The Centers for Medicare and Medicaid Services (CMS) has issued a proposed rule outlining the changes to its hospital inpatient prospective payment system (IPPS) for fiscal year (FY) 2016. Beyond proposing a 1.1% increase in operating payment rates for general acute care hospitals that successfully participate in the Hospital Inpatient Quality Reporting Program and are meaningful electronic health record users, the rule proposes several policies that continue CMS's commitment to increasingly shift Medicare payments from volume to value. For the Hospital Inpatient Quality Reporting Program, CMS is proposing to add a total of eight new measures for the FY 2018 payment determination and subsequent years (five clinical-episode-based payment measures, one patient safety measure, and two coordination-of-care measures), remove nine measures, and refine two previously adopted measures to expand measure cohorts. In addition, CMS is proposing two changes in relation to electronic clinical quality measures to align the Hospital Inpatient Quality Reporting Program with the Medicare Electronic Health Record Incentive Program for eligible hospitals and critical access hospitals. For the Value-Based Purchasing Program, CMS proposes to add a care coordination measure to the FY 2018 program year and a 30-day mortality measure for chronic obstructive pulmonary disease to the FY 2021 program year, as well as to remove two measures effective with the FY 2018 program year. Other changes proposed by CMS in the rule include an adjustment to how total scores are calculated for the Hospital-Acquired Conditions Reduction Program and the addition of an extraordinary circumstance exception policy, a refinement of the pneumonia readmission measure for the Hospital Readmissions Reduction Program, and the potential expansion of the Bundled Payments for Care Improvement initiative. CMS does not propose any changes to its "two-midnight rule"—a much-debated provision in the FY 2014 hospital IPPS rule that established a benchmark that stays expected to last two or more midnights would generally be considered appropriate for inpatient payment. The proposed rule will be published in the April 30, 2015, Federal Register; comments are due June 16, 2015.

HRC Recommends: As CMS increasingly aligns Medicare reimbursement and healthcare quality, risk managers and quality improvement professionals must keep tabs on the agency's regulatory initiatives and their impact on the organization's approach to healthcare delivery. CMS's proposed rule to update its IPPS contains numerous measures that affect healthcare quality and patient safety. Risk managers can demonstrate their value to an organization by serving as facilitators to help their organizations identify and manage the risks that arise from CMS's regulatory initiatives.