EDITOR’S NOTE: This article is the first in a two-part series regarding the Inpatient Prospective Payment System Proposed Rule for the 2017 fiscal year.

The Centers for Medicare & Medicaid Services (CMS) released the display version of the Proposed Rule on April 18. The recommendations would become effective on Oct. 1, 2016. Comments on the Proposed Rule are due to CMS by 5 p.m. EST on June 17, and they can be posted on http://www.regulations.gov. There are a total of 1,585 pages in this Proposed Rule. The Final Rule is scheduled to be released on Aug. 1, according to information disclosed during the March meeting of the CMS Coordination and Maintenance Committee.

Now to cover some of the highlights of the newly released Proposed Rule:

A documentation and coding adjustment has been recommended at the level of 1.5 percent, which is an increase over last year’s adjustment of 0.8 percent. The Proposed Rule also includes a notice regarding an adjustment to IPPS rates by removing the 0.2-percent reduction to the IPPS rates (suggested in 2014) due to the latest changes to the two-midnight rule policy. There is also the suggestion of increasing the standardized amount, hospital-specific rates, and national capital federal rate by 0.6 percent.

There are also suggestions regarding the Readmission Reduction Program. Coronary artery bypass graft (CABG) procedures may be added beginning in the 2017 fiscal year.

Changes have also been suggested for the Hospital Value-Based Purchasing Program. For 2019, two measures may be revised; for 2021, one measure is to be updated, and two new measures are to be adopted; for 2022, one new measure is to be adopted.

Hospital-acquired conditions (HACs) have been another focus of change. It is proposed that Patient Safety Indicator (PSI) 90 – the Patient Safety and Adverse Events Composite – be refined and adopted. There is also a suggestion for changing the program by moving from the decile-based scoring methodology to a continuous scoring methodology.

Many changes have been suggested for Hospital Inpatient Quality Reporting Program. Fifteen measures (13 electronic and two chart abstraction) have been recommended for removal. Two other measures may be refined. Four new claims-based measures have been brought forth. From an administrative perspective, public comment is being sought on new measure suggestions. A suggestion to submit all electronic clinical quality measures has been made, as well as a modification in the validation process. Another administrative modification to the Hospital Inpatient Quality Reporting Program functionality is to make updates to the process to request an extension to the submission process.

The last topic for this article is the Medicare Code Editor (MCE). There are some changes in the ICD-10-CM code list that will occur to the diagnoses listed under the age conflict, sex conflict, and unacceptable principal diagnosis codes. Another frequent issue that may be addressed through this Proposed Rule is the rejection of a few procedure codes. The removal of the vas deferens (or the ovary) will not be covered when the procedure is not for sterilization. Another frequent issue that has been reported by some facilities is the denial for endovascular mechanical thrombectomy procedures because the procedure code appears on the uncovered procedures list. CMS had noticed that there was a replication error in the non-covered procedure. A replication error represents that an error was created due to an attempt to replicate the codes in ICD-9-CM. Four endovascular mechanical thrombectomy codes are scheduled to be removed from the non-covered procedure code list.  

Next week’s article will outline some of the changes to the MS-DRG methodology. The Proposed Rule can be found online at https://s3.amazonaws.com/public-inspection.federalregister.gov/2016-09120.pdf.

About the Author

Laurie Johnson, MS, RHIA, FAHIMA is the director of health information management (HIM) consulting services for Panacea Health Solutions Inc. She has conducted ICD-10 education sessions and documentation reviews for multiple organizations. Laurie also anchors the News Desk on Talk-Ten-Tuesdays. Prior to working for Panacea, Laurie worked for Peak Health Solutions and Optum.

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