The Centers for Medicare and Medicaid Services (CMS) has issued its hospital inpatient prospective payment system (IPPS) final rule for fiscal year (FY) 2016. Continuing CMS's previous actions to shift Medicare reimbursement from volume- to value-based payment, the final rule removes nine measures from the Hospital Inpatient Quality Reporting (IQR) Program for the FY 2018 payment determination and subsequent years and adds seven measures: four for the FY 2018 payment determination and subsequent years and three for the FY 2019 payment determination and subsequent years. CMS is also requiring hospitals to report 4 of the 28 Hospital IQR Program electronic clinical quality measures that align with the Medicare Electronic Health Record (EHR) Incentive Program. For the Hospital Readmissions Reduction Program, CMS has refined the pneumonia readmissions measure, expanding the cohort to include patients with a principal discharge diagnosis of pneumonia or aspiration pneumonia and patients with a principal discharge diagnosis of sepsis with a secondary diagnosis of pneumonia coded as present on admission. The agency is also making several changes to the Hospital-Acquired Condition Reduction Program, including expanding the population covered by the central-line-associated bloodstream infection and catheter-associated urinary tract infection measures to include patients in select non–intensive care unit sites within a hospital; adjusting the relative contribution of each domain to the "Total HAC Score," which is used to determine if a hospital will receive the payment adjustment; and adopting an extraordinary circumstance exception policy that will align with existing policies for other IPPS quality reporting and payment programs and will allow hospitals to request a waiver for the use of data from the affected time period. Despite proposing changes to the "two-midnight" policy in its outpatient prospective payment system proposed rule (see the July 8, 2015, HRC Alerts), CMS's IPPS final rule does not extend the partial enforcement delay of the two-midnight policy that expires on September 30, 2015. The final rule, which will be published in the August 17, 2015, Federal Register, is effective on October 1, 2015; comments are due September 29, 2015. Additional information regarding other major provisions of the rule, such as updated payment rates and changes to the Hospital Value-Based Purchasing Program, is provided by a July 31, 2015, CMS fact sheet.

HRC Recommends: Risk managers, quality assurance managers, and others involved in quality measurement and reporting must understand the measures they are required to report on and ensure that data to fulfill those requirements is being captured and transmitted appropriately. The data should also be used internally to identify opportunities for improvement regarding patient care and outcomes and with regard to reimbursement.