder feedback on the development of this measure
through a public comment period held from November 2 through December
1, 2015. Comments on this and other PAC measures of PPR measures
varied, with some commenters supportive of the proposed measure, while
others either were not in favor of the measure, or suggested potential
modifications to the measure specifications, such as including
standardized function data. A summary of our public comment period is
also available on the CMS Web site at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
The MAP encouraged continued development of the proposed measure.
Specifically, the MAP stressed the need to promote shared
accountability and ensure effective care transitions. More information
about the MAP's recommendations for this measure is available at:
https://www.qualityforum.org/Publications/2016/02/MAP_2016_Considerations_for_Implementing_Measures_in_Federal_Programs_-_PAC-LTC.aspx. At the time, the risk-adjustment model was still under
development. Following completion of that development work, we were
able to test for measure validity and reliability as described in the
measure specifications document

[[Page 24207]]

provided above. Testing results are within range for similar outcome
measures finalized in public reporting and value-based purchasing
programs, including the All-Cause Unplanned Readmission Measure for 30
Days Post-Discharge from IRFs (NQF #2502) that we previously adopted
into the IRF QRP.
We plan to submit the proposed measure to the NQF for consideration
of endorsement. If this proposed measure is finalized, we intend to
provide initial confidential feedback to providers, prior to public
reporting of this proposed measure, based on 2 calendar years of claims
data from discharges in 2015 and 2016. We propose a minimum of 25
eligible stays in a given IRF for public reporting of the proposed
measure for that IRF. We intend to publicly report this proposed
measure using claims data from calendar years 2016 and 2017.
We are inviting public comment on our proposal to adopt this
measure, Potentially Preventable Within Stay Readmission Measure for
IRFs.

G. IRF QRP Quality Measure Proposed for the FY 2020 Payment
Determination and Subsequent Years

In addition to the measures we are retaining as described in
section VII.E. of this proposed rule under our policy described in
section VII.C. of this proposed rule and the new quality measures
proposed in section VII.F of this proposed rule for the FY 2018 payment
determinations and subsequent years, we are proposing one new quality
measure to meet the requirements of the IMPACT Act for the FY 2020
payment determination and subsequent years. The proposed measure, Drug
Regimen Review Conducted with Follow-Up for Identified Issues--PAC IRF
QRP, addresses the IMPACT Act quality domain of Medication
Reconciliation.
1. Quality Measure Addressing the IMPACT Act Domain of Medication
Reconciliation: Drug Regimen Review Conducted With Follow-Up for
Identified Issues-Post Acute Care IRF QRP
Sections 1899B(a)(2)(E)(i)(III) and 1899B(c)(1)(C) of the Act, as
added by the IMPACT Act, require the Secretary to specify a quality
measure to address the quality domain of medication reconciliation by
October 1, 2018 for IRFs, LTCHs and SNFs by January 1, 2017 for HHAs.
We are proposing to adopt the quality measure, Drug Regimen Review
Conducted with Follow-Up for Identified Issues-PAC IRF QRP, for the IRF
QRP as a patient-assessment based, cross-setting quality measure to
meet the IMPACT Act requirements with data collection beginning October
1, 2018 for the FY 2020 payment determinations and subsequent years.
This proposed measure assesses whether PAC providers were
responsive to potential or actual clinically significant medication
issue(s) when such issues were identified. Specifically, the proposed
quality measure reports the percentage of patient stays in which a drug
regimen review was conducted at the time of admission and timely
follow-up with a physician occurred each time potential clinically
significant medication issues were identified throughout that stay.
For this proposed quality measure, drug regimen review is defined
as the review of all medications or drugs the patient is taking to
identify any potential clinically significant medication issues. The
proposed quality measure utilizes both the processes of medication
reconciliation and a drug regimen review, in the event an actual or
potential medication issue occurred. The proposed measure informs
whether the PAC facility identified and addressed each clinically
significant medication issue and if the facility responded or addressed
the medication issue in a timely manner. Of note, drug regimen review
in PAC settings is generally considered to include medication
reconciliation and review of the patient's drug regimen to identify
potential clinically significant medication issues.\73\ This measure is
applied uniformly across the PAC settings.
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\73\ Institute of Medicine. Preventing Medication Errors.
Washington DC: National Academies Press; 2006.
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Medication reconciliation is a process of reviewing an individual's
complete and current medication list. Medication reconciliation is a
recognized process for reducing the occurrence of medication
discrepancies that may lead to Adverse Drug Events (ADEs).\74\
Medication discrepancies occur when there is conflicting information
documented in the medical records. The World Health Organization
regards medication reconciliation as a standard operating protocol
necessary to reduce the potential for ADEs that cause harm to patients.
Medication reconciliation is an important patient safety process that
addresses medication accuracy during transitions in patient care and in
identifying preventable ADEs.\75\ The Joint Commission added medication
reconciliation to its list of National Patient Safety Goals (2005),
suggesting that medication reconciliation is an integral component of
medication safety.\76\ The Society of Hospital Medicine published a
statement in agreement of the Joint Commission's emphasis and value of
medication reconciliation as a patient safety goal.\77\ There is
universal agreement that medication reconciliation directly addresses
patient safety issues that can result from medication miscommunication
and unavailable or incorrect information.^{78 79 80}
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\74\ Ibid.
\75\ Leotsakos A., et al. Standardization in patient safety: The
WHO High 5s project. Int J Qual Health Care. 2014:26(2):109-116.
\76\ The Joint Commission. 2016 Long Term Care: National Patient
Safety Goals Medicare/Medicaid Certification-based Option.
(NPSG.03.06.01).
\77\ Greenwald, J.L., Halasyamani, L., Greene, J., LaCivita, C.,
et al. (2010). Making inpatient medication reconciliation patient
centered, clinically relevant and implementable: A consensus
statement on key principles and necessary first steps. Journal of
Hospital Medicine, 5(8), 477-485.
\78\ Leotsakos A., et al. Standardization in patient safety: The
WHO High 5s project. Int J Qual Health Care. 2014:26(2):109-116.
\79\ The Joint Commission. 2016 Long Term Care: National Patient
Safety Goals Medicare/Medicaid Certification-based Option.
(NPSG.03.06.01).
\80\ IHI. Medication Reconciliation to Prevent Adverse Drug
Events [Internet]. Cambridge, MA: Institute for Healthcare
Improvement; [cited 2016 Jan 11]. Available from: https://www.ihi.org/topics/adesmedicationreconciliation/Pages/default.aspx.
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The performance of timely medication reconciliation is valuable to
the process of drug regimen review. Preventing and responding to ADEs
is of critical importance as ADEs account for significant increases in
health services utilization and costs ^{81 82 83} including
subsequent emergency room visits and re-hospitalizations.\84\ Annual
health care costs in the United States are estimated at $3.5 billion,
resulting in 7,000 deaths annually.^{85 86}
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\81\ Institute of Medicine. Preventing Medication Errors.
Washington DC: National Academies Press; 2006.
\82\ Jha A.K., Kuperman G.J., Rittenberg E., et al. Identifying
hospital admissions due to adverse drug events using a computer-
based monitor. Pharmacoepidemiol Drug Saf. 2001;10(2):113-119.
\83\ Hohl C.M., Nosyk B., Kuramoto L., et al. Outcomes of
emergency department patients presenting with adverse drug events.
Ann Emerg Med. 2011;58:270-279.
\84\ Kohn L.T., Corrigan J.M., Donaldson M.S. To Err Is Human:
Building a Safer Health System Washington, DC: National Academies
Press; 1999.
\85\ Greenwald, J.L., Halasyamani, L., Greene, J., LaCivita, C.,
et al. (2010). Making inpatient medication reconciliation patient
centered, clinically relevant and implementable: A consensus
statement on key principles and necessary first steps. Journal of
Hospital Medicine, 5(8), 477-485.
\86\ Phillips, David P.; Christenfeld, Nicholas; and Glynn,
Laura M. Increase in US Medication-Error Deaths between 1983 and
1993. The Lancet. 351:643-644, 1998.
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Medication errors include the duplication of medications, delivery
of an incorrect drug, inappropriate drug omissions, or errors in the
dosage, route, frequency, and duration of medications.

[[Page 24208]]

Medication errors are one of the most common types of medical error and
can occur at any point in the process of ordering and delivering a
medication. Medication errors have the potential to result in an
ADE.^{87 88 89 90 91 92} Inappropriately prescribed medications
are also considered a major healthcare concern in the United States for
the elderly population, with costs of roughly $7.2 billion
annually.\93\
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\87\ Institute of Medicine. To err is human: Building a safer
health system. Washington, DC: National Academies Press; 2000.
\88\ Lesar, T.S., Briceland, L., Stein, D.S. Factors related to
errors in medication prescribing. JAMA. 1997:277(4): 312-317.
\89\ Bond, C.A., Raehl, C.L., & Franke, T. Clinical pharmacy
services, hospital pharmacy staffing, and medication errors in
United States hospitals. Pharmacotherapy. 2002:22(2): 134-147.
\90\ Bates, D.W., Cullen D.J., Laird, N., Petersen, L.A., Small,
S.D., et al. Incidence of adverse drug events and potential adverse
drug events. Implications for prevention. JAMA. 1995:274(1): 29-34.
\91\ Barker, K.N., Flynn, E.A., Pepper, G.A., Bates, D.W., &
Mikeal, R.L. Medication errors observed in 36 health care
facilities. JAMA. 2002: 162(16):1897-1903.
\92\ Bates, D.W., Boyle, D.L., Vander, Vliet M.B., Schneider,
J., & Leape, L. Relationship between medication errors and adverse
drug events. J Gen Intern Med. 1995:10(4): 199-205.
\93\ Fu, Alex Z., et al. ``Potentially inappropriate medication
use and healthcare expenditures in the US community-dwelling
elderly.'' Medical care 45.5 (2007): 472-476.
---------------------------------------------------------------------------

There is strong evidence that medication discrepancies occur during
transfers from acute care facilities to post-acute care facilities.
Discrepancies occur when there is conflicting information documented in
the medial records. Almost one-third of medication discrepancies have
the potential to cause patient harm.\94\ An estimated 50 percent of
patients experienced a clinically important medication error after
hospital discharge in an analysis of two tertiary care academic
hospitals.\95\
---------------------------------------------------------------------------

\94\ Wong, Jacqueline D., et al. ``Medication reconciliation at
hospital discharge: Evaluating discrepancies.'' Annals of
Pharmacotherapy 42.10 (2008): 1373-1379.
\95\ Kripalani, S., Roumie, C.L., Dalal, A.K., et al. Effect of
a pharmacist intervention on clinically important medication errors
after hospital discharge: A randomized controlled trial. Ann Intern
Med. 2012:157(1):1-10.
---------------------------------------------------------------------------

Medication reconciliation has been identified as an area for
improvement during transfer from the acute care facility to the
receiving post-acute care facility. PAC facilities report gaps in
medication information between the acute care hospital and the
receiving post-acute-care setting when performing medication
reconciliation.^{96 97} Hospital discharge has been identified
as a particularly high risk time point, with evidence that medication
reconciliation identifies high levels of
discrepancy.^{98 99 100 101 102 103} Also, there is evidence
that medication reconciliation discrepancies occur throughout the
patient stay.^{104 105} For older patients, who may have
multiple comorbid conditions and thus multiple medications, transitions
between acute and post-acute care settings can be further
complicated,\106\ and medication reconciliation and patient knowledge
(medication literacy) can be inadequate post-discharge.\107\ The
proposed quality measure, Drug Regimen Review Conducted with Follow-Up
for Identified Issues--PAC IRF QRP, provides an important component of
care coordination for PAC settings and would affect a large proportion
of the Medicare population who transfer from hospitals into PAC
services each year. For example, in 2013, 1.7 million Medicare FFS
beneficiaries had SNF stays, 338,000 beneficiaries had IRF stays, and
122,000 beneficiaries had LTCH stays.\108\
---------------------------------------------------------------------------

\96\ Gandara, Esteban, et al. ``Communication and information
deficits in patients discharged to rehabilitation facilities: An
evaluation of five acute care hospitals.'' Journal of Hospital
Medicine 4.8 (2009): E28-E33.
\97\ Gandara, Esteban, et al. ``Deficits in discharge
documentation in patients transferred to rehabilitation facilities
on anticoagulation: Results of a system wide evaluation.'' Joint
Commission Journal on Quality and Patient Safety 34.8 (2008): 460-
463.
\98\ Coleman, E.A., Smith, J.D., Raha, D., Min, S.J. Post
hospital medication discrepancies: Prevalence and contributing
factors. Arch Intern Med. 2005 165(16):1842-1847.
\99\ Wong, J.D., Bajcar, J.M., Wong, G.G., et al. Medication
reconciliation at hospital discharge: Evaluating discrepancies. Ann
Pharmacother. 2008 42(10):1373-1379.
\100\ Hawes, E.M., Maxwell, W.D., White, S.F., Mangun, J., Lin,
F.C. Impact of an outpatient pharmacist intervention on medication
discrepancies and health care resource utilization in post
hospitalization care transitions. Journal of Primary Care &
Community Health. 2014; 5(1):14-18.
\101\ Foust, J.B., Naylor, M.D., Bixby, M.B., Ratcliffe, S.J.
Medication problems occurring at hospital discharge among older
adults with heart failure. Research in Gerontological Nursing. 2012,
5(1): 25-33.
\102\ Pherson, E.C., Shermock, K.M., Efird, L.E., et al.
Development and implementation of a post discharge home-based
medication management service. Am J Health Syst Pharm. 2014; 71(18):
1576-1583.
\103\ Pronovosta, P., Weasta, B., Scwarza, M., et al. Medication
reconciliation: A practical tool to reduce the risk of medication
errors. J Crit Care. 2003; 18(4): 201-205.
\104\ Bates, D.W., Cullen, D.J., Laird, N., Petersen, L.A.,
Small SD, et al. Incidence of adverse drug events and potential
adverse drug events. Implications for prevention. JAMA. 1995:274(1):
29-34.
\105\ Himmel, W., M. Tabache, and M.M. Kochen. ``What happens to
long-term medication when general practice patients are referred to
hospital?.'' European journal of clinical pharmacology 50.4 (1996):
253-257.
\106\ Chhabra, P.T., et al. (2012). ``Medication reconciliation
during the transition to and from long-term care settings: A
systematic review.'' Res Social Adm Pharm 8(1): 60-75.
\107\ Kripalani, S., Roumie, C.L., Dalal, A.K., et al. Effect of
a pharmacist intervention on clinically important medication errors
after hospital discharge: A randomized controlled trial. Ann Intern
Med. 2012:157(1):1-10.
\108\ March 2015 Report to the Congress: Medicare Payment
Policy. Medicare Payment Advisory Commission; 2015.
---------------------------------------------------------------------------

A TEP convened by our measure development contractor provided input
on the technical specifications of this proposed quality measure, Drug
Regimen Review Conducted with Follow-Up for Identified Issues--PAC IRF
QRP, including components of reliability, validity, and the feasibility
of implementing the measure across PAC settings. The TEP supported the
measure's implementation across PAC settings and was supportive of our
plans to standardize this measure for cross-setting development. A
summary of the TEP proceedings is available on the PAC Quality
Initiatives Downloads and Video Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
We solicited stakeholder feedback on the development of this
measure by means of a public comment period held from September 18
through October 6, 2015. Through public comments submitted by several
stakeholders and organizations, we received support for implementation
of this proposed measure. The public comment summary report for the
proposed measure is available on the CMS Web site at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
The NQF-convened MAP met on December 14 and 15, 2015, and provided
input on the use of this proposed measure, Drug Regimen Review
Conducted with Follow-Up for Identified Issues--PAC IRF QRP. The MAP
encouraged continued development of the proposed quality measure to
meet the mandate added by the IMPACT Act. The MAP agreed with the
measure gaps identified by CMS, including medication reconciliation,
and stressed that medication reconciliation be present as an ongoing
process. More information about the MAPs recommendations for this
measure is available at: https://www.qualityforum.org/Publications/2016/02/MAP_2016_Considerations_for_Implementing_Measures_in_Federal_Programs_-_PAC-LTC.aspx.

[[Page 24209]]

Since the MAP's review and recommendation of continued development,
we have continued to refine this proposed measure in compliance with
the MAP's recommendations. The proposed measure is both consistent with
the information submitted to the MAP and support its scientific
acceptability for use in quality reporting programs. Therefore, we are
proposing this measure for implementation in the IRF QRP as required by
the IMPACT Act.
We reviewed the NQF's endorsed measures and identified one NQF-
endorsed cross-setting and quality measure related to medication
reconciliation, which applies to the SNF, LTCH, IRF, and HHA settings
of care: Care for Older Adults (COA), (NQF #0553). The quality measure,
Care for Older Adults (COA), (NQF #0553) assesses the percentage of
adults 66 years and older who had a medication review. The Care for
Older Adults (COA), (NQF #0553) measure requires at least one
medication review conducted by a prescribing practitioner or clinical
pharmacist during the measurement year and the presence of a medication
list in the medical record. This is in contrast to the proposed quality
measure, Drug Regimen Review Conducted with Follow-Up for Identified
Issues--PAC IRF QRP, which reports the percentage of patient stays in
which a drug regimen review was conducted at the time of admission and
that timely follow-up with a physician occurred each time one or more
potential clinically significant medication issues were identified
throughout that stay.
After careful review of both quality measures, we have decided to
propose the quality measure, Drug Regimen Review Conducted with Follow-
Up for Identified Issues--PAC IRF QRP for the following reasons:
The IMPACT Act requires the implementation of quality
measures, using patient assessment data that are standardized and
interoperable across PAC settings. The proposed quality measure, Drug
Regimen Review Conducted with Follow-Up for Identified Issues--PAC IRF
QRP, employs three standardized patient-assessment data elements for
each of the four PAC settings so that data are standardized,
interoperable, and comparable; whereas, the Care for Older Adults
(COA), (NQF #0553) quality measure does not contain data elements that
are standardized across all four PAC settings.
The proposed quality measure, Drug Regimen Review
Conducted with Follow-Up for Identified Issues--PAC IRF QRP, requires
the identification of potential clinically significant medication
issues at the beginning, during, and at the end of the patient's stay
to capture data on each patient's complete PAC stay; whereas, the Care
for Older Adults (COA), (NQF #0553) quality measure only requires
annual documentation in the form of a medication list in the medical
record of the target population.
The proposed quality measure, Drug Regimen Review
Conducted with Follow-Up for Identified Issues--PAC IRF QRP, includes
identification of the potential clinically significant medication
issues and communication with the physician (or physician designee) as
well as resolution of the issue(s) within a rapid timeframe (by
midnight of the next calendar day); whereas, the Care for Older Adults
(COA), (NQF #0553) quality measure does not include any follow-up or
timeframe in which the follow-up would need to occur.
The proposed quality measure, Drug Regimen Review
Conducted with Follow-Up for Identified Issues--PAC IRF QRP, does not
have age exclusions; whereas, the Care for Older Adults (COA), (NQF
#0553) quality measure limits the measure's population to patients aged
66 and older.
The proposed quality measure, Drug Regimen Review
Conducted with Follow-Up for Identified Issues--PAC IRF QRP, would be
reported to IRFs quarterly to facilitate internal quality monitoring
and quality improvement in areas such as patient safety, care
coordination, and patient satisfaction; whereas, the Care for Older
Adults (COA), (NQF #0553) quality measure would not enable quarterly
quality updates, and thus data comparisons within and across PAC
providers would be difficult due to the limited data and scope of the
data collected.
Therefore, based on the evidence discussed above, we are proposing
to adopt the quality measure entitled, Drug Regimen Review Conducted
with Follow-Up for Identified Issues--PAC IRF QRP, for the IRF QRP for
FY 2020 payment determination and subsequent years. We plan to submit
the quality measure to the NQF for consideration for endorsement.
The calculation of the proposed quality measure would be based on
the data collection of three standardized items to be included in the
IRF-PAI. The collection of data by means of the standardized items
would be obtained at admission and discharge. For more information
about the data submission required for this proposed measure, we refer
readers to section VII.I.c of this proposed rule.
The standardized items used to calculate this proposed quality
measure do not duplicate existing items currently used for data
collection within the IRF-PAI. The proposed measure denominator is the
number of patient stays with a discharge assessment during the
reporting period. The proposed measure numerator is the number of stays
in the denominator where the medical record contains documentation of a
drug regimen review conducted at: (1) Admission and (2) discharge with
a lookback through the entire patient stay with all potential
clinically significant medication issues identified during the course
of care and followed up with a physician or physician designee by
midnight of the next calendar day. This measure is not risk adjusted.
For technical information about this proposed measure, including
information about the measure calculation and discussion pertaining to
the standardized items used to calculate this measure, we refer readers
to the document titled, Proposed Measure Specifications for Measures
Proposed in the FY 2017 IRF QRP proposed rule available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/IRF-Quality-Reporting/IRF-Quality-Reporting-Program-Measures-Information-.html.
Data for the proposed quality measure, Drug Regimen Review
Conducted with Follow-Up for Identified Issues--PAC IRF QRP, would be
collected using the IRF-PAI with submission through the Quality
Improvement Evaluation System (QIES) Assessment Submission and
Processing (ASAP) system.
We invite public comment on our proposal to adopt the quality
measure, Drug Regimen Review Conducted with Follow-Up for Identified
Issues--PAC IRF QRP for the IRF QRP.

H. IRF QRP Quality Measures and Measure Concepts Under Consideration
for Future Years

We invite comment on the importance, relevance, appropriateness,
and applicability of each of the quality measures listed in Table 8 for
future years in the IRF QRP. We are developing a measure related to the
IMPACT Act domain, ``Accurately communicating the existence of and
providing for the transfer of health information and care preferences
of an individual to the individual, family caregiver of the individual,
and providers of services furnishing items and services to the
individual, when the individual transitions.'' We are considering the

[[Page 24210]]

possibility of adding quality measures that rely on the patient's
perspective; that is, measures that include patient-reported experience
of care and health status data. We recently posted a ``Request for
Information to Aid in the Design and Development of a Survey Regarding
Patient and Family Member Experiences with Care Received in Inpatient
Rehabilitation Facilities'' (80 FR 72725 through 72727). Also, we are
considering a measure focused on pain that relies on the collection of
patient-reported pain data. Finally, we are considering a measure
related to patient safety, Venous Thromboembolism Prophylaxis.

Table 8--IRF QRP Quality Measures Under Consideration for Future Years
------------------------------------------------------------------------

------------------------------------------------------------------------
IMPACT Act Domain................. Accurately communicating the
existence of and providing for the
transfer of health information and
care preferences of an individual
to the individual, family caregiver
of the individual, and providers of
services furnishing items and
services to the individual, when
the individual transitions.
IMPACT Act Measure................ Transfer of health
information and care preferences
when an individual transitions.
NQS Priority...................... Patient- and Caregiver-Centered
Care.
Measures.......................... Patient Experience of
Care.
Percent of Patients with
Moderate to Severe Pain.
NQS Priority...................... Patient Safety.
Measure........................... Venous Thromboembolism
Prophylaxis.
------------------------------------------------------------------------

I. Proposed Form, Manner, and Timing of Quality Data Submission for the
FY 2018 Payment Determination and Subsequent Years

1. Background
Section 1886(j)(7)(C) of the Act requires that, for the FY 2014
payment determination and subsequent years, each IRF submit to the
Secretary data on quality measures specified by the Secretary. In
addition, section 1886(j)(7)(F) of the Act requires that, for the
fiscal year beginning on the specified application date, as defined in
section 1899B(a)(2)(E) of the Act, and each subsequent year, each IRF
submit to the Secretary data on measures specified by the Secretary
under section 1899B of the Act. The data required under section
1886(j)(7)(C) and (F) of the Act must be submitted in a form and
manner, and at a time, specified by the Secretary. As required by
section 1886(j)(7)(A)(i) of the Act, for any IRF that does not submit
data in accordance with section 1886(j)(7)(C) and (F) of the Act for a
given fiscal year, the annual increase factor for payments for
discharges occurring during the fiscal year must be reduced by 2
percentage points.
a. Timeline for Data Submission Under the IRF QRP for the FY 2018, FY
2019 and Subsequent Year Payment Determinations
Tables 9 through 17 represent our finalized data collection and
data submission quarterly reporting periods, as well as the quarterly
review and correction periods and submission deadlines for the quality
measure data submitted via the IRF-PAI and the CDC/NHSN affecting the
FY 2018 and subsequent year payment determinations. We also provide in
Table 17 our previously finalized claims-based measures for FY 2018 and
subsequent years, although we note that, for claims-based measures,
there is no corresponding quarterly-based data collection or submission
reporting periods with quarterly-based review and correction deadline
periods.
Further, in the FY 2016 IRF PPS final rule (80 FR 47122 through
47123), we established that the IRF-PAI-based measures finalized for
adoption into the IRF QRP would transition from reporting based on the
fiscal year to an annual schedule consistent with the calendar year,
with quarterly reporting periods followed by quarterly review and
correction periods and submission deadlines, unless there is a clinical
reason for an alternative data collection time frame. The pattern for
annual, calendar year-based data reporting, in which we use 4 quarters
of data, is illustrated in Table 9 and is in place for all Annual
Payment Update (APU) years except for the measure in Table 10 for which
the FY 2018 APU determination will be based on 5 calendar year quarters
in order to transition this measure from FY to CY reporting. We also
wish to clarify that payment determinations for the measures finalized
for use in the IRF QRP that use the IRF-PAI or CDC NHSN data sources
will subsequently use the quarterly data collection/submission and
review, correction and submission deadlines described in Table 9 unless
otherwise specified, as is with the measure NQF #0680: Percent of
Residents or Patients Who Were Assessed and Appropriately Given the
Seasonal Influenza Vaccine. For this measure, we clarify in a
subsequent discussion that the data collection and reporting periods
span two consecutive years from July 1 through June 30th and we
therefore separately illustrate those collection/submission quarterly
reporting periods and review and correction periods and submission
deadlines for FY 2019 and subsequent years in Table 15. We also
separately distinguish the reporting periods and data submission
timeframes for the finalized measure Influenza Vaccination Coverage
among Healthcare Personnel which spans two consecutive years in Table
16.

Table 9--Annual QRP CY IRF-PAI & CDC/NHSN Data Collection/Submission Reporting Periods and Data Submission/
Correction Deadlines ** Payment Determinations [supcaret]
----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
Proposed CY data collection quarter Data collection/ QRP quarterly review and correction periods data
submission quarterly submission deadlines for payment determination
reporting period **
----------------------------------------------------------------------------------------------------------------
Quarter 1.......................... January 1-March 31 *.... April 1-August 15 *..... Deadline: August 15.*
Quarter 2.......................... April 1-June 30......... July 1-November 15...... Deadline: November 15.
Quarter 3.......................... July 1-September 30..... October 1-February 15... Deadline: February 15.
Quarter 4.......................... October 1-December 31 *. January 1-May 15 *...... Deadline: May 15.*
----------------------------------------------------------------------------------------------------------------
* We refer readers to Table 16 for the annual data collection time frame for the measure, Influenza Vaccination
Coverage among Healthcare Personnel.

[[Page 24211]]

** We note that the submission of IRF-PAI data must also adhere to the IRF PPS deadlines.
[supcaret] We refer readers to Table 15 for the 12 month (July-June) data collection/submission quarterly
reporting periods, review and correction periods and submission deadlines for APU determinations for the
measure NQF #0680: Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal
Influenza Vaccine.

Table 10--Summary Details on Data Collection Period and Data Submission Timeline for Previously Adopted Quality
Measure Affecting the FY 2018 Payment Determination That Will Use 5 CY Quarters in Order To Transition From a FY
to a CY Reporting Cycle
----------------------------------------------------------------------------------------------------------------
Quarterly review and
Data collection/ correction periods data
Submission method submission quarterly submission deadlines APU determination
reporting period(s) for payment affected
determination * * *
----------------------------------------------------------------------------------------------------------------
Finalized Measure:
NQF #0678 Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short
Stay) (80 FR 47122)
----------------------------------------------------------------------------------------------------------------
IRF-PAI/QIES ASAP System............. CY 15 Q4--10/1/15-12/31/ 1/1/2016-5/15/16 FY 2018.
15. deadline.
CY 16 Q1--1/1/16-3/31/ 4/1/2016-8/15/16
16. deadline.
CY 16 Q2--4/1/16-6/30/ 7/1/16-11/15/16
16. deadline.
CY 16 Q3--7/1/16-9/30/ 10/1/16-2/15/17
16. deadline.
CY 16 Q4--10/01/16-12/ 1/1/17-5/15/17 deadline
31/16.
----------------------------------------------------------------------------------------------------------------
* We refer readers to the Table 9 for an illustration of the data collection/submission quarterly reporting
periods and correction and submission deadlines.
** We note that the submission of IRF-PAI data must also adhere to the IRF PPS deadlines.

Table 11--Summary Details on Data Collection Period and Data Submission Timeline for Previously Adopted IRF-PAI
Quality Measure, NQF #0680 Percent of Residents or Patients Who Were Assessed and Appropriately Given the
Seasonal Influenza Vaccine, Affecting the FY 2018 Payment Determination
----------------------------------------------------------------------------------------------------------------
Quarterly review and
Data collection/ correction periods data
Submission method submission quarterly submission deadlines APU determination
reporting period(s) for payment affected
determination *
----------------------------------------------------------------------------------------------------------------
Finalized Measure:
NQF #0680 Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal
Influenza Vaccine (80 FR 47122)
----------------------------------------------------------------------------------------------------------------
IRF-PAI/QIES ASAP System............. CY 15 Q4--10/1/15-12/31/ 1/1/2016-5/15/16 FY 2018.
15. deadline.
CY 16 Q1--1/1/16-3/31/ 4/1/2016-8/15/16
16. deadline.
CY 16 Q2--4/1/16-6/30/ 7/1/16-11/15/16
16. deadline.
----------------------------------------------------------------------------------------------------------------
* We note that the submission of IRF-PAI data must also adhere to the IRF PPS deadlines.

Table 12--Summary Details on Data Collection Period and Data Submission Timeline for Previously Adopted Quality
Measures Affecting the FY 2018 Payment Determination That Will Use Only 1 CY Quarter of Data Initially for the
Purpose of Determining Provider Compliance
----------------------------------------------------------------------------------------------------------------
Quarterly review and
Data collection/ correction periods data
Submission method submission quarterly submission deadlines APU determination
reporting period(s) for payment affected
determination * * *
----------------------------------------------------------------------------------------------------------------
Finalized Measure:
NQF #0674 Application of Percent of Residents Experiencing One or More Falls with Major Injury (Long
Stay) (80 FR 47122)
NQF #2631 Application of Percent of Long-Term Care Hospital Patients with an Admission and Discharge
Functional Assessment and a Care Plan That Addresses Function (80 FR 47122)
NQF #2633 IRF Functional Outcome Measure: Change in Self-Care Score for Medical Rehabilitation
Patients (80 FR 47122)
NQF #2634 IRF Functional Outcome Measure: Change in Mobility Score for Medical Rehabilitation
Patients (80 FR 47122)
NQF #2635 IRF Functional Outcome Measure: Discharge Self-Care Score for Medical Rehabilitation
Patients (80 FR 47122)
NQF #2636 IRF Functional Outcome Measure: Discharge Mobility Score for Medical Rehabilitation
Patients (80 FR 47122)
----------------------------------------------------------------------------------------------------------------
IRF-PAI/QIES ASAP System............. CY 16 Q4--10/1/16-12/31/ 1/1/2017-5/15/17....... FY 2018.
16.
----------------------------------------------------------------------------------------------------------------
* We refer readers to the Table 9 for an illustration of the data collection/submission quarterly reporting
periods and correction and submission deadlines, which will be followed for the above measures, for all
payment determinations subsequent to that of FY 2018.
** We note that the submission of IRF-PAI data must also adhere to the IRF PPS deadlines.

Table 13--Summary Details on Data Collection Period and Data Submission Timeline for Previously Adopted CDC/NHSN
Quality Measures Affecting the FY 2018 Payment Determination and Subsequent Years That Will Use 4 CY Quarters *
----------------------------------------------------------------------------------------------------------------
Quarterly review and
Data collection/ correction periods data
Submission method submission quarterly submission deadlines APU determination
reporting period(s) for payment affected
determination
----------------------------------------------------------------------------------------------------------------
Finalized Measure:

[[Page 24212]]

NQF #0138 NHSN Catheter-Associated Urinary Tract Infection (CAUTI) Outcome Measure (80 FR 47122
through 47123)
NQF #1716 NHSN Facility-wide Inpatient Hospital-onset Methicillin-resistant Staphylococcus aureus
(MRSA) Bacteremia Outcome Measure (80 FR 47122 through 47123)
NQF #1717 NHSN Facility-wide Inpatient Hospital-onset Clostridium difficile Infection (CDI) Outcome
Measure (79 FR 45917)
----------------------------------------------------------------------------------------------------------------
CDC/NHSN............................. CY 16 Q1--1/1/16-3/31/ 4/1/2016-8/15/16 ** and FY 2018 and subsequent
16 and Q1 of 4/1-8/15 of subsequent years.**
subsequent Calendar years.
Years.
CY 16 Q2--4/1/16-6/30/ 7/1/16-11/15/16 **nand
16 and Q2 of 7/1-11/15 of
subsequent Calendar subsequent years.
Years.
CY 16 Q3--7/1/16-9/30/ 10/1/16-2/15/17 ** and
16 and Q3 of 10/1-2/15 of
subsequent Calendar subsequent years.
Years.
CY 16 Q4--10/1/16-12/31/ 1/1/17-5/15/17 ** and 1/
16 and Q4 of 1-5/15 of subsequent
subsequent Calendar years.
Years.
----------------------------------------------------------------------------------------------------------------
* We refer readers to the Table 9 for an illustration of the data collection/submission quarterly reporting
periods and correction and submission deadlines.
** As is illustrated in Table 9: Subsequent years follow the same CY Quarterly Data Collection/submission
Quarterly Reporting Periods and Quarterly Review and Correction Periods Deadlines for Payment Determination in
which every CY quarter is followed by approximately 135 days for IRFs to review and correct their data until
midnight on the final submission deadline dates.

Table 14--Summary Details on Data Collection Period and Data Submission Timeline for Previously Adopted IRF-PAI
Quality Measures Affecting the FY 2019 Payment Determination and Subsequent Years That Will Use 4 CY Quarters
----------------------------------------------------------------------------------------------------------------
Quarterly review and
Data collection/ correction periods data
Submission method submission quarterly submission deadlines APU determination
reporting period(s) for payment affected
determination * * *
----------------------------------------------------------------------------------------------------------------
Finalized Measure:
NQF #0678 Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short
Stay) (80 FR 47122)
NQF #0674 Application of Percent of Residents Experiencing One or More Falls with Major Injury (Long
Stay) (80 FR 47122)
NQF #2631 Application of Percent of Long-Term Care Hospital Patients with an Admission and Discharge
Functional Assessment and a Care Plan That Addresses Function (80 FR 47122)
NQF #2633 IRF Functional Outcome Measure: Change in Self-Care Score for Medical Rehabilitation
Patients (80 FR 47122)
NQF #2634 IRF Functional Outcome Measure: Change in Mobility Score for Medical Rehabilitation
Patients (80 FR 47122)
NQF #2635 IRF Functional Outcome Measure: Discharge Self-Care Score for Medical Rehabilitation
Patients (80 FR 47122)
NQF #2636 IRF Functional Outcome Measure: Discharge Mobility Score for Medical Rehabilitation
Patients (80 FR 47122)
----------------------------------------------------------------------------------------------------------------
IRF-PAI/QIES ASAP System............. CY 17 Q1--1/1/17-3/31/ 4/1/2017-8/15/17 *** FY 2019 and subsequent
17 and Q1 of and 4/1-8/15 of years.***
subsequent Calendar subsequent years.
Years.
CY 17 Q2--4/1/17-6/30/ 7/1/17-11/15/17 *** and
17 and Q2 of 7/1-11/15 of
subsequent Calendar subsequent years.
Years.
CY 17 Q3--7/1/17-9/30/ 10/1/17-2/15/18 *** and
17 and Q3 of 10/1-1/15 of
subsequent Calendar subsequent years.
Years.
CY 17 Q4--10/1/17-12/31/ 1/1/18-5/15/18 *** and
17 and Q4 of 1/1-5/15 of subsequent
subsequent Calendar years.
Years.
----------------------------------------------------------------------------------------------------------------
* We refer readers to the Table 9 for an illustration of the data collection/submission quarterly reporting
periods and correction and submission deadlines.
** We note that the submission of IRF-PAI data must also adhere to the IRF PPS deadlines.
*** As is illustrated in Table 9: Subsequent years follow the same CY Quarterly Data Collection/submission
Quarterly Reporting Periods and Quarterly Review and Correction Periods) and Data Submission Deadlines for
Payment Determination in which every CY quarter is followed by approximately 135 days for IRFs to review and
correct their data until midnight on the final submission deadline dates.

In the FY 2014 IRF PPS final rule, we adopted the Percent of
Residents or Patients Who Were Assessed and Appropriately Given the
Seasonal Influenza Vaccine (Short Stay) (NQF #0680) measure for the FY
2017 payment determination and subsequent years (78 FR 47910 through
47911). In the FY 2014 IRF PPS final rule (78 FR 47917 through 47919),
we finalized the data submission timelines and submission deadlines for
the measures for FY 2017 payment determination. Refer to the FY 2014
final rule for a more detailed discussion of these timelines and
deadlines.
We would like to clarify that this measure includes all patients in
the IRF one or more days during the influenza vaccination season (IVS)
(October 1 of any given CY through March 31 of the subsequent CY). This
includes, for example, a patient is admitted September 15, 2015, and
discharged April 1, 2016 (thus, the patient was in the IRF during the
2015-2016 influenza vaccination season). If a patient's stay did not
include one or more days in the IRF during the IVS, IRFs must also
complete the influenza items. For example, if a patient was admitted
after April 1, 2016, and discharged September 30, 2016, and the patient
did not receive the influenza vaccine during the IVS, IRFs should code
the reason the patient did not receive the influenza

[[Page 24213]]

vaccination as ``patient was not in the facility during this year's
influenza vaccination season.''
Further, we wish to clarify that the data submission timeline for
this measure includes 4 calendar quarters and is based on the influenza
season (July 1 through June 30 of the subsequent year), rather than on
the calendar year. For the purposes of APU determination and for public
reporting, data calculation and analysis uses data from an influenza
vaccination season that is within the influenza season itself. While
the influenza vaccination season is October 1 of a given year (or when
the vaccine becomes available) through March 31 of the subsequent year,
this timeframe rests within a greater time period of the influenza
season which spans 12 months--that is July 1 of a given year through
June 30 of the subsequent year. Thus for this measure, we utilize data
from a timeframe of 12 months that mirrors the influenza season which
is July 1 of a given year through June 30th of the subsequent year.
Additionally, for the APU determination, we review data that has been
submitted beginning on July 1 of the calendar year 2 years prior to the
calendar year of the APU effective date and ending June 30 of the
subsequent calendar year, one year prior to the calendar year of the
APU effective date. For example, and as provided in Table 15 for the FY
2019 (October 1, 2018) APU determination, we review data submission
beginning July 1 of 2016 through June 30th of June 2017 for the 2016/
2017 influenza vaccination season, so as to capture all data that an
IRF will have submitted with regard to the 2016/2017 Influenza season
itself. We will use assessment data for that time period as well for
public reporting. Further, because we enable the opportunity to review
and correct data for all assessment based IRF-PAI measures within the
IRF QRP, we continue to follow quarterly calendar data collection/
submission quarterly reporting period(s) and their subsequent quarterly
review and correction periods with data submission deadlines for public
reporting and payment determinations. However, rather than using CY
timeframe, these quarterly data collection/submission periods and their
subsequent quarterly review and correction periods and submission
deadlines begin with CY quarter 3, July 1, of a given year and end June
30th, CY quarter 2, of the following year. For further information on
data collection for this measure, please refer to section 4 of the IRF-
PAI training manual, which is available on the CMS IRF QRP Measures
Information Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/IRF-Quality-Reporting/IRF-Quality-Reporting-Program-Measures-Information-.html, under the
downloads section. For further information on data submission of the
IRF-PAI, please refer to the IRF-PAI Data Specifications Version 1.12.1
(FINAL)--in effect on October 1, 2015, available for download at
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientRehabFacPPS/Software.html.
Refer to Table 15 for details about the quarterly data collection/
submission and the review and correction deadlines for FY 2019 and
subsequent years for NQF #0680 Percent of Residents or Patients Who
Were Assessed and Appropriately Given the Seasonal Influenza Vaccine.

Table 15--Summary Details on Data Collection Period and Data Submission Timeline for Previously Adopted IRF-PAI
Quality Measure, NQF #0680 Percent of Residents or Patients Who Were Assessed and Appropriately Given the
Seasonal Influenza Vaccine, Affecting the FY 2019 Payment Determination and Subsequent Years *
----------------------------------------------------------------------------------------------------------------
Quarterly review and
Data collection/ correction periods data
Submission method submission quarterly submission deadlines APU determination
reporting period(s) for payment affected
determination **
----------------------------------------------------------------------------------------------------------------
Finalized Measure:
NQF #0680 Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal
Influenza Vaccine (80 FR 47122)
----------------------------------------------------------------------------------------------------------------
IRF-PAI/QIES ASAP System............. CY 16 Q3--7/1/16-9/30/ 10/1/16-2/15/17 ** and FY 2019 and subsequent
16 and Q3 of 10/1-2/15 of years.**
subsequent Calendar subsequent years.
Years.
CY 16 Q4--10/1/16-12/31/ 1/1/17-5/15/17 ** and 1/
16 and Q4 of 1-5/15 of subsequent
subsequent Calendar years.
Years.
CY 17 Q1--1/1/17-3/31/ 4/1/17-8/15/17 ** and 4/
17 and Q1 of 1-8/15 of subsequent
subsequent Calendar years.
Years.
CY 17 Q2--4/1/17-6/30/ 7/1/17-11/15/17 ** and
17 and Q2 of 7/1-11/15 of
subsequent Calendar subsequent years.
Years.
----------------------------------------------------------------------------------------------------------------
* We note that the submission of IRF-PAI data must also adhere to the IRF PPS deadlines.
** As is illustrated in Table 9: Subsequent years follow the same CY Quarterly Data Collection/submission
Quarterly Reporting Periods and Quarterly Review and Correction Periods (IRF-PAI) and Data Submission (CDC/
NHSN) Deadlines for Payment Determination in which every CY quarter is followed by approximately 135 days for
IRFs to review and correct their data until midnight on the final submission deadline dates.

We finalized in the FY 2014 IRF PPS final rule (78 FR 47905 through
47906) that for FY 2018 and subsequent years IRFs would submit data on
the quality measure Influenza Vaccination Coverage among Healthcare
Personnel (NQF #0431) beginning with data submission starting October
1, 2015. To clarify that while the data collected by IRFs for this
measure includes vaccination information for a flu vaccination season
that begins October 1 (or when the vaccine becomes available) of a
given year through March 31 of the subsequent year, the CDC/NHSN system
only allows for the submission of the corresponding data any time
between October 1 of a given year until March 31 of the subsequent
year; however, corrections can be made to such data until May 15th of
that year. Quality data for this measure are only required to be
submitted once per IVS (Oct 1 through March 31), but must be submitted
prior to the May 15 deadline for the year in which the IVS ends;
quarterly reporting is not required. For example, for FY 2018 payment
determinations, while IRFs can begin immunizing their staff when the
vaccine is available throughout the influenza vaccine season which ends
on March 31, 2016, IRFs can only begin submitting the data for this
measure via the CDC/NHSN system starting on October 1, 2015, and may do
so up until May 15 of 2016.

[[Page 24214]]

TABLE 16--Summary Details on the Data Submission Timeline and Correction Deadline Timeline For the Previously
Adopted Influenza Vaccination Coverage Among Healthcare Personnel Affecting CY 2018 and Subsequent Years
----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
Influenza vaccination coverage among Data submission period Review and correction periods data submission
healthcare personnel data submission (CDC/NHSN) deadlines for payment
quarters+ determination++
----------------------------------------------------------------------------------------------------------------
CY QTR 4 through Subsequent CY QTR 1. 10/1/15-3/31/16 and 10/ 4/1/16-5/15/16 and 4/1- Deadline: May 15, 2016
1-3/31 of subsequent 5/15 of subsequent and May 15 of
years. years. subsequent years.
----------------------------------------------------------------------------------------------------------------
+ Data on this measure may be submitted via the CDC/NHSN system from October 1 of a given year through May 15 of
the subsequent year.
++ A time period of April 1-May 15th is also allotted for the submission, review, and corrections.

TABLE 17--Finalized IRF QRP Claims-Based Measure Affecting FY 2018 and
Subsequent Years
------------------------------------------------------------------------
Data submission
Quality measure method Performance period
------------------------------------------------------------------------
NQF #2502 All-Cause Unplanned Medicare FFS CY 2013 and 2014
Readmission Measure for 30 Days Claims. for public
Post-Discharge from Inpatient reporting in
Rehabilitation Facilities (80 2016.
FR 47087 through 47089). CY 2014 and 2015
for public
reporting in
2017.
------------------------------------------------------------------------

b. Proposed Timeline and Data Submission Mechanisms for the FY 2018
Payment Determination and Subsequent Years for the Proposed IRF QRP
Resource Use and Other Measures Claims-Based Measures
The MSPB PAC IRF QRP measure; Discharge to Community PAC IRF QRP
measure; Potentially Preventable 30-Day Post-Discharge Readmission
Measure for IRF QRP, and Potentially Preventable Within Stay
Readmission Measure for IRFs, which we have proposed in this proposed
rule, are Medicare FFS claims-based measures. Because claims-based
measures can be calculated based on data that are already reported to
the Medicare program for payment purposes, no additional information
collection will be required from IRFs. As discussed in section VII.F of
this proposed rule, these measures will use 2 years of claims-based
data beginning with CY 2015 and CY 2016 claims to inform confidential
feedback reports for IRFs, and CYs 2016 and 2017 claims data for public
reporting,
We invite public comments on this proposal.
c. Proposed Timeline and Data Submission Mechanisms for the IRF QRP
Quality Measure for the FY 2020 Payment Determination and Subsequent
Years
As discussed in section VII.F of this proposed rule, we propose
that the data for the proposed quality measure, Drug Regimen Review
Conducted with Follow-Up for Identified Issues--PAC IRF QRP, affecting
FY 2020 payment determination and subsequent years, be collected by
completing data elements that would be added to the IRF-PAI with
submission through the QIES-ASAP system. Data collection would begin on
October 1, 2018. More information on IRF reporting using the QIES-ASAP
system is located at the Web site at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientRehabFacPPS/IRFPAI.html.
For the FY 2020 payment determinations, we propose to collect CY
2018 4th quarter data, that is beginning with discharges on October 1,
2018, through discharges on December 31, 2018, to remain consistent
with the usual October release schedule for the IRF-PAI, to give IRFs
sufficient time to update their systems so that they can comply with
the new data reporting requirements, and to give us sufficient time to
determine compliance for the FY 2020 program. The proposed use of 1
quarter of data for the initial year of assessment data reporting in
the IRF QRP is consistent with the approach we used previously for the
SNF, LTCH, and Hospice QRPs.
Table 18 presents the proposed data collection period and data
submission timelines for the new proposed IRF QRP Quality Measure for
the FY 2020 Payment Determination. We invite public comments on this
proposal.

TABLE 18--Details on the Proposed Data Collection Period and Data Submission Timeline for Resource Use and Other
Measures Affecting the FY 2020 Payment Determination
----------------------------------------------------------------------------------------------------------------
Data collection Data correction APU determination
Quality measure Submission method period deadlines* affected
----------------------------------------------------------------------------------------------------------------
Drug Regimen Review Conducted IRF-PAI/QIES ASAP. CY 2018 Q4 10/1/18- 5/15/19 Quarterly FY 2020.
with Follow-Up for Identified 12/31/18; approximately 135
Issues PAC IRF QRP. Quarterly for days after the
each subsequent end of each
calendar year. quarter for
subsequent years.
----------------------------------------------------------------------------------------------------------------
* We note that the submission of IRF-PAI data must also adhere to the IRF PPS deadlines.

Following the close of the reporting quarter, October 1, 2018,
through December 31, 2018, for the FY 2020 payment determination, IRFs
would have the already established additional 4.5 months to correct
their quality data and that the final deadline for correcting data for
the FY 2020 payment determination would be May 15, 2019 for these
measures. We further propose that for the FY 2021 payment determination
and subsequent years, we will collect data using the calendar year
reporting cycle as described in section VII.I.c of this proposed rule,
and illustrated in Table 19. We invite public comments on this
proposal.

[[Page 24215]]

TABLE 19--Proposed Data Collection Period and Data Correction Deadlines* Affecting the FY 2021 Payment
Determination and Subsequent Years
----------------------------------------------------------------------------------------------------------------
Proposed quarterly
review and data
Proposed CY data Proposed data correction periods
Quality measure Submission method collection quarter collection period * deadlines for
payment
determination
----------------------------------------------------------------------------------------------------------------
Drug Regimen Review Conducted IRF-PAI/QIES ASAP. Quarter 1......... January 1- March April 1- August
with Follow-Up for Identified 31. 15.
Issues PAC IRF QRP.
Quarter 2......... April 1-June 30... July 1-November
15.
Quarter 3......... July 1- September October 1-
30. February 15.
Quarter 4......... October 1- January 1- May 15.
December 31.
----------------------------------------------------------------------------------------------------------------
* We note that the submission of IRF-PAI data must also adhere to the IRF PPS deadlines

J. IRF QRP Data Completion Thresholds for the FY 2016 Payment
Determination and Subsequent Years

In the FY 2015 IRF PPS final rule (79 FR 45921 through 45923), we
finalized IRF QRP thresholds for completeness of IRF data submissions.
To ensure that IRFs are meeting an acceptable standard for completeness
of submitted data, we finalized the policy that, beginning with the FY
2016 payment determination and for each subsequent year, IRFs must meet
or exceed two separate data completeness thresholds: One threshold set
at 95 percent for completion of quality measures data collected using
the IRF-PAI submitted through the QIES and a second threshold set at
100 percent for quality measures data collected and submitted using the
CDC NHSN.
Additionally, we stated that we will apply the same thresholds to
all measures adopted as the IRF QRP expands and IRFs begin reporting
data on previously finalized measure sets. That is, as we finalize new
measures through the regulatory process, IRFs will be held accountable
for meeting the previously finalized data completion threshold
requirements for each measure until such time that updated threshold
requirements are proposed and finalized through a subsequent regulatory
cycle.
Further, we finalized the requirement that an IRF must meet or
exceed both thresholds to avoid receiving a 2 percentage point
reduction to their annual payment update for a given fiscal year,
beginning with FY 2016 and for all subsequent payment updates. For a
detailed discussion of the finalized IRF QRP data completion
requirements, please refer to the FY 2015 IRF PPS final rule (79 FR
45921 through 45923). We propose to codify the IRF QRP Data Completion
Thresholds at Sec. 412.634. We invite public comments on this
proposal.

K. IRF QRP Data Validation Process for the FY 2016 Payment
Determination and Subsequent Years

Validation is intended to provide added assurance of the accuracy
of the data that will be reported to the public as required by sections
1886(j)(7)(E) and 1899B(g) of the Act. In the FY 2015 IRF PPS rule (79
FR 45923), we finalized, for the FY 2016 adjustments to the IRF PPS
annual increase factor and subsequent years, a process to validate the
data submitted for quality purposes. However, in the FY 2016 IRF PPS
final rule (80 FR 47124), we finalized our decision to temporarily
suspend the implementation of this policy. We are not proposing a data
validation policy at this time, as we are developing a policy that
could be applied to several PAC QRPs. We intend to propose a data
validation policy through future rulemaking.

L. Previously Adopted and Codified IRF QRP Submission Exception and
Extension Policies

Refer to Sec. 412.634 for requirements pertaining to submission
exception and extension for the FY 2017 payment determination and
subsequent years. At this time, we are proposing to revise Sec.
412.634 to change the timing for submission of these exception and
extension requests from 30 days to 90 days from the date of the
qualifying event which is preventing an IRF from submitting their
quality data for the IRF QRP. We are proposing the increased time
allotted for the submission of the requests from 30 to 90 days to be
consistent with other quality reporting programs; for example, the
Hospital Inpatient Quality Reporting (IQR) Program is also proposing to
extend the deadline to 90 days in section VIII.A.15.a. of the FY 2017
IPPS/LTCH PPS proposed rule published elsewhere in this issue of the
Federal Register. We believe that this increased time will assist
providers experiencing an event in having the time needed to submit
such a request. We believe that allowing only 30 days was insufficient.
With the exception of this one change, we are not proposing any
additional changes to the exception and extension policies for the IRF
QRP at this time.
We invite public comments on the proposal to revise Sec. 412.634
to change the timing for submission of these exception and extension
requests from 30 days to 90 days from the date of the qualifying event
which is preventing an IRF from submitting their quality data for the
IRF QRP.

M. Previously Adopted and Finalized IRF QRP Reconsideration and Appeals
Procedures

Refer to Sec. 412.634 for a summary of our finalized
reconsideration and appeals procedures for the IRF QRP for FY 2017
payment determination and subsequent years. We are not proposing any
changes to this policy. However, we wish to clarify that in order to
notify IRFs found to be non-compliant with the reporting requirements
set forth for a given payment determination, we may include the QIES
mechanism in addition to US Mail, and we may elect to utilize the MACs
to administer such notifications.

N. Public Display of Measure Data for the IRF QRP & Procedures for the
Opportunity To Review and Correct Data and Information

1. Public Display of Measures
Section 1886(j)(7)(E) of the Act requires the Secretary to
establish procedures for making the IRF QRP data

[[Page 24216]]

available to the public. In the FY 2016 IRF PPS final rule (80 FR 47126
through 47127), we finalized our proposals to display performance data
for the IRF QRP quality measures by Fall 2016 on a CMS Web site, such
as the Hospital Compare, after a 30-day preview period, and to give
providers an opportunity to review and correct data submitted to the
QIES-ASAP system or to the CDC NHSN. The procedures for the opportunity
to review and correct data are provided in the following section. In
addition, we finalized the proposal to publish a list of IRFs that
successfully meet the reporting requirements for the applicable payment
determination on the IRF QRP Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/IRF-Quality-Reporting/Spotlights-Announcements.html. In the FY 2016 IRF PPS final
rule, we finalized that we would update the list after the
reconsideration requests are processed on an annual basis.
Also, in the FY 2016 IRF PPS final rule (80 FR 47126 through
47127), we also finalized that the display of information for fall 2016
contains performance data on three quality measures:
Percent of Residents or Patients with Pressure Ulcers That
Are New or Worsened (Short Stay) (NQF #0678);
NHSN CAUTI Outcome Measure (NQF #0138); and
All-Cause Unplanned Readmission Measure for 30 Days Post-
Discharge from IRFs (NQF #2502).
The measures Percent of Residents or Patients with Pressure Ulcers
That Are New or Worsened (Short Stay) (NQF #0678) and NHSN CAUTI
Outcome Measure (NQF #0138) are based on data collected beginning with
the first quarter of 2015 or discharges beginning on January 1, 2015.
With the exception of the All-Cause Unplanned Readmission Measure for
30 Days Post-Discharge from IRFs (NQF #2502), rates are displayed based
on 4 rolling quarters of data and would initially use discharges from
January 1, 2015, through December 31, 2015 (CY 2015) for Percent of
Residents or Patients with Pressure Ulcers That Are New or Worsened
(Short Stay) (NQF #0678) and data collected from January 1, 2015,
through December 31, 2015 (CY 2015) for NHSN CAUTI Outcome Measure (NQF
#0138). For the readmissions measure, data will be publicly report
beginning with data collected for discharges beginning January 1, 2013,
and rates would be displayed based on 2 consecutive years of data. For
IRFs with fewer than 25 eligible cases, we propose to assign the IRF to
a separate category: ``The number of cases is too small (fewer than 25)
to reliably tell how well the IRF is performing.'' If an IRF has fewer
than 25 eligible cases, the IRF's readmission rates and interval
estimates will not be publicly reported for the measure.
Calculations for all three measures are discussed in detail in the
FY 2016 IRF PPS final rule (80 FR 47126 through 47127).
Pending the availability of data, we are proposing to publicly
report data in CY 2017 on 4 additional measures beginning with data
collected on these measures for the first quarter of 2015, or
discharges beginning on January 1, 2015: (1) Facility-wide Inpatient
Hospital-onset Methicillin-resistant Staphylococcus aureus (MRSA)
Bacteremia Outcome Measure (NQF #1716) ; (2) Facility-wide Inpatient
Hospital-onset Clostridium difficile Infection (CDI) Outcome Measure
(NQF #1717) and, beginning with the 2015-16 influenza vaccination
season, these two measures; (3) Influenza Vaccination Coverage Among
Healthcare Personnel (NQF #0431); and (4) Percent of Residents or
Patients Who Were Assessed and Appropriately Given the Seasonal
Influenza Vaccine (NQF #0680).
Standardized infection ratios (SIRs) for the Facility-wide
Inpatient Hospital-onset Methicillin-resistant Staphylococcus aureus
(MRSA) Bacteremia Outcome Measure (NQF #1716) and Facility-wide
Inpatient Hospital-onset Clostridium difficile Infection (CDI) Outcome
Measure (NQF #1717) would be displayed based on 4 rolling quarters of
data and would initially use MRSA bacteremia and CDI events that
occurred from January 1, 2015 through December 31, 2015 (CY 2015), for
calculations. We are proposing that the display of these ratios would
be updated quarterly.
Rates for the Influenza Vaccination Coverage Among Healthcare
Personnel (NQF #0431) would be displayed for personnel working in the
reporting facility October 1, 2015 through March 31, 2016. Rates for
the Percent of Residents or Patients Who Were Assessed and
Appropriately Given the Seasonal Influenza Vaccine (NQF #0680) would be
displayed for patients in the IRF during the influenza vaccination
season, from October 1, 2015, through March 31, 2016. We are proposing
that the display of these rates would be updated annually for
subsequent influenza vaccination seasons.
Calculations for the MRSA and CDI Healthcare Associated Infection
(HAI) measures adjust for differences in the characteristics of
hospitals and patients using a SIR. The SIR is a summary measure that
takes into account differences in the types of patients that a hospital
treats. For a more detailed discussion of the SIR, please refer to the
FY 2016 IRF PPS final rule (80 FR 47126 through 47127). The MRSA and
CDI SIRs may take into account the laboratory methods, bed size of the
hospital, and other facility-level factors. It compares the actual
number of HAIs in a facility or state to a national benchmark based on
previous years of reported data and adjusts the data based on several
factors. A confidence interval with a lower and upper limit is
displayed around each SIR to indicate that there is a high degree of
confidence that the true value of the SIR lies within that interval. A
SIR with a lower limit that is greater than 1.0 means that there were
more HAIs in a facility or state than were predicted, and the facility
is classified as ``Worse than the U.S. National Benchmark.'' If the SIR
has an upper limit that is less than 1, the facility had fewer HAIs
than were predicted and is classified as ``Better than the U.S.
National Benchmark.'' If the confidence interval includes the value of
1, there is no statistical difference between the actual number of HAIs
and the number predicted, and the facility is classified as ``No
Different than U.S. National Benchmark.'' If the number of predicted
infections is less than 1.0, the SIR and confidence interval are not
calculated by CDC.
Calculations for the Influenza Vaccination Coverage Among
Healthcare Personnel (NQF #0431) are based on reported numbers of
personnel who received an influenza vaccine at the reporting facility
or who provided written documentation of influenza vaccination outside
the reporting facility. The sum of these two numbers is divided by the
total number of personnel working at the facility for at least 1 day
from October 1 through March 31 of the following year, and the result
is multiplied by 100 to produce a compliance percentage (vaccination
coverage). No risk adjustment is applicable to these calculations. More
information on these calculations and measure specifications is
available at https://www.cdc.gov/nhsn/pdfs/hps-manual/vaccination/4-hcp-vaccination-module.pdf. We propose that this data will be displayed on
an annual basis and will include data submitted by IRFs for a specific,
annual influenza vaccination season. A single compliance (vaccination
coverage) percentage for all eligible healthcare personnel will be
displayed for each facility.

[[Page 24217]]

We are inviting public comment on our proposal to begin publicly
reporting in CY 2017 pending the availability of data on Facility-wide
Inpatient Hospital-onset Methicillin-resistant Staphylococcus aureus
(MRSA) Bacteremia Outcome Measure (NQF #1716); Facility-wide Inpatient
Hospital-onset Clostridium difficile Infection (CDI) Outcome Measure
(NQF #1716); and Influenza Vaccination Coverage Among Healthcare
Personnel (NQF #0431).
For the Percent of Residents or Patients Who Were Assessed and
Appropriately Given the Seasonal Influenza Vaccine (Short Stay) (NQF
#0680), we propose to display rates annually based on the influenza
season to avoid reporting for more than one influenza vaccination
within a CY. For example, in 2017 we would display rates for the
patient vaccination measure based on discharges starting on July 1,
2015, to June 30, 2016. This is proposed because it includes the entire
influenza vaccination season (October 1, 2015, to March 31, 2016).
Calculations for Percent of Residents or Patients Who Were Assessed
and Appropriately Given the Seasonal Influenza Vaccine (Short Stay)
(NQF #0680) will be based on patients meeting any one of the following
criteria: Patients who received the influenza vaccine during the
influenza season, patients who were offered and declined the influenza
vaccine, and patients who were ineligible for the influenza vaccine due
to contraindication(s). The facility's summary observed score will be
calculated by combining the observed counts of all the criteria. This
is consistent with the publicly reported patient influenza vaccination
measure for Nursing Home Compare. Additionally, for the patient
influenza measure, we will exclude IRFs with fewer than 20 stays in the
measure denominator. For additional information on the specifications
for this measure, please refer to the IRF Quality Reporting Measures
Information Web page at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/IRF-Quality-Reporting/IRF-Quality-Reporting-Program-Measures-Information-.html.
We invite public comments on our proposal to begin publicly
reporting the Percent of Residents or Patients Who Were Assessed and
Appropriately Given the Seasonal Influenza Vaccine (Short Stay) (NQF
#0680) measure on discharges from July 1st of the previous calendar
year to June 30th of the current calendar year. We invite comments on
the public display of the measure Percent of Residents or Patients Who
Were Assessed and Appropriately Given the Seasonal Influenza Vaccine
(NQF #0680) in 2017 pending the availability of data.
Additionally, we are requesting public comments on whether to
include, in the future, public display comparison rates based on CMS
regions or US census regions for Percent of Residents or Patients with
Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678); All-
Cause Unplanned Readmission Measure for 30 Days Post-Discharge from
IRFs (NQF #2502); and Percent of Residents or Patients Who Were
Assessed and Appropriately Given the Seasonal Influenza Vaccine (Short
Stay) (NQF #0680) for CY 2017 public display.
2. Procedures for the Opportunity To Review and Correct Data and
Information
Section 1899B(g) of the Act requires the Secretary to establish
procedures for public reporting of IRFs' performance, including the
performance of individual IRFs, on quality measures specified under
section 1899B(c)(1) of the Act and resource use and other measures
specified under section 1899B(d)(1) of the Act (collectively, IMPACT
Act measures) beginning not later than 2 years after the applicable
specified application date under section 1899B(a)(2)(E) of the Act.
Under section 1899B(g)(2) of the Act, the procedures must ensure,
including through a process consistent with the process applied under
section 1886(b)(3)(B)(viii)(VII) of the Act, which refers to public
display and review requirements in the Hospital IQR Program, that each
IRF has the opportunity to review and submit corrections to its data
and information that are to be made public prior to the information
being made public.
In the FY 2016 IRF PPS final rule (80 FR 47126 through 47128), and
as illustrated in Table 9 in section VII.I.a of this proposed rule, we
finalized that once the provider has an opportunity to review and
correct quarterly data related to measures submitted via the QIES-ASAP
system or CDC NHSN, we would consider the provider to have been given
the opportunity to review and correct this data. We wish to clarify
that although the correction of data (including claims) can occur after
the submission deadline, if such corrections are made after a
particular quarter's submission and correction deadline, such
corrections will not be captured in the file that contains data for
calculation of measures for public reporting purposes. To have publicly
displayed performance data that is based on accurate underlying data,
it will be necessary for IRFs to review and correct this data before
the quarterly submission and correction deadline.
In this proposed rule, we are restating and proposing additional
details surrounding procedures that would allow individual IRFs to
review and correct their data and information on measures that are to
be made public before those measure data are made public.
For assessment-based measures, we propose a process by which we
would provide each IRF with a confidential feedback report that would
allow the IRF to review its performance on such measures and, during a
review and correction period, to review and correct the data the IRF
submitted to CMS via the CMS QIES-ASAP system for each such measure. In
addition, during the review and correction period, the IRF would be
able to request correction of any errors in the assessment-based
measure rate calculations.
We propose that these confidential feedback reports would be
available to each IRF using the CASPER system. We refer to these
reports as the IRF Quality Measure (QM) Reports. We propose to provide
monthly updates to the data contained in these reports as data become
available. We propose to provide the reports so that providers would be
able to view their data and information at both the facility and
patient level for its quality measures. The CASPER facility level QM
Reports may contain information such as the numerator, denominator,
facility rate, and national rate. The CASPER patient-level QM Reports
may contain individual patient information which will provide
information related to which patients were included in the quality
measures to identify any potential errors for those measures in which
we receive patient-level data. Currently, we do not receive patient-
level data on the CDC measure data received via the NHSN system. In
addition, we would make other reports available in the CASPER system,
such as IRF-PAI assessment data submission reports and provider
validation reports, which would disclose the IRFs data submission
status providing details on all items submitted for a selected
assessment and the status of records submitted. We refer providers to
the CDC/NHSN system Web site for information on obtaining reports
specific to NHSN submitted data at https://www.cdc.gov/nhsn/inpatient-rehab/. Additional information regarding the content and
availability of these confidential

[[Page 24218]]

feedback reports would be provided on an ongoing basis on our Web
site(s) at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/IRF-Quality-Reporting/.
As previously finalized in the FY 2016 IRF PPS final rule and
illustrated in Table 10 in section VII.I.c of this proposed rule, IRFs
would have approximately 4.5 months after the reporting quarter to
correct any errors of their assessment-based data (that appear on the
CASPER generated QM reports) and NHSN data used to calculate the
measures. During the time of data submission for a given quarterly
reporting period and up until the quarterly submission deadline, IRFs
could review and perform corrections to errors in the assessment data
used to calculate the measures and could request correction of measure
calculations. However, as already established, once the quarterly
submission deadline occurs, the data is ``frozen'' and calculated for
public reporting and providers can no longer submit any corrections. We
would encourage IRFs to submit timely assessment data during a given
quarterly reporting period and review their data and information early
during the review and correction period so that they can identify
errors and resubmit data before the data submission deadline.
As noted above, the assessment data would be populated into the
confidential feedback reports, and we intend to update the reports
monthly with all data that have been submitted and are available. We
believe that the data collection/submission quarterly reporting periods
plus 4.5 months to review correct and review the data is sufficient
time for IRFs to submit, review and, where necessary, correct their
data and information. These time frames and deadlines for review and
correction of such measures and data satisfy the statutory requirement
that IRFs be provided the opportunity to review and correct their data
and information and are consistent with the informal process hospitals
follow in the Hospital IQR Program.
In FY 2016 IRF PPS final rule (80 FR 47126 through 47128), we
finalized the data submission/correction and review period. Also, we
afford IRFs a 30-day preview period prior to public display during
which IRFs may preview the performance information on their measures
that will be made public. We would like to clarify that we will provide
the preview report using the CASPER system, with which IRFs are
familiar. The CASPER preview reports inform providers of their
performance on each measure which will be publicly reported. Please
note that the CASPER preview reports for the reporting quarter will be
available after the 4.5 month correction period and the applicable data
submission/correction deadline have passed and are refreshed on a
quarterly basis for those measures publicly reported quarterly, and
annually for those measure publicly reported annually. We propose to
give IRFs 30 days to review the preview report beginning from the date
on which they can access the report. As already finalized, corrections
to the underlying data would not be permitted during this time;
however, IRFs may ask for a correction to their measure calculations
during the 30-day preview period. We are proposing that if it
determines that the measure, as it is displayed in the preview report,
contains a calculation error, we could suppress the data on the public
reporting Web site, recalculate the measure and publish it at the time
of the next scheduled public display date. This process would be
consistent with informal processes used in the Hospital IQR Program. If
finalized, we intend to utilize a subregulatory mechanism, such as our
IRF QRP Web site, to provide more information about the preview
reports, such as when they will be made available and explain the
process for how and when providers may ask for a correction to their
measure calculations. We invite public comment on these proposals to
provide preview reports using the CASPER system, giving IRFs 30 days
review the preview report and ask for a correction, and to use a
subregulatory mechanism to explain the process for how and when
providers may ask for a correction.
In addition to assessment-based measures and CDC measure data
received via the NHSN system, we have also proposed claims-based
measures for the IRF QRP. The claims-based measures include those
proposed to meet the requirements of the IMPACT Act as well as the All-
Cause Unplanned Readmission Measure for 30 Days Post-Discharge from
IRFs (NQF #2502) which was finalized for public display in the FY 2016
IRF PPS final rule (80 FR 47126 through 47127). As noted in section
VII.N.2., section 1899B(g)(2) of the Act requires prepublication
provider review and correction procedures that are consistent with
those followed in the Hospital IQR Program. Under the Hospital IQR
Program's informal procedures, for claims-based measures, we provide
hospitals 30 days to preview their claims-based measures and data in a
preview report containing aggregate hospital-level data. We propose to
adopt a similar process for the IRF QRP.
Prior to the public display of our claims-based measures, in
alignment with the Hospital IQR, HAC and Hospital VBP Programs, we
propose to make available through the CASPER system, a confidential
preview report that will contain information pertaining to claims-based
measure rate calculations, for example, facility and national rates.
The data and information would be for feedback purposes only and could
not be corrected. This information would be accompanied by additional
confidential information based on the most recent administrative data
available at the time we extract the claims data for purposes of
calculating the measures. Because the claims-based measures are
recalculated on an annual basis, these confidential CASPER QM reports
for claims-based measures will be refreshed annually. As previously
finalized in the FY 2016 IRF PPS final rule (80 FR 47126 through
47128), IRFs would have 30 days from the date the preview report is
made available in which to review this information. The 30-day preview
period is the only time when IRFs would be able to see claims-based
measures before they are publicly displayed. IRFs would not be able to
make corrections to underlying claims data during this preview period,
nor would they be able to add new claims to the data extract. However,
IRFs may request that we correct our measure calculation if the IRF
believes it is incorrect during the 30 day preview period. We propose
that if we agree that the measure, as it is displayed in the preview
report, contains a calculation error, we could suppress the data on the
public reporting Web site, recalculate the measure, and publish it at
the time of the next scheduled public display date. This process would
be consistent with informal policies followed in the Hospital IQR
Program. If finalized, we intend to utilize a subregulatory mechanism,
such as our IRF QRP Web site, to explain the process for how and when
providers may contest their measure calculations.
The proposed claims-based measures--The MSPB-PAC IRF QRP measure;
Discharge to Community--PAC, Potentially Preventable 30-Day Post-
Discharge Readmission Measure for IRF QRP, and Potentially Preventable
Within Stay Readmission Measure for IRFs--use Medicare administrative
data from hospitalizations for Medicare FFS beneficiaries. Public
reporting of data will be based on 2 consecutive calendar years of
data, which is consistent with the specifications of the proposed
measures. We propose to create data

[[Page 24219]]

extracts using claims data for the proposed claims-based measures--The
MSPB-PAC IRF QRP measure; Discharge to Community--PAC, Potentially
Preventable 30-Day Post-Discharge Readmission Measure for IRF QRP, and
Potentially Preventable Within Stay Readmission Measure for IRFs--at
least 90 days after the last discharge date in the applicable period,
which we will use for the calculations. For example, if the last
discharge date in the applicable period for a measure is December 31,
2017, for data collection January 1, 2016, through December 31, 2017,
we would create the data extract on approximately March 31, 2018, at
the earliest, and use that data to calculate the claims-based measures
for that applicable period. Since IRFs would not be able to submit
corrections to the underlying claims snapshot nor add claims (for
measures that use IRF claims) to this data set at the conclusion of the
at least the 90-day period following the last date of discharge used in
the applicable period, at that time we would consider IRF claims data
to be complete for purposes of calculating the claims-based measures.
We propose that beginning with data that will be publicly displayed
in 2018, claims-based measures will be calculated using claims data at
least 90 days after the last discharge date in the applicable period,
at which time we would create a data extract or snapshot of the
available claims data to use for the measures calculation. This
timeframe allows us to balance the need to provide timely program
information to IRFs with the need to calculate the claims-based
measures using as complete a data set as possible. As noted, under this
proposed procedure, during the 30-day preview period, IRFs would not be
able to submit corrections to the underlying claims data or to add new
claims to the data extract. This is for two reasons: First, for certain
measures, the claims data used to calculate the measure is derived not
from the IRF's claims, but from the claims of another provider. For
example, the proposed measure Potentially Preventable 30-Day Post-
Discharge Readmission Measure for IRF QRP uses claims data submitted by
the hospital to which the patient was readmitted. The claims are not
those of the IRF and, therefore, the IRF could not make corrections to
them. Second, even where the claims used to calculate the measures are
those of the IRF, it would not be not possible to correct the data
after it is extracted for the measures calculation. This is because it
is necessary to take a static ``snapshot'' of the claims in order to
perform the necessary measure calculations.
We seek to have as complete a data set as possible. We recognize
that the proposed at least 90-day ``run-out'' period when we would take
the data extract to calculate the claims-based measures is less than
the Medicare program's current timely claims filing policy under which
providers have up to 1 year from the date of discharge to submit
claims. We considered a number of factors in determining that the
proposed at least 90-day run-out period is appropriate to calculate the
claims-based measures. After the data extract is created, it takes
several months to incorporate other data needed for the calculations
(particularly in the case of risk-adjusted or episode-based measures).
We then need to generate and check the calculations. Because several
months lead time is necessary after acquiring the data to generate the
claims-based calculations, if we were to delay our data extraction
point to 12 months after the last date of the last discharge in the
applicable period, we would not be able to deliver the calculations to
IRFs sooner than 18 to 24 months after the last discharge. We believe
this would create an unacceptably long delay both for IRFs and for us
to deliver timely calculations to IRFs for quality improvement.
We invite public comment on these proposals.

O. Mechanism for Providing Feedback Reports to IRFs

Section 1899B(f) of the Act requires the Secretary to provide
confidential feedback reports to post-acute care providers on their
performance to the measures specified under section 1899B(c)(1) and
(d)(1) of the Act, beginning 1 year after the specified application
date that applies to such measures and PAC providers. As discussed
earlier, the reports we proposed to provide for use by IRFs to review
their data and information would be confidential feedback reports that
would enable IRFs to review their performance on the measures required
under the IRF QRP. We propose that these confidential feedback reports
would be available to each IRF using the CASPER system. Data contained
within these CASPER reports would be updated as previously described,
on a monthly basis as the data become available except for our claims-
based measures, which are only updated on an annual basis.
We intend to provide detailed procedures to IRFs on how to obtain
their confidential feedback CASPER reports on the IRF QRP Web site at
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/IRF-Quality-Reporting/. We propose to use the CMS
QIES-ASAP system to provide quality measure reports in a manner
consistent with how providers obtain various reports to date. The QIES-
ASAP system is a confidential and secure system with access granted to
providers, or their designees.
We seek public comment on this proposal to satisfy the requirement
to provide confidential feedback reports to IRFs.

P. Proposed Method for Applying the Reduction to the FY 2017 IRF
Increase Factor for IRFs That Fail To Meet the Quality Reporting
Requirements

As previously noted, section 1886(j)(7)(A)(i) of the Act requires
the application of a 2-percentage point reduction of the applicable
market basket increase factor for IRFs that fail to comply with the
quality data submission requirements. In compliance with section
1886(j)(7)(A)(i) of the Act, we will apply a 2-percentage point
reduction to the applicable FY 2017 market basket increase factor (1.45
percent) in calculating a proposed adjusted FY 2017 standard payment
conversion factor to apply to payments for only those IRFs that failed
to comply with the data submission requirements. As previously noted,
application of the 2-percentage point reduction may result in an update
that is less than 0.0 for a fiscal year and in payment rates for a
fiscal year being less than such payment rates for the preceding fiscal
year. Also, reporting-based reductions to the market basket increase
factor will not be cumulative; they will only apply for the FY
involved. Table 13 shows the calculation of the proposed adjusted FY
2017 standard payment conversion factor that will be used to compute
IRF PPS payment rates for any IRF that failed to meet the quality
reporting requirements for the applicable reporting period(s).

[[Page 24220]]

Table 20--Calculations To Determine the Proposed Adjusted FY 2017
Standard Payment Conversion Factor for IRFs That Failed To Meet the
Quality Reporting Requirement
------------------------------------------------------------------------
Explanation for adjustment Calculations
------------------------------------------------------------------------
Standard Payment Conversion Factor for FY $15,478
2016.
Market Basket Increase Factor for FY 2017 x 0.9945
(2.7 percent), reduced by 0.5 percentage
point for the productivity adjustment as
required by section 1886(j)(3)(C)(ii)(I)
of the Act, reduced by 0.75 percentage
point in accordance with sections
1886(j)(3)(C) and (D) of the Act and
further reduced by 2 percentage points
for IRFs that failed to meet the quality
reporting requirement.
Budget Neutrality Factor for the Wage x 0.9992
Index and Labor-Related Share.
Budget Neutrality Factor for the Revisions x 0.9990
to the CMG Relative Weights.
Proposed Adjusted FY 2017 Standard Payment = $15,365
Conversion Factor.
------------------------------------------------------------------------

We invite public comment on the proposed method for applying the
reduction to the FY 2017 IRF increase factor for IRFs that fail to meet
the quality reporting requirements.

VIII. Collection of Information Requirements

A. Statutory Requirement for Solicitation of Comments

Under the Paperwork Reduction Act of 1995 (PRA), we are required to
provide 60-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the OMB for review and approval. To fairly evaluate whether an
information collection should be approved by OMB, section 3506(c)(2)(A)
of the PRA 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 estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
This proposed rule makes reference to associated information
collections that are not discussed in the regulation text contained in
this document.

B. Collection of Information Requirements for Updates Related to the
IRF QRP

Failure to submit data required under section 1886(j)(7)(C) and (F)
of the Act will result in the reduction of the annual update to the
standard federal rate for discharges occurring during such fiscal year
by 2 percentage points for any IRF that does not comply with the
requirements established by the Secretary. At the time that this
analysis was prepared, 91, or approximately 8 percent, of the 1166
active Medicare-certified IRFs did not receive the full annual
percentage increase for the FY 2015 annual payment update
determination. Information is not available to determine the precise
number of IRFs that will not meet the requirements to receive the full
annual percentage increase for the FY 2017 payment determination.
We believe that the burden associated with the IRF QRP is the time
and effort associated with data collection and reporting. As of
February 1, 2016 there are approximately 1131 IRFs currently reporting
quality data to CMS. In this proposed rule, we are proposing 5
measures. For the FY 2018 payment determinations and subsequent years,
we are proposing four new measures: (1) MSPB-PAC IRF QRP; (2) Discharge
to Community-PAC IRF QRP, and (3) Potentially Preventable 30-Day Post-
Discharge Readmission Measure for IRF QRP; (4) Potentially Preventable
30-Day Within Stay Readmission Measure for IRF QRP. These four measures
are Medicare claims-based measures; because claims-based measures can
be calculated based on data that are already reported to the Medicare
program for payment purposes, we believe there will be no additional
impact.
For the FY 2020 payment determination and subsequent years, we are
proposing one measure: Drug Regimen Review Conducted with Follow-Up for
Identified Issues--PAC IRF QRP. Additionally we propose that data for
this new measure will be collected and reported using the IRF-PAI
(version effective October 1, 2018).
Our burden calculations take into account all ``new'' items
required on the IRF-PAI (version effective October 1, 2018) to support
data collection and reporting for this proposed measure. The addition
of the new items required to collect the newly proposed measure is for
the purpose of achieving standardization of data elements.
We estimate the additional elements for the newly proposed Drug
Regimen Review Conducted with Follow-Up for Identified Issues--PAC IRF
QRP measure will take 6 minutes of nursing/clinical staff time to
report data on admission and 4 minutes of nursing/clinical staff time
to report data on discharge, for a total of 10 minutes. We estimate
that the additional IRF-PAI items we are proposing will be completed by
Registered Nurses (RN) for approximately 75 percent of the time
required, and Pharmacists for approximately 25 percent of the time
required. Individual providers determine the staffing resources
necessary. In accordance with OMB control number 0938-0842, we estimate
398,254 discharges from all IRFs annually, with an additional burden of
10 minutes. This would equate to 66,375.67 total hours or 58.69 hours
per IRF. We believe this work will be completed by RNs (75 percent) and
Pharmacists (25 percent). We obtained mean hourly wages for these staff
from the U.S. Bureau of Labor Statistics' May 2014 National
Occupational Employment and Wage Estimates (https://www.bls.gov/oes/current/oes_nat.htm), and to account for overhead and fringe benefits,
we have doubled the mean hourly wage. Per the U.S. Bureau of Labor and
Statistics, the mean hourly wage for a RN is $33.55. However, to
account for overhead and fringe benefits, we have doubled the mean
hourly wage, making it $67.10 for an RN. Per the U.S. Bureau of Labor
and Statistics, the mean hourly wage for a pharmacist is $56.98.
However, to account for overhead and fringe benefits, we have doubled
the mean hourly wage, making it $113.96 for a pharmacist. Given these
wages and time estimates, the total cost related to the newly proposed
measures is estimated at $4,625.46 per IRF annually, or $5,231,398.17
for all IRFs annually.
For the quality reporting during extraordinary circumstances,
section VII.M of this proposed rule proposes to add a previously
finalized process that IRFs may request an exception or extension from
the FY 2019 payment determination and that of subsequent payment
determinations. The request must be submitted by email within 90

[[Page 24221]]

days from the date that the extraordinary circumstances occurred.
While the preparation and submission of the request is an
information collection, unlike the aforementioned temporary exemption
of the data collection requirements for the new drug regimen review
measure, the request is not expected to be submitted to OMB for formal
review and approval since we estimate less than two requests (total)
per year. Since we estimate fewer than 10 respondents annually, the
information collection requirement and associated burden is not subject
as stated in 5 CFR 1320.3(c) of the implementing regulations of the
Paperwork Reduction Act of 1995.
As discussed in section VII.N of this proposed rule, this rule
proposes to add a previously finalized process that will enable IRFs to
request reconsiderations of our initial non-compliance decision in the
event that it believes that it was incorrectly identified as being
subject to the 2-percentage point reduction to its annual increase
factor due to non-compliance with the IRF QRP reporting requirements.
While there is burden associated with filing a reconsideration request,
5 CFR 1320.4 of OMB's implementing regulations for PRA excludes
activities during the conduct of administrative actions such as
reconsiderations.
If you comment on these information collection and recordkeeping
requirements, please submit your comments electronically as specified
in the ADDRESSES section of this proposed rule.

IX. Response to Public Comments

Because of the large number of public comments we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the DATES section of this preamble,
and, when we proceed with a subsequent document, we will respond to the
comments in the preamble to that document.

X. Regulatory Impact Analysis

A. Statement of Need

This proposed rule updates the IRF prospective payment rates for FY
2017 as required under section 1886(j)(3)(C) of the Act. It responds to
section 1886(j)(5) of the Act, which requires the Secretary to publish
in the Federal Register on or before the August 1 that precedes the
start of each fiscal year, the classification and weighting factors for
the IRF PPS's case-mix groups and a description of the methodology and
data used in computing the prospective payment rates for that fiscal
year.
This proposed rule also implements sections 1886(j)(3)(C) and (D)
of the Act. Section 1886(j)(3)(C)(ii)(I) of the Act requires the
Secretary to apply a multi-factor productivity adjustment to the market
basket increase factor, and to apply other adjustments as defined by
the Act. The productivity adjustment applies to FYs from 2012 forward.
The other adjustments apply to FYs 2010 through 2019.
Furthermore, this proposed rule also adopts policy changes under
the statutory discretion afforded to the Secretary under section
1886(j)(7) of the Act. Specifically, we propose to revise and update
the quality measures and reporting requirements under the IRF quality
reporting program.

B. Overall Impacts

We have examined the impacts of this proposed rule as required by
Executive Order 12866 (September 30, 1993, Regulatory Planning and
Review), Executive Order 13563 on Improving Regulation and Regulatory
Review (January 18, 2011), the Regulatory Flexibility Act (September
19, 1980, Pub. L. 96-354) (RFA), section 1102(b) of the Act, section
202 of the Unfunded Mandates Reform Act of 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). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. A regulatory impact analysis (RIA) must be prepared for a
major final rule with economically significant effects ($100 million or
more in any 1 year). We estimate the total impact of the policy updates
described in this proposed rule by comparing the estimated payments in
FY 2017 with those in FY 2016. This analysis results in an estimated
$125 million increase for FY 2017 IRF PPS payments. As a result, this
proposed rule is designated as economically ``significant'' under
section 3(f)(1) of Executive Order 12866, and hence a major rule under
the Congressional Review Act. Also, the rule has been reviewed by OMB.
The Regulatory Flexibility Act (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 IRFs and most
other providers and suppliers are small entities, either by having
revenues of $7.5 million to $38.5 million or less in any 1 year
depending on industry classification, or by being nonprofit
organizations that are not dominant in their markets. (For details, see
the Small Business Administration's final rule that set forth size
standards for health care industries, at 65 FR 69432 at https://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf,
effective March 26, 2012 and updated on February 26, 2016.) Because we
lack data on individual hospital receipts, we cannot determine the
number of small proprietary IRFs or the proportion of IRFs' revenue
that is derived from Medicare payments. Therefore, we assume that all
IRFs (an approximate total of 1,100 IRFs, of which approximately 60
percent are nonprofit facilities) are considered small entities and
that Medicare payment constitutes the majority of their revenues. The
HHS generally uses a revenue impact of 3 to 5 percent as a significance
threshold under the RFA. As shown in Table 21, we estimate that the net
revenue impact of this proposed rule on all IRFs is to increase
estimated payments by approximately 1.6 percent. The rates and policies
set forth in this proposed rule will not have a significant impact (not
greater than 3 percent) on a substantial number of small entities.
Medicare Administrative Contractors 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 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 in this section, the rates and policies set forth in this
proposed rule will not have a significant impact (not greater than 3
percent) on a substantial number of rural hospitals based on the data
of the 140 rural units and 11 rural hospitals in our database of 1,131
IRFs for which data were available.

[[Page 24222]]

Section 202 of the Unfunded Mandates Reform Act of 1995 (Pub. L.
104-04, enacted on March 22, 1995) 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 2016, that threshold level is approximately
$146 million. This proposed rule will not mandate spending costs on
state, local, or tribal governments, in the aggregate, or by the
private sector, of greater than $146 million.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a final rule that imposes
substantial direct requirement costs on state and local governments,
preempts state law, or otherwise has federalism implications. As
stated, this proposed rule will not have a substantial effect on state
and local governments, preempt state law, or otherwise have a
federalism implication.

C. Detailed Economic Analysis

1. Basis and Methodology of Estimates
This proposed rule proposes updates to the IRF PPS rates contained
in the FY 2016 IRF PPS final rule (80 FR 47036). Specifically, this
proposed rule would update the CMG relative weights and average length
of stay values, the wage index, and the outlier threshold for high-cost
cases. This proposed rule would apply a MFP adjustment to the FY 2017
IRF market basket increase factor in accordance with section
1886(j)(3)(C)(ii)(I) of the Act, and a 0.75 percentage point reduction
to the FY 2017 IRF market basket increase factor in accordance with
sections 1886(j)(3)(C)(ii)(II) and (D)(v) of the Act. Further, this
proposed rule contains proposed revisions to the IRF quality reporting
requirements that are expected to result in some additional financial
effects on IRFs. In addition, section VII of this proposed rule
discusses the implementation of the required 2 percentage point
reduction of the market basket increase factor for any IRF that fails
to meet the IRF quality reporting requirements, in accordance with
section 1886(j)(7) of the Act.
We estimate that the impact of the changes and updates described in
this proposed rule will be a net estimated increase of $125 million in
payments to IRF providers. This estimate does not include the
implementation of the required 2 percentage point reduction of the
market basket increase factor for any IRF that fails to meet the IRF
quality reporting requirements (as discussed in section X.C.7. of this
proposed rule). The impact analysis in Table 21 of this proposed rule
represents the projected effects of the updates to IRF PPS payments for
FY 2017 compared with the estimated IRF PPS payments in FY 2016. We
determine the effects by estimating payments while holding all other
payment variables constant. We use the best data available, but we do
not attempt to predict behavioral responses to these changes, and we do
not make adjustments for future changes in such variables as number of
discharges or case-mix.
We note that certain events may combine to limit the scope or
accuracy of our impact analysis, because such an analysis is future-
oriented and, thus, susceptible to forecasting errors because of other
changes in the forecasted impact time period. Some examples could be
legislative changes made by the Congress to the Medicare program that
would impact program funding, or changes specifically related to IRFs.
Although some of these changes may not necessarily be specific to the
IRF PPS, the nature of the Medicare program is such that the changes
may interact, and the complexity of the interaction of these changes
could make it difficult to predict accurately the full scope of the
impact upon IRFs.
In updating the rates for FY 2017, we are proposing standard annual
revisions described in this proposed rule (for example, the update to
the wage and market basket indexes used to adjust the federal rates).
We are also implementing a productivity adjustment to the FY 2017 IRF
market basket increase factor in accordance with section
1886(j)(3)(C)(ii)(I) of the Act, and a 0.75 percentage point reduction
to the FY 2017 IRF market basket increase factor in accordance with
sections 1886(j)(3)(C)(ii)(II) and -(D)(v) of the Act. We estimate the
total increase in payments to IRFs in FY 2017, relative to FY 2016,
will be approximately $125 million.
This estimate is derived from the application of the FY 2017 IRF
market basket increase factor, as reduced by a productivity adjustment
in accordance with section 1886(j)(3)(C)(ii)(I) of the Act, and a 0.75
percentage point reduction in accordance with sections
1886(j)(3)(C)(ii)(II) and (D)(v) of the Act, which yields an estimated
increase in aggregate payments to IRFs of $110 million. Furthermore,
there is an additional estimated $15 million increase in aggregate
payments to IRFs due to the proposed update to the outlier threshold
amount. Outlier payments are estimated to increase from approximately
2.8 percent in FY 2016 to 3.0 percent in FY 2017. Therefore, summed
together, we estimate that these updates will result in a net increase
in estimated payments of $125 million from FY 2016 to FY 2017.
The effects of the proposed updates that impact IRF PPS payment
rates are shown in Table 21. The following proposed updates that affect
the IRF PPS payment rates are discussed separately below:
The effects of the proposed update to the outlier
threshold amount, from approximately 2.8 percent to 3.0 percent of
total estimated payments for FY 2017, consistent with section
1886(j)(4) of the Act.
The effects of the proposed annual market basket update
(using the IRF market basket) to IRF PPS payment rates, as required by
section 1886(j)(3)(A)(i) and sections 1886(j)(3)(C) and (D) of the Act,
including a productivity adjustment in accordance with section
1886(j)(3)(C)(i)(I) of the Act, and a 0.75 percentage point reduction
in accordance with sections 1886(j)(3)(C)(ii)(II) and (D)(v) of the
Act.
The effects of applying the proposed budget-neutral labor-
related share and wage index adjustment, as required under section
1886(j)(6) of the Act.
The effects of the proposed budget-neutral changes to the
CMG relative weights and average length of stay values, under the
authority of section 1886(j)(2)(C)(i) of the Act.
The total change in estimated payments based on the
proposed FY 2017 payment changes relative to the estimated FY 2016
payments.
2. Description of Table 21
Table 21 categorizes IRFs by geographic location, including urban
or rural location, and location for CMS's 9 Census divisions (as
defined on the cost report) of the country. In addition, the table
divides IRFs into those that are separate rehabilitation hospitals
(otherwise called freestanding hospitals in this section), those that
are rehabilitation units of a hospital (otherwise called hospital units
in this section), rural or urban facilities, ownership (otherwise
called for-profit, non-profit, and government), by teaching status, and
by disproportionate share patient percentage (DSH PP). The top row of
Table 21 shows the overall impact on the 1,131 IRFs included in the
analysis.
The next 12 rows of Table 21 contain IRFs categorized according to
their geographic location, designation as

[[Page 24223]]

either a freestanding hospital or a unit of a hospital, and by type of
ownership; all urban, which is further divided into urban units of a
hospital, urban freestanding hospitals, and by type of ownership; and
all rural, which is further divided into rural units of a hospital,
rural freestanding hospitals, and by type of ownership. There are 980
IRFs located in urban areas included in our analysis. Among these,
there are 729 IRF units of hospitals located in urban areas and 251
freestanding IRF hospitals located in urban areas. There are 151 IRFs
located in rural areas included in our analysis. Among these, there are
140 IRF units of hospitals located in rural areas and 11 freestanding
IRF hospitals located in rural areas. There are 408 for-profit IRFs.
Among these, there are 355 IRFs in urban areas and 53 IRFs in rural
areas. There are 652 non-profit IRFs. Among these, there are 562 urban
IRFs and 90 rural IRFs. There are 71 government-owned IRFs. Among
these, there are 63 urban IRFs and 8 rural IRFs.
The remaining four parts of Table 21 show IRFs grouped by their
geographic location within a region, by teaching status, and by DSH PP.
First, IRFs located in urban areas are categorized for their location
within a particular one of the nine Census geographic regions. Second,
IRFs located in rural areas are categorized for their location within a
particular one of the nine Census geographic regions. In some cases,
especially for rural IRFs located in the New England, Mountain, and
Pacific regions, the number of IRFs represented is small. IRFs are then
grouped by teaching status, including non-teaching IRFs, IRFs with an
intern and resident to average daily census (ADC) ratio less than 10
percent, IRFs with an intern and resident to ADC ratio greater than or
equal to 10 percent and less than or equal to 19 percent, and IRFs with
an intern and resident to ADC ratio greater than 19 percent. Finally,
IRFs are grouped by DSH PP, including IRFs with zero DSH PP, IRFs with
a DSH PP less than 5 percent, IRFs with a DSH PP between 5 and less
than 10 percent, IRFs with a DSH PP between 10 and 20 percent, and IRFs
with a DSH PP greater than 20 percent.
The estimated impacts of each policy described in this proposed
rule to the facility categories listed are shown in the columns of
Table 21. The description of each column is as follows:
Column (1) shows the facility classification categories.
Column (2) shows the number of IRFs in each category in
our FY 2016 analysis file.
Column (3) shows the number of cases in each category in
our FY 2016 analysis file.
Column (4) shows the estimated effect of the proposed
adjustment to the outlier threshold amount.
Column (5) shows the estimated effect of the proposed
update to the IRF labor-related share and wage index, in a budget-
neutral manner.
Column (6) shows the estimated effect of the proposed
update to the CMG relative weights and average length of stay values,
in a budget-neutral manner.
Column (7) compares our estimates of the payments per
discharge, incorporating all of the proposed policies reflected in this
proposed rule for FY 2017 to our estimates of payments per discharge in
FY 2016.
The average estimated increase for all IRFs is approximately 1.6
percent. This estimated net increase includes the effects of the
proposed IRF market basket increase factor for FY 2017 of 2.7 percent,
reduced by a productivity adjustment of 0.5 percentage point in
accordance with section 1886(j)(3)(C)(ii)(I) of the Act, and further
reduced by 0.75 percentage point in accordance with sections
1886(j)(3)(C)(ii)(II) and (D)(v) of the Act. It also includes the
approximate 0.2 percent overall increase in estimated IRF outlier
payments from the proposed update to the outlier threshold amount.
Since we are making the proposed updates to the IRF wage index and the
CMG relative weights in a budget-neutral manner, they will not be
expected to affect total estimated IRF payments in the aggregate.
However, as described in more detail in each section, they will be
expected to affect the estimated distribution of payments among
providers.

[[Page 24224]]

[GRAPHIC] [TIFF OMITTED] TP25AP16.013

[[Page 24225]]

3. Impact of the Proposed Update to the Outlier Threshold Amount
The estimated effects of the proposed update to the outlier
threshold adjustment are presented in column 4 of Table 21. In the FY
2016 IRF PPS final rule (80 FR 47036), we used FY 2014 IRF claims data
(the best, most complete data available at that time) to set the
outlier threshold amount for FY 2016 so that estimated outlier payments
would equal 3 percent of total estimated payments for FY 2016.
For this proposed rule, we are using preliminary FY 2015 IRF claims
data, and, based on that preliminary analysis, we estimate that IRF
outlier payments as a percentage of total estimated IRF payments would
be 2.8 percent in FY 2016. Thus, we propose to adjust the outlier
threshold amount in this final rule to set total estimated outlier
payments equal to 3 percent of total estimated payments in FY 2017. The
estimated change in total IRF payments for FY 2017, therefore, includes
an approximate 0.2 percent increase in payments because the estimated
outlier portion of total payments is estimated to increase from
approximately 2.8 percent to 3 percent.
The impact of this proposed outlier adjustment update (as shown in
column 4 of Table 21) is to increase estimated overall payments to IRFs
by about 0.2 percent. We estimate the largest increase in payments from
the update to the outlier threshold amount to be 0.8 percent for rural
IRFs in the Pacific region.
4. Impact of the Proposed CBSA Wage Index and Labor-Related Share
In column 5 of Table 21, we present the effects of the proposed
budget-neutral update of the wage index and labor-related share. The
proposed changes to the wage index and the labor-related share are
discussed together because the wage index is applied to the labor-
related share portion of payments, so the proposed changes in the two
have a combined effect on payments to providers. As discussed in
section V.C. of this proposed rule, we are proposing to keep the labor-
related share unchanged from FY 2016 to FY 2017 at 71.0 percent.
5. Impact of the Proposed Update to the CMG Relative Weights and
Average Length of Stay Values.
In column 6 of Table 21, we present the effects of the proposed
budget-neutral update of the CMG relative weights and average length of
stay values. In the aggregate, we do not estimate that these proposed
updates will affect overall estimated payments of IRFs. However, we do
expect these updates to have small distributional effects.
6. Effects of Proposed Requirements for the IRF QRP for FY 2018
In accordance with section 1886(j)(7) of the Act, we will implement
a 2 percentage point reduction in the FY 2018 increase factor for IRFs
that have failed to report the required quality reporting data to us
during the most recent IRF quality reporting period. In section VII.P
of this proposed rule, we discuss the proposed method for applying the
2 percentage point reduction to IRFs that fail to meet the IRF QRP
requirements. At the time that this analysis was prepared, 91, or
approximately 8 percent, of the 1166 active Medicare-certified IRFs did
not receive the full annual percentage increase for the FY 2015 annual
payment update determination. Information is not available to determine
the precise number of IRFs that will not meet the requirements to
receive the full annual percentage increase for the FY 2017 payment
determination.
In section VII.L of this proposed rule, we discuss our proposal to
suspend the previously finalized data accuracy validation policy for
IRFs. While we cannot estimate the increase in the number of IRFs that
will meet IRF QRP compliance standards at this time, we believe that
this number will increase due to the temporary suspension of this
policy. Thus, we estimate that the suspension of this policy will
decrease impact on overall IRF payments, by increasing the rate of
compliance, in addition to decreasing the cost of the IRF QRP to each
IRF provider by approximately $47,320 per IRF, which was the estimated
cost to each IRF provider to the implement the previously finalized
policy.
In section VII.F of this proposed rule, we are proposing four
measures for the FY 2018 payment determinations and subsequent years:
(1) MSPB-PAC IRF QRP; (2) Discharge to Community-PAC IRF QRP, and (3)
Potentially Preventable 30-Day Post-Discharge Readmission Measure for
IRF QRP; (4) Potentially Preventable Within Stay Readmission Measure
IRFs. These four measures are Medicare claims-based measures; because
claims-based measures can be calculated based on data that are already
reported to the Medicare program for payment purposes, we believe there
will be no additional impact.
In section VII.G of this proposed rule, we are also proposing to
adopt one measure for the FY 2020 payment determination and subsequent
years: Drug Regimen Review Conducted with Follow-Up for Identified
Issues--PAC IRF QRP. Additionally, we propose that data for this
measure will be collected and reported using the IRF-PAI (version
effective October 1, 2018). While the reporting of data on quality
measures is an information collection, we believe that the burden
associated with modifications to the IRF-PAI discussed in this proposed
rule fall under the PRA exceptions provided in 1899B(m) of the Act
because they are required to achieve the standardization of patient
assessment data. Section 1899B(m) of the Act provides that the PRA does
not apply to section 1899B and the sections referenced in section
1899B(a)(2)(B) of the Act that require modification to achieve the
standardization of patient assessment data. The requirement and burden
will, however, be submitted to OMB for review and approval when the
modifications to the IRF-PAI or other applicable PAC assessment
instrument are not used to achieve the standardization of patient
assessment data.
The total cost related to the proposed measures is estimated at
$4,625.46 per IRF annually, or $5,231,398.17 for all IRFs annually.
We intend to continue to closely monitor the effects of this new
quality reporting program on IRF providers and help perpetuate
successful reporting outcomes through ongoing stakeholder education,
national trainings, IRF provider announcements, Web site postings, CMS
Open Door Forums, and general and technical help desks.

D. Alternatives Considered

The following is a discussion of the alternatives considered for
the IRF PPS updates contained in this proposed rule.
Section 1886(j)(3)(C) of the Act requires the Secretary to update
the IRF PPS payment rates by an increase factor that reflects changes
over time in the prices of an appropriate mix of goods and services
included in the covered IRF services Thus, we did not consider
alternatives to updating payments using the estimated IRF market basket
increase factor for FY 2017. However, as noted previously in this
proposed rule, section 1886(j)(3)(C)(ii)(I) of the Act requires the
Secretary to apply a productivity adjustment to the market basket
increase factor for FY 2017, and sections 1886(j)(3)(C)(ii)(II) and
1886(j)(3)(D)(v) of the Act require the Secretary to apply a 0.75
percentage point reduction to the market basket increase factor for FY
2017. Thus, in accordance with section 1886(j)(3)(C) of the Act, we
propose to update the IRF

[[Page 24226]]

federal prospective payments in this proposed rule by 1.45 percent
(which equals the 2.7 percent estimated IRF market basket increase
factor for FY 2017 reduced by a 0.5 percentage point productivity
adjustment as required by section 1886(j)(3)(C)(ii)(I) of the Act and
further reduced by 0.75 percentage point).
We considered maintaining the existing CMG relative weights and
average length of stay values for FY 2017. However, in light of
recently available data and our desire to ensure that the CMG relative
weights and average length of stay values are as reflective as possible
of recent changes in IRF utilization and case mix, we believe that it
is appropriate to propose to update the CMG relative weights and
average length of stay values at this time to ensure that IRF PPS
payments continue to reflect as accurately as possible the current
costs of care in IRFs.
We considered updating facility-level adjustment factors for FY
2017. However, as discussed in more detail in the FY 2015 final rule
(79 FR 45872), we believe that freezing the facility-level adjustments
at FY 2014 levels for FY 2015 and all subsequent years (unless and
until the data indicate that they need to be further updated) will
allow us an opportunity to monitor the effects of the substantial
changes to the adjustment factors for FY 2014, and will allow IRFs time
to adjust to the previous changes.
We considered maintaining the existing outlier threshold amount for
FY 2017. However, analysis of updated FY 2015 data indicates that
estimated outlier payments would be lower than 3 percent of total
estimated payments for FY 2017, by approximately 0.2 percent, unless we
updated the outlier threshold amount. Consequently, we propose
adjusting the outlier threshold amount in this proposed rule to reflect
a 0.2 percent increase thereby setting the total outlier payments equal
to 3 percent, instead of 2.8 percent, of aggregate estimated payments
in FY 2017.

E. Accounting Statement

As required by OMB Circular A-4 (available at https://www.whitehouse.gov/sites/default/files/omb/assets/omb/circulars/a004/a-4.pdf), in Table 22, we have prepared an accounting statement showing
the classification of the expenditures associated with the provisions
of this proposed rule. Table 22 provides our best estimate of the
increase in Medicare payments under the IRF PPS as a result of the
proposed updates presented in this proposed rule based on the data for
1,131 IRFs in our database. In addition, Table 22 presents the costs
associated with the proposed new IRF quality reporting program for FY
2017.

Table 22--Accounting Statement: Classification of Estimated Expenditures
------------------------------------------------------------------------

------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
Change in Estimated Transfers from FY
2016 IRF PPS to FY 2017 IRF PPS:
Annualized Monetized Transfers......... $125 million.
From Whom to Whom?..................... Federal Government to IRF
Medicare Providers.
------------------------------------------------------------------------
Category Costs
------------------------------------------------------------------------
FY 2017 Cost to Updating the Quality
Reporting Program:
Cost for IRFs to Submit Data for the $5,231,398.17.
Quality Reporting Program.
------------------------------------------------------------------------

F. Conclusion

Overall, the estimated payments per discharge for IRFs in FY 2017
are projected to increase by 1.6 percent, compared with the estimated
payments in FY 2016, as reflected in column 7 of Table 21.
IRF payments per discharge are estimated to increase by 1.7 percent
in urban areas and 0.9 percent in rural areas, compared with estimated
FY 2016 payments. Payments per discharge to rehabilitation units are
estimated to increase 1.8 percent in urban areas and 1.1 percent in
rural areas. Payments per discharge to freestanding rehabilitation
hospitals are estimated to increase 1.5 percent in urban areas and
decrease 0.1 percent in rural areas.
Overall, IRFs are estimated to experience a net increase in
payments as a result of the proposed policies in this proposed rule.
The largest payment increase is estimated to be a 2.4 percent increase
for urban IRFs located in the Middle Atlantic region.
In accordance with the provisions of Executive Order 12866, this
proposed 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
& Medicaid Services proposes to amend 42 CFR chapter IV as set forth
below:

PART 412--PROSPECTIVE PAYMENT SYSTEMS FOR INPATIENT HOSPITAL
SERVICES

0
1. The authority citation for part 412 continues to read as follows:

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.

0
2. Section 412.634 is amended by revising paragraph (c)(2) and adding
paragraph (f) to read as follows:

Sec. 412.634 Requirements under the Inpatient Rehabilitation Facility
(IRF) Quality Reporting Program (QRP).

* * * * *
(c) * * *
(2) An IRF must request an exception or extension within 90 days of
the date that the extraordinary circumstances occurred.
* * * * *
(f) Data completion thresholds. (1) IRFs must meet or exceed two
separate data completeness thresholds: One threshold set at 95 percent
for completion of quality measures data collected using the IRF-PAI
submitted through the QIES and a second threshold set at 100 percent
for quality measures data collected and submitted using the CDC NHSN.
(2) These thresholds will apply to all measures adopted into IRF
QRP.
(3) An IRF must meet or exceed both thresholds to avoid receiving a
2 percentage point reduction to their annual payment update for a given
fiscal year, beginning with FY 2016 and for all subsequent payment
updates.

[[Page 24227]]

Dated: April 5, 2016.
Andrew M. Slavitt,
Acting Administrator, Centers for Medicare & Medicaid Services.
Dated: April 14, 2016.
Sylvia M. Burwell,
Secretary, Department of Health and Human Services.
[FR Doc. 2016-09397 Filed 4-21-16; 4:15 pm]
BILLING CODE 4120-01-P

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